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82–908 2013

HEARING ON PRESIDENT OBAMA’S TRADE POLICY 

AGENDA WITH U.S. 

TRADE REPRESENTATIVE MICHAEL FROMAN 

HEARING 

BEFORE THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

July 18, 2013 

Serial No. 113–FC11 

Printed for the use of the Committee on Ways and Means 

( 


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COMMITTEE ON WAYS AND MEANS 

DAVE CAMP, Michigan, Chairman 

SAM JOHNSON, Texas 

KEVIN BRADY, Texas 

PAUL RYAN, Wisconsin 

DEVIN NUNES, California 

PATRICK J. TIBERI, Ohio 

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 

DIANE BLACK, Tennessee 

TOM REED, New York 

TODD YOUNG, Indiana 

MIKE KELLY, Pennsylvania 

TIM GRIFFIN, Arkansas 

JIM RENACCI, Ohio 

SANDER M. LEVIN, Michigan 

CHARLES B. RANGEL, New York 

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 

JOSEPH CROWLEY, New York 

ALLYSON SCHWARTZ, Pennsylvania 

DANNY DAVIS, Illinois 

LINDA SA ́ NCHEZ, California 

JENNIFER M. SAFAVIAN, Staff Director and General Counsel 

JANICE MAYS, Minority Chief Counsel 


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C O N T E N T S 

Page 

Advisory of July 18, 2013 announcing the hearing ............................................... 2 

WITNESSES 

Ambassador Michael Froman United States Trade Representative, Office of 

the United States Trade Representative 

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


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(1) 

HEARING ON PRESIDENT OBAMA’S TRADE 

POLICY AGENDA WITH U.S. 

TRADE REPRESENTATIVE MICHAEL FROMAN 

THURSDAY, JULY 18, 2013 

U.S. HOUSE OF REPRESENTATIVES, COMMITTEE ON WAYS AND MEANS, Washington, DC. 

The committee met, pursuant to call, at 9 a.m., in Room 1100, 

Longworth House Office Building, the Honorable Dave Camp 

[chairman of the committee] presiding. 


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HEARING ADVISORY 

Chairman Camp Announces Hearing on 

President Obama’s Trade Policy Agenda with 

U.S. Trade Representative Michael Froman 

Thursday, July 18, 2013 

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 

Obama’s trade policy agenda with U.S. Trade Representative Michael Froman. The 

hearing will take place on Thursday, July 18, 2013, in 1100 Longworth 

House Office Building, beginning at 9:00 A.M. 

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

hearing will be from the invited witness 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. 

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. Accordingly, the future success of 

American workers, businesses, farmers and ranchers is integrally tied with continuing America’s strong commitment to finding new markets and expanding existing ones for U.S. goods and services. 

This hearing will provide an opportunity to explore with Ambassador Froman how 

the President’s trade agenda will create new and expanded opportunities for U.S. 

companies, workers, farmers and ranchers. Those opportunities include ongoing negotiations such as the Trans-Pacific Partnership, the U.S.-EU Trade and Investment 

Partnership and the Trade in Services Agreement negotiations, as well as post-Doha 

negotiations at the World Trade Organization such as expansion of the Information 

Technology Agreement (ITA), a trade facilitation agreement and a WTO agreement 

on environmental goods and services. The hearing will also explore the need for 

Trade Promotion Authority legislation, which the President has recently requested, 

in setting out Congressional objectives, consultation, and consideration of trade 

agreements. In addition, the hearing will examine important enforcement priorities, 

including trade restrictive practices and non-tariff barriers from major emerging 

economies that prevent U.S. companies from competing on a level playing field and 

various bilateral and multilateral trade disputes and concerns. Finally, Ambassador 

Froman’s testimony will provide an opportunity to discuss Bilateral Investment 

Treaty (BIT) negotiations with China, India, Pakistan and Mauritius, as well as 

new BITs and investment opportunities; discussions in other bilateral and multilateral forums; and the trade and investment relationship with new and emerging 

trading partners. 

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

enforcing our trade rights support economic growth and job creation here 

in the United States. We are at a critical juncture to move forward aggressively on a number of trade fronts including negotiations on the Trans-Pacific Partnership, with the European Union, as well as negotiations for the 

Trade in Services Agreement. Trade Promotion Authority legislation is essential to concluding ongoing negotiations and providing important Congressional direction, particularly to the talks that are just now beginning. 

We must also continue to develop new trade and investment opportunities, 

and enforce our trading rights with important trading partners, including 

China, India, and Latin America, to maximize American competitiveness 

and ensure that we do not fall behind. The Administration’s active and engaged leadership is critical to achieving these goals.’’ 


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FOCUS OF THE HEARING: 

The hearing will provide an opportunity to explore with Ambassador Froman current and future trade issues such as: (1) developing and passing of Trade Promotion 

Authority legislation; (2) seeking to conclude a successful Trans-Pacific Partnership 

agreement this year; (3) negotiating with the European Union for a comprehensive 

and ambitious trade and investment agreement; (4) negotiating a Trade in International Services Agreement that increases access for all sectors of our economy; (5) 

improving our important trade relationship with major emerging economies like 

China, India and Brazil, and addressing their trade barriers; (6) ensuring appropriate trade enforcement efforts; (7) advancing WTO negotiations, including ‘‘postDoha’’ issues at the WTO such as Information Technology Agreement (ITA) expansion, a trade facilitation agreement and an agreement for trade in environmental 

goods and services; (8) negotiating Bilateral Investment Treaties (BITs) with China 

and India and exploring new BITs and investment opportunities; and (9) establishing long-term, closer ties with important trading partners. 

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 

Thursday, August 1, 2013. 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 availability 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 

/. 


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Chairman CAMP. The committee will come to order. 

Well, good morning, everyone. I want to welcome everyone here 

today and extend a special welcome to United States Trade Representative, Ambassador Mike Froman. First of all, let me congratulate you on your confirmation. You are now leading one of the 

most professional and productive agencies in the United States 

Government. We are glad to have you here, and we wish you very 

well in your new responsibilities. 

You take the helm of USTR at a critical juncture. We are in the 

midst of three major trade negotiations, all of which will need 

strong Administration leadership to complete. We are in deep into 

negotiations on the Trans-Pacific Partnership, which I hope will be 

finished this year. 

Earlier this month, you held the first round of negotiations for 

a U.S. EU Trade and Investment Agreement, which holds enormous potential economic benefit. A negotiation for a Trade in Services Agreement have begun, promising huge commercial gains and 

attracting new participants. 

We had initially seen some encouraging movement at the WTO 

on expansion of the Information Technology Agreement and a trade 

facilitation agreement, but that progress seems to have stalled, 

particularly with yesterday’s announcement about China, forcing 

us to suspend ITA negotiations. We need to find a way around 

these obstacles in Geneva. 

Each of these negotiations will support more, better-paying jobs 

here in the United States by dismantling barriers to U.S. exports 

and creating robust enforcement mechanisms to prevent future 

barriers from emerging. These agreements will tackle tariff and 

nontariff barriers as well as new 21st century issues like stateowned enterprises, regulatory coherence and trade facilitation. In 

addition, these agreements help to more deeply integrate U.S. companies into the global supply chains that are the reality of today’s 

marketplace. 

Quick movement on these negotiations is important because 

other countries are signing agreements that open markets and increasing their competitiveness at our expense. 

I look forward to continuing to work closely with you on each of 

these negotiations to ensure that each is ambitious, comprehensive 

and concluded as soon as possible. However, finishing these negotiations will not be easy. For example, in the TPP, I have serious 

concerns about Japanese nontariff barriers in the auto, insurance 

and agriculture sectors. In the EU, we face regulatory barriers to 

U.S. exports that must be resolved, particularly in agriculture. 

I look forward to hearing your testimony on these issues and 

working together to ensure that these barriers and others are fully 

addressed before any negotiation is completed. 

Another critical issue that has raised considerable concern is how 

to deal with currency in our trade agreements. I believe that currency misalignment is a serious problem, and I look forward to 

hearing more from you about how the administration plans to address this issue. 

Last Congress we passed, and the President signed into law, 

seven bipartisan trade bills, including legislation that implemented 

trade agreements with Colombia, Panama, and South Korea. I hope 


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to build on that bipartisan cooperation to move a bipartisan Trade 

Promotion Authority bill. TPA is essential so that we in Congress 

can outline our priorities for you, establish how you consult with 

us, and create the mechanism for considering implementing legislation. 

It is no overstatement to say that the success of your work at the 

negotiating table absolutely depends on passing TPA, and we simply will not be able to enjoy the benefits of what we negotiate unless we have Trade Promotion authority. 

I look forward to hearing today from you, Ambassador, about 

how the Administration plans to engage on this issue as well. In 

addition to negotiations, we must also pay attention to the challenges and opportunities presented by trading partners around the 

world. Take, for example, the major emerging economies, China, 

India, and Brazil. Each provides enormous potential opportunity, 

but also significant and growing barriers. We must seek ways to 

engage these countries constructively and address trade and investment issues. We should use our bilateral investment treaty agenda 

as one tool to address these concerns and also seek to expand our 

agenda to new partners. 

Finally, I also note that we continue our work here in Congress 

on several important initiatives. I will continue to seek a path forward to pass as soon as possible the bipartisan Miscellaneous Tariff Bill, which Ranking Member Levin and I introduced yesterday, 

to provide tariff relief to U.S. manufacturers for products not made 

in the United States. Our bill remains a model of transparency 

with benefits available to any entity that uses the products covered 

by the bill, and I am very aware that last December duties increased for over 600 products. 

Ranking Member Levin and I also introduced legislation yesterday to renew the Generalized System of Preferences, and we will 

continue to work together to find a path forward in this Senate 

that ensures that the Senate can move the bill without amendment. In addition, I hope to move a bipartisan customs reauthorization bill quickly. 

A robust international trade agenda puts U.S. job creators back 

on the offense. Let us seize this opportunity. 

Chairman CAMP. I will now yield to Ranking Member Levin to 

make an opening statement. 

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

And, Ambassador, on behalf of all of us, if I might say so, a warm 

welcome. 

With negotiations spanning the Atlantic and the Pacific illustrating that globalization is accelerating, we face major opportunities and challenges. I believe that this administration, in which you 

have played a key role, has, on some important occasions, demonstrated a broader vision of international trade. It has helped to 

create jobs through exports, while also looking actively at the impact of imports. It is working to incorporate enforceable worker and 

environmental standards in trade agreements. It has been more active in enforcement, from initiating WTO cases to applying the 

China safeguard on tires, to creating the ITEC. It has responded 

to a series of tragedies in the factories of Bangladesh, tragedies 

that have shaken conventional resistance to building some basic 


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standards to shape the human impact of the heightened flow of 

international trade. 

As USTR, you face many challenges: forced localization in China 

and India, for example; continued concerns about labor rights in 

Colombia; evasion of antidumping duties; even the future success 

of the WTO. 

TPP can expand our imports in many sectors, including services 

which are also under negotiation in Japan. While there are many 

outstanding issues, Japan’s engagement raises a broader policy 

question: whether and how to address one-way trade, a very 

unlevel playing field. 

The U.S. has had massive trade deficits with Japan for decades, 

the vast majority in the auto sector where Japan is taking advantage of a completely open U.S. market, while Japan’s has been 

tightly locked to imports from us and anywhere else. If the principle of two-way trade really matters, and I believe it does, we need 

to chart a course to achieve it. What the U.S. negotiates with 

Japan could have important impacts on the U.S. economy and also 

how TPP would be received in Congress. I am working with stakeholders to develop a proposal and hope to share it next week. 

The Transatlantic negotiations also provide an opportunity to expand our exports and strengthen our economy. Just as important, 

they can establish new rules for global trade, promoting an equitable and market-based economic model over the emerging model 

of, in quotes, ‘‘state capitalism.’’ These negotiations won’t be easy, 

but our relationship with Europe is unlike any other. We should 

build upon the strength of that relationship, and it should reflect 

our many common objectives and values, while also respecting our 

differences. 

The discussion on TPA has begun, and there is widely shared interest in getting it right. First, TPA sets the rules for engagement 

between Congress and the administration. A significant sustained 

role for Congress is critical. Today trade agreements address a 

broad and growing range of policy areas, so Members of Congress 

must play an active role in their development. There is also a 

chance that more effective, broader congressional involvement, and 

I would like to emphasize this, would help to establish more common ground in Congress for trade agreements. 

