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94–606PDF 2015

ADVANCING U.S. ECONOMIC INTERESTS IN ASIA

HEARING

BEFORE THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTEENTH CONGRESS

FIRST SESSION

MAY 14, 2015

Serial No. 114–50

Printed for the use of the Committee on Foreign Affairs

(

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

http://www.gpo.gov/fdsys/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

EDWARD R. ROYCE, California, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

DANA ROHRABACHER, California 

STEVE CHABOT, Ohio 

JOE WILSON, South Carolina 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

MATT SALMON, Arizona 

DARRELL E. ISSA, California 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

MO BROOKS, Alabama 

PAUL COOK, California 

RANDY K. WEBER SR., Texas 

SCOTT PERRY, Pennsylvania 

RON DESANTIS, Florida 

MARK MEADOWS, North Carolina 

TED S. YOHO, Florida 

CURT CLAWSON, Florida 

SCOTT DESJARLAIS, Tennessee 

REID J. RIBBLE, Wisconsin 

DAVID A. TROTT, Michigan 

LEE M. ZELDIN, New York 

TOM EMMER, Minnesota 

ELIOT L. ENGEL, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

BRIAN HIGGINS, New York 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

ALAN GRAYSON, Florida 

AMI BERA, California 

ALAN S. LOWENTHAL, California 

GRACE MENG, New York 

LOIS FRANKEL, Florida 

TULSI GABBARD, Hawaii 

JOAQUIN CASTRO, Texas 

ROBIN L. KELLY, Illinois 

BRENDAN F. BOYLE, Pennsylvania

AMY PORTER, Chief of Staff THOMAS SHEEHY, Staff Director

JASON STEINBAUM, Democratic Staff Director 

(III)

C O N T E N T S 

Page

WITNESSES 

The Honorable Charles H. Rivkin, Assistant Secretary, Bureau of Economic 

and Business Affairs, U.S. Department of State ............................................... 4

The Honorable Daniel R. Russel, Assistant Secretary, Bureau of East Asian 

and Pacific Affairs, U.S. Department of State ................................................... 14

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Charles H. Rivkin: Prepared statement ...................................... 6

The Honorable Daniel R. Russel: Prepared statement ......................................... 16

APPENDIX 

Hearing notice .......................................................................................................... 52

Hearing minutes ...................................................................................................... 53

The Honorable Brad Sherman, a Representative in Congress from the State 

of California: Material submitted for the record ............................................... 55

The Honorable Gerald E. Connolly, a Representative in Congress from the 

Commonwealth of Virginia: Prepared statement .............................................. 57

Written responses from the Honorable Daniel R. Russel to questions submitted for the record by the Honorable Edward R. Royce, a Representative 

in Congress from the State of California, and chairman, Committee on 

Foreign Affairs ..................................................................................................... 58

Written responses from the Honorable Charles H. Rivkin to questions submitted for the record by the Honorable Michael T. McCaul, a Representative in Congress from the State of Texas ........................................................... 59

(1)

ADVANCING U.S. ECONOMIC INTERESTS IN 

ASIA 

THURSDAY, MAY 14, 2015

HOUSE OF REPRESENTATIVES,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC. 

The committee met, pursuant to notice, at 10:08 a.m., in room 

2172, Rayburn House Office Building, Hon. Ed Royce (chairman of 

the committee) presiding. 

Chairman ROYCE. This hearing will come to order. Today we will 

hear from the State Department regarding the positive impact 

American trade with Asia has had—and promises to have—on our 

economy and, additionally, on our national security. That is if we 

are willing to put in place smart and fair policies to tear down 

trade barriers overseas to better sell U.S. products to the world. 

For most of the last century, the United States-led system of 

open global markets has dramatically increased our prosperity, and 

it has lifted more than 1 billion people out of extreme poverty in 

the last 20 years alone. More than 1 billion people lifted out of poverty, greatly serving our economic, political, and humanitarian interests worldwide, including our interest in Asia. 

The benefits of trade cannot be taken for granted. We have 

reached an important decision point. A strong Trans-Pacific Partnership agreement would bolster our economic and political standing in a growing and increasingly important part of the world, that 

is, in Asia. 

To negotiate a strong Trans-Pacific Partnership or TPP, as we 

are calling it, Trade Promotion Authority is needed. TPA will establish high standards for the TPP, and it will strengthen the 

hands of U.S. negotiators to strike an effective and an enforceable 

deal. And if the White House strikes a bad deal with TPA, Congress is still positioned to reject it. 

TPP could be enormously beneficial, potentially adding trillions 

of dollars to the world economy. TPP would give U.S. exporters better access to 1 billion consumers. International trade currently supports 38 million American jobs, and TPP and the trade agreement 

additionally being negotiated with Europe could add over 1 million 

more, helping build a healthier economy. 

Of course, there are concerns about the U.S. trade deficit. But 

much of that is due to our large oil import bill, which is dropping 

as domestic production increases. And the fact is that we have a 

trade surplus with our 20 current trade agreement partners. In 

manufacturing alone, we have a $55 billion surplus with these 

2

countries, over double from only a few years ago. Yet of the 75 

trade agreements in Asia since 2000, we were a party to three of 

them, just three. 

We cannot be sidelined. Good agreements create enforceable high 

standards for trade and help level the playing field for our American companies. It is us who have the most to gain from them as 

our exporters face far higher tariffs than their competitors do here. 

Meanwhile, Beijing is making rapid anticompetitive moves that 

are throwing the world trade system off balance. These include 

issuing regulations to make it easier to steal intellectual property 

from American companies operating overseas. Beijing also is creating its own parallel institutions. The Regional Comprehensive 

Economic Partnership and the Asian Infrastructure Investment 

Bank are designed to shut out the United States. TPP strengthens 

the U.S., not the government in Beijing. 

Beijing is pressing its neighbors to choose U.S. or them. Partner 

with one or the other. Asia is far too important economically and 

geopolitically for us to disengage, not being part of its economic 

fabric, which TPP will define. 

We are members. We are a Pacific country after all. Let’s remain 

one. 

And I will now turn to the ranking member for any opening comments he may have, Mr. Elliott Engel of New York. 

Mr. ENGEL. Thank you, Mr. Chairman. And thank you for convening this morning’s important hearing. Assistant Secretary Russell, Assistant Secretary Rivkin, welcome. Thank you for your testimony today, for your service to our country, and for keeping American foreign policy focused on our many interests across the Asia 

Pacific. 

This year, we mark 70 years since the end of World War II. In 

that time, American leadership has been indispensable in rebuilding the global economy and establishing the modern-day global economic order. American engagement has underpinned seven decades 

of relative stability and growth in Asia, growth that has benefited 

all the countries in the region as well as our own. But much work 

remains to be done, and many opportunities remain unexplored. 

Due to a thriving middle class, the Asia Pacific is the fastest growing region in the world. In the years ahead, we need to do everything possible to ensure that growth in Asia translates to growth 

and job creation here at home. 

We have already made much progress. The 10 countries of the 

Association of Southeast Asian Nations, ASEAN, are the fourth 

largest export markets for American goods and service. According 

to the Commerce Department, our trade with ASEAN countries 

supports nearly 1⁄2 million jobs. This success is no accident. The 

United States has long encouraged countries throughout the Asia 

Pacific to play by the same set of rules. We have driven this message home to the Asia Pacific Economic Cooperation Forum, or 

APEC. The 21 members of this group on both sides of the Pacific 

accounted for 58 percent of global GDP in 2014. 

At the same time, we know that American economic engagement 

in the Asia-Pacific region is an ongoing challenge. We continue to 

run large trade deficits of many Asian economies, including a staggering $327 billion deficit with China. And American companies 

3

are running up against nontariff barriers and other unfair practices by Asian governments that make real competition in Asian 

markets impossible. 

So, today, I would like to hear from our witnesses about what we 

need to do to stay on the right track in Asia. How do we advance 

what the President called a global economic order that continues 

to reflect our interest and values and can succeed against alternative, less open models? 

As China pushes one of those alternative models, how are we 

using the tools at our disposal to set new rules of the road, 

strengthen our partnerships, and promote inclusive development? 

From a geopolitical perspective, it makes sense for the U.S. to 

look at free trade, to pursue free trade. I think that is important. 

However, we would do well to listen to those who are fearful that 

the current TPP as written will drive down wages and cause the 

U.S. to lose jobs. I think we have to listen to everybody’s voices. 

So how are our efforts being perceived in the region? In my view, 

two questions should guide our trade and investment efforts in 

Asia. Do they benefit American workers? Do they open new markets to the makers of American goods and services? If the answer 

to either question is no, we put the progress we have made in Asia, 

along with the paychecks of American working families, at risk. We 

need to bring that perspective to individual cases, including the 

Trans-Pacific Partnership talks. An acceptable TPP agreement 

must advance peace and prosperity in Asia while, at the same 

time, creating new exports and export-related jobs for Americans. 

The TPP is a work in progress. But if an agreement is reached, we 

will have to take a hard look to make sure it measures up to those 

standards. 

Regardless of the outcome of TPP, America will continue to play 

an important role in Asia. The United States is a Pacific power. We 

need to keeping building on the legacy of the last 70 years, both 

to advance our own interests and promote our values in a way that 

benefits countries and individuals across the region and, of course, 

in a way that benefits ourselves. 

Thank you, again, Mr. Chairman. I look forward to the testimony 

of our witnesses. 

Chairman ROYCE. Thank you, Mr. Engel. So this morning we are 

pleased to be joined by senior representatives from the State Department. We have Mr. Charles Rivkin, Assistant Secretary of 

State for Economic and Business Affairs. He leads a bureau which 

includes the responsibility of managing trade negotiations and investment treatise. Mr. Rivkin served for over 4 years as Ambassador to France. And we thank you both for being with us today. 

Mr. Daniel Russel is the Assistant Secretary of State for East 

Asian and Pacific Affairs and is a career member of the Senior Foreign Service. Previously, Mr. Russel served at the White House as 

the National Security Counsel Senior Director for Asian Affairs. 

So without objection, the witnesses full prepared statements will 

be made part of the record. Members will have 5 calendar days to 

submit any statements or questions or extraneous material they 

may have for the record. 

And, Mr. Rivkin, we will begin with you. Thank you. 

4

STATEMENT OF THE HONORABLE CHARLES H. RIVKIN, ASSISTANT SECRETARY, BUREAU OF ECONOMIC AND BUSINESS AFFAIRS, U.S. DEPARTMENT OF STATE 

Ambassador RIVKIN. Thank you, Chairman Royce, Ranking Member Engel, and members of the committee. And I appreciate the opportunity to testify before you about—today about our economic engagement in Asia. 

In my 15 months as Assistant Secretary of State, I visited the 

region four times, and I will be going back again in 2 weeks to 

mark the 20th anniversary of our normalization of relations with 

Vietnam. Five visits to eight nations in this short span is no accident. 

Our economic engagement is an Obama administration priority 

for the opportunities that it will bring to our investors, entrepreneurs, workers, consumers, and for the security that it will underwrite for all American citizens. 

Few geographical regions offer greater market opportunities. It 

has some of the fastest growing economies, a third of the global 

population, a rapidly expanding middle class and more governments becoming democratic. 

By supporting economic growth, we will not only create economic 

opportunity, we will solidify our own strategic interests. One of the 

most effective ways we could accomplish this is through the TransPacific Partnership, or TPP, whose 12 participants account for over 

40 percent of global GDP. This high standard and ambitious deal 

will level the playing field for our businesses and investors and 

promote the values we live by and hope to see across the region. 

