[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
                 PRESIDENT OBAMA'S TRADE POLICY AGENDA

                   WITH U.S. TRADE REPRESENTATIVE RON

                 KIRK AND SECOND PANEL ON THE FUTURE OF

                        U.S. TRADE NEGOTIATIONS

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



                                HEARING

                               before the

                      COMMITTEE ON WAYS AND MEANS

                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 29, 2012

                               __________

                           Serial No. 112-22

                               __________

         Printed for the use of the Committee on Ways and Means





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                      COMMITTEE ON WAYS AND MEANS

                     DAVE CAMP, Michigan, Chairman

WALLY HERGER, California             SANDER M. LEVIN, Michigan
SAM JOHNSON, Texas                   CHARLES B. RANGEL, New York
KEVIN BRADY, Texas                   FORTNEY PETE STARK, California
PAUL RYAN, Wisconsin                 JIM MCDERMOTT, Washington
DEVIN NUNES, California              JOHN LEWIS, Georgia
PATRICK J. TIBERI, Ohio              RICHARD E. NEAL, Massachusetts
GEOFF DAVIS, Kentucky                XAVIER BECERRA, California
DAVID G. REICHERT, Washington        LLOYD DOGGETT, Texas
CHARLES W. BOUSTANY, JR., Louisiana  MIKE THOMPSON, California
PETER J. ROSKAM, Illinois            JOHN B. LARSON, Connecticut
JIM GERLACH, Pennsylvania            EARL BLUMENAUER, Oregon
TOM PRICE, Georgia                   RON KIND, Wisconsin
VERN BUCHANAN, Florida               BILL PASCRELL, JR., New Jersey
ADRIAN SMITH, Nebraska               SHELLEY BERKLEY, Nevada
AARON SCHOCK, Illinois               JOSEPH CROWLEY, New York
LYNN JENKINS, Kansas
ERIK PAULSEN, Minnesota
KENNY MARCHANT, Texas
RICK BERG, North Dakota
DIANE BLACK, Tennessee
TOM REED, New York

                   Jennifer Safavian, Staff Director

                   Janice Mays, Minority Chief Cousel



                            C O N T E N T S

                               __________

                                                                   Page

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

                               WITNESSES

PANEL 1:

Ambassador Ron Kirk, United States Trade Representative, Office 
  of the United States Trade Representative, Testimony...........     7

PANEL 2:

Mr. Tim Harris, President, Harris & Ford, LLC, Testimony.........    54
Mr. Brian Krzanich, Senior Vice President and Chief Operating 
  Offer, Intel Corp., Testimony..................................    59
Mr. James H. Quigley, Senior Partner, Deloitte & Touche, LLP, 
  Testimony......................................................    75
Mr. Alan Wolff Of Counsel, Dewey & LeBoeuf, LLP, Testimony.......   102

                       SUBMISSIONS FOR THE RECORD

The Hon. Dave Camp, Letter 1.....................................   133
The Hon. Dave Camp, Letter 2.....................................   135
National U.S. Arab Chamber of Commerce...........................   137
The U.S.-China Business Council..................................   140
Coalition to Enforce Antidumping & Countervailing Duty Orders....   156
Business Roundtable..............................................   159
U.S. Chamber of Commerce.........................................   166
American Apparel & Footwear Association..........................   179
Center for Fiscal Equity.........................................   184
Consumer Electronics Association.................................   189
Citizen Trade Policy Commission..................................   191
Intel............................................................   193
Philippine Embassy...............................................   208
Southern Shrimp Association......................................   211

                   MATERIAL SUBMITTED FOR THE RECORD

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


 PRESIDENT OBAMA'S TRADE POLICY AGENDA WITH U.S. TRADE REPRESENTATIVE 
   RON KIRK AND SECOND PANEL ON THE FUTURE OF U.S. TRADE NEGOTIATIONS

                              ----------                              


                      WEDNESDAY, FEBRUARY 29, 2012

             U.S. House of Representatives,
                       Committee on Ways and Means,
                                                    Washington, DC.

    The Committee met, pursuant to notice, at 10:08 a.m., in 
room 1100, Longworth House Office Building, the Honorable Dave 
Camp (Chairman of the Committee) presiding.
    [The advisory of the hearing follows:]

HEARING ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS


                   Chairman Camp Announces Hearing on

              President's Obama's Trade Policy Agenda with

             U.S. Trade Representative Ron Kirk and Second

             Panel on the Future of U.S. Trade Negotiations

                      Wednesday, February 29, 2012

    House Ways and Means Committee Chairman Dave Camp (R-MI) today 
announced that the Committee on Ways and Means will hold a hearing on 
President Barack Obama's trade policy agenda with U.S. Trade 
Representative Ron Kirk and with a second panel of witnesses on the 
future of U.S. trade negotiations. The hearing will take place on 
Wednesday, February 29, 2012, in 1100 Longworth House Office Building, 
beginning at 10:00 a.m.
      
    In view of the limited time available to hear the witnesses, oral 
testimony at this hearing will be from invited witnesses only. However, 
any individual or organization not scheduled for an oral appearance may 
submit a written statement for consideration by the Committee and for 
inclusion in the printed record of the hearing. A list of invited 
witnesses will follow.
      

BACKGROUND:

      
    International trade is an engine for growth and job creation in the 
United States. While the United States is the largest economy and 
trading nation in the world, 95 percent of the world's consumers are 
abroad. The future success of American workers, businesses, and farmers 
is therefore integrally tied with continuing America's strong 
commitment to finding new markets and expanding existing ones for U.S. 
goods and services.
      
    The bipartisan passage of the implementing bills for the Colombia, 
Panama, and South Korea free trade agreements in October 2011 marked an 
important step forward for U.S. trade policy. This hearing will provide 
an opportunity to explore with Ambassador Kirk how the President's 
trade agenda will sustain this momentum with respect to current trade 
issues, such as: progress in the Trans-Pacific Partnership 
negotiations; Russia's accession to the World Trade Organization; 
China's trade restrictive practices and non-tariff barriers that 
prevent U.S. companies from competing on a level playing field; the 
President's trade agency reorganization proposal and National Export 
Initiative (NEI); and various bilateral and multilateral trade disputes 
and concerns. In addition, Ambassador Kirk's testimony and the second 
panel of witnesses will provide an opportunity to focus on long-term 
thinking relating to future trade negotiations, including ``post-Doha'' 
WTO issues such as an international services agreement, Information 
Technology Agreement (ITA) expansion, and a trade facilitation 
agreement in the age of global supply chains; Bilateral Investment 
Treaties (BITs) with China and India and new BITs and investment 
opportunities; and the trade and investment relationship with the 
European Union, India, and Latin America.
      
    In announcing this hearing, Chairman Camp said, ``Opening new 
markets for U.S. businesses, workers, and farmers and strong 
enforcement of U.S. rights are essential to driving economic growth and 
job creation here in the United States. The three free trade agreements 
with Colombia, Panama, and South Korea that Congress passed last year 
in a bipartisan manner sent a strong message that the United States has 
returned to the trade negotiating table. We are now at an important 
juncture to move forward aggressively on the Trans-Pacific Partnership 
negotiations and other initiatives to make sure that last year's 
momentum is not lost. It's also a critical time for us to look ahead 
for future trade and investment opportunities with important trading 
partners like the European Union, India, and Latin America to maximize 
American competitiveness and ensure that we do not fall behind.''
      

FOCUS OF THE HEARING:

      
    The first panel of the hearing will provide an opportunity to 
explore with Ambassador Kirk current trade issues such as: (1) ensuring 
prompt implementation of the three free trade agreements with Colombia, 
Panama, and South Korea; (2) seeking to conclude a good Trans-Pacific 
Partnership agreement this year; (3) considering Russia's WTO 
accession; (4) improving our important trade relationship with China 
and addressing China's trade barriers; (5) addressing the Obama 
Administration's trade agency reorganization proposal and National 
Export Initiative (NEI); and (6) ensuring appropriate trade enforcement 
efforts. The first and second panels will also focus on areas of 
potential future trade negotiations such as: (1) advancing WTO 
negotiations, including ``post-Doha'' issues at the WTO such as an 
international services agreement, Information Technology Agreement 
(ITA) expansion and a trade facilitation agreement; (2) completing 
Bilateral Investment Treaties (BITs) with China and India and exploring 
new BITs and investment opportunities; (3) deepening and expanding the 
trade and investment relationship with the European Union; and (4) 
establishing long-term, closer ties with important trading partners 
such as Latin America and India.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
page of the Committee website and complete the informational forms. 
From the Committee homepage, http://waysandmeans.house.gov, select 
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and click on the link entitled, ``Click here to provide a submission 
for the record.'' Once you have followed the online instructions, 
submit all requested information. ATTACH your submission as a Word 
document, in compliance with the formatting requirements listed below, 
by the close of business on Wednesday, March 15, 2012. Finally, please 
note that due to the change in House mail policy, the U.S. Capitol 
Police will refuse sealed-package deliveries to all House Office 
Buildings. For questions, or if you encounter technical problems, 
please call (202) 225-1721 or (202) 225-3625.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
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    1. All submissions and supplementary materials must be provided in 
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attachments. Witnesses and submitters are advised that the Committee 
relies on electronic submissions for printing the official hearing 
record.
      
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or organizations on whose behalf the witness appears. A supplemental 
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    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://www.waysandmeans.house.gov/.

                                 
    Chairman CAMP. If everyone would take their seats, we are 
ready to begin. Well, good morning. I want to welcome everyone 
and extend a special welcome to our guest, the U.S. Trade 
Representative, Ambassador Ron Kirk, as well as our second 
panel of witnesses. I am looking forward to a discussion of the 
administration's trade policy agenda and the future of U.S. 
trade policy.
    We are coming off a strong year in which we saw more action 
on trade than the past 5 years. We secured bipartisan passage 
of our trade agreements with Colombia, Panama, and South Korea, 
which had languished for far too long. This achievement 
signified that Congress and the White House, House, and Senate, 
Republicans, and Democrats could come together to pursue pro-
growth, pro-job policies.
    Our trading partners around the world have taken notice 
that we are back at the negotiating table and ready to lead. 
And there is further good news: the United States and South 
Korea quickly took the necessary steps to allow for entry into 
force of the U.S.-South Korea agreement, which will take effect 
in 2 weeks. Discussions paving the way for the Colombia and 
Panama agreements are also underway, and I encourage an 
expeditious completion.
    Our recent trade successes have created a momentum--is 
somebody's phone ringing here? Hopefully they will hang up 
soon.
    Our recent trade successes have created a momentum that we 
must continue. Hesitation and delay allow our competitors to 
take our market share and our jobs. As such, I would like to 
flesh out today how this Administration and this Congress can 
best promote economic growth and job creation through trade.
    The one trade agreement negotiation away is the Trans-
Pacific Partnership, which President Obama announced he would 
like to complete this year. This agreement will allow U.S. 
goods and services to more easily reach consumers across the 
Asia-Pacific region. And the TPP also serves as an effective 
counterbalance to China in its own backyard. I welcome interest 
by Japan, Canada, and Mexico as long as they will take on what 
is already negotiated without delay and build confidence that 
they can and will address outstanding bilateral issues.
    We also faced Russia's WTO accession. Clearly, our ongoing 
relationship with Russia is a complex one, but I note that if 
we grant Russia Permanent, Normal Trade Relations will we be 
able to obtain the benefits of the concessions Russia made to 
join the WTO. We would give up nothing, not a single U.S. 
tariff, but we would obtain a new enforcement tool and bring 
our two countries closer on multiple fronts. This is a matter 
the Committee will have to carefully consider, and I look to 
the administration to build confidence and provide leadership 
on the economic issues to help explain why America should move 
ahead.
    One of the largest trade issues that remains is China. With 
a population of over 1.4 billion people, the Chinese market 
provides tremendous opportunities to sell more U.S. goods and 
services, which means more jobs here at home. Despite this 
potential, there are far too many problems with China that 
continue to put our workers and our businesses at a 
disadvantage from indigenous innovation policies to subsidies 
to intellectual property theft to currency undervaluation just 
to mention a few. We must push China on every front, and the 
Administration must ensure that China's commitments are fully 
implemented.
    This committee has asked the Administration several times 
to define clear, concrete metrics to verify success. Tomorrow, 
Committee Members will be meeting on a bipartisan basis with 
Secretary Geithner, Secretary Bryson, and U.S. Trade 
Representative Ron Kirk to discuss the challenges and 
opportunities presented by our China relationship.
    In addition, Ranking Member Levin, Chairman Brady, Ranking 
Member McDermott, and I are introducing targeted legislation 
today to make sure that we have the tools we need to address 
unfair Chinese subsidies through our countervailing duty law in 
a WTO consistent manner, and we expect to move this legislation 
shortly.
    I spent time talking about the issues on our plate right 
now, but what about what comes next? An important aspect of 
this forward thinking is renewing Trade Promotion Authority, 
and I hope that Ambassador Kirk will share the administration's 
views on that topic. Because the WTO Doha negotiations are 
dormant, we should focus on a ``post-Doha'' strategy with those 
countries that share our views and ambition.
    Given that 80 percent of U.S. employment is in services, an 
international services agreement holds great promise to 
enhanced market access abroad, and I support the 
administration's current discussions. Similarly, expanding our 
very successful Information Technology Agreement would provide 
us with more tariff-free access to foreign markets for our 
information technology products. A trade facilitation agreement 
could significantly reduce the cost of doing business in the 
age of global supply chains.
    Expanded investment opportunities are also vital to U.S. 
growth. For the last 3 years, the Obama Administration has 
placed all bilateral investment treaties on hold. Moving 
forward on BITs already begun with China and India and 
launching new negotiations should be a top priority. And 
finally, we have to think defensively about our strategy when 
other countries conclude subpar agreements that don't meet WTO 
standards.
    So in conclusion, today, I would like to have a 
comprehensive discussion about the present and future of U.S. 
trade policy and what it means for job creation here in the 
United States. And I will now yield to Ranking Member Levin for 
the purpose of an opening statement.
    Mr. LEVIN. Thank you, Mr. Chairman. We very much welcome 
this hearing.
    And Mr. Ambassador, we very warmly welcome you here today.
    Democrats on this committee have been actively working to 
shape a new trade policy responsive to the changing dynamics of 
a global economy. We rejected the passive, hands-off approach 
that earlier characterized American trade policy and embraced 
actively shaping the expansion of trade in ways that grappled 
with the impact of trade and broadened its benefits and 
minimized its downsides.
    These principles have been reflected in our work on this 
Committee for several decades now. They drove our work to 
ensure incorporating enforceable core labor standards and 
environmental standards in trade agreements. Working with the 
Clinton Administration to adopt workers standards in the 
pioneering Cambodia bilateral clothing agreement and in the 
Jordan FTA; opposing CAFTA because of the Bush administrations 
rejection of that standard; and when in the majority, 
developing the May 10th, 2007 agreement, incorporating the five 
basic labor and significant environmental standards into the 
Peru agreement.
    Those principles guided our refusal to approve the FTAs 
negotiated by the Bush administration with Korea, Panama, and 
Colombia until significant shortcomings were addressed; working 
with you, Ambassador Kirk, and others in the administration. 
Together we helped importantly improve those agreements ending 
the one-way street of Korea's historically closed auto market, 
ensuring that U.S. taxpayers could not use Panama as a tax 
haven, developing an action plan to improve labor conditions 
and address violence against workers in Colombia.
    We are beginning to see tangible results from these 
efforts. Ford has already begun shipping cars to South Korea 
from the United States of America, and work continues with 
Colombia to ensure full, meaningful implementation of the 
action plan related to labor rights. Today's hearing will focus 
in part on potential new agreements to open new markets for 
U.S. goods and services, the Trans-Pacific Partnership, 
Russia's WTO accession, the possibility of a U.S. EU FTA, and 
the promise of a WTO services ``plurilateral''.
    As important as these new opportunities are, they cannot be 
our sole focus. A defining trade issue continues to be our 
imbalanced trade relationship with China. Unfortunately, the 
Bush administration too often adopted a hands-off approach to 
this imbalance. It failed to actively implement the special 
provision provided for in China's WTO accession for an annual 
review of whether China was meeting its obligations. The Bush 
administration refused in all four cases presented to it to use 
the 421 safeguard against surges in Chinese imports that harm 
U.S. industries and workers.
    And Mr. Ambassador, this administration took a different 
track and used 421.
    Our trade with China effects myriad industries in their 
efforts to compete within this market in China and globally, 
and it is fundamentally affecting the structure and composition 
of our economy. A trade policy that ignores or fails to 
actively address this reality is incomplete and ultimately will 
prove ineffective. So I applaud the President's decision to 
create a new Interagency Trade Enforcement Center to enhance 
the administration's ability to aggressively challenge unfair 
trade practices in China and elsewhere.
    I urge the administration to ensure that the ITC is 
designed and equipped to fundamentally alter the way trade 
cases are developed and prosecuted, and I think, Mr. 
Ambassador, you will be talking about that. I also urge the ITC 
to focus immediately on China's duties on auto exports, its 
practices in rare Earth restraints, its export credit program, 
its forced technology transfer, and its lack of transparency 
and use of intimidation as a trade policy tool.
    The need to actively shape the contents of trade 
agreements, and not to assume simply that more is always 
better, applies to the important TPP talks. We must closely 
evaluate, number one, the challenges presented by unfair 
competition from state-owned enterprises, the unique 
circumstances presented by a communist nonmarket economy like 
Vietnam, and the opportunities and challenges presented by 
prospective new entrances, especially Japan, whether with its 
longstanding rigid, exclusionary structures; it presents real 
new market access opportunities for U.S. companies and workers 
and creates a new benefit for our economy, including our 
manufacturers.
    And finally, with respect to Russia and the WTO, there is a 
need to approach key outstanding issues in an active rather 
than passive way ranging from IPR enforcement to the rule of 
law.
    So I look forward to hearing from you, Ambassador, and the 
other panelists on how we can continue to craft a trade policy 
that will meet the challenges of today and anticipate those of 
tomorrow.
    Chairman CAMP. Well, thank you. And Ambassador Kirk, again, 
welcome, and I just want to congratulate you and your team at 
USTR for everything you do, and I just want you to know that I 
will do everything I can to make sure that you USTR continues 
to maximize its effectiveness by remaining a separate agency 
instead of being swallowed up within a larger bureaucracy. And 
while I want to shrink government, I don't want to do that at 
the expense of efficiency and excellence. So thank you for 
being here, Ambassador. We do have your written statement, but 
you are recognized for 5 minutes.

     STATEMENT OF AMBASSADOR RON KIRK, UNITED STATES TRADE 
                         REPRESENTATIVE

    Ambassador KIRK. Thank you, Mr. Chairman and Ranking Member 
Levin. To the Members of the Committee, it is an honor to be 
with you again.
    It was about 12 months ago that I had an opportunity to 
discuss our Administration's plan to work through outstanding 
issues related to the impending trade agreements with Korea, 
Colombia, and Panama, and we expressed our commitment to 
renewing Critical Trade Adjustment Assistance for America's 
workers, and extending trade preference programs. At the time, 
frankly, some of you thought we were seeking too much and 
taking far too long, but, notwithstanding, working together, we 
accomplished all of this and more last year.
    Together, we did the hard work necessary to pass all of 
these important measures in one historic evening, and in the 
process, I would like to believe we built the new template for 
bipartisan support of trade that opens markets and levels the 
playing field for American business, workers, farmers, 
ranchers, manufacturers, and service providers.
    This year, with your help, we are looking to forge ahead on 
another ambitious trade agenda. Tomorrow, you will receive 
formally our 2011 annual report as well as a comprehensive 
outline of our trade agenda for 2012, and in the interest of 
time, I would like to not speak to those in detail, but 
highlight some of our key initiatives for the coming year.
    First, I am proud to report that after the successful 
passage of these three trade agreements, we have been working 
on implementation of them, and we have finalized our plans with 
Korea, and that agreement will be entering into force on March 
the 15th. At the same time, we continue to pursue our due 
diligence with Colombia and Panama to ensure that they fulfill 
their commitments so that those agreements can take effect as 
soon as possible.
    We are also moving full speed ahead in the Trans-Pacific 
Partnership negotiations building on the broad outlines 
announced last November at our APEC meeting with the leaders. 
We are seeking to conclude this agreement this year and address 
crosscutting issues, such as negotiating and promulgating 
regulatory coherence among the countries, enhancing the 
participation of small business, of trade throughout the Asia-
Pacific, and building regional supply chains that will promote 
and sustain U.S. job growth.
    As we consider the ambitions of additional countries, we 
will closely coordinate with this Committee as well as other 
Members of Congress to ensure that these participants meet the 
TPP's high standards and address those specific issues of 
concern many of you have raised.
    As we move forward toward negotiating outcomes, the Obama 
Administration will also engage you thoughtfully on additional 
trade promotion authority as necessary to approve the TPP as 
well as future trade agreements. This year, we are getting even 
tougher on trade enforcement, which has been a priority of the 
Obama Administration from day one. Yesterday, President Obama 
established by Executive Order the Interagency Trade 
Enforcement Center to prioritize and more aggressively 
challenge the kinds of unfair trade practices that we fight 
fiercely every day, from China's improper restrictions on 
industrial raw materials to improper subsidies by the European 
Union and other partners.
    Right now, we also have an opportunity to defend the rights 
of U.S. workers and businesses by working to pass the 
legislation referenced by Chairman Camp that will ensure our 
ability to remedy the harmful effects of unfairly subsidized 
imports from China and other countries. And we are ready to 
bring Russia into the rules-based system in a way that gives us 
more enforcement tools to enable enhanced market access and a 
level playing field for U.S. exporters. And that is why the 
administration will seek to terminate Russia's Jackson-Vanik 
status to ensure that American firms enjoy the same job-
supporting benefits of Russia's WTO Membership as our 
international competitors.
    Broadly speaking, our pursuit of enhanced trade to support 
American jobs extends across all geographic regions in all 
economic sectors. For example, we are engaging with the 
European Union to deepen our Trans-Atlantic trade relationship, 
and we are eager to work with you to make immediate progress 
with Sub-Saharan Africa and our CAFTA countries on issues like 
third-country fabric and textile and apparel rules of origin.
    At the WTO, we will continue to pursue fresh, credible 
approaches to multilateral market opening trade negotiations in 
the Doha realm, but also in other plurilateral options such as 
services and information technology.
    In conclusion, I would like to thank the Committee for your 
thoughtful consideration of critical trade issues and continued 
support for our ambitious agenda. Working together, I have no 
doubt that we can stay on track to meet our goal of doubling 
U.S. exports and ensure that our trade policy continues to 
create job-supporting export opportunities for all Americans. 
Thank you.
    [The prepared statement of Ambassador Kirk follows:]

