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[Senate Hearing 114-221]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 114-221
 
                    CONGRESS AND U.S. TARIFF POLICY

=======================================================================

                                HEARINGS

                               before the

                          COMMITTEE ON FINANCE
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                      APRIL 16 AND APRIL 21, 2015

                               __________

                                     
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                                     

            Printed for the use of the Committee on Finance

                                  ______

                         U.S. GOVERNMENT PUBLISHING OFFICE 

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                          Washington, DC 20402-0001

                          COMMITTEE ON FINANCE

                     ORRIN G. HATCH, Utah, Chairman

CHUCK GRASSLEY, Iowa                 RON WYDEN, Oregon
MIKE CRAPO, Idaho                    CHARLES E. SCHUMER, New York
PAT ROBERTS, Kansas                  DEBBIE STABENOW, Michigan
MICHAEL B. ENZI, Wyoming             MARIA CANTWELL, Washington
JOHN CORNYN, Texas                   BILL NELSON, Florida
JOHN THUNE, South Dakota             ROBERT MENENDEZ, New Jersey
RICHARD BURR, North Carolina         THOMAS R. CARPER, Delaware
JOHNNY ISAKSON, Georgia              BENJAMIN L. CARDIN, Maryland
ROB PORTMAN, Ohio                    SHERROD BROWN, Ohio
PATRICK J. TOOMEY, Pennsylvania      MICHAEL F. BENNET, Colorado
DANIEL COATS, Indiana                ROBERT P. CASEY, Jr., Pennsylvania
DEAN HELLER, Nevada                  MARK R. WARNER, Virginia
TIM SCOTT, South Carolina

                     Chris Campbell, Staff Director

              Joshua Sheinkman, Democratic Staff Director

                                  (ii)
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                            C O N T E N T S

                              ----------                              

                             APRIL 16, 2015
                           Opening Statements

                                                                   Page
Hatch, Hon. Orrin G., a U.S. Senator from Utah, chairman, 
  Committee on Finance........................................... 2, 39
Wyden, Hon. Ron, a U.S. Senator from Oregon...................... 4, 41

                        Administration Witnesses

Froman, Hon. Michael, U.S. Trade Representative, Executive Office 
  of the President, Washington, DC............................... 5, 43
Lew, Hon. Jacob J., Secretary, Department of the Treasury, 
  Washington, DC.................................................     7
Vilsack, Hon. Tom, Secretary, Department of Agriculture, 
  Washington, DC.................................................     9

                             APRIL 21, 2015
                           Opening Statements

                                                                   Page
Hatch, Hon. Orrin G., a U.S. Senator from Utah, chairman, 
  Committee on Finance...........................................    53
Wyden, Hon. Ron, a U.S. Senator from Oregon......................    55

                               Witnesses

Donohue, Thomas J., president and chief executive officer, U.S. 
  Chamber of Commerce, Washington, DC............................    56
Trumka, Richard L., president, American Federation of Labor and 
  Congress of Industrial Organizations (AFL-CIO), Washington, DC.    59

               ALPHABETICAL LISTING AND APPENDIX MATERIAL

Donohue, Thomas J.:
    Testimony....................................................    56
    Prepared statement with attachment...........................    87
Froman, Hon. Michael:
    Testimonies.................................................. 5, 43
    Prepared statement...........................................    96
    Response to a question from Senator Toomey...................    98
Hatch, Hon. Orrin G.:
    Opening statements........................................2, 39, 53
    Prepared statements....................................99, 100, 101
    Letter to Congress from chambers of commerce, manufacturing 
      organizations, and farm bureaus, April 22, 2015............   103
Lew, Hon. Jacob J.:
    Testimony....................................................     7
    Prepared statement...........................................   109
Trumka, Richard L.:
    Testimony....................................................    59
    Prepared statement with attachments..........................   110
Vilsack, Hon. Tom:
    Testimony....................................................     9
    Prepared statement...........................................   125
Wyden, Hon. Ron:
    Opening statements........................................4, 41, 55
    Prepared statements...................................126, 127, 128

                             Communications

American Chemistry Council.......................................   131
Distilled Spirits Council of the United States, Inc..............   132
LeadingAge.......................................................   134
National Association of Manufacturers............................   135
National Farmers Union...........................................   138
21st Century Fox et al...........................................   140

                CONGRESS AND U.S. TARIFF POLICY, PART I

                              ----------                              

                        THURSDAY, APRIL 16, 2015

                                       U.S. Senate,
                                      Committee on Finance,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 10:12 
a.m., in room SD-215, Dirksen Senate Office Building, Hon. 
Orrin G. Hatch (chairman of the committee) presiding.
    Present: Senators Grassley, Roberts, Thune, Isakson, 
Portman, Toomey, Heller, Scott, Wyden, Schumer, Stabenow, 
Cantwell, Nelson, Menendez, Carper, Cardin, Brown, Bennet, 
Casey, and Warner.
    Also present: Republican Staff: Chris Campbell, Staff 
Director; Everett Eissenstat, Chief International Trade 
Counsel; Rebecca Eubank, International Trade Analyst; Kevin 
Rosenbaum, Detailee; and Sahra Park Su, Fellow. Democratic 
Staff: Joshua Sheinkman, Staff Director; Jocelyn Moore, Deputy 
Staff Director; Michael Evans, General Counsel; Jayme White, 
Chief Advisor for International Competiveness and Innovation; 
and Elissa Alben, International Trade Counsel.

    The Chairman. This hearing will come to order.
    I would like to begin by engaging in a colloquy with my 
friend, the ranking member, to tell the members of the 
committee and the public where things stand. We have had a very 
positive set of discussions, and we are, in my opinion, close 
to reaching an agreement on Trade Promotion Authority, Trade 
Adjustment Assistance, and other important trade programs. We 
are not quite there, but I hope and expect that we will be very 
soon.
    Senator Wyden. Mr. Chairman, thank you. I agree with your 
assessment. These have obviously been very challenging 
negotiations. I do believe that we are close to finding common 
ground. I want to be clear, because I know colleagues want to 
see how we are going to spend the day--and particularly the 
week ahead--that any agreement must include not only Trade 
Promotion Authority but other vital issues like Trade 
Adjustment Assistance and enforcement.
    It may be that the best procedural approach is for these 
provisions to be passed as separate bills, but the trains 
absolutely must be on parallel tracks, and both TPA and TAA 
must make it to the President's desk for signature so that one 
cannot be enacted without the other.
    The Chairman. I agree to help move these bills on parallel 
tracks. I oppose the TAA program, but, as I said in the past, I 
understand it is necessary to maintain Democratic support for 
TPA, so, when we have an agreement, I will bring the agreed-
upon bill before our committee and ensure that it gets a fair 
vote. I will also work with our Majority Leader to make sure it 
gets a fair vote on the floor and that TAA and TPA move in 
parallel.
    Let me explain how we intend to proceed. If an agreement is 
reached, we will make it available and will brief committee 
members as soon as possible. At the same time that we work to 
complete an agreement, this hearing gives us an opportunity to 
examine TPA, TAA, and other important trade issues, and it 
gives committee members an opportunity to ask questions of key 
administration officials and raise issues of concern.
    Senator Wyden. Mr. Chairman, I have one other suggestion. 
If an agreement is reached soon, I believe the committee should 
reconvene later today, so that it would be possible to consider 
the agreement in further detail. Is the chairman willing to do 
that?
    The Chairman. Yes, that is a good suggestion. Subject to 
scheduling considerations, we will reconvene the hearing, so 
this will be a continued hearing throughout the day.
    Senator Wyden. Thank you.
    Senator Stabenow. Mr. Chairman, might I ask a question?
    The Chairman. Sure.
    Senator Stabenow. Thank you. I assume that that does not 
mean voting today on an agreement we have not yet even seen, 
that has not been reached?
    Senator Wyden. The Senator is absolutely correct.
    Senator Stabenow. Thank you.
    The Chairman. The mark-up will be next Wednesday----
    Senator Stabenow. Thank you.
    The Chairman [continuing]. Assuming that we have this all 
together, and I think we will.

 OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM 
              UTAH, CHAIRMAN, COMMITTEE ON FINANCE

    The Chairman. Now, the committee will come to order.
    I would like to thank everyone for attending today's 
hearing on Congress and U.S. tariff policy and offer a special 
welcome to this distinguished panel of witnesses we have before 
our committee today: Ambassador Froman, Secretary Lew, and 
Secretary Vilsack. Each of you gentlemen serves in key 
positions and makes decisions every day on important trade 
issues, so we really look forward to your testimony and 
appreciate your contributions to this debate.
    My hope is that this hearing will help kick-start the first 
real opportunity we have had to debate U.S. trade policy in a 
number of years as we get closer to introducing and enacting 
legislation to renew Trade Promotion Authority, or TPA.
    Let me start by stating one simple premise. U.S. trade with 
other countries is a very good thing. Trade creates new 
opportunities for America's workers, enhances the standard of 
living for our citizens, helps our national security by 
solidifying alliances with like-minded nations, advances 
America's values abroad, strengthens the rule of law, and helps 
lift people across the globe out of poverty.
    To effectively achieve these goals, Congress must be an 
effective partner with the administration. Our Nation's 
constitutional framework is complex. Article I of the 
Constitution grants to the Congress the power to regulate 
commerce with foreign nations, but Article II grants the 
President the power to conduct foreign policy.
    I think most would agree that trying to negotiate an 
agreement among many different parties with different 
priorities and vague objectives is an inherently difficult, if 
not impossible, proposition. Most would also agree that it 
would be even more difficult to reach an agreement if the 
parties are unsure if their negotiating partners will be able 
to put the agreement into force.
    Given those realities, it is pretty easy to understand why 
TPA is so important. No potential trade partner will give our 
negotiators their best offer unless they know what issues 
matter to us the most and whether we can deliver on the final 
deal. Simply put, for America to be able to succeed at the 
trade negotiating table and to set the rules for a fair 
international marketplace, we have to speak with one voice in 
our demands and provide assurance that we will deliver what we 
promise.
    Now, people have different theories about how to best 
achieve these goals, but there is only one legislative tool 
with a proven track record, and that is Trade Promotion 
Authority. TPA is the most powerful tool in Congress's trade 
arsenal. For decades now, robust TPA laws have ensured that 
Congress plays a leading role in setting our country's trade 
agenda and providing our trade negotiators with the necessary 
tools to reach the best deals possible.
    Currently, the Obama administration is in the midst of 
negotiating some of the most ambitious trade agreements in our 
Nation's history. I commend the administration for that, and 
these leaders here today. But, as I have stated on a number of 
occasions, those negotiations will almost certainly fail if 
Congress does not renew TPA.
    Make no mistake, failure on these negotiations would have a 
negative impact on our economy. More than 96 percent of the 
world's consumers live outside the United States. In order to 
be competitive, American businesses need to be able to sell 
more American-made products and services to overseas customers. 
Put simply, if we want to create more opportunity and high-
paying jobs here at home, we need to open more foreign markets 
to U.S. goods and services.
    We should be doing all we can to tear down barriers to 
American exports, while at the same time laying down 
enforceable rules for our trading partners so that we can be 
sure that American workers and job creators are competing on a 
level playing field. We need to be leading the world on trade, 
writing the rules, and setting standards. If we do not, other 
countries like China most certainly will.
    We can address all of these concerns by passing strong TPA 
legislation. Senator Wyden and I, and others on the committee, 
are currently working to do just that. I want to personally 
thank Senator Wyden for his efforts to help us get as far as we 
have. I also want to once again thank the three Cabinet 
officials who are here to share their views on the role of 
Congress's U.S. tariff policy and what our work means to our 
Nation's international trade agenda.
    [The prepared statement of Chairman Hatch appears in the 
appendix.]
    The Chairman. We will now turn to Senator Wyden, our 
ranking member, for his opening statement.

             OPENING STATEMENT OF HON. RON WYDEN, 
                   A U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you very much, Mr. Chairman. It has 
been good to work with you over the last few months. I look 
forward, Mr. Chairman, to talking about this more today. I look 
forward to talking about it extensively over the next week, and 
then, I think it is clear we are going to be talking about it 
for weeks after that.
    This is an issue of such importance that it is essential to 
provide that kind of time, and I know you share my view that, 
on issues like this that really address the future of America's 
place in the global economy and national security, it takes 
that kind of deliberation.
    I also want to say to colleagues that this also must 
include the health care tax credit. In other words, it will not 
just be the Trade Adjustment Assistance program in terms of 
assisting our workers; it also is going to have to include a 
strong health care tax credit. Our colleague who has led that 
fight is not here, Senator Brown, but he has been eloquent in 
talking about what it means for workers, and it absolutely must 
be part of this agreement.
    For purposes of my kind of brief opening statement, Mr. 
Chairman, I had town hall meetings in my home State just this 
last week. The one issue that came up again and again was the 
excessive secrecy--the excessive secrecy--that seems to have 
accompanied so much of this debate. My view is, if you believe 
in trade and you want more of it, the last thing you should be 
for is all this secrecy that just makes the public more cynical 
and skeptical about what trade is all about.
    So American trade policy needs to be debated openly, and it 
is time to pull it out of the time warp so that it works better 
for 
middle-class Americans and delivers a new level of 
transparency. The focus of trade policy has to be about 
creating more red, white, and blue jobs and helping Americans 
climb the economic ladder. The same old playbook on global 
trade does not work for Oregonians; it does not work for 
Americans. I want to be clear as we start this discussion: I 
will not accept it.
    Now, as Chairman Hatch and I have discussed, we are working 
on a variety of issues that includes Trade Promotion Authority, 
Trade Adjustment Assistance, particularly tougher trade 
enforcement, and a variety of other important programs. I 
believe, as we begin this debate, it is important to recognize 
how important it is to have a fresh, strong strategy on 
enforcing our trade laws.
    This is critical to stop rulebreaking countries. 
Enforcement ought to be based on defending American jobs and 
promoting economic growth at home. It is also long past time to 
raise the bar on enforceable labor standards, enforceable 
environmental protection, and human rights. I am particularly 
pleased that Senator Cardin has led the fight here on human 
rights and governance and the fight for those values that are 
so important to us as Americans.
    Bottom line: make the system stronger and better for 
middle-class workers in Oregon and across the country. Those 
middle-class trade policies are going to work best when our 
workforce is ready to compete and when workers have access to 
job training, financial support, and health care.
    At the end of the day, what is going to be different about 
this is, the public has a right to know from this point on what 
is at stake in trade. And we are going to start that, because, 
before the President signs a Trans-Pacific Partnership 
agreement, it will be published for a significant length of 
time, and that will be directed for the first time by law.
    In the future, we are also going to have to make changes to 
ensure that the public knows, as negotiations go forward, what 
is in those negotiations. So those are some of the priorities 
that I have, Mr. Chairman. I know that this morning's session, 
given the interest of colleagues, is a chance to talk about 
some of those priorities, and I look forward to reconvening 
this afternoon to examine moving ahead in greater detail. I 
thank you for that opportunity.
    The Chairman. Well, thank you, Senator Wyden.
    [The prepared statement of Senator Wyden appears in the 
appendix.]
    The Chairman. We have three excellent witnesses here today, 
Cabinet-level officials, and we are going to start with Jacob 
Lew, who is the Treasury Secretary. We are very grateful to 
have you here. Then we will go to Secretary Vilsack, the 
Agriculture Secretary, and then we will go to our Trade 
Representative, Ambassador Froman.
    So, Secretary Lew, we will start with you.
    Secretary Lew. Thank you, Mr. Chairman. But if I might 
suggest, if Ambassador Froman went first, it might frame all 
three of our presentations.
    The Chairman. That would be fine with me.
    Secretary Lew. All right. Thank you.
    The Chairman. I thought about that too, but then we thought 
we would----
    Secretary Lew. I appreciate the recognition, and I am happy 
to deliver a statement.
    The Chairman. All right.

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

    Ambassador Froman. Thank you, Chairman Hatch, Ranking 
Member Wyden, members of the Finance Committee. Thanks for the 
opportunity to testify today. Thank you to my colleagues, 
Secretary Lew and Secretary Vilsack, for being here.
    Increasing access to foreign markets for U.S. exports 
through enhanced trade opportunities has long been a bipartisan 
effort, because trade plays such a critical role in supporting 
good jobs, promoting growth, and strengthening the middle class 
in America.
    Closely related to these economic stakes is the fact that 
sustaining our Nation's strategic position hinges on our 
economic strength and our ability to lead on trade. The 
importance of trade to America's economic well-being has never 
been clearer. Last year, U.S. exports reached $2.35 trillion, a 
record-breaking amount that supported an estimated 11.7 million 
jobs, an increase of 1.8 million jobs since 2009.
    With those jobs paying up to 18 percent more on average 
than non-export-related jobs, trade policy has an important 
role to play in raising wages and living standards for the 
middle class. Partially as a result of our exporting success, 
our economy continues to grow. Job creation is happening at the 
fastest pace since the 1990s, and wages are finally starting to 
rise.
    After nearly 2 decades of decline, factories are opening in 
this country again, manufacturing is starting to return from 
overseas, and we have added 900,000 new manufacturing jobs over 
the last 5 years. But we can do better. The playing field is 
still not level for American workers.
    The United States made its decision decades ago to have an 
economy that is open to the world. Our tariffs are low, and we 
do not use non-tariff barriers to discriminate against foreign 
countries. But when we sell our goods abroad, our businesses 
and workers often face much higher tariffs and countless non-
tariff measures.
    Many of these imbalances are in areas where the U.S. is 
most competitive: 50-percent tariffs on certain machinery; 80-
percent tariffs on autos; up to 400-percent tariffs on certain 
agricultural products. In a world where more than 95 percent of 
all customers live outside our borders, the disadvantages our 
workers and businesses face are less an inconvenience than an 
injustice. Fundamentally, our trade agenda is focused on 
addressing that injustice by changing the status quo so that it 
works better for Americans.
    A critical tool to help us level the playing field for our 
workers is Trade Promotion Authority. During the 8 decades 
since Franklin Delano Roosevelt signed the first version of 
trade negotiating legislation into law, Congresses of both 
parties have revised and renewed that legislation 18 different 
times under Democratic and Republican Presidents alike. But TPA 
has not been updated since 2002, and during that time the 
global economy has changed significantly. Congress now has the 
opportunity to account for those tectonic shifts, as well as 
the emerging consensus around key trade issues.
    Bipartisan TPA will bring us one step closer to delivering 
trade agreements like the Trans-Pacific Partnership and the 
Transatlantic Trade and Investment Partnership. With those 
agreements in place, American workers, farmers, ranchers, and 
businesses of all sizes will have access to nearly two-thirds 
of the global economy. That will help make the United States 
the world's production platform of choice, the premier location 
for making things not only to serve the U.S. market, but for 
exporting all over the world.
    Within our reach is an opportunity to promote not only 
America's interests, but also our values. That is why leaders 
from civil society and the private sector have spoken out about 
the important role that trade has in creating American jobs, 
advancing the global development and anti-poverty agenda, and 
protecting the environment.
    Trade brings together voices from our agricultural sector 
and our manufacturing and services sector, and it has united 
Mayors from across the country from Tallahassee to Tacoma, from 
Long Beach to Louisville. They understand that the choice we 
face today is clear. It is between a world in which America 
sets the rules of the road on trade and a world in which our 
competitors do. We cannot change the status quo by sitting on 
the sidelines.
    As we speak, China and others are negotiating an agreement 
that would encompass over 3 billion people. If we allow others 
to carve up markets of the future, our workers and businesses 
will pay a steep price. To drive production in the United 
States and create good jobs here, we must lead, and we must 
lead together with a unified, bipartisan voice about our 
commitment to opening markets for our workers, farmers, 
ranchers, and businesses of all sizes.
    So, with so much at stake, Mr. Chairman, I look forward to 
continuing to work with this committee and the Congress to pass 
TPA and to advance the broader trade agenda, including renewing 
the Generalized System of Preferences that expired in 2013 and 
the African Growth and Opportunity Act well before its 
expiration in September. We also look forward to working with 
you to renew Trade Adjustment Assistance.
    Thanks very much.
    The Chairman. Thank you, Ambassador Froman.
    [The prepared statement of Ambassador Froman appears in the 
appendix.]
    The Chairman. We will now turn to Secretary Lew.

 STATEMENT OF HON. JACOB J. LEW, SECRETARY, DEPARTMENT OF THE 
                    TREASURY, WASHINGTON, DC

    Secretary Lew. Thank you very much, Mr. Chairman, Ranking 
Member Wyden, members of the committee. I am happy to be here 
today and appreciate the opportunity to testify on Trade 
Promotion Authority. The Treasury Department has been working 
hard on the President's trade agenda and working very hard on 
bolstering global economic growth and stability.
    Today, exports make up some 30 percent of global GDP, and 
global per capita incomes are over 50 percent higher than they 
were 20 years ago. These macroeconomic gains are due in part to 
the rules-based trading system that boosts U.S. and global 
exports of goods and services and opportunities for American 
workers, even as it raises the standard of living for 
consumers.
    Reducing trade barriers and securing reforms abroad through 
well-crafted trade agreements benefit both U.S. economic 
competitiveness and global economic prosperity. First, our 
firms and workers benefit as our partner countries open up 
their markets to imported goods and services.
    Second, as countries open up to trade, over time they 
innovate more, invest more, and become more productive. The 
result is a stronger and more stable global economy. That is 
also important for American businesses and workers.
    Trade Promotion Authority is critical in helping secure the 
substantial economic gains that our ambitious trade agenda and 
investment agreements can bring. TPA sends a strong signal to 
our trading partners that Congress and the administration speak 
with one voice to the rest of the world on our priorities. We 
strongly agree with members of Congress that unfair currency 
practices need to be addressed.
    Since day one, the President has been clear that no country 
should grow its exports based on a persistently under-valued 
exchange rate, and currency has been at the top of Treasury's 
international agenda.
    We share the goal of moving major economies to market-
determined exchange rate systems that are transparent, 
flexible, and reflect underlying economic fundamentals. We are 
working tirelessly to address currency concerns, and our 
efforts, through bilateral and multilateral engagements, have 
met with considerable success. Japan and other G-7 countries 
have affirmed they will not target exchange rates and will only 
use domestic instruments to achieve domestic economic 
objectives. G-20 members have also pledged to move more rapidly 
toward market-determined exchange rate systems and flexibility 
in order to reflect underlying economic fundamentals, avoid 
persistent exchange-rate misalignments, not target exchange 
rates, and refrain from competitive devaluations.
    The IMF has bolstered its surveillance of its members' 
exchange rate policy obligations and has begun publishing an 
external sector report that includes estimates of exchange-rate 
misalignment for 25 major economies.
    We have made progress with China on exchange rates through 
the U.S.-China Strategic and Economic Dialogue and continue to 
raise the issue regularly with our Chinese counterparts. This 
has contributed to a decline in China's current account surplus 
from a peak of 10 percent of GDP before this administration 
took office to just 2 percent of GDP last year. The RMB has 
seen a real effective appreciation of nearly 30 percent since 
China allowed its currency to resume appreciation in mid-2010. 
We will continue to intensify our efforts on exchange rates, 
using the tools and channels that are most effective.
    We believe that more progress is needed, and Treasury will 
continue to engage with Congress on how best to address 
currency issues in a way that is consistent with our overall 
strategy of bilateral and multilateral engagement, and I look 
forward to answering questions from the committee.
    Thank you.
    The Chairman. Thank you, Mr. Secretary.
    [The prepared statement of Secretary Lew appears in the 
appendix.]
    The Chairman. I might mention that we are going to go as 
long as we can this morning. I have to leave. We have a vote at 
11, and I have to go over to the House and enroll a passed 
bill, but we will continue. Then we are going to re-continue at 
3 today so that we can finish this up today, and hopefully 
everybody will enjoy the 3 p.m. meeting as much as this 
morning.
    Senator Wyden. And, Mr. Chairman, I would just say I 
appreciate that. I really urge colleagues to be here at 3. I 
know it is short notice, but this will give us a chance to go 
into more detail. I know, after this hearing, there are going 
to be a number of meetings, and we just want to use the time, 
particularly over the next week in this committee, because we 
are going to have lots of debate after that before it goes to 
the floor and lots of time on the floor.
    But I want colleagues to have every opportunity to look at 
what I hope will be put together here very shortly. So 3 today, 
and I appreciate your announcing that at this time, Mr. 
Chairman.
    The Chairman. Thank you.
    Secretary Vilsack, we look forward to your testimony at 
this time.

