[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]




 
                  FULL COMMITTEE HEARING ON EVALUATING
                    THE IMPACT OF PENDING FREE TRADE
                 AGREEMENTS UPON U.S. SMALL BUSINESSES

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

                      COMMITTEE ON SMALL BUSINESS
                 UNITED STATES HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            NOVEMBER 1, 2007

                               __________

                          Serial Number 110-57

                               __________

         Printed for the use of the Committee on Small Business


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house


                                 ______
                                     
                    U.S. GOVERNMENT PRINTING OFFICE
39-378                      WASHINGTON : 2007
_____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512ï¿½091800  
Fax: (202) 512ï¿½092104 Mail: Stop IDCC, Washington, DC 20402ï¿½090001


                   HOUSE COMMITTEE ON SMALL BUSINESS

                NYDIA M. VELAZQUEZ, New York, Chairwoman


HEATH SHULER, North Carolina         STEVE CHABOT, Ohio, Ranking Member
CHARLIE GONZALEZ, Texas              ROSCOE BARTLETT, Maryland
RICK LARSEN, Washington              SAM GRAVES, Missouri
RAUL GRIJALVA, Arizona               TODD AKIN, Missouri
MICHAEL MICHAUD, Maine               BILL SHUSTER, Pennsylvania
MELISSA BEAN, Illinois               MARILYN MUSGRAVE, Colorado
HENRY CUELLAR, Texas                 STEVE KING, Iowa
DAN LIPINSKI, Illinois               JEFF FORTENBERRY, Nebraska
GWEN MOORE, Wisconsin                LYNN WESTMORELAND, Georgia
JASON ALTMIRE, Pennsylvania          LOUIE GOHMERT, Texas
BRUCE BRALEY, Iowa                   DEAN HELLER, Nevada
YVETTE CLARKE, New York              DAVID DAVIS, Tennessee
BRAD ELLSWORTH, Indiana              MARY FALLIN, Oklahoma
HANK JOHNSON, Georgia                VERN BUCHANAN, Florida
JOE SESTAK, Pennsylvania             JIM JORDAN, Ohio
BRIAN HIGGINS, New York
MAZIE HIRONO, Hawaii

                  Michael Day, Majority Staff Director

                 Adam Minehardt, Deputy Staff Director

                      Tim Slattery, Chief Counsel

               Kevin Fitzpatrick, Minority Staff Director

                                 ______

                         STANDING SUBCOMMITTEES

                    Subcommittee on Finance and Tax

                   MELISSA BEAN, Illinois, Chairwoman


RAUL GRIJALVA, Arizona               DEAN HELLER, Nevada, Ranking
MICHAEL MICHAUD, Maine               BILL SHUSTER, Pennsylvania
BRAD ELLSWORTH, Indiana              STEVE KING, Iowa
HANK JOHNSON, Georgia                VERN BUCHANAN, Florida
JOE SESTAK, Pennsylvania             JIM JORDAN, Ohio

                                 ______

               Subcommittee on Contracting and Technology

                      BRUCE BRALEY, IOWA, Chairman


HENRY CUELLAR, Texas                 DAVID DAVIS, Tennessee, Ranking
GWEN MOORE, Wisconsin                ROSCOE BARTLETT, Maryland
YVETTE CLARKE, New York              SAM GRAVES, Missouri
JOE SESTAK, Pennsylvania             TODD AKIN, Missouri
                                     MARY FALLIN, Oklahoma

        .........................................................

                                  (ii)

  
?

           Subcommittee on Regulations, Health Care and Trade

                   CHARLES GONZALEZ, Texas, Chairman


RICK LARSEN, Washington              LYNN WESTMORELAND, Georgia, 
DAN LIPINSKI, Illinois               Ranking
MELISSA BEAN, Illinois               BILL SHUSTER, Pennsylvania
GWEN MOORE, Wisconsin                STEVE KING, Iowa
JASON ALTMIRE, Pennsylvania          MARILYN MUSGRAVE, Colorado
JOE SESTAK, Pennsylvania             MARY FALLIN, Oklahoma
                                     VERN BUCHANAN, Florida
                                     JIM JORDAN, Ohio

                                 ______

            Subcommittee on Urban and Rural Entrepreneurship

                 HEATH SHULER, North Carolina, Chairman


RICK LARSEN, Washington              JEFF FORTENBERRY, Nebraska, 
MICHAEL MICHAUD, Maine               Ranking
GWEN MOORE, Wisconsin                ROSCOE BARTLETT, Maryland
YVETTE CLARKE, New York              MARILYN MUSGRAVE, Colorado
BRAD ELLSWORTH, Indiana              DEAN HELLER, Nevada
HANK JOHNSON, Georgia                DAVID DAVIS, Tennessee

                                 ______

              Subcommittee on Investigations and Oversight

                 JASON ALTMIRE, PENNSYLVANIA, Chairman


CHARLIE GONZALEZ, Texas              LOUIE GOHMERT, Texas, Ranking
RAUL GRIJALVA, Arizona               LYNN WESTMORELAND, Georgia

                                 (iii)

  
?

                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page

Velazquez, Hon. Nydia M..........................................     1
Chabot, Hon. Steve...............................................     2

                               WITNESSES


PANEL I
Veroneau, Hon. John, Deputy United States Trade Representative...     4


PANEL II
Ubl, Stephen J., The Advanced Medical Technology Association 
  (AdvaMed)......................................................    23
Wolf, Doug, National Pork Producers Council......................    25
Johnson, Cass, National Council of Textile Organizations.........    27
Ling, June, Codes & Standards, American Society of Mechanical 
  Engineers......................................................    29
Ellerhorst, Gary, Crown Plastics.................................    31

                                APPENDIX


Prepared Statements:
Velazquez, Hon. Nydia M..........................................    44
Chabot, Hon. Steve...............................................    46
Veroneau, Hon. John, Deputy United States Trade Representative...    48
Ubl, Stephen J., The Advanced Medical Technology Association 
  (AdvaMed)......................................................    59
Wolf, Doug, National Pork Producers Council......................    66
Johnson, Cass, National Council of Textile Organizations.........    78
Ling, June, Codes & Standards, American Society of Mechanical 
  Engineers......................................................    92
Ellerhorst, Gary, Crown Plastics.................................    97
Letter to Chairwoman from Ambassador Veroneau dated November 14, 
  2007...........................................................    97


Statements for the Record:
Letter to Chairwoman from Ambassador Veroneau dated November 14, 
  2007...........................................................   100
Attachments to USTR Testimony....................................   101
U.S. Hispanic Chamber of Commerce................................   137
National Electrical Manufacturers Association....................   139
EXPORAMERICA.....................................................   141
Peruvian Asparagus Importers Association.........................   151

                                  (v)

  


                  FULL COMMITTEE HEARING ON EVALUATING
                    THE IMPACT OF PENDING FREE TRADE
                 AGREEMENTS UPON U.S. SMALL BUSINESSES

                              ----------                              


                       Thursday, November 1, 2007

                     U.S. House of Representatives,
                               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 10:05 a.m., in Room 
2360, Rayburn House Office Building, Hon. Nydia M. Velazquez 
[Chairwoman of the Committee] Presiding.
    Present: Representatives Velazquez, Gonzalez, Cuellar, 
Altmire, Clarke, Ellsworth, Johnson, Sestak, Chabot, and Akin.

           OPENING STATEMENT OF CHAIRWOMAN VELAZQUEZ

    ChairwomanVelazquez. I am very pleased to call to order 
this morning's hearing on pending trade agreements.
    This hearing will provide an opportunity to evaluate the 
impact of the Peru, Colombia, Panama and South Korea trade 
commitments on the small business sector. It is a critical time 
to engage in this discussion, as Congress is currently 
considering the ratification of these four treaties.
    Given the resources expended to promote cross border 
commerce, it is important to determine whether these agreements 
should serve as models for future international commitments.
    Today, we will focus on three issues affecting small firms 
and their contribution to the U.S. Economy in an integrated 
world. The role these firms play in the development of trade 
agreements, international regulations impacting entrepreneurs 
and Federal infrastructure supporting small businesses, 
American U.S. Businesses in a global economy.
    The beneficiaries of trade agreements are largely 
determined during the negotiation process. Unfortunately, small 
business involvement in the development has been limited. As I 
have voiced concerns before, the USTR continues to lack a 
formal delegate as well as staff representing the small 
business sector at the negotiation table. This may explain why 
the pending agreements lack a small business focus.
    Given the opposition in some of the entrepreneurial 
community, particularly to provisions in the Korean agreement, 
their needs should have been more fully incorporated at the 
initial stage of the process. If small businesses had a seat at 
the table, I believe the current agreements would have been 
stronger.
    The agreements also impact smaller firms through their 
modifications to non tariff barriers. I wholly support 
inclusion of trade facilitation, particularly their 
harmonization of Customs requirements. This allows small 
businesses to more affordably access the newly opened markets.
    The elimination of technical barriers, particularly those 
impacting the livestock industry, is critical for U.S. 
Producers to expand their customer base. However, other 
regulatory barriers continue to hinder growth, including the 
maintenance of physical presence requirements, which benefit 
only those firms able to relocate abroad.
    Further, the procurement process lacks protection for small 
firms. For the agreements to help small businesses, regulations 
must not unfairly benefit the corporate competitors.
    While reducing regulation is critical for small businesses, 
they must also have access to expert financing alternatives, 
technical assistance and intellectual property protections. 
Lending programs are crucial for firms exporting to Latin 
America due to transactions fluctuations. Similarly, since the 
Korean government significantly supports its businesses, we 
must take steps to ensure our firms remain competitive in 
domestic and global markets.
    Overall, these agreements can significantly enhance small 
business global market share by decreasing barriers to cross-
border commerce. With increased small business involvement in 
the negotiation process, I believe many of the lingering 
concerns will have been addressed.
    We can have trade agreements that open new markets and also 
benefit our Nation's small businesses. It is my hope that 
future agreements will accomplish this and incorporate the 
interest of the smaller firms more broadly.
    I look forward to today's hearing and would like to thank 
all of the witnesses for their testimony.
    I now recognize the ranking member, Mr. Chabot, for his 
opening statement.

                OPENING STATEMENT OF MR. CHABOT

    Mr.Chabot. Thank you, Madam Chairwoman, for holding this 
vital and timely hearing on the proposed free trade agreements 
and their impact on small businesses. I want to welcome our 
distinguished panels of witness, including Ambassador Veroneau 
and Gary Ellerhorst, who is on the next panel, who is a 
constituent of mine from Harrison, Ohio.
    This Committee's oversight jurisdiction encompasses 
problems of all types of small businesses. This includes firms 
wanting to export, as well as those competing with imports. 
Today we will examine the proposed free trade agreements and 
hear the testimony of the Deputy U.S. Trade Representative and 
a panel of distinguished witnesses from various sectors of the 
economy. I want to thank them for being with us and sharing 
their perspectives.
    Free trade boosts our economy, eliminates worldwide 
barriers, and strengthens our global and regional ties with 
other nations. Trade also creates new opportunities for 
American workers and farmers and ranchers and businesses, 
including small businesses, which obviously is the focus of our 
hearing this morning. September was America's forty-ninth 
consecutive month of jobs creation, the longest uninterrupted 
period of job growth on record.
    Yesterday, the Department of Commerce reported that the 
economy grew faster than expected in the third quarter, lead in 
part by a surge in exports. Greater exports translate into more 
and higher paying jobs. In the United States, approximately 95 
percent of all direct exporters are small businesses and small 
firms account for roughly 29 percent of the exports, totaling 
$614 billion.
    Trade benefits can be seen in every State, according to the 
Department of Commerce, over 10,000 companies exported from my 
home State of Ohio in 2005. Of those, 89 percent were small and 
medium-sized firms with less than 500 employees. Since the 
U.S.-Chile and U.S.-Singapore free trade agreements were 
implemented in 2004, Ohio's exports to Chile have grown by 55 
percent, and exports to Singapore have risen by 99 percent. But 
challenging barriers such as Customs issues and high tariffs 
still exist. We in Congress must do all that we can to make it 
easier for small businesses to compete and to prosper in the 
global marketplace.
    Free trade agreements provide important protections such as 
transparency in a stable, legal trade framework for all 
businesses large and small. The stability and transparency lead 
to exports growing at twice the rate to FTA partners than to 
countries where the U.S. Has no agreement. The jobs supported 
by exports pay 13 to 18 percent more than those not supported 
by exports.
    Today Peru, Colombia and Panama enjoy duty free access to 
U.S. Markets. Yet when U.S. Goods are shipped to those markets, 
our products are tagged with significant tariffs. Free trade 
agreements with those countries will knock down many of these 
barriers and offer U.S. Exporters, many of whom are small 
businesses, the chance to compete fairly. Peru's economy is 
among the fastest growing in South America so there are 
significant mutual benefits from the free trade agreement.
    The Free Trade Agreements are not sole magical exert to 
increase exports by small businesses. Technical assistance from 
Federal programs can help if it reaches small business. 
However, in our very tight environment, I am skeptical about 
funding increases for Federal programs. So I look forward to 
hearing from our distinguished panel about innovative ways we 
can expand trading relationships and keep our small businesses 
competitive.
    Again, I want to thank the chairwoman for holding this 
timely hearing. And I thank the Ambassador and other witnesses 
for being with us today, and I think we all look forward to the 
testimony. I yield back.
    ChairwomanVelazquez. Thank you. Now I welcome Ambassador 
John Veroneau. Is that how you pronounce your name?
    AmbassadorVeroneau. Madam Chairman, Veroneau, John 
Veroneau.
    ChairwomanVelazquez. Veroneau. Ambassador Veroneau serves 
as Deputy U.S. Trade Representative. His portfolio at the 
Office of the U.S. Trade Representatives includes trade 
relations with Europe and Eurasia, the Middle East and America 
as well as matters involving the World Trade Organization. He 
also oversees USTR's functional offices handling intellectual 
property, telecommunications, pharmaceuticals, services and 
market access. Welcome, sir.