    [GRAPHIC] [TIFF OMITTED] 



    Chairman CAMP. Well, thank you very much, Ambassador Kirk. 
Our number one focus in Congress is jobs. And our push for 
better protection of U.S. intellectual property rights in China 
is all about jobs. Now, the International Trade Commission, an 
independent agency, recently did an analysis, and they 
determined that if China improved its IPR protection on the 
same level as we have in the United States, it concluded that 
U.S. exports to China would increase by $21.4 billion and that 
sales by U.S. companies in China would increase by $87.8 
billion and that more than two million jobs would be created in 
the United States.
    What is your Aministration doing to create these jobs? And 
are there any additional tools you need to be effective in this 
area?
    Ambassador KIRK. Well, we are aggressively pursuing a very 
broad strategy to challenge, we think, some of China's 
restrictive and discriminatory policies not only in the area of 
information technology, but the underlying industrial policies. 
We use all the tools available to us such as challenging some 
of these policies directly in the WTO which resulted in the win 
on the issue of entering our films into Chinese markets and 
getting adequate compensation and protection for U.S. 
intellectual property.
    We use all of our bilateral engagements to raise these 
issues from President Obama's frequent meetings with President 
Hu and Premier Wen to the recent visit of Vice President Xi, 
and the Strategic and Economic Dialog and the JCCT. But the 
bottom line, Mr. Chairman, is China presents a unique 
opportunity because of their explosive growth, but we all know 
of the frustrations that many of our businesses face because 
China has not fairly enforced the rules and recognized 
international standards in terms of respect for intellectual 
property and others.
    But we will continue to engage them to get them to 
recognize and respect the rule of law, enforce intellectual 
property rights, and particularly combat piracy and 
counterfeited goods that resulted in the type of numbers that 
you referenced.
    Chairman CAMP. Are there any additional tools you need to 
be more effective in this area?
    Ambassador KIRK. We believe--we think right now that we 
have a sufficient number of tools. But I will be honest; part 
of the President's rationale for bringing together all of our 
agencies through this Interagency Trade Enforcement Center is 
to make sure that we are adequately and efficiently using the 
resources that we have.
    As you know--or maybe the Committee does not know--our 
Administration has brought cases against China at twice the 
rate of the previous Administration. But more critically, at 
least right now, we have won every case we have brought against 
China. But we have had to be fairly selective in doing that, 
because in many cases, these are horribly resource intensive. 
It takes an extraordinary amount of work and time to gather the 
intelligence because of the non-transparency of China's system. 
So we do think the creation of this Trade EnforcementCenter 
will go a long way in making sure that we aren't resource 
constrained and we are operating as efficiently and 
thoughtfully as we can.
    Chairman CAMP. Well, and I know you know the stakes are 
enormous and the jobs that would be created in the United 
States, if we're able to simply bring them to the same standard 
on intellectual property we have, is significant. Two million 
jobs is important.
    I wanted to shift to another area. Japan is interested in 
joining the TPP or Trans-Pacific Partnership, and I also 
understand Canada and Mexico are as well. Particularly with 
Japan, it shows how TPP can further integrate the Asia-Pacific 
region. If Japan adopts the high standards of the TPP, there 
are obviously potentially many benefits to many sectors of the 
economy as well as many industries. But I know there are a 
number of significant outstanding issues that will need to be 
addressed, and I have heard from a number of industries about 
Japan's persistent barriers such as in autos, agriculture, and 
services, including issues about Japan Post.
    Now, in my opinion, Japan's interest in joining creates a 
unique opportunity to address some of these barriers to U.S. 
exports and investment, and that is an opportunity we have not 
had. But what steps is the Administration taking to address the 
outstanding concerns about Japan's discriminatory policies and 
to ensure that Japan is ready to meet the TPP's high standards?
    Ambassador KIRK. Well, that is--Mr. Chairman, you framed 
both the question and I think part of the response in exactly 
the same manner. I guess the attractive part of this equation 
was your statement ``if Japan meets all of the high 
standards.'' And we would say that for any of our partners in 
APEC, that what we have said is TPP is not something you are 
invited to. It is something other countries have to ascribe to.
    And--we want high standards, because the future of our 
economic growth is going to be based on our ability, as the 
President says, to out-innovate, out-educate, out-sell the rest 
of the world. We have a very innovative manufacturing model 
now, and we aren't going to compromise that by entering trade 
agreements that allow countries to undercut that. But for all 
the reasons you articulated, we very much welcome Japan's 
expression of interest in joining us.
    But I would say one of the strengths of our form of 
government is our transparency. And as you know, we welcome 
Japan's entry. We immediately began to proceed under the manner 
that Congress dictates to think about bringing in new 
countries, and we put a notice in the Federal Register inviting 
comments not only on Japan, but Mexico and Canada. And the 
upshot of that is Japan knows exactly, because all of these 
comments are public, what the concerns of our industries are.
    And so we are now engaging with them, frankly, in a very 
honest dialog based on feedback we have gotten from your 
Committees and industries on how we would address that. We have 
made it plain we welcome Japan's entry in the TPP. As you know, 
part of our deliberation as an Administration as to whether we 
would join was based on our belief that, one, it was in our 
competitive advantage to be in on the ground floor drafting 
what we believe will be the standard portrayed in the 21st 
century, but also to believe this could become the vehicle that 
rationalized trade in the Asia-Pacific, which is the fastest 
growing region in the world. So there is an implied bias on our 
part that other countries would join, but we have been very 
honest they have to meet those standards.
    So there are outstanding issues we are working with each of 
them to resolve, but we will work through them with all of 
those issues that have been raised. And then, frankly, it is in 
Japan's hands to demonstrate its willingness to address these 
issues.
    Chairman CAMP. All right. I just can't underscore how 
important addressing these persistent barriers are going to be 
as we move forward on that. So thank you very much.
    And with that, I will recognize Mr. Levin.
    Mr. LEVIN. Thank you, Mr. Chairman. I want to quickly pick 
up on that, because the question is regarding Japan and TPP 
whether TPP would be an adequate instrument to really open up 
Japanese markets. And so when we say that there are standards 
within TPP, the question is whether there are adequate 
standards and whether that would be adequate enough to change 
historic closed markets in Japan.
    I went through a brief history of trade policy, because I 
think it is important to remind us where we were and how far we 
have come. And for years, there was a failure to address the 
structural challenges presented by Japan in agriculture and in 
industrial areas. For example, they manufactured in 2010 almost 
10 million autos, and their domestic market is less than five 
million. And so if they were granted TPP entry and the tariffs 
went down to zero, their manufacturers would save roughly a 
billion dollars. And so far, the savings they have had from 
their closed markets have been used to sell the same auto here 
cheaper than it is sold in Japan.
    So you ask an important question, Mr. Chairman. And we have 
to be darn careful. We say ``we welcome.'' The question is 
whether a welcoming will lead to addressing historic closed 
markets. It has been a one-way street. And I think as we talk 
about China, we should be--we should remember the difficulty 
that we have had with Japan.
    I very much welcome the President's decision to create the 
ITC, Mr. Ambassador, and you are going to take the lead. And I 
think it signals a much more vigorous effort by this 
Administration than past Administrations to get at the problem 
of an inadequate two-way street in trade with China and their 
using their structures to give them advantages that are 
inimical to fair trade--to free trade.
    So I saw this story--and it was in The Detroit News--about 
the Ford F-150. I could take a DVD and use that as an example, 
but we would have to buy it illegally. So I didn't want to do 
that. But you could take a DVD selling for $1 in China, which--
about something that just came out, and they sell it.
    So this is a story about a Chinese truck that imitates the 
Ford F-150, which is apparently a complete imitation. And I 
think it raises all kinds of questions. I think China's entry 
into the WTO was necessary. We set some provisions in there 
that unfortunately weren't enforced. Now, the Administration is 
doing so. But I think that this picture shows the challenge 
that we face in making sure that China plays by the rules.
    So we welcome their participation, but we have to insist 
that there be a fair set of rules that they follow, and I hope 
very much that this establishment of the ITC will be not only a 
signal, but an embodiment of a new effort to insist that China 
play by the rules. Is that really what you're after?
    Ambassador KIRK. Well, I think the short answer is going to 
be yes. I just would like to--and you know how much you and I 
think alike on these. I just want to make one point. For us, 
this isn't a new effort. And again, I remind you when we were 
here last year--and this committee has always been wonderfully 
welcoming and supportive of us. But the biggest questions last 
year was why is everything taking so long, and we were very 
emphatic in our belief that our objective wasn't just to pass 
three trade agreements, but to really build a new template for 
trade, and I just--I said that from day one.
    If you go back to the first trade agenda we filed with you, 
we identified enforcement as one of the keys to--we believe--
beginning to rebuild America's trust in our trade policy. And 
so this is a continuation of that. And in short answer, I would 
say to you, we have heard your concerns. On TPP, even though we 
don't have trade promotion authority, we calculated that we 
have visited with Members of Congress and their staff over 350 
times to hear your concerns on a range of issues. Those are 
important to us, but we are in a good place. And I would say 
this committee and Congress deserve a lot of credit.
    The manner in which we passed the trade agreements, renewed 
Trade Adjustment Assistance, the trade preferences, and the 
strong bipartisan vote sent an unequivocal message to the 
world: The United States is ready to do business. We are open 
to do trade on the right terms. And we have got a great 
opportunity to move forward with that.
    So one, we want to address these concerns, but we also want 
to do it in a way that allows us to try to take advantage of 
this and get access to these new markets.
    Mr. LEVIN. Thank you.
    Chairman CAMP. Thank you.
    Mr. Herger is recognized.
    Mr. HERGER. Thank you, Chairman Camp.
    Ambassador Kirk, I want to join in thanking you for your 
efforts on free trade agreements this last year. As we continue 
to look for ways to increase exports and spur job creation in 
the U.S., I am concerned by the Administration's seemingly 
paralysis on bilateral investment treaties.
    As you know, exports and investments go hand in hand. U.S. 
investment abroad allows U.S. agricultural producers, 
manufacturers, and service providers to reach foreign 
customers. As such, we should be pursuing BITs to ensure that 
U.S. investments abroad are protected from arbitrary government 
actions and discrimination, further paving the way for U.S. 
exports to reach foreign markets.
    Almost 3,000 BITs have been concluded worldwide, yet the 
U.S. is party to only about 40 of them. Those numbers 
demonstrate the extent to which U.S. businesses and their 
workers are being left behind in the global economy. 
Unfortunately, the Administration has announced no new plans 
for bilateral investment treaties since 2009. And the existing 
negotiation on the China, India, and Mauritius bilateral 
investment treaties have been on hold for over 3 years, because 
the Administration has not been able to conclude a review of 
the U.S. model that you use to negotiate BITs.
    Mr. Ambassador, what plans do you have for moving our BIT 
negotiation forward and announcing negotiation for additional 
countries without further delay?
    Ambassador KIRK. Mr. Herger, thank you, and I appreciate 
your honest expression of your concern on this. But I would 
like to tell you, just as we brought a very deliberate approach 
to negotiating the FTAs, we try to bring that same thoughtful 
deliberation to the BIT, the bilateral investment treaties.
    We are hopeful that we will conclude our work on the new 
BIT model in the very near future. We have, in fact, 
intensified our engagement, at the same time, though, with 
important potential partners like India and China. We built on 
the successful visits of Prime Minister Singh to the U.S. and 
President Obama to India, for example, and got India to agree 
to a more robust engagement. We had one session in India in 
December. We are traveling to India within the next several 
weeks for the next meeting on that BIT. We have had over five 
sessions with China. We concluded a BIT with Rwanda, and again 
we hope to conclude work on the model BIT within the very near 
future that will allow us to go forward more aggressively.
    Now, I appreciate your illustration of the numbers of BITs 
signed by other countries, but we have been trying to be much 
more deliberate through the President's National Export 
Initiative, frankly, working with our businesses and using a 
very targeted data-centric model for where we would go. The 
good news is, most countries in the world would welcome the 
opportunity to have an FTA, a BIT, or a TIFA with the United 
States. But we think that is a unique opportunity we have to 
induce them to change their behavior in many places.
    But we want to go to markets in which it is in our 
collective best interests that will support that underlying 
concern that Chairman Camp mentioned, and that is job growth 
here and expanding our economy.
    So I have heard you. Hopefully, we will give you good news 
on conclusion of the model BIT. But I do want to assure you 
that we are engaged, in particular, with India, with China, and 
Mauritius, and we will be looking for appropriate partners as 
we go forward.
    Mr. HERGER. Well, Mr. Ambassador, I appreciate that, and I 
appreciate your hard work. But again, putting this in 
perspective, 3,000 negotiated worldwide, and we are party to 
only four of those. And we haven't had one since 2009. I would 
hope that we could, again, move a little more rapidly than we--
--
    Ambassador KIRK. I do. And I don't mean to minimize that, 
but all agreements aren't equal. I mean, in one example, the 
Korea Free Trade Agreement is economically more compelling than 
the last seven trade agreements that we've done. So we are 
going to do them where they make sense, where they help us and 
help our manufacturers get important markets, and we still--I 
mean, I would remind you the United States is still the best 
market for foreign direct investment by a wide margin, almost 
670,000 Americans owe their jobs to investment here. We are the 
most open market in the world. Our economy is still larger than 
the next two economies in the world. So we want to be very 
targeted and discreet where we use these. But I appreciate your 
encouragement.
    Mr. HERGER. Thank you.
    Chairman CAMP. All right. Thank you.
    Mr. Johnson is recognized.
    Mr. JOHNSON. Thank you, Mr. Chairman.
    Ron, welcome back. I'm delighted to see you. You probably 
liked the Mayor's job better than the one you have right now.
    Ambassador KIRK. This has been--but they have both been 
very rewarding. Thank you, Sam.
    Mr. JOHNSON. Well, I know you're finally able to take care 
of the free trade agreements with the three countries you 
mentioned. You better than most know the importance of trade 
with respect to jobs and economic growth, especially how it 
affects the Dallas area.
    So with that, let me ask you about the President's goal to 
double exports in relation to the President's corporate tax 
reform proposal he put out last week. As you may know, in that 
proposal, the President called for a minimum tax on foreign 
earnings of U.S. multinationals. Given today's global economy, 
I am trying to understand why the Administration would propose 
to make it tougher for U.S. companies to compete overseas, 
which would then make it harder for U.S. companies to increase 
their exports and create American jobs.
    Later on, we are going to be hearing from Intel's chief 
operating officer, who, in his written testimony, puts it best 
by saying, ``The revenue we generate outside the United States 
helps create and sustain our high-paying jobs at home.''
    So let me ask you: Wouldn't you agree this tax proposal 
would make it harder for American companies to compete 
globally?
    Ambassador KIRK. Well, first of all, Congressman, it is 
always good to be with you, and I appreciate your strong 
support. You are probably not going to be surprised that I may 
not readily agree with your last statement. And you correctly 
noted--and I am proud to be a former Mayor of Dallas, home of 
the world famous Dallas Mavericks; thank you for bringing that 
up. But I am not a tax expert.
    Sam, I would tell you everything we are doing as an 
Administration is designed to encourage job growth here at 
home. We recognize we live in a very different world now. And 
for many of our multinational corporations, whether it is Intel 
or Boeing or Microsoft or Google, they have to be engaged 
around the world. That is okay. But that ought to be a business 
decision. It ought not be one that our Tax Code incentivizes 
because they have the ability to make profits abroad and keep 
them home.
    Now, where I would agree with the gentleman from Intel is 
that absolutely what we want to protect is that research, that 
investment, that core technology in which Apple creates the 
iPad here, and it may be assembled elsewhere. But millions of 
Americans have their jobs because we design, we create products 
from California to Texas to Illinois, and then they may be 
assembled elsewhere. We want to support that. But the President 
simply wants to use our ability to leverage our tax policy, 
which is a choice that says if we're going to incentivize 
behavior, we want to incentivize behavior that encourages 
keeping those jobs here.
    Now, you asked about our National Export Initiative. The 
President challenged us in the State of the Union 2 years ago 
to double exports. We did that for a simple reason; we know 
about every billion dollars in exports support about 5,000 jobs 
at home. And if we could do that, that would be two million 
jobs. And one of the good news stories of our economic 
recovery--and we all know it is not enough--exports are helping 
to drive that. Our exports are up about 34 percent since that 
challenge. They were up 14.5 percent in 2011. Particularly in 
the farm economy we had a record year, almost $140 billion in 
agriculture exports with a $41 billion surplus.
    So this is working, but we want to make sure we continue 
that, because we are beginning to face headwinds as the global 
economy begins to stagnate in other places. Our tax policy can 
complement that by making sure we do things to create more 
manufacturing here. And what we are beginning to hear from 
manufacturing, particularly when the President held his in-
sourcing conference, was more and more business had begun to 
realize, particularly with China where wages are beginning to 
rise and China's continued inability or lack of will to protect 
core intellectual property that, in many cases, they are better 
served bringing those jobs here. We think we ought to have a 
tax policy that helps sustain that.
    Mr. JOHNSON. I agree with you, and I don't think we ought 
to double-tax people just for working overseas either. And I 
know you agree with that. We need to make it easier, not 
tougher, for American companies to compete globally.
    Ambassador KIRK. We would agree on that.
    Mr. JOHNSON. And I think you agree with that. And thank you 
for being here today, Ron. We appreciate you.
    Ambassador KIRK. Thank you. Good to see you.
    Chairman CAMP. Thank you.
    Mr. McDermott is recognized.
    Mr. MCDERMOTT. Thank you, Mr. Chairman.
     Mr. Ambassador, Washington state--Exhibit A, for the 
argument, that trade represents enormous opportunities for U.S. 
workers, farmers, and business. According to The Washington 
Public Ports Association, roughly one in four jobs in 
Washington state is tied to foreign exports, and pay for those 
jobs is about 46 percent higher than the average in the state.
    But my constituents believe--and I agree with them--that we 
have to get the full bang for our buck from all the trade 
deals. When a country signs a trade agreement with the United 
States, they have to fulfill their obligations. If we--if they 
fall down on the job, the United States should use every 
available tool at its disposal to make them live up to their 
commitments. It is just basic fair play.
    Last year, my Democratic colleagues and I called for the 
development of a comprehensive and robust strategy to help 
rebalance our trade relationship with China, and pleasing to 
all of us was that the President responded and created the 
Enforcement Center in the ITEC in his Administration. This ITEC 
will increase the administration's ability to make sure that 
China and other trading partners keep their promises.
    But it needs to be made clear; China's unfair trade 
policies have consequences not just for the United States and 
other developed countries, but for the developing countries as 
well, including countries in southern Africa. We can help 
lesser developed Sub-Saharan African countries compete against 
China by extending the third-country fabric provision, one of 
the most important elements of the African Growth and 
Opportunity Act. This provision, which expires in September, 
allows apparel producers in these countries to use third-
country fabric in making apparel that gets duty free treatment 
under AGOA.
    Sub-Saharan Africa competes with China in manufacturing 
exports. Last year, Charlie Rangel and I introduced legislation 
to extend the third-country provision until 2015. Identical 
legislation was introduced by Senators Baucus and Hatch last 
December. Now, both Chairman Camp and trade Subcommittee--Brady 
committed months ago to moving this legislation, and yet there 
is no action. Buyers are already turning away from the AGOA 
region, because they project out 9 months when they're planning 
their purchase of apparel. They can't turn on a dime. So this 
waiting until September to pass the extension doesn't really 
make any sense.
    And I understand some Republicans have concerns about 
sending a revenue measure over to the Senate. If they need an 
ironclad agreement from Senators Reid and McConnell that there 
won't be any shenanigans, well, they will get one. We cannot 
wait any longer to act if we're serious in our economic 
development strategies.
    I also want to take a moment to applaud the work of the 
USTR on Boeing-Airbus case in the 2011 appellate body decision 
that ruled that Airbus launch aid and other subsidies violated 
WTO. If the UA continues to drag its feet and doesn't withdraw 
the subsidies, then we should go directly to the compliance 
proceeding.
    My staff has been working with Mr. Reichert's staff, the 
Senate, and folks in Congress that will really help the 
National Export Initiative to make us better at exporting. This 
bill will have no cost and will solve some real problems to 
increase exports, and I just want you to know that we 
appreciate your team's efforts on that behalf.
    But I have one question for you. The May 10th changes--we 
are talking now about TPP and IPR medicines--the May 10th 
changes struck a fair balance between timely access to 
affordable medicines in developing countries and protection for 
innovation. In the TPP negotiations, USTR has proposed an 
alternative that throws off this balance in favor of protecting 
innovation. How have the other TPP countries, especially the 
developing ones, reacted to that proposal when it was tabled in 
the TPP negotiations?
    Ambassador KIRK. Well, first of all, let me thank you for 
your kind words for USTR about Airbus. That is, I think, as 
good an example of where smart enforcement policy helps sustain 
jobs. It is spectacularly the largest, most commercially 
significant case ever decided within the WTO identifying almost 
$18 billion in WTO non-consistent subsidies of Airbus to the 
harm of Boeing and their workers, and we are going to continue 
to insist that the EU complies with that.
    With respect to the Trans-Pacific Partnership and access to 
medicines, frankly, again--and I think I have mentioned the 
extraordinary number of consultations we have had with 
Congress. We have had even more with NGOs and others. What we 
are seeking to do is make sure that we have the strongest 
disciplines in terms of protecting intellectual property, which 
is the lifeblood of America's economic growth, but also making 
sure we have access to medicines, that we encourage those that 
are involved in the production of these new lifesaving drugs to 
bring them to market soon.
    We have a new approach that we are trying. It is called 
TEAM, Trade Enhancing Access to Medicines. We don't think it 
does anything to diminish what we accomplished in the May 10th 
agreement. We have been very plain that we at least want to 
start with the premise, with respect to the Trans-Pacific 
Partnership, that we are to build on what we have learned in 
the past.
    For the most part we have been doing trade agreements on 
the same model that has existed for the last 10 to 15 years. 
And we have a lot of challenges that didn't exist then--the 
involvement of state-owned enterprises, the explosion of the 
generic pharmaceutical industry, and we want to just make sure 
that we get the right balance between the two. That is what we 
have tabled. You have to know some of our partners don't want 
to do any of this, but I--while I--we will applaud, and the 
United States has a better than commendable track record of 
making sure that poor people around the world have access to 
these lifesaving medicines. We think it is not in our interest 
to do it in a manner that undercuts the basic premise of who 
does R&D and brings these medicines to life.
    Chairman CAMP. All right.
    Ambassador KIRK. So we are trying to strike the right 
balance.
    Chairman CAMP. Thank you. Time has expired.
    Mr. Brady is recognized.
    Mr. BRADY. Thank you, Ambassador. I join Chairman Camp in 
thanking you and commending USTR for the good work on moving 
these trade agreements forward. Trade is jobs. It is the 
economic freedom to buy and sell and compete around the world 
with as little government interference as possible, and we know 
the world has changed. It is not enough to simply buy American; 
we need to sell American in every corner of this globe.
    Clearly, with the passage of the three trade agreements, 
America is back on the trading field in a big way, but it is 
important that we not return to the sidelines. Our competitors 
are very aggressive, reaching negotiations that put us at a 
disadvantage. So it is important that we have a very 
aggressive, a very ambitious, as you said, 21st century trade 
agenda.
    I commend your efforts on enforcement. I think they are 
critical, and I support them. But enforcement alone is not 
enough. We need an aggressive agenda that finds new customers 
for our businesses and our farmers, that tears down trade 
barriers and fights protectionism anywhere in the world. And it 
finds ways to move our goods and services better, faster, and 
cheaper to the customers in this world. That is what today is 
about, about finding out what that new 21st trade agenda ought 
to be.
    So first, I want to start by issuing a broad invitation to 
all those in this room today and those listening to submit 
comments for the record for this hearing about what should be 
in the pipeline strategically from a market standpoint, from a 
facilitation effort, and for the next trade agenda for America.
    And secondly, in going forward, Ambassador, I want to ask 
you specifically about Trade Promotion Authority. One of the 
lessons we learned from the three trade agreements was how 
invaluable a role having a clear up or down--timely up or down 
vote on those agreements was. You are currently negotiating the 
Trans-Pacific Partnership critical agreement. The President has 
indicated he would like to see it completed this year. It is 
important to our agriculture, service companies, technology, 
and manufacturing businesses throughout America. So clearly 
moving this forward this year is important, but how do we do 
that without trade promotion authority?
    So my first question is: When will the President submit TPA 
for Congress's consideration.
    Ambassador KIRK. Mr. Chairman, first of all, thank you for 
your strong support. I agree with you. First of all, we aren't 
going to conclude TPP without trade promotion authority. And we 
want to engage, frankly, with the leadership of this Committee 
on what we want in the elements of that bill, and then we will 
timely submit it to you.
    But we have got to have it. We need to have it. It gives 
that protection of fast-track, which as you know, was 
invaluable. We would not have been able to pass the trade 
agreements with Korea, Panama, and Colombia without it. And one 
of the reasons we have had so many consultations with you is we 
hope as we get there, we have built up enough trust as to what 
elements--what is in that package. Then we can--design a 
thoughtful bill and move it hopefully rather efficiently 
through our committees of jurisdiction.
    Mr. BRADY. Do you expect that? The reason I ask, one, Trade 
Promotion Authority is where Congress gives clear negotiating 
authority to the White House with clear negotiating objectives 
from Congress. And in return, we provide that timely up or down 
vote without amendments.
    It is critical that our negotiating partners know that they 
have that assurance when negotiating important agreements like 
the Trans-Pacific Partnership. So do you expect us to see TPA 
from the White House sometime by the middle of this year, in 
the third quarter? With the work that you are doing on TPP, do 
you expect to conclude that by the end of the year, so this has 
to be in advance of it?
    Ambassador KIRK. Mr. Chairman, I don't want to handicap 
whether it is the middle of third quarter, but obviously, if we 
are going to meet that objective of concluding, we are going to 
have to have it before the end of the year. I would say--and my 
thanks to the committee--that the credibility we gained by the 
strong vote in this Congress on the three FTAs sort of answered 
the questions from some of our negotiating partners, on whether 
we had the political move to go forward.
    So one, it has not been a hindrance to us in terms of our 
negotiating thus far, and we have negotiated other trade 
agreements ahead of time without it. But obviously, we are 
going to have this resolved before we would bring TPP forward.
    Mr. BRADY. Thank you. I think we have another chance for 
more bipartisan success on jobs for America through trade, and 
I think that is critical. Thank you, Ambassador.
    Ambassador KIRK. Yes.
    Chairman CAMP. Thank you.
    Mr. Davis is recognized for 5 minutes.
    Mr. DAVIS. Thank you, Mr. Chairman.
    I appreciate you being here, Ambassador. We talked in 
December with Ambassador Marantis on a Trade Subcommittee 
hearing on the TPP. During that hearing, I asked Ambassador 
