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78–589 2013

PRESIDENT OBAMA’S TRADE POLICY AGENDA 

WITH U.S. TRADE REPRESENTATIVE RON 

KIRK AND SECOND PANEL ON THE FUTURE OF 

U.S. TRADE NEGOTIATIONS 

HEARING 

BEFORE THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

FEBRUARY 29, 2012

Serial No. 112–22 

Printed for the use of the Committee on Ways and Means 

( 


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COMMITTEE ON WAYS AND MEANS 

DAVE CAMP, Michigan, Chairman 

WALLY HERGER, California 

SAM JOHNSON, Texas 

KEVIN BRADY, Texas 

PAUL RYAN, Wisconsin 

DEVIN NUNES, California 

PATRICK J. TIBERI, Ohio 

GEOFF DAVIS, Kentucky 

DAVID G. REICHERT, Washington 

CHARLES W. BOUSTANY, JR., Louisiana 

PETER J. ROSKAM, Illinois 

JIM GERLACH, Pennsylvania 

TOM PRICE, Georgia 

VERN BUCHANAN, Florida 

ADRIAN SMITH, Nebraska 

AARON SCHOCK, Illinois 

LYNN JENKINS, Kansas 

ERIK PAULSEN, Minnesota 

KENNY MARCHANT, Texas 

RICK BERG, North Dakota 

DIANE BLACK, Tennessee 

TOM REED, New York 

SANDER M. LEVIN, Michigan 

CHARLES B. RANGEL, New York 

FORTNEY PETE STARK, California 

JIM MCDERMOTT, Washington 

JOHN LEWIS, Georgia 

RICHARD E. NEAL, Massachusetts 

XAVIER BECERRA, California 

LLOYD DOGGETT, Texas 

MIKE THOMPSON, California 

JOHN B. LARSON, Connecticut 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 

BILL PASCRELL, JR., New Jersey 

SHELLEY BERKLEY, Nevada 

JOSEPH CROWLEY, New York 

JENNIFER SAFAVIAN, Staff Director 

JANICE MAYS, Minority Chief Cousel 


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C O N T E N T S 

Page 

Advisory of February 29, 2012, announcing the hearing ..................................... 2 

WITNESSES 

PANEL 1: 

Ambassador Ron Kirk, United States Trade Representative, Office of the 

United States Trade Representative, Testimony ............................................... 7 

PANEL 2: 

Mr. Tim Harris, President, Harris & Ford, LLC, Testimony ............................... 54 

Mr. Brian Krzanich, Senior Vice President and Chief Operating Offer, Intel 

Corp., Testimony .................................................................................................. 59 

Mr. James H. Quigley, Senior Partner, Deloitte & Touche, LLP, Testimony .... 75 

Mr. Alan Wolff Of Counsel, Dewey & LeBoeuf, LLP, Testimony ........................ 102 

SUBMISSIONS FOR THE RECORD 

The Hon. Dave Camp, Letter 1 .............................................................................. 133 

The Hon. Dave Camp, Letter 2 .............................................................................. 135 

National U.S. Arab Chamber of Commerce ........................................................... 137 

The U.S.–China Business Council .......................................................................... 140 

Coalition to Enforce Antidumping & Countervailing Duty Orders ..................... 156 

Business Roundtable ............................................................................................... 159 

U.S. Chamber of Commerce .................................................................................... 166 

American Apparel & Footwear Association ........................................................... 179 

Center for Fiscal Equity .......................................................................................... 184 

Consumer Electronics Association .......................................................................... 189 

Citizen Trade Policy Commission ........................................................................... 191 

Intel ........................................................................................................................... 193 

Philippine Embassy ................................................................................................. 208 

Southern Shrimp Association ................................................................................. 211 

MATERIAL SUBMITTED FOR THE RECORD 

Questions for the Record ......................................................................................... 214 


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(1) 

PRESIDENT OBAMA’S TRADE POLICY AGENDA 

WITH U.S. TRADE REPRESENTATIVE RON 

KIRK AND SECOND PANEL ON THE FUTURE 

OF U.S. TRADE NEGOTIATIONS 

WEDNESDAY, FEBRUARY 29, 2012 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON WAYS AND MEANS, 

Washington, DC. 

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

1100, Longworth House Office Building, the Honorable Dave Camp 

(Chairman of the Committee) presiding. 

[The advisory of the hearing follows:] 


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HEARING ADVISORY 

FROM THE COMMITTEE ON WAYS AND MEANS 

Chairman Camp Announces Hearing on 

President’s Obama’s Trade Policy Agenda with 

U.S. Trade Representative Ron Kirk and Second 

Panel on the Future of U.S. Trade Negotiations 

Wednesday, February 29, 2012 

House Ways and Means Committee Chairman Dave Camp (R–MI) today announced that the Committee on Ways and Means will hold a hearing on President 

Barack Obama’s trade policy agenda with U.S. Trade Representative Ron Kirk and 

with a second panel of witnesses on the future of U.S. trade negotiations. The hearing will take place on Wednesday, February 29, 2012, in 1100 Longworth 

House Office Building, beginning at 10:00 a.m. 

In view of the limited time available to hear the witnesses, oral testimony at this 

hearing will be from invited witnesses only. However, any individual or organization 

not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing. A 

list of invited witnesses will follow. 

BACKGROUND: 

International trade is an engine for growth and job creation in the United States. 

While the United States is the largest economy and trading nation in the world, 95 

percent of the world’s consumers are abroad. The future success of American workers, businesses, and farmers is therefore integrally tied with continuing America’s 

strong commitment to finding new markets and expanding existing ones for U.S. 

goods and services. 

The bipartisan passage of the implementing bills for the Colombia, Panama, and 

South Korea free trade agreements in October 2011 marked an important step forward for U.S. trade policy. This hearing will provide an opportunity to explore with 

Ambassador Kirk how the President’s trade agenda will sustain this momentum 

with respect to current trade issues, such as: progress in the Trans-Pacific Partnership negotiations; Russia’s accession to the World Trade Organization; China’s trade 

restrictive practices and non-tariff barriers that prevent U.S. companies from competing on a level playing field; the President’s trade agency reorganization proposal 

and National Export Initiative (NEI); and various bilateral and multilateral trade 

disputes and concerns. In addition, Ambassador Kirk’s testimony and the second 

panel of witnesses will provide an opportunity to focus on long-term thinking relating to future trade negotiations, including ‘‘post-Doha’’ WTO issues such as an international services agreement, Information Technology Agreement (ITA) expansion, 

and a trade facilitation agreement in the age of global supply chains; Bilateral Investment Treaties (BITs) with China and India and new BITs and investment opportunities; and the trade and investment relationship with the European Union, 

India, and Latin America. 

In announcing this hearing, Chairman Camp said, ‘‘Opening new markets for 

U.S. businesses, workers, and farmers and strong enforcement of U.S. 

rights are essential to driving economic growth and job creation here in 

the United States. The three free trade agreements with Colombia, Panama, and South Korea that Congress passed last year in a bipartisan manner sent a strong message that the United States has returned to the trade 

negotiating table. We are now at an important juncture to move forward 

aggressively on the Trans-Pacific Partnership negotiations and other initiatives to make sure that last year’s momentum is not lost. It’s also a critical time for us to look ahead for future trade and investment opportunities with important trading partners like the European Union, India, and 


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Latin America to maximize American competitiveness and ensure that we 

do not fall behind.’’ 

FOCUS OF THE HEARING: 

The first panel of the hearing will provide an opportunity to explore with Ambassador Kirk current trade issues such as: (1) ensuring prompt implementation of the 

three free trade agreements with Colombia, Panama, and South Korea; (2) seeking 

to conclude a good Trans-Pacific Partnership agreement this year; (3) considering 

Russia’s WTO accession; (4) improving our important trade relationship with China 

and addressing China’s trade barriers; (5) addressing the Obama Administration’s 

trade agency reorganization proposal and National Export Initiative (NEI); and (6) 

ensuring appropriate trade enforcement efforts. The first and second panels will also 

focus on areas of potential future trade negotiations such as: (1) advancing WTO negotiations, including ‘‘post-Doha’’ issues at the WTO such as an international services agreement, Information Technology Agreement (ITA) expansion and a trade facilitation agreement; (2) completing Bilateral Investment Treaties (BITs) with China 

and India and exploring new BITs and investment opportunities; (3) deepening and 

expanding the trade and investment relationship with the European Union; and (4) 

establishing long-term, closer ties with important trading partners such as Latin 

America and India. 

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: 

Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee 

website and complete the informational forms. From the Committee homepage, 

http://waysandmeans.house.gov, select ‘‘Hearings.’’ Select the hearing for which you 

would like to submit, and click on the link entitled, ‘‘Click here to provide a submission for the record.’’ Once you have followed the online instructions, submit all requested information. ATTACH your submission as a Word document, in compliance 

with the formatting requirements listed below, by the close of business on 

Wednesday, March 15, 2012. Finally, please note that due to the change in House 

mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House 

Office Buildings. For questions, or if you encounter technical problems, please call 

(202) 225–1721 or (202) 225–3625. 

FORMATTING REQUIREMENTS: 

The Committee relies on electronic submissions for printing the official hearing 

record. As always, submissions will be included in the record according to the discretion of the Committee. The Committee will not alter the content of your submission, 

but we reserve the right to format it according to our guidelines. Any submission 

provided to the Committee by a witness, any supplementary materials submitted for 

the printed record, and any written comments in response to a request for written 

comments must conform to the guidelines listed below. Any submission or supplementary item not in compliance with these guidelines will not be printed, but will 

be maintained in the Committee files for review and use by the Committee. 

1. All submissions and supplementary materials must be provided in Word format and MUST 

NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised 

that the Committee relies on electronic submissions for printing the official hearing record. 

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. 

Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material 

not meeting these specifications will be maintained in the Committee files for review and use 

by the Committee. 

3. All submissions must include a list of all clients, persons and/or organizations on whose 

behalf the witness appears. A supplemental sheet must accompany each submission listing the 

name, company, address, telephone, and fax numbers of each witness. 

The Committee seeks to make its facilities accessible to persons with disabilities. 

If you are in need of special accommodations, please call 202–225–1721 or 202–226– 

3411 TTD/TTY in advance of the event (four business days notice is requested). 

Questions with regard to special accommodation needs in general (including availVerDate Mar 15 2010 05:21 Apr 03, 2013 Jkt 078589 PO 00000 Frm 00007 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\78589.XXX GPO1 PsN: 78589

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ability of Committee materials in alternative formats) may be directed to the Committee as noted above. 

Note: All Committee advisories and news releases are available on the World 

Wide Web at http://www.waysandmeans.house.gov

f 

/. 

Chairman CAMP. If everyone would take their seats, we are 

ready to begin. Well, good morning. I want to welcome everyone 

and extend a special welcome to our guest, the U.S. Trade Representative, Ambassador Ron Kirk, as well as our second panel of 

witnesses. I am looking forward to a discussion of the administration’s trade policy agenda and the future of U.S. trade policy. 

We are coming off a strong year in which we saw more action 

on trade than the past 5 years. We secured bipartisan passage of 

our trade agreements with Colombia, Panama, and South Korea, 

which had languished for far too long. This achievement signified 

that Congress and the White House, House, and Senate, Republicans, and Democrats could come together to pursue pro-growth, 

pro-job policies. 

Our trading partners around the world have taken notice that we 

are back at the negotiating table and ready to lead. And there is 

further good news: the United States and South Korea quickly took 

the necessary steps to allow for entry into force of the U.S.-South 

Korea agreement, which will take effect in 2 weeks. Discussions 

paving the way for the Colombia and Panama agreements are also 

underway, and I encourage an expeditious completion. 

Our recent trade successes have created a momentum—is somebody’s phone ringing here? Hopefully they will hang up soon. 

Our recent trade successes have created a momentum that we 

must continue. Hesitation and delay allow our competitors to take 

our market share and our jobs. As such, I would like to flesh out 

today how this Administration and this Congress can best promote 

economic growth and job creation through trade. 

The one trade agreement negotiation away is the Trans-Pacific 

Partnership, which President Obama announced he would like to 

complete this year. This agreement will allow U.S. goods and services to more easily reach consumers across the Asia-Pacific region. 

And the TPP also serves as an effective counterbalance to China 

in its own backyard. I welcome interest by Japan, Canada, and 

Mexico as long as they will take on what is already negotiated 

without delay and build confidence that they can and will address 

outstanding bilateral issues. 

We also faced Russia’s WTO accession. Clearly, our ongoing relationship with Russia is a complex one, but I note that if we grant 

Russia Permanent, Normal Trade Relations will we be able to obtain the benefits of the concessions Russia made to join the WTO. 

We would give up nothing, not a single U.S. tariff, but we would 

obtain a new enforcement tool and bring our two countries closer 

on multiple fronts. This is a matter the Committee will have to 

carefully consider, and I look to the administration to build confidence and provide leadership on the economic issues to help explain why America should move ahead. 

One of the largest trade issues that remains is China. With a 

population of over 1.4 billion people, the Chinese market provides 

tremendous opportunities to sell more U.S. goods and services, 


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which means more jobs here at home. Despite this potential, there 

are far too many problems with China that continue to put our 

workers and our businesses at a disadvantage from indigenous innovation policies to subsidies to intellectual property theft to currency undervaluation just to mention a few. We must push China 

on every front, and the Administration must ensure that China’s 

commitments are fully implemented. 

This committee has asked the Administration several times to 

define clear, concrete metrics to verify success. Tomorrow, Committee Members will be meeting on a bipartisan basis with Secretary Geithner, Secretary Bryson, and U.S. Trade Representative 

Ron Kirk to discuss the challenges and opportunities presented by 

our China relationship. 

In addition, Ranking Member Levin, Chairman Brady, Ranking 

Member McDermott, and I are introducing targeted legislation 

today to make sure that we have the tools we need to address unfair Chinese subsidies through our countervailing duty law in a 

WTO consistent manner, and we expect to move this legislation 

shortly. 

I spent time talking about the issues on our plate right now, but 

what about what comes next? An important aspect of this forward 

thinking is renewing Trade Promotion Authority, and I hope that 

Ambassador Kirk will share the administration’s views on that 

topic. Because the WTO Doha negotiations are dormant, we should 

focus on a ‘‘post-Doha’’ strategy with those countries that share our 

views and ambition. 

Given that 80 percent of U.S. employment is in services, an 

international services agreement holds great promise to enhanced 

market access abroad, and I support the administration’s current 

discussions. Similarly, expanding our very successful Information 

Technology Agreement would provide us with more tariff-free access to foreign markets for our information technology products. A 

trade facilitation agreement could significantly reduce the cost of 

doing business in the age of global supply chains. 

Expanded investment opportunities are also vital to U.S. growth. 

For the last 3 years, the Obama Administration has placed all bilateral investment treaties on hold. Moving forward on BITs already begun with China and India and launching new negotiations 

should be a top priority. And finally, we have to think defensively 

about our strategy when other countries conclude subpar agreements that don’t meet WTO standards. 

So in conclusion, today, I would like to have a comprehensive discussion about the present and future of U.S. trade policy and what 

it means for job creation here in the United States. And I will now 

yield to Ranking Member Levin for the purpose of an opening 

statement. 

Mr. LEVIN. Thank you, Mr. Chairman. We very much welcome 

this hearing. 

And Mr. Ambassador, we very warmly welcome you here today. 

Democrats on this committee have been actively working to 

shape a new trade policy responsive to the changing dynamics of 

a global economy. We rejected the passive, hands-off approach that 

earlier characterized American trade policy and embraced actively 

shaping the expansion of trade in ways that grappled with the imVerDate Mar 15 2010 05:21 Apr 03, 2013 Jkt 078589 PO 00000 Frm 00009 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\78589.XXX GPO1 PsN: 78589

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pact of trade and broadened its benefits and minimized its 

downsides. 

These principles have been reflected in our work on this Committee for several decades now. They drove our work to ensure incorporating enforceable core labor standards and environmental 

standards in trade agreements. Working with the Clinton Administration to adopt workers standards in the pioneering Cambodia bilateral clothing agreement and in the Jordan FTA; opposing 

CAFTA because of the Bush administrations rejection of that 

standard; and when in the majority, developing the May 10th, 2007 

agreement, incorporating the five basic labor and significant environmental standards into the Peru agreement. 

Those principles guided our refusal to approve the FTAs negotiated by the Bush administration with Korea, Panama, and Colombia until significant shortcomings were addressed; working with 

you, Ambassador Kirk, and others in the administration. Together 

we helped importantly improve those agreements ending the oneway street of Korea’s historically closed auto market, ensuring that 

U.S. taxpayers could not use Panama as a tax haven, developing 

an action plan to improve labor conditions and address violence 

against workers in Colombia. 

We are beginning to see tangible results from these efforts. Ford 

has already begun shipping cars to South Korea from the United 

States of America, and work continues with Colombia to ensure 

full, meaningful implementation of the action plan related to labor 

rights. Today’s hearing will focus in part on potential new agreements to open new markets for U.S. goods and services, the TransPacific Partnership, Russia’s WTO accession, the possibility of a 

U.S. EU FTA, and the promise of a WTO services ‘‘plurilateral’’. 

As important as these new opportunities are, they cannot be our 

sole focus. A defining trade issue continues to be our imbalanced 

trade relationship with China. Unfortunately, the Bush administration too often adopted a hands-off approach to this imbalance. It 

failed to actively implement the special provision provided for in 

China’s WTO accession for an annual review of whether China was 

meeting its obligations. The Bush administration refused in all four 

cases presented to it to use the 421 safeguard against surges in 

Chinese imports that harm U.S. industries and workers. 

And Mr. Ambassador, this administration took a different track 

and used 421. 

Our trade with China effects myriad industries in their efforts to 

compete within this market in China and globally, and it is fundamentally affecting the structure and composition of our economy. 

A trade policy that ignores or fails to actively address this reality 

is incomplete and ultimately will prove ineffective. So I applaud the 

President’s decision to create a new Interagency Trade Enforcement Center to enhance the administration’s ability to aggressively 

challenge unfair trade practices in China and elsewhere. 

I urge the administration to ensure that the ITC is designed and 

equipped to fundamentally alter the way trade cases are developed 

and prosecuted, and I think, Mr. Ambassador, you will be talking 

about that. I also urge the ITC to focus immediately on China’s duties on auto exports, its practices in rare Earth restraints, its exVerDate Mar 15 2010 05:21 Apr 03, 2013 Jkt 078589 PO 00000 Frm 00010 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\78589.XXX GPO1 PsN: 78589

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port credit program, its forced technology transfer, and its lack of 

transparency and use of intimidation as a trade policy tool. 

The need to actively shape the contents of trade agreements, and 

not to assume simply that more is always better, applies to the important TPP talks. We must closely evaluate, number one, the challenges presented by unfair competition from state-owned enterprises, the unique circumstances presented by a communist nonmarket economy like Vietnam, and the opportunities and challenges presented by prospective new entrances, especially Japan, 

whether with its longstanding rigid, exclusionary structures; it presents real new market access opportunities for U.S. companies and 

workers and creates a new benefit for our economy, including our 

manufacturers. 

And finally, with respect to Russia and the WTO, there is a need 

to approach key outstanding issues in an active rather than passive 

way ranging from IPR enforcement to the rule of law. 

So I look forward to hearing from you, Ambassador, and the 

other panelists on how we can continue to craft a trade policy that 

will meet the challenges of today and anticipate those of tomorrow. 

Chairman CAMP. Well, thank you. And Ambassador Kirk, again, 

welcome, and I just want to congratulate you and your team at 

USTR for everything you do, and I just want you to know that I 

will do everything I can to make sure that you USTR continues to 

maximize its effectiveness by remaining a separate agency instead 

of being swallowed up within a larger bureaucracy. And while I 

want to shrink government, I don’t want to do that at the expense 

of efficiency and excellence. So thank you for being here, Ambassador. We do have your written statement, but you are recognized 

for 5 minutes. 

STATEMENT OF AMBASSADOR RON KIRK, UNITED STATES 

TRADE REPRESENTATIVE 

Ambassador KIRK. Thank you, Mr. Chairman and Ranking 

Member Levin. To the Members of the Committee, it is an honor 

to be with you again. 

It was about 12 months ago that I had an opportunity to discuss 

our Administration’s plan to work through outstanding issues related to the impending trade agreements with Korea, Colombia, 

and Panama, and we expressed our commitment to renewing Critical Trade Adjustment Assistance for America’s workers, and extending trade preference programs. At the time, frankly, some of 

you thought we were seeking too much and taking far too long, but, 

notwithstanding, working together, we accomplished all of this and 

more last year. 

Together, we did the hard work necessary to pass all of these important measures in one historic evening, and in the process, I 

would like to believe we built the new template for bipartisan support of trade that opens markets and levels the playing field for 

American business, workers, farmers, ranchers, manufacturers, 

and service providers. 

This year, with your help, we are looking to forge ahead on another ambitious trade agenda. Tomorrow, you will receive formally 

our 2011 annual report as well as a comprehensive outline of our 

trade agenda for 2012, and in the interest of time, I would like to 


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not speak to those in detail, but highlight some of our key initiatives for the coming year. 

First, I am proud to report that after the successful passage of 

these three trade agreements, we have been working on implementation of them, and we have finalized our plans with Korea, and 

that agreement will be entering into force on March the 15th. At 

the same time, we continue to pursue our due diligence with Colombia and Panama to ensure that they fulfill their commitments 

so that those agreements can take effect as soon as possible. 

We are also moving full speed ahead in the Trans-Pacific Partnership negotiations building on the broad outlines announced last 

November at our APEC meeting with the leaders. We are seeking 

to conclude this agreement this year and address crosscutting 

issues, such as negotiating and promulgating regulatory coherence 

among the countries, enhancing the participation of small business, 

of trade throughout the Asia-Pacific, and building regional supply 

chains that will promote and sustain U.S. job growth. 

As we consider the ambitions of additional countries, we will 

closely coordinate with this Committee as well as other Members 

of Congress to ensure that these participants meet the TPP’s high 

standards and address those specific issues of concern many of you 

have raised. 

As we move forward toward negotiating outcomes, the Obama 

Administration will also engage you thoughtfully on additional 

trade promotion authority as necessary to approve the TPP as well 

as future trade agreements. This year, we are getting even tougher 

on trade enforcement, which has been a priority of the Obama Administration from day one. Yesterday, President Obama established by Executive Order the Interagency Trade Enforcement Center to prioritize and more aggressively challenge the kinds of unfair 

trade practices that we fight fiercely every day, from China’s improper restrictions on industrial raw materials to improper subsidies by the European Union and other partners. 

