[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



 
                  THE TRADE ADVISORY COMMITTEE SYSTEM

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

                                HEARING

                               before the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 21, 2009

                               __________

                           Serial No. 111-28

                               __________

         Printed for the use of the Committee on Ways and Means




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                      COMMITTEE ON WAYS AND MEANS

                 CHARLES B. RANGEL, New York, Chairman

FORTNEY PETE STARK, California       DAVE CAMP, Michigan
SANDER M. LEVIN, Michigan            WALLY HERGER, California
JIM McDERMOTT, Washington            SAM JOHNSON, Texas
JOHN LEWIS, Georgia                  KEVIN BRADY, Texas
RICHARD E. NEAL, Massachusetts       PAUL RYAN, Wisconsin
JOHN S. TANNER, Tennessee            ERIC CANTOR, Virginia
XAVIER BECERRA, California           JOHN LINDER, Georgia
LLOYD DOGGETT, Texas                 DEVIN NUNES, California
EARL POMEROY, North Dakota           PATRICK J. TIBERI, Ohio
MIKE THOMPSON, California            GINNY BROWN-WAITE, Florida
JOHN B. LARSON, Connecticut          GEOFF DAVIS, Kentucky
EARL BLUMENAUER, Oregon              DAVID G. REICHERT, Washington
RON KIND, Wisconsin                  CHARLES W. BOUSTANY, JR., 
BILL PASCRELL, JR., New Jersey       Louisiana
SHELLEY BERKLEY, Nevada              DEAN HELLER, Nevada
JOSEPH CROWLEY, New York             PETER J. ROSKAM, Illinois
CHRIS VAN HOLLEN, Maryland
KENDRICK B. MEEK, Florida
ALLYSON Y. SCHWARTZ, Pennsylvania
ARTUR DAVIS, Alabama
DANNY K. DAVIS, Illinois
BOB ETHERIDGE, North Carolina
LINDA T. SANCHEZ, California
BRIAN HIGGINS, New York
JOHN A. YARMUTH, Kentucky

             Janice Mays, Chief Counsel and Staff Director

                   Jon Traub, Minority Staff Director

                                 ______

                         Subcommittee on Trade

                  SANDER M. LEVIN, Michigan, Chairman

JOHN S. TANNER, Tennessee            KEVIN BRADY, Texas, Ranking Member
CHRIS VAN HOLLEN, Maryland           GEOFF DAVIS, Kentucky
JIM McDERMOTT, Washington            DAVID G. REICHERT, Washington
RICHARD E. NEAL, Massachusetts       WALLY HERGER, California
LLOYD DOGGETT, Texas                 DEVIN NUNES, California
EARL POMEROY, North Dakota
BOB ETHERIDGE, North Carolina
LINDA T. SANCHEZ, California

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Ways and Means are also published 
in electronic form. The printed hearing record remains the official 
version. Because electronic submissions are used to prepare both 
printed and electronic versions of the hearing record, the process of 
converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.


                            C O N T E N T S

                               __________
                                                                   Page

Advisory of July 21, 2009, announcing the hearing................     2

                               WITNESSES

Lisa A. Garcia, Assistant USTR for Intergovernmental Affairs and 
  Public Engagement, United States Trade Representative..........     7
Loren Yager, Ph.D., Director, International Affairs and Trade, 
  Government Accountability Office...............................    14
Daniel Magraw, President and Chief Executive Officer, Center for 
  International Environmental Law; Member, Trade and Environment 
  Policy Advisory Committee......................................    48
                               __________
Timothy K. Hoelter, Vice President, Government Affairs, Harley-
  Davidson Motor Company; Chairman, Industry Trade Advisory 
  Committee 04, Consumer Goods...................................    56
Ellen R. Shaffer, Ph.D., MPH, Co-Director, Center for Policy 
  Analysis on Trade and Health...................................    64
Owen E. Herrnstadt, Director of Trade and Globalization, 
  International Association of Machinists and Aerospace Workers; 
  Liaison, Labor Advisory Committee..............................    77
Brian T. Petty, Senior Vice President, Government Affairs 
  International Association of Drilling Contractors; Chairman, 
  Industry Trade Advisory Committee 02, Automotive Equipment and 
  Capital Goods..................................................    87

                              SUBMISSIONS

.................................................................
American Association of Exporters and Importers, Statement.......   103
Michael J. Stanton, Statement....................................   106
Coalition for a Prosperous America, Letter.......................   112
V.M. (Jim) DeLisi, Letter........................................   113
Humane Society International, Statement..........................   115
Maine Citizens' Trade Policy Commission, New Hampshire Citizens' 
  Trade Policy Commission, and Vermont Commission on 
  International Trade and State Sovereignty, Statement...........   116
Maine Citizen Trade Policy Commission, Statement.................   117
Susan Kohn Ross, Letter..........................................   118
Raymond C. Offenheiser, Statement................................   119
Susanna Rankin Bohme, Letter.....................................   126
Edward J. Black, Letter..........................................   127
The Council of State Governments Eastern Regional Conference, 
  Statement......................................................   128
The Society of Chemical Manufacturers and Affiliates, Letter.....   129
Vermont Commission on International Trade and State Sovereignty, 
  Letter.........................................................   131
William A. Gillon, Statement.....................................   132
Maralyn Chase, Peggy Pierce, Jill Cohenour, Steven D'Amico, and 
  Susi Nord, Statement...........................................   134


                       HEARING ON TRADE ADVISORY



                            COMMITTEE SYSTEM

                              ----------                              


                         TUESDAY, JULY 21, 2009

             U.S. House of Representatives,
                       Committee on Ways and Means,
                                     Subcommittee on Trade,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:09 a.m., in 
Room 1100, Longworth House Office Building, the Honorable 
Sander M. Levin [chairman of the subcommittee] presiding.
    [The advisory of the hearing follows:]

HEARING ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

  Chairman Levin Announces Hearing on Trade Advisory Committee System

July 21, 2009

By (202) 225-6649

    House Ways and Means Committee Trade Subcommittee Chairman Sander 
M. Levin today announced that the Committee on Ways and Means 
Subcommittee on Trade will hold a hearing on how the system of trade 
advisory committees is functioning, and on how to increase transparency 
and public participation in the development of U.S. trade policy. The 
hearing will take place on Tuesday, July 21, 2009, in Room 1100, 
Longworth House Office Building, beginning at 10:00 a.m.
      
    In view of the limited time available to hear witnesses, oral 
testimony at this hearing will be from invited witnesses only. However, 
any individual or organization not scheduled for an oral appearance may 
submit a written statement for consideration by the Subcommittee and 
for inclusion in the printed record of the hearing. A list of invited 
witnesses will follow.
      

FOCUS OF THE HEARING:

      
    The hearing will examine the development of trade policy from 
several perspectives. The Subcommittee will ask the Administration to 
discuss its recently-initiated policy review and consultations 
concerning the trade advisory committees. The Subcommittee is 
interested to hear from stakeholders whether administrative or 
statutory changes, building on revisions implemented in recent years, 
might broaden the range of views represented and permit the advisory 
committees to provide more timely and useful recommendations. Finally, 
the Subcommittee is requesting testimony on steps that could be taken 
to encourage public outreach and promote greater public engagement in 
U.S. trade policy.
      

BACKGROUND:

      
    Established under the Trade Act of 1974, the trade advisory 
committee system is intended to provide a formal mechanism through 
which U.S. trade negotiators receive information and advice from the 
private sector with respect to U.S. negotiating positions before and 
during trade negotiations. The system is arranged in three tiers: the 
President's Advisory Committee for Trade Policy and Negotiations 
(ACTPN), five policy advisory committees dealing with environment, 
labor, agriculture, Africa, and intergovernmental issues, and 22 
technical advisory committees in the areas of industry and agriculture. 
The trade advisory committees have participated in the formulation of 
policy for all trade negotiations and provided advice to the Executive 
and Congress on concluded trade agreements prior to implementation.
    Since 1974, the scope of U.S. trade agreements has expanded beyond 
tariffs and other ``border'' measures to encompass subjects such as 
intellectual property rights, food and product safety, environmental 
regulations and labor rights. The subcommittee will consider the extent 
to which environmental, labor, public health, development, and civil 
society stakeholder perspectives are or should be represented on the 
advisory committees. In the context of the Trade Act's requirement that 
advisory committee representation should be ``balanced'' or 
``representative,'' is it appropriate either to establish separate 
advisory committees devoted to these concerns or to ensure that 
existing advisory committees include such stakeholders?
    In announcing the hearing, Chairman Levin said, ``The new 
Administration is committed, and properly so, to making sure our 
international trade discussion is open to new perspectives. Now is a 
good time to look at how the trade advisory committees can be part of 
developing better trade policies.''
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
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For questions, or if you encounter technical problems, please call 
(202) 225-1721.
      

FORMATTING REQUIREMENTS:

      
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    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://democrats.waysandmeans.house.gov.

                                 

    Chairman LEVIN. The subcommittee will come to order.
    Welcome, everybody.
    I think we all know that this morning this subcommittee is 
going to take a look at how the advisory committee structure 
relating to trade is working. This is, I think, a particularly 
timely effort because the new administration has started a 
review of the advisory system, and there is legislation that is 
pending on this issue.
    The staffs working together have prepared a memo on the 
advisory structure, and as I had a chance to read this 
excellent memo, I was struck by a few points.
    First of all, it is a rather elaborate structure. It covers 
so many areas. There is some thought that it needs to have a 
broader participation. Clearly this has been, as I said, an 
elaborate structure, with 28 different advisory committees, and 
the negotiators in the administrations in the past have had 
interchange with these various committees. So that is the first 
point, an elaborate structure that perhaps should be even 
expanded.
    The second point that has come through in these materials 
as we prepare for today is how trade has changed since these 
structures were started. The breadth of trade issues has 
dramatically increased, and so, therefore, the mandates to the 
various advisory committees, that mandate has also changed.
    But the third point, and I think we will be discussing this 
today, is how effective the advisory committees have been, how 
much meaningful interchange there has been between the 
committees and USTR and the rest of the administration in the 
past. And I do think we need to very much focus on that issue, 
because as trade has become more and more important in the last 
35 to 40 years, as the scope of it has very much increased, I 
think the role of advisory committees therefore has become more 
salient, at least it should have become more salient.
    So I hope today, Mr. Brady, that you and I and our 
colleagues can really hone in on the issue of the effectiveness 
of these committees and how we can improve their effectiveness. 
I think that is such an important issue. Though we may be 
tempted to ask witnesses about issues beyond the role of 
advisory committee, that structure, I do hope that we can 
really maintain a focus on the issue before us because it is 
that important.
    So, Mr. Brady, if you will make your opening statement, 
which we are looking forward to, and then we will start the 
hearing with two panels.
    The first will be from Lisa Garcia, who is an assistant 
U.S. trade rep, who I think you are heading up the review 
within USTR; and also from Dr. Loren Yager, who is working on 
this issue and has had a lot of experience.
    So, Mr. Brady, if you will make your opening remarks, and 
then we will launch right into the testimony.
    Mr. BRADY. Thank you, Chairman Levin.
    I agree with you. Policymakers should have access to the 
views of stakeholders on all sides of trade issues. A critical 
question today is, how best can we allow everyone to have a 
voice while still maintaining the effectiveness and flexibility 
of the information flow? Like you, I am eager to hear testimony 
on this key part.
    Let me put up on the screen sort of where we are today on 
input. Here is the Tier 1 committee, the President's Advisory 
Committee For Trade Policy Negotiations, the five committees 
that advise USTR and the President on general policy areas. 
Then you will see 6 agriculture technical advisory committees, 
and then 16 industry trade advisory committees, and each of the 
yellow boxes within that structure are committees that have 
labor, environment, public health, universities or State and 
local government representatives on there providing their 
input.
    Without question, the private sector and the administration 
coordinate extensively on trade. The President has the Advisory 
Committee on Trade Policy Negotiations, which includes 
representatives from labor, environment, industry, ag and small 
businesses.
    USTR has also created policy advisory committees to provide 
advice on cross-cutting social and economic issues, such as 
labor and environment. USTR and the Departments of Commerce and 
Agriculture also meet with the industry and agriculture trade 
advisory committees which provide technical nuts and bolts 
advice on functional trade issues at the ground level.
    But this formal structure isn't the only game in town. USTR 
also holds public hearings, seeks comments through Federal 
Register notices, and holds meetings with relevant sectors and 
nongovernmental organizations. The Bush administration did it, 
and the Obama administration is doing it.
    The anti-counterfeiting trade agreement negotiation is a 
case in point, and USTR has been seeking comments not only from 
clear advisers within the industry trade advisory committees 
but also from other noncommercial interests and the general 
public. The Investment Working Group that reports to the ITAC 
chairs is another example of effective ad hoc information flow.
    I am encouraged that more people want to be part of the 
advisory committee system. That tells me the system must be 
performing reasonably well. Folks don't typically line up to 
jump on a sinking ship.
    But there is another side that is far less encouraging, and 
sadly, it hits much closer to home. We in Congress have our own 
housekeeping to do when it comes to providing opportunities for 
Americans to share their views on trade policy. I note with 
more than a tinge of disappointment that, on that score, we are 
failing.
    It is all supposed to start right here in this committee, 
the Ways and Means Committee, which has jurisdiction over trade 
agreements, but we are, unfortunately, redefining the phrase 
``ground zero.'' We have convened zero hearings in the 110th 
and 111th Congress on our pending free trade agreements since 
they have been signed.
    Members on our side have asked for and would warmly welcome 
a hearing, for example, on how to identify benchmarks in 
Colombia, and I think members of the public would jump at the 
chance to testify here on that topic and give us their very 
diverse views.
    We have held a grand total of zero hearings on the Trade 
Preference Programs, a tool to promote the economies of our 
developing trading partners; although I should add Chairman 
Levin and I and staff are in discussion on how we gather input 
from people because there are a lot of good ideas on how to 
move forward on preferences.
    Unfortunately, the new Democrat leadership in both Chambers 
have called zero meetings of the Congressional Oversight Group. 
This is the statutorily mandated group in which all committees 
with jurisdiction communicate to the administration what we are 
hearing from our constituents, the people that put us here. The 
statute requires that the Congressional Oversight Group convene 
within 30 days of the beginning of each Congress. We haven't 
done so this Congress or last.
    USTR, though, needs to consult better with Congress, too, 
so we have the information we need to engage productively with 
the American people. It may not shock you that Republicans feel 
shut out of the formulation of the administration's trade 
policy. But what may be more surprising is that the frustration 
appears to be bipartisan.
    Max Baucus, chairman of the Senate Finance Committee, 
readily acknowledged at a recent hearing he was not consulted 
on the administration's decision to have a timeout on trade 
until the articulation of a new trade policy framework and the 
passage of health care reform in Congress. It was, in his 
words, ``a shot out of the blue.'' ``I read about it in a 
newspaper article,'' lamented the Montana Senator.
    So while it is well and good and I think important to shine 
light on the advisory committee system to assess whether it is 
adequately performing its role, we must at the same time grade 
ourselves. We need to review our own performance on how well we 
are obtaining public input on trade.
    Let me be clear, I am not talking about passing free trade 
agreements, although I would love to see that. I am just asking 
whether or not we are doing enough here in this hearing and 
Congress to open up the dialogue with the American people on 
pending and future trade initiatives.
    This hearing is an excellent start, Mr. Chairman, and I 
appreciate your leadership on this, but I am hopeful there is 
much more we can do together in the future.
    Thank you. I yield back.
    Chairman LEVIN. All right.
    We will hear the testimony. Let me just mention that a 
number of the trade preferences do expire at the end of the 
year, Mr. Brady, and we will be having meetings and hearings on 
these preferences well before the end of the year, as you and I 
have discussed.
    Also, the administration has made clear that they are 
beginning work and I think it is increasing its activity in 
terms of a statement of overall trade policy of this 
administration. It is a new administration. It has indicated a 
desire to have new trade policies. I think everybody realizes 
that there are other issues pending before this Congress which 
have, I think, understandably preoccupied the attention of the 
administration and of the House of Representatives and of the 
U.S. Senate.
    I believe there is no lack of inattention to trade issues. 
Indeed, I think it is quite the opposite. I also think, though, 
that it is vital that there be a basic framework for a new 
trade policy rather than trying to take these ad hoc. I have 
confidence that that process will continue in a very time-
relevant fashion.
    So, we will focus today on the role of the advisory 
committees. As I said, the structure has been there in recent 
years. I am not sure how effective it has been. I think one of 
the issues before us today is whether what is true on paper has 
been true these 8-10 years in terms of the real back and forth 
between the public and the administration and ourselves on 
trade policy.
    Okay. We are first going to hear from Lisa Garcia of USTR; 
and then Dr. Yager, the director of International Affairs and 
Trade for GAO.
    Ms. GARCIA, if you would start. Your testimony will be 
placed in the record. If you would, try to summarize it. Pick 
and choose as you would like as to what you think are the most 
relevant points as you have begun work within USTR and a review 
of these committees.
    Thank you both for joining us.

        STATEMENT OF LISA A. GARCIA, ASSISTANT USTR FOR 
INTERGOVERNMENTAL AFFAIRS AND PUBLIC ENGAGEMENT, UNITED STATES 
                      TRADE REPRESENTATIVE

    Ms. GARCIA. Chairman Levin, Ranking Member Brady and other 
distinguished Members of the Subcommittee, on behalf of the 
United States Trade Representative, USTR, thank you for the 
opportunity to describe our advisory committee system and 
USTR's outreach activities.
    Ambassador Kirk is dedicated to crafting that policy in a 
transparent manner by sharing with the public and seeking input 
from stakeholders. The Office of the United States Trade 
Representative considers the trade advisory committee system 
and our outreach activities to be critical to both the crafting 
and implementing of U.S. trade.
    My written remarks include a brief description of the trade 
advisory committee system, but I would like to focus my remarks 
this morning on USTR's current review of the advisory committee 
system. That review is ongoing. However, USTR is committed to 
two results: first, making effective use of the committees; and 
second, ensuring the committees are more representative of 
diverse interests.
    With regard to that result, USTR has already made 
significant use of the committees. Ambassador Ron Kirk has 
already met with the Advisory Committee For Trade Policy and 
Negotiations, ACTPN; the Trade Advisory Committee for Africa, 
TACA; the Trade and Environmental Policy Advisory Committee, 
TEPAC; and the Labor Advisory Committee, LAC, liaison.
    My office has maintained the Intergovernment Policy 
Advisory Committee, IGPAC, and the State Point of contact, SPOC 
monthly calls, and we have scheduled a call next week with the 
Agriculture Policy Advisory Committee and the Agriculture Trade 
Advisory Committee, ATAC, members.
    Moreover, as GAO noted in its 2007 report, in the past, 
some committees have not been fully utilized and have lapsed 
entirely. We are committed to preventing that from happening 
again. To that end, we have already begun work on selecting new 
members for the ACTPN whose charter expires March of 2010. The 
Department of Commerce, which jointly administers the ITACs 
whose charters expire in February 2010 have similarly already 
begun the process of rechartering and is on track to complete 
this process before the deadline.
    We have also already taken steps to expand the range of 
interests to be represented on the committees. We believe that 
the first logical step of the review was to focus on the Tier 1 
ACTPN committee. That portion of the review is well along the 
way. We have sent a list of potential candidates to the White 
House. While it is not appropriate at this time to release 
names or list the organizations these candidates represent, 
since the vetting process is ongoing, I can share that several 
candidates represent consumer and public health interests. 
Thus, such voices will be represented at the very highest level 
of the advisory committee system on the newly constituted ACTPN 
and will have access to the USTR security advisor Web site and 
will therefore have access to all the information that is made 
available to other cleared advisers.
    In addition, as part of the regularly scheduled chartering 
effort, we seek additional opportunities for representatives of 
civil society, consumer groups and public health interests to 
serve on their Tier 2 committees. NGO representatives have 
already been added to some of the Tier 3 committees where 
appropriate. That review will include whether the current 
committees are the right ones, as well as whether the 
memberships fully represent the interests affected by the 
sectors covered by those committees.
    If certain interests cannot be adequately represented 
within the existing committee structure, USTR will explore the 
establishment of a new committee. We would want to ensure that 
such a committee would be flexible enough to absorb 
representatives from new interest areas as needed.
    The advisory committee system is only one mechanism USTR 
uses to outreach with the public and solicit their advice on 
U.S. trade policy. We have launched a new interactive Web site. 
The new site gives us the ability to share comments with the 
ambassador and the opportunity to be part of our online 
community.
    As I have detailed, the Office of the United States Trade 
Representative is making every effort to ensure that USTR's 
work is both open and transparent and guided by the American 
public that we serve. Working together, we can fulfill 
President Obama's vision of a trade policy that works better 
for American workers and families.
    Once again, Mr. Chairman, I appreciate the opportunity to 
testify before you today and before the Members of the 
Subcommittee of Trade. I would be happy to answer any questions 
that you might have.
    [The prepared statement of Ms. Garcia follows:]
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    Chairman LEVIN. Thank you very much, Ms. Garcia.
    Dr. Yager, we look forward to your testimony. Thank you for 
coming.