Marantis about the letter the Kentucky delegation had sent you 
opposing USTR's proposal to exclude certain products, 
specifically tobacco. And the response that we got back from 
your office said that you were ``still developing our 
negotiating position for the TPP'' end quote.
    As an ambitious trade agreement that I think has huge 
positive economic and national security implications for this 
country, I was wondering if you could tell us what factors are 
being considered in consultations to reach a decision regarding 
carve-outs, specifically the tobacco carve-out. And can you 
tell us if you are going to, in fact, exclude tobacco from the 
entire TPP or specific chapters.
    Ambassador KIRK. Well, first of all--and thank you, 
Congressman Davis, but let me make it clear. We have not tabled 
any proposal to exclude tobacco or any product. So I know there 
is great concern from the Kentucky delegation. I was with 
Governors Beshear from Kentucky and Perdue from North Carolina. 
We understand their very strong passion on this. As you know, 
there are equal concerns from NGOs and those in the healthcare 
field that we not table anything that would restrict this 
administration's, this Congress' ability to regulate in the 
interest of public health.
    And because of the passion on this on both sides, first of 
all, we have not tabled anything. We are trying to seek the 
proper balance between our stated objective of having a high 
standard, comprehensive agreement in which everything is on the 
table and as few carve-outs as possible, and at the same time, 
maintaining that core underlying standard of all trade 
agreements, and that would be nondiscrimination, that we would 
not treat other countries' manufacturers' products any 
differently than here--and that is the overall environment in 
which we are trying to come up with the proper balance on 
tobacco. But we have not yet concluded that.
    But I want to make it plain. We have not tabled anything 
that would exclude tobacco or any other product.
    Mr. DAVIS. Could you commit to us that you will stay in 
dialog with us as this position unfolds so that----
    Ambassador KIRK. Absolutely.
    Mr. DAVIS. And I'd like to switch subjects to another area 
of real concern. We talked a lot in this Committee about 
manufacturing. I spent my post-military life in manufacturing, 
and there are policies that really date to the Cold war on dual 
use technologies that don't reflect the reality of the 
international marketplace right now, specifically in the 
machine tool industry, which has always been at the heart or 
the cornerstone of American manufacturing.
    I have two of the most successful machine tool producers in 
the world headquartered in northern Kentucky--Mazak North 
America and MAG, the former Cincinnati Machine. And for 
example, five-axis metal cutting machines, which are at the 
core of any product production, whether it is automotive, 
aerospace, any other type of manufacturing are tightly 
controlled by the U.S. Government.
    Currently, it is creating huge competitive problems for us 
in Asia, in India, in Russia and China. And right now, there is 
at least 13 Chinese machine tool companies that build five-axis 
machines. They are exporting into other countries. The 
Europeans have a tremendous market advantage because of this 
issue.
    And I would like you to comment first on the challenges 
that--how can we work together to overcome this export control 
problem on what are obviously technologies that are widely 
available right now, and there are no defense constraints on, 
potentially changing the rules on that.
    And also dealing with the issue of visa control, many of 
our international businesses that are very, very dependent on 
international exports to fit with the President's plan to 
double exports can't, in fact, get their foreign clients here 
through the visa process with the State Department. I know it 
is not directly under your jurisdiction, but as a trade 
ambassador, I think ultimately this affects your ability to 
promote American manufacturing and ultimately American jobs 
that will create a lot of export revenue for us.
    Ambassador KIRK. Well, Congressman, yours was both a 
question and an answer, and I want to tread carefully, because, 
as you know, one of the realities of my job is that Congress 
retained the ability to implement commercial treaties, and you 
were very prescriptive about what I do. And one of the things I 
am most reminded of is that I am not supposed to make 
immigration policy, nor trade policy. But I----
    Mr. DAVIS. Feel free. Everybody else does it, too. So----
    Ambassador KIRK. I would say I think the President has--I 
mean, the common sense of what you have said--if part of our 
growing our economy and creating jobs is taking advantage of 
the opportunity to sell more of what we make to the rest of the 
world, it would just make sense that our customers ought to be 
able to come here and learn about the products and have access 
to the people that are going to be supplying them and teaching 
them. I think the President has said--is correct; the best way 
to address this is part of comprehensive immigration reform, 
but you have stated the obvious. We frustrate our own efforts 
when our visa laws are so--can be so restrictive that it makes 
it difficult to support our underlying ambition to sell more 
around the world. But I would just say I think that speaks to 
the need for Congress in a bipartisan way to do something that 
makes sense.
    With respect to export controls, as you know, the President 
asked then Secretary Gates to work with Secretary Locke at 
Commerce to modernize our export control regime. Many of these 
laws made sense 50 years ago when we were in a Cold war with 
Russia. We will absolutely not compromise on the core 
underlying principle that we aren't going to share technology 
with countries that might seek to use that against us. But for 
the overwhelming majority of products, we think that should be 
modernized.
    I know Secretary Bryson is working in an expedited manner 
to try to address that, because we have heard from too many 
businesses like the one you mentioned that the United States is 
just losing out on technology that people can easily go buy in 
another market. And we want to have that opportunity for our 
manufacturers.
    Mr. DAVIS. Thank you.
    Thank you, Mr. Chairman.
    Chairman CAMP. Thank you very much.
    Mr. Neal is recognized.
    Mr. NEAL. Thank you, Mr. Chairman.
    Mr. Ambassador, I have been hearing from companies in 
Massachusetts, as we discussed earlier this morning, that 
manufacture here in the U.S. and also import that a free trade 
agreement with the European Union could be beneficial both in 
opening European markets for U.S.-made products and for 
reducing cost to U.S. consumers for certain European products 
that they import.
    The Port of Boston would be an obvious gateway to expand a 
trade with the EU. Is USTR considering a U.S.-EU FTA, and what 
might be the status of your discussions with your EU 
counterpart about this possibility?
    Ambassador KIRK. Congressman, we are engaged at the 
direction of President Obama following the visit of the 
President of the EU here last fall. He and President Barroso 
instructed us to create what they call a high-level working 
group. And with strong encouragement from businesses across the 
country, we are exploring all options. Now, we have been very 
careful not to cast it or bias it ahead of time by saying it 
would or would not be an FTA, and frankly--and it is a great 
opportunity to remind us that by a huge margin, this is the 
largest commercial relationship in the world.
    And frankly, one of the things I instructed our negotiators 
is to adopt, I guess, the trade equivalent of a Hippocratic 
Oath--let's do no harm--because this relationship has sort of 
worked without government--but we are exploring everything 
across all areas from a services liberalization to non-tariff 
regulatory coherence. We have had about five meetings since the 
presidents have asked us to do that, but have tried our best to 
not restrict our teams as they work through it, but be 
practical, see where we have opportunities to liberalize trade, 
take cost out of the systems, but try and not prejudge the 
outcome.
    Mr. NEAL. And on a more parochial matter, we spoke again 
about enforcement today, and China has had severe problems with 
mandatory third-party auto liability insurance markets, and as 
this problems have become more compounded, the difficulty we 
have is that when we thought this was going to be an opening 
for American financial services. If anything, it has been a 
stalemate. I think that might be the best description. So I 
know that you have embraced firm enforcement as part of your 
tenure. And I hope you won't take your foot off the pedal on 
this issue.
    And I hope we are not going to lose momentum to make sure 
that China doesn't drag its feet in fulfilling its promise. As 
we indicated, there has been a huge chasm between those who 
thought that this was destiny in terms of new financial 
opportunities only to discover the impediments in those markets 
have not turned out to be quite what was anticipated. And 
enforcement remains a big issue for all of us here, and I think 
that with full market access for our companies, that they will 
be able to readily apply for licensure along those lines.
    Ambassador KIRK. Yes. First of all, again, I think the 
President's initiative in creating the taskforce demonstrates 
our resolve to keep our foot on the pedal. And with respect to 
the third-party liability in the auto industry, one of the 
better outcomes from Vice President Xi's recent visit was we 
were able to get a very firm commitment from China that they 
will open up that market.
    Now, what we have to do is make sure we are diligent, as 
you said, working with China that they will move quickly to 
implement the regulatory changes to enhance that. But 
hopefully, by the time I see you again, we will have companies 
selling in that market.
    Mr. NEAL. Thanks. Thanks, Mr. Ambassador.
    Thanks, Mr. Chairman.
    Chairman CAMP. Thank you. Mr. Reichert is recognized.
    Mr. REICHERT. Thank you, Mr. Chairman. Welcome, Mr. 
Ambassador. Good to see you again. And again, congratulations 
to you and your team, and I really appreciate your presence 
here and your open, honest answers. We have worked well 
together, the Committee and your office and my office 
personally. I appreciate your efforts.
    I want to touch on something. My focus will be all on jobs. 
And of course, this, you know, trade is essentially really, 
bottom line, about jobs. I know you're not a tax expert, but I 
just want to mention the Harbor Maintenance tax and how it 
impacts, especially the West Coast and the business that we're 
losing to Vancouver and Prince Rupert ports. The Longshoremen, 
Longshore Union and our Port Authority people are very, very 
nervous about how this impacts our trade opportunities 
especially in Washington State, in my case.
    If you could respond in writing, we'll follow up this 
question with a letter, and hopefully we'll get an answer back 
on what the administration's policy might be on this. So as far 
as the free flow of electronic information, you've touched on 
it just a little bit, it's critically important, as you know, 
to U.S. companies that sell goods and services over the 
Internet. The e-commerce--and e-commerce is something we know, 
I think, a little bit, we know a little bit about in Washington 
State, but we know that some foreign governments block, you 
know, these efforts and the flow of information. Other foreign 
governments require online service suppliers to process data 
locally or to locate servers in their contracts.
    These types of restrictions can impede trade, undermine the 
competitiveness of U.S. companies, and cost American jobs. This 
is a real twenty-first century trade issue. And to create a 
free trade agreement included landmark provisions on these 
cross-border data flows. Do you agree that the Trans-Pacific 
partnership must include strong provisions ensuring the free 
flow of electronic information?
    Ambassador KIRK. Absolutely we do, Congressman Reichert. 
And first of all, thank you again. You have been wonderfully 
supportive, and I appreciated your hosting the ASEAN trade 
ministers with us when we came out. But we agree with you, and 
I think you know we have worked with you and other Members to 
table what we believe is a very thoughtful, commonsense e-
commerce provision in the Trans-Pacific partnership for the 
reasons that you articulated.
    Mr. REICHERT. Thank you. And my last question, quickly, is 
regarding the Export-Import Bank. And, you know, we hear the 
administration talk a lot about manufacturing, but it's kind of 
rare when you hear officials talk about the importance of 
services. And we all know that services are 70 percent of our 
economy and 70 percent of our jobs, getting back to jobs. 
Services like financing, insurance and express deliveries don't 
just create jobs, but they create high paying American jobs and 
further, they enable manufacturing and they enable exports. And 
the Export-Import Bank is up for reauthorization.
    There are many who talk about the banks in terms of what it 
means for America's largest employers, but a lot of folks 
really sort of dismiss the small business impact here of the 
Export-Import Bank. Can you explain, really, how important it 
is for the Export-Import Bank and their relationship with small 
businesses in the United States, please?
    Ambassador KIRK. Thank you. I'm happy to and again, I 
recognize I'm here as U.S. Trade Representative, but, you know, 
one of the good things we've worked with you on, exports are a 
great story right now. Our exports are up. We are in records 
across all services, all sectors. Manufactured goods are up 34 
percent, agriculture is up 31 percent, services is up 21 
percent in comparison to 2009. In just about every country in 
which we trade, we have a surplus in services. Seventy percent 
of Americans work in the service sector. Ninety-seven percent 
of U.S. exporters are small businesses, many of them in the 
service sector.
    So first of all, we acknowledge everything you say, 
Congressman. We are working. That's why we are specifically 
addressing services liberalization in the Trans-Pacific 
Partnership. It is one of the larger opportunities we have in 
Korea; for example, which has over a half a trillion dollar 
services market. But I think it's also critical, that Congress 
renew and extend the authority of the Export-Import Bank. I 
think, and forgive me, I don't know the exact numbers, I want 
to say they have about a hundred billion dollar lending cap. 
They are effectively at about 95 percent of that. That's going 
to run out in the next 2 months.
    And so as well as we're doing, we're going to lose the 
ability to finance many of our products, and particularly, for 
small businesses. And so I think it's critically important that 
the Export Banks' caps be lifted, they be extended. They cost 
the taxpayers not one single dollar. They are financed through 
their transactions. It's one of our better stories. They enable 
many of our small businesses to grow and compete. So hopefully 
we can work with Congress to extend that.
    Mr. REICHERT. Thank you.
    Chairman CAMP. All right. Mr. Boustany is recognized.
    Mr. BOUSTANY. Thank you, Mr. Chairman. Congratulations, 
Ambassador Kirk, on getting a job well done with you, your 
staff working with this Congress to get these three free trade 
agreements finalized. That is singularly the most important 
jobs legislation this Congress has passed. And it's bipartisan. 
It's something we should all be proud of. But that doesn't 
constitute a twenty-first century trade agenda. In fact, if I 
could use a simple football analogy, it's almost as if we're 
deep in our own territory playing defense and we finally 
created a turnover. Now we can go on offense, but now we have 
to take advantage of this and move forward.
    And so we need to continue to knock down barriers, you 
know, continue with enforcement, and also look at hurdles that 
we have to overcome here internally. And I want to join with 
Chairman Herger over my concerns about the lack of progress on 
getting a model bid in place and also moving forward with the 
negotiations on a bid with both China and India.
    But if I could direct my questions to you on a couple of 
things with regard to China. Obviously, a broad range of issues 
out there. But two often overlooked areas are SMEs and the 
impact that they play on getting American exports into the 
Chinese market and services where we have a growing trade 
surplus of services. But we still have major problems there. I 
mean, for instance, currently we have 27,000 U.S. SMEs that 
exported to China in 2009. We can grow this, and this is an 
area that I think clearly my district we're seeing expanded 
activity, but there are significant barriers and problems in 
place.
    The same thing with services. Even though we do have a 
surplus with China, there are a number of issues with licensing 
and so forth that we need to--I would like to know what is the 
administration doing specifically in these two areas and what 
are our metrics. I mean, beyond just hearing what President Hu 
has said, statements from Wang Qishan, Mr. Xi was here earlier, 
but what is going on. How are we ensuring this follow-through 
in China on these things that we're agreeing to and what are 
the metrics to show progress?
    Ambassador KIRK. Okay. If I could take those separately 
because with the SMEs, through our export promotion activities, 
our Trade Policy Coordinating Committee, we have very specific 
metrics, but in many cases not country-specific. Maybe I will 
take that remark back.
    I think you all know we have only, surprisingly, about 
280,000 businesses in the U.S. of any size that export. Ninety-
seven percent of those are small businesses. One of the first 
things I did was ask the ITC to do a study to help us 
understand who they were. And that's, from my bias back when I 
was a Mayor; the most important thing is to find out who your 
customers are.
    So one of our first metrics is one, if we could just double 
the amount of small businesses that export because small 
businesses who export grow more, pay more, hire more. We 
represent only about 1 percent of the universe of all small 
businesses in the U.S. Now we've been more discriminating than 
that because our SBA administrator helped us understand small 
business is broad enough to capture everybody from the sub 
shop, but, you know, of those that could export, we're trying 
to double that. We're providing more knowledge, more trade, 
promotion authority, financing, a number of those things. But 
if we can double that, get that from 1 percent to the global 
average of 2 to 3, I think you can understand the role that 
will play in jobs.
    Secondly, I'll be honest, many of our small businesses 
export to only one country, one customer. So that's a great 
place to start. If they're exporting, they're not afraid of it, 
and we're working to help them grow and expand. Now, I'll be 
honest. With many of our small businesses, the best advice we 
tell them, you be very careful about going to a country like 
China because frankly, you know, Boeing can survive a five-year 
fight over Airbus. That small business that Congressman Neal 
and Congressman Davis mentioned, they can't. And we really 
steer----
    Mr. BOUSTANY. I've had companies that have had similar 
problems.
    Ambassador KIRK. Right.
    Mr. BOUSTANY. But one, we try to work with them to make 
sure they go somewhere there is going to be respect for rule of 
law; their product isn't going to be ripped off. Broadly on 
China, we're doing everything through the strategic and 
economic dialogue, the JCCT. We are taking them to court. They 
have a very close service market. As you know, we sought WTO 
panel consultation, for example, in the payment of electronic 
services to try to open up that market, but the pace nearly 
isn't to our satisfaction. And again, one of the rationales 
behind creating this trade enforcement center is so we can be 
more aggressive in taking some of those challenges.
    Mr. BOUSTANY. Thank you. I yield back.
    Chairman CAMP. Thank you. Mr. Becerra is recognized.
    Mr. BECERRA. Thank you, Mr. Chairman. Ambassador, thanks 
for being with us. And let me congratulate you and the 
administration for the work you've done, the successes you've 
had. And I believe that America, its workers, its 
entrepreneurs, its businesses, its farmers are all very much 
looking forward to your continued success as we try to open up 
markets in a fair and competitive way for our businesses and 
our workers here in this country.
    I also want to applaud you, by the way, for the work that 
this administration has done and its recent announcement, in 
fact yesterday's announcement, about the establishment of the 
trade enforcement center. That, I believe, will help us 
continue in this march towards the competitive and level 
playing field for American businesses and American workers. I 
hope that you can get that up and running very quickly. If we 
have that robust commitment to enforcement, I think that will 
be the key to helping establish broad support for a trade 
agenda here domestically and certainly to help make sure that 
we have that even playing field abroad for our companies and 
our workers to get out there and open up markets.
    I wanted to focus most of my time, if I could, just on the 
questions pertaining to the trade agreements that were recently 
signed. I just got back a couple of days ago from Colombia and 
had a great visit, a remarkable visit with President Santos of 
Colombia who is trying to do some remarkable things for the 
country. They have made some great strides in the last several 
years, and they acknowledge that it is because of U.S. support 
and investment and cooperation that they've been able to make 
some tremendous progress there. And they are working with us to 
try to make sure that implementation of the different 
commitments and promises made in this trade agreement are 
achieved.
    One of those very important commitments was in the area of 
labor, as I know you know this very well because you were very 
key in getting those terms agreed to. President Santos seems 
very committed to making sure we're well on our way to getting 
those pieces of the puzzle in place on the Colombian side. I'm 
hoping that you can give me a sense of what we're going to do 
to help monitor and assist Colombia as it tries to move forward 
because some of those commitments are going to be tough. They 
require institutional change.
    The issue of assassination of individuals simply because 
they happen to be trade unionists or the issue of the 
suppression of the ability of workers to try to collectively 
bargain are still there. And the President was very clear that 
he is committed to try to move forward on improving the 
situation there for Colombian workers so that American workers 
and American businesses can trade on an open and level playing 
field. But can you tell me what we're doing to try to, for 
example, help them further integrate these commitments into 
their institutions?
    Ambassador KIRK. First of all, Congressman, again, thank 
you for your kind words, and thank you for your strong support 
and advocacy on a number of these issues. One, I would hope 
that perhaps if not with you personally, my staff could follow 
up with your team just to get a better sense of what you 
learned.
    One, I would say we have made very good progress, not only 
with Korea, which will go into force March the 15th, but Panama 
and Colombia as well. We realize, as Congressman Brady said, 
the first step is passing these agreements, but to get the 
benefits, we need to get them entered into force. I know for 
you and many Members of the Committee, particularly from the 
Democratic party, absent this strong labor action plan, we 
wouldn't have gotten the strong bipartisan support we did. 
Because of that, the President made a commitment we would make 
sure that that was implemented, not only in the letter, but the 
spirit of it as well.
    Now we have some more work to do, but we have been very 
encouraged, frankly, with President Santos' very quick 
implementation of a number of those. As you know, one of the 
reasons we delayed bringing Colombia forward, we wanted to see 
these changes in law. We didn't want lip service. He did that. 
He appointed, I think, to many people's, frankly, surprise, one 
of the most respected labor leaders in Colombia as the new head 
of a new separate labor ministry.
    And Minister Pardo, I believe, came and met with a number 
of you here. He has met with labor leaders here. They have 
moved to hire many of the inspectors within the Labor Ministry 
that we've asked. They have worked, frankly accepted technical 
assistance from our Department of Labor, as well as the 
International Labor Organization. They have moved to address 
concerns in some of the most important sectors we asked them in 
terms of not only identifying issues, but bringing--holding 
people accountable.
    Now there is more to do, but at least it feels like they 
are absolutely meeting both the letter and the spirit of what 
we have asked them to do. And so we have made this a very 
collaborative process. And I very much have to highlight the 
strong involvement of Secretary Solis and her team and working 
with them. But at least thus far, it has been a very good, 
strong collaboration, and we'll continue to monitor and give 
them that technical assistance where they have asked for it.
    Mr. BECERRA. And my time has expired. So I'll just close by 
just saying that I agree with everything you said. And maybe we 
can work with them on their inspections and on their 
interpretations of some of the laws. But I agree with you, 
they're trying to make progress. And thank you, Mr. Chairman.
    Chairman CAMP. Thanks. Mr. Buchanan is recognized.
    Mr. BUCHANAN. Thank you, Mr. Chairman, and I want to thank 
the Ambassador for being here today and especially, as 
everybody has mentioned on the free trade agreements, it's huge 
to Florida. As you know, Ambassador, we've talked about it. We 
have 14 ports, $68 billion worth of economic activity. And so I 
want to thank you again for your leadership on that.
    Jobs. That's what we're all here for today. Last year I 
introduced a 10 point jobs plan. One of the key parts of the 
jobs plan was China's blatant disregard for intellectual 
property rights. It was reported by the U.S. International 
Trade Commission that Chinese piracy and counterfeiting cost 
American businesses an estimated $48 billion in 2009. The 
report concluded that 2.1 million jobs could be created in the 
U.S. if China complied with their international obligation to 
protect and enforce intellectual property rights. Ambassador, 
what are we doing about that and are these numbers remotely 
correct? That's what I've been told and verified. So I wanted 
to get your thoughts on this.
    Ambassador KIRK. Well, not having been involved in this 
study, and I think Congress very wisely separates the analysis 
of the value of our trade work from the responsibility to 
negotiate and enforce them between USTR and the International 
Trade Commission, but your numbers seemed at least remarkably 
similar. I think it was Chairman Levin that mentioned the same 
study.
    From my perspective, again, my bias having been a local 
official, if it's two hundred jobs, you know, if it's a 
thousand, they're worth fighting for. But clearly, China could 
be much more aggressive in enforcing and combating piracy and 
theft. It cost us billions of dollars of revenue to American 
businesses and lost jobs. And for that reason, it is one of the 
issues that we most persistently and singularly raise with 
China to work at, from engagements by President Obama and Vice 
President Biden to our work at the JCCT.
    One of the practical facts that we've heard from many of 
your businesses is that China typically tends to respond when 
we have an event. When we have a presidential visit, we do 
something. And they love special campaigns. And so for 6 
months, they do really good. And then they go right back to 
doing what they're doing.
    Mr. BUCHANAN. Well, they're saying 2.1 million jobs could 
be created. So I would like to have you look at that.
    I just want to touch on another question. The Panama trade 
agreements. It's been brought up by a lot of businesses in 
Florida to me is that even though they've been enacted, the 
U.S. exporters are still unable to reap the benefits of the 
agreements until it actually goes into force. That means U.S. 
exporters still face tariffs in Panama. Meanwhile, Canada and 
European unions and others are taking advantage of doing 
business with Panama.
    What can we do to move these along more aggressively. I 
know you're working on it, but what more could we be doing, in 
terms of the administration, to get these enacted because it's 
costing us, you know, not only business, but jobs all over the 
country. But I'm looking at Florida.
    Ambassador KIRK. Well, frankly, Congressman, you've done 
your part in giving us a strong vote, and I just want to assure 
you, we're moving as aggressively with Panama. We sent teams 
down to Panama last fall. The good news, we just received some 
of the documentation that Panama is required to submit. And now 
we're going through the process of analyzing that to make sure 
it does what we want. But we are moving as diligently----
    Mr. BUCHANAN. Do you have a time line, or maybe you have 
something because I get asked that a lot exactly where----
    Ambassador KIRK. You know, I hate to put a specific time on 
it. You know, we wanted to have them all done as soon--we're 
aware they have been at that trade agreement with Canada, and 
we don't want to lose ground. The other element, and it goes 
to, if I could, just the point you made about infrastructure 
and similarly Mr. Reichert and Mr. Boustany. We have a great 
opportunity with the opening of the Panama Canal, but a 
challenge to address our port infrastructure all around the 
country because that's going to be a huge opportunity for us to 
increase our exports.
    Mr. BUCHANAN. Thank you. I appreciate the opportunity.
    Chairman CAMP. Thank you. Mr. Smith is recognized.
    Mr. SMITH. Thank you, Mr. Chairman, and thank you, 
Ambassador. I appreciate your service and certainly, the 
agility of USTR to, I guess, act with the benefits of Americans 
in mind in production and certainly Nebraska agriculture. I was 
wondering if you could provide an update on Japan's age 
restriction on the U.S. beef imports to 30 months and under and 
also how the U.S. is assessing Japan's interest in joining the 
TPP.
    Ambassador KIRK. Thank you, Congressman. The exclusion of 
U.S. beef from the Asian market, as you know, over the last 8 
years has been crippling to our beef industry. We have done a 
better job of getting back into on U.S. agriculture exports to 
Korea. And the good news, with two-thirds of tariffs Korea has 
going away on March 15th, we expect to see our agriculture 
exports there do even better.
    We have met with Japan I can't tell you how many times to 
try to get them to comply and accept the fact our beef is as 
safe for consumption as any in the world. The good news, we 
have pressed them that they are now undertaking the risk 
assessment they have told us that they would to determine the 
safety of our beef. We are hopeful we can get them to conclude 
that and we can be back into that market soon because it is 
critical for beef suppliers all around the U.S.
    Mr. SMITH. Right. And certainly, this speaks to the 
sanitary, and vital sanitary issues that a lot of times our 
trade partners, I guess, don't go off of the science-based 
standards. What do you see as perhaps an opportunity to perhaps 
go beyond what past trade agreements haven't stated or even 
beyond what the WTO has in place?
    Ambassador KIRK. Well, our first goal for all of our 
partners, whether its China, Japan, Mexico, Europe is look, 
just play by the rules and accept sound science. We can't allow 
cultural differences of the others to distort the market. So 
one, we seek that level of compliance with everyone. Two of the 
opportunities we have are if we can get other countries into 
the Trans-Pacific Partnership, one element is going to be some 
of the strongest sanitary and phuto-sanitary standards. And 
secondly, we referenced earlier one of the real benefits. For 