    STATEMENT OF AMBASSADOR JOHN K. VERONEAU, DEPUTY TRADE 
       REPRESENTATIVE, OFFICE OF THE UNITED STATES TRADE 
                         REPRESENTATIVE

    AmbassadorVeroneau. Great, thank you very much. Thank you, 
Madam Chairwoman. Thank you for holding this hearing and thank 
you, and Mr. Chabot and others on the Committee, for your 
leadership in assuring that small business is taken care of and 
their interest don't fall through the cracks. So thank you, it 
is good to be here to talk about the four FTAs.
    We have negotiated agreements with Peru, Colombia, Panama 
and Korea. Peru will soon be considered by you on the House 
floor, we expect next week, so this hearing is very timely and 
we appreciate it.
    The USTR's mission is quite simple, we are in the business 
of reducing tariffs and non tariff barriers. In that sense, I 
think what we do benefits small businesses more than large 
corporations. Frankly, large corporations have the resources to 
find their way around and manage complex trade barriers and 
high tariffs. Small businesses have a much harder time. So in 
that sense, I would like to think that the band of negotiators, 
which are the heart and soul of USTR, their job every day is to 
do what is in the best interest of small businesses. I think 
that in that sense, USTR is different than other government 
agencies.
    We are not a regulatory agency where as we regulate, we 
need to make sure that we are doing so in a way that doesn't 
hurt small businesses. Similarly, we are not a procuring agency 
such as the Department of Defense where we need to make sure 
that our procurement strategy doesn't leave out small 
businesses. Our mission is quite simply to eliminate these 
barriers and the benefits, as I said, believe accrue mostly and 
most importantly to small businesses.
    We are benefited from having a small business advisory 
Committee, which I am pleased to report has endorsed each of 
the Free Trade Agreements. [Ambassador Veroneau was permitted 
to modify this statement in a letter to the Committee dated 
November 14,2007, which is included in the Appendix.]
    Exports equal jobs. Is this microphone on by the way? 
Exports accounted for over 40 percent of the economic growth in 
the past year. Exports are growing at twice the rate of imports 
and 95 percent of the world's consumers live outside of United 
States. One in six manufacturing jobs relies on exports, one in 
three acres of farmland is planted for export. Export-related 
jobs pay 13 to 18 percent higher than non export-related jobs. 
Our Free Trade Agreements accelerate exports and create jobs 
even faster. In fact, our exports to FTA countries, free trade 
partners have increased at a rate of 60 percent or faster than 
the rate of exports to other countries.
    The pending FTAs, the Peru, Colombia, Panama and South 
Korea agreements each provide an opportunity to level the 
playing field for U.S. Exporters, small businesses and others. 
There is currently a significant gap between the tariff that 
U.S. Companies face in those markets and the tariff that those 
exporters from those countries enjoy in the United States. Each 
of these agreements serves U.S. Interest, and respectfully 
suggests they deserve the support of each and every one in this 
Committee.
    I would like to now briefly discuss each of them in the 
order in which they were negotiated. The Peru Free Trade 
Agreement, I am pleased to say, passed the Ways and Means 
Committee yesterday by a vote of 39:0, which is a tremendous 
credit to Chairman Rangel, and Chairman Levin and Mr. McCrery, 
so we are grateful for that and look forward to floor action 
next week.
    Our bilateral trade with Peru has doubled in the past 3 
years. Ninety-eight percent of the goods from Peru come to the 
United States duty free. The average tariff that U.S. Exporters 
face in Peru is 10.2 percent. The average tariff that Peruvian 
exporters face in the U.S. Is 2.2 percent. So this free trade 
agreement provides an opportunity to level that playing field 
at zero tariffs.
    I would finally note that small business, small- and 
medium-size enterprises account for 81 percent of our exporters 
to Peru, accounting for 35 percent of our goods going to Peru.
    I now return to the Colombia Free Trade Agreement. Colombia 
is the largest export market in Latin America for U.S. 
Agricultural products. Ninety-two percent of the Colombian 
goods coming to the United States enter duty free. The average 
tariff on U.S. Goods going to Colombia is 12.5 percent. The 
average tariff on Colombian goods coming here is 2.2 percent.
    Last June this Congress, by an overwhelming majority, voted 
to renew the Andean trade preferences program, which is a 
terrific program that has helped to solidify economic growth in 
that part of the world. It is time that these countries, Peru 
and Colombia, have stepped up to say we appreciate the 
unilateral trade benefits, but what we really want is a 
partnership, we want a free trade agreement that helps lock in 
duty-free access for both sides and provide other benefits such 
as assuring better protection of intellectual property rights 
and other benefits. But again, the Colombian Free Trade 
Agreement provides the opportunity to level that playing field 
at zero tariffs.
    Small- and medium-size enterprises account for 85 percent 
of the exporters to Colombia accounting for 35 percent of the 
goods. From an economic and regional stability perspective the 
Colombia Free Trade Agreement is the most important of the 
three Latin FTAs. Colombia, as many of you may know, has 
suffered in recent decades through effectively a civil war. It 
has been a country that has had more than its share of turmoil 
and violence. And to President Clinton's credit in the late 
90s, he proposed Plant Colombia, which this Congress has 
supported initially when President Clinton proposed it and 
during President Bush's term here to advance and promote Plant 
Colombia.
    Plant Colombia in a nutshell has been a success in helping 
that country move back from a brink of chaos and implosion to a 
point now where speaking of business, Colombia was on the front 
cover of Business Week this summer as one of the critical 
emerging markets in the world. And that is a remarkable 
testament to the changes that have taken place in that country. 
And it is a far, far better place today than it was 5 or 10 
years ago.
    I had an opportunity to meet recently with General Barry 
McCaffrey, who many of you may know, he was President Clinton's 
drug czar. And he was recently in Colombia and he summarized 
his assessment of it as being night and day from what he saw in 
the late 1990s. There has been a remarkable turnaround in that 
country, and to reject their offer, their entreaty to have a 
bilateral trade agreement, would be a very serious debacle in 
U.S. Foreign policy, and it is my hope and my belief at the end 
of the day, this Congress will give its support to that 
important agreement.
    The Panama agreement, equally important to the United 
States in terms of leveling the playing field, 90 percent of 
the goods from Panama come to the U.S. Duty free. There is a 
tariff differential of 7.3 of U.S. goods to Panamanian goods 
coming to the U.S. Only a 2 percent tariff, again, this is an 
opportunity to level the playing field.
    Lastly, let me mention the Korea Free Trade Agreement. 
Economically this is the most important agreement in 15 years, 
it is our seventh largest trading partner. The International 
Trade Commission, which is obliged by statute to do a study of 
each of these free trade agreements, produced its report in 
September, and it concluded that in goods alone, not counting 
services, in goods alone, it will increase exports to Korea 
from the United States of $10 billion a year, $10 billion a 
year, which is a tremendous amount of job growth and good job 
growth in the United States.
    Again, the Korean tariffs, U.S. goods going to Korea, 
average tariff 12.1 percent. Average tariff on Korean goods to 
the U.S. 3.5 percent. Again, this free trade agreement provides 
an opportunity to level the playing fields in a way that I 
think small businesses and large businesses will benefit.
    Lastly, if we do not move with dispatch to approve these 
agreements, we will not only miss an opportunity to level the 
playing field as quickly as possible, but we need to be mindful 
that the playing field will get more unlevel. The world will 
not wait while we contemplate whether to have these bilateral 
trade agreements. Europe, Canada, other trading partners of 
ours and competitors in these markets are moving forward with 
trade agreements. And it is important that we not find 
ourselves in a situation where we are facing tariffs, our small 
businesses are facing tariffs in these markets and our 
competitors are not facing tariffs. Thank you very much.
    ChairwomanVelazquez. Thank you, Mr. Ambassador.
    [The prepared statement of Ambassador Veroneau may be found 
in the Appendix on page 48.]