Second, the TPA process must be a vehicle in crafting a broader 

strategy, as we did in 1988, to tackle the increasing challenges and 

potential benefits of globalization and enhance U.S. competitiveness. Since we last considered TPA, the U.S. has experienced the 

largest trade deficits in our history, contributing to lost jobs. These 

imbalances have more than one ingredient. One source often stems 

from trading partners refusing to play by the rules. 

As the chairman mentioned, currency manipulation is a vivid example. There is precedent preparing TPA with currency legislation. 

We did so with the very first TPA bill in 1974, and we did it again 

in the 1988 act. The House and Senate have both passed currency 

legislation, and this issue needs to be part of the TPA, TPP and 

T–TIP. We are going to have trouble keeping these three things 

separate, aren’t we? 

So I close to mention this of interest, I know, to you in your new 

position. With sequestration, USTR, like many other agencies, is 


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working under difficult personnel constraints. We need to help ensure that the administration can continue—can continue to devote 

the needed resources not only to negotiating new trade rules, but 

to enforcing those that exist. 

So, Mr. Ambassador, it is nice to call you that, we look forward 

to working with you. 

Chairman CAMP. All right. Thank you. 

Chairman CAMP. We will now turn to our witness. I want to 

welcome Ambassador Mike Froman again to the committee, and 

thank you very much for being with us today. You have five minutes to present your testimony, and your full written statement has 

been submitted for the record. Mr. Ambassador, you are recognized 

for five minutes. 

STATEMENT OF MICHAEL FROMAN, UNITED STATES TRADE 

REPRESENTATIVE, OFFICE OF THE UNITED STATES TRADE 

REPRESENTATIVE 

Ambassador FROMAN. Thank you, Mr. Chairman, Ranking 

Member Levin, Members of the Committee. Thank you very much 

for having me here today. There is a long tradition of partnership 

between the Ways and Means Committee and the U.S. Trade Representative, and that is a tradition I plan to continue. 

As President Obama’s advisor on international economic issues 

for the past 4 years, I have had the opportunity to work with many 

of you on a number of initiatives, including those that are now my 

full-time focus: opening markets for American goods and services 

and, in doing so, supporting jobs here at home. 

We have made important progress over the past 4 years. Exports 

are at an all-time high. Increases in U.S. exports have supported 

more than 1.3 million additional American jobs and have accounted 

for more than one-third of U.S. GDP growth over this period. I am 

pleased that you invited me here today because there is so much 

more that we need to do together. 

As President Obama has made clear, our focus must be to promote growth, create American jobs and strengthen our middle 

class. USTR can contribute to this effort in three important ways: 

First, by opening markets around the world so we can expand our 

exports; second, by leveling the playing field so that our people can 

compete and win in the global economy; and third, by ensuring 

that the rights and trade rules we have fought so hard for are fully 

implemented and enforced. 

Trade policy, negotiated and enforced vigorously to reflect both 

our interests and our values, gives our workers, farmers and ranchers, our manufacturers and service providers, our innovators, creators, investors in businesses of all sizes the best chance to compete around the world. 

The President has laid out one of the most ambitious trade agendas ever, and we at USTR are committed to getting it right. Last 

week, U.S. and EU negotiators completed the first round of Transatlantic Trade and Investment Partnership, or T–TIP, negotiations 

with the ultimate goal of enhancing what is already the world’s 

largest trading relationship. And as we speak, USTR negotiators 

are in Malaysia, hard at work negotiating the groundbreaking 


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Trans-Pacific Partnership, or TPP, a 21st century agreement that 

raises standards and introduces new trade disciplines. 

We are working on fresh, credible ways to energize multilateral 

trade liberalization at the WTO. We are working to negotiate a 

trade facilitation agreement, and we hope to make progress on an 

information technology agreement. Our services negotiators are 

hard at work negotiating a high-standard trade in services agreement, or TISA, that will allow our already competitive services providers to compete for global business on a more level playing field. 

If we are able to complete these agreements, and I say if, because 

let me be clear, it is better to have no agreement than a bad agreement, we will have created free trade with 65 percent of the global 

economy. These agreements hold real job-supporting export potential for manufacturers in Michigan and Pennsylvania, farmers and 

ranchers in Wisconsin and California, and service providers in New 

York and Massachusetts. 

Trade policy can only work, however, if it is fair. American workers are the most productive in the world. They deserve a level playing field to compete on, and this administration is taking a tough 

approach to trade enforcement, filing 18 cases to enforce our trade 

rights. The Interagency Trade Enforcement Center, or ITEC, has 

further enhanced the complexity, depth and reach of the administration’s enforcement efforts. 

The Obama administration is committed to pursuing freer trade, 

but we are equally committed to enforcing our trade rights and providing skills and opportunities for workers, including through the 

Trade Adjustment Assistance Program, which expires at the end of 

this year. 

Trade is also a powerful tool for our broader development policy. 

I recently returned from Africa where President Obama announced 

a Trade Africa Initiative, working with a new generation of reformminded leaders in some of the poorest countries in the world who 

are focused on pursuing policies of trade, not just aid; investment, 

not just assistance as the key to sustainable economic development. 

In that regard I am encouraged by the introduction yesterday by 

the leaders of this committee of a bipartisan bill to extend GSP, 

and I look forward to working with you to ensure the seamless renewal of AGOA before it expires in 2015. 

Trade policy fulfills its greatest potential when it is the product 

of close consultations between the administration, Congress, and a 

wide range of stakeholders. Transparent collaboration leads to better policies and better outcomes, and while USTR has done much 

to advance transparency in recent years, in my view, we can always do better, and here, too, I look forward to consulting with you 

as we explore what further steps should be taken. 

Let me say a word about an issue I know of importance to many 

of you, trade promotion authority, or TPA. As I said in my confirmation hearing, TPA is a critical tool, and as the leadership of 

our committees undertake a process to develop a TPA bill, we 

stand ready to work with you to craft a bill that achieves our 

shared interests. 

Finally, all of these things I have mentioned, all of our shared 

goals, are contingent on USTR having the resources to pursue its 

mission. We are managing our resources aggressively, and we will 


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do our best to achieve our priorities with whatever resources we 

have, but to be frank, I am worried. At a time of unprecedented 

levels of activity, sequestration and other budget cuts are compromising USTR’s ability to conduct trade negotiations and other market-opening efforts as well as to initiate new enforcement actions. 

Financial constraints are forcing us to make difficult decisions 

every day, and the opportunities we miss have real effect on whether or not your constituents are getting the full benefits of a robust 

trade policy and the jobs and growth promised by our trade agreements. 

With that, let me thank you again for inviting me to testify 

today. I am happy to take your questions. 

Chairman CAMP. Well, thank you very much. 

[The prepared statement off Ambassador Froman follows:] 


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Chairman CAMP. Mr. Ambassador, I have been working with 

Mr. Levin and our counterparts in the Senate on a bipartisan, bicameral basis to develop TPA legislation. As I mentioned, I believe 

you need this authority to bring TPP to a close, as well as the other 

things you mentioned, the EU agreement, services and other negotiations, because, as I said, it gives the administration the backing 


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of the Congress and a clear sense of what our negotiating objectives 

are. 

While we are making progress, we will not be able to do that 

without the administration’s full involvement and engagement, and 

I welcome your statement both at your confirmation hearing and 

again today that the Administration is asking for TPA, that you believe it is a critical tool, but we really do need to be full partners 

in this venture if it is to succeed. 

What exactly are you and the President doing to help build the 

case for TPA? 

Ambassador FROMAN. Well, Mr. Chairman, I think the President and the rest of the administration has been very much discussing the importance of our trade agenda, the implications of our 

trade agenda for a larger economic policy, and are fully committed 

to moving forward with what is necessary to get our trade agenda 

done. 

With regard to TPA specifically, the bipartisan leadership of this 

committee and of the Senate Finance Committee I know are beginning a process or working on a process to develop a bipartisan TPA 

bill, and we stand ready to engage and to help in that process as 

requested. 

Chairman CAMP. Regarding TPP,as I said, I am committed to 

working with you on that, and I think a robust agreement will 

have significant benefits for the U.S. economy and support job creation and better-paying jobs here. 

Japan’s scheduled entry next week, I think, raises some very significant concerns. Japan’s entry into the negotiations, should not be 

allowed to undo the work that has already been completed. I think 

a robust package fully addressing Japan’s nontariff and tariff barriers that have been long-standing, as Mr. Levin mentioned, particularly as they relate to auto, agriculture and insurance exports 

will be essential to obtaining my support for this agreement. 

But first, what steps are you taking to ensure that Japan will resolve these outstanding barriers to trade? 

Ambassador FROMAN. Thank you, Mr. Chairman. And this is a 

very important issue to us, as we appreciate your leadership and 

the leadership of Ranking Member Levin on this issue as well. 

Before—we had extensive consultations with Japan prior to 

agreeing to allow them to join TPP precisely on the issues you 

mentioned, on agricultural issues, on insurance, and on the auto 

sector, and we insisted on making progress on those issues before 

they were allowed to come in, and we reached some upfront agreements in certain areas, but also reached agreement on terms of reference for ongoing negotiations in these areas that will be linked 

to and part of TPP. 

So, for example, in the agricultural area, they moved forward 

with their agreement to allow American beef into their markets in 

30 months and under. On the insurance area, there is a standstill 

for the introduction of new products through their postal system 

and an agreement to negotiate, and terms of reference for that negotiation, for further opening of that market. And on autos, very 

importantly, we reached upfront agreements both on measures to 

allow greater access to the Japanese market by more than doubling 

what they call their PHP program, which allows expedited entry of 


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U.S. vehicles, but also we reached agreement on how the staging 

of U.S. tariffs will be done in the context of the overall TPP negotiations, and we laid out a negotiation on all the nontariff barriers, 

or many of the nontariff barriers that you referred to, and made 

it clear that negotiation of an agreement, an adequate and acceptable agreement on that, on those nontariff barriers, will be a key 

part of the TPP agreement, will be binding, will be subject to dispute resolution. 

So we share, very much share, your concern and your focus on 

the importance of opening up Japan’s market as part of their entry 

into TPP, and we believe we have structured an engagement with 

them through TPP and in parallel to TPP that can achieve that objective. 

Chairman CAMP. As a follow-up to that, I have heard a from 

various stakeholders and Members of Congress about Japan’s currency practices, and their past practices, you know, very serious 

concerns, particularly its uncoordinated intervention in 2011. 

Treasury flagged its concerns about those interventions in its semiannual currency report, and I have raised this issue with it before. 

Are you considering including provisions on currency in the TPP, 

and what would those provisions look like? What factors should be 

taken into account in determining the U.S. position with regard to 

those? 

Ambassador FROMAN. Well, Mr. Chairman, we share the concerns about—about currency. Clearly, obviously, Treasury has the 

lead on these issues, but these issues have been very much at the 

top of our agenda, engagement with countries of concern. China, for 

longstanding—there has been a longstanding dialogue with China 

about its currency policy, and whether it is through the G7 in the 

case of Japan, or the G20, IMF, elsewhere with regard to China, 

we made very clear the importance of exchange rates being based 

on market-determined forces and our opposition to—in the G20, for 

example, making it not just our opposition, but opposition of the 

bulk of the international economy to efforts to manipulate currency 

or to engage in competitive devaluation. 

So we do see this as a very important issue, and we explore, and 

we pursue it in the way that we think is most effective at each 

juncture. 

Chairman CAMP. I just think it is a real concern that we not 

allow this agreement to slip, that it needs to be concluded this 

year, and I think the active engagement of the administration on 

this issue is critical if we are to conclude TPP this year. So thank 

you for your responses. 

Mr. Levin is recognized. 

Mr. LEVIN. Thank you. 

Let me just say, Mr. Chairman, on currency, I think the administration needs to face up very directly to the question of inclusion 

of currency issues in both TPP and the discussions with Europe. 

And I don’t think there has been satisfaction here with progress 

today, and so we just have to confront the formal introduction of 

this issue in TPP as well as with Europe. 

And let me just say this to—to TPP in Japan, there is immense 

pressure on Japan, and they really haven’t been very unequivocal 

about addressing rice and other agricultural issues. And as a numVerDate Mar 15 2010 20:35 Oct 17, 2013 Jkt 082908 PO 00000 Frm 00019 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\82908.XXX 82908

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ber of us said before, and I will spell out more of this in the coming 

days, I don’t think what has been put forth so far on autos is likely 

to change decades of the same situation. 