example, if we can lift the Jackson-Vanik restrictions when 
Russia joins the WTO, for the first time they would have to 
adhere to those sanitary and phuto-sanitary standards.
    So we're using the opportunity to grant permanent, normal 
trade relations to Russia, as well as the development of the 
TPP, to try to enhance those standards and open up markets for 
American agriculture. And I referenced earlier, I won't go 
through it, but agriculture is one of our good news stories in 
our export policy. I'm sure you know we had a record year last 
year. $140 billion dollars with a forty-one billion dollar 
surplus.
    Mr. SMITH. Right. And you touched a little bit on the 
situation with Russia. Now very specifically, there have been 
very tangible, negative results from the restrictions that 
Russia has placed on U.S. pork. I mean, we had record levels of 
exports of pork to Russia and then when some, I would say, non-
science-based issues entered the equation, the numbers changed. 
What can you assure us will be done about that.
    Ambassador KIRK. Again, the first step would be for us to 
recognize that our granting Russia permanent normal trade 
status is decidedly in our interest. We are not required to 
lower one tariff. It would, for the first time, give our 
exporters, our farmers, at least access to dispute resolution. 
But we would have also the opportunity to compete for those 
TRQs.
    And I have to tell you the point, no one has been more 
supportive broadly of our trade initiatives than the pork 
industry. But I understand their very legitimate frustration in 
Russia because of the behavior of their Agriculture Ministry. 
But having more tools to confront them, Congressman Smith, 
would be the first step. And that's why we will be working with 
you to address the issue of Jackson-Vanik.
    Mr. SMITH. Great. I appreciate that. And I think, you know, 
in closing, there are some great opportunities in the world. 
Obviously you've touched on those. Great background in 
agriculture now with the numbers speaking for themselves of 
what trade can accomplish. And so I'm excited that our governor 
is planning to travel to China this summer on a trade mission. 
And so I think the opportunities are out there, and I look 
forward to working with you to make sure that we do move 
forward with a level playing field in mind. Thank you.
    Ambassador KIRK. Thank you, sir.
    Chairman CAMP. Thank you. Mr. Doggett is recognized.
    Mr. DOGGETT. Thank you, Mr. Chairman. And thank you, 
Ambassador. Good to have you here. I think all of us recognize 
the potential of the Trans-Pacific partnership, and as with any 
trade agreement, there are pluses, and there are minuses. My 
concern would be that there is as much attention at USTR 
focused on minimizing the harm from such an agreement as 
maximizing the many potential good benefits of the agreement.
    My understanding from prior testimony we had from your 
office is that you envisioned having the same standard applied 
to New Zealand and us and Vietnam. Is that correct? Do you 
expect there will be separate provisions so that some countries 
are dealt with differently than others?
    Ambassador KIRK. Congressman, without knowing 
specifically--and it is always good to see my mother's 
congressman.
    Mr. DOGGETT. That's right.
    Ambassador KIRK. She will send you her regards. And I am 
glad it sounds like we finally got a map in Texas.
    Mr. DOGGETT. Right.
    Ambassador KIRK. Our ambition, at least among the nine 
countries that initially decided to go down this road together, 
was let us not wait on what is going to happen in Doha or APEC; 
let us try and develop a new trade model for the twenty-first 
century with the highest standards knowing every country is 
going to have some challenge.
    But at least let us start with the proposition, we want a 
high-standard agreement that everybody has got to play to and 
that this would not be the place to try to draw those 
distinctions between developed economies or maybe least-
developed or emerging economies, that if you sat at the TPP 
table, which we gave Vietnam 24 months to make that decision, 
for example, then we would say, ``You take all the time you 
need to come here, but here is the price of admission. We are 
going to ask you to aim high and reach high.'' And at least 
that is the method by which we have progressed to this point, 
Congressman, and we still want to adhere to that.
    We want to have a high-standard agreement to which all of 
the parties are sort of on the same level, and the decision as 
to whether you want to meet those standards is up to individual 
countries. But from our perspective, we want this to be applied 
across the board.
    Mr. DOGGETT. Do you anticipate then asking Vietnam to meet 
International Labor Organization standards, core principles?
    Ambassador KIRK. Yes, we do.
    Mr. DOGGETT. And given its history of a lack of protection 
for workers, how do you see them getting there?
    Ambassador KIRK. Look, this is going to be a big lift for 
them. But to their credit, I would say this, there were no 
surprises. We were very honest. We were going table a labor 
agreement that incorporates core American values. Vietnam has a 
further road to travel, but at least every step of the way, 
they have said, ``We understand that, and we are going to 
aspire to that.''
    Now our team just came back from Vietnam. We were 
encouraged. They have, for the first time, sort of welcomed the 
ILO to come in and help them design some of their structures. 
They have got a lot to do. I don't want to underscore the fact 
this is, for Vietnam, a much heavier lift than others. We are 
doing everything we can to provide them technical assistance. 
There are some areas they are going to say--they are going to 
do the, we are new, we are young, but that is inherent in any 
trade negotiation.
    Mr. DOGGETT. Are there also transshipment issues with 
Vietnam, Malaysia, some of the other countries? And has 
transshipment of Chinese goods picked up in Korea since that 
agreement has been ratified?
    Ambassador KIRK. It has not in Korea. Because of you all's 
concerns, particularly about North Korea, as you know, we were 
very careful to craft an agreement, and I would say--Korea and 
the U.S. were interested in drafting an agreement that would 
help businesses in Korea and the U.S., not in China. That issue 
has come up particularly in the textile chapter, frankly, 
because there are some American businesses who don't want any 
restrictions on their ability to take goods from China and ship 
them through.
    We think this should be for the benefit of Vietnam, and we 
also want to protect a U.S. textile industry that, perhaps more 
than any other industry, feels like they have not been as well 
represented in our trade agreement. So we are trying to get the 
proper balance with our yarn-forward provisions and others that 
will protect the interest of our textile industry that is doing 
okay, but gives the incentive to Japanese suppliers, and not 
those being----
    Mr. DOGGETT. And what about the concerns that this 
Committee and you have dealt with on many occasions concerning 
currency manipulation in Asia. Would you expect that this 
partnership would address the currency manipulation problem?
    Ambassador KIRK. Well, we are going to have an opportunity, 
as the Chairman said, I think, to talk extensively about that 
and other issues. We know that's an issue for you, but our 
partners understand our concerns. Typically, that's an issue 
that's been difficult to define in the context of a trade 
agreement. But the core for us, we want an agreement that gives 
American exporters, farmers, entrepreneurs access to what is 
going to be the fastest growing region in the world, but gives 
us a level playing field and the opportunity to create jobs 
here.
    Mr. DOGGETT. All right. Thank you.
    Chairman CAMP. Thank you.
    Mr. Shock is recognized.
    Mr. SHOCK. Thank you. Welcome, Ambassador. Thank you for 
your good work on the three trade agreements. Appreciate your 
leadership on that.
    Questions about TPP, first question about U.S. biological 
medicines, many of which are produced in my home state of 
Illinois. When your Deputy Ambassador Marantis was here last 
December, I specifically asked him about whether or not USTR 
would be working to ensure that the same U.S. laws that protect 
U.S. biologic pharmaceuticals here in our country, specifically 
the 12-year period, would be included in TPP to ensure that 
those same safeguards and IP protections are in place in the 
countries we are about to trade with.
    Do you know if USTR has made a decision on that?
    Ambassador KIRK. Again, this is an issue, Congressman, 
where we understand that there are very strong differences. We 
are aware. Congress, I think, in the health care bill put in a 
12-year period for biologics, but as you know, the 
administration in its budget has wanted a 7-year period, and I 
think you can understand where my equities would come down on 
that, but we have not tabled a provision on the biologics yet 
as we continue to try to see if we can't find the proper 
balance between the two.
    Mr. SHOCK. Well, I am not sure even the most optimistic 
Member of congress would assume that the President's budget's 
going to pass considering the fact last year his budget didn't 
get a single vote, even from his own party, but having said 
that, whether the period is 7 years or 12, would it be a more 
fair question to say regardless of what the U.S. law is of the 
land at the time you negotiate TPP, that it will be your 
objective to ensure that whatever that period of protection is 
in U.S. law, you will work to try and get that same protection 
as a part of TPP?
    Ambassador KIRK. We are going to try to get the strongest 
provisions that we can, and understand, this is one where we 
have some of the strongest headwind because of some of the 
other countries that frankly have a very different approach to 
this.
    Mr. SHOCK. Well, you can understand our concern in terms of 
protecting our jobs here in the country in intellectual 
property and the money that is invested there if we don't have 
those same protections.
    Ambassador KIRK. Yes, sir.
    Mr. SHOCK. Second, state-owned enterprises, you are well 
aware of the large amount of foreign and direct investment 
specifically from the country of China. Overwhelming majority 
of that foreign direct investment is from state-owned 
enterprises. What assurances can you give us that TPP will have 
not only mechanisms in--not only rules in place, but most 
importantly, mechanisms in place to enforce competitive 
disadvantages that state-owned enterprises may have when 
dealing with market-based companies here in the United States?
    Ambassador KIRK. Well, the best answer I can give you, and 
understand, we haven't finished, but I will tell you for 
precisely the reasons you articulated, Congressman, this is the 
first time we have ever tabled a separate chapter on state-
owned enterprises. We have heard from you, but just as 
critically we have heard from businesses the frustration with 
dealing with them, competing with them, and for that reason, we 
have insisted, and we have tabled, a chapter on state-owned 
enterprises to make sure that if they are going to be there, 
they have got to be transparent. They have got to operate on 
market principles, and then having disciplines that we didn't 
know about, say, for example, 10 years ago, trying to build 
those into the Trans-Pacific Partnership.
    Mr. SHOCK. I have a specific question about whether or not 
the administration is prepared to rethink the need for 
maintaining high tariffs on consumer goods. As you know, when 
we do that oftentimes it is consumers who pay those higher 
tariffs, specifically one industry is the footwear companies 
who--virtually no footwear is produced here in the United 
States, and by having large tariffs on U.S. based companies, 
produced goods overseas and import, you are basically taxing, 
quite frankly, the middle class and the people who are buying 
those consumer goods.
    I have heard the administration say we need a 21st century 
approach to this. How do you see that shaking out?
    Ambassador KIRK. Some of your colleagues from the northeast 
would be quick to tell you there is some footwear made here 
with L.L. Bean and with New Balance, and again, as with 
everything, we want to strike that appropriate balance. If 
there is anything on which we all agree, the real winner of 
trade liberalization are consumers. But even the American 
public have told us they don't want to trade cheaper t-shirts 
and tennis shoes for jobs. So we want the right balance to make 
sure we aren't punishing consumers, but we want to protect 
America's manufacturing base where we can.
    Mr. SHOCK. Okay. Finally, the pork industry in the United 
States is being significantly hurt by Canada's recent addition 
of Federal subsidies, their provincial and Federal Government 
subsidies, of their hog industry, and as a result, pork 
producers here in the United States have calculated it is going 
to cost thousands of jobs, putting our pork industry at a 
competitive disadvantage because the Canadian government has 
decided to subsidize their production.
    I am just wondering if Canada's inclusion in TPP eventually 
would--that perhaps would be something that would be on your 
radar to get them to back down from their federal subsidies of 
that industry.
    Ambassador KIRK. It would be, and as you heard me say, 
Congressman, no industry has been more supportive of our trade 
liberalization than the pork industry. One of the issues they 
have raised, and we will address with Canada honestly using the 
information we've gathered from the Federal register process we 
went through in terms of their joining TPP, would be this 
issue.
    Mr. SHOCK. Okay. Thank you.
    Chairman CAMP. Thank you.
    Ms. Jenkins is recognized.
    Ms. JENKINS. Thank you, Mr. Chair, and thank you, Mr. 
Ambassador, for joining us and all your good work last year on 
the trade agreements.
    The free flow of electronic information is critical to U.S. 
companies that sell goods and services over the Internet and 
unfortunately some foreign governments blocked those flows. 
Other governments require online service suppliers to process 
local data or to locate servers in their countries. These types 
of restrictions can impede cross-border trade, undermine the 
competitiveness of U.S. companies, and cost American jobs. This 
is true certainly here in the 21st century.
    Do you agree that the TPP agreement must include strong 
provisions ensuring the free flow of electronic information and 
can you just comment?
    Ambassador KIRK. Congresswoman, I agree with you completely 
and for that reason we have tabled provisions to address 
exactly what you say.
    Ms. JENKINS. Okay. Thank you.
    And then to follow-up on Representative Smith's questions, 
being from Kansas and Nebraska, farmers and ranchers rather 
important to those of us in the Heartland and certainly our 
U.S. farmers and ranchers continue to face these significant 
sanitary and phytosanitary barriers in their efforts to export 
to China.
    I am concerned that China continues to maintain a series of 
regulations and restrictions on U.S. exports of fruit, 
potatoes, beef, pork, poultry, et cetera, that aren't supported 
by science and the independent U.S. International Trade 
Commission estimates that elimination of Chinese tariffs and 
nontariff measures could lead to an additional 3.9 billion to 
5.2 billion in U.S. ag exports to China. These new exports 
would support tens of thousands of good paying American jobs.
    What is the administration doing to address the persistent 
tariff and nontariff barriers that block U.S. exports to China?
    Ambassador KIRK. Well, again, Congresswoman, I mean I 
couldn't agree with you more, we have visited Kansas and I have 
talked with Senator Roberts and others extensively. I don't 
disagree with anything you have said. We continue to press 
China to adhere to sound sanitary, phytosanitary standards. We 
have challenged them in the WTO against, we think, non-
consistent duties they have put on poultry. We have challenged 
them.
    We got a little bit of relief in the JCCT 2 years ago, if 
you remember, after the--no, I am not supposed to call it swine 
flu, whatever we call it, the viral scare.
    Ms. JENKINS. H1N1.
    Ambassador KIRK. H1N1.
    Ms. JENKINS. Yes.
    Ambassador KIRK. We were able to get back in that market. 
Know that we work, I mean, almost daily with Secretary Vilsack 
and his team to try to get China to a better position, that 
they will do it, and where we can't do it in negotiation, we 
have demonstrated we are not afraid to take them to the WTO, 
and I would just say again, that is one more, I think, evidence 
of the wisdom of the President in creating this Interagency 
Trade Enforcement Center.
    Ms. JENKINS. Well, we thank you for your past support and 
encourage you to stay diligent and help us out. Thanks.
    Ambassador KIRK. We will, but, also, don't forget about 
Africa. When we had the AGOA forum here last year, we 
deliberately took them to Kansas because it was a great 
opportunity. They wanted to study more some of our standards in 
terms of agriculture production and you all were a great host.
    Chairman CAMP. Thank you.
    Mr. Thompson is recognized.
    Mr. THOMPSON. Thank you, Mr. Chairman. Ambassador, thank 
you for being here.
    I want to follow-up on something that Mr. Brady said 
earlier about your shop working with overseas markets to help 
us here in the United States, and I just want to put a mention 
that Governor Brown, our Governor in California, is leading an 
effort to recruit businesses for California in China, business 
for California in China, so our folks can do business in that 
country, and your work with California would be very, very 
important and very much appreciated.
    I want to talk a minute about flowers, and you and I have a 
little history here. You know my concerns. In my district, I 
have the largest cut flower and greens farm in the country and 
we are being absolutely hammered by the cheaper Colombian 
imports, and as I say, we have talked about this before, and I 
want to know what you can do to help especially now with the 
trade agreement that was signed pertaining to Colombia.
    Ambassador KIRK. Well, first of all, and I understand that 
on the programmatic side because USTR's primary 
responsibilities are negotiation, there is little we have 
there, but I commit we will continue to work with you and 
whether it is Transportation or others, to see if there isn't 
some vehicle that we can try to ensure the competitiveness of 
those California growers. And I very much appreciate your 
continued advocacy on this.
    If I might just digress 1 minute, I would tell you at the 
meeting President Obama hosted with the national Governors on 
Monday, almost singularly one area of cooperation with the 
Governors and administration was in our need to do more in 
exporting. If I could draw the Committee's attention, Mr. 
Chairman, we have launched two important initiatives. One in 
terms of every state is trying to get foreign investment, but 
through Commerce there is a great new program called Select 
USA. We are trying to make it easier to draw in foreign 
investment, but particularly the biggest concern we have heard 
from small business is the confusion of where we start, and 
last week we launched a new tool called Business.USA.org, where 
the idea was to have one single point of entry, particularly 
for small businesses, to try to understand all the tools that 
we have available.
    Mr. THOMPSON. Thank you. And I appreciate the help on the 
cut flowers. The transportation issue is an important one. It 
would be critical to supporting California business.
     Capcom is a company in the Bay area. It started there 
about 1985. They do videogames. They employ hundreds of 
American workers. The owner of that company is a constituent of 
mine and they are having a real tough time with counterfeiting 
going on in China and they have abandoned all of their efforts 
to fight this piracy problem because they found out that the 
company that is stealing their software has close ties with 
China's Cultural Ministry. So I am hoping that the Trade 
Enforcement Committee will be able to intercede and help out, 
notwithstanding the association that these pirates have with 
foreign governments.
    Ambassador KIRK. First of all, we would be happy to learn 
more about that, but I would say again, one of the key asks 
that we had at least year's JCCT was we wanted China to 
institutionalize at the highest level a governmental entity to 
deal with piracy and counterfeiting. They have agreed to do 
that.
    Secondly, one of the reports that we present to you every 
year is our 301 report on other countries' compliance with 
intellectual property rights. For the first time, last year in 
February we submitted to you what we called a notorious markets 
report identifying specifically the worst of those actors. It 
was a small step, but because of that, we were able to get 
China to shut down one of their worst sites for piracy, the 
Baidu website. But I understand the frustration of that small 
business and----
    Mr. THOMPSON. Thank you.
    Ambassador KIRK.--we will continue to watch that.
    Mr. THOMPSON. And then, as you know, the solar 
manufacturers filed an anti-dumping illegal subsidies case 
against China and what is happening in regard to our solar 
panels here in this country is costing us greatly in jobs. Do 
you have any update on the status of that claim?
    Ambassador KIRK. As you know, the ITC, I believe, accepted 
the case. It is now going through the investigatory period with 
the Department of Commerce and we have to stay separate from 
that. But the one thing I love about our job is we try to hear 
from everyone. You should know there is a huge divergence of 
thought among the solar industry on this because we are--and we 
absolutely don't want to yield to the issue of China dumping--
but the United States also enjoys a huge surplus because we 
produce most of the components and the more technologically 
advanced components and we have a very healthy surplus. But we 
will wait to see what the judgment is from the Department of 
Commerce.
    Mr. THOMPSON. Thank you.
    And, Mr. Chairman, I think it is important to note that 
Allen Edmonds still making shoes in Wisconsin, one of the 
greater companies around.
    Chairman CAMP. Note that the footwear for much of our 
military is made in Big Rapids, Michigan as well.
    So Mr. Roskam is recognized.
    Mr. ROSKAM. Thank you, Mr. Chairman. Thank you, Ambassador.
    Ambassador, I represent suburban Chicago and we have had a 
very positive exchange with your staff, who has been incredibly 
helpful. What I want to do is just highlight for you an issue. 
You and I had a conversation about this last year. Let me just 
read you a few paragraphs, kind of a short, encapsulated 
summary, and then I have a specific ask at the end.
    In suburban Chicago, there is a company called Fellows 
Manufacturing. These are the folks behind the bankers' boxes 
and shredding machines and so forth, a stellar reputation, 550 
Illinois employees, and in a nutshell, they entered into a 
joint venture in China in 2006, which went well for 3 year, and 
then in 2009, it just devolved into a nightmare. The nightmare 
now has involved theft of their property. They have been locked 
out and they have lost tools and it has been dramatic to say 
the least. They have now been involved in a Chinese court to 
try and seek justice, and over the past year, it has become, 
you know, increasingly murky. And your staff has, again, been 
really helpful on this.
    My question is would you be willing to raise this? You know 
how this works. If the trade ambassador raises it, it has the 
imprimatur and you are able to move the ball significantly 
based on your personal attention, and so I just wanted to ask 
if you would be willing to raise this issue with the Chinese 
Ministry of Commerce?
    It is also my understanding that you are going to be 
dispatching a delegation on intellectual property issues next 
month and there may be an opportunity there as well, but, 
again, your staff has been incredibly helpful and I just wanted 
to make a personal appeal.
    Ambassador KIRK. First of all, Congressman, thank you for 
bringing this to our attention. We have worked with you and not 
only will we raise it and have I raised it, but this was also 
one of the issues raised both at the Vice Presidential level 
and at the Presidential level.
    We are more than concerned and alarmed over the rise in 
trade secrets theft and--it is a tragedy. We are hearing it 
from small companies like Felloes, and larger companies as 
well, and I guess the only change since last year is for the 
first time it has gotten rampant enough that the companies have 
now gotten more engaged than many were before because they have 
realized they have nothing to lose. But we will continue to 
work with you on that.
    Mr. ROSKAM. Thank you, Ambassador. I yield back.
    Chairman CAMP. Thank you.
    Mr. Gerlach is recognized.
    Mr. GERLACH. Thank you, Mr. Chairman. Mr. Ambassador, thank 
you for joining us today.
    I have two local companies in my area that have raised a 
couple issues and I would like to ask you about that. The one I 
will simply end by just sending you a letter, if you don't 
mind, and if you could review it and respond, that would be 
much appreciated.
    Ambassador KIRK. Yes, sir.
    Mr. GERLACH. The other issue involves the issue of 
reinsurance in Brazil. I have a local company who has found an 
opportunity to do some reinsurance business down there, but 
apparently recently the Brazilian government has passed two 
resolutions, 224 and 225, that prohibit local insurers from 
associating themselves, in essence, with other companies from 
other countries and in essence trying to create a monopoly for 
those companies in that country on the reinsurance market.
    I know you are aware of the issue. Can you update us on the 
status of what your office might be able to do to encourage the 
Brazilian government to relook at its policy to create this 
monopoly situation that is uncompetitive for our companies here 
in the United States? And with the fact that the Brazilian 
President will be visiting in the not too distant future, might 
that not be a good opportunity at some point to raise this 
issue with he and his government officials to discuss it?
    Ambassador KIRK. Congressman, to prove I can be somewhat 
brief, I would say yours is both a question and an answer, and 
I would only correct you to say the president is not a he, but 
a she. It is----
    Mr. GERLACH. Oh, I'm sorry.
    Ambassador KIRK.--President Rousseff. No, no, no. We are 
exceptionally frustrated, I will be honest, with Brazil's 
market. But I would also tell you that that is part of the 
rationale behind President Obama's decision last year to make 
Brazil, Chile, and El Salvador his first foreign trip. We see 
enormous opportunities to expand our trade relationship within 
the hemisphere and we are hopeful that President Rousseff's 
reciprocal visit perhaps might be the impetus to being to 
loosen up some of these opportunities.
    And we applaud Brazil's growth. They had this extraordinary 
find in terms of energy. We are, frankly, hopeful that the 
challenge of reaping the benefits of this new energy 
opportunity, and hosting both the World Cup and the Olympics, 
perhaps might overwhelm Brazil enough that they would be 
welcoming of our assistance in some of these areas like 
services and insurance.
    Mr. GERLACH. Okay. Thank you for that.
    And, as I say, the other issue involves a CAFTA issue 
involving a company in my area that is one of the largest 
retailers of school uniforms and there is this yarn forward 
issue that is affecting their ability to continue to do 
business. So I, if you don't mind, will send you a letter on 
that and if you could review and respond, it would be 
appreciated.
    Ambassador KIRK. We will.
    Mr. GERLACH. Okay. Thank you.
    Chairman CAMP. Thank you.
    Mr. GERLACH. Thank you, Chairman.
    Chairman CAMP. Mr. Blumenauer is recognized.
    Mr. BLUMENAUER. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary, for being here. We appreciate your patience, and you 
have had expressed around the table, virtually all of us are 
interconnected with this global economy.
    I have two things that I will follow with you in terms of 
letter. I don't want to take you unawares, but I want to put 
them on as part of the record, a follow-up. And then one that I 
would like to engage you in further discussion.
    One, just reference to the footwear, I come from the 
Pacific Northwest. I have people in my district who manufacture 
footwear in the United States, but you will be receiving a 
letter that is circulated by Mr. Shock and me about this issue 
that deals with being serious about the tariff approach because 
the value of the footwear industry is here in the United States 
where the manufacturing, the design, the product--a lot of the 
manufacturing that comes here that is done domestically comes 
from a product that is imported to the United States and duty 
free. This is distorted. It is not good long-term business for 
the United States. So I would like you to look at this letter 
signed by other Members.
    The other letter that I will give you deals with the Peru 
free trade agreement. I spent a lot of time in working on the 
environmental and labor provisions so that we could have 
something that would be bipartisan, that would speak to 
concerns we have all heard at home, and particularly as it 
relates to Peru and illegal logging. Having spent so much time 
on that, I am a little dismayed, frankly, at the lack of 
progress, and we have met with the Peruvian authorities. They 
have done a little bit. I will be sending you a letter that I 
would hope that you could give some attention to because we 
want the integrity of these environmental protections respected 
so it will make further progress in international trade easier 
for you and for Members of congress.
    But the point that I would like to engage with you here in 
my remaining two and a half minutes or so, which I will turn 
over to you, speaks to what has happened with government 
procurement. You probably won't be here for testimony that will 
be delivered by Mr. Krzanich from Intel. Part of it speaks to 
this inequity. The brick countries are really not playing fair. 
They haven't been signatory to the GPA, and we are getting all 
sorts of unfair practices that are costing American technology 
in particular, but in a wide range of areas.
    Frankly, this mystifies me. I think that if they are not 
going to play games, we ought to be much more aggressive in 
terms of our government policies toward their procurement 
activities here. This is not a two-way street. I find that 
outrageous and I am wondering if there isn't something we can 
do to push back unless and until they are signatories and they 
play by the rules.
    Ambassador KIRK. First of all, Congressman, thank you for 
your cooperation with us on the other two issues. I will 
respond in writing, but I think you know we have continued to 
work with Peru to make sure that they understand that that 
Forestry Annex was real and it is in their interest and we are 
working and we will continue to.
    On GPA, one, I would be interested, and maybe I will have 
one of my staff stay, because I agree with you. But the 
fundamental premise of the government Procurement Agreement is 
if you aren't a Member of it, you don't get the benefits of it. 
So, frankly, I will be curious to hear what the gentleman from 
Intel says. But China, Russia, those countries that are not 
signatories to the government Procurement Act have no 
protection or no access to any of our access that we grant to 
other signatories.
    Now, it is an issue that we continue to press China on 
because one of the commitments they made when we granted them 
permanent normal trade status is they would join the government 
Procurement Agreement. They have tabled an offer that we think 
falls far short of what we need, but they have not yet----
    Mr. BLUMENAUER. Right, but there are examples of Chinese 
contracts in the United States that use some government funding 
that, frankly--I mean we have--the bridge in--building the Bay 
Bridge, $400 million of Chinese steel, and frankly a screwed up 
job. It was defective. It ended up costing more in the long 
run, but our being more aggressive about where they are 
beneficiaries of money either directly or indirectly that is 