   STATEMENT OF LOREN YAGER, PH.D., DIRECTOR, INTERNATIONAL 
      AFFAIRS AND TRADE, GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. YAGER. Mr. Chairman, Ranking Member Brady, Members of 
the Subcommittee, thank you for the opportunity to appear today 
before the subcommittee to provide insight from GAO's work on 
the private sector trade advisory system.
    Based on extensive stakeholder and advisory committee 
input, we provided one report in 2002 on the trade advisory 
system to the Congress and another on the subject of 
congressional and private sector consultations in 2007, and we 
have been working regularly with USTR and the other agencies to 
update the status of our recommendations since that time.
    In my statement today, I will highlight our findings and 
recommendations in three key areas: first, in committee 
consultations; second, logistics of the system; and, third, the 
overall system structure, and I will discuss the changes that 
have been made by U.S. agencies to respond to our 
recommendations.
    In terms of the committee consultations, our survey of 
trade advisory committee members found high levels of 
satisfaction with many aspects of committee operations and 
effectiveness, yet more than a quarter of respondents indicated 
that the system had not realized its potential to contribute to 
U.S. trade policy. In particular, we received comments about 
the timeliness, the quality and the accountability of 
consultations.
    As a result, we made a series of recommendations to USTR 
and the other agencies to improve those aspects of the 
consultation process. Specifically, we recommended that the 
agencies adopt or amend guidelines and procedures to ensure 
that the advisory committee input is sought on a continual and 
timely basis; that consultations are meaningful; and that 
committees receive feedback on how agencies respond to their 
advice.
    In response to those recommendations, USTR and the other 
agencies made a series of improvements. For example, USTR 
instituted a monthly conference call with the chairs of all 
committees, and the agencies created a new secure Web site to 
allow all cleared advisers better access to important 
documents.
    With regard to the logistics of the system, in 2002, we 
found slow administrative procedures disrupted committee 
operations and the resources devoted to commit management were 
out of step with the required tasks. In several instances, for 
example, committees ceased to meet and thus could not provide 
advice in part because the agencies had not appointed members.
    In our 2007 review, we still found several committees had 
not been able to meet for periods of time, either because 
agencies allowed their charters to lapse or had not started the 
process of soliciting and appointing members soon enough to 
ensure committees could meet. To address these concerns, we 
recommended that USTR and the other agencies start the 
rechartering process and the member appointment processes with 
sufficient time to avoid any lapse in the ability to hold 
committee meetings and to notify Congress if their committee is 
unable to meet for more than 3 months due to an expired 
charter.
    USTR and the other agencies have taken numerous steps to 
address these recommendations. For example, in a recent 
communication, USTR described improved timelines, which should 
allow the committee rechartering to take place without 
disrupting committee business, and we will continue to follow 
this issue for the Congress. However, I should point out that, 
based on the information in the FACA Web site, some of the 
committees have not been holding regular meetings in recent 
years.
    My third issue regards representation. In addition to the 
need to improve certain committee logistics, we believe that 
stakeholder representation should be considered in any review 
of the system. In particular, as the U.S. economy and trade 
policy have shifted, the trade advisory committee system has 
needed adjustments to remain in alignment, including both a 
consideration of committee coverage as well as committee 
composition.
    In our 2002 report, we found that the structure and 
composition of the committee system had not been fully updated 
to reflect changes in the U.S. economy and U.S. trade policy. 
In 2007, several committee chairs we interviewed also expressed 
the perception that the composition of their committees was not 
optimal, either favoring one type of industry or group over 
another or over nonbusiness interests. As a result, we made a 
series of representations suggesting that USTR work with the 
other agencies to update the system and make it more relevant 
to the U.S. economy and to trade policy needs. We also 
suggested that they seek to better incorporate new trade issues 
and interests.
    In response, USTR and the other agencies more closely 
aligned the system structure and composition with the economy 
and increased the system's ability to meet negotiator needs 
more reliably. I understand the ongoing review revisits that 
issue.
    Mr. Chairman, we appreciate the opportunity to summarize 
our work before the committee and will be happy to continue to 
provide input into the ongoing discussions regarding the 
system.
    [The prepared statement of Mr. Yager follows:]
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    Chairman LEVIN. Thank you very much. I do think that the 
testimony from the two of you highlights a dynamic within the 
discussion of trade over the last decade.
    Ms. Garcia, you indicate that the new USTR has tried to 
open up the channels of communication back and forth between 
USTR and the private sector.
    Dr. Yager, though, you do so somewhat gingerly. I think 
your testimony indicates that, while the structure has been 
there, it hasn't always been effective. Some of the groups 
haven't met. There has been underrepresentation in certain 
cases.
    So, let me just say, I think what the two of you have said 
really characterizes the state of affairs regarding discussion 
of trade policy the last decade, and I think it has been true 
of this subcommittee and this committee as well as the public 
generally.
    There has been such a polarization on trade issues, that I 
think meaningful discussion and debate has tended to be 
stifled. I think that has been true in the Congress, and I 
think it has been true generally within the public.
    I must say, and I want to focus on the advisory committee, 
that it is hard for me to think of a very useful discussion and 
a discussion in any depth of trade policy on this subcommittee 
or the full committee the last decade. The only exception I 
think was when we took up the rather controversial issue of 
China PNTR.
    The same was true of the advisory proceedings. I sat in on 
the COG discussions for a number of years, and they were not 
very meaningful. There wasn't a lot of back and forth. They 
tended to become automatic.
    My hope is that there will be, as I said, an evolution of a 
new trade policy and much more effective discussion back and 
forth within this Congress; between the Congress and USTR; and 
between all of us in the public more generally.
    We are going to have to consider the issue of preferences. 
I hope that the advisory group, Ms. Garcia, will be in active 
participation in the discussion of issues relating to the 
preferences. There are some controversial issues within that 
realm, and I think we are in need of having that kind of active 
participation.
    The same I think is true of the participation by some 
groups that have felt uninvolved, who have felt that advisory 
groups really related to the interests of one sector rather 
than all of the sectors.
    So I think we can look forward to a much more active 
discussion, I hope, within the public and within the Congress 
on trade issues, and I hope also between the House and the 
Senate.
    So let me ask you very quickly, Ms. Garcia, as you do your 
work, is that kind of the aim of all of your efforts, to really 
take the lid off, to see what the role of the advisory 
committees has been, and to really try to see that there is 
much more meaningful back and forth so that these meetings tend 
not to be too automatic, and also to look at the issue of how 
much the work of the advisory committees can become more 
public? Because a lot of it I think is cloaked in secrecy, 
sometimes because of security issues, but I think more 
generally because of the fear that it would inhibit discussion 
to have the work of the advisory committees become more public. 
So, if you would, comment on what you think is the general 
purpose of this review.
    Dr. Yager, I will be brief and ask you to be brief, too, 
comment on what you think is really needed to have a much more 
vibrant discussion within the public, a less polarized 
discussion, a discussion that is less about throwing labels 
back and forth and a more substantive discussion.
    Just tell us briefly what you are really after in this 
review, Ms. Garcia.
    And, Dr. Yager, don't be too polite. Tell us what GAO 
thinks could be done to make this whole process more 
meaningful. Just take a minute if you would, and then I will 
turn it over to Mr. Brady.
    Thanks.
    Ms. GARCIA. Yes, sir. There is no doubt Ambassador Kirk 
wants to engage the public when it comes to trade, and we want 
the advisory committee system to be effective, inclusive and 
transparent, while not adversely affecting our trade policy and 
negotiations. We want the practice to be as transparent as 
possible without compromising our position.
    But it is my job, it is our team's job, to engage and to 
really touch the public and help them understand how trade 
affects their lives.
    Chairman LEVIN. Let me just say a word then, and Dr. Yager, 
you take over. The WTO negotiations have been on hold, but that 
may change, and I have found that there isn't enough discussion 
as WTO negotiations evolve between the advisory committees and 
the administration and also between the administration and the 
Congress. There is a feeling that the administration, this has 
been true of past administrations, can't say so much because 
they will tip off their bargaining positions. But that has 
often made rather meaningless the back and forth between an 
administration and the Congress and I think between the 
administration and the advisory committees.
    So as you look at the role of the advisory committees, I 
hope the administration will take a really hard look as to how, 
as the Doha round becomes more active, it can be more active 
back and forth with the Congress and with the advisory 
committees. Okay?
    Dr. Yager, do you want to just say quickly----
    Mr. YAGER. Chairman Levin, just a couple of quick things.
    First off, of course, just to make sure the committees meet 
and provide advice, there were some important logistical 
changes that needed to be made, and I think, to a large extent, 
USTR has outlined some steps in order to make sure that occurs.
    Of course, one of the other important things is that the 
committee members need to feel that their voices are heard. 
There have been times in the past where the different 
committees have come back and said they don't believe that the 
input that they provided was meaningful, nor did they 
necessarily hear from USTR that they would not be able to use 
that input in the negotiations. So there are a couple of things 
about the process which we think needed some attention, and 
USTR has addressed a number of those logistical issues, as 
outlined today, as well as in other statements.
    As far as the broader question of getting the right people 
in the room and making sure that it happens at the right time, 
certainly the prior reviews that have been conducted by USTR 
and others provides some insight; the broadening of the economy 
at the very earlier stages of this system to include services; 
More recently, the addition of the non-business interests such 
as environment and others; and then, finally, some 
simplification of the system that occurred in 2004. We think 
these are guides to the current review.
    But more than that, there is the shift in the trade policy 
needs. Obviously the complexity of the negotiations has been 
expanding very rapidly and there are new issues that need to be 
considered, whether those are issues related to investment or 
public health as some of the legislation suggests. And I think 
USTR can also use its outreach. As Ms. Garcia noted, this isn't 
the only way they get input. But maybe that is an excellent way 
for them to understand what kind of groups can be included.
    There are really only three criteria in The Federal 
Advisory Committee Act, and those are affected, interested and 
qualified persons. But by reaching out to those other groups 
through other mechanisms, they can learn who are those types of 
groups that are affected, interested and qualified to be part 
of the trade committee structure and possibly incorporate 
those. Because we do know that people who are part of the 
structure feel that their input is valued, and others who are 
not part of that structure don't realize or fully appreciate 
that their input is given as much weight as those in the 
system.
    Chairman LEVIN. Mr. Brady, our ranking member.
    Mr. BRADY. Thank you, Mr. Chairman.
    I would respectfully disagree with the premise that trade 
dialogue has been stifled over the past decade. To me, it has 
been just the opposite. There has been aggressive hearings held 
in the Ways and Means Committee and Trade Subcommittee for the 
past decade. The informal groups and trying to put policy 
together has been almost a weekly occurrence when we were in 
the majority, in my view. Not that it can't always improve, by 
the way.
    I do think there is a difference between input and 
agreement. I don't know about you, but I always think my input 
is better when the person across from me is agreeing with my 
view, and my guess is, today, I probably get less agreement 
looking across the aisle, or at least with USTR, but maybe not 
at the outset. And I do think it is important.
    I look at your knowledge of trade. It is almost 
encyclopedic. I look at the members, whether it is the new 
preference programs or trying to harmonize existing ones, we 
have a tremendous amount of knowledge and resources on this 
committee and Ways and Means. I hate seeing Small Business, 
Energy and Commerce, Foreign Affairs, holding 12 hearings and 
us next to none. I just think we have a role we can play, and I 
am anxious. Again, I am glad to see your expertise as one that 
is important to bring to the table.
    Another point I would like to make today, I would like to 
ask Ms. Garcia a question too about the whole sort of bigger 
picture on gathering input from these trade advisory 
committees.
    But, Dr. Yager, just so you know what I am going to ask you 
in a moment, you really cited three areas from the GAO study 
that you want to see progress made on. One dealt with the 
continual timely meaningful input and feedback that these 
groups get. The second one is, are they meeting? Are they fully 
constituted, and are we staying on top of the process? The 
third was the composition, broadening it, making sure it is 
representative. In a minute, I am going to ask you, on a scale 
of 1 to 10 on how we are doing on those three so we can see 
what else we need to do?
    Ms. Garcia, I think a guiding principle should be that all 
input is important, irrespective of where it originates. USTR 
should hear all sides. Transparency, where possible, is 
important, too. I think another important principle is everyone 
should be in the room, but it is not clear to me why everyone 
should be in all the rooms simultaneously all the time.
    Our trade advisory system is set up so that USTR receives 
unvarnished information from all stakeholders. It is sent up to 
USTR to organize and synthesize to the extent it is able all 
the different viewpoints it has solicited and collected. 
Putting everyone in the same room for all issues means the 
parties tend to end up debating what trade policy should be. 
That doesn't strike me as the best use of our resources or 
their resources. It seems to me like it might make more sense 
for everyone to submit their unvarnished views to USTR and then 
have the President, the U.S. Trade Representative and their 
staff debate what U.S. trade policy should be, given 
Congressional direction, and then go out and implement it.
    Not everyone is going to agree on what that U.S. trade 
policy ends up being, but at least everyone will have the 
opportunity to provide undiluted views to USTR to inform the 
administration's thinking, analysis and decision making. In 
that area, I think there is agreement. I do agree with Chairman 
Levin on looking for ways we can better do that.
    With that in mind, Ms. Garcia, I would like to hear sort of 
the administration's view on this dynamic. And since you have 
been reviewing the operation of trade committees, are there 
specific areas USTR is focusing on that we need to be aware of?
    Ms. GARCIA. Thank you, sir.
    Our outreach first began with the ambassador always telling 
us and reminding us that we can always improve, and we then 
facilitated meetings, meetings with he and different groups, 
different organizations. So that was first and foremost.
    Then my office, Intergovernmental Affairs and Public 
Engagement, then set out to kind of understand and build a 
database that we could communicate with every day on whatever 
issue, alert people, ensure that they are well aware of any 
kind of news items, any kind of new actions made.
    That has served us well. I have been on the job for 4 
months, and we have gotten a great deal of calls back that 
actually give us confidence that we are moving in the right 
direction.
    Mr. BRADY. Can we pull up that screen of existing ITAC 
structure?
    At this point in the game, you have got to finish your 
review and sort of put your thoughts together, so I am not 
looking for a definitive answer, but are you looking at--let's 
get this up here. I apologize. I didn't give you any warning.
    Is your thought to add and diversify representation on the 
existing ag and industry trade advisory committee? There is the 
flowchart up there. The ones in yellow have right now existing 
environment, labor, public health, universities. Is your 
thought that we would expand the number of advisory committees 
themselves or add specific groups to the existing committees or 
both?
    Ms. GARCIA. Our review is ongoing. We began with the Tier 
1, with ACTPN, so I can speak to that, in that we looked at the 
charter and understood the language of the sectors that were to 
be represented. And then we looked at the list and said, who 
else needs to be a part of it? Trade policy affects many 
American lives and so we had to ensure that it was a diverse 
group.
    The next natural kind of movement as we move forward with 
the review are the Tier 3s, the ITACs, because their charter is 
up early next year. So we are looking at that and working 
closely with Commerce in understanding. The first step we did 
is asked the members of the ITAC, how is it working? What can 
we do better? Should we change names? Should there be a 
combination? But we are absolutely asking those tough 
questions.
    Mr. BRADY. So do you expect some type of reorganization of 
the existing 16 ITACs, or do you see the addition of more, and 
I am not pushing you, or is that yet to be determined?
    Ms. GARCIA. Yes, sir, it is more to be determined.
    Mr. BRADY. Dr. Yager, I am running out of time. But can you 
give us your thoughts? What progress was made?
    Mr. YAGER. I would have to say that, in some ways, the 
grades are still incomplete, but not necessarily because USTR 
has not taken actions, but it takes some time for us to 
understand the implications. One of those, of course, is the 
pace of negotiations right now doesn't call for as active a set 
of briefings and meetings as occurred a few years ago when 
there were an extraordinary number ongoing, not just of the 
private sector, but also of congressional staff.
    I think one other thing that we would note is we understand 
from the testimony that Ambassador Kirk has been holding 
meetings with a number of the different panels, but in our 
checking of the FACA Web site, those have not been put up on 
the site. So it is not easy for people to understand what kind 
of meetings are going on with the different advisory 
committees. So we think they could certainly improve on that to 
make sure that all meetings that are held are recorded so the 
transparency of the system is maintained.
    Mr. BRADY. Your thought though of the three areas from 
meaningful, timely, to recomposition, or making sure they are 
running and fully implemented, and then the composition. Are 
any of those moving ahead better than others?
    Mr. YAGER. We think the plans to ensure that the meetings 
are continued, the plans to make sure they are rechartered and 
members who are appointed appear to be very sound. They look 
like they have put quite a bit of effort into making sure that 
will happened. That was obviously a major problem and weakened 
the committees and the ability of the negotiators to hear from 
the trade advisory people. So certainly they have made great 
progress in that area.
    They have been responsive in the structure area as well. We 
do believe that it would be beneficial for the public to know 
why they placed certain members on particular committees. They 
have made some changes to identify which groups those 
individual members are representing. We think that is very 
helpful because it was quite difficult for the public to 
understand why those representatives were chosen and who they 
represented. So we think they have made significant progress on 
that third aspect as well.
    Mr. BRADY. Thank you.
    Mr. Chairman, thank you for the witnesses.
    Chairman LEVIN. Mr. Van Hollen will inquire.
    Mr. VAN HOLLEN. Thank you, Mr. Chairman.
    I want to thank Chairman Levin and Ranking Member Brady for 
having this hearing today, and like them, I hope that we can 
achieve some sort of consensus moving forward when it comes to 
U.S. trade policy. I look forward to that discussion and 
dialogue going forward.
    I think it is important to look at the role of the trade 
advisory committees and how we can make them more useful and 
more effective and also provide assurances to the public that 
the full range of voices are at the table there. Clearly, the 
trade advisory committee should have a large representation 
from U.S. business interests. After all, we are trying to 
advance a trade policy and increase our exports.
    I think we would also agree it is important they have 
representation from consumer interests and public health 
interests. We have seen a number of instances recently of 
challenges to our food safety system here in the United States, 
and I think if we had more voices at the table advancing public 
health interests, we would be well served.
    I just had a couple of questions in that regard, because if 
you look at the overall representation on the trade advisory 
committees in the area of health, you have, as we should, 
healthy representation from the health care industry, but very 
little representation from public health groups. In fact, the 
numbers I have show that of the 65 health-related advisers 
throughout the tax structure, only two of them currently 
represent public health interests.
    So, Ms. Garcia, I was pleased to hear, as part of the 
Presidential Advisory Committee, the top tier, you are going to 
have voices that represent consumer interests and the public 
health interests. Any idea when you are going to be making 
those announcements?
    Ms. GARCIA. We are working with the White House. It is 
going through the formal vetting process. So I don't have a 
timeline, but you and your staff will be one of the first to 
know.
    Mr. VAN HOLLEN. Thank you.
    Mr. Doggett and I have introduced legislation to try to 
ensure that, going forward, we have adequate representation 
from public health interests, so it is not something left to 
the whims of any particular administration, because we think 
that the American public should be confident that, regardless 
of what administration we have, there are representatives 
looking out for their public health interests as part of the 
trade advisory committee structure, and we have proposed the 
creation of a Tier 2 policy committee that would advance the 
public health interests at the table.
    I see from your testimony that you are in the process of 
trying to explore the best way to ensure those voices at the 
table, and I think we are happy to work with you in terms of 
structuring exactly what form that takes.
    But would you agree that it is important to ensure the 
ongoing representation from those public interest groups, 
health interest groups, to have something in the legislation to 
ensure, whether it is a committee dedicated exclusively to that 
or ensuring that public health voices are there at the policy 
level committees in adequate numbers, would you agree that we 
should do something through the legislative process?
    Ms. GARCIA. We will definitely use the review process to 
determine what is the best way to ensure the public health 
community is represented in our trade policy decision. At this 
time, the review of the committee system, we haven't made that 
determination. But we are focused and looking at steps that we 
can take immediately.
    Mr. VAN HOLLEN. Would you agree that under the current 
system, the decision as to whether or not you have public 
health representation in the structure is left entirely to the 
executive branch?
    Ms. GARCIA. We have public health representatives presently 
at the Tier 2 level as well as at the Tier 3 level.
    Mr. VAN HOLLEN. Right, we have them, but they can come, 
they can go, based on the decisions of the executive branch. 
Isn't that the case, depending on who is USTR or who the 
President may be?
    Ms. GARCIA. Correct.
    Mr. VAN HOLLEN. Then wouldn't you agree, if we want to 
ensure there are representatives looking out for the public 
health on an ongoing basis, we should have something that 
ensures that those voices are at the table?
    Ms. GARCIA. I believe that, as we look to each of the 
different tiers of the committees, we will ask those tough 
questions and see which voices are not represented and ensure 
that there is a balance.
    Mr. VAN HOLLEN. Okay. Thank you. That wasn't quite 
responsive, but we look forward to working with you.
    Thank you, Mr. Chairman.
    Chairman LEVIN. Mr. Van Hollen, since you had 25 seconds 
left, I think this exemplifies the need to face these issues 
and to really get the starch out of the discussion of trade and 
make it a much more vibrant, realistic back and forth.
    So I think your legislation helps to illustrate the need.
    I think next is our friend from Kentucky, Mr. Davis.
    Mr. DAVIS. Thank you, Mr. Chairman.
    Ms. Garcia, I know the Commerce Department has taken a 
leading role when it comes to managing and overseeing the Tier 
3 ITACs, but I would like to follow up on this issue, 
maintaining the integrity of the particular perspective that is 
being communicated to the USTR.
    Sometimes when we talk about inclusion of multiple 
interests, we can get folks that don't even speak the same 
language or have different definitions for the same terms. 
Imagine putting engineers and production people and medical 
people, et cetera, in the same room that don't have common 
processes or procedures. There could be confusion or conflict 
that could ultimately hamper the way these systems work.
    Many of the Tier 3 ITACs have extremely broad mandates as 
it is now. For example, ITAC 2 basically covers all capital 
goods, from ball bearings to drilling equipment and everything 
in between. ITAC 4 covers all consumers goods, from soap to 
Harley Davidsons. ITAC 13 has textile producers and apparel 
companies.
    The point I am trying to point out is many of these 
committees have a membership that is already so diverse and so 
complicated that it is enormously difficult as it is to provide 
information to USTR that both reflects a consensus and is also 
helpful from a technical standpoint as opposed to the political 
decisions that influence on a broader base that will be taken 
into consideration on the first two levels.
    This makes me wonder if including even more representatives 
on these ITACs, which are designed to provide this technical 
nuts and bolts advice, would complicate the mission so 
substantially as to make the ITACs effectively useless. It is 
kind of a moral equivalency issue where every voice is equal, 
when if fact perhaps a person that has valid concerns that 
would be represented at a Tier 1 or Tier 2 level might in fact 
not be schooled in the actual technology or technical aspects 
of trade or the products that are in discussion in that 
industry specific ITAC. I think finding that right balance, as 
you mentioned, is a very critical part, so we have meaningful 
dialogue that benefits the country as a whole.
    In any event, I am getting the impression that everybody 
thinks the committee tier that they are on is not the tier that 
informs key administration policy decisions. Some claim that 
the Tier 1 ACTPN is secret. Other say Tier 2 is where the real 
action is because those committee meetings are held by high-
ranking administration officials. The Tier 3 technical 
committees have long been accused of being a black box and 
there is a history of litigation on this very point.
    Ms. GARCIA, isn't it the case that each of these tiers 
plays a unique and specific role, and that together they 
provide a base of information and input that the administration 
is going to rely on in crafting trade policy?
    Ms. GARCIA. Yes, sir. The committees, as they are now in 
the three tiers, we rely on them and we ask advice and we seek 
balanced advice, and we believe that membership is made up in 
the three tiers. But, again, we are in a review, and those are 
the types of questions that will we will be asking.
    Mr. DAVIS. Do you have a concern that the potential with 
Tier 1 and Tier 2 having a political tinge to it, which is not 
necessarily a bad thing, based on the outcome of elections and 
the administration, but at the Tier 3 level, because the level 
of arcane technical detail that many of the products 
necessarily have to deal with because of Federal regulations or 
the unique needs of potential trading partners, are you 
concerned that it might not politicize the Tier 3 and reduce 
its effectiveness if the base is broadened out with many 
additional interest groups being represented to try to come to 
consensus?
    Ms. GARCIA. I am sorry, I don't know if I understand your 
question.
    Mr. DAVIS. By adding a lot of additional groups that aren't 
necessarily germane to the immediate product needs recommended, 
do you think that could have the impact politicizing and thus 
weakening the ability of the Tier 3 ITACs to do their job?
    Ms. GARCIA. No, sir. Again, we depend upon the advisory 
committee system to be effective, and in that effectiveness, 
there is diversity in voices. I think that with that 
inclusiveness and with some transparency, I think it would take 
away any kind of questions or political questions that there 
might be.
    Mr. DAVIS. The other question I have is on the competitive 
side when we talk about transparency; businesses that compete 
against each other sometimes when they are asked for their 
opinion at the Tier 3 level, thanks to the confidentiality, 
share proprietary information about their businesses that could 
affect thousands of employees, American citizens, who are 
working here in this country.
    Are you committed to assuring that that confidentiality 
would be protected in this transparency process so that 
proprietary trade and pricing information that is critical to 
the way these businesses function and compete in both the 
domestic and international economy would be protected?
    Ms. GARCIA. Absolutely. We want this process and this 
advisory committee to be open, but at the same time, we want to 
ensure that we are not compromising our trade negotiations or 
enforcement actions.
    Mr. DAVIS. Thank you.
    I yield back, Mr. Chairman.
    Chairman LEVIN. Mr. Neal.
    Mr. NEAL. Thank you very much, Mr. Chairman. There is an 
obvious disconnect between the perception that the American 
people have of the benefits of trade and the reality of what 
most economists will testify to regardless of their political 
persuasion. What kind of steps might be taken to further engage 
the American people in these discussions of trade and how its 
benefits accrue across the board?
    I must tell you that trying to discuss this issue in some 
sectors is nearly impossible, including some parts of my own 
party who have a reaction that is largely based upon what their 
constituents witness every day as opposed to this notion that 
trade ought to lift everybody.
    Ms. Garcia, Dr. Yager perhaps.
    Ms. GARCIA. Yes, sir. With our outreach, it has been a 
number one priority for Ambassador Kirk to ensure that the 
first thing that we did was we updated the Web site and we made 
sure that we reached out to an on-line community, new 
generations that are coming of age and wanting to understand 
about trade and inquiring about it. And so we made sure that 
that was one way that we brought trade to the discussion.
    The second is our outreach, is the Ambassador directly 
meeting with people and at all levels, from all ages. And I 
think with our work in my office, it is important that we keep 
people in touch. We have a weekly newsletter that we highlight 
as we grow our database.
    Mr. NEAL. Dr. Yager.
    Mr. YAGER. Yes, sir, Congressman Neal, I think that in some 
ways the struggles that occurs within the system, whether it is 
within a particular committee or within, for example, the 
second tier where there really are difficult discussions about 
which way a trade policy should go is, in fact, I think a good 
outcome of the trade advisory system, because it does reflect 
the debate and should reflect the debate that goes on within 
the United States to handle and to try to come to decisions 
about those very difficult issues.
    So I think that to some extent a successful system will 
address those most difficult issues within the United States so 
that the United States can come to a position and then go to 
the negotiations with a solid position, but I think that as we 
have heard from others, there certainly are differences. Some 
very difficult types of meetings occur when you have a broad 
array of differences represented within the meeting. But in 
some ways that is the purpose to accomplish that, to hear those 
voices and then to come up with a single policy that can be put 
forward.
    Mr. NEAL. I think we all would agree that the opposition to 
many of these bilateral agreements largely comes from 
manufacturing States and regions. How might you suggest that we 
proceed in convincing people who have either lost their jobs, 
watched the plant close or are in danger of losing their jobs 
that there are benefits to trade?
    Ms. GARCIA. I think one of the first things that we will 
look at and that I know we have been engaged in is looking 
first and foremost to have town hall meetings and to go to 
States or cities.
    Mr. NEAL. If you are going to do that in Akron, Ohio, you 
better bring a helmet.
    Ms. GARCIA. Fair enough, fair enough. Again, it is about 
going and being bold enough and engaging, and that is a 
priority, and we are looking at doing things like that. But 
also, you know, it is important to be able to talk about trade 
and about the fact that we are also ensuring that enforcement 
actions are being made and jobs are--regarding areas of 
manufacturing as we trade those goods are being protected as 
well.
    Mr. NEAL. I thought the President's position a week ago on 
community colleges offered considerable hope and opportunity 
along the lines that would go far beyond town hall meetings 
where you try to pursue an esoteric academic position. I 
thought that the President's effort on the role that community 
colleges might play in furthering this discussion made a good 
deal of sense. I think that is a concrete proposal, as opposed 
to this notion that we can have a seminar to discuss the 
benefits of trade. One of the difficulties between perception 
and reality is that when the discussions are over, trade 
lawyers have their jobs, editorial writers have their jobs, and 
trade representatives have their jobs. So oftentimes the 
individual who is in the plant doesn't have his or her job. I 
think the use of a community college system offers one real 
possibility as opposed to the usual suggestion that we have had 
just about retraining. I think that there are those 
opportunities for individuals.
    So thank you, Mr. Chairman.
    Chairman LEVIN. I thank you. By the way, Mr. Neal, I think 
we will hear from the second panel that, in answer to your 
question, there is a feeling that we need to bring within the 
advisory structure more vigorous, honest debate of differences 
on trade policy, that there has been a failure the way it has 
been positioned and staffed, or appointed, that there hasn't 
been that diversity of view within the structure to make the 
advisory committee structure work as effectively as it might.
    Let's go on, Mr. Reichert, I think Congressman Reichert 
from Washington, you are next.
    Mr. REICHERT. Thank you, sir. This is for Ms. Garcia. I 
represent a district in Washington State that is probably one 
of the most trade dependent States in the country. One out of 
every three jobs in Washington State is directly related to 
trade. And I first have to say I was quite disappointed in one 
of my first hearings here in late February when Secretary 
Geithner appeared and presented his summary report on the 
President's budget, and there was no mention of trade as a 
piece of economic recovery, and it should be a centerpiece, in 
my opinion, and a focus for our country. So I think it is sort 
of the forgotten economic stimulus. It is not the end-all 
answer to everything, but it certainly is one of the important 
aspects of economic recovery.
    So I am glad that we are having this hearing today and glad 
we are investigating the effectiveness of trade advisory 
committees and that entire system. But I do think, too, along 
with all the other members here, it is important for all the 
voices to be heard, including those of a trade dependent, 
organized labor, organizations like longshoremen, for example, 
and the machinists. They should have opportunities for input 
into our Nation's trade policies.
    So there has been a lot of focus on the technical sector 
specific advisory committees which you have sort of outlined in 
your testimony. But could you share with the committee what the 
Office of the U.S. Trade Representative does outside of the 
formal trade advisory process to ensure that all parties are 
heard from, or even informed and educated?
    Ms. GARCIA. The trade community as well as other 
stakeholders have been an intricate part. I mean, we stay in 
touch with them. And what we do with the on-line community, but 
more than anything, I think what we have had to do is ensure 
that we spread the word. And Ambassador Kirk recently had a 
speech, and we ensured that many communities received and 
understood what was actually being discussed, and why, and how 
it affects them. So when it comes to our daily work, we touch 
base with our stakeholders and we touch base with different 
audiences, but we ensure that we stay in touch when it comes to 
our outreach.
    Mr. REICHERT. So there is no formal process is kind of what 
I am hearing from you. Am I hearing correct, or is this kind of 
an informal process that is set up to reach out to people 
outside of the trade advisory groups? Is there a plan?
    Ms. GARCIA. Yes, sir.
    Mr. REICHERT. Can you describe the plan to me?
    Ms. GARCIA. Well, it is a plan in that we actually touch 
base with groups when it comes to upcoming discussions. So it 
is us checking in with groups and with individuals. And we make 
sure that they are well aware of what is going on that month or 
that quarter.
    Mr. REICHERT. Which groups and which individuals and what 
communities are you speaking about when you are talking about 
that communication process?
    Ms. GARCIA. It is people that actually are interested and 
have touched base with us.
    Mr. REICHERT. For example.
    Ms. GARCIA. Well, it is different trade associations, but 
it is also small businesses, medium size businesses, State 
groups that are dependent upon their ports, and so forth.
    Mr. REICHERT. Can you give me a specific business or 
community?
    Ms. GARCIA. We have reached out to, I believe it was the 
National Conference of State Legislators. They have a committee 
and we go and we ensure that we talk about issues like ``buy 
America'' provisions or procurement questions that they might 
have.
    Mr. REICHERT. It still seems a little bit unstructured to 
me. I would look forward to working with you and the Ambassador 
and the administration and in looking forward to making some 
sort of structure that lays out a plan to reach out, educate, 
and include everyone.
    So Mr. Chairman, thank you, and I yield back.
    Chairman LEVIN. Mr. Doggett will inquire.
    Mr. DOGGETT. Thank you. I think there is a great bipartisan 
interest in engaging more Americans to support more 
international trade. But what we see today is that you cannot 
expect to engage more by excluding all but a select few 
commercial interests from the decision-making process that 
develops our trade policy.
    While hardly a substitute for the first ever hearing 
devoted exclusively to trade and environment that I was 
promised last year, again this year, and which should occur as 
soon as possible in this subcommittee, today does focus on one 
important aspect of the mindset, the traditional exclusion at 
USTR of the broader public interest. If references to 
considering the environment and workers that are often made in 
talking about trade policy are to be anything other than just 
rhetorical flourishes, they must be given meaning in the daily 
operations of USTR.
    Nine years ago I met personally with President Clinton to 
discuss this issue. Now Chairman Henry Waxman and George Miller 
joined me in meeting Ambassador Charlene Barshefsky to discuss 
our concern that nongovernmental, public interest 
representatives be added to the industry sector advisory 
committees as they were called then.
    The Clinton administration pledged to do just that. But 
time has passed, and in a decade the acronym has changed but 
not much else. The so-called Tier 3 committees have never 
included outside public interests except for when a court has 
forced them to do so.
    I am pleased to have Ms. Garcia here, until recently an 
Austinite, who is working with Ambassador Kirk, as she has 
testified, to address this.
    The team at USTR that is there today, this new team, cannot 
be held accountable for the closed shop and the myopic trade 
policy of the past, but it must be held responsible for 
fulfilling the pledges of President Obama to change that. These 
advisory committees are a very good place to start.
    Dr. Yager, I think the work of GAO has been important in 
demonstrating how totally meaningless the so-called public 
participation in developing trade policy has often been. If 
Ambassador Kirk called some of these committees recently, he 
had one more meeting that occurred in the space of several 
years during the last administration.
    I would begin, Ms. Garcia, by asking you--and all my 
questions are very specific--when can this Congress expect to 
receive a complete report of the results of the review that you 
have been describing so that the public can understand fully 
how you are implementing and fulfilling the pledges of 
President Obama for reform?
    Ms. GARCIA. The review process, as I stated earlier, is 
ongoing, yes.
    Mr. DOGGETT. So I just want to know when it is reasonable 
to expect that you will report all the details of that process 
to this Congress.
    Ms. GARCIA. As we follow along this review process, we are 
following along the rechartering timeline.
    Mr. DOGGETT. I want to talk about rechartering next. But 
just the review itself that you are doing, this thorough review 
to reform and conform to President Obama's pledges, when will 
we have the report on that here in Congress so that we can 
begin to understand how you are fulfilling his promise?
    Ms. GARCIA. Yes, sir. I don't have a timeline.
    Mr. DOGGETT. Will it be this year?
    Ms. GARCIA. I hope so. Well, I hope so too, because what 
has happened here has been going on for too long and your 
opportunity to change it has been brief, but it demands 
immediate action.
    Let me ask you about something that Dr. Yager testified to 
a minute ago. I am pleased that on behalf of President Obama 
that Ambassador Kirk has visited with these various committees, 
but there is no good reason why that shouldn't have been posted 
so that we had full transparency as he noted. Let me ask you if 
you will commit on behalf of USTR to conduct a thorough review 
of all barriers to public access to trade policy, not just the 
classification of documents, though that is important, but 
anything else that keeps of sunlight out of this process, such 
as providing timely notices of meetings, whether they are 
telephone conferences or otherwise, the decision to open or 
close meetings. And will you provide us a report on whether 
these procedures are necessary, as I know they are sometimes, 
or whether there are opportunities to reduce or eliminate 
barriers to the public knowing what is going on between USTR 
and those representatives on advisory committees?
    Ms. GARCIA. Yes, sir. We are looking at what we can publish 
but keeping the balance of course.
    Mr. DOGGETT. When could we expect to have a report on that?
    Ms. GARCIA. Again, I don't have a deadline. I don't have a 
timeline.
    Mr. DOGGETT. And just lastly, if you are already beginning 
the chartering process, when I read these charters, some of 
them are very narrow in terms of what they include in the 
advisory committees. And so the advisory sommittee chartering 
process is itself a decision on whether or not public health 
representatives will be included.
    Has there during the sharp periods where a court forced 
prior USTR to have public representatives on these ITACs, or 
industry sector committees, whatever they were called, do you 
know of any evidence whatsoever that the concerns that have 
been voiced here about the dangers that would result if the 
public were representated on these ITACs? Is there any evidence 
at all that that ever occurred where somebody related 
competitive information or the ITAC just became such an area of 
political conflict it couldn't do its job?
    Ms. GARCIA. I have been on the job for 4 months. I am not 
aware, but I can get that information.
    Mr. DOGGETT. I welcome getting it, because I think these 
arguments are raised, they don't have validity. Members of the 
ITACs have one competitor revealing information to another 
competitor who served on the committee. And so why can't the 
public share in that? Why does it have to be a closed shop 
where the public is excluded, but a few commercial interests 
meet privately and share their views with USTR?
    That is what we need to know. If there is in evidence there 
has been harm in the past, there ought to be ways through 
confidentiality to protect that, but please report back to us 
promptly on what evidence there is that this has ever been a 
problem during the times that the courts forced USTR to do what 
it should have done on its own initiative.
    Thank you.
    Chairman LEVIN. All right, thank you very much. Mr. Herger.
    Mr. HERGER. Thank you very much, Mr. Chairman. I would like 
to follow up on that line of questioning actually with some 
concerns that I have. The Federal Advisory Committee Act, or 
FACA, is a broad, extremely well-intentioned statute, but it 
uses a one-size-fits-all approach. The strategic activities 
that USTR conducts often don't fit that broad, blunt approach.
    So Congress wisely provided USTR with certain exemptions to 
FACA. One important exemption is that the trade committee 
meetings are not required to be open to the public when USTR 
staff and the ITAC representatives are exchanging sensitive 
information such as candid commercial information from the 
businesses or the business side of negotiating positions from 
the government side. Making these meetings public would give 
our trading partners access to commercially sensitive 
information and would also offer a clear line of sight into the 
U.S. negotiating position. It would seem to me that this would 
effectively destroy our ability to negotiate the best possible 
trade result for U.S. workers, farmers, as well as the public 
interest in these negotiations.
    Another possible scenario is that the ITAC would simply 
cease providing useful information to USTR altogether, because 
they know it would be scooped up.
    I was disappointed to learn that the Oversight and 
Government Reform Committee reported a bill that would remove 
some of the USTR's exemptions to FACA statute. In the past our 
committee has exchanged letters with Oversight on this issue, 
ensuring that they recognized our bipartisan jurisdictional 
interests and addressed our concerns. I would hope that this 
committee take similar action this year to ensure our 
prerogatives are not overrun by other committees.
    Ms. Garcia, could you expand on what would happen to the 
role of ITACs in our trade agreement negotiations if our 
trading partners were allowed to monitor ITAC meetings? And 
would you describe if your agency is comfortable with the 
substance of the FACA reform bill as reported by the Oversight 
Committee?
    Ms. GARCIA. As we look for opportunities of inclusiveness 
and transparency we understand that we need to maintain a 
balance not to compromise our trade policy, and that is 
absolutely at the forefront of our review and ensuring that as 
we work and visit with our negotiators when it comes to this 
review.
    Mr. HERGER. And why is that so important to have this 
balance? Would you go into that just a little bit more?
    Ms. GARCIA. I think as you are reviewing a structure you 
always have to ask those types of questions. If we made this 
choice, what then would happen. So it is absolutely something 
that we are always asking ourselves and ensuring that that we 
keep that balance.
    Mr. HERGER. And do you recognize the concern that I have 
expressed of opening up to our trading partners what it is we 
are doing and the importance of keeping this within ourselves?
    Ms. GARCIA. Yes, sir. Yes, sir. It is important that we 
have this discussion and that we as an agency are looking at 
this review. But there is no doubt there is a great deal at 
hand and we want to keep that balance.
    Mr. HERGER. I appreciate that, Ms. Garcia. Thank you, and I 
yield back.
    Chairman LEVIN. Thank you very much.
    Mr. Etheridge, it is your turn.
    Mr. ETHERIDGE. Thank you, Mr. Chairman. And let me thank 
both of you for being here. I know today Ms. Garcia is about 
the advisory committees, but since you are here I want to get 
at least one question in. I am not going to ask you to respond 
to it, but I will ask you to get me an answer back from 
somebody.
    Ms. GARCIA. Yes, sir.
    Mr. ETHERIDGE. And let me give it to you. Because we talk 
about advisory committees. They are very important because they 
give input. I want to talk about a real live situation, where 
people's lives are being turned upside down, they are losing 
their jobs and being displaced. And it really is about 
enforcing our trade agreements with other countries. So let me 
just share that with you, and then I will come back to a couple 
of questions on advisory committees. Because in my home State 
we are looking at 11.1 percent statewide unemployment. Our 
State is the 3rd worst in North Carolina in terms of a budget 
crisis. We are a State that is heavily dependent on exports, 
agricultural exports, manufacturing exports, et cetera.
    And recently we were caught in a perfect storm with the 
outbreak of H1N1, or so-called swine flu. It had nothing to do 
with hogs except for the fact that it just said swine. So guess 
what happened to our pork producers? They not only got hit in 
the chin, they got hit everywhere else. And there is no 
scientific evidence that that had any impact other than the 
fact that nine countries now continue to hold restrictions on 
U.S. pork products as a result of that, most notably China.
    And here is my question and I that I want an answer to, 
what is USTR and the administration doing or, better yet, what 
will they do to ensure that those markets are open to U.S. pork 
products since there is no scientific evidence that they are 
linked? And hopefully I can get something back in writing on 
that, because that is having a significant impact on our 
farmers, but it is radiating all across the whole community.
    And secondly, not only do our pork and poultry producers, 
but all of our economy in our State benefit from access to new 
markets. So obviously fair trade is important to our State and 
I know we are looking at a number of opportunities, and I look 
forward to talking about that in the days and weeks to come.
    So my question to you on advisory committees is this, 
number one, will the administration be seeking legislative 
changes to the trade advisory system? And if so, what changes 
are considered desirable?
    Ms. GARCIA. Yes, sir, I would be happy to get back to you 
with that information.
    Mr. ETHERIDGE. Are you prepared to answer the last 
question, and that is will the administration be seeking 
legislative changes to the trade advisory committee system? And 
if so, what changes are considered desirable? Do you feel you 
need to get back to me in writing as well?
    Ms. GARCIA. No, sir. At this time we are reviewing the 
committee system and have not made that determination. We are 
focused on looking at what we can do immediately in the short 
term, but----
    Mr. ETHERIDGE. Any timelines?
    Ms. GARCIA. No, sir.
    Mr. ETHERIDGE. Any idea of a timeline?
    Ms. GARCIA. Yes, sir. We are working diligently with this 
review and again following the rechartering process, you know, 
but we are being efficient and will be timely reporting back to 
you all.
    Mr. ETHERIDGE. Will you be kind enough to keep this 
committee informed and the members of this committee?
    Ms. GARCIA. Absolutely.
    Mr. ETHERIDGE. That would be very helpful just so we know 
where we are going.
    Dr. Yager, are there any specific recommendations that you 
made either in the GAO 2002 report or the 2007 report that have 
not been implemented by the respective agencies that would 
ensure that our international trade discussion is open to new 
perspectives and there is transparency in them that needs to be 
there for the public interest?
    Mr. YAGER. Yes, Mr. Etheridge, let me respond in two ways. 
First, there is one outstanding recommendation that we have, 
which is to clarify which issues the members that are appointed 
represent and explain how they determined, how USTR and the 
agency determined why they would place those particular members 
on the committees. We think that would be very helpful for 
those who would like to observe and be aware of how the trade 
advisory system is working.
    One other thing that we have noticed as we were doing the 
work, and prior to this hearing, is that there does appear to 
be a divergence right now between the practice of meeting and 
what is written in the trade advisory system. So for example, 
there seem to be a number of liaison groups that are meeting 
particularly at the Tier 2 level where it is not the principals 
that are named within the advisory committee structure, but it 
is their liaison group that is meeting.
    I think one of the things that we would suggest is that 
when the practice that is occurring within the advisory system 
diverges significantly from the stated policies, that it 
probably warrants a review to determine whether any changes 
need to be made.
    Mr. ETHERIDGE. Do they meet on a stated regular basis or on 
call?
    Mr. YAGER. Well, I think what is happening is that in a 
number of the particularly Tier 2 committees there is a group 
of liaison officials who are meeting on behalf of their 
principals. But those are not official meetings and therefore 
they are not noted in the FACA Web site or in the database. So 
we think that when a practice like that occurs, it probably is 
worth looking to see whether those meetings should be happening 
or if those are an effective way of gathering the input, and 
maybe the system should be modified to be transparent about the 
fact that those meetings are taking place.
    Mr. ETHERIDGE. Thank you. Thank you, Mr. Chairman. I yield 
back.
    Chairman LEVIN. Mr. Nunes.
    Mr. NUNES. Thank you, Mr. Chairman.
    Mr. Chairman, I understand the administration is conducting 
a review of the trade advisory committee system. We are of 
course doing the same thing here by holding this hearing, and I 
hope what we are trying to figure out is an offensive strategic 
way to move forward on our trade initiatives. If that is our 
goal, then I am all for this hearing.
    However, if what we are really talking about is how to 
provide groups who oppose trade with a greater ability to 
affect the direction of this administration's trade agenda, 
then I think we are wasting our time. Because as I survey the 
current scene it seems to me that these groups are doing a 
really good job at stopping our trade agenda in the existing 
advisory committee structure as it currently stands.
    When I look around, what I see is these groups have a 
stranglehold on our efforts to expand exports. We are not 
moving forward with pending trade agreements with Colombia, 
Panama, South Korea, and we are not even negotiating new ones. 
We are not holding hearings in this committee or subcommittee 
on trade agreements. It appears to me that the unions and the 
radical environmentalists are winning and the American people 
are losing.
    I will ask a simple question, Ms. Garcia and Mr. Yager, is 
trade dead in this country? Do either of you see us moving 
forward at all in any trade agreements?
    Ms. GARCIA. The President believes that the United States 
needs a new framework for trade. But to accomplish this trade 
agreements need to include strong labor and environmental 
standards. And we need to do a better job enforcing our trade 
agreements, as well as domestic policies to help Americans 
succeed in an increasingly dynamic economy. The President will 
outline this framework in the near future.
    Mr. NUNES. Well, I am waiting with bated breath to see what 
we are going to do. But as for now I will take it as trade is 
dead.
    Mr. Yager, do you have a comment?
    Mr. YAGER. I can make a brief comment, Representative 
Nunes. We have done work for the Congress in I think a number 
of areas which we believe would contribute to the discussion. 
For example, we have done significant work on the trade 
adjustment assistance policy, which assists dislocated workers. 
We have done a significant amount of work on monitoring and 
enforcement on existing trade agreements where we have given 
some suggestions to the administration on how to better ensure 
that the trade agreements are effectively implemented.
    And finally, we made a significant investment in the 
system; for example, this particular trade advisory system. We 
stand ready to assist the Congress in any way to do additional 
work to help you understand or to discuss the tradeoffs and the 
issues raised by any of these issues.
    Mr. NUNES. Now on that point, Mr. Yager, I think you guys 
have done several studies at GAO, and you mentioned in your 
testimony, I think I am quoting you exactly, but in the past 7 
years you recommended changes on member appointment and 
committee rechartering. You also stated that not enough time 
has passed to assess whether the steps already taken fully 
address the problem.
    Can you expand on that a little bit? I think you were 
headed there anyway.
    Mr. YAGER. Yes. One of the things that Ms. Garcia mentioned 
is that they have started the rechartering process well in 
advance of the termination of those committees. And we think 
that is necessary in order to ensure there isn't a significant 
break in the process. So we will know whether that is effective 
as the committee charters expire and they need to be 
rechartered and add new members.
    We do look at the plans and, if they are able to carry out 
those plans, then it does appear that there will be no break 
and this particular plan that has been put in place will be 
effective. But since the recharters have not been necessary 
yet, it is difficult to know whether the steps taken will in 
turn be effective.
    Mr. NUNES. For both of you, so the countries that we 
negotiate with, are all their meetings open to the public? Like 
when we negotiate with South Korea are they open to the public?
    Ms. GARCIA. I am not sure on that specific example.
    Mr. NUNES. Okay. So do other foreign countries, whether it 
be Panama, Colombia, Chile, who we have negotiated trade 
agreements with, did they have public interest groups sitting 
at the table at every single committee? I think the answer is 
no.
    Ms. GARCIA. I am not sure, sir.
    Mr. NUNES. Do you know?
    Mr. YAGER. I don't know specifically about those countries. 
I do know that when we speak to members of our countries and 
discuss the process for gathering input in the United States we 
have heard back from some countries that they appreciate the 
processes that the United States have put in place; for 
example, having to do with the rulemaking process, the public 
input into rulemaking and others. And so we actually see that 
some countries have adopted practices or at least taken some of 
the practices that we have and utilized those because that 
provides a greater degree of transparency than they had in the 
past.
    Mr. NUNES. Well, Mr. Chairman, I know my time is up, but I 
would strongly encourage us here in this committee, the Ways 
and Means Committee has the jurisdiction over these trade 
agreements. And I would prefer as elected officials that we do 
our job similar to how elected officials in other countries do 
their job and not bring a lot of unelected individuals into 
this process. I think the process is already long enough, takes 
too long. At this point it seems like our trade agenda is, if 
not dead, at least stalled.
    I yield back.
    Chairman LEVIN. I don't think it is dead. I don't think you 
mean to say that we should shut out the public from 
participation in discussion of trade policies, Mr. Nunes. I 
don't think that is what you are saying.
    Mr. NUNES. No. What I am saying, Mr. Chairman, specifically 
is that we are elected by the people to do our job, and I think 
if we begin to bring in outside interest groups into this 
process, whether they be various NGOs or public health 
organizations or that sort of thing, we are basically I think--
in my opinion, we would be delegating our job and our 
responsibilities that we are elected on behalf of constituents 
that we represent to others who are unaccountable, and that is 
my concern.
    Chairman LEVIN. We are not delegating any more than when we 
hold town hall meetings that we are delegating our 
responsibility.
    Mr. Pomeroy is next.
    Mr. POMEROY. Mr. Chairman, I would just say that I 100 
percent disagree with the line of questioning of Mr. Nunes. And 
I think a hearing like this is fun to kind of bring out the 
varying perspectives. I tend to agree, to take the view that 
there has hardly been a trade deal that our Ivy league 
educated, silk shirted, trade negotiators couldn't lose in half 
an hour. We need to have broad input into the process from 
immediately impacted constituencies. So the advisory process is 
established to create exactly that.
    I think sometimes this whole negotiation business gets to 
be a club. And they look at how many deals they can put up 
whether or not there is a win on the board. Good deal, it is a 
win, bad deal, it is a deal, it is a win. And I think that we 
need to change that. I don't see trade deals that don't advance 
U.S. interests--as far as I am concerned they are not worth 
doing. We need to recalibrate a little bit in how we proceed in 
that way.
    Now one of the things that interests me is this note in the 
GAO report that increasingly the U.S. advisory committee 
information which is supposed to be considered and responded 
to, not necessarily accepted, it sounds like there is going to 
be quite explicit provisions for transparency in the dialogue 
with an expectation the advisory committee hears back when 
there is a departure from their counsel and that that is only 
occurring about 50 percent of the time. Is that what the study 
shows, Mr. Yager?
    Mr. YAGER. That is correct. We did get significant feedback 
that certain members, and I do not have a specific percentage, 
but in our the survey of 2002 we asked that very question. 
There was a considerable number that did not feel they were 
being informed when the decision did not go their way and the 
direction of trade policy was not accepted. So we did have a 
recommendation that that we done more systematically, that kind 
of feedback be provided more systematically.
    Mr. POMEROY. Was there any trim line notice? Has that been 
an increasing practice or that just the professional crew takes 
or leaves the advice and moves forward without really complying 
with the expectation they are to report back and maintain a 
dialogue.
    Mr. YAGER. Mr. Pomeroy, maybe the second panel can give you 
up-to-date information. Our information, we do these snapshots 
of the views of the committee members at certain points in 
time. So I cannot give you information as to whether it has 
improved since that time. As I mentioned earlier, I think the 
pace of negotiations and the meetings right now is 
significantly off where it was at one point. So I think there 
is less opportunity to observe the system and see whether that 
kind of feedback is being provided.
    Mr. POMEROY. And there is more opportunity for our 
negotiators to school up. I have been amazed at the 
intellectual capacity of our negotiators to handle so many 
specifics of so many sectors all at once, but nobody is perfect 
and that is where this kind dialogue is so particularly 
important to keep us on track. We have certainly seen that in 
agriculture where some nuance of a particular crop versus a 
State trading enterprise, it may look fine in theory but look 
on the ground there is some application here that our 
professional staff at USTR needs to know about. To the extent 
the advisory committee broke down, there becomes a robust 
dialogue between USTR and the congressional community. That is 
a bit extraordinary. I think an ongoing, meaningful dialogue 
with the advisory committee would be a far better practice. It 
goes back to 35 years of trade policy, so it clearly has been 
something contemplated, and I just would hope that I think your 
report has value in terms of making certain we don't get a 
little soft in terms of the honoring the dimensions of those 
dialogues that are so important.
    I thank the gentleman. I yield back, Mr. Chairman.
    Chairman LEVIN. Thank you very much. Mr. Tanner will 
inquire.
    Mr. TANNER. Thank you very much, Mr. Chairman. I am sorry I 
was delayed getting here. This is a topic of great interest to 
this subcommittee and very important to our country.
    Ms. Garcia, I want to ask you, many of us who see the 
benefit of trade sometimes do not have the information 
disseminated to the general public that would bolster our 
positions, and I wonder, do you have a plan to talk about the 
benefits of trade in a way that is a little more forceful and a 
little more specific than we have seen in the past?
    Ms. GARCIA. I am sorry, are you speaking--I just wanted to 
make sure I understood the question.
    Mr. TANNER. What is it that you don't----
    Ms. GARCIA. Could you repeat the question, sir? I am sorry.
    Mr. TANNER. Do you have a----
    Ms. GARCIA. A plan.
    Mr. TANNER. In the past we have had trade bills that I 
thought were meritorious. From USTR we are not getting, in my 
view, the information disseminated to the general public that 
would bolster our arguments inside the Congress. I want to know 
if you have any plans to make a more forceful or a more 
widespread effort to educate people about the benefits of trade 
and what it means to job creation in this country. I think it 
has been woefully inadequate and would like to know if you have 
a plan to address that.
    Ms. GARCIA. Yes, sir. Our Web site that we recently 
launched is interactive. So people can come on and blog, ask 
the Ambassador questions, engage the USTR team, as well as 
video blogs and so forth. So we are absolutely--you know, that 
is important to us and we are working through different 
mediums, but definitely our newly launched Web site.
    Mr. TANNER. Thank you, Mr. Chairman. I yield back.
    Chairman LEVIN. All right. I want to thank you on behalf of 
all of us for this testimony and for the back and forth. I 
think these issues are very much alive and trade is with us and 
expanded trade is with us, issues relate to how we shape the 
terms of trade, and the role of the advisory committees, I 
think those roles are important, and this is a hearing and is a 
step to try to make sure that the back and forth is real, not 
theoretical.
    So thank you again, and we will now call the second panel.
    Dan Magraw is the President of the Center for International 
Environmental Law and a member of the Trade and Environment 
Policy Advisory Committee. Welcome, Mr. Magraw. Thank you.
    Mr. Hoelter is Vice President, Government Affairs of 
Harley-Davidson. I won't ask you how you journeyed here, 
whether you came on a Harley-Davidson vehicle. Congressmen 
sometimes ask people how they arrive here, but I won't ask you 
that.
    Dr. Shaffer is the Co-Director of the Center for Policy 
Analysis on Trade and Health, and welcome to you Dr. Shaffer.
    And Owen Herrnstadt is the Director of Trade and 
Globalization for the International Association of Machinists, 
the organization of which has been mentioned here briefly.
    And Brian Petty is the Senior Vice President, Government 
Affairs International Association of Drilling Contractors, and 
a chairman of ITAC-2 on automotive equipment and capital goods.
    Now, each of you have testimony, and thank you for 
providing it on time. It doesn't always happen. And it has been 
circulated among the members. So just proceed as you would 
wish, either referring specifically to the testimony, 
summarizing it, or highlighting what you think are the most 
important futures, especially perhaps in terms of what you have 
heard here today. Welcome to each of you, you have 5 minutes to 
choose as you wish to proceed. Mr. Magraw, we will start with 
you.