Right now, we also have an opportunity to defend the rights of 

U.S. workers and businesses by working to pass the legislation referenced by Chairman Camp that will ensure our ability to remedy 

the harmful effects of unfairly subsidized imports from China and 

other countries. And we are ready to bring Russia into the rulesbased system in a way that gives us more enforcement tools to enable enhanced market access and a level playing field for U.S. exporters. And that is why the administration will seek to terminate 

Russia’s Jackson-Vanik status to ensure that American firms enjoy 

the same job-supporting benefits of Russia’s WTO Membership as 

our international competitors. 

Broadly speaking, our pursuit of enhanced trade to support 

American jobs extends across all geographic regions in all economic 

sectors. For example, we are engaging with the European Union to 

deepen our Trans-Atlantic trade relationship, and we are eager to 

work with you to make immediate progress with Sub-Saharan Africa and our CAFTA countries on issues like third-country fabric and 

textile and apparel rules of origin. 

At the WTO, we will continue to pursue fresh, credible approaches to multilateral market opening trade negotiations in the 


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Doha realm, but also in other plurilateral options such as services 

and information technology. 

In conclusion, I would like to thank the Committee for your 

thoughtful consideration of critical trade issues and continued support for our ambitious agenda. Working together, I have no doubt 

that we can stay on track to meet our goal of doubling U.S. exports 

and ensure that our trade policy continues to create job-supporting 

export opportunities for all Americans. Thank you. 

[The prepared statement of Ambassador Kirk follows:] 


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f 

Chairman CAMP. Well, thank you very much, Ambassador Kirk. 

Our number one focus in Congress is jobs. And our push for better 

protection of U.S. intellectual property rights in China is all about 

jobs. Now, the International Trade Commission, an independent 

agency, recently did an analysis, and they determined that if China 

improved its IPR protection on the same level as we have in the 


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United States, it concluded that U.S. exports to China would increase by $21.4 billion and that sales by U.S. companies in China 

would increase by $87.8 billion and that more than two million jobs 

would be created in the United States. 

What is your Aministration doing to create these jobs? And are 

there any additional tools you need to be effective in this area? 

Ambassador KIRK. Well, we are aggressively pursuing a very 

broad strategy to challenge, we think, some of China’s restrictive 

and discriminatory policies not only in the area of information technology, but the underlying industrial policies. We use all the tools 

available to us such as challenging some of these policies directly 

in the WTO which resulted in the win on the issue of entering our 

films into Chinese markets and getting adequate compensation and 

protection for U.S. intellectual property. 

We use all of our bilateral engagements to raise these issues 

from President Obama’s frequent meetings with President Hu and 

Premier Wen to the recent visit of Vice President Xi, and the Strategic and Economic Dialog and the JCCT. But the bottom line, Mr. 

Chairman, is China presents a unique opportunity because of their 

explosive growth, but we all know of the frustrations that many of 

our businesses face because China has not fairly enforced the rules 

and recognized international standards in terms of respect for intellectual property and others. 

But we will continue to engage them to get them to recognize 

and respect the rule of law, enforce intellectual property rights, 

and particularly combat piracy and counterfeited goods that resulted in the type of numbers that you referenced. 

Chairman CAMP. Are there any additional tools you need to be 

more effective in this area? 

Ambassador KIRK. We believe—we think right now that we have 

a sufficient number of tools. But I will be honest; part of the President’s rationale for bringing together all of our agencies through 

this Interagency Trade Enforcement Center is to make sure that 

we are adequately and efficiently using the resources that we have. 

As you know—or maybe the Committee does not know—our Administration has brought cases against China at twice the rate of 

the previous Administration. But more critically, at least right 

now, we have won every case we have brought against China. But 

we have had to be fairly selective in doing that, because in many 

cases, these are horribly resource intensive. It takes an extraordinary amount of work and time to gather the intelligence because 

of the non-transparency of China’s system. So we do think the creation of this Trade EnforcementCenter will go a long way in making sure that we aren’t resource constrained and we are operating 

as efficiently and thoughtfully as we can. 

Chairman CAMP. Well, and I know you know the stakes are 

enormous and the jobs that would be created in the United States, 

if we’re able to simply bring them to the same standard on intellectual property we have, is significant. Two million jobs is important. 

I wanted to shift to another area. Japan is interested in joining 

the TPP or Trans-Pacific Partnership, and I also understand Canada and Mexico are as well. Particularly with Japan, it shows how 

TPP can further integrate the Asia-Pacific region. If Japan adopts 

the high standards of the TPP, there are obviously potentially 


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many benefits to many sectors of the economy as well as many industries. But I know there are a number of significant outstanding 

issues that will need to be addressed, and I have heard from a 

number of industries about Japan’s persistent barriers such as in 

autos, agriculture, and services, including issues about Japan Post. 

Now, in my opinion, Japan’s interest in joining creates a unique 

opportunity to address some of these barriers to U.S. exports and 

investment, and that is an opportunity we have not had. But what 

steps is the Administration taking to address the outstanding concerns about Japan’s discriminatory policies and to ensure that 

Japan is ready to meet the TPP’s high standards? 

Ambassador KIRK. Well, that is—Mr. Chairman, you framed 

both the question and I think part of the response in exactly the 

same manner. I guess the attractive part of this equation was your 

statement ‘‘if Japan meets all of the high standards.’’ And we 

would say that for any of our partners in APEC, that what we have 

said is TPP is not something you are invited to. It is something 

other countries have to ascribe to. 

And—we want high standards, because the future of our economic growth is going to be based on our ability, as the President 

says, to out-innovate, out-educate, out-sell the rest of the world. We 

have a very innovative manufacturing model now, and we aren’t 

going to compromise that by entering trade agreements that allow 

countries to undercut that. But for all the reasons you articulated, 

we very much welcome Japan’s expression of interest in joining us. 

But I would say one of the strengths of our form of government 

is our transparency. And as you know, we welcome Japan’s entry. 

We immediately began to proceed under the manner that Congress 

dictates to think about bringing in new countries, and we put a notice in the Federal Register inviting comments not only on Japan, 

but Mexico and Canada. And the upshot of that is Japan knows exactly, because all of these comments are public, what the concerns 

of our industries are. 

And so we are now engaging with them, frankly, in a very honest 

dialog based on feedback we have gotten from your Committees 

and industries on how we would address that. We have made it 

plain we welcome Japan’s entry in the TPP. As you know, part of 

our deliberation as an Administration as to whether we would join 

was based on our belief that, one, it was in our competitive advantage to be in on the ground floor drafting what we believe will be 

the standard portrayed in the 21st century, but also to believe this 

could become the vehicle that rationalized trade in the Asia-Pacific, 

which is the fastest growing region in the world. So there is an implied bias on our part that other countries would join, but we have 

been very honest they have to meet those standards. 

So there are outstanding issues we are working with each of 

them to resolve, but we will work through them with all of those 

issues that have been raised. And then, frankly, it is in Japan’s 

hands to demonstrate its willingness to address these issues. 

Chairman CAMP. All right. I just can’t underscore how important addressing these persistent barriers are going to be as we 

move forward on that. So thank you very much. 

And with that, I will recognize Mr. Levin. 


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Mr. LEVIN. Thank you, Mr. Chairman. I want to quickly pick up 

on that, because the question is regarding Japan and TPP whether 

TPP would be an adequate instrument to really open up Japanese 

markets. And so when we say that there are standards within TPP, 

the question is whether there are adequate standards and whether 

that would be adequate enough to change historic closed markets 

in Japan. 

I went through a brief history of trade policy, because I think it 

is important to remind us where we were and how far we have 

come. And for years, there was a failure to address the structural 

challenges presented by Japan in agriculture and in industrial 

areas. For example, they manufactured in 2010 almost 10 million 

autos, and their domestic market is less than five million. And so 

if they were granted TPP entry and the tariffs went down to zero, 

their manufacturers would save roughly a billion dollars. And so 

far, the savings they have had from their closed markets have been 

used to sell the same auto here cheaper than it is sold in Japan. 

So you ask an important question, Mr. Chairman. And we have 

to be darn careful. We say ‘‘we welcome.’’ The question is whether 

a welcoming will lead to addressing historic closed markets. It has 

been a one-way street. And I think as we talk about China, we 

should be—we should remember the difficulty that we have had 

with Japan. 

I very much welcome the President’s decision to create the ITC, 

Mr. Ambassador, and you are going to take the lead. And I think 

it signals a much more vigorous effort by this Administration than 

past Administrations to get at the problem of an inadequate twoway street in trade with China and their using their structures to 

give them advantages that are inimical to fair trade—to free trade. 

So I saw this story—and it was in The Detroit News—about the 

Ford F-150. I could take a DVD and use that as an example, but 

we would have to buy it illegally. So I didn’t want to do that. But 

you could take a DVD selling for $1 in China, which—about something that just came out, and they sell it. 

So this is a story about a Chinese truck that imitates the Ford 

F-150, which is apparently a complete imitation. And I think it 

raises all kinds of questions. I think China’s entry into the WTO 

was necessary. We set some provisions in there that unfortunately 

weren’t enforced. Now, the Administration is doing so. But I think 

that this picture shows the challenge that we face in making sure 

that China plays by the rules. 

So we welcome their participation, but we have to insist that 

there be a fair set of rules that they follow, and I hope very much 

that this establishment of the ITC will be not only a signal, but an 

embodiment of a new effort to insist that China play by the rules. 

Is that really what you’re after? 

Ambassador KIRK. Well, I think the short answer is going to be 

yes. I just would like to—and you know how much you and I think 

alike on these. I just want to make one point. For us, this isn’t a 

new effort. And again, I remind you when we were here last year— 

and this committee has always been wonderfully welcoming and 

supportive of us. But the biggest questions last year was why is everything taking so long, and we were very emphatic in our belief 

that our objective wasn’t just to pass three trade agreements, but 


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to really build a new template for trade, and I just—I said that 

from day one. 

If you go back to the first trade agenda we filed with you, we 

identified enforcement as one of the keys to—we believe—beginning to rebuild America’s trust in our trade policy. And so this is 

a continuation of that. And in short answer, I would say to you, 

we have heard your concerns. On TPP, even though we don’t have 

trade promotion authority, we calculated that we have visited with 

Members of Congress and their staff over 350 times to hear your 

concerns on a range of issues. Those are important to us, but we 

are in a good place. And I would say this committee and Congress 

deserve a lot of credit. 

The manner in which we passed the trade agreements, renewed 

Trade Adjustment Assistance, the trade preferences, and the strong 

bipartisan vote sent an unequivocal message to the world: The 

United States is ready to do business. We are open to do trade on 

the right terms. And we have got a great opportunity to move forward with that. 

So one, we want to address these concerns, but we also want to 

do it in a way that allows us to try to take advantage of this and 

get access to these new markets. 

Mr. LEVIN. Thank you. 

Chairman CAMP. Thank you. 

Mr. Herger is recognized. 

Mr. HERGER. Thank you, Chairman Camp. 

Ambassador Kirk, I want to join in thanking you for your efforts 

on free trade agreements this last year. As we continue to look for 

ways to increase exports and spur job creation in the U.S., I am 

concerned by the Administration’s seemingly paralysis on bilateral 

investment treaties. 

As you know, exports and investments go hand in hand. U.S. investment abroad allows U.S. agricultural producers, manufacturers, and service providers to reach foreign customers. As such, we 

should be pursuing BITs to ensure that U.S. investments abroad 

are protected from arbitrary government actions and discrimination, further paving the way for U.S. exports to reach foreign markets. 

Almost 3,000 BITs have been concluded worldwide, yet the U.S. 

is party to only about 40 of them. Those numbers demonstrate the 

extent to which U.S. businesses and their workers are being left 

behind in the global economy. Unfortunately, the Administration 

has announced no new plans for bilateral investment treaties since 

2009. And the existing negotiation on the China, India, and Mauritius bilateral investment treaties have been on hold for over 3 

years, because the Administration has not been able to conclude a 

review of the U.S. model that you use to negotiate BITs. 

Mr. Ambassador, what plans do you have for moving our BIT negotiation forward and announcing negotiation for additional countries without further delay? 

Ambassador KIRK. Mr. Herger, thank you, and I appreciate your 

honest expression of your concern on this. But I would like to tell 

you, just as we brought a very deliberate approach to negotiating 

the FTAs, we try to bring that same thoughtful deliberation to the 

BIT, the bilateral investment treaties. 


ccoleman on DSK8P6SHH1PROD with HEARING
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We are hopeful that we will conclude our work on the new BIT 

model in the very near future. We have, in fact, intensified our engagement, at the same time, though, with important potential partners like India and China. We built on the successful visits of 

Prime Minister Singh to the U.S. and President Obama to India, 

for example, and got India to agree to a more robust engagement. 

We had one session in India in December. We are traveling to 

India within the next several weeks for the next meeting on that 

BIT. We have had over five sessions with China. We concluded a 

BIT with Rwanda, and again we hope to conclude work on the 

model BIT within the very near future that will allow us to go forward more aggressively. 

Now, I appreciate your illustration of the numbers of BITs signed 

by other countries, but we have been trying to be much more deliberate through the President’s National Export Initiative, frankly, 

working with our businesses and using a very targeted data-centric 

model for where we would go. The good news is, most countries in 

the world would welcome the opportunity to have an FTA, a BIT, 

or a TIFA with the United States. But we think that is a unique 

opportunity we have to induce them to change their behavior in 

many places. 

But we want to go to markets in which it is in our collective best 

interests that will support that underlying concern that Chairman 

Camp mentioned, and that is job growth here and expanding our 

economy. 

So I have heard you. Hopefully, we will give you good news on 

conclusion of the model BIT. But I do want to assure you that we 

are engaged, in particular, with India, with China, and Mauritius, 

and we will be looking for appropriate partners as we go forward. 

Mr. HERGER. Well, Mr. Ambassador, I appreciate that, and I 

appreciate your hard work. But again, putting this in perspective, 

3,000 negotiated worldwide, and we are party to only four of those. 

And we haven’t had one since 2009. I would hope that we could, 

again, move a little more rapidly than we—— 

Ambassador KIRK. I do. And I don’t mean to minimize that, but 

all agreements aren’t equal. I mean, in one example, the Korea 

Free Trade Agreement is economically more compelling than the 

last seven trade agreements that we’ve done. So we are going to 

do them where they make sense, where they help us and help our 

manufacturers get important markets, and we still—I mean, I 

would remind you the United States is still the best market for foreign direct investment by a wide margin, almost 670,000 Americans owe their jobs to investment here. We are the most open market in the world. Our economy is still larger than the next two 

economies in the world. So we want to be very targeted and discreet where we use these. But I appreciate your encouragement. 

Mr. HERGER. Thank you. 

Chairman CAMP. All right. Thank you. 

Mr. Johnson is recognized. 

Mr. JOHNSON. Thank you, Mr. Chairman. 

Ron, welcome back. I’m delighted to see you. You probably liked 

the Mayor’s job better than the one you have right now. 

Ambassador KIRK. This has been—but they have both been very 

rewarding. Thank you, Sam. 


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Mr. JOHNSON. Well, I know you’re finally able to take care of 

the free trade agreements with the three countries you mentioned. 

You better than most know the importance of trade with respect 

to jobs and economic growth, especially how it affects the Dallas 

area. 

So with that, let me ask you about the President’s goal to double 

exports in relation to the President’s corporate tax reform proposal 

he put out last week. As you may know, in that proposal, the President called for a minimum tax on foreign earnings of U.S. multinationals. Given today’s global economy, I am trying to understand 

why the Administration would propose to make it tougher for U.S. 

companies to compete overseas, which would then make it harder 

for U.S. companies to increase their exports and create American 

jobs. 

Later on, we are going to be hearing from Intel’s chief operating 

officer, who, in his written testimony, puts it best by saying, ‘‘The 

revenue we generate outside the United States helps create and 

sustain our high-paying jobs at home.’’ 

So let me ask you: Wouldn’t you agree this tax proposal would 

make it harder for American companies to compete globally? 

Ambassador KIRK. Well, first of all, Congressman, it is always 

good to be with you, and I appreciate your strong support. You are 

probably not going to be surprised that I may not readily agree 

with your last statement. And you correctly noted—and I am proud 

to be a former Mayor of Dallas, home of the world famous Dallas 

Mavericks; thank you for bringing that up. But I am not a tax expert. 

Sam, I would tell you everything we are doing as an Administration is designed to encourage job growth here at home. We recognize we live in a very different world now. And for many of our 

multinational corporations, whether it is Intel or Boeing or Microsoft or Google, they have to be engaged around the world. That is 

okay. But that ought to be a business decision. It ought not be one 

that our Tax Code incentivizes because they have the ability to 

make profits abroad and keep them home. 

Now, where I would agree with the gentleman from Intel is that 

absolutely what we want to protect is that research, that investment, that core technology in which Apple creates the iPad here, 

and it may be assembled elsewhere. But millions of Americans 

have their jobs because we design, we create products from California to Texas to Illinois, and then they may be assembled elsewhere. We want to support that. But the President simply wants 

to use our ability to leverage our tax policy, which is a choice that 

says if we’re going to incentivize behavior, we want to incentivize 

behavior that encourages keeping those jobs here. 

Now, you asked about our National Export Initiative. The President challenged us in the State of the Union 2 years ago to double 

exports. We did that for a simple reason; we know about every billion dollars in exports support about 5,000 jobs at home. And if we 

could do that, that would be two million jobs. And one of the good 

news stories of our economic recovery—and we all know it is not 

enough—exports are helping to drive that. Our exports are up 

about 34 percent since that challenge. They were up 14.5 percent 

in 2011. Particularly in the farm economy we had a record year, 


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almost $140 billion in agriculture exports with a $41 billion surplus. 

So this is working, but we want to make sure we continue that, 

because we are beginning to face headwinds as the global economy 

begins to stagnate in other places. Our tax policy can complement 

that by making sure we do things to create more manufacturing 

here. And what we are beginning to hear from manufacturing, particularly when the President held his in-sourcing conference, was 

more and more business had begun to realize, particularly with 

China where wages are beginning to rise and China’s continued inability or lack of will to protect core intellectual property that, in 

many cases, they are better served bringing those jobs here. We 

think we ought to have a tax policy that helps sustain that. 

Mr. JOHNSON. I agree with you, and I don’t think we ought to 

double-tax people just for working overseas either. And I know you 

agree with that. We need to make it easier, not tougher, for American companies to compete globally. 

Ambassador KIRK. We would agree on that. 

Mr. JOHNSON. And I think you agree with that. And thank you 

for being here today, Ron. We appreciate you. 

Ambassador KIRK. Thank you. Good to see you. 

Chairman CAMP. Thank you. 

Mr. McDermott is recognized. 

Mr. MCDERMOTT. Thank you, Mr. Chairman. 

Mr. Ambassador, Washington state—Exhibit A, for the argument, that trade represents enormous opportunities for U.S. workers, farmers, and business. According to The Washington Public 

Ports Association, roughly one in four jobs in Washington state is 

tied to foreign exports, and pay for those jobs is about 46 percent 

higher than the average in the state. 

But my constituents believe—and I agree with them—that we 

have to get the full bang for our buck from all the trade deals. 

When a country signs a trade agreement with the United States, 

they have to fulfill their obligations. If we—if they fall down on the 

job, the United States should use every available tool at its disposal to make them live up to their commitments. It is just basic 

fair play. 

Last year, my Democratic colleagues and I called for the development of a comprehensive and robust strategy to help rebalance our 

trade relationship with China, and pleasing to all of us was that 

the President responded and created the Enforcement Center in 

the ITEC in his Administration. This ITEC will increase the administration’s ability to make sure that China and other trading 

partners keep their promises. 

But it needs to be made clear; China’s unfair trade policies have 

consequences not just for the United States and other developed 

countries, but for the developing countries as well, including countries in southern Africa. We can help lesser developed Sub-Saharan 

African countries compete against China by extending the thirdcountry fabric provision, one of the most important elements of the 

African Growth and Opportunity Act. This provision, which expires 

in September, allows apparel producers in these countries to use 

third-country fabric in making apparel that gets duty free treatment under AGOA. 


ccoleman on DSK8P6SHH1PROD with HEARING
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Sub-Saharan Africa competes with China in manufacturing exports. Last year, Charlie Rangel and I introduced legislation to extend the third-country provision until 2015. Identical legislation 

was introduced by Senators Baucus and Hatch last December. 

Now, both Chairman Camp and trade Subcommittee—Brady committed months ago to moving this legislation, and yet there is no 

action. Buyers are already turning away from the AGOA region, 

because they project out 9 months when they’re planning their purchase of apparel. They can’t turn on a dime. So this waiting until 

September to pass the extension doesn’t really make any sense. 

And I understand some Republicans have concerns about sending 

a revenue measure over to the Senate. If they need an ironclad 

agreement from Senators Reid and McConnell that there won’t be 

any shenanigans, well, they will get one. We cannot wait any 

longer to act if we’re serious in our economic development strategies. 

I also want to take a moment to applaud the work of the USTR 

on Boeing-Airbus case in the 2011 appellate body decision that 

ruled that Airbus launch aid and other subsidies violated WTO. If 

the UA continues to drag its feet and doesn’t withdraw the subsidies, then we should go directly to the compliance proceeding. 

My staff has been working with Mr. Reichert’s staff, the Senate, 

and folks in Congress that will really help the National Export Initiative to make us better at exporting. This bill will have no cost 

and will solve some real problems to increase exports, and I just 

want you to know that we appreciate your team’s efforts on that 

behalf. 

But I have one question for you. The May 10th changes—we are 

talking now about TPP and IPR medicines—the May 10th changes 

struck a fair balance between timely access to affordable medicines 

in developing countries and protection for innovation. In the TPP 

negotiations, USTR has proposed an alternative that throws off 

this balance in favor of protecting innovation. How have the other 

TPP countries, especially the developing ones, reacted to that proposal when it was tabled in the TPP negotiations? 

Ambassador KIRK. Well, first of all, let me thank you for your 

kind words for USTR about Airbus. That is, I think, as good an example of where smart enforcement policy helps sustain jobs. It is 

spectacularly the largest, most commercially significant case ever 

decided within the WTO identifying almost $18 billion in WTO 

non-consistent subsidies of Airbus to the harm of Boeing and their 

workers, and we are going to continue to insist that the EU complies with that. 