taxpayer money, that we turn this spigot back unless and until 
they play by the rules for our companies.
    Ambassador KIRK. Well, I don't disagree with your premise. 
I would love to know what those specific cases are so we can--
--
    Chairman CAMP. Okay. Thank you. Time is expired.
    Mr. Paulson is recognized.
    Mr. PAULSON. Thank you, Mr. Chairman, and thank you, Mr. 
Ambassador, for being here today.
    You made some comments earlier about the working 
relationship we have with the EU and the high level working 
group I think you said that has been appointed to that and I 
appreciate those comments. That is the largest commercial 
relationship by far that exists and I would like to stay 
engaged on this issue as well and make sure we are able to 
maximize the potential in that transatlantic economic 
relationship.
    I also wanted to ask this, is that I know last June there 
was several technology companies, many that have roots to 
Minnesota actually, Best Buy, Honeywell, 3M, as well as U.S. 
Chamber and the Retail Industry Leaders Association, 
Entertainment Software Association, they filed comments with 
the USTR in strong support of your proposal to update the 
Information Technology Agreement, ITA, with the WTO, and I 
understand it has not been updated since 1996. So it does not 
include connected devices with Internet or Wi-Fi capability, 
like Smartphones, televisions, e-readers, et cetera, and these 
are hugely popular items and they are growing with consumers, 
and so if this agreement were updated, it would absolutely help 
lower duties and reduce costs for consumers.
    Can you just update me and the Committee where USTR stands 
with the WTO and the efforts to get this IT updated and what 
can the Committee, what can congress do to help disagreement 
kind of move forward and help reflect modern technological 
advances and developments?
    Ambassador KIRK. Well, thank you, Congressman, and one, I 
cannot tell you the value to our negotiators of what this 
congress did in a bipartisan way and the message you sent last 
fall in passing all of our trade agreements because, people in 
Geneva that frankly wanted to hide behind other things 
questioned our political will. There is more we can do, but, 
one, you just sent a strong message. As I told them, ``You give 
us a good deal and our congress will move on it, but there is 
never a time to take a bad deal''.
    Now, I will say that one of the things all of you asked me 
was for an assurance that we wouldn't just sign an agreement 
out of deal fatigue if we didn't get the right deal. Because we 
insisted we have a more honest approach than that. The good 
news is we now have a little more latitude, frankly, to look at 
other ways we can liberalize trade. One of the opportunities a 
number of countries, including the U.S., has embraced is a more 
honest discussion about modernizing the ITA.
    Perhaps I can follow-up so I don't take up more time, but 
we are working collaboratively with a number of countries that 
are interested in this initiative and you correctly note, this 
is one that our industry is wildly supportive of and so we will 
continue to work with you and industry to see whether we 
achieved this both in product coverage or others, but it is 
something we are very supportive of.
    Mr. PAULSON. Yes, I appreciate that. I would absolutely 
like to try and help you with it and help in any way possible.
    Let me follow-up too because you made some comments earlier 
about the biopharmaceutical and medical technology industries 
and that is obviously critical to the future of our economy 
right here in America, and these are industries that do support 
very good, very high paying jobs. They depend on the strong 
intellectual property rights and the innovation that created 
the industry, especially in the areas of drugs and devices, the 
research and development, and it comes from our workers here. 
And it is these strong IPR protections, including data 
protection, that make it commercially sustainable for these 
biopharmaceutical firms to invest so substantially.
    Do you agree in general that to encourage American 
innovation in this sector, that we need to help and make sure 
we are pressing for the same high standards and IPR protections 
in the TPP countries that are part of that structure going 
forward so we can move forward with keeping the R&D here and 
protecting that IPR?
    Ambassador KIRK. Absolutely. Yes, sir.
    Mr. PAULSON. Good. Well, I appreciate that.
    Mr. Chairman, I yield back.
    Chairman CAMP. Thank you.
    Mr. Marchant is recognized.
    Mr. MARCHANT. Thank you, Mr. Chairman.
    Ambassador, as you know, my district includes the Dallas-
Fort Worth Airport and Los Colinas. So you know how important 
trade is to my district and our region and we are privileged to 
have someone that is so familiar with that area as trade 
representative.
    We have just passed the Colombian and Panama trade 
agreements and some people are suspecting that both the 
administration and congress is going to rest on their laurels 
now and not pursue any kind of additional trade agreements in 
South America. I think in April there is a summit that is 
hosted by Colombia, a lot of American states down there. Do you 
anticipate going--having representation at that gathering and 
do you anticipate opening discussions about new trade 
agreements in South America?
    Ambassador KIRK. Absolutely. And thank you, Congressman. 
Your hometown is blessed to have a really young, dynamic Mayor 
that I think is going to have a great career as well.
    Kenny, as you know, we don't want to lapse in too much of 
our Texas pride. No state benefits from exporting more than 
Texas. We are the number one exporter and we have been. It is 
important to note that in addition to Panama and Colombia, our 
largest trading partners are still Mexico and Canada. A lot of 
the benefits are to our region, but we aren't going to rest.
    Two of the countries critical to moving the Trans-Pacific 
Partnership forward, for example, are Chile and Peru. We have a 
trade agreement with Chile, but I will be joining the President 
for the Summit of the Americas, and again, part of President 
Obama's deliberate decision to go to South America first last 
year was to begin to try to set new dynamics for increased 
trade relations between us and our partners in South America 
and the Caribbean.
    Mr. MARCHANT. And on a second note, just recently I had the 
opportunity to visit troops in Afghanistan and we had an 
opportunity to stop in Pakistan and I can tell you that they 
had a major emphasis that both the prime minister, the 
president, and the parliamentary members, their emphasis was on 
trade and could I ask you what the trade--as trade 
representative, what is being done in--as far as you said you 
are going to India, but what is being done in Central Asia, 
Pakistan specifically, in opening up trade relations?
    Ambassador KIRK. Congressman, thank you so much for raising 
this because it hadn't gotten as much attention. One of our 
more important initiatives that I referenced in my opening 
remarks is what we can do to help stabilize this region, not 
just in Pakistan. Pakistan, we would very much welcome their 
coming back to the table and frankly, that is one of the 
countries we could conclude a BIT with, for example, pretty 
quickly, but we have a broader initiative that we call MENATIP. 
It is the Middle East North African Trade and Investment 
Partnership. Recognizing one of our real challenges, whether it 
is in Egypt or Libya and others, we applaud this Arab Spring, 
but as you know, one of the challenges for their leaders is to 
show this dividend of democracy. We think we can be a partner 
with them, but we are having to tread very carefully so that 
this is seen as something that they embrace and initiate. So we 
have had teams recently in Egypt. We have gone to other trade 
partners in Jordan and Bahrain, to see how we can work 
collaboratively, because in many cases, they are constrained 
because of barriers among one another.
    So we are doing everything we can to work with them both 
bilaterally, but also pluralaterally to grow the seeds for 
increased trade and investment throughout the region.
    Mr. MARCHANT. Well, the central message from their 
parliamentary leaders was that an escalation in trade talks 
would significantly help in deescalating the tensions between 
Pakistan and our country over there. So----
    Ambassador KIRK. As you know, we have heard not just from 
them, but you have heard it from Secretary Gates and our 
military leaders, countries that generally find a way to do 
business together and find a common future in trade are less 
likely to go to war with one another.
    Mr. MARCHANT. The prime minister's message primarily was 
trade not aid. So thank you very much.
    Chairman CAMP. Thank you.
    Mr. Berg is recognized.
    Mr. BERG. Thank you, Mr. Chairman. Thank you, Ambassador 
Kirk.
    I wanted to talk a little bit about Russia and where we are 
going there, and, you know, probably the first question I have 
is a lot of our tariffs are relatively low right now, and so if 
we don't really change any of our agreements with Russia, you 
know, what would be the negative impact, the status quo, on 
business, on labor, on agriculture?
    Ambassador KIRK. Well, first of all, thank you, 
Congressman.
    If we were to grant Russia, which I hope we will, permanent 
normal trade status and lift the Jackson-Vanik restrictions, 
the good thing is not one thing is required from the United 
States. We don't have to lower our tariffs. We don't have to 
change any of our laws. This is decidedly about whether 
American businesses, farmers, small businesses, will reap the 
benefits of, frankly, all of the efforts that Russia will 
undertake to, in many cases, lower their tariffs, open up their 
service markets, begin to conform to sanitary and phytosanitary 
standards. And I want to make it plain. I know there are very 
legitimate, strong concerns on other issues, but the simple 
fact is our extending permanent normal trade relation status to 
Russia is singularly in our interest.
    Now, we do have a bilateral trade framework agreement, that 
dates back to 1992. But for us to reap the real benefits and 
not be put at a competitive advantage, I can't make it any 
plainer than the Chairman did in his remarks. This is 
singularly in our commercial interest to do this.
    Mr. BERG. What would be the big benefits for our economy if 
we did take those steps, both repealing of the Jackson-Vanik, 
as well as a permanent normal trade relations?
    Ambassador KIRK. Well, I mean, Russia is the largest 
economy of the world not in a rules-based trading system. We 
have a number of U.S. companies and interests in the Baltics 
and the region, but Russia can be, you know, the launching pad 
for further integration there. It gives us protection we don't 
have now. For example, if we have businesses there and they are 
experiencing challenges, you know, we can talk about it, but we 
don't have a lot of tools to move it.
    We think there are a lot of offensive categories, and I 
can't believe--you know, even though I'm from Texas, I really 
am a city boy--but I can't believe the whole time I spent about 
talking about agriculture. This is a huge market for us for 
pork and for grain, for those industries. In terms of 
manufactured goods, the automotive industry, aircrafts, 
technology--with all of the opportunities for joint venturing 
in energy exploration. These are great immediate opportunities 
we could reap, but, again, if Jackson-Vanik stays in place, our 
exporters, our businesses are going to be competing with one 
hand behind their back because we won't get that tariff benefit 
differential through the WTO.
    Mr. BERG. I can clearly see your passion on this, so I 
guess the question is what--you know, what are you--what is the 
administration doing to move this forward? I mean I see it is 
number three on your list here. What are----
    Ambassador KIRK. Well, as you know, we have begun to engage 
Congress on the need to do this and we will work with the 
leadership of this Committee and the Senate Finance Committee 
in particular on the appropriate time and vehicle to bring this 
up. But we have been very plain and I stated this in my remarks 
last year. This is something collaboratively we need to work to 
achieve.
    Mr. BERG. Has the President came out with a statement 
supporting the repeal and supporting the permanent relations?
    Ambassador KIRK. Yes, he did. In fact, I think the 
President referenced it in his State of the Union Address.
    Mr. BERG. Okay. Then from the administration standpoint, is 
there anything else that you are planning to do or can do to 
help remove some of the political barriers to taking this a 
step forward?
    Ambassador KIRK. Well, we have engaged the business 
community. Again, we have begun to discuss this issue with 
members. Again, there are other issues, Members legitimately 
concerned, again, but we have done everything we can to try to 
socialize the issue so that--look, many--those of us who--and I 
hate being one of those old enough to remember the debate about 
granting China PNTR. I mean, these are very, very difficult 
decisions, but we are trying to create the right environment. 
We can have it in a dispassionate way as possible and hopefully 
work with the leadership to get an affirmative vote.
    Mr. BERG. If there is things that leadership feels would be 
helpful the administration to do to this move forward, you are 
willing to help in that manner however it goes?
    Ambassador KIRK. Absolutely.
    Mr. BERG. Okay. All right. Thank you.
    I yield back.
    Chairman CAMP. Thank you.
    Ms. Black is recognized.
    Ms. BLACK. Thank you, Mr. Chairman, and again, Ambassador, 
thank you so much for being here with us. We always learn so 
much with these dialogs.
    As you know, the United States has long enjoyed a large 
service trade surplus and U.S. services firms are global 
leaders across many service sectors, especially, for example, 
business services like banking and insurance and so on. The 
average wage in these business services is substantially higher 
than in the manufacturing service. These are good jobs, and the 
business service sector alone dwarfs the entire manufacturing 
sector.
    Promoting more U.S. service exports will be important on an 
ongoing source of well-paid U.S. jobs, and that is, of course, 
something we are all looking forward to make sure that we have 
more U.S. jobs and especially those high paying jobs, and yet 
the President's National Export Initiative that is led by 
commerce appears to focus principally on manufacturing exports.
    What are you doing to ensure that the administration's 
export promotion initiative is seizing the opportunity that we 
have to generate good U.S. jobs by expanding our services 
exports?
    Ambassador KIRK. Well, thank you for your question and let 
me at least try to--not necessarily disagree with you, but 
assure you that we are as aware of the importance of the 
service industry to our economy and our exports as you. It is 
absolutely an integral part of our National Export Initiative. 
We had a meeting of the President's Export Council and trade 
policy coordinating group yesterday. We spent a large part of 
our time looking at opportunities to further expand the service 
industry.
    Our services exports are up about 21 percent since we 
started the Export Initiative. Many of our services, frankly, 
support the manufacturing industry. It is a place that we 
believe, frankly, that the numbers that we use in terms of our 
ambition for Korea are understated because we don't capture 
services data as well as we do hard goods data, but, for 
example, in Korea, you heard even their president say, this is 
a half a trillion dollar services market. It is a huge 
opportunity for us. And particularly in our Trans-Pacific 
Partnership, we have engaged with the Service Industry 
Coalition and other groups on a number of opportunities to make 
sure we are addressing their concerns in an offensive way.
    So it is something we embrace. It is an area that we have a 
surplus in just about every region in the world and we think it 
is a critical place America can help other economies meet their 
ambition while creating jobs here at home.
    Ms. BLACK. I hear you saying that you are engaging. Can you 
give me anything more specific in what you are doing in order 
to help promote the service industry?
    Ambassador KIRK. Not that they are the only group, but one 
of the strongest resources we have is the Service Industries 
Coalition, for example. We have worked with them to hold 
seminars for other countries, frankly, on how partnering with 
the United States where, frankly, we have resources and 
competencies that they may not, is not a threat to them, but it 
is a way we can jointly help them achieve some of their broad 
ambitions.
    Our WTO ambassador, Ambassador Michael Punke, for example, 
met with the Service Industries Coalition yesterday to talk 
both about some practical things we can seek, the opportunity 
we have now in Geneva to expand trade and services, as well as 
some ideas that we can incorporate into our Trans-Pacific 
Partnership.
    Ms. BLACK. And I appreciate what you are saying. I guess I 
am just not hearing from you anything specifically that you----
    Ambassador KIRK. Within the Trans-Pacific Partnership, we 
are specifically tailoring chapters that will expand and 
promote nondiscriminatory access----
    Ms. BLACK. Okay.
    Ambassador KIRK [continuing]. To our services markets.
    Ms. BLACK. Okay.
    Ambassador KIRK. I mean I am sorry if I did not make that 
clear.
    Ms. BLACK. Okay. Well, I appreciate that, and again, you 
know, jobs, jobs, jobs are so important for us here in the 
United States, but I think we have to be very aware that as 
things are different than they were years ago, and that this is 
an industry where it is good paying jobs and I don't want us to 
overlook that, and obviously manufacturing is important too, 
but as we move on in this new age of where jobs are seen as the 
jobs that are the future jobs with high paying, I want to be 
sure that we are making sure we are staying where we need to be 
in that industry.
    Thank you.
    Ambassador KIRK. Yes, ma'am.
    Chairman CAMP. Thank you.
    Mr. Reed is recognized.
    Mr. REED. Thank you, Mr. Chairman, and thank you, Mr. 
Ambassador. Just wanted to echo the sentiment from my 
colleagues, just applaud your efforts in your office and the 
recent success with Korea, Colombia, Panama. We did a lot of 
work trying to advance that cause and I just so appreciate all 
the efforts that you have done there.
    And so I wanted to go back to our future trade agenda and 
in particular Russia and the focus on Russia and bringing them 
as they move into the potential WTO establishment, and what I 
am concerned about is I am all about free trade, but it has to 
be free, fair trade, and specifically as part of Russia's 
accession into the WTO had agreed to concessions to open its 
market, such as reducing its export tariffs; however, recently 
the Russian Government has taken administrative actions that 
would undermine these export concessions. For example, a draft 
decree would cut off exports of metals, such as tin, magnesium, 
and titanium, just to name a few, key materials used by the 
steel industry and other manufacturers in my district from 
selected Russian ports. I believe that was issued in December/
January of this year.
    And I was wondering if you are aware of that action by the 
Russian Government and what your thoughts on that would be, and 
also your assurances or concerns, if any, about Russia 
complying with the potential WTO requirements.
    Ambassador KIRK. Congressman, first of all, we are aware of 
it. We are troubled by it. I hope I don't sound repetitive or 
redundant, but it is precisely again one of the reasons that we 
need to bring Russia fully into the WTO and the United States' 
exporters ought to have that protection. Right now if we don't 
lift Jackson-Vanik and grant them PNTR, you and I can talk 
about it and shake our heads, but I don't have the ability to 
take them to the WTO, as I did China. Just last week, since you 
mentioned raw materials, the very first case we filed in 2009 
was a case in the WTO that challenged China's restraints on raw 
materials that are critical to the steel industry and this was 
a case where, you know, not just the United Steelworkers, but, 
you know, U.S. Steel Company and others had come to us and 
said, ``This is harmful to us.'' We acted on it and we got a 
ruling from the WTO that validated our concerns almost 100 
percent.
    Having that in hand, that would greatly enable us to then 
challenge Russia in a more formal way if we can't get them to 
redraw these export restraints by dialog, but I would go back--
it absolutely makes the case why we would be benefited by 
having full access to all of Russia's inclusion in the World 
Trade Organization, including dispute settlement.
    Mr. REED. Well, I so appreciate that, and I so appreciate 
what you did with the China situation and also the rare earth 
and the aggressive nature and I applaud you on that effort.
    And so what I am hearing is that if we get Russia to the 
WTO in full PNTR status, that you would give me the assurance 
that if this type of behavior or these type of government 
decrees occur in the future, that we will vigorously go after 
those potential situations. Do I have that assurance from you, 
Mr. Ambassador.
    Ambassador KIRK. Yes, you do.
    Mr. REED. All right. Thank you so much.
    With that, I yield back, Mr. Chairman.
    Chairman CAMP. Thank you.
    Dr. Price is recognized.
    Dr. PRICE. Thank you, Mr. Chair. Mr. Ambassador, I want to 
thank you for your service and also for your patience today. 
You have been here for a good long time.
    I want to ask just a couple of very specific questions. The 
first is on state-owned enterprises. I think that Japan's 
interest in the TPP creates an opportunity to address a number 
of barriers to U.S. exports and investment. Issues such as 
Japan Post remind us the market dangers of government provided 
benefits in state-owned enterprises because then they create an 
unlevel playing field in those countries. You have heard others 
talk about the state-owned enterprises and the problems and 
challenges in China.
    What are your thoughts on discouraging the proliferation of 
market impacting state-owned enterprises among those countries 
with which we hope to expand our trade, with specific attention 
to Japan?
    Ambassador KIRK. Well, first of all, we share your concerns 
about the presence of state-owned enterprises wherever they are 
and I am happy to follow-up with you directly, Congressman, but 
it is precisely the reason in the Trans-Pacific Partnership 
negotiations that we are tabling for the first time a chapter 
that would deal with the disciplines of state-owned 
enterprises. We have learned from some of the lessons that we 
had with respect, say, to China and others and we have 
consulted with business and with Members of Congress and at 
least are insisting that we be knowledgeable and thoughtful 
about that and address that.
    With respect to Japan Post, this is an issue we have 
challenged Japan regularly since we have been in. I have 
visited with a number of our insurers. This is an important 
market. You may or may not know AFLAC, for example, I think 
some 75 percent of their revenue comes from Japan. You know, 
thus far, fortunately because of their own politics, they have 
not moved on that. But we have not yielded in insisting that if 
they are going to open that market up and they are going to 
allow a state-owned entity to compete, it has to be on market 
terms and nondiscriminatory terms and we will continue to 
insist on that.
    Dr. PRICE. And I hear that, the market terms again, and you 
mentioned earlier that--the two items, transparency and market 
principles. We would suggest that it is virtually impossible to 
have market principles work with state-owned enterprises, so--
and I would urge you to be very, very challenging to those 
countries that want to make it so there isn't a level playing 
field.
    One other issue I want to talk about, in Georgia we are 
increasingly concerned and remarkably frustrated by India's 
position to deny access to U.S. poultry into their Indian 
market, a market with really great potential, and although they 
use a variety of excuses and trade barriers to prohibit the 
importation of U.S. poultry, the one that they keep coming back 
to is a concern about viral disease, avian influenza, and 
although it sounds foreboding, there is no scientific basis for 
their concern.
    So I wonder what the administration has done to convey the 
use--their concern about the use of such non-scientifically 
based measures to prevent trade that is clearly inconsistent 
with the WTO, and if this continues, does the administration 
plan to seek to enforce our rights under the WTO?
    Ambassador KIRK. We are extraordinarily frustrated with 
India's continued non-application of internationally recognized 
scientific standards. Our American poultry, it is safe. There 
is no reason for them to deny us access. We have raised this at 
every opportunity we have engaged India, including past trade 
policy forums. We would continue. We have continued to press 
them. It is our practice, though, not to publicly state whether 
or when we will take legal action within the WTO.
    Dr. PRICE. Is it fair to say that that still remains an 
option that the administration is considering?
    Ambassador KIRK. It is certainly an option that is on the 
table. I think you could examine our actions in China on 
similar cases and others to perhaps lead you to the conclusion 
that you want to draw.
    Dr. PRICE. And I appreciate that. We would encourage the 
administration to move with dispatch. This has been a long, 
ongoing battle and one, again, for which there is no scientific 
evidence. Thank you so much.
    I yield back.
    Chairman CAMP. Well, thank you, and thank you, Mr. 
Ambassador, and thank you for being here for allowing all 
Members who wish to ask questions the chance to be able to do 
that.
    Senator Baucus and I wrote you and Secretary Geithner in 
January and we did receive a response regarding China's 
currency and their exchange rate policies and particularly with 
regard to the upcoming seminar and the World Trade 
Organization. I want to thank you for the response to that 
letter, and without objection, I would like to enter both 
letters into the record and just tell you again how much I 
appreciate all of your efforts and your testimony here today 
and also want to acknowledge Luis Jimenez, who I understand is 
leaving your operation and going to be heading over to the 
White House. So we expect to see him frequently in his capacity 
in Legislative Affairs there, and I know that Mr. Levin would 
also like to make a comment.
    [The insert of The Honorable Dave Camp #1 follows:]
    [The insert of The Honorable Dave Camp #2 follows:]
    Mr. LEVIN. Well, Mr. Ambassador, we really appreciated all 
of your testimony and your expertise, and if I might just say a 
word to your pal Luis. As you know, he has worked incessantly 
on these issues and has represented you and USTR and the 
administration so well. And Luis, we wish you well. As the 
Chairman said, we won't say so long since we will be seeing you 
very often.
    Mr. JIMENEZ. Thank you.
    Chairman CAMP. Again, thank you very much, sir.
    Ambassador KIRK. Thank you.
    Chairman CAMP. And now I would like to turn to our second 
panel.
    We have with us today Mr. Tim Harris, President of Harris & 
Ford, Mr. Brian Krzanich, Chief Operating Officer of Intel 
Corp., Mr. James H. Quigley, Senior Partner, Deloitte & Touche, 
and Mr. Alan Wolff, Of Counsel, Dewey & LeBoeuf.
    I've asked these witnesses to take the long view today, 
specifically with respect to new negotiations and already today 
we have addressed our relationship with China and Russia, the 
TPP negotiations, and the need for strong enforcement.
    At this point, I would like to discuss what steps we should 
be taking in undertaking new negotiations to best position the 
United States and I welcome our panel.
    Mr. BRADY. Well, I want to join with Chairman Camp and 
thank our witnesses for being here today and again looking at 
the long view specifically with respect to new negotiations and 
we reserve 5 minutes for each of the testimony.
    So, Mr. Harris, I yield to you. Thank you for being here 
today.
    Mr. HARRIS. To Chairman Camp and Ranking Member Levin and 
Members of the Committee, I am Tim Harris, cofounder of Harris 
& Ford, a distributor based in Indianapolis, Indiana, and 
again, I thank you for this opportunity to allow me to present 
our views on U.S. trade policy.
    When I look at Harris & Ford, Harris & Ford we are, again, 
a distributor. We focus in food, pharmaceutical, cosmetics, and 
the industrial marketplace. We started out on two empty paint 
pails that the painters left behind, didn't really have money 
for furniture or anything else, and I remember walking in, 
seeing those two empty paint pails and I said to my partner, 
Joe Ford, I said, ``Man, thank God we got furniture,'' and he 
said, ``Where do you see furniture?'' And I said, ``Man, where 
I came from, Joe, that is furniture.''
    When we started out, we didn't have very much. We had an 
idea. We had experiences, but companies like Procter & Gamble 
opened up their doors and allowed Harris & Ford to distribute 
their products, yet and still most companies, both suppliers 
and customers, were reducing their distributor base. So what we 
had to do, we had to create a niche. We had to find a way into 
the marketplace and the way that we did that was we created 
what we called a consolidation model. Did it first with 
Pillsbury where we were able to go into plants and they 
eliminate 210 suppliers in favor of Harris & Ford. I should say 
consolidate those.
    We went from distributing products in the U.S. to traveling 
abroad with, again, multibillion dollar companies of the likes 
of Coca-Cola, traveled to China and begin to import products 
like saccharine sweeteners, ascorbic acid, of course vitamin C, 
citric acid, and other products that were used as preservatives 
for primarily food and cosmetics.
    As time went on, we seen that our customer base, a lot of 
their growth market was overseas or offshore to India, to 
China, to South Africa, to Europe, et cetera, and what we did, 
we went from having our model that we used just domestically to 
employing that internationally.
    Let me just say to you right now, Harris & Ford went from 
sitting on those two empty paint pails with zero customers and 
now Harris & Ford is about a $200 million distributor. Harris & 
Ford sells to North America, Central America, Western Europe, 
Asia, as well as the Middle East. There are 27 countries that 
we export product to, 18 companies that we import product from.
    When I look at Harris & Ford, and again trying to be very 
concise here, and I think about the U.S. trade policies, 
countries where it is easy to work in, countries where it is 
difficult for us to work in, there is three points that I would 
like to leave with the Ways and Means Committee here. First of 
all, in the countries where you set the rules of engagement, 
where the rules are like the U.S. rules, like Mexico, like 
Canada, it is easy for us to do business in those countries, 
much more difficult in countries like Brazil, Argentina, and 
China, Saudi Arabia. So one thing we are asking that you set 
the rules of the road.
    Secondly, I want you to understand that we are just one 
link in the supply chain and when you help our customers win, 
the Krafts, the Procter & Gambles, the Coca-Colas, if business 
is easy for them to do offshore, it makes it easy for us to do 
business with them as well.
    Third, and final, I would like to say again that a lot of 
companies that export are the same companies that import. I 
heard Representative Kirk express some concerns about China 
pirating. I heard some concerns about assets being taken from 
U.S. companies over in China. And it is much easier if we work 
with a company like Procter & Gamble that carries us there with 
them and do business with them. It is much easier. It is much 
safer.
    So, again, I would like you to consider the statements that 
I made and I thank you for your time.
    Chairman CAMP. Thank you, sir. Your full statement will be 
put in the record.
    Mr. HARRIS. Thank you.
    [The prepared statement of Mr. Harris follows:]