   STATEMENT OF DANIEL MAGRAW, PRESIDENT AND CHIEF EXECUTIVE 
      OFFICER, CENTER FOR INTERNATIONAL ENVIRONMENTAL LAW

    Mr. MAGRAW. Thank you very much, Chairman Levin and Ranking 
Member Brady and the other distinguished members of this 
subcommittee, for holding this hearing on the critically 
important topics of transparency and public participation in 
U.S. trade policy. Congress wisely recognized the importance of 
transparency in public participation in the 1974 Trade Act, and 
your remarks this morning have simply reinforced that.
    Thank you also for inviting me to speak regarding the 
environmental aspects of the process. In this respect it is 
important to note that for purposes of this conversation and 
advice on trade policy that the term ``environment'' also 
includes protecting human health from environmental threats.
    With your permission, I would like to highlight several 
aspects of my written testimony.
    The Center for International Environmental Law, CIEL, and I 
have considerable experience with the trade advisory committee 
system. I currently serve on the Trade and Environment Policy 
Advisory Committee, TEPAC, which is a Tier 2 advisory 
committee, as did my predecessor at CIEL. I also served as a 
senior official in three previous administrations and, in that 
process, was present at the creation of TEPAC and also in its 
implementation. In addition, a senior attorney from CIEL served 
as the first public interest representative on a Tier 3 
technical advisory committee for the chemical and 
pharmaceutical industries.
    My written testimony contains many specific observations 
and suggestions. I would like to emphasize three points here. 
The current system in many respects thwarts transparency and 
public participation. U.S. trade policy and American interests 
are worse off as a result, and fixing this will require strong 
leadership by the administration and robust oversight from 
Congress.
    The first major point is that in spite of the changes that 
were mentioned this morning by Mr. Yager, the current system 
thwarts transparency and public participation in important 
ways. A few examples include USTR often fails to inform or 
consult TEPAC and other advisory committees. Just an aside, we 
did not learn about the review that USTR is conducting until we 
read the announcement of this hearing. So thank you for letting 
us know that.
    When we are informed it often occurs too late, after 
decisions and texts have been finalized. Tier 2 committees do 
not have adequate time to review and comment on free trade 
agreements. The committees lack sufficient diversity. For 
example, ITAC-3 contains 36 representatives from the chemical 
and pharmaceutical industries but not a single public interest 
representative.
    Interaction between the tiers is inefficient or 
nonexistent.
    Finally, there is an excessive secrecy and unnecessary 
classification of negotiating and other trade documents that 
interferes both with the input we can give and also the input 
that the public can give.
    My second major point is that U.S. trade policy and 
American interests are harmed by the lack of transparency, 
consultation and public participation. Let me provide two 
examples.
    The U.S.-Korea free trade agreement contains unprecedented 
appropriation provisions that radically shift power to foreign 
corporations at the expense of legitimate U.S. laws protecting 
health, safety, and the environment. USTR did not inform TEPAC 
about the nature of these provisions. Instead, we learned about 
them from another U.S. agency, which was not the Environmental 
Protection Agency by the way, and insisted on being briefed. By 
then it was too late. The text had already been finalized.
    Here is another example where the absence of public 
participation and transparency leads to poor U.S. trade policy. 
USTR has been openly critical of the 2006 European regulation 
for the Registration, Evaluation, and Authorization of 
Chemicals, known as REACH. REACH is an ambitious law that 
harmonizes health and safety requirements across the now 27 EU 
member states with important implications for U.S. companies, 
consumers, and citizens.
    In 2009, we on TEPAC learned that some Tier 3 committees 
had in December of 2008 submitted written recommendations to 
USTR and the Commerce Department urging a formal technical 
barriers to trade challenge. This recommendation followed years 
of aggressive advocacy by ITAC-3, but USTR had failed to notify 
TEPAC of this. Moreover, USTR strongly resisted requests by 
TEPAC members to receive a copy of this recommendation, 
asserting that TEPAC members were legally prohibited from 
seeing the letter. They later shared the letter with TEPAC 
members, but the Bush administration's policy opposing REACH 
apparently remains unchanged. The result is a U.S. policy that 
completely ignores valuable benefits to American businesses, 
consumers, policymakers, and others.
    My third and final major point is that this situation will 
not be fixed without strong leadership by the administration 
and robust oversight by Congress. Discrimination and corruption 
in institutional cultures regarding transparency and public 
participation will not change without the person at the top 
insisting that they are important and must be paid attention to 
so that U.S. trade policy supports sustainable development; 
that is, that U.S. trade policy integrates environmental and 
social policies with economic ones. This requires leadership 
from the U.S. Trade Representative, the EPA administration, and 
other high administration officials.
    Advisory committee members also must exhibit leadership for 
the system to be effective and not just window dressing. One 
positive example is TEPAC's Subcommittee on Fishing Subsidies. 
There were many reasons that this was successful, but an 
essential element was that a TEPAC member, in this case an 
environmental NGO, was willing and able to step up and lead. 
Unfortunately, this is a rare example of the constructive 
engagement by USTR that Congress intended. We can do better, 
and I am cautiously optimistic that we will.
    Thank you.
    [The prepared statement of Mr. Magraw follows:]
                  Prepared Statement of Daniel Magraw
    President and Chief Executive Officer, Center for International 
Environmental Law; Member, Trade and Environment Policy Advisory 
Committee
I. Introduction
    Thank you Chairman Levin and Ranking Member Brady for the 
opportunity to appear before this subcommittee. I am Daniel Magraw, 
President and CEO of the Center for International Environmental Law 
(CIEL), a nonprofit organization that uses international law and 
institutions to protect the environment, promote human health, and 
ensure a just and sustainable society.
    I currently serve on the Trade and Environment Policy Advisory 
Committee (TEPAC), a Tier 2 policy advisory committee. Previously I 
served as a senior official in the U.S. government with direct 
experience in the creation and implementation of this advisory 
committee. In addition, a senior attorney from CIEL served as the first 
public interest representative on a Tier 3 technical advisory committee 
for the chemical and allied industries.
    In this testimony, I will offer some lessons learned from CIEL's 
experience with the trade advisory committee system. I will also 
recommend administrative and legislative improvements to enhance 
transparency and public participation and to ensure that U.S. trade 
policy achieves sustainable development, which necessarily involves 
integration of environmental, social and economic policies.
    I have been asked to address the environment-and-trade aspect of 
that integration. I would like to stress at the outset that the term 
``environment'' includes human health. The U.S. Environmental 
Protection Agency's statutes, for example, direct it to protect human 
health and the environment.\1\ Environmental standards are set with 
human health as a primary consideration. Moreover, trade rules' 
restrictions on non-tariff barriers affect the United States' ability 
to protect human health just as they do our ability to protect natural 
resources. Thus when I use the term ``environment,'' I am also 
referring to human health.
---------------------------------------------------------------------------
    \1\ See, e.g. 42 U.S.C. Sec. Sec. 7401-7671 (1990) [Clean Air Act]; 
7 U.S.C. Sec. 136 (1996) [Federal Insecticide, Fungicide and 
Rodenticide Act].
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II. Transparency and Public Participation: Congressional Intent of the 
        Trade Act and FACA
    Thirty-five years ago, Congress recognized the importance of 
transparency and public participation in developing sound U.S. trade 
policy. I applaud this subcommittee for its continuing oversight of 
this important issue. The inclusion and consideration of diverse views 
leads to stronger trade policy reflective of American interests. As the 
GAO concluded in their 2007 report, ``to effectively perform the unique 
role in U.S. trade policy [that] Congress has given trade advisory 
committees, certain process issues need to be resolved.'' \2\
---------------------------------------------------------------------------
    \2\ United States General Accounting Office, An Analysis of Free 
Trade Agreements and Congressional and Private Sector Consultations 
under Trade Promotion Authority, 66-67 (2007) [hereinafter GAO Report].
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    When read together, the Trade Act of 1974\3\ and Federal Advisory 
Committee Act \4\ (FACA) demonstrate Congress' commitment to the 
development of U.S. trade policy with public participation and 
transparency, subject to limited safeguards for legitimate trade 
secrets. The Trade Act requires that the U.S. Trade Representative 
(USTR) seek policy advice from trade advisory committees before 
entering into trade agreements.\5\
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    \3\ 19 U.S.C. Sec. 2155 (2006).
    \4\ 5 U.S.C. app. Sec. Sec. 1-16 (2001).
    \5\ 19 U.S.C. 2155(a)(1)(A)-(C); (b), (c) (2006).
---------------------------------------------------------------------------
    Additionally, by direct reference to FACA, the Trade Act creates a 
presumption of open meetings, public notice, public participation, and 
public availability. This mandate is only constrained when it ``would 
seriously compromise the development by the United States government of 
trade policy, priorities, negotiating objectives or bargaining 
positions.'' \6\
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    \6\ 19 U.S.C. 2155(f)(2) (2006).
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    FACA requires that the membership of these advisory committees be 
``fairly balanced'' with regard to the viewpoints represented and the 
functions performed.\7\ Some courts have refused to apply that 
standard, which has resulted in practice in a failure to achieve 
balance.\8\ Additionally, FACA requires some degree of transparency by 
directing that the committees ``ensure that the public [is] informed 
with respect to the number, purpose, membership, activities, and cost 
of advisory committees.'' \9\
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    \7\ 5 U.S.C. app. Sec. 5(b)(2) (2001).
    \8\ See Ctr. for Policy Analysis on Trade and Health (CPATH), et. 
al. v. USTR, 540 F.3d 940 (9th Cir 2008).
    \9\ 5 U.S.C. app. Sec. 3(2) (A)-(C) (2001).
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III. CIEL's Experience with the Trade Advisory Committee System
    Let me share some of our direct experience with the trade advisory 
committee system and offer lessons learned and suggestions for 
improvement. As you know, this system includes three tiers of advisory 
committees.
Tier 1--ACTPN
    I do not serve on the Advisory Committee for Trade Policy and 
Negotiations (ACTPN), the Tier 1 committee. However, despite my service 
on a Tier 2 committee, my security clearance to review trade secrets, 
and my professional involvement in trade issues, the workings of ACTPN 
are essentially hidden from view. It is nearly impossible to determine 
when ACTPN meets, with what agenda, what issues it addresses, or what 
conclusions it reaches.
Tier 2--TEPAC
    As a member of the Trade and Environment Policy Advisory Committee 
(TEPAC), and having been involved in its creation and early operation, 
I have a much better understanding of how this Tier 2 committee 
functions. I have witnessed successful cooperation between the USTR and 
TEPAC, such as when they worked together on fishing subsidies. A 
constructive experience was possible for several reasons.
    Perhaps most importantly, the elimination of fishing subsidies 
presents a win-win-win situation: environmentalists want to end over-
fishing in the world's oceans, which is encouraged by subsidies; U.S. 
industry wants to have a level playing field without being 
disadvantaged by the subsidies provided to foreign fleets; and trade 
policymakers want to eliminate subsidies as a general matter because 
they distort trade. In addition, a strong and effective leader (Oceana) 
on TEPAC put the committee into a proactive mode and headed the effort, 
which occurred via a subcommittee of TEPAC. In addition, non-
governmental participants on the sub-committee could immediately see 
classified negotiating documents because they already had clearance; 
and the participants could rely on the familiarity and trust that had 
been built up through their common experiences on TEPAC.
    The TEPAC subcommittee's involvement led to a balanced and more 
nuanced trade position. Moreover, endorsement of the U.S. negotiating 
position validated USTR's assertions to other countries regarding its 
environmental sustainability, which was reinforced by environmental 
NGOs' activities in Geneva during the negotiations. This experience 
thus helped forge, and supported, a constructive U.S. trade policy on 
fishing subsidies.
    I have also witnessed some serious shortcomings of TEPAC as a 
vehicle to advise U.S. policy. I would like to draw your attention to 
several procedural issues that hinder effective advice by TEPAC. In my 
experience, TEPAC generally has very little or no access to actual U.S. 
negotiating positions prior to or during U.S. negotiations. Instead, 
TEPAC receives general, sometimes perfunctory briefings which lack 
confidential information and often occur only after USTR has completed 
negotiations. Negotiating texts which are put on the internal, 
classified website are often out-of-date or already agreed to. This 
situation makes it essentially impossible for TEPAC to guide or advise 
U.S. trade policy in a meaningful way.
    The Korea-U.S. Free Trade Agreement is an example of a failure of 
transparency and consultation that led to deeply flawed U.S. trade 
policy. Without consulting TEPAC, U.S. negotiators agreed to 
unprecedented and damaging language in the investment chapter, in the 
process deviating from the corresponding language in other FTAs and the 
U.S. Model Bilateral Investment Treaty. The lack of involvement 
occurred despite the fact that USTR was aware of TEPAC's interest 
because of our repeated expressions of concern in reports to Congress 
about investment language.
    TEPAC finally learned of the new language only via other parts of 
the U.S. government and only after we insisted on being briefed, but by 
that time it was too late. The result was: the creation of two new 
tests for expropriation that will make it easier for foreign investors 
to successfully challenge U.S. laws and regulations regarding the 
environment, health and safety; \10\ the insertion of a Korean legal 
concept into the expropriation provision that none of the U.S. 
negotiators could explain; \11\ and the inclusion of a factually 
inaccurate footnote that also could lead to easier success in 
challenging legitimate U.S. environmental, health and safety laws.\12\
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    \10\ Korea-U.S. Free Trade Agreement, Investment chapter, Annex B, 
paragraph 3(b) (the new, unprecedented tests are whether a regulatory 
action is ``extremely severe'' or whether a regulatory action is 
``disproportionate in light of its purpose of effect.'').
    \11\ Id., para. 3(a), sub-paragraph (iii) (the Korean legal concept 
is ``special sacrifice,'' which apparently is based on German law but 
in any event appears nowhere in other U.S. agreements or international 
law generally.
    \12\ Id., n. 19 to sub-paragraph (ii) (the footnote assumes that 
regulatory changes are more likely to occur in heretofore heavily 
regulated sectors than in heretofore lightly regulated sectors, thus 
ignoring the situation of merging technologies such as nanotechnology, 
potential changes in scientific understanding of risks, and experience 
in regulating a sector).
---------------------------------------------------------------------------
    Another example concerns implementation of the Peru-U.S. Trade 
Promotion Agreement. Implementation of that agreement led to dozens of 
deaths during violent protests against decrees (especially one 
regarding forests) that were promulgated with virtually no public input 
(under a kind of fast-track authority) and allegedly with the 
explanation that the U.S. government had required the Peruvian 
government to promulgate them in order to satisfy environmental and 
other provisions of the agreement. Among other things, this raises 
questions about the agreement's public participation provisions that 
TEPAC, in its February 1, 2006 report to Congress, recommended be 
improved as soon as possible and which TEPAC ``urge[d] USTR and 
Congress to monitor closely.''
    In response to questions, USTR staff repeatedly stated that TEPAC 
had been ``robustly'' involved during the entire process involving the 
decrees in question. I respectfully disagree. I urge Congress to 
investigate this situation to better understand the role of the 
agreement in this tragedy and the subsequent destabilization of a U.S. 
ally. This should include whether the U.S. government insisted on the 
decrees in question, how it acted to counter any assertions that it had 
so insisted (if it had not), what positions it took vis-a-vis the 
transparency and public participation required by the agreement, and 
how it involved TEPAC throughout.
    USTR is under no obligation to respond to TEPAC recommendations, 
either consensus opinions or dissenting views. This makes it difficult 
to determine whether USTR has considered or understood our advice. The 
2007 GAO report and my own experience attest to the short time frame 
for TEPAC to formulate a position and draft a report to USTR. The short 
window (30 days) does not leave adequate time to craft a thorough 
opinion, particularly when we often do not receive trade agreement text 
until well after the 30-day window has begun. For example, TEPAC had 
eleven business days to review the U.S.-Peru Environmental Cooperation 
Agreement. Every TEPAC report to Congress since the passage of the 
Trade Act of 2002 has unanimously stressed that 30 days is 
insufficient.
    Furthermore, TEPAC's reports on trade agreements are delivered to 
USTR and then relayed to the President and Congress. This effectively 
insulates TEPAC and other Tier 2 advisory committees from interaction 
with Congress. Our experience is the congressional staff are often 
unaware of TEPAC's views or even of its existence.
    TEPAC's reports are not easily accessible to the public, a practice 
in direct opposition to congressional intent of the 1974 Trade Act. 
Stakeholders cannot expect to have meaningful engagement when they are 
unaware of pertinent trade policies.
    Some members of TEPAC would welcome more direct relationship with 
congressional staff. The staff would also benefit from increased 
interaction and involvement with the trade advisory committees. 
Although USTR holds hundreds of meetings with congressional staff each 
year, GAO reports that many legislative staff expressed frustration 
with a sense that they did not have meaningful input.\13\ Congressional 
engagement with trade advisory committees would allow both parties to 
share views at critical junctures during trade negotiations. This 
practice could enhance the transparency of the negotiating process and 
lead to a more robust trade policy for the United States.
---------------------------------------------------------------------------
    \13\ GAO Report at 29.
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Tier 3--ITAC-3
    Let me turn to CIEL's experience with a Tier 3 Industry Trade 
Advisory Committee (ITAC). Following a 2001 settlement agreement of a 
civil suit between public interest advocates and the USTR, CIEL 
attorney Steve Porter was appointed to the ISAC-3 (now ITAC-3), the 
industry trade advisory committee on chemical and allied industries. 
After he stepped down the committee was slow to seek a replacement, 
resulting in a judgment to enforce the settlement in the original civil 
suit that prevented ITAC-3 from meeting pending another public interest 
member.\14\ The seat was eventually filled by another qualified 
representative. After this member stepped down, ITAC-3 has continued to 
meet.
---------------------------------------------------------------------------
    \14\ See Wash. Toxics Coalition v. Office of the United States 
Trade Representative, 2003 U.S. Dist. LEXIS 25869 (W.D. Wash. 2003).
---------------------------------------------------------------------------
    As members of ITACs, NGO representatives have the same obligation 
to maintain confidentiality of trade secrets as industry 
representatives. However, public interest representatives are hampered 
in representing diverse views of their community: on ITAC-3, multiple 
industry views are represented, but only one NGO was ever on the 
committee. Today, the membership of ITAC-3 includes thirty-five members 
representing the chemical and allied industries and not a single 
environmental representative, despite the terms of a settlement 
agreement.\15\
---------------------------------------------------------------------------
    \15\ See id.; Industry Trade Advisory Committee on Chemicals, 
Pharmaceuticals, Health Science Products and Services (ITAC 3), http://
www.trade.gov/itac/committees/chem.asp (last visited July 16, 2009).
---------------------------------------------------------------------------
    The 2007 GAO report highlighted problems that committees have 
recruiting representatives that are not representing for-profit 
industries.\16\ In my experience, this is typically due to a lack of 
financial resources.
---------------------------------------------------------------------------
    \16\ GAO Report at 67.
---------------------------------------------------------------------------
    It is difficult to argue that the inclusion of a single public 
interest representative on a committee comprising dozens of industry 
members fulfills FACA's requirement that advisory committees be 
``fairly balanced.'' One way to address this issue would be to provide 
additional resources to recruit and retain public interest 
representatives, to ensure diverse opinions on the ITACs. In the 
absence of significant additional resources, increasing the number of 
NGO ``chairs'' at these ITAC tables will solve this inequity because 
they will not be filled.
    Another possible remedy is to increase public transparency, as the 
Trade Act envisioned. In this way, additional perspectives could be 
brought to bear without the added burdens and delays of security 
clearances and the committee selection process. Instead of more 
``chairs,'' the Tier 3 committees might benefits from more ``windows.'' 
While others in the NGO community are aware of the opportunity for 
public comment, many feel it is futile to participate.\17\ 
Opportunities for public involvement and comment should be meaningful 
for stakeholders at key stages of the negotiating process.
---------------------------------------------------------------------------
    \17\ GAO Report at 58
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    What are the practical consequences of Tier 3 committee operating 
with little or no participation by public interest representatives? An 
important and timely example is the U.S. policy on the European Union 
concerning their 2006 regulation on chemicals known as REACH (for the 
Registration, Evaluation and Authorization of Chemicals).\18\ REACH is 
an ambitious law that harmonizes health and safety requirements across 
the now-27 E.U. Member States, with important implications for U.S. 
companies, consumers, and citizens.
---------------------------------------------------------------------------
    \18\ Regulation No 1907/2006, 2006 O.J. (L396) 1 (EC). [Regulation 
on Registration, Evaluation, and Authorization of Chemicals (REACH)].
---------------------------------------------------------------------------
    Congress has already documented how U.S. chemical manufacturers and 
their representatives succeeded in co-opting U.S. foreign policy on 
REACH under the Bush administration.\19\ Key U.S. government documents 
and communiques were based on unsubstantiated assertions by these 
private interests while public interest input and Congressional 
inquiries were shunned. Ironically the adoption and subsequent 
implementation of REACH offers valuable benefits to American consumers, 
exporters, policymakers and others. These include: free access to 
health and safety information; harmonized rules across a market of 
nearly 500 million consumers; safer ingredients and products available 
to U.S. manufacturers, workers and consumers; and competitive 
advantages for U.S. exporters that already offer superior products.
---------------------------------------------------------------------------
    \19\ U.S. House of Representatives, Committee on Government Reform, 
Minority Staff, Special Investigations Division. A Special Interest 
Case Study: The Chemical Industry, the Bush Administration, and 
European Efforts to Regulate Chemicals, April 1, 2004. (available at 
http://oversight.house.gov/Documents/20040817125807-75305.pdf)
---------------------------------------------------------------------------
    In 2009 TEPAC members learned that ITAC members had submitted 
formal recommendations to USTR and the Commerce Department urging a 
formal Technical Barriers to Trade challenge to the E.U. REACH policy. 
This recommendation followed years of aggressive advocacy by ITAC-3. 
However, USTR had failed to notify TEPAC in a timely manner. Moreover, 
USTR strongly resisted requests by TEPAC members to receive a copy of 
this recommendation. USTR asserted that TEPAC members were legally 
prohibited from seeing the letter. They later shared this with TEPAC 
members. TEPAC has requested a legal opinion on whether there is such a 
prohibition. With all due respect, I doubt there is.
    This example raises troubling questions about USTR's regard for 
advice from TEPAC. It also demonstrates that Tier 3 committees, which 
are charged with providing technical advice, also engage in broad 
policy advice. Yet the source of this advice is committees that are the 
antithesis of FACA's fairly balanced standard. I believe that Congress 
should not only call on USTR to initiate a thorough review of its ill-
advised policy on REACH, but it should also give serious consideration 
to changes that will prevent future cases of Tier 3 committees 
bypassing Tier 2 committees that have responsibility to advise U.S. 
trade policy, such as TEPAC.
    I do not suggest that the previous administration's misguided 
policy was solely the result of the advice provided through the trade 
advisory committee system. However, the failure to ensure effective, 
meaningful public participation led to the formulation of a U.S. policy 
to the detriment of clear and compelling U.S. interests.
Transparency, Participation and Role of Classifying Documents
    It is axiomatic that in order to get public input on these 
documents, stakeholders need to be able to know U.S. policy and 
proposed policy. USTR routinely classifies trade negotiating texts and 
other trade policy-related documents, however. Accordingly, one of the 
perceived advantages of the advisory committees is that their members 
have security clearances and thus can view and hear the contents of 
classified documents. This situation has at least two important effects 
detrimental to public participation: advisory committee members cannot 
get input from experts and others who do not have clearances; and, more 
problematically, the public at large cannot effectively participate at 
all. I thus suggest that USTR's classification practices be scrutinized 
to determine whether they meet legal requirements and are necessary for 
U.S. interests considered as a whole.
Leadership
    Aside from statutory or administrative changes, the situation 
described above could be greatly improved through strong leadership by 
Congress, the U.S. Trade Representative, EPA Administrator, and other 
senior officials. These attitudes are extremely influential with 
respect to how staffs deal with the advisory committees and how 
seriously non-trade considerations are taken into account. At times in 
the past, those attitudes have unfortunately led to the view that Tier 
2 committees, at least, are primarily symbolic and that environmental 
and social issues are peripheral: that it might be all right to 
leverage them through trade policy but are not integral to it.
    With the Obama administration's commitment to transparency and 
public participation, which they have already demonstrated, I am 
hopeful that congressional and agency staff can put a renewed emphasis 
on cooperation and open dialogue within the trade advisory committees, 
throughout the office of the U.S. Trade Representative and other 
appropriate agencies. This systemic change can be a powerful catalyst 
for improving the trade advisory committee system.
IV. Reflections on H.R. 2293
    Finally, I would like to address pending legislation before the 
Ways and Means Committee that is relevant to the trade advisory 
committee system. The bill, H.R. 2293, would amend the Trade Act of 
1974 to create a new Tier 2 policy advisory committee known as the 
Public Health Advisory Committee on Trade (PHACT).\20\
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    \20\ H.R. 2293, 111th Cong. (2009).
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    The proposed PHACT bears important similarities to TEPAC, with a 
primary focus on public health rather than environmental protection. Of 
course, there are important overlaps between protection of public 
health and environmental protection. In my opinion, PHACT could be a 
positive addition to the trade advisory committee system. But it is 
important that Congress avoid the problems that hamper the 
effectiveness of other Tier 2 committees, including procedural 
obstacles and a lack of timely and meaningful engagement by USTR staff 
and other agencies.
    Importantly, provisions of H.R. 2293 would also affect the 
functioning of the Tier 1, other Tier 2, and Tier 3 trade advisory 
committees. For example, reports regarding trade agreements would 
address health and environmental concerns both in the United States and 
in affected regions. Reports would be made publicly available on the 
USTR website and appropriate agencies would be required to seek input 
from trade advisory committees throughout the trade negotiating 
process, including prior to negotiations. Furthermore, appropriate 
agencies would be required to respond in writing to the information 
submitted by trade advisory committees. This expands the role of the 
advisory committees from existing legislation.
    The 1974 and 2002 Trade Acts require committees provide a report to 
appropriate agencies at the conclusion of trade negotiations and allows 
them only 30-days to submit reports. The 2007 GAO report concluded that 
these reporting deadlines are difficult to meet, especially as trade 
agreement text is often not available on a timely basis and committee 
members have other obligations.\21\ Involving committee members earlier 
in the negotiating process, as H.R. 2293 would do, is a step in the 
right direction to ensure that advisory committees have an opportunity 
to engage early in the process.
---------------------------------------------------------------------------
    \21\ GAO Report at 59.
---------------------------------------------------------------------------
    H.R. 2293 addresses many shortcomings of the current system. 
However, the bill does not clarify the ambiguous standard of ``fairly 
balanced'' in FACA.
V. Recommendations
    The existing trade advisory committee system, while well-
intentioned, is hampered from achieving its full potential due to 
legislative gaps, i.e. a failure to clarify ``fairly balanced,'' and 
procedural impediments. For example, TEPAC is typically unable to offer 
meaningful input prior and during negotiations, there is an inadequate 
turnaround time for comments, and TEPAC receives no response from 
Congress or the USTR after submitting comments. Additionally, there is 
a sense among some participants that consultations are more symbolic 
than substantive.
    Tier 3 committees, such as some ITACs, appear to engage in policy 
as well as technical advice, but without any semblance of fair and 
balanced representation. This deserves serious scrutiny by Congress and 
by the senior leadership of the Obama administration. It may be 
impractical to recruit willing representatives to fill new chairs for 
environmental, consumer, public health and other public interest 
perspectives. Potential solutions may involve greater transparency, 
more proactive public engagement, and other means to bring broader 
perspectives to bear on the development of U.S. trade policy.
    Although USTR is required to provide an opportunity for comment to 
groups or individuals outside the trade advisory committee system, the 
GAO Report deemed these consultations ineffective. The advisory 
committees should be a mechanism by which public interest perspectives 
can be heard and subsequently considered in the development of U.S. 
trade policy. Making trade advisory committee recommendations available 
on the website of USTR and other agencies, as proposed in H.R. 2293, 
would be a step in the right direction.
    Leadership from the U.S. Trade Representative, the EPA 
Administrator, and other senior officials can play a crucial role in 
inspiring these agencies to give the advisory committees their proper 
role in the formulation of U.S. policy. That leadership must be 
strengthened.
    Here are several specific recommendations to improve public 
participation and transparency.