Those include a system for trade, an investment that is open, free, 

transparent and fair. Open to all comers from both inside and outside the region. Free from unwarranted at-the-border or behindthe-border barriers to international economic activity. Transparent 

so that all players can understand the rules, and fair so that no 

entities have any improper advantage, whether based on ownership 

or political relationship or any other consideration. 

A successful trade deal will also assure our allies and our partners that our long-term commitment to the region reaches beyond 

security and into the economic realm. 

During my recent visit to Japan, I spoke to government officials, 

businesses, and the media about the importance of a free and open 

Internet. Three billion people are currently connected to the Internet, and trillions of devices are set up to join them in the upcoming 

Internet of things. Now, that connectivity holds the potential to reduce poverty, formalize the informal economy, increase the efficiency of supply chains and worker productivity, raise wages, and 

make possible activities that we have not even begun to imagine. 

Small- and medium-sized enterprises can especially benefit. Digital technologies enable the smallest companies and entrepreneurs 

to become micro multinationals and conduct business across borders. In emerging and developing nations whose small businesses 

are so often the backbone of their economies, this global access can 

have dramatic results. From trade agreements to building infrastructure to protecting intellectual property, we work to create environments that will enable small- and medium enterprises to 

flourish and get their goods to market. 

5

One of the most effective ways to open markets is through open 

skies agreements where my Bureau takes the interagency lead. By 

eliminating government interference, these agreements enable commercial carriers to provide affordable, convenient, and efficient air 

service to consumers that promotes increased travel and trade and 

spurs high-quality job opportunities and economic growth. 

No discussion about the Asia Pacific should ignore China, with 

whom we account for a third of global GDP, 600 billion of trade between our countries, and 40 percent of recent global growth. We believe that seeking practical and tangible cooperation on challenges 

that face both nations, while managing our clear differences, is central to our bilateral engagement with China and our wider engagement in the region. 

On the economic side, we have seen signs of real success and potential. Last November on President Obama’s trip to Beijing, we 

agreed to expand visa validity for business visitors to 10 years. And 

through the WTO’s information technology agreement, we agreed 

to eliminate tariffs on next generation ICT products, like advanced 

semiconductors and high-tech medical equipment. 

Also, in November, I joined Secretary Kerry in Beijing to meet 

10 of the most important CEOs in China, major companies that all 

of you, I am sure, have heard of and who are doing extraordinary 

work, and they are investing in the United States. Secretary Kerry 

used this CEO roundtable, as he does with businesses around the 

world, to send a clear message that the United States provides an 

open and reliable investing environment. 

Our bilateral investment treaty or BIT negotiations with China 

offer great potential to unlock new opportunities for U.S. firms and 

promote a more level playing field for U.S. investors in China’s 

market. We are pressing China to provide a narrow negative list 

with greater openness to foreign investment, and we are also pressing for more progress on economic reform including stronger investor protections that support transparency, predictability, and rule 

of law. And next month, I will join Secretary Kerry and Secretary 

Lew in the strategic and economic dialogue where we will have another important opportunity to move our mutual objectives forward. 

In conclusion, ultimately our economic engagement with the Asia 

Pacific fulfills two fundamental foreign policy objectives, to create 

prosperity for Americans, and to make them safer. We must continue to define standards, open markets, create jobs, and strengthen our alliances and partnerships. With sustained commitment, we 

can build an even greater architecture of prosperity and security 

for generations to come. Thank you. 

[The prepared statement of Ambassador Rivkin follows:]

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Chairman ROYCE. Thank you, Secretary Rivkin. 

Now we go to Secretary Russel. 

STATEMENT OF THE HONORABLE DANIEL R. RUSSEL, ASSISTANT SECRETARY, BUREAU OF EAST ASIAN AND PACIFIC AFFAIRS, U.S. DEPARTMENT OF STATE 

Mr. RUSSEL. Mr. Chairman, thank you very much. Ranking 

Member Engel, members of the committee, I appreciate the committee’s strong support of our work in the Asia-Pacific region and 

for the opportunity to testify today with my friend and colleague, 

Assistant Secretary Charlie Rivkin, on U.S. economic engagement 

in the Asia-Pacific region. 

Assistant Secretary Rivkin has just spoken to the economic relationship and interests that we have in the region. I would like to 

speak to the broader strategic context. The U.S. is a Pacific power. 

The U.S. is a trading nation, so the Asia Pacific is hugely consequential to the United States, both to our security and to our 

economy and the importance will only continue to grow. 

Over the last 6 years, the President’s rebalanced policy has established a new normal of relations marked, first, by sustained engagement with the region by the President, the Secretary of State, 

and other cabinet officials; and, second, by unprecedented extensive 

collaboration with Asian allies and partners on the full range of 

global challenges that we face. 

The results of this policy and the benefits to the American people 

are clear: We are safer, our economy is stronger, the region is more 

stable, and regional institutions are more robust as a result. 

Now, concluding the Trans-Pacific Partnership negotiations is 

the single-most important thing we can do this year to continue 

that progress. The TPP is essential both to our economic and to our 

strategic relationships with the Asia-Pacific region. Let me explain 

why. The simple fact, Mr. Chairman, is that stability nurtures 

prosperity. That is why we have invested in our security alliances 

in the region and reinforced our security partnerships, and that is 

why a strong focus on getting our relationship with China right is 

also a key part of the rebalance. 

Strengthening regional institutions, another central tenet of the 

rebalance, is also key to shared prosperity. Businesses invest and 

commerce grows when there is dependable rule of law, and the disputes that do arise are managed or resolved peacefully. That is 

why we work to elevate the East Asia summit to bolster the AsiaPacific Economic Cooperation Forum, APEC and that is why we 

support ASEAN and the emerging ASEAN economic community 

that is being formed in 2015. These institutions promote standards 

and they promote rule of law, just like TPP will. And all of that 

is good for America and good for American businesses and jobs. 

But make no mistake, without TPP, our credibility and our ability to lead are put at risk. Countries across the region look to us 

to help establish fair rules, open markets, and effective safeguards. 

Moreover, the 2008 recession and the loss of U.S. market share 

in Asia to China feed an inaccurate perception of U.S. economic decline. The region worries about our staying power as both a trading 

partner and an economic leader. Failure to complete and improve 

15

TPP this year would feed those fears and set back confidence in the 

United States. 

Conversely, TPP is a golden opportunity to reclaim the initiative 

and reaffirm American leadership. The alternative to TPP isn’t the 

status quo. If we don’t move forward, we will lose ground. Environmental and labor protections will diminish. Unfair competition 

from state-owned enterprises will increase. Obstacles to a free and 

open Internet will multiply. In other words, we will find ourselves 

on a skewed playing field where we struggle to compete. 

Mr. Chairman, I have, from my experience serving overseas, immense faith in American business. And I am particularly proud, as 

a regional Assistant Secretary, of the extraordinary diplomats who 

work overseas to facilitate our commercial and economic interests. 

Our system supports entrepreneurship. Our universities, our 

legal system, our venture capital system, our tradition of corporate 

social responsibility, all of these are part of what I call the American brand; and our brand in Asia is strong. I have seen that with 

my own eyes. And with continued leadership and engagement, we 

will keep it that way. 

Thank you very much. 

[The prepared statement of Mr. Russel follows:]

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Chairman ROYCE. Thank you, Mr. Secretary. 

Let me ask Ambassador Rivkin a question because for many of 

the members on this committee over the last 3 years, we have had 

four trips to Asia. And if the members could focus on this for a 

minute, one of the things that we have found is that a typical 

southeast Asian country imposes tariffs that are five times higher 

than the U.S. average. At the same time, we have duties on our 

agricultural products that frankly are triple digits. I mean, it is a 

very different circumstance. And that is without going into the nontariff and regulatory barriers that exist today that could be eliminated in an agreement. Those block market access in many of these 

countries to our exports. Now, we know that. 

So the United States already has among the lowest tariff rates 

in the world. So the one compelling argument here, the first argument made by TPP advocates, is that if it doesn’t pass, that means 

that a lot of these goods from southeast Asian countries, they will 

keep selling them in the United States; and we can’t effectively sell 

to them. And that is a huge argument in favor of trying to negotiate something where we have lowered the tariffs to the equivalency. 

So what specific role would TPP play in lowering tariffs, increasing jobs here in the United States, strengthening our exports, deepening our production networks? And I would ask that of you, the 

Ambassador. 

Ambassador RIVKIN. Thank you, Mr. Chairman, for the question. 

And the entire central focus of TPP is to reduce, not only the tariffs, but the nontariff barriers. 

And with your permission, Mr. Chairman, just to speak to that, a little known fact is that 98 percent of our nearly $19 trillion economy comes from small and medium enterprises. And of that 98 percent, which generate more than two-thirds of net new job creation—of that 98 percent, only 1 percent export. And of that 1 percent, 60 percent or so goes to Canada and Mexico. 

So imagine—you talked about tariffs, and they are reasonably 

low to begin with. But it is existential for a small or medium enterprise, in many cases, if you lower it even a little bit. And the other 

benefit is that—I used to be the CEO of a number of small medium 

enterprises. I know what it is like to meet payroll. 

Chairman ROYCE. You are in California? 

Ambassador RIVKIN. I am in California, southern California. And 

I have got to tell you, it is a pleasure to have business experience 

and have a chance to serve in policy in the U.S. Government because I know what this can do for the entrepreneur, the 28 million 

of them that exist in the United States. And if this deal passes, 

small and medium enterprises will have the chance to export for 

the first time. They will have a chance to access markets that they 

never believed they could access. And imagine what that could do 

for job creation. 

And, sir, one last point: There is already 11.7 million jobs in the 

United States related to exports. I would argue that, with TPP, 

this number is going to dramatically increase. 

Chairman ROYCE. Secretary Russel, your view on this? 

Mr. RUSSEL. As you pointed out, Mr. Chairman, the U.S. market 

is already a wide open market. The countries that I deal with in 

23

East Asia are asking themselves if the growth of China’s economy 

means that, ultimately, there is only one game in town. There has 

been a proliferation of trade—so-called free trade agreements in 

Asia, but none of them reflect a low—a high standard or genuinely 

open markets. These are, by and large, least common denominator 

agreements. 

In order to create choices for our Asian partners, in order to 

allow for economic diversity and in order to hedge against the risk 

of economic coercion or economic retaliation, linking these countries 

to a high standard free trade agreement with the United States, 

TPP, not only opens their markets, it gives them choices. 

I would also add respectfully, Mr. Chairman, that there are tremendous nontrade benefits to the agreement that mean a great 

deal to us as Americans and to the region in terms of the environment, in terms of labor and labor standards, in terms of an open 

Internet and the free movement of data and ideas across borders. 

This agreement, even if it weren’t an agreement that opened markets and lowered tariffs, brings tremendous benefits to the United 

States. 

Chairman ROYCE. Well, then, I guess my follow-up question on 

that would be: How would the future look of the Asia-Pacific region 

if the future includes the passage of this, if it includes a U.S.-led 

rules for trade basically versus an alternative model? What would 

you see play out? Mr. Russel. 

Mr. RUSSEL. Well, Mr. Chairman, the anxiety that I regularly 

hear from my interlockers in Asia, as I mentioned in my statement, 

is that the United States’ best days are behind us; and that is simply not true. The proof point, in the eyes of so many of our Asian 

friends, is whether we remain committed, whether our economy 

grows, and whether we stay engaged present, active, and accounted 

for in the Asia-Pacific region. And many of them, to be frank, Mr. 