    ChairwomanVelazquez. Mr. Ambassador, it is really 
fascinating to hear you representing the administration and the 
previous administration under President Bill Clinton, and to 
come here before this committee and talk about the important 
role and the benefits for small businesses on any of these 
trade agreements.
    My question to you is, if this is so important for small 
businesses where they can benefit, American small businesses, 
why is it that throughout the negotiation process on any of 
these trade agreements, we don't have a formal delegate 
representing small businesses?
    AmbassadorVeroneau. Well, I think, Madam Chairwoman, I 
would say we have a small business advisory committee, so we 
routinely consult with them, they have the same access to 
everybody that we do. And I would say that it would be 
artificial, honestly, to have a negotiate--USTR is the heart 
and soul of negotiators, so you have a negotiator at the table. 
The interest that negotiator is pursuing is unavoidably and 
necessarily the interest of small businesses.
    It is not as though we would be sitting there saying, well, 
this is a good proposal and a good outcome for large 
businesses, but not good for small business. What we do is 
eliminate tariffs, that will be good for everybody. What we do 
is eliminate non tariff barriers, that will be good for 
everybody. So it would be artificial, honestly, to disaggregate 
from the negotiators perspective small business interest from 
other interests.
    ChairwomanVelazquez. Can you explain to me why the Small 
Business Trade Advisory Committee to the USTR does not support 
the career FTA in its totality? I have the report right here.
    AmbassadorVeroneau. There have been concerns about some of 
the non tariff barriers in Korea, they have been significant. 
And we have a major focus of that agreement, it was not simply 
eliminating the tariffs, but focusing on the non tariff 
barriers and having mechanism to address that. I think some of 
the members of the Small Business Advisory Committee were 
concerned that notwithstanding the provisions in the agreement, 
that they were still not confident that all those non tariff 
barriers would be eliminated.
    And my response to that would be, I believe, that they will 
be, and that the administration, and I am sure any future 
administration enforcing this agreement will put an extremely 
high priority on assuring that those non tariff barriers come 
down.
    ChairwomanVelazquez. What is really disappointing is the 
fact that the Small Business Trade Advisory Committee to the 
USTRs is not allowed to raise formally their concerns only 
after the agreements are finalized; isn't that true?
    Mr.Veroneau. Actually, it is not, Madam Chairwoman, because 
they have the same access and input in the process as we go 
through these negotiations. Before we have a negotiating round, 
we reach out to our advisory committees, share text with 
them.So there is access to our negotiating process and 
throughout our negotiating process of the same level that all 
other advisory groups have.
    ChairwomanVelazquez. If they were included in the process, 
then why is it that they are opposed?
    AmbassadorVeroneau. Well, much to my chagrin, there are 
some times where other groups, other advisory committees are 
not pleased with the outcome and don't support it. So I would 
not equate tepid support or opposition as synonymous with being 
shut out of the process. They just wanted a better outcome and 
I respect that, but I believe that over time we will 
demonstrate that these non tariff barriers will come down in a 
way that will provide opportunities for U.S. Companies.
    ChairwomanVelazquez. So you are correcting your statement 
that you gave when you were reading or giving us your testimony 
saying that the Small Business Trade Advisory Committee was 
supported for all the agreements, and that is not correct?
    AmbassadorVeroneau. That is not correct, I overstated it.
    ChairwomanVelazquez. Mr. Ambassador, with fewer resources 
to protect their enterprises from unfair trade practices, small 
businesses require effective enforcement of regulations and 
agreements. Currently, many small firms are being harmed by 
inadequate enforcement. For example, small U.S. Mills are 
increasingly reporting losing orders to companies that claim 
inaccurately to be based in the U.S. What is the USTR doing to 
help small businesses from falling prey to unfair trade 
practices as new trade legalization efforts are introduced?
    AmbassadorVeroneau. One of the recent actions that we have 
taken to address that is we took a WTO case against China for 
export subsidies that it provides. We have taken other WTO 
cases that helped small businesses, ranchers, farmers and 
businesses. So I think the USTR, the primary tool that we have, 
is bringing WTO cases as formal enforcement actions.
    Obviously, the Department of Commerce has authority to take 
countervailing and antidumping actions against companies that 
are subsidized.
    ChairwomanVelazquez. How many complaints have been filed 
with WTO regarding practices, unfair practices?
    AmbassadorVeroneau. Well, every case that we filed 
obviously is based upon a country in our belief not living up 
to its obligations. We have taken, I think, 23 WTO cases in 
recent years, which puts us at the top of the list. The United 
States has taken more WTO cases than any other country, Europe 
is a close second. But we took the first WTO cases against 
China, we have taken the largest case ever in the WTO in dollar 
terms in our case against Airbus, frankly, which helps a lot of 
small businesses who support Boeing.
    ChairwomanVelazquez. Given all of these trade agreements 
and the fact that unfair practices, trade practices can happen, 
and we might foresee that it will happen, how does USTR work 
with U.S. Customs? In terms of personnel, are you going to hire 
more personnel? What is your interaction with U.S. Customs to 
make sure that you have the personnel necessary to make in 
terms of enforcement?
    AmbassadorVeroneau. Well, we work closely with Customs in a 
number of ways. They are the primary enforcers obviously. We 
are not a direct enforcement agency.
    ChairwomanVelazquez. I understand that. My question is, do 
you have any interaction with U.S. Customs, any discussion in 
terms of the implementation of trade agreements and what it 
will require?
    AmbassadorVeroneau. We have constant dialogue with them. 
Our agreements don't go into effect without Customs 
understanding what the new terms are. In fact, that is why 
there is usually a 6-month lag between the ratification of an 
agreement and its entry into force. We need all that time to 
work with Customs to make sure they understand what the new 
obligations are of these agreements.
    ChairwomanVelazquez. Mr. Chabot. Thank you.
    Mr.Chabot. Thank you very much, Madam Chair.
    Mr. Ambassador, relative to your goals and these free trade 
agreements, correct me if I am wrong, my understanding is 
essentially what you are trying to do is lower the tariffs on 
our goods going over to other countries so we can export more, 
and our tariffs have been traditionally lower, and therefore, 
our interests are adversely affected by that lack of parity, so 
to speak.
    So the idea with the trade agreements is to lower both, 
which should benefit both large businesses, medium businesses, 
small businesses. Everybody should benefit from that is my 
understanding.
    Are there any natural adverse interests that small 
businesses and big businesses would have in this whole process 
or historically have they both benefited?
    AmbassadorVeroneau. Well, I would say, virtually all the 
time their interests are synonymous and our goals would equally 
serve both small and large businesses to the extent that we are 
eliminating tariffs. Different companies will, depending upon 
their capabilities, will take advantage of that new market 
access, but I would submit that to the extent a tariff is 
eliminated, or more importantly, a non tariff barrier is 
eliminated or a sector telecommunications, or insurance is 
opened up, I would submit that it is the small and medium-size 
enterprises that stand the most to gain because they are less 
likely to have an Army of lawyers and trade experts who can to 
find their way around otherwise complex trade barriers.
    Mr.Chabot. Relative to free trade agreements, I think, 
historically, the goal was to do it on a broader basis, if you 
look at NAFTA, if you look at the African free trade, the 
Caribbean Basin, Doha, that whole idea was to lower. And we 
have run into difficulties in that area, so it seems like more 
and more we are having a country to country, U.S. With Panama, 
U.S. With Peru, South Korea, Colombia, et cetera, Singapore.
    Does that seem to be the trend that is politically the most 
realistic to anticipate in the future?
    AmbassadorVeroneau. Well, we certainly would like to see 
trade liberalization occur on a global basis as well. The Doha 
negotiations have been going on for a while now. We are still 
hoping we can achieve success, and there happens to be a lot of 
activity right now on that front. But I would envision that 
there would continue to be, in addition to global efforts, more 
bilateral efforts, and I think Europe is clearly on this track, 
Canada is and others.
    And in Asia there has been a proliferation of these 
bilateral trade agreements. I would envision you will see a 
continuation of not only WTO global trade liberalization 
efforts, but also these bilateral agreements for a number of 
reasons, including you can do more a lot more in a bilateral 
agreement.
    You can eliminate tariffs completely and open up sectors 
completely, you can assure higher protections of intellectual 
property in a bilateral agreement far more than you can in a 
global agreement where you have to get the consent of 150 WTO 
members.
    Mr.Chabot. It seems to me this is one member of Congress 
that has been following this for the last 13 years since I have 
been here, it seems, unfortunately, the political realities of 
Congress are it will be more and more challenging to get one 
that deals with the whole region in the United States as 
opposed to individual countries, it is just tougher and 
tougher, unfortunately.
    I think we benefit from trade agreements and I would like 
to see them broader, but that just doesn't seem politically to 
be double in Congress any time in the near future, so it looks 
like you would see more of country to country.
    Could you comment on Fast Track, which was the old name and 
now trade promotion authority and how important that is in 
actually accomplishing these trade agreements in a way that is 
favorable to the U.S.?
    AmbassadorVeroneau. The Fast Track, or as we call it now, 
trade promotional authority, I think the best way to think of 
it is from the perspective of the negotiator. You are at the 
negotiating table and you are negotiating with your 
counterpart, and ultimately, they will want to know are you the 
ultimate authority? Is this the end of the negotiations? Can 
you deliver, or are we going to get a deal here and then it 
will come back to Congress to change the agreement and modify a 
series of provisions as opposed to saying, all right, in its 
totality, we think this is a good agreement, or we think it is 
a bad agreement.
    I think there is a tremendous amount of power that you give 
a negotiator, and a negotiator has to have in order to drive 
the best deal for U.S. Interest. And without Fast Track, or 
TPA, it is much more difficult to get that best value, best 
deal for the United States.
    Our view has been and continues to be that every President 
of whatever party has fast track trade promotion authority. It 
is just so essential to driving the best bargain for U.S. 
Companies, I think they should always have it, it is 
unfortunate that it has lapsed. It is our hope that we can 
reclaim and renew this authority so that for the balance of 
this administration and for the next President. The next 
President should have this authority, regardless of what party 
that President is from.
    Mr.Chabot. Thank you. Before I yield back, I just want to 
make one point and emphasize something you said in your 
testimony. And that is, relative to the Free Trade Agreement 
with Colombia. This was essentially begun under the previous 
administration under President Clinton, and it has been carried 
on through the Bush administration, and I think it is very 
important to recognize that this country is critical to the 
interest of the United States and South America when one 
considers Chavez in Venezuela and others in that region who 
certainly don't have the interest of the United States in mind. 
I think we ought to be very careful to harm the relationship 
that we have with the government in Colombia right now, because 
they are really critical to U.S. Interest.
    And I would yield back my time, thank you.
    ChairwomanVelazquez. Ms. Clarke.
    Ms.Clarke. Thank you very much, Madam Chair, to Ranking 
Member Chabot. This is certainly a very timely issue for a new 
member here. Just sort of wrapping my brain around what is in 
the best interest of our trade, which is a necessity, it is 
something we have been doing since the establishment of this 
Nation. It is really about how we can do that and not adversely 
impact on the reputation we have as a Nation, 1. And 2, what 
happens to communities around this Nation as we pursue 
globalization in a very proactive way.
    Chairwoman Velazquez asked a question that I want to 
revisit with you, and what she was essentially asking was what 
is the level of collaboration that the USTR have with the 
Customs and border protection to produce a seamless process for 
enforcement against trade breaches? Could you clarify USTR's 
efforts to establish such protocols, whether they have been 
established or not.
    AmbassadorVeroneau. Certainly. We collaborate regularly. We 
need the Customs in so many ways, technical ways. Let me give 
you one example where let's take section 337 is legal authority 
to block imports that infringe upon U.S. Patents, that is USTR 
has a role in that, the ITC has a role in that, but at the end 
of the day, it is the Customs Enforcement Authority that give 
effect to give an order to block an import. So that is one 
example of many where we obviously rely upon the Customs 
authorities to enforce these agreements, we are not an 
enforcement agency in that sense.
    Ms.Clarke. Right.
    AmbassadorVeroneau. I mean, we enforce WTO laws, we are the 
litigators and we are the ones who bring those cases, but at 
the ports, USTR has no presence.
    Ms.Clarke. I recognize that, but when you are looking for 
basically the green light from representatives of people of 
this Nation, and you know how critical it is to present a very 
strong and focused, I guess, front, for lack of a better term, 
it would seem to me that there would be a much more proactive 
role that the USTR would play and would demonstrate so that 
even dealing with section 337 and the breach of patent of 
imports.
    I come from New York, it is very evident there that there 
have been breaches. And at some point, we are going to have to 
account for that. And I think we have reached that point in 
this Nation where folks really want to know do we have strong 
protocols in place that make it possible for U.S. Businesses to 
benefit as much as those who are importing to our nation 
through trade agreements are benefiting.
    China we know is the ultimate example right now. So I just 
want to leave that with you, because I think that is really 
important. It may take moving out of the realm in which we 
currently operate in order to achieve that goal.
    I also just learned that the Peruvian President, Alan 
Garcia, is planning and broadening the number of businesses 
that would qualify as small business enterprises which many say 
can offer workers in that country less pay, fewer vacation days 
than workers in larger firms.
    How does the USTR plan to address this labor rights 
dilemma?
    AmbassadorVeroneau. I am not familiar Congresswoman with 
the example you just gave, but I would say that the trade 
agreement that you will soon have an opportunity to consider 
has the strongest labor provisions of any trade agreement ever 
considered. And the United States is clearly in the forefront 
of having trade agreements with strong labor provisions, we are 
the only ones frankly, that have provisions of this nature.
    So I would say that your colleague Chairman Levin, as you 
know, feels very strongly about the intersection of labor and 
trade, and he has been satisfied through his direct discussions 
with President Garcia and his administration about the status 
of Peruvian labor law and their plans for enforcement. I am 
pleased to follow up on the specific concern that you raised, 
but there has been a tremendous amount of dialogue between 
Chairman Levin and Peruvian officials, and I think to Chairman 
Levin's satisfaction, he is quite happy with the status of the 
Peruvian labor law and its enforcement plan.
    Ms.Clarke. Thank you Mr. Ambassador. Thank you, Madam 
Chair.
    ChairwomanVelazquez. Mr. Akin.
    Mr.Akin. Thank you, Madam Chair. From just looking the 
example of Colombia here and many of us are concerned about 
Chavez and his destabilizing influence in various nations and 
certainly it seems to be in our overall interest to have good 
relations with some of these countries and good relations 
through trade and all.
    I guess my question is, if Colombia is putting a 12 percent 
tariff on the majority of our goods that are going down there 
and we are putting 2 percent tariff on their goods coming up 
here. I guess my question is, and it seems to me it is a good 
deal for America if we drop the tariffs down so we get closer 
to a free trade kind of situation.
    Is that going to destabilize Colombia not to have the 
tariffs on the goods that we are sending down there, will it, 
all of a sudden, create a situation where their businesses can 
compete with the better quality and lower cost products we are 
sending down there? Are we, in a sense, doing them a disservice 
by doing this? And do we inadvertently destabilize Colombia 
rather than helping them?
    AmbassadorVeroneau. That is an excellent question. I think 
the short answer is no. Obviously we have to defer to President 
Uribe and his administration, they are the elected 
representatives, they belive this is in their best interest. 
And I think, frankly, they are right on that. And I think they 
look to their neighbor of Chile. And Chile is a great example 
of a country that had high protective tariffs and decided a 
decade or so ago to open itself up and the results have been 
quite impressive.
    Our free trade agreement with Chile has been a tremendous 
success for them and for us. Our agreement is one of 57 trade 
agreements that Chile has. So I think countries like Peru and 
others look to Chile and say, that is the model they want for 
themselves. And yes, whenever you open yourself, your economy 
up more, there are some transitional adjustments, there is no 
question about that. Some sectors will flourish and others will 
have a harder time in that competitive environment. But 
overall, the World Bank studies and every other study has 
demonstrated pretty compellingly that countries that are more 
open grow faster. If you look around the world at those 
countries that are doing the worst, it is no coincidence that 
they are also the ones that are the most closed.
    Mr.Akin. So Colombia could look at Chile and say, it worked 
over there and so they can have that sense of confidence in 
trying to just drop the tariff barriers.
    AmbassadorVeroneau. Yes, sir.
    Mr.Akin. From America's point of view, Colombia is not a 
major sector of our economy. Politically, we can make a big 
deal about it, but practically speaking, we are talking 
fractions of a penny or something.
    AmbassadorVeroneau. Yes. I would certainly not want to 
suggest that I think this trade agreement with Colombia is 
going to drive the U.S. Economy, but you are advocates of small 
businesses and I think they would be the first to say every 
sale counts. And I think opening up this market, 44 million 
consumers is not insignificant. It may not drive the U.S. 
Economy, but it is not insignificant.
    Mr.Akin. I thank you for your testimony. Thank you Madam 
Chair.
    ChairwomanVelazquez. Mr. Sestak.
    Mr.Sestak. Thank you, Madam Chair.
    I thought about what you said about President Clinton was 
true, and I worked in the White House during that period of 
time on the NSC, but I worked closely with NEC. I thought his 
principals approach to free trade were spot on. But it always 
came down to the enforceability had kind of been raised a bit 
here. I always thought the Jordanian FTA was quite a model in 
'99, except for the enforceability of it.
    The reason I bring that up is I do think this bodes 
something for small businesses, but ultimately businesses about 
jobs and wages while we may have lost 3.2 million jobs, 
manufacturing jobs the first 3 years of the Bush 
administration, he regained those back recently. But the real 
wages median level of income came down about 18 percent. While 
the guy might have gotten his job back, it wasn't in the same 
amount of real income as he had before.
    Three quick questions for me on the enforceability is we 
are supposed to have this enforceable, reciprocal obligation on 
both Peru's side and our side to have within law the ILO 
standards.
    My second question is we are all supposed to enforce not 
just domestic law, but also have to have and maintain within 
the law WTO environmental standards.
    My third question which I will hold off for a moment will 
have to do with more on the cooperation of the regulatory 
issues, but can you talk a bit about is it in law in Peru and 
if it is in law how are we to enforce it in this case? What is 
different about this than the Jordanian one? Because of the WTO 
cases you brought 23, how many have been successful, not that 
just that you brought them, but they have been successful? And 
so those are my two over arching questions of the 
enforceability even if it is in law.
    AmbassadorVeroneau. Thank you. The number of manufacturing 
jobs has clearly declined over the past 20 years.
    Mr.Sestak. It is due to different reasons, if we can get to 
the question because I only have 5 minutes.
    AmbassadorVeroneau. The enforceability, the key difference 
is in the Jordan agreement, the essence, the labor and 
environment commitment was that each country agreed to enforce 
its own laws. So regardless as to what those laws were as long 
as you were enforcing your own laws, you were fine.
    What is historic about these agreements and that were 
reflected in the May 10 bipartisan agreement that we reached 
was that for the first time we established an objective 
standard, not a subjective standard, but an objective standard 
on labor revolving around the international labor organization 
core principals. So that is really what is new, it is not 
enough to enforce your own, you have to meet this objective 
standard.
    On the environment similarly there is no global standard on 
environment in a way that there is for ILO for labor, the 
agreement does require you to enforce your own labor laws and 
follow through and abide by the multi lateral environmental 
agreements that you do have.
    Mr.Sestak. Of the WTO?
    AmbassadorVeroneau. It is not of the WTO.
    Mr.Sestak. I thought it was.
    AmbassadorVeroneau. No.
    Mr.Sestak. Are you sure?
    AmbassadorVeroneau. Yes.
    Mr.Sestak. All right. So how do you enforce them? That is 
good, it is a nice mechanism, how do you enforce them? You set 
an objective, now the enforcement.
    AmbassadorVeroneau. On the enforcement you bring a dispute.
    Mr.Sestak. So it is back to bringing it up.
    AmbassadorVeroneau. It is back to bringing a dispute.
    Mr.Sestak. So really we have set a nice objective, now what 
we have to is if they don't bring it up to an international 
body.
    AmbassadorVeroneau. We bring it up to a bilateral body.
    Mr.Sestak. And if they disagree.
    AmbassadorVeroneau. Well, a panel adjudicates it. We 
appoint the panel and they adjudicate it. But I would say 
that--
    Mr.Sestak. That is enforceable then, the agreement says the 
adjudication is what will be followed?
    AmbassadorVeroneau. Yes. There are remedies, there is a 
panel, there is a finding, the finding, let's say, the country 
is not living up to its obligations, then we have rights to 
withdraw some of the benefits that we have extended.
    Mr.Sestak. I understand. But if the arbitration panel says 
U.S. Was right, does Peru have to follow that, or if it 
doesn't, we then have the right to withdraw benefits and all?
    AmbassadorVeroneau. Right, if it doesn't, we have the right 
to withdraw benefits.
    Mr.Sestak. My last question is on regulatory issues. My 
understanding is ours and Peru's is supposed to converge, but 
there is no adherence to any international standards. Have we 
left that all by itself out there sanitary and all that? In 
other words, it is kind of their domestic interpretation of 
what sanitary or health is. That is my understanding in 
perusing this agreement. There is no objective standard, there 
is no international standard set for this area.
    AmbassadorVeroneau. I would say the core commitment is that 
these regulations have to be science based. In the food safety 
area, as you can imagine, every country, including ours 
obviously, we have a strong right that we want to say, look, we 
want to be able to decide when is safe, safe? But we have to 
balance that with the reality that a lot of countries use these 
safety regulations as protectionist measures.
    So the core, the essence of what we achieve in these 
agreements is a requirement that if you want to have a food 
safety regulation, it has to be science-based. We have the 
right to challenge whether that is science-based. That is a 
critical benefit of these agreements that commitment exists in 
principle in the WTO agreements, but it is very difficult to--
    Mr.Sestak. If we do disagree on this area, we can bring it 
up to this arbitration panel?
    AmbassadorVeroneau. Yes.
    ChairwomanVelazquez. Your time has expired.
    Mr. Gonzalez.
    Mr.Gonzalez. Thank you very much, Madam Chair. I always 
think if I am a small businessman or woman in the audience who 
are listening, they must wonder why we ask questions about the 
environment or labor. I want to make it perfectly clear that it 
impacts their ability to compete. I think you may have pointed 
that out.
    It is an unfair advantage to those in another country if 
they have a regulatory scheme that does not add cost to 
operating their businesses as we have in the United States; 
which is admirable. We have many conditions regarding the 
rights and benefits to an employee, as well as to the 
obligations of a business when it comes to an array of 
regulatory scheme relating to the environment, for instance.
    So I am hoping everybody understands the relevancy of these 
questions. I know they want us to get to more nuts and bolts, 
meat and potatoes. How do these agreements benefit a small 
businessman or woman?
    I think Mr. Chabot brought up a very important point, and 
that is in today's environment and Congress, I think it will be 
more difficult to get free trade agreements out, on both sides 
of the aisle, actually, for many, many reasons.
    Now the encouraging news is the Peru Free Trade Agreement, 
and we put a lot of effort in this was reported out of 
committee, I think, 39-0. Yesterday the trade adjustment 
assistance legislation passed by 264-157. I would like to think 
we are laying the groundwork not just for Peru, but everything 
that will follow thereafter.
    How important is legislation, such as Mr. Rangel's TAA 
legislation is to this whole process, in your opinion?
    AmbassadorVeroneau. Well, I think the maintaining political 
support for trade, I am certainly aware of the difficult 
environment that we all preach about the benefits of trade, but 
I am certainly mindful of the political environment in which we 
try to do that and it is difficult at times.
    I think having TAA and other safety nets for those that are 
temporarily and adversely affected by trade is critically 
important. President Bush supports reauthorization of TAA. We 
obviously have some differences about how it should be 
reauthorized, but I think having a strong program to help 
individuals adjust is critical to maintaining political support 
for open trade.
    Mr.Gonzalez. And TAA, would you agree, also addresses small 
business concerns, expanding that safety net, making sure we 
take care of those individuals and assist them to make those 
adjustments when they may be displaced or adversely affected by 
free trade agreements, that is incredibly important, wouldn't 
you agree?
    AmbassadorVeroneau. Yes. There is currently as you know, 
Congressman, a program for firms, an adjustment for firms. In 
its broadest sense, I think the most important thing we can do 
to help individuals and firms adjust to competitive pressures 
from imports is by having a pro-business, pro-job creation 
environment, because as we found over the past 50 years, 
especially one of the great strengths of the U.S. Economy is 
its dynamism. Some of the biggest companies in the world and 
the United States today didn't exist 20 years ago. It is having 
an environment that while jobs may be shrinking in some 
sectors, there is an environment of entrepreneurship to create 
jobs in other areas, and that is to me the most important that 
we can do to help firms adjust, but in addition to that we 
clearly need specific programs to help individuals and firms 
make adjustments.
    Mr.Gonzalez. Well, in some of the handouts as we considered 
TAA, the bill includes a package of tax incentives designed to 
encourage the redevelopment of areas that suffered substantial 
reductions in manufacturing employment. The proposal authorizes 
Secretary of Treasury to designate a group of manufacturing 
redevelopment zones. Under the bill, the areas designated its 
manufacturing redevelopment zones would be eligible for the 
special work opportunity tax credit classification and now 
applies to empowerment zones.
    I think we are trying to set the stage, I just hope that we 
will be receiving the support and assistance of the 
administration that it is going to be required in order to not 
just pass Peru, but those free trade agreements that will 
follow in due course.
    Thank you for your testimony, and I yield back.
    ChairwomanVelazquez. Mr. Cuellar.
    Mr.Cuellar. Thank you, Madam Chair, and thank you 
ambassador for being here with us.
    One thing we are missing here is that all we are trying do 
with the free trade agreement is to allow our exports to go out 
to those countries, because Peru, Colombia, Panama, 90 percent 
of their goods are coming into our country duty free. So all we 
are doing, Members, is allowing our exports to go to those 
countries. It is not a regular trade agreement where we are 
opening up our country to those imports because we have been 
doing that for years and years.
    For example, the CBI, Caribbean Initiative in the 1980s, 
because what was happening in Central America we decided to 
help those countries by opening up our country to those 
imports. So the TAA and those other bills that we have been 
working on, they are more aimed for imports coming into the 
United States, and I supported that yesterday.
    But again, we have to keep in mind, Members, that this 
trade agreement simply deals with our exports going into those 
countries. In fact, when you look at it, and I know you went 
over this already, under CAFTA, Bahrain, Chile, Singapore, 
Australia, Morocco, all of those trade agreements have shown 
that the exports from the United States have increased. As you 
know, for every dollar we create or have for exports, it means 
we will have jobs created here in the United States.
    If you look at example for, and I have--I don't have copies 
for the members, but if you look at the exports or you look at 
the trade between Colombia and the United States, 90 percent of 
the Colombian industrial products are coming into the United 
States duty free. When you look at the duty free ag products 
coming from Colombia, they are coming in duty free to the 
United States. When you talk about our industrial products 
going into Colombia, there are literally zero.
    I don't have enough copies, but you can see all we are 
talking about, Members, is to allow our exports to go. We are 
not talking about imports coming in, because we have been doing 
that for years and year and years. I would ask you, Members, to 
look at this, and I can understand the arguments that Charlie 
made and the regulations and assistance. And I can understand 
this, but bottom line, Members, what we are talking about here, 
it is not a regular free trade agreement where you are allowed 
imports to come in and you negotiate what imports come in like 
NAFTA. NAFTA was different because we negotiated with Canada 
and Mexico. This is a very, very different topic. All we are 
talking about is talking about exports going into those 
countries.
    Let me say one more thing on--I don't know how much time I 
have.
    ChairwomanVelazquez. You have time.
    Mr.Cuellar. Let me say this, on CAFTA, the pre CAFTA trade 
we were in the deficit with those countries, $1.9 billion. The 
year that we go into CAFTA, those 2 years, 2006 and 2007 our 
trade balance went up, it went into a surplus. Immediately we 
went into a surplus with those countries.
    So, Members, again, CAFTA and the Free Trade Agreement are 
just simply to look at the bottom line it is simply allowing 
our exports to go into those countries, and that is basically 
what we are talking about, especially when you talk about it, 
most people think it is big companies are talking about going 
to those countries, but it is really, what was it, 89 percent 
in CAFTA when we talk about CAFTA as an example, 89 percent or 
so are small, medium-size businesses, which what we are talking 
about here. It is not the big multi corporations like most 
people make it sound. It is 89 percent small and medium-size 
businesses.
    Members, we can go into different type of discussions, but 
I ask you to look at the bottom line, all we are talking about 
is sending our exports to those countries.