    STATEMENT OF HON. TOM VILSACK, SECRETARY, DEPARTMENT OF 
                  AGRICULTURE, WASHINGTON, DC

    Secretary Vilsack. Mr. Chairman, thank you very much. To 
Senator Wyden and committee members, I appreciate the 
opportunity to be here this morning to speak specifically on 
the benefits of Trade Promotion Authority and the trade 
agreements that are being negotiated for America's farmers, 
ranchers, and producers.
    Let me start with a bit of history. In August of 1941, 
Franklin Roosevelt and Winston Churchill were off the coast of 
Nova Scotia discussing the development of the Atlantic Charter, 
a vision for post-World War II America and the world. In that 
charter, they agreed as follows in the fourth paragraph, that 
they will ``endeavor with due respect for their existing 
obligations to further the enjoyment by all States, great or 
small, victor or vanquished, of access on equal terms to the 
trade and to the raw materials of the world which are needed 
for their economic prosperity, and they desire to bring about 
the fullest collaboration between all nations in the economic 
field with the object of securing for all improved labor 
standards, economic advancement, and social security.''
    That was the vision in 1941, it is the vision today, and it 
is one that is shared by agricultural groups throughout the 
United States, as reflected in the letter sent to this 
committee by 70 agricultural groups indicating support for the 
Trans-Pacific Partnership agreement, as well as Trade Promotion 
Authority. It is also reflective of the vision of the eight 
former Agriculture Secretaries who, in a bipartisan way, 
indicated their support as well for TPA and TPP.
    And well they should: 30 percent of all agricultural sales 
are a result of trade; 20 percent of all agricultural income is 
directly related to trade, helping to create those middle-class 
families we all want to support. The last 6 years have been the 
best 6 years in agricultural export history, supporting nearly 
1.1 million jobs.
    Since NAFTA and the free trade agreements subsequent to 
NAFTA, agricultural exports have increased by 145 percent, 
despite high tariffs in other countries, sanitary and 
phytosanitary barriers, and a strong dollar. Agriculture sees 
TPP as leveling the playing field, reducing tariffs, breaking 
down SPS barriers, and making access to American products more 
readily available.
    We want to take advantage of the expanding market 
opportunities in Asia, with a growing middle class that is 
projected to grow to 3.2 billion people in the next 15 years, 
10 times the population of the U.S. We want America to stay in 
the game. We do not want one-off agreements that America is 
shut out of.
    We want to balance the Chinese influence, using trade as a 
strategic opportunity, and we absolutely want to assure high 
standards for both labor and environment, with strong 
enforcement mechanisms. This is an opportunity, as the 
President promised to do, to essentially renegotiate NAFTA. We 
see TPA as essential to getting TPP done.
    I can tell you, Mr. Chairman, that I have been across the 
table from some of my colleagues, agriculture ministers from 
states that we are currently negotiating with. They are not 
interested in putting their final or best offer on the table 
until they are assured that whatever trade agreement Ambassador 
Froman is able to negotiate is ultimately provided an up-or-
down vote and is not subject to modification or amendment.
    We look forward to answering questions as they relate to 
agriculture, and again, we appreciate the opportunity to be 
here this morning.
    The Chairman. Well, thank you, Secretary Vilsack.
    [The prepared statement of Secretary Vilsack appears in the 
appendix.]
    The Chairman. Ambassador Froman, maybe I can lead off. You 
are working hard to conclude agreements like the Trans-Pacific 
Partnership. Also, you know this committee will carefully 
review any trade agreement you submit to Congress to ensure 
that you achieve our priorities. I intend to bring before this 
committee a Trade Promotion Authority bill that has over 150 
negotiating objectives that we expect you to achieve.
    If you would, please tell us how you intend to deliver on 
Congress's trade negotiating objectives and how TPA will help 
you to achieve a strong trade agreement or set of agreements 
that will benefit our country.
    Ambassador Froman. Well, thank you, Mr. Chairman. TPA is a 
critical tool for moving the trade agenda forward. We have been 
working closely with this committee and other members of 
Congress, both in the House and Senate, over the course of the 
negotiations, consulting closely with them to ensure that we 
have a clear understanding of what their expectations are for 
our trade negotiations, that we have incorporated that into our 
trade negotiating efforts.
    We have been making progress in the negotiation, and now 
getting TPA will allow us to move these agreements forward. We 
have benefitted enormously from the input we have received, 
whether it is on market access issues or on rules issues, and 
we are confident that the agreement that we bring back 
ultimately will meet the objectives set out by Congress.
    The Chairman. Thank you. I share my colleagues' concerns 
about countries unfairly manipulating their currency for trade 
advantage, and I agree that we need to address this problem. 
But I think a unilateral approach is not the answer.
    The TPA bill I introduced in January of 2014 directs the 
administration for the first time to fight currency 
manipulations through trade negotiations. Would you please take 
time to explain to me, and others here, how you are approaching 
this issue in the context of Trans-Pacific Partnership 
negotiations?
    Ambassador Froman. Well, since we have the honor of having 
Secretary Lew here, why don't I first defer to him?
    The Chairman. That would be fine.
    Secretary Lew. Mr. Chairman, we agree with you and with so 
many members of Congress that currency practices are a 
critically important issue. I want to begin by saying that we 
engage on a very, very regular basis in the multilateral 
institutions--the G-7, the G-20, the IMF--and in an intense way 
in our bilateral relations to make sure that countries 
understand the urgency of this issue, and that they understand 
that the United States will not tolerate practices that we 
consider unfair.
    As I mentioned in my opening remarks, we have made 
substantial progress in those efforts by getting agreements in 
international settings that set rules that drive towards 
market-determined exchange rates and that create more 
transparency in terms of our ability to see what countries are 
doing.
    In the context of a trade agreement--obviously we have not 
seen the final text of the TPA that you are working on, but the 
provision that you refer to from the prior bill, for the first 
time ever, raised currency to the highest level of being an 
objective in a trade negotiation. That sends a powerful signal 
to the world that strengthens our hand when we raise the issue 
in terms of the importance of addressing it in a fair way.
    I think that there is a question in terms of what the 
nature of an approach would be, and we believe that any efforts 
that are made here should strengthen our ability to be 
effective and to bring the world together to agree with us on 
treating currency in a manner that reflects the kind of 
fairness that is appropriate.
    I think that the question of how that is done is a 
sensitive one. It is a challenging area, because there is a 
line between legitimate macroeconomic policies, and things that 
are truly unfair, that is sometimes difficult to define. It is 
sometimes very clear when the line is crossed. We would look 
forward to working with the committee to explore what kinds of 
mechanisms we can use to strengthen our hand in a way that 
would make it as effective as possible.
    The Chairman. Thank you.
    Secretary Vilsack, you have frequently been a strong voice 
expressing the importance of TPA. Now, you have stated that the 
United States will not get the best possible agreement from our 
trading partners unless our partners know that the deal they 
signed with the United States is a deal that Congress is going 
to vote on.
    At the same time, you have noted that Congress always holds 
the ultimate power over any trade agreement: the power to vote 
it down. Will you explain, as you have done so well before, how 
TPA allows Congress to retain its power over trade agreements 
while empowering our negotiators to get the best deal possible 
for the United States?
    Secretary Vilsack. Mr. Chairman, Congress basically sets 
the framework and provides a set of instructions and borders 
for Ambassador Froman and his team from which to negotiate. 
They, I believe, have been listening very carefully during the 
course of the last several years to the concerns that members 
of this committee and other members of the Congress have 
expressed, and I think that they are living up to the directive 
that you ultimately will provide to them.
    Clearly, everyone wants higher standards for labor, 
environment, wants greater enforcement, and I think that there 
has been no question that Ambassador Froman has been engaged in 
ensuring the negotiations are focused on this.
    I would say that it is difficult for someone on the other 
side of the negotiating table to be confident in putting their 
best offer forward if there is the possibility that members of 
Congress could then subsequently amend or modify an agreement 
after it has been agreed upon by the negotiators. That is why I 
think it is appropriate to have the balance between a TPA which 
provides you the ability to set instructions--and set the 
framework and the boundaries, provide Ambassador Froman the 
opportunity to negotiate--and then sufficient time for Congress 
to review what the negotiated agreement is, because then 
Congress has the opportunity and the appropriate power to 
decide ``yes'' or ``no.''
    The Chairman. Well, thank you. My time is up.
    We are going to try to hold to a firm 5 minutes.
    Senator Wyden?
    Senator Wyden. Thank you, Mr. Chairman. Mr. Chairman, I 
also want to note that Senator Casey has done yeoman work on 
the health care tax credit, and I omitted that in my earlier 
comments.
    Gentlemen, I want to start with this. I have come to feel 
that opponents of trade deals make a number of very valid 
arguments. As Senator Hatch knows, I have been fighting to 
change a lot of those policies. We have talked about the 
excessive secrecy, the inadequate enforcement, the inadequate 
congressional oversight through the process. So I want to be 
clear as we start this, that I think opponents have made a 
number of valid arguments.
    Often they make an argument that I do not think stands up 
to the facts, and I want to go into this in detail. There has 
been an argument presented that somehow trade is no longer 
about tariffs, that America can just get into these foreign 
markets, and it is really not about tariffs anymore.
    Our research shows that that is not the case. There are 
substantial tariffs on information technology. Colleagues, 
there are double-digit tariffs on American manufacturers, and 
often there are triple-digit tariffs on American agriculture. 
So, these are vital American industries that can pay good jobs.
    I think Japan is pretty close to a 40-percent all-in tariff 
on American agriculture. In my home State, we do a lot of 
things well, but what we do best is, we grow things, and we 
want to add value to them, we want to ship them somewhere, 
because that is a good economic multiplier.
    So I want to start with you on this point, Secretary 
Vilsack. There have been a lot of promises made in the past 
about trade agreements really turning this all around, and it 
has not panned out. I would like to hear you tell the committee 
this morning how you think this time it is going to be 
different for American agriculture, how this time, under your 
leadership, under the President's leadership, the 
administration's team, it is going to be possible for more 
American farmers to sell their products to a growing middle 
class around the world.
    There are going to be millions of consumers around the 
world, and they like buying the Oregon brand, they like buying 
the American brand. Tell us if you will, because it goes right 
to this question of tariffs, how things are going to be 
different for American farmers trying to sell to a growing 
middle class around the world.
    Secretary Vilsack. Senator, poultry producers will not face 
a 240-percent tariff in Japan for their poultry products. 
Vegetable growers in your State and around the country will not 
confront 90-percent tariffs in TPP nations. Citrus growers will 
not confront a 43-percent tariff.
    The reality here is that Ambassador Froman understands that 
in order to secure agriculture support for trade agreements, 
market access has to be fair. The average agricultural export 
tariff today in the U.S. is 1.4 percent, so we are at a 
significant disadvantage. So you are going to see a significant 
reduction, if not elimination, of those tariffs, which provides 
a level playing field.
    Second, oftentimes countries use sanitary and phytosanitary 
rules to create artificial barriers that are not science-based 
and not rules-based. Those also will be coming down, and we 
will provide strong enforcement if folks decide to use non-
scientific and non-rules-based SPS to try to block American 
agricultural products.
    So there is no question, with an expanding market, reduced 
and eliminated tariffs, and a process for enforcing science- 
and rules-based sanitary and phytosanitary barriers, that we 
are going to increase agricultural exports.
    Senator Wyden. We are going to want to work with you to 
really flesh out those numbers, because my understanding is the 
number of middle-class households in the developing world by 
2025 is going to double, and that would bring the global middle 
class to more than a billion households.
    Much of that additional income that that growing middle 
class is going to have is going to be spent on food, so whether 
it is Oregon wheat or blueberries, our farmers, in my view, are 
in a position, as the most productive farmers in the world, to 
sell a lot of what they grow to those middle-class consumers 
around the world.
    So, if you could get to every member of this committee the 
specifics about the tariffs that they are facing now, and what 
you envision changing for the future, I think that would be 
very helpful. I am going to go into it some more, colleagues. I 
have heard that there are no tariffs in, for example, 
environmental goods. That is an upcoming, promising American 
industry. They now face very large tariffs.
    I want to make it clear that we are going to have to get 
into this debate in considerable detail, and, if you could 
furnish that to us, Mr. Secretary, that would be helpful. I 
know my time is up.
    The Chairman. Well, thank you. Thank you, Senator.
    Senator Grassley?
    Senator Grassley. Ambassador Froman, at the time of the 
Chile and Singapore free trade agreements, there was a special 
carve-out of H-1B visas for those countries. Since then, USTR 
has consulted with the Judiciary Committee, which has 
jurisdiction over immigration and nationality issues.
    I expect USTR to continue this tradition of consultation; 
however, we have reason to be concerned about over-reach of 
this administration and, frankly, I would say future 
administrations, to unilaterally change our immigration laws.
    My question is, could you assure the committee that the TPP 
agreement, or any related side agreement, does not and will not 
contain any provisions relating to immigration, visa 
processing, or temporary entries of persons?
    Ambassador Froman. Thank you, Senator Grassley. The answer 
is ``yes,'' I can assure you that we are not negotiating 
anything in TPP that would require any modifications of the 
U.S. immigration laws or system, any changes to our existing 
visa system. In fact, TPP will explicitly state that it will 
not require changes in any party's immigration laws or 
procedures.
    Senator Grassley. All right.
    Ambassador Froman. Now, the 11 other TPP countries are 
making offers to each other in the area of temporary entry, but 
we have decided not to do so. So, I appreciate the opportunity 
to clarify that.
    Senator Grassley. Yes. And I am going to ask you some more 
questions that kind of bring out some possibilities that maybe 
are not legitimate, but I want to bring them up anyway. 
According to USTR's website and the outlines of the TPP 
agreement, countries have agreed on ``provisions to promote 
transparency and efficiency in the processing of applications 
for temporary entry,'' and then ``that specific obligations 
related to individual categories of business persons are under 
discussion.'' Could you explain? That comes from a 2011 memo.
    Ambassador Froman. Sure. The text of the temporary entry 
chapter contains commitments on transparency, visa processing, 
and cooperation on border security. They are all good 
governance provisions, and U.S. procedures are already 
consistent with those provisions. There are no changes to U.S. 
procedures required by this chapter. On that last issue, again, 
that is not an issue that the U.S. will be making any offers 
on.
    Senator Grassley. All right. This may be something for 
clarification. You have said that the United States is not 
negotiating immigration changes--you have just said that--but 
that other countries are discussing the issue. If the U.S. 
signs the TPP, are we bound to what other countries have agreed 
to with regard to temporary entry of people?
    Ambassador Froman. What other countries are discussing are 
reciprocal arrangements with each other with regard to 
temporary entry, and again the U.S. has decided not to make any 
offers in that area.
    Senator Grassley. All right. Then the last question in this 
area is, if Congress grants Trade Promotion Authority to 
President Obama, could immigration provisions be included in 
future trade agreements, or is that off the table because of 
Congress's plenary constitutional power over immigration?
    Ambassador Froman. Again, we have not seen the TPA bill 
that is being finalized, but it is our expectation that we 
would not be doing anything in this area without Congress's 
approval.
    Senator Grassley. All right. Then a short question for 
Secretary Vilsack on country of origin labeling or COOL. I hope 
it does not conflict with anything you have said, but I would 
like to ask you anyway. The WTO is currently reviewing COOL--
that was brought forward by Mexico and Canada. I am told this 
is our last appeal, and, if we lose again, we will be forced to 
reconfigure COOL or face retaliation from our neighbors.
    I have read in the press that you have said that there is 
nothing more that you could do from an administrative 
perspective to bring COOL into compliance with WTO, so I would 
like to ask you if you could briefly explain why USDA is out of 
options as it relates to this issue.
    Secretary Vilsack. Senator, the COOL legislation passed by 
Congress directs us to provide labels to distinguish between 
U.S.-produced, processed, slaughtered, and raised beef and 
poultry products versus those which may involve Canada and 
Mexico. Because of the nature of that law, we are then required 
to segregate livestock as it comes in to the processing 
facility. It is this segregation that WTO objects to, at least 
at this point in time.
    Absent a winning of the appeal, we are in a situation where 
there is a conflict between the law and what the WTO says is 
inappropriate, which creates the opportunity for retaliation. 
We just cannot fix it. We have tried, twice. We just cannot fix 
it. You all have to fix it by either repealing COOL or 
modifying COOL to create some kind of more generic label.
    Senator Grassley. And I thank you, Secretary Vilsack. Thank 
you, Ambassador Froman.
    The Chairman. Thank you, Senator Grassley.
    Senator Schumer?
    Senator Schumer. Thank you, Mr. Chairman. First, I want to 
thank Secretaries Lew and Vilsack and Ambassador Froman for 
making the time to be with us. I would also like to thank our 
ranking member, Ranking Member Wyden, for trying to get as much 
time so that we can ask questions and see agreements. I know he 
has tried hard on that.
    But, Mr. Chairman, and you are my dear friend, this process 
is not good. First, we are dealing with an issue that is 
unique. We are supposed to vote on TPA, tie our hands, and not 
vote on amendments before we have seen what the TPP is. I have 
never seen anything like it.
    They say there is no way to do trade agreements otherwise, 
but at the very minimum we ought to be seeing and having ample 
time to discuss the TPA agreement beforehand. To say that we 
are having a hearing now before we have seen the agreement, or 
even to say we will do it 1 hour after the agreement, is not 
fair, not right, and not adequate on such an important issue.
    So I would like to first ask our three witnesses, if we 
needed you to come back once we see what the TPA agreement is 
next week, would you be willing to do so? You can just answer 
that ``yes'' or ``no.''
    Ambassador Froman. I will take responsibility for this. We 
are happy to work with the committee in whatever they deem is 
appropriate in terms of engagement on this issue.
    Senator Schumer. So you would be willing, if asked.
    Ambassador Froman. I am happy to work with the chairman and 
the ranking member in terms of engagement.
    Senator Schumer. Thank you. And I would ask our chairman if 
we could have--not at noon today if an agreement is shown to us 
at 11:30, but at some point--a real hearing on what TPA is, 
because it is throwing salt in the wound.
    Here we go forward on a procedure that is unique, to put it 
kindly, which is, you do not see what the treaty is before you 
tie your hands so you cannot amend it. We do not even now know 
what the TPA is going to be like. Not fair. Not fair. You are a 
fair-minded man, Chairman Hatch, and you are a good man, and 
you are my friend, so I hope you would just reconsider, and we 
could stretch out this process a little bit.
    The next question is on the substance----
    The Chairman. Well, let me just answer on that.
    Senator Schumer. Please.
    The Chairman. We did have a hearing last year on the bulk 
of what is in this.
    Senator Schumer. But we do not have the agreement now.
    The Chairman. I understand, and we will take that under 
advisement.
    Senator Schumer. Thank you. I very much appreciate that.
    Let me just say, as somebody who at this point is opposed 
to the agreement, it does not help the cause of those who are 
for it, to do this rush-through-type situation in this 
difficult situation.
    Now, I would like to make a couple of substantive points, 
first, on trade itself. I used to be a supporter of free trade. 
In fact, I lost the AFL-CIO endorsement in my congressional 
district several times because I supported free trade. I have 
changed. Here is why I have changed. Here is why.
    You can make the argument that a trade agreement like this 
will increase corporate profits. It probably will. You might 
even make the argument that it will improve GDP. Maybe it will. 
But if it does not increase middle-class incomes--which to me 
is the greatest problem we now face in America, which we did 
not in the 1990s--I cannot be for such an agreement. Our middle 
class is hurting. All the evidence I have seen says this hurts 
middle-class incomes, and I cannot be for it in that regard.
    Second, we have talked--my dear friend, Ron Wyden, has 
talked about enforcement. I have been in the Congress 35 years. 
With every trade agreement, we talk about enforcement, and we 
get virtually none. None. We do not get labor enforcement, we 
do not get environmental enforcement. We do not get all the 
enforcement we are talking about, and that is why the deck is 
so stacked against us. It just does not work on a multilateral 
basis.
    Other countries, particularly China, the most rapacious--
they are not involved in this agreement, and I agree with the 
geopolitical goal of getting these countries in our orb, not 
China's, although that is not equal to me with middle-class 
incomes going up or down. That is why I am on the other side.
    But China just does not abide by these agreements. They 
say, we are doing what we want, take us to WTO. It will take 6 
years. First, if you are a little company--I have had companies 
in my area that want to sue WTO, 500-job, 1,000-job companies. 
They cannot. They cannot afford it, and China threatens them. 
Even the bigger companies, they do not agree.
    So I went to the Business Roundtable, and I said, ``I do 
not agree with trade because China steals your intellectual 
property, manipulates currency, and does not even let you in 
when you have a good product unless it is a 51-percent Chinese-
owned company.'' That is why I do not believe in these 
agreements anymore.
    Now, this is before the Business Roundtable--they are all 
for your bill. Six CEOs ran to the back and told me, you are 
right, keep it up, and this is including major companies and 
people you know. They are all afraid to say anything because 
China retaliates. So, at the very minimum, to make this 
agreement well, we ought to do something--it is in consonance 
with this agreement. Let us deal with China's rapaciousness. 
Let us at least do something about China. What some of us have 
proposed, on both sides of the aisle, is a strong currency 
bill, a bill that is unilateral, a bill that lets our 
companies, when they are aggrieved, take action.
    Now, in good faith, the Secretary of the Treasury, 
Ambassador Froman, and Mr. Zients have come to me and said, 
``Here is a proposal.'' The problem with their proposals is 
they are weak tea and will not do anything because they all 
depend--they give an option to our government.
    Every time our government has had an option to call China a 
currency manipulator for 20 years, we have not done it. It does 
not work. The bill we have proposed--I am sorry. Yes, it is; my 
time is up. But the bill we have proposed is strong and 
unilateral. It gives companies that are aggrieved an option for 
relief, and we cannot have weak tea.
    The Chairman. Your time is up.
    Senator Schumer. I am sorry I went over time.
    The Chairman. Your time is up, Senator, but I understand 
your feelings. You are going to make an excellent Democratic 
Leader, is all I can say. [Laughter.]
    Senator Schumer. As Harry Reid reminds me, it is many 
months away.
    The Chairman. Yes, that is right. [Laughter.]
    We on the inside know.
    Senator Roberts?
    Secretary Lew. Mr. Chairman, would it be appropriate to 
take a moment to respond to some of the issues that Senator 
Schumer raised?
    Senator Roberts. I am going to do that, if you will give me 
the time.
    The Chairman. He has the time.
    Senator Roberts. All right. Then I will be happy to have 
you respond. Is there any way we can get transparency on that 
agreement with the Senator from New York and Mr. Reid? 
[Laughter.]
    Senator Schumer. I did not hear what you said.
    Senator Roberts. I know you did not hear it. I was just 
wondering if we could get some transparency with regards to the 
conversation between you and Mr. Reid on when we can achieve 
the take-over and achieve common sense and all the goals that 
the Senator has espoused on this trade agreement.
    Senator Schumer. These Schumer conversations are governed 
by something even tougher than TPA. [Laughter.]
    Senator Roberts. All right. I will meet you on the 
basketball court.
    I want to thank the witnesses for coming. I appreciate all 
the work you are doing. Thank you for your work, Mr. Chairman 
and Mr. Ranking Member. I am not sure. Are we going to see this 
agreement at 3, if in fact there is an agreement?
    The Chairman. We are moving towards that goal, yes.
    Senator Roberts. Right. Well, I know you are not quite 
there, but I also know you have never been this far before.
    The Chairman. That is right.
    Senator Roberts. All right. Sorry for the country-and-
western allegory.
    I fully appreciate the primary concern of the distinguished 
ranking member regarding labor, environment, human rights, 
transparency, currency manipulation. But, if we do not get a 
bill, if we do not get an agreement, all of these concerns 
become specious, and we have all heard those speeches. I would 
remind everybody that any major bill like this may not be the 
best possible bill, but it may be the best bill possible.
    I think we have to get an agreement. If we do not, the 
responsibility will fall on this committee. Everybody here has 
testified that they are going to work very hard on the very 
concerns that have been raised. I will simply count my 
distinguished friend, who has now, I think, left, I will mark 
him down as undecided. [Laughter.]
    This may be the only issue where the new Congress and the 
administration can reach agreement for the benefit, yes of the 
middle class, but of everybody with regards to income. I would 
invite the distinguished Senator from New York--and I apologize 
for saying anything--and also the distinguished Senator from 
Oregon, who actually was born in Wichita, KS, to come out and 
talk to the Dodge City folks who are the wheat growers who have 
endured 4 years of drought and say, where is the trade bill? I 
would also remind the distinguished ranking member of the 
famous comment on another major bill: ``If you want to know 
what is in it, you have to pass it first.''
    Now, I hope that we can see it, look at it. I hope we can 
address your concerns.
    Senator Wyden. Count on seeing it.
    Senator Roberts. All right. Well, I share your concerns.
    Let me ask a question of the distinguished Secretary of 
Agriculture. Tom, thank you for everything that you do. There 
is much concern regarding the E.U. Commission's consideration 
of allowing individual state preferences on the acceptance of 
biotech crops, even those approved by the Commission following 
a positive safety assessment.
    To me, this regards sound science and practices approved by 
the world's premier food safety mechanism, the Food and Drug 
Administration, as well as the science-based approaches at the 
Department--our Department--and the EPA. It also disadvantages 
the under-served in Europe and the famous middle class by 
raising food prices and, obviously, hurting farmers.
    Now, just last week, Germany's National Academy of Sciences 
argued that biotech crops can increase yields, reduce the use 
of insecticides, and increase farmers' income. The Academy 
argues that modern molecular breeding techniques are safe and 
that the cultivation of approved biotech crops presents no 
risk. I agree with the Academy.
    Mr. Secretary, do you believe the U.S. should, or can, 
consider a trade agreement with the E.U. if member states have 
the ability to reject U.S. seeds and commodities cultivated 
after years of research and investment approved by the U.S. 
Government?
    Secretary Vilsack. Senator Roberts, we have made very clear 
a number of concerns within Agriculture in the very preliminary 
discussions on the Transatlantic Partnership, and that is one 
of them. We have been very clear in our belief that 
biotechnology is an accepted and an important practice for 
agriculture to expand productivity, to reduce reliance on 
chemicals and pesticides. We think it is critically important 
to meeting the global food security challenge that we will 
face.
    So my expectation is that we will continue to negotiate 
very hard on that issue, and I would say that we are also 
deeply concerned about recent discussions in this space where 
individual countries not only have the concern about 
cultivation, but also about feed. We will be expressing our 
objection to that approach as well. So we are going to be very 
aggressive on that issue, as well as on the geographic 
preference issue.
    Senator Roberts. I know my time is up. I apologize to my 
colleagues. One thing I want to say is, thank you for your 
advice and counsel and your work with regard to COOL. COOL 
isn't nearly as cool as some people thought it would be, and 
the WTO stove is hot.
    Now, I know that you have tried every way possible to 
address this, and speaking on behalf of my distinguished 
chairman--pardon me, chairperson--emeritus of the committee, 
Senator Stabenow, we stand ready to fix that with regards to a 
statutory change, and we look forward to working with you. 
Thank you.
    The Chairman. Thank you, Senator. Let me just say, I am 
very appreciative of you folks. I am going to have to leave in 
just a few minutes, but we are going to continue this hearing, 
and then we will re-continue it at 3 p.m. So we will go to 
Senator Stabenow now.
    Senator Stabenow. Thank you, Mr. Chairman.
    I do join with the chairman of the Agriculture Committee on 
the issue of COOL. I know, Secretary Vilsack, we are going to 
work through that and figure that one out. I want to thank all 
of you for being here and for the roles you play in so many 
areas.
    I do have deep concerns about what is in front of us, but I 
do want to start out by thanking the administration and 
Ambassador Froman for the work that is being done on trade 
enforcement. We have had some significant cases around auto 
parts. Last June, WTO, as you know, found that China breached 
rules regarding American automobiles and SUVs and extra-duties. 
Thank you for that.
    Again, China, in August, as it related to rare earth 
issues, that was very important, as well as WTO finding in 
favor of a dispute challenging Argentina's importation of U.S. 
goods, and so there are a number of things. There are a number 
of things.
    One of my concerns is that we have been, and the 
administration has been, focused on that, but it is very 
dependent on a particular administration. So having strong 
enforcement rules in place on an ongoing basis is very, very 
important.
    Let me speak now to something that will be no surprise to 
any of you, and that is to add to what Senator Schumer was 
talking about in terms of currency. We have had multiple 
conversations on this. Senator Graham and I authored a letter a 
year ago. Sixty members of the Senate signed a letter saying we 
wanted strong, enforceable currency language in TPA and TPP. 
That is a real issue in getting all of this passed. I do not 
know how this passes without something strong, both in terms of 
TPA and TPP.
    I think it is also very important to reiterate--because I 
know the discussion about American policy versus international 
policy, other countries--we know that we have economists from 
all over the political spectrum, from the Economic Policy 
Institute, the Peterson Institute, former advisor to President 
Reagan Arthur Laffer, who all agree that currency manipulation 
has cost us millions of jobs in the United States. And they 
also discount this argument that the U.S. has manipulated its 
currency because of our domestic quantitative easing policy 
that in no way mirrors what China, Japan, Malaysia, and others 
are doing.
    And so, I believe very strongly, as you know, that we need 
to move forward on strong currency language that is 
enforceable, not just wishing and hoping. I know there is a lot 
of effort going on on this, but it needs to be enforceable.
    So let me just ask, and, Secretary Lew, I know this is your 
bailiwick; I know you bring this up over and over again. But we 
have seen Japan, which is critical, as we all know--we cannot 
sell automobiles to Japan. Part of this is, I appreciate us 
opening this up, but they have in fact manipulated their 
currency 376 times since 1991. So why do we think just moving 
forward through international forums like IMF will prevent 
number 377?
    Second, if they say they are not going to do it anymore and 
this is such a big issue for all of us, why can we not, why do 
we not, include enforceable currency disciplines in TPP, so 
that we have confidence, and the business community and workers 
have confidence, that we are serious about 21st-century trade 
rules?
    Secretary Lew?
    Secretary Lew. Senator Stabenow, first, as you and I have 
discussed many times, we agree 100 percent that unfair 
practices with regard to currency need to be opposed, need to 
be stopped. The efforts that you have described in terms of our 
engagement on the international front, both multilaterally and 
bilaterally, have had real effect.
    So, over the last several years, the last 3 years, I do not 
think that the case could be made that Japan has intervened in 
a way that would meet the standard that you have described.
    Senator Stabenow. Then why not go ahead, I mean, if they 
are not doing it now and they are not going to be doing it in 
the future?
    Secretary Lew. What have they been doing over the last 3 
years? They have been engaging in macroeconomic policies, 
quantitative easing policies, that some people characterize as 
the same as the kind of practices that should be barred because 
they are unfair and manipulative.
    I think that the issue is one which, as I understand the 
current draft--I have not seen it, so it is just based on 
conversation--reflects raising the issue of currency to the 
highest level it has ever had in a trade negotiation, making it 
one of the principle objectives.
    We would work with you and the committee on the kind of 
flexible language that would empower us to have those 
conversations effectively. I think the thing that we do have to 
be careful about is anything that would confuse the issue of 
unfair practices and legitimate macroeconomic policy.
    I understand your question is not trying to get at the 
legitimate macroeconomic policy, but in terms of our engagement 
with other countries, one can understand why they would be 
concerned if that line got crossed, just as we would be 
concerned were there to be any kind of an international 
agreement that restricted our Central Bank's ability to conduct 
the monetary policy that it needs to conduct to manage the U.S. 
economy.
    So I think we agree on the goal. I think the language 
matters, and some flexibility is important in terms of engaging 
on the international front.
    Senator Stabenow. Thank you. I would just say in conclusion 
that this whole discussion is about whether we are going to 
export our products or our jobs. That is a very big deal right 
now for Americans.
    Thank you, Mr. Chairman.
    Senator Roberts [presiding]. Senator Carper?
    Senator Carper. Thank you. Thanks, Mr. Chairman.
    Gentlemen, thank you all for joining us. I know you have 
worked hard on this. Ambassador Froman, I know, especially 
worked hard on this.
    Senator Schumer has spelled out with great passion and, as 
you know, a lot of heart-felt feeling and thought, his views on 
currency manipulation. I would just ask the Treasury Secretary, 
at some point in time we are going to have to reconcile the 
differences between those who share Chuck's views and the 
administration. What can the administration live with?
    Secretary Lew. Well, Senator Carper, we would start out 
sharing a view that we should be together in opposing unfair 
practices that use currency as a way to gain unfair trade 
advantages, so we do not start out with a disagreement on an 
objective.
    In terms of approach, we do have some concerns, as you 
know, with the countervailing duty proposal. First, there is a 
very serious question as to whether or not it is consistent 
with our WTO obligations, and that is something that we need to 
pay serious attention to.
    Second, it is a mechanism that would take our current 
antidumping regime, which is run by the Commerce Department, 
and turn it into a process that is devoted to reviewing 
currency issues, making it more difficult to implement our 
antidumping rules, which are designed to protect U.S. 
businesses.
    Third, it has the real risk of inviting retaliation and a 
kind of tit-for-tat of defining currency. While we might define 
it in a way that we think is fair and would not include 
policies like the Federal Reserve's policies, other countries 
could define it differently.
    Where is there the potential for agreement? I think, 
because we have a significant overlapping concern, we would 
look to find tools that would supplement the current foreign 
exchange report with an additional ability to use objective 
criteria--things like significant bilateral trade surplus with 
the United States, like a material current account surplus, 
like persistent one-sided intervention and foreign exchange--to 
set a standard that could trigger some additional actions that 
we could take that would not have the kinds of problems that we 
think the countervailing duty proposal has.
    We would look forward to working with members of the 
committee to see if there is a space there where there could be 
agreement. I do not think it is appropriate for it to be part 
of TPA. It is not really a set of concerns that are inherently 
about the trade agreements that would be covered by TPA, but it 
is a set of serious concerns.
    As I said both to Senator Stabenow and earlier, we spare no 
effort in making the case--I am doing it all week with 
colleagues from around the world at the IMF meeting. Even if 
there is a hint of a problem, I am confronting the issue. And 
we have had significant success.
    Getting the G-7 to agree that countries will only use 
domestic tools for domestic purposes is one of the reasons 
Japan is not doing the kinds of things Senator Stabenow is 
concerned about. Getting the G-20 to agree to move towards 
market-determined exchange rates strengthens our hand when we 
engage with China, and we have had some significant progress 
with China. I would worry about an approach that would 
undermine our ability to make real progress.
    Senator Carper. All right. Well, thank you very much for 
those responses.
    I have a minute and a half left. I want to go back to 
Ambassador Froman. I do not want to leave without Senator 
Warner, Senator Cardin, or I raising the issue of poultry. 
Again, from the State where we have more chickens per capita 
than any State of America, I think it is----
    Ambassador Froman. Three hundred chickens per capita.
    Senator Carper. Well, you have it. You are good! One of you 
mentioned that this is an opportunity. This trade agreement is 
an opportunity to go back and revisit NAFTA and actually fix 
some things in NAFTA. I think one of them may actually deal 
with our inability to sell poultry to our friends up to the 
north, one of our best trading partners in the world, and that 
is Canada. We just have not been successful.
    Tell us how this trade agreement is going to help address 
this issue for us.
    Ambassador Froman. Well, thank you, Senator. Before Canada 
joined TPP, we had a series of consultations with them about 
the importance of addressing a number of issues that were not 
fully addressed in NAFTA, including access to the poultry 
market. We are encouraging our Canadian partners to come to the 
table on this issue.
    We have not yet seen the kind of engagement on agricultural 
market access from them that we would like to see. Certainly 
all TPP parties agreed to achieve a certain level of standards 
when it came to market access, and we are hopeful that Canada 
will be able to achieve that objective as we reach closure with 
the rest of the TPP parties.
    Senator Carper. We appreciate your efforts. Just do not 
give up. Be vigilant. Thank you.
    Senator Roberts. Senator Menendez?
    Senator Menendez. Thank you, Mr. Chairman.
    Let me start off by saying that if we agree that trade is 
an issue with major domestic and geo-strategic implications for 
the United States, then we should at the very least have 
another hearing after reading a TPA bill, which presently is 
not before the committee. I mean, 12 hours' notice before a 
hearing is beneath this committee. And, as some of my 
colleagues have said before, we should not fast-track fast-
track.
    While I am glad to see that some of my Republican 
colleagues are so eager to support this piece of the 
President's economic agenda by giving President Obama 
additional executive authority, I am concerned that we are 
rushing too quickly to fast-track trade agreements that will 
have major economic consequences.
    Now, I know my colleagues know that, in the Senate Foreign 
Relations Committee, we marked up the Iran Nuclear Agreement 
Review Act earlier this week. It took a lot of time and a lot 
of work and patience, but the committee leadership made sure 
that members had ample time to consider the legislation and 
offer amendments in an open and respectful process.
    So I hope that today's last-minute hearing is not a sign 
that TPA will be forced through this committee without the 
open, broadly germane opportunity to first consider the bill, 
and then to offer views as to how to perfect it. So I am 
looking forward to getting a chance to actually see the TPA 
bill currently being negotiated by the chairman and the ranking 
member and having that opportunity.
    So I would like to first ask our witnesses, have any of you 
seen the text of the Trade Promotion Authority bill that is the 
topic of today's hearing?
    Ambassador Froman. We have exchanged ideas over the course 
of the last several months about the various pieces of this 
package, but we have not seen any final package or any final 
text.
    Senator Menendez. Has anyone else seen any text? All right. 
You are shaking your heads, so for the record that is a ``no.''
    So this reminds me of the framework agreement. We have 
different views of what the agreement is, but we do not have a 
text to be able to define it, so I do not know how one proceeds 
without a text.
    Ambassador Froman, I asked you at our last hearing on the 
broad question of trade, how many jobs do you expect to be 
created--net jobs, I would say, because in every process of 
trade there are winners and losers--in TPP within the first 
year, the first 5 years, the first 10 years? You did not give 
me any figures, and I am wondering if at this point you are in 
the position to describe what they would be.
    Ambassador Froman. So, when the agreement is complete, 
there will be a full economic analysis done. I think the most 
authoritative analysis out there right now is probably the one 
that comes from the report from the Peterson Institute that 
talks about expanding exports, when fully implemented, by $123 
billion a year, adding $77 billion to U.S. GDP, and 
contributing to many more high-paying jobs. It depends a bit on 
where you are on the spectrum of full employment. If you are 
not at full employment, then it adds jobs. If you are at full 
employment, then it adds better jobs. So it will bend a little 
bit----
    Senator Menendez. So we do not have a number on the jobs. 
You are talking about just gross----
    Ambassador Froman. What we know is that every billion 
dollars of exports, additional exports, supports somewhere 
between 5,000 and 7,000 jobs, and that those jobs pay, on 
average, 18 percent more than non-export-related jobs in the 
same sector.
    Senator Menendez. And the loss of jobs?
    Ambassador Froman. Well, we have been looking, and we have 
been doing some studies, State by State or in various 
districts, to see, because we have so few tariffs ourselves, so 
few import-sensitive sectors ourselves, where there might be 
job loss. With our average tariff of 1.4 percent and with no--
we do not use non-tariff measures as a barrier to trade----
    Senator Menendez. So we do not have an answer on that, 
exactly.
    Ambassador Froman. We do not have a specific answer.
    Senator Menendez. Let me ask you one other thing. We have 
discussed many times my concern about adequate intellectual 
property protection for U.S. innovators, such as those who are 
working in the life science industry, as part of TPP.
    In New Jersey, the bio-pharma industry represents nearly 
70,000 employees. While many of us do not know yet how we will 
judge the final Trans-Pacific Partnership agreement, I am sure 
you know that one of my priorities remains that we reach 12 
years of data protection for biologics within TPP, as currently 
stipulated in U.S. law. However, I noticed that the President's 
budget recommends lowering list standard protection to just 7 
years as a matter of domestic policy.
    So, if Congress passes TPA before TPP is finalized, will 
USTR continue to negotiate for a 12-year standard as currently 
in U.S. law, or will it negotiate for the lower standard that 
the President proposes in his budget?
    Ambassador Froman. Consistent with past practice where 
Congress has spoken on an issue of that sort with a number, we 
have tabled that as our proposal, the 12 years for biologics. 
Around the table, you have 5 countries that have zero years, 4 
countries that have 5 years, 2 countries that have 8 years, and 
we are at 12 years. This is one of the outstanding issues still 
to be resolved in terms of where the resolution of the data 
protection period might be.
    Senator Roberts. I would tell the distinguished Senator 
that it is my understanding that we will have a full week to 
chew and digest, if possible, all the details. It is like being 
in the same church pew, and we are all going to sing the same 
song. We know it is going to be ``How Great Thou Art,'' but we 
just do not have the music. We will get the music.
    Senator Menendez. Mr. Chairman, some of us sing better than 
others, though.
    Senator Roberts. I understand that. You can sing in the 
next pew. [Laughter.]
    We have Mr. Cardin next. Thank you.
    Senator Cardin. Thank you, Senator Roberts. We have 
different views on the Democratic side, I think on the 
Republican side too, on trade issues. But I must tell you I am 
in full agreement with Senator Menendez and Senator Schumer on 
the process. We are talking about legislation that gives up the 
prerogatives, the normal prerogatives, of Congress. We have not 
had an issue like this for over 12 years.
    At the very minimum, there needs to be a public hearing 
when we have the text of the legislation. And it is not just 
the TPA text, it is the TAA text, it is the extension of the 
tax credits, it is the other related issues that I understand 
the leadership of this committee intends to bring up for action 
in this committee.
    Mr. Chairman, let me tell you, that hearing must, in my 
view, have a non-governmental panel. I do not know how we could 
proceed without giving the stakeholders an opportunity to be 
heard in this committee, including organized labor.
    So I just hope you will relate that to Chairman Hatch and 
the committee, but I think that due process of this committee 
and the reputation of this committee requires that we follow 
that process.
    Senator Roberts. I would just tell the Senator that I have 
not been riding this horse, but I do not intend to have it go 
into a box canyon. So we are not going to go in there and ride 
out when members do not have the full opportunity to discuss 
everything that Senator Menendez and you have discussed. I 
think we will have a full week to do that. If it takes longer, 
it will take longer. I appreciate that.
    Senator Cardin. Thank you very much.
    There are several issues, Ambassador Froman, that I would 
like us to be able to address. I obviously do not have the text 
of the bill, so I am at somewhat of a disadvantage. Senator 
Portman and I have brought forward a proposal that deals with 
the Boycott, Divestment, and Sanctions movement. We do that 
because this TPA agreement will deal with more than TPP.
    It will also deal with TTIP, if I understand correctly. 
Particularly with the European countries, the actions taken 
with BDS have been pretty dramatic. I would hope that we would 
use this trade opportunity to make progress on that, so we are 
very much interested in that being a principal negotiating 
objective. I say that--and I will give you a chance to respond 
in a moment.
    The area that Senator Wyden has mentioned frequently that I 
did not hear you mention in your opening comments deals with 
the request I made for principal negotiating objectives for 
human rights. Several TPP countries are challenged in this 
area. Using trade is our best opportunity to accelerate those 
democratic reforms. I am very hopeful that you have made 
specific progress in your TPP negotiations in these areas.
    I specifically mentioned the various points that relate to 
progress on human rights, to ensure implementation of trade 
agreements and obligations by strengthening good governance, 
including internationally recognized human rights, the rule of 
law, including the right of due process, the right of fair 
trial, the right of equal protection under the law, the 
effective operations of legal regimes of our trading partners 
of the United States through appropriate means, including 
capacity building.
    So my question to you is, can you share with us, before you 
are going to ask us to act on TPA, the progress that you have 
made on these issues specifically? Then secondarily, what 
enforcement can we anticipate will be in the trade agreement, 
TPP, particularly as to the use of dispute settlement 
procedures or trade sanctions if there are violations of the 
expectations in regards to good governance?
    Ambassador Froman. Well, thank you, Senator. Thank you for 
your leadership on this issue. Let me answer you in two parts. 
One, within TPP we are negotiating a range of obligations that 
touch upon these issues of governance, transparency, good 
regulatory practice, participation, anti-corruption, all of 
which, as you have noted, help contribute to the rule of law 
and ultimately to the promotion of democracy.
    So this has been a key part, one of the key themes of TPP, 
and it cuts across many of the chapters in terms of focusing on 
governments being transparent about what they are doing and how 
they are doing it, putting on the web all of their regulations, 
allowing for public participation in these processes.
    Those are obligations that are subject to the same kind of 
binding dispute settlement that the rest of the agreement is, 
as a general matter. So I think you will find in TPP--and we 
are happy to go through this in detail with you--a whole series 
of obligations that are broadly in that area----
    Senator Cardin. And enforcement?
    Ambassador Froman [continuing]. And that as a general 
matter are enforceable like the other provisions of the 
agreement.
    Senator Cardin. So, if they do not meet these obligations, 
we have an opportunity to take that to dispute settlement 
resolution?
    Ambassador Froman. Right.
    Senator Cardin. And ultimately trade sanctions?
    Ambassador Froman. Correct, as a general matter. Separate 
from the TPP agreement itself, we are using our engagement with 
these countries to press them on human rights issues as well. I 
will just use Vietnam as an example, where there clearly are 
serious human rights issues. From the President on down, at 
each of these meetings that we have with the senior Vietnamese 
leadership, we raise issues, for example, around the release of 
prisoners of conscience.
    Vietnam has released a number of prisoners of conscience. 
We are continuing to press them to release all of their 
prisoners of conscience unconditionally. We are pressing them 
on religious freedom and the ability for people to speak out 
without fear of retribution. Because of our engagement on TPP, 
we are able to have a more meaningful dialogue with them about 
that.
    Senator Cardin. And I assume no response about BDS means 
you agree with Senator Portman and I that it should be a 
principal term?
    Ambassador Froman. Obviously, Israel is a key and vital 
ally. We look forward to learning more about your proposals and 
working with you.
    Senator Roberts. Senator Portman? Let me say that, after 
Senator Portman, it is my understanding it will be Senator 
Bennet, and then Senator Casey, and then Senator Toomey, with 
regards to the members who are here. Did I skip you, Mr. Brown?
    Senator Brown. Yes, sir.
    Senator Roberts. I did not mean to do that. So, Senator 
Brown, you will be following----
    Senator Bennet. Mr. Chairman, I think I am next on the 
list.
    Senator Roberts. Yes, I know. Well, I understand that, but 
we have had four on the minority side. Senator Portman has 
asked for consideration that he, like everybody else, has an 
important meeting, if you could just hold on.
    Senator Bennet. Well, I would defer to the Senator from 
Ohio. I also have meetings that I need to----
    Senator Roberts. Everybody in this room has meetings.
    Senator Bennet. I agree. I was just wondering why we are 
changing the rules.
    Senator Roberts. I am not changing the rules. We have had a 
coup, and there is going to be---- [Laughter.]
    We have had four on the minority side. Senator Portman had 
asked if he could be recognized because of this. I agreed to 
that. So I would recognize Senator Portman, with the 
understanding that we are going to go down the line over here 
on this side, if you could just bear with us.
    Senator Bennet. Well, with respect to my other friend from 
Ohio----
    Senator Portman. Senator Bennet is before I am.
    Senator Roberts. I think your name is next, sir. You are 
Senator Bennet from Colorado, a member of the sometimes----
    Senator Bennet. Your neighbor.
    Senator Roberts. Yes.
    Senator Bennet. Thank you. To the west.
    Senator Roberts. And member of the sometimes powerful 
Senate Agriculture Committee.
    Senator Bennet. That is very correct.
    Senator Roberts. That is correct. All right.
    Senator Bennet. Thank you.
    Senator Roberts. Senator Portman?
    Senator Portman. Thank you, Mr. Chairman, and thank you, 
Senator Bennet. And, Ben Cardin, thanks for your passion on the 
human rights issues, and also on the BDS issue we have been 
working on. I appreciate the answer from Ambassador Froman, but 
I do think this is a critical part of the overall package. We 
will have an opportunity to have a good debate on that over the 
next couple of weeks. This is really economic warfare against 
some of our allies, including Israel. Senator Cardin and I are 
going to be eager to get your support on it.
    Thanks, too, for being here and for the great testimonies 
this morning. You all have talked a lot about the importance of 
trade. I do not disagree with what you said about the 
importance for us to create more jobs and better-paying jobs, 
and this is critical to Senator Schumer's point about, how do 
you get more middle-class jobs, and how do we increase pay?
    I mean, one way is you export more, because those are jobs 
that are supporting goods and services being sold to the 95 
percent of consumers outside of our borders. They do pay more. 
The jobs pay, on average, 18 percent more, with better 
benefits. We want more stuff stamped ``Made in America.'' I 
think everyone agrees with that.
    But we also have to be sure imports are not illegally 
traded and they are fairly traded, and I think that is where 
the enforcement that has been talked about here today is so 
critically important. We are looking for a level playing field, 
and if American workers, farmers, and service providers can 
have a level playing field, we will be just fine, but we do not 
see that now.
    So I think that is the concern that, certainly, I 
experienced when I was in your job and that you are seeing. 
Just quickly, in terms of these trade agreements, what 
percentage of the world do we have trade agreements with, in 
relation to the global GDP or the global economy?
    Ambassador Froman. That is a good question. I think at the 
moment it is about 10 percent.
    Senator Portman. About 10 percent of the world we have a 
trade agreement with?
    Ambassador Froman. TPP is about 40 percent.
    Senator Portman. So we do not have a trade agreement with 
China, for instance, or Japan, or the European Union. Of that 
10 percent of the world, what percent of our exports did they 
get?
    Ambassador Froman. I would say it is about 30 or 40 
percent.
    Senator Portman. It is about 47 percent.
    Ambassador Froman. Yes. Something like that.
    Senator Portman. Forty-seven percent, almost half of the 
exports that come from Ohio and other States--in fact, in Ohio 
it is a little higher than that, it is over half--go to this 10 
percent of the world. So we want more of that. We want more of 
our products going overseas. But the trick is how to have a 
level playing field. We talked about a lot of those aspects 
today.
    The one I want to focus on quickly is currency. Secretary 
Lew said we have more work to do. He said we will not tolerate 
practices we consider unfair. He talked about how we need to be 
sure we are not jeopardizing appropriate macroeconomic policy 
versus intervention. I do not disagree with that. We had a good 
conversation about this earlier this week.
    What we would like to do--and Senator Stabenow and I intend 
to offer an amendment which I hope the committee can support--
is to set up a standard within TPA to be able to ensure that 
currency is not just considered, but that it has teeth, that 
there is some enforceability. As you know, there are IMF and 
WTO principles on this, so all the countries we are talking to 
about trade agreements are part of this.
    I mean, they are members of the IMF or members of WTO. 
These principles are very clear, but they are not enforceable, 
so that is what we are trying to do. We do think there is a 
distinction between macroeconomic policy versus what we would 
consider to be intervention, and we will use those IMF 
principles, follow those standards. I think this is one issue 
where--to the question earlier from Senator Carper about how we 
can find common ground here, I think this is the place to find 
it.
    I will tell you, it is just not fair, because, right now 
when a country manipulates its currency--we talked about the 
fact that, although Japan is engaging in macroeconomic policy 
now, they have hundreds of times in the past intervened, as 
have other countries. What happens is, our exports are more 
expensive, because they have artificially intervened. That is 
not fair to our workers and our farmers and our service 
providers.
    My colleague Senator Brown has been involved in this issue 
for many years, because he, like me, goes to talk to these 
workers and these companies, and they say, wait a minute, we 
are finally competitive in terms of our energy policy, we are 
doing everything we can in terms of technology, and we are 
making concessions on our pay and our benefits, and yet you are 
telling me that, as Paul Volker famously said, ``In 5 minutes, 
someone can change exchange rates and currency that does away 
with years of trade negotiating successes.'' It is just not 
fair.
    In a second, of course, the imports that they are sending 
to us are less expensive. So this is the lack of a playing 
field that is level that we are trying to address.
    The final thing I want to say, quickly, is that it also 
affects third-party countries--in other words, other export 
markets that we have--because those products, whether they are 
from China, Japan, or wherever, are being sold at an advantage 
in those markets too, meaning that our workers, our service 
providers, our farmers, do not have the opportunity to get the 
market share that they deserve. So we want to work with you on 
that.
    On the health care tax credit that was talked about 
earlier, Senator Brown and I have authored legislation on this. 
We think the health care tax credit is incredibly important to 
have as part of this process. We understand it will probably be 
part of the TAA discussion. That is fine.
    It is very important to about 5,000 Delphi workers in my 
home State of Ohio. It frankly just lets them pay a portion of 
their health bills, and that is the least we can do, because 
their pensions were taken away from them. Their retirement 
benefits were taken away. If they are not on Medicare yet, if 
they are between 55 and 64 years old, their pensions were 
terminated and administered by PBGC. It is a bridge to Medicare 
for them. So, I hope you can support us on that as well.
    With that, thank you, my colleagues, for indulging me and 
allowing me to intervene.
    Senator Bennet [presiding]. I thank the Senator from Ohio, 
and I now see the opportunity for a real coup. [Laughter.] I 
just do not know if we are going to be able to make the most of 
it.
    For, I think, probably everybody on this panel, and much 
more importantly for people in our country, the central 
challenge we face has been the decoupling of wage growth and 
job growth from economic growth that we have seen over the last 
20 years.
    One of you mentioned that we have just begun to see median 
family incomes begin to grow a little bit, but that is new--
very, very new. A lot of that decoupling, I think we would all 
agree, has had to do with globalization. There are other things 
as well: productivity and technology. But it is clear that 
globalization has put pressure on middle-class wages. I have 
often heard the administration say that we have learned lessons 
from NAFTA. This is the first time in 20 years we have had the 
opportunity to negotiate a trade deal.
    So I would love to give the balance of my time to the panel 
to address that issue, to go into some detail about what we 
have learned from prior agreements, how this agreement is 
different, and what assurances you can give to the American 
people that TPP is actually going to help middle-class families 
that are struggling with the effects of globalization, and also 
what the effect would be of the alternative, of not passing 
this trade agreement.
    Ambassador Froman. Why don't I start, and of course invite 
my colleagues to add? Look, Senator, I think you are absolutely 
right. We have seen the impact of technological change, of 
productivity increases, and of globalization on American jobs 
and American wages. Globalization is a real force.
    It is the product of the containerization of shipping, the 
spread of broadband, the emergence of economies like China and 
Eastern Europe from being closed economies to being open 
economies, and the ease of air travel. It is a real force that 
has an impact on the American economy.
    The question is, what are we going to do about it? The risk 
is that people conflate globalization with trade agreements. 
Globalization is a force; trade agreements are how we shape it. 
Through trade agreements, if we can not only tear down barriers 
to our exports as we have been talking about this morning--
these barriers tend to be disproportionately high since our 
market is open and other markets have higher tariffs and have 
other non-tariff barriers.
    If we can tear down barriers disproportionately, we can 
increase our exports, which we know support jobs that pay more 
than non-export-related jobs, therefore dealing with wages, and 
at the same time use agreements to raise standards in these 
other countries: labor and environmental standards, rule of law 
standards, as Senator Cardin was saying, and intellectual 
property rights.
    TPP, for the first time ever, will put disciplines on 
state-owned enterprises, government-owned companies, so when 
they compete against our private firms and they get the benefit 
of subsidies or other benefits from the government ownership, 
if they do not compete fairly against our firms, we will then 
have a trade action against them, whether it is in their 
country or whether it is in our country, for the first time 
ever.
    TPP, for the first time, will bring to the digital economy 
rules from the real economy, so that there is a free flow of 
data and information so that companies do not have to move 
abroad from the United States in order to service those markets 
abroad.
    This is particularly important for small and medium-sized 
businesses that cannot afford to set up offices all over the 
world, that cannot afford to replicate infrastructure all over 
the world. TPP will allow them to engage through e-commerce, 
through the digital economy, with 95 percent of the customers 
outside this area.
    The labor and environmental provisions are the strongest of 
any trade agreement, and they are fully enforceable, just like 
any other provision of the trade agreement, including though 
the availability of trade sanctions. To go to a question that 
Senator Schumer raised earlier, we demonstrated over the last 5 
years--we brought 19 WTO actions, half of them against China. 
We have won every case that has been brought to conclusion, as 
Senator Stabenow noted, a number of them in important 
manufacturing areas.
    These are all things that we can do through TPP. The 
lessons we learned from NAFTA, and the renegotiation of NAFTA 
that this represents, means that we are pulling into the core 
of the agreement labor and environmental provisions and making 
them fully enforceable just like any other provision of the 
trade agreement, which is what folks have been asking for for 
some time.
    Senator Bennet. Secretary Lew, would you like to answer?
    Secretary Lew. I think Mike covered what I would have said. 
I would just underscore that many of the concerns we raised 
are, as you said in your opening question, related to 
globalization. The fact that trade agreements raise the bar--we 
already have high standards. The world will be a more 
competitive place for U.S. goods, U.S. services, and U.S. 
workers if other countries have higher standards, so I think it 
will lead to more middle-class jobs.
    Senator Bennet. Mr. Chairman, I am going to conclude just 
by saying that I want to go on the record sharing Senator 
Cardin's concerns about the process here, and I appreciate very 
much the opportunity to ask questions.
    Senator Toomey [presiding]. Next is Senator Casey.
    Senator Casey. Thank you, Senator Toomey.
    I will be brief. Number one, I wanted to thank our 
witnesses, Secretary Lew, Secretary Vilsack, and Ambassador 
Froman. We appreciate your service and the difficult work that 
you have to do.
    I would first, for the record, incorporate by reference 
Senator Schumer's remarks about the process. I think this 
process is wholly inadequate in terms of being able to consider 
such an important policy as it relates to both Trade Promotion 
Authority and trade itself. So, that is just for the record, 
but I think there is a lot of agreement, at least on our side, 
about the process. That does not involve our witnesses.
    But I wanted to focus on manufacturing firms. Senator 
Toomey and I represent a State that has had a tremendous loss 
of manufacturing jobs, not just over a couple of years but 
really over a generation. These firms get hammered, and have 
been getting hammered, and often the damage is done before they 
can even bring cases when competitors, foreign competitors, 
break the rules. I think you understand that. I know that most 
recently the steel industry and other industries have asked for 
both clarity and stronger enforcement when it comes to 
enforcing measures for domestic industries, and I know you are 
aware of that request.
    I would just ask--I guess it would be best to ask 
Ambassador Froman. I know we will be coming back this 
afternoon, but I would just ask you, on behalf of the 
administration, if you are in agreement and if you will be 
committed to working with the steel industry and others to 
provide that clarity and stronger enforcement.
    Ambassador Froman. Thank you, Senator Casey. We certainly 
agree on the importance of enforcement. You note the steel 
industry, which has been one of the areas that has taken 
advantage of the enforcement resources more than most. I think, 
of the 52 antidumping and countervailing duty procedures 
brought last year, I think over 30 of them were from the steel 
industry. We have been in dialogue with yourself and other 
members of the Senate and the House, as well as the steel 
industry, about how best to perhaps improve our trade remedy 
laws. We are happy to work with you on that.
    Senator Casey. Great. Thanks very much. That is all I have.
    Senator Roberts [presiding]. Senator Brown?
    Senator Brown. Thank you, Senator Roberts. Thank you very 
much.
    I join my colleagues in my disappointment about this 
hearing today. I am a little incredulous, too, that the 
chairman and the ranking member are not here. I do not ever 
judge other people's schedules--I know we are all busy--but to 
give such short notice for the meeting is a concern to all of 
us. I want to talk for a second about what this committee has 
done historically, and it has never done what it is doing 
today.
    Our predecessors took the consideration of this legislation 
much more deliberately. The 1979 Senate Finance Committee held 
2 days of hearings on trade policy in advance of considering 
fast-track. They held 9 days of meetings with administration 
representatives on the substance, 3 days of consultation with 
the Ways and Means Committee. In 1988, this committee held 6 
days of legislative hearings on the Omnibus Trade Act. In 2001, 
in anticipation of fast-track legislation coming from the 
House, the committee held 2 days of hearings on that alone.
    Yet today we are meeting for a hearing that was noticed 12 
hours before it began on a bill we have not seen, with 
witnesses, I assume, who know more than we do and, frankly, 
Ambassador, never tell us. Why? So we can rush through a bill 
that will expedite consideration of the largest trade agreement 
we have ever negotiated.
    Whenever fast-track and other trade bills are finalized, 
this committee needs to have a legislative hearing on the 
package before we have a mark-up. I do not know if the ranking 
member and the chairman plan to do that. You cannot fast-track 
fast-track. That is a complete abdication of our 
responsibilities.
    I want to lay out a few other points. First, Democrats will 
not accept massive cuts to TAA, nor will we tolerate separate 
consideration of TAA which will jeopardize its passage, 
especially in the House.
    Second, there is strong support in this committee, 
bipartisan, for provisions both on fast-track and on our trade 
remedy laws to fight currency manipulation. It has cost our 
country as many as 5 million jobs. We will not accept watered-
down versions in either of these proposals.
    Third, the package of bills, as it has been described--
again, we do not know much--will not do nearly enough on trade 
enforcement. Any trade package considered by this Congress must 
include strong trade enforcement provisions, including my Level 
the Playing Field Act, which was written with direct and 
detailed consultation with this administration's Department of 
Commerce, yet we can get no action from this administration on 
including the Level the Playing Field Act in this legislation.
    Fourth, we are considering a bill that will change Senate 
rules for the consideration of two massive trade acts. The last 
time we passed fast-track was 12 years ago. A lot has changed 
in U.S. trade policy since then. The legislative process must 
be open and methodical, for the committee and on the floor, for 
the trade agreement itself.
    If the administration is committed to helping working-class 
Americans, you three will insist on a strong TAA program as 
part of the bill; an omnibus package that includes strong trade 
enforcement provisions, again, like the Level the Playing Field 
Act that this administration helped us to write; and you will 
accept strong bipartisan proposals to fight currency 
manipulation.
    Now, my question is this, to the Ambassador: I cannot speak 
for everyone else on this committee, but from my own 
experience, USTR's consultations with Congress have been--I 
hesitate to use this adverb, but I will--pathetically 
inadequate. Here are some examples. We asked for data showing 
the utilization rate of the Korean FTA since it has gone into 
effect. We have gotten nothing from USTR.
    We asked for information used to justify the auto rules of 
origin proposal the U.S. tabled in TPP. USTR gave us nothing. I 
might add, that is where you are able to say--or maybe you are 
not--that you actually did renegotiate the North American Free 
Trade Agreement.
    We asked for analysis comparing the NAFTA auto rules of 
origin to the TPP auto rules of origin proposals. USTR said 
they did not have it. USTR did say they would provide 
information from Customs on academic studies that were used to 
develop the auto rules of origin proposal. Two months later, 
Mr. Ambassador, we are still waiting. My staff asked for a 
meeting on rules of origin in October of last year. USTR 
dragged their feet, they dragged their feet, they scheduled it 
once, they did not show up. We are still waiting for an in-
depth briefing 6 months later.
    We asked to be kept regularly informed on the negotiations 
between the U.S. and Vietnam when implementing the agreement's 
labor standards. It has been 17 weeks since that request; we 
have gotten no update.
    My staff director asked to see the TPP text over recess, 
after she and I viewed it the week before. She was told ``no.'' 
To be clear, she has appropriate clearance and is bound by the 
laws of our staff and all staff in this situation. So in other 
words, Nora in my office can only go and look at the TPP text 
with your staff person at USTR sitting there, only if I am in 
the room. We can get access, staff can get access to DoD 
documents, often, to Iran sanctions documents, to CIA 
briefings, but we cannot get access to Trans-Pacific 
Partnership text.
    Finally, I was one of the 60 Senators who signed the letter 
urging the administration to include strong enforceable 
currency disciplines in TPP. It took me nearly a year to get a 
response from the administration, and we have been told by 
several officials, including yourself, that TPP will include 
nothing on currency.
    This list is long. It is actually incomplete. I could list 
a number of other things where your office has been totally 
unresponsive.
    My question is this: is there any legislative text, Mr. 
Ambassador, that we can include in fast-track that would get 
you to be more responsive to Senators, more forthcoming with 
meaningful information about the trade negotiations, and that 
would get you to be less dismissive of the U.S. Senate and the 
U.S. House of Representatives?
    Ambassador Froman. Well, Senator, I am sorry that you feel 
we have been unresponsive. We take our responsibilities of 
consulting with Congress very seriously. We consult very 
closely with the staff of this committee, which you have access 
to, on every proposal before we table it. We have had literally 
hundreds of consultations with the staff of this committee on 
TPP.
    We have had 51 consultations with your office, including 7 
with yourself and 44 with your staff on a variety of subjects. 
But we take this very seriously, and we want to do as much as 
we possibly can to encourage the dialogue back and forth, and I 
am happy to address the issues you have raised, either now or 
later.
    This is a key part, I think, of what TPA is intended to lay 
out, which is, what are the processes for transparency and for 
access to text? I am glad you raised the issue of text, because 
we made changes in the last couple of months.
    As you know, historically, personal staff did not have 
access to text at all. The text was only shared with the staff 
of this committee and of the Ways and Means Committee, our 
committees of jurisdiction, and of course with members of 
Congress themselves who have the fundamental responsibility for 
reviewing the text.
    We heard from a number of members of Congress over the last 
couple of months, and the general view was of three things that 
they wanted: (1) they wanted the text to be deposited up here 
so that they did not have to set up an appointment with USTR to 
view it; (2) they wanted to have the text unredacted so that 
they could see the positions of our trading partners, not just 
the positions of the United States where there is bracketed 
text; and (3) a number of members of Congress and the Senate 
asked that they be allowed to bring their personal staff with 
them when they are able to view the text to help them 
understand and analyze the text. We have accommodated all three 
of those requests, both in the House and in the Senate. So we 
look forward to working with you and with the leadership of 
this committee and the leadership of the Ways and Means 
Committee.
    Senator Brown. If I can interrupt, Mr. Ambassador, there 
has been a very, very specific request a number of times from a 
number of us in the Senate that our staffs could go. Ms. Todd 
and I went and spent an hour in the room, and I appreciated her 
being nearby--as if that is a major concession on a trade 
agreement that is 40 percent of the world's economy. But we 
spent an hour there. She wanted to go back in the 2 weeks after 
I had returned to Ohio, and she was not allowed to go back in 
spite of repeated requests.
    However, my staff can go and view all kinds of other 
documents, with the proper intelligence clearance, having to do 
with national defense. It just begs the question, this is not--
if I could say this, this is not smart politics for you and the 
Trade Representative to try to sell this huge agreement to a 
very cynical, very skeptical Senate and a very worried public, 
because we know----
    The Chairman. Senator----
    Senator Brown. I am sorry, Mr. Chairman. I want to finish, 
and I am going to, if you will allow me, Mr. Chairman. I did 
not know you were in the room now. I apologize for that. I do 
not understand why my staff director cannot go, just because it 
might have been precedent, why she cannot go in this room in 
the 2 weeks that all of us were gone, that she could not read 
this text. It just begs the question of, what are you hiding?
    Ambassador Froman. We are happy to work with the chairman 
and the ranking member on this, and with the Ways and Means 
Committee.
    Senator Brown. The answer is not ``yes.'' The answer is 
not, ``Ms. Todd can go in.'' The answer is, you will work with 
the chairman to continue to stonewall and continue to deny 
access to this agreement for a staff person in the U.S. Senate. 
That is your answer?
    The Chairman. Senator, your time is up, and we are going to 
have to stop there. You have gone twice as long as anybody 
else.
    Senator Scott, you are next, but Senator Wyden would like 
to say a few words.
    Senator Wyden. Less than a minute. Less than a minute, 
colleagues. I know you have been very patient. I just want to 
be clear, on the record, that I think Senator Brown is making a 
number of valid points, particularly with respect to staff 
access to these kinds of materials. This will be the last 
time--the last time--where this kind of restriction on staff 
access is allowed to take place.
    This goes to the question of whether there is going to be a 
fairer debate and a fairer fight with respect to this 
discussion. A lot of Americans do not think it is fair now. I 
am committed to changing it, committed to work with the Senator 
from Ohio. I thank you for the chance to respond briefly.
    The Chairman. Well, let me just say this. I think it has 
been a very fair process. We have bent over backwards time and 
time again. Ambassador Froman, you have been up here 
repeatedly, so has Secretary Lew. We are really happy to have 
you, Secretary Vilsack. The three of you are terrific people, 
working in this area. So let us face it, we are never going to 
satisfy some people who just plain, honestly disagree. But 
there comes a time when you have to move ahead, and with that 
we are going to turn to Senator Scott.
    Senator Scott. Mr. Chairman, I think Senator Toomey has an 
event, and I will give him my time and take his.
    The Chairman. I would be happy to do that, and then we will 
take you after Senator Toomey.
    Senator Scott. Thank you, Mr. Chairman.
    Senator Toomey. Senator Scott, thank you very much. That 
was very kind, indeed. I am going to try to be as quick as I 
can here.
    But I would like the panel to just answer directly some 
straightforward questions, because I know they are on the minds 
of the folks from Pennsylvania. Starting with Secretary 
Vilsack, agriculture is the biggest industry in Pennsylvania. 
We produce a lot of different agricultural products: dairy, 
poultry, all kinds of fruits, vegetables, corn, soybeans, 
mushrooms. We do a lot.
    If TPA is passed, and subsequent to that we can pass TPP, 
is it your view that Pennsylvania farmers will export more 
products than they otherwise would?
    Secretary Vilsack. Absolutely.
    Senator Toomey. And the simple reason is why?
    Secretary Vilsack. Senator, tariffs come down.
    Senator Toomey. Right. So the single biggest thing is, 
their products become more affordable.
    Secretary Vilsack. More competitive. The second equally 
important reason is, the SPS barriers are not going to be 
constructed, or they can be torn down more quickly.
    Senator Toomey. Right. Non-tariff barriers are eliminated, 
so Pennsylvania farmers sell more products.
    Secretary Vilsack. Yes.
    Senator Toomey. Secretary Lew, according to the Department 
of Commerce, exports supported 191,000 Pennsylvania jobs last 
year. A majority of exports are manufactured goods in 
Pennsylvania. Is it your view that if TPA is passed, and then 
TPP is subsequently passed, that Pennsylvania manufacturers 
will export more than they export today, would export more than 
they otherwise would, and that we will have more employment in 
the manufacturing sector than we otherwise would?
    Secretary Lew. Senator, my view is that if U.S. products 
compete on a more level playing field, where other countries 
lower their tariffs and have to meet higher standards that we 
already meet, that is a competitive environment that will be 
helpful to U.S. manufacturers.
    Senator Toomey. All right. That is an indirect answer, 
though. Directly speaking, do you think that the TPP will 
result in more manufactured exports from Pennsylvania?
    Secretary Lew. I believe there will be more manufacturing 
exports. I would not pretend to be an expert about Pennsylvania 
manufacturers, but I believe it would help Pennsylvania 
manufacturers.
    Senator Toomey. Yes. We are a very large manufacturing 
State. If we can manufacture more and sell more overseas, I 
think that follows.
    Secretary Lew, obviously we heard some discussion about the 
controversy around currency manipulation. Specifically, I think 
Senator Schumer has introduced legislation--actually for quite 
some time--that would require currency manipulation to be 
deemed to be an actionable subsidy with respect to our 
antidumping law. Is it the administration's view that that 
provision should be left out and should not be included in TPA?
    Secretary Lew. Well, Senator, as I indicated earlier, I 
think countervailing duties based on currency are problematic. 
They might well not be consistent with our WTO obligations, and 
I think there is the risk of retaliation, but we would look 
forward to working with the Congress on strengthening our 
remedies, not as part of TPA, but in a parallel process.
    Senator Toomey. And then just very quickly, my last point--
I did not hear it come up. Maybe it came up, but I did not hear 
once anybody make the point about how trade has the 
characteristic of providing consumers with a range of choices 
and lower costs and options that are valuable to consumers. We, 
quite understandably, focus as I just did on the virtues of 
more jobs that are associated with exports.
    But, Ambassador Froman, maybe you would like to address 
this. Is it your view that a working-class family benefits from 
the availability of an affordable choice of whatever the 
product might be that might originate overseas?
    Ambassador Froman. Yes. Thank you, Senator. That is 
certainly the case. There have been studies about how the 
tariff reductions over the last several rounds of trade 
negotiations have added upwards of $10,000 per family to their 
income when it takes into account the lower costs of the 
products that they buy, and it is particularly important for 
lower-income Americans who spend a larger portion of their 
disposable income on tradeable products like food and clothing 
and shoes. So, by bringing down those barriers, we both bring 
down the cost but also, as you say, increase the availability 
and the choices that consumers have.
    Senator Toomey. Thank you very much.
    Once again, thank you to Senator Scott.
    Senator Scott. You are very welcome.
    The Chairman. Senator Scott, thank you for your patience. 
We will now turn to you.
    Senator Scott. Thank you, Mr. Chairman.
    Thank you, Secretary Lew, Secretary Vilsack, and Ambassador 
Froman, for investing so much time on what is a very important 
issue.
    I do have my first question for Ambassador Froman. There is 
a well-known issue with a lack of enforcement and duty evasion, 
looking only at the apparel imports. Of course, this is very 
important to South Carolina. Last year--there is a conservative 
estimate that about 15 percent of FTA entries are non-
compliant.
    This translates roughly to about $500 million in lost 
revenue just in 2014, and that is just with one specific 
sector. These significant enforcement problems exist under the 
FTAs with only 20 countries, and now we are considering an 
additional 39 countries, which will cover about 65 percent of 
global trading if you add in TPP and TTIP.
    How does the administration plan to address the additional 
resources needed to enforce the terms of these agreements and 
ensure that the U.S. does not continue to lose billions of 
dollars under current agreements?
    Ambassador Froman. Well, thank you, Senator, for that 
question. It is an important issue. One of the areas that we 
are negotiating in TPP, and we expect to do in TTIP as well, 
will strengthen our cooperation among Customs officials to 
avoid circumvention and transshipment that has been a problem.
    We have also worked very closely with our colleagues at DHS 
and Customs and Border Protection to ensure that they have the 
resources and the focus for enforcing our trade laws, and I 
think they very much appreciate the significance of that 
mandate that they have.
    Senator Scott. Thank you.
    Secretary Lew and Ambassador Froman, one of the challenges 
that I have as I think through the process of approving a TPP 
agreement is that the executive branch, for the last few years 
from my perspective, has really undermined the authority of 
Congress through rulemakings, regulatory measures, and 
executive actions to achieve results that carry the weight of 
law without it actually being a law. I certainly understand 
that the current TPA proposal goes to significant lengths to 
preserve U.S. sovereignty.
    I am very concerned, however, about the potential to 
effectively change our system of government, change our laws as 
well, under the current proposal. Considering the troubling 
actions taken already by the White House, I do not see any 
reason why President Obama's Trade Representatives would not 
use the trade agreements as an opportunity to negotiate 
otherwise unpopular regulatory changes, whether they be 
environmental, business, labor, or financial regulation.
    My question then is, this TPA is being touted as setting a 
new standard for transparency in trade negotiations that will 
not allow for trade agreements to impinge on U.S. sovereignty. 
Does Congress not deserve a chance to review whether certain 
laws and regulations should be negotiated?
    Ambassador Froman. Perhaps I can take the first shot at 
answering that. First, to be absolutely clear, only Congress 
can change the laws. There is nothing that we can do to our 
trade agreement that can change the laws without congressional 
approval, and we consult closely with Congress throughout this 
process, throughout the negotiations, and of course through 
whatever the process is that TPA establishes, to get a very 
clear understanding of the steps that we may have to take to 
comply with our trade obligations, if any. Ultimately, it is 
only Congress that has the power and the authority to make the 
decision about whether to change any laws.
    Senator Scott. I will take that as a ``yes.''
    Given that response, is it not reasonable for Congress to 
require a full descriptive list of proposed regulations that 
are going to be negotiated?
    Ambassador Froman. We have not seen the final TPA bill, but 
certainly, as part of the past processes of TPA, we will have 
to lay out any changes to U.S. law. It tends to be, for 
example, changes to the tariff schedule long before there is 
any decision by Congress.
    Senator Scott. So my concern, obviously, is that, in spite 
of the laws of our land, the executive actions of the 
administration, the regulations, the enforcement of those 
regulations from a bureaucratic process, have in fact had the 
impact of law without there actually being law.
    So our concern is, as we move forward in further 
negotiations and empower the President to negotiate on our 
behalf, that part of the negotiation will lead to trade 
agreements that have imbedded in them regulatory coherence that 
allows for some new set of standards that are inconsistent with 
the laws of the land that will be involved or imbedded in those 
trade agreements.
    Secretary Lew. If I could just add, no agency has the 
authority to make regulations if it is not pursuant to an 
authority that has been granted. So we do take actions like 
every administration of both parties has taken for many, many 
decades.
    I think the question here about TPA actually goes the other 
way, because TPA is a chance for the Congress to put objectives 
in front of an agreement that comes up for approval. It is a 
direction to the administration that has guidelines in it of 
what are the issues that Congress is telling the administration 
to weigh heavily in the negotiations, and then ultimately 
Congress gets to vote on a trade agreement.
    So I do not agree with the description of the use of 
executive authority, obviously, but I do not think the TPA is a 
case of granting that kind of new regulatory authority.
    Senator Scott. There is no doubt that the process that we 
would go through to achieve new agreements would require 
Congress's final authority, final approval. I get that part. 
The transparency and the timeline to understand and appreciate 
what is part of that agreement and having transparency as a 
part of that process up front, is very important for us to 
consider in yielding more authority and power to the 
administration.
    Thank you, Mr. Chairman.
    The Chairman. Well, thank you, Senator Scott.
    I want to personally thank all three of you. You all three 
have served with distinction in this administration, and I just 
care a great deal for each one of you. You, Mr. Ambassador, you 
have taken a lot of guff over the years, and this is a tough, 
tough job, but I do not know of anybody who could do it better 
than you have done it. We have had some very good people in 
your position, but it is a very, very tough job. If we get this 
done, this is really monumental. We are talking about nearly 80 
percent of world trade if we get TPP and TTIP both done. Is it 
more than 80 percent?
    Ambassador Froman. It is about two-thirds of the global 
economy, yes.
    The Chairman. Yes. I thought it was more than that, but 
that is a lot. I appreciate the hard work that you have done 
and the time you have spent away from your family, traveling 
around the world, debating with others and talking about these 
matters.
    Secretary Vilsack, I appreciate all you do in the world of 
agriculture. You have done it with fairness across the board, 
as far as I can see, and I have always had a great deal of 
respect for you, even when you were Governor. Especially when 
you were Governor, I should say.
    Then, Jack Lew, you have been all over the world fighting 
for this administration and this government, and all of that 
effort that you have put forward, I just want to personally 
thank you for. I want to thank all three of you.
    This is a very important time. If we can get this done--and 
I believe we will; I believe we will have this basically agreed 
to before the end of this day, and I have good reason to say 
that--then I intend to hold a mark-up next week, and, 
hopefully, before the end of the month, we can have this 
debated on the floor. Hopefully, with your help, we will be 
able to have enough votes on both sides to be able to pass this 
and put the United States back in the whole world as a trading 
partner that everybody is going to want to trade with.
    So I know this has been a long hearing. I know that some of 
it may not have been as pleasant as you would have liked, but I 
am just very grateful for you taking the time and being with us 
today. Thanks so much.
    With that, we will recess until further notice.
    [Whereupon, at 12:15 p.m., the hearing was recessed, 
reconvening at 3:20 p.m.]

 OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM 
              UTAH, CHAIRMAN, COMMITTEE ON FINANCE

    The Chairman. The committee is going to come to order. 
Welcome back. I appreciate everyone who has returned for the 
second half of our hearing on trade policy.
    Ambassador Froman, I especially want to thank you for 
appearing again today and for staying a little longer.
    I am pleased to announce that Ranking Member Wyden, House 
Ways and Means Committee Chairman Ryan, and I have reached an 
agreement on legislation to renew Trade Promotion Authority. We 
have also reached an agreement on bills to address Trade 
Adjustment Assistance and to reauthorize and extend some trade 
preference programs, all of which is very important and none of 
which could have been done without the help of our ranking 
member here.
    I hope that all my colleagues will take the time to 
carefully study these bills. Once they do, they will find that 
we have been able to put together some balanced and effective 
legislation that will help improve the health of our economy 
and better serve our Nation's hardworking taxpayers.
    The TPA bill contains the clearest articulation of trade 
policies and priorities in our Nation's history. It includes 
nearly 150 ambitious high-standard negotiating objectives, 
including strong rules for intellectual property rights and 
agricultural trade, as well as protections for U.S. investment. 
Many of these objectives break down barriers that American 
exporters face in the 21st-century economy, such as regulatory 
barriers, currency manipulation, and state-owned enterprises.
    The bill contains unprecedented consultation requirements 
that will ensure that Congress is an equal partner throughout 
the negotiations. It also includes new transparency 
requirements that will help the public know and understand what 
is being discussed before agreements are signed.
    Unlike prior TPA bills, the procedures in our bill 
guarantee that all trade agreements will get an up-or-down vote 
in Congress. At the same time, we included new tools to hold 
the administration accountable, including a procedure that 
Congress can employ if our trade negotiators fail to consult or 
make progress toward meeting the negotiating objectives. This 
is a strong bill and one that builds off the success of 
previous iterations of TPA. It enhances our efforts to expand 
market access for our exporters and job creators.
    Throughout the process of crafting this legislation, I have 
worked closely with my colleagues, and I would just like to 
thank all of them for their contributions. I would like to 
thank Senator Portman for his input on trade issues. He has a 
great background in this area, and his leadership on TAA and 
the health coverage tax credit has been extremely important.
    Senator Toomey has been a great partner on enforcement 
issues. The trade bills we are looking at include the strongest 
language yet on enforcement, and that is really because of 
members like Senator Toomey and others and the work that they 
have done.
    I would like to thank Senator Grassley as well for his 
leadership, especially on agricultural issues. I would also 
like to say a warm thanks to Senator Isakson, who has also been 
a strong voice for agricultural issues.
    In addition, Senator Isakson has been a leader for years on 
the African Growth and Opportunity Act, and I look forward to 
working with him to get that renewed along with the Generalized 
System of Preferences.
    We are lucky to have Senator Burr and Senator Scott on the 
committee. Both have been strong advocates in this process for 
the textiles industry, and I would like to thank them for their 
work.
    Senator Thune has provided many creative ideas on digital 
trade. I think we have been able to incorporate a lot of them 
here, and I would like to thank him for his contributions.
    Senators Crapo and Coats have been of great assistance on 
some particularly challenging agricultural issues, and I would 
like to thank them as well.
    I would like to thank my colleagues on the other side as 
well. We have been working together. Hopefully we can get 
enough of our Democrat friends to go with us that we might be 
able to put this bill through the Senate as well.
    As I mentioned this morning, we intend to move 
expeditiously on these bills. If we do not act now, we will 
lose our opportunity, so I appreciate the cooperation of all of 
our members moving forward.
    With that, I will turn the time over to Senator Wyden for 
any remarks that he would like to make.
    [The prepared statement of Chairman Hatch appears in the 
appendix.]

             OPENING STATEMENT OF HON. RON WYDEN, 
                   A U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you very much, Mr. Chairman. Thank you 
for your graciousness.
    Suffice it to say, colleagues, Chairman Hatch and I have 
been at this, by my count, for over 6 months now, week after 
week, in effect trying to put in place a modern trade policy. 
The reality is, much of the body of trade law was written 
before there were iPhones and people were texting. I look out 
in the audience and see lots of young people, and it is hard to 
imagine there was even life before texting.
    But there was trade law before there was texting, and what 
we have sought to do in this debate is to start to flesh out 
what a modern trade policy would look like and get us out of 
this time warp where trade law has not kept up with the times.
    There are a handful of areas that I have felt particularly 
strongly about. The first addresses this question of what I 
consider to be excessive secrecy in the debate about global 
trade and global commerce. If you believe strongly in trade, as 
I do, and you want more of it, all of this excessive secrecy 
accomplishes nothing except making people more cynical and more 
skeptical about trade.
    Chairman Hatch and I--and I thank you for this, Chairman 
Hatch--have put in place some very different policies with 
respect to openness and accountability. I want to be clear, for 
example, that the President of the United States will be 
required by law to publish trade agreements, starting with the 
Trans-Pacific Partnership, 60 days before he signs them.
    If you take those 60 days and what is probably another 
couple of months, you are talking about 4 months when, finally, 
the American people and the Congress get to see what is in an 
actual trade agreement. In my view, that will make for a fairer 
debate, and it will make for a fairer fight between people who 
have different views on this subject.
    With respect to enforcement, we take, again, a very 
different approach. It is designed to respond to Americans who 
come up to their Senators and say, why in the world would you 
guys work on a new trade agreement when you are not enforcing 
the laws that are on the books today? So what we have done is, 
we have taken the bipartisan ENFORCE Act--colleagues on the 
other side, colleagues on this side--and we have in effect put 
that in our enforcement section.
    Then we have moved to address a very common concern of both 
business and labor, that the enforcement process is 
dramatically limited and flawed by the fact that people do not 
really even find out in time in order to set in motion the 
enforcement tools. So we have what amounts to an unfair trade 
alert, unfair import alert, where people will get that kind of 
information so that they can set in motion the enforcement 
tools that they desire.
    Then finally, we are seeking to ensure that Congress is 
involved on an ongoing basis--on an ongoing basis--in the 
negotiations. After many, many months where Chairman Hatch and 
I had, I think it would be fair to say, Chairman Hatch, some 
spirited discussions, we have set up a process that would allow 
this committee, building on existing law, to turn off fast-
track just as it is turned on today.
    So, higher standards for trade agreements, tougher 
enforcement, a new level of transparency and accountability, 
and vigorous oversight, raising the bar for trade deals. If 
they fall short, if it does not meet our standards, Congress 
can put the brakes on a bad deal.
    The last couple of points that I would like to make--I see 
my friend Senator Cardin, the ranking member on the Foreign 
Relations Committee and a key architect in the historic 
developments this week. He has led the fight for finally--after 
years of, I think it would be fair to say, almost indifference 
to governance questions and human rights--governance and human 
rights to be right at the center of the trade agenda in the 
future. The reality is, nobody has the muscle or the 
determination to force progress on human rights like the United 
States, and I think that is a real plus.
    I just want to mention an issue that has been especially 
important to me, and that is protecting the free and open 
Internet and building for the future so as to have priorities 
that can ensure that information flows freely across national 
borders.
    The last point: no trade deal is going to change U.S. law 
without congressional action. There is going to be no back door 
for powerful special interests to skirt U.S. law. Foreign 
companies will have no more rights in international tribunals 
than they have in American courts.
    Finally, this legislation ensures that, when you have 
changes in the American economy, in Oregon's economy, there is 
the opportunity for workers to get job training and financial 
support and access to health care. Competing in the global 
economy is a tough challenge, it is a national challenge, and 
that is why this package expands the Trade Adjustment 
Assistance program to include not just manufacturing-sector 
workers, but service-sector workers as well, to cover workers 
hurt by competition from any country around the world. It also 
extends the health care tax credit, and it includes preference 
programs like the Generalized System of Preferences and the 
African Growth and Opportunity Act.
    If we were to talk about everything this package does, we 
would be here until breakfast time tomorrow. There are booming 
economies around the world that have more money to spend with 
every passing year. I want them to spend it on products that 
are made and grown here.
    So I think that this is the right thing to do here. As 
Chairman Hatch will tell you, these were very, very challenging 
discussions. We have not addressed this issue really since 
2002. We are going to have a lot more debate on this, 
colleagues, here in the committee, and on the floor. I think we 
are on our way to a modern trade policy that strengthens the 
middle class, expands economic opportunity, and creates high-
skill, high-wage jobs at home.
    Mr. Chairman, I look forward to talking to our witness 
today and, as you and I have talked about, hearing from others 
as well. I thank you very much for your consideration.
    The Chairman. Well, thank you, Senator Wyden.
    [The prepared statement of Senator Wyden appears in the 
appendix.]
    The Chairman. We have with us today again Ambassador 
Froman, the U.S. Trade Representative. Ambassador, you are 
becoming a very well-known figure to this committee. I would 
like to thank you and welcome you back. I appreciate especially 
your giving us so much of your time today.
    Would it be all right if we just go into questions, or 
would you care to make a statement? I would be happy to have 
your statement if you want to make one.

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

    Ambassador Froman. Well, it is good to be back so soon 
again. Let me just say, as I mentioned this morning, Trade 
Promotion Authority has always been a bipartisan effort, and it 
is important that it is going forward.
    I just want to congratulate the chairman and the ranking 
member on this package of measures. At first glance--of course 
we have not studied it yet in detail--we see very important 
developments in terms of the negotiating objectives and with 
regard to the importance of enforceable labor and environmental 
standards; a balanced approach to intellectual property rights, 
promoting innovation and access to medicines, the need to 
address unfair competition from SOEs, to protect a free and 
open Internet, to address currency manipulation, and to 
increase transparency; and increased opportunities for 
congressional oversight and engagement, strong safeguards of 
sovereignty to make it absolutely clear that there can be no 
change of law without congressional approval, and, as the 
ranking member mentioned, the importance of good governance and 
the rule of law, which is so important to promoting human 
rights and democracy.
    We look forward to working with you on this, and I am happy 
to answer your questions.
    The Chairman. Well, thank you, Mr. Ambassador. I am going 
to withhold any questions, so we will turn to Senator Wyden.
    Senator Wyden. Thank you very much, Mr. Chairman.
    Let us start with this question of the Internet. As you 
know, Ambassador Froman, in this room I put a hold on the 
predecessor of what are called the PIPA and SOPA bills, these 
anti-Internet bills, and then did everything I could to 
actually block them in the next Congress because I thought that 
these bills, while well-meaning because we are all against 
piracy, would do a great deal of damage to the architecture of 
the Internet, and keeping the Internet open and free is 
absolutely critical.
    So I think it would be very helpful to have on the record 
whether the Trans-Pacific Partnership contains provisions such 
as those in these anti-Internet bills, the PIPA and SOPA 
legislative proposals or any others that would damage the 
openness of the Internet, that would harm the cause of net 
neutrality, any provisions in your view that would impede the 
free flow of information and ideas.
    Ambassador Froman. No, Senator Wyden, it does not include 
any of those provisions, and it is very much focused on 
maintaining a free and open Internet. We think that is one of 
the important parts of the TPP agreement. It includes concepts 
coming out of existing U.S. law, such as safe harbors for ISP 
liability. Both technology protection measures but also the 
exceptions to them, such as cell phone unlocking, create 
opportunities for that, the flexibility to do that. And it is 
the first trade agreement that both strengthens copyright but 
also recognizes exceptions and limitations to copyright law, 
similar to the fair use doctrine that we have here in the 
United States.
    Senator Wyden. One last question with respect to the 
Internet and the digital economy. Would Congress still be able, 
if the Trans-Pacific Partnership proposal passed, to change 
U.S. laws to take into account the changing shape of the 
digital economy?
    Ambassador Froman. Yes.
    Senator Wyden. All right. The other area that I would like 
to explore at this time is trade law enforcement. You heard me 
in my earlier comments talk about how central this is, both in 
terms of the well-being of American workers and American 
families, but also in terms of the credibility that a new trade 
policy is going to have.
    I want to commend you, by the way, in terms of the number 
of approaches you all have taken with rare earth minerals, the 
steel and plumbing matter, a variety of areas you have made 
some very important headway on, even before these issues are 
dealt with in the context of trade.
    But we have to lock these more aggressive enforcement 
policies into a very different strategy here. In my view, the 
expansion of trade requires an expansion of trade compliance. 
U.S. businesses and workers have to be able to realize that the 
benefits you actually negotiate ensure that they can compete on 
a level playing field with foreign competitors.
    If the United States concludes the Trans-Pacific 
Partnership--and, as you know better than we do, this is still 
being negotiated--we are going to see an increase in trade with 
Asia, a region of the world where American manufacturers and 
American farmers have repeatedly, repeatedly faced unfair trade 
practices that disadvantage our workers and disadvantage our 
families.
    How are you all going to ensure that the Trade 
Representative's Office has an enforcement strategy that is 
going to meet these new challenges that result from expanded 
trade?
    Ambassador Froman. Well, thank you, Senator. We completely 
agree in what you laid out about the importance of enforcement 
being part of the compact of these agreements. It is not just 
about opening agreements, it is making sure that we fully 
enforce the trade rights that we have negotiated for ourselves, 
and our trade laws.
    I think the first step is to make sure that, in TPP itself, 
we get very good standards across the board that are fully 
enforceable, which makes it easier to bring enforcement 
actions. We have worked internally, as you know, over the last 
several years to ramp up our enforcement efforts. We have 
brought 19 cases before the WTO, half of those against China. 
Every case we have brought that has gone to conclusion we have 
won, and we are continuing to explore cases.
    The President established the Inter-Agency Trade 
Enforcement Center, which allowed us to bring resources from 
across the government, from different agencies, to help build 
better and more complex cases in enforcement. It has been very 
successful to date, and we look forward to continuing to build 
on that.
    We are right now working with our inter-agency partners--
Commerce Department, Labor Department, EPA, and others--to make 
sure that we have procedures in place for being able to fully 
and effectively enforce what we negotiate.
    Senator Wyden. Let me see if I can get one other question 
in that is very important to a lot of Senators, and that is the 
question of the relationship between trade agreements and 
having stronger and better labor standards.
    The President, as you know, has said that Trade Promotion 
Authority is going to help him conclude TPP and set high 
standards in Asia on labor rights. As you know, the 
International Labor Organization already sets rules on labor 
rights, and the countries that you are negotiating with have in 
fact agreed to many of the rules, and yet the problems just 
persist. They just go on and on. Mexico is part of NAFTA, and 
it seems to be falling short when it comes to labor rights.
    Why do you believe--and I think it is important as part of 
this hearing--that a new trade agreement is going to help to 
get these countries to actually live up to the higher labor 
standards, and what do you propose to do to make sure that they 
follow up on the promises that are made in TPP on these crucial 
labor questions?
    Ambassador Froman. Well, again, I think first, it is making 
sure that the standards are set sufficiently clearly and at a 
high level, so that we have the five basic ILO principles, but 
we also have acceptable conditions of work around minimum wage, 
hours, and safe workplace conditions.
    We are working with countries to ensure that they not only 
agree to these ILO principles, but that they have a pathway 
towards bringing their laws into compliance with them and that 
they also have the capacity-building mechanisms under way to 
ensure that they can implement these standards fully, and that 
is part of the process.
    Senator Wyden. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Isakson has not had his first round yet, so we will 
turn to you, Senator Isakson.
    Senator Isakson. Well, thank you, Mr. Chairman, and 
congratulations to both you and the ranking member for good 
work on the trade agreements. I look forward to working with 
you, and I appreciate the acknowledgment of my work on AGOA.
    It is to that end that I would like to address Ambassador 
Froman after I express my complete support for Ambassador 
Froman and his forceful and positive representation of the 
United States of America in Europe, in Africa, and around the 
world. You have done an outstanding job. I have seen you in 
action in Africa; I have seen you in action in Brussels. We are 
lucky to have you doing it, and I hope this all comes to a good 
conclusion for you, and for us too.
    Ambassador Froman. Thank you, Senator.
    Senator Isakson. As you know, Senator Coons and I have 
traveled to South Africa over the last 3 years, meeting with 
Foreign Minister Davies. Foreign Minister Davies is in 
Washington today because of our invitation, because there have 
been artificial barriers to domestic chicken from the United 
States being able to be exported into South Africa.
    They have done arbitrary blockage along the way, and we 
have been trying to use the AGOA extension as a lever to get 
them to come to the table, asking the South African Poultry 
Federation and the United States private-sector poultry people 
to come together and come up with a quota that made sense for 
both, which we think is the right way to do it.
    After my meeting this morning, I think Senator Coons would 
agree with me, we became concerned that this is a matter of 
rope-a-dope with South Africa, that they like to string us out 
until AGOA gets renewed, and they will forget ever talking 
about it. I do not want AGOA to become subject to one country's 
trade violations one way or another, but I do want to get on 
the record two points.
    One is, you will have the power, as the Trade 
Representative, to revisit anybody's participation under AGOA 
during the course of the agreement, is that correct?
    Ambassador Froman. We have not, again, seen the final 
version of the legislation, but yes, that is our expectation.
    Senator Isakson. Well then, let me ask a third question. If 
in fact it is not in the final version, would you help assist 
us in putting in language that would give us the authority to 
do that?
    Ambassador Froman. We would be happy to work with you on 
that.
    Senator Isakson. Secondly, I understand it is a 10-year 
agreement. Is that correct, Mr. Chairman, the extension?
    The Chairman. That is correct, yes.
    Senator Isakson. It is a 10-year extension of AGOA, and I 
congratulate you on that time period. I think that is right.
    Could we possibly, in amending it or dealing with the trade 
agreement, put in, say, a 3-year look-back period where you say 
at the end of 3 years, we will review South Africa, 
particularly with regard to its market access in poultry, or 
would that be something we could not do?
    Ambassador Froman. Well, Senator, we first of all very much 
appreciate you and your colleagues raising the concerns about 
agricultural market access to South Africa. It is something we 
have raised consistently with the South African government from 
the highest levels on down, and we appreciate working with you 
on that.
    I just met with Minister Davies before coming back up to 
the Hill to review the progress in the negotiations, and I made 
clear that we are not seeing sufficient progress towards 
resolving the outstanding issues at this point and urged him to 
take further actions to try to resolve our differences.
    If we do not make sufficient progress in that regard, we 
would be happy to work with you on appropriate next steps in 
the legislation.
    Senator Isakson. Well, I would really appreciate it, 
because it would be a shame for the continent of Africa to 
suffer because one participant on the continent just refused to 
cooperate in negotiations that are, I think, legitimate.
    The last point I will make about the AGOA, Mr. Chairman, is 
that Africa is a continent of 1.5 billion people with most of 
the world's rare earth minerals, a tremendous amount of natural 
gas and oil, and precious minerals. It is a great continent and 
can become the continent of the 21st century for America, and 
trade is the key to doing business with those countries, the 
key to raising the standards in Africa, but also opening up 
markets for the United States and our companies. So I commend 
you.
    Although AGOA is a footnote compared to TPP and TTIP, it is 
a very important agreement for the continent of Africa, for the 
United States, and United States business and investment. So I 
commend you on what you have done for it, and I appreciate it. 
When we get the final text of the bill, I will talk to you 
about some look-back period in the bill if we do not get an 
agreement out of South Africa.
    Ambassador Froman. Thank you, Senator.
    Senator Isakson. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Senator Thune has not had his first round 
either. I missed that, so we will turn to you, Senator Thune.
    Senator Thune. Thank you, Mr. Chairman. Congratulations to 
you and Senator Wyden on working this out. Trade should be a 
bipartisan issue. It is critically important to our economy. 
When you get a President and leadership in Congress who agree 
on something when it comes to economic policy, I think 
everybody ought to take notice. I think it is really important 
that this President and future Presidents have the authority, 
the ability that they need, to bring down foreign barriers to 
American products.
    So, congratulations on your good work, and I look forward 
to working with our colleagues, on both sides on this committee 
and when we get to the floor, on getting this TPA bill through 
the process and on the President's desk so these trade 
agreements can continue and hopefully get completed.
    Ambassador Froman, as you know, I think pretty well, there 
is no greater priority in farm country than making sure that 
other nations cannot discriminate against our agricultural 
products or otherwise unfairly keep those products off the 
market. These are decisions that ought to be left to consumers 
in those countries.
    Unfortunately, too often we have agricultural producers in 
this country who are seeing access to foreign markets for crops 
with new technology significantly delayed as a result of the 
foreign approval process, which puts our farmers at a 
competitive disadvantage. One of the key negotiating objectives 
in the agricultural section of the TPA legislation that will 
soon be introduced is intended to prevent foreign regulatory 
approval processes from being used as a trade barrier to new 
agricultural technologies.
    I just want to know, do you agree that strong language on 
this topic in the TPA bill is appropriate, and that addressing 
these foreign regulatory issues should be a priority when it 
comes to promoting American farm exports?
    Ambassador Froman. Absolutely. As Secretary Vilsack 
mentioned this morning, tariffs are one issue, but there are 
several issues that block our agricultural exports. These SPS 
measures, and particularly non-science-based approvals or 
disapprovals of biotech products, are one set of serious issues 
that we are trying to take on both in TPP and in TTIP.
    We know it is a sensitive issue. There is a lot of public 
debate about it. Our view is, we are not trying to force 
anybody anywhere to eat anything, but we do think that the 
decisions about what is safe should be made by science and not 
by politics.
    Senator Thune. Great. And I hope that that will continue to 
be an area of emphasis for you and the negotiators as we move 
forward.
    One of the areas that I have been very involved with, as 
Senator Wyden and Senator Hatch, I think, mentioned, both as a 
member of this committee and as the chairman of the Commerce 
Committee, is the area of digital trade and making sure that 
other nations cannot restrict data flows across borders that 
are essential today in the conduct of business.
    In December of 2013, Senator Wyden and I introduced the 
Digital Trade Act, which was designed to set new negotiating 
objectives when it comes to that area of our trade 
negotiations. As you know, these are cutting-edge issues that 
have not been in previous TPA bills enacted into law, so I am 
wondering if you could briefly discuss--I know you have touched 
on it a little bit already--how important strong rules are in 
the area of digital trade for American businesses, whether we 
are talking about large multinational corporations doing 
business around the world or the small business person who is 
using the Internet to sell goods abroad for the first time.
    Ambassador Froman. No, absolutely. It is absolutely a key 
part of what we are trying to achieve in TPP. In 2002, when the 
last TPA bill was passed, there really was not much of a 
digital economy. There was not that much going on in the area 
of e-commerce. Over the last 13 years, access to the Internet 
and e-commerce has exploded all over the world, and we see 
great opportunities for our companies and for our people.
    As you suggested, it goes to the issue of the free flow of 
data and information across borders. It also goes to the issue 
of pushing back against localization requirements that some 
countries have adopted around the world that require companies 
to build unnecessarily redundant infrastructure in a market in 
order to serve that market, creating an incentive to move the 
businesses from the U.S., for example, to another market in 
order to access that. These are all key parts of what we are 
negotiating in TPP.
    As you suggest, this is very much an issue that affects 
small and medium-sized businesses. I have met with a number of 
participants in Etsy, for example. These are people who sell 
products, out of their homes sometimes, on the Internet, to 
people all over the world. When they are engaging in e-
commerce, they are using software services, computer services, 
telecommunication services, electronic payment services, and 
express delivery services. Those are all covered by TPP.
    We work on making sure that markets are open to the 
provision of those services so that our small and medium-sized 
businesses using the Internet, using the digital economy, can 
access the 95 percent of the customers who live outside the 
United States.
    Senator Thune. Good. I am glad to hear that. I appreciate 
the fact that the chairman and his staff worked hard to 
incorporate some of those strong provisions in the TPA 
legislation that we are considering here today, and glad to 
hear that you are very focused on that in the discussions with 
both the Europeans and our Asian partners as well.
    So, keep up the good fight. Let us push this thing across 
the finish line and hopefully get these trade deals completed 
and open up what I think are some very significant markets to 
American businesses, manufacturers, farmers, and ranchers. And 
a lot of people in this country would benefit, not to mention, 
I should say as well, American workers who I think are going to 
benefit enormously from the economic growth that we see when we 
are opening up markets abroad. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Thune.
    We will go to Senator Cardin now.
    Senator Cardin. Thank you, Mr. Chairman. First, listening 
to the summary of particularly the TPA bill containing much 
stronger provisions on labor, environment, and new provisions 
on good governance, looking at the enforcement issues that were 
attached to this legislation and the other bills we are taking 
up, I just want to first thank you, thank Senator Wyden, for 
developing a bill that tries to take TPA to the next level. I 
think that is a very important accomplishment.
    I want to repeat what I said earlier today, and that is, we 
just got the bill today. I have read up to page 32, and I found 
an inconsistency with Ambassador Froman's statement a little 
bit earlier, and I am going to question you on that in a 
moment. I have not read the entire bill, which is 113 pages. I 
have a bad habit, Mr. Chairman. I like to read the bills. I 
have not read the TAA bill or the health care bill or the 
preference bills or the AGOA bill. I understand that----
    The Chairman. What kind of Senator are you that you read 
your own bills? My goodness!
    Senator Cardin. I learned that at the University of 
Pittsburgh. [Laughter.]
    The Chairman. He knows we both graduated from there. That 
is great. So I know you do, and you are one of the better 
Senators here.
    Senator Cardin. Well, my request to you is that I think, 
for the reputation of this committee, I would just urge you to 
consider a public hearing before we mark up, and particularly 
to give non-governmental stakeholders an opportunity to be 
heard. Organized labor deserves an opportunity to be able to 
comment publicly before this committee on the provisions that 
are in this bill, and I would just urge you to give that 
opportunity.
    Mr. Chairman and Ambassador Froman, let me just deal with a 
couple of issues that I mentioned this morning. It looks like 
the BDS, dealing with Israel and boycotts, is not in this bill, 
so I take it from your comments this morning you are prepared 
to work with Senator Portman and I to develop some language 
that could be added to this bill.
    As I explained earlier, we are interested in the TTIP trade 
agreements, not TPP. If we could work on some language between 
now and mark-up, we would certainly hope we could work together 
in regards to that issue. I take it from your response this 
morning that you are willing to sit down and work with us in 
that regard.
    Ambassador Froman. Yes. We would certainly like to learn 
more about your proposals and are happy to work with you.
    Senator Cardin. Thank you.
    So let me talk about the human rights areas. What I am 
trying to figure out is the difference between being in section 
2(a) and section 2(b), the requirements on the President being 
in section 3 rather than section 5, and I know those who are 
listening to this have no idea what I am talking about.
    But I read on page 32 that the dispute settlement 
enforcement applies to principal negotiating objectives, but 
you mentioned to me this morning that the dispute settlement 
procedures and enforcement applied to the human rights 
sections.
    I am not quite getting that from what I have read so far, 
but maybe I am reading the language incorrectly. So I like your 
answer the best, that we do intend that these provisions are 
going to be subject to enforcement, including trade sanctions, 
if they are not remedied.
    Ambassador Froman. Well, I have not had a chance to read 
the bill, so you have it on me that----
    Senator Cardin. I am only up to page 32.
    Ambassador Froman. What I would like to do is to walk 
through with you what we are actually negotiating in TPP and 
the various provisions dealing with good governance, 
transparency, et cetera, and talk to you about how the 
enforcement applies to that. We are happy to set up a separate 
meeting to go through that with you.
    Senator Cardin. I appreciate that.
    Last weekend I was pretty busy on another matter; this 
weekend I have free time. I assure you, I am going to be 
looking at this and taking you and the chairman at your word 
that we will have the opportunity to get your input so that, if 
we need modifications, we will have opportunity to present 
those during a committee mark-up.
    Ambassador Froman. Great.
    Senator Cardin. Thank you.
    Ambassador Froman. Happy to do that.
    Senator Cardin. Thank you, Mr. Chairman.
    The Chairman. Well, thank you.
    Ambassador Froman, you have been a solid soldier here for 
so many times before the committee. I personally am very 
appreciative of the efforts that you have made and appreciate 
you being here today, twice. Just one last thing. Please 
describe how passage of TPA will help our trade agenda.
    Ambassador Froman. Well----
    The Chairman. You have been doing that, but if you can 
summarize it in a paragraph, I would appreciate it.
    Ambassador Froman. Sure. TPA is a critical tool for moving 
our trade agenda forward. It allows us to speak with one voice 
when we sit at the negotiating table with our trading partners 
and ensures them that the executive branch and the Congress are 
together on a bipartisan basis to pursue the negotiating 
objectives. So we do view this as a critical tool for moving 
the agenda forward, and I think today's introduction will have 
a very positive effect in terms of momentum in our current 
negotiations.
    The Chairman. Well, thank you. I want to thank you and the 
other witnesses who were here today, and I want to thank all 
the Senators who have taken time out of what I know are really 
busy schedules at this time to take part in this important 
hearing and debate. I would look forward to continuing to work 
with all of you on this matter.
    The committee will stand in recess, subject to the call of 
the chair. Thank you.
    Senator Wyden. Mr. Chairman, I just want to say ``thank 
you'' for that. I think you heard how strongly my colleagues 
like Senator Cardin feel about this, and the voices of 
organized labor. I very much appreciate your thoughtfulness. We 
are in recess, and I look forward to working with you on this.
    The Chairman. Well, that will be fine. We appreciate you, 
Mr. Ambassador, and with that, we will recess until further 
notice by the chair.
    Ambassador Froman. Thank you.
    [Whereupon, at 4 p.m., the hearing was recessed.]

                CONGRESS AND U.S. TARIFF POLICY, PART II

                              ----------                              

                        TUESDAY, APRIL 21, 2015

                                       U.S. Senate,
                                      Committee on Finance,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 10:15 
a.m., in room SD-215, Dirksen Senate Office Building, Hon. 
Orrin G. Hatch (chairman of the committee) presiding.
    Present: Senators Grassley, Crapo, Cornyn, Thune, Isakson, 
Scott, Wyden, Schumer, Stabenow, Cantwell, Nelson, Menendez, 
Carper, Cardin, Brown, Bennet, Casey, and Warner.
    Also present: Republican Staff: Chris Campbell, Staff 
Director; Bryan Hickman, Special Counsel; and Jay Khosla, Chief 
Health Counsel and Policy Director. Democratic Staff: Michael 
Evans, General Counsel; Jocelyn Moore, Deputy Staff Director; 
Joshua Sheinkman, Staff Director; and Jayme White, Chief 
Advisor for International Competitiveness and Innovation.

 OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM 
              UTAH, CHAIRMAN, COMMITTEE ON FINANCE

    The Chairman. I would like to welcome everyone to the 
continuation of our hearings on Congress and U.S. tariff 
policy.
    Today we have a very distinguished panel of witnesses that 
I hope will help us expand the ongoing discussion of our 
Nation's trade agenda. As everyone here knows, last week 
Senator Wyden and I, along with the House Ways and Means 
Committee Chairman Ryan, introduced legislation to renew Trade 
Promotion Authority, or TPA.
    Our intention is to mark up the TPA bill, along with a 
handful of other trade-related bills, later this week. This 
legislation is a long time coming. TPA expired in 2007. While 
talks for various trade agreements have gone on since that 
time, without TPA in effect, our negotiators have been 
effectively negotiating with one hand tied behind their backs, 
because they have not been able to assure our trading partners 
that the deal they sign is the one that Congress will vote on 
in the end. Our legislation will fix that.
    I want to thank Ranking Member Wyden for his support and 
assistance thus far, and also Congressman Ryan as well. We have 
a long way to go, but, working together, I am confident we can 
get there.
    Now, some have expressed concerns about the process by 
which we are moving this bill forward. For example, I have 
heard arguments that we are moving too quickly without adequate 
discussion or examination. Those concerns are, in my view, very 
unfounded. First of all, the bill on which our current TPA 
legislation is based was first introduced in January of 2014, 
almost a year and a half ago.
    Since that time, it has been available for examination, 
dissection, discussion, and comment. Thousands of organizations 
have weighed in on the merits of that bill, including business 
associations, organized labor, think tanks, and advocacy 
groups. Many members of Congress from both parties and in both 
chambers are on record either praising or criticizing that 
bill.
    Officials in the Obama administration expressed their 
support for it. True enough, in our discussions, Senator Wyden, 
Chairman Ryan, and I made some improvements of that original 
bill, but the fundamentals remain the same, and we have been 
very transparent as to what the changes really have been.
    Second, in the 113th Congress, the Finance Committee held 
nine hearings on trade, and TPA was brought up in virtually 
every one of them. I know this because, more often than not, I 
was the one bringing it up. One of those hearings was devoted 
specifically and entirely to TPA and included the testimony of 
witnesses across the spectrum, including one representing 
organized labor.
    Finally, since the 114th Congress convened just about 3 
months ago, this committee has had three hearings on which 
trade and TPA were major topics of discussion. Today's hearing 
is the fourth. In other words, this is a well-covered territory 
for this committee.
    So, while I understand and respect that there are sincerely 
held views on this topic, some of which are different than 
mine, any arguments that we have been less than forthcoming and 
transparent with this TPA legislation are, not to put too fine 
a point on it, nonsense.
    I have been in the Senate a long time and I think am 
generally considered to be pretty reasonable. I am certainly 
willing to listen to and consider any genuine concerns that 
some may have about process. I want all sides to be heard, and 
I want to have a fair and open debate, and that is why we are 
having this additional hearing. By all means, we should have a 
frank and open discussion about these issues, and I hope we 
will continue to do so today. But let us not dress up our 
position on trade and TPA as concerns about process.
    During our hearing last week, I made two assertions about 
trade. I stated plainly that U.S. trade with foreign countries 
is a good thing, and I said that TPA is the best tool Congress 
has in its arsenal to help influence and facilitate trade. 
Those are pretty fundamental assertions.
    At the end of the day, people are either going to agree 
with them or they will not. More hearings and weeks of 
additional delays are not going to change many minds one way or 
the other on these essential issues. With that in mind, I 
welcome today's hearing.
    Like I said, we have a very distinguished panel of 
witnesses. It does not get any more distinguished than these 
two gentlemen who are before us here today. I think they will 
speak to the heart of these matters.
    I look forward to a spirited discussion. For my part, I 
just want to make clear, if it is not clear enough already, 
that I believe Congress should be working hand-in-hand with the 
administration to break down barriers to foreign markets in 
order to give our businesses and job creators a chance to 
compete in the global marketplace.
    The United States should be a leader in international 
trade. We should be setting the standards and making the rules. 
We simply cannot afford to sit on the sidelines and let other 
countries dictate where the world goes on trade. Trade is an 
essential element of a healthy economy.
    We should be doing all we can to advance a trade agenda 
that works for America and advances our interests on the world 
stage. I might add that this TPA will cover 11 nations in the 
Trans-Pacific Partnership plus ours, and 28 different nations 
in the TTIP European partnership plus ours.
    So it involves a high percentage of trade throughout the 
world, and it puts us in a position to be able to do a good job 
with regard to trade and to advance our country in many ways 
that we will not be able to do without this legislation. Now, 
that is where we are. I will just stop right there.
    [The prepared statement of Chairman Hatch appears in the 
appendix.]
    The Chairman. Senator Wyden, why don't you give your 
remarks?

             OPENING STATEMENT OF HON. RON WYDEN, 
                   A U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you, Mr. Chairman. Mr. Chairman and 
colleagues, normally I would make an opening statement, the 
focus of which would be to lay out the significant differences 
between this bill and the trade bills of the 1990s. Under 
normal circumstances, I would detail that before the committee 
at this time.
    I have talked with Mr. Trumka often about this topic in the 
past and have visited with a number of the members of the 
Chamber to discuss the bill. Given the interest, however, with 
colleagues on the committee in engaging with our two 
witnesses--and we thank them both, Mr. Trumka and Mr. Donohue, 
for doing it--I will forgo any further statement at this time, 
Mr. Chairman, in the interest of my colleagues who are here to 
ask questions.
    The Chairman. Well, thank you, Senator Wyden.
    [The prepared statement of Senator Wyden appears in the 
appendix.]
    The Chairman. Our first witness is Thomas J. Donohue. He is 
the president and the CEO of the U.S. Chamber of Commerce, the 
largest business organization in the world, representing the 
interests of more than 3 million businesses across various 
sectors and industries. Mr. Donohue has held this position at 
the U.S. Chamber since 1997. We have had a lot of experience 
working together. Prior to that, he served for 13 years as 
president and CEO of the American Trucking Association. Earlier 
in his career, he served as the Deputy Assistant Postmaster 
General of the United States and as vice president of 
development at Fairfield University.
    Mr. Donohue received a bachelor's degree from St. John's 
University and an MBA from Adelphi University. So we welcome 
you, Mr. Donohue, to the Finance Committee. We are honored to 
have you here. We appreciate your willingness to be here today.
    Our second witness today on this panel is Richard L. 
Trumka. Mr. Trumka is president of the 12.5 million-member 
American Federation of Labor and Congress of Industrial 
Organizations, or the AFL-CIO, the largest organization of 
labor unions in the country. He has held this position since 
2009. I might add that this organization has an effect for 
American citizens all over the world. One of my closest friends 
was the international vice president of the AFL-CIO. He has 
since passed away, but what a great leader he was in this 
world.
    Now, prior to 2009, Mr. Trumka served for 15 years as the 
AFL-CIO's secretary/treasurer. From 1982 to 1995, he was 
president of the United Mine Workers. Mr. Trumka has a 
bachelor's degree from Penn State University and a law degree 
from Villanova. He is a tough guy and somebody I have a lot of 
respect for. These are the two top people in this country, as 
far as I am concerned, to appear at this hearing.
    They have widely divergent views perhaps, but, on the other 
hand, we need to listen to both of them. I want to thank you, 
Mr. Trumka, and Mr. Donohue as well, for joining us here today. 
Welcome to the Senate Finance Committee. I hope this will not 
be the last time you come before this committee.
    So with that, we will turn to you, Mr. Donohue. You will be 
the first witness. We will take your statement now.