With respect to the Trans-Pacific Partnership and access to medicines, frankly, again—and I think I have mentioned the extraordinary number of consultations we have had with Congress. We 

have had even more with NGOs and others. What we are seeking 

to do is make sure that we have the strongest disciplines in terms 

of protecting intellectual property, which is the lifeblood of America’s economic growth, but also making sure we have access to 

medicines, that we encourage those that are involved in the production of these new lifesaving drugs to bring them to market soon. 

We have a new approach that we are trying. It is called TEAM, 

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thing to diminish what we accomplished in the May 10th agreement. We have been very plain that we at least want to start with 

the premise, with respect to the Trans-Pacific Partnership, that we 

are to build on what we have learned in the past. 

For the most part we have been doing trade agreements on the 

same model that has existed for the last 10 to 15 years. And we 

have a lot of challenges that didn’t exist then—the involvement of 

state-owned enterprises, the explosion of the generic pharmaceutical industry, and we want to just make sure that we get the 

right balance between the two. That is what we have tabled. You 

have to know some of our partners don’t want to do any of this, 

but I—while I—we will applaud, and the United States has a better than commendable track record of making sure that poor people 

around the world have access to these lifesaving medicines. We 

think it is not in our interest to do it in a manner that undercuts 

the basic premise of who does R&D and brings these medicines to 

life. 

Chairman CAMP. All right. 

Ambassador KIRK. So we are trying to strike the right balance. 

Chairman CAMP. Thank you. Time has expired. 

Mr. Brady is recognized. 

Mr. BRADY. Thank you, Ambassador. I join Chairman Camp in 

thanking you and commending USTR for the good work on moving 

these trade agreements forward. Trade is jobs. It is the economic 

freedom to buy and sell and compete around the world with as little government interference as possible, and we know the world 

has changed. It is not enough to simply buy American; we need to 

sell American in every corner of this globe. 

Clearly, with the passage of the three trade agreements, America 

is back on the trading field in a big way, but it is important that 

we not return to the sidelines. Our competitors are very aggressive, 

reaching negotiations that put us at a disadvantage. So it is important that we have a very aggressive, a very ambitious, as you said, 

21st century trade agenda. 

I commend your efforts on enforcement. I think they are critical, 

and I support them. But enforcement alone is not enough. We need 

an aggressive agenda that finds new customers for our businesses 

and our farmers, that tears down trade barriers and fights protectionism anywhere in the world. And it finds ways to move our 

goods and services better, faster, and cheaper to the customers in 

this world. That is what today is about, about finding out what 

that new 21st trade agenda ought to be. 

So first, I want to start by issuing a broad invitation to all those 

in this room today and those listening to submit comments for the 

record for this hearing about what should be in the pipeline strategically from a market standpoint, from a facilitation effort, and for 

the next trade agenda for America. 

And secondly, in going forward, Ambassador, I want to ask you 

specifically about Trade Promotion Authority. One of the lessons 

we learned from the three trade agreements was how invaluable a 

role having a clear up or down—timely up or down vote on those 

agreements was. You are currently negotiating the Trans-Pacific 

Partnership critical agreement. The President has indicated he 

would like to see it completed this year. It is important to our agriVerDate Mar 15 2010 05:21 Apr 03, 2013 Jkt 078589 PO 00000 Frm 00026 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\78589.XXX GPO1 PsN: 78589

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culture, service companies, technology, and manufacturing businesses throughout America. So clearly moving this forward this 

year is important, but how do we do that without trade promotion 

authority? 

So my first question is: When will the President submit TPA for 

Congress’s consideration. 

Ambassador KIRK. Mr. Chairman, first of all, thank you for your 

strong support. I agree with you. First of all, we aren’t going to 

conclude TPP without trade promotion authority. And we want to 

engage, frankly, with the leadership of this Committee on what we 

want in the elements of that bill, and then we will timely submit 

it to you. 

But we have got to have it. We need to have it. It gives that protection of fast-track, which as you know, was invaluable. We would 

not have been able to pass the trade agreements with Korea, Panama, and Colombia without it. And one of the reasons we have had 

so many consultations with you is we hope as we get there, we 

have built up enough trust as to what elements—what is in that 

package. Then we can—design a thoughtful bill and move it hopefully rather efficiently through our committees of jurisdiction. 

Mr. BRADY. Do you expect that? The reason I ask, one, Trade 

Promotion Authority is where Congress gives clear negotiating authority to the White House with clear negotiating objectives from 

Congress. And in return, we provide that timely up or down vote 

without amendments. 

It is critical that our negotiating partners know that they have 

that assurance when negotiating important agreements like the 

Trans-Pacific Partnership. So do you expect us to see TPA from the 

White House sometime by the middle of this year, in the third 

quarter? With the work that you are doing on TPP, do you expect 

to conclude that by the end of the year, so this has to be in advance 

of it? 

Ambassador KIRK. Mr. Chairman, I don’t want to handicap 

whether it is the middle of third quarter, but obviously, if we are 

going to meet that objective of concluding, we are going to have to 

have it before the end of the year. I would say—and my thanks to 

the committee—that the credibility we gained by the strong vote in 

this Congress on the three FTAs sort of answered the questions 

from some of our negotiating partners, on whether we had the political move to go forward. 

So one, it has not been a hindrance to us in terms of our negotiating thus far, and we have negotiated other trade agreements 

ahead of time without it. But obviously, we are going to have this 

resolved before we would bring TPP forward. 

Mr. BRADY. Thank you. I think we have another chance for 

more bipartisan success on jobs for America through trade, and I 

think that is critical. Thank you, Ambassador. 

Ambassador KIRK. Yes. 

Chairman CAMP. Thank you. 

Mr. Davis is recognized for 5 minutes. 

Mr. DAVIS. Thank you, Mr. Chairman. 

I appreciate you being here, Ambassador. We talked in December 

with Ambassador Marantis on a Trade Subcommittee hearing on 

the TPP. During that hearing, I asked Ambassador Marantis about 


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the letter the Kentucky delegation had sent you opposing USTR’s 

proposal to exclude certain products, specifically tobacco. And the 

response that we got back from your office said that you were ‘‘still 

developing our negotiating position for the TPP’’ end quote. 

As an ambitious trade agreement that I think has huge positive 

economic and national security implications for this country, I was 

wondering if you could tell us what factors are being considered in 

consultations to reach a decision regarding carve-outs, specifically 

the tobacco carve-out. And can you tell us if you are going to, in 

fact, exclude tobacco from the entire TPP or specific chapters. 

Ambassador KIRK. Well, first of all—and thank you, Congressman Davis, but let me make it clear. We have not tabled any proposal to exclude tobacco or any product. So I know there is great 

concern from the Kentucky delegation. I was with Governors 

Beshear from Kentucky and Perdue from North Carolina. We understand their very strong passion on this. As you know, there are 

equal concerns from NGOs and those in the healthcare field that 

we not table anything that would restrict this administration’s, this 

Congress’ ability to regulate in the interest of public health. 

And because of the passion on this on both sides, first of all, we 

have not tabled anything. We are trying to seek the proper balance 

between our stated objective of having a high standard, comprehensive agreement in which everything is on the table and as few 

carve-outs as possible, and at the same time, maintaining that core 

underlying standard of all trade agreements, and that would be 

nondiscrimination, that we would not treat other countries’ manufacturers’ products any differently than here—and that is the overall environment in which we are trying to come up with the proper 

balance on tobacco. But we have not yet concluded that. 

But I want to make it plain. We have not tabled anything that 

would exclude tobacco or any other product. 

Mr. DAVIS. Could you commit to us that you will stay in dialog 

with us as this position unfolds so that—— 

Ambassador KIRK. Absolutely. 

Mr. DAVIS. And I’d like to switch subjects to another area of real 

concern. We talked a lot in this Committee about manufacturing. 

I spent my post-military life in manufacturing, and there are policies that really date to the Cold war on dual use technologies that 

don’t reflect the reality of the international marketplace right now, 

specifically in the machine tool industry, which has always been at 

the heart or the cornerstone of American manufacturing. 

I have two of the most successful machine tool producers in the 

world headquartered in northern Kentucky—Mazak North America 

and MAG, the former Cincinnati Machine. And for example, fiveaxis metal cutting machines, which are at the core of any product 

production, whether it is automotive, aerospace, any other type of 

manufacturing are tightly controlled by the U.S. Government. 

Currently, it is creating huge competitive problems for us in 

Asia, in India, in Russia and China. And right now, there is at 

least 13 Chinese machine tool companies that build five-axis machines. They are exporting into other countries. The Europeans 

have a tremendous market advantage because of this issue. 

And I would like you to comment first on the challenges that— 

how can we work together to overcome this export control problem 


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on what are obviously technologies that are widely available right 

now, and there are no defense constraints on, potentially changing 

the rules on that. 

And also dealing with the issue of visa control, many of our 

international businesses that are very, very dependent on international exports to fit with the President’s plan to double exports 

can’t, in fact, get their foreign clients here through the visa process 

with the State Department. I know it is not directly under your jurisdiction, but as a trade ambassador, I think ultimately this affects your ability to promote American manufacturing and ultimately American jobs that will create a lot of export revenue for 

us. 

Ambassador KIRK. Well, Congressman, yours was both a question and an answer, and I want to tread carefully, because, as you 

know, one of the realities of my job is that Congress retained the 

ability to implement commercial treaties, and you were very prescriptive about what I do. And one of the things I am most reminded of is that I am not supposed to make immigration policy, 

nor trade policy. But I—— 

Mr. DAVIS. Feel free. Everybody else does it, too. So—— 

Ambassador KIRK. I would say I think the President has—I 

mean, the common sense of what you have said—if part of our 

growing our economy and creating jobs is taking advantage of the 

opportunity to sell more of what we make to the rest of the world, 

it would just make sense that our customers ought to be able to 

come here and learn about the products and have access to the people that are going to be supplying them and teaching them. I think 

the President has said—is correct; the best way to address this is 

part of comprehensive immigration reform, but you have stated the 

obvious. We frustrate our own efforts when our visa laws are so— 

can be so restrictive that it makes it difficult to support our underlying ambition to sell more around the world. But I would just say 

I think that speaks to the need for Congress in a bipartisan way 

to do something that makes sense. 

With respect to export controls, as you know, the President asked 

then Secretary Gates to work with Secretary Locke at Commerce 

to modernize our export control regime. Many of these laws made 

sense 50 years ago when we were in a Cold war with Russia. We 

will absolutely not compromise on the core underlying principle 

that we aren’t going to share technology with countries that might 

seek to use that against us. But for the overwhelming majority of 

products, we think that should be modernized. 

I know Secretary Bryson is working in an expedited manner to 

try to address that, because we have heard from too many businesses like the one you mentioned that the United States is just 

losing out on technology that people can easily go buy in another 

market. And we want to have that opportunity for our manufacturers. 

Mr. DAVIS. Thank you. 

Thank you, Mr. Chairman. 

Chairman CAMP. Thank you very much. 

Mr. Neal is recognized. 

Mr. NEAL. Thank you, Mr. Chairman. 


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Mr. Ambassador, I have been hearing from companies in Massachusetts, as we discussed earlier this morning, that manufacture 

here in the U.S. and also import that a free trade agreement with 

the European Union could be beneficial both in opening European 

markets for U.S.-made products and for reducing cost to U.S. consumers for certain European products that they import. 

The Port of Boston would be an obvious gateway to expand a 

trade with the EU. Is USTR considering a U.S.-EU FTA, and what 

might be the status of your discussions with your EU counterpart 

about this possibility? 

Ambassador KIRK. Congressman, we are engaged at the direction of President Obama following the visit of the President of the 

EU here last fall. He and President Barroso instructed us to create 

what they call a high-level working group. And with strong encouragement from businesses across the country, we are exploring all 

options. Now, we have been very careful not to cast it or bias it 

ahead of time by saying it would or would not be an FTA, and 

frankly—and it is a great opportunity to remind us that by a huge 

margin, this is the largest commercial relationship in the world. 

And frankly, one of the things I instructed our negotiators is to 

adopt, I guess, the trade equivalent of a Hippocratic Oath—let’s do 

no harm—because this relationship has sort of worked without government—but we are exploring everything across all areas from a 

services liberalization to non-tariff regulatory coherence. We have 

had about five meetings since the presidents have asked us to do 

that, but have tried our best to not restrict our teams as they work 

through it, but be practical, see where we have opportunities to liberalize trade, take cost out of the systems, but try and not prejudge 

the outcome. 

Mr. NEAL. And on a more parochial matter, we spoke again 

about enforcement today, and China has had severe problems with 

mandatory third-party auto liability insurance markets, and as this 

problems have become more compounded, the difficulty we have is 

that when we thought this was going to be an opening for American financial services. If anything, it has been a stalemate. I think 

that might be the best description. So I know that you have embraced firm enforcement as part of your tenure. And I hope you 

won’t take your foot off the pedal on this issue. 

And I hope we are not going to lose momentum to make sure 

that China doesn’t drag its feet in fulfilling its promise. As we indicated, there has been a huge chasm between those who thought 

that this was destiny in terms of new financial opportunities only 

to discover the impediments in those markets have not turned out 

to be quite what was anticipated. And enforcement remains a big 

issue for all of us here, and I think that with full market access 

for our companies, that they will be able to readily apply for licensure along those lines. 

Ambassador KIRK. Yes. First of all, again, I think the President’s initiative in creating the taskforce demonstrates our resolve 

to keep our foot on the pedal. And with respect to the third-party 

liability in the auto industry, one of the better outcomes from Vice 

President Xi’s recent visit was we were able to get a very firm commitment from China that they will open up that market. 


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Now, what we have to do is make sure we are diligent, as you 

said, working with China that they will move quickly to implement 

the regulatory changes to enhance that. But hopefully, by the time 

I see you again, we will have companies selling in that market. 

Mr. NEAL. Thanks. Thanks, Mr. Ambassador. 

Thanks, Mr. Chairman. 

Chairman CAMP. Thank you. Mr. Reichert is recognized. 

Mr. REICHERT. Thank you, Mr. Chairman. Welcome, Mr. Ambassador. Good to see you again. And again, congratulations to you 

and your team, and I really appreciate your presence here and your 

open, honest answers. We have worked well together, the Committee and your office and my office personally. I appreciate your 

efforts. 

I want to touch on something. My focus will be all on jobs. And 

of course, this, you know, trade is essentially really, bottom line, 

about jobs. I know you’re not a tax expert, but I just want to mention the Harbor Maintenance tax and how it impacts, especially the 

West Coast and the business that we’re losing to Vancouver and 

Prince Rupert ports. The Longshoremen, Longshore Union and our 

Port Authority people are very, very nervous about how this impacts our trade opportunities especially in Washington State, in my 

case. 

If you could respond in writing, we’ll follow up this question with 

a letter, and hopefully we’ll get an answer back on what the administration’s policy might be on this. So as far as the free flow of electronic information, you’ve touched on it just a little bit, it’s critically important, as you know, to U.S. companies that sell goods and 

services over the Internet. The e-commerce—and e-commerce is 

something we know, I think, a little bit, we know a little bit about 

in Washington State, but we know that some foreign governments 

block, you know, these efforts and the flow of information. Other 

foreign governments require online service suppliers to process 

data locally or to locate servers in their contracts. 

These types of restrictions can impede trade, undermine the competitiveness of U.S. companies, and cost American jobs. This is a 

real twenty-first century trade issue. And to create a free trade 

agreement included landmark provisions on these cross-border data 

flows. Do you agree that the Trans-Pacific partnership must include strong provisions ensuring the free flow of electronic information? 

Ambassador KIRK. Absolutely we do, Congressman Reichert. 

And first of all, thank you again. You have been wonderfully supportive, and I appreciated your hosting the ASEAN trade ministers 

with us when we came out. But we agree with you, and I think you 

know we have worked with you and other Members to table what 

we believe is a very thoughtful, commonsense e-commerce provision 

in the Trans-Pacific partnership for the reasons that you articulated. 

Mr. REICHERT. Thank you. And my last question, quickly, is regarding the Export-Import Bank. And, you know, we hear the administration talk a lot about manufacturing, but it’s kind of rare 

when you hear officials talk about the importance of services. And 

we all know that services are 70 percent of our economy and 70 

percent of our jobs, getting back to jobs. Services like financing, inVerDate Mar 15 2010 05:21 Apr 03, 2013 Jkt 078589 PO 00000 Frm 00031 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\78589.XXX GPO1 PsN: 78589

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surance and express deliveries don’t just create jobs, but they create high paying American jobs and further, they enable manufacturing and they enable exports. And the Export-Import Bank is up 

for reauthorization. 

There are many who talk about the banks in terms of what it 

means for America’s largest employers, but a lot of folks really sort 

of dismiss the small business impact here of the Export-Import 

Bank. Can you explain, really, how important it is for the ExportImport Bank and their relationship with small businesses in the 

United States, please? 

Ambassador KIRK. Thank you. I’m happy to and again, I recognize I’m here as U.S. Trade Representative, but, you know, one of 

the good things we’ve worked with you on, exports are a great story 

right now. Our exports are up. We are in records across all services, all sectors. Manufactured goods are up 34 percent, agriculture 

is up 31 percent, services is up 21 percent in comparison to 2009. 

In just about every country in which we trade, we have a surplus 

in services. Seventy percent of Americans work in the service sector. Ninety-seven percent of U.S. exporters are small businesses, 

many of them in the service sector. 

So first of all, we acknowledge everything you say, Congressman. 

We are working. That’s why we are specifically addressing services 

liberalization in the Trans-Pacific Partnership. It is one of the larger opportunities we have in Korea; for example, which has over a 

half a trillion dollar services market. But I think it’s also critical, 

that Congress renew and extend the authority of the Export-Import 

Bank. I think, and forgive me, I don’t know the exact numbers, I 

want to say they have about a hundred billion dollar lending cap. 

They are effectively at about 95 percent of that. That’s going to run 

out in the next 2 months. 

And so as well as we’re doing, we’re going to lose the ability to 

finance many of our products, and particularly, for small businesses. And so I think it’s critically important that the Export 

Banks’ caps be lifted, they be extended. They cost the taxpayers not 

one single dollar. They are financed through their transactions. It’s 

one of our better stories. They enable many of our small businesses 

to grow and compete. So hopefully we can work with Congress to 

extend that. 

Mr. REICHERT. Thank you. 

Chairman CAMP. All right. Mr. Boustany is recognized. 

Mr. BOUSTANY. Thank you, Mr. Chairman. Congratulations, 

Ambassador Kirk, on getting a job well done with you, your staff 

working with this Congress to get these three free trade agreements finalized. That is singularly the most important jobs legislation this Congress has passed. And it’s bipartisan. It’s something 

we should all be proud of. But that doesn’t constitute a twenty-first 

century trade agenda. In fact, if I could use a simple football analogy, it’s almost as if we’re deep in our own territory playing defense 

and we finally created a turnover. Now we can go on offense, but 

now we have to take advantage of this and move forward. 

And so we need to continue to knock down barriers, you know, 

continue with enforcement, and also look at hurdles that we have 

to overcome here internally. And I want to join with Chairman 

Herger over my concerns about the lack of progress on getting a 


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model bid in place and also moving forward with the negotiations 

on a bid with both China and India. 

But if I could direct my questions to you on a couple of things 

with regard to China. Obviously, a broad range of issues out there. 

But two often overlooked areas are SMEs and the impact that they 

play on getting American exports into the Chinese market and 

services where we have a growing trade surplus of services. But we 

still have major problems there. I mean, for instance, currently we 

have 27,000 U.S. SMEs that exported to China in 2009. We can 

grow this, and this is an area that I think clearly my district we’re 

seeing expanded activity, but there are significant barriers and 

problems in place. 

The same thing with services. Even though we do have a surplus 

with China, there are a number of issues with licensing and so 

forth that we need to—I would like to know what is the administration doing specifically in these two areas and what are our 

metrics. I mean, beyond just hearing what President Hu has said, 

statements from Wang Qishan, Mr. Xi was here earlier, but what 

is going on. How are we ensuring this follow-through in China on 

these things that we’re agreeing to and what are the metrics to 

show progress? 

Ambassador KIRK. Okay. If I could take those separately because with the SMEs, through our export promotion activities, our 

Trade Policy Coordinating Committee, we have very specific 

metrics, but in many cases not country-specific. Maybe I will take 

that remark back. 

I think you all know we have only, surprisingly, about 280,000 

businesses in the U.S. of any size that export. Ninety-seven percent 

of those are small businesses. One of the first things I did was ask 

the ITC to do a study to help us understand who they were. And 

that’s, from my bias back when I was a Mayor; the most important 

thing is to find out who your customers are. 

So one of our first metrics is one, if we could just double the 

amount of small businesses that export because small businesses 

who export grow more, pay more, hire more. We represent only 

about 1 percent of the universe of all small businesses in the U.S. 

Now we’ve been more discriminating than that because our SBA 

administrator helped us understand small business is broad 

enough to capture everybody from the sub shop, but, you know, of 

those that could export, we’re trying to double that. We’re providing more knowledge, more trade, promotion authority, financing, 

a number of those things. But if we can double that, get that from 

1 percent to the global average of 2 to 3, I think you can understand the role that will play in jobs. 

Secondly, I’ll be honest, many of our small businesses export to 

only one country, one customer. So that’s a great place to start. If 

they’re exporting, they’re not afraid of it, and we’re working to help 

them grow and expand. Now, I’ll be honest. With many of our 

small businesses, the best advice we tell them, you be very careful 

about going to a country like China because frankly, you know, 

Boeing can survive a five-year fight over Airbus. That small business that Congressman Neal and Congressman Davis mentioned, 

they can’t. And we really steer—— 


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Mr. BOUSTANY. I’ve had companies that have had similar problems. 

Ambassador KIRK. Right. 

Mr. BOUSTANY. But one, we try to work with them to make 

sure they go somewhere there is going to be respect for rule of law; 

their product isn’t going to be ripped off. Broadly on China, we’re 

doing everything through the strategic and economic dialogue, the 

JCCT. We are taking them to court. They have a very close service 

market. As you know, we sought WTO panel consultation, for example, in the payment of electronic services to try to open up that 

market, but the pace nearly isn’t to our satisfaction. And again, one 

of the rationales behind creating this trade enforcement center is 

so we can be more aggressive in taking some of those challenges. 