    [GRAPHIC] [TIFF OMITTED] 


    Congressman BRADY. Mr. Krzanich.

 STATEMENT OF BRIAN KRZANICH, SENIOR VICE PRESIDENT AND CHIEF 
              OPERATING OFFICER, INTEL CORPORATION

    Mr. KRZANICH. Thank you, Congressman Brady, Members of the 
Committee. I appreciate the opportunity to appear here before 
you today and discuss the future U.S. trade policy.
    Intel is a Fortune 50 company, a leading manufacturer of 
computer communications and networking products. We have 
approximately 100,000 employees worldwide, with more than half 
of those in the U.S.
    Even during strained economic climate, Intel has continued 
to invest in the U.S. to stimulate economic and job growth.
    Since 2009, the company has announced plans to build two 
new factories in Oregon and in Arizona, and update its existing 
manufacturing facilities in those two states and in New Mexico.
    These projects required an investment of between $18 and 
$20 billion and are underway currently.
    When we complete these projects, we will have created more 
than 15,000 construction jobs, and we will have created and 
maintained thousands of permanent jobs, all of which are 
sustained by overseas sales of our products. Trade is important 
to us.
    While Intel manufacturers three-quarters of its products in 
the U.S., it generates more than three-quarters of its revenue 
from overseas.
    Our ability to export and sell to 95 percent of the world's 
consumers living outside the U.S. has led to record earnings 
during these turbulent times.
    In fact, microprocessors have been the leading U.S. export 
when averaged over the last 5 years. However, many U.S. 
industries, not just ours, are highly dependent on market 
access overseas to create and maintain domestic jobs.
    Robust free trade agreements are essential to market access 
and continued growth.
    I want to briefly make three points today in support of the 
need for the U.S. Government to pursue a more ambitious trade 
agenda. Each of these points is discussed in detail in our 
written submissions.
    My first point is that existing trade agreements need to be 
expanded. Too many key markets are subject to too few existing 
trade rules. I have several brief examples.
    The WTO information technology agreement or the ITA, has 
dramatically increased U.S. exports by eliminating Custom 
duties in many countries on a range of technology products that 
were in existence at the time it was negotiated.
     Mexico, Brazil and several other notable countries are not 
ITA Members. They are not signatories of the ITA.
    Many of the digital products developed in the last decade, 
such as multi-processors, video game consoles, DRAMs, are not 
covered by the ITA.
    The Information Technology and Innovation Foundation 
estimates that the ITA expansion would increase direct U.S. 
exports by $2.8 billion, boost U.S. revenues by over $10 
billion, and support an estimated 60,000 new jobs.
    Intel strongly supports the administration's recent efforts 
to begin negotiations to expand Membership and product coverage 
on the now 16 year old agreement.
    My second example, a more broad example, is the need to 
expand the existing agreements to pertain to government 
procurements, which we heard this morning limits companies on a 
significant share of the global economy.
    Yet none of the BRIC countries are Members of the WTO 
government procurement agreements or the GPA, which prohibits 
discrimination against foreign suppliers. This has enabled 
China, India and Brazil to pursue measures designed to favor 
local suppliers, especially those in the electronic sector.
    The U.S. Government needs to find a way to incentivize 
other large governments to join the GPA with similar 
transaction coverage.
    The second major point I would like to make this morning is 
the U.S. Government must enter into additional robust trade 
agreements on an accelerated basis.
    Trade flow data shows how important FTAs are to the U.S. 
economy. Trade agreements between the U.S. and 17 countries 
accounted for 41 percent of the U.S. exports in 2011, even 
though these countries represent only 7 percent of the world 
economy.
     U.S. exports to every single FTA partner country have 
increased dramatically after these agreements were implemented. 
U.S. exports create and sustain U.S. jobs.
    Robust FTAs open up new markets to our exports and reduce 
the cost of doing business overseas. We need more FTAs to 
create more U.S. jobs.
    Yet the U.S. has not kept pace with other countries in 
opening new markets abroad, especially in the fast growing 
economies of Asia and Latin America, and they are now major 
engines of global growth.
    As the global competitiveness increases, our pace to 
increase market access for U.S. goods and services needs to 
accelerate.
    My third major point and my final one, the U.S. government 
must use a variety of mechanisms to tackle more complex non-
tariff barriers.
    Some governments are linking more traditional NTBs, such as 
local content measures, with new entities that promote 
discriminatory technology standards and favor domestic 
intellectual property rights, all with the objective of 
creating national manufacturing champions and increasing 
indigenous innovation.
    Mr. BRADY. Mr. Krzanich, I apologize. Time has expired. I 
would like to come back to your points during the questioning, 
if I may. Thank you, sir, and welcome.
    [The prepared statement of Mr. Krzanich follows:]

    [GRAPHIC] [TIFF OMITTED]                                  

    Mr. BRADY. Mr. Quigley.