          The Subcommittee on Trade should exercise its 
        oversight authority by investigating the role of the Peru-U.S. 
        Trade Promotion Agreement and the U.S. government in the recent 
        troubles in Peru, including the degree to which TEPAC was 
        consulted.
          The U.S. government should review its policy on 
        REACH, with full and meaningful involvement of all relevant 
        advisory committees and the public.
          Any legal impediments to sharing information and 
        documents, including reports, between Tier 1, Tier 2, and Tier 
        3 advisory committees should be identified and removed, by 
        legislation if necessary.
          Trade advisory committees at all levels should have 
        greater involvement from environmental and other public 
        interest stakeholders, with adequate resources to enable 
        participation.
          USTR should review its practices in classifying 
        documents to ensure it meets legal requirements and is in the 
        best interest of the United States.

VI. Conclusions
    In summary, the trade advisory committee system has an important 
role to play in informing and improving U.S. trade policy. Greater 
transparency and more meaningful public participation can substantially 
improve this process in at least three ways. First, leadership by 
Congress, the U.S. Trade Representative and other senior administration 
officials can demonstrate the importance and value of active public 
engagement. Second, changes in administrative procedures, such as 
genuine engagement of the advisory committee prior to and during 
negotiations, are necessary to ensure that input from advisory 
committees is not too late to inform U.S. policymakers. Similarly, 
continued efforts are needed to broaden representation and to include 
more ``doors and windows'' to permit greater public accountability. 
Finally, I urge Congress and the Obama administration to revisit the 
congressional intent of the Trade Act of 1974 and FACA, in particular 
by clarifying the ``fairly balanced'' standard and to consider other 
legislative improvements. This re-commitment to core American values 
will ensure that the trade advisory committees contribute to the 
formation of a U.S. trade policy that serves broad U.S. interests.

                                 

    Chairman LEVIN. Thank you very much. Mr. Hoelter, you are 
next.

  STATEMENT OF TIMOTHY K. HOELTER, VICE PRESIDENT, GOVERNMENT 
  AFFAIRS, HARLEY-DAVIDSON MOTOR COMPANY, CHAIRMAN, INDUSTRY 
          TRADE ADVISORY COMMITTEE 04, CONSUMER GOODS

    Mr. HOELTER. Thank you, Mr. Chairman, Ranking Member Brady. 
I appreciate the opportunity to be here. My name is Tim 
Hoelter. I am Vice President for Harley-Davidson Motor Company 
from Milwaukee. I am also Chairman of the ITAC-4, which is the 
Consumer Goods Committee. I have submitted written comments for 
the record, so what I will do in my verbal remarks today is 
focus on a few key issues.
    ITAC-4 perhaps has the most diverse industry membership of 
any of the ITACs. We have representatives representing a broad 
range of consumer goods, health care products. We have weed 
whackers, we have washing machines, we have toys, we have pots 
and pans, and a number of other things. But despite the fact 
that our membership is diverse, we stand shoulder to shoulder 
when it comes to embracing the principals of free and fair 
trade, and all of us want to create opportunities to enhance 
our exports overseas. And as an employee of Harley-Davidson let 
me assure you that growing our own export business is one of 
our number one priorities, because it brings work into our U.S. 
factories and helps protect American jobs or in the current 
environment mitigate the current job losses.
    ITAC-4 regularly holds three to four meetings per year. Our 
agendas include a half dozen or more trade matters on the 
topic. We receive reports and updates from representatives of 
the Department of Commerce or USTR staff. The reports vary of 
course from meeting to meeting. They may concern things like 
REACH, as we mentioned, import safety, Doha, China, India, you 
name it. These are all important issues.
    One thing I would like to emphasize is that our meetings 
are typically closed to the public. Because we are all cleared 
advisers this is invaluable as speakers are able to talk 
candidly and directly on what the current U.S. Government 
position is and what factors are driving the decision-making 
process. The closed meetings also let us as members give advice 
that is honest, focused, and we hope meaningful policymakers. 
On occasion some of our members have served as treaty watchdogs 
by alerting staff to specific instances where trading partners 
were not living up to their obligations.
    As a participant in the ITAC system for the past decade, I 
appreciate the need to maintain transparency and to ensure that 
all citizens have the ability to express their views on trade 
issues. Providing channels of communication and an appropriate 
forum for engagement for both industry and non-industry groups 
alike leads to better decision making and more informed 
decisions by those charged with establishing trade policy.
    By the same token, advice and recommendations flowing to 
policymakers from any one source needs to be clear and focused. 
The advice needs to be actionable. Having multiple sources, 
each providing ungarnished advice, is really good, even when it 
differs, because it gives policymakers more options. On the 
other hand, advice that is processed down to the lowest common 
denominator to achieve consensus within a group whose members 
reflect opposing interests is worthless to senior officials 
charged with developing coherent trade policy. Advice that goes 
through a strainer does our trade policymakers a profound 
disservice.
    Chairman Levin, Ranking Member Brady, I also want to thank 
you for this opportunity, and I also want to share with you how 
privileged I feel to serve our government in the trade advisory 
system.
    Thank you.
    [The prepared statement of Mr. Hoelter follows:]
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    Chairman LEVIN. Well, thank you very much.
    Dr. Shaffer, you are next.

STATEMENT OF ELLEN R. SHAFFER, PH.D., MPH, CO-DIRECTOR, CENTER 
            FOR POLICY ANALYSIS ON TRADE AND HEALTH

    Ms. SHAFFER. Thank you very much, Mr. Chairman, Ranking 
Member Brady, Members of the Committee.
    The global economy has transformed the way we conduct trade 
and our ability to protect and improve the public's health. 
Thank you for the opportunity to discuss how the U.S. trade 
advisory committee system can produce healthy public policy on 
trade.
    I am the Co-Director of CPATH with Joseph Brenner. In 2004, 
many Members of Congress were surprised to hear their 
constituents echo our finding that the Australia free trade 
agreement could interfere with reimportation of drugs into the 
U.S. Both then Representative Rahm Emanuel and Senator John 
McCain called for expanding public health representation on 
trade advisory committees.
    I would like to focus on three points mentioned in our 
written testimony. First, the public health views are essential 
to assure that the rapidly transforming global economy improves 
people's lives.
    Second, health related industries are robustly represented 
on the trade advisory committees while public health is 
virtually invisible.
    Finally, both the law and sound policy require that Federal 
advisory committees represent a fair balance of views and 
interests. They should also be transparent and accountable.
    Trade agreements can foster sustainable economic 
development, democracy, and peace consistent with public health 
principles. They can also delay access to affordable 
prescription drugs and conflict with or subordinate policies 
that protect people's health.
    Recognizing these conflicts, this subcommittee in May 2007, 
for example, initiated action to limit the impact to so called 
TRIPS-Plus rules on intellectual property on access to 
medicines in lower income countries. Further work remains on 
this issue.
    There is a range of vital human services such as water 
supply, health care, and education, as well as financial and 
commercial services that have been included in trade 
negotiations and in trade disputes.
    These issues call for public health leadership.
    On other issues, like tobacco trade, the 1997 Doggett 
amendment has banned using government funds to promote tobacco 
products abroad, but this amendment must be renewed by the new 
administration.
    Thanks to a campaign by CPATH and our allies, there are now 
technically two public health or three public health 
representatives assigned to certain Trade Advisory Committees. 
But since 2005, the number of representatives from health-
related industries, including pharmaceuticals, tobacco, 
alcohol, processed foods and health insurance companies, has 
grown from 42 to 65. They now sit on 31 committees instead of 
25. The pharmaceutical industry alone increased their 
representatives from 20 to 27. The scales must be balanced.
    The GAO and others have recognized public health's 
legitimate interest in trade policy. CPATH and, again, our 
allies took the USTR to court in 2005 to compel increasing 
public health representatives from zero to something. The court 
said, surprisingly, that even in this stark case, the Trade Act 
as written is too broad for courts to interpret and enforce. 
Congress must establish in the law the need for public health 
representation at all three levels of Trade Advisory 
Committees.
    Together with public health organizations around the 
Nation, we strongly support H.R. 2293 which, among the other 
things, would establish a new Tier 2 Public Health Advisory 
Committee on Trade. As we have discussed, the members of a Tier 
2 committee can receive confidential information and analyze it 
with other cleared advisers who have a similar viewpoint. This 
allows committee members to gain insight into new policies and 
helps shape them, while the U.S. Trade Representative would 
receive a range of views that reflect the public health 
community.
    It clarifies that members representing public health should 
be nominated and represent organizations in the U.S. with an 
interest in improving and protecting the public's health.
    It calls for regularly scheduled communication among the 
committees, policymakers and the public, and it calls for the 
publication of minority views. There has to be a presumption 
that reports are transparent and open to the public unless 
there is a compelling interest to the contrary.
    Finally, there should be USTR staff that is adequate to 
support advisory committee members from NGOs that may be more 
sparsely endowed than corporate representatives.
    I want to echo what members have said, that at this moment 
in history national economies are at a crossroads and the 
questions of global trade policy are vital ones. It is 
important to incorporate a meaningful public health 
perspective. This is the time to set this enterprise on the 
right course.
    Thank you.
    Chairman LEVIN. Thank you very much.
    [The prepared statement of Ms. Shaffer follows:]

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    Chairman LEVIN. Owen Herrnstadt, it is now your turn.

    STATEMENT OF OWEN E. HERRNSTADT, DIRECTOR OF TRADE AND 
  GLOBALIZATION, INTERNATIONAL ASSOCIATION OF MACHINISTS AND 
      AEROSPACE WORKERS; LIAISON, LABOR ADVISORY COMMITTEE

    Mr. HERRNSTADT. Thank you, Mr. Chairman, Ranking Member 
Brady and distinguished colleagues of the subcommittee.
    The International Association of Machinists and Aerospace 
Workers represent workers in a variety of industries--aerospace 
manufacturing, electronics, defense, transportation, 
shipbuilding, woodworking and motorcycles, to name a few. Much 
of what our members produce and service depends upon 
international trade.
    Like other unions, we have developed significant trade-
related expertise in many of the industries in which our 
members work, and we recognize the importance of a Trade 
Advisory Committee System that provides a mechanism for 
creating a strong and unified national trade policy. The Trade 
Act seeks to achieve this goal, as has been mentioned by others 
on this panel and by the previous panel. It seeks to do this by 
setting up the Trade Advisory Committee System that is based on 
a three-tiered approach.
    The tiers are all supposed to be well balanced, to bring in 
diverse views. The first advisory committee, the ACTPN 
committee, constitutes really the first tier; and despite a 
clear statutory mandate to be broadly representative of the key 
sectors and groups of the economy, ACTPN's composition has been 
overwhelmingly weighted towards industry interests. Only one of 
the over 30 ACTPN members represents labor.
    The second tier of the advisory committee system consists 
of five committees, one of which is the Labor Advisory 
Committee for trade negotiations and trade policies. Although 
the LAC's charter allows for up to 30 members, the previous 
administration named only 13 members of that committee, in 
contrast to other second tier committees, which had several 
more members on that committee.
    The third tier involves over 22 trade industry committees 
and agricultural committees which look specifically at 
technical areas. There are--and this was my cursory count and 
also comes a little bit from the USTR Web site--over 300 
industry executives represented on those various ITACs; and 
from a quick review of the USTR Web site, there don't appear to 
be any labor representatives on the third tier group.
    In all there appear, from my quick count, over 400 industry 
and trade association representatives on the entire three-tier 
advisory committee system. Only 14 labor representatives were 
included; and of these, 13 of them serve on the second tier, 
the LAC.
    The failure to include more diverse numbers on all three 
tiers of the committee system impedes the advisory committee 
system from achieving its goal to provide the administration 
with information and advice from adverse groups.
    In addition to the need for balanced composition, 
committees also need to meet in a regular and timely fashion. 
The GAO report well documents that the LAC did not meet for 
more than a 2-year period. When meetings eventually resumed, 
many members of the LAC did not pass the vetting process which, 
according to the GAO report, in many cases took over a year to 
complete. As a result of these delays, the administration lost 
a valuable opportunity to gain much-needed insight from labor.
    In addition, the consultation process can't work if the 
exchange of information between the administration and the 
advisory committee members is inadequate. During meetings, 
little or no information that wasn't already available to the 
public was exchanged. There were also sincere concerns over the 
consideration that was given by that advice and information.
    In order to improve the system, I have listed a variety of 
recommendations in my written testimony. Some of them include 
providing greater balance by increasing the number of labor, 
environmental, consumer and other nongovernmental organizations 
on the ACTPN; increasing the number of labor representatives on 
the Labor Advisory Committee; including labor and other 
noncorporate representatives on appropriate ITAC and ATAC 
committees; expediting the vetting process; improving the 
entire consultation process by engaging committees at the 
earliest possible point of trade activities; and ensuring the 
transparency of the entire Trade Advisory Committee System by, 
among other things, requiring USTR, the Labor Department and 
Commerce to report on an annual basis to Congress the number of 
meetings held, as well as the agenda items discussed at each 
meeting.
    The Federal Trade Advisory Committee System is instrumental 
in providing a mechanism for developing and implementing a 
national trade policy that benefits all stakeholders and, of 
course, the public. We are hopeful that the Congress and the 
current administration will move swiftly to correct the 
deficiencies that we have elaborated on.
    Thank you.
    Chairman LEVIN. Thank you very much.
    [The prepared statement of Mr. Herrnstadt follows:]
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    Chairman LEVIN. Mr. Petty.

STATEMENT OF BRIAN T. PETTY, SENIOR VICE PRESIDENT, GOVERNMENT 
  AFFAIRS INTERNATIONAL ASSOCIATION OF DRILLING CONTRACTORS; 
  CHAIRMAN, INDUSTRY TRADE ADVISORY COMMITTEE 02, AUTOMOTIVE 
                  EQUIPMENT AND CAPITAL GOODS

    Mr. PETTY. Mr. Chairman, Ranking Member Brady and Members 
of the Subcommittee, I am Brian T. Petty, Senior Vice-President 
of Government Affairs of the International Association of 
Drilling Contractors and Chairman of the Industry Trade 
Advisory Committee for Automotive Equipment and Capital Goods, 
ITAC 2.
    ITAC 2 is comprised of 27 members representing a wide 
gambit of U.S. manufacturing interests, including automotive 
manufacturers, auto parts makers and industries that sell to 
them. In addition, our membership includes trade groups 
representing the largest manufacturers of goods and equipment 
and those companies supplying goods and services to them. We 
also include significant construction, farm equipment, energy, 
precision tools and packaging entities.
    I formally served as Vice Chairman of the Industry Sector 
Advisory Committee for Capital Goods, ISAC 2, which in 2004 
which was consolidated into ITAC 2.
    Accounting for a quarter of global manufacturing output, 
the U.S. is still the world's largest manufacturer. If the U.S. 
manufacturing sector stood by itself, it would be the eighth 
largest economy in the world. Japan, Germany and China are the 
next largest economies, but their GDP is significantly smaller 
than that of the United States.
    In 2008, U.S. manufacturing output was $5.18 trillion. More 
goods are made in the United States today than at any time in 
American history. The significance of manufacturing in the 
economy is even greater than the macroeconomic data indicate, 
for the manufacturing sector is what has enabled other sectors 
of the economy to grow.
    The industries represented by ITAC 2 represent close to 
one-third of U.S. manufacturing output. In 2008, U.S. capital 
goods production was $907 billion and auto industry production 
was $479 billion. These industries account for 56 percent of 
U.S. domestic exports of manufactured goods.
    Capital goods are the largest single category of exports, 
at $469 billion, while automotive exports were $121 billion in 
2008. Automotive products are the single largest U.S. export, 
followed by aerospace and semiconductors.
    More than one in six U.S. private sector jobs depends on 
U.S. manufacturing. Specifically, the manufacturing sector 
supports more than 20 million jobs in the United States, 14 
million jobs directly within manufacturing and 6 million others 
in sectors such as commodities, wholesaling, transportation, 
and finance and insurance dependent on the manufacturing 
sector.
    I also serve on the ITAC Committee of Chairs Investment 
Working Group. The IWG was formed in 2003 and reauthorized in 
2006. The IWG's purpose is to provide advice to the U.S. 
Government on legislation, policies and issues concerning both 
in-bound and outbound investment, as well as investment 
treaties and agreements. The group was formed at a time when 
the administration was engaged in an extensive review of 
investment policy as required by the Trade Act of 2002.
    Officials at USTR and the Departments of Commerce, State 
and Treasury recognizes that need for private sector 
consultation, but also realized that no single advisory 
committee focused on investment matters. Rather, investment 
experts were dispersed among various ITACs. The working group 
was formed in response though this problem.
    The IWG draws its membership from the roster of cleared 
ITAC advisers. The main criterion for membership is that the 
adviser has depth, knowledge and expertise in investment policy 
and practice.
    USTR and the Department of Commerce seek a diversity of 
views by encouraging membership from all ITACs and limiting the 
number of members from any single ITAC. The IWG meets and 
deliberates independently, but reports its findings and 
recommendations to the ITAC Committee of Chairs.
    The IWG's most recent work product was entitled Investment 
Policy Outlook for 2009, submitted by the ITAC Committee of 
Chairs to Secretary Locke and Ambassador Kirk on April 23, 
2009. Membership has ranged from 12 to 15. Currently there are 
13 IWG members from eight different ITACs.
    For the first 5 years of operation, 2003 to 2007, the IWG 
included cleared advisers from nonbusiness NGOs, specifically 
Friends of the Earth, the Mercatus Center at George Mason 
University, and the Pacific Environmental Resources Center. But 
only Friends of the Earth briefly participated, and after that, 
none of them participated.
    My history with the industry Federal advisory system goes 
back to 1997 and has given me some substantial insight into its 
efficacy in advising the USTR and Department of Commerce on 
trade policy. As security advisers, we have common sectoral 
interests in promoting exports and creating jobs and market 
value in the U.S.
    Some are counseling adding NGOs and representatives of 
organized labor to the individual ITACs, notwithstanding the 
fact there are advisory committees created precisely to provide 
them the same or even better access to administration trade 
policymakers. For example, the Trade Environment Policy 
Advisory Committee meets routinely with the USTR to express the 
environment community's views about emerging trade issues, and 
organized labor has its own Labor Advisory Committee for Trade 
Negotiations and Trade Policy. Just so, U.S. industry under the 
ITAC system has the opportunity to speak clearly and with an 
unvarnished opinion about what is in U.S. business's interests 
and where U.S. economic interests lie.
    The ITAC system was reorganized in 2004 after a thorough-
going study by the GAO proposed rationalizing the sectoral 
system first established in the 1970s to reflect the 21st 
century American economy. From where I sit and in this, I am 
supported by the 26 other members of ITAC 2. This system has 
worked very well.
    Adding adverse or potentially contentious elements to the 
individual ITACs would certainly chill free and frank 
discussion and would be a major disincentive to recruit members 
to the ITACs. We all give time and sacrifice something of our 
day jobs in participating. I hope the subcommittee treads 
lightly in promoting something which could discourage the 
critical input of U.S. employers and, in particular, the 
manufacturing sector substantially represented by ITAC 2.
    Thank you for the opportunity to testify.
    Chairman LEVIN. Well, thank you very much.
    [The prepared statement of Mr. Petty follows:]
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    Chairman LEVIN. So let's have a discussion, Mr. Petty. I 
think your testimony and that of your colleagues, the four 
others, now helps us shift into kind of the dynamics of the 
advisory system. I think we need to spend a few minutes about 
that.
    You know, we have this chart that lays out Tier 1, Tier 2, 
Tier 3, and let's take manufacturing. All of us care a lot 
about that. There are manufacturing issues in a lot of the 
negotiations, and that is surely true of the WTO negotiations. 
We have the NAMA, we have the tariff issues, et cetera, et 
cetera.
    You seem to be saying--take us to manufacturing--that we 
don't want a very diverse representation within that ITAC 
group, and that it is better that there be within that ITAC 
group business interests and not the involvement of diverse 
points of view.
    And the same might be true, for example, of the Health--I 
guess that would be ITAC 3; it is not always clear--in that I 
think you are saying that other points of view can be expressed 
through, for example, the Tier 2 committee, say it is Labor, 
say it is Environmental Issues.
    But if there isn't a lot of back and forth of diverse 
points of view within an advisory committee. Doesn't that 
prevent the kind of enrichment of the dialogue with USTR? For 
example, on Health, we have had a lot of discussion about the 
health provisions within FTAs. And I don't want to go into any 
one in particular, but we became in the Congress quite involved 
in that in recent years.
    So are you saying that within, say, the ITACs there should 
be essentially representation from the business sector? And, by 
the way, the business sector itself may have different points 
of view, right?
    Mr. PETTY. Yes.
    Chairman LEVIN. So I don't quite understand how this system 
works, if the advice comes from particular points of view 
without meaningful back and forth among those points of view 
being fed into USTR.
    Mr. PETTY. I would respond that Tier 2 provides the 
mechanism that may be failing now, for providing that access by 
TEPAC, by the Labor analog. But I can tell you that I have 
known people who have been on the TEPAC in years past, and they 
enjoyed ready access to the USTR Ambassador himself or herself 
and to top officials of the Department of Commerce that we, at 
the ITAC level, don't see.
    Chairman LEVIN. I understand that. That may be true.
    But essentially--I will just take a couple of minutes and 
then pass it over to Mr. Brady and the others. Apparently, you 
seem to be saying that the advisory model should be more or 
less this: that each of the entities would represent a 
particular slice of interest--and I don't mean self-interest--
and that that should be fed in kind of on a parallel basis 
without there having been within the advisory group what you 
call an adverse or potentially contentious element.
    Take the NAMA negotiations within the WTO and the whole 
industrial sector set of issues. Are you saying that there 
ought to be within the advisory structure the feed-in of 
particular points of view that have talked to each other, but 
not the benefit of the back and forth between what you call 
contentious or adverse points of view?
    Mr. PETTY. What I am saying is those other interests have a 
place in the system already. The industrial interest and the 
manufacturing interest cannot be represented on the labor Tier 
2 committee, nor can it be represented on the TPAC committee. 
And I would point out that the pending or proposed H.R. 2293 
would set up a Tier 2 public health committee that would 
exclude specifically commercial interests. So there is an 
avenue for those voices to advise our trade policymakers.
    I can tell you as a practical matter, it is difficult 
enough to manage an agenda, to get a coherent view, consensus 
view, from the manufacturing industry, which represents a wide 
spectrum of employers in this country and a big chunk of the 
economy, to give coherent advice without distractions or 
confusion that might be created by people who don't really have 
a stake in it, a direct stake in the technical advice being 
provided on NAMA, on nontariff barriers on the Doha Round.
    And I can tell you with absolute confidence that if that 
element was introduced into our system, into my ITAC, people 
would not re-up and a lot of people would not join. So it would 
just wither away. The voice of business would be severely 
diminished.
    Chairman LEVIN. So essentially you see the advisory 
structure having again the interests, though there may be some 
differences within that group, working on parallel tracks 
instead of their having meaningful back and forth that can then 
be fed into USTR?
    Where do the people with very diverse points of view meet--
and I will finish.
    Take antidumping issues for a moment. Don't you need to 
have a clash, if you want to put it that way, within the 
advisory structure?
    Mr. PETTY. I would say the Tier 2 and the ACTPN are part of 
the advisory structure, and they have the opportunity to 
express those views. I can tell you, on antidumping in 
particular, within our own ITAC we have a wide diversion.
    Chairman LEVIN. I know that. But don't you want to have--
take steel, and I will finish. Don't you want an advisory 
structure that has the business and labor interests having some 
opportunity to, in quotes, ``clash and feed'' that into the 
advisory structure; or do you want each of these to be fed in 
without the benefit of that difference of opinion into the 
USTR?
    Mr. PETTY. Mr. Chairman, I can't speak for steel, but I can 
speak for the group that I represent, which I chair; and most 
of those or a great many of them are not represented by 
organized labor. Organized labor represents a distinct minority 
of the U.S. workforce, so I am not sure having organized labor 
at the table adds anything to the give-and-take.
    Chairman LEVIN. You represent the construction industry?
    Mr. PETTY. My paid job is the International Association of 
Drilling Contractors.
    Chairman LEVIN. No, but the construction industry is 
involved in your ITAC?
    Mr. PETTY. They are indeed, yes. They are elements of the 
construction industry.
    Chairman LEVIN. And within the construction industry, 
whether it is organized labor or otherwise--okay, look, I am 
not 100 percent sure of the answer, but I do think the question 
needs to be asked.
    Mr. Brady, you are next.
    Mr. BRADY. Let me follow up on that questioning.
    I think the key question today is not how can we design a 
system to ensure that USTR does exactly what all facets of the 
private sector or the people on the advisory committees tell it 
to do, but how do we design a system so that USTR effectively 
hears from all facets of the private sector so they can take 
this oftentimes contradicting information and formulate trade 
policy that makes sense for America.
    My question to you: It seems to me each of the advisory 
committees from Tier 1 to Tier 2 to Tier 3 get increasingly 
deeper into the weeds on trade agreements, in a good way, as--
the overall strategy and policy of Tier 1, a little more broken 
out in the sectors on Tier 2, and then in Tier 3 that technical 
expertise so we can tell what the specific language of trade 
agreements that are being proposed, how they would affect 
American workers and our industry. It seems to me a pretty good 
approach on this.
    I will ask Mr. Petty and Mr. Hoelter, what is the impact 
if, in effect, the advisory committees at the technical level 
presynthesize--package, sort of, the consensus--rather than 
creating an arena for vigorous airing of different views?
    My thought is, I am not interested in dumbing down the 
advisory committees at the technical level or creating a mini-
United Nations where debate goes on endlessly. It seems to me 
the technical advisory committees are just that, technical. The 
goal is to provide that information, that insight, into USTR as 
they deal with specific issues.
    Mr. Petty and Mr. Hoelter, following what Chairman Levin 
had to say and given the role of the ITACs, what is the optimal 
role for them to play?
    Mr. HOELTER. Thank you. Let me take a crack at that.
    Based on our own ITAC, the consumer goods ITAC, which I 
mentioned has very diverse membership, diverse industry 
membership, we do get into very technical details, and--
primarily concentrating on some of the more invidious barriers 
to our export opportunities overseas, and those are the 
technical barriers to trade.
    For example, in my own company, we welcomed the accession 
of China, because it is the largest motorcycle market in the 
world. So now we can sell our product in China. The problem is 
the Chinese can't use them. They are prohibited in many cities 
from operating motorcycles in those cities.
    We get into a great level of detail and have quite a lot of 
discussion that I think opens the eyes of the staff members who 
participate from both the Department of Commerce and U.S. Trade 
Representative's Office.
    So I do think we have enriching, robust dialogue among our 
committee members and the industry expertise that they bring to 
bear.
    Mr. BRADY. Does USTR always agree with your views?
    Mr. HOELTER. I don't think they will ever say, we accept 
and agree and are going to carry your water for you. They are 
diplomatic and thank us and take them back. I would also say, 
too, I think there are other opportunities for all members of 
our society and interest groups to take advantage of, I think, 
the fairly open-door attitude I have seen with the U.S. Trade 
Representative's Office and Department of Commerce in this 
administration and past administrations. If meetings need to be 
held or particular matters are outside the trade advisory 
system and are not on our agendas, we can still have those 
opportunities to raise them and have an audience.
    Mr. BRADY. Thank you.
    Mr. Petty.
    Mr. PETTY. I would agree with Tim. Absolutely. I think that 
we have enough of a heavy agenda when we meet, and we meet as 
routinely as his does, and we have many telecoms to provide 
specific advice. But the level of detail and the heavy agenda 
that is provided at each meeting is all consuming. It is 
sufficiently difficult to come to some kind of resolution and 
give adequate advice and consensus views to our trade 
policymakers in this current context.
    Mr. BRADY. Is there a role for public health or labor, for 
example, to be expanded on the Tier 1, the advisory ACTPN, or 
Tier 2, where you are dealing with sort of a larger general 
policy dialogue?
    Mr. PETTY. That is someone else's call to make. It is 
certainly something we would not resist, of course. But if it 
is inadequate, I think it should be expanded.
    But as I said, my conversation with people on TPAC in 
particular over the decades, let's say, has been they have 
enjoyed meetings with the very top people at USTR and the 
Commerce Department; they have had ready access, and they get 
closer to actually the people that make the decision than we 
do. Ours is funneled up a long, long tree.
    Mr. BRADY. Great. Thank you. My point is I want to make 
sure the technical committees are doing their job, are 
providing in a very complex world the knowledge and information 
USTR needs to be able to create win situations for the United 
States and our workers. So thank you all for your input.
    Mr. Chairman.
    Chairman LEVIN. Thank you for following up on that 
question.
    Mr. Doggett, you are next.
    Mr. DOGGETT. Thank you, Mr. Chairman, and thank you to each 
of you for your testimony.
    The caricature of radical environmentalists and inept labor 
union representatives running rampantly through these 
committees and disclosing all the secrets to the Chinese and 
the Germans and the Indians is not only silly, but I think it 
is dangerous, the caricature we have heard from some this 
morning.
    Mr. BRADY. Mr. Chairman, look, I don't want to interrupt, 
but----
    Mr. DOGGETT. You are interrupting and I don't yield to you. 
You can make your comments further. I didn't refer to you 
specifically.
    But ``radical environmentalist'' is a term used by one of 
our colleagues. And it is caricature and it is silly and it is 
dangerous mainly to our trade policy, because we will not build 
broader support for more trade in this country until we deal 
with some of the issues that are referred to.
    And I also have to disagree with some of the testimony that 
we just heard, because I have a great deal more confidence in 
American business than some of the testimony suggests. I don't 
believe that American business is so weak that it will wither 
away if somebody files a minority report or that it cannot 
withstand some serious professional discussion behind closed 
doors about how best to shape our trade objectives and how to 
respond to the negotiating positions of other countries.
    No one is suggesting that we put it on the front page or 
invite the Chinese to have a representative within these 
committees if we are deciding on what our objectives are going 
to be. But there are times in the process, as Mr. Magraw 
pointed out in his testimony, that our foreign trading partner 
knows exactly what our position is. The commercial interests 
that have met behind closed doors in a private way know exactly 
what our position is. The only people that don't know what our 
position is are the American people. And it is that lack of 
transparency at key points in the process that this hearing 
really needs to focus on. And USTR needs to do more than a 
superficial review but a real review.
    Mr. Herrnstadt, let me ask you, if you had representatives 
of steelworkers on steel or autoworkers on this auto committee 
or machinists dealing with aircraft parts, do your members have 
any interest in disclosing to our foreign trading partners 
trade secrets of the industries that you work for?
    Mr. HERRNSTADT. Well, we absolutely don't--do not. In terms 
of the proprietary nature, let me also remind everyone that, at 
least on the Tier 2 committee, we all do have security 
clearances on that.
    Mr. DOGGETT. You are actually subject to--you not only have 
been vetted, but there are laws that because you are dealing 
with secret information, you could be subject to some action if 
you disclosed it, right?
    Mr. HERRNSTADT. That is correct.
    In addition to that, I would remind everyone just to take a 
look at the statute when it comes to the ITAC. ``Such committee 
shall insofar as practical be representative of all industry, 
labor, agricultural or service interests in the sector or 
functional areas concerned.''
    Certainly the machinists union is well versed in issues 
like nontariff issues. Certainly we have worked with Harley-
Davidson in the past, and that is one of the reasons that has 
led to our historic labor relations that has brought that 
company such great success.
    In addition, if I could also add, the topics that are 
covered in the two-tier system are, by statute, to be generally 
policy oriented. They are cross-industrial because they do 
represent--we do have labor representatives from a variety of 
other industries.
    The ITACs cover specific issues. I have never been to one, 
but I understand it is things like export controls, maybe bits, 
maybe other things like tariffs and so forth that we do have 
expertise on.
    Lastly, we really do need to get away from this old mind-
set that everything is so adversarial. I do believe that 
particularly labor has a great deal of expertise in the 
technical areas of these trade-related issues that we can add 
to the function of such a committee, and in doing so add to the 
information and advice the administration is seeking.
    Mr. DOGGETT. Thank you. I think it is very clear from the 
studies that the General Accountability Office has done that 
any attention to the views of employee organizations, whether 
they were union or nonunion, in the last decade, has been 
negligible to nonexistent.
    Mr. Magraw, let me ask you specifically about what 
impediments there are presently to sharing documents and 
information between advisory committees?
    Mr. MAGRAW. Thank you, Congressman.
    The main experience we had recently had to do with the 
ITAC's recommendation regarding reach that I mentioned. What 
initially happened is that we were told we couldn't share those 
documents because of a legal impediment. I think the genesis of 
that is that the ITAC 3, the ITACs report both to USTR and to 
the Department of Commerce.
    Several of us wondered if in fact there was any legal 
impediment. There might be a politeness impediment to telling 
the ITACs in question that their advice, which was, after all, 
to the U.S. Government, was being shared with other people who 
had clearances.
    But that is not a legal impediment. We have asked for a 
legal opinion and so far have not gotten one.
    I think the main impediment actually, though, is practice. 
I have never been involved in the Tier 1 ACTPN. No 
representative of that or member of that has ever asked my 
opinion of anything or informed me about it. I think I am able 
to be asked because I have a clearance. There is no practice of 
USTR that I know of at all that would bring an ITAC 
recommendation to the attention of any of the Tier 2 
committees.
    I might point out, if I could take one second to say, this 
technical advice is extremely important. I can see why labor 
would have a tremendous amount to add to it. But, of course, 
the ITACs are going far beyond technical advice; they are also 
providing policy advice.
    I completely agree with what I think was the gist of the 
chairman's questions, that it is very important to have a give-
and-take and a dialogue. What the USTR gets now is narrow, 
self-interested advice that isn't informed by a give-and-take 
and, I think, is poor.
    And I think it was Mr. Davis who pointed out earlier that 
it is USTR's job to synthesize this result, the different 
advice. But you want to get good advice, and if that involves a 
minority opinion off of an ITAC, I think that would be fine.
    Mr. DOGGETT. Thank you.
    Thank you, Mr. Chairman.
    Chairman LEVIN. Mr. Davis, I think you have the last series 
of questions.
    Mr. DAVIS. Thank you. I appreciate Mr. Magraw's point about 
the give-and-take on an ITAC.
    My concern in including everybody under the sun is, many of 
the staffers that I have met in the organized labor movement 
have never walked a factory floor like I have, and I would be 
very concerned that somebody who doesn't know what a bill of 
materials is, doesn't understand the difficulties and the 
mathematical complexities in distribution requirements planning 
might in fact take an ideological or emotional position over 
the actual facts and jobs that are being affected, particularly 
considering the minority of manufacturing employees being 
represented nationally.
    I also appreciate Mr. Herrnstadt's statement. I am not a 
politician by background. I am just a guy that kind of grew up 
around manufacturing, couldn't even get elected to the student 
council. I am not a silver-tongued orator like the gentleman 
from Texas.
    But the one thing that I would say, from your comments, is 
I appreciate your saying that we need to get away from this 
mind-set that everything is adversarial. I think there are so 
many issues related to process that are very, very critical 
that we understand that are not partisan issues, they are not 
emotional issues, they are technical issues. They are cause and 
effect. We often miss that.
    I think most folks should be able to have input at the 
table, but at the same point having people who actually 
understand fully the impact of this and are not pursuing 
political agendas, I think, is very important from a technical 
side.
    It brings me to a question.
    Mr. Hoelter, you noted in your testimony that the ITAC 
advice needs to be clear, focused and unvarnished. You also 
expressed concern about watering down advice to the lowest 
common denominator to achieve group consensus. In a group whose 
members might reflect opposing interests, it is effectively 
worthless to USTR. You also say that such a result would do our 
trade policymakers a profound disservice.
    I understand there are political issues afoot, particularly 
in the first two tiers, because of the importance of elections, 
the outcomes of that, the will of the people ultimately. But 
could you elaborate on your comment about this statement 
regarding a profound disservice? What do you see to be the 
issue here?
    Mr. HOELTER. Well, maybe this is the wrong analogy, but 
let's take bills just in the United States Congress. You have a 
House bill, you have got a Senate bill. Both may be very, very 
different and provide clear choices, but in our system, you 
have to sit down at a conference committee and you hammer 
things out and you dilute it, and there is a give-and-take that 
goes on, and the bill then goes up to the executive.
    What we are suggesting here and what I think really goes on 
that I think would be more effective and has been working 
within the ITAC process is to provide a variety of options that 
then the policymaker, the executive in my example, can choose 
or pick on almost a smorgasbord approach.
    Mr. DAVIS. So you are suggesting, not unlike an executive 
brief in a business or an operations brief, that there would be 
a chart of possible courses of action that that decision-maker 
or policymaker would be able to choose from?
    Mr. HOELTER. Something like that.
    I think what we should do is look at the entire system as 
opposed to each--or look at the forest as opposed to each 
individual tree, and do we have a rich forest with great 
diversity of foliage and things that one can draw upon to come 
up with what I said earlier is a coherent trade policy.
    If I might comment on one other thing, I also believe that 
it is the responsibility of industry to do a better job than we 
have been on educating our own constituencies, our employees 
and our stakeholders, about trade and about the benefits and 
what it means on the shop floor to the ordinary worker or 
someone who is a pencil-neck like myself. I think that is very 
important.
    Mr. DAVIS. I appreciate that. Our workers in the largest 
machine tool manufacturer in North America in my district would 
be sensitive to that.
    Mr. Petty, GM, Chrysler and Ford all sit on the same ITAC 
that you chair. Could you describe what this new dynamic would 
be on your ITAC if labor unions, for example, were to 
participate in all of your meetings and were to participate in 
the drafting of your reports to the administration, 
particularly if you had to arrive at a consensus report?
    Mr. PETTY. It is hard to say. Again, I leave it to those 
companies to answer that question on their own.
    I just see the potential in not involving the Big Three, if 
you will, but there are other members of my ITAC who may be 
uncomfortable by having labor represented at the table. It 
could be that the Big Three are very comfortable or basically 
indifferent, but we haven't sensed that out.
    I am just speaking of the view of the whole ITAC, and I 
have polled them, that generally they think it would be a 
disruptive intrusion into the process and would dilute the 
quality of the advice given ultimately to the USTR and the 
Department of Commerce.
    Mr. DAVIS. Thank you. I see my time has expired.
    Chairman LEVIN. Mr. Reichert.
    Mr. REICHERT. Thank you, Mr. Chairman. I am going to 
address my question to Mr. Herrnstadt.
    As you probably know, I come from the Pacific Northwest. I 
may have mentioned that in my earlier question. But running 
between assignments from here to there, I have forgotten 
exactly what I said the first questions.
    So a lot of your members, as well as Longshoremen and 
Teamsters, live and work in my district, and as I mentioned in 
my remarks in the first panel, I am looking for ways to 
increase the participation of your association and others when 
it comes to providing input on trade.
    These workers' livelihoods depend on international trade, 
and they have so much to gain from trade, especially in 
Washington State. Airplane parts, the parts that your members 
manufacture, are key exports for my State and our country.
    I just want to mention, I was really disappointed to see 
opposition to the Colombian FTA. I traveled to Colombia, 
visited with the President and union members on both sides of 
the issue in Colombia. I understand there was a great impact on 
the Caterpillar Company whose tariffs were about $200,000 to 
$250,000 per piece of machinery as they were exported from the 
U.S. and imported into Colombia.
    If that trade agreement would have been in place, those 
tariffs would have disappeared, and it certainly would have 
been, I think, welcome to the workers at Caterpillar. That in 
mind, I would like to work with you to achieve this goal, to 
get people engaged in this. So my comments are to you.
    I would like to ask Mr. Hoelter, you mentioned in your 
testimony that in your experience the Commerce Department and 
the USTR have maintained an open-door policy and an eagerness 
to listen. In other channels, beyond the formal Trade Advisory 
Committee System, those things work inside the system, but 
outside the system.
    Could you elaborate on that statement that you made, and do 
you think that labor groups that oppose trade agreements so 
beneficial to their members have adequate avenues for input 
now, and do you think their perspectives would change if they 
had other channels to communicate with the administration or 
Congress on trade?
    Mr. HOELTER. Thank you.
    I cannot speak on behalf of the labor groups, but I can say 
that, as to many of the challenges that my company faces 
overseas, most of them being in the form of nontariff technical 
trade barriers, it would be inappropriate for me as chairman of 
ITAC 4 consumer goods to monopolize the dialogue when we have 
our ITAC meetings with Commerce and USTR representatives there 
with the issues that pertain only to my company.
    We do have a full agenda. But from experience, there have 
been many opportunities where we have been able to hold 
meetings within the Department of Commerce and also at U.S. 
Trade Representative's Office to get into the particulars of 
particular issues that create great problems for us and 
restrain our opportunities.
    So, again, it is inappropriate to do that I think within a 
committee, because I have to also defer to others who have 
strong points of view and want to participate in the dialogue.
    Mr. REICHERT. Mr. Herrnstadt, could you answer the last 
question for me? Do you think that the perspectives of union 
workers could be changed if they had other channels to 
communicate with and learn more about trade and how it impacts 
their jobs?
    Mr. HERRNSTADT. Well, let me answer the first part of your 
question.
    I think that there needs to be a great deal more forum for 
labor and the public at large to participate in the trade 
policy. The Trade Advisory Committee System that we are talking 
about is one of those, although it is inadequate; in the way it 
is currently being run, it is completely deficient on that.
    We have got 6.5 million jobs that have been lost since 
December 2007. Two million of those were manufacturing jobs. We 
have got to do things differently. We can't just sit back at 
the status quo and say, if we include labor expertise in ITACs, 
it will be the end of the system.
    Mr. REICHERT. Sir, my time is about to expire. Could you 
address the last question for me, please, before the red light 
comes on?
    Mr. HERRNSTADT. Sure. I believe that we need to do so much 
more to make sure that the worker perspective is given towards 
creating trade policy in this country, and we haven't given 
adequate attention to that at this point.
    Mr. REICHERT. Okay. My time has expired.
    My question wasn't answered, but thank you, Mr. Chairman.
    Chairman LEVIN. Well, you didn't hear an answer on the 
first comment you made, but that is for another time I think.
    I just want to say, Mr. Hoelter, before Mr. Herger finishes 
our part of this, I thought your answer was admirably discreet 
because your company has faced nontariff barriers in a number 
of countries, and I think trade policy needs to worry about 
being able to ship our goods to other countries as well as the 
openness of our market.
    And if I might say so, your discreet answer I think 
somewhat underestimates--on purpose, in your case--the problems 
that your company has faced exporting a product that is made in 
the United States of America.
    Mr. Herger.
    Mr. HERGER. Thank you, Mr. Chairman.
    Mr. Petty and Mr. Hoelter, given the proprietary nature of 
your information exchanged with the government, what are your 
thoughts on opening ITAC meetings to the public? What could 
happen to U.S. negotiating interests if our trading partners 
had access to that information exchange? And would that be 
helpful or hurtful to all U.S. interests?
    Mr. PETTY. Well, I will take it for starters.
    It would certainly diminish the quality of the advice being 
given by the current advisers. So if you open it to the public, 
people are going to be much more hidebound in giving good 
advice because they are going to be always watching their back. 
They are worrying about implications about their own 
competitive situation, they are worrying implications with 
their workforce, they are worrying about implications for a 
variety of lawyers that are on the periphery circling like 
sharks. They wouldn't feel comfortable.
    Frankly, from--again polling my ITAC, which is one of the 
largest and most robust, they just wouldn't continue to 
participate. Many of them would just fall away. It is just not 
worth the time and trouble.
    As far as advising or influencing U.S. trade policy and our 
trade policymakers abroad, I think it clearly would take an 
arrow out of their quiver. They wouldn't be as effective as 
they could be in promoting American jobs. That is what it is 
all about, and American exports.
    Mr. HERGER. Thank you, Mr. Petty.
    Mr. Hoelter.
    Mr. HOELTER. Thank you. I would say that on our own ITAC, 
since it does not represent really a sector of competing 
interests, commercially competing interests, but rather a broad 
range of companies that are involved in manufacturing consumer 
goods, we don't have really the issue so much among ourselves 
of disclosing trade secrets, if you will; but we do have the 
interest of disclosing negotiating positions and suggestions, I 
guess, to our government policymakers.
    I think that we have to be very careful about opening up 
our meetings to the public at large. Certainly perhaps some 
agenda items can be disclosed. Meeting frequency can be 
disclosed.
    But even as the chairman just mentioned with my prior 
remarks--I don't know if it was a compliment, but he did 
describe them as being very discreet. I was trying to be 
measured in what I felt about some of the trade barriers we 
face in China and elsewhere. If I really told you how I felt, I 
don't think that would be appropriate for this particular 
forum, but that is because it is public. When we are behind 
closed doors, I think we can sort of take the gloves off, if 
you will, and be frank, honest, and have a really good, dynamic 
exchange.
    Mr. HERGER. That is very helpful, Mr. Hoelter and Mr. 
Petty. Thank you very much.
    I believe the whole purpose of this ITAC is to be able to 
help our negotiators, be able to help our trade team. And it 
sounds to me like this would be very detrimental, and 
individuals participating would be holding back what otherwise 
they would be much more forthcoming of.
    I think what is important is that we have the best product 
available. So I thank you very much for your testimony.
    Thank you, Mr. Chairman. And with that, I yield back.
    Chairman LEVIN. All right. I think we are finished. Thank 
you very much to all five of you. It has been a most 
interesting and, I think, important hearing.
    We stand adjourned.
    [Whereupon, at 12:57 p.m., the subcommittee was adjourned.]
    [Submissions for the Record follow:]