Mr. BOUSTANY. Thank you. I yield back. 

Chairman CAMP. Thank you. Mr. Becerra is recognized. 

Mr. BECERRA. Thank you, Mr. Chairman. Ambassador, thanks 

for being with us. And let me congratulate you and the administration for the work you’ve done, the successes you’ve had. And I believe that America, its workers, its entrepreneurs, its businesses, 

its farmers are all very much looking forward to your continued 

success as we try to open up markets in a fair and competitive way 

for our businesses and our workers here in this country. 

I also want to applaud you, by the way, for the work that this 

administration has done and its recent announcement, in fact yesterday’s announcement, about the establishment of the trade enforcement center. That, I believe, will help us continue in this 

march towards the competitive and level playing field for American 

businesses and American workers. I hope that you can get that up 

and running very quickly. If we have that robust commitment to 

enforcement, I think that will be the key to helping establish broad 

support for a trade agenda here domestically and certainly to help 

make sure that we have that even playing field abroad for our companies and our workers to get out there and open up markets. 

I wanted to focus most of my time, if I could, just on the questions pertaining to the trade agreements that were recently signed. 

I just got back a couple of days ago from Colombia and had a great 

visit, a remarkable visit with President Santos of Colombia who is 

trying to do some remarkable things for the country. They have 

made some great strides in the last several years, and they acknowledge that it is because of U.S. support and investment and 

cooperation that they’ve been able to make some tremendous 

progress there. And they are working with us to try to make sure 

that implementation of the different commitments and promises 

made in this trade agreement are achieved. 

One of those very important commitments was in the area of 

labor, as I know you know this very well because you were very 

key in getting those terms agreed to. President Santos seems very 

committed to making sure we’re well on our way to getting those 

pieces of the puzzle in place on the Colombian side. I’m hoping that 

you can give me a sense of what we’re going to do to help monitor 

and assist Colombia as it tries to move forward because some of 

those commitments are going to be tough. They require institutional change. 


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The issue of assassination of individuals simply because they 

happen to be trade unionists or the issue of the suppression of the 

ability of workers to try to collectively bargain are still there. And 

the President was very clear that he is committed to try to move 

forward on improving the situation there for Colombian workers so 

that American workers and American businesses can trade on an 

open and level playing field. But can you tell me what we’re doing 

to try to, for example, help them further integrate these commitments into their institutions? 

Ambassador KIRK. First of all, Congressman, again, thank you 

for your kind words, and thank you for your strong support and advocacy on a number of these issues. One, I would hope that perhaps if not with you personally, my staff could follow up with your 

team just to get a better sense of what you learned. 

One, I would say we have made very good progress, not only with 

Korea, which will go into force March the 15th, but Panama and 

Colombia as well. We realize, as Congressman Brady said, the first 

step is passing these agreements, but to get the benefits, we need 

to get them entered into force. I know for you and many Members 

of the Committee, particularly from the Democratic party, absent 

this strong labor action plan, we wouldn’t have gotten the strong 

bipartisan support we did. Because of that, the President made a 

commitment we would make sure that that was implemented, not 

only in the letter, but the spirit of it as well. 

Now we have some more work to do, but we have been very encouraged, frankly, with President Santos’ very quick implementation of a number of those. As you know, one of the reasons we delayed bringing Colombia forward, we wanted to see these changes 

in law. We didn’t want lip service. He did that. He appointed, I 

think, to many people’s, frankly, surprise, one of the most respected labor leaders in Colombia as the new head of a new separate labor ministry. 

And Minister Pardo, I believe, came and met with a number of 

you here. He has met with labor leaders here. They have moved 

to hire many of the inspectors within the Labor Ministry that we’ve 

asked. They have worked, frankly accepted technical assistance 

from our Department of Labor, as well as the International Labor 

Organization. They have moved to address concerns in some of the 

most important sectors we asked them in terms of not only identifying issues, but bringing—holding people accountable. 

Now there is more to do, but at least it feels like they are absolutely meeting both the letter and the spirit of what we have asked 

them to do. And so we have made this a very collaborative process. 

And I very much have to highlight the strong involvement of Secretary Solis and her team and working with them. But at least 

thus far, it has been a very good, strong collaboration, and we’ll 

continue to monitor and give them that technical assistance where 

they have asked for it. 

Mr. BECERRA. And my time has expired. So I’ll just close by 

just saying that I agree with everything you said. And maybe we 

can work with them on their inspections and on their interpretations of some of the laws. But I agree with you, they’re trying to 

make progress. And thank you, Mr. Chairman. 

Chairman CAMP. Thanks. Mr. Buchanan is recognized. 


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Mr. BUCHANAN. Thank you, Mr. Chairman, and I want to 

thank the Ambassador for being here today and especially, as everybody has mentioned on the free trade agreements, it’s huge to 

Florida. As you know, Ambassador, we’ve talked about it. We have 

14 ports, $68 billion worth of economic activity. And so I want to 

thank you again for your leadership on that. 

Jobs. That’s what we’re all here for today. Last year I introduced 

a 10 point jobs plan. One of the key parts of the jobs plan was China’s blatant disregard for intellectual property rights. It was reported by the U.S. International Trade Commission that Chinese 

piracy and counterfeiting cost American businesses an estimated 

$48 billion in 2009. The report concluded that 2.1 million jobs could 

be created in the U.S. if China complied with their international 

obligation to protect and enforce intellectual property rights. Ambassador, what are we doing about that and are these numbers remotely correct? That’s what I’ve been told and verified. So I wanted 

to get your thoughts on this. 

Ambassador KIRK. Well, not having been involved in this study, 

and I think Congress very wisely separates the analysis of the 

value of our trade work from the responsibility to negotiate and enforce them between USTR and the International Trade Commission, but your numbers seemed at least remarkably similar. I think 

it was Chairman Levin that mentioned the same study. 

From my perspective, again, my bias having been a local official, 

if it’s two hundred jobs, you know, if it’s a thousand, they’re worth 

fighting for. But clearly, China could be much more aggressive in 

enforcing and combating piracy and theft. It cost us billions of dollars of revenue to American businesses and lost jobs. And for that 

reason, it is one of the issues that we most persistently and singularly raise with China to work at, from engagements by President Obama and Vice President Biden to our work at the JCCT. 

One of the practical facts that we’ve heard from many of your 

businesses is that China typically tends to respond when we have 

an event. When we have a presidential visit, we do something. And 

they love special campaigns. And so for 6 months, they do really 

good. And then they go right back to doing what they’re doing. 

Mr. BUCHANAN. Well, they’re saying 2.1 million jobs could be 

created. So I would like to have you look at that. 

I just want to touch on another question. The Panama trade 

agreements. It’s been brought up by a lot of businesses in Florida 

to me is that even though they’ve been enacted, the U.S. exporters 

are still unable to reap the benefits of the agreements until it actually goes into force. That means U.S. exporters still face tariffs in 

Panama. Meanwhile, Canada and European unions and others are 

taking advantage of doing business with Panama. 

What can we do to move these along more aggressively. I know 

you’re working on it, but what more could we be doing, in terms 

of the administration, to get these enacted because it’s costing us, 

you know, not only business, but jobs all over the country. But I’m 

looking at Florida. 

Ambassador KIRK. Well, frankly, Congressman, you’ve done your 

part in giving us a strong vote, and I just want to assure you, we’re 

moving as aggressively with Panama. We sent teams down to Panama last fall. The good news, we just received some of the docuVerDate Mar 15 2010 05:21 Apr 03, 2013 Jkt 078589 PO 00000 Frm 00036 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\78589.XXX GPO1 PsN: 78589

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mentation that Panama is required to submit. And now we’re going 

through the process of analyzing that to make sure it does what 

we want. But we are moving as diligently—— 

Mr. BUCHANAN. Do you have a time line, or maybe you have 

something because I get asked that a lot exactly where—— 

Ambassador KIRK. You know, I hate to put a specific time on it. 

You know, we wanted to have them all done as soon—we’re aware 

they have been at that trade agreement with Canada, and we don’t 

want to lose ground. The other element, and it goes to, if I could, 

just the point you made about infrastructure and similarly Mr. 

Reichert and Mr. Boustany. We have a great opportunity with the 

opening of the Panama Canal, but a challenge to address our port 

infrastructure all around the country because that’s going to be a 

huge opportunity for us to increase our exports. 

Mr. BUCHANAN. Thank you. I appreciate the opportunity. 

Chairman CAMP. Thank you. Mr. Smith is recognized. 

Mr. SMITH. Thank you, Mr. Chairman, and thank you, Ambassador. I appreciate your service and certainly, the agility of USTR 

to, I guess, act with the benefits of Americans in mind in production and certainly Nebraska agriculture. I was wondering if you 

could provide an update on Japan’s age restriction on the U.S. beef 

imports to 30 months and under and also how the U.S. is assessing 

Japan’s interest in joining the TPP. 

Ambassador KIRK. Thank you, Congressman. The exclusion of 

U.S. beef from the Asian market, as you know, over the last 8 

years has been crippling to our beef industry. We have done a better job of getting back into on U.S. agriculture exports to Korea. 

And the good news, with two-thirds of tariffs Korea has going away 

on March 15th, we expect to see our agriculture exports there do 

even better. 

We have met with Japan I can’t tell you how many times to try 

to get them to comply and accept the fact our beef is as safe for 

consumption as any in the world. The good news, we have pressed 

them that they are now undertaking the risk assessment they have 

told us that they would to determine the safety of our beef. We are 

hopeful we can get them to conclude that and we can be back into 

that market soon because it is critical for beef suppliers all around 

the U.S. 

Mr. SMITH. Right. And certainly, this speaks to the sanitary, 

and vital sanitary issues that a lot of times our trade partners, I 

guess, don’t go off of the science-based standards. What do you see 

as perhaps an opportunity to perhaps go beyond what past trade 

agreements haven’t stated or even beyond what the WTO has in 

place? 

Ambassador KIRK. Well, our first goal for all of our partners, 

whether its China, Japan, Mexico, Europe is look, just play by the 

rules and accept sound science. We can’t allow cultural differences 

of the others to distort the market. So one, we seek that level of 

compliance with everyone. Two of the opportunities we have are if 

we can get other countries into the Trans-Pacific Partnership, one 

element is going to be some of the strongest sanitary and phutosanitary standards. And secondly, we referenced earlier one of the 

real benefits. For example, if we can lift the Jackson-Vanik restricVerDate Mar 15 2010 05:21 Apr 03, 2013 Jkt 078589 PO 00000 Frm 00037 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\78589.XXX GPO1 PsN: 78589

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tions when Russia joins the WTO, for the first time they would 

have to adhere to those sanitary and phuto-sanitary standards. 

So we’re using the opportunity to grant permanent, normal trade 

relations to Russia, as well as the development of the TPP, to try 

to enhance those standards and open up markets for American agriculture. And I referenced earlier, I won’t go through it, but agriculture is one of our good news stories in our export policy. I’m 

sure you know we had a record year last year. $140 billion dollars 

with a forty-one billion dollar surplus. 

Mr. SMITH. Right. And you touched a little bit on the situation 

with Russia. Now very specifically, there have been very tangible, 

negative results from the restrictions that Russia has placed on 

U.S. pork. I mean, we had record levels of exports of pork to Russia 

and then when some, I would say, non-science-based issues entered 

the equation, the numbers changed. What can you assure us will 

be done about that. 

Ambassador KIRK. Again, the first step would be for us to recognize that our granting Russia permanent normal trade status is decidedly in our interest. We are not required to lower one tariff. It 

would, for the first time, give our exporters, our farmers, at least 

access to dispute resolution. But we would have also the opportunity to compete for those TRQs. 

And I have to tell you the point, no one has been more supportive 

broadly of our trade initiatives than the pork industry. But I understand their very legitimate frustration in Russia because of the 

behavior of their Agriculture Ministry. But having more tools to 

confront them, Congressman Smith, would be the first step. And 

that’s why we will be working with you to address the issue of 

Jackson-Vanik. 

Mr. SMITH. Great. I appreciate that. And I think, you know, in 

closing, there are some great opportunities in the world. Obviously 

you’ve touched on those. Great background in agriculture now with 

the numbers speaking for themselves of what trade can accomplish. 

And so I’m excited that our governor is planning to travel to China 

this summer on a trade mission. And so I think the opportunities 

are out there, and I look forward to working with you to make sure 

that we do move forward with a level playing field in mind. Thank 

you. 

Ambassador KIRK. Thank you, sir. 

Chairman CAMP. Thank you. Mr. Doggett is recognized. 

Mr. DOGGETT. Thank you, Mr. Chairman. And thank you, Ambassador. Good to have you here. I think all of us recognize the potential of the Trans-Pacific partnership, and as with any trade 

agreement, there are pluses, and there are minuses. My concern 

would be that there is as much attention at USTR focused on minimizing the harm from such an agreement as maximizing the many 

potential good benefits of the agreement. 

My understanding from prior testimony we had from your office 

is that you envisioned having the same standard applied to New 

Zealand and us and Vietnam. Is that correct? Do you expect there 

will be separate provisions so that some countries are dealt with 

differently than others? 

Ambassador KIRK. Congressman, without knowing specifically— 

and it is always good to see my mother’s congressman. 


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Mr. DOGGETT. That’s right. 

Ambassador KIRK. She will send you her regards. And I am glad 

it sounds like we finally got a map in Texas. 

Mr. DOGGETT. Right. 

Ambassador KIRK. Our ambition, at least among the nine countries that initially decided to go down this road together, was let 

us not wait on what is going to happen in Doha or APEC; let us 

try and develop a new trade model for the twenty-first century 

with the highest standards knowing every country is going to have 

some challenge. 

But at least let us start with the proposition, we want a highstandard agreement that everybody has got to play to and that this 

would not be the place to try to draw those distinctions between 

developed economies or maybe least-developed or emerging economies, that if you sat at the TPP table, which we gave Vietnam 24 

months to make that decision, for example, then we would say, 

‘‘You take all the time you need to come here, but here is the price 

of admission. We are going to ask you to aim high and reach high.’’ 

And at least that is the method by which we have progressed to 

this point, Congressman, and we still want to adhere to that. 

We want to have a high-standard agreement to which all of the 

parties are sort of on the same level, and the decision as to whether you want to meet those standards is up to individual countries. 

But from our perspective, we want this to be applied across the 

board. 

Mr. DOGGETT. Do you anticipate then asking Vietnam to meet 

International Labor Organization standards, core principles? 

Ambassador KIRK. Yes, we do. 

Mr. DOGGETT. And given its history of a lack of protection for 

workers, how do you see them getting there? 

Ambassador KIRK. Look, this is going to be a big lift for them. 

But to their credit, I would say this, there were no surprises. We 

were very honest. We were going table a labor agreement that incorporates core American values. Vietnam has a further road to 

travel, but at least every step of the way, they have said, ‘‘We understand that, and we are going to aspire to that.’’ 

Now our team just came back from Vietnam. We were encouraged. They have, for the first time, sort of welcomed the ILO to 

come in and help them design some of their structures. They have 

got a lot to do. I don’t want to underscore the fact this is, for Vietnam, a much heavier lift than others. We are doing everything we 

can to provide them technical assistance. There are some areas 

they are going to say—they are going to do the, we are new, we 

are young, but that is inherent in any trade negotiation. 

Mr. DOGGETT. Are there also transshipment issues with Vietnam, Malaysia, some of the other countries? And has transshipment of Chinese goods picked up in Korea since that agreement has been ratified? 

Ambassador KIRK. It has not in Korea. Because of you all’s concerns, particularly about North Korea, as you know, we were very 

careful to craft an agreement, and I would say—Korea and the U.S. 

were interested in drafting an agreement that would help businesses in Korea and the U.S., not in China. That issue has come 

up particularly in the textile chapter, frankly, because there are 


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some American businesses who don’t want any restrictions on their 

ability to take goods from China and ship them through. 

We think this should be for the benefit of Vietnam, and we also 

want to protect a U.S. textile industry that, perhaps more than any 

other industry, feels like they have not been as well represented in 

our trade agreement. So we are trying to get the proper balance 

with our yarn-forward provisions and others that will protect the 

interest of our textile industry that is doing okay, but gives the incentive to Japanese suppliers, and not those being—— 

Mr. DOGGETT. And what about the concerns that this Committee and you have dealt with on many occasions concerning currency manipulation in Asia. Would you expect that this partnership 

would address the currency manipulation problem? 

Ambassador KIRK. Well, we are going to have an opportunity, as 

the Chairman said, I think, to talk extensively about that and 

other issues. We know that’s an issue for you, but our partners understand our concerns. Typically, that’s an issue that’s been difficult to define in the context of a trade agreement. But the core 

for us, we want an agreement that gives American exporters, farmers, entrepreneurs access to what is going to be the fastest growing 

region in the world, but gives us a level playing field and the opportunity to create jobs here. 

Mr. DOGGETT. All right. Thank you. 

Chairman CAMP. Thank you. 

Mr. Shock is recognized. 

Mr. SHOCK. Thank you. Welcome, Ambassador. Thank you for 

your good work on the three trade agreements. Appreciate your 

leadership on that. 

Questions about TPP, first question about U.S. biological medicines, many of which are produced in my home state of Illinois. 

When your Deputy Ambassador Marantis was here last December, 

I specifically asked him about whether or not USTR would be 

working to ensure that the same U.S. laws that protect U.S. biologic pharmaceuticals here in our country, specifically the 12-year 

period, would be included in TPP to ensure that those same safeguards and IP protections are in place in the countries we are 

about to trade with. 

Do you know if USTR has made a decision on that? 

Ambassador KIRK. Again, this is an issue, Congressman, where 

we understand that there are very strong differences. We are 

aware. Congress, I think, in the health care bill put in a 12-year 

period for biologics, but as you know, the administration in its 

budget has wanted a 7-year period, and I think you can understand 

where my equities would come down on that, but we have not tabled a provision on the biologics yet as we continue to try to see 

if we can’t find the proper balance between the two. 

Mr. SHOCK. Well, I am not sure even the most optimistic Member of congress would assume that the President’s budget’s going 

to pass considering the fact last year his budget didn’t get a single 

vote, even from his own party, but having said that, whether the 

period is 7 years or 12, would it be a more fair question to say regardless of what the U.S. law is of the land at the time you negotiate TPP, that it will be your objective to ensure that whatever 


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that period of protection is in U.S. law, you will work to try and 

get that same protection as a part of TPP? 

Ambassador KIRK. We are going to try to get the strongest provisions that we can, and understand, this is one where we have 

some of the strongest headwind because of some of the other countries that frankly have a very different approach to this. 

Mr. SHOCK. Well, you can understand our concern in terms of 

protecting our jobs here in the country in intellectual property and 

the money that is invested there if we don’t have those same protections. 

Ambassador KIRK. Yes, sir. 

Mr. SHOCK. Second, state-owned enterprises, you are well 

aware of the large amount of foreign and direct investment specifically from the country of China. Overwhelming majority of that foreign direct investment is from state-owned enterprises. What assurances can you give us that TPP will have not only mechanisms 

in—not only rules in place, but most importantly, mechanisms in 

place to enforce competitive disadvantages that state-owned enterprises may have when dealing with market-based companies here 

in the United States? 

Ambassador KIRK. Well, the best answer I can give you, and understand, we haven’t finished, but I will tell you for precisely the 

reasons you articulated, Congressman, this is the first time we 

have ever tabled a separate chapter on state-owned enterprises. We 

have heard from you, but just as critically we have heard from 

businesses the frustration with dealing with them, competing with 

them, and for that reason, we have insisted, and we have tabled, 

a chapter on state-owned enterprises to make sure that if they are 

going to be there, they have got to be transparent. They have got 

to operate on market principles, and then having disciplines that 

we didn’t know about, say, for example, 10 years ago, trying to 

build those into the Trans-Pacific Partnership. 

Mr. SHOCK. I have a specific question about whether or not the 

administration is prepared to rethink the need for maintaining 

high tariffs on consumer goods. As you know, when we do that oftentimes it is consumers who pay those higher tariffs, specifically 

one industry is the footwear companies who—virtually no footwear 

is produced here in the United States, and by having large tariffs 

on U.S. based companies, produced goods overseas and import, you 

are basically taxing, quite frankly, the middle class and the people 

who are buying those consumer goods. 

I have heard the administration say we need a 21st century approach to this. How do you see that shaking out? 

Ambassador KIRK. Some of your colleagues from the northeast 

would be quick to tell you there is some footwear made here with 

L.L. Bean and with New Balance, and again, as with everything, 

we want to strike that appropriate balance. If there is anything on 

which we all agree, the real winner of trade liberalization are consumers. But even the American public have told us they don’t want 

to trade cheaper t-shirts and tennis shoes for jobs. So we want the 

right balance to make sure we aren’t punishing consumers, but we 

want to protect America’s manufacturing base where we can. 

Mr. SHOCK. Okay. Finally, the pork industry in the United 

States is being significantly hurt by Canada’s recent addition of 


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Federal subsidies, their provincial and Federal Government subsidies, of their hog industry, and as a result, pork producers here 

in the United States have calculated it is going to cost thousands 

of jobs, putting our pork industry at a competitive disadvantage because the Canadian government has decided to subsidize their production. 

I am just wondering if Canada’s inclusion in TPP eventually 

would—that perhaps would be something that would be on your 

radar to get them to back down from their federal subsidies of that 

industry. 

Ambassador KIRK. It would be, and as you heard me say, Congressman, no industry has been more supportive of our trade liberalization than the pork industry. One of the issues they have 

raised, and we will address with Canada honestly using the information we’ve gathered from the Federal register process we went 

through in terms of their joining TPP, would be this issue. 

Mr. SHOCK. Okay. Thank you. 

Chairman CAMP. Thank you. 

Ms. Jenkins is recognized. 

Ms. JENKINS. Thank you, Mr. Chair, and thank you, Mr. Ambassador, for joining us and all your good work last year on the 

trade agreements. 

The free flow of electronic information is critical to U.S. companies that sell goods and services over the Internet and unfortunately some foreign governments blocked those flows. Other governments require online service suppliers to process local data or 

to locate servers in their countries. These types of restrictions can 

impede cross-border trade, undermine the competitiveness of U.S. 

companies, and cost American jobs. This is true certainly here in 

the 21st century. 

Do you agree that the TPP agreement must include strong provisions ensuring the free flow of electronic information and can you 

just comment? 