  STATEMENT OF JAMES H. QUIGLEY, SENIOR PARTNER, DELOITTE LLP

    Mr. QUIGLEY. Thank you, Congressman Brady. I appreciate the 
chance to testify here before the Committee on the future 
directions of international trade policy and negotiations.
    I have submitted a written statement and I ask that be 
included in the record of the hearing.
    My name is Jim Quigley. I am a senior partner of Deloitte 
LLP, and prior to that role, I was the chief executive officer 
of Deloitte Touche Tohmatsu Limited, a global network of 
Deloitte Member firms around the world that provides services 
in 153 countries. We definitely have an interest in your work 
on trade.
    This hearing is both important and timely because there is 
no more significant issue facing our Nation than the need for 
economic growth and jobs.
    Trade negotiations to open markets and strengthen the rules 
of fair international competition are a critical component of 
the policies needed to address growth and employment.
    Deloitte has long supported the multi-lateral trading 
system and like many others, we had hoped for a successful 
conclusion of the Doha development round of negotiations with 
agreement on a broad market opening package for services, 
manufactured products and agriculture. Unfortunately, this 
appears to be beyond the reach of negotiators in the 
foreseeable future.
    Although the suspension of the Doha round is disappointing, 
it does give us an opportunity to reassess our negotiating 
objectives and launch some initiatives that might prove more 
successful in the immediate timeframe.
    Over the past few years, I have had the good fortune to co-
chair the Transatlantic Business Dialog and over the past 
several months, I have served as a Member of the Transatlantic 
Task Force on Trade and Investments, sponsored by the German 
Marshall Fund of the United States and the European Center for 
International Political Economy.
    Both have recently articulated their visions for the future 
of global trade and investment built on a strong transatlantic 
platform.
    This makes both good political and good economic sense. The 
U.S. and the EU already have the largest trade and investment 
relationships in the world.
    We enjoy relatively similar wage and benefit structures and 
labor rights and worker protections. We have common concerns 
about the environment and the health and safety of our 
citizens, and we have generally robust intellectual property 
protections, and we have a shared view of the global trading 
system based on free markets and fair competition.
    Given the level of integration that already exists, we have 
an opportunity to raise the transatlantic relationship to a 
whole new level, a real partnership for jobs and growth.
    In this connection, I hope the high level working group 
that Ambassador Kirk earlier referenced that is co-chaired by 
him and Commissioner DeGucht will set an ambitious agenda, 
constrained neither by old trade concepts, such as FTAs, nor by 
past issues where agreement has proved elusive.
    We should strive for a truly barrier free transatlantic 
marketplace. This could bring enormous benefits in three ways.
    First, it would add hundreds of billions of dollars to our 
economic output, more than $120 billion from the removal of 
tariffs, and more than $210 billion from the removal of even 
half of the non-tariff barriers.
    This is to say nothing of the potential gains in the 
service sector.
    Second, it would also allow us to tackle issues that are 
significant to business in the 21st century that have not been 
addressed or only timidly addressed in multilateral 
negotiations, such as services, information flows, government 
procurement, the movement of talent, product and service 
standards, and regulations, to name some of the prominent few.
    Third, it would set the stage for engaging other countries 
in more productive negotiations.
    Success on the transatlantic front might draw other 
countries into negotiations so that their companies can remain 
competitive in a transatlantic marketplace, and others might be 
encouraged by seeing that new and innovative solutions can be 
found to difficult issues.
    Negotiations between the U.S. and the EU to achieve these 
objectives should not be pursued as a single undertaking where 
success in one area is dependent on success in all others.
    Negotiations should seek positive outcomes in each area at 
whatever negotiating pace is possible. Forward movement should 
not be stymied by attempting to resolve up front all those 
difficult issues that have proven intractable in the past.
    The goal here is not to build a transatlantic fortress. 
Quite to the contrary, we should use progress in the 
transatlantic space to engage third countries and pave the way 
for broader trade liberalization and economic cooperation in 
services, investment regulation, and other areas I mentioned.
    Our objective here should be forward movement on a broad 
front but rooted in the transatlantic commitment to a trading 
system based on free markets and fair competition.
    Stalemate serves no one's purpose and certainly will not 
lead to growth and employment that our economy and others so 
desperately need.
    Thank you again for the opportunity to express these views, 
and I would be happy to respond to questions.

   [The prepared statement of Mr. Quigley follows:]

    [GRAPHIC] [TIFF OMITTED] 


    Mr. BRADY. Thank you, Mr. Quigley.
    Mr. Wolff, welcome.

    STATEMENT OF ALAN WOLFF OF COUNSEL, DEWEY & LeBOEUF LLP

    Mr. WOLFF. Thank you very much, Mr. Brady, Mr. Levin, 
Congressman Camp, other Members.
    I started my education on trade in this room 42 years ago, 
and it is continuing today.
    I have for the record a longer written statement plus an 
attachment from the National Foreign Trade Council on trade 
objectives going forward.
    A couple of points I would make at the outset. One is we 
have come through a major financial crisis and recession 
without the trade world collapsing, so actually our trade 
agreements work in a broad sense.
    We have heard a lot about complaints today, and we have a 
lot of complaints, but in fact, overall, protectionism has not 
surged, which is amazing.
    We have a negotiation underway in TTP (the Transpacific 
Partnership), which is really very vibrant. It is a great 
opportunity. It may be very well the template for all future 
trade agreements.
    We have a positive development with the President's 
initiative with respect to trade agreement enforcement, which 
we hope works out well.
    You, Mr. Chairman and Ranking Member Levin, have introduced 
legislation to fix a hole in our countervailing duty law with 
the Court making a mistake in the GPX case. The amendment would 
allow the commerce department to countervail, again, against 
subsidies from China.
    The rest of the story is far more troubling. The point I 
would emphasize most is the role of state owned enterprises in 
international trade. It has been brought up by several Members 
today.
    In this regard, most of the examples that are mentioned are 
from China. Wind energy equipment of foreign companies declined 
in sales in China from 75 percent of the market to 10 percent 
of the market in 5 years, 2005 to 2010. The causes of that 
decline were first that the purchasers were state owned 
enterprises but there were a variety of other measures.
    State owned enterprises are not only a China problem. 
Chairman Camp and Mr. Price mentioned that Japan continues to 
be a significant problem with respect to the ability of 
Americans to sell financial products. There is discriminatory 
regulation. There is no level playing field. These factors also 
affect express delivery services.
    If we do not cure the problem with Japan Post, we will have 
the same problem in India, we will have the same problem in 
China, we need to cure the state owned enterprise problem, and 
TTP as Ambassador Kirk mentioned has a chapter which I am told 
looks very good in this regard.
    Services negotiations. Brad Jensen for the IIE estimates 
that there are three million additional jobs in business 
services that would occur if we can open up foreign markets.
    We have a lot of problems with respect to information 
technology that Mr. Krzanich mentioned, and cross border data 
flows. Food security is being addressed in the wrong way in 
Geneva by countries wishing to put on more export restrictions 
rather than fewer.
    We have dead letter provisions in the GATT. The currency 
provision (GATT Article XV) not used. The transparency 
provision (GATT Article X) is not really used. The TRIPs, 
(Trade Related Intellectual Property) provisions, are not 
effective because performance is not measured in results, it is 
measured in process. Process is not good enough.
    We are losing many billions of dollars as you all know with 
respect to losses due to loss of protection of IP under TRIPs.
    We need to reinvigorate the WTO. We need to make sure TPP 
lands safely as soon as possible.
    I would like to make a pitch since most Republican 
candidates at least, (I am not sure the President does) carry 
the Constitution in each of their pockets, that Article I 
states that actually the buck starts here, and trade promotion 
authority, I think, has to be made permanent, and the debate to 
do so should start now. The guidance as to what is to be done 
with it has to come from this Committee.
    You in this Committee and in this Congress have to set the 
objectives, and I think you should set them every 4 years for 
every Administration.
    There is a lot to be done with respect to trade law 
enforcement, and in my remaining 5 seconds, I would just say we 
do not have the intelligence and analytical capability devoted 
to foreign trade barriers that allow us to set trade policy 
correctly or trade negotiation objectives correctly.
    We are operating in the dark, and we need to put resources 
into understanding the barriers that American exporters face.
    Thank you very much.
    [The prepared statement of Mr. Wolff follows:]

    [GRAPHIC] [TIFF OMITTED] 