Mr. Camp joined us in addressing this issue in Korea, and the 

agreement was changed and strengthened. Japan is an even sterner case. Nothing, to date, has ever worked. We are today, in terms 

of our access to Japan’s auto, automotive, its parts as well as assembled vehicles, essentially where we were 34 years ago. So we 

need to have a very emphatic dialogue on this, and I am sure we 

will. 

So let me just say a word and ask you about TPA. I think it is 

important, Mr. Chairman, that all of us work together on TPA to 

determine what kind of a TPA, and not simply say, ‘‘Let us just do 

it.’’ We have been through this before. In the 1980s, we had a fast 

track that was worked out that had rather strong bipartisan support. That fell apart in 2002, and it passed by, I think, three votes, 

keeping, as I remember, the vote open for awhile to see if those 

votes could be secured. 

And with the burgeoning globalization, I think we need to sit 

down on a bipartisan basis with the administration to determine 

issues like what will be the role of Congress; what will be the objectives stated in a TPA; what will be the role of Congress in seeing 

that these objectives are kept; and then, related to it, the whole 

issue of transparency; and what access not only Members of the 

Committee, very importantly, in finance, but others have to the negotiations that are under way. 

And I think we just want to have, on our side, your assurance 

that there will be a very active discussion of these issues, because 

simply to say, let us pass it, without focusing on its contents, I 

think, is a serious mistake substantively, and procedurally would 

likely lead to much more conflict instead of confluence. So just 

briefly your reaction. 

Ambassador FROMAN. Well, thank you, Congressman Levin. We 

certainly, as I said, stand ready to work with you-all in your process as you proceed to develop a TPA—a TPA bill to ensure precisely what you say, that it reflects our shared interests and our 

shared goals. And so we will look forward to—we will look forward 

to that. 

On transparency in particular, we think that is a very important 

issue. We think it is critically important that vis-a-vis Congress, 

vis-a-vis our advisors, vis-a-vis the public, that we have a robust 

policy of engagement to ensure that we are getting the best input, 

and that we are also explaining what it is we are doing, how it is 

we are doing it, and why it is we are doing it. And we are looking 

at those, the whole array of policies and procedures that we have, 

to determine how best to take that forward. I think we have done 

a lot over the last few years, and I will just mention one example. 

You know, we now have had our negotiations. TPP, we started 

this, and we just did it again last week with T–TIP, we organized 

an event for stakeholders to come and be able to present directly 

to negotiators, not just U.S. negotiators, but our trading partners 

as well, and so they can have a direct dialogue with them. We had 

350 people come to the session last week to be able to present 

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fore, but as I said, I think we can always do better, and we look 

forward to working with you on that. 

Mr. LEVIN. Thank you. 

Chairman CAMP. Thank you. 

Time has expired, and because today’s hearing has to end at 

11:00, in order to try to accommodate every Member who wants to 

ask questions, Mr. Levin and I have agreed that we would limit 

Members’ questions to 3 minutes. 

Mr. Johnson is recognized. 

Mr. JOHNSON. Thank you, Mr. Chairman. 

Mr. Froman, first, I want to thank you for being here with us. 

It is a delight to see you, and while I was sad to see my good friend 

and fellow Texan Ron Kirk move on, I am sure you will be equally 

up to the task. 

As you know, trade is very important to our home State of Texas, 

and recent data shows that the Dallas/Fort Worth area alone was 

responsible for 26-plus billion in exports. Over one-quarter of all 

manufacturing workers in Texas depend on exports. That is why I 

think it is critically important that Congress develop and pass bipartisan trade promotion authority that set out negotiating objectives. 

For the ongoing negotiations you have already outlined, do you 

think that your negotiations can be concluded and any agreement 

implemented without trade promotion authority? And is the administration, in your opinion, prepared to actively engage with the 

Congress to build political support for TPA? 

Ambassador FROMAN. Thank you, Congressman. 

We think TPA is a critical tool, and we stand ready to work with 

the committees as they develop a bill that addresses our shared interests and our shared goals. We are engaged in these negotiations, 

we will continue to pursue them aggressively, and we consult very 

actively with this committee, with the finance committee and other 

committees of jurisdiction to ensure that we have the input with 

regard to our negotiating objectives and how those objectives are 

translated into actual proposals at every step in this process. And 

so we feel confident that as we are negotiating, we are taking into 

account the input that we have received from our—from our committees of jurisdiction. 

Ultimately, to get through Congress, we think TPA would be 

very useful for the ultimate agreements to get through Congress, 

and in the meantime we will operate according to the longstanding 

procedures we have of consulting with you-all and your colleagues 

in the Senate and making sure that what we are doing with regard 

to our negotiating objectives are consistent with the input that we 

have from you. 

Mr. JOHNSON. Thank you, sir. Welcome aboard. 

Yield back. 

Chairman CAMP. Thank you. 

Mr. Rangel. 

Mr. RANGEL. Thank you, Mr. Chairman. 

And I join with the committee in welcoming you, looking forward 

to one possible bipartisan effort that this Congress can participate 

in. We do have a record of sorts in working together, and, with 

your help, we look forward to improving even on that. I would like 


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to report that our staff feels very comfortable with the relationship 

we have with your office and ask you to continue that, because 

many times we have to depend on staff with our views, and it 

makes it a lot easier for us to get some type of agreement before 

something is presented to us than trying to convince each other 

that we are right. 

You have answered many of the questions that I have. I would 

be interested in seeing how America, as a result of the President’s 

trip to Africa—exactly what plans we have to be competitive with 

China and other countries that have taken advantage of this economic growth that has taken place. And also, when you talk about 

supporting jobs, it is very important that your office understands 

that to a person that is unemployed or those protecting the workers, you say ‘‘trade,’’ and some people automatically think that 

means losing jobs. 

You have to help us in working with the Education Department 

and Department of Labor so that we can present new job opportunities that are going to be involved country by country, and where 

we are going to lose because we cannot compete, we have to talk 

about training and retraining as though we are just talking to 

Americans and not to importers and exporters, because we all are 

looking toward for the same goal. 

And again, I don’t have to tell you that we have to be competitive 

with countries. With our automobile industry and what we have 

been through, I don’t think it should be a hard sell that people 

should not put barriers up when we are competing with a good 

product. There were changes that we had to make in Detroit during the crisis, and made those changes. But we look forward to 

working with you, and when you think of trade, trade, trade, some 

of us have to—are forced to think about jobs, jobs, jobs. 

So, welcome on board. 

Ambassador FROMAN. Thank you, Congressman. That is a very 

healthy reminder that this is all about jobs, jobs, jobs in the U.S., 

and we need to do a better job of talking about how what we are 

doing through negotiations or through enforcement leads to greater 

exports, leads to greater jobs and higher wages, allows us to deal 

ourselves into global supply chains rather than being on the outside of them. And I look forward to working with you on Africa, on 

training, on the auto sector, and the whole array of issues. 

Chairman CAMP. All right. Thank you. 

Mr. Brady is recognized. 

Mr. BRADY. Ambassador, congratulations on your new role. 

Thank you for the critical role that you played in reaching sales 

agreements with Colombia, Panama, and South Korea. Our local 

businesses’ workers are looking for new customers, and those 

agreements that you played a critical role on have leveled the playing field and allowed us to compete. So it is creating both new jobs 

in my region and neighborhood, and more secure jobs as well. So 

thank you for that role, look forward going forward. 

To that vein, I want to ask two questions, one about the TransPacific Partnership, a critical region for those new customers, and 

the role of the bilateral investment treaties going forward. On the 

timetable for TPP, do you see that completed by the end of the year 

and being submitted to Congress shortly thereafter? 


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Ambassador FROMAN. With regard to TPP, we have stated that 

our objective is to finish it this year. It is ambitious, but our negotiators are hard at work as we speak in Malaysia, and we are going 

to work very hard with Japan when they get in to bring them up 

to speed and not allow them to reopen or re-litigate or delay the 

negotiations. So our focus is to try and get this done this year. 

Mr. BRADY. Do you think there is a good chance we can do that? 

Always the tougher issues come at the end, you know what I mean, 

a little more unpredictable as you are sort of near the finish line, 

but are you optimistic that we can finish in that timetable? 

Ambassador FROMAN. Yeah, I am. I think it is ambitious, but 

I think it is doable. 

Mr. BRADY. Great. 

On the bilateral investment treaties, those are important because 

they really take a big first step toward a level playing field, and 

they can also provide protections for American investment when we 

are chasing those customers around the world. We, as a government, in the first term the President took a look at the bilateral 

investment treaties. We sort of pulled the truck to the side of the 

road, took a look at the engine, made some adjustments, but now 

it is really time to get back on down the road, and it is an important tool. 

So, as we look at China, India, Pakistan, as we look at Africa 

and other areas, B, do you see bilateral investment treaties as an 

important tool; and, two, are you going to use them to advance our 

trade agenda? 

Ambassador FROMAN. Yes, Congressman. I think they are an 

important tool, and we will use them as appropriate. And I would 

just note that last week we had the strategic and economic dialogue with China here in Washington, and one of the outcomes was 

China agreeing to engage in bid negotiations on the basis of some 

of the key principles of our bid, including national treatments in 

the pre-establishment phase, and on the basis of coming up with 

a negative list rather than a positive list. 

Now, obviously, the devil will be in the details, and we have not 

yet even begun to negotiate, and it will be very important to make 

sure that those—those commitments are implemented fully, but it 

is a potentially very positive development both in terms of our bilateral relationship, but also what it will require China to domestically in terms of its—— 

Mr. BRADY. No, I agree. I think that is an important role in 

China and in the other regions as well. Thank you, Ambassador. 

Chairman CAMP. Thank you. 

Mr. Neal. 

Mr. NEAL. Thank you, Mr. Chairman. Thank you, Mr. Chairman. Three questions quickly. I know this is an abbreviated opportunity to ask them. 

First, footwear in New England, we are down to New Balance, 

small operations after that, ensuring their success. They are the 

last ones to really—in New England to do athletic footwear, very 

important part of our economy, and certainly interested in what 

the administration’s position is going to be. 

And on enforcement procedures with competition, can you address the issue of financial service and regulatory issues in the 


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U.S. and EU? Did it come up in the first round of discussions? And 

an opportunity for you to hold forth on the President’s goal as to 

whether or not we have been able to double exports, or are we on 

a path of doubling exports during the 5 years that the President 

has outlined, understanding it really is, last year, I think, the fastest part of American economic growth in trade and trade-related 

issues. So, abbreviate it, but the opportunity is yours, Mr. Ambassador. 

Ambassador FROMAN. Thank you, Congressman. 

On footwear, that is obviously a very sensitive sector, and we are 

looking at our domestic producers, our importers and our retailers 

to come up with a proposal that maximizes job creation and jobs 

supported by trade in footwear in the United States. But we are 

well aware of the sensitivities there, and indeed I will be visiting— 

I am planning to visit the New Balance factory sometime later this 

summer. 

Mr. NEAL. Thank you. 

Ambassador FROMAN. On financial regulation, yes, we have had 

extensive discussions with the Europeans about this, and our view 

is the following. The financial services sector is a key part of the 

Transatlantic relationship. It cannot be left outside T–TIP altogether. We think financial services market access belongs in a 

trade agreement, but since the financial crisis of 2008, 2009, there 

has been an explosion of regulatory cooperation activity bilaterally 

through the G20, through the FSB, the BIS, the IOSCO, IASB, and 

we think that those processes should be encouraged to make 

progress in parallel alongside the trade agreement so that when 

the trade agreement is done, we can look back and see that we 

have managed to bring the two markets closer together. 

Mr. NEAL. Lastly, are we on the President’s—— 

Ambassador FROMAN. On NEI. The President laid out goals of 

doubling exports and increasing jobs supported by exports by 2 million. We have increased jobs supported by exports by 1.3 million. 

I think we are broadly on track. On the doubling of exports, a number of markets around the world, we are at or above the run rate 

that would have as double exports, but to be frank, with the 

headwinds in Europe over the last couple of years, that has been 

a drag on our overall export growth, and we are going to need to 

continue to do everything we can do to—in terms of our export promotion efforts, but also opening markets and focusing on enforcement—to continue on the path towards doubling exports. 

Mr. NEAL. Thank you, Mr. Chairman. 

Chairman CAMP. All right. Thank you. 

Mr. Nunes. 

Mr. NUNES. Thank you, Mr. Chairman. 

Ambassador, welcome. 

I want to echo Mr. Rangel’s comments that not only does the 

staff here work in a bipartisan manner, but we also enjoy this longterm relationship with your staff, and we hope that that continues. 