Testimony By American Association of Exporters and Importers, Statement
    Statement of the American Association of Exporters and Importers
1. Introduction and Overview
    AAEI appreciates the opportunity to offer these comments on the 
Trade Advisory Committee System, which is currently being reviewed by 
the House Ways and Means Committee--Subcommittee on Trade in the U.S. 
House of Representatives.
    AAEI has been a national voice for the international trade 
community in the United States since 1921. Our unique role in 
representing the trade community is driven by our broad base of 
members, including manufacturers, importers, exporters, wholesalers, 
retailers and service providers, including brokers, freight forwarders, 
trade advisors, insurers, security providers, transportation interests 
and ports. Many of these enterprises are small businesses seeking to 
export to foreign markets. With promotion of fair and open trade policy 
and practice at its core, AAEI speaks to international trade, supply 
chain security, export controls, non-tariff barriers, import safety and 
customs and border protection issues covering the expanse of legal, 
technical and policy-driven concerns.
    As a trade organization representing those immediately engaged in 
and directly impacted by developments pertaining to international 
trade, trade facilitation and supply chain security, we are very 
familiar with the operational impact of U.S. trade policies and 
programs. Many AAEI members serve on the Commercial Operations Advisory 
Committee and the International Trade Advisory Committees to various 
federal agencies. Therefore, AAEI is deeply interested in the Trade 
Advisory Committee System designed to assist U.S. officials concerning 
implementation of international trade policy.
2. Commercial Operations Advisory Committee
    The Commercial Operations Advisory Committee (``COAC'') was 
established in the 1980's to assist the U.S. Department of Treasury 
oversee the U.S. Customs Service. Specifically, Section 9503(c) of the 
Omnibus Budget Reconciliation Act of 1987 authorized the Secretary of 
Treasury to establish COAC as follows:

        (1)  The Secretary of the Treasury shall establish an advisory 
        committee which shall be known as the `Advisory Committee on 
        Commercial Operations of the United States Customs Service' 
        (hereafter in this subsection referred to as the `Advisory 
        Committee').
        (2)  (A) The Advisory Committee shall consist of 20 members 
        appointed by the Secretary of the Treasury.

    (B) In making appointments under subparagraph (A), the Secretary of 
the Treasury shall ensure that--
        (i)  the membership of the Advisory Committee is representative 
        of the individuals and firms affected by the commercial 
        operations of the United States Customs Service; and

        (ii)  a majority of the members of the Advisory Committee do 
        not belong to the same political party.
        (3)  The Advisory Committee shall--

    (A) provide advice to the Secretary of the Treasury on all matters 
involving the commercial operations of the United States Customs 
Service; and
    (B) submit an annual report to the Committee on Finance of the 
Senate and the Committee on Ways and Means of the House of 
Representatives that shall--

        (i)  describe the operations of the Advisory Committee during 
        the preceding year, and
        (ii)  set forth any recommendations of the Advisory Committee 
        regarding the commercial operations of the United States 
        Customs Service.
        (4)  The Assistant Secretary of the Treasury for Enforcement 
        shall preside over meetings of the Advisory Committee.

    19 U.S.C. Sec. 2071. At that time, COAC's focus was on customs 
procedures which had an impact on the trade community's commercial 
operations.
    Over the last several years, particularly since 2002, the COAC has 
shifted its focus more to trade security issues to reflect the transfer 
of the U.S. Customs Service to the U.S. Department of Homeland Security 
(``DHS''), which now functions as U.S. Customs and Border Protection 
(``CBP''). COAC's charter was revised in 2004 to reflect its new focus 
on homeland security issues, particularly maritime cargo. The 
membership of COAC reflected this change with more representatives with 
supply chain security expertise, which previously were not involved in 
import and export regulatory procedures.
    In addition to the change in focus, COAC's government chairman was 
relegated to the Commissioner of CBP instead of senior management of 
DHS, who did not express interest in attending COAC meetings let alone 
hearing COAC's views on significant policy issues, such as:

          Customs-Trade Partnership Against Terrorism
          ``First Sale'' Rule
          Uniform Rules of Origin
          Importer Security Filing (``10+2'')

    AAEI recommends a number of changes to COAC, which we believe will 
return COAC to its traditional role in assisting the Departments (both 
DHS and Treasury) properly provide advice to and report to the 
Secretaries and the Congress concerning the operations of CBP. 
Specifically, AAEI recommends the following changes:

          Remove COAC from the Federal Advisory Committee Act 
        (``FACA''), 5 U.S.C. App. 2 Sec. Sec. 1--14. Specifically, we 
        suggest that Congress enact legislation adding a section to 19 
        U.S.C. Sec. 2071, stating:

    Nonapplicability of FACA. The Federal Advisory Committee Act (5 
U.S.C. App.) shall not apply to the Commercial Operations Advisory 
Committee under this section.

          For COAC to fulfill its statutory obligation to 
        Congress in assisting both Departments, DHS and Treasury, COAC 
        and CBP must collaborate on the development of agendas and 
        issues which are timely and relevant to the international trade 
        community. The statute states that COAC ``shall provide advice 
        to the Secretary of Treasury [and DHS] on all matters involving 
        the commercial operations of [CBP].'' The statute is expansive 
        in the scope of issues that COAC can advise on and report to 
        Congress with recommendations. Nowhere in the statute does it 
        state that advice and recommendations are limited only to those 
        issues deemed appropriate by CBP. COAC shall make the final 
        determination on all subject matters covered by its meeting 
        agendas.
          COAC members shall choose their own Chairman, who 
        will recommend the establishment of sub-committees, create and 
        manage the agenda and prepare the annual reporting to Congress 
        and the Secretaries.
          COAC should be free to establish subcommittees as 
        needed ``on all matters'' involving commercial operations of 
        CBP. The membership of such subcommittees should not be limited 
        to members of COAC or FACA appointments as such issues may 
        require either specific expertise not represented within the 
        current membership of COAC, or may require a wider segment of 
        the trade community who should be consulted on such issues 
        before COAC can render advice to CBP and recommendations to 
        Congress.
          In order to avoid conflicts of interest, industry 
        members selected for COAC should not derive any income, 
        directly or indirectly, from CBP. COAC members who are employed 
        with firms who are contractors or consultants to CBP have a 
        direct conflict of interest with the mission of COAC since the 
        Committee's work often reviews, assesses and critiques the very 
        projects which a member's firm has developed for CBP.
          COAC members should be selected based on well-
        established criteria which are transparent and published well 
        in advance of the solicitation for applicants. Moreover, COAC 
        members should be chosen through a selection committee 
        comprised of both government and industry representatives to 
        ensure that the membership as a whole is balanced among the 
        broad spectrum of interests of the international trade 
        community. The current system whereby the agency forwards names 
        to Congress for comments or vetting is too opaque, and may not 
        necessarily produce the best mix of COAC members based on 
        professional experience.
          If changes are made to trade advisory committees 
        through legislation, we recommend that any such changes 
        grandfather existing 11th term COAC members to ensure they 
        complete their 2nd year term with the 12th term COAC, if they 
        elect to do so.
          In order to fulfill its statutory obligation to 
        provide timely and relevant recommendations to Congress 
        regarding commercial operations of CBP, COAC must be free to 
        submit comments to Congress on the impact on commercial 
        operations of any existing or pending statutory or regulatory 
        matters.
          To fulfill the spirit of the transfer of functions 
        from the Secretary of Treasury to the Secretary of Homeland 
        Security, COAC meetings must presided over by both the 
        Assistant Secretary of Treasury for Trade and Assistant 
        Secretary for Policy of the U.S. Department of Homeland 
        Security under 6 U.S.C., Section 203, and the Department of 
        Homeland Security Reorganization Plan of November 25, 2002 as 
        modified by a note in Section 542 of Title 6. CBP should not 
        preside over COAC meetings which reviews the agency's 
        performance relating to commercial operations.

3. International Trade Advisory Committees
    Because of the importance of product safety, AAEI recommends the 
establishment of a trade advisory committee for the U.S. Consumer 
Product Safety Commission (``CPSC''). The CPSC ITAC shall be comprised 
of representatives from industry, including quality assurance 
professionals, international trade compliance professionals, 
certification companies and laboratories, and other commercial 
stakeholders affected by the laws and regulations of CPSC.
    The CPSC ITAC should also be permitted to interact with COAC to 
provide additional commercial operations expertise where appropriate. 
Again, we recommend that CPSC ITAC members be chosen through a 
selection committee comprised of both government and industry 
representatives to ensure that the membership as a whole is balanced 
among the broad spectrum of interests of the international trade 
community with a financial stake in product safety regulations and 
programs.
    The Committee's desire to add more diverse representation to the 
ITACs is may not produce better results since trade policy is rarely 
decided at the Tier 3 ITAC level. Rather, the ITACs are designed to 
include the commercial stakeholders impacted by and responsible for 
implementing established trade policy.
    Stakeholders representing broader segments of the public should be 
limited to Tier 2 advisory committees rather than be involved at the 
Tier 3 level ITAC. ITACs generally require technical and function 
knowledge of commercial operations in order to advise agencies on 
implementation of the trade policy established by Tier 1 and Tier 2 
advisory committees.
    The U.S. regulatory regime, like the World Trade Organization 
framework, regulates trade based on physical products with certain 
exceptions under U.S. law (e.g., deemed export rule) and certain U.S. 
export controls on information technology (e.g., release of 
information). Only recently has ``trade in services'' become part of 
the trading regime, but it does not generally involve the work of Tier 
3 ITACs. Other non-commercial interests should be handled by the U.S. 
Congress and the President in establishing U.S. trade policy. The 
health and safety impact resulting from global trade cannot be 
adequately addressed at the Tier 3 ITAC level since it requires a 
broader political consensus at a higher level of government.
4. Conclusion
    In conclusion, AAEI believes that Congress should exercise more 
oversight over federal agencies' interaction with Trade Advisory 
Committees to ensure that the system is functioning the way Congress 
intended it to. AAEI thanks the House Ways and Means Committee 
Subcommittee on Trade for holding this timely hearing

                                 

               Testimony By Michael J. Stanton, Statement
                    Statement of Michael J. Stanton
    The Association of International Automobile Manufacturers (AIAM) 
appreciates this opportunity to comment on the advisory committee 
system and ways to increase transparency and participation in the 
development of U.S. trade policy. For reasons summarized below, we 
believe the time has come to open the federal advisory committee 
process to individuals associated with U.S. subsidiaries of 
international companies, particularly with respect to the automobile 
industry.
    We take this position for three principal reasons:

        1.  Neither the Federal Advisory Committee Act (FACA) nor the 
        Trade Act of 1974 explicitly or implicitly requires that 
        federal advisory committee members be employees of U.S.-owned 
        corporations.
        2.  The U.S. auto industry has changed dramatically. Aside from 
        the large and growing level of U.S automotive production by 
        U.S. subsidiaries of foreign-owned corporations, there may 
        shortly be only two U.S.-owned major motor vehicle 
        manufacturers, with the ``new'' Chrysler now under the 
        operational control of Fiat SpA, Italy's largest automaker.\1\ 
        We do not believe U.S. government trade negotiators can secure 
        the best possible advice on trade negotiating positions from 
        only two of the eleven (soon to be thirteen with the addition 
        of Kia and VW) U.S vehicle manufacturers.
---------------------------------------------------------------------------
    \1\ Although Chrysler is not yet ``owned'' by Fiat, it is 
effectively controlled by Fiat management and thus raises the question 
of whether it is a foreign-owned corporation in the spirit of the 
Commerce Department's rules.
---------------------------------------------------------------------------
        3.  The confidentiality requirements of the FACA prevent the 
        disclosure of advice sought or given as part of the advisory 
        committee process to those without the requisite security 
        clearance. Accordingly, the issue of corporate ownership is 
        moot.

                                 * * *

    AIAM is a trade association representing the interests of the U.S. 
subsidiaries of international automobile manufacturers, including many 
of the largest automotive companies in America \2\ Collectively, AIAM 
companies are responsible for billions of dollars annually in cross-
border trade, involving all aspects of manufacturing and distribution 
of passenger cars, light trucks and multipurpose vehicles.
---------------------------------------------------------------------------
    \2\ AIAM members include American Honda Motor Co. Inc., American 
Suzuki Motor Corporation., Aston Martin Lagonda of North America, Inc., 
Ferrari North America, Inc., Hyundai Motor America, Isuzu Motors 
America, LLP, Inc., Kia Motors America, Maserati North America, Inc., 
Mitsubishi Motors North America, Inc., Nissan North America, Inc., 
Peugeot Motors of America, Inc., Subaru of America, Inc., and Toyota 
Motor North America, Inc. The Association also represents original 
equipment suppliers, other automotive-related trade associations, and 
motor vehicle manufacturers not currently engaged in the sale of motor 
vehicles in the United States.
---------------------------------------------------------------------------
    Both individually and as a group, AIAM companies have a substantial 
interest in trade policy matters and, we believe, much useful 
information and guidance to offer through the federal advisory 
committee process. As detailed in these comments, at the end of 2008, 
AIAM-member companies accounted for about one-third of all 
manufacturing plant employment in the U.S. automobile and light truck 
manufacturing industry.\3\ We are increasingly being recognized as the 
positive side of the ``globalization'' coin for many Americans employed 
in manufacturing. In the automotive sector, U.S. subsidiaries have 
invested more than $40 billion in new production and distribution 
capacity over the last 25 years, creating more than 90,000 high-skill, 
high-wage jobs across the country.
---------------------------------------------------------------------------
    \3\ AIAM 2009 Member Economic Impact Survey and the Bureau of Labor 
Statistics.
---------------------------------------------------------------------------
    Despite the substantial and growing role of AIAM companies in the 
U.S. economy and the contributions such companies could make to the 
federal international trade policy development process, under current 
agency practice no one associated with AIAM--or any other U.S. 
subsidiary--may sit on a federal advisory committee for trade policy 
matters. While no formal rule has ever been promulgated, the Office of 
the U.S. Trade Representative (USTR) and the Commerce Department have 
for many years applied a blanket prohibition on advisory committee 
membership to individuals employed by U.S. subsidiaries or otherwise 
representing their interests.
    This policy was most recently reaffirmed and restated in April 2006 
when the Commerce Department published a Notice on the Charter Renewal 
of the Industry Trade Advisory Committees (ITACs); Request for 
Nominations. \4\ As stated in the Notice, current policy requires that 
an advisory committee member ``must represent a U.S. entity'' which is 
defined as ``an organization incorporated in the United States (or if 
unincorporated, having its principal place of business in the United 
States) that is controlled by U.S. citizens or by another U.S. 
entity.'' The policy further states that ``[a]n entity is not a U.S. 
entity if 50 percent plus one share of its stock (if a corporation, or 
a similar ownership interest of an unincorporated entity) is 
controlled, directly or indirectly, by non-U.S. citizens or non-U.S. 
entities.'' In addition, a nominee to advisory committee membership who 
represents an entity or corporation with ten percent or more non-U.S. 
ownership ``must demonstrate at the time of nomination that this 
ownership interest does not constitute control and will not adversely 
affect his or her ability to serve as a trade advisor to the United 
States.'' \5\
---------------------------------------------------------------------------
    \4\ U.S. Dep't of Commerce, Internat'l Trade Admin., Notice of 
Renewal of the Charters and Request for Nominations, 71 Fed. Reg. 18720 
(Apr. 12, 2006).
    \5\ Id. at 18721. These criteria are also published at the 
International Trade Administration's ITAC website at http://
www.ita.doc.gov/itac/become_an_advisor/index.asp. This policy was 
relied upon in the past to reject on eligibility grounds an application 
for membership on ISACs (the acronym for an element of the pre-2003 
trade advisory committee structure that was replaced by ITACs) by then-
AIAM President Philip Hutchison. We also understand that it was applied 
to applicants associated with Volkswagen of America and to Chrysler 
when it was affiliated with DaimlerBenz.
---------------------------------------------------------------------------
    We do not believe this policy is consistent with the Federal 
Advisory Committee Act (FACA) requirement that membership on advisory 
committees be ``fairly balanced.'' Nor do we believe this 
discriminatory rule can be justified on public policy grounds. In fact, 
the real question is ``can, or even should, the Commerce Department 
determine the nationality of the stockholders of major international 
corporations?'' Whatever restrictions may have been warranted in the 
past, U.S. subsidiaries and their American employees unquestionably 
have a stake and interest in U.S. trade policy matters and important 
information and guidance to contribute to the policymaking process.
    The Subcommittee's hearing offers a timely opportunity to reassess 
the rules governing U.S. subsidiary participation in the federal 
advisory committee process and, through more rigorous application of 
FACA's ``fair balance'' requirement, better ensure that U.S. 
policymakers receive ``timely, relevant trade policy advice'' on a 
representative basis. The automotive sector provides a particularly 
good window on the changes taking place in the national and global 
economy, but the issue raised by the blanket U.S. subsidiary 
prohibition is much broader. The ultimate question for USTR and the 
Commerce Department is whether trade policy can or should be driven 
solely by narrow questions of capital affiliation (i.e., nationality of 
ownership) or also, as we believe, must take into account the interests 
and issues of U.S.-based workers and manufacturing. The U.S. subsidiary 
prohibition puts front and center the question of what is meant, or 
should be meant when we refer to ``American'' companies in the context 
of the emerging global economy.