    Mr. BRADY. Mr. Wolff, thank you. Thank you for all the 
testimony. I want to begin by reiterating the point Chairman 
Camp and I made at the initial portion of this hearing which is 
what we truly want to invite all interested stakeholders, job 
creators, in addition to the witnesses here today in giving 
recommendations to this Committee for the record on where we go 
next.
    I cannot emphasize how interested we are in hearing your 
views on what is next for trade policy for America.
    I want to thank the witnesses for raising the issue of non-
tariff barriers, what we are finding in the 21st Century global 
marketplace is it is not enough simply to bring down the 
tariffs and the quotas. We often find there are locked doors 
beyond that making it difficult for us to sell and compete.
    We also discovered some of those non-tariff barriers are in 
essence like trying to put an American plug into an European 
socket. Different standards, different regulations in 
telecommunications, technology, financial services, security, 
and food safety. All those block our ability to sell our goods 
and services around the world.
    Thank you for the emphasis on that. It needs to be part of 
our 21st Century approach.
    I want to ask a specific question of each of our panelists 
about trade facilitation, and what we have learned since the 
global trade flows decreased significantly in 2008 and 2009 was 
moving goods cheaper, faster, and better around this world is 
critical to trade, competition and lower prices.
    Yet, there are a number of barriers to that. I know in the 
developing countries, we are seeing great interest in the WTO 
and trade facilitation. We see developing countries like Africa 
who have an interest in trade facilitation as a means of 
reducing the costs of doing business among themselves as well 
as their trade partners.
    My question is how would a new trade facilitation agreement 
affect your ability to sell throughout the world and to create 
jobs here in the United States, and what barriers do you see as 
the most significant that will be part of that discussion?
    Mr. Wolff, why don't we start with you.
    Mr. WOLFF. Many of the Members of the National Foreign 
Trade Council are amongst the largest trading companies in the 
world, global companies. Moving goods across borders is still 
all too difficult.
    Tariffs have come down a lot in most places, not every 
place, obviously. Customs' procedures are still a real problem, 
and if we are going to salvage anything out of the Doha Round, 
one of the major things to salvage is the agreement on trade 
facilitation. It actually would promote development. The Doha 
development agenda could be made real with an agreement on 
trade facilitation.
    I know Ambassador Kirk is pushing this issue very strongly 
as well in TPP. It means a lot to American business.
    Mr. BRADY. Thank you, Mr. Wolff. Mr. Quigley.
    Mr. QUIGLEY. I think anything we can do to reduce the 
amount of friction in the pipe is obviously going to increase 
its throughput.
    We are strong supporters of the idea of standards, mutual 
recognition of those standards, and then fair enforcement in 
order to promote fair competition.
    Trade facilitation absolutely can increase our exports and 
the amount of global trade that we have. That becomes the 
engine of jobs and growth.
    Mr. BRADY. Thank you, Mr. Quigley. Mr. Krzanich, you made 
the point you are manufacturing here but selling and exporting 
around the world. Trade facilitation is key?
    Mr. KRZANICH. Yes, sir, Mr. Brady. As I mentioned, most of 
our product is manufactured in the U.S., 75 percent, but 75 
percent of our revenues from outside trade agreements give us 
access to 95 percent of the consumers that lie outside the U.S.
    Trade agreements are critical to our access to markets at a 
fair and even cost.
    Mr. BRADY. Thank you. Mr. Harris, you are a distributor. 
Obviously, you have to get the product to the customer. Trade 
facilitation an important part of what should be America's new 
trade agenda?
    Mr. HARRIS. Very important. I think two of the areas where 
we see we could benefit is relative to the tariffs, if the 
tariffs were removed. The second area is relative to Customs. 
Somebody mentioned that.
    A company like Harris & Ford, we filled out paperwork or we 
actually had our expediters fill out paperwork, and they had a 
``1'' instead of a ``3.'' We found it, corrected it. We were 
fined $78,000 on one transaction. On that particular product, 
there was zero duty on that product.
    Mr. BRADY. Apparently we found a new way to balance the 
budget here in Washington.
    Mr. HARRIS. I think so.
    [Laughter.]
    Mr. BRADY. Grant Adonis, former trade leader at USTR, made 
the point that time is a trade barrier, and we need to focus on 
real 21st Century means to decrease that time, that cost, and 
we will create jobs in America as a result.
    Thank you very much. I would like to yield to Ranking 
Member Levin.
    Mr. LEVIN. Thank you. Welcome.
    Mr. Wolff, you talked about the need for more resources, 
especially in language. I hope this new proposal of the 
administration will lead to that. They are asking for more 
resources. We will see if they are given that.
    Mr. Harris, your story is a story that should be heard by 
small businesses and medium sized businesses throughout the 
country because, while they are important in terms of trade, 
too few still participate. That has been a problem for a long 
time.
    Let me just zero in on a couple of other issues. I just 
have a couple of minutes.
    Mr. Quigley, let me just talk to you about services. Within 
WTO, services' negotiations really never got off the ground. I 
think that is a fair characterization. It kind of went up in 
smoke.
    What do you think? How do we do it better but differently?
    Mr. QUIGLEY. There is no question there is a huge 
opportunity that simply has not been looked at, when we look at 
the scale of services in our economy and the opportunity that 
is there in a global marketplace.
    Moving that up the agenda and then trying to advance 
something as we have advocated in a transatlantic way as a 
starting place, and then invite other countries to join an 
agreement that we might be able to reach between Europe and the 
U.S., I think, would be an important first step.
    Mr. LEVIN. You think there is reality to that in terms of 
discussions with the Europeans?
    Mr. QUIGLEY. I do indeed. I think we have a mutual 
opportunity that we should not squander, if the U.S. and Europe 
as this huge market that we represent when we work on a 
combined basis, if we want to influence the future direction of 
trade negotiations, we need to come together.
    I believe that the high level working group that has been 
formed and this notion of a vision for the 21st century gives 
me hope that in fact we can engage on these issues and advance 
the ball.
    Mr. LEVIN. Mr. Krzanich, you were somewhat optimistic in 
terms of relations with China. On page ten, you talk about a 
number of the JCCT commitments that have been implemented, but 
then there are others that have not, so the administration may 
want to carefully track the completion of the Chinese 
commitments made to date.
    I am not sure, I am thinking back when there was 
competition between our high tech industries in Japan, and the 
difficulties that we had to barriers.
    Do you face similar problems in China? I am not clear from 
your testimony. How free are you to work there, to trade there, 
to feel protected there? You are such a vital industry.
    I may be putting you on the spot. If there is a conflict 
there in terms of your proprietary interests, do not answer 
beyond what you should, but just in the minute or two I have 
left, describe what it is like.
    Mr. KRZANICH. I would say that one of the major concerns 
that we have is that China has listed semiconductors as one of 
their strategic industries. You see them putting together 
programs and policies that really favor and try to establish 
this industry.
    That puts pressure on us around intellectual property 
protection, and then also it started to creep into other areas, 
of our ability to do trade in that area as well.
     Them picking out semiconductors as a growth and a 
strategic industry has become one of the issues for us.
    You asked how free are we to do business there. We have 
been able to do business very well there from the standpoint of 
being able to get our product in and out of there and being 
able to manufacture, and we do have manufacturing in China, but 
we continue to see pressure on their part to get access to that 
intellectual property that resides there, and we are finding 
that we are having to be more and more careful about how we 
manage that.
    Mr. LEVIN. Do you expect the U.S. Government to be helpful 
to you? Even companies as large as yours probably cannot do it 
alone. You need a vigorous USTR and governmental presence to 
help you.
    Mr. KRZANICH. Yes, it is critical that Government helps us 
remain having access to those 95 percent of consumers outside 
the U.S., and helping us break down these non-tariff barriers, 
the ones where governments employ standards that favor local 
contents.
    Mr. LEVIN. Thank you.
    Mr. BRADY. Thank you. Mr. Herger is recognized.
    Mr. HERGER. Thank you, Chairman Brady. I would like to ask 
a question of each of our panelists. With the Doha round at an 
impasse, what WTO initiatives would be the most beneficial to 
you? Beginning with you, Mr. Harris.
    Mr. HARRIS. I think I will have to pass on that. I cannot 
answer that.
    Mr. KRZANICH. I do not know if I know exactly which of the 
WTO initiatives would be best. You are asking for specific 
initiatives.
    I think anything that continues to lower the trade barriers 
and these non-trade tariffs that are being applied by 
governments is good, but I do not have specifics beyond that, 
sir.
    Mr. HERGER. Thank you. Mr. Quigley.
    Mr. QUIGLEY. Our recommendation given the fact that we are 
a decade in and we seem stalled is that we move on. The way we 
recommend moving on is let's look at U.S. and Europe and what 
can we do together in terms of that huge platform that we 
represent, and if we can build some principle based standard 
approaches to some of the matters that have become so difficult 
on the Doha round, and then other countries decide they want to 
join, to participate in this U.S./Europe market, now we have 
the U.S. and Europe driving standards, driving for mutual 
recognition, driving forward and facilitating trade.
    That is our recommendation, that we move on, and we move on 
with our partners in Europe, and let's make something happen in 
a bilateral way that will then lead to plural lateral kinds of 
agreements.
    Mr. HERGER. Thank you. Mr. Wolff.
    Mr. WOLFF. Three possibilities exist currently, I think. A 
services agreement among a coalition of the willing. There are 
meetings going on in Geneva now among those countries, about 20 
countries, that believe they can get something done in Geneva 
on services, to see whether it be done with full participation 
of all the WTO Members, it could become a WTO agreement.
    Under GATS, the General Agreement on Trade in Services, 
there is the possibility of having less than most favored 
nation treatment, so one can have an agreement in the WTO that 
does not apply to everybody, just those who are willing to 
play.
    Second, an expanded ITA, the Information Technology 
Agreement, there is sentiment to go forward with that.
    Third, an agreement on Environmental Goods and Services 
would benefit all countries. Going to zero tariffs. In 
addition, an agreement on trade facilitation, as mentioned 
earlier. What is not possible in Geneva, we will do in TPP, and 
TPP will become the template for what happens in WTO later.
    Mr. HERGER. Thank you.
    Mr. BRADY. Thank you, Mr. Herger. Mr. Davis is recognized.
    Mr. DAVIS. Thank you, Mr. Chairman.
    I would like to touch on a question that I opened up with 
to Ambassador Kirk. I would like to talk about the impact of 
Federal regulations on your ability to export, more 
specifically in the area of manufactured goods.
    MAG, a very successful machine tool producer that is 
located in my district, and a systems company, has a tremendous 
amount of their success tied to international business.
    In fact, a very large portion of their business portfolio 
is export of products internationally. It creates a tremendous 
amount of jobs in the automotive, aerospace, and industrial 
equipment industries.
    According to MAG, obsolete Cold war export regulations 
significantly limit their export market. For example, the dual 
use technology question that is largely outdated right now, 
particularly in the area of machine tool manufacturing.
    For example, five axis metal cutting machine tools continue 
to be tightly controlled by the Federal Government. However, 
this technology is now available as a commodity worldwide, 
putting U.S. suppliers at a severe disadvantage.
    There are now at least 13 Chinese machine tool builders 
building five axis machines that as a matter of policy, the 
Aviation Industry Corp. in China will only commit to a maximum 
of ten percent of its import purchases to the U.S. machine tool 
industry due to the U.S. export policy for five axis machine 
tools.
    This puts European competitors at an immediate advantageous 
position to capture the rest of the market share in the fastest 
growing market in the world.
    MAG informs me that they could increase their annual 
machine take output in Northern Kentucky and the commensurate 
job creation associated with this by 30 percent, creating many 
new jobs, focused on export, because of this approval process 
if it were to be modernized.
    From your view, how do U.S. regulations impact your ability 
to compete in international markets, and what should we as 
Congress be doing to ease any regulatory burdens that companies 
experience?
    I would just open it up to the panel in general.
    Mr. WOLFF. The National Foreign Trade Council spends a good 
deal of its time on export control matters and sanctions. The 
controls and sanctions really have to be multilateral, not 
unilateral to be effective. If something is available generally 
from other sources, it must not be restricted from the United 
States.
    We are concerned about national security, but we also have 
to be concerned about our industrial base. Our industrial base 
is impaired if goods are generally available from other places 
and we are the only country restricting the exports.
    Mr. DAVIS. Would anybody else care to comment?
    Mr. KRZANICH. I will comment. I think you made one very key 
point in that many of those regulations and rules were defined 
a long time ago when those technologies were unique or at a 
different level of acceptance or availability.
    We see some similar trends in our industry as well, as 
competing power becomes higher. Things that were considered 
super computers before are available on your desktop and 
eventually in your palm of your hand.
    We also see things like radiation hardness, where we start 
to shrink geometries and just make things smaller. Things 
become just naturally more radiation hardened.
    Some of those regulations need to be updated for what the 
current trends in technology are.
    Mr. HARRIS. I am just going to make the comment that again 
at Harris & Ford, we are the small business represented here. 
Thirty percent of the products we purchase are from overseas, 
the majority of that by far is from China. As far as the 
exports, there is a disproportionate amount of exports versus 
imports.
    Anything that you can do that lowers the barriers for our 
customer base enables Harris & Ford to be able to participate, 
and particularly, I am thinking in China, because that is where 
our imbalance is.
    Mr. QUIGLEY. I would just comment very quickly, Deloitte is 
not a manufacturer, but from my Transatlantic Business Dialog 
approach, what we have often times aspired to this barrier free 
market between the U.S. and Europe, and when it comes to these 
issues, we always advocate the notion of can we establish 
global standards and with global standards, have mutual 
recognition of those standards, and with that mutual 
recognition of those global standards, then create a barrier 
free market, where growth can in fact occur.
    Mr. DAVIS. Thank you very much. Mr. Chairman, I yield back.
    Mr. BRADY. Thank you, sir. Mr. McDermott is recognized.
    Mr. MCDERMOTT. Thank you, Mr. Chairman. Mr. Krzanich, we 
pass laws here and the Government tries to do things to help, 
but I would like to have your assessment of at least one thing 
that has been tried.
    I understand you have a serious problem with counterfeit 
chips being imported into the United States. The National 
Defense Authorization Act of 2011, the NDAA, included a 
provision to ensure that Customs can work with rights' holders 
such as Intel, to more effectively identify and combat IPR 
infringing products.
    In the State of the Union, the President made clear that 
beefing up IPR enforcement at the Border will be a top 
priority.
    Would you agree with that, that the implementation of the 
NDAA provision is one way they can do that, and are you working 
with the administration to make sure that happens?
    Mr. KRZANICH. The simple answer is yes. Enforcement of 
those counterfeiting rules and having the Custom agents being 
able to enforce them at a stronger level is good. Yes, we are 
working with the administration.
    Counterfeiting is much broader than products just working 
their way back into the U.S. Remember, I said 95 percent of the 
consumers are outside of the U.S., 75 percent of our revenue is 
from outside the U.S.
    It is really much more global than that, and what we really 
need to do is really focus on externally as well.
    It is counterfeiting going on in China and those products 
are probably never coming back into the U.S., but they are 
being sold throughout the world, and really having all of the 
countries enforce these counterfeiting rules and regulations.
    Mr. MCDERMOTT. If they present to you some chips and say 
these are coming from somewhere, do you have some way to make 
sure those chips are not your chips? How do you work with 
Customs in dealing with that?
    Mr. KRZANICH. Yes, sir. We have a system. Think of it as 
like a bar code that every part has, that is unique to that 
part. It is generated during the manufacturing process, and 
tells us exactly the identity, where it was manufactured, what 
date, all that kind of information.
    When Customs hands us a part it questions whether it is 
counterfeit or not, we can tell almost immediately now whether 
it is counterfeit or not.
    Mr. MCDERMOTT. It is not reproducible by somebody else and 
putting it into another part?
    Mr. KRZANICH. No. We would know, it is unique to that part 
and it has a unique generation code. It is not a simple number 
like you could understand otherwise.
    Mr. MCDERMOTT. You are saying the biggest problem is not 
parts coming in here, but really what is going on----
    Mr. KRZANICH. I am saying it is a global issue broader than 
just the U.S.; yes.
    Mr. MCDERMOTT. How can we be helpful in the global issue?
    Mr. KRZANICH. I think it is back to the discussion that we 
have had all morning here in this session and the session prior 
as well, around really having the government help us with 
protection of intellectual property rights in all of these 
countries.
    All of this is around--whether it is counterfeit parts or 
counterfeit software or counterfeit products in general, it is 
around support of intellectual property rights.
    Mr. MCDERMOTT. Can it be done in a country that does not 
want to put the hammer down on those people who are making 
counterfeit things? We are talking about China here. Obviously, 
there are lots of other places.
    Mr. KRZANICH. I think it has to be tied to broader 
initiatives. You are right, probably just this initiative on 
its own would not be enough to get them to move.
    When you tie it to other trade efforts and make it broader 
than just this one, access to our markets, teaming with other 
countries that have intellectual property to protect as well, 
and access to those markets, I think you can incentivize them 
that to play in this global economy, you have to play by a 
certain set of rules, and that includes protection of 
intellectual property.
    Mr. MCDERMOTT. Do you think as the Chinese move up the 
scale of manufacture from fabric and bicycles and now they are 
getting into electronics, that they will have more interest in 
this kind of enforcement?
    Mr. KRZANICH. Just my own observations from my time in 
China, I would say yes, you see less counterfeit as you travel 
the streets of China.
    I think also any country that as you start to develop your 
own intellectual property, you start to become more and more 
interested in intellectual property protection.
    I think there is a natural evolution that will occur as 
well; yes.
    Mr. MCDERMOTT. Thank you very much for your testimony.
    Mr. BRADY. Thank you. Chairman Camp is recognized.
    Chairman CAMP. Thank you. Mr. Wolff, you mentioned 
permanent Trade Promotion Authority and that this Committee 
should establish some guidance, and there should be objectives.
    What kind of things did you have in mind?
    Mr. WOLFF. I sat through 2 years here when the first Trade 
Promotion Authority was put through. The House actually passed 
you, Mr. President, can change any law subject to just an 
override, and the Senate said we are not doing that, we are 
going to have fast track.
    I think executive agreements need domestic implementation 
for trade, similar to treaties. Our treaty power, the way we 
handle treaties is in the Constitution and is permanent. There 
is a mechanism for doing it.
    That does not mean there should not be checks and balances 
within the committee structure to make sure that any agreement 
that comes through gets scrutinized and approved.
    I think the objectives have to be upgraded and changed 
regularly, and if the objectives are not met, they would not 
qualify for this permanent fast track in effect.
    Namely, you have heard here today new issues, the cross 
Border data flows, information technology products that are no 
longer adequately covered by agreements.
    We have now very outdated--not all of them but many of 
them--objectives in existing law. We are pretending, at least 
the administration is pretending that the procedures exist.
    I would say put the procedures into place, put them in 
permanently, and update the objectives at least for every new 
Administration, no less than frequently than that.
    Chairman CAMP. Thank you. To our other witnesses, obviously 
bilateral trade with India and Brazil has grown rapidly in the 
last few years. They are important markets for our exports and 
also for services.
    There are practices that have been occurring in both of 
those countries, and certainly in China, as we had been talking 
about earlier today, but the Indian and Brazilian markets as 
well but in a different context.
    What do you think about these protectionist policies? What 
effect do they have in our ability to enter into and sustain 
business in those markets, and what should we do about it? 
Should we pursue bilateral investment agreements or should we 
negotiate around them with others who are interested or both?
    Mr. Harris, why don't I start with you, and we can just go 
down the line.
    Mr. HARRIS. Again, in speaking with our staff that handles 
that part of Harris & Ford, as I mentioned earlier, it is more 
difficult for us to work with Brazil than Mexico or Canada.
    If we could extend something similar to an agreement where 
you, the House here, the Ways and Means Committee sets the 
rules, that will make it easier for Harris & Ford to do 
business with Brazil.
    The paperwork with Brazil is a nightmare for a small 
company compared to Mexico or Canada.
    Chairman CAMP. All right. Mr. Krzanich.
    Mr. KRZANICH. I think you stated the problem very well. I 
would like to say countries like Brazil are some of our fastest 
growing markets now for our industry as well.
    I think the time is now to try to institute these kinds of 
programs. Their markets are not as developed and as big as say 
China, for example. They do not have the large internal market 
that they can capitalize on as well.
    I would say the answers are similar to what we said 
throughout this conversation, that we really need to put 
together trade agreements that break down these non-trade 
barriers, these government driven programs.
    I think now is the time to do that because they are going 
to be incentivized because access to our market is a bigger 
incentive for them, so they will be more willing to negotiate 
now than late, so the time is critical.
    Mr. QUIGLEY. Nothing to really add other than to just 
simply restate that because of the scale of those markets, the 
pace at which they are growing, we cannot ignore them. I think 
some of the tactics that we could use to try to influence the 
behavior is just simply negative lists.
    Name and shame of practices that we believe in fact are 
protectionist in their very nature, and as those economies 
mature, grow and want a stronger seat at the global table, they 
need to be ready to play by the global rules, and to call them 
out, I think, is one of the tactics that could be used to start 
to influence the behavior.
    Chairman CAMP. Thank you. I yield back.
    Mr. BRADY. Thank you. Dr. Boustany is recognized.
    Dr. BOUSTANY. Thank you, Mr. Chairman.
    Mr. Wolff, we are engaging in TPP negotiations without 
trade promotion authority. In your testimony, you talked a lot 
about state owned enterprises and the problem it poses.
    I guess my question would be given that our Committee has 
to provide guidance and certainly once the trade promotion 
authority is in place, we will go forward hopefully with an 
agreement, what would you like to see in a chapter on state 
owned enterprises? Can you go into a little more detail there 
to give us some guidance?
    Mr. WOLFF. First there must be no discrimination in 
regulation. This is a major problem. We see it in Japan. It is 
true in China and India. The Vietnamese economy, of course, has 
a huge number of state owned enterprises.
    Eliminating discriminatory regulations that favor of SOEs 
as opposed to private players in the market is one aspect of 
dealing with the state-owned enterprise problem.
    Obtaining market access, where a network is controlled by a 
state owned enterprise, is equally important. There have to be 
obligations to have state owned enterprises live up to the 
national treatment obligations of the country involved.
    Obtaining transparency. There is no transparency with 
respect to the operations or subsidies to state owned 
enterprises. This is a major problem.
     China is the number one example in the world. We have to 
think about what rules we want to apply to China when we are 
negotiating the rules in TPP. When the Chinese government makes 
a pronouncement, those company executives that know they have 
only one shareholder know exactly what they are supposed to do, 
and that means--I gave the example of wind energy procurement, 
wind turbines, in China--don't buy foreign products.
    Those are all state owned enterprises that do the 
procurement. When they stopped buying foreign products, it was 
in part because there was in China an indigenous innovation 
policy, which now the Indians are following in their telecom 
area.
    The bid procedures are entirely secret; they are considered 
a state secret. You can go to prison for revealing those 
measures.
    Transparency is very important. National treatment 
obligations on the state owned enterprise itself would be very 
important. Market access in a real way is vital.
    We are not against state owned enterprises as such--but if 
they are going to act in the commercial arena, they ought to be 
governed by the same rules.
    Dr. BOUSTANY. Held to the same standards.
    Mr. WOLFF. Yes.
    Dr. BOUSTANY. Thank you. Mr. Quigley, I questioned 
Ambassador Kirk earlier with regard to services. We have a 
trade surplus with China, some $7.5 billion in surplus. I 
personally believe it should be much higher, and I think there 
is potential room for growth there.
     China imposes all kinds of equity limitations in key 
sectors, banking, insurance, retail, telecom. There are 
licensing issues and so forth. The list goes on and on.
    What are your views on how we can deal with all this and 
better create opportunities for our services companies in 
China?
    Mr. QUIGLEY. I think the visibility once again is just 
simply a first step in the right direction, and given the scale 
of the trading relationship that exists between China and the 
U.S., I believe we can have discussions related to services and 
can begin a more disciplined and more open approach to 
services, and we should not put it in the ``too hard'' file.
    It is just simply so large, and there is mutual benefit 
that is available, so I think keeping it at the top of the list 
and pushing on services as one of those areas where we just 
simply have not invested much time at this point is something 
that is definitely worthy of the energy of those that want to 
work on trade policy and trade negotiations.
    Dr. BOUSTANY. Thank you. Mr. Krzanich, you mentioned 
government procurement agreement certainly with China and other 
countries, the BRIC countries.
    I can assure you our Committee is really pushing on the 
administration to use every bit of leverage it has with these 
countries to move forward, to see that these countries follow 
through with their WTO obligations.
    Mr. BRADY. Thank you. Votes will be called in the next 
minute or two, and we want to get to all the Committee Members, 
so we would like to move this along.
    Ms. Jenkins is recognized.
    Ms. JENKINS. Thank you, Mr. Chair, and thank you all for 
being here today.
    There is no doubt that China's currency misalignments is a 
serious problem, but it seems it is not the single most 
pressing problem. China maintains a number of discriminatory 
and distortionary industrial policies that harm U.S. companies 
and their workers.
    In addition to currency misalignment, these include 
subsidies that distort competition, lack of regulatory 
transparency, a closed capital account, harmful indigenous 
innovation policies, failure to adequately protect intellectual 
property, and many other barriers to U.S. exports and 
investments.
    I would just like each of you maybe to comment, how does 
the currency rank in terms of other barriers that you face in 
China, and what do you all consider the most significant 
barriers that you face?
    Mr. Harris, and then down the line.
    Mr. HARRIS. The currency itself, I think my customer base 
that I serve would speak better to that. I can tell you that 
one of the most alarming events I have ever had in business was 
when I was with one of the Vitamin C manufacturers in China.
    We were negotiating, that was the goal, to negotiate volume 
and pricing. When they said to us that we have already met with 
the other three major Chinese Vitamin C producers and they will 
sell you 10,000, this one will sell you 11,000, this one will 
sell you 12,000, they already had the meeting as we were flying 
over, and already had set the price.
    Certainly, things of that nature have to be addressed 
because what happened in our industry was it drove out every 
Vitamin C manufacturer in the U.S.
    That is why I am happy and excited about our companies 
moving over and manufacturing there because that will eliminate 
or reduce those types of things from happening.
    Mr. KRZANICH. For us, we both import and export out of 
China. Currency manipulation is not really a big factor for us. 
I do not consider us really experts on this subject.
    From our point of view, I think we think we should take a 
broader look at China and these countries, how we manage trade. 
It is much further than just the currency issue itself.
    Ms. JENKINS. Thank you. Mr. Quigley.
    Mr. QUIGLEY. No comment on the currency issue. I would just 
simply say that in our business, it is regulatory coherence 
that we are seeking and getting to those common global 
standards and then mutual recognition that would be the 
enabler.
    Ms. JENKINS. Fair enough.
    Mr. WOLFF. China's undervaluation of its currency, I think, 
causes most problems in this country--wiping out manufacturing 
competing with imports that have in effect a 20 percent (or 
whatever it is today) subsidy.
    On entry into China, since we are not competing very often 
in commodities but in higher value goods, it is other types of 
barriers that are really the major problem that people have 
mentioned.
    If someone in China will not buy something from a foreign 
source, if a state owned enterprise will not buy something from 
the United States, or will not buy something unless it is 
invented with Chinese technology, then currency values do not 
matter at all.
    Ms. JENKINS. Thank you. I yield back.
    Mr. BRADY. Thank you. Mrs. Black.
    Mrs. BLACK. Thank you, Mr. Chairman. I am going to be 
really brief. I just want to follow up on the comments and the 
dialog that I had with the Ambassador.
    Mr. Quigley, this goes to you. I recognize, maybe not right 
in my district but in Tennessee around me, are very important 
professional services that are exported.
    I do not know that we are really putting a lot of emphasis 
on that. I know the President in his agenda has looked more at 
the manufacturing side.
    I would just like you for the record to talk about where 
you see the importance of these professional services being 
exported, and in particular, how that really helps us with 
creating more jobs and not just jobs but very well paying jobs.
    Mr. QUIGLEY. There is no question that the markets are 
global and the professional services market is also global. 
Having the ability to move intellectual property and then also 
people across Border becomes the great enabler of growing those 
businesses and at the pace they could grow, so access to 
movement of talent and VISAs, that we would like to be able to 
move people here, and also move people from here overseas, and 
getting to the point where we have a coherent tax policy that 
enables that becomes the objective.
    We at Deloitte, more than half of our jobs are outside the 
United States, but those firms are actually owned by partners 
in those individual countries.
    For us, I do not view it as a huge impediment, but the 
ability to move talent does sometimes get in the way, and the 
ability to share intellectual property across Border.
    Mrs. BLACK. With that being said, what would you say would 
be the number one barrier?
    Mr. QUIGLEY. Again, I go back to the regulatory coherence, 
the inability and the degree of difficulty and frankly the huge 
costs associated with dealing with separate sets of regulations 
country by country for a product that is fundamentally viewed 
for its global nature.
    I really hope we can get to regulatory coherence, and that 
would be a big enabler of continuing to grow the professional 
services market.
    Mrs. BLACK. I hope so, too, for the sake of our American 
workers for jobs and jobs that pay well.
    Thank you. I yield back my time.
    Mr. BRADY. Thank you. Mr. Reed, for the final questions.
    Mr. REED. Thank you, Mr. Chairman. Thank you to our panel.
    If I could focus a little bit on you, Mr. Harris. I come 
from a rural agricultural based, small business based area of 
New York State.
    You made some comments in your testimony, I believe, about 
how small business needs to work with the world, I think that 
is a phrase you kept utilizing.
    I am interested, from your frontline perspective and 
experience and from a small business perspective, and a lot of 
my constituents being small businesses, what is the most 
important next step, or what is your vision for a trade policy 
that could advance the small business opportunities on the 
world stage?
    Mr. HARRIS. Again, I am going to say that we are more small 
business in the services business. What we do at Harris & Ford 
is we do the things our customers do not want to do themselves.
    We specialize in the small stuff. Logistics, finding 
synergies, things of that nature.
    I am not trying to be evasive, but whatever is done to 
allow--I mentioned three companies that have really been 
instrumental, and there are others, in Harris & Ford's growth, 
but let's say, for example, Kraft. We sell over 500 products 
and to several countries.
    Whatever is done to allow them to do business easier, it is 
just a pull through effect for Harris & Ford. We get business 
because you helped them regulatory-wise. Same way with Coke, 
Gatorade.
    Whatever you do that helps them ease their transactions 
internationally, it helps us as a small business. We patch the 
tires and we do the little stuff, but we do it well.
    Mr. REED. Being a small businessowner myself, I can relate 
to that.
    One last question. Mr. Quigley, you had some suggestions 
about how WTO was not addressing or utilizing all the tools. 
You said there was another tool that you envisioned outside of 
the WTO, I believe, in some testimony to my colleagues.
    I just want to delve into that. What specifically would you 
suggest outside the WTO that could be utilized to address the 
concerns that the WTO is not doing?
    Mr. QUIGLEY. I just think we have a huge opportunity with 
the colossal market of Europe and the colossal market of the 
U.S., and a wonderful and robust trading relationship today, to 
take an U.S.-EU approach to global trade.
    If we can in fact build a free trade agreement or other 
bilateral trading arrangements between the U.S. and Europe, and 
then we construct it in such a way that third countries could 
participate, we could start to move the trade agenda forward on 
the U.S.-EU approach, and key players in Asia would want to 
join because they want access to that U.S. and European market.
    I think there is an opportunity that is not exploited fully 
there. That is what we hope this high level working group that 
Ambassador Kirk is co-chairing with Commissioner DeGucht has 
the potential of doing, and helping to enable global trade 
through this stronger partnership for the 21st century between 
the U.S. and Europe.
    That is the opportunity we see.
    Mr. REED. Mr. Wolff, with your 20 years plus or how many 
years experience you have, do you see that as an opportunity to 
develop and promote?
    Mr. WOLFF. Absolutely. I am a multilateralist at heart. 
Doha is stalled. We cannot get as much done there if anything 
at all. I would look to see what could be done with the EU. I 
hope they are not looking inward so much because of current 
financial issues that the EU cannot join hands across the ocean 
and conclude a good agreement with the United States.
    The EU is negotiating with Canada, for example, and getting 
better market access right across the Border from us in 
government procurement than we have under NAFTA.
    We cannot stand still. I think we ought to prioritize, EU, 
Canada, Brazil, India, and the largest markets, and improve 
those agreements where we have some and get agreements where we 
do not.
    Mr. REED. Very good. With that, I yield back.
    Mr. BRADY. Great testimony, very insightful. On behalf of 
Chairman Camp, I want to thank you for being here today.
    The hearing is adjourned.
    [Whereupon, at 2:48 p.m., the Committee was adjourned.]

    [Submissions for the Record follow:]

                   The Honorable Dave Camp, Letter 1

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    [Material Submitted for the Record]
                        Questions For The Record
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