I would like for you to quickly address SPS enforcement mechanisms, specifically dispute resolution as it relates to the TPP. I 

know we have a short time, so I will leave it at that, and then I 

have one additional question. 


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Ambassador FROMAN. This is a critical part of our—of our negotiation, and as we propose SPS–Plus disciplines in TPP, we want 

to make sure we have mechanisms for ensuring that those disciplines are fully implemented. 

The substantive disciplines of SPS–Plus are really rooted in the 

WTO and the WTO commitments, and there, of course, binding dispute resolution is available. The other elements of SPS–Plus are 

procedural elements, and most of those are also subject to dispute 

resolution in—under TPP. So we think that the bulk of the commitments that we are likely to achieve in TPP in the SPS chapter will 

be subject to enforcement either under the WTO or through this 

consultative mechanism in TPP, leading to a dispute resolution on 

the procedural elements. 

Mr. NUNES. Well, we look forward to continuing to work closely 

with you. As you know, American agriculture is strongly behind 

getting some type of enforcement mechanism in the TPP negotiations. 

I would like to, with the remaining time, for you to address our 

ongoing relationship and ever-improving relationship with Brazil. 

We had a hearing on Brazil about a month ago, and we are looking 

at possibly doing some legislation to kind of redouble our effort on 

our trade relationship with Brazil. And I know that you have met 

with them recently, and I know that they are—I think they are 

sending a delegation here in the fall, and, you know, what we can 

do from this committee and the Congress to improve those relations. 

Ambassador FROMAN. Well, thank you. Clearly Brazil is an incredibly important country in the hemisphere, and we think really 

has the potential to be an even closer economic partner of us going 

forward. We have had a lot of dialogue with the Brazilians, both 

business community to business community, but also over energy, 

over trade issues, and we try and make progress through these dialogues on our outstanding issues. 

The President visited there, as you know, a couple of years ago. 

We talked about wanting to be a strategic energy partner of theirs 

as they develop their new energy resources, and we have had discussions with them about, for example, pursuing a bilateral investment treaty, as that would be a next step towards deepening our 

relationship. They have not yet responded positively to that, but we 

will continue to have those discussions, including as high-level visits continue later this year. 

Mr. NUNES. We are looking at possibly consolidating the dialogues into kind of a more clairvoyant structure. Is that something 

that you would think would be helpful to get high-level dialogue between not only your office, but also the Congress? 

Ambassador FROMAN. I am happy to talk further with you 

about that. We have got an energy dialogue, a CEO forum. We 

have a, I believe, a commercial dialogue as well, and we try and 

use each of these to make progress on their respective agendas. 

And, of course, our two Presidents have a good relationship and 

have an ongoing dialogue, and we expect to see more of that in the 

future. 

Mr. NUNES. I thank you, Ambassador. 

Thank you, Mr. Chairman. 


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Chairman CAMP. Mr. Doggett, and after Mr. Doggett I will proceed two to one. 

Mr. DOGGETT. Thank you, Mr. Chairman. 

Thank you, Ambassador, for your testimony. With your stated 

objective of finishing the Trans-Pacific agreement by the end of this 

year, what do you view as the deadline for Congress approving 

fast-track authority for President Obama? 

Ambassador FROMAN. Well, thank you, Congressman. I don’t 

think it is for me to give a deadline to Congress. 

Mr. DOGGETT. Just tell us by when you think you—I understand you are a diplomat first off. 

Ambassador FROMAN. We look toward to working with you as 

you-all proceed with your process on TPA. I think our negotiators 

are going to proceed apace, and they are proceeding apace as we 

speak. I think having TPA before we bring an agreement to Congress is very important. 

Mr. DOGGETT. So it will be sometime next year? 

Ambassador FROMAN. I think getting the TPA right is important, and I think getting it in time to—before the bill—the trade 

agreement is ready to be submitted to Congress would be a great 

help. 

Mr. DOGGETT. And the thinking of the Obama administration 

is that it cannot get the Trans-Pacific Partnership Agreement approved in the fashion that it would like to have it approved without 

fast-track authority. 

Ambassador FROMAN. I think traditionally, I think all but one 

trade agreement in history, I believe, in the—at least since the 

1980s, has been approved under some form of trade promotion authority, and I think that that is likely to be the most productive 

way of moving forward on TPP as well. 

Mr. DOGGETT. So you are not saying you couldn’t do without 

it. Actually during the time I have been on this committee, I think 

most of the trade legislation has been approved without fast-track 

authority. But you would view it as essential to your work, or are 

you saying you can do without it? 

Ambassador FROMAN. Well, no, no, no. I think, again, I was 

just assuming between trade agreements and trade legislation, I 

think with the exceptional of the Jordanian FTA, all other FTAs 

have been approved under some form of fast-track authority. I 

haven’t thought through what it would mean to try and proceed 

without that kind of authority, but I am happy to work with the 

committee, and, of course, we stand ready to work with you as you 

work on your process. 

Mr. DOGGETT. In your work on TPP, has USTR undertaken or 

requested that anyone undertake any studies concerning the economic subsectors where we will see job growth and those where we 

will see job loss? 

Ambassador FROMAN. I think there has been a lot of work done 

by various think tanks and other research centers. I am not aware 

of what has been done when TPP started 21⁄2 years ago. Oftentimes 

there is a study done by the ITC, and I am not sure whether that 

was done in this case or not, but I am happy to look into that and 

get back to you. 

Mr. DOGGETT. It is not—isn’t that a factor in your negotiations? 


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Ambassador FROMAN. Well, we certainly are looking to open 

markets for all of our sectors, and we consult very closely with 

stakeholders and get their perspective on where they see the opportunities for expanded exports and job creation, and that helps inform our priorities as well. 

Chairman CAMP. All right. Thank you. 

Mr. Reichert. 

Mr. REICHERT. Thank you, Mr. Chairman. 

And welcome. Good to see you again. I want to echo some of the 

comments made by Members here. The working relationship we 

had with the Ambassador Kirk and his team, I hope, continues 

with our staff. And I know that our staff is in continuous conversation with yours, and we hope that continues. 

I just want to make a quick comment about TPA. We know that 

you don’t have to make a formal request for that authority, It is 

Congress’ job to move forward with that, but I think there is a perception that goes back to, I think, the Korean agreements and goes 

back to the ascension of Russia into the WTO world that the administration wasn’t, you know, as actively involved in that process 

and those processes as we would like to see. And so I think there 

is the perception today that the administration may not be as aggressively involved as we would like to see them be in helping us 

promote the idea of the tremendous need for TPA, so I am going 

to encourage you to be a more active—and the President to be more 

active in that regard. 

But I also want to ask a question. On TPP, you mentioned that 

you, you know, have a focus to get this done by the end of the year. 

I want to get a little bit more specific. I would like to know what 

your strategy is to get it done by the end of the year, and is there 

anything we can do to help you get that accomplished? 

Ambassador FROMAN. Well, our strategy is to work very hard, 

and we are working around the clock. 

Mr. REICHERT. Any more details than that? 

Ambassador FROMAN. I am happy to go through more details 

with you, but, look, the team at USTR is doing a phenomenal job. 

It is a very complex negotiation; 11 and soon to be 12 countries in 

the negotiation. We have 29 chapters. Many of the issues we are 

dealing with are new issues, issues that none of the countries 

around the table have negotiated before in any agreement, and 

that is an ongoing mutual learning process. 

We have done a lot of work over the last 2 years to close out 

chapters, close out issues, park issues. They are engaged, as we 

speak, right now in trying to move that agenda forward, and they 

will be meeting with the Japanese at the end of this—at the end 

of this round to welcome them into the discussions and bring them 

up to speed on the status of the negotiations. 

But we have—our strategy is to work country by country, issue 

by issue, and to get a sense, as we—particularly as we enter the 

end game of where the trade-offs are going to be and how best to 

come up with a deal that everyone will find in their mutual interests, but that raises the overall standards and achieves the level 

of ambition that we set out. 


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Mr. REICHERT. So we know that your staff works hard, so the 

fact that they work hard, and that is your strategy, we can count 

on them, the timeline being the end of the year. 

Ambassador FROMAN. Well, that is our objective. As I said, it 

is ambitious, but it is doable, and we are going to do everything 

we can at all levels of government to try and make that happen. 

Mr. REICHERT. Thank you, Mr. Ambassador. 

I yield back. 

Chairman CAMP. All right. Thank you. 

Dr. Boustany. 

Mr. BOUSTANY. Thank you, Mr. Chairman. 

Welcome, Ambassador. 

The Trade in Services Agreement, or TISA, has massive potential, commercial potential, and could be a major source of job creation for U.S. firms. And if you look at our economy, we have a 

competitive advantage in this area clearly, with 75 percent of the 

U.S. GDP being in services, 80 percent of the private sector employment, and currently 30 percent of our exports. 

As I look at TISA, 70 percent of the world market is represented 

with those countries, and yet several high-profile events have come 

and gone. I was glad to hear you mention TISA in your testimony 

today, but in previous occasions, we have not heard the White 

House or the administration put the kind of emphasis that needs 

to be put on this agreement. I think it should be given as much 

emphasis as TPP and the EU negotiations. 

I sent a letter this week, earlier this week, talking about some 

of this, and I just want to get your assurances that TISA will be 

given the priority it really deserves going forward, because I think 

the potential is immense. 

Ambassador FROMAN. Well, Congressman, I totally agree, and 

we think this is really one of the most promising areas of trade 

globalization going on in the world right now. And we have a terrific ambassador in Geneva in the form of Michael Punke, who is 

leading those negotiations with our team back here. And as you 

say, it represents 70 percent of the global services market, so we 

think it is a very significant—it could be a very significant market 

that we hope other countries may join over time. 

So we very much agree with you on the importance to our economy, to our jobs in the United States, to promoting growth here in 

the United States, and we are optimistic that we will continue to 

make progress. 

Mr. BOUSTANY. Yeah. My home State is Louisiana, and we are 

an energy-producing State, and in the energy sector this could be 

really beneficial. I was with Chairman Nunes down in Brazil, and 

they are struggling with the right kind of expertise and technology 

to develop deepwater resources as well as shale. Other countries 

have the same concerns. We have the expertise. We have the engineering services and so forth. 

Mr. BOUSTANY. Yeah. Agreed. 

Ambassador FROMAN. So we should move forward. Yeah, 

thanks. 

Mr. BOUSTANY. I yield back. 

Chairman CAMP. Thank you. 

Mr. Thompson. 


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Mr. THOMPSON. Thank you, Mr. Chairman. Thank you for having the hearing. 

Ambassador, thank you for being here, and congratulations. We 

look forward to working with you. 

The chairman started off talking about some tariff and nontariff 

barriers as it pertains to agriculture, and I would like to pick up 

on that. I represent an area that has a very significant agricultural 

component. We produce some of the best wines in the world, and 

some of the T–TIP and TPP countries present some pretty good 

barriers for our product. And so I would like to be able to get a 

good commitment that we work together to make sure that we 

lower these barriers and work to protect this important agricultural product that we have. The 2006 bilateral Wine Trade Agreement with the U.S. and the EU was a good start, and I would like 

to make sure that we continue that. 

Along the same lines, counterfeit and imitation wines that are 

made by other countries that try and capitalize on our brand are 

a real problem, and our geographical indicator system works well, 

and I would like to make sure that we work to protect that as well. 

And another agricultural product that is important to California 

is our rice, and recently the President and Japan’s Prime Minister 

sent a joint statement that said, and I will paraphrase, all tariffs 

are on the table. And the U.S. rice industry would like to very 

much make sure that this holds true to rice, and that we don’t exempt rice in any agreements that are coming in, and that we include them and you work with them as we work towards facilitating this particular market. 

And then lastly you had sent a letter to some of our Senate colleagues talking about apparel rules in textiles, and I think you said 

that appropriate balance between divergent views was important, 

and I hope we can find more opportunity for trade liberalization 

other than just short supply issues. And I look forward to working 

with you on all of these issues. 

Ambassador FROMAN. Well, thank you, Congressman. 

Let me just say that with regard to the agricultural issues, agricultural trade is at an all-time high. Our exports last year, I think, 

were $140 billion. We see this as a tremendous opportunity for expansion. We are working very closely with Secretary Vilsack and 

USDA to ensure that we are doing everything that we can to promote agricultural trade in all of our agreements. That is why, as 

Congressman Nunes mentioned, the SPS–Plus agreement is important in—— 

Mr. THOMPSON. Some of our tariff and nontariff barriers are 

at an all-time high. Also, if you look at China, when we send our 

U.S. wine there, we are paying about 56 percent combined tax and 

tariff, and it is terribly prohibitive. 