Chairman, look on TPA and TPP as the telltale, the litmus test, 

the bellwether of both our ability to get things done in Washington 

and our determination to remain active in the region. This has a 

strategic and symbolic importance above and beyond all the practical benefits. 

Conversely, if we succeed, as I personally am very confident we 

will, in completing this agreement in the course of 2015, we will 

have, not only advanced the substance of our trade agenda, we will 

be exporting the values that Americans hold so dearly; the values 

of transparency, the values of fairness, the sanctity of contracts, 

environmental responsibility, good labor standards, good governance. Those are values that the region cherishes. They want us 

there and they want us to lead. 

Chairman ROYCE. Mr. Russel, my time has expired. 

Mr. Engel. 

Mr. ENGEL. Thank you, Mr. Chairman. 

Let me ask you a TPP question. Obviously, the Vietnamese Government is eager to see a successful conclusion to the TPP agreement, and some civil society groups have asserted that the negotiations provide us sufficient leverage to encourage the Vietnamese 

Government to take positive steps on human rights issues. 

So I would like to ask either one of you: To what extent do you 

think this is true? What steps do you think the government will 

24

take in advance of the agreement? How can we ensure that they 

continue to make progress after the agreement is signed? And do 

you think that similar progress on human rights is possible for 

other countries like Malaysia and Brunei? 

Mr. RUSSEL. Thank you very much, Congressman Engel. I will 

begin, if I may. 

The first thing to consider is the alternative. It has been my experience, working the Asia account for 41⁄2 years from the National 

Security Council and here at the State Department for almost 2 

years now, that without the leverage and the traction that we have 

gained through the TPP negotiations and the powerful interests, in 

the first instance of Vietnam, to accede to this agreement, we 

would not have made a fraction of the headway, nor would we have 

seen the progress in terms of loosening of constraints on civil society in Vietnam that we have seen. 

Now, many members of the committee have visited Vietnam in 

the last year or 2. No one now who goes to Vietnam can fail to see 

the tremendous flourishing of ideas, of communication, of expression, of openness. Now, don’t get me wrong. Vietnam is led by a 

Communist government. There are a large number of repressive 

and troubling policies. These are things that we raised at high-level 

dialogues. In fact, we just recently held a high-level human rights 

dialogue with Vietnam. And when President Obama has met with 

top leaders, when Secretary Kerry meets with them, he raises 

these issues head on. 

But we have seen positive steps. We have seen the release of 

prisoners. We have seen Vietnam accede to the U.N. Convention 

Against Torture and the Convention on Disabilities. We have seen 

a number of institutional reforms, including the ongoing revision of 

their criminal code and criminal penal code. That would not happen absent the TPP negotiations. And when TPP is concluded, the 

variety of safeguards and enforcement mechanisms that are part 

and parcel of this trade agreement will apply on areas such as 

labor standards. 

This agreement will bring Vietnam up to International Labour 

Organization standards. Now, we will not let off the gas in pressing 

for human rights progress in partner countries. 

Mr. ENGEL. If you—I am told that if you form an independent 

labor union in Vietnam, you are thrown in prison for 4 years. Is 

that not true anymore? 

Mr. RUSSEL. Under the TPP agreement, the Vietnamese—and 

they understand this—are obligated to accept labor unions and the 

right of assembly and the right to organize. 

I am not going to go public with the details of the negotiations 

and the commitments, but the binding labor rights elements in the 

TPP agreement, which the Vietnamese understand they will have 

to accept, are transformative in terms of allowing for labor organizing in Vietnam. 

Mr. ENGEL. Let me also ask you: You know, organized labor has 

been fighting this tooth and nail. I have not seen such vehemence 

from them since the days of the NAFTA treaty. They claim that it 

will be a race to the bottom and that it will wind up being a downward spiral, loss of American jobs because of cheap labor in Asia 

25

and Vietnam and something that would generally be not good for 

U.S. labor. How do you refute that? 

Mr. RUSSEL. Under this agreement, we will be able to do things 

like assist union officials and help them to develop practical knowledge and the skills to support grassroots union organizations. 

We will be able to improve labor rights information and access 

to legal aid for workers. We will be able to identify and assist children who are being trafficked or who are being at risk of being 

trafficked. 

Mr. ENGEL. How about the downward spiral? The fact that they 

believe very vehemently that this will cause a loss in American jobs 

and a lessening of wages, because if you—you can’t compete 

against wages from a country like Vietnam because they are so 

cheap and the net result will be a loss of American jobs or a downward spiral of what Americans will get paid. How do you account 

to those? 

Ambassador RIVKIN. Well, I would like to add to Assistant Secretary Russell’s testimony by saying, in answer to your question, 

in terms of labor, this is—and this will be—the largest expansion 

of enforceable labor rights in human history, increasing from 133 

million covered outside the United States workers to 588 million. 

And in terms of jobs, trade is a job creator, and the jobs that trade 

creates generally pay 18 percent higher than other jobs. TPP will 

grow the economy, the global economy, and it will generate jobs for 

Americans. 

Chairman ROYCE. We will go to Mr. Chris Smith of New Jersey. 

Mr. SMITH. Thank you very much, Mr. Chairman. Welcome to 

our two distinguished witnesses. 

You know on that issue that you just mentioned, the highest 

labor standards or however it might be articulated by the administration, Mr. Richard Trumka addressed that in his testimony in the 

latter part of April before the Senate, and he said 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 continued to be killed, beaten, and 

threatened for exercising basic rights like organizing with fellow 

workers for better wages and working conditions. 

You know, before the bilateral trade agreement was agreed to by 

the U.S. during the Bush administration, I and others raised many 

serious questions about the religious freedom or the lack thereof. 

The human trafficking, I believe that on trafficking, especially 

labor trafficking, Vietnam ought to be a Tier 3 country. I wrote 

that law, and I have had many hearings on it, and I am appalled 

that the administration has not designated Vietnam a Tier 3 country. 

In like manner, CPC, if you try to practice your religion in—and 

that goes for the Buddhists who aren’t part of the official Vietnamese Buddhist church, they are thrown into prison. And I have 

met with many of these people under house arrest, tried to meet 

with them when they were in prison, and to no avail. 

And the point of my comments is that the day after the bilateral 

trade agreement, there was a snap back and the Vietnamese Government basically said, ‘‘These are internal affairs, and you will 

have nothing to say about it.’’ They were removed from the CPC, 

26

as you know, by the Bush administration in anticipation of benefits 

that would flow. None of it flowed. It has gotten worse. So I—you 

know, the new normal, as you talk about, is a near total decoupling 

in real terms of universally recognized human rights and the respect for it, especially in the nation of Vietnam. 

So, you know, those human rights dialogues at times, they have 

been suspended in the past. Because, like with China, they are a 

vetting session and it does not go up the chain of command to the 

policy level. 

For example, if Vietnam continues to incarcerate labor rights organizers, what does that do to the trade agreement? Are they out 

of it? Bill Clinton delinked most favored nation status and human 

rights on May 26, 1994. On a Friday afternoon when most of us 

had gone home, I went and did a press conference because I happened still to be in Washington, and that was the end of our meaningful leverage with China on the human rights issue. 

And they have gone from bad to worse, not just on intellectual 

property and all of those issues, but especially on the human rights 

basket of issues that we care about. There are no labor unions in 

China, and there are no independent labor unions in Vietnam. So 

I am very disappointed. And maybe you could tell us what happens 

when these labor leaders continue to be incarcerated and tortured, 

what happens? Are they out of the agreement? 

And, secondly, since the textiles will malaffect our friends in 

Central America as well as in the Carolinas, has there been a 

study to determine—I mean, a good, empirical study to determine 

the job loss potential to American workers and, also, to those in 

Central America? 

I yield. 

Mr. RUSSEL. Thank you very much, Congressman. 

Please let me assure you that human rights is a central tenet of 

our approach to Vietnam. It is not decoupled. It is central to our 

engagement and the——

Mr. SMITH. Let me go on. Will you then support legislation, bipartisan legislation, I will be marking up today in my subcommittee called the Vietnam Human Rights Act? So there, at 

least, is a list of benchmarks. The administration has been against 

it in the past. And I would hope that with this probably going to 

go through, that you would at least say there is a safeguard set of 

protections when it comes to human rights in Vietnam. 

Mr. RUSSEL. Congressman, the critical phrase that you used is 

‘‘point of comparison.’’ And the question is, what is the—what are 

the two alternative futures facing us? A future in which Vietnam 

joins TPP and is subject to the enforcement mechanisms, to the dispute resolution mechanisms is obligated by treaty to honor and 

abide by ILO standards and principles, ILO conventions. They are 

binding on Vietnam. That is the future that we want for——

Mr. SMITH. How is it enforced? 

Mr. RUSSEL [continuing]. Interest of human rights. 

Mr. SMITH. Are they out of the treaty? Are they out of the benefits that will be gleaned from by being in the treaty? 

Mr. RUSSEL. The treat it itself like——

Mr. SMITH. Because WTO has not done that—sorry. 

27

Mr. RUSSEL. It has sanctions, it has enforcement mechanisms, 

and it has dispute resolution mechanisms. 

Mr. SMITH. What are the enforcement mechanisms and how 

quickly can they be actuated? 

Mr. RUSSEL. Well, I will take that question and get you an answer, Congressman. 

Mr. SMITH. I know I am out of time. 

Mr. RUSSEL. But there will be no enforcement mechanisms and 

no standards without TPP. 

Mr. SMITH. Oh, but there will be. If we had human rightslinkaged language, like our Vietnam Human Rights Act, a total bipartisan piece of legislation, we would have leverage. And two Congresses in a row have passed it. Hopefully, it passes again. We 

want your support for it. And, again, in both of your testimonies, 

there was not one mention of human rights. 

Chairman ROYCE. And, Secretary Russel, we will pass that out 

of this committee and off the floor with a large bipartisan majority. 

And I intend to see it passed out of the Senate. So that will give 

us additional leverage, Mr. Smith, on the human rights issue. 

We are going to go to Mr. Brad Sherman of California. 

Mr. SHERMAN. Mr. Russel, that legislation that chairman spoke 

of, is the administration going to veto it or can’t you tell us? 

Mr. RUSSEL. I cannot—I can’t——

Mr. SHERMAN. Thank you. 

Mr. RUSSEL [continuing]. I can’t speak to that. 

Mr. SHERMAN. Thank you. 

I agree with the chairman, we need a smart fair trade policy. We 

have the largest trade deficit the world has ever seen 20 years in 

a row. That is right. The best workers, the best entrepreneurs, the 

best scientists, the most vibrant economy loses to every nation 20 

years in a row. 

Why do the best lose? Because we—for 20 years, we have had the 

worst trade policy in the world, and now we are asked to double 

down on it. We are told that our trade deficit gets better with free 

trade agreements. That is simply false. 

I ask to put in the record this statement from public citizen that 

shows a chart that supports the statement that trade deficits surge 

under FTAs. U.S. trade deficits have grown more than 425 percent 

with FTA countries, while declining slightly with non-FTA countries. 

Now, what is the confusion on the numbers? The proponents ask 

us, when we calculate the effective FTAs, to ignore NAFTA. That 

is like going to the zoo and ignoring the elephants. The fact is, 

when you include all our FTAs, including NAFTA, we have seen a 

425 percent increase in our trade deficit with FTA countries. 

The other—NAFTA is the biggest thing we have done perhaps in 

trade. The other biggest almost equally big thing we have done is 

MFM for China. We were told that would have de minimus effect 

on our trade deficit. The administration at the time told us a $1 

billion increase; they were off by 30,000 percent. 