 STATEMENT OF THOMAS J. DONOHUE, PRESIDENT AND CHIEF EXECUTIVE 
       OFFICER, U.S. CHAMBER OF COMMERCE, WASHINGTON, DC

    Mr. Donohue. Thank you very much, Chairman Hatch, Ranking 
Member Wyden, and distinguished members of the committee. As 
you now know, I am Tom Donohue, and I am president and CEO of 
the Chamber of Commerce of the United States.
    I am really pleased to testify today on behalf of our 3 
million small and medium-sized businesses, State and local 
chambers of commerce, as well as large companies that are 
members of the Chamber and our national federation.
    I am also pleased to be here with my friend, Rich Trumka. 
We appear quite often together on matters of immigration, 
infrastructure, and a whole lot of things we agree on. When we 
retire, we are going to get a Mike-and-Ike show and go on the 
road. We think we can make a good deal out of it.
    The Chamber strongly supports the Bipartisan Congressional 
Trade Priorities and Accountability Act of 2015, which will 
renew Trade Promotion Authority. TPA is critical because 
economic growth and job creation at home depend on our ability 
to sell American goods and services abroad. After all, 95 
percent of the world's consumers live outside the borders of 
the United States.
    Why does trade matter to our country? In a word, it comes 
down to American jobs. Already, one in four manufacturing jobs 
depends on exports, and 1 in 3 acres of American farms is 
planted for consumers overseas. All totaled, nearly 40 million 
American jobs depend on trade. Nearly 400,000 jobs in Utah and 
500,000 in Oregon depend on trade, just to pick two States at 
random. [Laughter.]
    These numbers could even be higher, but unfortunately the 
playing field for trade is not always level. While our market 
is generally open, U.S. exports face foreign tariffs often 
soaring into double digits, as well as a thicket of non-tariff 
barriers.
    No one wants to go into a game many points behind before 
the tip-off, but that is exactly what American exporters are 
doing every day. These barriers are particularly burdensome for 
America's small and medium-sized companies, about 300,000 of 
which are exporters from the United States. The good news is 
that America's trade agreements do a great job leveling the 
playing field, and the results include significantly higher 
exports and new and better jobs.
    The Chamber analyzed these benefits in a recent report 
entitled, ``The Open Door of Trade,'' which we would like, Mr. 
Chairman, to enter into the record today.
    The Chairman. Without objection, it will be entered.
    [The report appears in the appendix on p. 94.]
    Mr. Donohue. Thank you.
    Now, here are some of the highlights of that study. 
America's 20 trade agreement partners represent just 6 percent 
of the world's population. Let me say that again. The 20 trade 
agreements we have around the world represent just 6 percent of 
the world's population, but they buy nearly half of America's 
exports.
    By tearing down foreign barriers to U.S. exports, these 
agreements have proven an ability to make big markets even out 
of small economies. U.S. exports to new trade agreement 
partners have grown by an annual average of 18 percent in the 
5-year period following an agreement coming into force. That is 
much faster than we typically see in U.S. export growth to 
other countries.
    The increased trade brought about by these agreements 
supports more than 5 million American jobs, according to a 
study commissioned by the Chamber. Trade-related jobs also pay 
well. For instance, manufacturing jobs tied to exports pay 
wages that average 18 percent higher than those that are not. 
The trade balance is a poor measure of whether or not your 
trade policy is successful, but we often hear the opponents of 
trade arguments say that they cause deficits. That could not be 
more incorrect.
    The United States--I am going to say this: please listen. 
The United States has a trade surplus with our 20 trade 
agreement partners as a group. U.S. exports of manufactured 
goods to our trade agreement partners generate revenue of about 
$55,000 for each American factory worker. Many manufacturers 
just could not make payroll without these export revenues.
    For American farmers and ranchers, the stakes are 
especially high. That is because foreign markets often slap the 
highest tariffs on their products, and that is why our 
agricultural exports soared under our new trade agreements. 
U.S. service exports are also growing rapidly and supporting 
millions of high-wage jobs, even though the potential for 
service industries to export is nearly untapped.
    But to get more of these benefits, Congress must approve 
TPA. The United States has never entered into a major trade 
agreement without it. A simple form of TPA was first enacted in 
1934, but the latest version expired in 2007. TPA is based on 
the common-sense notion that Congress and the White House must 
work together on trade agreements.
    TPA is how Congress sets priorities and holds the 
administration accountable in trade negotiations. A few people 
have claimed that this is a presidential power grab. I may be 
uniquely qualified to comment on this; after all, the Chamber 
has not been shy about criticizing some actions of the 
administration when we see over-reach.
    But TPA is not about Congress ceding power to the 
President. On the contrary, TPA strengthens the voice of the 
Congress on trade. Without TPA, the administration can pursue 
its own priorities at the negotiating table and consult with 
Congress only when and if it chooses. TPA lets Congress set 
negotiation goals and sets forth detailed requirements for 
consultation between the trade negotiators and the Congress.
    What should we do with TPA? We should start by bringing 
several trade negotiations to a successful conclusion. The 
Trans-Pacific Partnership agreement would open the dynamic 
Asia-Pacific markets to American goods and services.
    It is critical that we do so, because nations across the 
Pacific are clinching their own trade agreements that exclude 
the United States, denying American exporters access to these 
very important markets. TPA gives the United States a strong 
hand in writing the rules for trade for this important region. 
It makes us an active player, not a bystander, stuck on the 
outside looking in.
    TPP would affirm and deepen America's ties to Asia at a 
time when there is a perception that we are pulling back. Then 
there is the Transatlantic Trade and Investment Partnership, 
which would further remove barriers between the United States 
and Europe. This agreement could not come at a better time.
    Both America and Europe are dealing with struggling 
economies, aging populations, and new competition from emerging 
nations. The United States and the E.U. represent nearly half 
of the global economy. A relationship that huge, eliminating 
today's relatively modest trade barriers, could bring 
extraordinarily large benefits to both countries.
    According to a study by the Atlantic Council and the 
British Embassy, the agreement would create 740,000 new jobs in 
America. The Trade in Services Agreement, which we have not 
talked about enough, is another big opportunity, a free trade 
zone for services with 50 countries around the globe. This 
agreement plays to one of America's strengths: U.S. service 
companies are among the most competitive on the globe.
    From the U.S. business community's perspective, the 
negotiating objectives laid out in the TPA bill are balanced 
and ambitious. They reflect the evolution in U.S. trade 
agreements in recent years and include the best new ideas in 
trade policy, and the bill strikes just the right balance on 
intellectual property, which is the lifeblood of the U.S. 
economy.
    Negotiating objectives have been modernized to reflect our 
changing economy, with new provisions on digital trade and 
state-owned enterprises, for examples. Importantly, the bill 
directs the U.S. trade negotiators to seek comprehensive 
agreements, avoiding exceptions or carve-outs from those 
agreements for any industry.
    The Chamber supports the TPA bill's negotiating objectives 
on currency practices. It says that parties to a trade 
agreement should avoid manipulating exchange rates to gain an 
unfair advantage. I believe the U.S. should continue to press 
economies to adopt 
market-determined exchange rate systems that reflect economic 
fundamentals.
    In recent years, the G-7 and G-20 economies have affirmed 
that they will not target exchange rates or engage in 
competitive devaluations, but the notion that you can use trade 
policy tools to address monetary policy challenges causes 
concerns in many quarters.
    Here is one, for example. It is not in the U.S.'s interests 
to enter into an international agreement that would handcuff 
U.S. monetary policy and limit the flexibility of the Federal 
Reserve to respond to an economic crisis. The TPA bill's 
negotiating provision relating to currency reflects a careful 
and reasonable balance.
    The Chairman. Mr. Donohue, your time is up. I let you go 
over a little bit. Can you wrap up really quickly?
    Mr. Donohue. Oh, sure.
    The Chairman. All right.
    Mr. Donohue. I was going to go as long as I could, it is 
just that----
    The Chairman. I did not realize that. I would have 
interrupted you earlier. [Laughter.]
    Mr. Donohue. No. Thank you.
    The Chairman. No, you are fine.
    Mr. Donohue. In sum, this is a strong bipartisan bill. 
There is nothing fast about the manner in which it was done, as 
the chairman indicated. Given the careful balance in many 
areas, we urge all of the members to vote for this and get it 
through.
    To conclude, the United States cannot afford to sit on the 
sideline while others set the rules of trade. To create jobs, 
growth, and prosperity, our children need us to set the agenda. 
Two quick points. To open foreign markets to American-made 
goods and services, we need to renew TPA. Then we have to use 
the legislation to get these trade agreements. Those agreements 
now being negotiated are going to make a fundamental difference 
for this country. With all our trade agreements, old and new, 
we need to ensure they are enforced.
    Mr. Chairman, Senator Wyden, let me thank you for having us 
here. We will now hear from the other side of the argument, and 
then we can get down to a good discussion.
    The Chairman. Well, thank you. We surely appreciate your 
testimony, and we appreciate very much your being here.
    [The prepared statement of Mr. Donohue appears in the 
appendix.]
    The Chairman. Mr. Trumka, we will allow you a little extra 
time if you need it too. So we will turn to you now and hear 
your testimony.

STATEMENT OF RICHARD L. TRUMKA, PRESIDENT, AMERICAN FEDERATION 
 OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS (AFL-CIO), 
                         WASHINGTON, DC

    Mr. Trumka. Thank you, Mr. Chairman. Before I start my oral 
testimony, I would like to submit for the record my full 
testimony----
    The Chairman. Without objection.
    [The prepared statement of Mr. Trumka appears in the 
appendix.]
    Mr. Trumka [continuing]. Bipartisan letters signed from the 
House and the Senate urging the administration to do something 
on currency manipulation, and an analysis of the Hatch-Wyden-
Ryan TPA bill by Ranking Member Sander Levin. I would like to 
have those submitted for the record.
    The Chairman. Without objection, they will be placed in the 
record at this point, or immediately following your remarks.
    [The submitted materials appear in the appendix beginning 
on 
p. 114.]
    Mr. Donohue. Excuse me, Rich. Mr. Chairman, there are a few 
materials, like my formal testimony and so on, I know that you 
have----
    The Chairman. We will put all of that in the record.
    Mr. Donohue. Thank you.
    The Chairman. You bet.
    Mr. Trumka. I would like to start, Mr. Chairman, by 
stipulating that Tom Donohue is an expert on presidents. He 
goes back to Abe Lincoln's days, so he is ably qualified to be 
an expert on those presidents. [Laughter.]
     I want to thank you, Chairman Hatch, Senator Wyden, and 
members of the committee, and my friend Tom Donohue. The labor 
movement has been advocating for new trade policy for more than 
2 decades, for strengthening labor and environmental 
provisions, for reforming investment rules, for finding the 
appropriate balance in regulatory measures and intellectual 
property protections, for fair rules of origin, and finally, 
for including meaningful currency provisions, among many other 
issues.
    Far from being opposed to trade on principle, we have 
supported trade deals when warranted. Some examples would be 
the Jordan trade agreement, the African Growth and Opportunity 
Act, the Generalized System of Preferences, and the 
reauthorization of the Import-Export Bank.
    Key to reforming our trade policies, we believe, is 
abolishing the outdated, unaccountable, and un-democratic fast-
track process. The Trans-Pacific Partnership now being 
negotiated by our government includes 12 countries and about 40 
percent of the world's GDP. The TPP is designed to be 
infinitely expandable, so it could very well be the last trade 
agreement that we negotiate, so it is especially crucial that 
we get the terms of this one right.
    Mr. Chairman, the idea that fast-track lets Congress set 
the standards and goals for TPP--I am not talking about other 
agreements, but for TPP--is an absolute fiction. The agreement 
has been under negotiation for more than 5 years and is 
essentially complete, so the instructions that you send them 
will have no effect whatsoever.
    Congress cannot set meaningful negotiating objectives if 
the administration has already negotiated most of the key 
provisions. I might also add, this would be the worst possible 
time to pass fast-track for TPP, because the leverage that you 
have left for those issues that are remaining is right now, and 
you give that away if you pass fast-track legislation. Congress 
will lose that crucial leverage over any remaining provisions 
by agreeing to fast-track at this late date. The administration 
has ignored Congress's direct instructions to negotiate 
meaningful currency provisions and to reform the flawed 
Investor-State Dispute Settlement process.
    Granting fast-track now takes Congress out of the picture 
until the agreement is complete. While all fast-track bills 
have gone through the charade of listing negotiating 
objectives, there have been no consequences when the 
administration willfully ignores, or fails to achieve any or 
all of those objectives.
    America needs an entirely new trade negotiating authority, 
not minor tweaks at the margin. The Hatch-Wyden-Ryan Bipartisan 
Congressional Trade Priorities and Accountability Act of 2015 
falls far short of doing that. Congress must not agree to fast-
track a fast-track bill right now, Mr. Chairman. The time 
allotted between the introduction of the bill, hearings, 
committee consideration, and floor action is really short, and 
it is a sign that I believe that, if it had more time and more 
people knew about it, more people, not less people, would 
oppose it.
    A new and effective trade negotiating authority must do the 
following. It must ensure that Congress approves trade 
agreement partners before negotiations begin; create 
negotiating objectives that are specific to the individual 
trading partners that we are dealing with, because they are all 
different; ensure that Congress, not the executive branch, 
determines whether the congressional trade objectives have been 
met; ensure Congress has effective opportunities to strip 
expedited consideration provisions from trade deals that fail 
to meet congressional objectives, or to incorporate 
congressional and public participation; increase access to U.S. 
trade policy making, trade proposals, and negotiating texts for 
Congress, congressional staff, and the public; and include a 
broader trade and competitive package that addresses 
infrastructure, training shortcomings, and reforms tax policies 
to ensure that all--and I mean all--can benefit from trade.
    A few comments about TPP, to the extent that we know. 
Bipartisan majorities of the House and the Senate have insisted 
that currency manipulation should be addressed, but the 
administration has failed to include any currency provisions in 
TPP. An Economic Policy Institute study said that the U.S. 
could add as many as 5.8 million jobs to our economy by 
eliminating currency manipulation.
    On investment, legitimate and serious concerns have been 
raised by both the left and the right about Investor-State 
Dispute Settlement, yet the investment provisions of TPP have 
not addressed any of those concerns.
    On climate, without a border adjustment, TPP will not stop 
manufacturers from closing up shops in the United States and 
moving to TPP countries with no carbon-reduction scheme. In 
fact, it will encourage China, not a member of this agreement, 
to move dirty manufacturing plants to countries that are 
partners to this and to send dirty products back here, to the 
disadvantage of American producers.
    On the labor side, the labor movement has been clear that 
the status quo on labor, the so-called May 10th agreement, 
needs further strengthening. The May 10th standards were first 
steps towards leveling the playing field for workers, but they 
did little to ensure timely and effective action.
    Let me list some of the problems. The highly touted Labor 
Action Plan in Columbia, combined with the May 10th language 
protecting workers' rights, has been totally ineffective. Since 
that plan has been signed, 105 workers have been murdered for 
trying to exercise their fundamental worker rights in Colombia 
since the Labor Action Plan was implemented.
    Mr. Chairman, we have been told by USTR staff, their 
general counsel, and their Assistant USTR for Labor told us 
repeatedly that murder of trade unionists and violence against 
trade unionists is not a violation of the labor provisions in 
our FTAs.
    So, when people say this is the highest standard yet, 
talking about labor, you have to excuse me if I am unmoved or I 
am unsatisfied when they tell us directly, without any 
equivocation, that violence and the murder of trade unionists 
for exercising their rights is not a violation of these 
agreements. Now, we have asked for reasonable measures to 
strengthen the labor chapter, but USTR has ignored those 
requests. They are not there.
    I would also say that the human rights language in the 
Hatch-Wyden-Ryan bill is not binding. The fact that several 
very serious human rights violators--Vietnam, Brunei, Malaysia, 
and Mexico--are already in the TPP demonstrates that the fast-
track objectives are ignored or irrelevant.
    In sum, to get this thing right, Congress should not be 
constrained by misguided secrecy, or speed, or unaccountability 
of fast-track. We really urge Congress to reject the outdated 
and undemocratic process known as fast-track and develop 
instead a new trade negotiating authority for the 21st century. 
This is going to affect 40 percent of the world's GDP. It may 
well be the last trade agreement that gets negotiated, and the 
lives of workers are at stake, and the livelihoods of workers 
are at stake here. It is important that we get it right.
    I can understand our friend Tom advocating for fast-track 
and TPP. His members have benefitted by it, benefitted greatly. 
But the average working folks in this country have not, and we 
need a different deal. We need to have something that really 
works on our behalf and protects the lives of trade unionists 
from being murdered, or having violence perpetrated against 
them, and not be told that it does not--does not--violate a 
trade agreement.
    Mr. Chairman, thank you for the opportunity to speak here 
today, and I look forward to working with you and Senator Wyden 
to strengthen this piece of legislation to make it better for 
the American worker.
    The Chairman. Well, thank you. Thank you, Mr. Trumka, and 
thank you, Mr. Donohue. We appreciate both of you. We know you 
are busy people. We also know that you are very sincere people 
in your respective areas of the law.
    Senator Wyden, let us turn to you first.
    Senator Wyden. Thank you very much. Mr. Chairman, I 
indicated I want to let my colleagues ask their questions. I 
just want to make one very quick point. Mr. Trumka, with whom I 
agree so often, suggested that there would be insufficient 
public scrutiny of TPP. Colleagues, under this legislation, by 
law, the American people will have TPP in their hands for 2 
months before the President signs it, and months more before it 
is fully debated on the floor of the House and the Senate. So 
with that, I want to let my colleagues ask their questions.
    The Chairman. Well, maybe I will take back my right to ask 
questions at this point.
    Mr. Donohue, as you noted in your opening testimony, and as 
I have been saying for years now since Trade Promotion 
Authority expired in 2007, other countries, other competitors 
in the world marketplace, have not been resting on their 
laurels when it comes to trade.
    Indeed, there are hundreds of free trade agreements around 
the world that are currently in effect or under negotiation, 
and the U.S. is a party to relatively few of these agreements. 
In your opinion, what is the cost to the United States if we 
refuse to pass new trade agreements while our competitors press 
forward with their own?
    Mr. Donohue. Well, long-term refusal--and we have been at 
it for a while--to pass new trade agreements will basically 
provide markets across the world to our competitors. It will 
cost American workers an ever-growing number of jobs, it will 
have a measurable effect on the economy in the United States, 
and it will make us far less significant in the geopolitical 
and economic affairs of the world.
    This is the equivalent of going out and resigning from the 
rest of the world. We are going to say that none of this is 
important in terms of how we get our children and grandchildren 
into the economic system? We are going to say none of this is 
important in terms of what effect we are going to have on the 
general affairs of the world?
    And most of all, Mr. Chairman, 95 percent of the people--
and we all agree to this--whom we want to sell something to do 
not live in the United States. That is no reason to put 
together agreements that are totally irresponsible, but it is a 
reason to get out there in the marketplace and compete as we 
have since our founding. A failure to compete is a resignation 
from the global economy, and the results would be one of the 
great tragedies of our time.
    The Chairman. Mr. Trumka, let me ask you a question. 
According to the USTR, average wages in export-intensive 
industries in the U.S. are above those in non-export-intensive 
industries. USTR also tells us that ``with every $1 billion in 
services exports supporting an estimated 7,000 U.S. jobs, 
expanded services trade globally will unlock new opportunities 
for Americans.'' According to recent Bureau of Labor Statistics 
data, close to 12 percent of those employed in service 
occupations are represented by unions.
    So, Mr. Trumka, the administration's data tells us that the 
free trade agreements under consideration will expand exports 
and create more jobs in export-intensive industries, including 
services. In turn, that means more jobs in sectors with 
significant union representation and higher wages.
    With this data provided from a Democratic, union-friendly 
administration, why do you oppose agreements that can expand 
your membership and, more importantly, generate good-paying 
jobs, including many union jobs for middle-class workers?
    What are your thoughts on that, Mr. Donohue, after Mr. 
Trumka finishes?
    Mr. Trumka. Well, first of all, I would like to comment on 
the last question that you asked Tom.
    The Chairman. Sure.
    Mr. Trumka. This is not a choice between TPP and no trade, 
where, if we do not get TPP, we get no trade. That is the way 
you made it sound, and that is the way he answered. There is a 
lot of distance between there. What we are saying is, let us 
have a good trade agreement that really does benefit people.
    Look, the statistics that you quoted will also tell you, 
for every billion dollars in trade deficit--and we have about 
$500 billion of trade deficit a year--there are several 
thousand, almost 15,000 jobs, lost per billion dollars of trade 
deficit. Now, each one of the trade agreements that we have 
signed so far has encouraged out-sourcing and increased that 
deficit. It is sustaining--$500 billion a year takes jobs out 
of the country.
    I wish we could reverse that and bring it back. I swear, I 
do not know where Tom got his figures earlier that we have a 
surplus, a trade surplus. To have a trade surplus is no figure 
that I know of, because goods and services and everything else 
has been in deficit. So, with a good trade bill, Mr. Chairman, 
we could create jobs, and it could benefit everybody.
    But currently the TPP, as constituted, is not that bill. It 
does not address currency, it does not address the investment 
provisions, it does not address the labor provisions, and it 
does not address the environmental provisions. It does not 
address ``buy American'' provisions. There are a number of 
other things that we have listed to try to make this agreement 
into something worthwhile.
    We have worked for 5 years to try to make TPP an agreement 
that the American worker could benefit from, and precious few 
of our suggestions--fewer than you can count on one hand--even 
made it into the U.S.'s proposal to our trading partners. 
Obviously you cannot achieve something if you do not even 
propose it and negotiate for it.
    So I would love to work with you to create something better 
than TPP, but a lot better than nothing, because there is a lot 
of room between that. To imply that, if TPP is not passed, we 
are not going to do trade is just a misrepresentation, I 
believe.
    The Chairman. Well, thank you. My time is up. I am sorry.
    Senator Cornyn?
    Senator Cornyn. Thank you, Mr. Chairman.
    I come from a State that, in 2013, counted an estimated 1.1 
million jobs associated with trade. Just the binational trade 
with Mexico is estimated to support as many as 6 million jobs 
in the United States. In terms of its impact on small and 
medium-sized businesses and the people they employ, 93.1 
percent of the trade jobs were in small and medium-sized 
enterprises with less than 500 employees.
    I actually believe that one reason why Texas has done 
better than the rest of the country, in terms of its economy 
and jobs, has in large part been because of trade. We have led 
the Nation in overall exports since 2002 in beef, cotton, 
petrochemicals, machinery, and high-tech electronics. In 2014 
alone, Texas manufacturers and farmers set new records of 
exports with nearly $290 billion worth of merchandise to buyers 
around the globe.
    So I believe that this Trade Promotion Authority proposal 
that we will mark up tomorrow represents real progress. The 
challenge I think we have is that, absent Trade Promotion 
Authority or so-called fast-track authority, we are left with 
negotiations on behalf of 535 individual members of Congress, 
which is just not feasible.
    What I worry about--and, Mr. Donohue, you have alluded to 
this--is what happens if we do not engage with Asia as on this 
Trans-Pacific Partnership proposal, which we have not seen, by 
the way, Mr. Trumka. I am looking, waiting to see what the 
contents of it are, because I do believe that the impact of 
trade does not fall uniformly. There are things we need to do, 
and there are things we will do with Trade Adjustment 
Assistance authority to help people who are dislocated as a 
result of trade learn new skills and earn higher-paying jobs.
    But, Mr. Donohue, what would be the consequences to the 
United States long-term if we do not do this and, let us say, 
countries like China step in to fill the void?
    Mr. Donohue. I think it is important to first recognize, 
Senator, that we are the largest manufacturer in the world. We 
are the most significant economy in the world. But that reality 
of what is going on around the world sees large--very large--
economies getting more efficient, more productive, and more 
engaged with one another on trade.
    If we are not major players in the trading affairs of the 
world, it will have a fundamentally negative effect on our 
economy, on jobs in the United States, and on our influence 
around the globe.
    Now, Mr. Trumka is a very passionate representative of his 
ideas. I would say just for the record, Mr. Chairman, all of 
our numbers on jobs from this deal or that deal come from the 
Commerce Department. When I was talking about the significant 
benefit in jobs in recent trade agreements, it is very, very 
clear.
    But I think there is another point that we should all look 
at, if you would allow me to make a point. The jobs that are 
lost in the United States in manufacturing, the great 
percentage of them, they go to two countries. They go to a 
country called efficiency and a country called productivity.
    The American business system, which is the most efficient 
in the world, has taken 40-plus percent of the jobs out of the 
manufacturing process because of information technology, 
robotics, process engineering, and supply chain management. 
Those 40 percent of the jobs are never coming back.
    But the way we get the jobs back, which Mr. Trumka wants, I 
want, and we all want, is we do two things. Number one, we 
encourage others to come here and produce their products. You 
could go around this country today, and you would find 
representatives of Europe looking for places to build their 
factories, simply because their energy is three times more 
costly than ours.
    The second thing that we need to do, in a fundamentally 
efficient way, is go out and produce more things in our 
manufacturing plants and in new manufacturing plants that we 
would build, and export them around the world. Those are the 
only ways to expand manufacturing jobs in the United States.
    Senator Cornyn. Mr. Chairman, I was not here when the North 
American Free Trade Agreement was negotiated, but I can tell 
you, in my State it is viewed as a net positive for that region 
of the country, as the Central American Free Trade Agreement 
is.
    But part of the consequences--I would just close on this 
point--I have visited with Senator Kaine down in Honduras 
recently. You remember the influx of unaccompanied minors 
streaming across our borders and moving into the United States. 
Our failure to help our neighbors provide, not only security, 
but also to help grow their economy where they live does have 
residual impact on us in ways that perhaps we do not even 
recognize.
    So I appreciate the great work that you and the ranking 
member have undertaken on this and look forward to supporting 
the TPA in tomorrow's mark-up.
    The Chairman. Thank you, Senator Cornyn.
    Mr. Trumka. Mr. Chairman, might I comment to Senator 
Cornyn?
    The Chairman. Sure.
    Mr. Trumka. Senator, you indicated that we would have to 
have 535 different agreements without fast-track. That again 
is--there is a whole lot in between there. I have suggested the 
following things to improve Trade Promotion Authority: ensure 
that Congress approves trade agreement partners before the 
negotiation begins; create negotiating objectives that are 
specific to each one of the trading partners, because they are 
different; ensure that Congress, not the executive branch, 
determines whether the congressional trade objectives have been 
met; and ensure that Congress has effective opportunities to 
strip expedited consideration provisions from trade deals that 
fail to meet congressional objectives, or to incorporate 
congressional and public participation. We also think that we 
ought to integrate this with the rest of the things necessary 
to make trade work: infrastructure, training, and tax policy.
    So it is not that we are saying you cannot have it, or that 
you should not have it, we are saying this one, the one that 
you are considering, abrogates too much power. You give too 
much power away, and you have no control, particularly over 
this agreement that is almost completely negotiated.
    Mr. Donohue. Mr. Chairman, we all recognize that a 
negotiation is a give-and-take. You have experienced it here in 
your own committee in recent weeks as you, working together, 
have come up with a bill. That is exactly what happens in a 
trade negotiation.
    The fundamental reality is, we are in a new time. If we 
fail to inject ourselves at the right time, and in a 
significant way in this trading process, those other large and 
growing countries are going to do it on their own.
    I know everybody believes America is so essential, because 
they are, because of technology, because of our value system, 
and so on. To keep that position, we have to enter into these 
agreements. We do not have to give away our value system--we 
have to deal with the things that are important--but there is 
no way that we can tell everybody else, look, just wait about 
10 years, we will get our stuff together, we will think about 
it, we will work on it. We have to have an expediting system. 
We have to have a system that lets the people who do this every 
day all day, professionals, bring you the results based on what 
you have told them you want. But tomorrow is too late. Today, 
it is time to move on these issues.
    The Chairman. Well, thank you.
    Senator Schumer?
    Senator Schumer. Thank you, Mr. Chairman. Thank you for 
holding this discussion today. I thank our ranking member for 
pushing hard to get it. I want to thank both of our witnesses.
    Mr. Trumka, my belief is the greatest problem America faces 
is the decline of middle-class incomes. It is harder to stay in 
the middle class, harder to gain the middle class. I know of 
almost no one who has done more to try to reverse that trend 
than you, and thank you for your good work across the board.
    Mr. Donohue, thank you for your strong advocacy and 
leadership. We have worked together on many issues, immigration 
above all, but also export-import infrastructure, and, most 
important, you are from St. Therese's Parish in Brooklyn. So, 
it is good to have you both here.
    Well, look. We know the administration, when they try to 
sell me on TPP, it is almost the geopolitics that prevails over 
the economics, that we want to keep these countries in our orb 
rather than China's orb. If there is an economic web between 
them and China and not one between us and them, it is hard to 
do that. I agree with that. I agree with that goal.
    With that said, though, if that is one of the main goals of 
TPP, to lure countries away from China's influence, it makes 
perfect sense, as part of the overall effort within TPP or 
alongside TPP, to deal with China head-on to show them that 
this is not business as usual. China is our most rapacious 
trading partner. None of the other countries in TPP do what 
China does, which is, not only do they manipulate their 
currency, which has cost us millions of jobs and trillions of 
dollars of wealth unfairly flowing from us to them, they steal 
our intellectual property. That has been documented over and 
over again.
    And probably worst of all, when we have a good product, 
they do not let us in. We are at a new phase. We are doing 
high-end manufacturing, high-tech stuff. That is our hope and 
our future. We have already had the competition with China on 
furniture, toys, and clothing, sort of low-end stuff.
    But if they start stealing our intellectual property in 
these areas, and then they keep us out or they force us to join 
joint ventures that are 51-percent Chinese government-owned and 
take all that information to build their own industries from 
their protected market and then compete with us, I do not know 
of anything that is more frightening to me. That will constrain 
the thing that I believe is so important, which is to get 
middle-class income going again like it was in the grand era of 
America from 1950 to about 2000.
    So I think we can do two things, and I know what China 
does. Let me say, small companies, big companies--I had a small 
company in upstate New York; they needed a material from China, 
rare earth, 500 jobs. The Chinese told them, if you want those 
rare earths, you have to make your product in China.
    The guy said to me, I know that is against WTO, but I 
cannot spend 5 years not having the goods and going to court 
through the long WTO process. Then I spoke to the Business 
Roundtable--I guess just about every one of them is one of your 
members--and I told them that I thought China does not play 
fair and it is hurting our big companies. That is why we need 
currency legislation. We need to do more against China 
alongside, within, TPA.
    The position of the Business Roundtable is against that. 
That is six, six of the major CEOs, all of whom you know, Mr. 
Donohue, and we all know, who came to me and said, keep doing 
it. We cannot say anything, because China retaliates against us 
if we say a thing. We need that big market. I appreciate that.
    If I were CEO of one of these companies, I might do the 
same thing. But they said, you keep it up. So my goal here is 
to do something about China, the most rapacious of our trading 
partners.
    Frankly, I am disappointed. I was very disappointed in the 
efforts of President Bush, and I am disappointed in the efforts 
of President Obama. I have dealt with five Treasury Secretaries 
on this issue of currency, in particular from Snowe on, and 
none of them has done anything.
    So this mark-up is a unique opportunity to stand, to do 
something about the rapaciousness of China trade. It is the one 
point in time throughout this TPP process where Congress will 
have the opportunity to show, to China and the world, that it 
is not business as usual, because they are just killing us. 
They are just taking everything from us, and not in a fair way, 
in a WTO non-compliant way. They just thumb their nose and say, 
take us to WTO.
    So I say to my colleagues, now is the time, if there ever 
was one. If not now, when? We have been trying for a long time. 
This is a unique opportunity to do something about China. Some 
of us are against TPA, other people are for it.
    But we can all agree--we had 60 people, as Mr. Trumka 
mentioned, sign a letter saying we ought to do something as 
part of this process with China, and I hope we will. I hope we 
will. We cannot have weak tea. Anything that is just 
discretionary, that just says, well, the administration could 
do something against China if they wanted to--I have been 
through the wars on this one.
    I have tried every administration. I have spent hours with 
every Treasury Secretary, and they never will say China is a 
currency manipulator because the geopolitical forces are too 
strong the other way. So, unless we have something stronger 
than just giving to any administration, not just this one, more 
tools, it is not going to work. So I hope we will do something 
on currency, and I know you feel that way.
    So my quick questions to each: Mr. Trumka, how do you feel 
about currency manipulation as part of this; and, Mr. Donohue, 
not on this particular bill, which I know you are strongly for, 
but do you believe we should be doing something on currency 
manipulation, that it is a problem here for our country, 
China's currency manipulation?
    Mr. Trumka. EPI says that currency manipulation alone costs 
this country 5.8 million jobs. If we eliminate currency 
manipulation, we have a chance to gain almost 6 million jobs. 
We strongly support that and think it needs to be part of the 
agreement.
    I would also say, though, Senator Schumer, that some of our 
partners in TPP have been identified as currency manipulators. 
Malaysia, Japan, and Singapore have been identified as currency 
manipulators as well.
    Senator Schumer. I know. My bill just applies to China, 
though.
    Mr. Donohue?
    Mr. Donohue. Senator, we have debated many subjects, but as 
we know, the China card, so to speak, is an issue that we will 
be dealing with for many years. It is complicated by serious 
problems in China as well, economic problems.
    My view about this bill is that there is a very serious 
attention to currency, as there should be, and it is at a point 
where I would encourage moving ahead without major amendments. 
In terms of dealing with currency outside the bill, there are a 
lot of things here that are important.
    Mr. Trumka said Japan is a currency manipulator. Well, they 
sure were back then, but they have not been for a long time. 
People would accuse the United States of currency manipulation 
when we were dealing with the crises of the recent years, when 
we were handling and managing our interest rates and other 
factors that came out of the Fed.
    The specific challenge that you raise about China is one 
that we will deal with for all of our lifetimes. I am very 
willing and very anxious to talk about other opportunities 
beyond this agreement to get the facts straight, to look for 
ways to apply more, I will not say aggressive, but more 
successful, pressure on these issues. I understand the point 
about the theft of intellectual property.
    I would make a point that we are making a little progress, 
but surely not enough. I understand what happens when they 
decide to make a product and do not need us any longer. The 
China issue needs serious discussion. We would like to be a 
part of it. I do not think at this date and this time you can 
go beyond what we are talking about on currency in this bill.
    Senator Schumer. Thank you, Mr. Chairman.
    The Chairman. Well, thank you, Senator Schumer. I want to 
make it clear that I believe this is a serious issue.
    Senator Schumer. I know you do.
    The Chairman. I do not think it should be part of this 
agreement, which has been very, very fastidiously worked out. 
But I am willing to hold hearings and do appropriate work after 
we pass this bill, if we can get this passed with everybody's 
cooperation.
    Senator Schumer. Thank you, Mr. Chairman.
    The Chairman. Senator Cantwell, you are next.
    Senator Cantwell. Thank you, Mr. Chairman.
    I am always struck, when you two gentlemen are before the 
committee, that there are many things that you actually agree 
on. Workforce training and Ex-Im Bank seem to be two of those. 
Do I have that right?
    Mr. Donohue. Yes.
    Mr. Trumka. Yes.
    Senator Cantwell. So you are both supportive of apprentice 
programs for job training?
    Mr. Donohue. We do not have enough of them. The private 
sector spends something in the area of $60 billion a year on 
it. The public sector--and Rich and I have talked about this. 
There will have to be a bill for job training and Trade 
Adjustment Assistance to follow all of these trade deals, but 
we really believe that has to be thought out more. We are doing 
old things in job training. We can do new things to train 
people for new industries, but we both agree we need to do 
those things in the private sector, and in the public sector.
    Senator Cantwell. Well good, because we are proposing some 
new things. But I definitely am a big supporter of TAA and do 
not think that we should be doing TPA or TPP without it. But, 
Mr. Donohue, could you please tell the Republican presidential 
candidates that they are wrong about the Ex-Im Bank?
    Mr. Donohue. Well, thank you. Let me say, Senator, we do 
not do presidential politics. We do every other kind but----
    Senator Cantwell. All right. Do you think people who----
    Mr. Donohue. Wait. Wait. We talk to people who are in the 
public world about presidential policies, and you are damn 
right we tell them.
    Senator Cantwell. That the Ex-Im Bank should be passed?
    Mr. Donohue. I have told probably three of them myself, and 
we have a little plan to have a visit with some of these people 
in the normal course of business and point out what the bank 
means to this country and to American industry, and 
particularly the thousands and thousands of small companies.
    Senator Cantwell. Well, I just want to say, with my time, 
that I come from a big manufacturing State, and it has a lot of 
labor members in it, and it has a lot of people who support 
trade. In fact, probably 1 in 3 jobs are related to trade.
    Mr. Donohue. At least.
    Senator Cantwell. So I support having more bilaterals, 
multilaterals, because a bunch have been done while we have 
been sitting around not having TPA. But at the same time, I 
believe that we have to have these tools that work together, 
like the Ex-Im Bank and like Trade Adjustment Assistance and 
investment in apprentice programs and the things that go along 
with this. So I just hope that we can get our colleagues here 
to understand that it is both, and I think you hold a lot of 
punch to make sure that we get these things done.
    Otherwise, then it is only shareholders at the top level 
benefitting from these deals and not working people. I think 
that I would put up our manufacturing skills against anybody in 
the world.
    Mr. Donohue. Best in the world.
    Senator Cantwell. And I also do not apologize for our 
country being a leader in aerospace manufacturing and making a 
great product that is worth hundreds of millions of dollars. 
When people talk about Boeing being a lot of the Ex-Im Bank, it 
is almost as if people want us to apologize that we do not make 
a lot of tchotchkes and ship them over to China for them to 
buy.
    We are lucky we make a very expensive product with a lot of 
skilled workers, and we want people to buy those planes, so I 
just hope people will stop and realize for one second that 
aerospace manufacturing is a lot of jobs in the United States 
of America.
    Mr. Donohue. It is a bad thing to make predictions, because 
then the people you want to work hard let up. The things that 
you have raised, the issues of job training and some of the 
related issues there--and we could talk about community 
colleges and all of that--and the thing you raise on the bank 
are issues that we are pushing very hard, and I feel that we 
are going to get there.
    Senator Cantwell. Thank you.
    Thank you very much, Mr. Chairman.
    The Chairman. Thank you, Senator Cantwell.
    We are going to turn to Senator Stabenow next, then Senator 
Warner right after Senator Stabenow.
    Senator Stabenow. Thank you very much, Mr. Chairman, and 
thank you for the hearing. Thank you to both of our witnesses.
    I feel, when we are talking about trade, we always need to 
start by saying that we are in a global economy, we know we are 
going to trade, so this is really about whether we are 
exporting our products or our jobs. It is a question of policy.
    So we either have something that means we strengthen the 
middle class and it is a race to the top and we bring other 
countries with us, workers with us, or it is a race to the 
bottom. I will never forget sitting in Greenville, MI with a 
company that was making refrigerators a number of years ago 
when we were trying all kinds of ways to keep them in western 
Michigan.
    Finally, they turned to us and said, you cannot compete 
with a buck fifty-seven an hour in wages, sorry. I mean, this 
cannot be a race down to that; this has to be a race up. So 
fundamentally, when we are talking about fast-track, let us 
talk about fast-tracking the middle class so that we can make 
it a race up.
    One of those issues is very much currency manipulation. I 
know my colleague, Senator Schumer, has talked about this, 
others are talking about this as well. Senator Graham and I 
authored a letter with 60 members of the U.S. Senate. That is a 
pretty magic number, 60 members, who said that we wanted trade 
agreements to include enforceable currency language. It needs 
to be in TPA; it needs to be in TPP.
    But I am wondering, Mr. Trumka, if you could talk--I know 
you have talked about currency, and the importance of enforcing 
it, but talk more about what this means in terms of jobs, 
because, from the numbers I have seen, we have lost millions of 
jobs because we have not enforced against China, or back when 
Japan was doing it, and they could do it again. So, it seems to 
me that is a very important part of enforcement.
    Mr. Trumka. Absolutely. EPI did a study, and it estimates 
that correcting currency manipulation would create 5.8 million 
jobs in this country. That is almost 6 million jobs with 
currency manipulation being corrected. If one of the reasons 
you want to vote for TPP is because you want the U.S. to be a 
world leader, well, China is excluded from this agreement. 
China is a leader in that area, and will continue to lead with 
currency manipulation, and we do nothing about it.
    TPP will not change the rules for currency manipulation 
between us and those trading partners or China and those 
trading partners. It is going to have a dramatic effect and 
cause a continual drain of jobs. Everything that you gain in 
this agreement by reducing tariffs and other things can be 
obviated overnight by people manipulating their currency.
    I want to say this, Tom. I want to put your mind to rest, 
because I do not like you to worry. The actions of the Federal 
Reserve do not constitute currency manipulation, according to 
the IMF test, so you do not have to worry about that, and that 
canard can be put to sleep for a little while.
    Mr. Donohue. Rich, what I said, to be specific, is that 
others would accuse us, because of the use of the Fed to 
support us during the crisis, of manipulating currency.
    Mr. Trumka. But you agree it is not currency manipulation.
    Mr. Donohue. I agree that it is not in standard terms, and 
people recently have come out and tried to agree within the 
international organizations that going ahead and dealing with 
interest rates that way would not be manipulation, and they did 
it because all of Europe has now begun to do that to try to 
save their own economy.
    Senator Stabenow. I think the debate really is, again, 
foreign currency issues versus domestic. We have economists 
from the right and the left who have said, well, it has been 
done here with the Fed. It is not what we are talking about 
when we are saying ``currency manipulation.''
    I can just say, as we approach not just TPA, but after this 
TPP, the ability to open up with Japan, which right now is 
closed--I grew up with a father who had a car dealership, and 
my grandpa. They could not put a car dealership in Japan. They 
could not put cars in Japan from the United States, cars made 
in Michigan, in Japan right now. So we are trying to open that 
up.
    But one of the great concerns I have is that we see 
Japanese automakers who have made their whole profit in the 
past based on currency manipulation. Now, let us compete fair 
and square. That is what I am very concerned about as we move 
forward in all these trade agreements.
    Thank you very much, Mr. Chairman.
    The Chairman. Senator, your time is up.
    Senator Warner?
    Senator Warner. Thank you, Mr. Chairman.
    Gentlemen, it is great to see both of you again. I guess I 
want to make a couple of points. One, I do fear at times that 
the analogies back to NAFTA--thank goodness we are in a 
different world at this point. America is much more competitive 
on manufacturing. American energy costs, because of things that 
you again both have supported, like Keystone and others, make 
us more competitive.
    I think having a trade agreement strengthens our hands in 
terms of attracting jobs. One of the things that Senator 
Schumer and Senator Stabenow mentioned was currency 
manipulation, and I think it needs to be addressed.
    The curious thing is, on currency manipulation, at least in 
the way I read Senator Schumer's bill, again, this will be a 
prospective tool. But Japan would not be in violation right now 
on currency manipulation. There is even a question of whether 
China would with its current actions.
    Now, should we add more tools to our tool kit going 
forward, as a country that has lost money against companies in 
China, which has manipulated currency? Absolutely. Which has 
stolen our intellectual property? Absolutely. But the notion of 
doing nothing right now and continuing the status quo would be 
a disaster for America vis-a-vis China and vis-a-vis the 
region.
    I would point out to my colleagues, and I wish Senator 
Schumer were still here, because most of his argument, until he 
got to currency, was actually, you could argue, in favor of TPA 
and TPP, because clearly America's position has weakened, and 
it seems to be retreating.
    I would point out the New York Times article Saturday that 
points out the fact that we as a Congress have not taken up the 
IMF reforms, that we as a Congress have not ended up doing 
Export-Import Bank, that the Chinese have started to create a 
brand-new financial institution that is focused on Asia but 
ultimately could contest America in terms of the dollar as the 
reserve currency. These are things that, if we want to truly 
protect American jobs, we ought to be worried about.
    So what do we do? Well, there is 40 percent of the world we 
are talking about here. China is not part of TPP. Who is going 
to set the framework for that region? I believe it ought to be 
American-led, and I think the work of the chairman and the 
ranking member, both in terms of the added transparency, added-
on intellectual property rights--and I get the fact that the 
standards are not as strong on environment and labor as you 
would like, but at least they are standards, and I believe they 
are standards that can be enforced, which has not been the case 
in the past.
    If we take these 11 nations and combine them in what I hope 
would be an American-led trading entity, this will give us an 
ability to actually increase our leverage vis-a-vis China, 
which, long-term, I believe we have to watch on every count, in 
terms of intellectual property theft, in terms of trade 
advantage, in terms of currency.
    But let us not miss the opportunity for America to once 
again reassert its national and international leadership in 
trade, and in a way that I believe will actually increase jobs, 
increase job opportunities. My fear is that re-fighting the 
battles of the 1990s in 2015 is not the format we ought to be 
looking at.
    Let me just close with one question for Mr. Donohue, 
although, Rich, you can come back at me as well.
    Mr. Trumka. I would like that.
    Senator Warner. All right. ISDS. We have folks, members of 
the Senate, who are saying this could open up a whole new can 
of worms. Ambassador Froman has said repeatedly that it does 
not, that there are prudential exceptions in the ISDS language 
as put forward. This is a tool that has not been used a lot in 
the past. There is some question that it is being ramped up and 
potentially could undermine our labor, environmental, and other 
laws.
    Do you want to make a comment on that, Mr. Donohue? And 
then, obviously, Mr. Trumka gets the last word.
    Mr. Donohue. Senator, it is an issue that cannot stand the 
argument. I mean, it is so much stronger than the argument when 
you look at it. There are 3,000 trade agreements that have 
these provisions. We have never lost--never lost--one of these 
issues. They have no authority to impede on Federal law.
    If we ever lost a negotiation, it would be the case that 
somebody would have to pay them money. But it has been in trade 
agreements. It provides a rational way to address issues. The 
only reason anyone would bring this up as a reason not to do 
what we are about to do here is because they did not want to do 
it. This argument does not carry water.
    I think it is very important to understand something. I 
respect people--Rich and I disagree 80 percent of the time, but 
we get along pretty well, and I respect his positions. But what 
is going on here is that the people who do not want to do the 
trade bills, under the current circumstance, would like to stop 
this bill, and it is the only way they could do it.
    I think to leave those trade bills on the side of the road, 
to deny, as the Senator from Michigan said, the opportunity to 
create lots more serious jobs in manufacturing and to sell to 
that 95 percent of the people around the world who want to buy 
our stuff, would be a serious mistake. I respect Rich's really 
strong views here, but I am telling you, he is going to have a 
hell of a lot more members if we do these deals than he is if 
we do not.
    The Chairman. All right. Senator, your time is up.
    Mr. Trumka. May I respond, Mr. Chairman?
    The Chairman. Sure. Of course.
    Mr. Trumka. First of all, Senator, this is not, again, an 
issue about doing nothing or having TPP. This is about making 
TPP worthy of every American, and not just Tom's members, 
because they are going to do really fine. No matter what, they 
are going to do fine, but it is everybody down below who is 
not.
    When you say, oh, these are some standards and they are 
better than no standards, we were told by the USTR general 
counsel that murdering a trade unionist does not violate these 
standards, that perpetuating violence against a trade unionist 
does not violate these agreements. Excuse me. Excuse me if I am 
not willing to accept that standard, because I think the 
country can do better.
    With regard to ISDS, look, this is a special privilege for 
companies. No individual gets access to ISDS. Tom, we have not 
lost a case yet. We won a couple by technicalities that we 
should have lost.
    There was just a case in Nova Scotia 2 weeks ago, a stone 
quarry. They wanted to expand a stone quarry, and all around it 
was an environmentally sensitive area. They denied the permit 
to expand the stone quarry. The ISDS panel said, ``You are 
entitled to damages.'' They are going to collect because they 
did not get an extension of their boundaries into a sensitive 
environmental area.
    This will affect food safety, it will affect the 
environment. It affects trade unionists, I can tell you that. 
This is a secret tribunal that you cannot control, because, 
once you give them instructions, once that panel is in place, 
they have the absolute power to do what they want to do, and 
they have interpreted the language that you have given them--
fair and reasonable economy--beyond any stretch of the 
imagination.
    So, Senator, we can do a lot better, and American workers 
deserve a lot better, than what we are getting with TPP or with 
this version of fast-track.
    The Chairman. Senator Casey?
    Senator Casey. Thank you, Mr. Chairman. I appreciate the 
hearing.
    I thank Mr. Donohue and Mr. Trumka for being here. I 
especially want to note Mr. Trumka's Pennsylvania roots. He is 
using that Villanova law degree today, right?
    I am grateful for the opportunity, because it is important 
that we debate this, even an issue that tends to divide the 
country and even divides both political parties between and 
among themselves at times.
    My concern here, with both Trade Promotion Authority and 
TPP, the trade deal itself, is the same concern I had about 
NAFTA and every other agreement since then: what is the impact 
not just broadly on Pennsylvania, that is my first priority, 
but in particular, what does it mean for workers and wages? 
Unless it can meet the test that I set forth with regard to 
workers and wages, it is very difficult for me to support 
either Trade Promotion Authority or the trade deal itself.
    Let me focus, first, on wages. I would argue, and in a very 
similar way to what Senator Schumer said about the middle 
class, that our central challenge as a country, at least our 
central domestic challenge, is, how do we solve this wage 
problem?
    There was a recent report by the Economic Policy Institute 
which very graphically, and in a very alarming manner, set 
forth the correlation between wages and productivity--post-
World War II, basically 1948 to 1973, almost perfect alignment. 
So if productivity was up as it was in those years 97 percent, 
wages went up 91 percent. That is the way it ought to work.
    Since 1973, for a whole variety of reasons, not simply 
because of trade obviously, but certainly trade, I believe, is 
a substantial factor, we have in the United States of America 
productivity up 74 percent in those 40 years--1973 to 2013--
with wages up 9--not 91--but 9 percent. Neither political party 
has come up with an answer to that central challenge.
    Part of this debate, I think, or I should say part of the 
resolution of that problem, is what we do on trade, though it 
is not the only part of the solution. So we see now that a 
recent paper by economists at the University of Pennsylvania, 
as well as other universities, found that when workers are 
displaced by trade and they switch jobs, they suffer real wage 
losses of between 12 and 17 percent.
    So I guess, Mr. Trumka, I would ask you--and some of this 
you set forth in your testimony--what is the best approach in 
terms of using our trade policy to address this wage problem or 
lack of wage growth?
    Mr. Trumka. Well, first of all, you have to get it right on 
trade authority, the fast-track authority. I have laid out a 
series of things that would make it right so that Congress has 
more control and can actually certify when they believe that 
the objectives have been met.
    Then, when you look at it, we have laid out a whole 
chapter. In fact, we worked with the European Union in 
anticipation of TTIP and laid out an entire chapter about how 
to make labor standards better so that we do not destroy their 
standards in Europe or our standards here, and I would love to 
submit that to you.
    Senator Casey. Thanks very much.
     I want to say for the record as well, you say, in the 
section of your testimony at the very end about labor, and I am 
quoting here, ``When you analyze the so-called May 10th 
provisions and how they have fallen short''--I think very few 
Americans, very, very few, a very tiny percentage of Americans, 
know the story about what has happened in some of these 
countries to trade unionists. The number of murders in 
Colombia, you said, was 100 and----
    Mr. Trumka. Five.
    Senator Casey. A hundred and five. That is evidence enough. 
But even if it does not rise to the level of the gravity of a 
murder, just the intimidation and the threats and the failure 
to have any kind of enforcement mechanism in place, what are we 
doing about that? I think virtually nothing, as a country. So 
that is where I think your proposal, as it relates to giving 
Congress more of a role in terms of weighing in on who these 
trading partners are and who gets into our agreements, is a 
pretty reasonable and appropriate approach.
    I know I am over time. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator.
    Senator Menendez is next.
    Senator Menendez. Thank you, Mr. Chairman.
    Let me say at the outset, I think we all have the same goal 
in mind, and that is jobs for our families and markets for our 
businesses that together build a stronger American economy. 
Trade may offer some new opportunities, but it also brings its 
challenges.
    We talk about breaking barriers to trade, or ending 
barriers to trade, but I have a broader view of what those 
barriers are than just simply tariffs and regulations. For 
example, lower labor and environmental standards abroad make 
foreign workers with fewer skills less expensive than highly 
skilled American workers with greater expectations for higher 
living standards. I think the failure to protect our 
intellectual property in other countries leads to cuts in the 
value of our investments and the value of our products in 
international markets.
    So, at the end of the day, for me, I have not just had a 
knee-jerk reaction against all trade bills. I have voted for 
some when I thought the balance was right. But for me, trade 
bills have been about protecting and providing opportunities 
for my State's workers and our businesses, in a world where 
competition is not always fair and it is not always open. It 
seems to me that we should judge the standards we set for any 
trade deal and the deals themselves on how well they deliver on 
those priorities.
    So with that, let me ask you, President Trumka--I heard 
your comments in the office when I was getting ready to come, 
and I know you are very passionate about workers' rights. I 
think a barrier to trade is also the inability to enforce the 
provisions of our trade agreements, which I think have sadly 
not gone in the direction that I would like to see. Those 
include the provisions of trade agreements as they relate to 
negotiated labor standards.
    So can you talk a little bit--you started with my 
colleague, Senator Casey--about Colombia, about the lack of 
enforcement mechanisms, and would you support an amendment that 
would mandate that all countries must meet negotiated labor 
standards prior to any new trade deal going into effect with 
them, in other words, to verify before we trust countries with 
lax labor standards?
    Mr. Trumka. I would. The other thing I would suggest right 
off the bat is that the wage standard that is talked about in 
most of the trade agreements, including TPP, is the minimum 
wage. It does not talk about anything beyond the minimum wage. 
Vietnam's happens to be 65 cents an hour.
    The lack of enforcement is one of the major problems of 
labor standards and environmental standards. The May 10th 
agreement was a step in the right direction, but it does not 
get us there. The truth is that the Guatemalan situation, where 
we are dealing with gross violations of the ILO standards, has 
been going on for 6 years now with no end in sight.
    Colombia--we have had 105 trade unionists killed since the 
labor action plan was put into place, and there is nothing that 
they can do about it. That is why, Senator, getting the rules 
right now is so important, because no matter how great the 
enforcement, if the rules that you have are inadequate, no 
matter how great the enforcement, they do not get you there.
    The rules or the standards that are being told to us that 
are in TPP are inadequate to protect American workers and 
discourage American manufacturers and employers from sending 
jobs offshore. So we are all for enforcement, and I am sure Tom 
would agree that we want to eliminate every one of the cheaters 
that we can, but if you do not have the standards to enforce, 
you cannot get the job done.
    Senator Menendez. Well, I agree you need the right 
standards. But even when we have had standards that some of us 
might agree to, we have not had the enforcement mechanisms that 
actually pursue it.
    Mr. Trumka. That is correct. That is absolutely right.
    Senator Menendez. Let me ask you this, President Donohue. I 
have long advocated for strong intellectual property 
protections in any trade deal. Does the Chamber believe that 
protecting innovation through strong IP protections is an 
important priority in any trade deal?
    Mr. Donohue. The Chamber, Senator, has a major, broad 
system, both international and domestic, for dealing with 
counterfeiting and the theft of intellectual property. We have 
put a great deal of money in it. We work with individual 
countries, and we work with groups of countries. We have had 
very significant improvement in about 70 percent of the 
countries, which are giving us a much better protection of 
intellectual property.
    We are also doing it at home, because you can lose your 
intellectual property here in the United States faster than you 
can get ready to go to work. The points made about China and 
others, there are still issues where there is a sophisticated 
way of going after your intellectual property.
    Senator Menendez. Let me ask you one final question, if I 
may, Mr. Chairman. The current U.S. standard is 12 years of 
patent protection for biologics. This is an incredibly 
important industry in my home State of New Jersey, where we are 
the medicine cabinet to the world.
    Do you think that our trade deals should protect that 
standard?
    Mr. Donohue. I do not exactly know the answer to that, but 
I will tell you something. I know more about the protection of 
biologics and patent deals on pharmaceuticals just in my own 
family. I am dealing with that issue now. I want to do anything 
I can to protect America's ability to drive the innovation in 
biologics, pharmaceuticals, and other things that we are doing. 
You cannot catch up with me on that deal.
    Senator Menendez. I am glad to hear that. I know that you 
will have to run after me on that part, so I look forward to 
working with you on that issue.
    Thank you, Mr. Chairman.
    The Chairman. Senator, your time is up. Let me just say 
that it was Senator Kennedy and myself who drove that 12-year 
data exclusivity, without which we would not have a biologic 
empire in this country. So you are speaking the truth, and I 
appreciate you raising the issue.
    Senator Isakson?
    Senator Isakson. Thank you, Mr. Chairman, Ranking Member 
Wyden. I appreciate the opportunity. I have learned a lot from 
listening to the other questions. I am one who favors doing 
business. I sold houses for 33 years of my life before I came 
to Congress. I never saw the perfect deal, but I made a lot of 
deals. We had a meeting of the minds. This is not a perfect 
deal, but the question I have in my mind is to make sure it is 
the best deal we can get to move forward for our country.
    I give you this premise. Two years ago, Mike Enzi took a 
mission to India. It was called All of America's Jobs Have Gone 
to India. Do you remember that, Tom, when all the help desks 
were going to India? We went to meet with Mr. Murthy, the owner 
of Mphasis, which is now the largest trading company on the 
NASDAQ. He has an 80-acre campus in Bangalore, India, where he 
was doing back-room operations for U.S. hospitals and emergency 
rooms, help desks for corporations.
    We asked him this question. We said, Mr. Murthy, all of 
America is so scared all of our jobs are going to India because 
of what you are doing with lower wages, more technology, things 
like that. What would you tell the American people? Why should 
we not fear India?
    He said, ``For a very simple reason. When I started my 
business, I drove an Indian car, I banked with the Bank of 
India, and I drank an Indian soft drink. Today I drink Coca-
Cola, I bank with Citibank, and I drive a Ford.'' The point 
being, when you do business with people, you end up doing 
business both ways. American products were then being sold in 
India.
    Today, interestingly enough, 12 years later, the help desks 
have come back to the midwestern United States and left India 
because the standards have grown in India for wages, labor 
laws, and things like that, where they are on a comparable 
playing field with the United States.
    So I believe doing business is good for America. I respect 
the middle class. Mr. Trumka, I was in Savannah, GA yesterday, 
where we have a new plant that has come in. Caterpillar has 
come in to Georgia from Japan, where they are now building the 
tractors they were building in Japan. They are building them in 
Georgia and shipping them back to Japan out of the Port of 
Savannah. That is good for manufacturing jobs in Georgia. Those 
are the 
middle-class jobs. It is very important that we promote jobs 
and promote trade, because 1.2 million Georgians' jobs are 
directly dependent on trade. We are now the eighth largest 
State in the Union. We have 10,400,000 people.
    I want to make sure we continue to trade and have a vibrant 
trade policy, not one that looks the other way at currency 
manipulation, not one that looks the other way at labor 
standards, but one that is realistic enough to continue to do 
business. Because, if you do business with people, you have a 
better chance to influence them than if you do not do business 
with them. Would you agree with that, Tom?
    Mr. Donohue. The history of the U.S. economy, from our very 
beginning, was doing business with people around the world to 
bring us products we did not have, innovations we had not yet 
achieved. It has shifted to where we are shifting products and 
innovations all around the world, which has given us, over 
time, more influence around the world than we otherwise would 
have had.
    We could sit here for a week and talk about the value of 
America's export of ideas and values and products. I think the 
argument on this particular bill here should come down to 
finally, after all these years, putting us in a place to do 
more of what we have done for years, to sell American products, 
to move American ideas and values. I hope we do not screw it up 
looking for the perfect, or seeking to get rid of this bill 
because we really do not want to do the trade bills.
    Senator Isakson. Mr. Trumka, I really have a lot of respect 
for what you do and the people whom you represent. One of the 
things you talked about that meant a lot to me and that I 
believe in seriously is workers' rights, and making sure people 
are treated right, and not doing business with people who abuse 
other people.
    But you have a better way of exporting your values overseas 
if you are doing business with somebody rather than if you are 
folding your arms and not doing it. One example: Swaziland. 
Swaziland is in Africa. I do a lot of work in Africa with AGOA, 
the African Growth and Opportunity Act, which I think this week 
we are going to hopefully extend for 10 years.
    In that, Swaziland was a participant until we learned they 
were beating up and imprisoning their workers for not working 
hard enough or long enough or being productive enough, and we 
suspended them on a temporary basis. They came back to the 
table. They started treating their workers right, because doing 
business with America was more important than abusing their 
workers.
    So my point is, and I would like you to respond to this, do 
we not have better leverage by having influence, by doing 
business with people, to encourage them to do better in terms 
of the way they treat their folks, or do we have to insist on 
it being a part of the deal?
    Mr. Trumka. First of all, it is important to do business 
with people, but the rules are important because the rules and 
the trade agreements that you have been talking about have been 
resulting in a $500-billion deficit for this country each and 
every year, trillions and trillions of dollars flowing out and 
not coming in. That is why it is important to have the rules. 
It is also important to have the rules whenever you engage them 
to have the ability to help correct those things.
    Now, if they are going to agree to the ILO core standards--
and, quite frankly, if we are willing to agree to the ILO core 
standards, because we have not been willing to do that yet--
then you have a chance to really influence them and improve 
their conduct.
    But if all you do is say, all you have to do is comply with 
your minimum wage and then, when they do not even comply with 
their minimum wage, we do not have the ability to influence or 
change it, it goes the opposite way, Senator.
    They look at the United States as perpetuating that bad 
treatment, not correcting it. We are better than that, and we 
can do better than that if we write the right rules and we have 
an agreement that we can enforce. Then we can be a positive 
force for good around the world. But this trade agreement will 
not do that.
    Senator Isakson. Mr. Chairman, let the record show I gave 
both sides a chance to make their case. Thank you, Mr. 
Chairman.
    The Chairman. Thank you, Senator.
    Senator Brown, you are up.
    Senator Brown. Thank you, Mr. Chairman. Senator Wyden, 
thank you. Mr. Trumka, Mr. Donohue, good to see you both.
    Mr. Trumka, a lot of people accuse you--and I might add, 
accuse me--of being against trade, of being protectionist, of 
being stuck in the last century, or even the one before the 
last century. Did AFL oppose the idea of TPP from the 
beginning?
    Mr. Trumka. Absolutely not. Quite the contrary. We engaged 
almost 5 years ago. We have submitted dozens and dozens, a 
couple of hundred, suggested language changes to make the 
agreement better. We did, and still want, to be able to support 
TPP, but in its current standards it falls far short of what is 
necessary.
    Senator Brown. So you can see from the amendments that a 
number of us will offer--there will be a lot of them, Mr. 
Chairman, as you may have heard by now, on Thursday, or 
Wednesday, I guess--you can see that this trade agreement, that 
TPA and TPP, could be improved significantly. Would you name 
two or three ideas that you have tried to constructively engage 
USTR or the staff of this committee in to give me just some 
ideas of where we could do much better than we are doing on 
this?
    Mr. Trumka. Well, with regard to TPA, first of all, you 
need to ensure that Congress approves trade agreement partners 
before their negotiations begin, that you create objectives 
that are specific to each individual trading partner, and that 
Congress and not the executive branch determines whether 
congressional trade objectives have been met.
    We have submitted a whole chapter on labor to make it 
better, we have submitted a chapter on currency, we have 
submitted a chapter on ISDS, and we have submitted a chapter on 
the environment that does not include procurement rules, Buy 
America, and a number of other things that we think could make 
TPP not only a good agreement, but one worthy of the American 
people.
    Senator Brown. And little of this has been accepted?
    Mr. Trumka. Well, in fact, less than three or four changes 
have even been accepted by our Trade Representative to put them 
across the table.
    Senator Brown. I heard you said that in your testimony.
    Mr. Trumka. They have not been included in our proposal, 
no.
    Senator Brown. Well, like you, I have tried to engage in 
the process, both at a member and a staff level with the U.S. 
Trade Representative. I have pushed for currency disciplines, I 
have pushed for better enforcement of labor standards, for 
improved state-owned enterprise language, for modified 
investor-state provisions, literally more than a dozen items. 
If I were anti-trade, I, like you, would not take the time, I 
would not bother, I would not get my staff to put the time in 
it takes in this effort.
    USTR claims they have had 51 meetings. Ambassador Froman 
sat where you are sitting late last week. They claim they have 
had 51 meetings with me and my staff. That may be true, I do 
not know. We have asked them, though, for the list of meetings, 
and, true to form, they have not responded, as they so often do 
not, to members of this committee, let alone the rest of the 
House and Senate.
    When they do meet with me, it is not to exchange ideas or 
to re-think how we do things, it is to tell me why I am wrong, 
that my concerns are not valid. The administration has taken 
this approach that you are either with us or against us on 
trade--nothing in between. I have heard your testimony through 
all of this about how there is TPP, there is present law, and 
there is something in between that is much more desirable that 
we could get real agreement on.
    I just wonder why, on trade agreements, when we have seen 
what kinds of permanence they bring and how they affect all 
Americans, why there is so much hostility to changing the 
direction of trade policy. The American public, as you point 
out, is pretty cynical about this and pretty skeptical about 
Congress's learning nothing, where this TPA, with some minor 
exceptions, is not much different from the TPA of 10 years ago. 
It has been 13 years since Congress passed fast-track, yet the 
bill we are considering today is fundamentally the same, again, 
with small, minor, relatively insignificant exceptions.
    I am going to continue my effort tomorrow to improve U.S. 
trade policy. I think we have a real opportunity in this 
amendment process. My question then for you, Mr. Trumka, the 
last question, is, can you comment in sort of a general, but 
substantive, way on what is at stake if we do not improve U.S. 
trade policy? What happens to our country?
    I have heard Mr. Donohue's vision, that the world falls 
apart, more or less, if we do not engage and China takes over 
the world and maybe colonizes the United States. I am not sure 
where he was going with that. But would you give us your view 
on what actually happens if we do not do this as written today?
    Mr. Trumka. TPP is 40 percent of the world GDP, and TTIP 
will be another 20 percent. That means those two agreements 
will cover 60 percent of the world's economy. If it is not done 
right, you will see the continuation of wage stagnation, you 
will see the continuation of a growth in inequality in this 
country, you will see the middle class continue to shrink and 
get decimated.
    You will also see, eventually, the weakening of our 
economy, because you cannot continually have a massive trade 
deficit every year that sucks jobs out of the country and not 
remedy that in some way or another. So one way to remedy it is, 
you stop buying other products, I guess. That would create a 
tremendous hardship on our economy and on the American worker, 
something that none of us, I think, wants to see.
    Senator Brown. Thank you.
    I heard somebody remark around the table--and I will close 
with this, Mr. Chairman; it is not a question, just a quick 
statement--that $1 billion in services trade can translate into 
7,000 jobs. That is great. It is a little bit, though, like 
saying the Cleveland Indians scored six runs yesterday. Yes, 
well, but the Tigers scored eight.
    So, when you talk about $1 billion in services, and that is 
7,000 jobs, what is it when the surplus, when we are buying so 
much more than we are selling--China, $300 billion a year--how 
many jobs is that? I mean, President Bush the first said 13,000 
jobs for every $1 billion in trade deficit, so it is a pretty 
significant job loss that we continue to add to with one trade 
agreement after another. I will stop there, Mr. Chairman, and 
thank you for your indulgence.
    The Chairman. All right.
    Senator Wyden would like to make a comment, then we are 
going to turn to Senator Grassley.
    Senator Wyden. Thank you very much, Mr. Chairman. I passed 
at the beginning because I wanted all of my Democratic 
colleagues to have a chance to speak first. While Senator Brown 
is here, I just want to be clear that I think he has made a 
very valid point that the playbook on international trade has 
to change. Trade agreements in 2015 have to be very different 
than trade agreements from the 1990s. The President, to his 
credit, said in the State of the Union address that past 
agreements have not lived up to the hype.
    So we have to make sure our trade policies are not part of 
a time warp. All you have to do is recognize that 25 years ago 
nobody had an iPhone, nobody was texting. China was not an 
economic powerhouse. It is a different world.
    I just want to tick off--and do this briefly, because I did 
not ask any questions earlier, while my colleagues are still 
here--what is different with respect to the legislation that 
will be considered this week and, in effect, the old playbook.
    The first area in which it is different, and I especially 
appreciate Senator Brown focusing on this, is on trade 
enforcement. Trade enforcement has to focus on protecting 
American jobs, high-skill American jobs that pay good wages. 
People say, why in the world would you be talking about a new 
trade agreement if you are not enforcing the laws on the books? 
You see that reflected in this legislation.
    For example, it includes the bipartisan ENFORCE Act, 
Senator Brown, colleagues on the other side, Senator Portman 
and others, to go after tax cheats. It includes an upgrade on 
301, something that I think our friends in Labor have been 
absolutely right about. It includes a measure to have warning 
bells go off earlier when our industries and our jobs are 
threatened, and to go off more loudly. That is number one.
    Number two, with this legislation, the United States is 
going to aim higher in trade deals. In the 1990s, labor and 
environment were basically an after-thought. If you had said 
back in the 1990s you were going to have enforceable labor and 
environmental issues, people just laughed at you. That is not 
the case any longer. They are going to be enforceable. They are 
going to be imbedded in the text, and, for the first time, 
there will be a new provision to focus on human rights.
    Third, I touched on the secrecy question. I could tell you, 
having been a young Congressman in those days, the public and 
lots of people in the Congress were just in the dark about what 
was being debated with respect to trade. Those days are over. 
The American people are basically going to be able to sit at a 
town hall meeting for up to 4 months with the actual text of 
the agreement so they can ask questions of their member of 
Congress.
    Fourth, the legislation goes further than any trade 
promotion bill to protect American sovereignty. It guarantees 
that trade deals cannot change U.S. law without congressional 
action. It guarantees that foreign companies will have no more 
rights in international tribunals than in American courts 
today, no back door to let anybody skirt our laws.
    Fifth, this legislation--and Chairman Hatch knows about 
this, because we had a lot of spirited conversations about it--
protects Congress's ability to put the brakes on a bad deal. 
This is not a green light for TPP or anything else, but it is 
an opportunity for Congress to stop a bad deal in its tracks.
    The last point I will make responds to why I have been in 
this from the beginning. I think Senator Brown, Mr. Trumka, and 
others are spot-on in talking about the middle class and how 
important it is that they get a better break, because wages for 
them have been stagnant for a lot of years.
    Here is the way I am looking at the world, and it was 
really kind of the defining judgment I made in getting into 
this. In the developing world, the middle class is going to 
double between now and 2025. That means there are going be a 
billion middle-class consumers in the developing world, and I 
want them to buy our products. I want them to buy our 
computers, and our eggs, and our wine, and our cars.
    In Oregon, they are buying our helicopters and our bikes. 
That is the chance for the American people to get high-skill, 
high-wage jobs. Let us fight here for the Oregon brand and the 
American brand. I think everybody knows we are going to have a 
spirited debate. We have seen some of it today, and the dust-
bowl level will go up again tomorrow.
    But I want to tell Mr. Trumka and Mr. Donohue that I am 
going to work very closely with both of you in the days ahead. 
I am committed to doing this in a way that works for both our 
middle-class families and our businesses. We can get this 
right. Trade done right will be a winner for American families.
    Mr. Chairman, I want to thank you for the opportunity to 
wrap this up and look forward to working with you and our 
colleagues tomorrow.
    The Chairman. Well, thank you, Senator Wyden.
    Senator Grassley, you are going to be our last questioner. 
At least, I expect you to be the last questioner.
    Senator Grassley. Well, since I was absent, I do not want 
the witnesses, or anybody else to think I do not have an 
interest in this trade issue. I had a hearing on juvenile 
justice reform in the Judiciary Committee that I chair, and I 
just got done with that. But I thought I ought to come by and 
speak my support for moving ahead on trade agreements.
    To me, it is common sense, when 95 percent of the people 
live outside the United States, and we are an exporting Nation, 
that we should do whatever we can do to get our products into 
other countries, and particularly countries that have higher 
trade barriers than what we have, and most countries do. 
Leveling the playing field--and that is a phrase we use around 
this Hill so many times it gets over-used--for our exports 
creates jobs, and those jobs pay 15 percent above the national 
average, so it seems to me that is something we need to pursue.
    Common sense being that 95 percent of the people are 
outside of the United States, then that 95 percent is where our 
market is. So I want to compliment the chairman and the ranking 
member for moving ahead on this package of bills we have, and 
particularly on giving the President the authority that he 
needs, and we have given it to Presidents on and off since 
World War II to do what they can to level the playing field for 
American exporters and the jobs that are connected with that.
    I yield.
    The Chairman. Thank you, Senator Grassley.
    This morning, Congress received a letter signed by nearly 
300 State and local chambers of commerce, manufacturing 
organizations, and farm bureaus urging ``swift action to renew 
Trade Promotion Authority.'' So, without objection, this letter 
will be entered into the record at this point.
    [The letter appears in the appendix on p. 103.]
    The Chairman. Now, let me just say, I want to thank my 
colleagues for their participation today. And, of course, I 
want to thank our two heavy-weight witnesses for joining us 
here. I have great respect for both of you and have known you 
for a long time.
    I want everyone to know that I recognize that there are 
passionately held views on both sides of these issues and that 
these debates are not easy for anyone. Nobody has had a picnic 
here. You all know where I stand when it comes to trade. I want 
to convince everyone to support TPA. I wish we could report a 
TPA bill unanimously, but it is pretty clear we are not going 
to be able to do that.
    Still, Senator Wyden and I have done our best to create 
both a product, and a process on this legislation, that is 
bipartisan. So far, I think we have really been successful, and 
I think most people would agree with that. This is important 
for our country. It is important for our industry in our 
country.
    In the end, I think we will have members from both parties 
supporting our bill. I really want to personally thank Senator 
Wyden, once again, for his help on this effort. It has been a 
very difficult one for him, as it has been for many of my 
colleagues on the Democratic side. Mr. Trumka, you have not 
helped him here today very much with your criticisms.
    Mr. Trumka. Thank you, Mr. Chairman. I appreciate that. 
[Laughter.]
    The Chairman. Well, I expect nothing less than that from 
you. I have known you a long time, and I have a lot of respect 
for you.
    But Senator Wyden deserves a lot of credit here. I think it 
is very important that we move forward and that we let the 
committee function properly. I am looking forward to an even 
more lively discussion and debate tomorrow as we mark up this 
bill.
    Let me just say that I have tremendous respect for both of 
you. Mr. Donohue, you have been around here a long time. You 
are no shrinking violet, I will tell you. You handle yourself 
very well, and you represent the business community about as 
well as anybody I have ever seen, and I have seen a lot of 
great business leaders.
    Mr. Trumka, I think you represent the unions very well. You 
are a tough guy, you are a smart guy. Even though we disagree 
on this bill, I have been paying pretty strict attention to you 
too. This is basically your administration that is doing this. 
I am trying to help the President on this bill. I personally 
think they are right in pushing it the way they have, but I 
still have the obligation to just tell you how much I respect 
and appreciate you as well.
    I look forward to--we are going to have to find some things 
we can work on together. We have in the past, but I think we 
have to find some things to work on together. I am going to 
count on you to help me to understand that, all right?
    With that, let me just say that I have been really 
appreciative that you both have been willing to stay this long 
and to answer every question anybody has asked.
    With that, we will recess until further notice. Thanks so 
much.
    Mr. Trumka. Thank you, Mr. Chairman.
    The Chairman. You bet. Thank you.
    [Whereupon, at 12:10 p.m., the hearing was concluded.]