                                 * * *

U.S. Subsidiary Prohibition Contravenes Statutory ``Fair Balance'' 
        Requirement
    Neither FACA nor the Trade Act of 1974 authorizes the U.S. 
subsidiary prohibition. To the contrary, they appear to mandate 
participation where U.S. subsidiaries represent a significant part of 
the domestic industry.
The Federal Advisory Committee Act
    The starting point for analyzing agency authority and 
responsibilities on matters involving federal advisory committees is 
the Federal Advisory Committee Act (FACA), 5 U.S.C. app. 2. Its 
provisions apply to all federal advisory committees, including those 
established by USTR and the Commerce Department to advise on trade 
policy matters. See, e.g., Northwest Ecosystem Alliance v. USTR, C99-
1165R at 7 (W.D. Wash. Nov. 9, 1999) (rejecting a blanket prohibition 
on ISAC participation by non-business interests).
    Congress' paramount objective when it passed FACA in 1972 was to 
reform an out-of-control advisory committee system. The numerous 
committees in existence at the time had no clearly-defined role or 
responsibilities and, in the absence of enforceable membership 
guidelines, too often functioned as closed conduits for special 
interests. Reform was to be accomplished by making the process more 
transparent and representative. To this end, Congress reclaimed sole 
authority to authorize advisory committees and prescribed operational 
guidelines to ensure that advisory committees have ``a clearly defined 
mission, balanced representation, assurance of autonomy, legislation 
authorization for funds [and] a time certain for termination.'' H.R. 
Rep. 92-1017 at 6 (1972).
    The ``balanced representation'' requirement at the heart of this 
reform was codified in a provision of FACA mandating that membership on 
advisory committees be ``fairly balanced in terms of point of view 
represented and the functions to be performed by the advisory 
committee.'' 5 U.S.C. app. 2 Sec. 5(b)(2). Its purpose was not simply 
fairness, but to prevent ``special interests'' from capturing the 
process. As the House Committee on Government Operations explained in 
accompanying report language,
    Particularly important among the guidelines are [1] the requirement 
. . . that `the membership of an advisory committee be fairly balanced 
in terms of point of view represented and the functions to be 
performed' and [2] the requirement . . . that in creating an advisory 
committee the creating authority should include `appropriate provisions 
to ensure that the advice and recommendations of the advisory committee 
will not be inappropriately influenced by the appointing authority or 
any special interests.'
    One of the great dangers in the unregulated use of advisory 
committees is that special interest groups may use their membership on 
such bodies to promote their private concerns. Testimony received at 
hearings . . . pointed out the danger of allowing special interest 
groups to exercise undue influence upon the Government through the 
dominance of advisory committees which deal with matters in which they 
have vested interests.
    H.R. Rep. 92-1017 at 6 (emphasis added).
    After describing a specific instance where outside interests had 
not been reflected on an advisory committee, the Committee went on to 
observe that ``[t]his lack of balanced representation of different 
points of view and the heavy representation of parties whose private 
interests could influence their recommendations would be prohibited by 
the provisions contained in [FACA].'' Id. \6\
---------------------------------------------------------------------------
    \6\ The companion Senate report likewise notes that FACA would 
``require that membership of the advisory committee shall be 
representative of those who have a direct interest in the purpose of 
such committee.'' S. Rep. No. 92-1098 at 9 (1972).
---------------------------------------------------------------------------
    As the court in the Northwest Ecosystem Alliance case observed, 
``[t]he `fairly balanced' requirement was designed to ensure that 
persons or groups directly affected by the work of a particular 
advisory committee would have some representation on the committee.'' 
C99-1165R at 7.\7\ This applies with full force to U.S. subsidiaries, 
whose interests and perspectives on some trade-related policy matters 
can differ significantly from other U.S. companies.
---------------------------------------------------------------------------
    \7\ In a subsequent case, the Northwest Ecosystem Alliance court 
enforced a Settlement Agreement between the USTR and a coalition of 
environmental groups that had filed a lawsuit challenging the lack of a 
health or environmental representative on a particular ISAC. The 
Agreement obligated the USTR to appoint a ``properly qualified 
environmental representative'' to the ISAC. See Washington Toxics 
Coalition v. USTR, 2003 U.S. Dist. Lexis 25869 (W.D. Wash. Jan. 15, 
2003). See also Public Citizen v. National Advisory Committee on 
Microbiology Criteria for Foods, 886 F.2d 419, 433 (D.C. Cir. 1989) 
(concurring opinion, Edwards J.), noting that a primary purpose of the 
``fair balance'' requirement is ``to constrain executive discretion and 
to establish a measurable standard against which to judge executive 
action.''
---------------------------------------------------------------------------
    Nowhere in FACA is there any suggestion that the ``fair balance'' 
requirement does not apply to U.S. subsidiaries and their American 
workers or that they (or any other discrete interest) can be excluded 
from the committee process. While federal agencies have wide latitude 
to weigh individual membership applications, FACA does not permit 
blanket exclusion of persons associated with a particular interest or 
point of view.
Trade Act of 1974
    Two years after passing FACA, Congress included provisions in the 
Trade Act of 1974 authorizing creation of advisory committees on trade 
matters. 19 U.S.C. Sec. 2155. With certain limited exceptions 
(unrelated to committee membership), these trade committees were to be 
administered in full compliance with FACA provisions, including the 
``fair balance'' requirement. Id. Sec. 2155(f).
    Section 135 of the Trade Act directs the President to ``seek 
information and advice from representative elements of the private 
sector and the non-Federal Governmental sector'' with respect to a 
broad range of trade policy matters. 19 U.S.C. Sec. 2155(a)(1). These 
expressly include ``(A) negotiating objectives and bargaining positions 
. . . ; (B) the operation of any trade agreement once entered into . . 
. ; and (C) other matters arising in connection with the development, 
implementation and administration of [U.S. trade policy].'' Id. A 
second provision further requires that the President ``consult with 
representative elements of the private sector and non-Federal 
Governmental sector on overall current trade policy of the United 
States.'' Id. Sec. 2155(a)(2).
    To facilitate this information-gathering function, the 1974 Trade 
Act required creation of an Advisory Committee for Trade Policy and 
Negotiations (ACTPN) to provide ``overall policy advice'' and 
authorized the President to establish two additional types of 
committees--individual general policy advisory committees to obtain 
advice from particular interest groups and ``such sectoral or 
functional advisory committees as may be appropriate.'' Id. 
Sec. 2155(b), (c). One set of these committees is now organized as 
Industry Trade Advisory Committees (ITACs).\8\
---------------------------------------------------------------------------
    \8\ A reorganization in 2003 resulted in 16 new Industry Trade 
Advisory Committees (ITACs) that replaced the previous structure of 
``sectoral or functional advisory committees.'' See the joint 
Department of Commerce and USTR press release, U.S. Department of 
Commerce and the U.S. Trade Representatives Announce New Industry Trade 
Advisory Committee Structure,'' (Nov. 25, 2003) available at http://
www.commerce.gov/opa/press/Secretary_Evans/2003_Releases/November/
25_evans_itac_release.htm.
---------------------------------------------------------------------------
    For all three types of advisory committees, the importance of 
balanced representation was reiterated. For ACTPN, the President was 
directed to seek information and advice from ``representative elements 
of the private sector.'' Id. Sec. 2155(a)(1). Balanced representation 
was similarly required for general policy committees, while the Trade 
Act mandated that sectoral and functional committees (now the ITACs), 
``insofar as is practicable, be representative of all industry, labor, 
agriculture and service interests . . . in the sector or functional 
interests concerned.'' Id. Sec. 2155(c)(2) (emphasis added).
    Further guidance on this point was provided in report language 
accompanying the House version of the bill, in which the House Ways and 
Means Committee observed that with multilateral trade negotiations on 
the horizon ``the need for the Government to seek information and 
advice from the private sector [was] more important than ever before'' 
and that ``[t]he broad range of interests to be represented on this 
committee [was] intended to provide U.S. negotiators with a balanced 
view of what objectives U.S. negotiators should pursue in the 
multilateral trade negotiations.'' H.R. Rep. No. 93-571 at 38 (1973) 
(emphasis added).
    As with FACA, nothing in the statute itself or accompanying 
legislative history would appear to suggest or otherwise support 
excluding ``U.S. subsidiary'' interests from the advisory committee 
process.\9\
---------------------------------------------------------------------------
    \9\ Nor can such authority be found elsewhere. The 1994 Executive 
Order establishing a trade and environment policy committee, for 
example, states only with respect to membership that ``[t]he Committee 
should be broadly representative of the key sectors and groups of the 
economy with an interest in trade and environmental policy issues.'' 
Exec. Ord. No. 12905 (Mar. 25, 1994).
---------------------------------------------------------------------------
Non-Statutory Justifications
    Over the years, several ``justifications'' for the blanket U.S. 
subsidiary prohibition have been alluded to, informally, but none hold 
up under scrutiny.
    The most common argument made is that the advisory committees 
established by USTR and the Commerce Department are narrowly focused 
and do not implicate U.S. subsidiary interests. We contend that this 
view is wrong on two counts. First, as has been noted, the 1974 Trade 
Act mandates advisory committee involvement not only on export-related 
issues but a wide spectrum of matters involving U.S. trade policy. 
Advisory committees provide agency officials with information and 
recommendations on matters ranging from trade and investment policy to 
services, intellectual property rights and import rules, not just 
exports.
    Whether focused on exports or a wider range of trade matters, U.S. 
subsidiaries can make a valuable contribution to the advisory committee 
process by, among other things, helping to identify and rank agenda 
priorities and advising on the implications of particular events or 
proposals for U.S.-based manufacturing. AIAM members invested in U.S. 
production facilities for a variety of reasons and can provide unique 
advice on how U.S. trade policy can be improved to increase the 
attractiveness of the United States to automotive investors. U.S. 
subsidiaries also have a unique contribution to make on international 
trade issues involving environmental technologies, customs clearance, 
technical standards and other product design issues with trade policy 
implications.
    A central argument made by those opposing ITAC membership for U.S. 
subsidiaries is that individuals employed by these U.S. companies 
cannot be trusted with classified information. This is simply not 
defensible. Everyone who serves on an advisory committee must have a 
confidential security clearance and commit in writing to non-disclosure 
conditions. Eliminating the U.S. subsidiary prohibition would in no way 
affect these requirements. Trade advisory committee members cannot 
legally disclose advice sought and given as part of the advisory 
process. This requirement holds regardless of the employer. There is no 
reason to expect lesser compliance from U.S. citizens associated with 
U.S. subsidiaries.
    In fact, were there evidence to suggest a more serious security 
concern for committee members with ties to U.S. subsidiaries (and we do 
not believe there is any), this presumably would also be an issue for 
advisory committee members employed by ``U.S. entities'' whose 
professional responsibilities extend to other entities. This would 
include, for example, committee members working for trade associations 
that have U.S. subsidiary as well as ``U.S. entity'' members (i.e., 
most Washington-based business groups), as well as members employed by 
accounting and other consulting firms that provide service (and may 
have fiduciary responsibilities) to U.S. subsidiary clients. The 
security of confidential information also presumably would be an issue 
for U.S.-owned companies with foreign subsidiaries, affiliates or joint 
ventures.
    In a 2002 report on international trade advisory committees, the 
Government Accountability Office (GAO) described the policy of 
excluding representatives of U.S. subsidiaries from the committees as a 
``gap in industry representation on committees.'' \10\ GAO reported the 
Commerce Department's ``rationale for this long-standing policy . . . 
[as] the sensitivity of the subject matter considered by the committees 
and possible conflicts that might be experienced by U.S. firms that 
have foreign owners.'' \11\ Yet GAO went on to observe that ``[t]hese 
gaps in industry representation have encouraged negotiators to seek 
advice outside the advisory committee system, including from foreign-
owned firms or trade associations that include such firms.'' \12\ It 
seems clear that FACA's purposes would be better served if such advice 
were rendered in the established advisory committee forum, rather than 
in off-the-record meetings.
---------------------------------------------------------------------------
    \10\ U.S. Gov't Accountability Office, International Trade: 
Advisory Committee System Should Be Updated to Better Serve U.S. Policy 
Needs, GAO-02-876, at 34 (Sept. 2002).
    \11\Id. at 35.
    \12\ Id.

     Whether intended or otherwise, the practical effect of the blanket 
prohibition on U.S. subsidiary advisory committee membership in many 
areas has been to foster the very ``danger'' FACA was designed to 
prevent--``that special interest groups may use their membership on 
such bodies to promote their private concerns.'' H.R. Rep. No. 92-1017 
---------------------------------------------------------------------------
at 6.

    ITAC 2, the Industry Trade Advisory Committee on Automotive 
Equipment and Capital Goods, is a case in point. Under current rules, 
only three automakers (General Motors, Ford, and Chrysler) are 
currently eligible to participate. While the ITAC 2 charter 
contemplates a membership of ``not more than 50 members,'' the 
committee currently has only 27. Only three are from auto 
manufacturing, one each from General Motors, Ford, and Chrysler. There 
is no representation, direct or otherwise, of any of the eight other 
companies manufacturing automobiles in this country.\13\
---------------------------------------------------------------------------
    \13\ The following companies currently operate vehicle 
manufacturing facilities in the United States: BMW, Honda, Hyundai, 
Mercedes, Mitsubishi, Nissan, Subaru, and Toyota. In addition, Mazda 
and Ford have a joint-venture operation and additional vehicle plants 
are under construction by Kia and Volkswagen.
---------------------------------------------------------------------------
    It is difficult to imagine a clearer contravention of the FACA 
``balanced representation'' requirement. Three multinational companies, 
General Motors, Ford, and Chrysler have been given a monopoly on 
access--in effect, a proprietary forum for advancing their private 
corporate perspectives and agendas.
    Beyond locking out the rest of the companies that make up the U.S. 
automotive industry, information and advice from so limited a source 
has other policy-distorting implications. Like AIAM members, GM, Ford, 
and Chrysler are international companies with mixed global interests. 
Even as international automakers have been expanding in the United 
States, these ``U.S.'' multinationals--despite their current 
difficulties--have been shifting production offshore and taking 
ownership of or controlling interests in offshore automakers. There 
certainly is nothing wrong with this as a business strategy, but these 
companies can no longer claim to be the sole repositories of 
``domestic'' interests. On many issues--for example, rules affecting 
imports--their strategic interests are as likely to reflect foreign-
based manufacturing as they are the interests of their U.S. workforce. 
In such circumstances, U.S. subsidiaries can more fully represent 
American workforce and manufacturing base interests.
    Globalization has made it much harder for policymakers to discern 
the national interest in any given matter. In true American fashion, 
FACA rests on the notion that such interests are best divined through 
full and open debate--in an advisory committee context, by requiring 
policymakers to seek out information and advice from affected interests 
on a broadly representative basis.
U.S. Subsidiaries Are ``American'' Companies
    The U.S. subsidiary prohibition rests on a fundamentally flawed 
premise--that U.S. subsidiaries are foreign rather than American. As 
former Labor Secretary Reich, among others, has observed, in today's 
global economy ``domestic'' and ``foreign'' labels are no longer 
meaningful.
1. Overall U.S. Subsidiary Contributions
    U.S. subsidiaries are American companies in every sense of the 
word, especially in the contribution they make to the U.S. economy and 
their local communities. According to a recent Congressional Research 
Service study (which is based on the Commerce Department's own data 
quantifying U.S. subsidiary contributions to the U.S. economy),\14\ by 
the end of 2005, all U.S. subsidiaries of international corporations:
---------------------------------------------------------------------------
    \14\ The Congressional Research Service, ``Foreign Direct 
Investment in the United States: An Economic Analysis,'' August 15, 
2008.

          Employed 5.5 million people--about 4% of the U.S. 
        workforce;
          Owned over 30,000 U.S. business establishments and 
        with a direct presence in every state; and
          Maintained forty percent of their employment in the 
        hard hit U.S. manufacturing sector, ``more than twice the share 
        of manufacturing employment in the U.S. economy as a whole, 
        with average annual compensation (wages and benefits) per 
        worker of about $63,000.

    In addition, the study said that ``foreign-owned establishments, on 
average, are far outperforming their U.S.-owned counterparts. Although 
foreign-owned firms account for less than 4% of all U.S. manufacturing 
establishments, they have 14% more value-added on average and 15% 
higher value of shipments than other manufacturers.'' Further, ``. . . 
foreign-owned firms paid wages on average that were 14% higher than all 
U.S. manufacturing firms, had 40% higher productivity per worker, and 
50% greater output per worker than the average of comparable U.S.-owned 
manufacturing plants.''
2. Automotive Sector Contributions
    The contribution to the U.S. economy made by U.S. subsidiaries of 
international motor vehicle corporations in the automotive sector is 
even more dramatic.
    Changing Nature of the U.S. Auto Industry. At the time the ISAC 
process was formally established in 1974, there were no automobiles and 
light trucks produced in the United States by U.S. subsidiaries of 
international companies. According to Automotive News data, in 2008, 
AIAM member companies produced 3.1 million vehicles or 36% of all U.S. 
light duty vehicle production. All international companies 
manufacturing in the United States produced 3.5 million vehicles or 40% 
of all U.S. production. These percentages have grown dramatically this 
year with all international companies producing 51% of all U.S. 
production and AIAM members producing 48%. These numbers will grow even 
larger when the Fiat acquisition of Chrysler is completed and the new 
Kia and Volkswagen plants begin production.
    According to a 2009 AIAM Member Economic Impact Survey, in 2008 
AIAM members:

          Employed 90,100 Americans
          Supported a total payroll of $6.62 billion
          Purchased $65.59 billion from U.S. suppliers
          Purchased $54.5 billion in U.S. parts and materials 
        from U.S. suppliers; and
          Invested $41 billion in 325 U.S. facilities, 
        including 109 high value U.S. manufacturing and R&D facilities, 
        15 vehicle manufacturing facilities and 54 component 
        manufacturing plants. International vehicle manufacturing 
        plants are the only such plants located in California, 
        Mississippi, Alabama, and South Carolina.

    Innovation and Competitiveness. Substantial as these figures are, 
the overall U.S. subsidiary contribution in the auto sector has been 
even greater. U.S. subsidiaries consistently earn the industry's top 
marks for manufacturing efficiency, setting a standard that has helped 
to make Detroit-based production better and more efficient. Advanced 
technologies developed by U.S. subsidiaries at their U.S.-based 
research and design facilities have resulted in greater fuel 
efficiency, improved safety, and better overall vehicle performance. 
AIAM members are the leaders in putting the most advanced and fuel 
efficient vehicles on America's roads.
    AIAM appreciates the opportunity to comment on this important 
issue. We believe the time has come to open the advisory committee 
process to all affected U.S. industry and look forward to working with 
you to this end.

                                 

        Testimony By Coalition for a Prosperous America, Letter
              Coalition for a Prosperous America's Letter
    Thank you Chairman Levin, and members of the House Subcommittee on 
Trade, for allowing the Coalition for a Prosperous America (CPA) to 
submit this written testimony for the record. CPA works for trade 
policy reform that benefits U.S. farmers, ranchers, workers and 
manufacturers. We are a unique coalition of agriculture, manufacturing 
and organized labor representing the interests of over 2.6 million 
people through our association and company members.
    We submit this testimony to encourage the ITAC inclusion of more 
domestic producers, i.e. those who produce primarily for the domestic 
market and are sensitive to unfair imports through foreign government 
mercantilism.
    America's trade policy has been too focused upon opening export 
markets and innovation without sufficient consideration of either 
reciprocity, or trading partner protectionism and mercantilism. The 
past ``open-export-markets'' and ``innovate-our-way-to-prosperity'' 
approaches to trade have proven insufficient and often harmful. We do 
not oppose those approaches, but oppose relying upon them exclusively.
    Our massive trade deficit subtracts directly from gross domestic 
product. The deficit is disruptive, provides massive economic harm, and 
handicaps our ability to recover from a recession. Jobs, investment, 
companies and agricultural production have moved offshore as a result. 
Fixing America's economy requires a changed trade policy. More balanced 
membership in, and input from, the Trade Advisory Committee System is 
necessary to help the U.S. Trade Representative receive better input 
and advice than in the past.
The Role of the ITACs
    The USTR website states specifically how ITACs are used as 
resources.
    U.S. Government policy makers rely on our trade advisors to 
identify barriers and to provide advice on key objectives and 
bargaining positions for multilateral, bilateral, and regional trade 
negotiations, as well as other trade-related policy matters. As a 
result of these efforts, the United States is able to display a united 
front when it negotiates trade agreements with other nations. The 
United States' negotiating position is strengthened because its 
objectives are developed with bipartisan, private-sector input 
throughout the negotiations.
     . . . The sixteen ITACs were created to reflect the manufacturing 
and services sectors of the U.S. economy, as well as issue-oriented 
matters that cut across all sectors. . . . \1\
---------------------------------------------------------------------------
    \1\  Http://www.ustr.gov/about-us/advisory-committees/industry-
trade-advisory-committees-itac
---------------------------------------------------------------------------
    This is a worthy use of the ITACs. However, the membership of the 
ITACs, with the exceptions of Textiles and Steel ITACs, has been skewed 
towards offshoring interests. The lack of balance and diversity has 
harmed trade policy efforts.
The ITAC Problem--Insufficient Domestic Producer Representation
    The sixteen Trade Advisory Committees largely, though not 
exclusively, represent multinationals. Insufficiently represented are 
companies producing primarily for the domestic market. The advice 
currently given to USTR from the ITACs tends to promote offshoring, 
ease of importation and selective market access.
    Exports and innovation have been the mantra of the last two 
administrations. Those are worthy, but insufficient, goals that fail to 
respond to current problems. Import volume resulting from unanswered 
foreign interference in our market and in world markets has given rise 
to crippling deficits and offshoring. Foreign reciprocity has been 
absent. National security and food safety have been ignored or 
criticized as ``protectionist.'' The ITACs thus fail to represent the 
diversity of the economy, but rather narrow special interests.
The ITAC Solution: More Domestic Producer Representation
    CPA requests that domestic producers be given increased 
representation in the ITACs to provide balance and additional insight 
on the modern trade problems. By ``domestic producers,'' we 
specifically mean those that produce primarily for the domestic U.S. 
market.
    Because the current ITAC representation is skewed towards 
multinational corporations, a disproportionate amount of time and 
effort is spent opening relatively small markets which are of keen 
interest to a few, and not enough time opening larger markets that 
would be of interest to a larger set of potential exporters.
    Unfair import competition/foreign mercantilism is another topic 
that has been neglected. Some ITACs and USTR have given too little 
attention to trade strategies ensuring that competitive American 
producers are not placed at a crippling disadvantage by mercantilist 
foreign government policies. Many trading partners misalign their 
currencies to enable massive sales to the U.S.
    Virtually all trading partners rebate value added taxes (VAT) when 
their companies export to us, a massive global export subsidy. China, 
for example, adjusts their VAT rebates monthly depending upon market 
conditions to support a trade strategy that is not based upon their 
domestic tax policy. Massive and fundamentally trade distorting foreign 
subsidies which result in artificially cheap imports at the same time 
as those same countries place our exporters at a disadvantage in all 
world markets. State owned government enterprises in Asia and elsewhere 
are ignored as substantial sources of unfair and subsidized 
international competition.
    The multinationals represented within most ITACs have no interest 
in curtailing these trade distorting policies. Due to their offshoring, 
many are interested in continuing those foreign policies and programs 
for their own benefit, which conflicts with the interests of U.S. 
workers, farmers and manufacturers.
    Additionally, the unbalanced ITACs tend to offer advice to limit 
the effect of U.S. trade laws, rather than strengthen the effect. U.S. 
trade laws are a vital tool to prevent foreign government cheating, but 
are not used.
    Furthermore, the lack of balance results in too much focus upon 
trade facilitation and not enough action on product safety; too much 
discussion of future trade agreements in tiny markets and not enough 
enforcement of the agreements we have; and too much discussion on 
opening new markets and not enough on reciprocal and real market 
access.
    Domestic producers are fundamentally reliant on the good 
performance of the U.S. economy. Multinational companies spread their 
risk across the globe and are thus not reliant on the U.S. economy.
Conclusion
    A country cannot prosper with a persistent trade deficit. The U.S. 
cannot recover from the recession without trade balance improvement. 
More domestic producer input into trade policy is necessary, via the 
ITACs, to bring new insights into problems long ignored.
    We hope your Subcommittee shows support for more domestic producer 
balance on the ITACs as you consider how to make the Trade Advisory 
Committee System work better. This diversity will help address the 
specific shortcomings that persist in U.S. trade policy.

                                 
                 Testimony By V.M. (Jim) DeLisi, Letter
                       V.M. (Jim) DeLisi's Letter

Dear Chairman Levin & Ranking Member Brady:

    I am the President of Fanwood Chemical, Inc., a small chemical 
sales, marketing and consulting company located in Fanwood, NJ. I have 
personally been involved in the Advisory Committee process for more 
than 20 years as a member of ITAC 3 the Industry Trade Advisory 
Committee for Chemicals, Pharmaceuticals, Health/Science Products and 
Services, as well as its predecessor ISAC 3, the Industry Sector 
Advisory Committee for Chemicals and Allied Products. I currently serve 
as the Chairman of ITAC 3, and am proud to be the first small company 
Chair of this group in its 35-year history. I also have attended WTO 
Ministerial Meetings as an Advisor in Seattle, Cancun, and Hong Kong. I 
can personally attest to how important the existing system is to 
creating jobs and investment in the USA. Records would show that our 
Committee has met regularly for 35 years. We are also very proud of the 
fact that members of ITAC 3 always represent the largest contingent of 
any sector at the various WTO Ministerials that have occurred in this 
time period, including four of our members who accompanied you, Mr. 
Chairman, to Doha. Our sector accounts for approximately $500 billion 
in trade during 2008.
    First, a point of clarification, I am submitting comments as an 
individual, not as a representative of ITAC 3, the Department of 
Commerce (DOC) or the Office of the United States Trade Representative 
(USTR).
    Everyone that I've ever met in the Advisory process believes as I 
do that every interested citizen of the U.S. deserves to have input 
into U.S. trade policy. We are very fortunate to have an enormously 
talented group of individuals, both career and appointed, in both the 
Office of the USTR and the Department of Commerce, dedicated to 
expanded trade in goods and services. It has been shown that this is 
the way towards prosperity. Perhaps the only place where we differ with 
many in the NGO community is that we also believe that USTR and DOC 
officials are capable of gathering input from a variety of sources and 
then distilling from this input the proper trade policy for our nation. 
Such advice does not need to be contained in a single document, nor 
does it need to come from a single committee. In fact, we strongly 
advocate that the best advice is gleaned from committees that can 
function in a clear and open manner with the ability to reach 
consensus. This can only be accomplished when there is mutual trust 
among committee participants. The necessary level of trust is very 
difficult to achieve if all views are required to be heard and 
discussed in the same forum.
    The existing ITAC system has served the U.S. very well, being 
especially beneficial to small business. Large companies will always be 
able to get the ear of government officials. This is a natural 
outgrowth of their importance to our overall economic well-being. 
However, the ITAC process allows small companies, such as mine, to also 
have input into the decision-making process.
    As you know, the Advisory System administered by USTR and DOC was 
specifically created to ensure that our negotiators had as much 
knowledge of what's happening in the real world sectors of industry as 
possible so that they could best represent our real needs, not our 
perceived needs.
    At its core are a group of highly motivated industry experts that 
must undergo a rigorous security clearance. This allows the USG to have 
confidence that negotiating positions can be discussed without fear of 
leaks. In fact, during my 20-year tenor only a couple individuals have 
been removed from the system for breaching this trust. We all take this 
responsibility very seriously!
    I truly believe that the Advisory System has played an important 
role, not in setting U.S. trade policy, but in helping mold the policy, 
once it has been set by our political leaders, into a form that assures 
us that the policy goals, once achieved, will truly be beneficial for 
our economy as a whole.
    As a ``Tier 3'' committee, we are charged to advise the USTR and 
DOC on highly technical issues impacting our industry, such as rules of 
origin, tariffs, and non-tariff barriers to improved global market 
access for U.S. goods and services.
    We have had a great deal of experience with environmental NGO's on 
ITAC 3 and ISAC 3. Frankly, this experience shows that we ``bore them 
to death'' discussing in detail the technical aspects of trade and they 
rarely show up. When we occasionally do discuss an issue of interest, 
NGO participation in an ITAC's activities can be highly disruptive and 
counterproductive. Moreover, most of their expressed concerns have not 
been sectoral in nature, but more cross cutting (global warming, 
investment, IPR, labor, environmental, etc.), and therefore do not 
belong in the ``sectoral setting''.
    ISAC 3 learned first hand what could happen when the Advisory 
System is not allowed to function. We where shut down by court decree 
for about 18 months specifically during the time that both the 
Singapore and Chile Free Trade Agreements were under negotiation. The 
case was settled just in time for ISAC 3 to meet our statuary deadline 
to present to Congress our report on these two agreements. While we 
supported both deals in principle, some of the details that are 
important to our sector, specifically regarding rules of origin, were 
not properly reflected in the agreements. This would not have occurred 
had ISAC 3 been allowed to meet during the period that these agreements 
were being drafted.
    I'd like to address two pieces of legislation that are currently in 
this Congress, HR 1320 and HR 2293.
    A few ITAC members have carefully reviewed both of these bills 
after consultation with your staffs.
    We enthusiastically support HR 2293 which creates a Public Health 
Advisory committee at the ``Tier 2'' level at USTR. One of the reasons 
we support this legislation is that it agrees with our contention that 
USTR is capable of receiving advice from a multitude of sources in 
different venues. It specifically bans the inclusion of representatives 
of ``commercial interests'' on the new committee being proposed.
    We could also support HR 1320, except for Section 11 which 
radically alters the existing practices for disclosing information. All 
of our members have to undergo a government security clearance prior to 
joining the committee, which includes the signing of a confidentiality 
agreement. This is then re-enforced with routine ethics briefings. 
Therefore, our meetings can be closed to the public, allowing 
representatives from DOC, USTR and other agencies to discuss 
negotiating positions and tactics. Section 11 of HR 1320 requires that 
a transcript, audio or video recording of each meeting be posted on a 
pubic website within 30 days of a meeting. This requirement will kill 
the system since neither USTR, nor DOC would be able to discuss 
anything of substance in confidence with ITAC-3, as well as every other 
Advisory Committee, including the Health Care NGO Committee to be 
established by HR 1320, if they knew it would be made public within 30 
days.
    I recently had an interesting experience whereby I reviewed my 
notes of ISAC 3 meetings from the mid 90's. Some of the information in 
these notes would still be considered trade sensitive today. This is 
especially true for negotiations that drag on for years, such as has 
been the case with the Doha Round, but also in cases where negotiations 
are suspended for several years such as the Free Trade Area of the 
Americas (FTAA) and the Free Trade negotiations that where begun with 
the South Africa Customs Union.
    If the provisions of Section 11 were removed, we would then also be 
able to enthusiastically support the passage of HR 1320.
    In conclusion, the existing system works well. Mend it--don't end 
it--by adding appropriately targeted committees to the existing system. 
Frankly, it is likely that many of the agencies involved already have 
sufficient authority to make many of these changes themselves, so all 
that may be needed is a slight ``nudge'' from Congress.
    Thank you for taking the time to review this important subject.
            Respectfully submitted,
    V.M. (Jim) DeLisi, President
    Fanwood Chemical, Inc.
                                 
          Testimony By Humane Society International, Statement
               Statement of Humane Society International
    On behalf of Humane Society International (HSI), we hereby submit 
the following written comments for the hearing record in connection 
with the July 21, 2009 Hearing on the Trade Advisory Committee System 
before the Trade Subcommittee of the U.S. House of Representative's 
Committee on Ways and Means. Our organization appreciates the 
opportunity to submit our views and share our experiences on this 
topic.
    HSI is the international arm of The Humane Society of the United 
States (HSUS). Together, HSUS and HSI represent one of the largest 
animal protection organizations in the world with a constituency of 
over 11 million people and a significant global presence. HSI actively 
participates in discussions of international trade policy at the World 
Trade Organization (WTO) addressing such issues as equitable 
development, humane and sustainable agriculture, environmental 
conservation, and wildlife and habitat protection. HSI also implements 
a number of trade capacity building and technical assistance programs 
in developing WTO Member countries to support sustainable economic 
development, including humane agricultural practices and habitat and 
wildlife protection policies.
    HSI is also a long-standing Member of the Trade and Environment 
Policy Advisory Committee (TEPAC). HSI has been a Member of TEPAC since 
1998, and is one of the most active participants on the committee, 
attending meetings, providing comments, and participating in TEPAC 
subcommittees. Over the years, HSI has found membership on TEPAC to be 
a valuable way of assisting the Office of the United States Trade 
Representative (USTR) and the United States Environmental Protection 
Agency (EPA) with formulation and implementation of trade policies that 
impact environmental and animal protection at home and abroad. As with 
any system, there are positive aspects and areas for improvement. This 
is explained in further detail below.
    Overall, in HSI's experience,\1\ USTR has been transparent and 
collaborative on trade and environment issues. Although TEPAC Members 
only meet several times a year, there are regular liaisons meetings and 
conference calls, with the opportunity for Members and/or liaisons to 
raise questions or concerns on trade and environment issues, even if 
they are not on the agenda. During certain meetings, such as the World 
Trade Organization Doha Round negotiations, USTR set up times to 
discuss developments with TEPAC while U.S. negotiators were in Geneva 
so as to provide real-time updates. USTR also invites TEPAC Members/
liaisons to assist U.S. trading partners with establishment of their 
own advisory committees, which allows TEPAC Members to encourage strong 
levels of public participation outside of the U.S.
---------------------------------------------------------------------------
    \1\ These comments solely reflect the views of HSI, not TEPAC as a 
whole.
---------------------------------------------------------------------------
    One example of HSI's experience in particular involves the U.S.-
Peru Trade Promotion Agreement (TPA). HSI has been actively working 
with USTR through TEPAC and its individual capacity on negotiation and 
implementation of the U.S.-Peru TPA for the last several years. USTR 
has regularly updated TEPAC about developments in Peru, and has held 
numerous meetings to gather input that have included TEPAC plus 
additional interested civil society stakeholders, Congressional staff, 
and inter-agency representatives. USTR has also invited TEPAC (and 
additional groups) to Peru for civil society outreach meetings. HSI 
recently traveled to Lima for one such meeting and was grateful for the 
opportunity to talk about issues associated with implementation of the 
trade agreement, including public participation, with Peruvian 
government officials and non-government organization (NGOs). HSI looks 
forward to continuing this constructive relationship.
    While as a general matter, we have a voice on trade and environment 
issues through TEPAC, as well as our individual role as HSI, we believe 
there are ways the trade advisory system can be strengthened. Areas for 
improvement that complement culture of transparency embraced by Obama 
Administration include:

          First, one of our main concerns serving on TEPAC over 
        the years involves insufficient time to provide comments on 
        negotiating texts and other issues. It is important to our 
        organization to play a proactive role to the extent possible in 
        influencing trade policy. When negotiating texts (or other 
        issues that arise) are presented to advisors with short 
        turnaround time for comments, the value of our role as advisors 
        is diminished. We recognize that negotiations can be fluid, and 
        developments can arise in short timeframes that do not always 
        allow for robust consultation with advisors. However, we 
        believe institution of a mandatory comment timeframe for 
        advisors would be helpful in this regard. We would be glad to 
        discuss this further with TEPAC and USTR.
          Second, in a similar regard, HSI believes that the 30 
        day timeframe for TEPAC Members to thoroughly review, analyze 
        and provide opinions of Free Trade Agreements is insufficient. 
        HSI believes Congress should increase this review period to at 
        least 45 days.
          Third, we support creation of a formal policy that 
        would allow for the exchange of information between advisory 
        committees on issues of mutual interest.