Every lobbyist in Washington whose job it is to create higher 

profits is telling us to vote for the deal, and every Representative 

in Washington whose job it is to create higher wage is telling us 

to vote no on the deal. Maybe they are right. 

28

We are given the straw man that the choices between the 

present system where we go into negotiations with the lowest tariffs in the world, or get going with a trade deal that is even worse. 

Real trade negotiation would be you start and you go in and you 

threaten to increase our tariffs. You put us on an equal playing 

field in the negotiations. You don’t re-announce your surrender. 

Now we are told in Vietnam that we are going to get free access 

to their markets, except they don’t have freedom and they don’t 

have markets. We are told that they will change their tariffs. The 

Communist Party of Vietnam controls every importer. There is not 

a single decision that will be made according to published rules or 

free access rules. Every decision will be made based on Communist 

Party policy; and they will buy our goods to the extent they choose 

to, and it will have nothing to do with this agreement. 

We are told that they will have a right to organized labor unions, 

because you can’t arrest them for organizing a labor union. All you 

have to do is plant drugs on them and arrest them for that. Do we 

really believe that the Vietnamese Government isn’t going to plant 

drugs or come up with some other criminal charge against any effective labor leader? 

And then, Mr. Smith, imagine how difficult it is going to be to 

get U.S. support to enforce these labor agreements when you have 

the Nike lobbyist on the other side? This is the end of a chance for 

free labor unions in Vietnam. 

But we are told by Ambassador Rivkin not to ignore China and 

we shouldn’t. What does China get in this agreement? They get a 

deal that says ‘‘never look at currency in trade agreements.’’ But 

they get more. Go to the basement, look at the rules of origin. 

Goods that are admitted to be 50, 60, 70 percent made in China, 

finished in Vietnam or Japan, come into the United States on a 

fast track duty free. And that is when they admit they are 50, 60, 

70 percent made in China. Obviously, the businesses are going to 

bring in goods that are 70, 80, 90 percent made in China. They 

slap a ‘‘Made in Japan’’ sticker on it, bring it to the United States. 

What could be a better deal for China than free access to our 

markets and they don’t even have to sign an agreement, which 

they wouldn’t adhere to anyway. 

This is a deal worthy of a country that for 20 years has had a 

trade policy capable of mutilating our trade flows, even though we 

have the best workers, the best entrepreneurs, and the best businesses in the world. I yield back. 

Chairman ROYCE. Ambassador Rivkin. 

Ambassador RIVKIN. Congressman Sherman, I couldn’t agree 

with you that we have the best workers in the world, and all we 

are asking is a level playing field where we can let our workers 

complete evenly around the planet so that we can win. And we will 

win when given the chance. 

Sir, I would like to address your comment about trade surpluses 

and deficits. For the record, in my mind, NAFTA is not an elephant 

in the room. In fact, no countries in the world buy more made-inAmerica products right now than Canada and Mexico. There is a 

$56 billion trade surplus in goods and services with NAFTA partners in 2013. This excludes energy. There is a three times surplus—three times more than before NAFTA. 

29

Mr. SHERMAN. Ambassador, if I can reclaim my time. You can’t exclude energy. If we send $1 billion to Mexico for oil, that is $1 billion they could spend in the United States. Can’t ignore NAFTA. You can’t ignore energy. 

If we are able—why not—you can’t ignore agricultural. You can’t 

ignore cars. That would be—the fact is that our trade deficit with 

Canada before the deal was $23 billion and after 58. Our trade deficit with—we had a surplus with Mexico before the deal. Now, we 

have a $98 billion trade deficit. Those are the facts. 

You can hide NAFTA. You can hide oil. But the fact is when we 

ship money out to buy oil, we have got to be able to export something and you can’t say oil doesn’t count. 

Ambassador RIVKIN. If I may respectfully, sir, oil is as much 

about geography as it is about trade. But I hear you. 

You talk about agricultural. NAFTA has a $3 billion surplus in 

agriculture. And agriculture exports are four times what they were 

before NAFTA went into operation. Services with NAFTA, $44 billion surplus. Manufacturing, U.S. manufacturing exports went 

from $126 billion to $473 billion in 2013 between ’93 and——

Mr. SHERMAN. Ambassador, we are both products of the LA 

schools. Where I went to school, they taught us to both add and 

they taught us to subtract. If you increase exports by $2 billion and 

you won’t tell us that you increase exports by $4 billion and you 

have increased the deficit by $2 billion and that that costs 20,000 

Americans their jobs and costs them the American dream, then, 

you know, yes, you are going to increase exports, but you are going 

to increase imports more. And that is why our trade deficit with 

Canada is now $82 billion. It used to be 23. With Mexico, it is $99 

billion. It used to be a positive 2. It has gotten $160 billion worse. 

And all you can do is say, oh, but we are increased agriculture 

exports by $1 billion or $2 billion. That is part of the $160 billion 

worse. Look at the bottom line. 

Ambassador RIVKIN. And I would, sir, respectfully argue that the 

trade deficit is obviously extremely complicated and is not solely directed to trade deals. There is a lot of other factors that go into 

that deficit——

Mr. SHERMAN. Ambassador, if proponents of the deal cite the 

number——

Chairman ROYCE. In terms of the time—in terms of the time 

limit. 

Mr. SHERMAN. My time has expired? 

Chairman ROYCE. I think your time is far——

Ambassador RIVKIN. I think your time has expired. 

Mr. SHERMAN. I think my time has expired as well. 

Chairman ROYCE. All right. All right. We are going to go to 

Ileana Ros-Lehtinen of Florida. 

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

Yes, we must counter China’s expansion and increasing aggression whenever and wherever possible. And we must have freedom 

of navigation, free flow of commerce by pushing back against China’s territorial claims and its manmade islands in the South China 

Sea. 

However, as we negotiate trade deals like the Trans-Pacific Partnership, TPP, we must not lose sight of the values that we are tryVerDate 0ct 09 2002 11:01 Jul 16, 2015 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 F:\WORK\_FULL\051415\94606 SHIRL
30

ing to protect, like human rights as we achieve trade pacts with responsible nations. And that is why I oppose TPP because of the inclusion of Vietnam in the deal. 

The people of Vietnam are living under a brutal Communist regime, which is imprisoning thousands of political dissidents, prisoners of conscious, and ethnic and religious minorities. In Vietnam, 

violence and discrimination against women and minorities are common, and the judicial system is corrupt. Violations of religious freedom are so prevalent that the U.S. Commission on International 

Religious Freedom is recommending that Vietnam be added to the 

State Department’s list of countries of particular concern, something the Commission has done since 2001. 

In Vietnam, there is no rule of law. There is no freedom of the 

press. There is no freedom of speech. There is no freedom of assembly, and access to the Internet and information are all severely restricted. Child labor and forced labor continue in conditions that 

are already poor, and sex and human trafficking remain horrendously rampant. And this is a country we want to call a trade partner? 

In addition to the human rights abuses, there are reports that 

TPP would allow Vietnam and China, using Vietnam as an access 

point, to do serious harm to the textile industry in nations in Central America with which we already have free trade agreements. 

There are estimates that Vietnam and China subsidized textiles 

would put hundreds of thousands of people in Central American 

nations and the Dominican Republic out of work. Rights that we 

are—right when we are dealing with enormous social and security 

problems in our own region. 

According to some of the CAFTA–DR countries, if Vietnam gets 

its way, the combination of its own massive state-owned textile and 

apparel countries and subsidized inputs from China may come in 

duty free into the United States. This could wipe out most of the 

textile and apparel industry in our Western Hemisphere. I am concerned that the loss of this sector to China would result in mass 

unemployment, increase social problems and mass migration. 

Free trade agreements, especially with worthwhile partners in 

Asia, are needed in order to secure U.S. economic interests and to 

strengthen our alliance to counter Chinese aggression. But they 

must not come at the expense of human rights and they must take 

into account the interest and the obligations we have with our free 

trade partners, especially in our own hemisphere. 

So following up on the points that Congressman Smith and 

Ranking Member Engel made, I was disappointed that neither of 

you mentioned human rights a single time in your written testimony. How important are human rights to the administration’s 

trade agenda? What have you communicated to the Vietnamese regime about its human rights practices? What repercussions will the 

regime suffer under TPP if it continues to violate the human rights 

of its people? 

You testified that TPP has enforcement mechanisms for violation 

of labor standards. What are they and what about other human 

rights? What mechanisms are in place to flag those violations? 

31

And, lastly, will TPP allow state-subsidized Vietnamese and Chinese textiles to enter the market? And what impact would this 

have on a textile industry in CAFTA countries? 

Mr. RUSSEL. Thank you very much, Congresswoman RosLehtinen. I will begin and then turn to Charlie Rivkin on rules of 

origin and textiles, if I may. 

First and foremost, human rights is central to our foreign policy 

and central to our Vietnam policy. It is a key element——

Ms. ROS-LEHTINEN. But it is not in your testimony? 

Mr. RUSSEL. Well, my testimony addresses U.S. values. And the 

values component includes rule of law, includes transparency, includes good governance, includes labor standards, includes antitrafficking. And that is what we are working on with Vietnam. 

That is what we seek to advance through TPP. 

When the President of Vietnam was in Washington, President 

Obama and I were there. The two leaders agreed, in a joint statement, that protecting and promoting human rights will be a key 

element of the U.S.-Vietnam comprehensive partnership and——

Ms. ROS-LEHTINEN. Excuse me. But you realize that when you 

come and you testify and we have the written testimony and your 

oral testimony and it is not mentioned, I think that that telegraphs 

a very strong message to the folks overseas. They hear what we 

don’t say as well. 

Mr. RUSSEL. Congresswoman, I am and certainly Secretary Kerry 

and President Obama are abundantly on record. There should be 

no doubt that human rights is central to our foreign policy. And in 

Vietnam in particular, we push for lifting restrictions on freedom 

of expression, we advocate for the release of prisoners of conscience, 

and we push for all Vietnamese to be able to express their opinions. 

I believe that TPP does not come at the expense of human rights. 

TPP is a driver for human rights in Vietnam. 

Ms. ROS-LEHTINEN. And what about the enforcement mechanisms? You say we have it for labor standards. What about other 

human rights? What are the mechanisms that we have enforcement? 

Mr. RUSSEL. Well, if I may, before I get to enforcement, let me 

tell you—may I share one episode. There is currently a Facebook 

campaign underway in Vietnam called ‘‘I Hate the Communist 

Party Because,’’ and it shows individual citizens, Vietnamese citizens standing up and holding placards that are posted in Vietnam 

on Facebook with their objections to the Communist Party’s Policies. This has been going on for months. The government accepts 

it. It is a direct function of the government’s determination to do 

what it has to in order to join TPP. That is enforcement mechanism 

number one. 

Beyond that, within the agreement is——

Ms. ROS-LEHTINEN. So let me get this straight——

Chairman ROYCE. Well, wait. Wait. 

Ms. ROS-LEHTINEN. That is okay. Thank you, Mr. Chairman. 

Chairman ROYCE. Could we just hear the witness finish because 

we are out of time and then we will go to the next question. 

Mr. RUSSEL. The binding enforcement elements of the trade 

agreement are similarly binding on the provisions regarding labor 

32

rights, standards, government transparency; and they create opportunities for either dispute resolution under the TPP mechanisms, 

or even for sanctions and the suspension of the benefits that accrue 

to Vietnam as a trading partner under TPP. 