                            A P P E N D I X

              Additional Material Submitted for the Record

                              ----------                              

Prepared Statement of Thomas J. Donohue, President and Chief Executive 
                   Officer, U.S. Chamber of Commerce

                             April 21, 2015

    Chairman Hatch, Ranking Member Wyden, and distinguished members of 
the committee, my name is Tom Donohue, and I am President and Chief 
Executive Officer of the U.S. Chamber of Commerce (Chamber). I am 
pleased to testify today on the importance of renewing Trade Promotion 
Authority (TPA). The Chamber is the world's largest business 
federation, representing the interests of more than 3 million 
businesses of all sizes, sectors, and regions, as well as state and 
local chambers and industry associations.

    In the Chamber's view, reinvigorating economic growth and creating 
good jobs are the nation's top priorities. Approximately 17.4 million 
Americans are unemployed, underemployed, or have given up looking for 
work. Participation in the workforce stands at the lowest since 1978, 
reflecting a significant level of discouragement.

    World trade must play a central role in reaching this job-creation 
goal. After all, outside our borders are markets that represent 80% of 
the world's purchasing power, 92% of its economic growth, and 95% of 
its consumers. The resulting opportunities are immense, and many 
Americans are already seizing them: One in four manufacturing jobs 
depends on exports, and one in three acres on American farms is planted 
for hungry consumers overseas.

    Nearly 40 million American jobs depend on trade, as detailed on the 
coalition website www.TradeBenefitsAmerica.org. Consider the number of 
jobs that depend on trade just in the states represented by senators 
serving on this committee: Colorado (709,000), Delaware (123,000), 
Florida (2.4 million), Georgia (1.2 million), Idaho (195,000), Indiana 
(796,000), Iowa (448,000), Kansas (392,000), Maryland (790,000), 
Michigan (1.2 million), Nevada (350,000), New Jersey (1.2 million), New 
York (2.6 million), North Carolina (1.2 million), Ohio (1.5 million), 
Oregon (484,000), Pennsylvania (1.6 million), South Carolina (559,000), 
South Dakota (124,000), Texas (3 million), Utah (374,000), Virginia 
(1.1 million), Washington (915,000), and Wyoming (68,000).

    Another excellent resource on the benefits of trade is 
www.TradeSupports Jobs.com, a website offering extensive information on 
U.S. exports by state and congressional district, with detailed data on 
manufactured goods and services exports, the direct jobs they support, 
and the markets for which they are bound.
                    a level playing field for trade
    While the United States receives substantial benefits from trade, 
there is more than a grain of truth in the observation that the 
international playing field is unfairly tilted against American 
workers. The U.S. market is largely open to imports from around the 
world, but other countries continue to levy tariffs on U.S. exports 
that in some cases are quite high, and foreign governments have erected 
other kinds of barriers against U.S. goods and services.

    Americans rightly sense that this status quo is unfair to U.S. 
workers, farmers, and businesses. U.S. exporters face higher tariffs 
abroad than nearly all our trade competitors. The United States 
received a rank of 130th among 138 economies in terms of ``tariffs 
faced'' by its exports, according to the World Economic Forum's Global 
Enabling Trade Report. That means U.S. exporters are often at a marked 
disadvantage to our competitors based in other countries. In addition, 
a thicket of non-tariff barriers adds to the burden exporters face.

    No one wants to go into a basketball game down by a dozen points 
from the tip-off--but that is exactly what American exporters do every 
day. These barriers are particularly burdensome for America's small and 
medium-sized companies, approximately 300,000 of which are exporters. 
The U.S. Chamber believes that American workers, farmers, and companies 
must be allowed to operate on a level playing field when it comes to 
trade.
                   benefits of u.s. trade agreements
    The good news is that America's trade agreements do a great job 
creating a level playing field--and tremendous commercial gains are the 
proof in the pudding. The U.S. Chamber of Commerce in February released 
The Open Door of Trade: The Impressive Benefits of America's Free Trade 
Agreements, a report which catalogues the success of these agreements 
and makes the case for swift renewal of TPA.

    Following are some of the report's highlights:

    America's 20 trade agreement partners represent just 6% of the 
        world's population but buy nearly half of U.S. exports. By 
        tearing down foreign barriers to U.S. products, these 
        agreements have a proven ability to make big markets even out 
        of small economies.

    U.S. exports to new trade agreement partners have grown by an 
        annual average of 18% in the five-year period following an 
        agreement's entry-into-force.

    The increased trade facilitated by these trade agreements boosted 
        U.S. output by more than $300 billion and in turn supports an 
        estimated 5.4 million U.S. jobs, according to an earlier study 
        commissioned by the Chamber entitled Opening Markets, Creating 
        Jobs: Estimated U.S. Employment Effects of Trade with FTA 
        Partners.

    Trade-related jobs also tend to pay well: For instance, 
        manufacturing jobs tied to exports pay wages that average 18% 
        higher than those that are not.

    For those worried about the U.S. trade deficit, trade agreements 
        are clearly the solution--not the problem. The United States 
        has a trade surplus with its 20 trade agreement partners as a 
        group. This includes sizeable trade surpluses in manufactured 
        goods, services, and agricultural products.

    U.S. manufacturers' exports to trade agreement partners have 
        topped $650 billion in recent years, generating revenue of 
        about $55,000 for each American factory worker.

    U.S. agricultural exports to trade agreement partners increased by 
        more than 130% in the past decade and today exceed $56 billion.

    Topping $700 billion last year, U.S. services exports are growing 
        rapidly and support millions of high-wage jobs even though the 
        potential for services industries to engage in international 
        trade is almost untapped.

    Trade agreements sweep away trade barriers that are especially 
        tough on the 300,000 small and medium-size companies that 
        account for 98% of all U.S. exporters and one-third of goods 
        exports.

    Imports play a critical role in the U.S. economy as well. 
        Companies' imports of intermediate goods, raw materials, and 
        capital goods account for more than 60% of all U.S. goods 
        imports and help them maintain their global competitiveness.
                       trade promotion authority

    To get more of these benefits, Congress must approve the Bipartisan 
Congressional Trade Priorities and Accountability Act of 2015 (``TPA 
bill''), which will renew TPA. The U.S. Chamber strongly supports this 
bill and urges Congress to approve it swiftly.

    TPA is a critical tool to help Americans sell their goods and 
services to the 95% of the world's customers living outside our 
borders. The United States has never entered into a major trade 
agreement without it. A simple form of TPA was first enacted in 1934, 
but the latest iteration lapsed in 2007.

    TPA is premised on the commonsense notion that the executive and 
legislative branches of the federal government should work together on 
trade. The Constitution gives Congress authority to regulate 
international commerce, but it gives the president authority to 
negotiate with foreign governments.

    TPA allows Congress to show leadership on trade policy by doing 
three important things: (1) It allows Congress to set negotiating 
objectives for new trade pacts; (2) it requires the executive branch to 
consult extensively with Congress during negotiations; and (3) it gives 
Congress the final say on any trade agreement in the form of an up-or-
down vote. The result is a true partnership stretching the length of 
Pennsylvania Avenue.

    While foreign governments may initiate negotiations with the United 
States without TPA in place, they have historically proven leery of 
making the difficult political choices associated with the final stages 
of negotiations in its absence. In this sense, TPA strengthens the hand 
of U.S. negotiators, helping them secure the best possible deal for 
U.S. workers, farmers and companies.

    Without TPA, the United States is relegated to the sidelines as 
other nations negotiate trade agreements without us--putting American 
workers, farmers, and companies at a competitive disadvantage. 
According to the World Trade Organization (WTO), 398 bilateral or 
regional trade agreements are in force around the globe today, but the 
United States has agreements in place with just 20 countries. There are 
more than 100 trade agreements currently under negotiation among our 
trading partners.

    The United States cannot afford to stand on the sidelines as 
foreign governments rewrite the rules of international trade and 
American companies are placed at a competitive disadvantage in market 
after market. If we do, American workers, farmers and companies will 
pay the price.
                     strong negotiating objectives
    From the U.S. business community's perspective, the negotiating 
objectives laid out in the TPA bill are balanced, ambitious, and well 
suited for attaining trade agreements that are commercially valuable. 
They reflect the evolution in U.S. trade agreements in recent years and 
push the envelope to include many of the best ideas in contemporary 
trade policy.

    The TPA bill directs U.S. trade negotiators to seek high-standard 
and comprehensive agreements. Indeed, U.S. trade agreements must be 
comprehensive, avoiding exceptions or carveouts. Whenever one party in 
ongoing trade negotiations seeks to exclude a given commodity or sector 
from an agreement, other parties follow suit, limiting the agreement's 
reach and its benefits. This is not just a matter of tariff policy: The 
TPA bill admirably instructs U.S. negotiators to seek agreements that 
extend their rules to all industries. This sends a positive signal to 
other governments about the priority the United States ascribes to 
trade agreements based on high standards and comprehensive coverage.

    The Chamber applauds the clear, concise objectives in the TPA bill 
that give our negotiators a mandate to achieve in our trade agreements 
the same effective protection and balance that are found in U.S. 
intellectual property law. It is devastating for American workers and 
companies to have their ideas and ``know how'' copied and stolen, or 
likewise to see our innovations shut out of overseas markets, because 
we either did not have a trade agreement with a key market in place or 
because that agreement lacked the strong protections we need. This bill 
strikes exactly the right balance.

    The TPA bill's objectives on digital trade and cross-border data 
flows are another example of its modernized negotiating objectives. In 
today's global economy, companies often move data across borders as 
they create new products, enhance productivity, deter fraud, protect 
consumers and grow their business. This is particularly important for 
services, many of which were considered ``non-tradable'' before the 
advent of the Internet. Recent studies estimate that within ten years 
products and services reliant on cross-border data flows will add over 
$1 trillion annually to the global economy, with the United States at 
the fore. To seize these benefits, U.S. trade agreements should 
prohibit restrictions on legitimate cross-border information flows and 
bar local infrastructure mandates relating to data storage.

    The TPA bill also directs U.S. negotiators to seek rules in future 
trade agreements to ensure that private companies are not put at a 
disadvantage when they compete with state-owned enterprises (SOEs) and 
other national champions. U.S. negotiators are instructed to guard 
against anti-competitive behavior by SOEs and ensure a level playing 
field. The Chamber applauds these objectives.

    The TPA bill's negotiating objectives also direct U.S. negotiators 
to consider how goods are produced in the 21st century using global 
value chains. Today, the goods we buy are usually labeled ``Imported'' 
or ``Made in the USA''--with no middle ground. However, companies often 
rely on global value chains that span national borders to hone their 
competitiveness. The United States is a principal beneficiary of these 
supply chains. Making customs and border procedures more efficient and 
enacting other trade facilitation reforms will remove sand from the 
gears of global value chains and enhance U.S. competitiveness.

    The Chamber also supports the TPA bill's negotiating objective that 
parties to a trade agreement avoid manipulating exchange rates to gain 
an unfair competitive advantage. On this matter, the United States 
should continue to press economies to adopt market-determined exchange 
rate systems that reflect economic fundamentals, and there are several 
fora for such discussions. In recent years, the G-7 economies have 
affirmed that they will not target exchange rates to achieve domestic 
economic objectives. G-20 members have made similar commitments to 
avoid persistent exchange rate misalignments and refrain from 
competitive devaluations.

    The notion that trade policy mechanisms can address monetary policy 
challenges elicits concern in many quarters. To cite one, it is not in 
the U.S. interest to enter into an international agreement that would 
handcuff U.S. monetary policy and limit the flexibility of the Federal 
Reserve to respond to economic circumstances. Amid these concerns, the 
Chamber believes the TPA bill's negotiating provision relating to 
currency reflects a careful and reasonable balance.

    As noted, the TPA bill reflects many of the best ideas in 
contemporary trade policy. Negotiating objectives have been modernized 
to reflect our changing economy. The careful bipartisan compromise on 
labor and environmental issues included in the four most recent U.S. 
trade agreements is reflected in the TPA bill--with some enhancements--
not least because it allowed those agreements to attract broad 
bipartisan support. There is nothing ``fast'' about the manner in which 
this bill was prepared, and it plainly reflects input from many 
quarters. Given the careful balance attained in many areas, the Chamber 
urges Members of Congress to forgo amendments and support this bill, 
which squarely reflects the U.S. national interest.
                     the trans-pacific partnership
    And how should TPA be used? The first priority is the Trans-Pacific 
Partnership (TPP).

    The booming Asia-Pacific region is a logical focus for America's 
trade negotiators. Over the last two decades, the region's middle class 
grew by 2 billion people, and its spending power is greater than ever. 
That number is expected to rise by another 1.2 billion by 2020. 
According to the International Monetary Fund, the world economy will 
grow by more than $20 trillion over the next five years, and nearly 
half of that growth will be in Asia.

    U.S. workers, farmers and businesses need access to those lucrative 
markets if they are to share in this dramatic growth. However, U.S. 
companies are falling behind in the Asia-Pacific. While U.S. exports to 
the Asia-Pacific market steadily increased from 2000 to 2010, America's 
share of the region's imports declined by about 43%, according to the 
think tank Third Way. In fact, excluding China, East Asia in 2014 
purchased a smaller share of U.S. exports in 2014 than it did five 
years earlier, despite a 54% increase in total U.S. merchandise exports 
in that period.

    One reason U.S. companies have lost market share in the Asia-
Pacific region is that some countries maintain steep barriers against 
U.S. exports. A typical Southeast Asian country imposes tariffs that 
are five times higher than the U.S. average while its duties on 
agricultural products often soar into the triple digits. In addition, a 
web of nontariff and regulatory barriers block market access in many 
countries.

    Trade agreements are crafted to overcome these barriers. However, 
Asia-Pacific nations are clinching trade deals among themselves that 
threaten to leave the United States on the outside looking in. The 
number of trade agreements between Asian countries surged from three in 
2000 to more than 50 today. Some 80 more are in the pipeline. 
Meanwhile, the United States has just three trade agreements in Asia 
(with Australia, Singapore and South Korea).

    This challenge is growing: 16 countries are launching expedited 
negotiations for a trade deal called the Regional Comprehensive 
Economic Partnership (RCEP). It includes Australia, China, India, 
Japan, Korea and New Zealand--as well as the 10 ASEAN countries--but 
not the United States.

    The TPP is America's best chance to secure a level playing field 
for trade in the Asia-Pacific region. Its objective is to achieve a 
comprehensive, high-standard and commercially meaningful trade and 
investment agreement with 11 other Asia-Pacific nations, including 
Australia, Brunei, Japan, Malaysia, New Zealand, Singapore and Vietnam. 
It also includes Canada, Mexico, Peru and Chile, thus offering a chance 
to integrate existing U.S. trade agreements in the Americas.

    One top U.S. priority is to ensure the TPP protects intellectual 
property (IP), which plays a critical role in driving economic growth, 
jobs and competitiveness. According to the U.S. Department of Commerce, 
IP-intensive companies account for more than $5 trillion of U.S. GDP, 
drive 60% of U.S. exports and support 40 million American jobs. To 
build on these strengths, the TPP must include robust IP protection and 
enforcement provisions that build on the U.S-Korea Free Trade Agreement 
and provide 12 years of data protection for biologics consistent with 
U.S. law.

    Completing the TPP would pay huge dividends for the United States. 
The agreement would significantly improve U.S. companies' access to the 
Asia-Pacific region, which is projected to import nearly $10 trillion 
worth of goods in 2020. A study by the Peterson Institute for 
International Economics estimates the trade agreement could boost U.S. 
exports by $124 billion by 2025.

    Working closely with the Office of the U.S. Trade Representative 
(USTR), the Chamber has led the business community's advocacy for the 
inclusion of strong disciplines in the TPP trade agreement on 
intellectual property, due process in antitrust enforcement, state-
owned enterprises, and regulatory coherence.

    The TPP has the potential to strengthen our nation's commercial, 
strategic and geopolitical ties across one of the fastest growing and 
most influential parts of the world. It would be an economic shot in 
the arm, boosting growth and jobs across the country.
           the transatlantic trade and investment partnership
    As we consider new trade accords with our biggest commercial 
partners, Europe calls out for attention. Indeed, the European Union is 
by far America's largest commercial partner.

    Together, the United States and the European Union account for 
nearly half of global economic output, with each producing 
approximately $17 trillion in GDP. Total U.S.-EU commerce--including 
trade in goods and services and sales by foreign affiliates--tops $6.5 
trillion annually and employs 15 million Americans and Europeans.

    The U.S.-EU investment relationship is even more impressive. 
Companies headquartered in EU Member States had invested nearly $1.7 
trillion in the United States by the end of 2013 and directly employ 
more than 3.5 million Americans. Similarly, U.S. firms have invested 
$2.4 trillion in the EU--a sum representing more than half of all U.S. 
investment abroad. It's also nearly 40 times as much as U.S. companies 
have invested in China. Because of this unique investment-based 
relationship, approximately 40% of U.S.-EU trade is intra-industry and 
intra-firm, which means that removing barriers to this trade will 
substantially boost the competitiveness of our companies in global 
markets.

    The United States and the Member States of the EU share common 
values as strong democracies with an enduring commitment to civil 
liberties and the rule of law. We uphold similar social, labor and 
environmental standards in our laws and regulations.

    For these reasons and more, the United States and the EU in July 
2013 launched the TTIP negotiations. The goal is to eliminate tariffs; 
open up services, investment and procurement; and promote regulatory 
cooperation to ensure high levels of health, safety and environmental 
protection while cutting unnecessary costs.

    The benefits could be immense. The sheer volume of transatlantic 
commerce is so large that eliminating today's relatively modest trade 
barriers could bring big benefits. According to the London-based Centre 
for Economic Policy Research (CEPR), the TTIP would boost U.S. exports 
to the EU by $300 billion annually, add $125 billion to U.S. GDP each 
year and increase the purchasing power of the typical American family 
by nearly $900--with similar benefits for Europeans.

    One key goal in the negotiations is to tackle regulatory barriers 
to trade. Companies selling their products on both sides of the 
Atlantic incur high costs complying with both U.S. and European 
regulations, even when they are very similar. For example, U.S. 
automakers run crash tests to comply with U.S. safety regulations but 
must do so a second time to comply with EU standards--and vice versa. 
Mutual recognition of these regulations would save consumers up to 7% 
on each car or truck and enhance the global competitiveness of U.S. and 
European companies.

    TTIP also is an opportunity to raise global standards. With a 
combined GDP of more than $30 trillion, the sheer size of the 
transatlantic economy will incentivize other countries to look to 
standards set in the TTIP. Accordingly, the United States and the EU 
should establish a high bar in such areas as cultivating the digital 
economy and combating trade and investment protectionism.

    Indeed, refusing to pursue this agreement would exact a price as 
other countries enter into new trade pacts with the EU. Already, the EU 
has dozens of trade agreements in force with such countries as Mexico, 
Central America, Colombia, South Africa and South Korea. It has 
concluded negotiations for additional agreements with Canada, 
Singapore, Ukraine and others.

    The EU is currently in negotiations with India, Japan, Malaysia, 
Thailand, Vietnam and the Mercosur bloc. Without a trade agreement in 
place with the EU, U.S. workers and companies could be put at a 
disadvantage in the giant European marketplace.

    Finally, the TTIP would not benefit the United States and the EU at 
the expense of other nations. In fact, liberalizing transatlantic trade 
would increase GDP in the rest of the world by as much as $130 billion, 
according to a CEPR study.
                    the trade in services agreement
    While it hasn't made national headlines, the United States has 
joined with more than 50 other countries to launch negotiations for a 
high-standard trade agreement in services dubbed the Trade in Services 
Agreement (TISA). This exciting new accord, covering about two-thirds 
of the global market for services, has the potential to ignite economic 
growth and job creation in the United States and abroad.

    Services are a clear strength for the United States, which is by 
far the world's largest exporter of services. U.S. services exports 
reached $710 billion in 2014, and the U.S. services trade surplus 
reached $232 billion. In addition, services sales by foreign affiliates 
of U.S. multinational corporations topped $1 trillion. Combined, total 
sales of U.S. services abroad reached approximately $1.7 trillion in 
2014.

    Contrary to popular misconception, many jobs in services pay well. 
Approximately 18 million Americans are employed in business services 
such as software, architectural services, engineering and project 
management services, and insurance--all of which generate billions of 
dollars in exports. Wages in these sectors are 20% higher on average 
than those in manufacturing, which employs about 12 million Americans.

    Even so, the potential for service industries to engage in 
international trade is almost untapped. One in four U.S. factories 
exports, but just one in every 20 providers of business services does 
so. Just 3% of U.S. services output is exported, according to the 
Peterson Institute for International Economics.

    The chief goals of the United States in TISA are to expand access 
to foreign markets for U.S. service industries and prohibit 
discrimination against American service providers in foreign markets. 
In addition, the TISA will put in place rules to prevent regulations 
from being used as disguised trade barriers that shut out U.S. services 
exports.

    The payoff from the TISA could be huge. Eliminating barriers to 
trade in services could boost U.S. services exports by as much as $860 
billion--up from 2013's record $682 billion--to as much as $1.4 
trillion, according to the Peterson Institute. Such a dramatic increase 
could create as many as three million American jobs.

    The TISA may not be making headlines anytime soon, but its 
potential to drive economic growth and job creation in the United 
States and beyond is significant. The American business community is 
committed to working closely with U.S. negotiators, foreign governments 
and Congress to press for a strong agreement that translates this 
potential to reality.
                      the world trade organization
    In addition to these negotiations, the U.S. Chamber remains firmly 
committed to the global rules-based trading system embodied by the 
World Trade Organization (WTO). In the view of Chamber members, the 
U.S. business community needs the WTO today as much as ever. Its rules 
inform national policy at home and abroad, and its dispute settlement 
system commands global respect.

    The multilateral trading system has benefited the entire world. 
Eight successful multilateral negotiating rounds have helped increase 
world trade from $58 billion in 1948 to $22 trillion today. This is a 
40-fold increase in real terms, and it has helped boost incomes in 
country after country.

    Renewing TPA could open the door to additional trade agreements 
negotiated through the WTO. While it is not required for the critical 
expansion of the Information Technology Agreement, TPA will be needed 
to secure passage of the WTO's Environmental Goods Agreement now under 
negotiation.

    The United States and 13 other WTO Members, including China and the 
28 Member States of the European Union, last year launched this new 
initiative to eliminate tariffs on environmental goods. These countries 
account for 86% of global trade in environmental goods. The initiative 
aims to build on the APEC Leaders' commitment to reduce tariffs on the 
APEC List of 54 Environmental Goods to make these technologies cheaper 
and more accessible.

    The Chamber welcomed the initiative. Eliminating barriers to trade 
in environmental goods such as solar panels, gas and wind turbines, and 
products to control air pollution and treat wastewater is both pro-
environment and pro-growth.

    Total global trade in environmental goods approaches $1 trillion 
annually, but some countries currently apply tariffs to these goods as 
high as 35%, discouraging their use. The countries taking part in this 
initiative have begun to reach out to other countries to encourage them 
to join in.
                 other trade priorities before congress
    In addition, the Chamber strongly supports the AGOA Extension and 
Enhancement Act of 2015, which would renew both the African Growth and 
Opportunity Act (AGOA) and the Generalized System of Preferences (GSP) 
and provide continued trade benefits for Haiti.

    AGOA benefits not only the economies of sub-Saharan Africa but U.S. 
companies and consumers here at home, but it will expire on September 
30, 2015. Moving this bill sooner rather than later will avert 
disruption of trade flows and afford companies the certainty they need 
to make investments and sourcing decisions. Moreover, as the first and 
only economic policy platform that exists between the United States and 
sub-Saharan Africa, AGOA's looming expiration weighs heavily on U.S. 
relations with the region and threatens to undermine the gains that 
African economies have made under this program.

    GSP expired on July 31, 2013. Since 1976, GSP has promoted economic 
growth in more than 120 developing countries by providing duty-free 
access to the U.S. market for thousands of selected products. GSP helps 
keep U.S. manufacturers and their suppliers competitive. Approximately 
three-quarters of U.S. imports using GSP are raw materials, parts and 
components, or machinery and equipment used by U.S. companies to 
manufacture goods in the United States for domestic consumption or for 
export. The products coming in under GSP generally do not compete with 
U.S.-made goods in any significant way. According to a 2006 U.S. 
Chamber of Commerce study, over 80,000 American jobs are associated 
with moving GSP imports from the docks to farmers, manufacturers, and 
retail shelves.

    In addition, the Chamber strongly supports efforts to modernize our 
own borders and facilitate trade and travel through customs 
reauthorization legislation. A bill to reauthorize U.S. Customs and 
Border Protection is long overdue, as the dramatic growth of global 
supply chains has made trade facilitation critical to business 
competitiveness.

    Technological progress and falling transportation costs--coupled 
with companies' need to access resources, labor, and markets--have 
pushed companies to source many raw materials, intermediate goods, and 
other inputs from locations around the world. Outdated customs 
procedures can raise costs for U.S. businesses that rely on global 
supply chains to access these inputs and to reach new consumer markets. 
Making improvements to customs procedures to ease cross-border friction 
will smooth the flow of trade and ensure the timely delivery of inputs 
and final products. Small- and medium-sized businesses would be among 
the top beneficiaries.

    The Chamber is eager to advance legislation in the 114th Congress 
to promote trade facilitation, modernize customs processes, improve 
enforcement of customs and trade laws, advance cooperation among 
government agencies, enhance intellectual property rights enforcement, 
and set the global standard for border management. There is bipartisan 
support for this legislation, and we urge Congress to move this 
legislation forward alongside the TPA bill.
                               conclusion
    To conclude, the United States cannot afford to sit on the 
sidelines while others set the rules of world trade. To create the 
jobs, growth, and prosperity our children need, we need to set the 
agenda. Otherwise, our workers and businesses will miss out on huge 
opportunities.