Ambassador KIRK. Congresswoman, I agree with you completely 

and for that reason we have tabled provisions to address exactly 

what you say. 

Ms. JENKINS. Okay. Thank you. 

And then to follow-up on Representative Smith’s questions, being 

from Kansas and Nebraska, farmers and ranchers rather important 

to those of us in the Heartland and certainly our U.S. farmers and 

ranchers continue to face these significant sanitary and 

phytosanitary barriers in their efforts to export to China. 

I am concerned that China continues to maintain a series of regulations and restrictions on U.S. exports of fruit, potatoes, beef, 

pork, poultry, et cetera, that aren’t supported by science and the 

independent U.S. International Trade Commission estimates that 

elimination of Chinese tariffs and nontariff measures could lead to 

an additional 3.9 billion to 5.2 billion in U.S. ag exports to China. 

These new exports would support tens of thousands of good paying 

American jobs. 

What is the administration doing to address the persistent tariff 

and nontariff barriers that block U.S. exports to China? 

Ambassador KIRK. Well, again, Congresswoman, I mean I 

couldn’t agree with you more, we have visited Kansas and I have 


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talked with Senator Roberts and others extensively. I don’t disagree with anything you have said. We continue to press China to 

adhere to sound sanitary, phytosanitary standards. We have challenged them in the WTO against, we think, non-consistent duties 

they have put on poultry. We have challenged them. 

We got a little bit of relief in the JCCT 2 years ago, if you remember, after the—no, I am not supposed to call it swine flu, 

whatever we call it, the viral scare. 

Ms. JENKINS. H1N1. 

Ambassador KIRK. H1N1. 

Ms. JENKINS. Yes. 

Ambassador KIRK. We were able to get back in that market. 

Know that we work, I mean, almost daily with Secretary Vilsack 

and his team to try to get China to a better position, that they will 

do it, and where we can’t do it in negotiation, we have demonstrated we are not afraid to take them to the WTO, and I would 

just say again, that is one more, I think, evidence of the wisdom 

of the President in creating this Interagency Trade Enforcement 

Center. 

Ms. JENKINS. Well, we thank you for your past support and encourage you to stay diligent and help us out. Thanks. 

Ambassador KIRK. We will, but, also, don’t forget about Africa. 

When we had the AGOA forum here last year, we deliberately took 

them to Kansas because it was a great opportunity. They wanted 

to study more some of our standards in terms of agriculture production and you all were a great host. 

Chairman CAMP. Thank you. 

Mr. Thompson is recognized. 

Mr. THOMPSON. Thank you, Mr. Chairman. Ambassador, thank 

you for being here. 

I want to follow-up on something that Mr. Brady said earlier 

about your shop working with overseas markets to help us here in 

the United States, and I just want to put a mention that Governor 

Brown, our Governor in California, is leading an effort to recruit 

businesses for California in China, business for California in 

China, so our folks can do business in that country, and your work 

with California would be very, very important and very much appreciated. 

I want to talk a minute about flowers, and you and I have a little 

history here. You know my concerns. In my district, I have the 

largest cut flower and greens farm in the country and we are being 

absolutely hammered by the cheaper Colombian imports, and as I 

say, we have talked about this before, and I want to know what 

you can do to help especially now with the trade agreement that 

was signed pertaining to Colombia. 

Ambassador KIRK. Well, first of all, and I understand that on 

the programmatic side because USTR’s primary responsibilities are 

negotiation, there is little we have there, but I commit we will continue to work with you and whether it is Transportation or others, 

to see if there isn’t some vehicle that we can try to ensure the competitiveness of those California growers. And I very much appreciate your continued advocacy on this. 

If I might just digress 1 minute, I would tell you at the meeting 

President Obama hosted with the national Governors on Monday, 


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almost singularly one area of cooperation with the Governors and 

administration was in our need to do more in exporting. If I could 

draw the Committee’s attention, Mr. Chairman, we have launched 

two important initiatives. One in terms of every state is trying to 

get foreign investment, but through Commerce there is a great new 

program called Select USA. We are trying to make it easier to draw 

in foreign investment, but particularly the biggest concern we have 

heard from small business is the confusion of where we start, and 

last week we launched a new tool called Business.USA.org, where 

the idea was to have one single point of entry, particularly for 

small businesses, to try to understand all the tools that we have 

available. 

Mr. THOMPSON. Thank you. And I appreciate the help on the 

cut flowers. The transportation issue is an important one. It would 

be critical to supporting California business. 

Capcom is a company in the Bay area. It started there about 

1985. They do videogames. They employ hundreds of American 

workers. The owner of that company is a constituent of mine and 

they are having a real tough time with counterfeiting going on in 

China and they have abandoned all of their efforts to fight this piracy problem because they found out that the company that is 

stealing their software has close ties with China’s Cultural Ministry. So I am hoping that the Trade Enforcement Committee will 

be able to intercede and help out, notwithstanding the association 

that these pirates have with foreign governments. 

Ambassador KIRK. First of all, we would be happy to learn more 

about that, but I would say again, one of the key asks that we had 

at least year’s JCCT was we wanted China to institutionalize at 

the highest level a governmental entity to deal with piracy and 

counterfeiting. They have agreed to do that. 

Secondly, one of the reports that we present to you every year 

is our 301 report on other countries’ compliance with intellectual 

property rights. For the first time, last year in February we submitted to you what we called a notorious markets report identifying specifically the worst of those actors. It was a small step, but 

because of that, we were able to get China to shut down one of 

their worst sites for piracy, the Baidu website. But I understand 

the frustration of that small business and—— 

Mr. THOMPSON. Thank you. 

Ambassador KIRK.—we will continue to watch that. 

Mr. THOMPSON. And then, as you know, the solar manufacturers filed an anti-dumping illegal subsidies case against China and 

what is happening in regard to our solar panels here in this country is costing us greatly in jobs. Do you have any update on the 

status of that claim? 

Ambassador KIRK. As you know, the ITC, I believe, accepted the 

case. It is now going through the investigatory period with the Department of Commerce and we have to stay separate from that. 

But the one thing I love about our job is we try to hear from everyone. You should know there is a huge divergence of thought among 

the solar industry on this because we are—and we absolutely don’t 

want to yield to the issue of China dumping—but the United States 

also enjoys a huge surplus because we produce most of the components and the more technologically advanced components and we 


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have a very healthy surplus. But we will wait to see what the judgment is from the Department of Commerce. 

Mr. THOMPSON. Thank you. 

And, Mr. Chairman, I think it is important to note that Allen Edmonds still making shoes in Wisconsin, one of the greater companies around. 

Chairman CAMP. Note that the footwear for much of our military is made in Big Rapids, Michigan as well. 

So Mr. Roskam is recognized. 

Mr. ROSKAM. Thank you, Mr. Chairman. Thank you, Ambassador. 

Ambassador, I represent suburban Chicago and we have had a 

very positive exchange with your staff, who has been incredibly 

helpful. What I want to do is just highlight for you an issue. You 

and I had a conversation about this last year. Let me just read you 

a few paragraphs, kind of a short, encapsulated summary, and 

then I have a specific ask at the end. 

In suburban Chicago, there is a company called Fellows Manufacturing. These are the folks behind the bankers’ boxes and shredding machines and so forth, a stellar reputation, 550 Illinois employees, and in a nutshell, they entered into a joint venture in 

China in 2006, which went well for 3 year, and then in 2009, it just 

devolved into a nightmare. The nightmare now has involved theft 

of their property. They have been locked out and they have lost 

tools and it has been dramatic to say the least. They have now 

been involved in a Chinese court to try and seek justice, and over 

the past year, it has become, you know, increasingly murky. And 

your staff has, again, been really helpful on this. 

My question is would you be willing to raise this? You know how 

this works. If the trade ambassador raises it, it has the imprimatur 

and you are able to move the ball significantly based on your personal attention, and so I just wanted to ask if you would be willing 

to raise this issue with the Chinese Ministry of Commerce? 

It is also my understanding that you are going to be dispatching 

a delegation on intellectual property issues next month and there 

may be an opportunity there as well, but, again, your staff has 

been incredibly helpful and I just wanted to make a personal appeal. 

Ambassador KIRK. First of all, Congressman, thank you for 

bringing this to our attention. We have worked with you and not 

only will we raise it and have I raised it, but this was also one of 

the issues raised both at the Vice Presidential level and at the 

Presidential level. 

We are more than concerned and alarmed over the rise in trade 

secrets theft and—it is a tragedy. We are hearing it from small 

companies like Felloes, and larger companies as well, and I guess 

the only change since last year is for the first time it has gotten 

rampant enough that the companies have now gotten more engaged than many were before because they have realized they have 

nothing to lose. But we will continue to work with you on that. 

Mr. ROSKAM. Thank you, Ambassador. I yield back. 

Chairman CAMP. Thank you. 

Mr. Gerlach is recognized. 


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Mr. GERLACH. Thank you, Mr. Chairman. Mr. Ambassador, 

thank you for joining us today. 

I have two local companies in my area that have raised a couple 

issues and I would like to ask you about that. The one I will simply 

end by just sending you a letter, if you don’t mind, and if you could 

review it and respond, that would be much appreciated. 

Ambassador KIRK. Yes, sir. 

Mr. GERLACH. The other issue involves the issue of reinsurance 

in Brazil. I have a local company who has found an opportunity to 

do some reinsurance business down there, but apparently recently 

the Brazilian government has passed two resolutions, 224 and 225, 

that prohibit local insurers from associating themselves, in essence, 

with other companies from other countries and in essence trying to 

create a monopoly for those companies in that country on the reinsurance market. 

I know you are aware of the issue. Can you update us on the status of what your office might be able to do to encourage the Brazilian government to relook at its policy to create this monopoly situation that is uncompetitive for our companies here in the United 

States? And with the fact that the Brazilian President will be visiting in the not too distant future, might that not be a good opportunity at some point to raise this issue with he and his government 

officials to discuss it? 

Ambassador KIRK. Congressman, to prove I can be somewhat 

brief, I would say yours is both a question and an answer, and I 

would only correct you to say the president is not a he, but a she. 

It is—— 

Mr. GERLACH. Oh, I’m sorry. 

Ambassador KIRK.—President Rousseff. No, no, no. We are exceptionally frustrated, I will be honest, with Brazil’s market. But 

I would also tell you that that is part of the rationale behind President Obama’s decision last year to make Brazil, Chile, and El Salvador his first foreign trip. We see enormous opportunities to expand our trade relationship within the hemisphere and we are 

hopeful that President Rousseff’s reciprocal visit perhaps might be 

the impetus to being to loosen up some of these opportunities. 

And we applaud Brazil’s growth. They had this extraordinary 

find in terms of energy. We are, frankly, hopeful that the challenge 

of reaping the benefits of this new energy opportunity, and hosting 

both the World Cup and the Olympics, perhaps might overwhelm 

Brazil enough that they would be welcoming of our assistance in 

some of these areas like services and insurance. 

Mr. GERLACH. Okay. Thank you for that. 

And, as I say, the other issue involves a CAFTA issue involving 

a company in my area that is one of the largest retailers of school 

uniforms and there is this yarn forward issue that is affecting their 

ability to continue to do business. So I, if you don’t mind, will send 

you a letter on that and if you could review and respond, it would 

be appreciated. 

Ambassador KIRK. We will. 

Mr. GERLACH. Okay. Thank you. 

Chairman CAMP. Thank you. 

Mr. GERLACH. Thank you, Chairman. 

Chairman CAMP. Mr. Blumenauer is recognized. 


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Mr. BLUMENAUER. Thank you, Mr. Chairman. Thank you, Mr. 

Secretary, for being here. We appreciate your patience, and you 

have had expressed around the table, virtually all of us are interconnected with this global economy. 

I have two things that I will follow with you in terms of letter. 

I don’t want to take you unawares, but I want to put them on as 

part of the record, a follow-up. And then one that I would like to 

engage you in further discussion. 

One, just reference to the footwear, I come from the Pacific 

Northwest. I have people in my district who manufacture footwear 

in the United States, but you will be receiving a letter that is circulated by Mr. Shock and me about this issue that deals with being 

serious about the tariff approach because the value of the footwear 

industry is here in the United States where the manufacturing, the 

design, the product—a lot of the manufacturing that comes here 

that is done domestically comes from a product that is imported to 

the United States and duty free. This is distorted. It is not good 

long-term business for the United States. So I would like you to 

look at this letter signed by other Members. 

The other letter that I will give you deals with the Peru free 

trade agreement. I spent a lot of time in working on the environmental and labor provisions so that we could have something that 

would be bipartisan, that would speak to concerns we have all 

heard at home, and particularly as it relates to Peru and illegal 

logging. Having spent so much time on that, I am a little dismayed, 

frankly, at the lack of progress, and we have met with the Peruvian authorities. They have done a little bit. I will be sending you 

a letter that I would hope that you could give some attention to because we want the integrity of these environmental protections respected so it will make further progress in international trade easier for you and for Members of congress. 

But the point that I would like to engage with you here in my 

remaining two and a half minutes or so, which I will turn over to 

you, speaks to what has happened with government procurement. 

You probably won’t be here for testimony that will be delivered by 

Mr. Krzanich from Intel. Part of it speaks to this inequity. The 

brick countries are really not playing fair. They haven’t been signatory to the GPA, and we are getting all sorts of unfair practices 

that are costing American technology in particular, but in a wide 

range of areas. 

Frankly, this mystifies me. I think that if they are not going to 

play games, we ought to be much more aggressive in terms of our 

government policies toward their procurement activities here. This 

is not a two-way street. I find that outrageous and I am wondering 

if there isn’t something we can do to push back unless and until 

they are signatories and they play by the rules. 

Ambassador KIRK. First of all, Congressman, thank you for your 

cooperation with us on the other two issues. I will respond in writing, but I think you know we have continued to work with Peru 

to make sure that they understand that that Forestry Annex was 

real and it is in their interest and we are working and we will continue to. 

On GPA, one, I would be interested, and maybe I will have one 

of my staff stay, because I agree with you. But the fundamental 


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premise of the government Procurement Agreement is if you aren’t 

a Member of it, you don’t get the benefits of it. So, frankly, I will 

be curious to hear what the gentleman from Intel says. But China, 

Russia, those countries that are not signatories to the government 

Procurement Act have no protection or no access to any of our access that we grant to other signatories. 

Now, it is an issue that we continue to press China on because 

one of the commitments they made when we granted them permanent normal trade status is they would join the government Procurement Agreement. They have tabled an offer that we think falls 

far short of what we need, but they have not yet—— 

Mr. BLUMENAUER. Right, but there are examples of Chinese 

contracts in the United States that use some government funding 

that, frankly—I mean we have—the bridge in—building the Bay 

Bridge, $400 million of Chinese steel, and frankly a screwed up job. 

It was defective. It ended up costing more in the long run, but our 

being more aggressive about where they are beneficiaries of money 

either directly or indirectly that is taxpayer money, that we turn 

this spigot back unless and until they play by the rules for our 

companies. 

Ambassador KIRK. Well, I don’t disagree with your premise. I 

would love to know what those specific cases are so we can—— 

Chairman CAMP. Okay. Thank you. Time is expired. 

Mr. Paulson is recognized. 

Mr. PAULSON. Thank you, Mr. Chairman, and thank you, Mr. 

Ambassador, for being here today. 

You made some comments earlier about the working relationship 

we have with the EU and the high level working group I think you 

said that has been appointed to that and I appreciate those comments. That is the largest commercial relationship by far that exists and I would like to stay engaged on this issue as well and 

make sure we are able to maximize the potential in that transatlantic economic relationship. 

I also wanted to ask this, is that I know last June there was several technology companies, many that have roots to Minnesota actually, Best Buy, Honeywell, 3M, as well as U.S. Chamber and the 

Retail Industry Leaders Association, Entertainment Software Association, they filed comments with the USTR in strong support of 

your proposal to update the Information Technology Agreement, 

ITA, with the WTO, and I understand it has not been updated 

since 1996. So it does not include connected devices with Internet 

or Wi-Fi capability, like Smartphones, televisions, e-readers, et 

cetera, and these are hugely popular items and they are growing 

with consumers, and so if this agreement were updated, it would 

absolutely help lower duties and reduce costs for consumers. 

Can you just update me and the Committee where USTR stands 

with the WTO and the efforts to get this IT updated and what can 

the Committee, what can congress do to help disagreement kind of 

move forward and help reflect modern technological advances and 

developments? 

Ambassador KIRK. Well, thank you, Congressman, and one, I 

cannot tell you the value to our negotiators of what this congress 

did in a bipartisan way and the message you sent last fall in passing all of our trade agreements because, people in Geneva that 


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frankly wanted to hide behind other things questioned our political 

will. There is more we can do, but, one, you just sent a strong message. As I told them, ‘‘You give us a good deal and our congress 

will move on it, but there is never a time to take a bad deal’’. 

Now, I will say that one of the things all of you asked me was 

for an assurance that we wouldn’t just sign an agreement out of 

deal fatigue if we didn’t get the right deal. Because we insisted we 

have a more honest approach than that. The good news is we now 

have a little more latitude, frankly, to look at other ways we can 

liberalize trade. One of the opportunities a number of countries, including the U.S., has embraced is a more honest discussion about 

modernizing the ITA. 

Perhaps I can follow-up so I don’t take up more time, but we are 

working collaboratively with a number of countries that are interested in this initiative and you correctly note, this is one that our 

industry is wildly supportive of and so we will continue to work 

with you and industry to see whether we achieved this both in 

product coverage or others, but it is something we are very supportive of. 

Mr. PAULSON. Yes, I appreciate that. I would absolutely like to 

try and help you with it and help in any way possible. 

Let me follow-up too because you made some comments earlier 

about the biopharmaceutical and medical technology industries and 

that is obviously critical to the future of our economy right here in 

America, and these are industries that do support very good, very 

high paying jobs. They depend on the strong intellectual property 

rights and the innovation that created the industry, especially in 

the areas of drugs and devices, the research and development, and 

it comes from our workers here. And it is these strong IPR protections, including data protection, that make it commercially sustainable for these biopharmaceutical firms to invest so substantially. 

Do you agree in general that to encourage American innovation 

in this sector, that we need to help and make sure we are pressing 

for the same high standards and IPR protections in the TPP countries that are part of that structure going forward so we can move 

forward with keeping the R&D here and protecting that IPR? 

Ambassador KIRK. Absolutely. Yes, sir. 

Mr. PAULSON. Good. Well, I appreciate that. 

Mr. Chairman, I yield back. 

Chairman CAMP. Thank you. 

Mr. Marchant is recognized. 

Mr. MARCHANT. Thank you, Mr. Chairman. 

Ambassador, as you know, my district includes the Dallas-Fort 

Worth Airport and Los Colinas. So you know how important trade 

is to my district and our region and we are privileged to have 

someone that is so familiar with that area as trade representative. 

We have just passed the Colombian and Panama trade agreements and some people are suspecting that both the administration 

and congress is going to rest on their laurels now and not pursue 

any kind of additional trade agreements in South America. I think 

in April there is a summit that is hosted by Colombia, a lot of 

American states down there. Do you anticipate going—having representation at that gathering and do you anticipate opening discussions about new trade agreements in South America? 


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Ambassador KIRK. Absolutely. And thank you, Congressman. 

Your hometown is blessed to have a really young, dynamic Mayor 

that I think is going to have a great career as well. 

Kenny, as you know, we don’t want to lapse in too much of our 

Texas pride. No state benefits from exporting more than Texas. We 

are the number one exporter and we have been. It is important to 

note that in addition to Panama and Colombia, our largest trading 

partners are still Mexico and Canada. A lot of the benefits are to 

our region, but we aren’t going to rest. 

Two of the countries critical to moving the Trans-Pacific Partnership forward, for example, are Chile and Peru. We have a trade 

agreement with Chile, but I will be joining the President for the 

Summit of the Americas, and again, part of President Obama’s deliberate decision to go to South America first last year was to begin 

to try to set new dynamics for increased trade relations between us 

and our partners in South America and the Caribbean. 

Mr. MARCHANT. And on a second note, just recently I had the 

opportunity to visit troops in Afghanistan and we had an opportunity to stop in Pakistan and I can tell you that they had a major 

emphasis that both the prime minister, the president, and the parliamentary members, their emphasis was on trade and could I ask 

you what the trade—as trade representative, what is being done 

in—as far as you said you are going to India, but what is being 

done in Central Asia, Pakistan specifically, in opening up trade relations? 

Ambassador KIRK. Congressman, thank you so much for raising 

this because it hadn’t gotten as much attention. One of our more 

important initiatives that I referenced in my opening remarks is 

what we can do to help stabilize this region, not just in Pakistan. 

Pakistan, we would very much welcome their coming back to the 

table and frankly, that is one of the countries we could conclude 

a BIT with, for example, pretty quickly, but we have a broader initiative that we call MENATIP. It is the Middle East North African 

Trade and Investment Partnership. Recognizing one of our real 

challenges, whether it is in Egypt or Libya and others, we applaud 

this Arab Spring, but as you know, one of the challenges for their 

leaders is to show this dividend of democracy. We think we can be 

a partner with them, but we are having to tread very carefully so 

that this is seen as something that they embrace and initiate. So 

we have had teams recently in Egypt. We have gone to other trade 

partners in Jordan and Bahrain, to see how we can work collaboratively, because in many cases, they are constrained because of 

barriers among one another. 

So we are doing everything we can to work with them both bilaterally, but also pluralaterally to grow the seeds for increased trade 

and investment throughout the region. 

Mr. MARCHANT. Well, the central message from their parliamentary leaders was that an escalation in trade talks would significantly help in deescalating the tensions between Pakistan and 

our country over there. So—— 

Ambassador KIRK. As you know, we have heard not just from 

them, but you have heard it from Secretary Gates and our military 

leaders, countries that generally find a way to do business together 


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and find a common future in trade are less likely to go to war with 

one another. 

Mr. MARCHANT. The prime minister’s message primarily was 

trade not aid. So thank you very much. 

Chairman CAMP. Thank you. 

Mr. Berg is recognized. 

Mr. BERG. Thank you, Mr. Chairman. Thank you, Ambassador 

Kirk. 

I wanted to talk a little bit about Russia and where we are going 

there, and, you know, probably the first question I have is a lot of 

our tariffs are relatively low right now, and so if we don’t really 

change any of our agreements with Russia, you know, what would 

be the negative impact, the status quo, on business, on labor, on 

agriculture? 