Chairman ROYCE. Okay. Okay. We are going to go to Mr. Gregory Meeks of New York. 

Mr. MEEKS. Thank you, Mr. Chairman. 

And I want to give the witnesses some more chance to answer 

some of the questions. But, you know, it is hard to constrain oneself, especially, you know, because there is no one more for human 

rights, environmental rights, environmental standards than I am. 

I think doing nothing doesn’t improve anything. It is being engaged is what will make an improvement. To sit back and do nothing doesn’t change anything. And folks look at us, if we sit back 

and do nothing. Geopolitically, there is a big question of whether 

or not we should be engaged in the region or not. 

Now, I recently traveled to the region. I have had conversations 

with several different heads of states in the region, asking them 

what do they think? And let me tell you, they are focused in what 

we are doing in Congress. And, quite frankly, they say very clearly, 

whether the Congress does not give the President first TPA authority, number one, we don’t get the best deal, because we are not 

going to be able to negotiate the best deal because they will think 

that Congress will just come back and not have an up-and-down 

vote or we know—you know, whatever, try to put 1,000 amendments in, and we know that we know how to put poison pills in 

to kill a bill. 

So the question is, do we engage in the region or not? And I 

think others are looking and because—I believe China is licking its 

chops, hoping that we don’t engage because then it can engage, as 

it is doing now. And they are setting up various trade agreements 

with countries in the region. 

And, believe me, if you look at those trade agreements, there are 

no environmental standards, there are no labor standards, there is 

no anything about—anything about helping human beings get a 

lift, a hand up. 

So the question is, if we really want to get involved in trying to 

say that we want what we believe in and lifting our standards—

and I have got to say this, too, because always I love my country. 

This is the greatest country that this planet has ever seen, in my 

estimation. But we have come a long way as a country. Because the 

fact of the matter is, we have learned from our mistakes, our mistakes. When we were a developing nation, we didn’t have these 

rules. When we were building, we built a lot of our country on 

slave labor. 

We have more people incarcerated in the United States right now 

than any civilized nation. So we need to engage. We need people 

to learn from our mistakes, admit that we have made mistakes, because there is no one that is perfect and move from there. 

There is no question that we have lost a lot of jobs. But I say, 

if you look at the jobs that we have lost, it is because of our great 

technology and innovation. We have lost more jobs. I just went to 

the supermarket the other day, no longer do there need to be—

33

young people used to be at the counter, you know, counting. You 

just check yourself out. 

So where do we go to gain more jobs? Well, we are told that 40 

percent of the market is now part of this trade agreement. I am 

told that by the year 2020, 1.2 billion middle class folks will be in 

Asia. So it would seem to me to make sense, as we are talking 

about the future, we want to make it here and be able to sell to 

that 1.2 billion middle class folks that is going to be in Asia and 

other parts of the world. That is why we have to do TPP, also. We 

only represent 5 percent of the world’s economy—the world’s buying population. So if we are going to create jobs we have got to do 

it outside of here and that is what this is all about. And I didn’t 

want to take up all of my time talking, but I just did just about. 

So my question is, though: If we do nothing—I mean, even with 

the geopolitical aspects of it, if we do nothing, what happens to our 

Nation and where do we go from there? 

Mr. Ambassador. 

Ambassador RIVKIN. Congressman, first of all, I wanted to thank 

you for everything you do for American businesses abroad. I had 

the chance to witness it firsthand when I served as Ambassador in 

Paris, the delegation that you led. 

On your question about geopolitics, sir. Secretary Kerry, from the 

very first day of office, said that economic policy is foreign policy 

and foreign policy is economic policy. And this deal, this TPP, is as 

much strategic as it is economic. It gives us a chance to cement our 

geopolitical relationships with key allies around the world. 

As you mentioned, sir, about the 95 percent of consumers outside 

the United States, the TPP zone alone is 30 percent of trade, 40 

percent of GDP, and 50 percent of the future projected economic 

growth on the planet. America needs to be present. It needs to define these rules. It needs, as Assistant Secretary Russel said, our 

values need to be driving this process. 

And if we don’t write these rules, to your question, Mr. Congressman, I can assure you that somebody else will. When Secretary of 

Defense Ash Carter says that he would—values TPP as much as 

a new aircraft carrier, that says a lot from the Secretary of Defense. It shows you the geopolitical reality of trade. 

And it is important more now than ever, given what you suggested about how there is 525 million middle class consumers in 

Asia now, that number is going to go to 2.7 billion by 2030, which 

will be six times the population of the United States. Now more 

than ever, we need to engage in that region and we need to set the 

rules for that region or someone else will, sir. 

Chairman ROYCE. Mr. Rohrabacher from California. 

Mr. ROHRABACHER. Thank you very much, Mr. Chairman, and 

thank you for providing this forum for a lively discussion. 

I would like to identify myself with Ms. Ros-Lehtinen’s statements as well as Mr. Smith’s statements. 

Prior to this—let me ask both of our witnesses, I take it that 

both of you have—could you tell me just a yes or no, you have actually read this agreement, TPP, have you read the agreement? 

Ambassador RIVKIN. Sir, my trade——

Mr. ROHRABACHER. May I have a yes or no? 

34

Ambassador RIVKIN. I am fully briefed on the agreement, but I 

have not read——

Mr. ROHRABACHER. You have not read it. Have you read it? That 

is enough. 

Have you read it?

Mr. RUSSEL. I have read the parts that are relevant. 

Mr. ROHRABACHER. No you haven’t. I am not saying the parts, 

have you read the agreement as it stands now? Neither one of 

them have done that. Let’s be very clear, you have been here testifying about all these magnificent things and you haven’t even read 

the agreement. Come off it. This is what we are getting here, ladies 

and gentlemen. All these wonderful, wonderful descriptions, and 

you haven’t even read the treaty. You know what? The American 

people aren’t permitted to read the treaty. And you are supposed 

to be giving us the information and you haven’t even read it. 

Mr. Chairman, I am dismayed by that answer and we have every 

American citizen—we have heard all of these predictions on your 

part and haven’t bothered to read it. Now let me ask you this: Do 

you think that the agreements that we made with China—you 

know what, this is the big deal, I call it the ‘‘hug a Nazi, make a 

liberal theory’’ that we were just going to open up to China and 

they were going to then democratize. Do you think they got—let’s 

put it this way: Do they have a rule of law now in China? No. Do 

they have free labor unions in China? No. Do they have opposition 

parties in China? No. And you think this is going to work in Vietnam, but it didn’t work in China. Again, the contradiction between 

reality here and what we are being fed on this TPP is——

Okay, let me ask you again, from what you have read in this 

TPP, how does it affect intellectual property rights? Is there a provision now in TPP that you were advocating that tells us that we 

must publish our patent applications in the United States after 18 

months whether or not the patent has been granted. Is that part 

of the TPP? 

Ambassador RIVKIN. Sir, intellectual property rights are essential 

to any investment. 

Mr. ROHRABACHER. I asked you a specific question on a specific 

part. Is there a provision in the TPP that mandates that intellectual property on the intellectual property rights area, that patent 

applications have to be published after 18 months, whether or not 

they have been granted—the patent has been granted? 

Ambassador RIVKIN. The essence of investment has to do with 

transparency predictability and rule of law, and rule of law is 

clearly involved with intellectual property protections——

Mr. ROHRABACHER. Can you answer the question? I have given 

you a yes or no, you are here testifying about a treaty. I am asking 

you a specific on it, you have already told us you haven’t even read 

it yet. Come on, is that part of the treaty? 

Ambassador RIVKIN. We will get you a specific answer form 

USGR on your specific question. 

Mr. ROHRABACHER. Well, I hope so, and I hope it is soon, because 

I have information, people have told me that something that we defeated here in this House 20 years ago, an attempt by huge multinational corporations to change our patent law, they are still trying 

do it, but what we defeated 20 years ago they are trying to sneak 

35

into this treaty. And what it says, my fellow colleagues, is that 

after 18 months if we have an application for a patent, that patent 

has to be published whether or not it has been granted. I call that 

the Steal American Technologies Act, because it gives all of our 

competitors, all of these people that you had trust in with this 

TPP—the fact is all of them will have our utmost secrets, even before the patent has been granted and the person who has invented 

this has the right to defend that creation that belongs to him or 

her. 

I am—again, that was a very specific question, it is very important, I expect to get an answer within 24 hours. It is a very easy 

one to confirm one way or the other. 

Mr. Chairman, I think we have heard a lot of platitudes, we have 

heard how grandiose things this is going to be from people who 

have not even read the treaty. And I—and the American people are 

being denied the right to read the treaty. Let’s not be so optimistic 

at a point when we know that the same approach has not worked 

with China and has not worked to make this a more secure world. 

Thank you very much. 

Mr. RUSSEL. If I may put Congressman Rohrabacher’s anxieties 

to rest on two important points. One, you associated yourself with 

the concerns expressed by Congresswoman Ros-Lehtinen about 

human rights. I would just point out in my written testimony I do, 

in fact, on page 6 speak directly to the American brand and promoting a political system based on a rule of law, protection of civil 

liberties, safeguards against corruption or the imprisonment of citizens for ideas. So even on the economically focused thing we are 

focused on human rights. 

Secondly, with regard to——

Mr. ROHRABACHER. Do you believe there is a rule of law? 

Mr. RUSSEL. And secondly, Congressman if I may say again, the 

issue is what are we choosing between. We, under TPP, will be able 

to obtain, and insist on, and enforce changes to IP rules and laws 

in other countries. Our laws will not change. We are raising their 

standards. We are, via TPP, making significant advances in terms 

of the ability to move data and move information and to protect it. 

Mr. ROHRABACHER. So if we sign this treaty into law that this 

provision in the treaty does not apply to us? 

Chairman ROYCE. No. I think what Mr. Russel was saying is it 

is presumed this that language is not in the agreement because 

what he is saying is that it is current U.S. law that would apply, 

and U.S. law is not so defined. We will get an answer, Mr. Rohrabacher, we will get an answer about whether or not this provision 

is there. But his answer implies that it is not changing the rules 

of the road with—and maybe we are going to get a further clarification right now. Do you have any additional information there, Mr. 

Secretary? 

Mr. RUSSEL. We will provide a written answer. 

Chairman ROYCE. Provide an answer to Mr. Rohrabacher and me 

on that issue. 

Mr. ROHRABACHER. The one point this treaty it will apply to 

them but not will apply to us? 

Chairman ROYCE. Well, what he is stating, what Mr. Russel is 

stating is that the language that you presume is in there. There 

36

may not be the language in there—we need to get to the bottom 

of that and we will do that shortly, but in the meantime, it is Mr. 

Albio Sires of New Jersey’s time and we recognize him. 

Mr. SIRES. Thank you very much. You know, we have this strong, 

vibrant trading relationship with Taiwan, and we send most of our 

agricultural products—we have a good break exporting to Taiwan. 

Where do they fit in all this? Are we just going to forget that they 

have been our friends for all these years or how do they fit in this 

TPP? I give you a nice easy question, I am not going to ask you 

if you read it. Thank you. 

Mr. RUSSEL. Taiwan is a very, very important partner to the 

United States, we have thriving unofficial relations, and we are 

deeply committed under the Taiwan Relations Act to support for 

maintaining Taiwan’s freedom from coercion and its ability to 

maintain and protect its democracy. Taiwan’s economy is a central 

piece of that. It is also a glowing example of a free society, of an 

open society, of a free market society. 