    We need a laser-like focus on access to foreign markets. We 
urgently need to renew TPA. Then, Congress and the administration 
should use this legislation to pursue new trade agreements to ensure 
that international commerce is fair. The trans-Pacific, trans-Atlantic, 
services, and WTO trade agreements now being negotiated represent a 
once in a lifetime opportunity to tear down the walls that have shut 
American goods and services out of foreign markets for so long.

    And with all our trade agreements--old and new--we need to ensure 
they are fully enforced. The trade agreements we enter into are not 
worth the paper they are written on if they are not fully enforced.

    The United States is home to many of the best workers and companies 
in the world. We create many of the world's most innovative products. 
We have also got tougher competition facing us than ever before. But 
our productivity is high, and our energy costs are going down. The 
facts show we can compete and win.

    The Chamber looks forward to working with Congress and the 
administration to advance a bold trade agenda to generate growth, 
opportunity, and jobs.

    Thank you very much, and I look forward to your questions.

                                 ______
                                 

        (From the U.S. Chamber of Commerce, February, 11, 2015)

       The Open Door of Trade: How America's FTAs Facilitate the 
                           Exchange of Trade
                           By John G. Murphy
Part 2 in an occasional series

Previously: Assessing the Benefits of America's FTAs (http://
www.uschamber.com/blog/open-door-tade-assessing-benefits-america-s-
ftas)

What are the benefits of America's free trade agreement (FTAs)? With 
debate over the renewal of Trade Promotion Authority (TPA) now underway 
in Washington, the Chamber is publishing this series of blog posts 
examining the benefits of the trade agreements that TPA makes possible. 
Here is the full report on the benefits of America's free trade 
agreement.

These benefits are most obvious in the booming trade we enjoy with the 
20 countries with which we have entered into FTAs. While these 
countries represent just 10 percent of the world economy outside the 
United States, in recent years they have purchased nearly half of all 
U.S. exports, according to the U.S. Department of Commerce.

It should come as no surprise that eliminating tariffs and other trade 
barriers allows trade to expand. As the chart below indicates, U.S. 
exports to new FTA partner countries have grown roughly three times as 
rapidly on average in the five-year period following the agreement's 
entry-into-force as the global rate of growth for U.S. exports.

        Increase in U.S. Exports Since FTA Entry Into Force PMerchandise Exports, Millions of U.S. Dollars
----------------------------------------------------------------------------------------------------------------
                                                                           U.S.Exports      U.S.
                                                   Date of    Year Before     to FTA     Exports to
              FTA Partner Country                Entry-into-  FTA Entered   Partner in  FTA Partner   % Increase
                                                   Force of    into Force    Baseline    Five Years
                                                     FTA       (Baseline)      Year        Later
----------------------------------------------------------------------------------------------------------------
Israel                                              9/1/1985         1985      2,579.6      3,203.0        24.2%
----------------------------------------------------------------------------------------------------------------
Canada                                              1/1/1989         1988     71,622.0    100,444.2        40.2%
----------------------------------------------------------------------------------------------------------------
Mexico                                              1/1/1994         1993     41,580.8     56,791.6        36.6%
----------------------------------------------------------------------------------------------------------------
Jordan                                            12/17/2001         2001        339.0        650.3        91.8%
----------------------------------------------------------------------------------------------------------------
Chile                                               1/1/2004         2003      2,715.0     11,857.4       336.7%
----------------------------------------------------------------------------------------------------------------
Singapore                                           1/1/2004         2003     16,560.2     27,853.6        68.2%
----------------------------------------------------------------------------------------------------------------
Australia                                           1/1/2005         2004     13,957.9     19,599.3        40.4%
----------------------------------------------------------------------------------------------------------------
Morocco                                             1/1/2006         2005        480.8      1,947.0       305.0%
----------------------------------------------------------------------------------------------------------------
El Salvador                                         3/1/2006         2005      1,854.3      2,433.1       31 .2%
----------------------------------------------------------------------------------------------------------------
Honduras                                            4/1/2006         2005      3,253.8      4,606.4       41 .6%
----------------------------------------------------------------------------------------------------------------
Nicaragua                                           4/1/2006         2005        625.5        981.3        56.9%
----------------------------------------------------------------------------------------------------------------
Guatemala                                           7/1/2006         2005      2,835.4      4,478.3        57.9%
----------------------------------------------------------------------------------------------------------------
Bahrain                                             8/1/2006         2005        350.8      1,249.6       256.2%
----------------------------------------------------------------------------------------------------------------
Dominican Republic                                  3/1/2007         2006      5,350.5      7,346.2        37.3%
----------------------------------------------------------------------------------------------------------------
Costa Rica                                          1/1/2009         2008      5,679.8      7,223.5        27.2%
----------------------------------------------------------------------------------------------------------------
Oman                                                1/1/2009         2008      1,382.0      1,571.3        13.7%
----------------------------------------------------------------------------------------------------------------
Peru                                                2/1/2009         2008      6,183.0     10,101.8        63.4%
----------------------------------------------------------------------------------------------------------------
South Korea                                        3/15/2012         2011     43,461.6           NA           NA
----------------------------------------------------------------------------------------------------------------
Colombia                                           5/15/2012         2011     14,335.7           NA           NA
----------------------------------------------------------------------------------------------------------------
Panama                                            10/31/2012         2011      8,251.6           NA           NA
----------------------------------------------------------------------------------------------------------------
Average annual % change in U.S. exports for all FTAs in first five years:                                  18.0%
Average annual % change in U.S. exports to the world 2000-2010 (for comparison):                            6.3%
----------------------------------------------------------------------------------------------------------------
Note: As the U.S.-Israel and U.S.-Jordan FTAs entered into force late in the calendar year, those years are used
  as the baseline in this table.
Source: U.S. Department of Commerce.

Some FTAs have helped produce even more impressive results. U.S. 
exports to Chile and Morocco quadrupled in the five years after FTAs 
entered into force. This boost to U.S. export growth is especially 
pronounced with more recent FTAs, which are front-loaded to eliminate 
tariffs rapidly, open services markets, and eliminate non-tariff 
barriers more comprehensively than earlier FTAs.

The trade balance is a poor measure of the success of these agreements, 
but the trade deficit is often cited by trade skeptics as a principal 
reason why the United States should not negotiate additional FTAs. 
However, taken as a group, the United States ran a trade surplus with 
its FTA partner countries in 2012 and 2013, and this surplus likely has 
grown since then (see chart below).

                  U.S. Trade Balance With FTA Partners
------------------------------------------------------------------------
                                       2011         2012         2013
------------------------------------------------------------------------
Merchandise                          $(79,918)    $(70,820)    $(66,612)
------------------------------------------------------------------------
Services                               $65,841      $70,876      $75,034
------------------------------------------------------------------------
Total                                $(14,077)          $56       $8,422
------------------------------------------------------------------------
Source: U.S. Department of Commerce.

In fact, the United States has recorded a trade surplus in manufactured 
goods with its FTA partner countries for each of the past five years, 
according to the U.S. 
Department of Commerce. This surplus reached $27 billion in 2009 and 
had expanded to $61 billion by 2013.

However, exports are just one side of the trade equation: Imports 
provide direct benefits to Americans as well. They mean lower prices 
for American families as they try to stretch their budgets-and for 
companies seeking raw materials and other inputs. In recent decades, 
lower tariffs have stimulated U.S. productivity through greater 
competition in the marketplace and brought greater product choices to 
U.S. producers and consumers. According to the Peterson Institute for 
International Economics, this has brought ``a gain in annual income of 
about $10,000 per household.''

In fact, half a century of trade liberalization has made it less and 
less relevant to look at international commerce through a mercantilist 
lens focused solely on exports. North America offers a useful case 
study: After more than two decades of free trade, officials and 
business leaders in Canada, Mexico, and the United States point out 
with growing frequency that workers and firms across the continent 
increasingly ``make things together,'' employing ``global value 
chains'' that cross national borders.

This approach leads to efficiencies that have proven vital to the 
global competitiveness of North American industry. In the highly 
integrated auto sector, for example, it is common for cars assembled in 
the Great Lakes region to cross the U.S.-Canada border half a dozen 
times as they are assembled. In turn, American auto exports increased 
82 percent between 2009 and 2012, according to the International Trade 
Commission, reaching an all-time high of approximately 2 million cars 
and trucks in 2013. A growing share is headed to Asia, the Middle East, 
and other locations: U.S.-built cars shipped to China have risen nearly 
sixfold since 2009.

One study found that ``one-quarter of U.S. imports from Canada consist 
of value added from the United States itself, and a huge 40 percent of 
U.S. final good imports from Mexico consist of its own [U.S.] value 
added.'' As Mexican officials have pointed out, ``For every dollar that 
Mexico earns from exports, 50 cents are spent on American goods.''

North America's mature global value chains reduce costs for businesses 
and enhance their global competitiveness, but there are other examples 
where U.S. firms are operating with a host of partners in other 
regions. For example, one recent study found that 70 percent of the 
final retail price of apparel assembled in Asia--and sold in the United 
States--is created by American innovators, designers, and retailers. 
Further, even though nearly all apparel and footwear sold in the United 
States is imported, these industries employ 4 million Americans.

The principal rationale for FTAs is to unleash new flows of mutually 
beneficial trade between Americans and the citizens of these 20 
countries--and do so in a way that is fundamentally fair. On this 
score, these FTAs have been a dramatic success for the United States--
as they have been for our FTA partners.

                                 ______
                                 
 Prepared Statement of Hon. Michael Froman, U.S. Trade Representative, 
                   Executive Office of the President

                             April 16, 2015

    Chairman Hatch, Ranking Member Wyden, Members of the Senate Finance 
Committee, thank you for the opportunity to testify today.

    Trade plays a vital role in supporting good jobs, spurring growth, 
and strengthening the American middle class. As a result, increasing 
access to foreign markets for U.S. exports through enhanced trade 
opportunities has long been a bipartisan effort. Closely related to 
these economic stakes is the simple fact that sustaining our strength 
and influence abroad requires that we lead on trade. Our nation's 
economic strength and our position in the world hinges on our ability 
to lead--and to lead together.
                      economic importance of trade
    Trade has been one of our strongest engines for prosperity and 
progress. Since World War II, trade liberalization has added 
significantly to our GDP, boosting average family incomes year after 
year. These gains have disproportionately benefitted low-income 
Americans, who spend a much greater portion of their income on highly 
traded staples.

    Today, the importance of trade to America's economic well-being has 
never been clearer. Since 2009, U.S. exports have contributed nearly 
one-third of our overall economic growth. Last year, U.S. exports 
reached $2.35 trillion, a record-breaking amount that supported an 
estimated 11.7 million jobs, an increase of 1.8 million jobs since 
2009. With those jobs paying up to 18 percent more than jobs not 
related to exports, trade policy has an important role to play in 
raising wages and living standards for the middle class.

    Partially as a result of our exporting success, our economy 
continues to grow. Job creation is happening at the fastest rate since 
the 1990s, and wages are finally starting to rise. After nearly two 
decades in decline, factories are opening in this country again, 
manufacturing is starting to return from overseas, and we have added 
900,000 new manufacturing jobs over the last five years. Last week, we 
published a report detailing how trade is benefitting all 50 states and 
highlighting some of the small and medium-sized American businesses 
that are competing and winning in global markets.

    But we could do much better if the playing field were level. Put 
simply, the United States is already an open economy, but others are 
not. Our average applied tariff is only 1.4 percent, among the lowest 
in the world. In contrast, our businesses face much higher tariffs, and 
countless non-tariff measures abroad. Many of these imbalances are in 
areas where the United States is most competitive: 50% tariffs on 
machinery, 70% on autos, and up to 400% on certain agricultural 
products. In a world where more than 95 percent of all customers live 
outside our borders, the disadvantages our workers and businesses face 
are less an inconvenience than an injustice.
                       advancing the trade agenda
    As global markets continue to grow, so too does the opportunity for 
American workers and businesses. Take Asia, whose middle class consumer 
population of 525 million is expected to swell to 3.2 billion over the 
next 15 years. By 2030, two-thirds of the world's middle class will 
call Asia home. These countries will be the world's fastest-growing 
consumers of everything from cars and cosmetics to streaming movies and 
music to fresh fruit and vegetables, and their governments and 
businesses will be the fastest-growing investors in everything from 
infrastructure to aircraft to satellites. As they grow, the question 
is, will American workers and businesses get a fair shot at serving 
these markets? Will they be buying Made-in-America products or products 
made elsewhere?

    At the forefront of our trade agenda is TPP, which will cover 11 
other countries and nearly 40 percent of the global economy. TPP will 
grow our exports by more than $123 billion by 2025, according to one 
estimate. These exports will support many more high-paying jobs. TPP 
will level the playing field for U.S. businesses and workers by 
establishing the highest standards of any trade agreement in history, 
as well as the first disciplines on state-owned enterprises and on 
maintaining a free and open Internet.

    Equally important, TPP represents a once-in-a-generation 
opportunity to play a leading role in writing the rules of the road for 
the world's fastest-growing region. That's why TPP is a central pillar 
of America's rebalance to Asia, as Secretary of Defense Carter recently 
noted. By leading on these issues, the United States underscores our 
commitment as a Pacific power to the region, deepens our alliances and 
partnerships, and establishes standards that reflect our interests and 
values. We can launch a race to the top, rather than be subject to a 
race to the bottom that we cannot win and should not run.

    The stakes become even clearer when you consider the alternatives 
to American leadership on trade. In recent years, Asia-Pacific 
countries have entered into over 200 trade agreements, altering the 
landscape of trade and putting U.S. companies and workers at a 
disadvantage.

    As we speak, China and others are negotiating an agreement that 
would encompass over three billion people, most of the new global 
middle class. This would create a strong tidal pull for investment and 
a powerful disincentive for investment in the United States. If we 
allow others to carve up the markets of the future--and to do so 
without raising labor and environmental standards, promoting 
innovation, and ensuring fair competition and openness--our workers and 
businesses will pay a steep price.

    The choice we face today is clear. On the one hand, the promise of 
leading on trade includes more good jobs, robust growth, and a stronger 
middle class. On the other hand, the status quo is not only 
counterproductive, but unsustainable. The inescapable fact is that we 
cannot protect American workers by ceding our leadership and standing 
by as other nations set the rules of the road. If we want to drive 
production in the United States, and create good jobs here, we must 
lead through a trade policy that reflects our interests and our values.

    America's interests extend beyond the Asia-Pacific, of course, and 
so does the importance of our leadership on trade. During my testimony 
in January, I discussed in much greater depth and detail the efforts 
that comprise the President's Trade Agenda, whether it is the 
Transatlantic Trade and Investment Partnership we're negotiating with 
the EU or the work we're undertaking in Geneva to further WTO 
negotiations, eliminate tariffs on environmental goods and information 
technology products and increase access for our world class services 
exporters.
                  strengthening a bipartisan tradition
    A critical tool for unlocking the benefits of trade is Trade 
Promotion Authority (TPA) legislation. The long bipartisan tradition on 
this issue began when President Franklin Roosevelt signed the first 
trade negotiating legislation in 1934. During the eight decades since, 
Congresses of both parties have revised and renewed that authority 18 
different times for Democratic and Republican Presidents alike.

    Under the modern form of TPA, Congress establishes legislative 
procedures for the consideration and approval of trade agreements, 
including setting out what objectives should be negotiated and how the 
Administration will consult with it before and during negotiations.

    But TPA hasn't been updated since 2002. During that time, the 
global economy has changed significantly. State-owned enterprises have 
increasingly tilted the playing field against our workers and 
businesses by receiving unfair subsidies while competing for the same 
customers. The digital economy has exploded. Congress now has the 
opportunity to account for the tectonic shifts in the global economy as 
well as the emerging consensus around key issues affecting trade, 
including labor, the environment and innovation policies.
                               conclusion
    With so much at stake, I look forward to continue working with this 
Committee and the Congress as a whole to pass TPA and advance the 
broader trade agenda, including renewing the Generalized System of 
Preferences that expired in 2013 and the African Growth and Opportunity 
Act well before its expiration in September. We also look forward to 
renewing Trade Adjustment Assistance, which helps provide American 
workers with the skills to compete in the 21st century.

    Thank you again for the opportunity to testify today. I welcome 
your questions.

                                 ______
                                 
        Question Submitted for the Record to Hon. Michael Froman
              Question Submitted by Hon. Patrick J. Toomey
    Question. As we work to promote trade opportunities in Europe and 
the Pacific Rim, I want to raise a significant issue relating to the 
enforcement of the existing free trade agreement between the United 
States and Morocco.

    In 2014, the Government of Morocco enacted an export quota on 
Gigartina seaweed. Gigartina is a significant source of carrageenan, a 
food manufacturing input used by several U.S. companies. It is my 
understanding that the export quota announced in June of 2014 
significantly reduces the amount of Gigartina available to U.S. 
companies, which may detract from the competiveness of our domestic 
food manufacturers. Further, my office has been informed that the 
government of Morocco has provided no legitimate environmental or 
economic reason to impose this quota and it does not appear to be 
permitted under any multilateral or bilateral trade agreement.

    I respectfully request that you investigate Morocco's export quota 
on Gigartina and, if necessary, seek consultations with the government 
of Morocco to resolve the issue in a manner that is consistent with all 
relevant WTO and FTA obligations.

    Answer. Morocco's export quota on Gigartina seaweed has been and 
continues to be a high priority in our bilateral engagement with 
Morocco. We have raised concerns relating to the export quota with 
Moroccan officials on numerous occasions, both in person and in 
writing. The issue featured prominently in the U.S.-Morocco Free Trade 
Agreement Joint Committee meeting in February and in a more recent 
meeting between USTR and the Moroccan Ambassador in Washington in June. 
We are working with affected stakeholders and continue--in close 
cooperation with the Department of State, the Department of 
Agriculture, and the U.S. Embassy in Morocco--to gather relevant facts 
and to urge the Government of Morocco to provide information (including 
appropriate studies) as to whether there is a legitimate basis for 
maintaining the restrictive export quota. A letter sent in June by the 
U.S. Ambassador to Morocco to relevant Moroccan authorities is the most 
recent example of this interagency cooperation. The U.S. Embassy in 
Rabat is also coordinating with European Union officials--whose 
industry is likewise affected by the export quota--in order to 
reinforce our efforts.

    Our next steps in engaging the Moroccan authorities on this issue 
will depend on what we learn from the Moroccans and what we learn from 
affected stakeholders and our own sources about the basis for the 
Moroccan government's actions with respect to the export quota.

                                 ______
                                 
               Prepared Statement of Hon. Orrin G. Hatch
April 16, 2015

WASHINGTON--Senate Finance Committee Chairman Orrin Hatch (R-Utah) 
today delivered the following opening statement at a committee hearing 
on Congressional trade priorities:

    I would like to thank everyone for attending today's hearing on 
Congress and U.S. Tariff Policy.

    And, welcome to the distinguished panel of witnesses we have before 
the committee today: Ambassador Froman, Secretary Lew, and Secretary 
Vilsack.

    Each of you gentlemen serves in key positions and makes decisions 
every day on important trade issues. We look forward to your testimony 
and appreciate your contributions to this debate.

    My hope is that this hearing will help kick-start the first real 
opportunity we've had to debate U.S. trade policy in a number of years 
as we get closer to introducing and enacting legislation to renew Trade 
Promotion Authority, or TPA.

    Let me start by stating one simple premise: U.S. trade with other 
countries is a good thing.

    Trade creates new opportunities for America's workers, enhances the 
standard of living for our citizens, helps our national security by 
solidifying alliances with like-minded nations, advances America's 
values abroad, strengthens the rule of law, and helps lift people 
across the globe out of poverty.

    To effectively achieve these goals, Congress must be an effective 
partner with the administration.

    Our nation's constitutional framework is complex. Article I of the 
Constitution grants to the Congress the power to regulate commerce with 
foreign nations. But, Article II grants the President the power to 
conduct foreign policy.

    I think most would agree that trying to negotiate an agreement 
among many different parties with different priorities and vague 
objectives is an inherently difficult, if not impossible, proposition. 
Most would also agree that it would be even more difficult to reach an 
agreement if the parties are unsure if their negotiating partners will 
be able put the agreement into force.

    Given those realities, it's pretty easy to understand why TPA is so 
important. No potential trade partner will give our negotiators their 
best offer unless they know what issues matter to us most and whether 
we can deliver on the deal. Simply put, for America to be able to 
succeed at the trade negotiating table and to set the rules for a fair 
international marketplace, we must speak with one voice in our demands 
and provide assurance that we will deliver what we promise.

    Now, people may have different theories about how to best achieve 
those goals, but there is only one legislative tool with a proven track 
record, and that is TPA.

    TPA is the most powerful tool in Congress's trade arsenal. For 
decades now, robust TPA laws have ensured that Congress plays a leading 
role in setting our country's trade agenda and providing our trade 
negotiators with the necessary tools to reach the best deals possible.

    Currently, the Obama Administration is in the midst of negotiating 
some of the most ambitious trade agreements in our nation's history. I 
commend them for that. But, as I've stated on a number of occasions, 
those negotiations will almost certainly fail if Congress does not 
renew TPA.

    And, make no mistake, failure in these negotiations would have a 
negative impact on our economy.

    More than 96 percent of the world's consumers live outside the 
United States. In order to be competitive, American businesses need to 
be able to sell more American-made products and services to those 
overseas customers.

    Put simply, if we want to create more opportunity and high-paying 
jobs here at home, we need to open more foreign markets to U.S. goods 
and services. We should be doing all we can to tear down barriers to 
American exports while, at the same time, laying down enforceable rules 
for our trading partners so we can be sure that American workers and 
job-creators are competing on a level playing field.

    We need to be leading the world on trade, writing the rules and 
setting the standards. If we don't, other countries--countries like 
China--most certainly will.

    We can address all of these concerns by passing strong TPA 
legislation. Senator Wyden and I are currently working to do just that.

    I want to thank Senator Wyden for his efforts to help us get as far 
as we have. I also want to once again thank the three cabinet officials 
who are here to share their views on the role of Congress, U.S. tariff 
policy, and what our work means to our nation's international trade 
agenda.

                                 ______
                                 
               Prepared Statement of Hon. Orrin G. Hatch
April 16, 2015

WASHINGTON--Senate Finance Committee Chairman Orrin Hatch (R-Utah) 
today delivered the following opening statement at a committee hearing 
on trade priorities following the announcement of a bipartisan, 
bicameral Trade Promotion Authority bill:

    Welcome back. I appreciate everyone who has returned for this 
second half of our hearing on trade policy.

    Ambassador Froman, thank you for agreeing to stay a little longer.

    I'm pleased to announce that Ranking Member Wyden, House Ways and 
Means Committee Chairman Ryan, and I have reached an agreement on 
legislation to renew Trade Promotion Authority. We've also reached an 
agreement on bills to address Trade Adjustment Assistance and to 
reauthorize and extend some trade preference programs.

    I hope that all my colleagues will take the time to carefully study 
these bills. Once they do, I think they will find that we've been able 
to put together some balanced and effective legislation that will help 
improve the health of our economy and better serve our nation's 
hardworking taxpayers.

    The TPA bill contains the clearest articulation of trade priorities 
in our nation's history. It includes nearly 150 ambitious, high-
standard negotiating objectives, including strong rules for 
intellectual property rights and agricultural trade, as well as 
protections for U.S. investment. Many of these objectives break down 
barriers that American exporters face in the 21st-century economy, such 
as regulatory barriers, currency manipulation, and state-owned 
enterprises.

    The bill contains unprecedented consultation requirements that will 
ensure that Congress is an equal partner throughout the negotiations. 
It also includes new transparency requirements that will help the 
public know and understand what is being discussed before agreements 
are signed.

    And, like prior TPA bills, the procedures in our bill guarantee 
that all trade agreements will get an up-or-down vote in Congress.

    At the same time, we included new tools to hold the administration 
accountable, including a procedure that Congress can employ if our 
trade negotiators fail to consult or make progress toward meeting the 
negotiating objectives.

    This is a strong bill, one that builds off the success of previous 
iterations of TPA to enhance our efforts to expand market access for 
our exporters and job creators.

    Throughout the process of crafting this legislation, I have worked 
closely with my colleagues and I would just like to thank all of them 
for their contributions.

    I'd like to thank Senator Portman for his input on trade issues. 
He's got a great background in this area and his leadership on TAA and 
HCTC has been extremely important.

    Senator Toomey has been a great partner on enforcement issues. The 
trade bills we are looking at include the strongest language yet on 
enforcement and that's really because of members like Senator Toomey 
and their work.

    Senator Grassley, I'd like to thank you as well for your leadership 
on agriculture issues.I'd also like to say a warm thanks to Senator 
Isakson who has also been a strong voice for agriculture issues. In 
addition, Senator Isakson has been a leader for years on the African 
Growth and Opportunity Act and I look forward to working with him to 
get that renewed along with the Generalized System of Preferences.

    We are lucky to have Senator Burr and Senator Scott on the 
committee. Both have been strong advocates in this process for the 
textiles industry, and I would like to thank them for their work.

    Senator Thune has provided many creative ideas on digital trade. I 
think we have been able to incorporate a lot of them here. I'd like to 
thank him for his contributions.

    Senator Crapo and Senator Coats have been of great assistance on 
some particularly challenging agriculture issues, and I'd like to thank 
them as well.

    As I mentioned this morning, we intend to move expeditiously on 
these bills. If we don't act now we will lose our opportunity. I 
appreciate the cooperation of all our members moving forward.

                                 ______
                                 
               Prepared Statement of Hon. Orrin G. Hatch
April 21, 2015

WASHINGTON--Senate Finance Committee Chairman Orrin Hatch (R-Utah) 
today delivered the following opening statement at a committee hearing 
on trade priorities and The Bipartisan Congressional Trade Priorities 
and Accountability Act of 2015:

    I'd like to welcome everyone to the continuation of our hearing on 
Congress and U.S. Tariff Policy. Today, we have a very distinguished 
panel of witnesses that I hope will help us expand the ongoing 
discussion of our nation's trade agenda.

    As everyone here knows, last week Senator Wyden and I, along with 
House Ways and Means Committee Chairman Ryan, introduced legislation to 
renew Trade Promotion Authority, or TPA. Our intention is to mark up 
the TPA bill--along with a handful of other trade-related bills--later 
this week.

    This legislation is a long time coming.

    TPA expired in 2007. While talks for various trade agreements have 
gone on since that time, without TPA in effect, our negotiators have 
been effectively negotiating with one hand tied behind their backs 
because they have not been able to assure our trading partners that the 
deal they sign is the one Congress will vote on in the end.

    Our legislation will fix that.

    I want to thank Ranking Member Wyden for his support and assistance 
thus far. We've got a long way to go, but, working together, I am 
confident we can get there.

    Now, some have expressed concerns about the process by which we're 
moving this bill forward. For example, I've heard arguments that we're 
moving too quickly, without adequate discussion or examination.

    Those concerns are, in my view, unfounded.

    First of all, the bill on which our current TPA legislation is 
based was first introduced in January of 2014, almost a year and a half 
ago. Since that time, it has been available for examination, 
dissection, discussion, and comment.

    Thousands of organizations weighed in on the merits of that bill, 
including business associations, organized labor, think tanks, and 
advocacy groups.

    Many members of Congress from both parties and in both chambers are 
on the record either praising or criticizing that bill. And, officials 
in the Obama Administration expressed their support for it.

    True enough, in our discussions, Senator Wyden, Chairman Ryan, and 
I made some improvements to that original bill. But, the fundamentals 
remain the same and we've been very transparent as to what the changes 
have been.

    Second, in the 113th Congress, the Finance Committee held nine 
hearings on trade, and TPA was brought up at virtually every one of 
them. I know this because, more often than not, I was the one bringing 
it up.

    One of those hearings was devoted specifically and entirely to TPA 
and included the testimony of witnesses across the spectrum, including 
one representing organized labor.

    Finally, since the 114th Congress convened just about three months 
ago, this committee has had three hearings in which trade and TPA was a 
major topic of discussion. Today's hearing is the fourth.

    In other words, this is well-covered territory for this committee.

    So, while I understand and respect that there are sincerely-held 
views on this topic, some of which are different than mine, any 
arguments that we've been less than forthcoming and transparent with 
this TPA legislation are, not to put too fine a point on it, nonsense.

    I've been in the Senate a long time. And, I think I'm generally 
considered to be pretty reasonable. I am certainly willing to listen to 
and consider any genuine concerns that some may have about process. I 
want all sides to be heard and I want a fair and open debate. That's 
why we're having this additional hearing.

    By all means, we should have a frank and open discussion about 
these issues and I hope we will continue to do so today. But, let's not 
dress up opposition to trade and TPA as concerns about process.

    During our hearing last week, I made two assertions about trade.

    I stated plainly that U.S. trade with foreign countries is a good 
thing. And, I said that TPA is the best tool Congress has in its 
arsenal to help influence and facilitate trade.

    Those are pretty fundamental assertions. And, at the end of the 
day, people are either going to agree with them or they won't. More 
hearings and weeks of additional delays aren't going to change many 
minds one way or the other on those essential issues.

    With that in mind, I welcome today's hearing. Like I said, we've 
got a very distinguished panel of witnesses who I think will speak to 
the heart of these matters. I look forward to a spirited discussion.

    For my part, I just want to make clear--if it's not clear enough 
already--that I believe Congress should be working hand in hand with 
the administration to break down barriers to foreign markets in order 
to give our businesses and job creators a chance to compete in the 
global marketplace.

    The United States should be a leader in international trade. We 
should be setting the standards and making the rules. We simply cannot 
afford to sit on the sidelines and let other countries dictate where 
the world goes on trade.

    Trade is an essential element of a healthy economy. We should be 
doing all we can to advance a trade agenda that works for America and 
advances our interests on the world stage.

                                 ______
                                 
         Letter Submitted for the Record by Hon. Orrin G. Hatch

                             April 22, 2015

The Honorable Mitch McConnell       The Honorable Harry Reid
 Majority Leader                    Democratic Leader
United States Senate                United States Senate
Washington, DC 20510                Washington, DC 20510

The Honorable John Boehner          The Honorable Nancy Pelosi
Speaker                             Democratic Leader
U.S. House of Representatives       U.S. House of Representatives
Washington, DC 20515                Washington, DC 20515

Dear Majority Leader McConnell, Speaker Boehner, Democratic Leader 
Reid, and Democratic Leader Pelosi:

    We are writing to urge swift action to renew Trade Promotion 
Authority (TPA) on behalf of the nearly 300 undersigned organizations. 
Our chambers of commerce, manufacturing organizations, and farm bureaus 
represent millions of companies, workers, farmers, and ranchers from 
every sector of the economy and every state in the union.

    Trade agreements negotiated and concluded under TPA help drive 
economic growth and job creation here at home. They enable 
manufacturers, service providers, farmers, and ranchers across the 
country to reach the 95 percent of the world's customers who live 
outside our borders. One in four manufacturing jobs in the United 
States depends on exports, and one in every three acres of farmland is 
planted for consumers overseas. More than 97 percent of the 300,000 
U.S. companies that export are small and medium-sized businesses.

    However, the international playing field often is tilted unfairly 
against businesses and workers in the United States. While our market 
generally is open, U.S. exports face significant barriers abroad. Trade 
agreements tear down these barriers and create a level playing field. 
They help firms in this country and the millions of workers they employ 
compete successfully overseas. America's 20 existing trade agreement 
partners represent just 10 percent of the global economy, but purchase 
nearly half of all U.S. exports.

    To expand these benefits, the United States is negotiating new 
trade agreements with some of the world's largest and fastest-growing 
economies, including with Europe and 11 Asia-Pacific nations. The 
United States also is pursuing multilateral deals that would reduce 
barriers to trade in services and environmental goods worldwide. 
However, to realize the potential of these agreements for U.S. jobs, 
economic growth, and competitiveness, Congress must pass Trade 
Promotion Authority.

    TPA is a longstanding and proven partnership between Congress and 
the President that enables Congress to set negotiating objectives and 
requires the executive branch to consult extensively with legislators 
during negotiations. We urge you to act on this essential legislation 
as soon as possible this year.

Sincerely,

 
 
 
Alabama                   Alexander City Chamber of Commerce
                          Birmingham Business Alliance
                          Manufacture Alabama
                          Mobile Area Chamber of Commerce
                          Montgomery Area Chamber of Commerce
                          South Baldwin Chamber of Commerce
 
Alaska                    Greater Fairbanks Chamber of Commerce
 
Arizona                   Arizona Chamber of Commerce
                          Arizona Farm Bureau Federation
                          Arizona Manufacturers Council
                          Buckeye Valley Chamber of Commerce
                          Chandler Chamber of Commerce
                          Gilbert Chamber of Commerce
                          Greater Flagstaff Chamber of Commerce
                          Greater Phoenix Chamber of Commerce
                          Mesa Chamber of Commerce
                          Scottsdale Area Chamber of Commerce
                          Tempe Chamber of Commerce
                          Tucson Hispanic Chamber of Commerce
                          Tucson Metro Chamber
 
Arkansas                  Arkansas State Chamber of Commerce/Associated
                           Industries of Arkansas
 
California                California Business Roundtable
                          California Chamber of Commerce
                          California Manufacturers & Technology
                           Association
                          Camarillo Chamber of Commerce
                          Carlsbad Chamber of Commerce
                          Cerritos Regional Chamber of Commerce
                          Chamber of Commerce of the Santa Barbara
                           Region
                          Chambers of Commerce Alliance of Ventura &
                           Santa Barbara Counties
                          Corona Chamber of Commerce
                          Desert Hot Springs Chamber of Commerce &
                           Visitors Center
                          Elk Grove Chamber of Commerce
                          Fresno Chamber of Commerce
                          Fullerton Chamber of Commerce
                          Gateway Chambers Alliance
                          Greater Conejo Valley Chamber of Commerce
                          Huntington Beach Chamber of Commerce
                          Indio Chamber of Commerce
                          Irvine Chamber of Commerce
                          Irwindale Chamber of Commerce
                          Long Beach Area Chamber of Commerce
                          Los Angeles Area Chamber of Commerce
                          Moreno Valley Chamber of Commerce
                          Murrieta Chamber of Commerce
                          North San Diego Business Chamber
                          Ojai Valley Chamber of Commerce
                          Orange County Business Council
                          Oxnard Chamber of Commerce
                          Palm Desert Area Chamber of Commerce
                          Palos Verdes Peninsula Chamber of Commerce
                          Pasadena Chamber of Commerce & Civic
                           Association
                          Port Hueneme Chamber of Commerce
                          Redondo Beach Chamber of Commerce
                          Sacramento Metropolitan Chamber of Commerce
                          San Bruno Chamber of Commerce
                          San Diego Regional Chamber of Commerce
                          San Francisco Chamber of Commerce
                          San Gabriel Valley Economic Partnership
                          San Jose Silicon Valley Chamber of Commerce
                          Santa Clara Chamber of Commerce and Convention-
                           Visitors Bureau
                          Simi Valley Chamber of Commerce
                          South Bay Association of Chambers of Commerce
                          Southwest California Legislative Council
                          Torrance Area Chamber of Commerce
                          Valley Industry and Commerce Association
                          Wilmington Chamber of Commerce
 
Colorado                  Colorado Association of Commerce & Industry
                          Colorado Business Roundtable
                          Colorado Competitive Council
                          Denver Metro Chamber of Commerce
                          Metro Denver Economic Development Corporation
                          South Metro Denver Chamber
 
Connecticut               Connecticut Business and Industry Association
                          MetroHartford Alliance
                          Middlesex County Chamber of Commerce
                          The Bridgeport Regional Business Council
 
Delaware                  Central Delaware Chamber of Commerce
                          Delaware State Chamber of Commerce
 
Florida                   Associated Industries of Florida
                          Central Pinellas Chamber of Commerce
                          Florida Chamber of Commerce
                          Gainesville Area Chamber--Advanced
                           Manufacturing Council
                          Greater Boca Raton Chamber of Commerce
                          Greater Miami Chamber of Commerce
                          JAX Chamber
                          West Orange Chamber of Commerce
 
Georgia                   Cobb Chamber of Commerce
                          Georgia Association of Manufacturers
                          Georgia Chamber of Commerce
                          Metro Atlanta Chamber of Commerce
                          Savannah Area Chamber of Commerce
 
Hawaii                    Chamber of Commerce Hawaii
                          Kauai Chamber of Commerce
 
Idaho                     Boise Metro Chamber of Commerce
                          Idaho Association of Commerce & Industry
 
Illinois                  Aurora Regional Chamber of Commerce
                          Canton Area Chamber of Commerce
                          Chicago Southland Chamber of Commerce
                          Chicagoland Chamber of Commerce
                          Des Plaines Chamber of Commerce and Industry
                          Greater Oak Brook Chamber of Commerce and
                           Economic Development Partnership
                          Hoopeston Chamber of Commerce
                          Illinois Chamber of Commerce
                          Illinois Farm Bureau Federation
                          Illinois Manufacturers' Association
                          McLean County Chamber of Commerce
                          Northcenter Chamber of Commerce
                          Rolling Meadows Chamber of Commerce
                          Western DuPage Chamber of Commerce
 
Illinois/Indiana          Quad Cities Chamber of Commerce
 
Indiana                   Indiana Chamber of Commerce
                          Indiana Farm Bureau Federation
                          Indiana Manufacturers Association
                          Indy Chamber
                          Nappanee Area Chamber of Commerce
                          St. Joseph County Chamber of Commerce
                          Wabash County Chamber of Commerce
 
Iowa                      Ames Chamber of Commerce
                          Greater Des Moines Partnership
                          Iowa Association of Business and Industry
                          Iowa Business Council
                          Iowa Chamber Alliance
                          Iowa Farm Bureau Federation
                          Mason City Chamber of Commerce
 
Kansas                    Fort Scott Area Chamber of Commerce
                          Greater Topeka Chamber of Commerce
                          Kansas Farm Bureau Federation
                          The Kansas Chamber of Commerce
 
Kentucky                  Commerce Lexington Inc.
                          Greater Louisville Inc.
                          Kentucky Chamber of Commerce
                          Northern Kentucky Chamber of Commerce
 
Louisiana                 Chamber Southwest Louisiana
                          Committee of 100 Louisiana
                          Greater New Orleans, Inc.
                          Jeff Davis Chamber of Commerce
                          Louisiana Association of Business and Industry
                          Monroe Chamber of Commerce
                          Natchitoches Area Chamber of Commerce
                          New Orleans Chamber of Commerce
 
Maine                     Maine Chamber of Commerce
 
Maryland                  Baltimore Washington Corridor Chamber of
                           Commerce
                          Maryland Chamber of Commerce
 
Massachusetts             Associated Industries of Massachusetts
                          Fall River Area Chamber of Commerce & Industry
                          Metro South Chamber of Commerce
                          United Regional Chamber of Commerce
 
Michigan                  Goodwill Industries of Southwestern Michigan
                          Greater Brighton Area Chamber of Commerce
                          Michigan Chamber of Commerce
                          Michigan Chemistry Council
                          Michigan Farm Bureau Federation
                          Michigan Manufacturers Association
 
Minnesota                 Dakota County Regional Chamber
                          Eden Prairie Chamber of Commerce
                          International Falls Area Chamber of Commerce
                          Minnesota Chamber of Commerce
                          Minnesota Farm Bureau Federation
                          St. Cloud Area Chamber of Commerce
                          TwinWest Chamber of Commerce
 
Mississippi               Mississippi Manufacturers Association
                          The Chamber and Economic Development Center of
                           Washington County
 
Missouri                  Associated Industries of Missouri
                          Missouri Chamber of Commerce and Industry
                          Missouri Farm Bureau Federation
                          St. Joseph Chamber of Commerce
                          St. Louis Regional Chamber
 
Montana                   Kalispell Chamber of Commerce
                          Montana Chamber of Commerce
                          Montana Farm Bureau Federation
                          Montana Manufacturing Council
 
Nebraska                  Columbus Area Chamber of Commerce
                          Holdrege Area Chamber of Commerce
                          Lincoln Chamber of Commerce
                          Nebraska Chamber of Commerce & Industry
 
Nevada                    Carson Valley Chamber of Commerce
                          Las Vegas Metro Chamber of Commerce
                          Nevada Manufacturers Association
                          The Chamber of Reno, Sparks, and Northern
                           Nevada
 
New Hampshire             Business & Industry Association of New
                           Hampshire
 
New Jersey                Morris County Chamber of Commerce
                          New Jersey Business & Industry Association
                          New Jersey State Chamber of Commerce
                          Newark Regional Business Partnership
 
New Mexico                Greater Albuquerque Chamber of Commerce
 
New York                  Albany-Colonie Regional Chamber
                          Buffalo Niagara Partnership
                          JFK Airport Customs Brokers and Freight
                           Forwarders Association
                          Manhattan Chamber of Commerce
                          North Country Chamber of Commerce
                          Partnership for New York City
                          Rochester Business Alliance
                          The Business Council of New York State
                          The Chamber of Schenectady County
 
North Carolina            Cabarrus Regional Chamber of Commerce
                          Charlotte Chamber of Commerce
                          Greater Raleigh Chamber of Commerce
                          North Carolina Chamber
                          North Carolina Farm Bureau Federation
                          Wilmington Chamber of Commerce
 
North Dakota              Greater North Dakota Chamber
 
North Dakota/Minnesota    The Fargo Moorhead West Fargo Chamber of
                           Commerce
 
Ohio                      Ashland Area Chamber of Commerce
                          Columbus Chamber of Commerce
                          Dayton Area Chamber of Commerce
                          Licking County Chamber of Commerce
                          Lima/Allen County Chamber of Commerce
                          Ohio Chamber of Commerce
                          Ohio Farm Bureau Federation
                          The Ohio Manufacturers' Association
                          Willoughby Western Lake County Chamber of
                           Commerce
 
Oklahoma                  The State Chamber of Oklahoma
                          Tulsa Regional Chamber
 
Oregon                    Associated Oregon Industries
                          Beaverton Area Chamber of Commerce
                          Hermiston Chamber of Commerce
                          Klamath County Chamber of Commerce
                          Oregon State Chamber of Commerce
                          Portland Business Alliance
                          Wilsonville Area Chamber of Commerce
 
Pennsylvania              Chester County Chamber of Business and
                           Industry
                          Greater Pittsburgh Chamber of Commerce
                          Greater Reading Chamber of Commerce & Industry
                          Pennsylvania Business Council
                          Pennsylvania Chamber of Business and Industry
                          Pennsylvania Farm Bureau Federation
                          Pennsylvania Manufacturers' Association
                          Schuylkill Chamber of Commerce
 
Rhode Island              Greater Providence Chamber of Commerce
                          Northern Rhode Island Chamber of Commerce
                          Rhode Island Chamber of Commerce Coalition
 
South Carolina            Fountain Inn Chamber of Commerce
                          Myrtle Beach Area Chamber of Commerce
                          North Myrtle Beach Chamber of Commerce
                          South Carolina Chamber of Commerce
 
South Dakota              Sioux Falls Area Chamber of Commerce
                          South Dakota Chamber of Commerce and Industry
 
Tennessee                 Clay County Chamber of Commerce
                          Greater Memphis Chamber
                          Johnson City Chamber of Commerce
                          Kingsport Area Chamber of Commerce
                          Tennessee Chamber of Commerce & Industry
 
Texas                     Dallas Regional Chamber
                          Fort Worth Chamber of Commerce
                          Greater Beaumont Chamber of Commerce
                          Greater Houston Partnership
                          Greater Irving Las Colinas Chamber of Commerce
                          Lewisville Area Chamber of Commerce
                          Lubbock Chamber of Commerce
                          North Texas Commission
                          Port Aransas Chamber of Commerce/Tourist
                           Bureau
                          San Antonio Chamber of Commerce
                          Texas Association of Business
 
Utah                      Salt Lake Chamber
                          Utah Manufacturers Association
 
Vermont                   Associated Industries of Vermont
                          Vermont Chamber of Commerce
 
Virginia                  Dickenson County Chamber of Commerce
                          Fairfax County Chamber of Commerce
                          New Market Area Chamber of Commerce
                          Virginia Chamber of Commerce
                          Virginia Manufacturers Association
 
Washington                Association of Washington Business
                          Bellevue Chamber of Commerce
                          Bonney Lake Chamber of Commerce
                          Economic Alliance Snohomish County
                          Ferndale Chamber of Commerce
                          Greater Pasco Area Chamber of Commerce
                          Greater Spokane Incorporated
                          Greater Yakima Chamber of Commerce
                          Kittitas County Chamber of Commerce
                          Seattle Metropolitan Chamber of Commerce
                          Southwest King County Chamber of Commerce
                          Tacoma-Pierce County Chamber
                          Tri-City Regional Chamber of Commerce
                          Washington Council on International Trade
 
West Virginia             West Virginia Chamber of Commerce
                          West Virginia Manufacturers Association
 
Wisconsin                 Eau Claire Area Chamber of Commerce
                          Fox Cities Chamber of Commerce
                          Metropolitan Milwaukee Association of Commerce
                          Oshkosh Chamber of Commerce
                          Wisconsin Farm Bureau Federation
                          Wisconsin Manufacturers & Commerce
 
Wyoming                   Campbell County Chamber of Commerce
 
National                  American Farm Bureau Federation
                          Business Roundtable
                          National Association of Manufacturers
                          National Black Chamber of Commerce
                          U.S. Chamber of Commerce
 
 
cc: Members of the United States Congress

                                 ______
                                 
          Prepared Statement of Hon. Jacob J. Lew, Secretary, 
                       Department of the Treasury

                             April 16, 2015

    Chairman Hatch and Ranking Member Wyden, and distinguished members 
of the Committee, thank you for the opportunity to testify on Trade 
Promotion Authority. Bolstering global economic growth and stability 
remains a priority of the United States, and the U.S. Department of the 
Treasury has been working hard over the last six years to achieve a 
high-standard trade and investment agenda that raises income and spurs 
growth.

    Our robust trade agenda--the cornerstones of which include the 
Trans-Pacific Partnership and the Transatlantic Trade and Investment 
Partnership agreements--will expand opportunities for American 
businesses, create high-quality jobs, and further unlock the 
macroeconomic gains from expanded trade and investment.

    Today, exports make up some 30 percent of global GDP, and global 
per-capita incomes are over 50 percent higher than what they were 20 
years ago. These macroeconomic gains are due in part to the framework 
of bilateral, regional, and multilateral trade agreements that are in 
place and to institutions such as the World Trade Organization that 
have been developed to implement the rules-based trading system. The 
rules-based trading system facilitates greater openness to trade--
boosting U.S. and global exports of goods and services and 
opportunities for American workers--even as it raises the standard of 
living for consumers, through greater choice and access to quality 
imports.

    Much has changed in the way we trade and invest in the last 30 
years. The growth of the services sector, the rise of electronic 
banking and commerce, and the major role of state-owned enterprises in 
some of the most dynamic regions of the world--altogether, these trends 
have expanded the sectors in which U.S. firms are investing and 
competing. At the same time, U.S. firms continue to face market access 
and fair competition challenges to operating, investing, and exporting 
overseas.

    Reducing trade barriers and securing reforms abroad through well-
crafted trade agreements benefit both U.S. economic competitiveness and 
global economic prosperity. First, our firms and workers stand to 
benefit directly as our partner countries further open their markets to 
imported goods and services, including from the United States. Second, 
as countries open up to trade, over time they innovate more, invest 
more, and become more productive; the result is a stronger and more 
stable global economy. That, too, is important for American businesses 
and workers.
                 trade promotion authority legislation
    Trade Promotion Authority (TPA) is critical to helping secure the 
substantial economic gains that our ambitious trade and investment 
agreements can bring, including labor and environmental standards, 
consumer protections, and benefits for small and medium-sized 
businesses. There are few policy measures that can do more to support 
jobs and deliver sustained high-quality growth than trade agreements, 
and TPA sends a strong signal to our trading partners that Congress and 
the Administration speak with one voice to the rest of the world on our 
priorities.

    We strongly agree with Members of Congress that unfair currency 
practices need to be addressed. Since day one, the President has been 
clear that no country should grow its exports based on a persistently 
undervalued exchange rate, and currency has been at the top of 
Treasury's international agenda. We share the goal of moving major 
economies to market-determined exchange rate systems that are 
transparent, flexible, and reflect underlying economic fundamentals.
                   progress on exchange rate policies

    We are working tirelessly to address currency concerns, and our 
efforts through bilateral and multilateral engagement have met with 
considerable success:

    We have secured unprecedented commitments in the G-7 and G-20 
related to exchange rate practices. Through our leadership, Japan and 
other G-7 countries have publicly affirmed that they will not target 
exchange rates and will use only domestic instruments to achieve 
domestic economic objectives.