Ambassador KIRK. Well, first of all, thank you, Congressman. 

If we were to grant Russia, which I hope we will, permanent normal trade status and lift the Jackson-Vanik restrictions, the good 

thing is not one thing is required from the United States. We don’t 

have to lower our tariffs. We don’t have to change any of our laws. 

This is decidedly about whether American businesses, farmers, 

small businesses, will reap the benefits of, frankly, all of the efforts 

that Russia will undertake to, in many cases, lower their tariffs, 

open up their service markets, begin to conform to sanitary and 

phytosanitary standards. And I want to make it plain. I know there 

are very legitimate, strong concerns on other issues, but the simple 

fact is our extending permanent normal trade relation status to 

Russia is singularly in our interest. 

Now, we do have a bilateral trade framework agreement, that 

dates back to 1992. But for us to reap the real benefits and not be 

put at a competitive advantage, I can’t make it any plainer than 

the Chairman did in his remarks. This is singularly in our commercial interest to do this. 

Mr. BERG. What would be the big benefits for our economy if we 

did take those steps, both repealing of the Jackson-Vanik, as well 

as a permanent normal trade relations? 

Ambassador KIRK. Well, I mean, Russia is the largest economy 

of the world not in a rules-based trading system. We have a number of U.S. companies and interests in the Baltics and the region, 

but Russia can be, you know, the launching pad for further integration there. It gives us protection we don’t have now. For example, 

if we have businesses there and they are experiencing challenges, 

you know, we can talk about it, but we don’t have a lot of tools to 

move it. 

We think there are a lot of offensive categories, and I can’t believe—you know, even though I’m from Texas, I really am a city 

boy—but I can’t believe the whole time I spent about talking about 

agriculture. This is a huge market for us for pork and for grain, 

for those industries. In terms of manufactured goods, the automotive industry, aircrafts, technology—with all of the opportunities 

for joint venturing in energy exploration. These are great immediate opportunities we could reap, but, again, if Jackson-Vanik 

stays in place, our exporters, our businesses are going to be competing with one hand behind their back because we won’t get that 

tariff benefit differential through the WTO. 


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Mr. BERG. I can clearly see your passion on this, so I guess the 

question is what—you know, what are you—what is the administration doing to move this forward? I mean I see it is number three 

on your list here. What are—— 

Ambassador KIRK. Well, as you know, we have begun to engage 

Congress on the need to do this and we will work with the leadership of this Committee and the Senate Finance Committee in particular on the appropriate time and vehicle to bring this up. But 

we have been very plain and I stated this in my remarks last year. 

This is something collaboratively we need to work to achieve. 

Mr. BERG. Has the President came out with a statement supporting the repeal and supporting the permanent relations? 

Ambassador KIRK. Yes, he did. In fact, I think the President referenced it in his State of the Union Address. 

Mr. BERG. Okay. Then from the administration standpoint, is 

there anything else that you are planning to do or can do to help 

remove some of the political barriers to taking this a step forward? 

Ambassador KIRK. Well, we have engaged the business community. Again, we have begun to discuss this issue with members. 

Again, there are other issues, Members legitimately concerned, 

again, but we have done everything we can to try to socialize the 

issue so that—look, many—those of us who—and I hate being one 

of those old enough to remember the debate about granting China 

PNTR. I mean, these are very, very difficult decisions, but we are 

trying to create the right environment. We can have it in a dispassionate way as possible and hopefully work with the leadership 

to get an affirmative vote. 

Mr. BERG. If there is things that leadership feels would be helpful the administration to do to this move forward, you are willing 

to help in that manner however it goes? 

Ambassador KIRK. Absolutely. 

Mr. BERG. Okay. All right. Thank you. 

I yield back. 

Chairman CAMP. Thank you. 

Ms. Black is recognized. 

Ms. BLACK. Thank you, Mr. Chairman, and again, Ambassador, 

thank you so much for being here with us. We always learn so 

much with these dialogs. 

As you know, the United States has long enjoyed a large service 

trade surplus and U.S. services firms are global leaders across 

many service sectors, especially, for example, business services like 

banking and insurance and so on. The average wage in these business services is substantially higher than in the manufacturing 

service. These are good jobs, and the business service sector alone 

dwarfs the entire manufacturing sector. 

Promoting more U.S. service exports will be important on an ongoing source of well-paid U.S. jobs, and that is, of course, something we are all looking forward to make sure that we have more 

U.S. jobs and especially those high paying jobs, and yet the President’s National Export Initiative that is led by commerce appears 

to focus principally on manufacturing exports. 

What are you doing to ensure that the administration’s export 

promotion initiative is seizing the opportunity that we have to generate good U.S. jobs by expanding our services exports? 


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Ambassador KIRK. Well, thank you for your question and let me 

at least try to—not necessarily disagree with you, but assure you 

that we are as aware of the importance of the service industry to 

our economy and our exports as you. It is absolutely an integral 

part of our National Export Initiative. We had a meeting of the 

President’s Export Council and trade policy coordinating group yesterday. We spent a large part of our time looking at opportunities 

to further expand the service industry. 

Our services exports are up about 21 percent since we started 

the Export Initiative. Many of our services, frankly, support the 

manufacturing industry. It is a place that we believe, frankly, that 

the numbers that we use in terms of our ambition for Korea are 

understated because we don’t capture services data as well as we 

do hard goods data, but, for example, in Korea, you heard even 

their president say, this is a half a trillion dollar services market. 

It is a huge opportunity for us. And particularly in our Trans-Pacific Partnership, we have engaged with the Service Industry Coalition and other groups on a number of opportunities to make sure 

we are addressing their concerns in an offensive way. 

So it is something we embrace. It is an area that we have a surplus in just about every region in the world and we think it is a 

critical place America can help other economies meet their ambition while creating jobs here at home. 

Ms. BLACK. I hear you saying that you are engaging. Can you 

give me anything more specific in what you are doing in order to 

help promote the service industry? 

Ambassador KIRK. Not that they are the only group, but one of 

the strongest resources we have is the Service Industries Coalition, 

for example. We have worked with them to hold seminars for other 

countries, frankly, on how partnering with the United States 

where, frankly, we have resources and competencies that they may 

not, is not a threat to them, but it is a way we can jointly help 

them achieve some of their broad ambitions. 

Our WTO ambassador, Ambassador Michael Punke, for example, 

met with the Service Industries Coalition yesterday to talk both 

about some practical things we can seek, the opportunity we have 

now in Geneva to expand trade and services, as well as some ideas 

that we can incorporate into our Trans-Pacific Partnership. 

Ms. BLACK. And I appreciate what you are saying. I guess I am 

just not hearing from you anything specifically that you—— 

Ambassador KIRK. Within the Trans-Pacific Partnership, we are 

specifically tailoring chapters that will expand and promote nondiscriminatory access—— 

Ms. BLACK. Okay. 

Ambassador KIRK [continuing]. To our services markets. 

Ms. BLACK. Okay. 

Ambassador KIRK. I mean I am sorry if I did not make that 

clear. 

Ms. BLACK. Okay. Well, I appreciate that, and again, you know, 

jobs, jobs, jobs are so important for us here in the United States, 

but I think we have to be very aware that as things are different 

than they were years ago, and that this is an industry where it is 

good paying jobs and I don’t want us to overlook that, and obviously manufacturing is important too, but as we move on in this 


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new age of where jobs are seen as the jobs that are the future jobs 

with high paying, I want to be sure that we are making sure we 

are staying where we need to be in that industry. 

Thank you. 

Ambassador KIRK. Yes, ma’am. 

Chairman CAMP. Thank you. 

Mr. Reed is recognized. 

Mr. REED. Thank you, Mr. Chairman, and thank you, Mr. Ambassador. Just wanted to echo the sentiment from my colleagues, 

just applaud your efforts in your office and the recent success with 

Korea, Colombia, Panama. We did a lot of work trying to advance 

that cause and I just so appreciate all the efforts that you have 

done there. 

And so I wanted to go back to our future trade agenda and in 

particular Russia and the focus on Russia and bringing them as 

they move into the potential WTO establishment, and what I am 

concerned about is I am all about free trade, but it has to be free, 

fair trade, and specifically as part of Russia’s accession into the 

WTO had agreed to concessions to open its market, such as reducing its export tariffs; however, recently the Russian Government 

has taken administrative actions that would undermine these export concessions. For example, a draft decree would cut off exports 

of metals, such as tin, magnesium, and titanium, just to name a 

few, key materials used by the steel industry and other manufacturers in my district from selected Russian ports. I believe that was 

issued in December/January of this year. 

And I was wondering if you are aware of that action by the Russian Government and what your thoughts on that would be, and 

also your assurances or concerns, if any, about Russia complying 

with the potential WTO requirements. 

Ambassador KIRK. Congressman, first of all, we are aware of it. 

We are troubled by it. I hope I don’t sound repetitive or redundant, 

but it is precisely again one of the reasons that we need to bring 

Russia fully into the WTO and the United States’ exporters ought 

to have that protection. Right now if we don’t lift Jackson-Vanik 

and grant them PNTR, you and I can talk about it and shake our 

heads, but I don’t have the ability to take them to the WTO, as I 

did China. Just last week, since you mentioned raw materials, the 

very first case we filed in 2009 was a case in the WTO that challenged China’s restraints on raw materials that are critical to the 

steel industry and this was a case where, you know, not just the 

United Steelworkers, but, you know, U.S. Steel Company and others had come to us and said, ‘‘This is harmful to us.’’ We acted on 

it and we got a ruling from the WTO that validated our concerns 

almost 100 percent. 

Having that in hand, that would greatly enable us to then challenge Russia in a more formal way if we can’t get them to redraw 

these export restraints by dialog, but I would go back—it absolutely makes the case why we would be benefited by having full access to all of Russia’s inclusion in the World Trade Organization, 

including dispute settlement. 

Mr. REED. Well, I so appreciate that, and I so appreciate what 

you did with the China situation and also the rare earth and the 

aggressive nature and I applaud you on that effort. 


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And so what I am hearing is that if we get Russia to the WTO 

in full PNTR status, that you would give me the assurance that if 

this type of behavior or these type of government decrees occur in 

the future, that we will vigorously go after those potential situations. Do I have that assurance from you, Mr. Ambassador. 

Ambassador KIRK. Yes, you do. 

Mr. REED. All right. Thank you so much. 

With that, I yield back, Mr. Chairman. 

Chairman CAMP. Thank you. 

Dr. Price is recognized. 

Dr. PRICE. Thank you, Mr. Chair. Mr. Ambassador, I want to 

thank you for your service and also for your patience today. You 

have been here for a good long time. 

I want to ask just a couple of very specific questions. The first 

is on state-owned enterprises. I think that Japan’s interest in the 

TPP creates an opportunity to address a number of barriers to U.S. 

exports and investment. Issues such as Japan Post remind us the 

market dangers of government provided benefits in state-owned enterprises because then they create an unlevel playing field in those 

countries. You have heard others talk about the state-owned enterprises and the problems and challenges in China. 

What are your thoughts on discouraging the proliferation of market impacting state-owned enterprises among those countries with 

which we hope to expand our trade, with specific attention to 

Japan? 

Ambassador KIRK. Well, first of all, we share your concerns 

about the presence of state-owned enterprises wherever they are 

and I am happy to follow-up with you directly, Congressman, but 

it is precisely the reason in the Trans-Pacific Partnership negotiations that we are tabling for the first time a chapter that would 

deal with the disciplines of state-owned enterprises. We have 

learned from some of the lessons that we had with respect, say, to 

China and others and we have consulted with business and with 

Members of Congress and at least are insisting that we be knowledgeable and thoughtful about that and address that. 

With respect to Japan Post, this is an issue we have challenged 

Japan regularly since we have been in. I have visited with a number of our insurers. This is an important market. You may or may 

not know AFLAC, for example, I think some 75 percent of their 

revenue comes from Japan. You know, thus far, fortunately because of their own politics, they have not moved on that. But we 

have not yielded in insisting that if they are going to open that 

market up and they are going to allow a state-owned entity to compete, it has to be on market terms and nondiscriminatory terms 

and we will continue to insist on that. 

Dr. PRICE. And I hear that, the market terms again, and you 

mentioned earlier that—the two items, transparency and market 

principles. We would suggest that it is virtually impossible to have 

market principles work with state-owned enterprises, so—and I 

would urge you to be very, very challenging to those countries that 

want to make it so there isn’t a level playing field. 

One other issue I want to talk about, in Georgia we are increasingly concerned and remarkably frustrated by India’s position to 

deny access to U.S. poultry into their Indian market, a market with 


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really great potential, and although they use a variety of excuses 

and trade barriers to prohibit the importation of U.S. poultry, the 

one that they keep coming back to is a concern about viral disease, 

avian influenza, and although it sounds foreboding, there is no scientific basis for their concern. 

So I wonder what the administration has done to convey the 

use—their concern about the use of such non-scientifically based 

measures to prevent trade that is clearly inconsistent with the 

WTO, and if this continues, does the administration plan to seek 

to enforce our rights under the WTO? 

Ambassador KIRK. We are extraordinarily frustrated with India’s continued non-application of internationally recognized scientific standards. Our American poultry, it is safe. There is no reason for them to deny us access. We have raised this at every opportunity we have engaged India, including past trade policy forums. 

We would continue. We have continued to press them. It is our 

practice, though, not to publicly state whether or when we will take 

legal action within the WTO. 

Dr. PRICE. Is it fair to say that that still remains an option that 

the administration is considering? 

Ambassador KIRK. It is certainly an option that is on the table. 

I think you could examine our actions in China on similar cases 

and others to perhaps lead you to the conclusion that you want to 

draw. 

Dr. PRICE. And I appreciate that. We would encourage the administration to move with dispatch. This has been a long, ongoing 

battle and one, again, for which there is no scientific evidence. 

Thank you so much. 

I yield back. 

Chairman CAMP. Well, thank you, and thank you, Mr. Ambassador, and thank you for being here for allowing all Members who 

wish to ask questions the chance to be able to do that. 

Senator Baucus and I wrote you and Secretary Geithner in January and we did receive a response regarding China’s currency and 

their exchange rate policies and particularly with regard to the upcoming seminar and the World Trade Organization. I want to 

thank you for the response to that letter, and without objection, I 

would like to enter both letters into the record and just tell you 

again how much I appreciate all of your efforts and your testimony 

here today and also want to acknowledge Luis Jimenez, who I understand is leaving your operation and going to be heading over to 

the White House. So we expect to see him frequently in his capacity in Legislative Affairs there, and I know that Mr. Levin would 

also like to make a comment. 

[The insert of The Honorable Dave Camp #1 follows:] 

[The insert of The Honorable Dave Camp #2 follows:] 

Mr. LEVIN. Well, Mr. Ambassador, we really appreciated all of 

your testimony and your expertise, and if I might just say a word 

to your pal Luis. As you know, he has worked incessantly on these 

issues and has represented you and USTR and the administration 

so well. And Luis, we wish you well. As the Chairman said, we 

won’t say so long since we will be seeing you very often. 

Mr. JIMENEZ. Thank you. 

Chairman CAMP. Again, thank you very much, sir. 


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Ambassador KIRK. Thank you. 

Chairman CAMP. And now I would like to turn to our second 

panel. 

We have with us today Mr. Tim Harris, President of Harris & 

Ford, Mr. Brian Krzanich, Chief Operating Officer of Intel Corp., 

Mr. James H. Quigley, Senior Partner, Deloitte & Touche, and Mr. 

Alan Wolff, Of Counsel, Dewey & LeBoeuf. 

I’ve asked these witnesses to take the long view today, specifically with respect to new negotiations and already today we have 

addressed our relationship with China and Russia, the TPP negotiations, and the need for strong enforcement. 

At this point, I would like to discuss what steps we should be 

taking in undertaking new negotiations to best position the United 

States and I welcome our panel. 

Mr. BRADY. Well, I want to join with Chairman Camp and 

thank our witnesses for being here today and again looking at the 

long view specifically with respect to new negotiations and we reserve 5 minutes for each of the testimony. 

So, Mr. Harris, I yield to you. Thank you for being here today. 

Mr. HARRIS. To Chairman Camp and Ranking Member Levin 

and Members of the Committee, I am Tim Harris, cofounder of 

Harris & Ford, a distributor based in Indianapolis, Indiana, and 

again, I thank you for this opportunity to allow me to present our 

views on U.S. trade policy. 

When I look at Harris & Ford, Harris & Ford we are, again, a 

distributor. We focus in food, pharmaceutical, cosmetics, and the 

industrial marketplace. We started out on two empty paint pails 

that the painters left behind, didn’t really have money for furniture 

or anything else, and I remember walking in, seeing those two 

empty paint pails and I said to my partner, Joe Ford, I said, ‘‘Man, 

thank God we got furniture,’’ and he said, ‘‘Where do you see furniture?’’ And I said, ‘‘Man, where I came from, Joe, that is furniture.’’ 

When we started out, we didn’t have very much. We had an idea. 

We had experiences, but companies like Procter & Gamble opened 

up their doors and allowed Harris & Ford to distribute their products, yet and still most companies, both suppliers and customers, 

were reducing their distributor base. So what we had to do, we had 

to create a niche. We had to find a way into the marketplace and 

the way that we did that was we created what we called a consolidation model. Did it first with Pillsbury where we were able to go 

into plants and they eliminate 210 suppliers in favor of Harris & 

Ford. I should say consolidate those. 

We went from distributing products in the U.S. to traveling 

abroad with, again, multibillion dollar companies of the likes of 

Coca-Cola, traveled to China and begin to import products like saccharine sweeteners, ascorbic acid, of course vitamin C, citric acid, 

and other products that were used as preservatives for primarily 

food and cosmetics. 

As time went on, we seen that our customer base, a lot of their 

growth market was overseas or offshore to India, to China, to 

South Africa, to Europe, et cetera, and what we did, we went from 

having our model that we used just domestically to employing that 

internationally. 


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Let me just say to you right now, Harris & Ford went from sitting on those two empty paint pails with zero customers and now 

Harris & Ford is about a $200 million distributor. Harris & Ford 

sells to North America, Central America, Western Europe, Asia, as 

well as the Middle East. There are 27 countries that we export 

product to, 18 companies that we import product from. 

When I look at Harris & Ford, and again trying to be very concise here, and I think about the U.S. trade policies, countries where 

it is easy to work in, countries where it is difficult for us to work 

in, there is three points that I would like to leave with the Ways 

and Means Committee here. First of all, in the countries where you 

set the rules of engagement, where the rules are like the U.S. 

rules, like Mexico, like Canada, it is easy for us to do business in 

those countries, much more difficult in countries like Brazil, Argentina, and China, Saudi Arabia. So one thing we are asking that you 

set the rules of the road. 

Secondly, I want you to understand that we are just one link in 

the supply chain and when you help our customers win, the Krafts, 

the Procter & Gambles, the Coca-Colas, if business is easy for them 

to do offshore, it makes it easy for us to do business with them as 

well. 

Third, and final, I would like to say again that a lot of companies 

that export are the same companies that import. I heard Representative Kirk express some concerns about China pirating. I 

heard some concerns about assets being taken from U.S. companies 

over in China. And it is much easier if we work with a company 

like Procter & Gamble that carries us there with them and do business with them. It is much easier. It is much safer. 

So, again, I would like you to consider the statements that I 

made and I thank you for your time. 

Chairman CAMP. Thank you, sir. Your full statement will be put 

in the record. 

Mr. HARRIS. Thank you. 

[The prepared statement of Mr. Harris follows:] 


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f 

Congressman BRADY. Mr. Krzanich. 


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STATEMENT OF BRIAN KRZANICH, SENIOR VICE PRESIDENT 

AND CHIEF OPERATING OFFICER, INTEL CORPORATION 

Mr. KRZANICH. Thank you, Congressman Brady, Members of 

the Committee. I appreciate the opportunity to appear here before 

you today and discuss the future U.S. trade policy. 

Intel is a Fortune 50 company, a leading manufacturer of computer communications and networking products. We have approximately 100,000 employees worldwide, with more than half of those 

in the U.S. 

Even during strained economic climate, Intel has continued to invest in the U.S. to stimulate economic and job growth. 

Since 2009, the company has announced plans to build two new 

factories in Oregon and in Arizona, and update its existing manufacturing facilities in those two states and in New Mexico. 

These projects required an investment of between $18 and $20 

billion and are underway currently. 

When we complete these projects, we will have created more 

than 15,000 construction jobs, and we will have created and maintained thousands of permanent jobs, all of which are sustained by 

overseas sales of our products. Trade is important to us. 

While Intel manufacturers three-quarters of its products in the 

U.S., it generates more than three-quarters of its revenue from 

overseas. 

Our ability to export and sell to 95 percent of the world’s consumers living outside the U.S. has led to record earnings during 

these turbulent times. 

In fact, microprocessors have been the leading U.S. export when 

averaged over the last 5 years. However, many U.S. industries, not 

just ours, are highly dependent on market access overseas to create 

and maintain domestic jobs. 

Robust free trade agreements are essential to market access and 

continued growth. 

I want to briefly make three points today in support of the need 

for the U.S. Government to pursue a more ambitious trade agenda. 

Each of these points is discussed in detail in our written submissions. 

My first point is that existing trade agreements need to be expanded. Too many key markets are subject to too few existing trade 

rules. I have several brief examples. 

The WTO information technology agreement or the ITA, has dramatically increased U.S. exports by eliminating Custom duties in 

many countries on a range of technology products that were in existence at the time it was negotiated. 

Mexico, Brazil and several other notable countries are not ITA 

Members. They are not signatories of the ITA. 

Many of the digital products developed in the last decade, such 

as multi-processors, video game consoles, DRAMs, are not covered 

by the ITA. 

The Information Technology and Innovation Foundation estimates that the ITA expansion would increase direct U.S. exports 

by $2.8 billion, boost U.S. revenues by over $10 billion, and support 

an estimated 60,000 new jobs. 


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Intel strongly supports the administration’s recent efforts to 

begin negotiations to expand Membership and product coverage on 

the now 16 year old agreement. 

My second example, a more broad example, is the need to expand 

the existing agreements to pertain to government procurements, 

which we heard this morning limits companies on a significant 

share of the global economy. 

Yet none of the BRIC countries are Members of the WTO government procurement agreements or the GPA, which prohibits discrimination against foreign suppliers. This has enabled China, 

India and Brazil to pursue measures designed to favor local suppliers, especially those in the electronic sector. 