    Mr.Cuellar. That was not a question. That was a statement.
    AmbassadorVeroneau. Well-put, Congressman, well-put.
    ChairwomanVelazquez. Mr. Ellsworth?
    Mr.Ellsworth. Thank you, Madam Chairwoman.
    Thank you, Mr. Ambassador, for being here. Sorry I was 
late.
    I really only have one question. People are very leery, 
after CAFTA and NAFTA, about trade agreements, back in Indiana. 
They realize it is a global economy, they know we want to trade 
with others, but they are nervous about that. And I have to go 
back and reassure them, when I vote for these agreements, that 
they are a good deal.
    I noticed that, when I was reading your testimony, you said 
on page 11 that these countries will have to take any steps 
necessary to bring them into compliance with the FTA 
obligations as of day one. And can you expound on that a little 
bit, what you mean by that?
    Because I guess what I see, as a new Member, is, so many 
times, Federal Government goes into things with really good 
intentions, and then we can't quite get a ride out on the other 
end, like the enforcement that Charlie was talking about.
    So how far along in the process toward labor, environment 
protections--are they going to be 100 percent?
    And then reassure me and my folks back home that, if we 
find these violations, that we are going to enforce them with 
some teeth, something that really means something. Don't drag 
it out for years. You know, it is the old hot stove theory. A 
kid only touches a stove one time when it is hot. You hit them 
fast, you hit them every time, and you hit it--that is what I 
think people want to see.
    And if you can help me with that, I am willing to look at 
these.
    AmbassadorVeroneau. Certainly, Congressman. What I was 
referring to in that part of the testimony is that, under the 
statute, under Trade Promotion Authority, the President must 
certify, before he signs the essential paper that enters these 
agreements into force, that the other country has met the 
obligations that it agreed to; it has changed its laws in 
various ways to meet this obligation.
    So we take that process very seriously. A majority of 
people at USTR are lawyers. The legal staff spends an enormous 
amount of time poring over the legislative changes that our 
trading partners have presented to say, "Here is how by 
complied with this obligation." And it is a very long process. 
In fact, our process with Oman, Congress approved that 
agreement 2 years ago, and we are still going through that 
process. So we do not gloss over or whitewash that process. We 
take it very seriously, and as we should, to make sure that the 
countries on day one have met those agreements.
    Now, after that, there is still, obviously, vigilance 
required to make sure that they continue to live up to those 
agreements, and that we do. And there will inevitably be 
disputes. We have had them in the WTO; we have had them in 
NAFTA. We have been sued under NAFTA for not abiding by some 
commitments. We have sued others for not abiding by 
commitments.
    So invariably these things will happen, but I would not 
want to give the impression that these are scofflaws. I mean, 
compliance is extremely high in these agreements. It is the 
rare case where there is not compliance. And in those cases, we 
don't hesitate to bring actions. I mean, from our perspective, 
there is every incentive to bring an action substantively, and 
politically frankly, to show that we are serious about 
upholding these agreements.
    Because we know that if we are seen as not serious about 
upholding these agreement, then we lose political support for 
them. If we are seen as just an agency that negotiates deals 
and then puts them in the safe and moves on to the next deal, 
we are not helping ourselves. And I assure you that is not the 
posture in which we operate.
    Mr.Ellsworth. Thank you very much. I appreciate that.
    Then, my only caution is, again, that the public sees us, 
this Government, as not moving very fast, and when we get these 
countries that find loopholes--for instance, changing the 
placement of a license plate on the bumper so it doesn't comply 
with American standards--whatever that might be, that they find 
a loophole to get around our agreements, that we then go after 
that. And I will refer back to the hot stove theory: Do it 
fast, do it fierce and make it count.
    Thank you. I yield back.
    ChairwomanVelazquez. Thank you.
    Mr. Johnson?
    Mr.Johnson. Thank you, Madam Chair. I wish to commend you 
for holding this hearing, and I apologize for being late.
    Ambassador, your testimony makes a convincing case for 
supporting these agreements. But, as you know, trade remains a 
controversial issue simply because there are winners and 
losers. Both sides make a compelling case either for or against 
trade agreements.
    In the case of NAFTA, for example, I know that there were 
24,500 manufacturing jobs lost in the Atlanta area from 1995 
through 2006, or nearly one out of six manufacturing jobs. 
Those were clearly losers. Others might cite the ballooning 
trade deficit and say all Americans are losers because of that.
    What is your response to these critiques of past free trade 
agreements? And how have these critiques been addressed in the 
four pending agreements before us?
    AmbassadorVeroneau. Thank you, Congressman.
    I mentioned in my testimony earlier, 40 percent of the 
economic growth of the past year has been as a result of 
exports. So exports are a key part of our economy. I mean, we 
import, we export, but unfortunately, a lot of time, the 
attention is on imports, that imports cost jobs. The reality is 
imports are good for consumers, including small businesses, who 
have seen a lot of their costs moderated because of global 
competition. But exports are a tremendous source of job growth, 
as I said, 40 percent.
    As far as manufacturing, there is a myth out there that the 
U.S. has lost its manufacturing prowess, and it is simply not 
true. We produce 50 percent more today in manufactured goods 
than we did 10 years ago. We produce 30 percent more cars today 
in the United States than we did in 1980--30 percent more. 
There are fewer people making them, and that is a function not 
of trade policy but a function of technology.
    Mr.Johnson. So you are disagreeing with the job-loss 
statistics that I cited?
    AmbassadorVeroneau. I would. I am not knowledgeable enough, 
Congressman, to know if that number is wrong. But what my 
point, I think, goes more to is, if there has been loss of 
manufacturing jobs in Atlanta or elsewhere, it is probably 
unfair to attribute them to trade policy.
    I would say the vast majority of job losses in 
manufacturing in the United States and globally--I mean, even 
China--most people don't realize this--China has lost millions 
of manufacturing jobs, millions, because of improvements in 
technology. And I hate to say it, but that is a good thing. The 
same reason that, you know, a third of us used to farm, a third 
of us used to farm. In this country today, only 2 or 3 percent 
of us farm.
    Mr.Johnson. Point well-taken. Point well-taken.
    AmbassadorVeroneau. That is progress.
    Mr.Johnson. Let me ask you this question. Have there been 
any lessons that we have learned from the NAFTA and CAFTA 
agreements?
    AmbassadorVeroneau. Well--
    Mr.Johnson. Or have they just been roaring successes and we 
just want to build on them? Have there been any negative 
consequences, in your eyesight?
    AmbassadorVeroneau. Honestly, I think the lessons that I 
would say are: We need to liberalize and open up these markets 
more, not less. And, in that sense, I think there is--I have 
learned no lesson that suggests, gee, maybe we should not have 
pursued these agreements or opened up the markets. If anything, 
I would say we need to do a better job, those of us in 
Government, those of us in the business community who support 
trade, frankly, need to do a better job to explain to people 
why open trade is a good thing.
    And I think, in that sense, we are not helping ourselves 
because the political environment, as you know better than I, 
for trade is getting more complicated, not less. And in that 
sense, I would say a lesson learned for me has been not so much 
with the agreements, but with our advocacy for them, and 
stepping up to explain to people why these are good for 
America.
    Mr.Johnson. Let me ask you this question. In your 
testimony, you mentioned that trade agreements give American 
small businesses access to foreign-government procurement 
contracts.
    Isn't it true that foreign companies in Peru, Colombia, 
Panama, et cetera, will be afforded that same opportunity for 
U.S. Government contracts? And that being the case, what would 
stop a Chinese company, for instance, from incorporating in 
Peru and then competing with our small businesses for U.S. 
Government contracts.
    AmbassadorVeroneau. Well, to take advantage of those 
procurement opportunities, the goods have to be made in the 
country. So it wouldn't be enough that a foreign company, 
Chinese or otherwise, simply purchased the Peruvian company. 
The goods have to be made there. There is no opportunity to 
simply transship goods through a Peruvian company.
    But I would say that, you know, we already have a very open 
system, frankly. Our procurement system is quite open. So, 
again, I see these agreements as a way to level the playing 
field. It is other countries around the world that have much 
more closed systems on their procurement.
    So, to me, we are not to giving up anything. We are gaining 
access that we don't currently have. In the same way that, on 
the terror side, our markets are already open, and this is an 
opportunity to get equal access to their market.
    ChairwomanVelazquez. Time has expired.
    Ms. Hirono?
    Ms.Hirono. Thank you very much, Madam Chair.
    Mr. Ambassador, did you say that 40 percent of economic 
growth in the United States has been due to exports?
    AmbassadorVeroneau. Yes, ma'am.
    Ms.Hirono. How much of that was due to exports based on 
FTAs?
    AmbassadorVeroneau. I don't have that figure.
    What I do know is that our exports to FTA countries over 
the past year have been growing 60 percent faster than exports 
to non-FTA countries. And couple that with the fact that our 
FTAs account for almost 50 percent--or our FTAs, including the 
ones I am testifying today, account for almost 50 percent of 
our exports, I would say that, of that 40 percent, a not-
insignificant amount of that is attributable to our free-
trading partners.
    Ms.Hirono. That is really--
    AmbassadorVeroneau. Sorry for those--I think I did four 
extrapolations. I apologize. I can--
    Ms.Hirono. Thank you for the clarification, because I 
didn't realize that our FTAs accounted for almost 50 percent of 
our exports. That is an astoundingly high number. My 
understanding was that most of our trade with other countries 
are done pretty much outside of FTAs.
    AmbassadorVeroneau. My staff is double-checking. My 
recollection is, including these four FTAs--Korea, et cetera--
the figure will be--that, obviously, Canada, a major trading 
partner of ours, and Mexico. So our exports to our FTA 
partners, including these pending FTAs, is, I believe, almost 
50 percent. I will confirm that number for you.
    Ms.Hirono. And the reason I ask these questions is that I 
would like to get an understanding of really how much of our 
trade is really done through FTAs, as opposed to just the fact 
that we are trading with all of these countries and have been 
for decades.
    I have a question about--perhaps you have already gone 
through this, and I apologize for being late. For a lot of us, 
the environmental and the labor standards that are relatively 
new to the new round of trade agreements is really an important 
part of us moving forward in the kind of trade agreements that 
we would want to see. Now, that is great, but my question 
really is around enforcement. Because if you have all these 
requirements and standards but we are not enforcing them, what 
good are they? That is my view.
    So what kind of enforcement is our country doing to make 
sure that the countries with whom we have these trade 
agreements are living up to their part of the bargain, 
particularly in reference to labor and environmental 
requirements?
    AmbassadorVeroneau. Well, I would say that enforcement is 
very high. I mean, compliance with these trade agreements is 
extremely high. I mean, as one would expect, attention is paid 
to those instances where there is noncompliance. But compliance 
is very high. So I wouldn't want to leave here with the 
impression that enforcement is a systemic problem, because that 
has not been my experience in my current capacity or my prior 
capacity as a general counsel.
    The agreements provide for dispute-settlement mechanisms, 
basically panels to be established to adjudicate cases. We have 
had a number of NAFTA panels, some that we have been the 
plaintiff, so to speak, and others we have been the defendant. 
But these are panels that I think do a very good job of sorting 
out disputes.
    So I would expect that certainly this administration and 
any future administration would take seriously any charges that 
a country is not living up to its commitments. And if you can't 
find your way to resolve those short of bringing a formal 
action, then you bring the formal action. I have detected no 
resistance to bringing formal actions in the face of 
noncompliance.
    Ms.Hirono. Madam Chair, if I could just request that you 
provide to the Committee the list of actions that have been 
taken by our country to enforce trade agreements, the 
provisions of trade agreements. Because I don't have that kind 
of information. And you indicate that the enforcement part has 
been a very active part of what--
    ChairwomanVelazquez. Ms. Hirono, will you yield?
    Ms.Hirono. Yes.
    ChairwomanVelazquez. And I would like for the Ambassador to 
also--you say compliance is high. What about the area of 
intellectual property and textile?
    AmbassadorVeroneau. I think on intellectual property, 
again, if you look around the world, some of our biggest 
problems have been with partners that we don't have bilateral 
trade agreements with. China and Russia are the two countries 
that we are having the major problems with on intellectual 
property. And in that sense, frankly these FTAs that are the 
subject of this hearing today provide mechanisms to address 
intellectual property that we don't have with those other 
countries to the same fullness.
    But I would be pleased to provide information about 
enforcement actions, but I think it is important to be clear 
that enforcement actions encompass much more than bringing 
formal disputes. I mean, every day, I or someone at USTR is on 
the phone with a foreign government to say, "Hey, you have to 
live up to this obligation." So the vast majority of 
enforcement is not through a formal dispute mechanism, but 
through pressuring and jaw-boning and putting pressure on 
countries to meet their obligations.
    ChairwomanVelazquez. Time has expired.
    Mr. Buchanan?
    Mr.Buchanan. Thank you, Madam Chair.
    I know we have votes, but, Ambassador, real quick, my 
interest is in, as all of this Committee, is small business. 
How do you define small business as it relates to these 
relationships and various trade agreements? Do you have a 
definition for small business?
    AmbassadorVeroneau. Well, I think we have used the SME, 
small and medium-size enterprise's definition of 500 companies 
or less. But--
    Mr.Buchanan. You mean 500 employees?
    AmbassadorVeroneau. Yes, 500 employees. But, as I was 
saying earlier, what we do, to oversimplify, is we are in the 
business of eliminating tariffs and nontariff barriers. And I 
think that mission benefits small companies, frankly, more than 
big companies, because big companies have the resources to find 
their way around and navigate these barriers, where small 
companies don't.
    Mr.Buchanan. Let me mention, just in terms of that, there 
is a lot of--I mean, that is one way to define small companies. 
But I know in the State of Florida and all throughout the 
United States, a lot of small companies, we--I was chairman of 
the State chamber. In those businesses, we defined a lot of our 
companies as small companies that were 20, 50 or 40 employees 
or less.
    What are you doing, and how does it affect those groups?
    AmbassadorVeroneau. Well, again, I would say whether I am a 
company with 10 employees or 10,000, my interest is seeing a 
tariff eliminated or a nontariff barrier eliminated. So, from 
our perspective, from the mission of USTR, my goal and interest 
in eliminating this barrier is the same for you as a small 
company as it is for a large company. And in that sense, our 
mission does not split, I think, in the following way of small-
business interests versus big-business interests. We are 
interested in eliminating these barriers, and small and large 
can take advantage of that.
    Mr.Buchanan. Well, on the record, I would just like to say 
I would just love to see us do more in any of these trade 
representative meetings to help companies 50 employees or less. 
Because that is a lot of what we represent here.
    Thank you. And we have--I know we have to leave.
    ChairwomanVelazquez. Mr. Ambassador, thank you for your 
participation this morning.
    We still have some more questions. We will be submitting 
them in writing.
    You are excused. But before you leave, I would like for the 
record to reflect who will be the person or persons from your 
staff that will stay here to listen to the next panel.
    AmbassadorVeroneau. Our Congressional Affairs Office will 
stay here and enjoy the rest of the hearing.
    ChairwomanVelazquez. Thank you very much.
    AmbassadorVeroneau. Thank you very much.
    ChairwomanVelazquez. The Committee stands in recess, and we 
will resume right after this vote.
    [Recess.]
    ChairwomanVelazquez. The Committee is called to order. And 
we are going to start with our second panel.
    I want to thank you all for being here this morning.
    Our first witness is Mr. Stephen Ubl. He is the president 
and CEO of AdvaMed. He oversees all internal and external 
operations for the organization, which is the world's largest 
association representing manufacturers of medical devices, 
diagnostic products and medical information systems.
    Mr. Ubl, you have 5 minutes to either talk to us or 
summarize your testimony.
    And every statement will be submitted to the record, 
without objection. So ordered.
    And you have 5 minutes.