    Likewise, G-20 members have also pledged to move more rapidly 
toward more market-determined exchange rate systems and flexibility in 
order to reflect underlying economic fundamentals, avoid persistent 
exchange rate misalignments, not target exchange rates, and refrain 
from competitive devaluations.

    We have successfully pressed the IMF to bolster its surveillance of 
its members' exchange rate policy obligations. As a result of our 
efforts, the IMF has begun publishing an External Sector Report that 
includes estimates of exchange rate misalignment for 25 major 
economies, and has developed an additional tool for monitoring 
countries' foreign exchange reserves.

    We have made progress with China on exchange rates through the 
S&ED, and continue to raise the issue regularly with our Chinese 
counterparts. As part of our Strategic and Economic Dialogue (S&ED), 
China has committed to reduce its foreign exchange intervention as 
conditions permit--and the amount of China's currency intervention has 
fallen significantly in the last year. This has contributed to a 
decline in China's current account surplus from a peak of 10 percent of 
GDP before this Administration took office to just 2 percent of GDP 
last year. RMB has seen a real effective appreciation of nearly 30 
percent since China allowed its currency to resume appreciation in mid-
2010.

    We will continue to intensify our efforts on exchange rates using 
the tools and channels that are most effective. We will build on our 
ongoing multilateral and bilateral engagement in the G-20, IMF, and 
U.S.-China Strategic and Economic Dialogue to press countries even 
harder towards more market-determined exchange rates and to secure 
strong commitments on currency disciplines.

    We believe that more progress is needed, and Treasury will continue 
to engage with Congress on how best to address currency issues in a way 
that is consistent with our overall strategy of bilateral and 
multilateral engagement.

                                 ______
                                 
Prepared Statement of Richard L. Trumka, President, American Federation 
      of Labor and Congress of Industrial Organizations (AFL-CIO)

                             April 21, 2015

    Mr. Chairman, Senator Wyden, members of the committee, thank you 
for the opportunity to speak today on behalf of the twelve and a half 
million working men and women of the AFL-CIO on this important topic.

    The labor movement and our allies have been advocating for a 
Raising Wages economy for many years. We don't believe we can build 
strong and sustainable economic growth on a foundation of stagnant 
wages and disempowered workers. And a key component of a Raising Wages 
economy is a new approach to trade and globalization--one that puts 
good jobs, safe products, and a clean environment at the center of 
global economic integration--not enhanced corporate power and profits.

    The AFL-CIO has been advocating for a new trade policy for more 
than two decades--we have engaged with the executive branch, as well as 
with Congress, to advocate for progressively strengthening and making 
more effective our labor and environmental provisions, for reforming 
investment rules, for ensuring that we have found the appropriate 
balance in regulatory measures and intellectual property protections, 
for fair rules of origin, and for finally including meaningful currency 
provisions in trade agreements, among many other issues.

    Far from being ``opposed to trade on principle,'' we have supported 
trade deals when warranted, such as the U.S.-Jordan trade agreement and 
trade preference programs such as the African Growth and Opportunity 
Act (AGOA) and the Generalized System of Preferences (GSP). We have 
supported reauthorization of the 
Export-Import Bank. We have engaged with policymakers in both parties 
and at every level to work toward a new generation of trade policies 
that will create a virtuous cycle of demand-led growth while 
strengthening our democracy, protecting workers' rights globally and 
promoting sustainable global economic development. Key to reforming our 
trade policies is abolishing the outdated, unaccountable, undemocratic 
fast track process.

    For too long, decisions about trade policy have been made behind 
closed doors, with excessive secrecy. The secrecy tends to serve the 
policy interests of political and economic elites, not the broad 
interests of the American middle class. American workers, farmers, 
small and medium-sized businesses and domestic producers have paid the 
price.

    The stakes could not be higher. The Trans-Pacific Partnership 
(TPP), now being negotiated by our government, includes twelve 
countries and about 40 percent of the world economy. It is designed to 
be infinitely expandable--that means that additional countries could 
join in the future, subject to congressional approval and as long as 
they agree to the original terms negotiated. TPP could be the last 
trade agreement we negotiate, so it is especially crucial that we get 
the terms right.

    The idea that fast track lets Congress set the standards and goals 
for the TPP is a fiction--the agreement has been under negotiation for 
more than five years and is essentially complete. Congress cannot set 
meaningful negotiating objectives in a fast track bill if the 
administration has already negotiated most of the key provisions. And 
Congress will lost crucial leverage over any few remaining provisions 
by agreeing to fast track at this late date.

    To update our trade and economic policies for the 21st century, we 
must change the process that governs the negotiation and passage of 
trade deals. Today's ``trade'' agreements are about much more than 
tariffs and quotas. They affect foreign and domestic investment, 
financial services, food safety, labor rights, environmental 
protections, Buy American procurement policies, consumer safety, health 
care, and more. These agreements put in place rules that could limit 
the ability of Congress and the states to legislate in the public 
interest now and for decades to come. Yet the public and Congress have 
too little say in the important details of these deals.

    Through fast track, past Congresses have ceded authority over trade 
policy to the executive branch with virtually no strings attached. 
While all fast track bills have gone through the charade of listing 
``negotiating objectives,'' there have been no consequences when the 
administration willfully ignores or fails to achieve any or all of 
these. Fast track has failed to include meaningful accountability 
mechanisms, including tools to turn off expedited consideration when 
warranted. This cedes important and long-lasting decisions about our 
economy to a few negotiators in a small room in the middle of the 
night. This is undemocratic. It's wrong. And it has led to disastrous 
policies for America's workers and producers.

    America needs an entirely new trade negotiating authority, not 
minor tweaks at the margin.

    The Hatch-Wyden-Ryan Bipartisan Congressional Trade Priorities and 
Accountability Act of 2015 (Fast Track 2015) does not represent a new 
form of trade negotiating authority. It doesn't meet a single criterion 
set out by the AFL-CIO in its publication ``Time for a New Track.''

    Congress must not agree to fast track a fast track bill. The short 
time allotted between introduction of the bill, hearings, committee 
consideration, and floor action is a sign that this bill cannot stand 
on its own merits. It is losing support fast. It seems that its 
proponents see their only hope for passage is to rush it through before 
anyone has had a chance to review it properly. The American people 
deserve better.

    A new and effective trade negotiating authority must:

    Ensure Congress approves trade agreement partners before 
        negotiations begin: Congress should be able to weigh in on 
        whether countries (including those that suppress their wages 
        through allowing or engaging in serious labor and human rights 
        abuses) are appropriate partners to receive permanent trade 
        benefits. If Congress does not agree with the choice of trade 
        partners, it ought to be able to deny expedited consideration 
        to agreements that include them. Fast Track 2015 contains not a 
        single opportunity for Congress to reject an administration's 
        proposed trading partners.

    Create negotiating objectives that are specific to the trade 
        partners involved: Even though the U.S. has amassed historic 
        trade deficits over the last 20 years and is currently 
        negotiating the TPP with partners that have histories as labor 
        and human rights abusers, currency manipulators, over-fishers, 
        or transshipment hubs, Fast Track 2015 fails to tailor 
        objectives to the unique situations in the eleven countries 
        involved.

    Ensure that Congress, not the executive branch, determines whether 
        Congressional trade objectives have been met: Fast Track 2015 
        fails to include an effective accountability mechanism to 
        ensure that Congressional instructions are carried out, leaving 
        the executive branch in the position of essentially grading its 
        own performance. Not surprisingly, no executive branch has ever 
        confessed failure to meet Congress's goals. Congress should 
        have the final say on whether negotiating objectives have been 
        met. It could employ a variety of tools to help evaluate the 
        deal, for instance by requiring reports from the Government 
        Accountability Office, Congressional trade advisors, or from 
        all Congressional committees whose jurisdiction would be 
        impacted by the topics covered by the trade deal in question. 
        Open hearings would help shed considerable light on the 
        completed deals and help Congress to determine if its 
        objectives were fulfilled.

    On the other hand, an evaluation process solely in the hands of the 
        committees responsible for trade policy (Finance and Ways and 
        Means) won't provide a reliable measurement. It is widely 
        conceded that neither committee is representative of the 
        opinions of the larger body of Congress when it comes to trade.

    Ensure Congress has effective opportunities to strip expedited 
        consideration provisions from trade deals that fail to meet 
        Congressional objectives or to incorporate Congressional and 
        public participation: Fast track, even if it had perfect 
        negotiating objectives, has never provided Congress a realistic 
        opportunity to withdraw expedited consideration from deals that 
        fail to measure up. For reasons noted above, the process cannot 
        be left solely in the hands of the committees responsible for 
        trade, as Fast Track 2015 does. The rest of Congress would have 
        to rely on these committees to reject the trade deal first (an 
        extremely unlikely possibility given the makeup of the panels) 
        and only then attempt to strip expedited consideration from the 
        deal. Leaving the decision solely in the hands of these 
        committees provides no effective opportunity to ``strip 
        expedited consideration'' from a job-killing deal.

    Nor should the process set impossibly high supermajority vote 
        thresholds, which Fast Track 2015 also does, by requiring 60 
        votes in the Senate to strip fast track from a bad deal when 
        only 51 are required to vote the deal down. If fast track 
        privileges can be granted to a trade agreement on a simple 
        majority vote, it should be possible to remove the privileges 
        with a simple majority vote. To be clear, the goal of this 
        criterion is not to subject a trade deal and its implementing 
        legislation to an unwieldy process. It is to ensure that bad 
        deals go back to the negotiating table instead of becoming bad 
        laws.

    Increase access to U.S. trade policymaking, trade proposals, and 
        negotiating text for Congress, congressional staff, and the 
        public: Fast Track 2015 simply locks in current USTR practice, 
        which is unacceptable. Instead, Congress should broadly expand 
        the universe of those who have access to U.S. proposals and 
        full negotiating texts (optimally, full negotiating texts 
        should be available to the public). The 21st century is the 
        Internet age--citizens are accustomed to viewing proposed and 
        amended legislation on line. Trade policy should be no 
        different. While USTR analogizes sharing trade proposals to 
        showing a used car salesman one's bottom line at the outset of 
        negotiations, this analogy is inapt. Neither USTR, nor any 
        other rational negotiating partner, would put its bottom line 
        in its first proposal; and after the proposal has been shared 
        with the negotiating partner, any possible justification for 
        keeping it secret is moot.

    Be part of a larger trade and competitiveness package that 
        addresses shortcomings in existing trade enforcement and 
        remedies and provides complementary domestic economic policies 
        that will help ensure that all can benefit from trade: Fast 
        Track 2015 contains not a single piece of domestic economic 
        reform to help America's working families thrive under expanded 
        trade. Trade is not a substitute for investing in our own 
        future. To work, trade deals require thoughtful complementary 
        policies, including upgrading our ports, airports, roads and 
        rail; investing in education and skills training so that 
        workers young and old can benefit from any new jobs that trade 
        creates; labor market policies that support working families; 
        renewal of export promotion initiatives, including the Export-
        Import Bank; extending tax policies to promote advanced 
        manufacturing, renewable fuels, and R&D; and fully funding 
        well-designed and easy to use enforcement mechanisms to catch 
        and deter trade cheats. Enacting trade deals without upgrading 
        our domestic economy will only lead to more disappointing deals 
        that undermine jobs and wages for U.S. workers and exacerbate 
        the race to the bottom.

    In short, the proposed fast track mechanisms are inadequate to 
        ensure that the major shortcomings in the TPP will be resolved 
        in ways that will benefit, rather than harm, working people in 
        the U.S. and around the Pacific Rim. Among the numerous issues, 
        the top four remain:

    Currency: Addressing currency manipulation is probably the single 
        most effective action the U.S. can take to create jobs. The 
        fact that currency provisions continue to be absent from the 
        TPP is disturbing on two fronts: it is both a glaring policy 
        omission and a procedural concern. In the absence of existing 
        fast track legislation, the one trade-related issue on which 
        bipartisan majorities of the House and Senate have spoken 
        clearly is currency. Misaligned currency is an important 
        contributing factor to the U.S. trade imbalance with China and 
        other nations. The Economic Policy Institute estimates the U.S. 
        could add as many as 5.8 million jobs by eliminating currency 
        manipulation. Provisions must be included in the TPP, and they 
        must be enforceable. Otherwise, the U.S. will continue to bleed 
        jobs to China and other currency manipulators.

    Investment: To ensure that the TPP does not skew benefits toward 
        global corporations, it should eliminate Investor-State Dispute 
        Settlement (ISDS). ISDS undermines democratic control, and is 
        currently being used to attack public health policies in 
        Australia and Uruguay, environmental policies in Canada and 
        Peru, and labor provisions in Egypt. Rather than challenge 
        actual takings or discriminatory policies, global firms use 
        ISDS to seek compensation for a violation of the nebulous right 
        to ``fair and equitable treatment,'' which the private 
        arbitrators have interpreted expansively. ISDS creates a 
        chilling effect on local, state, and national measures and 
        poses an unjustifiable risk to our democracy and economy.

    Climate: Currently, U.S. trade policy could undermine both domestic 
        efforts to address climate and the administration's bilateral 
        agreement with China to cooperate on climate change and clean 
        energy. Unless the TPP sets the bar in line with the recent 
        bilateral agreement with China, it represents a missed 
        opportunity. Without a border adjustment--to adjust the cost of 
        highly polluting imports so that low-emission U.S. and high-
        emissions foreign goods can fairly compete--the TPP will do 
        nothing to stop manufacturers from closing up shop in the U.S. 
        and moving to TPP countries with no carbon reduction scheme in 
        order to sell cheaper, dirtier goods here and around the globe, 
        undercutting not only our workers but our efforts to address 
        climate change.

    Labor: The labor movement has been clear from the outset of the TPP 
        talks that the status quo on labor (the so-called ``May 10'' 
        agreement) needed further strengthening. The ``May 10'' 
        standards were a first step towards leveling the playing field 
        for workers, but did too little to ensure timely and effective 
        action. In 2011, the AFL-CIO joined with labor federations from 
        the majority of TPP countries to draft and submit a 
        comprehensive labor chapter that attempted to address past 
        shortcomings. To the best of our knowledge, this new model has 
        not been incorporated into the agreement. We have no reason to 
        believe that, despite being touted as including the ``highest 
        labor standards ever,'' the TPP will include meaningful 
        improvements over ``May 10.'' The problem with language such as 
        ``highest labor standards ever'' is that the point of 
        comparison is so low--even after the highly touted ``Labor 
        Action Plan'' in Colombia, workers continue to be killed, 
        beaten, and threatened for exercising basic rights like 
        organizing with fellow workers for better wages and working 
        conditions.

    Indeed, the TPP may be too complex to stake out a position ``for'' 
        or ``against'' without careful consideration of its voluminous 
        text, a careful study of the impacts of prior, similarly 
        structured agreements, and broad consultations with legal 
        experts from a variety of points of view who have also had an 
        opportunity to study the texts. Such discussion, study, and 
        thorough evaluation seems unlikely given the current level of 
        secrecy surrounding the text. Moreover, it seems even less 
        likely to occur should Congress accede to fast track authority, 
        which will severely limit the time that Congress and outside 
        experts may study the text before a simple up-or-down vote is 
        required. Finally, should Congress decide that, while the TPP 
        contains some beneficial provisions, on balance it presents a 
        risk to the firms, families, and communities of the United 
        States, Congress may already have lost much of its leverage to 
        force improvements in the deal.

    In sum, to get the TPP right, Congress faces consequential choices 
        that, for the good of the country, should not be constrained by 
        the misguided secrecy, speed, and unaccountability of fast 
        track. To best safeguard the authority over trade policy given 
        to Congress by the Constitution, the AFL-CIO urges Congress to 
        reject the outdated and undemocratic process known as fast 
        track and develop instead a new trade negotiating authority for 
        the 21st century.

                                 ______
                                 
             Submitted for the Record by Richard L. Trumka

                          United States Senate

                          Washington DC 20510

                            January 8, 2014

President Barack Obama
The White House
1600 Pennsylvania Avenue
Washington, DC 20500

Dear Mr. President:

Following the conclusion of another round of Trans-Pacific Partnership 
(TPP) negotiations, we write to reiterate our serious concern that 
strong and enforceable currency disciplines have not yet been addressed 
in the ongoing negotiations and may not be included in the final 
agreement. A well-negotiated TPP has the potential to help American 
businesses and workers, but an agreement that fails to address foreign 
currency manipulation could further harm the United States economy by 
leading to a permanent unfair trade relationship.

Our concern regarding the impact of foreign currency manipulation on 
America's workers and our economy is not new and is shared by the vast 
majority of our colleagues. In June, 230 Members of the House of 
Representatives wrote to you and said ``it is imperative that the 
agreement address currency manipulation.'' Then, in September, 60 
Senators sent a similar letter to Secretary Lew and Ambassador Froman 
asking that TPP and all future trade agreements ``include strong and 
enforceable foreign currency manipulation disciplines to ensure that 
these agreements meet the `high standards' our country, America's 
companies, and America's workers deserve.''

Thus far, United States trade negotiators have failed to propose 
currency disciplines in any TPP negotiating rounds, and our written 
concerns have gone unanswered. As you know, Congress ratifies free 
trade agreements, and we expect our concerns to be addressed in a 
strong and effective manner. On behalf of the 290 Members of Congress 
who expect foreign currency manipulation to be addressed in our trade 
agreements, please update us on what is being done to address our 
concerns.

As we stated before, we agree with your goal that TPP should achieve 
``high standards worthy of a 21st century trade agreement.'' However, 
we cannot conclude a truly ambitious trade agreement without the 
inclusion of strong and enforceable currency provisions. We believe the 
Administration has had adequate time not only for internal 
deliberations about such provisions, but also to negotiate them with 
our trading partners. Likewise, there exists significant congressional 
support for including currency manipulation provisions in TPP. We look 
forward to working with you to meaningfully address currency 
manipulation and to make TPP a truly 21st century trade agreement.

Sincerely,

Lindsey Graham                      Debbie Stabenow
Rob Portman                         Ron Wyden
Jeff Merkley                        Tom Udall
Christopher Murphy                  Amy Klobuchar
John Boozman                        Charles E. Schumer
Elizabeth Warren                    Joe Manchin III
Al Franken                          Robert Menendez
John D. Rockefeller IV              Heidi Heitkamp
Barbara A. Mikulski                 Claire McCaskill
Benjamin L. Cardin                  Jeanne Shaheen
Mark Begich                         Christopher A. Coons
Roy Blunt                           Carl Levin
Edward J. Markey                    Richard Burr
James M. Inhofe                     Jerry Moran
Jeff Sessions                       Patrick Leahy
Kirsten E. Gillibrand               Daniels Coats
Saxby Chambliss                     James E. Risch
Robert P. Casey, Jr.                John Hoeven
Jack Reed                           Martin Heinrich
Tom Harkin                          Bill Nelson
Tammy Baldwin                       Richard Blumenthal
Joe Donnelly                        David Vitter
Mark Pryor                          Bernard Sanders
Sheldon Whitehouse                  Jon Tester
Sherrod Brown                       Angus S. King, Jr.
Susan M. Colins                     Dick Durbin
Brian Schatz                        Mary L. Landrieu
Mazie K. Hirono                     Chuck Grassley
Pat Roberts                         Barbara Boxer
Kay R. Hagan                        Tom Coburn

                                 ______
                                 

                     Congress of the United States

                          Washington DC 20515

                              June 6, 2013

President Barack Obama
The White House
Washington, DC 20500

Dear President Obama:

As the United States continues to negotiate the Trans-Pacific 
Partnership, it is imperative that the agreement address currency 
manipulation. Exchange rates strongly influence trade flows, and, in 
recent years, currency manipulation has contributed to the U.S. trade 
deficit and cost us American jobs. Incorporating currency provisions in 
the agreement will strengthen our ability to combat these unfair trade 
practices and help to create a level playing field for American 
workers, businesses, and farmers.

Undervalued exchange rates allow other countries to boost exports or 
their products and to impede exports of ours. They also contribute to 
trade imbalances and market access limitations that make it difficult 
for U.S. companies to compete in foreign countries. According to the 
Peterson Institute for International Economics, a minimum of 1 million 
American jobs have been shipped overseas as a result of currency 
manipulation alone. The consequences are not singular to the U.S.; 
misaligned currencies are distorting the entire global economy.

Despite U.S. efforts to address currency manipulation at the G-20, 
major currencies remain significantly undervalued. Including currency 
disciplines in the TPP is consistent with and will bolster our ongoing 
efforts to respond to these trade-distorting policies. It will also 
raise TPP to the 21st century agreement standard set by the 
Administration. More importantly, it will create a level playing field 
for American businesses and workers and prevent more U.S. jobs from 
being shipped overseas.

Thank you for your consideration of this letter. We look forward to 
working with you to address undervalued exchange rates in the TPP 
agreement.

            Sincerely,

MICHAEL H. MICHAUD                  SAM GRAVES
Member of Congress                  Member of Congress

JOHN D. DINGELL                     RICK CRAWFORD
Member or Congress                  Member of Congress

SANDER M. LEVIN                     MARK POCAN
Member of Congress                  Member of Congress

JOHN CONYERS, JR.                   DAVID P. JOYCE
Member of Congress                  Member of Congress

WALTER B. JONES                     DANIEL LIPINSKI
Member of Congress                  Member of Congress

TIM RYAN                            MARCY KAPTUR
Member of Congress                  Member of Congress

GARY C. PETERS                      JAMES P. McGOVERN
Member of Congress                  Member of Congress

HOWARD COBLE                        BILL FOSTER
Member of Congress                  Member of Congress

MO BROOKS                           CAROL SHEA-PORTER
Member of Congress                  Member of Congress

DAVID LOEBSACK                      JANICE D. SCHAKOWSKY
Member of Congress                  Member of Congress

JERROLD NADLER                      BETTY McCOLLUM
Member of Congress                  Member of Congress

STEVE COHEN                         HENRY C. JOHNSON, JR.
Member of Congress                  Member of Congress

JOYCE BEATTY                        MICHAEL F. DOYLE
Member of Congress                  Member of Congress

ROSA L. DeLAURO                     PATRICK T. McHENRY
Member of Congress                  Member of Congress

MICHAEL E. CAPUANO                  MIKE McINTYRE
Member of Congress                  Member of Congress

GEORGE MILLER                       SCOTT H. PETERS
Member of Congress                  Member of Congress

PETER J. VISCLOSKY                  WILLIAM L. ENYART
Member of Congress                  Member of Congress

WILLIAM L. OWENS                    KEITH ELLISON
Member of Congress                  Member of Congress

GENE GREEN                          STEPHEN F. LYNCH
Member of Congress                  Member of Congress

CHRIS COLLINS                       LINDA T. SANCHEZ
Member of Congress                  Member of Congress

PAUL TONKO                          ERIC SWALWELL
Member of Congress                  Member of Congress

GWEN MOORE                          PETER WELCH
Member of Congress                  Member of Congress

DANIEL T. KILDEE                    H. MORGAN GRIFFITH
Member of Congress                  Member of Congress

JOHN A. YARMUTH                     BRUCE L. BRALEY
Member of Congress                  Member of Congress

DAVID N. CICILLINE                  NICK J. RAHALL II
Member of Congress                  Member of Congress
LOUISE M. SLAUGHTER                 PETER A. DeFAZIO
Member of Congress                  Member of Congress

CORRINE BROWN                       GREGG HARPER
Member of Congress                  Member of Congress

RAUL M. GRIJALVA                    CHRISTOPHER P. GIBSON
Member of Congress                  Member of Congress

EDDIE BERNICE JOHNSON               KERRY L. BENTIVOLIO
Member of Congress                  Member of Congress

DAVID B. McKINLEY                   MIKE J. ROGERS
Member of Congress                  Member of Congress

CANDICE S. MILLER                   MICHAEL G. FITZPATRICK
Member of Congress                  Member of Congress

ELEANOR HOLMES NORTON               MARCIA L. FUDGE
Member of Congress                  Member of Congress

ROBERT A. BRADY                     BRIAN HIGGINS
Member of Congress                  Member of Congress

DANIEL B. MAFFEI                    DONALD M. PAYNE, JR.
Member of Congress                  Member of Congress

ALCEE L. HASTINGS                   CHELLIE PINGREE
Member of Congress                  Member of Congress

BILL JOHNSON                        ALLYSON Y. SCHWARTZ
Member of Congress                  Member of Congress

PATRICK MEEHAN                      DONNA F. EDWARDS
Member of Congress                  Member of Congress

BILL HUIZENGA                       ANN KIRKPATRICK
Member of Congress                  Member of Congress

JAMES R. LANGEVIN                   CHERI BUSTOS
Member of Congress                  Member of Congress

CHARLES B. RANGEL                   TIM WALBERG
Member of Congress                  Member of Congress

JOHN LEWIS                          BILL PASCRELL, JR.
Member of Congress                  Member of Congress

BRAD SHERMAN                        GRACE F. NAPOLITANO
Member of Congress                  Member of Congress

JOSE E. SERRANO                     KAREN BASS
Member of Congress                  Member of Congress

GRACE MENG                          TONY CARDENAS
Member of Congress                  Member of Congress

JANICE HAHN                         BARBARA LEE
Member of Congress                  Member of Congress

SANFORD D. BISHOP, JR.              JOE COURTNEY
Member of Congress                  Member of Congress

LUIS V. GUTIERREZ                   MARK TAKANO
Member of Congress                  Member of Congress

JOHN F. TIERNEY                     PETE P. GALLEGO
Member of Congress                  Member of Congress

BETO O'ROURKE                       ALBIO SIRES
Member of Congress                  Member of Congress

KURT SCHRADER                       TAMMY DUCKWORTH
Member of Congress                  Member of Congress

ADAM KINZINGER                      COLLIN C. PETERSON
Member of Congress                  Member of Congress

CHAKA FATTAH                        CYNTHIA M. LUMMIS
Member of Congress                  Member of Congress

SUSAN W. BROOKS                     ROB BISHOP
Member of Congress                  Member of Congress

JULIA BROWNLEY                      LLOYD DOGGETT
Member of Congress                  Member of Congress

ANN M. KUSTER                       DAVID SCOTT
Member of Congress                  Member of Congress

AL GREEN                            MARC A. VEASEY
Member of Congress                  Member of Congress

JOHN P. SARBANES                    TIMOTHY H. BISHOP
Member of Congress                  Member of Congress

JOE BARTON                          G.K. BUTTERFIELD
Member of Congress                  Member of Congress

MATTHEW A. CARWRIGHT                RON BARBER
Member of Congress                  Member of Congress

ALAN GRAYSON                        RUSH HOLT
Member of Congress                  Member of Congress

SHEILA JACKSON LEE                  LOIS CAPPS
Member of Congress                  Member of Congress

C.A. DUTCH RUPPERSBERGER            WILLIAM R. KEATING
Member of Congress                  Member of Congress

ELIJAH E. CUMMINGS                  TOM MARINO
Member of Congress                  Member of Congress

ANDRE CARSON                        NIKI TSONGAS
Member of Congress                  Member of Congress

LORETTA SANCHEZ                     ROBERT E. ANDREWS
Member of Congress                  Member of Congress

EDWARD J. MARKEY                    XAVIER BECERRA
Member of Congress                  Member of Congress

EMANUEL CLEAVER                     DAVID E. PRICE
Member of Congress                  Member of Congress

FRANK PALLONE, JR.                  DUNCAN HUNTER
Member of Congress                  Member of Congress

DANNY K. DAVIS                      TERRI A. SEWELL
Member of Congress                  Member of Congress

JOE WILSON                          BRADLEY S. SCHNEIDER
Member of Congress                  Member of Congress

JOHN GARAMENDI                      ROBIN L. KELLY
Member of Congress                  Member of Congress

RICHARD M. NOLAN                    YVETTE D. CLARKE
Member of Congress                  Member of Congress

DORIS O. MATSUI                     TIMOTHY J. WALZ
Member of Congress                  Member of Congress

JOSEPH P. KENNEDY III               STEVAN A. HORSFORD
Member of Congress                  Member of Congress

WILLIAM LACY CLAY                   JIM McDERMOTT
Member of Congress                  Member of Congress

DON YOUNG                           DINA TITUS
Member of Congress                  Member of Congress

JUDY CHU                            RODNEY DAVIS
Member of Congress                  Member of Congress

MIKE QUIGLEY                        RICHARD E. NEAL
Member of Congress                  Member of Congress

ADAM B. SCHIFF                      DEREK KILMER
Member of Congress                  Member of Congress

BENNIE G. THOMPSON                  BEN RAY LUJAN
Member of Congress                  Member of Congress

MICHAEL G. GRIMM                    LUCILLE ROYBAL-ALLARD
Member of Congress                  Member of Congress

ELIZABETH H. ESTY                   TIM MURPHY
Member of Congress                  Member of Congress

GLENN THOMPSON                      JON RUNYAN
Member of Congress                  Member of Congress

FRED UPTON                          LOU BARLETTA
Member of Congress                  Member of Congress

MELVIN L. WATT                      ROBERT C. SCOTT
Member of Congress                  Member of Congress

ED PASTOR                           FREDERICA S. WILSON
Member of Congress                  Member of Congress

JOHN K. DELANEY                     RAUL RUIZ
Member of Congress                  Member of Congress

JERRY McNERNEY                      SEAN PARTICK MALONEY
Member of Congress                  Member of Congress

FRANK A. LoBIONDO                   HAKEEM S. JEFFRIES
Member of Congress                  Member of Congress

TULSI GABBARD                       SAM FARR
Member of Congress                  Member of Congress

JAMES A. HIMES                      ED WHITFIELD
Member of Congress                  Member of Congress

CAROLYN McCARTHY                    THEODORE E. DEUTCH
Member of Congress                  Member of Congress

JOHN SHIMKUS                        MARLIN A. STUTZMAN
Member of Congress                  Member of Congress

SUZANNE BONAMICI                    LAMAR SMITH
Member of Congress                  Member of Congress

MICHELLE LUJAN GRISHAM              AMI BERA
Member of Congress                  Member of Congress

NITA M. LOWEY                       KYRSTEN SINEMA
Member of Congress                  Member of Congress

LOIS FRANKEL                        ROBERT B. ADERHOLT
Member of Congress                  Member of Congress

MICHAEL C. BURGESS                  DAN BENISHEK
Member of Congress                  Member of Congress

ROBERT PITTENGER                    LEE TERRY
Member of Congress                  Member of Congress

JEFF FORTENBERRY                    JAMES E. CLYBURN
Member of Congress                  Member of Congress

KEVIN YODER                         HENRY A. WAXMAN
Member of Congress                  Member of Congress

ELIOT L. ENGEL                      JOHN BARROW
Member of Congress                  Member of Congress

JUAN VARGAS                         CAROLYN B. MALONEY
Member of Congress                  Member of Congress

DIANA DEGETTE                       JOHN C. CARNEY, JR.
Member of Congress                  Member of Congress

JACKIE SPEIER                       PATRICK E. MURPHY
Member of Congress                  Member of Congress

STEVE ISRAEL                        KATHY CASTOR
Member of Congress                  Member of Congress

ED PERLMUTTER                       ANNA G. ESHOO
Member of Congress                  Member of Congress

THOMAS E. PETRI                     CHRIS VAN HOLLEN
Member of Congress                  Member of Congress

GERALD E. CONNOLLY                  JIM COOPER
Member of Congress                  Member of Congress

JIM MATHESON                        SUSAN A. DAVIS
Member of Congress                  Member of Congress

BOBBY L. RUSH                       ADAM SMITH
Member of Congress                  Member of Congress

ALAN S. LOWENTHAL                   RICK LARSEN
Member of Congress                  Member of Congress

SUZAN K. DELBENE                    DENNY HECK
Member of Congress                  Member of Congress

GLORIA NEGRETE McLEOD               EARL BLUMENAUER
Member of Congress                  Member of Congress

JOSEPH CROWLEY                      JOHN B. LARSON
Member of Congress                  Member of Congress

                                 ______
                                 

                      Committee on Ways and Means

                     Ranking Member Sander M. Levin

                             April 16, 2015

                     The Hatch-Wyden-Ryan TPA Bill:

                 A Major Step Back on TPP Negotiations

The Trans-Pacific Partnership (TPP) negotiations--the most important 
trade negotiations in at least 20 years--are at a critical juncture--
with many issues unresolved. TPP has the potential to raise standards 
and open new markets for U.S. businesses, workers, and farmers--or to 
lock in weak standards, uncompetitive practices, and a system that does 
not spread the benefits of trade.

Unfortunately, the Hatch-Wyden-Ryan Trade Promotion Authority (TPA) 
does not move us toward a stronger TPP agreement that will garner 
broad, bipartisan support in Congress. TPP is not where it needs to be 
right now, and Hatch-Ryan-Wyden does nothing to change that. On all of 
the major issues in the negotiations, the negotiating objectives are 
obsolete or woefully inadequate. We can't expect to get the best deal 
if we are not asking for the right things.

The Hatch-Wyden-Ryan TPA gives up Congressional leverage at the exact 
wrong time. Instead of pressing USTR to get a better agreement or 
signaling to our negotiating partners that Congress will only accept a 
strong agreement, the Hatch-Wyden-Ryan TPA puts Congress in the back 
seat and greases the skids for an up-or-down vote after the fact. Real 
Congressional power is not at the end of the process, it is right now 
when the critical outstanding issues are being negotiated.

Below is a brief review of the major outstanding issues in TPP, and how 
the Hatch-Wyden-Ryan TPA bill fails to instruct the Administration on 
how each issue should be resolved.

How the TPA Bill is a Major Step Back in Improving TPP Negotiations

Currency Manipulation

Issue:   Majorities in the House and the Senate have urged the 
        Administration to include strong and enforceable currency 
        obligations in the TPP, which includes a number of countries 
        that have manipulated their currencies in the recent past, such 
        as Japan. Other alleged manipulators, such as Korea and Taiwan, 
        have also expressed an interest in joining TPP.

Status:  The Administration has not made a currency proposal in the TPP 
        negotiations.

TPA   The Hatch-Wyden-Ryan TPA bill leaves it up to the 
        Administration to decide how to address currency manipulation, 
        and only lays out options that the President already has to 
        address the issue--including things like ``monitoring'' that 
        are already being done.
Labor Rights

Issue:   Will all TPP parties meet international worker rights 
        standards?

Status:  TPP does not yet have a mechanism to ensure compliance by TPP 
        parties that have labor laws and practices that fall far short 
        of international standards contained in the ``May 10th 
        Agreement'' even though TPP is expected to include the May 10th 
        obligation with enforceability through the basic dispute 
        settlement structure in TPP.\1\
---------------------------------------------------------------------------
    \1\ The ``May 10th Agreement'' of 2007, as initiated by House 
Democrats, incorporated for the first time in history strong and fully 
enforceable labor and environmental obligations in trade agreements and 
included several other important new rules, including providing a 
better balance between strong intellectual property rights and access 
to affordable medicines.

        Vietnam presents the greatest challenge we have ever had in 
        ensuring compliance. Workers there are prohibited from joining 
        any union independent of the communist party. While the 
        Administration is discussing these issues with Vietnam, Members 
        of Congress and stakeholder advisors have not yet seen any 
        proposal to address these critical issues. The Administration 
        also has not committed to ensuring that all changes to laws and 
        regulations are made before Congress votes--or even before the 
---------------------------------------------------------------------------
        TPP agreement enters into force.

        Mexico also presents considerable challenges. Employer-
        dominated ``protection unions'' are prevalent, and the 
        arbitration boards responsible for resolving labor disputes are 
        inherently and structurally biased. It is not clear whether, 
        how, or when the Administration will resolve these and other 
        issues with Mexico. Without their resolution, it will not be 
        possible to say that the problems with NAFTA are being fixed.

TPA   The Hatch-Wyden-Ryan TPA bill does not address what 
        Congress believes needs to be done to bring countries like 
        Vietnam and Mexico (as well as Malaysia and Brunei) into 
        compliance with international labor standards. It contains only 
        general language in line with the May 10th Agreement.\2\
---------------------------------------------------------------------------
    \2\ The TPA bill lumps together labor and environment into one 
negotiating objective.
---------------------------------------------------------------------------
Environment

Issue:   Will the TPP environmental chapter ensure a level of 
        environmental protection at least as high as the May 10th 
        standard which directly incorporated seven multilateral 
        environmental agreements into the text of past trade 
        agreements?

Status:  The TPP environment chapter will look very different from the 
        May 10th Agreement. The environment chapter covers a broad 
        range of subjects, ranging from shark finning, to fish 
        subsidies, to trade in illegally harvested plants and animals. 
        But the obligations themselves--the ``verbs'' used--are often 
        weak.

TPA   The Hatch-Wyden-Ryan TPA bill simply lists the seven 
        multilateral environmental agreements from the May 10th 
        Agreement, which is not consistent with the approach taken in 
        TPP and is obsolete in providing instructions since the TPP is 
        already taking a different approach. The TPA bill also does not 
        address whether or how climate change issues should be handled 
        in TPP, an issue raised by other countries in the TPP 
        negotiations.
Investment and Investor-State Dispute Settlement (ISDS)

Issue:   Will the TPP include an investor-state dispute settlement 
        (ISDS) mechanism that provides foreign companies a right of 
        action against other governments for infringing on the 
        companies' investment rights? Will the TPP include an ISDS 
        mechanism without incorporating any new, additional safeguards 
        to prevent it from being abused?

        There are now more cases of private investors challenging 
        environmental, health, and other regulations in nations--even 
        nations with strong and independent judicial systems and rule 
        of law. Just last month, an investor won a NAFTA ISDS case in 
        which the government of Nova Scotia denied a permit to develop 
        a quarry in an environmentally sensitive area. Other investment 
        disputes involve ``plain packaging'' of tobacco products in 
        Australia aimed at protecting public health and pharmaceutical 
        patent requirements in Canada. This issue is receiving 
        heightened scrutiny among negotiators and from a broad-range of 
        interested parties. Some of our TPP partners do not support 
        ISDS or are seeking safeguards to ensure that nations preserve 
        their right to regulate. The Economist magazine, the Cato 
        Institute, and the Government of Germany (the birthplace of 
        ISDS) have also recently expressed concerns with ISDS.

Status:  The text of the investment chapter in TPP includes ISDS and is 
        basically the same as the model adopted 10 years ago, even 
        though conditions have changed dramatically in the past 10 
        years, and calls for changes to or elimination of the chapter 
        have intensified. Despite proposals to include new safeguards 
        in the ISDS mechanism, the Administration has not made any 
        attempts to incorporate them.

TPA   The Hatch-Wyden-Ryan TPA investment negotiating 
        objective is the same as it was 12 years ago again and is 
        obsolete.
Access to Medicines

Issue:   Will the TPP ensure a balance between strong intellectual 
        property rights and access to affordable, life-saving 
        medicines, as provided under the May 10th Agreement?

Status:  Absent some change in course, the final text is likely to 
        provide less access to affordable medicines than provided under 
        the May 10th Agreement. For example, developing countries will 
        likely be required to ``graduate'' to more restrictive 
        intellectual property rights standards before they become 
        developed--a clear inconsistency with May 10th. There are also 
        a number of concerns that the TPP agreement will restrict 
        access to medicines in the United States and other developed 
        countries (e.g., by encouraging second patents on similar 
        products, by having long periods of data exclusivity for 
        biologic medicines, by allowing drug companies to challenge 
        government pricing and reimbursement decisions).

TPA   The Hatch-Wyden-Ryan bill includes additional language 
        on access to medicines that was not part of the 2002 bill, 
        apparently as a nod to the May 10th Agreement. But it is 
        unclear what this language means.
Automotive Market Access

Issue:   Will the TPP finally open Japan's market to U.S. automobiles 
        and auto parts?

        For most of the past 15 years, our trade deficit with Japan has 
        been second only to our deficit with China, and over two-thirds 
        of the current deficit is in automotive products. Japan has 
        long had the most closed automotive market of any 
        industrialized country, despite repeated efforts by U.S. 
        negotiators over decades to open it. At a minimum, the United 
        States should not open its market further to Japanese imports, 
        through the phase-out of tariffs, until we have time to see 
        whether Japan has truly opened its market.

Status:  The Administration has not stated a specific period of time 
        for when the phase-out in U.S. tariffs for autos, trucks, and 
        auto parts would begin or when they would end. The parties are 
        also still working to address certain non-tariff barriers that 
        Japan utilizes to close their market.

TPA   The Hatch-Wyden-Ryan TPA bill broadly states that the 
        United States should ``expand competitive market opportunities 
        for exports of goods.'' Such a broad negotiating objective 
        provides no guidance regarding how to truly open the Japanese 
        automotive market.

Rules of Origin

Issue:   Will the TPP incorporate rules that ensure that the benefits 
        of the tariff cuts flow primarily to the parties to the 
        agreement and not to free-rider third parties that have not 
        signed up for the commitments in the TPP?

        ``Rules of origin'' define the extent to which inputs from 
        outside the TPP region (e.g., China) can be incorporated into 
        an end product for that product to still be entitled to 
        preferential/duty-free treatment under the Agreement. The rule 
        should be restrictive enough to ensure that the benefits of the 
        agreement accrue to the parties to the agreement. Some have 
        argued that the automotive rule of origin in TPP should be at 
        least as stringent as the rule in NAFTA, given that TPP 
        involves all three of the NAFTA countries plus nine others.

Status:  There are a number of rules of origin being negotiated in the 
        TPP for different products, including in the sensitive textile 
        and apparel, agricultural, and automotive sectors. Some of the 
        rules are largely settled while others--including the rules for 
        automotive products--remain open and controversial.

TPA   The Hatch-Wyden-Ryan TPA bill provides no guidance 
        whatsoever on any rule of origin on any product in the TPP 
        negotiations.
Tobacco Controls

Issue:   Will the TPP safeguard countries' ability to regulate tobacco 
        as a matter of public health?

        TPP needs to explicitly preserve the ability to regulate 
        tobacco. A number of recent international disputes have 
        challenged tobacco measures, including multiple disputes (both 
        WTO and ISDS) challenging Australia's plain packaging scheme 
        for cigarettes. A number of public health groups are concerned 
        about the potential of FTAs to roll back legitimate tobacco 
        control measures.

Status:  In 2013, the Administration decided not to pursue a safe 
        harbor for tobacco in TPP that it had originally supported. 
        Instead, the Administration tabled a proposal that merely 
        confirms that tobacco measures may be subject to the normal 
        public health exception in our trade agreements--drawing 
        intense criticism from former mayor Bloomberg, the New York 
        Times editorial board, and NGOs.

TPA   The Hatch-Wyden-Ryan TPA bill provides no guidance on 
        tobacco control measures, given the Administration the 
        flexibility to include whatever it wants, or nothing at all.
State-Owned Enterprises

Issue:   Will the TPP impose rules on companies effectively run and 
        funded by their governments, so that truly private enterprises 
        can compete with them on a level playing field?

        In today's global economy, competition is fiercer than ever. 
        Certain countries that rely heavily on state-controlled and 
        state-funded enterprises (also known as state-owned enterprises 
        or SOEs) are able to give those champions an enormous--and 
        unfair--advantage over private companies that compete against 
        them in the marketplace. And, in turn, those SOEs don't always 
        operate based on commercial considerations, but instead may 
        pursue state objectives such as favoring local suppliers over 
        U.S. suppliers.

Status:  The TPP will include disciplines on SOEs that are expected in 
        language to go beyond anything ever included in past trade 
        agreements. But the extent to which an SOE provision will help 
        to level the playing field, will be determined by the degree to 
        which parties seek very broad country-specific carve-outs for 
        particular SOEs. As concerning, the definition of SOEs is too 
        narrow, allowing enterprises that are effectively controlled by 
        foreign governments (but where the government owns less than 
        50% of the shares) to circumvent the obligations.

TPA   The TPA bill provides no guidance on what an acceptable 
        definition of an SOE is, or on what kinds of carve-outs are 
        acceptable.
Agricultural Market Access

Issue:   Will the TPP eliminate tariffs on virtually all U.S. 
        agricultural exports, especially in markets that have been 
        traditionally sheltered from competition from trade like 
        Japan's and Canada's?

Status:  It appears that the United States and Japan will agree that 
        Japan will reduce tariffs--but never eliminate them--on 
        hundreds of agricultural products, far more carve-outs than 
        under any U.S. trade agreement in the past. Canada, on the 
        other hand, has not put any offer on the table for dairy 
        products, which is causing some concern in the dairy industry. 
        This concern is even stronger given that the dairy industry is 
        not entirely pleased with the status of the Japan negotiations, 
        plus the fact that the industry is concerned about an increase 
        in dairy imports from New Zealand. Finally, the dairy industry 
        is also closely watching the negotiations over ``geographical 
        indications'' as it relates to cheeses and other dairy 
        products.

TPA   The Hatch-Wyden-Ryan TPA bill has as its objective 
        ``reducing or eliminating'' tariffs on agricultural products. 
        (Emphasis added.) Thus, even Japan's opening offer--to reduce 
        but never eliminate tariffs on nearly 600 products--satisfied 
        this objective, demonstrating this objective is meaningless. 
        And while former Chairman Camp said that Japanese ``exclusions 
        from tariff elimination translate to Congressional 
        opposition,'' the bill does not mention comprehensive tariff 
        elimination even as a negotiating objective, much less as a 
        requirement.
Food Safety Measures

Issue:   Will the TPP safeguard the ability of regulators to block 
        unsafe imported food while also ensuring that U.S. agricultural 
        exporters are not subjected to bogus food safety measures?

Status:  TPP will be the first U.S. trade agreement that will include 
        restrictions on the kind of measures TPP parties can take to 
        block food imports based on alleged safety concerns, reflecting 
        growing, legitimate concerns of U.S. farmers and ranchers.

        We have asked the Administration to confirm that existing U.S. 
        laws, regulations and practices will not be impacted by these 
        obligations. There is also a concern that we do not have 
        adequate resources to monitor the safety of food imports.

TPA   The Hatch-Wyden-Ryan TPA bill requires the President to 
        report on any changes to U.S. labor laws or practices necessary 
        to comply with the labor obligations in a trade agreement. It 
        has no similar provision regarding changes to U.S. food safety 
        laws or practices, nor does it ensure adequate resources to 
        monitor the safety of food imports.
The Basic Structure of Hatch-Wyden-Ryan is Flawed

In addition to the obsolete or weak negotiating objectives, the Hatch-
Wyden-Ryan TPA does not strengthen the role of Congress once its power 
is ceded through TPA.

For example:

       Hatch-Wyden-Ryan relies on the President to certify 
        whether his negotiators have met the negotiating objectives 
        that Congress set. It is unacceptable to rely upon a 
        President--who negotiated the agreement--to issue a statement 
        ``asserting that the agreement makes progress in achieving'' 
        Congressional negotiating objectives.

       Hatch-Wyden-Ryan includes a provision that ``creates a 
        new mechanism for the removal of expedited procedures for a 
        trade agreement if, in the judgment of either the House or 
        Senate, that agreement does not meet the requirements of TPA.'' 
        But this is authority that the House and Senate already hold. 
        We can always change the rules of the House. Indeed, House 
        Democrats did that when we removed the Bush-negotiated Colombia 
        Free Trade Agreement from ``fast-track'' procedures in 2008. 
        The so-called ``third process'' would happen after the 
        agreement is finalized and after the implementing legislation 
        is introduced further indicated how meaningless it is in 
        providing Congress a real role in the negotiations.

       Hatch-Wyden-Ryan leaves it up to USTR ``to develop 
        within 120 days of enactment written guidance on enhanced 
        coordination with Congress'' which is particularly meaningless 
        given the status of TPP negotiations.

                                 ______
                                 
          Prepared Statement of Hon. Tom Vilsack, Secretary, 
                       Department of Agriculture

                             April 16, 2015

    Mr. Chairman, members of the Committee, I am pleased to come before 
you today to discuss the benefits of agricultural trade, trade 
agreements, and Trade Promotion Authority (TPA) for America's farmers, 
ranchers, and producers.

    The Administration fully supports passage of bipartisan TPA 
legislation. Securing TPA is a top USDA priority. That is why I have 
been speaking publicly and sending USDA officials to roundtables around 
the country to make the case for a trade agenda that merits strong 
bipartisan support. TPA is a linchpin in finalizing trade agreements 
that strengthen the U.S. economy through expanding exports, which are 
critically important to the U.S. agricultural sector.

    Fiscal years 2009 to 2014 represent the strongest six years in 
history for U.S. agricultural trade, with U.S. agricultural exports 
totaling $771.7 billion. Agricultural exports last fiscal year reached 
$152.5 billion, the highest level on record. U.S. agricultural exports 
support more than one million jobs across America. These numbers would 
not be possible without the market access secured in trade agreements.