Ambassador FROMAN. These are all issues we want to work on 

in the context of these hearings. 

Mr. THOMPSON. Thank you. 

Chairman CAMP. Thank you. 

Mr. Buchanan. 

Mr. BUCHANAN. Thank you, Mr. Chairman. 


kgrant on DSKB33CYQ1 with HEARINGS
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And I really look forward—and congratulations, Mr. Ambassador. 

Looking forward to working with you, and I am sure the committee 

does, on a bipartisan basis. 

I am from Florida, and these trade agreements, the FTAs we just 

did with Panama and Colombia are huge to Florida. And I just see 

the—what trade means to Florida with 14 ports is 550,000 jobs, so 

$70 billion in economic activity. 

But I also grew up in Michigan. So I take a look at—just curious, 

from your standpoint, you look at a lot of the coastal communities, 

huge benefits in terms of trade, the President talking about doubling trade, 95 percent of the marketplace outside. But then you 

will see different parts of the country, somewhat the Midwest and 

other areas, that don’t benefit as much as the—many at times the 

coastal communities. What is your thought on that, what we could 

do more to help more States feel like it is a win-win for them as 

well on trade? 

Ambassador FROMAN. Well, thank you very much, Congressman. From our perspective trade is part of the broader economic 

strategy of creating jobs and promoting growth, strengthening the 

middle class, and that has got to work across the country. And, obviously, different parts of the country will be affected in different 

ways, but it is one reason we put so much emphasis on our manufacturing policy in the administration and making sure that our 

trade policy is supportive of our manufacturing policy. We want to 

make sure that it is—even as we export additional services, and we 

export additional agricultural products, that we are also building 

a stronger manufacturing capability in the United States. 

Mr. BUCHANAN. Another quick question because we only have 

3 minutes. The question I wanted to really kind of get to is I was 

in Beijing in January, and, you know, they have AmCham, which 

is about 4,500 members in the chamber, U.S. businesses in the 

chamber there. And, of course, you have heard this a lot about intelligence properties; it is still the biggest issue. An article that The 

Times had put out a little while back, it said that it is costing the 

U.S., I think, $48 billion in 2009. I think it would—if they improved their IP protection, it would mean $87 billion to the U.S. 

and create 2 million jobs. 

I know you worked on that, and it is something that is a big 

issue, but I can tell you, that is a very big issue to our country in 

terms of job creation, the additional economic opportunities for 

companies in the U.S. Where are we at on that? 

Ambassador FROMAN. Well, it is a very high priority, and as recently as last week when we had the strategic and economic dialogue, intellectual property rights, trade secrets, cyber thefts all 

featured very prominently in that discussion. 

We need to keep on pressing China to make progress there. We 

have made some progress. We reached an MOU on access for our 

films, which—— 

Mr. BUCHANAN. I think it is about enforcement. I mean, you 

might get agreement, but then try to get something implemented. 

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forts in certain respects. It is not enough, it hasn’t gone far enough, 

it hasn’t gone fast enough. 

The one thing I would say that gives us some hope is that they 

are beginning to see in their own country developers of intellectual 

property, and as that happens, there is more of a constituency 

within China that wants to see better enforcement of intellectual 

property rights. We need to capitalize that—on that and press for 

further resources being put into enforcement, further metrics and 

benchmarks, and ensure that they are not stealing our intellectual 

property. 

Chairman CAMP. Thank you. 

Mr. Nunes, for the purposes of UC. 

Mr. NUNES. Thank you, Mr. Chairman. 

Mr. Thompson reminded me that there is actually a letter that 

was sent to Mr. Froman and Secretary Vilsack on the SPS measures, and I just want to submit that for the record. 

Chairman CAMP. Without objection. 

[The information follows: The Honorable Devin Nunes] 


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Chairman CAMP. Ms. Jenkins is recognized. 

Ms. JENKINS. Thank you, Mr. Chairman. 

Thank you for being here. 

Strong intellectual property right protections are essential to the 

success of U.S. and EU economies. In the United States alone, inVerDate Mar 15 2010 20:35 Oct 17, 2013 Jkt 082908 PO 00000 Frm 00034 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\82908.XXX 82908

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tellectual property-intensive industries account for over 50 million 

jobs, nearly 6 trillion in output, and a trillion in exports. 

So a couple questions. First, what barriers for IPR-intensive 

trade in goods and services do U.S. companies face in the EU? And, 

second, in what areas is there potential for greater convergence between U.S. and EU IPR practices, and how can the United States 

and the EU enshrine high levels of protection in those areas in 

which harmonization is not pursued? 

And I would be interested in hearing about not only patents, 

trademarks and copyrights, but also about protection of trade secrets from disclosure by governments. 

Ambassador FROMAN. Well, it is—intellectual property is a critical part of our economy, as you said, and it is a critical part of our 

relationship with the EU as well. And we both have quite high levels of IPR protection, although they are somewhat different in 

terms of the number of years of protection or exactly on how they 

are implemented. 

We see the T–TIP negotiations as giving us an opportunity to 

work together with the EU to raise the standards overall for the 

global community, for the global economy, and to work vis-a`-vis 

third countries where we have common interests to help strengthen 

intellectual property rights enforcement. 

On a bilateral basis we have our differences. Geographical indications is one area, and we want to make sure we protect the 

trademarks and the common product names of our products. But 

we see more commonality in terms of the overall levels of protection between the U.S. and EU than with a number of other markets, and as a result we see the opportunity to really work together 

to set high standards around the world. 

Ms. JENKINS. Okay. Thank you. I yield back. 

Chairman CAMP. Thank you. 

Mr. Blumenauer. 

Mr. BLUMENAUER. Thank you, Mr. Chairman. 

Welcome, Ambassador. We have appreciated the professionalism, 

and the hard work, and the skill of the USTR. Look forward to 

working with you, the other committees, members. 

I appreciated our earlier conversation about the importance of 

labor and environmental protections, which, I think, working with 

you for the extent to which we are able to protect and enhance, I 

think that makes it better for everybody all the way around. 

My friend Mr. Neal referenced the footwear industry. You talked 

about going to New England. I think that is terrific. 

I would ask unanimous consent to enter in the record a letter 

that we had submitted with my friend Aaron Schock, almost 50 

Members of the House, that talked about the value chain of footwear. 

[The information follows: The Honorable Earl Blumenauer] 


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Mr. BLUMENAUER. I would hope that you would be able to 

visit Portland, Oregon, and look at part of that supply chain. I represent people who manufacture shoes in the United States, Danner 

Boots, King Footwear. We have got a whole range of others, however, because although less than 1 percent of footwear is manufactured in the United States, the vast amount of the value chain is 


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here. Companies like Nike, New Balance, King, others—not New 

Balance—well, New Balance also—their design, promotion, the intellectual property, the engineering, the sales, the marketing, a 

huge amount of the value is here. And we are trapped in the past 

with a tariff structure that is outmoded, long ago ceased to actually 

have any rational bearing on the marketplace, and, in fact, translates into a very substantial sales tax, particularly on the lowerend product. And it would be exciting if we could have some meaningful work with the treaty negotiations that you are under way 

with to do something meaningful in terms of tariff reduction to be 

able to promote that entire value chain. 

I mean, do you have any thoughts or observations? You can accept the invitation to come visit us. We would be happy to put tech 

and and and wine into the mix as well. 

Ambassador FROMAN. Thank you. Thank you, Congressman. 

You know, I would say on the footwear issue in particular, and 

this goes to some other products as well, we have got multiple interests at stake, as you say: the domestic producers, those who are 

assembling product that is being imported, the retailers, the consumers. And one thing we have to do is weigh all those interests 

and find the best possible path, and one in particular that supports 

the most jobs in the United States. 

And so we are looking at all those issues. We recognize the sensitivities. And we hope to be able to strike a balance that addresses 

the multiplicity of interests at stake. 

Mr. BLUMENAUER. Well, I appreciate that. And, as I say, we 

would be able to show you in our community people who are manufacturing, but also the design, the production, the engineering, the 

sales, thousands of very high-paying jobs right here in the United 

States that support that mechanism that you talked about. 

Chairman CAMP. All right. Thank you. 

Mr. Paulsen. 

Mr. PAULSEN. Congratulations, also, Mr. Ambassador. I echo 

the comments of some of my colleagues. 

I want to shift gears and just talk about India real quick. You 

are aware that many U.S. businesses and investors are facing 

issues that are significantly impeding their ability to compete in 

India. And, as you know, Congressman Larson and myself, we recently sent a letter with 170 of our colleagues ahead of last month’s 

U.S.-India strategic dialogue urging the administration to make India’s deteriorating environment for intellectual property a focus for 

that dialogue. 

I know last week India announced a review of its preferential 

market-access policy, which requires information technology products to be produced in India as a condition of sale. That is a policy 

that would violate fundamental global trade rules, obviously. But 

that review does not solve the problems facing the information 

technology sector in India. It doesn’t do anything to address the serious concerns in other sectors, including the solar industry. And 

it doesn’t do anything to address discriminatory tax treatment or 

stop the blatant theft of American intellectual property. 

The primary forum to discuss bilateral trade investment issues 

is the Trade Policy Forum, which USTR cochairs, but it hasn’t been 

held since 2010. When do you expect to hold the next Trade Policy 


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Forum? What can we do to support you in these efforts? And what 

is the administration doing to ensure that U.S.-India trade and investment relationship is on a positive trajectory down the road? 

Ambassador FROMAN. Well, thank you, Congressman. And this 

was very much at the center of the agenda last week when we had 

the U.S.-India CEO forum. We had the Finance Minister, the Trade 

Minister, and Deputy Chairman of the Planning Commission in 

town for a series of meetings precisely on that issue of the investment and innovation environment in India, how it is affecting our 

bilateral economic relationship, how we might be able to address 

it. 

And I had very good conversations with my new counterpart, the 

Trade Minister Sharma there, and we have agreed to have our 

staffs work closely together to tee up and try and resolve a number 

of the outstanding issues so that we can have a ministerial-level 

Trade Policy Forum sometime in the future. But we want to make 

sure that the groundwork is laid and that we are making progress 

towards resolving those issues in the run-up to that meeting. 

Mr. PAULSEN. And what can we do to help support you in that 

effort, knowing that this is a town—Congressman Crowley and others, we had a little meetings also with the Finance Minister recently, had a great conversation to keep that dialogue going. But 

what else can we do to support you in your effort? 

Ambassador FROMAN. I think it has been very important for 

India to understand the breadth of concern in the business community, in Congress, the bipartisan basis of that concern. I think it 

helps focus the attention on what needs to be done. It is one thing 

if we say it to them, but if they are hearing it also from a variety 

of other sources, I think that is very—that is very positive, and I 

would encourage you to continue that. 

Mr. PAULSEN. Thank you. I yield back. 

Chairman CAMP. Thank you. 

Mr. Marchant. 

Mr. MARCHANT. Welcome, Ambassador. 

I represent 700,000 people that live and work within 30 minutes 

of the—one of the great trade hubs in the United States, DFW Airport. Trade agreements equal high-quality and high-paying jobs in 

my district, and it isn’t just—it is an equation that is a district 

equation. And so we are very interested in your success and want 

to let you know that we are more than willing to help in any way. 

My question is about the TPP. The TPP is meant to be a living 

agreement that could eventually be the basis for a free trade area 

for the Asia-Pacific. Such a free trade area would further integrate 

the United States into the supply chains that cross the Asian-Pacific region, benefiting our exports and increasing our competitiveness. 

I understand that now the focus is properly on completing a high 

standard and ambitious TPP agreement; however, we need to lay 

the groundwork so that the Pacific Rim countries from Latin America through Asia that meet the high standards will eventually join 

and increase the value of TPP. What is the USTR strategy for ensuring that this can happen? 

Ambassador FROMAN. Well, thank you. And, as you said, our 

focus right now is trying to complete this agreement this year with 


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the 12 countries that will be part of it, but we have always envisioned this as a living agreement, as a platform to which other 

countries could ultimately accede if they so wished. And we heard 

expressions of interest, formal and informal, from a number of 

other countries who are following TPP’s progress with great interest, and who we expect may want to join in a second tranche of 

countries sometime in the future. But our focus for now is just 

bringing this first tranche to a close. 