The U.S. Government needs to find a way to incentivize other 

large governments to join the GPA with similar transaction coverage. 

The second major point I would like to make this morning is the 

U.S. Government must enter into additional robust trade agreements on an accelerated basis. 

Trade flow data shows how important FTAs are to the U.S. economy. Trade agreements between the U.S. and 17 countries accounted for 41 percent of the U.S. exports in 2011, even though 

these countries represent only 7 percent of the world economy. 

U.S. exports to every single FTA partner country have increased 

dramatically after these agreements were implemented. U.S. exports create and sustain U.S. jobs. 

Robust FTAs open up new markets to our exports and reduce the 

cost of doing business overseas. We need more FTAs to create more 

U.S. jobs. 

Yet the U.S. has not kept pace with other countries in opening 

new markets abroad, especially in the fast growing economies of 

Asia and Latin America, and they are now major engines of global 

growth. 

As the global competitiveness increases, our pace to increase 

market access for U.S. goods and services needs to accelerate. 

My third major point and my final one, the U.S. government 

must use a variety of mechanisms to tackle more complex non-tariff barriers. 

Some governments are linking more traditional NTBs, such as 

local content measures, with new entities that promote discriminatory technology standards and favor domestic intellectual property 

rights, all with the objective of creating national manufacturing 

champions and increasing indigenous innovation. 

Mr. BRADY. Mr. Krzanich, I apologize. Time has expired. I 

would like to come back to your points during the questioning, if 

I may. Thank you, sir, and welcome. 

[The prepared statement of Mr. Krzanich follows:] 


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f 

Mr. BRADY. Mr. Quigley. 

STATEMENT OF JAMES H. QUIGLEY, SENIOR PARTNER, 

DELOITTE LLP 

Mr. QUIGLEY. Thank you, Congressman Brady. I appreciate the 

chance to testify here before the Committee on the future directions of international trade policy and negotiations. 

I have submitted a written statement and I ask that be included 

in the record of the hearing. 

My name is Jim Quigley. I am a senior partner of Deloitte LLP, 

and prior to that role, I was the chief executive officer of Deloitte 


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Touche Tohmatsu Limited, a global network of Deloitte Member 

firms around the world that provides services in 153 countries. We 

definitely have an interest in your work on trade. 

This hearing is both important and timely because there is no 

more significant issue facing our Nation than the need for economic 

growth and jobs. 

Trade negotiations to open markets and strengthen the rules of 

fair international competition are a critical component of the policies needed to address growth and employment. 

Deloitte has long supported the multi-lateral trading system and 

like many others, we had hoped for a successful conclusion of the 

Doha development round of negotiations with agreement on a 

broad market opening package for services, manufactured products 

and agriculture. Unfortunately, this appears to be beyond the reach 

of negotiators in the foreseeable future. 

Although the suspension of the Doha round is disappointing, it 

does give us an opportunity to reassess our negotiating objectives 

and launch some initiatives that might prove more successful in 

the immediate timeframe. 

Over the past few years, I have had the good fortune to co-chair 

the Transatlantic Business Dialog and over the past several 

months, I have served as a Member of the Transatlantic Task 

Force on Trade and Investments, sponsored by the German Marshall Fund of the United States and the European Center for International Political Economy. 

Both have recently articulated their visions for the future of global trade and investment built on a strong transatlantic platform. 

This makes both good political and good economic sense. The 

U.S. and the EU already have the largest trade and investment relationships in the world. 

We enjoy relatively similar wage and benefit structures and labor 

rights and worker protections. We have common concerns about the 

environment and the health and safety of our citizens, and we have 

generally robust intellectual property protections, and we have a 

shared view of the global trading system based on free markets and 

fair competition. 

Given the level of integration that already exists, we have an opportunity to raise the transatlantic relationship to a whole new 

level, a real partnership for jobs and growth. 

In this connection, I hope the high level working group that Ambassador Kirk earlier referenced that is co-chaired by him and 

Commissioner DeGucht will set an ambitious agenda, constrained 

neither by old trade concepts, such as FTAs, nor by past issues 

where agreement has proved elusive. 

We should strive for a truly barrier free transatlantic marketplace. This could bring enormous benefits in three ways. 

First, it would add hundreds of billions of dollars to our economic 

output, more than $120 billion from the removal of tariffs, and 

more than $210 billion from the removal of even half of the nontariff barriers. 

This is to say nothing of the potential gains in the service sector. 

Second, it would also allow us to tackle issues that are significant to business in the 21st century that have not been addressed 

or only timidly addressed in multilateral negotiations, such as servVerDate Mar 15 2010 05:21 Apr 03, 2013 Jkt 078589 PO 00000 Frm 00080 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\78589.XXX GPO1 PsN: 78589

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ices, information flows, government procurement, the movement of 

talent, product and service standards, and regulations, to name 

some of the prominent few. 

Third, it would set the stage for engaging other countries in more 

productive negotiations. 

Success on the transatlantic front might draw other countries 

into negotiations so that their companies can remain competitive in 

a transatlantic marketplace, and others might be encouraged by 

seeing that new and innovative solutions can be found to difficult 

issues. 

Negotiations between the U.S. and the EU to achieve these objectives should not be pursued as a single undertaking where success 

in one area is dependent on success in all others. 

Negotiations should seek positive outcomes in each area at whatever negotiating pace is possible. Forward movement should not be 

stymied by attempting to resolve up front all those difficult issues 

that have proven intractable in the past. 

The goal here is not to build a transatlantic fortress. Quite to the 

contrary, we should use progress in the transatlantic space to engage third countries and pave the way for broader trade liberalization and economic cooperation in services, investment regulation, 

and other areas I mentioned. 

Our objective here should be forward movement on a broad front 

but rooted in the transatlantic commitment to a trading system 

based on free markets and fair competition. 

Stalemate serves no one’s purpose and certainly will not lead to 

growth and employment that our economy and others so desperately need. 

Thank you again for the opportunity to express these views, and 

I would be happy to respond to questions. 

[The prepared statement of Mr. Quigley follows:] 


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f 

Mr. BRADY. Thank you, Mr. Quigley. 

Mr. Wolff, welcome. 

STATEMENT OF ALAN WOLFF OF COUNSEL, DEWEY & 

LeBOEUF LLP 

Mr. WOLFF. Thank you very much, Mr. Brady, Mr. Levin, Congressman Camp, other Members. 

I started my education on trade in this room 42 years ago, and 

it is continuing today. 


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I have for the record a longer written statement plus an attachment from the National Foreign Trade Council on trade objectives 

going forward. 

A couple of points I would make at the outset. One is we have 

come through a major financial crisis and recession without the 

trade world collapsing, so actually our trade agreements work in a 

broad sense. 

We have heard a lot about complaints today, and we have a lot 

of complaints, but in fact, overall, protectionism has not surged, 

which is amazing. 

We have a negotiation underway in TTP (the Transpacific Partnership), which is really very vibrant. It is a great opportunity. It 

may be very well the template for all future trade agreements. 

We have a positive development with the President’s initiative 

with respect to trade agreement enforcement, which we hope works 

out well. 

You, Mr. Chairman and Ranking Member Levin, have introduced 

legislation to fix a hole in our countervailing duty law with the 

Court making a mistake in the GPX case. The amendment would 

allow the commerce department to countervail, again, against subsidies from China. 

The rest of the story is far more troubling. The point I would emphasize most is the role of state owned enterprises in international 

trade. It has been brought up by several Members today. 

In this regard, most of the examples that are mentioned are from 

China. Wind energy equipment of foreign companies declined in 

sales in China from 75 percent of the market to 10 percent of the 

market in 5 years, 2005 to 2010. The causes of that decline were 

first that the purchasers were state owned enterprises but there 

were a variety of other measures. 

State owned enterprises are not only a China problem. Chairman 

Camp and Mr. Price mentioned that Japan continues to be a significant problem with respect to the ability of Americans to sell financial products. There is discriminatory regulation. There is no 

level playing field. These factors also affect express delivery services. 

If we do not cure the problem with Japan Post, we will have the 

same problem in India, we will have the same problem in China, 

we need to cure the state owned enterprise problem, and TTP as 

Ambassador Kirk mentioned has a chapter which I am told looks 

very good in this regard. 

Services negotiations. Brad Jensen for the IIE estimates that 

there are three million additional jobs in business services that 

would occur if we can open up foreign markets. 

We have a lot of problems with respect to information technology 

that Mr. Krzanich mentioned, and cross border data flows. Food security is being addressed in the wrong way in Geneva by countries 

wishing to put on more export restrictions rather than fewer. 

We have dead letter provisions in the GATT. The currency provision (GATT Article XV) not used. The transparency provision 

(GATT Article X) is not really used. The TRIPs, (Trade Related Intellectual Property) provisions, are not effective because performance is not measured in results, it is measured in process. Process 

is not good enough. 


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We are losing many billions of dollars as you all know with respect to losses due to loss of protection of IP under TRIPs. 

We need to reinvigorate the WTO. We need to make sure TPP 

lands safely as soon as possible. 

I would like to make a pitch since most Republican candidates 

at least, (I am not sure the President does) carry the Constitution 

in each of their pockets, that Article I states that actually the buck 

starts here, and trade promotion authority, I think, has to be made 

permanent, and the debate to do so should start now. The guidance 

as to what is to be done with it has to come from this Committee. 

You in this Committee and in this Congress have to set the objectives, and I think you should set them every 4 years for every 

Administration. 

There is a lot to be done with respect to trade law enforcement, 

and in my remaining 5 seconds, I would just say we do not have 

the intelligence and analytical capability devoted to foreign trade 

barriers that allow us to set trade policy correctly or trade negotiation objectives correctly. 

We are operating in the dark, and we need to put resources into 

understanding the barriers that American exporters face. 

Thank you very much. 

[The prepared statement of Mr. Wolff follows:] 


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f 

Mr. BRADY. Mr. Wolff, thank you. Thank you for all the testimony. I want to begin by reiterating the point Chairman Camp and 

I made at the initial portion of this hearing which is what we truly 

want to invite all interested stakeholders, job creators, in addition 

to the witnesses here today in giving recommendations to this 

Committee for the record on where we go next. 

I cannot emphasize how interested we are in hearing your views 

on what is next for trade policy for America. 

I want to thank the witnesses for raising the issue of non-tariff 

barriers, what we are finding in the 21st Century global marketplace is it is not enough simply to bring down the tariffs and the 


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quotas. We often find there are locked doors beyond that making 

it difficult for us to sell and compete. 

We also discovered some of those non-tariff barriers are in essence like trying to put an American plug into an European socket. 

Different standards, different regulations in telecommunications, 

technology, financial services, security, and food safety. All those 

block our ability to sell our goods and services around the world. 

Thank you for the emphasis on that. It needs to be part of our 

21st Century approach. 

I want to ask a specific question of each of our panelists about 

trade facilitation, and what we have learned since the global trade 

flows decreased significantly in 2008 and 2009 was moving goods 

cheaper, faster, and better around this world is critical to trade, 

competition and lower prices. 

Yet, there are a number of barriers to that. I know in the developing countries, we are seeing great interest in the WTO and trade 

facilitation. We see developing countries like Africa who have an 

interest in trade facilitation as a means of reducing the costs of 

doing business among themselves as well as their trade partners. 

My question is how would a new trade facilitation agreement affect your ability to sell throughout the world and to create jobs 

here in the United States, and what barriers do you see as the 

most significant that will be part of that discussion? 

Mr. Wolff, why don’t we start with you. 

Mr. WOLFF. Many of the Members of the National Foreign 

Trade Council are amongst the largest trading companies in the 

world, global companies. Moving goods across borders is still all too 

difficult. 

Tariffs have come down a lot in most places, not every place, obviously. Customs’ procedures are still a real problem, and if we are 

going to salvage anything out of the Doha Round, one of the major 

things to salvage is the agreement on trade facilitation. It actually 

would promote development. The Doha development agenda could 

be made real with an agreement on trade facilitation. 

I know Ambassador Kirk is pushing this issue very strongly as 

well in TPP. It means a lot to American business. 

Mr. BRADY. Thank you, Mr. Wolff. Mr. Quigley. 

Mr. QUIGLEY. I think anything we can do to reduce the amount 

of friction in the pipe is obviously going to increase its throughput. 

We are strong supporters of the idea of standards, mutual recognition of those standards, and then fair enforcement in order to 

promote fair competition. 

Trade facilitation absolutely can increase our exports and the 

amount of global trade that we have. That becomes the engine of 

jobs and growth. 

Mr. BRADY. Thank you, Mr. Quigley. Mr. Krzanich, you made 

the point you are manufacturing here but selling and exporting 

around the world. Trade facilitation is key? 

Mr. KRZANICH. Yes, sir, Mr. Brady. As I mentioned, most of our 

product is manufactured in the U.S., 75 percent, but 75 percent of 

our revenues from outside trade agreements give us access to 95 

percent of the consumers that lie outside the U.S. 

Trade agreements are critical to our access to markets at a fair 

and even cost. 


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Mr. BRADY. Thank you. Mr. Harris, you are a distributor. Obviously, you have to get the product to the customer. Trade facilitation an important part of what should be America’s new trade 

agenda? 

Mr. HARRIS. Very important. I think two of the areas where we 

see we could benefit is relative to the tariffs, if the tariffs were removed. The second area is relative to Customs. Somebody mentioned that. 

A company like Harris & Ford, we filled out paperwork or we actually had our expediters fill out paperwork, and they had a ‘‘1’’ instead of a ‘‘3.’’ We found it, corrected it. We were fined $78,000 on 

one transaction. On that particular product, there was zero duty on 

that product. 

Mr. BRADY. Apparently we found a new way to balance the 

budget here in Washington. 

Mr. HARRIS. I think so. 

[Laughter.] 

Mr. BRADY. Grant Adonis, former trade leader at USTR, made 

the point that time is a trade barrier, and we need to focus on real 

21st Century means to decrease that time, that cost, and we will 

create jobs in America as a result. 

Thank you very much. I would like to yield to Ranking Member 

Levin. 

Mr. LEVIN. Thank you. Welcome. 

Mr. Wolff, you talked about the need for more resources, especially in language. I hope this new proposal of the administration 

will lead to that. They are asking for more resources. We will see 

if they are given that. 

Mr. Harris, your story is a story that should be heard by small 

businesses and medium sized businesses throughout the country 

because, while they are important in terms of trade, too few still 

participate. That has been a problem for a long time. 

Let me just zero in on a couple of other issues. I just have a couple of minutes. 

Mr. Quigley, let me just talk to you about services. Within WTO, 

services’ negotiations really never got off the ground. I think that 

is a fair characterization. It kind of went up in smoke. 

What do you think? How do we do it better but differently? 

Mr. QUIGLEY. There is no question there is a huge opportunity 

that simply has not been looked at, when we look at the scale of 

services in our economy and the opportunity that is there in a global marketplace. 

Moving that up the agenda and then trying to advance something as we have advocated in a transatlantic way as a starting 

place, and then invite other countries to join an agreement that we 

might be able to reach between Europe and the U.S., I think, 

would be an important first step. 

Mr. LEVIN. You think there is reality to that in terms of discussions with the Europeans? 

Mr. QUIGLEY. I do indeed. I think we have a mutual opportunity that we should not squander, if the U.S. and Europe as this 

huge market that we represent when we work on a combined basis, 

if we want to influence the future direction of trade negotiations, 

we need to come together. 


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I believe that the high level working group that has been formed 

and this notion of a vision for the 21st century gives me hope that 

in fact we can engage on these issues and advance the ball. 

Mr. LEVIN. Mr. Krzanich, you were somewhat optimistic in 

terms of relations with China. On page ten, you talk about a number of the JCCT commitments that have been implemented, but 

then there are others that have not, so the administration may 

want to carefully track the completion of the Chinese commitments 

made to date. 

I am not sure, I am thinking back when there was competition 

between our high tech industries in Japan, and the difficulties that 

we had to barriers. 

Do you face similar problems in China? I am not clear from your 

testimony. How free are you to work there, to trade there, to feel 

protected there? You are such a vital industry. 

I may be putting you on the spot. If there is a conflict there in 

terms of your proprietary interests, do not answer beyond what you 

should, but just in the minute or two I have left, describe what it 

is like. 

Mr. KRZANICH. I would say that one of the major concerns that 

we have is that China has listed semiconductors as one of their 

strategic industries. You see them putting together programs and 

policies that really favor and try to establish this industry. 

That puts pressure on us around intellectual property protection, 

and then also it started to creep into other areas, of our ability to 

do trade in that area as well. 

Them picking out semiconductors as a growth and a strategic industry has become one of the issues for us. 

You asked how free are we to do business there. We have been 

able to do business very well there from the standpoint of being 

able to get our product in and out of there and being able to manufacture, and we do have manufacturing in China, but we continue 

to see pressure on their part to get access to that intellectual property that resides there, and we are finding that we are having to 

be more and more careful about how we manage that. 

Mr. LEVIN. Do you expect the U.S. Government to be helpful to 

you? Even companies as large as yours probably cannot do it alone. 

You need a vigorous USTR and governmental presence to help you. 

Mr. KRZANICH. Yes, it is critical that Government helps us remain having access to those 95 percent of consumers outside the 

U.S., and helping us break down these non-tariff barriers, the ones 

where governments employ standards that favor local contents. 

Mr. LEVIN. Thank you. 

Mr. BRADY. Thank you. Mr. Herger is recognized. 

Mr. HERGER. Thank you, Chairman Brady. I would like to ask 

a question of each of our panelists. With the Doha round at an impasse, what WTO initiatives would be the most beneficial to you? 

Beginning with you, Mr. Harris. 

Mr. HARRIS. I think I will have to pass on that. I cannot answer 

that. 

Mr. KRZANICH. I do not know if I know exactly which of the 

WTO initiatives would be best. You are asking for specific initiatives. 


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I think anything that continues to lower the trade barriers and 

these non-trade tariffs that are being applied by governments is 

good, but I do not have specifics beyond that, sir. 

Mr. HERGER. Thank you. Mr. Quigley. 

Mr. QUIGLEY. Our recommendation given the fact that we are 

a decade in and we seem stalled is that we move on. The way we 

recommend moving on is let’s look at U.S. and Europe and what 

can we do together in terms of that huge platform that we represent, and if we can build some principle based standard approaches to some of the matters that have become so difficult on 

the Doha round, and then other countries decide they want to join, 

to participate in this U.S./Europe market, now we have the U.S. 

and Europe driving standards, driving for mutual recognition, driving forward and facilitating trade. 

That is our recommendation, that we move on, and we move on 

with our partners in Europe, and let’s make something happen in 

a bilateral way that will then lead to plural lateral kinds of agreements. 

Mr. HERGER. Thank you. Mr. Wolff. 

Mr. WOLFF. Three possibilities exist currently, I think. A services agreement among a coalition of the willing. There are meetings 

going on in Geneva now among those countries, about 20 countries, 

that believe they can get something done in Geneva on services, to 

see whether it be done with full participation of all the WTO Members, it could become a WTO agreement. 

Under GATS, the General Agreement on Trade in Services, there 

is the possibility of having less than most favored nation treatment, so one can have an agreement in the WTO that does not 

apply to everybody, just those who are willing to play. 

Second, an expanded ITA, the Information Technology Agreement, there is sentiment to go forward with that. 

Third, an agreement on Environmental Goods and Services 

would benefit all countries. Going to zero tariffs. In addition, an 

agreement on trade facilitation, as mentioned earlier. What is not 

possible in Geneva, we will do in TPP, and TPP will become the 

template for what happens in WTO later. 

Mr. HERGER. Thank you. 

Mr. BRADY. Thank you, Mr. Herger. Mr. Davis is recognized. 

Mr. DAVIS. Thank you, Mr. Chairman. 

I would like to touch on a question that I opened up with to Ambassador Kirk. I would like to talk about the impact of Federal regulations on your ability to export, more specifically in the area of 

manufactured goods. 

MAG, a very successful machine tool producer that is located in 

my district, and a systems company, has a tremendous amount of 

their success tied to international business. 

In fact, a very large portion of their business portfolio is export 

of products internationally. It creates a tremendous amount of jobs 

in the automotive, aerospace, and industrial equipment industries. 

According to MAG, obsolete Cold war export regulations significantly limit their export market. For example, the dual use technology question that is largely outdated right now, particularly in 

the area of machine tool manufacturing. 


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For example, five axis metal cutting machine tools continue to be 

tightly controlled by the Federal Government. However, this technology is now available as a commodity worldwide, putting U.S. 

suppliers at a severe disadvantage. 

There are now at least 13 Chinese machine tool builders building 

five axis machines that as a matter of policy, the Aviation Industry 

Corp. in China will only commit to a maximum of ten percent of 

its import purchases to the U.S. machine tool industry due to the 

U.S. export policy for five axis machine tools. 

This puts European competitors at an immediate advantageous 

position to capture the rest of the market share in the fastest growing market in the world. 

MAG informs me that they could increase their annual machine 

take output in Northern Kentucky and the commensurate job creation associated with this by 30 percent, creating many new jobs, 

focused on export, because of this approval process if it were to be 

modernized. 

From your view, how do U.S. regulations impact your ability to 

compete in international markets, and what should we as Congress 

be doing to ease any regulatory burdens that companies experience? 

I would just open it up to the panel in general. 

Mr. WOLFF. The National Foreign Trade Council spends a good 

deal of its time on export control matters and sanctions. The controls and sanctions really have to be multilateral, not unilateral to 

be effective. If something is available generally from other sources, 

it must not be restricted from the United States. 

We are concerned about national security, but we also have to be 

concerned about our industrial base. Our industrial base is impaired if goods are generally available from other places and we 

are the only country restricting the exports. 

Mr. DAVIS. Would anybody else care to comment? 

Mr. KRZANICH. I will comment. I think you made one very key 

point in that many of those regulations and rules were defined a 

long time ago when those technologies were unique or at a different 

level of acceptance or availability. 

We see some similar trends in our industry as well, as competing 

power becomes higher. Things that were considered super computers before are available on your desktop and eventually in your 

palm of your hand. 

We also see things like radiation hardness, where we start to 

shrink geometries and just make things smaller. Things become 

just naturally more radiation hardened. 

Some of those regulations need to be updated for what the current trends in technology are. 