We are working hard with the Taiwanese now in TIFA talks to 

promote liberalization. We are also enjoying a renaissance of bilateral investment in each other’s economies. In fact, a very significant delegation was recently in the United States to attend the Select America Commerce and White House-lead program on investment. We are looking at a bilateral investment agreement, something we are researching at the moment. And in principle——

Mr. SIRES. They are not included in this TPP, right? 

Mr. RUSSEL. They are not a negotiating partner in TPP. They 

have informally expressed interest. We have informally welcomed 

their interest. Right now the focus of our negotiators is exclusively 

on the challenge of getting TPP done with among the existing——

Chairman ROYCE. If the gentleman would yield. The current conundrum is that the bilateral investment treaty has not been finalized between Taipei and Washington. And until that happens, this 

is held in abeyance. So when it happens, the presumption, I think 

it that Taiwan will have a seat at the table in the second round, 

correct, Mr. Secretary? If that happens? I have been led to believe 

that and I think Mr. Sires and I would like to know the answer 

to that. 

Mr. RUSSEL. I would be getting ahead of myself, and the President, and the trade representative if I said that there is a presumption, but we have indicated that we welcome Taiwan’s interest. And certainly Taiwan with an economy that adheres to the 

rule of law and an important partner and trading partner is the 

kind of country that we would give serious consideration to as a 

candidate, as I suspect most of the other 11 TPP members would. 

Ambassador RIVKIN. To build on what Secretary Russel said, we 

not only appreciate their interest, but we are deeply engaged on an 

economic level. In fact, I am heading to Taiwan at the end of this 

month to discuss economic issues. And Mr. Chairman, for just 1 

second I wanted to make sure that the record—I can correct the 

record a little bit about an allegation of transparency and whether 

or not Assistant Secretary Russel and I have read the agreement. 

I just want to point out that I have, in the Economic Bureau, some 

of the world’s most expert foreign service officers and civil service 

officers on trade. My team will be at the next round of the TPP neVerDate 0ct 09 2002 11:01 Jul 16, 2015 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6633 F:\WORK\_FULL\051415\94606 SHIRL
37

gotiations in Guam. I am briefed on a daily basis on what is happening on that deal. 

Congress has the ability to see the deal, USGR’s Web site is 

highly full of information. We consult industry representatives environmental groups, NGOs, labor. In order for the American people 

to get the best deal, the USGR needs some latitude negotiation. 

But certainly, I refute the idea that we aren’t familiar with the 

Trans-Pacific Partnership. I believe that when you have 60 days 

before the President signs it available for the entire American public to see, you will be able to see whether we followed Congress’s 

wishes, and certainly what Assistant Secretary Russel and I say 

today is accurate. 

Mr. SIRES. May I ask another question now to clarify that? 

Chairman ROYCE. Mr. Sires, it is your time, yes, sir. 

Mr. SIRES. Thank you, you know, my concern with the question 

that I asked you is I know China continues to incite conflict and 

it keeps this region asserting itself. Won’t they object to us to continue dealing with Taiwan? Especially on the economic level. 

Mr. RUSSEL. We have a vigorous and a thriving, ongoing economic and trading relationship with Taiwan. That will not change. 

The leadership in Beijing is well aware of our determination and 

commitment to continue to build that economic relationship. China 

itself has a tremendously close intertwined economic relationship 

with Taiwan. Taiwan is heavily invested in the mainland. And I 

see no indication or evidence that the PRC seeks to, in any way, 

disrupt or preclude the Taiwan economy from continuing. 

Mr. SIRES. My last question is with all these recent events with 

China, how have the other nations in the region reacted to this 

event? 

Mr. RUSSEL. With deep concern, and by soliciting affirmation 

from the United States that we will continue to serve both as the 

security guarantor in east Asia and the Pacific, and also as the 

champion of the rules and the global norms that prevent large 

countries from bullying the small. 

Mr. SIRES. There was just an incident yesterday or the day before yesterday, on the seas with one of our ships. I don’t know if 

you—I just read that somewhere. 

Thank you very much, Mr. Chairman. 

Mr. SALMON [presiding]. Thank you. The Chair recognizes himself because I have been chomping at the bit. I actually just led a 

codel to Vietnam with Mr. Lowenthal, who, by the way, a Great 

American, and Mr. Emmer, who is another Great American. It was 

a real pleasure to be able to go with some really open-minded folks 

that actually want to learn something instead of having made already made up their minds, I really appreciate that. 

Also we were accompanied on the trip by State Department personnel Julie Bulgrin. And if everybody was as great as her, I think 

that this world would be a lot better off. We really appreciated her 

great leadership and she represented the State Department very 

well. Then also from the full committee Brady Howell was there, 

and I just can’t say enough positive things about Brady. What a 

great guy and we are really just fortunate. 

Actually, I have gone into that secret room and I have gone 

through the agreement. And I know, you know, when you are talkVerDate 0ct 09 2002 11:01 Jul 16, 2015 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 F:\WORK\_FULL\051415\94606 SHIRL
38

ing about the agreement, it is a moving target, and things change 

as the negotiations change. And so, I think it was a bit of an unfair 

question to ask if you have read the agreement. Of course, you 

have read through the agreements, but when it gets right down it, 

it changes on a frequent basis. I have read through the agreements 

and I have looked at some of the piece parts that especially have 

concerned some of the members of this committee. Like the allegation that we can simply have a product that will be manufactured 

in China and then slap a Vietnam label on it and have it come into 

the United States. 

Let me just state for the record there are very, very clear rules 

of engagement on rules of origin. And I think there are sufficient 

safeguards to make sure that something like that doesn’t happen. 

Also let me say for the record that after having gone to Vietnam, 

and seeing the animosity personally between Vietnam and China, 

it will be a cold day in hell before they would slap a label on something made in China in Vietnam. And they want those jobs in Vietnam, they don’t want them in China, they want them in Vietnam. 

So the idea that they are going to slap some Vietnam label on 

something made in China is complete claptrap. So I think that that 

needs to be on the record. 

Also on some of the human rights issues, knowing that the members of this committee that were with me on the trip placed human 

rights at the very top of the agenda, and every meeting that we 

had I think the very first question that came out of our mouths 

was regarding human rights, while I think that Vietnam that is a 

long way to go in terms of human rights. We have met with several 

of the dissidents, including we met with Patriarch Thich Quang Do 

of the United Buddhist Church of Vietnam, who is not just a hero 

in Vietnam, but is a hero in the world because he stands for the 

things that we all care about. 

Mr. Lowenthal, who represents, I believe, the largest, if not the 

largest diasporas, Vietnam diasporas in the entire United States in 

his congressional district, was clear to ask those questions regarding labor, regarding human rights. And I believe that we have got 

answers that satisfies our questions. Now the answers to those 

questions weren’t always the way we exactly wanted them to be, 

but almost to a tee, everyone of those leaders, including Patriarch 

Thich Quang Do. 

When we asked them what they thought about TPP, whether it 

would help or hurt the situation, they all said that they believe 

that it would help the situation, and that it would be a positive 

thing for the U.S. to be constructively engaged. Because guess 

what? We export lots of things, but the most valuable thing that 

we export to these countries is our ideals. The things that we believe, the things that we stand for. And if we are not engaged, I 

think like Mr. Meeks said, if we are not having a seat at the table, 

then we are not going to impact anything. If we are just going to 

sit here and gripe from our Ivory towers here in Washington, DC. 

And not be constructively engaged don’t expect anything to be 

change on the ground in Vietnam. But if we do have these kinds 

of constructive agreements, I think as was mentioned, it impacts 

so much more than just trend, it is a major geopolitical tool that 

39

we have to try to influence that region for a very, very positive direction. 

As for the comment that was made from one of the people on my 

side of the aisle, that you didn’t read the agreements and the 

American people are never going to be afforded the ability to read 

the agreements. After having looked at some of the language myself, I know that that is also claptrap too, because after all is said 

and done, the American people are going to be given 60 days to review the agreement. I know that has all been made public. They 

are going to be given 60 days to review the agreement as are we 

as Members of Congress before we give an up-or-down vote. We 

have not abdicated our responsibility for trade under Article 1, Section 8 of the Constitution. It stays with us. And ultimately, it is 

us that will give an up-or-down on it after 60-day review. I don’t 

know of any other trade agreement in the history of the United 

States that has afforded that much transparency to the American 

people to be able to see exactly what is going on. 

So, I get a little hot and bothered too, but I get hot and bothered 

when I see things misrepresented for political expediency. And I 

belive that while I believe we have a long way to go in the region 

on some of the issues that we care about, we don’t have a seat at 

the table, we don’t have an ability to influence. 

Okay, that is my diatribe. 

Mr. CONNOLLY. Would my friend yield just for a second? 

Mr. SALMON. Yeah, I sure would. 

Mr. CONNOLLY. First of all thank you for your comments, very 

passionate and very eloquent. Just a little footnote to your point 

about the sort of, I think, pseudo argument about a secret, nobody 

can see it and nobody can read it. But I would hope that those critics would have——

Mr. SALMON. Would have read it. 

Mr. CONNOLLY. No, but I would hope those critics would hold 

themselves to the same standard, because most of them have 

signed on in opposition without one word being seen or being made 

available. They didn’t need to see it to decide they were going to 

oppose it. And you can’t have it both ways. You can’t insist that 

something not be ‘‘secret’’ when it doesn’t matter whether it is open 

or secret apparently to you, you have decided to oppose it. 

Mr. SALMON. I think you have made an excellent point. Right 

now, any Member of Congress, any Member of Congress can go into 

that top secret room, and they can look at the entire document. 

They can spend as many hours as they want in that room, reading 

every word, crossing every T and dotting every I. And if they don’t 

want to do that, then they have nobody to blame but themselves, 

so I appreciate the comment. 

I do have one question because I think it would be valid to get 

an answer, it is on immigration. Ambassador Rivkin, I am getting 

a few questions from my constituents concerned that TPP might 

hinder our ability to manage our international—excuse me, our national immigration policy, can you just speak to that concern? 

Ambassador RIVKIN. Excuse me, but could you just clarify exactly 

how? 

Mr. SALMON. Some of my constituents, in fact, many right now 

because apparently there is some kind of an email chain going out 

40

there, are concerned that if we sign on to this agreement, that 

somehow we are going to be compromising our immigration standards and that our immigration standards will be ruled by that 

agreement rather than our own immigration policies. 

Ambassador RIVKIN. I think there is a common misunderstanding about the part of TPP that is called ISDS, the investorstate dispute settlement, which may be where that is coming from. 

I want to assure you that ISDS, that no private company or individual can overturn domestic laws, or overturn regulation. President Obama would never sign any such deal. 

Mr. SALMON. I read that section also, that is my understanding 

as well. Thank you very much. 

The Chair would go to Mr. Bera. 

Mr. BERA. I appreciate the comments of my colleagues from Arizona, Mr. Salmon. This is an incredibly important vote that will be 

taking on an important piece of legislation. Let’s just look at our 

history as a Nation. If we look at the second half of the 20th century, America is a benevolent nation, and the would has benefited 

from American leadership, sometimes to our own detriment. We 

did not have to rebuild Europe post World War II, but we did, we 

did through economic development, we did Free Trade. We did not 

have to rebuild and help the nations in the Asia Pacific region, 

Japan and others become the economic powers that they are, but 

we did. Because it represents our values as Americans, we are a 

benevolent Nation. 

But fast-forward to where we are today. These are competitor nations, and that is not a bad thing because we have lifted billions 

out of poverty; we have created stable democracies; we have created stable allies. But when we are looking at the rules of the 21st 

century, we are in a very competitive global marketplace, and it is 

a question of who is going to set the rules. I firmly believe, and I 

think the nations that are in the Asia Pacific region firmly believe 

that they want to play by the rules that the United States sets. 