Mr. MARCHANT. Mr. Chairman, I would like unanimous consent to submit a question for the record concerning our relationship 

with Taiwan to the Ambassador. 

Chairman CAMP. Without objection. 

Mr. MARCHANT. Yield back. 

Chairman CAMP. All right. Mr. Davis. 

Mr. DAVIS. Thank you very much, Mr. Chairman. 

Let me add my congratulations, Mr. Ambassador. 

You know, as we experience globalization, there seem to be more 

and more small, moderate, minority-owned, women-owned businesses who are trying to get into the pipeline and make use of opportunities to do business abroad. How helpful does your office expect to be to help these individuals make connections, contacts, and 

get moving? 

Ambassador FROMAN. Well, thank you very much for asking 

that question, because getting small and medium-sized businesses 

into the export business has been a major focus of the administration, and we want to do more on that. 

A couple of years ago, Ambassador Kirk launched an SME initiative at USTR. And more broadly in the administration, through the 

National Export Initiative, and through the works of the Export 

Promotion Cabinet, we made increasing the number of small, medium-sized businesses who export a major objective. And we went 

at that by, one, increasing the availability of trade finance and 

working with community banks, who have the best relationships 

with small and medium-sized businesses, to bring them into the 

trade finance business. We also looked at the array of points of contact that the administration, the government has with small and 

medium-sized businesses, the SBA, the commerce offices around 

the country, to ensure that they were trained and capable of providing small and medium-sized businesses with the kind of advice 

they need about how to begin to export, how to evaluate a market, 

and how to navigate their ways through the various procedures 

that they need to navigate. So this has been a major priority of 

ours. 

In TPP itself, we have a small and medium-sized business chapter. And the objective there is to be able to look back at TPP as 

it is being implemented to ensure that the benefits of TPP are also 

going to small and medium-sized businesses and to make adjustments as appropriate. 

So this is a high priority for us. We agree these are the drivers 

of jobs in the United States, and we think there is much more that 

we could do to help these companies become part of the global 

economy. 

Mr. DAVIS. Thank you very much. We had a great relationship 

with Ambassador Kirk and look forward to working with you. 


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I yield back. 

Chairman CAMP. All right. Thank you. 

Mr. Reed. 

Mr. REED. Thank you, Mr. Chairman. 

And thank you, Ambassador, for being here today. And I offer my 

congratulations and also my personal thanks for all the hard work 

on Korea in particular that you were involved with and that we 

worked on with Korea, Colombia, and Panama. 

I represent upstate western New York. I have got companies like 

Nucor Steel, Corning Incorporated. So I am very concerned about 

making sure that we are enforcing our trade provisions to the fullest extent possible to make sure we have that level playing field 

that is critical to the future of America and American manufacturing in particular. So just want to make sure I have a clear understanding that you and I agree that enforcing our trade remedy 

laws is something that protects American jobs, good for American 

jobs. 

Ambassador FROMAN. Absolutely. 

Mr. REED. And when it comes to intellectual property, for example, at Corning Incorporated, and the trade secrets and things like 

that, would you agree with me that being able to point at our U.S. 

criminal and civil laws is critical in your negotiations as you go in 

regards to the trade agenda across the world? 

Ambassador FROMAN. Well, certainly the whole area of trade 

secret theft has been of great concern to us and a high priority. 

And Corning is one of the specific cases we have advocated for aggressively with China to try and see if we can help resolve that 

case. 

I don’t know enough about the criminal and civil laws to comment on the relation between that and what we are doing on the 

trade side other than to say that we have underscored that trade 

secret theft is unacceptable, and that it is important that these 

issues, both the individual cases, but also the broader message 

from the Chinese leadership that trade secret theft won’t be tolerated, has got to be a critical part of moving forward. 

Mr. REED. Well, I so appreciate that commitment, because that 

is an important piece to me, obviously. 

Is there anything that you would recommend to us from a legislative perspective to champion to put you in the best position to accomplish your job in regards to that trade secret initiative? 

Ambassador FROMAN. Well, I would say the following, and I 

mentioned it in my opening statement a bit. Our—my biggest 

worry at the moment is really about—is about resources. USTR is 

lean, it is nimble, but it is highly constrained at the moment for 

all the reasons that we know, between sequestration and other 

budget cuts, and it is forcing us to make hard decisions between 

what negotiations we can engage in and how, what other marketopening measures we want to pursue, and what enforcement cases 

we can bring. 

And so I am quite concerned that we will manage our resources 

to the best of our ability, we will do the best we can to meet our 

various priorities, but, frankly, I think USTR gets the biggest bang 

for the buck of anyplace I know. And I think making sure that we 

are fully resourced to be able to achieve the kinds of enforcement 


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gains and negotiating and monitoring gains that you identify are 

very important. 

Mr. REED. I appreciate that, and if there is anything you need 

from our office, don’t hesitate to reach out. I look forward to working with you, I truly do, Ambassador. Good luck. 

Chairman CAMP. Thank you. 

Mr. Griffin. 

Mr. GRIFFIN. Thank you, Mr. Chairman. 

Thank you for being here. I want to talk to you about SPS enforceability. And I think my colleague, Mr. Nunes, talked a little 

about this. 

I believe that you discussed the current arrangement, which is 

to go through WTO procedures to deal with this, as opposed to having something in the agreement itself. Is that a fair characterization? 

Ambassador FROMAN. Well, in TPP, as we seek to negotiate— 

and, of course, we are still in the midst of negotiating—as we seek 

to negotiate what we are calling SPS–Plus disciplines, we want to 

make sure that they are fully implemented. Many of the SPS disciplines, SPS–Plus disciplines, go to a future elaborating how countries’ WTO commitments are to be implemented. So, for example, 

that regulations be based on science, it describes how that science 

should be applied, or what kinds of relevant science there are to 

apply and how that should be discussed. Those underlying commitments, those underlying commitments to apply science, are subject 

to WTO dispute resolution. 

Mr. GRIFFIN. Right. And that process is laid out in the WTO 

agreement, not in the agreement that is being negotiated here. 

Ambassador FROMAN. What we have got in TPP is both the 

WTO dispute resolution process on the substance of the SPS commitments, but also separate TPP disputes element on the procedural enhancements that we are seeking to achieve. 

Mr. GRIFFIN. I have looked at this and talked with some of my 

constituents, and I am concerned that there are not enough—there 

is not enough teeth and efficiency in using the WTO dispute resolution process as opposed to elevating this and creating a more effective mechanism in the agreement itself. And this is something that 

I think we should pursue. 

And let me ask you this: If there are voices in the administration, in the Federal Government, that disagree with me, where do 

those voices come from? Are they FDA? Are they worried about 

their science being under scrutiny? What—I mean, the FDA is already science-based, so where is the rub there? 

Ambassador FROMAN. We approach this in—by trying to figure 

out what is the most efficient, quickest way to resolve issues as 

their arise. And that is a little bit what is behind the consultative 

mechanism that we have proposed in TPP, because we think by 

being able to raise these issues through a formal process, forcing 

the parties to come to the table to try and resolve them can help 

expedite some of the resolution. 

We think we have struck the right balance by leveraging off the 

scientific expertise of the WTO, because it really is a very scienceand technical-heavy set of issues, while at the same time adding 

a consultative mechanism that will allow us to force parties to the 


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table and get the procedural elements addressed in the context of 

TPP. 

Chairman CAMP. All right. Thank you. 

Mr. McDermott. 

Mr. McDERMOTT. Welcome. 

I don’t know if you got promoted or demoted, leaving the White 

House and going over to Trade. 

The last 2 years as you have worked on this TPP, the issue of 

access to medicines has been central to some of our concerns, and 

it seems like the language you have put in is really a step back 

for the May 10th agreements that Chairman Rangel and Mr. Levin 

made with the White House in terms of trade agreements. 

The proposal you put out did away with the word ‘‘guarantees.’’ 

I think that is what poor countries really want are guarantees of 

access to the medicine within 5 years of their introduction in the 

United States. You got a lot of negative feedback at the time that 

first came out, and since that time, you have said you are in a period of reflection. Can you tell us where you are on your decision 

about that? 

Ambassador FROMAN. Thank you, Congressman. And thank 

you for your leadership on this issue. 

This is a critically important issue, and we are committed to 

finding the right balance to strike between protecting innovation, 

but also achieving access to—access to medicines. We are in the 

process of engaging with our TPP partners to educate them as to 

what is in U.S. law. We took the feedback on our original proposal 

very seriously. We received a wide range of feedback. And we are 

in the process of figuring out how we want to take it forward, consistent with some of the principles that you laid out that strikes 

that balance between—— 

Mr. McDERMOTT. Is there any language presently written that 

we can look at? 

Ambassador FROMAN. We have not tabled—we have not tabled 

new text on this issue. We are in the process of dialogue with our 

TPP partners about what the principles of a chapter on this might 

look like. 

Mr. McDERMOTT. So the only tabled proposal is the one of February or wherever? 

Ambassador FROMAN. We never tabled that proposal. We 

briefed the committee here and our stakeholders on it. 

Mr. McDERMOTT. You never tabled it. 

Ambassador FROMAN. Correct. 

Mr. McDERMOTT. Okay. Let me ask you a second question. This 

committee does a lot of things here, but most of them are irrelevant. But it seems to me that we ought to be dealing with GSP if 

we are serious about our relationship with the rest of the world. 

Can you just tell the committee why GSP ought to pass in the next 

2 weeks and not expire on the 1st of August? 

Ambassador FROMAN. Well, thank you. Thank you very much 

for that. And I—we very much agree that GSP has both its development dynamic to it, but also very importantly it helps importers 

of products who can’t otherwise access those products to bring 

those products in and provide them to American consumers at 

lower costs. So we think it is both good for American consumers, 


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but also good for development. We were comforted to see and welcomed the introduction yesterday of the bipartisan bill by the leadership of this committee to renew GSP, and we think that is important. 

Chairman CAMP. All right. Thank you. 

Mrs. Black. 

Mrs. BLACK. Thank you, Mr. Chairman. 

And welcome, Ambassador. We look forward to working with you. 

I want to turn to the issue of data. One of the most important 

21st century issues is the protection of cross-border data flows, 

which, of course, is critical not just for service companies, but to 

any globalized company in any sector. Firms with global sales 

forces must be able to transfer the sales data back to their headquarters, and many companies across the sectors that centralize 

the processing of their data must be able to do so, as you know, 

seamlessly. The emergence of the digital trade also depends on the 

free flow of data across borders. 

In both the EU and the United States, data privacy is protected, 

but we do have different systems for providing that protection. So 

respecting the difference of those privacy approaches, how can we 

ensure a robust protection for cross-border data flows in the EU negotiations, in the Trade in Services Agreement, and also in TPP? 

And in what other ways has the digital revolution impacted services trade in a manner that should be reflected in these negotiations? 

Ambassador FROMAN. Well, thank you very much. 

And clearly the impact of the—of digital—the digital economy, of 

digital trade is playing an increasing role in all of our trade agreements, as you say. In TPP we have a particular focus on it, but we 

will also be talking about it with our European colleagues and in 

the services agreement. 

We think the free flow of data is important for all the reasons 

that you say. And also, as technology develops, and the cloud develops, we want to make sure that businesses are able to structure 

its operations in a way that makes maximum sense. At the same 

time, obviously, there are privacy concerns. We want to take those 

seriously, and strike the right balance, and ensure that we are able 

to achieve those privacy concerns without distorting the free flow 

of data as part of the digital economy. 

So those are active issues for discussion right now in TPP. We 

have begun that dialogue with the EU as well. And my sense is it 

is going to become an increasing part of our trade agreements 

going forward, and we would be happy to work with you and get 

your input on how you think we ought to be thinking about this. 

Mrs. BLACK. I appreciate that. We can all certainly appreciate 

the fact that data must be protected. It is a very important part 

of businesses and a very important part of the flows. 

Are you feeling in negotiations at this point in time that there 

is any really good case model that you could say, yes, this is going 

to work for all of our agreements? 

Ambassador FROMAN. You know, I think TPP is farthest along 

in terms of the negotiation at the moment, and we will have to see 

where we come out on that. But I think we need to remain flexible 

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ciplines in each of our agreements depending on the particular 

partners that we’re working with. 

Mrs. BLACK. Thank you. I look forward to working with you. 

I yield back. 

Chairman CAMP. Thank you. 

Mr. Kind. 

Mr. KIND. Thank you, Mr. Chairman. 