 STATEMENT OF MR. STEPHEN J. UBL, PRESIDENT AND CEO, ADVANCED 
            MEDICAL TECHNOLOGY ASSOCIATION (ADVAMED)

    Mr.Ubl. Thank you, Madam Chairwoman and Ranking Member 
Chabot, for inviting me to testify this morning. I am Steve 
Ubl, president and CEO of AdvaMed. And we thank the Committee 
for holding this important hearing today on pending free trade 
agreements between the United States and some of our trading 
partners.
    As you mentioned, AdvaMed represents over 1,600 of the 
world's leading medical technology innovators and manufacturers 
of medical devices, diagnostic products and health information 
systems. Importantly, over 70 percent of our members are small 
companies with sales under $30 million in revenue.
    AdvaMed members are devoted to the development of new 
technologies that allow patients to lead longer, healthier and 
more productive lives. Our members manufacture 90 percent of 
the $94-billion U.S. Health-care technology market and nearly 
half the $220-billion market globally. In 2006, U.S. exports in 
medical devices and diagnostics totaled over $29.4 billion.
    The medical technology industry is fueled by intensive 
competition within the innovative energy of our small 
companies, firms that drive very rapid innovation cycles 
amongst our products, in many cases leading to new product 
iterations every 18 months. Our industry succeeds most in a 
fair, transparent global market where products can be adopted 
on their merits without excessive regulatory hurdles or 
inappropriate reimbursement policies.
    We strongly support the efforts to expand market access for 
U.S. products abroad through FTAs, the World Trade 
Organization, as well as oversight of market access barriers in 
countries with which we have strong trading relationships. We 
believe U.S. leadership in international trade is crucial to 
the health of our industry and the future success of the U.S. 
economy. There is really no credible alternative to engaging 
fully in the global marketplace. Congressional approval of 
solid FTAs is an important cornerstone in advancing a strong 
U.S. Trade agenda.
    The Korea-U.S. FTA is an excellent example of such an 
agreement. In 2006, U.S. medical technology exports to Korea 
exceeded $673 million, an increase of 8 percent over 2005. 
Korea currently imposes tariffs in the range of 6.5 percent to 
13 percent on U.S. medical technology compared to almost no 
tariffs on U.S. imports from Korea. The elimination of tariffs 
on all medical technology under the FTA will save the U.S. 
industry about $25 million per year.
    The FTA also offers important benefits specifically 
addressed to medical technology. In fact, it is the first FTA 
to have a specific medical technology chapter, including 
recognition of innovation; commitments to fair, transparent and 
nondiscriminatory rules on reimbursement and regulatory 
decisions. We urge Congress to pass the legislation to 
implement this FTA.
    The Latin American FTAs would also provide benefits to 
AdvaMed members, including tariff elimination, thereby leveling 
the playing field with countries that enjoy duty-free access to 
our market and provisions addressing a range of nontariff 
barriers.
    We also hope that the administration and Congress will work 
together on a bipartisan approach to U.S. trade policy. Many 
other countries are concluding FTAs with our trading partners. 
As an American and as a representative of the medical 
technology industry, I do not want to see us left behind.
    Thank you, again, for holding this hearing and for seeking 
our input on the pending FTAs. We look forward to working with 
you and the rest of the Committee on these important issues. 
Thank you very much.
    [The prepared statement of Mr. Ubl may be found in the 
Appendix on page 59.]

    ChairwomanVelazquez. Thank you very much, Mr. Ubl.
    Our next witness is Mr. Doug Wolf. Mr. Wolf is a board 
member of the National Pork Producers Council and a pork 
producer from Lancaster, Wisconsin. He owns and operates Wolf 
L&G Farms, a farrow-to-finish operation marketing 20,000 hogs 
per year.
    Welcome, sir.

    STATEMENT OF MR. DOUG WOLF, OWNER, WOLF L&G FARMS LLC, 
LANCASTER, WISCONSIN, ON BEHALF OF THE NATIONAL PORK PRODUCERS 
                            COUNCIL

    Mr.Wolf. Thank you very much, Madam Chairman, members of 
the Committee. I am Doug Wolf, a board member of the National 
Pork Producers Council and a pork producer from Lancaster, 
Wisconsin. I do own and operate Wolf L&G Farms, a farrow-to-
finish operation marketing 20,000 hogs a year.
    The National Pork Producers Council is a national 
association representing 44 affiliated State organizations and 
the Nation's 67,000 pork producers. We annually generate 
approximately $15 billion in farm gate sales, support an 
estimated 550,000 domestic jobs, generate more than $97.4 
billion in total U.S. economic activity and contribute $34.5 
billion to the U.S. gross national product.
    Madam Chairwoman, I strongly believe that the future of the 
U.S. pork industry and the future of livelihood of my family 
operation depends in large part on further trade agreements, 
including the pending agreements with Peru, Colombia, Panama 
and South Korea.
    Past trade agreements have fueled export growth in the U.S. 
pork industry. Total U.S. exports of pork and pork products 
have increased by more than 433 percent in volume terms, 401 
percent in value terms, since the implementation of NAFTA in 
1994 and the Uruguay Round agreement in 1995. Without the 
NAFTA, there is no way that U.S. exports of pork products to 
Mexico could have reached such heights. In 2006, Mexico was the 
number-one volume market and the number-two value market of 
U.S. pork exports.
    Thanks to a bilateral agreement with Japan on pork that 
became part of the Uruguay Round, U.S. exports to Japan have 
soared. In 2006, U.S. Pork exports to Japan reached over $1 
billion. Japan remains the top-value foreign market for U.S. 
pork.
    U.S. pork exports to Korea have increased over 2,000 
percent, as a result of concessions made by Korea in the WTO 
Uruguay Round in 1995. More recently, U.S. exports of pork have 
expanded because of bilateral deals with Russia, Taiwan, China 
and the U.S.-Australia Free Trade Agreement.
    As U.S. pork experts grow, so do U.S. jobs. In 2006, the 
United States exported 15 percent of its domestic pork 
production. International trade contributed approximately 
82,500 U.S. jobs to the pork industry alone. The majority of 
these jobs are located in rural America. In my home State of 
Wisconsin, about 14,200 jobs are involved in various aspects of 
the pork industry. Using 15 percent share, Wisconsin receives 
2,130 jobs and $90 million in personal income from exporting 
pork products to foreign markets.
    Wolf L&G Farms is a small, family owned, independent hog 
operation in southwest Wisconsin. I run the business with my 
30-year-old son, Shannon. Between 1998 and 2002, we faced tough 
financial times. It wasn't until 2002 that we started to 
recover and became financially stable and actually expanded our 
production.
    In September of 2007, we replaced an old sow facility and 
increased our capacity from 800 to 1,400. Due to this 
expansion, we will be able to increase the number of hogs 
marketed significantly, from 20,000 to 30,000 annually. We have 
also erected new feed processing, increased competitiveness 
with new modern technology, and purchased more energy-efficient 
equipment.
    Increased pork exports over the last 5 years have 
contributed significantly to the profitability of our 
operation. Wolf L&G Farms markets hogs to the Waterloo and 
Columbus Junction, Iowa, Tyson pork-processing plants. These 
plants export pork all over the world, including loins and 
tenderloins to Japan, bellies and butts to South Korea, hams to 
Mexico, picnic and trimmings to Russia, and a variety of meats 
indirectly to China. Wolf L&G Farms is very proud to supply the 
world with our homegrown Wisconsin pork and pork products.
    It is absolutely critical that U.S. pork exports continue 
to grow. Right now, though high tariffs, the average global 
tariff on pork is a staggering 77 percent. The technical 
barriers to trade are stifling that growth and affecting the 
industry.
    The four free trade agreements currently pending in 
Congress can help change that. I am very excited about that. 
Each agreement aggressively cuts tariffs, and all tariffs are 
eventually phased out completely.
    Additionally, the Governments of Peru, Colombia, Panama and 
South Korea have agreed to accept pork from all USDA-approved 
facilities. This ensures my product will not be stopped from 
entering these markets because of non-science-based 
restrictions.
    The potential impact of the pending free trade agreement on 
Wolf L&G Farms is very substantial. According to an Iowa State 
University economist, once fully implemented, the Peru 
agreement will add 83 cents per head to each hog. The Colombia 
trade agreement will add $1.63. Panama will add 20 cents. And 
Korea will add a phenomenal $10 per animal. Assuming our 
current level of production, these agreements, respectively, 
would mean an additional $16,600; $32,600; $4,000; and $200,000 
in additional income than otherwise would have been the case 
without these deals. That is more than $250,000 that will add 
to our farm receipts. Remarkably, these estimates are based on 
current levels of production, and we are expanding our 
production.
    The added income from the pending FTAs will allow our small 
operation to grow, develop and ensure a future in hog 
production for my son and his family. We eventually would like 
to invest resources in the methane digestive technology, which 
helps supplement profits and generate electricity. It also 
helps us support the environmental concerns. Given the proper 
resources, this could be a reality.
    Free trade agreements spur exports, which, in turn, drive 
our profits upward. I would strongly urge you to support the 
pending free trade agreements with Peru, Colombia, Panama and 
South Korea.
    Thank you very much.
    [The prepared statement of Mr. Wolf may be found in the 
Appendix on page 66.]

    ChairwomanVelazquez. Thank you, Mr. Wolf.
    Our next witness is Mr. Cass Johnson. Mr. Johnson is the 
president of the National Council of Textile Organizations. The 
National Council of Textile Organizations represents the entire 
domestic textile industry, including producers, manufacturers 
and suppliers of these products.
    Welcome, sir.

 STATEMENT OF MR. CASS JOHNSON, PRESIDENT, NATIONAL COUNCIL OF 
            TEXTILE ORGANIZATIONS, WASHINGTON, D.C.

    Mr.Johnson. Thank you.
    Chairwoman Velazquez and Congressman Chabot and 
distinguished members of the Committee, thank you for the 
opportunity to appear today and outline the textile industry's 
perspective on the pending free trade agreements.
    My name is Cass Johnson. I am the president of the National 
Council of Textile Organizations. First of all, I would like to 
thank you for holding this hearing on trade. It is very 
important, as you have noted, to small- and medium-sized 
business. I believe this is the second hearing the Committee 
has held this year, and I urge you to continue to hold these 
hearings. It is very important.
    I would like to state at the outset that our companies, 
almost all of which are small- and medium-sized businesses, 
need a trade policy that concentrates on retaining jobs in this 
country and that exacts penalties for those countries that 
break the rules.
    The U.S.-China Economic and Security Review Commission 
estimates that Chinese bad-playing has cost the United States 
over 1.5 million manufacturing jobs during the last 10 years. 
Many of these were good-paying textile jobs. And yet our 
members are very concerned that China continues to get 
virtually a free pass by the Congress and by the Government. 
While our industry is supportive of free trade agreements, if 
we were to ask you today to do one thing for the U.S. 
manufacturing sector, it would be to pass a bill that holds 
China accountable for its currency manipulation and subsidy 
schemes. We hear that such bills are being prepared, and we 
look forward to those moving through Congress quickly.
    Regarding the Peru and Colombia and Panama FTAs, NCTO 
members have examined these agreements carefully and have been 
strongly supportive. In terms of textiles, these agreements 
contain the gold standard for textile agreements, a pure-yarn 
foreign rule of origin, with none of the free-riders that have 
been in past agreements. This means that only textile apparel 
companies in the free trade areas get the benefits and that 
nonparticipants, particularly China, are technically shut out.
    You may have noticed I said the word "technically." I use 
the word, because, while Customs regulations in these 
agreements are very strong, Customs itself has been back-
pedaling furiously on commitments made to the textile industry 
when the CAFTA agreement was being debated. These commitments 
are one of the primary reasons that our members voted to 
support the CAFTA agreement.
    But today, instead of a reinvigorated customs effort that 
we were promised, textile customs enforcement is now at a 
crisis point. The Government has stopped sharing data on 
seizures and detentions with both the industry and the 
Congress. Special operations regarding textiles enforcement 
have been virtually halted, and textile enforcement staff has 
been leaving in droves.
    The result is that the cheaters are now winning. U.S. 
textile mills are reporting a sharp upswing in shipments lost 
to illegal trade. This is because the rules in CAFTA are being 
broken by unscrupulous importers who know there is virtually no 
chance, in this current customs environment, that they are 
going to get caught.
    The industry has done its homework on this issue. We have 
traced the roots that illegal shipments take from China and 
elsewhere. We know which ports the boats dock at. We know which 
companies are falsely claiming U.S.-origin goods, and yet we 
watch as U.S. mills close, as a spinning mill closed 2 weeks 
ago down in North Carolina. And their workers become 
unemployed, because Customs is no longer keeping its word and 
making textile enforcement a priority in free trade agreements.
    This turnaround by U.S. Customs is all the more infuriating 
because Customs' own records show that fraud and cheating 
occurs more in textile trade than in any other manufactured 
good. In fact, nearly 50 percent of all customs fraud involves 
textile products.
    Our industry's patience is nearing an end. We have made 
many appeals to Customs to restore the program, but we have yet 
to see Customs respond in a meaningful way.
    So while we support the Peru and Colombia and Panama 
agreements, there is no reason for the industry to continue to 
support these or future agreements if Customs has decided it 
will not bother to enforce them. Rules are great, but they have 
to been enforced. If they are not being enforced, then we are 
in more danger having an agreement than in not having an 
agreement.
    Finally, regarding the Korea FTA, we believe the textile 
portions need to be renegotiated. In the agreement, USTR 
reversed a decades-old policy when it agreed to give Korea 
duty-free treatment immediately on the vast majority of its 
textile products. In addition, Korea continues to manipulate 
its currency, and the chaebol system continues to give its 
manufacturers additional unfair advantages. Finally, Korea has 
been a major transit point for textile fraud with China for 
over 30 years and has shown no willingness, to date, to enforce 
its borders.
    This concludes my verbal remarks. I would like to thank the 
Committee once again for holding this hearing and for turning 
its attention to the issue of trade and its impact on small- 
and medium-sized businesses.
    [The prepared statement of Mr. Johnson may be found in the 
Appendix on page 78.]