Here’s an example, I had a chance to travel to China with some 

of my colleagues, including Mr. Salmon, when we are talking to 

business leaders in China, here are the rules that we have to operate under. We talk to one of our auto manufacturers, in order to 

do business in China, the Chinese state-owned auto industry has 

to own at least 50 percent of that business. They can’t import cars 

to China because there is a 25 percent tariff there. And we can see 

the writing on the wall. What they are doing is they are learning 

how to manufacture cars. They are learning from the best in the 

world, our auto makers. And fairly soon, they will then say, we are 

going to buy the other 50 percent or 40 percent, kick us out, and 

start making those cars, taking our technology, taking our intellectual property. That is why this is so important. 

And what is China doing with its economic power? We are seeing 

what is happening in the South China Sea, we are seeing the tensions that are rising there. We are seeing China pen deals with 

Pakistan to sell 8 submarines. They are not operating in a benevolent Nation. We are when we invest in Africa we are doing so to 

help the African countries grow and develop. When China invests 

in Africa, they are doing it for a singular purpose, to extract those 

minerals and so forth. And when they have taken what they can, 

41

they move. They are not leaving behind better countries. So that 

is what is at stake here. This is as Secretary Carter said a geopolitical national security issue. I mean, this is a seminal issue of 

what the 21st century looks like. I think this is why this vote is 

so critical. 

I will make one other point. To all my colleagues, what we are 

discussing in terms of our most immediate vote is giving the President the ability to negotiate the deal. Now that bill that is before 

us is not a long bill, everyone can actually access it, everyone in 

the public can read it, if they want. It is giving the negotiating parameters and it does give solid negotiating parameters. And I 

would encourage all my colleagues, I would encourage everyone in 

the American public to go read the bill and look at the parameters. 

Now if the President negotiates a bad bill, we will get a chance to 

vote on that. We will get to do our constitutional duties and vote 

on the deal. But right now, let’s give the President, a Democratic 

President, the authority to go and negotiate this deal. 

I would ask either one of our witnesses, my concern is certainly, 

if we create a fair playing field, I am not afraid that we will lose 

to China, that we are going to lose to other countries. We have the 

highest quality workers, we produce the highest quality products. 

We will win this, and we are already seeing manufacturing coming 

back to the United States, because they are seeing the quality of 

products that are being manufactured abroad, low cost, low quality. 

It isn’t what the world wants. I think, according to the administration, we have created, since the recession, over 1 million manufacturing jobs here in the United States. 

We can win this. You know, we have got an advantage on energy 

prices, we have got the highest quality workers. We can compete 

on the highest quality products. Let’s win this thing, but let’s do 

it on a fair playing field. 

Ambassador Rivkin, I give you a chance to make some comments 

as well as Mr. Russel. 

Ambassador RIVKIN. Well, Congressman, I really appreciate the 

chance to respond. And just to reiterate what you said and what 

President Obama recently said, you give the American people, the 

American workers, the chance to compete on a level playing field 

and we will win every time. And that is what these deals are 

about. He specifically talked about China. I am happy to say that 

we have a number of fora where we are engaging China, including 

the U.S.-China Joint Commission on Commerce and Trade, the 

JCTT, as well as the U.S.-China Strategic and Economic Dialogue, 

and we are pushing for a 19th round of our bilateral investment 

treaty. And it is our hope through this diplomatic engagement that 

we can further level that playing field with the second largest economy in the world. 

Mr. RUSSEL. Thank you, Congressman. You mentioned two 

things that are critically important to the administration, to U.S. 

interest, and to the TPP agreement. Ideals and development. In 

terms of ideals, the TPP includes a chapter on good governance, 

provisions on good governance that includes transparency; it includes anticorruption, government accountability, public participation and decisionmaking, rules-based disputes, settlements. These 

42

are critical elements to a civil society, to a stable society, to good 

governance. 

Secondly, on development, sustainable and responsible development is an essential ingredient to promoting the global economy 

from which the United States directly benefits in addition to it 

being an intrinsic benevolence—to use your word—imperative for 

mankind. The TPP has the first ever chapter in a trade agreement 

on development. It is dedicated to promoting cooperative activity to 

promote broad-based growth and sustainable development. In addition and in a similar spirit, when Secretary Kerry travels to China 

this weekend, looking for working with the Chinese to encourage 

complementary and responsible, sustainable development, including in Africa will be high on his agenda. Thank you. 

Mr. SALMON. Thank you. Mr. Weber. 

Mr. WEBER. Thank you, Mr. Rivkin. Should we be concerned 

about the balance of trade? 

Ambassador RIVKIN. Of course we should, sir. 

Mr. WEBER. Mr. Russel? 

Mr. RUSSEL. Yes, sir. 

Mr. WEBER. Okay. So my colleague, Mr. Sherman, said that for 

20 years it has been going in the wrong direction. Should we be 

concerned about that, Mr. Rivkin? 

Ambassador RIVKIN. The reason we are trying to negotiate these 

deals is to strengthen our balance of trade. 

Mr. WEBER. Do you agree with his assessment that for 20 years, 

it has been headed the wrong direction and we haven’t been able 

to turn that around? 

Ambassador RIVKIN. Sir, I——

Mr. WEBER. I mean, the numbers are either up or down, yes or 

no. 

Ambassador RIVKIN. The numbers need to be parsed, because as 

I mentioned, when you take energy out of the equation, and we are 

in surplus in 17 out 23 trade deals that we have done. 

Mr. WEBER. Okay. You said, oil is as much about geography as 

it is about trade. Would you agree with the statement that a country that doesn’t have energy doesn’t produce products, and doesn’t 

remain nationally secure? 

Ambassador RIVKIN. Repeat the question, please, sir. 

Mr. WEBER. You said in your comments earlier that oil was as 

much about geography as it was about trade. Would you agree with 

the statement that the country that doesn’t have energy, doesn’t 

get to produce its products and is not going to be national—it is 

not going to be secure as a Nation. 

Ambassador RIVKIN. No, of course not. And energy is critical and 

energy has been at the core of our current resurgence in the economy. 

Mr. WEBER. Okay. Well, it is hard to take oil out of the equation. 

Ambassador RIVKIN. Of course, it is part of trade, no question 

about it. But the point is it is important to learn from trade by 

parsing exactly what is driving job creation. 

Mr. WEBER. Now I go back to my previous question, do you agree 

with Mr. Sherman’s assessment that for 20 years, our trade deficit 

has been getting worse? 

43

Ambassador RIVKIN. I would have to look at the statistics and 

get back to you. 

Mr. WEBER. I have the Web site, I will get it for you in a little 

bit. 

Mr. Russel, you actually read from a statement about human 

rights, you said the TPP doesn’t come—and I watched you—at the 

expense of human rights, but it is a driver, it is like you had talking points on your list, okay? 

Mr. RUSSEL. I wrote those points down when I was listening to 

some of the members speak. 

Mr. WEBER. Well, I hope your handwriting is better than mine. 

If that is true, then why is it that these other members bring up 

all of these human rights violations going back 20 years? Lay aside 

the question I had for the Ambassador about why haven’t the numbers improved. Why haven’t the human rights violations gone 

away? If it is a driver, it doesn’t come at the expense of human 

rights, you said, but it drives it. And if human rights are not getting that much better in Vietnam, for example, does that kind of 

refute the statements you made? 

Mr. RUSSEL. To the contrary, Congressman. I think that the 

prospect of joining TPP has been a driving force behind relaxation 

of repressive and draconian policies. This is a trend line, we are 

talking about change, we are talking about direction, we are talking about reduction of offenses and increases in civil society and 

space. 

Mr. WEBER. Okay. Do you have children? 

Mr. RUSSEL. Yes, sir. 

Mr. WEBER. And Ambassador Rivkin, do you have children? 

Ambassador RIVKIN. I do, sir. 

Mr. WEBER. Have they ever lied to either one of you all? 

Ambassador RIVKIN. My children would never lie to me. 

Mr. WEBER. You have perfect kids. I am glad to hear that. 

Mr. RUSSEL. I plead the Fifth Amendment. 

Mr. WEBER. So what makes us think that a government who disrespects its citizens and has horrific human rights violations would 

not lie to us and disrespect any kind of agreements that we come 

up with, indeed dump cheap steel on the market, Lord forbid that 

that would every happen out of China. What makes us think they 

would honor, somehow—with all due respect to the acting chair, 

that we want to exploit our ideals, I get that. It would be better 

if they had their ideals or not. What makes us think that they are 

going to abide by those agreements and not do everything they can 

to mislead us? You have children who were gone around your rules, 

who have lied to you, and hopefully come back and seen the error 

of their ways. Do you think these human violating governments are 

going to do that? Do you honestly? 

Mr. RUSSEL. Congressman, I think the same principles that 

apply in human nature apply in government in both directions. 

And the consequences that governments such as the Government 

of Vietnam face in terms of the loss of benefits they accrue under 

TPP constitute a very formidable disincentive. 

Mr. WEBER. Has that been our history? The United States is 

great on country building and exporting democracy to Iraq and 

Iran and some of the other countries? 

44

Mr. RUSSEL. We are breaking new ground, in my view, by taking 

a 21st century high standard trade agreement and negotiating it 

with safeguards, with enforcement mechanisms. I would add, Congressman, that there is also a very significant training and capacity-building component. We are helping Vietnam, we will be helping Vietnam to honor its obligations under the ILO, for example, 

and honor its obligations under the agreement in terms of wildlife 

trafficking and environmental management. 

Mr. WEBER. Well, I would guess there are those who would admire your faith in them, and the faith that we have the chance to 

make that difference. 

You said that the tenets of the agreement are enforceable. Do we 

really have the wherewithal to be constantly checking on them and 

making sure that they are complying with not only the tenets of 

the agreement, the trade laws, but also, hopefully, the decreasing 

the human rights violations? Can we police their country to that 

extent? 

Mr. RUSSEL. We have a very significant monitoring presence in 

Vietnam, as do the international NGOs, the other governments 

who share our values and our concerns as does the international 

press. I mentioned, for example, Vietnam’s own Facebook, and the 

access to citizens through Twitter, through Facebook gives us 

abundant windows into what is happening in this society. We are 

not saying that the Vietnamese are angels, nobody is. 

Mr. WEBER. Just ya’ll’s children as you testified here earlier. 

Chairman ROYCE [presiding]. Let’s go to Mr. Connolly, if we 

could, of Virginia. 

Mr. CONNOLLY. Thank you, Mr. Chairman. Thank you to your 

panelists. I think, Ambassador Rivkin, this is your maiden voyage 

testifying before Congress and you are doing just fine. 

And I would say to my friend from Texas, he makes a point, but 

the analogy can only go so far. Nations are not children, and behavior among nations must be circumscribed by legal agreements 

that have to be enforceable. The record will never be perfect. The 

question for us, though, is shall we make perfect through the 

enemy of the good. Will we disengage? If we have any fighting 

chance to change behavior to norms closer to our own, is it better 

to write off countries and say because they cheat or because they 

don’t share our values, we are going to write them up or is it better 

to engage? And what does the record show when we do that? That 

is, to me, the fair screen. The questions you raise are absolutely 

fair, but I am not sure the analogy can be taken too far. And I 

come down on the side of saying it is better to engage, we are far 

better off with the agreement that is emerging then not. And I 

think that is really the choice. 