And, Mr. Froman, thank you for being here and for your service 

to our country. We look forward to working with you and the administration on a robust fair trade agenda that can help spark the 

economic growth and job creation that we need in this country 

right now. And you have a lot on your plate. 

Let me just raise a couple of the concerns, and then happy to follow up with you on. But I appreciate USTR’s report on Russia and 

WTO compliance and what further action needs to be taken. I and 

most of the members on this committee did support Russia PNTR. 

We felt it was important to get the sixth largest economy into a 

global rules-based trading system, but there are shortcomings that 

I feel need to be addressed, not least of which, being from Wisconsin, their exclusion of dairy products since 2010. And I am hoping that with your assistance—and I will follow up with you as I 

did with Ambassador Kirk—that we may look at practical steps to 

be taken to see if we can get Russian and the Customs Union there 

to open up their markets to our dairy products. 

Canada right now is revising their standards on dairy products, 

too. We are concerned about the possible exclusion of more exports 

into the Canadian market. 

And then finally, just pivoting to TPP quickly, as you probably 

have seen, Prime Minister Abe’s LDP Party has been taking a lot 

of agricultural—at least attempting to take a lot of our agricultural 

products off the table when it comes to TPP negotiations: rice, 

wheat, barley, pork, beef, dairy, sugar. Obviously that is very disturbing. You had mentioned earlier in your testimony the large agricultural exports, roughly 140 billion a year. We feel we can do 

even better than that. Japan is a late entry in TPP negotiations. 

Hate to see us go down the road of allowing them to unilaterally 

try to exclude certain products from negotiations, and I am sure we 

will enjoy your support on that as we move forward as well. 

But there is a lot that has to be addressed. And, as you know 

already, it is going to be important to keep not only this committee, 

but other Members in the Congress informed as far as the state of 

negotiations, especially the large new class that has joined the Congress recently, too, who have never been through a trade debate or 

a trade discussion. Try to get them information as well. 

But I would be interested in your perspective on Russia and 

where they are right now with their new-found WTO obligations. 

Ambassador FROMAN. Well, thank you very much. And we 

agree that it is very important to stay focused on ensuring that 

Russia implements the commitments it made when it acceded to 

the WTO. And there were, I think, four or five areas that we asked 

them to take action on. They have taken action on a couple of 

them, but a couple of them still remain outstanding. 

You know, I would note that when we were talking about PNTR 

for Russia, one thing that we underscored, the value of bringing 


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them into the WTO, is that they would be subject to certain disciplines and subject to dispute resolution when they failed to meet 

those disciplines. There is now a case being brought against them 

on the auto recycling fee in the WTO, and we will be joining that 

case. 

And so I think that is exactly the sort of process we want to see. 

Obviously, we would prefer for them to implement all their commitments assiduously, but if they don’t, we will certainly go to dispute 

resolution as necessary. 

Just with regard to Japan, it was very important to us that 

Japan agreed before we let them into the TPP that everything is 

on the table. There are no upfront exclusions. Now, obviously, 

every country has its sensitivities, and those will all be subject to 

negotiation, but we have not agreed to any upfront exclusions with 

regard to Japanese agriculture. 

Chairman CAMP. Thank you. 

Mr. Kelly. 

Mr. KELLY. Thank you, Mr. Chairman. 

Mr. Ambassador, welcome and congratulations. 

On the TPP, I am really interested in this. Now, I know if we 

are going to get the economy back on track, we have got to go after 

the global market. There is just no question about that. And in the 

district—and we all have been talking about our districts and how 

important the ability to sell things all over the world is to each of 

our districts individually. 

But on the TPP, though, you have got a heavy, heavy load there. 

And I am wondering, we talk about this and this sense of urgency, 

because I would just say that sooner, of course, is better than later, 

and as you see us approaching that, the challenges that you are 

going to have trying to get there, and I wonder—because geopolitically right now I don’t think there is more important trade policy 

that we can get than in that part of the world, especially with the 

influence of China and all the rest of the members that are talking, 

NGOs, nations that are talking to you. So the biggest challenges 

you see. 

And then on top of that, what can we do to help you here? Is 

there anything we can do to help you? Because I am looking at 

what you are doing, I don’t know how you are going to get it done 

as quickly as you want to get it done. And I know you said we are 

going to work really hard. But the biggest challenges you see. 

Ambassador FROMAN. Well, thank you for underscoring—— 

Mr. KELLY. This is a big deal. 

Ambassador FROMAN.—the challenges ahead. 

You know, this will be a complicated process to bring TPP to a 

close as well as these other negotiations that we are working on. 

But there is a lot of political will among the countries around the 

table, because they see this as an opportunity to set high standards, to introduce new disciplines, to have a positive impact on the 

multilateral trading system, and that, I think, has mobilized and 

motivated our trading partners to work with us to try and resolve 

these issues. But there will be very difficult issues that will require 

some tough trade-offs at the end of the day to ensure that we can 

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You know, I would just add to what I said to Congressman Reed. 

I think our biggest challenge right now is the resource challenge, 

simply not having—we have open positions we can’t fill. We have 

travel budgets that are constrained that we can’t send negotiators 

to all the rounds we would like to send them to, and we have meritorious enforcement cases we would like to bring but don’t have the 

capability of necessarily bringing them all. 

And so I think where you all can help, I think, in the short run 

is in trying to ensure that we have the necessary resources and 

support to get our job done. 

Mr. KELLY. Well, I appreciate what you are doing. I think the 

closer relationship we have with these countries who—the better 

we are as partners also in a world that is constantly now undergoing some changes. China, to me, really scares that part of the 

world. And when I have been over there, I have talked to those 

folks, have a read pretty good relationship with South Korea, I 

don’t know how we—if we don’t. Now, of course, this is a huge lift 

for us, but for that part of the world, if we aren’t the biggest player, and we are not the most influential, then we are going to lose 

out. And again, if people to look to us to be the leaders, we need 

to be able to do that. 

So thanks for what you are doing. Any way we can help, please 

let me know. 

Ambassador FROMAN. Thank you. 

Chairman CAMP. Thank you. Thank you. 

Mr. Pascrell. 

Mr. PASCRELL. Mr. Chairman, thank you. 

Ambassador Froman, congratulations on your confirmation. I am 

sure those of us on—all of us on the Ways and Means look forward 

to having a great relationship with you. 

My other colleagues have mentioned today different policies that 

would improve our competitiveness hand in hand with the trade 

promotion authority: legislation on currency manipulation, strong 

enforcement of our trade laws, trade adjustment assistance, just to 

name a few. 

I would like to bring your attention to something that we worked 

on the last 2 years. The Bring Jobs Home Act would provide tax 

credit for companies that bring jobs back into the United States of 

America. These are the kinds of policies we need if we are to get 

the most out of our trading relationships. 

I want to zero in on the Trans-Pacific Partnership, if I may. I 

would like to talk about our domestic textile industry, that which 

is still alive, that is. I was glad to learn of your support for this 

rule during your recent Senate confirmation. 

I want to draw your attention to a bipartisan letter from Representatives Howard Coble, Patrick McHenry, and I sent to you, 

which was signed by 167 House Members, including many of my 

colleagues who sit on this committee. 

And I—I would like to ask, Mr. Chairman, unanimous consent to 

have this letter entered into the record. 

Chairman CAMP. Without objection. 

[The information follows: The Honorable Bill Pascrell] 


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f 

Mr. PASCRELL. Mr. Froman, have you reviewed this letter? 

Ambassador FROMAN. I am not familiar with the specifics of the 

letter, but I am happy to discuss it with you. 

Mr. PASCRELL. The letter supports the inclusion of strong rule 

of origin language, which has really hampered us in other trade 

agreements; in this case, the yarn forward rule. I understand that 

you are negotiating strategy has yarn forward at its center. Can 

you update this committee on your negotiations over the rule of origin? 

Ambassador FROMAN. Well, thank you very much. And you are 

right that we have—we want to very much pursue a policy that addresses both our domestic manufacturing interests in the textile 

and apparel sector, as well as our other interests and strike the 


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right balance. And we think yarn forward at the center of that proposal makes a lot of sense, and that is the proposal that we are 

currently negotiating with. 

With regards to rules of origin more generally, those are being 

discussed among our TPP partners, and we are looking to make 

sure that across all sectors we are dealing ourselves into supply 

chains by making sure the rules of origin support that; that having 

manufacturing and production here in the U.S. is made more attractive by the rules of origin of TPP so that companies can make 

their decisions in a way that enhances job creation, creates jobs 

here in the United States. 

Mr. PASCRELL. So you are willing to work with the industry to 

find the proper trade tariff reduction arrangement that does allow 

for a reasonable approach, particularly during the transition period? 

Ambassador FROMAN. Yes. I said we are very much in touch 

with the stakeholders and obviously with the staffs of the committees here as we try and work through these issues of yarn forward 

and rules of origin more generally. 

Chairman CAMP. All right. Thank you. 

Mr. Becerra. 

Mr. BECERRA. Thank you, Mr. Chairman. 

Ambassador, thank you for being with us. A couple quick points 

and then one crucial question. 

Enforcement. More and more that I have watched and been here, 

my sense is that my vote on any trade deal will now hinge on enforcement, because I find that a trade deal is a hollow agreement 

if our trading partner doesn’t or won’t play by the rules. And so the 

last thing we need is to tell American businesses or American 

workers that we struck a good deal with a trading partner, then 

find that the other side doesn’t follow the rules, and we are losing 

jobs, hemorrhaging jobs and the rest. 

Secondly, I hope that you will take a deep interest in the whole 

issue of currency manipulation. On a bipartisan basis more than 

230 Members of this House, Republicans and Democrats, sent a letter to the President last month saying, please, please consider language on currency manipulation when it comes to any future trade 

deal, because what we find is that somewhere between 1 million to 

5 million American jobs have been lost, shipped overseas because 

of currency manipulation by other countries where they artificially 

depress their currency so they can export more things to us. And 

so I hope you will really take a crucial look at that and let us know 

that you will be defending the American interests of both work and 

business. 

Intellectual property. I am from Los Angeles, so, to me, if we 

can’t protect intellectual property, again enforcement provisions are 

crucial, we are going to lose some industries that have been net exporters of goods. 

And finally the question to you. As I just mentioned, I am from 

the Los Angeles area. The Los Angeles area, because of our two 

ports, Los Angeles and Long Beach port, we account for some 10 

percent of all U.S. trade in the U.S., and that is now 5 years running. We are the largest port in the Nation, and we are one of the 

largest ports in the world. Lots of folks in Los Angeles depend on 


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the ports for their jobs; lots of Americans throughout the country 

do as well. 

I know you have to travel all over the place, all over the world, 

including the west coast. I would love it if the next time you find 

yourself going through Los Angeles, you will give me a chance to 

introduce you to some of those folks in Los Angeles who create 

American jobs, keep American businesses thriving. And can I ask 

you, if you do have a chance to go to Los Angeles, we can count 

on you to perhaps spend a little time with some folks there in Los 

Angeles? 

Ambassador FROMAN. Absolutely. I would be happy to do that. 

Let me just say on enforcement in particular, we very much 

agree. In our view this administration’s view has been that it is not 

enough to negotiate an agreement and to implement it; you need 

to make sure that it is being fully enforced as well. And that is why 

we brought 18 enforcement actions over the course of this term. We 

brought the first super 301 case—or 301 case in 15 years against 

China for subsidizing unlawfully their wind energy business. We 

brought the first 421 case on tires. We have brought an aggressive 

agenda to WTO, and we are continuing to focus on that, including 

through the standing up of the Interagency Trade Enforcement 

Center. So we are very much in line with your perspective on that. 

Mr. BECERRA. Thank you. Look forward to seeing you in Los 

Angeles. 

Yield back, Mr. Chairman. 

Chairman CAMP. Thank you. 

Mr. Crowley. 

Mr. CROWLEY. Thank you, Mr. Ambassador. Great to have you 

before your committee. Congratulations to you. Look forward to 

working with you, continuing the relationship we have developed 

over the past few years. And thank you for your endeavors. 

And I want to point out in particular we appreciate the time and 

the effort that you and the administration have given and put on 

the enforcement of trade rules, as were mentioned. As America exports more, we need to make sure that foreign barriers to trade are 

not erected to prevent the free flow of American goods and services, 

because it is one thing to have trade, but it is another thing to 

have trade deals that work for us and for our partners. So please 

keep up that focus on enforcement. I think it is paying off and will 

continue to do so as well. 