    ChairwomanVelazquez. Thank you, Mr. Johnson.
    Our next witness is Ms. June Ling. Ms. Ling is the 
associate executive director of Codes & Standards for the 
American Society of Mechanical Engineers. Founded in 1880, the 
organization promotes the arts, science and practice of 
mechanical and multidisciplinary engineering and allied 
sciences.
    Welcome.

STATEMENT OF MS. JUNE LING, ASSOCIATE EXECUTIVE DIRECTOR, CODES 
  & STANDARDS, AMERICAN SOCIETY OF MECHANICAL ENGINEERS, NEW 
                         YORK, NEW YORK

    Ms.Ling. Thank you, Madam Chairman, and thank you, Ranking 
Member.
    This morning I would like to cover standards, their impact 
on trade and small- and medium-sized enterprises, and I would 
also like to highlight the importance of language within trade 
agreements when addressing international standards and their 
implementation through regulatory adoption.
    So what is a standard? What is a technical consensus 
standard? Basically, it is a set of rules or guidelines 
developed under a disciplined process of well-defined 
characteristics. And when applied, standards achieve a common 
objective. That objective may be a baseline for public safety, 
from toys to home heating boilers to safe operation of nuclear 
power plants. It can achieve better utilization of new 
technological advances, and it can also cover 
interchangeability and interconnectivity of products and 
services. So standards are basically a set of rules or 
guidelines.
    Standards have two significant results: One is they enable 
a transfer of technology to a broad base of users, and, two, 
they create a level playing field for competition and, thus, 
enter into new markets. Both technology transfer and market 
access are especially important benefits to small businesses, 
as most would not have the means of achieving these results 
independently.
    Today the United States enjoys a well-established and 
vigorous process for development of technical consensus 
standards by the private sector in partnership with Government. 
This partnership has become ever more important in ensuring 
U.S. competitiveness in the global market. The USTR and 
Department of Commerce have actively worked in concert with the 
private sector, including the standards-developing community, 
to safeguard U.S. interests through ensuring international 
standards used by U.S. companies are not unfairly blocked.
    Free trade agreements and texts regarding standards in free 
trade agreements are essential to ensuring businesses are able 
to export goods. So why is text in trade agreements important?
    Well, under the WTO Technical Barriers to Trade Agreement, 
signatory nations are obligated to provide, quote, 
"preferential treatment" to, quote, "relevant international 
standards." As such, how international standards are defined 
within the context of the TBT Agreement became a major item of 
debate.
    A significant milestone occurred during the second tri-
annual review of the TBT Agreement. At that time, there was an 
effort by other nations to define international standards as 
limited to standards developed by organizations whose 
membership structures consisted only of national bodies. Under 
this interpretation, the open membership of U.S.-domiciled 
international standards-developing organizations, such as ASME, 
would not qualify, and the products made in the United States 
that were engineered to these international standards would 
effectively be restrained from trade.
    But through the strong and able efforts of USTR, support by 
Commerce and the private sector, the U.S. prevented this threat 
through sustained efforts, and it led to the decision of the 
TBT committee not to specify or name organizations developing 
international standards but, rather, to define the principles 
for international standards development that any standards 
developer could follow. The principles of transparency, 
openness, impartiality and consensus, effectiveness and 
relevance, coherence and development are met by ASME and other 
U.S.-domiciled standards organizations.
    It is important that the U.S. remain vigilant, however. We 
need to ensure that any text within trade agreements which 
address international standards is inclusive of those standards 
utilized by U.S. Businesses and Government. In addition, 
treatment of conformity assessment in the WTO TBT Agreement and 
implementing text in free trade agreements can add to the 
complexity of fair and open access to the market. Here, too, 
vigilance is needed.
    A few years ago, ASME and three other organizations formed 
a consortium, and we opened an office in Beijing using a 
manufacturing development cooperative program grant provided by 
the Department of Commerce International Trade Administration. 
With Commerce ITA support and their engagement on a Government-
to-Government basis, this consortium of four organizations 
successfully gained greater understanding on use of our 
standards in China, which, in turn, facilitated greater 
acceptance of products and technology produced to those 
standards.
    So, in conclusion, standards and related conformity 
assessment are an underpinning of U.S. competitiveness and 
trade promotion. It can carry a greater impact for small 
businesses, as small businesses do not have the resources for 
independent research nor participation in the international 
standards activity. Effective export trade promotion would not 
be achievable without continued acceptance and use of 
international standards, many of which are developed and 
maintained by ASME.
    Thank you.
    [The prepared statement of Ms. Ling may be found in the 
Appendix on page 92.]

    ChairwomanVelazquez. Thank you, Ms. Ling.
    And the Chair recognizes the ranking member for the purpose 
of introducing our next witness.
    Mr.Chabot. Thank you, Madam Chairwoman.
    I am pleased to welcome a constituent of mine, Gary 
Ellerhorst, who is president and CEO of Crown Plastics Company, 
Inc., which is located in Harrison, Ohio, which is in my 
congressional district. He happens, also, to be a graduate of 
one of the more distinguished high schools in our district, 
Elder High School, who happens to be playing my son's high 
school in the State playoffs this week and one of the rivals of 
my high school as well. So football in Cincinnati is a big 
deal, and we always talk about that back home.
    But Crown was cofounded in 1973 by Gary's father, Bob 
Ellerhorst. Gary began as a second-shift machine operator, 
worked his way up to sales manager, and today he and three of 
his brothers manage the company, which now employs 52 people.
    Crown manufacturers plastics material and resin and is the 
world leader in the manufacture of ultra high molecular weight 
polyethylene, which is used in the manufacture of high-quality 
snowboards and which lined the bottom of four American gold and 
silver medal-winning snowboarders in the 2006 Winter Olympics.
    Gary is a two-term past president of the Main Street 
Harrison Downtown Revitalization Program.
    And I want to thank him for adding his perspective to the 
hearing, and I think we all look forward to his testimony.
    Mr. Ellerhorst?

  STATEMENT OF MR. GARY ELLERHORST, PRESIDENT AND CEO, CROWN 
                    PLASTICS, HARRISON, OHIO

    Mr.Ellerhorst. Madam Chairwoman, Congressman Chabot and 
esteemed Committee members, I would like to thank you for the 
honor of speaking before you today on the subject of small 
business and free trade agreements.
    Unlike many who come before you, I have no charts or 
graphs, no reams of data, no results of exhaustive research. I 
am here with nothing but 30 years of experience of working in, 
growing with and managing a small manufacturing business in the 
Midwestern region of the United States.
    Like every other company in America, we are challenged by 
the ever-changing landscape of the global market we find 
ourselves in. The acceleration of market changes for our 
company over the past 5 years, and the necessary adaptation 
that goes along with it, has exceeded that of our first 30 
years in business.
    Explosions in technological advancement and the massive 
shift in manufacturing throughout the world has created the 
scenario where over 50 percent of what Crown Plastics now 
produces either involves the use of materials from outside the 
U.S. or is exported in the form of finished products or 
components. We currently export product to approximately 15 
countries throughout North and Central America, Asia, Europe, 
the Middle East, as well as Australia and New Zealand.
    Much of our growth in exports are in areas of the world 
that have developed through trade with the United States, such 
as Mexico, Canada and China. We have found that open trade 
policies have not only encouraged economic cooperation to 
reduce costs and red tape, but that economic growth experienced 
by our international trade partners has also led to increased 
demand for additional U.S. products. In other words, investment 
in trade is an investment in the American economy.
    Crown Plastics' future strategy has part of its focus in 
Central, Latin and South Americas, several of these countries, 
again, being currently considered for additional free trade 
agreements. Again, I am sure you have received data from both 
sides of the issue, but my experience tells me that enacting 
these proposed agreements will, in the long term, prove to be 
economically, politically and socially beneficial.
    As a parent and a CEO of a small business, I completely 
understand the natural tendency to want to help when we see an 
issue with things or people we care about. But I also see that, 
in some cases, we have tried so hard to protect our children 
from everything that they are now susceptible to anything. If 
we raised an animal in the protected environment of our homes 
and then later released it into the wild without the necessary 
developed skills and instincts needed to survive, our actions 
would rightly be admonished as cruelty. Why, then, do we insist 
on doing the same to our own businesses?
    While artificial supports and protections are usually well-
intentioned, in the short-term reality they only benefit the 
small portion of the economic population they are designed to 
help, while actually creating additional difficulties for the 
rest. More importantly, in the long run, they only serve to 
artificially prop up outdated, antiquated and inefficient 
policies and practices and provide a false sense of security 
and success to those they are intended to help.
    Meanwhile, the global marketplace continues to shift and 
grow around us. The end result, as we see with so many of these 
programs, is a lifetime of continued addiction to such support, 
as we are no longer able to fend for ourselves in the wilds of 
the marketplace, or, if finally forced to deal with the 
realities of an open market, a massive investment of time and 
money to impose a greatly accelerated process of adjustment 
which may or may not succeed. In either case, we are the weaker 
for it.
    Businesses, like everything else, need to constantly be 
able to adjust to the changing environment or risk extinction. 
Besides our competitors, we are in a constant battle with 
economic forces such as interest rates, energy cost, currency 
fluctuations, technological advances, health-care costs and so 
on. On top of that, we have national and international 
political issues, environmental issues and people issues. And 
when we finally think we have it all figured out, along comes 
9/11 or Katrina or wildfires.
    And we continue to survive and to succeed. Is it difficult? 
Absolutely. Is it painful sometimes? You bet. But what in life 
is not?
    And we in America have got to quit looking for the painless 
fix that does not exist. When faced with a problem, we demand 
that somebody fix it, but just don't let the solution affect 
me. Or we waste our efforts putting Band-Aids on symptoms and 
ignoring the disease, the category in which artificial supports 
and trade restrictions fall.
    We have economic cancers that require chemo-therapeutic 
treatment. During the process, we will feel sick and our hair 
will fall out. But when we are past it, we will be stronger, 
and the alternative is far less desirable. The longer we waste 
time trying to avoid discomfort, the more intrusive and painful 
the cure becomes.
    I understand that when it comes to free trade agreements 
like those being considered, many across the political spectrum 
have legitimate human rights, environmental and economic fair-
play concerns. But unlike some issues that require sanctions 
and trade barriers, most socioeconomic issues are best 
addressed through economic engagement. Having a vested economic 
stake is the best way to ensure proactive cooperation. And one 
need only to look at recent changes in China for proof. There 
are still many, many problems, but a whole host of issues are 
moving rapidly in the right direction.
    But I suspect the biggest issue with protectionism is fear: 
fear of the future, fear of uncontrollable forces in the 
marketplace, fear of the unknown. Well, I am here to represent 
all of those who are not afraid of the uncertainties of the 
global marketplace but rather revel in their opportunities. Why 
do we feel this way? Because we have two huge advantages over 
many of our foreign competitors. The first is us--me, those 
sitting at this table with me, and millions of men and women 
like us who have grown up with the American, entrepreneurial, 
competitive spirit etched into our very being. The second is 
you, all you honorable representatives working in the 
Government based on a Constitution which allows people like us 
to strive to be all we wish to be. Working together, there is 
not a country on earth that can compete with us.
    Circling the wagons may at times seem like a good idea, as 
it might help you to defend yourself. But the only thing it 
actually guarantees is that you either move in a circle or stop 
moving all together. But all this requires a third factor, and 
that is trust: a trust and faith and confidence in and between 
the people and the Government, as well as in the global free-
market economy; a trust and understanding that, as with nature 
and the U.S. Constitution, the free-market system always works 
best when not tampered with, despite our best intentions. And 
with that trust and understanding, I guarantee you that we will 
not fail.
    Again, as a mere small-business man with no Ph.D. In 
economics, no studies or data or anything else to back me up, 
except the nonpolitical common-sense opinion, how can I be so 
sure? Simple: Because I am an entrepreneur in the greatest 
country this world has ever known. And we, the American 
business men and women, will simply not allow ourselves to 
fail.
    I will grow Crown Plastics. I will be successful. And I 
will make bigger profits for myself and my family in the near 
future. And at that time, I will be thrilled to come back to 
Washington to meet with you nice people once again and discuss 
the issue of how much of it you will allow me to keep.
    Thank you, again, for allowing me the honor of addressing 
you here today.
    [The prepared statement of Mr. Ellerhorst may be found in 
the Appendix on page 97.]