Mr. HARRIS. I am just going to make the comment that again 

at Harris & Ford, we are the small business represented here. 

Thirty percent of the products we purchase are from overseas, the 

majority of that by far is from China. As far as the exports, there 

is a disproportionate amount of exports versus imports. 

Anything that you can do that lowers the barriers for our customer base enables Harris & Ford to be able to participate, and 

particularly, I am thinking in China, because that is where our imbalance is. 


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Mr. QUIGLEY. I would just comment very quickly, Deloitte is 

not a manufacturer, but from my Transatlantic Business Dialog approach, what we have often times aspired to this barrier free market between the U.S. and Europe, and when it comes to these 

issues, we always advocate the notion of can we establish global 

standards and with global standards, have mutual recognition of 

those standards, and with that mutual recognition of those global 

standards, then create a barrier free market, where growth can in 

fact occur. 

Mr. DAVIS. Thank you very much. Mr. Chairman, I yield back. 

Mr. BRADY. Thank you, sir. Mr. McDermott is recognized. 

Mr. MCDERMOTT. Thank you, Mr. Chairman. Mr. Krzanich, we 

pass laws here and the Government tries to do things to help, but 

I would like to have your assessment of at least one thing that has 

been tried. 

I understand you have a serious problem with counterfeit chips 

being imported into the United States. The National Defense Authorization Act of 2011, the NDAA, included a provision to ensure 

that Customs can work with rights’ holders such as Intel, to more 

effectively identify and combat IPR infringing products. 

In the State of the Union, the President made clear that beefing 

up IPR enforcement at the Border will be a top priority. 

Would you agree with that, that the implementation of the 

NDAA provision is one way they can do that, and are you working 

with the administration to make sure that happens? 

Mr. KRZANICH. The simple answer is yes. Enforcement of those 

counterfeiting rules and having the Custom agents being able to 

enforce them at a stronger level is good. Yes, we are working with 

the administration. 

Counterfeiting is much broader than products just working their 

way back into the U.S. Remember, I said 95 percent of the consumers are outside of the U.S., 75 percent of our revenue is from 

outside the U.S. 

It is really much more global than that, and what we really need 

to do is really focus on externally as well. 

It is counterfeiting going on in China and those products are 

probably never coming back into the U.S., but they are being sold 

throughout the world, and really having all of the countries enforce 

these counterfeiting rules and regulations. 

Mr. MCDERMOTT. If they present to you some chips and say 

these are coming from somewhere, do you have some way to make 

sure those chips are not your chips? How do you work with Customs in dealing with that? 

Mr. KRZANICH. Yes, sir. We have a system. Think of it as like 

a bar code that every part has, that is unique to that part. It is 

generated during the manufacturing process, and tells us exactly 

the identity, where it was manufactured, what date, all that kind 

of information. 

When Customs hands us a part it questions whether it is counterfeit or not, we can tell almost immediately now whether it is 

counterfeit or not. 

Mr. MCDERMOTT. It is not reproducible by somebody else and 

putting it into another part? 


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Mr. KRZANICH. No. We would know, it is unique to that part 

and it has a unique generation code. It is not a simple number like 

you could understand otherwise. 

Mr. MCDERMOTT. You are saying the biggest problem is not 

parts coming in here, but really what is going on—— 

Mr. KRZANICH. I am saying it is a global issue broader than 

just the U.S.; yes. 

Mr. MCDERMOTT. How can we be helpful in the global issue? 

Mr. KRZANICH. I think it is back to the discussion that we have 

had all morning here in this session and the session prior as well, 

around really having the government help us with protection of intellectual property rights in all of these countries. 

All of this is around—whether it is counterfeit parts or counterfeit software or counterfeit products in general, it is around support 

of intellectual property rights. 

Mr. MCDERMOTT. Can it be done in a country that does not 

want to put the hammer down on those people who are making 

counterfeit things? We are talking about China here. Obviously, 

there are lots of other places. 

Mr. KRZANICH. I think it has to be tied to broader initiatives. 

You are right, probably just this initiative on its own would not be 

enough to get them to move. 

When you tie it to other trade efforts and make it broader than 

just this one, access to our markets, teaming with other countries 

that have intellectual property to protect as well, and access to 

those markets, I think you can incentivize them that to play in this 

global economy, you have to play by a certain set of rules, and that 

includes protection of intellectual property. 

Mr. MCDERMOTT. Do you think as the Chinese move up the 

scale of manufacture from fabric and bicycles and now they are getting into electronics, that they will have more interest in this kind 

of enforcement? 

Mr. KRZANICH. Just my own observations from my time in 

China, I would say yes, you see less counterfeit as you travel the 

streets of China. 

I think also any country that as you start to develop your own 

intellectual property, you start to become more and more interested 

in intellectual property protection. 

I think there is a natural evolution that will occur as well; yes. 

Mr. MCDERMOTT. Thank you very much for your testimony. 

Mr. BRADY. Thank you. Chairman Camp is recognized. 

Chairman CAMP. Thank you. Mr. Wolff, you mentioned permanent Trade Promotion Authority and that this Committee should 

establish some guidance, and there should be objectives. 

What kind of things did you have in mind? 

Mr. WOLFF. I sat through 2 years here when the first Trade 

Promotion Authority was put through. The House actually passed 

you, Mr. President, can change any law subject to just an override, 

and the Senate said we are not doing that, we are going to have 

fast track. 

I think executive agreements need domestic implementation for 

trade, similar to treaties. Our treaty power, the way we handle 

treaties is in the Constitution and is permanent. There is a mechanism for doing it. 


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That does not mean there should not be checks and balances 

within the committee structure to make sure that any agreement 

that comes through gets scrutinized and approved. 

I think the objectives have to be upgraded and changed regularly, and if the objectives are not met, they would not qualify for 

this permanent fast track in effect. 

Namely, you have heard here today new issues, the cross Border 

data flows, information technology products that are no longer adequately covered by agreements. 

We have now very outdated—not all of them but many of them— 

objectives in existing law. We are pretending, at least the administration is pretending that the procedures exist. 

I would say put the procedures into place, put them in permanently, and update the objectives at least for every new Administration, no less than frequently than that. 

Chairman CAMP. Thank you. To our other witnesses, obviously 

bilateral trade with India and Brazil has grown rapidly in the last 

few years. They are important markets for our exports and also for 

services. 

There are practices that have been occurring in both of those 

countries, and certainly in China, as we had been talking about 

earlier today, but the Indian and Brazilian markets as well but in 

a different context. 

What do you think about these protectionist policies? What effect 

do they have in our ability to enter into and sustain business in 

those markets, and what should we do about it? Should we pursue 

bilateral investment agreements or should we negotiate around 

them with others who are interested or both? 

Mr. Harris, why don’t I start with you, and we can just go down 

the line. 

Mr. HARRIS. Again, in speaking with our staff that handles that 

part of Harris & Ford, as I mentioned earlier, it is more difficult 

for us to work with Brazil than Mexico or Canada. 

If we could extend something similar to an agreement where you, 

the House here, the Ways and Means Committee sets the rules, 

that will make it easier for Harris & Ford to do business with 

Brazil. 

The paperwork with Brazil is a nightmare for a small company 

compared to Mexico or Canada. 

Chairman CAMP. All right. Mr. Krzanich. 

Mr. KRZANICH. I think you stated the problem very well. I 

would like to say countries like Brazil are some of our fastest growing markets now for our industry as well. 

I think the time is now to try to institute these kinds of programs. Their markets are not as developed and as big as say 

China, for example. They do not have the large internal market 

that they can capitalize on as well. 

I would say the answers are similar to what we said throughout 

this conversation, that we really need to put together trade agreements that break down these non-trade barriers, these government 

driven programs. 

I think now is the time to do that because they are going to be 

incentivized because access to our market is a bigger incentive for 


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them, so they will be more willing to negotiate now than late, so 

the time is critical. 

Mr. QUIGLEY. Nothing to really add other than to just simply 

restate that because of the scale of those markets, the pace at 

which they are growing, we cannot ignore them. I think some of 

the tactics that we could use to try to influence the behavior is just 

simply negative lists. 

Name and shame of practices that we believe in fact are protectionist in their very nature, and as those economies mature, grow 

and want a stronger seat at the global table, they need to be ready 

to play by the global rules, and to call them out, I think, is one of 

the tactics that could be used to start to influence the behavior. 

Chairman CAMP. Thank you. I yield back. 

Mr. BRADY. Thank you. Dr. Boustany is recognized. 

Dr. BOUSTANY. Thank you, Mr. Chairman. 

Mr. Wolff, we are engaging in TPP negotiations without trade 

promotion authority. In your testimony, you talked a lot about 

state owned enterprises and the problem it poses. 

I guess my question would be given that our Committee has to 

provide guidance and certainly once the trade promotion authority 

is in place, we will go forward hopefully with an agreement, what 

would you like to see in a chapter on state owned enterprises? Can 

you go into a little more detail there to give us some guidance? 

Mr. WOLFF. First there must be no discrimination in regulation. 

This is a major problem. We see it in Japan. It is true in China 

and India. The Vietnamese economy, of course, has a huge number 

of state owned enterprises. 

Eliminating discriminatory regulations that favor of SOEs as opposed to private players in the market is one aspect of dealing with 

the state-owned enterprise problem. 

Obtaining market access, where a network is controlled by a 

state owned enterprise, is equally important. There have to be obligations to have state owned enterprises live up to the national 

treatment obligations of the country involved. 

Obtaining transparency. There is no transparency with respect to 

the operations or subsidies to state owned enterprises. This is a 

major problem. 

China is the number one example in the world. We have to think 

about what rules we want to apply to China when we are negotiating the rules in TPP. When the Chinese government makes a 

pronouncement, those company executives that know they have 

only one shareholder know exactly what they are supposed to do, 

and that means—I gave the example of wind energy procurement, 

wind turbines, in China—don’t buy foreign products. 

Those are all state owned enterprises that do the procurement. 

When they stopped buying foreign products, it was in part because 

there was in China an indigenous innovation policy, which now the 

Indians are following in their telecom area. 

The bid procedures are entirely secret; they are considered a 

state secret. You can go to prison for revealing those measures. 

Transparency is very important. National treatment obligations 

on the state owned enterprise itself would be very important. Market access in a real way is vital. 


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We are not against state owned enterprises as such—but if they 

are going to act in the commercial arena, they ought to be governed 

by the same rules. 

Dr. BOUSTANY. Held to the same standards. 

Mr. WOLFF. Yes. 

Dr. BOUSTANY. Thank you. Mr. Quigley, I questioned Ambassador Kirk earlier with regard to services. We have a trade surplus 

with China, some $7.5 billion in surplus. I personally believe it 

should be much higher, and I think there is potential room for 

growth there. 

China imposes all kinds of equity limitations in key sectors, 

banking, insurance, retail, telecom. There are licensing issues and 

so forth. The list goes on and on. 

What are your views on how we can deal with all this and better 

create opportunities for our services companies in China? 

Mr. QUIGLEY. I think the visibility once again is just simply a 

first step in the right direction, and given the scale of the trading 

relationship that exists between China and the U.S., I believe we 

can have discussions related to services and can begin a more disciplined and more open approach to services, and we should not put 

it in the ‘‘too hard’’ file. 

It is just simply so large, and there is mutual benefit that is 

available, so I think keeping it at the top of the list and pushing 

on services as one of those areas where we just simply have not 

invested much time at this point is something that is definitely 

worthy of the energy of those that want to work on trade policy and 

trade negotiations. 

Dr. BOUSTANY. Thank you. Mr. Krzanich, you mentioned government procurement agreement certainly with China and other 

countries, the BRIC countries. 

I can assure you our Committee is really pushing on the administration to use every bit of leverage it has with these countries to 

move forward, to see that these countries follow through with their 

WTO obligations. 

Mr. BRADY. Thank you. Votes will be called in the next minute 

or two, and we want to get to all the Committee Members, so we 

would like to move this along. 

Ms. Jenkins is recognized. 

Ms. JENKINS. Thank you, Mr. Chair, and thank you all for 

being here today. 

There is no doubt that China’s currency misalignments is a serious problem, but it seems it is not the single most pressing problem. China maintains a number of discriminatory and distortionary 

industrial policies that harm U.S. companies and their workers. 

In addition to currency misalignment, these include subsidies 

that distort competition, lack of regulatory transparency, a closed 

capital account, harmful indigenous innovation policies, failure to 

adequately protect intellectual property, and many other barriers 

to U.S. exports and investments. 

I would just like each of you maybe to comment, how does the 

currency rank in terms of other barriers that you face in China, 

and what do you all consider the most significant barriers that you 

face? 

Mr. Harris, and then down the line. 


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Mr. HARRIS. The currency itself, I think my customer base that 

I serve would speak better to that. I can tell you that one of the 

most alarming events I have ever had in business was when I was 

with one of the Vitamin C manufacturers in China. 

We were negotiating, that was the goal, to negotiate volume and 

pricing. When they said to us that we have already met with the 

other three major Chinese Vitamin C producers and they will sell 

you 10,000, this one will sell you 11,000, this one will sell you 

12,000, they already had the meeting as we were flying over, and 

already had set the price. 

Certainly, things of that nature have to be addressed because 

what happened in our industry was it drove out every Vitamin C 

manufacturer in the U.S. 

That is why I am happy and excited about our companies moving 

over and manufacturing there because that will eliminate or reduce 

those types of things from happening. 

Mr. KRZANICH. For us, we both import and export out of China. 

Currency manipulation is not really a big factor for us. I do not 

consider us really experts on this subject. 

From our point of view, I think we think we should take a broader look at China and these countries, how we manage trade. It is 

much further than just the currency issue itself. 

Ms. JENKINS. Thank you. Mr. Quigley. 

Mr. QUIGLEY. No comment on the currency issue. I would just 

simply say that in our business, it is regulatory coherence that we 

are seeking and getting to those common global standards and then 

mutual recognition that would be the enabler. 

Ms. JENKINS. Fair enough. 

Mr. WOLFF. China’s undervaluation of its currency, I think, 

causes most problems in this country—wiping out manufacturing 

competing with imports that have in effect a 20 percent (or whatever it is today) subsidy. 

On entry into China, since we are not competing very often in 

commodities but in higher value goods, it is other types of barriers 

that are really the major problem that people have mentioned. 

If someone in China will not buy something from a foreign 

source, if a state owned enterprise will not buy something from the 

United States, or will not buy something unless it is invented with 

Chinese technology, then currency values do not matter at all. 

Ms. JENKINS. Thank you. I yield back. 

Mr. BRADY. Thank you. Mrs. Black. 

Mrs. BLACK. Thank you, Mr. Chairman. I am going to be really 

brief. I just want to follow up on the comments and the dialog that 

I had with the Ambassador. 

Mr. Quigley, this goes to you. I recognize, maybe not right in my 

district but in Tennessee around me, are very important professional services that are exported. 

I do not know that we are really putting a lot of emphasis on 

that. I know the President in his agenda has looked more at the 

manufacturing side. 

I would just like you for the record to talk about where you see 

the importance of these professional services being exported, and in 

particular, how that really helps us with creating more jobs and 

not just jobs but very well paying jobs. 


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Mr. QUIGLEY. There is no question that the markets are global 

and the professional services market is also global. Having the ability to move intellectual property and then also people across Border 

becomes the great enabler of growing those businesses and at the 

pace they could grow, so access to movement of talent and VISAs, 

that we would like to be able to move people here, and also move 

people from here overseas, and getting to the point where we have 

a coherent tax policy that enables that becomes the objective. 

We at Deloitte, more than half of our jobs are outside the United 

States, but those firms are actually owned by partners in those individual countries. 

For us, I do not view it as a huge impediment, but the ability 

to move talent does sometimes get in the way, and the ability to 

share intellectual property across Border. 

Mrs. BLACK. With that being said, what would you say would 

be the number one barrier? 

Mr. QUIGLEY. Again, I go back to the regulatory coherence, the 

inability and the degree of difficulty and frankly the huge costs associated with dealing with separate sets of regulations country by 

country for a product that is fundamentally viewed for its global 

nature. 

I really hope we can get to regulatory coherence, and that would 

be a big enabler of continuing to grow the professional services 

market. 

Mrs. BLACK. I hope so, too, for the sake of our American workers for jobs and jobs that pay well. 

Thank you. I yield back my time. 

Mr. BRADY. Thank you. Mr. Reed, for the final questions. 

Mr. REED. Thank you, Mr. Chairman. Thank you to our panel. 

If I could focus a little bit on you, Mr. Harris. I come from a rural 

agricultural based, small business based area of New York State. 

You made some comments in your testimony, I believe, about 

how small business needs to work with the world, I think that is 

a phrase you kept utilizing. 

I am interested, from your frontline perspective and experience 

and from a small business perspective, and a lot of my constituents 

being small businesses, what is the most important next step, or 

what is your vision for a trade policy that could advance the small 

business opportunities on the world stage? 

Mr. HARRIS. Again, I am going to say that we are more small 

business in the services business. What we do at Harris & Ford is 

we do the things our customers do not want to do themselves. 

We specialize in the small stuff. Logistics, finding synergies, 

things of that nature. 

I am not trying to be evasive, but whatever is done to allow— 

I mentioned three companies that have really been instrumental, 

and there are others, in Harris & Ford’s growth, but let’s say, for 

example, Kraft. We sell over 500 products and to several countries. 

Whatever is done to allow them to do business easier, it is just 

a pull through effect for Harris & Ford. We get business because 

you helped them regulatory-wise. Same way with Coke, Gatorade. 

Whatever you do that helps them ease their transactions internationally, it helps us as a small business. We patch the tires and 

we do the little stuff, but we do it well. 


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Mr. REED. Being a small businessowner myself, I can relate to 

that. 

One last question. Mr. Quigley, you had some suggestions about 

how WTO was not addressing or utilizing all the tools. You said 

there was another tool that you envisioned outside of the WTO, I 

believe, in some testimony to my colleagues. 

I just want to delve into that. What specifically would you suggest outside the WTO that could be utilized to address the concerns 

that the WTO is not doing? 

Mr. QUIGLEY. I just think we have a huge opportunity with the 

colossal market of Europe and the colossal market of the U.S., and 

a wonderful and robust trading relationship today, to take an U.S.- 

EU approach to global trade. 

If we can in fact build a free trade agreement or other bilateral 

trading arrangements between the U.S. and Europe, and then we 

construct it in such a way that third countries could participate, we 

could start to move the trade agenda forward on the U.S.-EU approach, and key players in Asia would want to join because they 

want access to that U.S. and European market. 

I think there is an opportunity that is not exploited fully there. 

That is what we hope this high level working group that Ambassador Kirk is co-chairing with Commissioner DeGucht has the potential of doing, and helping to enable global trade through this 

stronger partnership for the 21st century between the U.S. and Europe. 

That is the opportunity we see. 

Mr. REED. Mr. Wolff, with your 20 years plus or how many 

years experience you have, do you see that as an opportunity to develop and promote? 

Mr. WOLFF. Absolutely. I am a multilateralist at heart. Doha is 

stalled. We cannot get as much done there if anything at all. I 

would look to see what could be done with the EU. I hope they are 

not looking inward so much because of current financial issues that 

the EU cannot join hands across the ocean and conclude a good 

agreement with the United States. 

The EU is negotiating with Canada, for example, and getting 

better market access right across the Border from us in government procurement than we have under NAFTA. 

We cannot stand still. I think we ought to prioritize, EU, Canada, Brazil, India, and the largest markets, and improve those 

agreements where we have some and get agreements where we do 

not. 

Mr. REED. Very good. With that, I yield back. 

Mr. BRADY. Great testimony, very insightful. On behalf of 

Chairman Camp, I want to thank you for being here today. 

The hearing is adjourned. 

[Whereupon, at 2:48 p.m., the Committee was adjourned.] 


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The Honorable Dave Camp, Letter 1 


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The Honorable Dave Camp, Letter 2 


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Statement of The National U.S. Arab Chamber of Commerce 


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Statement of The US–China Business Council 


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Statement of Business Roundtable 


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ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 95 here 78589.095
163 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 96 here 78589.096
164 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 97 here 78589.097
165 

f 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 98 here 78589.098
166 

Statement of U.S. Chamber of Commerce 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 99 here 78589.099
167 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 100 here 78589.100
168 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 101 here 78589.101
169 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 102 here 78589.102
170 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 103 here 78589.103
171 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 104 here 78589.104
172 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 105 here 78589.105
173 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 106 here 78589.106
174 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 107 here 78589.107
175 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 108 here 78589.108
176 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 109 here 78589.109
177 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 110 here 78589.110
178 

f 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 111 here 78589.111
179 

Statement of American Apparel & Footwear Association 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 112 here 78589.112
180 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 113 here 78589.113
181 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 114 here 78589.114
182 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 115 here 78589.115
183 

f 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 116 here 78589.116
184 

Statement of Center for Fiscal Equity 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 117 here 78589.117
185 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 118 here 78589.118
186 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 119 here 78589.119
187 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 120 here 78589.120
188 

f 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 121 here 78589.121 Insert offset folio 122 here 78589.122
189 

Statement of Consumer Electronics Association 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 123 here 78589.123
190 

f 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 124 here 78589.124 Insert offset folio 125 here 78589.125
191 

Statement of Citizen Trade Policy Commission 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 126 here 78589.126
192 

f 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 127 here 78589.127
193 

Statement of Intel 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 36 here 78589.036
194 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 37 here 78589.037
195 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 38 here 78589.038
196 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 39 here 78589.039
197 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 40 here 78589.040
198 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 41 here 78589.041
199 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 42 here 78589.042
200 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 43 here 78589.043
201 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 44 here 78589.044
202 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 45 here 78589.045
203 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 46 here 78589.046
204 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 47 here 78589.047
205 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 48 here 78589.048
206 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 49 here 78589.049
207 

f 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 50 here 78589.050
208 

Statement of Philippine Embassy 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 143 here 78589.143
209 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 144 here 78589.144
210 

f 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 145 here 78589.145
211 

Statement of Southern Shrimp Association 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 146 here 78589.146
212 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 147 here 78589.147
213 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 148 here 78589.148
214 

[Material Submitted for the Record] 

Questions For The Record 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 149 here 78589.149
215 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 150 here 78589.150
216 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 151 here 78589.151
217 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 152 here 78589.152
218 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 153 here 78589.153
219 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 154 here 78589.154
220 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 155 here 78589.155
221 

Æ 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 156 here 78589.156