One of the major problems for service exporters like those from 

New York, my hometown, is having to compete with state-owned 

industries in other countries. What do you envision for the USTR 

in terms of how you view those enterprises? And how do you see 

these issues coming into play in the deals that are being negotiated 

right now? Japan post comes to mind, for one, as it pertains to 

TPP. 

Ambassador FROMAN. Well, thank you very much. And I very 

much enjoyed working with you, and look forward to doing so going 

forward. 

Certainly the role of state-owned enterprises is absolutely critical, and that is why in TPP this is one of the areas of new disciplines that we are working to introduce into the agreement to ensure that state-owned enterprises whose—that are focused on comVerDate Mar 15 2010 20:35 Oct 17, 2013 Jkt 082908 PO 00000 Frm 00058 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\82908.XXX 82908

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peting with commercial firms, are engaged in commercial activity, 

that they play by the same rules and are subject to the same kind 

of disciplines as private firms, and that we deal with their inherent 

subsidies and their other inherent advantages in an appropriate 

way. 

And equally on our bilateral investment treaties, I mentioned 

progress made last week with China in terms of their moving forward and wanting to negotiate a bilateral investment treaty with 

us. We have made clear that SOEs will be a critical part—looking 

at their SOE sector will be a critical part of that negotiation as 

well. And we at USTR, working with our colleagues at the State 

Department to co-lead that effort, are very much looking forward 

to engaging with them on that. 

Mr. CROWLEY. Thank you, Ambassador. 

I just want to also follow up briefly on my colleague Mr. Paulsen 

and his referencing to India. I did not sign on to that letter of 

over—almost 150 Members, but that doesn’t diminish my interest 

in the issue. I am the cochair of the India Caucus here in the 

House, and I am concerned about that level you talked about in 

terms of the unprecedented nature of the coming together of U.S. 

industries and the concern for their opportunities, or diminished 

opportunities, within India, and I appreciated your response as 

well and look forward to working with you and the administration 

moving forward on a positive growth agenda between our two nations. 

I do view India and the U.S.—it is probably our most important 

ally in this century, and we have to get this right. 

So thank you, Mr. Chairman. Thank you, Mr. Chairman, for 

holding this committee meeting today. 

Chairman CAMP. Thank you. 

Mr. Larson and then Mr. Smith. Mr. Larson is recognized. 

Mr. LARSON. Thank you, Mr. Chairman. Thank you for conducting this hearing. 

Ambassador, welcome, and thank you for your outstanding service to the Nation. I want to thank you for your testimony today, 

and I wanted to follow up and echo on the comments of my colleague Erik Paulsen. 

Over the last few months, I have become concerned on what we 

have heard regarding the environment for American businesses operating in India. Whether it be patent violations and compulsory licensing in pharmaceutical industries, piracy within the software 

and film industries, local content rules in the technology sector, or 

forced globalization in green tech industries, the news coming out 

of India has not been good for American innovators. 

These challenges are of great concern to me because of what they 

mean for American businesses and American workers. America is 

at the heart of the nations of innovators, and millions of American 

jobs, including thousands in my State of Connecticut, rely on this 

very important innovation. I know that both of and the President 

get it, and I appreciate the fact that you stated recently at the 

U.S.-India Business Council that we must begin to address these 

challenges. 

Could you please expand on those recent comments in detail for 

the committee what specific steps you will take over the next year 


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to combat the increasing challenges that Mr. Paulsen and myself 

outlined? 

Ambassador FROMAN. Well, thank you. And to build on what 

Congressman Crowley also said, this is a very important relationship. And we should—we shouldn’t ignore the fact that our economic relationship has developed significantly over the last few 

years; that there are vast areas of good cooperation, defense sector, 

counterterrorism, and a number of other areas. It is a strong relationship. 

I think the frustration we are all hearing from the business community and others is that this relationship is not nearly achieving 

its potential precisely because of the policies that you identified. 

And that is the message we conveyed to our Indian Government 

counterparts last week both from ourselves, but also from the 

American business community, and the American business community that is interested in India, that wants India to succeed and 

wants to invest there. And our hope is that through these dialogues, including the Trade Policy Forum, other high-level dialogues, including the Vice President will be going there, I believe, 

next week and will be conveying similar messages, that we can 

help the Indian Government move towards addressing some of 

these concerns. 

We have seen some movement. Even this week they lifted certain 

caps on foreign direct investment in certain sectors. And so they 

have taken some steps, but the key is for them to be able to convey 

that India is a place that people want to do business, and that people can rely on as a place to do business. And that is in our mutual 

interest. And so we very much look forward to working with them 

through all these mechanisms to try and address those issues. 

Chairman CAMP. All right. Thank you. 

Mr. Smith. 

Mr. SMITH. Thank you, Mr. Chairman. 

And thank you, Ambassador, for your presence here today. 

I guess I want to add emphasis to some of the issues—some of 

my colleagues talking about SPS and how important it is, and especially more specifically to, obviously, agriculture. We know that 

there is more U.S. pork sent to a Central American country of 7.7 

million population compared to the 28 European countries that 

make up 500 million population. I think that there needs to be 

some dispute resolution contained in the agreements moving forward. And can you, I guess, respond to that and add anything you 

might have had to say previously? 

Ambassador FROMAN. Well, thank you. And we agree that agricultural opportunities for export are significant. We are exporting 

at an all-time high now, but there is much more that we can do, 

and it is a central part of what we are doing in TPP and T–TIP 

as well. 

And I would just say with regard to T–TIP, we have worked very 

closely with our European colleagues, even before we launched negotiations, to underscore the importance of resolving some of these 

SPS issues, and to work with them to resolve some longstanding 

disputes, including over lactic acid, live swine, and a variety of 

other areas. We have underscored that is going to be important 

looking forward to address these outstanding issues. 


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On the issue of dispute resolution itself, as I mentioned, most of 

what we are seeking in TPP, what we call the SPS–Plus chapter, 

the underlying disciplines are subject to dispute resolution either 

in the WTO or under the consultative mechanism that we are proposing in TPP. And we think that is the appropriate way of moving 

forward to ensure that there are efficient ways as issues arise of 

getting them resolved on an expedited basis. But we very much 

agree that this is a critical area of our trade. It is a critical area 

of these negotiations. We want to make sure that we have mechanisms to ensure that they are fully implemented. 

Mr. SMITH. Okay. Thank you. I yield back. 

Chairman CAMP. Thank you. 

Ms. Sa ́nchez is recognized. 

Ms. SA ́ NCHEZ. Thank you, Mr. Chairman. 

And Ambassador Froman, congratulations on your confirmation, 

and thank you for being here to discuss the administration’s trade 

agenda. 

You are obviously stepping into the U.S. Trade Representative at 

a very exciting time. The administration is negotiating agreements 

with the European Union, the Pacific Rim countries, and working 

on a new international services agreement. We also have the issue 

of congressional action on trade promotion authority, or fast-track 

authority, and the expiring Generalized System of Preferences program, and hopefully tougher trade enforcement rules. 

I guess the main point that I want to express to you is that in 

the past I have been highly critical of past U.S. Trade Representatives, because all too often I think that our trade deals that are negotiated are unfair to American workers, and that they erode our 

U.S. manufacturing base. So I just want to share with you a few 

of the priorities that I think we should keep in mind as you continue your work in that office. 

First of all, strengthening Customs enforcement to create a level 

playing field for American industries is something that I am very 

interested in seeing. 

Aggressively trying to crack down on currency manipulators. One 

of my colleagues mentioned that that results in huge job losses for 

American businesses. 

Ensuring high levels of labor and environmental standards in 

our trade negotiations, and specifically trying to build on the bipartisan May 10th agreement. 

And also promoting U.S. manufacturing and opening up access to 

foreign markets. 

So I look forward to hopefully working with you and my colleagues to ensure that our trade agenda keeps in mind those priorities. 

You have been asked questions about aggressively cracking down 

on antidumping and countervailing duty violators. That is an area 

that I am pleased to see progress on with this administration, but 

I think we can be doing more there. So I am going to ask you a 

question specifically about the Trans-Pacific Partnership, because I 

do have some concerns there. 

Clearly Japan’s late entry into the Trans-Pacific Partnership has 

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percent of the domestic Japanese market, making Japan one of the 

most closed auto markets in the world, and that is despite the fact 

that Japanese auto tariffs are at zero percent. So with the TPP negotiations, how does the USTR hope to effectively address Japanese 

nontariff barriers? 

Ambassador FROMAN. Thank you very much. 

Obviously Japan’s auto sector has been an area of concern for— 

as Ranking Member Levin said, for decades, and it is still very 

much a concern today. And that is why prior to allowing Japan to 

come into TPP, we insisted on negotiating certain upfront commitments both in terms of the reduction of tariffs in the U.S., but also 

in terms of access to their market, more than doubling of the PHP 

program, which provides for expedited entry of imports into Japan, 

but also agreed on the terms of reference for a specific parallel negotiation on the auto sector that will be part of TPP, will be binding, will be subject to dispute resolution. And those negotiations 

are focused directly at those nontariff barriers that you mention. 

We are looking forward to working with the auto industry here 

and auto workers here to get our best understanding of their priorities for that negotiation. But this is a high priority for us, and we 

want to make sure that we achieve concrete results through these 

negotiations. 

Chairman CAMP. All right. Thank you. 

Mr. Schock. 

Mr. SCHOCK. Thank you, Mr. Chairman. 

Thank you, Ambassador. We are all excited that you are in your 

new post, and confident that we are going to do even more on trade 

in the coming years with you at the helm. 

I just want to bring up some—two specific concerns that I have 

had, one of them that I brought up repeatedly to the previous trade 

ambassador and, in my opinion, really haven’t gotten a clear answer on. 

U.S. biologics is an important industry in our country. From my 

home State of Illinois, we have several of the big pharmaceutical 

companies based there. Current U.S. law basically guarantees 

them 12 years to be able to recapture their investment in U.S. biologic medicines and pharmaceuticals. 

On several occasions the administration in its budget and, we 

have heard, in some of the discussions has opened the door, if you 

will, on the potential to roll back 12 years’ protection to perhaps 

a 7-year protection, as was put in the President’s budget. Obviously, that concerns that industry, certainly concerns me as their 

representative, if we are going to change current U.S. law which 

protects them up to 12 years to 7 years, which would be, you know, 

more than a 50 percent reduction in how many years they can recapture their earnings or their investment. 

Can we get some answer from you on whether or not that is still 

a position the administration holds, or is the administration’s position going forward that they are going to negotiate trade agreements like they did in Korea in TPP that upholds current U.S. law; 

i.e., the 12 years? 

Ambassador FROMAN. Well, thank you—— 

Mr. SCHOCK. Let me just—why the nonclarity? In other words, 

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is doing is creating uncertainty within the pharmaceutical industry 

and making them not want to invest. If we are going to stick to 

current law, which is what we did in Korea, moving forward—and 

it is current U.S. law, by the way, and I don’t know how we agree 

to a trade agreement that isn’t consistent with U.S. law. Let us 

just say that so we remove the doubt, and we can move on to other 

important things. 

Ambassador FROMAN. Thank you for that. And obviously, this 

is a very important issue in terms of protecting innovation in the 

U.S., which is a high priority. 

We are currently engaged with our TPP partners in discussing 

how U.S. law works, the distinction between small molecules and 

biologics, the timeframes that are in U.S. law for each, and beginning that process of consultation with them about why U.S. law operates the way it does. 

We have not tabled text yet in this particular area, but we are 

in the process of socializing the issues around current U.S. law 

with our trading partners, and obviously this will be subject to negotiation. But for—but at the current time, our focus is on educating our trading partners as to what is in U.S. law, why it operates the way it does, and how it operates. 

Mr. SCHOCK. Do you believe you can negotiate a free trade 

treatment and agree to text that is inconsistent with current U.S. 

law? 

Ambassador FROMAN. Well, I think what we need to do is to 

achieve the highest level of protection possible for our innovative 

industries, and the first step in that process is educating our trading partners about what is in U.S. law and why it operates the way 

it does. 

Chairman CAMP. All right. Thank you. 

Thank you very much, Ambassador Froman for your testimony, 

and with that, this hearing is adjourned. 

[Whereupon, at 10:55 a.m., the committee was adjourned.] 


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Member Submissions For The Record 

The Honorable Devin Nunes 


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The Honorable Earl Blumenauer 


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The Honorable Bill Pascrell 


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Questions For The Record 

Member Questions for the Record 


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Public Submissions for the Record 

IIPA 


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Michelle Egan, American University 


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USACM 


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Æ 


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