    ChairwomanVelazquez. Thank you. Thank you very much, Mr. 
Ellerhorst.
    Let me just say that I love real people, and it is really 
refreshing when we are able to bring people from our own 
districts to come here and talk to us about your own stories. 
Definitely.
    Something that really got my attention is the statement 
that you made about the best tool that we have to deal with 
human rights and environmental violations is through economic 
engagement. So that is why I support for this Government to do 
commercial trade with Cuba.
    Will you support that?
    Mr.Ellerhorst. I believe that there are, outside of the 
free trade, there are political and governmental decisions that 
are made by our Government for what it deems to be in the best 
interest of our national security. At that point, I feel we 
need to defer to our representatives to make those decisions. I 
would like to see free trade opened with Cuba, but under the 
proper circumstances.
    ChairwomanVelazquez. Sure. Well, we did it with Vietnam.
    Mr.Chabot. Will the gentlelady yield?
    ChairwomanVelazquez. Sure.
    Mr.Chabot. I would just like to comment, that was a pretty 
impressive answer, I think, Mr. Ellerhorst.
    ChairwomanVelazquez. Definitely. He dodged that one, huh?
    Mr.Ellerhorst. I want to grow up to be just like you, Mr. 
Chabot.
    ChairwomanVelazquez. This question I would like to invite 
every one of the witnesses to answer it.
    Could you tell this Committee what you see as the top 
provisions in the pending FTAs to aid small businesses in your 
industry access, newly opened markets?
    Mr. Ubl?
    Mr.Ubl. Sure. I will--
    ChairwomanVelazquez. And a second question: What provisions 
would you recommend for inclusion that would further facilitate 
cross-border commerce with consumers in these countries?
    Mr.Ellerhorst. I will focus mostly on Korea, because, 
again, as we look at the pending FTAs as a matter of economic 
development of those partners, our exports to Korea are far 
more material. They are about six times greater than Colombia 
and about 20 times greater than the other two FTAs.
    But the two things that the FTA focuses on, I think, are 
emblematic of the two barriers that our companies face most 
frequently and should be incorporated in FTAs going forward. 
And that is eliminating high border tariffs and including 
mechanisms to address nontariff barriers.
    In our industry, nontariff barriers can take many forms. It 
can be slow or corrupt Customs processes. It can be 
nontransparent regulatory processes. The U.S. medical 
technology industry is the leading sector. There is no 
indigenous market in many of these countries that we deal with. 
So sometimes it is very easy to take discriminatory pricing 
decisions, reimbursement decisions or regulatory decisions that 
are focused slowly on our industry.
    So, in terms of what we can do to further commerce, I think 
a greater focus, perhaps, on the nontariff barriers, and 
including mechanisms for dispute resolution and committees, for 
example, that allow for a dialogue on nontariff barriers.
    ChairwomanVelazquez. Thank you.
    Mr. Wolf?
    Mr.Wolf. I am not certain I can give you the best answer at 
all, but I can give you the one that comes to mind with us 
today.
    Number one is reducing our tariffs. It is 77 percent. We 
definitely need to get that down to be fair.
    And some of the other issues that we could use help with 
are in the phytosanitary concerns, that our products are safe 
and that we do not go beyond scientific means to determine 
that, that everything that we do today is backed up 
scientifically and it makes it fit across all borders.
    So that would be our health areas. Thank you.
    Mr.Johnson. Regarding textiles, I think the certainty that 
these free trade agreements bring that tariff rates will remain 
at zero and that you can build trade is probably the best 
portion of the agreement.
    The areas that the free trade agreements, particularly 
Korea, do not get into--and I think trade policy in the United 
States needs to start getting into this--is the fact that 
governments, through nontariff barriers and through subsidies, 
wipe out the notion of free trade.
    Free trade is a great thing, and we can compete and export 
all over the world when it really occurs. But when governments 
such as China target a sector, such as the textile industry--we 
are now being targeted with their 11th 5-year plan; 73 
different subsidies offered to the Chinese textile industry; we 
don't get any of them--I think the Government needs to go after 
those.
    It is not appropriate, necessarily, to protect U.S. 
industry, but it is appropriate for the U.S. to go after the 
bad players who are breaking the rules and get them to stop. 
And that is what we have not seen happen enough.
    ChairwomanVelazquez. Before I go to the next two witnesses, 
Mr. Johnson, what type of domestic trade assistance programs do 
you think are necessary in order to help the textile industry?
    Mr.Johnson. Domestic assistance programs?
    ChairwomanVelazquez. Uh-huh. Are there any Federal programs 
that exist right now that you think it would be--
    Mr.Johnson. Well, I think our industry is concerned about a 
number of things that many manufacturers are--that is, the cost 
of health care; the fact that we control our environmental 
output, and other countries do not, and they can benefit from 
that and charge lower prices.
    On the export side, I think the Government could do a 
better job in terms of supporting industry and getting out 
there, small- and medium-sized industry in particular, giving 
them the resources to do trade missions around the world. I 
mean, our members have done export missions through the 
Department of Commerce, but they are actually very expensive, 
very expensive to do. And there is only a limited number of 
people who can do them, only a limited number of trips. And 
they find them helpful, but I think that is another area where 
small- and medium-sized businesses could get a big benefit.
    ChairwomanVelazquez. Okay.
    Ms. Ling?
    Ms.Ling. I would like to address standards and the need to 
assure the text of FTAs carefully address international 
standards and the use of international standards.
    Standards are not a sexy topic. They are not overt. They 
are not as overt as tariff or tariff barriers. But the 
inappropriate restrictions on use of standards can very easily 
convert into a nontariff barrier.
    So within any free trade agreement, the recommendation 
would be that language be open and inclusive of all 
international standards, not just those that are developed by 
groups such as ISO or IUC or ITU. ASME had a recent example 
where that did occur. It would have affected many small 
businesses, mom-and-pop welding shops, fab shops, manufacturers 
of compressors and home heating appliances and all, in which 
there was an effort by the Europeans to block out ASME and 
other U.S.-domiciled standards. And it took a concerted effort 
of private sector and Government to defuse that threat.
    So the treatment of international standards and also 
conformity assessment in trade agreements is key.
    ChairwomanVelazquez. Mr. Ellerhorst?
    Mr.Ellerhorst. Yes, with regards to enforcement, I think it 
is critical, whether it is a political negotiation or economic 
one, they work when both parties have a common goal of reaching 
some sort of common ground, not when one is going to use what 
they negotiated as a weapon because they know you intend to 
keep their word and they don't intend to keep theirs. So I 
think enforcement becomes critical.
    As far as what the Government can actually continue to do 
is--I am in a relatively high technological environment. Some 
of the tax incentives for technological investment have been 
very, very helpful, as far as us. People who copy can do what 
you do today, but they can't do what you do tomorrow, because 
they don't know what you did yesterday. And so, investment in 
what makes us different, which is our technological know-how 
and advancement, I think is where we can stay out in front. If 
I focus all my time on protecting my IP, I am not really 
focusing on my business.
    So anything that can enhance small businesses, especially 
their creative talents and abilities, to improve the 
technological advancements is where I think we will stay ahead 
the curve. And I think that would be the safest way for my 
industry that the Government can help.
    ChairwomanVelazquez. Thank you.
    Mr. Ubl, in your statement you mentioned the need to 
maintain oversight of existing trade agreements. And which one 
or two, in particular, are of top concern for your industry?
    Mr.Ubl. I would say, right now, we are very much focused on 
the bilateral relationship with Japan, as well as China.
    Japan continues to have probably the most expensive and 
slow regulatory-approval process for new technologies anywhere 
in the world. And that is coupled with, in our view, a 
discriminatory pricing practice, where they compare our prices 
in Japan to those prices in other markets, which tend to ignore 
the real differences in the marketplace in Japan.
    Similarly, in China, we have a proposed price-control 
regulation that the Chinese Government is contemplating, 
particularly focused on medical technology. And there are, in 
some cases, agencies serving the same functions, so we have 
duplicate inspection regimes that are conducted both by customs 
and by regulatory agencies. So that redundant regulation is a 
very high nontariff barrier for many of our small companies.

    ChairwomanVelazquez. Thank you.
    Mr. Chabot?
    Mr.Chabot. Thank you, Madam Chair.
    Mr. Ellerhorst, I will begin with you, if I can. I think 
you stated that about 40 percent of your business is export-
related. How important is trade to the bottom line, and 
especially with respect to the number of employees? I think you 
have about 52 right now.
    Mr.Ellerhorst. Yes, sir.
    Mr.Chabot. If you didn't have the export trade 
opportunities that you have now because we were more 
protectionist or whatever, how would that impact your ability 
to hire more people? Is that one of the critical aspects of all 
this?
    Mr.Ellerhorst. Yes. We probably, if we didn't export, we 
would be maybe half of the people currently that we have at 
this point.
    It is kind of unique because it didn't start as export. 
That is the other thing. If we create business here, and then 
as that shifts within the marketplace, things that didn't used 
to export, as companies move, then our business has to move 
with it. So it is critical.
    And the free trade agreements, from the aspect of making 
things less--I am not as intelligent as the people sitting to 
my right, when it comes to all the exportation and the issues 
involved. So the simpler it is for somebody like me, the more 
time I can spend on growing my business and less time on 
dealing with how I am supposed to get this material out of the 
country.
    So exports right now are huge, and I think in the next 5 
years it will even become more critical for us as a company.
    Mr.Chabot. I imagine with winning of the gold medals and 
the silver medals in the Olympics, that must have been kind of 
a--your employees must have gotten a pretty big rush out of 
that, I would think. Is that accurate?
    Mr.Ellerhorst. Yeah, there are posters all over the place. 
When they are on the gold medal stand and they turn their board 
over, they like to see what it is they make. And they probably 
garnish 53 more people watching every snowboard event in the 
Olympics.
    Mr.Chabot. I will bet. Thank you.
    Mr. Ubl, you stated that the medical technology industry 
jobs pay about 30 percent more than the average U.S. Salary. 
How important is it, opening new markets, to keeping those 
high-paying jobs in this country?
    Mr.Ubl. Oh, it is just incredibly important. We are very 
proud in our sector of that statistic. And we actually just had 
the Lewin Group take a look at the economic impact of the 
medical technology sector, both in the direct that you 
mentioned, but the indirect, in terms of other jobs that they 
stimulate and economic activity.
    I mean, if you consider two States where we have a high 
concentration of companies you will get a better sense, but in 
Massachusetts one in five jobs in medical technology is 
dependent on free trade; in California, one in seven jobs are 
dependent on just trade with Asia.
    So trade is an incredibly important aspect, and the typical 
medical technology company has around 50 percent of their sales 
outside of the United States.
    Mr.Chabot. Thank you.
    Mr. Wolf, relative to the pork industry, I understand it is 
really experiencing record growth and that the U.S. Is one of 
the world's leading pork-producing countries and it is the 
second-leading pork exporter. And the consumer demand is really 
high worldwide.
    With the current trade environment, did you envision a 
continued growth for the industry?
    And I don't know if you happened to see this, but I think 
it was on one of the "Good Morning America"-type shows, they 
were referring to some new survey out there talking about 
people living longer and getting cancer. And the gist of what I 
got is you are not supposed to eat anything. And as long as you 
don't eat anything, you are probably safe. And they 
particularly bashed bacon. They were commenting about--
    ChairwomanVelazquez. I saw that, yes.
    Mr.Chabot. Did you see that, too?
    ChairwomanVelazquez. Yes.
    Mr.Chabot. Now, I happen to consider bacon to be nature's 
perfect meat, myself. But they said don't eat it. And I think 
you should have this forum to defend bacon and other products. 
So go ahead.
    Mr.Wolf. Thank you very much. I appreciate your comments. 
On bacon, I feel the same.
    ChairwomanVelazquez. What is this, free advertisement here?
    Mr.Chabot. Hey.
    Mr.Wolf. The check is in the mail.
    Mr.Chabot. He is just kidding. Right?
    Mr.Wolf. Yes, of course. I am sorry. I didn't realize that.
    Mr.Chabot. That is all right.
    Mr.Wolf. No, we feel that we are in the best place to 
produce pork in the world. We can do it--we have the resources, 
we have the technology, the ability to do it. And we have a 
very healthy animal, our product that we produce.
    Our biggest thing is competing and getting the tariffs 
down, of course, and, as I said earlier, the nontariff barriers 
that they put up to prevent us, because nobody can compete with 
us on a cost-production-wise. So that is where we feel that we 
can continue to do it on a long-term basis.
    And I appreciate you bringing up the report, because we 
discussed that a little bit just a few minutes ago. I think 
everything has to be taken in moderation. If you sit down and 
eat 10 pounds of bacon a day, you will probably get sick, as 
well as any other food out there.
    Mr.Chabot. Oh, man.
    Mr.Wolf. As well as any other food out there. So I think 
the report has to be looked at very, very closely before it 
goes any further. But thank you.
    Mr.Chabot. Thank you.
    Mr. Johnson, you mentioned particularly, as a problem, 
China. And I know we are all very familiar and we hear a lot 
about the currency-manipulation aspects of what China is doing 
that is counterproductive. And you mentioned about the textile 
customs enforcement, how it is really either nonexistent or 
isn't where it ought to be.
    Other than the currency manipulation, would you tell us, 
again, what is China doing to get around the rules and just 
creating a non-level playing field that we ought to be aware of 
and that Congress perhaps should act to counterbalance that?
    Mr.Johnson. Well, I think enforcement, here, again, is key. 
We did a review of the subsidies that China is giving to its 
textile industry, 73 subsidies. I think 23 of those were 
export-related, which is a banned, on its face, subsidy by the 
WTO. And China has been doing this since it joined the WTO. And 
we have forwarded these to USTR, to go after them in the WTO.
    But our experience with the current structure of the trade 
administration in this country is that the resources go too 
heavily toward negotiation and too little toward enforcement. 
And that enforcement is not seen as a strong career path, 
either within Commerce or within USTR. If there is a way to 
make the enforcement of these agreements, the investigatory 
ability of the Commerce Department and USTR, if there is a way 
to enhance that and to also help small- and medium-sized 
businesses bring cases when they find them to the groups--we 
had to do a lot of digging and a lot of searching. We are an 
association with a lot of members; we could afford to do that. 
Most small companies can't.
    I would suggest those three areas.
    Mr.Chabot. Okay. Thank you.
    And finally, Ms. Ling, you referenced the establishment of 
market-accepted international standards. Could you describe the 
efforts that are under way to do so currently?
    Ms.Ling. Within ASME, we have what we call a Boiler and 
Pressure Vessel code. It is about 85 years old. It began purely 
as a U.S. Code, accepted by State law and cities. It is now 
accepted in over 100 countries around the world.
    The importance of, again, the right language in the text is 
to ensure that the U.S. Businesses that use the ASME standards 
can get their products accepted in other nations without going 
through the unnecessary hoops and loops based on technical 
regulations and technical requirements. So that is an example 
of the international standards that organizations such as ASME 
has developed.
    As far as the U.S. Technical consensus standards, I would 
estimate there is probably tens upon tens upon tens of 
thousands of standards, impacting every sector represented here 
today at this table and every other sector that is not. 
Standards, again, are a non-sexy product developed by 
organizations such as ASME, but they underpin every product 
that goes out.
    Mr.Chabot. Thank you very much, Ms. Ling.
    And I yield back the balance of my time.
    ChairwomanVelazquez. Mr. Gonzalez?
    Mr.Gonzalez. Thank you very much, Madam Chair.
    And my apologies to the witness. I missed all of your 
testimony. Of course, the good thing is you have your written 
states, which greatly benefits us as we read through them with 
staff.
    I want to commend the Chairwoman for what she has been 
doing in this Committee. You probably have picked up that our 
mission and our goal is the interest of the small-business man 
and woman in this country when it comes to governmental 
policies and such. And it has been my experience that we really 
never dealt to the extent that we have in all the different 
areas.
    But the shocking thing, of course, is that, many times, 
small business is kind of an afterthought as we go through huge 
policy considerations and programs and agendas. And I will give 
you two real quick examples.
    We have actually had hearings with the FCC Chairman, 
regarding the sale of spectrum and such--no one ever heard of 
that--but in the context of, what does that mean for small 
business? And I think what we learned was small business can't 
compete in the auction for spectrum. And so it was interesting. 
So, then we have to start figuring out, how do we get small-
business men and women at the table after the fact?
    Then we go in for the Centers for Medicaid and Medicare on 
competitive bidding. Was that just yesterday? I can't even 
remember. But we had these hearings. Huge changes, and the 
whole intent is to reduce the number of vendors. Well, you know 
who is going to go first; it is going to be the smaller 
businesses. So then we have to figure out how we are going to 
address that.
    Now, when it comes to trade, it is really difficult. And I 
know that we hear from our trade representatives that small 
businesses are being looked at and cared for and such. But the 
truth is that, unless we are all really vigilant--and I want to 
thank you for your contribution that you are making--regarding, 
for instance, enforcement, making sure that the regulatory 
scheme in another country doesn't really prohibit, now that we 
have the reduction or elimination of tariffs, from you actually 
doing business. I mean, that is important. We have to start 
figuring out how to become your advocates.
    The good news is that you have got an incredibly aggressive 
Chairwoman. And I am not trying to just butter her up; she 
doesn't need it, believe me.
    But that is the interesting thing. And so, I think we need 
to get that message out there.
    And, again, I just apologize, because what I gathered here 
in your testimony is that you will throw things out that are 
actually tangible, that we can promote your interest.
    And so, I guess if there was--again, and you probably went 
over it--but to each of the witnesses, one small, incremental 
but important thing that we can do for you in the context of 
free trade agreements, because they are going to be pretty 
contentious. Now, we have labor out there; it is pretty well-
represented. We have the environmentalists are pretty well-
represented. We have big, big businesses and manufacturers and 
producers that are represented.
    What is the one thing that you could say, just keep an eye 
out for us and that is truly meaningful?
    Mr.Ubl. Well, first, let me applaud you for the hearing 
yesterday. We had a witness who testified.
    And if I could attempt to try to combine the two, what you 
are doing with this hearing and bringing attention to 
transparency around nontariff barriers--you know, competitive 
bidding happens in all the foreign markets that we operate in, 
but they do it without proposed rule-making, without 
transparency, without congressional oversight, in many cases. 
So, you know, nontariff barriers and addressing nontariff 
barriers in these agreements is just critical for our members. 
So if you ask me one thing.
    I guess the other one thing, I am tempted to say, is just 
keep them moving. You know, trade agreements work; they work 
for our sector. Work in a bipartisan way to keep them moving, 
because they are working. They are creating jobs in our space. 
And jobs in our space, as we talked about while you were away, 
pay 30 percent more, on average, than the U.S. Jobs. So it is a 
job creator. And just keep them moving.
    Mr.Gonzalez. Mr. Wolf?
    Mr.Wolf. I would probably have to agree with everything Mr. 
Ubl just said. It was very appropriate. Mainly to just keep the 
trade moving, keep increasing, if we can. Thank you.
    Mr.Johnson. I would add, make sure they are enforced. Mr. 
Veroneau, a very insightful question, what does USTR do to make 
sure that Customs enforces the agreement? Well, we have gone 
back to USTR and we have said, "Customs is not enforcing this 
agreement. What are you going to do?" and they say, "Well, we 
will pass on your concerns," and we believe they do, but they 
have no control over Customs. And Customs, if it doesn't want 
to, it just doesn't.
    And so I don't know how you go back and you say, "Is this 
agreement being enforced or not, and what is being done about 
it?", but there needs to be some kind of a review or an 
increased emphasis in manpower on how are these agreements 
being implemented and enforced.
    Mr.Gonzalez. Thank you.
    Ms. Ling?
    Ms.Ling. Again, text of trade agreements, but in this area, 
in addition to international standards, it would be conforming 
assessment, and that includes the testing and inspection that 
can create nontariff barriers to trade.
    It would be important that text agreements currently in the 
future include language that provide national treatment within 
the TBT Agreement context. And that means that U.S. 
Manufacturers are not treated unfairly within the testing and 
inspection protocols of a nation.
    Thank you.
    Mr.Gonzalez. Thank you.
    Mr. Ellerhorst?
    Mr.Ellerhorst. We are very a small business. We don't 
really have a full-time import-export person on our staff. It 
is very, very easy, in running your own business, to get so 
inwardly focused that you really don't have a good idea of the 
changes that are happening, other than when you start feeling 
them in the marketplace.
    I would say an effort to work with the U.S. Trade 
organizations and things, to come up with ways of identifying 
the opportunities and the things that you are offering to small 
businesses. Because a lot of times, I don't think people, 
businesses our size, really know--we don't really get the 
information. We read on the news that this happens, but we 
don't know how that really impacts us, what opportunities it 
provides.
    Because, in the global marketplace shift, the smaller 
companies are the ones that must reinvent themselves, and do it 
quickly. Sometimes we are so wrapped up in doing that, we 
really get closed off from looking up, coming up for air a 
little bit and finding out, really, what opportunities the 
Government is providing us. There is help out there that we 
don't even know exists, a lot of us, already. And I think if we 
could get word to the small, small businesses that, "Hey, you 
can play in the global market; it is not just for the big 
companies anymore," I think that would be helpful.
    Mr.Gonzalez. And I do believe you need that advocate. You 
know, we work with the Small Business Administration and others 
and maybe small-business development centers. There has to be a 
way that they will have that personnel out there that you can't 
have on staff that puts you on notice regarding certain issues 
that are coming, how they impact you, or if you have a question 
about it. We have to do that.
    And just one last thought, Madam Chair, and that is I think 
we are all, really, for free trade, especially when it is the 
other country that has had tariffs and so on. But I don't think 
we can have such a simplistic attitude, saying, "Look, let's 
just go for it because they are dropping all their tariffs. 
This is a great windfall for the United States." We have to 
really look at the potential impact of the competition and who 
will benefit by it. And, again, where is the small business in 
America going to, in any way, reap any of the benefits that 
should be out there.
    So, again, just, thank you very much.
    And, again, my apologies, Madam Chair. I yield back.
    ChairwomanVelazquez. Sure.
    Mr. Gonzalez and to the witnesses and Mr. Ellerhorst, there 
are programs under the Department of Commerce. And when people 
come here and say, "But we don't know about it"--so it seems 
like they have to do a better job at doing the outreach, 
providing information.
    We have the Agriculture Marketing Service under the 
Department of Agriculture. There is the Manufacturing Extension 
Partnership and the Advanced Technology Partnership. But there 
is a role for the Federal Government to play. We are not 
asking, here, for handouts for small businesses, but when they 
do well, the American economy does well too. And then we create 
the jobs that are important and are necessary.
    I would like to follow up on what Mr. Gonzalez was talking 
about, to ask each one of you if you--well, during the whole 
negotiation process of this trade agreement, do you feel that 
there was participation with small businesses? Do you feel that 
you have some input into those trade negotiation processes?
    Mr.Ubl. I would say we felt we did, but maybe not for the 
reason you might suspect, in that we felt we had very good 
collaboration with USTR and Commerce as a trade association, as 
these negotiations proceeded. Inside the trade association, we 
have a small-business or emerging-growth entity that is 
comprised of the CEOs of our small companies. So we used that 
as a feedback mechanism as we engaged with USTR and Commerce.
    But I must say, with regard to USTR in particular, they 
spent hours with our companies as these negotiations were 
proceeding. And there is a specific chapter on medical 
technology in the Korea FTA dealing, as I mentioned in my 
testimony, with many of our critical concerns.
    Mr.Wolf. Yes, as far as the National Pork Producers 
Council, we did have representation on the trade agreements 
with Mr. Giordano.
    ChairwomanVelazquez. Let me just--yes, Mr. Johnson?
    Mr.Johnson. We did, but as part of the Textile Apparel 
Advisory Committee, in good consultation.
    ChairwomanVelazquez. Ms. Ling?
    Ms.Ling. There is also another advisory committee under 
USTR with Commerce, and that is the Advisory Committee on 
Standards. And we had input through that advisory body.
    Mr.Ellerhorst. I am unaware of any direct, but we have 
international plastics associations and things, and I am sure--
    ChairwomanVelazquez. Sure.
    All right. I think that basically, if Mr. Gonzalez has no 
further questions--
    Mr.Gonzalez. Nothing further.
    ChairwomanVelazquez. Look, I think the timing of this 
hearing is very important, since we are going to be dealing 
with Peru probably next week?
    Mr.Gonzalez. I think so.
    ChairwomanVelazquez. And then Colombia, Panama and Korea. 
And there are some important issues that continue to be out 
there. But let me just say that, in the sense that this 
Committee--we do not have jurisdiction over trade agreements, 
but we do have influence over the decision-making process, 
especially since the jurisdiction of this Committee was 
expanded. And since Democrats, the different chairmen, we meet 
every Tuesday, we discuss and we go over legislation. So I 
share many of the things that we hear in these hearings. So it 
is very important for you to come to us and spend some time and 
discuss the issues that are important to you.
    We hope that, as this legislation moves forward, that we 
feel more comfortable, in the sense that we feel provisions 
that are needed to be included as part of the trade agreements 
representing small businesses, that will be there, that the 
Department of Commerce, also, and USTR will provide the tools 
and the resources that are needed to make sure that, yes, laws 
are good, they look good on paper, in the books, but it is 
important--enforcement is important.
    And, Mr. Johnson, I hear you loud and clear.
    So, to all of you, thank you.
    And members have 5 legislative days to submit statements 
and other materials for the hearing record.
    This hearing now is adjourned. Thank you.
    [Whereupon, at 1:03 p.m., the Committee was adjourned.]