The choice in front of us, not that my friend from Texas was suggesting this, but some critics, if you listen to the rhetoric, as if the 

choice were we can create an ideal world only if we start all over 

again and reengage everybody, and that is just not the case. It is 

really a straw man. 

In listening to my friend, Mr. Sherman from California, I think 

he is guilty of a logical fallacy, propter hic ergo hoc, before because 

of this, therefore that. So it has to be NAFTA. NAFTA is what 

caused a trade deficit among the three countries of North America, 

45

and therefore it is bad. Now in order to believe that, you have got 

to take out some inconvenient facts like job growth. The same 

President who championed NAFTA and put it through, Bill Clinton, also oversaw one of the largest job growths in American history in the same time period. 

So if I am going to buy into because of this therefore that, then 

I have, the same logical fallacy must say it must be NAFTA that 

created all those jobs. Are we only going to cite certain statistics 

that serve our cause and, you know, take out in convenient facts. 

In the remaining time I really want to give both of you an opportunity to slay this dragon about NAFTA. Ambassador Rivkin, you 

were interrupted and now allowed to answer the question. Tell us 

again, my friend from California said there is a $98 billion trade 

deficit with Mexico. How much of that is, in fact, in the energy sector? 

Ambassador RIVKIN. Thank you so much, Congressman. I would 

be honored to repeat some of the points that I made earlier. I didn’t 

have the chance, as I was mentioning some of the strengths of 

NAFTA with Congressman Sherman, to mention that we have improved upon NAFTA with the TPP negotiation. President Obama, 

in his 2008 campaign, spoke about how he would improve certain 

aspects of NAFTA specifically labor and environment. And they are 

not separate chapters, fully enforceable, it is definitely an improvement. We learn from that. 

Specifically the statistics I wanted to mention I mentioned to the 

congressman that more made-in-America products are sold in Mexico and Canada than any other country in the world. Fifty-six billion dollars trade surplus excluding energy in goods and service, it 

was just three times before NAFTA. Three billion dollars agricultural surplus. 

Mr. CONNOLLY. How much of the $98 billion in the deficit net 

deficit is attributable to oil and gas? 

Ambassador RIVKIN. Yes, sir, I am going to have to get back to 

you on the specifics amounts. 

Mr. CONNOLLY. I just want to point out because I think the data 

you were just providing is very helpful and makes for a much more 

complex picture, but the United States consciously chose as part of 

NAFTA to use Mexico as a reliable supplier of energy and as a substitute for unreliable sources of energy such as the Middle East. Is 

that not correct, Ambassador Rivkin? 

Ambassador RIVKIN. I believe that is true, sir. 

Mr. CONNOLLY. So to simply cite the gross number in normative 

terms is bad, is to really distort a much more complex picture in 

terms of the two-way trade. Is it also not true, Ambassador Rivkin, 

that since NAFTA, trade among the three North American countries has quadrupled? 

Ambassador RIVKIN. Yes, sir. 

Mr. CONNOLLY. Are we to believe that let to a net job loss in 

America? 

Ambassador RIVKIN. As I said, sir, it is my belief that trade deals 

done right generate jobs. 

Mr. CONNOLLY. Right. 

Ambassador RIVKIN. Generate high paying jobs, 18 percent more 

than average. So no, I don’t believe that is the cause, sir. 

46

Mr. CONNOLLY. So one of the criticisms of NAFTA is it did not 

codify integrally human rights environment and labor standards, 

and that is fair criticism perhaps in retrospect. Would you agree? 

Ambassador RIVKIN. Yes, sir. And President Obama identified 

some of those himself before even becoming President. 

Mr. CONNOLLY. Right, that is right. And now what is before us 

we can go read what is before us, as a matter of fact, rectifies and 

codifies that which one would think satisfies that level of criticism. 

Is that correct? 

Ambassador RIVKIN. Yes, sir. These chapters are very strong and 

fully enforceable, something that might not have been imagined 20 

years ago. 

Mr. CONNOLLY. I thank you and I thank the chairman. 

Chairman ROYCE. Mr. Lowenthal. 

Mr. LOWENTHAL. Thank you, Mr. Chair. I think the last shall be 

first and first shall be last. 

I—before I ask some questions, I had the good opportunity of 

traveling with Julie and the State Department and Chairman 

Salmon to engage in Vietnam last week, not only with government 

officials, but with business leaders, with human rights activists, 

people who had just been released from prison as pointed out, the 

patriarch Thich Quang Do, the government was very gracious. It 

surprised me because I will have to admit I left with tremendous 

misgivings about why we are rewarding a country that engages in 

such bad behavior as human rights and the lack of labor protections. And yet I came with—I learned a lot. I changed some of my 

perceptions, but I also maintained some perceptions that I really 

want to discuss with you. 

On one hand, I think, as you pointed out, Mr. Russel, Vietnam 

has made some progress on human rights. There is, my understanding—is that there has been a moratorium on recent arrests 

of political activists who speak out against the government. Although on the other hand, there are still imprisoned large numbers 

of political activists who have spoken out. 

One of the people that was just recently released from prison, the 

government allowed us to meet with and to visit who interestingly 

enough, although a great opponent of the government, and of their 

labor rights, and of their human rights did speak to us in favor of 

the TPP. I was very surprised that someone fighting against the 

government saw this as a positive step. 

On the other hand, it was real clear to me there still remains not 

even a semblance of freedom of the press, it is just as troubling. 

There is not yet any kind of independent trade union allowed in 

Vietnam. And although I listen to and I really wanted to, and I do, 

hear the Vietnamese Government saying they are making movement in this direction, just shortly after we left, just a few days 

after we left, there was a Vietnamese activist, Mr. Tuyen Chi 

Nguyen, was beaten severely in Hanoi by allegedly five police officers not in uniform—and I make the word ‘‘allegedly,’’ we don’t 

know for sure. This is a person who spoke out against some of the 

environmental practice—spoke for environmental practices in 

Hanoi most recently, one of the leaders on that position and also 

against China. So on one hand, I am hearing that there are 

changes, the other hand just after we left, they beat up an activist. 

47

And so my question is, you know, how do we know that these 

changes are really going to be institutionalized? Are we going to require Vietnam to actually require? And will there be a mechanism 

to ensure that there really be an independent trade union? Are 

these changes that we are seeing, maybe begrudgingly in human 

rights, are they just because we are initiating the trade package, 

the TPP, and that there is enough evidence to also indicate that 

the government is very frightened of these kinds of changes, and 

that they will not exist after we have done this? So I am kind of 

left with what is real and how much of these changes are real and 

how do we know that there is going to be trade? And as I say, there 

was no doubt by visiting Vietnam that there are changes occurring. 

The question is are they sufficient? 

Mr. RUSSEL. Congressman, I very much appreciate your thoughtful questions and your willingness to travel personally to Vietnam 

and make your own assessment and see for yourself. But importantly to me as a diplomat for you to speak on behalf of the American people and the Congress directly to the leadership in Vietnam 

and to meet with civil society, the fundamental question here is, do 

we think of economic engagement as a reward or are we using it 

as a tool to try to shore up these principles and these ideals and 

to safeguard the fragile progress that has been made and to create 

incentives for further improvements? 

Obviously, my bias is in favor of the latter. But we are very 

mindful of the need to build safeguards that ensure that there is 

a consequence to partner country in this case, to Vietnam for failing to honor the commitments that it makes, or to live up to high 

standards that are embedded in the agreement. 

The question that it boils down to is how are we going to influence the decisions that will be made in the ongoing political debate 

and process in Vietnam? It is a long-term process, they are in a period of transition. There is an important party Congress coming up 

next year. As you heard firsthand, there is a surprisingly vigorous 

discussion and a multiplicity of ideas, even within the Communist 

Party. 

TPP is not designed to replace governments or to unseat a ruling 

party in a partner country such as Vietnam. But it is designed to 

lift up the principles of transparency, of good governance and good 

labor standards. We want—we have seen many positive steps, but 

as you pointed out, we are also seeing significant backsliding and 

periodic episodes that violate the direction that we want Vietnam 

to move in. 

We engage vigorously and directly in discussions with the Vietnamese on these subjects and these problems. And we are encouraging them to move forward on the institutional reforms, including 

the reforms of the criminal code, including relaxation of their restrictions on Internet use and on press freedoms. And we continue 

to call on the Vietnamese Government to release unconditionally 

prisoners of conscience. 

I think—we think that the economic engagement that TPP 

brings, both the incentives and the enforcement mechanisms and 

safeguards will strengthen the rule of law. So this is, again, a relative question, will we be better off by following through and by 

48

collecting Vietnam’s commitments by building their capacity and by 

holding them to account? I am convinced the answer is yes. 

Mr. LOWENTHAL. Well, thank you, and just as I yield back I have 

to say I want to believe what you are saying, but I also was 

shocked by what just took place after we left. When the government, which I think had our—was attending to what we said and 

then the juxtaposition of then the severe beating of an activist. 

Chairman ROYCE. Mr. Lowenthal, it is shocking. When I was in 

Vietnam, the head of the Buddhist church the venerable Thich 

Quang Do was under house arrest, but I did talk to him about 

these trade agreements. He said it has the opportunity to bring the 

rule of law. It has the opportunity to bring that type of engagement. And as you begin to set up standards and the rule of law, 

that begins the process of empowering people. So you do have that 

perspective as well. 

Mr. LOWENTHAL. I heard that very clearly, Mr. Chair. 

Chairman ROYCE. Thank you Mr. Lowenthal. Well, I want to underscore some of the key points that have been made today, including in the colloquy between Chairman Salmon and Mr. Connolly, 

the TPA process is transparent. There are no secrets there, this is 

going to be publicized for 60 days, or for a period of time. You can 

correct me, Mr. Russel, but that will be not just before the Congress, but before the people. The Congress, under TPA, can vote 

down a bad deal. I am optimistic that we will get a good deal, but 

if we don’t, Congress doesn’t give up its right to approve or reject 

the Asia-Pacific arena here. So there is great potential here because we have trade surpluses with our trade agreement partners 

and manufactured goods when we look at the numbers. 

Now, we don’t necessarily have surpluses and manufactured 

goods with those who aren’t partners, well, yes, because typically 

the tariffs are higher overseas and then they are here in the 

United States. This gives us in the United States an opportunity 

to equalize those tariffs. And when that happens it accrues to our 

benefit, because we are 5 percent of the world’s market, but we are 

a bigger percentage of the world’s export market. And so—5 percent of the world’s population, I should say, and so this is an opportunity. 

I want to underscore Mr. Sires’ comments that we want our good 

ally, Taiwan, in the game and I think that is very important. And 

I want to thank the witnesses here, Secretary Russel and Ambassador Rivkin for your appearances, these are critical issues touching on our economic, political and security interests. And I think 

we aired some of the important issues here today. But as I said in 

my opening statement, we hope that we don’t turn away from Asia, 

seating ground in Asia. We need a fair and enforceable deal. And 

if we get that, then American workers will absolutely excel and create a healthy economy. 

I think one other point that was raised to those who raise the 

concerns about the laws changing in the United States. Just to 

quote the administration on this last week, no trade agreement is 

going to change our laws. We don’t change U.S. laws as a result 

of a trade agreement. This agreement would make sure our companies aren’t discriminated against in other countries. That is the 

whole point. 

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So I think the idea of bringing standards there to our higher 

standards, especially on the intellectual property, gives us a way 

forward that will open more markets. And with that, this hearing 

is adjourned. Thank you. 

[Whereupon, at 12:08 p.m., the committee was adjourned.] 

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