    HSI looks forward to continuing to work with USTR and EPA through 
the advisory system, and to continuously finding ways to strengthen the 
system.

                                 
  Testimony By Maine Citizens' Trade Policy Commission, New Hampshire 
     Citizens' Trade Policy Commission, and Vermont Commission on 
          International Trade and State Sovereignty, Statement
  Statement of Maine Citizens' Trade Policy Commission, New Hampshire 
     Citizens' Trade Policy Commission, and Vermont Commission on 
               International Trade and State Sovereignty
    Thank you for the opportunity to submit testimony to the 
Subcommittee on Trade on how to increase transparency and public 
participation in the development of U.S trade policy. The trade policy 
oversight commissions of Maine, New Hampshire, and Vermont have been 
working cooperatively for several years to communicate shared concerns 
about federal-state consultation, transparency, and the federalism 
implications to the U.S. Trade Representative, the U.S. Secretary of 
Commerce, and our congressional delegations.
    Through annual regional meetings and frequent conference calls, the 
trade policy commissions and other interested parties from neighboring 
states have discussed how to more effectively communicate issues and 
concerns to the United States Trade Representative (USTR), implications 
of new trade developments for states, and principles necessary for 
ensuring that essential trade promotion activities reflect state 
priorities.
    We all agree that states have a common interest in improved 
transparency and in a more accessible and vigorous federal-state 
consultation mechanism with USTR. Increasing information available will 
allow states to better assess the impact of trade agreements on state 
export promotion and state regulation. Creating an improved process for 
communication of state issues and concerns will provide both states and 
USTR with the opportunity to share information to assist USTR in 
creating new vibrant trade relationships and create opportunities for 
U.S. businesses.
    We look forward to building a more collaborative relationship 
between the Federal Government and the states on trade to preserve our 
federal system and reach out for new trade relationships around the 
world.

                                 
     Testimony By Maine Citizen Trade Policy Commission, Statement
         Statement of the Maine Citizen Trade Policy Commission
    We, the members of the Maine Citizen Trade Policy Commission, 
appreciate this opportunity to submit our comments regarding the system 
of trade advisory committees and how to increase transparency and 
public participation in the development of U.S. trade policy. We 
believe in the power of trade as a tool for promoting economic growth 
and enhancing relationships between the United States and its trading 
partners.
    The Citizen Trade Policy Commission was established by the Maine 
Legislature in 2004 to monitor the impact of international trade policy 
on our state. We have members representing the House of 
Representatives, the State Senate, the Maine International Trade 
Center, various state agencies, and members affiliated with citizen 
constituencies including small businesses, manufacturers, labor, 
environmental organizations, and small farmers.
    States and local governments are important partners with private 
business in the design and implementation of our nation's economic 
development strategies. States and cities have traditionally acted as 
the `laboratories of democracy' where different economic policies can 
be pioneered. Because trade is a critical part of any successful 
economic development strategy, and because different states, cities and 
towns have needs related to trade and trade policy that are as 
different from one another as are the mix of products and services that 
we export, we seek to add our voices and expertise to this policy 
arena.
    Since the conclusion of NAFTA and the WTO Uruguay Round, states 
have been allowed to play only a limited role in the policy-making 
process. The United States Trade Representative (USTR) has expected our 
support in all matters pertaining to trade but too often has been 
unwilling to engage in dialogue with state actors on critical issues of 
trade and investment. With your assistance, we intend to build a more 
collaborative relationship between the Federal Government and the 
states on trade to preserve our federal system and reach out for new 
trade relationships around the world.
    In meetings convened with the support of national associations such 
as the National Governors Association, the National Association of 
Attorneys General, and the National Conference of State Legislatures, 
officials from the different branches of state and local governments 
have been meeting in order to articulate a set of approaches that could 
assist in the development of a better federal-state consultative 
process on trade. As a result of these discussions, in which Maine has 
played an essential part, we request your consideration of the 
following:
    The establishment of a Federal-State International Trade Policy 
Commission, and/or the creation of a Center on Trade & Federalism, 
supported by both the Federal Government and the states, with adequate 
personnel and resources to ensure that the major provisions of trade 
agreements and disputes that impact on states can be analyzed, and 
their findings communicated to and discussed with key state actors on 
trade.
    Changes in the structure and role of USTR trade advisory 
committees. All state and local government input has been limited to a 
single committee, the InterGovernmental Policy Advisory Committee 
(IGPAC); the membership of that committee was determined exclusively by 
USTR and not by the states themselves. IGPAC was designated few 
resources and a time line for input that resulted in no meaningful 
consultation for states. More than half of all states lack any 
representation on IGPAC.
    We look forward to discussing with you opportunities for building a 
collaborative approach to trade that will strengthen the system of 
federalism that was part of the genius of our nation's founders.

                                 
                  Testimony By Susan Kohn Ross, Letter
                        Susan Kohn Ross' Letter

Dear Mr. Chairman,

    This submission is made on behalf of Mitchell Silberberg & Knupp 
LLP (MS&K), a 100+ year old full service business law firm 
headquartered in Los Angeles, with offices in New York and Washington, 
D.C. MS&K's Homeland Security Regulatory Practice features extensive 
expertise with security, immigration and international trade issues. In 
addition to our International Trade, Corporate & Business Transactions 
and Immigration Practices, MS&K also practices in other areas of law 
including Labor & Employment, Real Estate, Tax and Litigation, as well 
as Intellectual Property, Entertainment & New Media and Bankruptcy & 
Reorganization. As such, our attorneys have broad experience and a 
wealth of knowledge about the issues companies must deal with daily in 
seeking to be compliant, good corporate citizens while engaging in the 
movement of legitimate goods and people across our borders.
    In response to the Committee's invitation for comments about the 
current trade advisory committee structure, we take the liberty of 
making the following comments and recommendations. There is no question 
that providing a structure whereby the private sector is empowered to 
give organized input to Congress and government officials, especially 
those negotiating on behalf of American businesses, is an invaluable 
resource for all sides. At the same time, we think the process can be 
further enhanced to the benefit of all parties.
    Our comments will be limited to the Tier Three: Technical and 
Sectoral Committees. The current structure for the United States Trade 
Representative's Tier Three advisory committees is division by 
industry. There is little doubt this is the proper structure to rely on 
in many instances. For example, the challenges faced in gaining market 
access while broadly similar across industries, are generally 
distinguishable for different industries. However, the issues now 
facing the American trading community have become less industry 
functional. They are significantly more broad-based. Put another way, 
concerns such as product and food safety, security, government 
procurement, export licensing and anti-bribery have become much more 
complex and so, we conclude they are best addressed across industry 
sectors.
    A recent example in the legislative context is the Food Safety 
Enhancement Act of 2009 (the Act). Well before Congress took its recent 
vote, the Produce Marketing Association joined the United Fresh Produce 
Association to partner with their affiliate the Canadian Produce 
Marketing Association and develop the trend setting Produce 
Traceability Initiative (PTI). PTI relies on broad general standards 
which, when implemented, greatly assist companies to deal with 
traceability for a variety of reasons, including damage, loss, outbreak 
and recall. Those broad principles were blended into the Act when it 
was presented to the House for the recent floor vote. Similarly, the 
toy industry (among others) has worked actively with the Consumer 
Product Safety Commission to quickly and fully implement the Consumer 
Product Safety Improvement Act. The toy lead safety standard, ASTM 
F963-07, is now being reviewed to determine whether it needs to be 
further enhanced following its recent improvement.
    In both cases, industry was at the forefront in recognizing the 
need to enhance consumer confidence, and protect brands, products and 
company reputations, and so took prompt and meaningful action. This 
enabled the U.S. to take a leadership role in enacting and implementing 
standards on crucial questions of international trade. It is timely to 
institutionalize the key role of the private sector through recognition 
of formal issue-focused advisory committees. Moreover, in an 
increasingly globalized economy, chartering such committees will help 
to reduce the risk of unilateral actions that may be disruptive of 
international trade, as we have recently seen with the REACH standards 
enacted in the European Union for chemical and similar products with 
the registration and labeling requirements. Instead, industry leaders 
should be encouraged to collaborate to create those cross-industry 
standards which can then be adopted by countries and companies as are 
best suited to their local needs.
    In seeking to arrive at any broad standards to propose for 
international adoption, we contend the model of the Investment Working 
Group is more likely to succeed than the current industry specific 
committees. As such, we urge the Committee to consider changing the 
current advisory committee structure to include issue focused 
committees which address product safety (including food safety), 
security and anti-bribery/corporate governance.
    We recognize that some of the consolidation work could be and 
currently is performed at the Committee of Chairs. However, from 
experience, it appears to us the structure should invite as much input 
as possible so that by the time a proposal reaches the recommended for 
approval stage, it is as complete as possible. Therefore, the cross-
industry structure seems preferable. As you know, H.R. 2293 is 
currently pending and could be a likely vehicle to accomplish such a 
goal. H.R. 2293, of course, addresses the creation of a Public Health 
Advisory Committee on Trade. We propose it be amended it include the 
creation of one or more of the issue specific committees we have 
proposed.
    We look forward to being of further assistance to the Committee and 
so are prepared to answer any questions or provide further 
clarification or additional information regarding these recommendations 
in person or through other means at the convenience of the Members and 
staff. In the interim, we remain,
            Very truly yours,
    Susan Kohn Ross
    International Trade Counsel for
    Mitchell Silberberg & Knupp LLP
    SKR/vlp

                                 
             Testimony By Raymond C. Offenheiser, Statement
                  Statement of Raymond C. Offenheiser
    Oxfam believes that trade can be an engine for development and 
poverty reduction as long as the rules of trade work to benefit poor 
people and developing countries. Well-managed trade has the potential 
to lift millions of people out of poverty. To achieve such a goal, 
trade agreements, which set the rules for ongoing trade relations, need 
to work to improve livelihoods and reduce poverty in developing 
countries. To that end, it is important that the U.S. take into account 
economic disparities with our trading partners in the formulation and 
implementation of trade policy.
    We have one fundamental message: sustainable economic development 
must be a core objective of U.S. trade policy. That has not been the 
case in practice. It is vital that this change. We will discuss here 
why development should be at the core of U.S. trade policy, and how 
Congress and the administration can work more effectively toward that 
end.
    In particular, we recommend establishment of a separate Tier 2 
trade advisory committee on development and appointment of development 
experts to the existing Tier 1 and relevant Tier 3 committees. 
Furthermore, we support H.R. 2293, introduced by Mr. Van Hollen and Mr. 
Doggett, which would similarly establish a public health advisory 
committee and public health representation on existing advisory 
committees. And we suggest ways to improve the effectiveness of the 
process of consultation on U.S. trade policy so as to improve 
accountability in outcomes.
Why development matters
    Poverty, disease and lack of economic opportunity in developing 
countries are a human tragedy that is now being magnified by the global 
economic crisis. Yet these conditions also have implications for the 
long-term security and prosperity of the United States. In fact, the 
Director of National Intelligence testified earlier this year that the 
global economic crisis is now the top threat to our national security. 
However, our trade policy has often worked at cross purposes with other 
policies to address these conditions.
    The global economy is more interconnected than ever, and the 
economic welfare of U.S. citizens is inextricably linked with the well-
being of people across the globe. In President Obama's own words, ``the 
world depends on us to have a strong economy, just as our economy 
depends on the strength of the world's.'' In order to expand markets 
abroad for U.S. goods and services there must be healthy economies and 
growing middle classes, particularly in developing countries where the 
majority of the world's population lives.
    If trade is to be an engine for growth and poverty reduction in the 
developing world as well as an avenue for our own export growth, U.S. 
trade policy would do best to take into account existing disparities in 
development with our trading partners. It should be one of our own core 
objectives to ensure developing country needs and interests are 
addressed in the formulation and implementation of U.S. trade policy. 
With greater flexibility to foster the development of their industries, 
poor countries can build up their middle class and provide new 
consumers for our products. In this way, U.S. trade policy can 
facilitate economic recovery and promote more just and equitable 
economic development worldwide.
    It's generally accepted that more open trade creates winners and 
losers, both at home and in our trading partners. The distribution of 
the benefits from trade can be quite skewed demographically and 
geographically within a country. To address the problems of those who 
stand to lose, governments need policies that enable some form of 
support or compensation to help losers re-adjust and to take advantage 
of new opportunities from trade. Here in the U.S., new trade adjustment 
assistance legislation passed this year is key in this regard.
    But in developing countries with high levels of poverty and 
inequality, benefits from more open trade tend to be very concentrated 
among those who already have economic and social advantages. It is 
therefore essential that developing countries maintain adequate policy 
space in trade agreements to foster their domestic agriculture and 
manufacturing industries in ways that can reduce poverty and inequality 
and strengthen their middle class. Furthermore, the timing and pace of 
market openings is critically important and should be matched to 
specific conditions in each country. Reducing rather than exacerbating 
economic and social exclusion in developing countries is vital from the 
perspective of foreign policy and national security; it should also be 
a priority for trade policy. From a development perspective, fair trade 
does not mean equal treatment for all, but rather greater advantages 
for those left behind in order to help them get a leg up the 
development ladder.
    Assessment of U.S. trade policy looks different when using as a 
lens the promotion of sustainable economic development rather than just 
the promotion of U.S. exports. The need for a development lens is 
warranted for moral reasons, as well as for the purposes of our own 
longer-term economic prosperity and national security. U.S. foreign 
policy and development policy acknowledge this reality. More effective 
coordination and coherence between our trade and aid policies are 
essential.
Trade policy should be an integrated part of a national strategy for 
        global development
    US efforts to promote sustainable economic growth and poverty 
reduction abroad often face a key obstacle--our own U.S. government. 
The way our government is organized, both in the Executive Branch and 
on Capitol Hill, means that trade policy and development policy are 
segregated. Coordinating the two effectively can be exceptionally 
difficult.
    In practice, this divide means we often shoot ourselves in the 
foot. For example:

          We collect more in tariffs from MCC countries than we 
        give them in assistance;
          Bangladesh and Cambodia are two of the poorest 
        countries in the world, yet we collect about six times as much 
        in tariffs than we give them in foreign assistance;
          Indonesia is the world's largest Muslim country, a 
        place that is critical to us in fighting Al Qaeda, yet we take 
        in more than five times as much in tariffs than we give in aid.
          Our major aid program to treat HIV and AIDS 
        worldwide, PEPFAR, relies on the use of generic medicines, yet 
        intellectual property protections in our trade policy can choke 
        off supply or curtail production of much needed generics.
          The environmental impact assessment for the MCC 
        compact that is providing nearly half a billion dollars in aid 
        to El Salvador warned of significant harmful impacts of mining 
        in the affected region, yet Salvadoran government action to 
        prevent such mining activities is being challenged in an 
        investor-state suit filed by a US-based Canadian company under 
        CAFTA.

    In order to be most effective in combating global poverty--which is 
in our economic and national security interest--more needs to be done 
to make sure all elements of our Federal Government work together 
effectively. To this end, one key reform that Oxfam supports is a 
National Strategy for Global Development. This strategy would define 
the mission of the U.S. government as a whole in fighting global 
poverty and clarify how various agencies would work together. It would 
provide a more effective inter-agency mechanism for preventing USTR and 
USAID from working at cross purposes. It would help ensure that our 
trade policy is effectively complementing our aid policy, and vice 
versa.
Formulation and implementation of U.S. trade policy currently lacks a 
        development lens
    The Office of the U.S. Trade Representative (USTR) was wisely 
situated under the Executive Office of the President in order to take 
into account the broadest interests of the United States and achieve an 
effective balance among competing interests. Yet in practice the USTR 
has tended to respond foremost to the export interests of U.S. 
businesses and to facilitate foreign investment without considering 
effects on sustainable development or public health.
    Trade negotiations have expanded in ways not considered just a 
couple of decades ago when tariffs were the primary concern. Today, 
trade negotiations have entered a range of areas that can force changes 
in a country's economic policy framework, with serious implications for 
public health and poverty reduction in developing countries. In today's 
increasingly globalized economy, only when U.S. trade policy also meets 
the development needs of poorer countries will it be of greatest 
benefit to our own economy and well-being. It is therefore essential 
that the Office of the USTR take steps to effectively ensure that 
development concerns are adequately addressed in the formulation and 
implementation of U.S. trade policy.
    The structure and functioning of the trade advisory committees and 
the USTR's public hearing process have not adequately addressed these 
concerns, as noted by several GAO reports over the last few years (GAO-
02-876, GAO-07-1198, GAO-08-59). Representation of development 
proponents and public health interests on advisory committees still 
remains insignificant. Where there is or has been participation on 
committees, those involved have felt marginalized. Similarly, the 
public hearing process has not led to non-business concerns being taken 
into account in trade policymaking. In essence, input to USTR from 
public interest groups, which often represent alternative views to 
export interests, has not resulted in substantive changes in U.S. trade 
policy to address concerns raised.
    Until recently there was no public health representation on trade 
advisory committees. Now, after more than four years of public requests 
and extensive efforts by the public health community, led by the Center 
for Policy Analysis on Trade and Health (CPATH) and others, only three 
public health representatives have been named to Tier 3 committees. In 
addition, two representatives of the generic pharmaceuticals industry 
have finally been named to one Tier 3 committee (ITAC-3), only one-
tenth the representation of the brand-name pharmaceutical industry on 
trade advisory committees. Yet it's worth noting that nearly two-thirds 
of all prescriptions filled in the U.S. are now generic medicines.
    Limitations of public participation in trade policy making are not 
confined to the Trade Advisory Committee system. By its very nature, 
this system cannot be a full mechanism for participation as members are 
sworn to secrecy and even if expanded will not represent the full range 
of views and interests affected by trade policy. In important areas 
where USTR makes policy or adjudicates interests, it follows the most 
restrictive possible participation mechanisms.
    For example, in the ``Special 301'' review USTR adjudicates 
complaints against other countries to determine listing on punitive 
``watch lists'' that can lead to investigations and sanctions for 
intellectual property policies that do not violate any trade agreement. 
The most full and fair process for such an adjudication of rights under 
general administrative law norms would be to hold an open hearing on 
the record before any decision is made, with full rights to reply to 
complaints in writing and orally. Instead, USTR adjudicates these 
matters through a notice and comment process. Other policy issues are 
determined without public consultation, or after meetings where the 
public can present their views but have no rights to a decision based 
on an evidentiary record, as is the norm for other agencies. Such 
consultation processes have been structured so that they are easily 
captured by industry interests. While the new USTR has undertaken 
important outreach efforts to public interest groups, the underlying 
structural problem remains.
    We do not question the importance of enabling U.S. business and 
industry interests to contribute to trade policy. However, the USTR was 
established to balance competing interests, and Congress mandated that 
advisory committees include a ``fair balance'' of perspectives. 
Instead, particular industry interests dominate, such as the brand-name 
pharmaceutical industry, at the expense of vital public interests. It 
is quite clear that the public health community and proponents of 
sustainable economic development have been excluded from effective 
engagement in the formulation and implementation of trade policy. This 
does not best serve the overall interests of the United States.
    It's important to recognize that consultation cannot be an end in 
itself, but should be understood as a means towards improving decision-
making and affecting an outcome. Without clear mechanisms of 
accountability and transparency, consultations may not be meaningful. 
This has generally been the case with USTR and the trade advisory 
committee system from the perspective of those of us in the non-
business and public interest community, particularly public health and 
development advocates.
Without a development lens, trade policies can undermine sustainable 
        development goals in poorer countries
    Trade negotiations at the multilateral, regional and bilateral 
levels should take into account disparities in development and poverty 
levels with our trading partners. They should seek to expand 
opportunities for working people to gain a greater share in the 
benefits of trade.
    Instead, negotiations led by the USTR over the past decade have 
locked in rules and policy prescriptions that facilitate further 
concentration of wealth and limit the policy options governments need 
to address poverty and inequality and to foment broad-based sustainable 
development. Following are three examples of this concern, involving 
the areas of intellectual property, investment and agriculture. We will 
suggest how greater representation and effective engagement of public 
health groups and development advocates could lead to a trade policy 
that better serves the broadest interests of the United States.
Intellectual property and access to affordable medicines
    Ensuring access to affordable medicines is a core element of the 
human right to health. Yet over two billion people still lack regular 
access to affordable medicines, due in part to the high price of 
existing medicines and the lack of new medicines needed to treat 
diseases that disproportionately affect poor people in developing 
countries.
    Strict intellectual property (IP) protection strengthens monopolies 
and restricts generic competition, which leads to higher medicine 
prices that are unaffordable for most people in developing countries. 
Although justified in the name of innovation, strict IP rules fail to 
stimulate medical innovation to address diseases that 
disproportionately affect people living in poverty.
    All World Trade Organization member countries have adopted IP 
protections in line with the WTO Agreement on Trade-Related Aspects of 
Intellectual Property Rights (TRIPS), although least-developed 
countries have until 2016 to comply with TRIPS provisions. These 
protections are considered by independent analysts to be more than 
adequate to balance the need to provide incentives for innovation with 
the obligation to the public of ensuring access to the benefits of the 
invention (in this case, medicines).
    In 2001, all WTO members adopted the Doha Declaration on TRIPS and 
Public Health, which reaffirmed the primacy of public health over the 
protection of intellectual property for medicines. This Declaration 
rested upon global acknowledgement that high medicine prices charged by 
brand-name pharmaceutical companies through IP-based monopolies exact a 
serious and unacceptable toll upon the world's poor. As such, the Doha 
Declaration empowers developing countries to employ public health 
safeguards and flexibilities to foster generic competition as a means 
to ensure affordable medicine prices.
    Yet with the strong influence of the pharmaceutical industry, U.S. 
trade policy has instead been used to extend monopolies for brand name 
medicines and disable the right of developing countries to use public 
health safeguards, thereby limiting generic competition and worsening 
the developing world's public health crisis. A succession of free trade 
agreements (FTAs) has imposed increasingly strict levels of IP 
protection in developing countries. When the ink was barely dry on the 
Doha Declaration, the U.S. entered an FTA with Jordan that introduced 
stricter IP rules than required by TRIPS.
    These rules have had real public health consequences in Jordan and 
subsequently in other countries that have concluded similar agreements. 
An Oxfam study conducted in Jordan and published in 2007 concluded that 
stricter IP rules led to dramatic increases in the price of key 
medicines to treat cancer and heart disease, which are the main causes 
of death in the country. Higher medicine prices, due in part to these 
stricter IP rules, are now undermining Jordan's public health system. 
Effects are similar in other countries, but are only manifested over 
time because it takes several years for newer medicines to go through 
the pipeline.
    USTR has pursued stricter IP rules as a cornerstone of U.S. trade 
policy through other means too. The Special 301 report, issued annually 
to review the IP policies of other countries, labels countries as 
violators of U.S. intellectual property rights for using legitimate 
measures to protect public health. Placement on the Special 301 List 
puts enormous pressure on developing countries that take steps to 
provide affordable health care. Thailand, which has used a key public 
health safeguard--compulsory licensing--to extend medical treatment to 
thousands of poor people suffering from HIV and AIDS, cancer and heart 
disease, has been repeatedly castigated under the Special 301 report, 
including by the new USTR, for its laudable actions.
    These policies are incoherent with U.S. foreign policy objectives. 
The United States sponsors one of the world's pre-eminent programs to 
treat HIV and AIDS--over two million people are on treatment due in 
part to the generosity of the U.S. government and taxpayers. To treat 
HIV and AIDS, this program relies almost entirely on the use of generic 
medicines produced by manufacturers in India--the same manufacturers 
that export over 70 percent of all generic medicines used in developing 
countries. Yet U.S. trade policy has sought to choke off the supply of 
these generic medicines to many developing countries and even to 
curtail their production in India, although to do so would directly 
undermine U.S. foreign assistance programs to treat HIV and AIDS.
    Such formulation and implementation of U.S. trade policy is enabled 
by the entire lack of balance in the trade advisory committees, which 
facilitates the domination of influence by the brand-name 
pharmaceutical industry on trade policy. The GAO (Report 07-1198) came 
to the same conclusion and added that the Office of the USTR made 
little or no effort to advance the goals of the Doha Declaration to 
promote public health. This imbalance and the undue influence of the 
pharmaceutical industry translate into trade policies that undermine 
public health and broader U.S. policy objectives in developing 
countries.
    This must change, and we have seen that it can. Under the 
leadership of Chairmen Rangel and Levin, IP rules included in FTAs 
already signed but yet to be considered by Congress were modified in 
order to address public health concerns as part of the May 10th (2007) 
Agreement. Their staff engaged a broad range of public interest groups 
and representatives of the pharmaceutical industry and worked to take 
into account public health and development concerns. The Agreement 
achieved an unprecedented reversal in the decade-long trend of 
increasingly stricter IP provisions. Oxfam applauded this important 
initiative, even if it fell short of addressing all our concerns, as it 
clearly illustrates how trade policymaking can be improved.
    The key point here is that Congress should not need to intervene to 
create balance in the day-to-day process of trade policymaking. That 
should be the role of the USTR working with its advisory committees. 
Inclusion of public health representatives and development advocates on 
trade advisory committees and improvements in their functioning will 
help to make the formulation and implementation of trade policy more 
accountable to broader U.S. interests.
    Improved public health representation can also improve transparency 
in U.S. trade policy making. The USTR recently re-started negotiations 
of an Anti-Counterfeiting Trade Agreement. Despite numerous concerned 
expressions by public health advocates that such an agreement could 
undermine access to medicines, the text remains a secret even as 
various industry representatives have full access through the trade 
advisory committees. Adequate public health representation on advisory 
committees as proposed in H.R. 2293 would ensure that at least some 
public health input can warn, and hopefully forestall, any negative 
consequences of this Agreement on public health and access to 
affordable medicines in developing countries.
Investment provisions from a development perspective
    This subcommittee held a hearing in May on investment protections 
in U.S. trade and investment agreements. The testimonies provided by 
Thea Lee of the AFL-CIO and Robert Stumberg of Georgetown University 
Law Center raise important points that echo key concerns Oxfam has 
raised for a number of years with regard to investment provisions in 
trade agreements. These concerns are illustrated by a very recent 
example that could have serious implications for sustainable 
development in El Salvador.
    Pacific Rim, a Canadian mining company, has filed a case against 
the Salvadoran government that will go to international arbitration 
under CAFTA's investor-state dispute settlement provision because the 
company has a subsidiary in Nevada. The company claims it has incurred 
hundreds of millions of dollars in damages for which it must be 
compensated because it has been unable to obtain a permit for 
extraction of gold found through initial exploration. The Salvadoran 
government determined it could not issue such a permit based on results 
of environmental impact studies that show significant harmful effects 
would occur from extraction, particularly on the country's already 
scarce water resources.
    At the same time, the Millennium Challenge Corporation's compact in 
El Salvador, signed in 2006, is providing nearly half a billion dollars 
for a sustainable development program in the same region where Pacific 
Rim wants to extract gold. An environmental impact assessment required 
by the MCC similarly warned against the anticipated adverse effects 
that mining activities would have in the region, which already suffers 
from highly vulnerable water resources, soil problems and environmental 
degradation. It is clear that if mining activities were to proceed, 
they would undermine the sustainable development initiative supported 
by the MCC. And if Pacific Rim wins its case, the Salvadoran government 
could be forced to pay the company an amount similar to what it is 
receiving from MCC.
    This is a `no win' situation for both El Salvador and the United 
States. If the Salvadoran government feels forced to cede to the 
company's pressure to issue a mining permit despite the harmful effects 
on the environment as well as on the health of the local population, or 
ultimately loses the case and has to pay hundreds of millions in 
compensation to the company, the result would not only be a blow to El 
Salvador's efforts at development and poverty reduction. It would also 
undermine U.S. foreign and development policy.
    The investor-state dispute settlement mechanism, which has been a 
part of U.S. trade policy, elevates investor rights in ways that can 
threaten legitimate environmental protections and undermine sustainable 
development efforts. Even if the government were to win the case, it 
does not mean there would be no costs, as legal fees alone can go into 
the millions. And many developing countries that can hardly afford such 
fees, much less a potential settlement payment, may be more likely to 
sacrifice protections of the environment and other public interests 
rather than risk a challenge from a U.S.-based company. With no check 
to avoid frivolous lawsuits, investors can use the threat of filing a 
case to force governments to forgo measures that protect the public 
interest.
    In general, developing country governments need the policy space to 
regulate investment so that it furthers their national development 
goals. Yet the investment provisions included in U.S. trade agreements 
seek to deregulate investment in developing companies, thereby limiting 
the use of policy tools, such as performance requirements and capital 
controls, that can help ensure investment will spur sustainable 
development and help reduce poverty and inequality.
    As discussed in the hearing of this subcommittee last month, the 
State Department has recently created a panel to conduct a formal 
review of investment provisions in FTAs and the U.S. model bilateral 
investment treaty, whose recommendations are to feed into an 
interagency review of investment issues. This is an important 
initiative that we understand will include development experts. We hope 
the recommendations of this panel will address the concerns raised 
here.
    However, it will also be important to have development experts on 
trade advisory committees in order for USTR to receive ongoing advice 
on investment provisions from a development perspective. There is no 
advisory committee on investment, but the recent GAO report (08-59) 
mentions an Investment Working Group that draws from across the ITAC 
committees. This indicates the importance of development experts and 
public health representatives being included in these Tier 3 
committees.
Agriculture from a development perspective
    Some 70 percent of the world's poor depend on agriculture for their 
livelihoods. Half of the world's undernourished people and those living 
in absolute poverty reside on small farms. Sales and exports from 
agriculture constitute the main source of revenue for many poor 
countries, in some cases upwards of 40 percent of GDP. Here in the 
United States, agriculture accounts for barely more than 1 percent of 
output and its share of exports is only about twice that amount.
    From a development perspective, it seems obvious that it is 
indispensable to ensure that trade rules in agriculture work to promote 
development and poverty reduction. Yet agriculture has no competitors 
for the title of most distorted sector of the global economy. And the 
U.S. continues to maintain, and in last year's Farm Bill even expand 
the scope for, trade-distorting agricultural subsidies. Negotiations on 
agriculture have been the Gordian Knot of the WTO Doha negotiations, as 
one of developing countries' greatest needs in the global trading 
system is to right the wrongs of decades of rigged rules in 
agriculture.
    At the same time, our bilateral and regional FTAs do not take into 
consideration this reality and instead limit the ability of our 
developing country trading partners to foster their own agricultural 
production. This is one of Oxfam's principal concerns with regard to 
the FTA with Colombia, where rural poverty is a cause of and further 
fuels the armed conflict and the illegal economy.
    The agricultural provisions in the FTA would undermine small 
farmers in Colombia, who produce 40 percent of the country's basic food 
basket but would be unable to compete with subsidized U.S. exports. 
Colombia's rural population is the most vulnerable to being recruited 
to supply manpower for illicit crops and armed groups. If more 
agricultural imports from the U.S. threaten small farmer livelihoods, 
the FTA would increase the pressure on rural populations to engage in 
the cultivation of illegal crops and to take part in the dynamics of 
the war.
    This is one more example where U.S. trade policy is working at 
cross purposes with U.S. foreign and development policy. Since 2000, 
the U.S. has provided $5 billion in military aid to the Colombian 
government's war effort and to reduce coca cultivation. It is not in 
the best interests of the U.S. or Colombia for a trade agreement to 
undermine the livelihoods of Colombia's small farmers. From a 
development perspective, this problem should have been understood and 
taken into account when the USTR first considered negotiating an FTA 
with Colombia.
Recommendations for improvement in the trade advisory committee system
    Having made a case for including development and public health 
interests in the formulation and implementation of U.S. trade policy, 
we make the following concrete recommendations to improve the trade 
advisory committee system in that regard.

        1.  Congress should pass H.R. 2293, which would establish a 
        Tier 2 public health advisory committee, include public health 
        organizations on the Tier 1 committee, and improve the process 
        of consultation and reporting on all advisory committees.
        2.  A separate Tier 2 trade advisory committee on development 
        should be established, in a similar way to the public health 
        advisory committee that would be established under H.R. 2293, 
        and development organizations and experts should be included on 
        the Tier 1 committee. In order for this to be most effective, 
        we also recommend that a position of Assistant U.S. Trade 
        Representative for Development be created to enable development 
        interests and concerns to be effectively coordinated in all 
        aspects of the formulation and implementation of U.S. trade 
        policy undertaken by the Office of the USTR.
        3.  Congress should clarify, through legislative action, the 
        intent of the `fair balance' requirement that applies to each 
        advisory committee so as to ensure a clear mandate for adequate 
        representation of non-business interests, including public 
        health and development organizations, on all relevant Tier 2 
        and Tier 3 committees. It should neither be considered fair nor 
        legitimate to limit Tier 3 committee membership to industry 
        representatives when the focus of the committee is of broader 
        public interest. Diversity of stakeholder representation to 
        include a wide range of interests at all levels of the advisory 
        committee system should be clearly established as a norm. To 
        date, the only non-business representatives on Tier 3 
        committees have been named following lawsuits brought against 
        the government.
        4.  Measures should be taken to improve and make more 
        consistent the process of consultation and functioning of the 
        trade advisory committee system in order to increase 
        accountability to stakeholders in the formulation and 
        implementation of trade policy. The following suggestions would 
        contribute toward that end, and some of them are addressed in 
        H.R. 2293:

        a.  There should be a requirement for advisory committees to 
        meet regularly, with a minimum number of annual meetings--
        possibly quarterly.
        b.  Advisory committees should be consulted before entering 
        into negotiations, throughout the negotiating process and prior 
        to final agreement--including seeing and commenting on text 
        before it is tabled or finalized.
        c.  Advisory committees should regularly submit written reports 
        on their advice provided, including any divergence of opinion 
        in the committee. All efforts should be made to respect 
        diversity of opinions on committees by clearly presenting 
        minority as well as majority advice.
        d.  The Office of the USTR and relevant agencies that co-
        administer advisory committees should provide written responses 
        to committee advice received through these reports.
        e.  USTR should increase the staff resources allocated to 
        advisory committees, which may require Congress appropriating 
        additional funds for this purpose. Effective consultation costs 
        staff time and resources, but it will result in better 
        outcomes. Without adequate staff resources for USTR to 
        adequately administer, engage, use input from and respond to 
        advisory committees, the system will not be fully effective.
        5.  The process of consultation with the public on trade policy 
        should be improved and the USTR should be held more accountable 
        to input received. To this end, we recommend the following:

        a.  Consultations with the public should follow the most 
        participatory models available under the Administrative 
        Procedures Act, including rulemaking after a public hearing on 
        the record with written decisions responding to submissions, as 
        is the norm for rulemaking in other agencies.
        i.  All public comments solicited by USTR should be organized 
        as `open hearings on the record' and, as such, follow 
        procedures established by the Administrative Procedure Act 
        (Title 5 of the U.S. Code, Chapter 5, section 556). This 
        involves having an open comment period, providing an 
        opportunity for others to respond to comments, and then holding 
        an open public hearing.
        ii.  Upon completion of the particular consultation process, 
        the USTR should provide a written response explaining whether 
        the input received was used or not and why.
        iii.  Where data is being used by USTR (such as when it relies 
        on industry estimations of the costs of IP policies in other 
        countries), the methodologies for its generation should 
        themselves be subject to notice and comment, as is required 
        under the currently binding case law under the Administrative 
        Procedures Act.
        b.  Adjudications of interests, such as development of the 
        Special 301 watch lists, should take place after an 
        administrative process with the full range of protective 
        procedural rights, including an opportunity to reply to 
        industry charges, an open hearing with a written record and 
        opportunity to appeal findings and interpretations of law. To 
        this end:

        i.  Reform the notice and comment process to permit countries 
        and civil society groups adequate time to reply to 
        pharmaceutical industry Special 301 submissions;
        ii.  Allow public notice and comment on any data derived from 
        submissions in the comment process that is used as the basis 
        for policy or decision making;
        iii.  Provide, upon completion of the particular consultation 
        process, a written response explaining whether the input 
        received was used or not and why; and
        iv.  Regarding the Special 301 Report, publish objective 
        standards for listing decisions, require listing decisions to 
        be preceded by a public (in-person) hearing on the record, and 
        offer opportunities to appeal adverse decisions.