    [GRAPHIC] [TIFF OMITTED] T9378.001
    
    [GRAPHIC] [TIFF OMITTED] T9378.002
    
    [GRAPHIC] [TIFF OMITTED] T9378.003
    
    [GRAPHIC] [TIFF OMITTED] T9378.004
    
    [GRAPHIC] [TIFF OMITTED] T9378.005
    
    [GRAPHIC] [TIFF OMITTED] T9378.006
    
    [GRAPHIC] [TIFF OMITTED] T9378.007
    
    [GRAPHIC] [TIFF OMITTED] T9378.008
    
    [GRAPHIC] [TIFF OMITTED] T9378.009
    
    [GRAPHIC] [TIFF OMITTED] T9378.010
    
    [GRAPHIC] [TIFF OMITTED] T9378.011
    
    [GRAPHIC] [TIFF OMITTED] T9378.012
    
    [GRAPHIC] [TIFF OMITTED] T9378.013
    
    [GRAPHIC] [TIFF OMITTED] T9378.014
    
    [GRAPHIC] [TIFF OMITTED] T9378.015
    
    [GRAPHIC] [TIFF OMITTED] T9378.016
    
    [GRAPHIC] [TIFF OMITTED] T9378.017
    
    [GRAPHIC] [TIFF OMITTED] T9378.018
    
    [GRAPHIC] [TIFF OMITTED] T9378.019
    
    [GRAPHIC] [TIFF OMITTED] T9378.020
    
    [GRAPHIC] [TIFF OMITTED] T9378.021
    
    [GRAPHIC] [TIFF OMITTED] T9378.022
    
    [GRAPHIC] [TIFF OMITTED] T9378.023
    
    [GRAPHIC] [TIFF OMITTED] T9378.024
    
    [GRAPHIC] [TIFF OMITTED] T9378.025
    
    [GRAPHIC] [TIFF OMITTED] T9378.026
    
    [GRAPHIC] [TIFF OMITTED] T9378.027
    
    [GRAPHIC] [TIFF OMITTED] T9378.028
    
    [GRAPHIC] [TIFF OMITTED] T9378.029
    
    [GRAPHIC] [TIFF OMITTED] T9378.030
    
    [GRAPHIC] [TIFF OMITTED] T9378.031
    
    [GRAPHIC] [TIFF OMITTED] T9378.032
    
    [GRAPHIC] [TIFF OMITTED] T9378.033
    
    [GRAPHIC] [TIFF OMITTED] T9378.034
    
    [GRAPHIC] [TIFF OMITTED] T9378.035
    
    [GRAPHIC] [TIFF OMITTED] T9378.036
    
    [GRAPHIC] [TIFF OMITTED] T9378.037
    
    [GRAPHIC] [TIFF OMITTED] T9378.038
    
    [GRAPHIC] [TIFF OMITTED] T9378.039
    
    [GRAPHIC] [TIFF OMITTED] T9378.040
    
    [GRAPHIC] [TIFF OMITTED] T9378.041
    
    [GRAPHIC] [TIFF OMITTED] T9378.042
    
    [GRAPHIC] [TIFF OMITTED] T9378.043
    
    [GRAPHIC] [TIFF OMITTED] T9378.044
    
    [GRAPHIC] [TIFF OMITTED] T9378.045
    
    [GRAPHIC] [TIFF OMITTED] T9378.046
    
    [GRAPHIC] [TIFF OMITTED] T9378.047
    
    [GRAPHIC] [TIFF OMITTED] T9378.048
    
    [GRAPHIC] [TIFF OMITTED] T9378.049
    
    [GRAPHIC] [TIFF OMITTED] T9378.050
    
    [GRAPHIC] [TIFF OMITTED] T9378.051
    
    [GRAPHIC] [TIFF OMITTED] T9378.052
    
    [GRAPHIC] [TIFF OMITTED] T9378.053
    
    [GRAPHIC] [TIFF OMITTED] T9378.054
    
    [GRAPHIC] [TIFF OMITTED] T9378.055
    
    [GRAPHIC] [TIFF OMITTED] T9378.056
    
    [GRAPHIC] [TIFF OMITTED] T9378.057
    
    [GRAPHIC] [TIFF OMITTED] T9378.058
    
    [GRAPHIC] [TIFF OMITTED] T9378.059
    
    [GRAPHIC] [TIFF OMITTED] T9378.060
    
    [GRAPHIC] [TIFF OMITTED] T9378.061
    
    [GRAPHIC] [TIFF OMITTED] T9378.062
    
    [GRAPHIC] [TIFF OMITTED] T9378.063
    
    [GRAPHIC] [TIFF OMITTED] T9378.064
    
    [GRAPHIC] [TIFF OMITTED] T9378.065
    
    [GRAPHIC] [TIFF OMITTED] T9378.066
    
    [GRAPHIC] [TIFF OMITTED] T9378.067
    
    [GRAPHIC] [TIFF OMITTED] T9378.068
    
    [GRAPHIC] [TIFF OMITTED] T9378.069
    
    [GRAPHIC] [TIFF OMITTED] T9378.070
    
    [GRAPHIC] [TIFF OMITTED] T9378.071
    
    [GRAPHIC] [TIFF OMITTED] T9378.072
    
    [GRAPHIC] [TIFF OMITTED] T9378.073
    
    [GRAPHIC] [TIFF OMITTED] T9378.074
    
    [GRAPHIC] [TIFF OMITTED] T9378.075
    
    [GRAPHIC] [TIFF OMITTED] T9378.076
    
    [GRAPHIC] [TIFF OMITTED] T9378.077
    
    [GRAPHIC] [TIFF OMITTED] T9378.078
    
    [GRAPHIC] [TIFF OMITTED] T9378.079
    
    [GRAPHIC] [TIFF OMITTED] T9378.080
    
    [GRAPHIC] [TIFF OMITTED] T9378.081
    
    [GRAPHIC] [TIFF OMITTED] T9378.082
    
    [GRAPHIC] [TIFF OMITTED] T9378.083
    
    [GRAPHIC] [TIFF OMITTED] T9378.084
    
    [GRAPHIC] [TIFF OMITTED] T9378.085
    
    [GRAPHIC] [TIFF OMITTED] T9378.087
    
    [GRAPHIC] [TIFF OMITTED] T9378.088
    
    [GRAPHIC] [TIFF OMITTED] T9378.089
    
    [GRAPHIC] [TIFF OMITTED] T9378.090
    
    [GRAPHIC] [TIFF OMITTED] T9378.091
    
    [GRAPHIC] [TIFF OMITTED] T9378.092
    
    [GRAPHIC] [TIFF OMITTED] T9378.093
    
    [GRAPHIC] [TIFF OMITTED] T9378.094
    
    [GRAPHIC] [TIFF OMITTED] T9378.095
    
    [GRAPHIC] [TIFF OMITTED] T9378.096
    
    [GRAPHIC] [TIFF OMITTED] T9378.097
    
    [GRAPHIC] [TIFF OMITTED] T9378.098
    
    [GRAPHIC] [TIFF OMITTED] T9378.099
    
    [GRAPHIC] [TIFF OMITTED] T9378.100
    
    [GRAPHIC] [TIFF OMITTED] T9378.101
    
    [GRAPHIC] [TIFF OMITTED] T9378.102
    
    [GRAPHIC] [TIFF OMITTED] T9378.103
    
    [GRAPHIC] [TIFF OMITTED] T9378.104
    
    [GRAPHIC] [TIFF OMITTED] T9378.105
    
    [GRAPHIC] [TIFF OMITTED] T9378.106
    
    [GRAPHIC] [TIFF OMITTED] T9378.107
    
    [GRAPHIC] [TIFF OMITTED] T9378.108
    
    [GRAPHIC] [TIFF OMITTED] T9378.109
    
    [GRAPHIC] [TIFF OMITTED] T9378.110
    
    [GRAPHIC] [TIFF OMITTED] T9378.111
    
    [GRAPHIC] [TIFF OMITTED] T9378.112
    
    [GRAPHIC] [TIFF OMITTED] T9378.113
    
    [GRAPHIC] [TIFF OMITTED] T9378.114
    
    [GRAPHIC] [TIFF OMITTED] T9378.115
    
                                 