    Access to export markets is vital to U.S. agriculture. Our 
producers rely on and prosper from access to foreign markets. We 
export:

    About half of U.S. wheat, milled rice, and soybean production;

    Over 60 percent of almond, walnut and pistachio production;

    More than two-thirds of cotton production;

    40 percent of grape production, 20 percent of cherry production 
        and 20 percent of apple production;

    20 percent of poultry and pork production and 10 percent of beef 
        production.

    Population growth and rising incomes--particularly in the 
developing countries of the Asia-Pacific--are creating significant new 
agricultural export opportunities. U.S. farmers, ranchers, and food 
processors are well positioned to capitalize on growing global demand, 
especially since the productivity of U.S. agriculture is growing faster 
than domestic food and fiber demand. But to capitalize, we need to 
break down tariff and non-tariff barriers to allow our agricultural 
sector to compete on a level playing field. Eight former Secretaries of 
Agriculture agree. That is why they recently wrote to you noting that 
it is critical for U.S. agriculture that Congress passes a bipartisan 
TPA. The former Secretaries noted how each of them worked hard to open 
foreign markets and support trade agreements that help U.S. farmers, 
ranchers, and producers thrive.

    Despite our export successes, many other countries' markets are not 
as open to American products as our markets are to theirs. Trade 
agreements are the most effective way to eliminate foreign tariffs, 
unscientific regulatory barriers, and bureaucratic administrative 
procedures designed to block trade. Trade agreements lead to expanded 
agricultural exports by promoting economic growth, removing trade 
barriers and import duties, and developing mutually beneficial trade 
rules.

    Key to our ability to negotiate and implement market-opening 
agreements has been enactment of trade negotiating authority. TPA 
ensures that the United States has the credibility to conclude the best 
deal possible at the negotiating table. TPA ensures common trade 
agreement objectives between the President and the Congress, and 
appropriate consultation prior to final Congressional approval or 
disapproval of a trade agreement. TPA will signal to Trans-Pacific 
Partnership (TPP) and Transatlantic Trade and Investment Partnership 
(T-TIP) negotiation counterparts that Congress and the Administration 
stand together on the high standards we are seeking at trade talks.

    For U.S. agriculture the opportunities of TPP are clear across the 
board. Here are a few examples where TPP will address tariffs and 
expand market opportunities for U.S. farmers and ranchers:

    Beef--Japan is the largest export market for U.S. beef, valued at 
        $1.6 billion in 2014. Tariffs are as high as 50 percent in some 
        TPP countries.

    Pork--Japan was the United States' top pork market in 2014 with $2 
        billion in sales despite high tariffs and a complicated import 
        system, both of which will be addressed in TPP.

    Poultry--Poultry tariffs in the TPP region are as high as 240 
        percent, and in 2014, the United States exported over $2.5 
        billion of poultry to the TPP region.

    Dairy Products--TPP countries markets for dairy accounted for $3.6 
        billion in U.S. dairy product exports in 2014.

    Fruits--Tariffs on fruits are as high as 40 percent across the TPP 
        region, and in 2014, the United States exported almost $3.1 
        billion in fresh fruits to the TPP region.

    Vegetables--In 2014, the United States exported almost $5 billion 
        in fresh and processed vegetables to the TPP region, and 
        tariffs are as high as 90 percent.

    Wheat--In 2014, the United States exported more than $2 billion of 
        wheat to the TPP region, including to Japan where the United 
        States is the dominant supplier.

    Soybeans and Soybean Products--The TPP region is the fourth-
        largest export destination for U.S. soybeans, accounting for 
        over $1 billion a year in sales, despite tariffs as high as 20 
        percent.

    In addition to cutting tariffs, the TPP will include strong 
        sanitary and phytosanitary (SPS) provisions that will improve 
        transparency and scientific decision-making to provide expanded 
        access for U.S. products including meat, fresh fruits, and 
        vegetables.

    Trade in the 21st century is also about America's place in the 
world. The TPP is key to markets in Asia and the ability for the United 
States to play a lead role in establishing the rules and terms of trade 
throughout the Pacific Rim. If we don't get a trade agreement, the 
world will not stand still; other countries will step in and fill the 
void. They will have their own trade agreements. For those of us in 
agriculture who are concerned about raising standards, reducing 
barriers to trade, securing preferential access, and instituting 
enforcement provisions, the question is who do you want writing the 
rules of the road? I want the United States negotiating those rules.

    With TPA, the United States will be able to seal the deal on high 
standard agreements, like the TPP and the T-TIP, that will help 
America's farmers and ranchers increase U.S. exports and compete in a 
highly competitive, globalized economy. But don't just take my word for 
it, I urge you to speak to your farmers, ranchers, and producers. A 
group of more than 70 agricultural organizations recently sent a letter 
to Congress stating that TPP can become the ``most important regional 
trade negotiation ever undertaken'' but for ``TPP to become reality, 
Congress needs to pass TPA.'' I am committed to working with you in 
securing a bipartisan TPA.

    Thank you. I look forward to your questions.

                                 ______
                                 
                  Prepared Statement of Hon. Ron Wyden

                             April 16, 2015

    In several town halls I've recently held at home in Oregon, the 
number one issue that came up was secrecy. That's why I felt it was 
important to start the conversation on this issue as soon as possible. 
If you believe in trade and you want more of it, it doesn't make sense 
to have all this secrecy that makes the public cynical about what's 
going on. American trade policy needs to be pulled out of the time warp 
so that it works better for the middle class and delivers a new level 
of transparency. This has to be about creating more red, white and blue 
jobs and helping people climb the economic ladder. The same old 
playbook on trade won't work for Oregonians, so I won't accept it.

    As Chairman Hatch and I discussed, we are working hard on finding 
common ground on modernizing our approach to trade policy. That 
includes Trade Promotion Authority, Trade Adjustment Assistance, 
tougher enforcement strategies and other important programs.

    There are some very significant goals to accomplish. I believe it's 
essential to step up our enforcement of trade laws to stop rule-
breaking countries more effectively. Enforcement should be based on 
defending American jobs and promoting economic growth at home.

    It's time to raise the bar on labor standards, environmental 
protection, and human rights. No other country will carry the banner 
and fight for those values like the United States.

    It's important to solidify the support system for workers in Oregon 
and across the country. Middle-class trade policies will work best when 
our workforce is ready to compete and when workers have access to job 
training, financial support, and health care.

    And finally, it's necessary to build a better process and more 
transparency in trade policy. The public has a right to know what's at 
stake in trade negotiations, plain and simple. Those are some of the 
priorities I'm focused on as the committee works to find common ground. 
I look forward to discussing these issues with the witnesses here 
today.

                                 ______
                                 
                  Prepared Statement of Hon. Ron Wyden

                             April 16, 2015

    What's most important about the package I worked on with Chairmen 
Hatch and Ryan, in my view, is that it builds middle-class trade 
policies that will heighten transparency, expand economic opportunity, 
and create good jobs here at home. Let's be clear--this legislation 
will not dust off the same old playbook from decades ago. Our approach 
to trade has been stuck in a time warp for too long. That old plan 
doesn't work for Oregonians or for everyday Americans across the 
country. This new package is a modern approach designed to help 
American workers and businesses take on the challenges of the global 
marketplace.

    It does that by setting higher standards for trade agreements, 
stepping up tough enforcement, and delivering a new level of 
transparency, accountability, and oversight in trade. In sum, this 
package raises the bar for trade deals, and challenges our negotiators 
and other countries to meet it. If they fall short and the product 
doesn't meet our standards, Congress can still hit the brakes on a bad 
deal. That's something I fought to secure. And this package strengthens 
the support system for American workers and helps ensure our workforce 
is ready to compete. So with the remainder of my time this afternoon, 
I'd like to run briefly through those highlights.

    First is how this legislation will ensure American businesses and 
workers--particularly in the middle class--get more out of trade. This 
package includes a new tool to put the focus of trade enforcement back 
where it belongs--on American jobs and growth--and make sure our 
trading partners live up to their commitments. It includes new 
enforcement provisions to stop foreign companies from making end-runs 
around our laws. And if other countries try to break the rules, it will 
include a new monitoring system to ensure that the warning bells will 
go off earlier than ever before.

    With this package, labor rights and environmental standards will be 
brought to the core of trade agreements and backed by the threat of 
sanctions, rather than left unenforced on the periphery. There will be 
a new emphasis on human rights in agreements. And there will be new 
priorities set to ensure information can flow freely across national 
borders, which is crucial in today's digital economy. Nobody else has 
the muscle or the determination to force progress on those issues like 
the United States does.

    Second, I want to talk about how this legislation creates a better 
process and more transparency in trade policy. Under this package, the 
public and their representatives in Congress will get real-time updates 
on what's at stake in trade negotiations. Every member of Congress will 
have full access to the text of negotiations from beginning to end. And 
any trade deal will be public for 60 days before the president can sign 
it.

    No trade deal will be able to change U.S. law without Congressional 
action. There will not be any back door for corporations to skirt U.S. 
law. Foreign companies will have no more rights in international 
tribunals than they have in American courts.

    And with this package, there will be a new procedure to hit the 
brakes on bad trade deals before they reach the Senate or House floor. 
So this is not a green light for any future trade deal that comes 
along.

    Third, this legislation backs workers in Oregon and across the 
country by providing job training and financial support and by 
preserving their access to health care. Competing in the global economy 
is a tough, national challenge. Taking that challenge on, it's 
absolutely essential to support America's workers--especially in tough 
times. That's why this package expands the Trade Adjustment Assistance 
program to include not just manufacturing sector workers but service 
sector workers as well, and to cover workers were hurt by competition 
from any country around the world. This restores the policy to exactly 
what was in place in 2013, and extends it until July 2021. It also 
extends the Health Care Tax Credit.

    Those three points are only some of what this legislation does. It 
also includes important preference programs called the Generalized 
System of Preferences and the African Growth and Opportunity Act. GSP 
will last through 2017 and AGOA for a decade. It includes a five year 
extension of the Haiti HOPE Act.

    A full description of everything this package does to modernize 
trade policy would keep us here till sundown, so I'll close by saying 
this. There are booming economies around the world that have more money 
to spend with every passing year. So my bottom line is, we should grow 
and manufacture things here, add value to them here, and ship them to 
consumers in those markets abroad. The package of legislation I've 
worked on with Chairmen Hatch and Ryan will help ensure our trade 
policies do that in a transparent way that strengthens the middle 
class, expands economic opportunity, and creates high-skill, high-wage 
jobs here at home. I look forward to discussing that opportunity with 
our witnesses today.

                                 ______
                                 
                  Prepared Statement of Hon. Ron Wyden

                             April 21, 2015

    My guiding principle in six months of negotiating with Chairman 
Hatch and working with the members of this committee is that the 
playbook for trade has to change. It's clear, in my view, that trade 
agreements in 2015 must be very different than trade agreements from 
the 1990s. The president himself said in the State of the Union that 
previous trade deals haven't always, ``lived up to the hype.'' So our 
policies can't be stuck in a time warp.

    Twenty-five years ago, nobody carried around iPhones. The Internet 
was not anything close to the economic engine it is today. China was 
only beginning to develop into an economic powerhouse. Container ships 
were smaller and the world traded less.

    It's a different world today, which is why the legislation the 
committee is debating this week throws out the old playbook. Here's 
some of what's different with this legislation.

    First, it will put the focus of enforcement back where it belongs--
on jobs and growth here in America. I hear a lot of people ask, ``Why 
bother negotiating new trade deals when the existing trade laws aren't 
being enforced?'' This legislation will help make sure the warning 
bells go off earlier and more loudly when other countries try to break 
the rules. And it will help stop other countries and companies that try 
to make end-runs around our laws. It will also break down unfair trade 
barriers that are preventing Made in America products from competing on 
a level playing field in overseas markets.

    Second, with this legislation, the U.S. is going to aim higher in 
its trade deals. In the 1990s, labor rights and environmental standards 
were unenforceable side-deals in trade agreements. Those side-deals had 
no teeth, which meant they weren't much good from the beginning. That's 
going to change today because labor and the environment will be core, 
enforceable elements in trade agreements going forward. Furthermore, 
there will be a new emphasis on human rights in trade deals. And 
protecting an open Internet and the digital economy will be new 
priorities.

    Third, this legislation is going to fight the excessive secrecy 
that causes people to be skeptical about trade. If you believe in trade 
and want more of it, why have so much secrecy? Under this legislation, 
any trade deal will be public for 60 days before the president can sign 
it. Add in the time it takes to move through Congress, and that means 
deals will be public for four or five months. In addition, Congress and 
the public will get real-time updates on what's at stake in 
negotiations. That's a new level of transparency.

    Fourth, this legislation goes further than any TPA bill to protect 
American sovereignty. It guarantees that trade deals cannot change U.S. 
law without congressional action. And foreign companies will have no 
more rights in international tribunals than they have in American 
courts today. There won't be any back door that would let corporations 
skirt our laws.

    Finally, this legislation protects Congress' ability to hit the 
brakes on a bad trade deal. This bill is not a green light for the 
Trans-Pacific Partnership or any trade deal that comes before Congress. 
What this legislation does is raise the bar for future trade deals and 
challenge our negotiators and foreign countries to meet it. If they 
fail, Congress can stop a bad deal dead in its tracks. That's an 
important democratic power that I fought to protect.

    I'll wrap up by saying that the global middle class will more than 
double in size by 2030, with most of that growth overseas. And as I see 
it, there will be a positive link between the strength of America's 
middle class and the growing middle class around the world. Billions of 
people, for the first time, will be looking to buy food, computers, 
cars, and hundreds of other products and services. I bet everybody in 
this hearing room would like to see those products and services made 
and delivered by Americans.

    In my view, the legislation under debate this week--and in the 
weeks ahead--is all about fighting for the Oregon brand and the 
American brand. This is Congress's best chance to produce middle-class 
trade policies and fight for American values around the world. And I'm 
looking forward to debating how best to accomplish that.

                             Communications

                              ----------                              

           Letter Submitted by the American Chemistry Council

                             April 21, 2015

The Honorable Orrin G. Hatch        The Honorable Ron Wyden
Chairman                            Ranking Member
Committee on Finance                Committee on Finance
U.S. Senate                         U.S. Senate
219 Dirksen Senate Office Building  219 Dirksen Senate Office Building
Washington, D.C. 20510              Washington, D.C. 20510

Dear Chairman Hatch and Ranking Member Wyden:

The American Chemistry Council (ACC) strongly supports current 
initiatives to expand access for U.S. exports to key international 
markets. We particularly support the Trans-Pacific Partnership (TPP) 
and Trans-Atlantic Trade and Investment Partnership (TTIP) negotiations 
as a means to achieve these export objectives. Trade Promotion 
Authority (TPA) renewal is among the most critical trade votes Congress 
must undertake to realize America's ambitious trade agenda and support 
expanded growth in exports. We urge Congress to renew TPA as soon as 
possible.

The business of chemistry in the United States is enjoying an 
unprecedented boom in competitiveness and growth, largely due to the 
increased supply of low-cost natural gas, a feedstock and a power 
source for chemical manufacturing. As a result of shale gas, more than 
229 separate chemical manufacturing investments have been announced 
since 2010, representing a cumulative capital investment of $140 
billion in new chemical capacity. This new capacity will exceed U.S. 
domestic demand, and will necessarily serve important export markets. 
Even with the recent drop in oil prices, gross exports of chemical 
products linked directly to natural gas are projected to double in the 
next fifteen years, from $60 billion in 2014 to $123 billion by 2030, 
according to a recent report from Nexant, Inc. However, enhanced U.S. 
chemical export performance will depend on many factors, including the 
U.S. pursuing the right trade policies that further strengthen the 
competitive position of the U.S. industry.

TPA is critical to completing the trade agreements now being 
negotiated. TPA will therefore help open markets and help ensure the 
U.S. chemical industry can capitalize on its massive export potential.

The Congressional trade agenda should also include the reauthorization 
of the Miscellaneous Tariff Bill (MTB). U.S. manufacturers large and 
small use the MTB's tariff suspension provisions to obtain raw 
materials, proprietary inputs and other products that are not available 
in our nation without incurring unnecessary tariff barriers. Each day 
that passes without an MTB process hurts American manufacturers' 
ability to do business. In fact, the failure to pass the MTB has 
essentially imposed a tax on manufacturers of $748 million and economic 
losses of $1.857 billion over three years. The impacts extend to the 
people and businesses that depend on manufacturing. Ramifications are 
experienced throughout the supply chain, from the suppliers, to the 
millions of people who are employed in manufacturing, to the local 
governments that depend on the spending and tax revenue generated by 
the industry. Any action to reduce barriers to domestic production and 
increase the competitiveness of U.S. companies must include the 
reauthorization of MTB.

For U.S. chemical manufacturers to succeed in today's global economy, 
we must be able to compete effectively in international markets. For 
this reason, we support an ambitious trade agenda, including TPA and 
MTB, that deliver enhanced access to overseas markets and support the 
competitive position of U.S. manufacturers. ACC looks forward to 
working with you to ensure that an ambitious trade agenda delivers on 
its promise.

Sincerely,

Michael P. Walls
Vice President
Regulatory and Technical Affairs

                                 ______
                                 

                          UNITED STATES SENATE

                          COMMITTEE ON FINANCE

             HEARING ON ADVANCING CONGRESS'S TRADE AGENDA:

                    CONGRESS AND U.S. TARIFF POLICY

                             APRIL 21, 2015

               STATEMENT OF THE DISTILLED SPIRITS COUNCIL

                       OF THE UNITED STATES, INC.

    The following statement is submitted on behalf of the Distilled 
Spirits Council of the United States, Inc. (Distilled Spirits Council) 
for inclusion in the printed record of the Committee's hearing on 
Advancing Congress's Trade Agenda and U.S. Tariff Policy. The Distilled 
Spirits Council is a national trade association representing U.S. 
producers, marketers and exporters of distilled spirits products. Its 
member companies export spirits products to more than 130 countries 
worldwide.

THE IMPORTANCE OF TRADE TO THE U.S. SPIRITS INDUSTRY

    The Distilled Spirits Council and its members have a strong and 
growing interest in trade, from a commercial perspective and from a 
policy perspective. As a commercial matter, our members have become 
increasingly reliant on exports to fuel growth. Indeed, global U.S. 
spirits exports have more than doubled over the past decade, reaching 
over $1.5 billion in 2014. This was the eighth consecutive year that 
exports of American-made spirits exceeded $1 billion. The majority of 
U.S. spirits exports are comprised of Bourbon and Tennessee Whiskey, 
which are recognized in several trade agreements as distinctive 
products of the United States. Exports of rum and other spirits also 
make a significant contribution to the U.S. economy. As of 2012, the 
distilled spirits industry supported 717,000 direct employees. 
Continuing to expand exports supports current and future employment in 
the industry.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Given the growing importance of export markets to the industry's 
long term growth, the Distilled Spirits Council has a strong interest 
in a wide range of trade policy matters and has long been a very active 
supporter of market-liberalizing trade initiatives. For example, the 
Distilled Spirits Council has strongly supported multilateral, regional 
and bilateral trade agreements. We are active participants in the 
business coalitions supporting the negotiations toward a Trans-Pacific 
Partnership Agreement (TPP) and Transatlantic Trade and Investment 
Partnership (TTIP), have supported Congressional approval of free trade 
agreements (FTAs) the United States has concluded with various trading 
partners, as well as the granting of Permanent Normal Trade Relations 
(PNTR) status to China, Vietnam and Russia.
---------------------------------------------------------------------------
    \1\ Source: U.S. International Trade Commission TradeDataweb.
---------------------------------------------------------------------------

THE IMPORTANCE OF RENEWING TRADE PROMOTION AUTHORITY

    There is no doubt that past efforts by the United States to open 
foreign markets have contributed to the impressive gains the U.S. 
industry has made, and continues to make, in expanding U.S. spirits 
exports. Certainly, past grants of trade promotion authority provided 
previous administrations with the necessary leverage to secure 
significant market access commitments from trading partners.

    For example, during the Uruguay Round of GATT negotiations, 
distilled spirits were included in the ``zero-for-zero'' negotiations, 
in which the United States and European Union agreed to eliminate their 
respective tariffs on substantially all spirits. The value of U.S. 
exports to the European Union have more than tripled since the Uruguay 
Round agreements entered into force in 1995, from $184 million to 
$744.5 million in 2014. In addition, the implementation of FTAs has 
improved access for U.S. spirits exports to several important overseas 
markets, such as Australia, Canada, Mexico, Chile, Peru, Singapore, 
Korea, Colombia, Panama and Central America. Since the tariffs were 
eliminated under the U.S.-Australia FTA in 2005, for example, U.S. 
spirits exports to Australia have grown by 70% to $131 million. 
Australia now ranks as the industry's fourth largest export market 
worldwide. Such trade liberalizing efforts are critical to ensure that 
U.S. spirits exports are on a level playing field with domestically-
produced spirits and other imported spirits.

    Despite these impressive gains, the U.S. spirits industry continues 
to confront formidable trade barriers, particularly in key emerging 
markets. India, for example, assesses an import tariff of 150% ad 
valorem on spirits and, as a result, U.S. spirits exports to India 
remain disappointingly low. In 2014, U.S. direct spirits exports to 
India were valued at $3.9 million, accounting for less than 0.3% of all 
U.S. spirits exports. Indeed, U.S. spirits exports to India remain far 
below U.S. exports to comparable markets, particularly in light of the 
fact that India ranks as the largest whiskey market in the world, both 
in terms of volume (1.5 billion liters in 2013) and value ($21.6 
billion in retail sales in 2013).\2\ Other emerging markets with strong 
potential for U.S. spirits sales also maintain high tariffs on imports, 
including Vietnam (45%), which is participating in the TPP 
negotiations, Thailand (54-60%), and Brazil (20%).
---------------------------------------------------------------------------
    \2\ Source: Euromonitor International Database.

    Moreover , international regulatory activities affecting product 
standards, labeling and certification requirements, among other non-
tariff measures, have become increasingly problematic for the U.S. 
spirits industry. As a consequence, our organization devotes 
considerable resources to monitoring regulatory developments, 
principally through the notification procedures established under the 
WTO Agreements on Technical Barriers to Trade (TBT) and Sanitary and 
Phytosanitary Measures (SPS). In that connection, the Distilled Spirits 
Council has submitted numerous detailed comments with respect to 
proposed TBT and SPS measures that could impact trade in distilled 
---------------------------------------------------------------------------
spirits.

    Current and future trade negotiations offer an important vehicle to 
address tariff and non-tariff barriers that impede the ability of U.S. 
spirits exporters to gain a foothold in foreign markets. Specifically, 
negotiations towards a TPP agreement afford an important opportunity to 
open up key emerging markets, including Vietnam and Malaysia, to U.S. 
spirits exports. However, TPA is essential in order to bring these 
important negotiations to a successful conclusion. Failure to do so 
will provide trading partners with whom the U.S. is negotiating little 
incentive to make the key decisions needed to conclude strong, market-
opening agreements, thus leaving U.S. companies, including spirits 
exporters, at a serious competitive disadvantage vis-a-vis our overseas 
competitors.

CONCLUSION

    In sum, international trade has become increasingly important to 
the U.S. spirits industry, and the ability of the United States to 
conclude high standard, comprehensive and trade liberalizing agreements 
with key partners will help to ensure the long term viability of the 
industry. TPA is absolutely vital to ensure that U.S. negotiators are 
empowered to conclude the strongest possible trade agreements to 
address the types of trade barriers that impede U.S. exports of 
distilled spirits. The Distilled Spirits Council, therefore, strongly 
supports swift congressional approval of the Bipartisan Congressional 
Trade Priorities and Accountability Act of 2015, and we stand ready to 
cooperate closely with Congress in seeking the prompt approval of this 
legislation.

    Thank you very much for your consideration.

Written Statement of:

    Dr. Peter H. Cressy
    President/CEO
    Distilled Spirits Council of the United States, Inc.
    1250 Eye Street, NW, Suite 400
    Washington, DC 20005
    (202) 682-8870

                                 ______
                                 

                        Senate Finance Committee

                    Congress and U.S. Tariff Policy

                             April 21, 2015

                               LeadingAge

                      William L. Minnix, Jr., CEO

The Honorable Paul D. Ryan, Chair
The Honorable Sander M. Levin, Ranking Member
Committee on Ways and Means
U.S. House of Representatives
Washington, DC 20515

Dear Chairman Ryan and Ranking Member Levin:

On behalf of LeadingAge, I am writing about our concern over proposed 
trade legislation that would offset the cost of extending trade 
readjustment assistance benefits with another extension of Medicare 
sequestration. This offset is simply wrong, and we urge you to remove 
it from the legislation.

Over the last few years, Medicare payments to post-acute care providers 
have taken a number of hits. The Affordable Care Act applies a 
productivity adjustment factor to the annual Medicare payment update, 
directly affecting resources necessary for good-quality care. Payments 
to skilled nursing facilities were cut by 11% across-the-board in 2011. 
Home health care payments are being rebased, which will substantially 
reduce reimbursement to providers. Last year, Congress enacted value-
based purchasing for skilled nursing facilities, due to take effect 
within a few months. And the IMPACT Act enacted last year will lead to 
major revisions in post-acute care payment systems over the next few 
years.

In 2015, the 2% Medicare sequestration resulted in no payment update 
for most post-acute care providers, since it essentially negated the 2% 
increase in provider costs that the Centers for Medicare and Medicaid 
Services (CMS) had calculated. Medicare sequestration is already 
scheduled to last a year longer than originally enacted because it was 
used to offset the cost of restoring cost-of-living increases in 
military pensions. Again, we do not argue with military pension policy, 
but the offset should not have come from a program providing essential 
health care coverage to seniors.

As the large baby boom cohort ages, Medicare will face growing cost 
pressures. We also anticipate potential budget legislation later this 
year that could have an impact on the program. If savings have to be 
achieved in Medicare, they should be directed back into keeping it 
financially stable for the population it is intended to serve.

Medicare must not be a piggy bank to offset the costs of legislation 
unrelated to the program. Please find other means of offsetting the 
costs of the trade measure soon to come before your committee.

Sincerely,
William L. Minnix, Jr.
President and CEO

About LeadingAge

The mission of LeadingAge is to expand the world of possibilities for 
aging. Our membership has a service footprint of 4.5 million and 
includes a community of 6,000 members representing the entire field of 
aging services, including not-for-profit organizations, state partners, 
and hundreds of businesses, consumer groups, foundations, and research 
partners. LeadingAge is a tax-exempt charitable organization focused on 
education, advocacy, and applied research.

                                 ______
                                 

                        Statement for the Record

                 National Association of Manufacturers

                     733 10th Street, NW, Suite 700

                          Washington, DC 20001

                      Senate Committee on Finance

                     Congress and U.S. Trade Policy

                             April 21, 2015

    The National Association of Manufacturers (NAM) is pleased to 
provide the following statement to the Senate Committee on Finance on 
``Congress and U.S. Trade Policy.''

    The NAM is the nation's largest industrial association and voice 
for more than 12 million women and men who make things in America. 
Manufacturing in the U.S. supports more than 17 million jobs, and in 
2014, U.S. manufacturing output reached a record of nearly $2.1 
trillion. It is the engine that drives the U.S. economy by creating 
jobs, opportunity and prosperity. The NAM is committed to achieving a 
policy agenda that helps manufacturers grow and create jobs. 
Manufacturing has the biggest multiplier effect of any industry and 
manufacturers in the United States perform more than three-quarters of 
all private-sector R&D in the nation--driving more innovation than any 
other sector.

    The NAM has long championed a robust trade and investment policy to 
grow manufacturing in the United States. At its core, a robust 
manufacturing U.S. trade policy should seek to open markets and level 
the playing field overseas, improve the competitiveness of 
manufacturers in the United States and ensure the strong enforcement of 
the rules of the trading system at home and by our trading partners. 
The Committee is marking-up major parts of that robust manufacturing 
trade agenda on April 22. The NAM's views on Trade Promotion Authority 
and the other key pieces of legislation contained in the Chairman's 
Mark are contained herein. The NAM also supports action on the 
``American Manufacturing Competitiveness Act of 2015'' by Senators Rob 
Portman (R-OH), Claire McCaskill (D-MO), Pat Toomey (R-PA), and Richard 
Burr (R-NC), that provides an important path forward on the 
Miscellaneous Tariff Bill (MTB) that helps promote the competitiveness 
of our country's manufacturers.

Bipartisan Congressional Trade Priorities and Accountability Act

    The NAM strongly supports the Bipartisan Congressional Trade 
Priorities and Accountability Act (H.R. 1890/S. 995), introduced last 
week by Senate Finance Committee Chairman Orrin Hatch (R-UT), Senate 
Finance Ranking Member Ron Wyden (D-OR), and House Ways and Means 
Chairman Paul Ryan (R-WI). This legislation sets forth the much-needed 
Executive-Congressional framework to ensure that both branches of 
government work to achieve the strongest possible outcomes in our trade 
agreements. This legislation also provided important updates to the 
traditional TPA framework, including with respect to priority 
negotiating issues consistent with the NAM's priorities.

    TPA is a longstanding and proven procedural partnership between 
Congress and the Executive Branch that facilitates negotiation and 
approval of trade agreements that open markets for manufacturers in the 
United States. As set out in the new legislation, Congress sets forth 
trade negotiating objectives, increasing Congress's role in shaping 
international trade negotiations.

    As detailed in NAM's Trading Up with TPA report, trade agreements 
negotiated under TPA deliver for manufacturers and their employees. 
America's 20 existing free trade agreement partners account for less 
than ten percent of the global economy but purchased nearly half of all 
U.S. manufactured goods exports in 2014.

    New trade agreements would give the more than 256,000 manufacturers 
in the United States--and their more than 12.3 million employees--
better access to the 95 percent of the world's consumers who live 
outside the United States. At $11.8 trillion, world trade in 
manufactured goods is nearly three times the size of the $4.1 trillion 
U.S. domestic market for manufactured goods.

    In doing so, strong trade agreements negotiated under TPA would 
boost U.S. manufacturers' confidence that they can compete on a level 
playing field internationally. The United States has one of the most 
open economies in the world. America has the lowest applied tariff of 
any G-20 country according to the WTO, with more than two-thirds of all 
manufacturing imports entering the United States duty-free since 2013. 
But U.S. manufactured goods exports face higher tariffs, non-tariff 
barriers and other unfair trade practices overseas than exports from 
China, Germany, Mexico and other major economies according to the World 
Economic Forum. By eliminating these discriminatory and unfair barriers 
overseas, trade agreements negotiated under TPA will provide 
substantially greater opportunities for businesses and their employees 
in the United States.

    To negotiate the type of comprehensive, high-standard and market-
opening trade agreements that have driven export growth and jobs across 
the country, TPA is essential.\1\ TPA legislation has been in place and 
was utilized during the negotiation and implementation of the Uruguay 
Round Agreements creating the WTO and for 13 FTAs negotiated since 
1974.\2\ Without TPA, manufacturers in the United States have been 
standing on the sidelines while other countries negotiate deals that 
don't include--and disadvantage--the United States. TPA last expired in 
2007, and the United States has not concluded any new agreements since 
then. That is nearly eight years ago. U.S. manufacturers cannot afford 
to wait any longer.
---------------------------------------------------------------------------
    \1\ It is sometimes argued that hundreds of trade agreements have 
been negotiated without TPA. Those agreements are not the type that 
open markets overseas or include binding and state-of-the art dispute 
settlement. For example, Trade and Investment Framework Agreements 
provide a useful opportunity for the United States to engage in 
economic discussions with foreign governments but do not obligate 
either country to open its market or address barriers.
    \2\ Of all U.S. market-opening FTAs, only the U.S.-Jordan FTA was 
implemented without TPA. Notably, the Jordan FTA is much less 
comprehensive and less developed than our other FTAs, and most 
prominently lacks the state-of-the-art time-limited dispute settlement 
provisions that are found in the North American Free Trade Agreement 
and all subsequent FTAs.

    Action on TPA is vital to ensure that U.S. negotiators can bring 
home the strongest possible outcomes in both the ongoing Trans-Pacific 
Partnership (TPP) and Transatlantic Trade and Investment Partnership 
(T-TIP) talks that will set in place new and stronger rules to level 
the global playing field and to engage in major new negotiations. Such 
legislation is also needed for the World Trade Organization 
Environmental Goods Agreement and Trade in Services Agreement talks and 
---------------------------------------------------------------------------
future negotiations.

    Time is of the essence. Other major economies are already 
negotiating dozens of agreements without the United States that could 
put manufacturers and workers in the United States at a significant 
competitive disadvantage. If Congress does not move expeditiously to 
pass TPA and ensure the United States continues to lead in striking 
trade deals that drive manufacturing growth and job creation, we will 
be forced to sit on the sidelines while other countries negotiate deals 
that exclude us.

    The Bipartisan Congressional Trade Priorities Act and 
Accountability of 2015 provides a very strong model to move forward on 
TPA as soon as possible. Not only does this legislation set forth clear 
and ambitious goals to eliminate tariffs and open overseas markets to 
U.S. goods, services and investment, it also establishes powerful new 
trade negotiating objectives that address existing and emerging 
commercial challenges to manufacturing growth and exports in markets 
around the world.

    For the first time in a TPA bill, the Bipartisan Congressional 
Trade Priorities Act confronts the serious and growing problem of 
forced localization barriers to trade. It seeks to eliminate trade 
distortions and unfair competition from state-owned enterprises and to 
promote regulatory transparency, procedural fairness and rule-
making based on risk assessments and sound scientific evidence. It 
includes critical new provisions addressing cyber theft and protecting 
trade secrets and confidential business information.

    The legislation would foster manufacturing growth and innovation 
here in the United States. It includes highly important negotiating 
objectives to establish more open and fair trade in goods, improved 
transparency and protections and enforcement for intellectual property.

    The negotiating objectives also seek to ensure that U.S. property 
overseas is treated fairly and in accordance with core U.S. due process 
principles, subject to 
Investor-State Dispute Settlement. As explained this week in a letter 
from 62 business organizations representing millions of manufacturers 
and businesses across the United States, ``[t]hese provisions promote 
fairness and the rule of law overseas, while helping to sustain and 
grow the U.S. economy.'' These provisions provide recourse against 
unfair and discriminatory treatment overseas.

    Just as importantly, the legislation would restore the vital 
partnership between Congress and the President that facilitates the 
negotiation and approval of trade agreements. It enhances congressional 
oversight over trade negotiations and, for the first time, explicitly 
confirms and provides that any Member of Congress can access 
negotiating text, submit views and attend trade agreement negotiating 
rounds. Separate House and Senate advisory groups would oversee ongoing 
trade talks, including through regular, scheduled meetings.

    At the same time, the Bipartisan Congressional Trade Priorities and 
Accountability Act will empower U.S. negotiators to bring back the 
strongest possible trade agreements to open markets and level the 
playing field. Without this authority, our trading partners have little 
incentive to make tough decisions or put their best offer on the table.

    From the NAM's perspective, this legislation provides the type of 
framework needed to secure new, market-opening trade agreements. The 
NAM urges Congress and the Administration to move forward on the 
Bipartisan Congressional Trade Priorities and Accountability Act as 
quickly as possible. For more information, please see more information 
on the NAM's website.

Other Trade Legislation

    The NAM also strongly supports the following legislation being 
considered by the Committee:

    The retroactive extension of the Generalized System of Preferences 
        (GSP) program that provides duty-free treatment to non-import 
        sensitive products from developing countries that meet 
        important eligibility criteria. This important legislation, 
        which is contained in the AGOA Extension and Enhancement Act of 
        2015 (H.R. 1891), introduced by House Ways and Means Chair Ryan 
        and Ranking Member Sander Levin (D-MI) and Senate Finance 
        Committee Chairman Hatch and Ranking Member Levin, is vital for 
        many manufacturers that require manufacturing imports from 
        overseas and helps grow the global competitiveness of the U.S. 
        manufacturing sector.

    The customs modernization provisions of the Senate Finance 
        Committee Chairman's Mark that will improve the operations of 
        Customs and Border Protection (CSP), cut red tape to prevent 
        delays and improve manufacturers' ability to participate more 
        competitively in the global economy. The Senate's proposed bill 
        contains many customs modernization provisions that the NAM had 
        sought to address problems in customs processing including on 
        key issues such as duty drawback modernization, exemption from 
        duty for container residue and protection of intellectual 
        property rights.

    The Enforcing Orders and Reducing Customs Evasion Act (ENFORCE) 
        provisions of the Senate Finance Committee Chairman's Mark. 
        This legislation is critical to ensure the full and fair 
        enforcement of the trade remedy laws that help manufacturers 
        address government-subsidized and other unfair competition. Too 
        often, we hear from our manufacturers that they have spent 
        significant time and resources to utilize the trade remedy 
        rules and obtain antidumping/countervailing duty (AD/CVD) 
        orders only to find importers that are evading these orders. 
        When manufacturers request that CSP investigate these cases of 
        evasion, years often pass with no resolution, hindering the 
        ability of U.S. industry to remedy the injury they have 
        suffered from unfair imports. As detailed recently by the 
        Office of the United States Trade Representative \3\ ``the 
        United States has witnessed a dramatic increase in activities 
        expressly designed to evade the application of antidumping 
        duties.'' Title V of the Chairman's Mark includes an important 
        remedy to this problem by creating a process for CBP to review 
        and act to reclassify imports that have been found to be 
        evading trade remedy orders. This legislation provides basic 
        due process procedures for domestic manufacturers, including 
        timelines for CBP to act and the potential for judicial review.
---------------------------------------------------------------------------
    \3\ ``Antidumping Duty `Evasion Services,' '' paper from the United 
States to the WTO Committee on Anti-Dumping Practices, Informal Group 
on Anti-Circumvention (17 Mar. 2015), accessed at http://
documents.nam.org/IEA/G-ADP-IG-W-54.pdf.
---------------------------------------------------------------------------

Conclusion

    In manufacturing communities across America, the gains from trade 
can and should be increased. The United States achieved a record level 
of $1.4 trillion in manufactured exports last year, but we can do 
better so that America can expand manufacturing and jobs here at home. 
To improve the global competitiveness of manufacturers in the United 
States and grow our manufacturing economy, the NAM urges prompt action 
on TPA, in addition to the extension of GSP, customs modernization 
legislation and new ENFORCE provisions that will advance our global 
competitiveness and the full enforcement of our trade agreements and 
existing domestic trade rules.

                                 ______
                                 

                         National Farmers Union

                         20 F St. NW, Suite 300

                          Washington, DC 20001

                       TESTIMONY OF ROGER JOHNSON

                               PRESIDENT

                         NATIONAL FARMERS UNION

           SUBMITTED TO THE U.S. SENATE COMMITTEE ON FINANCE

               REGARDING CONGRESS AND U.S. TARIFF POLICY

                             APRIL 21, 2015

                             WASHINGTON, DC

Introduction

On behalf of family farmers, ranchers, and rural members of National 
Farmers Union (NFU), thank you for the opportunity to submit testimony 
regarding U.S. trade policy and Trade Promotion Authority. NFU was 
organized in Point, Texas in 1902 with the mission of improving the 
well-being and economic opportunity for family farmers, ranchers, and 
rural communities through grassroots-driven advocacy. That mission 
still drives NFU's work today. As a general farm organization, NFU 
represents agricultural producers across the country and in all 
segments of agriculture.

NFU, as directed by its policy adopted by delegates to its annual 
convention, advocates for fair trade. NFU recognizes that international 
trade is an important part of successful family farming in the U.S., 
but increasing trade is not an end unto itself. NFU policy states, 
``Every future trade agreement must address differences in labor 
standards, environmental standards, health standards, and the trade-
distorting effect of currency manipulation and cartelization of 
agriculture markets.'' \1\
---------------------------------------------------------------------------
    \1\ Nat'l Farmers Union, 2015 Policy of the National Farmers Union 
(2015) available at http://www.nfu.org/nfu-2015-policy/2066.

The original intent of Trade Promotion Authority (TPA) was to lay out 
the procedures for notification between the executive and legislative 
branch and the expedited legislative process for approval. Beyond the 
procedural components of Trade Promotion Authority, and most 
importantly, the legislation sets forth the objectives for any 
president for negotiating trade agreements. The Trans-Pacific 
Partnership negotiations are largely completed, so there is no need for 
Congressionally assigned, unenforceable objectives. Objective-setting 
should occur prior to the start of negotiations, not near the end.

Balancing Trade

For years, trade agreements have been touted for their ability to open 
up markets for agricultural exports. Agriculture has had the good 
fortune to fair relatively well in trade. Since 1960, U.S. agricultural 
exports have been larger than agricultural imports, creating a surplus 
in agricultural trade.\2\ This surplus is important for the overall 
economy because it helps offset the massive overall trade deficit, 
which totaled over $505 billion in 2014, a six percent increase from 
2013. The overall trade deficit represents roughly three percent of the 
U.S. Gross Domestic Product (GDP). The trade deficit causes a drag on 
overall growth of the economy. With a strengthening U.S. dollar, the 
deficit is likely to grow in 2015, as a strong U.S. dollar will 
encourage imports and reduce exports.
---------------------------------------------------------------------------
    \2\ USDA Economic Research Service available at
    http://www.ers.usda.gov/topics/international-markets-trade/us-
agricultural-trade.aspx.

In the first three years of the Korea-U.S. Free Trade Agreement, 
remarkably and unfortunately, U.S. agricultural exports have stagnated 
at zero percent, and the overall trade deficit with Korea has increased 
to $12.7 billion, an estimated 84 percent increase. After 
implementation of the free trade agreement, agricultural exports have 
failed to increase to Korea, despite increasing six percent overall. 
When even agriculture fails to grow as a result of trade agreements, 
the overall trade policy must be reevaluated. The U.S. reduced tariffs 
with Korea, and as a result, more Korean products are in the U.S. than 
the U.S. has shipped to Korea. The deficit has negative impacts on jobs 
---------------------------------------------------------------------------
and rural communities.

The massive overall trade deficit exists despite the U.S. having free 
trade agreements with 20 countries, including major trading partners 
like Canada and Mexico. Because of the significant impact the trade 
deficit has on the U.S. economy, all future trade agreements, such as 
TPP and the Transatlantic Trade and Investment Partnership (T-TIP), 
must have the explicit objective of balancing trade. NFU is 
disappointed this objective was not included in the Bipartisan 
Congressional Trade Priorities and Accountability Act of 2015.

Currency Manipulation

One of the major contributing factors to the massive trade deficit is 
currency manipulation. Currency manipulation occurs when other 
countries deliberately lower the value of their currencies relative to 
the U.S. dollar to gain an unfair advantage. This uniquely American 
issue, due to the role of the U.S. dollar in the global economy, 
effectively acts as a subsidy on that country's exports and a tax on 
U.S. exports.

One of the members of the TPP negotiations, Japan, is a major currency 
manipulator. In a report by the Economic Policy Institute (EPI) 
evaluating the impact of trade with Japan, EPI found that 896,600 U.S. 
jobs have been lost due to the U.S.-Japan trade deficit.\3\ Currency 
manipulation is the single most significant cause of the trade deficit 
with Japan, which totaled $78.3 billion in 2013 for goods.
---------------------------------------------------------------------------
    \3\ Economic Policy Institute, Currency Manipulation and the 
896,600 U.S. Jobs Lost Due to the U.S.-Japan Trade Deficit (2015) 
available at
    http://www.epi.org/publication/currency-manipulation-and-the-
896600-u-s-jobs-lost-due-to-the-u-s-japan-trade-deficit/.

The issue of currency manipulation is not exclusive to countries with 
which the U.S. does not have trade agreements. In fact, the latest free 
trade agreement the U.S. entered into with South Korea suffers the same 
issues with currency manipulation as Japan. Earlier this month, the 
U.S. Treasury Department issued its semiannual report on international 
economic and exchange rate policies. In its report, its harshest 
criticism of currency manipulation was reserved for South Korea, not 
China. The report stated, ``Korean authorities appear to intervene on 
both sides of the market but, on net, they have intervened more 
aggressively to resist won appreciation.'' \4\ The U.S. entered into a 
free trade agreement with Korea in March of 2012. The U.S.-Korea Free 
Trade Agreement (KORUS) used the same failed blueprints of previous 
trade agreements and failed to include provisions to address currency 
manipulation. South Korea has, and continues to be, one of the world's 
major currency manipulators. Currency manipulation has the capacity to 
eliminate any gains in tariff reductions that may be made in free trade 
agreements. Without measures to enforce restrictions on currency 
manipulation, free trade agreements fail to live up to the promises 
made by their supporters.
---------------------------------------------------------------------------
    \4\ U.S. Department of the Treasury, Report to Congress on 
International Economic and Exchange Rate Policies (2015) available at 
http://www.treasury.gov/resource-center/international/exchange-rate-
policies/Documents/2014-4-15_FX%20REPORT%20FINAL.pdf.

Currency manipulation remains a top concern of NFU, particularly in the 
context of TPP. Members of the TPP negotiations are well known currency 
manipulators, including Malaysia, Singapore, and Japan. With passage of 
Trade Promotion Authority, Congress eliminates its capacity to ensure 
that this significant trade agreement contains enforceable measures to 
address currency manipulation.

Conclusion

NFU's policy book states, ``The measure of the success of a trade 
agreement has to be its benefit to U.S. agriculture and specifically of 
its producers' net income. Vague promises of `market access' to foreign 
markets do not offset opening our border for even larger amounts of 
foreign-produced goods to enter our markets. Market access does not 
equal market share.''

Since TPP almost certainly contains no measures to address the trade 
deficit or currency manipulation and TPA fails to address these major 
concerns, NFU opposes TPA. Congress should maintain its Constitutional 
authority and review the trade agreements in a transparent manner.

                                 ______
                                 
              Letter Submitted by 21st Century Fox et al.

                             April 21, 2015

The Honorable Orrin Hatch           The Honorable Paul Ryan
Chairman                            Chairman
Committee on Finance                Committee on Ways and Means
U.S. Senate                         U.S. House of Representatives
219 Dirksen SOB                     1101 Longworth HOB
Washington, DC 20510                Washington, DC 20515

The Honorable Ron Wyden             The Honorable Sander M. Levin
Ranking Member                      Ranking Member
Committee on Finance                Committee on Ways and Means
U.S. Senate                         U.S. House of Representatives
219 Dirksen SOB                     1106 Longworth HOB
Washington, DC 20510                Washington, DC 20515

Dear Chairmen Hatch and Ryan and Ranking Members Wyden and Levin:

We write in strong support of the Bipartisan Congressional Trade 
Priorities Act of 2015 (BCTPA). America's film and television industry 
is one of the few that runs a persistent trade surplus--over $13 
billion in 2013. More broadly, America's core copyright industries 
(film, TV, music, publishing, and software) are among America's biggest 
trade success stories. Total foreign sales (exports + licensing and 
royalty revenue) of these industries exceeded $156 billion in 2013--
which is larger than total foreign sales of many other major U.S. 
industries, including aerospace, chemicals, and all of agriculture.

As these numbers show, international markets are already critically 
important to the U.S. movie and television industry and the two million 
men and women whose jobs depend on it. On average, over 60% of film 
revenue comes from overseas markets. Foreign market sales also provide 
an important source of revenue supporting U.S. television productions. 
Overseas markets will be increasingly important in the future.

For the U.S. movie and television industry, the intellectual property 
(IP) chapters of U.S. free trade agreements (FTAs) are critical. All 
over the world, a lack of adequate IP protection is an effective market 
access barrier for the U.S. creative and innovative industries. Many of 
our trading partners do not provide nearly the level of copyright or 
other IP protections as the United States. The IP chapters help raise 
standards to a basic level of protection for America's creative and 
innovative industries--still significantly lower than the level 
provided by U.S. law, but usually major improvements from the standards 
in the absence of the FTA.

Other provisions of FTAs are also important. The Services chapters help 
break down barriers to U.S. audio-visual productions such as screen 
quotas, primetime limits, investment restrictions, and distribution 
limits. The e-commerce and digital trade provisions are also 
increasingly critical. The U.S. movie and television industry is 
already one of America's biggest Internet industries and will 
increasingly rely on digital distribution channels in the future.

BCTPA's objectives provide the right foundation for USTR to negotiate 
strong agreements for the U.S. creative industries and the millions of 
workers they employ. We urge you to move swiftly to approve the 
legislation and look forward to working with you to help.

Sincerely,

21st Century Fox
NBCUniversal
Sony Pictures Entertainment Inc.
Time Warner Inc.
Viacom Inc.
The Walt Disney Company

                                   [all]
```