        6.  There should be greater transparency in the formulation and 
        implementation of U.S. trade policy. Non-business and public 
        interest organizations are often at a disadvantage in providing 
        input to influence policy because negotiating text is generally 
        classified. Even as participants on advisory committees, non-
        profit organizations may have difficulty in providing timely 
        quality input on the range of technical issues they care about 
        if they are unable to consult with external experts because 
        they cannot share information with anyone who lacks security 
        clearance. A better solution should be found to allow for more 
        effective consultation of the wide range of stakeholders in 
        U.S. trade policy.

Conclusion
          Getting U.S. trade policy right means helping to 
        foster sustainable development in our trading partners while 
        also strengthening our own economy. If we are only looking at 
        one side of that equation, we may be going down the wrong path. 
        To put us on the correct path, Congress and the administration 
        should work to ensure:

          Effective coordination and coherence of our trade 
        policy, foreign policy and aid policy;
          Effective engagement of stakeholders that bring a 
        development perspective and a public health perspective into 
        trade advisory committees and the overall USTR public 
        consultation process;
          Improvement in the functioning of the trade advisory 
        committee system to increase accountability to the broad range 
        of stakeholders in the formulation and implementation of trade 
        policy.

                                 
               Testimony By Susanna Rankin Bohme, Letter
                      Susanna Rankin Bohme, letter

Dear Members of Congress:

    I am writing to ask you to vote in support of the Public Health 
Trade Advisory Committee Act (HR2293) introduced by Reps. Chris Van 
Hollen (D-MD) and Lloyd Doggett (D-TX). Although the Federal Advisory 
Committee Act requires that federal advisory committees be fairly 
balanced in terms of points of view represented and committee functions 
performed, public health advocates are underrepresented at all levels 
of the USTR advisory committees. The creation of a Tier 2 Public Health 
Advisory Committee on Trade as well as the inclusion of knowledgeable 
public health advisors in other parts of the advisory system are 
essential to establishing a fair balance of public representation at 
the USTR.
    As an American Studies scholar whose work focuses on trade and 
health, and as a member and chair of the American Public Health 
Association's Forum on Trade and Health, I know that U.S. trade 
practices and policies often harm rather than improve the health of 
people worldwide--especially people in poorer nations. The Public 
Health Trade Advisory Committee Act offers an opportunity to reverse 
that trend and allow the United States to take global leadership in 
establishing healthy and truly fair trade policy.
    To date, trade agreements negotiated by the USTR have disregarded 
several important public health priorities. Trade agreements that 
prioritize health have the potential to improve the daily lives and 
health of people worldwide in a number of ways.
Affordable Medicines
    Public health representation can help ensure the availability of 
safe, effective medicines in poor nations facing extreme public health 
emergencies.
Environmental, Occupational, and Consumer Regulation
    Public health representation can help ensure that nations worldwide 
are empowered to regulate environmental and occupational health risks 
in a democratic, transparent, and pro-health manner.
Basic Human Services
    Public health representation can help ensure that health care, 
water, sanitation, energy, education, and other basic services are 
managed and distributed in a manner that maximizes human health and 
well being.
Impact on traditional means of livelihood
    Public health representation can help ensure that trade agreements 
are implemented in such a way as to maximize stability rather than 
dramatically reshaping a nation's industrial and agricultural 
production, causing unemployment and instability that impact mortality 
and morbidity.
    To improve global health in these areas and more, I urge you to 
support the passage of Public Health Trade Advisory Committee Act 
(HR2293). Thank you for your leadership and your consideration.

            Sincerely,

                                          Susanna Rankin Bohme, PhD
Chair, American Public Health Association Forum on Trade and Health

                                 
                  Testimony By Edward J. Black, Letter
                        Edward J. Black, Letter

Dear Chairman Levin and Ranking Member Brady:

    The Computer & Communications Industry Association (CCIA) 
appreciates the opportunity to submit comments for the record for the 
Trade Subcommittee's hearing on the trade advisory committee system. 
CCIA wholeheartedly supports the Subcommittee's efforts to examine 
whether ``administrative or statutory changes, building on revisions 
implemented in recent years, might broaden the range of views 
represented and permit the advisory committees to provide more timely 
and useful recommendations.'' The hearing on July 21st focusing on 
environmental, labor, public health, development, and civil society 
perspectives was an excellent start. However, these are not the only 
perspectives that deserve to be reflected in the trade advisory 
committee system.
    In its testimony before the Subcommittee at last week's hearing, 
the Government Accountability Office stated ``that representation of 
stakeholders is a key component of the trade advisory committee system 
that warrants consideration in any review of the system. In particular, 
as the U.S. economy and trade policy have shifted, the trade advisory 
committee system has needed adjustments to remain in alignment with 
them, including both a revision of committee coverage as well as 
committee composition.'' One of the most significant advances in the 
U.S. and global economy in the past decade has been the development of 
the Internet as a tool and stage for commerce in products and services. 
The Internet has enabled truly global access to products, services and 
information in a way previously unimagined. This has in turn led to 
conflicts and issues that are equally new, and for which the 
traditional trade advisory committee system is not well equipped.
    For example, foreign legal regimes contribute to a hostile business 
environment for U.S. Internet companies. Foreign courts are 
increasingly imposing sweeping civil--and sometimes criminal--liability 
on U.S. companies simply for providing innovative online services 
entirely consistent with U.S. law. Indeed, in some countries, this 
anti-Internet bias may be viewed as a form of de facto protectionism 
due to the Internet being identified as a predominantly American 
phenomenon. Please see the attached analysis on Internet Protectionism 
for further information and examples.
    The advent of a new, networked world has given rise to innovative 
types of trade barriers. There must be a framework to address this 
changed landscape, and rules of the road for this new world need to be 
established. In order for our government to represent our industry's 
interests, and those of the consumers and users of the Internet, in 
this process, CCIA strongly urges the creation of an Industry Trade 
Advisory Committee (ITAC) on Internet issues. The issues that confront 
our industry are substantially unique from those facing other industry 
sectors, and cleared advisers with expertise in the Internet industry 
would be able to provide USTR with information and a perspective that 
it is not presently receiving.
    We greatly appreciate your attention to the issue of trade advisory 
committee system reform, and your consideration of our views. We would 
be pleased to discuss these issues with you and your staff, and to 
assist in any way we can.

            Sincerely,

                                                    Edward J. Black
                                                    President & CEO

                                 
    Testimony By The Council of State Governments Eastern Regional 
                         Conference, Statement
    Statement of The Council of State Governments Eastern Regional 
                               Conference
    Whereas, The economic prosperity of the United States is best 
served by embracing free and fair trade in global markets, investing in 
innovative research and technologies, and providing assistance to 
workers impacted by technology and trade trends; and
    Whereas, Expanding trade opportunities for American workers and 
businesses depends on cooperation between the Federal Government and 
the states; and
    Whereas, The trade liberalization efforts of the early 1990s and 
trade agreements such as the North American Free Trade Agreement and 
the World Trade Organization (WTO) Uruguay Round agreements have 
increased the role of state policymakers in international trade 
decisions; and
    Whereas, WTO, FTA and other recent trade and investment agreements 
have proceeded beyond discussion of basic tariffs and quotas and now 
address government regulation, taxation, procurement, services, 
investment, subsidies, not-tariff trade barriers, and economic 
development policies that are implemented at state and local levels;
    Whereas, Recent trade agreements that proceed beyond tariffs and 
quotas also intersect with traditional areas of state authority under 
the 10th Amendment, such as regulating the environment, health, and 
safety and, thus, may impact the states' continuing authority to 
effectively legislate and regulate in these areas; and
    Whereas, Trade liberalization has transformed both global markets 
and the historical state-federal division of power, thereby offering 
new economic development horizons for state programs, presenting market 
opportunities to some firms, creating significant competitive 
challenges for other firms, increasing the need for training and 
assistance to firms and works having to adjust, and imposing a burden 
on state agency resources having to determine the impact of new trade 
agreement provisions on state laws, practices and regulations; and
    Whereas, States should be supported by the Federal Government in 
trade development activities and trade policy analysis; and
    Whereas, States often lack a clearly defined institutional trade 
policy structure and resources, making it difficult to handle requests 
from trading partners and federal agencies and to articulate an 
informed state stance on trade issues; and
    Whereas, International lawsuits may be brought against the U.S. 
that challenge state-level laws, practices or regulations alleged to be 
in violation of trade agreements and, therefore, the U.S. government 
should ensure that international trade agreements covering the U.S. 
would accord presumptive validity and not preempt or undercut those 
non-discriminatory state laws, practices and regulations adopted for a 
public purpose and with due process; and
    Whereas, There is a need for a stronger federal-state trade policy 
consultation mechanism so that states are more comprehensively 
consulted during the negotiation, implementation and dispute resolution 
of international trade agreements and; and
    Whereas, the Intergovernmental Policy Advisory Committee, an 
advisory committee of the United States Trade Representative, plays an 
important role in providing state and local government perspectives and 
input to the United States Trade Representative, but is limited in 
scope by statute, including prohibitions on sharing classified 
information with relevant state officials and members of the public, 
membership determination by the USTR, lack of sufficient resources, 
etc.; and
    Whereas, In August 2004 the Intergovernmental Policy Advisory 
Committee recommended that a Federal-State International Trade Policy 
Commission would be an ideal structure for objective trade policy 
analysis and would foster communication among federal and state trade 
policy officials; and
    Whereas, The creation of a federal-state trade policy 
infrastructure would assist states in understanding the scope of 
federal trade efforts, would assist federal agencies in understanding 
the various state trade processes, and would give states meaningful 
input in the United States Trade Representative's activities; and
    Whereas, Federal-state consultation should include the timely and 
comprehensive sharing of information on the substance of trade and 
investment agreement provisions and federal trade and investment 
programs, including analysis on their potential impacts, benefits and 
costs related to state laws, practices, programs, and regulations; 
appropriate use of the state single points of contact (SPOCs); improved 
trade data to assess the impact of proposed and existing agreements; 
and a reasonable opportunity for meaningful input by the states; and
    Whereas, the Eastern Trade Council has fostered regional 
cooperation among states and business by jointly promoting trade shows, 
organizing joint trade missions, sharing trade research data and other 
resources, and increasing access to business programs through the U.S. 
Department of Commerce; and
    Whereas, the Eastern Trade Council has facilitated regional 
cooperation to advocate for improving trade data in order to provide 
sufficient and detailed information to support sub-federal trade 
development and international investment attraction strategies, and to 
measure the economic impacts of trade agreements at the state level; 
and
    Whereas, the Eastern Trade Council has participated in regional 
meetings and calls with states in developing an improved federal-state 
consultation mechanism;
    NOW, THEREFORE, BE IT RESOLVED that the Council of State 
Governments' Eastern Regional Conference urge Congress to create 
dedicated capacity to improve federal-state consultation on 
international trade and investment policy and programs, including 
improving data available to states and increasing transparency of 
documents necessary to analyze the impacts of trade and investment 
agreements on states; and
    BE IT FURTHER RESOLVED, that the Council of State Governments' 
Eastern Regional Conference, including the Eastern Trade Council, renew 
its efforts to educate and engage states on the importance of 
international trade development and policy and to understand impacts on 
states, and create a recommendation on improving federal-state 
consultation.
                                 
  Testimony By The Society of Chemical Manufacturers and Affiliates, 
                                 Letter
      The Society of Chemical Manufacturers and Affiliates, letter

Dear Chairman Levin & Ranking Member Brady:

    The Society of Chemical Manufacturers and Affiliates (SOCMA) is a 
trade association comprised of custom, batch, and specialty chemical 
manufacturers. Founded in 1921, SOCMA has over 300 members, the 
majority of which are small and medium sized businesses. Currently a 
SOCMA member, V.M. ``Jim'' DeLisi of Fanwood Chemical serves as the 
Chairman of ITAC 3, the Advisory Committee for Chemicals, 
Pharmaceuticals, Health/Science Products and Services. As a ``Tier 3'' 
committee, ITAC-3 is charged to advise the USTR and DOC on highly 
technical issues impacting the chemical manufacturing industry, such as 
rules of origin and tariffs. Our sector generated about 500 billion 
dollars in trade during 2008. Fanwood Chemical is the first small 
company Chair of this group in its 45-year history. Mr. DeLisi has 
attended WTO Ministerial Meetings as an Advisor in Seattle, Cancun, and 
Hong Kong. Records would show that his Committee has met regularly for 
45 years. The Committee is also very proud of the fact that members of 
ITAC 3 always represent the largest contingent of any sector at the 
various WTO Ministerials that have occurred in this time period, 
including four ITAC 3 members who accompanied you, Mr. Chairman, to 
Doha.
    SOCMA believes that every interested citizen of the U.S. deserves 
to have input into U.S. trade policy. We are very fortunate to have an 
enormously talented group of individuals, both career and appointed, in 
both the Office of the USTR and the Department of Commerce, dedicated 
to expanded trade in goods and services. It has been repeatedly shown 
that increased trade is vital to increasing the prosperity of the 
United States.
    We also believe that these officials are capable of gathering input 
from a variety of sources and then distilling from this input the 
proper trade policy for our nation. Such advice does not need to be 
contained in a single document, nor does it need to come from a single 
committee. In fact, we strongly advocate that the best advice is 
gleaned from committees that can function in a clear and open manner. 
This can only be accomplished when mutual trust exists among committee 
members. This trust is very difficult to achieve if all views need to 
be expressed in the same forum. Therefore, committees that support 
manufacturing and services in the USA, such as the existing ITACs, 
should remain ``pure'' and not be saddled with members that have 
different agendas.
    The ITAC is a place where various companies and representatives 
from the same or similar sectors can come together, discuss common 
challenges, and dialogue with government officials. The relationship 
established between government and industry has been mutually 
beneficial. Government and industry both benefit from educating each 
other on issues and exchanging ideas and information. The experienced 
professionals sitting on the ITACs are a valuable resource to 
government and their expertise should be utilized.
    The existing ITAC system has served the country well, being 
especially beneficial to small business. Most large companies have 
sufficient resources to present their trade issue interests effectively 
before government entities. There is nothing wrong with this fact; it 
is a natural result of their importance to our overall economic well-
being. However, the ITAC process is neither exclusive to size nor 
inherently drawn to only one size of company. Therefore, it 
appropriately allows smaller companies to also have input into our 
officials.
    The Advisory System at USTR and DOC was specifically created to 
ensure that U.S. negotiators had as much knowledge as possible of real 
world situations, so that they could best represent the real needs of 
American manufacturers, not just their perceived needs. In fact, the 
advisory system was created in the mid-1970's as U.S. Government 
officials tried to understand why the USA did not prevail in the Tokyo 
Round of the GATT negotiations. At the time, it was determined that the 
significant difference between perception and reality could only be 
remedied by constructing a system that would allow U.S. negotiators 
direct access to the best experts in industry, those who truly 
understood what was required to gain access to foreign markets, based 
on their real world experience. The only way for this interchange to 
work was to be sure that the ``industry advisors'' were granted a level 
of security clearance sufficient for discussions to be held free from 
fear of disclosure to the public or to our trading partners. This was 
the genesis of the existing trade advisory system which has served both 
Government and Industry very well for over 40 years.
    In addition to attendance at the Ministerials described above, 
SOCMA has specifically partnered with USTR to support efforts in 
identifying technical barriers to trade within the Asia-Pacific 
Economic Cooperation Forum.
    The U.S. advisory system is unique in the world. Our foreign 
competitors recognize it as one of our strengths as they have witnessed 
the outstanding results of this partnership.
    The Advisory System has played an important role, not in setting 
U.S. trade policy, but in helping to mold the policy, once it has been 
set by our political leaders. In this manner, political leaders can be 
assured that the policy goals, once achieved, will truly be beneficial 
for our economy.
    In conclusion, the existing ITAC system works well. It serves a 
noble purpose--to help the government protect the interests of American 
industry--and is inclusive of those within industry who are permitted 
to participate.
            Respectfully submitted,
    Bill Allmond, Vice President of Government Relations and 
ChemStewards
    Justine Freisleben, Assistant Manager, Government Relations

                                 
   Testimony by Vermont Commission on International Trade and State 
                          Sovereignty, letter

Dear Chairman Levin:

    We are writing in response to the request by the Subcommittee on 
Trade for input on how to increase transparency and public 
participation in the development of U.S trade policy. The Vermont 
Commission on International Trade and State Sovereignty (Vermont 
Commission) was established by the Vermont General Assembly in 2006 to 
assess the legal and economic impacts of international trade agreements 
on state and local laws, state sovereignty, and the business 
environment. As part of this charge, the Vermont Commission closely 
examined the transparency offered and public participation process 
utilized by the U.S. Trade Representative (USTR) in the negotiation of 
trade agreements.
    Over the past three years, the Vermont Commission held multiple 
meetings on the need to increase transparency and public participation 
in the development of U.S. trade policy. The Commission solicited and 
received testimony from members of USTR, members of the business 
community, members of the intergovernmental policy advisory committee 
(IGPAC), trade officials from Canada, representatives of national trade 
organizations, and other interested parties. The Vermont Commission, 
its members, and its staff also met with other state trade commissions 
and representatives to discuss and develop a regional policy regarding 
transparency and public participation. In addition, due to the work of 
Deputy Assistant U.S. Trade Representative Myesha Ward, the Vermont 
Commission spoke with USTR representatives about the steps taken or 
considered by the current administration to increase transparency and 
public participation.
    The extraordinary amount of information and input gathered by the 
Vermont Commission led in January of 2009 to the Vermont Commission 
approving a Statement of Principles on International Trade which noted 
recommended changes to USTR trade policy. A copy of the Statement of 
Principles is attached for your review. As part of these principles, 
the Vermont Commission asserted that the USTR should improve 
transparency in its trade negotiations and sharing of data and that the 
process for consultation with states should be improved. Specifically, 
the Vermont Commission noted that:

          States should be consulted during the negotiation of 
        international trade agreements. Federal-state consultation 
        should include the timely and comprehensive sharing of 
        information on the substance and likely impact of trade 
        agreements on state laws and regulations; appropriate use of 
        the state single points of contact (SPOCs); and a reasonable 
        opportunity for meaningful input by the states; and
          State legislatures and governors should be consulted 
        or have a voice in determining whether their state procurement 
        policies are covered by international trade agreements, and 
        they should be afforded notice and an opportunity to comment 
        and the authority to decline or limit state participation.

    In May of 2009, the Vermont Commission met to review and discuss 
potential methods for improving USTR transparency and consultation. 
Generally, the Commission members agreed that if changes are made to 
the USTR consultation process, the new process should be simple in 
format and structure, acknowledge and respect principles of state 
sovereignty, and allow additional state access to trade data and texts. 
In preliminary discussion on how to achieve this goal, the Vermont 
Commission focused on the need for a new consultative body and two 
possible models for such a body as a starting point for wider 
discussion and consideration.
    The first model would be a new, federally funded organization or 
structure established at the national level to allow for consultation 
between the USTR and the states. This new national consultation 
organization would replace the existing IGPAC and would be designed to 
inform states of trade policy and ongoing trade negotiations and their 
potential impacts on states. The new consultation organization would 
serve as the mechanism by which state and local representatives would 
provide comment or requests to USTR. It also could aid USTR in the 
distribution of trade data and other materials. Membership of the 
organization would include representatives of all states, but 
membership could be expanded to include representatives of local 
governments. In addition, this new organization would need to stand 
apart from and independent of the USTR and the administration in 
general in order to ensure non-partisanship.
    A second model considered by the Vermont Commission would be the 
creation of several new regional trade commissions that would represent 
the varied geographic and economic interests of the states. Regional 
trade commissions would provide input to IGPAC or a national 
consultation organization and its members. The regional trade 
commissions could also serve as interfaces with the states by providing 
state and local government information and data regarding trade and 
trade agreements. Federal funding would be necessary to fully staff and 
successfully implement regional trade commissions.
    Establishing and appropriately funding and staffing a new national 
consultation organization or several regional commissions will 
significantly increase transparency if USTR cooperates with such a 
national organization or regional commissions by providing relevant and 
timely information regarding trade policy, ongoing trade negotiations, 
the impact on states, and trade information and data. Such information 
sharing will help states analyze the impact of trade and agreements 
while also optimizing trade promotion in order to afford businesses 
increased trade opportunities. Moreover, a national consultation 
organization or a regional commission will provide USTR with valuable 
input regarding the impact of trade agreements on state sovereignty and 
state legislation.
    Thank you for requesting input on how to increase transparency and 
public participation in the development of U.S. trade policy. The 
Vermont Commission is dedicated to working with Congress and the USTR 
to develop a trade policy that improves transparency and consultation 
with the states while continuing to further the trade interests of the 
United States and its individual states. If you need additional 
information, please contact the commission staff, Robin Lunge or 
Michael O'Grady.

            Sincerely,

                                                        Ginny Lyons
                                                           Co-Chair
                                                    Kathleen Keenan
                                                           Co-Chair

                                 
               Testimony By William A. Gillon, Statement
                     Statement of William A. Gillon
    I appreciate the opportunity to provide written testimony to the 
Trade Subcommittee of the House Committee on Ways and Means. My name is 
William Gillon. I am an attorney from the Memphis, Tennessee, area. The 
Trade Policy Advisory Committee system has been a valuable tool for 
agriculture to convey its concerns and needs regarding trade 
negotiations. I am happy to present this testimony in support of that 
system.
    My work experience includes the Office of the General Counsel at 
the U.S. Department of Agriculture, Senior Counsel to the Senate 
Committee on Agriculture, Nutrition and Forestry, General Counsel and 
Director of International Trade Policy for the National Cotton Council, 
and the private practice of law since 2005. My practice focuses mainly 
on agriculture and international trade policy. My professional 
responsibilities at each position I have held since graduating from law 
school have involved a mix of domestic and international agricultural 
policy.
    I have watched trade negotiations from within USDA, from Congress, 
from a large commodity trade association, and now as a private attorney 
for interested parties. The only thing I have not done is directly 
negotiate for the United States. I have served within the Agricultural 
Trade Advisory Committee (ATAC) system for a number of years, under 
several different Presidents. Before becoming a member myself, I worked 
with industry representatives who served as Members of the Committees.
    As I stated above, I believe the ATAC system helps create a 
dialogue between an Administration's agricultural trade negotiators and 
the private sector. The system as it has evolved is one that has 
enabled industry representatives to become familiar with the trade 
policy positions of the United States and our trading partners. It has 
enabled private sector participants to become somewhat familiar with 
the ever-evolving ``language of trade,'' that special dialogue that 
occurs within international trade negotiations that has brought words 
like ``modalities'' into our standard nomenclature.
    Mr. Chairman, it is my hope that the basic structure and 
representation on the advisory committees be maintained in the future. 
It should not be the case that individuals are automatically 
disqualified from membership on a trade advisory committee because they 
are registered as a lobbyist.
    I am a registered lobbyist. When Congress expanded the definition 
of lobbyist in the Lobby Disclosure Act, I immediately registered and 
began an extensive review of my clients to ensure that everyone who 
should register under the Act did so. I have taken a cautious approach 
to the Act and a broad approach to registration. If an individual or a 
company comes close under the lobbyist definitions, I encourage them to 
register and I help them comply with the statute. I reject, however, 
the notion that because I am registered and because my activities are 
reported and public I am nonetheless automatically disqualified from 
providing sound advice through the ATAC system.
    The experience that qualifies me to be a member of an ATAC is the 
same experience that led some persons to hire me to represent their 
interests to elected officials or to help them understand the position 
of elected officials. When an Administration automatically disqualifies 
persons with significant experience from positions of advice or 
counsel, it deprives itself of the high level of professional advice 
and insight they can render and it deprives private citizens of their 
right to monitor the Administration's activities. This is particularly 
the case in the area of international trade negotiations where it takes 
many years of experience just to understand the lingo. Individuals who 
do not follow trade negotiations every day may know that a certain 
outcome will or will not be beneficial, but they may not be able to 
discern whether the language in front of them or the speech just 
delivered to them contains that detrimental outcome.
    Congress may often find itself having to jump the same hurdles. 
Trade negotiations tend to continue from one Administration to the next 
with points of reference often shifting significantly from January to 
December. It is difficult even for Congressional staff to consistently 
be aware of those shifts and the ultimate impact they may have on 
citizens in the United States.
    The ATAC system itself has been developed to ensure that an 
Administration hears from affected parties. The commodity 
representatives on the Tobacco, Cotton, Peanuts and Planting Seeds ATAC 
are supposed to provide their opinion regarding trade affecting their 
specific commodity. It is wholly necessary to that role that the 
individuals on the ATAC be interested in that commodity and, indeed, 
have a stake in it and deep knowledge of it. For the purposes of 
representing the interests of a specific commodity, it shouldn't matter 
whether an individual is a registered lobbyist. First, with respect to 
the lobbyist, the public is notified as to the lobbyist's clients and 
political activity, but they are not so well-informed with respect to 
private citizens.
    Second, Mr. Chairman, farmers farm. If they are not putting all of 
their focus and effort into their farming operations, they increase 
their already ridiculously high chances of failure. Most farmers I know 
are not fully aware there is a difference between ``special'' products 
and ``sensitive'' products within the Doha negotiations, nor can they 
be expected to stop and research the exact scope and impact of those 
differences. Generally, those farmers associate together and hire 
experienced professionals to help them understand these and similarly 
involved policy issues. The ban on lobbyists should not be extended to 
representation on the ATACs as it would deprive these farmers of voices 
they consider to be valuable and necessary to help them protect their 
interests.
    Third, trade negotiations are directed by the Administration that 
is in office. It is generally understood that all other interested 
parties, farmers and Congress alike, must find a way to understand what 
is going on within those negotiations. If ATACs are reformed in such a 
way as to ban lobbyists from participating, those ATACs will be far 
less prepared to take on the task of ombudsman. They will not be able 
to provide the kind of advice that comes from experience and daily 
immersion. Such a step will not improve the system, it will make it 
superfluous.
    Mr. Chairman, I would like to make one point about diversity on 
committees. Representation on the committees I have been involved with 
has been minimally diverse, but knowledgeable. Because of the knowledge 
and because of even the minimal diversity, ATAC meetings have tended to 
enhance our understanding of the negotiations and the members of the 
various ATACs have, by and large, been able to convey to the 
Administration their needs and concerns with trade discussions. 
However, as these are committees designed to advise the Administration 
on agricultural trade policy, they have been committees with membership 
from the agricultural trade community--individuals who generally have a 
mindset and a position that trade is good and beneficial. Membership 
has evolved and different points of view have populated the committee I 
have participated in.
    While it welcomes diversity, the Tobacco, Cotton, Peanuts and 
Planting Seeds committee I have been a member of for several years has 
struggled to reconcile the positions of Members of the Committee who 
are opposed to the export of specific products. As the Committee was 
asked to review free trade agreements and render its advice, it was 
difficult to obtain consensus when a committee member is opposed to 
trade in a product. Advisory Committee members generally do not address 
the larger questions of whether trade is or is not good or advisable. 
Instead, the Committee reviews the technical terms of proposals, the 
draft negotiating documents, to determine if they are fair and 
reasonable. Diversity of opinion is helpful, but I question whether 
members of agricultural trade advisory committees shouldn't, at the 
least, be committed to agricultural trade.
    Mr. Chairman, thank you again for holding this hearing and for 
allowing me to submit testimony.

                                 
    Testimony By Maralyn Chase, Peggy Pierce, Jill Cohenour, Steven 
                   D'Amico, and Susi Nord, Statement
    Statement of Maralyn Chase, Peggy Pierce, Jill Cohenour, Steven 
                         D'Amico, and Susi Nord
    Thank you very much for convening a hearing on the future of the 
U.S. Trade Advisory Committee system, and for taking written comments 
from interested parties. As state legislators concerned with how 
international trade rules affects our states, we are grateful for the 
opportunity to provide our perspectives.
    In the last several years states have observed first-hand some of 
the impacts of international trade agreements, and aggressive actions 
by trading partners:

          NAFTA Chapter 11 claims brought against California's 
        regulatory ability to protect public health and the 
        environment. We appreciate the vigorous defense mounted by the 
        U.S. State Department in arguing against those claims. But we 
        also note that despite a favorable outcome in the Methanex and 
        Glamis cases, the California Department of Justice was not 
        compensated for the considerable time and expense that they had 
        to devote to defending themselves. We view this as an unfunded 
        mandate--something states can ill afford in the present budget 
        climate.
          Threatening letters sent by the People's Republic of 
        China to state legislators in Vermont and Maryland regarding 
        bills introduced in those states dealing with lead content in 
        toys, and electronic waste. China claimed that the bills would 
        violate the World Trade Organization's Technical Barriers to 
        Trade agreement. We dispute the validity of the claim; but 
        equally important, we think it's totally inappropriate that the 
        Department of Commerce would notify China about pending state 
        legislation.
          The WTO case brought by Antigua against the United 
        States on internet gambling. The WTO found that the U.S. had 
        made such a commitment binding gambling under the services 
        agreement. We appreciate that the U.S. withdrew its WTO 
        commitment, largely as a result of pressure from states that 
        ban all forms of gambling (Utah and Hawaii), but the case has 
        led to a messy and still-unresolved dispute with a number of 
        countries regarding the withdrawal of the commitment that could 
        negatively affect businesses through the U.S. Legislators from 
        coastal states are concerned that USTR has offered to commit 
        services pertaining to liquefied natural gas under WTO rules as 
        compensation for withdrawing `other recreational services-
        gambling.'
          Threatened challenges to California's Low Carbon Fuel 
        Standard and to greenhouse gas reduction strategies in the 10 
        Regional Greenhouse Gas Initiative states in the northeast. The 
        Federal Government of Canada and the Province of Alberta are 
        trying to block the leadership of the states in grappling with 
        these urgent climate change issues by citing WTO and NAFTA 
        rules.
          Retaliatory tariffs taken by Mexico as a result of a 
        NAFTA trucking case is causing severe hardship to many of our 
        agricultural producers and manufacturers.

    We support efforts made by the Office of the United States Trade 
Representative to open up new markets for American goods and services. 
We believe that this can be done in a way that safeguards U.S. 
federalism, and doesn't put state laws or regulatory authority at risk, 
or that causes unexpected shocks to our businesses because of 
retaliatory actions.
    To avoid such shocks, and to safeguard U.S. federalism, there needs 
to be better communication between U.S. trade negotiators and state 
leaders. There should be regular and open communication between the 
Office of the United States Trade Representative (USTR) and ALL the 
states.
    Right now, fewer than half the states are represented on 
InterGovernmental Policy Advisory Committee (IGPAC). It is hard to feel 
that USTR takes IGPAC seriously when there have been so few face-to-
face meetings between state leaders and our trade negotiators, and also 
when USTR posts on its new website a roster of IGPAC members that is 
several years out of date.
    It cannot be expected that states will support existing trade 
policy when there is so little consultation. States will seek to opt 
out of agreements about which they are not consulted.
    We urge Congress to mandate a regular schedule of face-to-face 
meetings between the states and USTR, and a review of transparency 
policies regarding trade so that the states can have a clearer idea of 
what trade and investment issues are on the table and for negotiators 
to understand states' positions prior to the start of negotiations. 
This can be done as part of the formal trade advisory committee system, 
but the commitment to consultation should go beyond that. We also urge 
Congress to develop a process that allows states to decide whether to 
opt in to certain non-tariff aspects of trade agreements like 
procurement, services and investment provisions.
    We note that several state trade commissions, as well as IGPAC, 
have put forward concrete proposals for how to reform some aspects of 
federal-state consultation on trade. We urge you to give serious 
consideration to these ideas.
    To summarize:

          State legislators supporting this letter appreciate 
        the Trade Subcommittee's consideration of this important issue 
        of the formal trade advisory committee system.
          IGPAC and state commissions have made specific 
        recommendations for improving USTR's consultation with states 
        that have implications for the future of the trade advisory 
        committee system.
          Consultation with the states must go beyond the 
        formal advisory system and include a regular schedule of 
        meetings with state leaders and with the national associations 
        such as NCSL that support our interests.
          Congress should include an ``opt-in'' mechanism to 
        allow U.S. states to decide whether to be bound to trade pacts' 
        non-tariff regulatory constraints regarding services, 
        procurement and investment in future trade negotiations.
          If states are to be supportive of U.S. trade policy, 
        they must be consulted regarding the content of that policy.

    Thank you very much for the opportunity to comment.

                                 
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