[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]







                    ADVANCING THE U.S. TRADE AGENDA:
                      THE WORLD TRADE ORGANIZATION

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

                                HEARING

                               before the

                         SUBCOMMITTEE ON TRADE

                                 of the

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

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 16, 2014

                               __________

                            Serial 113-TR06

                               __________

         Printed for the use of the Committee on Ways and Means





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                      COMMITTEE ON WAYS AND MEANS

                     DAVE CAMP, Michigan, Chairman


SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan
KEVIN BRADY, Texas                   CHARLES B. RANGEL, New York
PAUL RYAN, Wisconsin                 JIM MCDERMOTT, Washington
DEVIN NUNES, California              JOHN LEWIS, Georgia
PATRICK J. TIBERI, Ohio              RICHARD E. NEAL, Massachusetts
DAVID G. REICHERT, Washington        XAVIER BECERRA, California
CHARLES W. BOUSTANY, JR., Louisiana  LLOYD DOGGETT, Texas
PETER J. ROSKAM, Illinois            MIKE THOMPSON, California
JIM GERLACH, Pennsylvania            JOHN B. LARSON, Connecticut
TOM PRICE, Georgia                   EARL BLUMENAUER, Oregon
VERN BUCHANAN, Florida               RON KIND, Wisconsin
ADRIAN SMITH, Nebraska               BILL PASCRELL, JR., New Jersey
AARON SCHOCK, Illinois               JOSEPH CROWLEY, New York
LYNN JENKINS, Kansas                 ALLYSON SCHWARTZ, Pennsylvania
ERIK PAULSEN, Minnesota              DANNY DAVIS, Illinois
KENNY MARCHANT, Texas                LINDA SANCHEZ, California
DIANE BLACK, Tennessee
TOM REED, New York
TODD YOUNG, Indiana
MIKE KELLY, Pennsylvania
TIM GRIFFIN, Arkansas
JIM RENACCI, Ohio

        JENNIFER M. SAFAVIAN, Staff Director and General Counsel

                  JANICE MAYS, Minority Chief Counsel

                                 ______

                         SUBCOMMITTEE ON TRADE

                   DEVIN NUNES, California, Chairman

KEVIN BRADY, Texas                   CHARLES B. RANGEL, New York
DAVID G. REICHERT, Washington        RICHARD E. NEAL, Massachusetts
VERN BUCHANAN, Florida               JOHN B. LARSON, Connecticut
ADRIAN SMITH, Nebraska               EARL BLUMENAUER, Oregon
AARON SCHOCK, Illinois               RON KIND, Wisconsin
LYNN JENKINS, Kansas
CHARLES W. BOUSTANY, JR., Louisiana
PETER J. ROSKAM, Illinois




















                            C O N T E N T S

                               __________
                                                                   Page

Advisory of July 16, 2014 announcing the hearing.................     2

                               WITNESSES

Michael Punke, Ambassador, Deputy United States Trade 
  Representative and U.S. Ambassador and Permanent Representative 
  to the World Trade Organization, Office of the United States 
  Trade Representative...........................................     6

                       SUBMISSIONS FOR THE RECORD

Alexan International, letter.....................................    46
Ambassador Glassman, letter......................................    48
American Farm Bureau Federation, statement.......................    49
Institute for Liberty, letter....................................    53
Stewart and Stewart, statement...................................    55

                        QUESTIONS FOR THE RECORD

The Honorable Charles Boustany...................................    32
The Honorable Peter Roskam.......................................    36
The Honorable Tom Reed...........................................    36
The Honorable Lynn Jenkins.......................................    37
The Honorable David Reichert.....................................    38
The Honorable Sander Levin.......................................
  and the Honorable Charles Rangel...............................    39
The Honorable Sander Levin.......................................    42
The Honorable Richard Neal.......................................    43
The Honorable Richard Neal.......................................
  and the Honorable Ron Kind.....................................    43
The Honorable John Larson........................................    44
 
     ADVANCING THE U.S. TRADE AGENDA: THE WORLD TRADE ORGANIZATION

                              ----------                              


                        WEDNESDAY, JULY 16, 2014

             U.S. House of Representatives,
                       Committee on Ways and Means,
                                     Subcommittee on Trade,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:00 a.m., in 
Room 1100, Longworth House Office Building, the Honorable Devin 
Nunes, [chairman of the subcommittee] presiding.
    [The advisory announcing the hearing follows:]
    
    
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    Mr. NUNES. Good morning and welcome to today's hearing on 
advancing our trade agenda and the World Trade Organization. 
Before hearing from Ambassador Punke, I would like to make 
three points.
    First, after years of inaction, we now have an active 
agenda at the WTO which can create new opportunities for U.S. 
exports and support American jobs. Our first order of business 
is ensuring that last year's trade facilitation agreement is 
fully adopted and implemented. We have an important deadline 
later this month, and I am closely watching to see if the WTO 
can still function as an institution for negotiating--and 
implementing--new trade liberalization agreements. Implementing 
the trade facilitation agreement helps developing countries 
become more attractive for trade and investment.
    We are also trying to conclude negotiations to expand the 
Information Technology Agreement, but I am frustrated by 
China's intransigence. Any final agreement must include key 
U.S. products. Failure to reach an ambitious agreement would 
reflect a serious failure in China's leadership as it hosts 
APEC this year.
    The Environmental Goods Agreement negotiations formally 
launched last week could cover nearly ninety percent of trade 
in environmental goods and provide an enormous boost to U.S. 
high tech exports. And of course, we must continue our crucial 
enforcement and compliance work.
    Second, beyond our current agenda, we must strengthen and 
improve the WTO, particularly by eliminating behind the border 
barriers. The WTO has been successful in reducing tariff 
barriers. For the organization to be relevant in the 21st 
Century, however, it must address non-tariff barriers more 
effectively. These include, among others, government-induced 
border delays, unjustified regulatory rules, domestic content 
requirements, and sanitary and phytosanitary measures that 
impede U.S. agricultural exports.
    Continued work is also needed to ensure that countries meet 
their WTO obligations and to improve the WTO's dispute 
settlement system. At the same time, we cannot take up where we 
left off on the Doha round. Emerging market nations must take 
on meaningful obligations befitting their level of development. 
I look forward to hearing from Ambassador Punke about the 
Administration's efforts to strengthen the WTO in each of these 
areas.
    Third, we must pass Trade Promotion Authority without delay 
to ensure that our negotiators have the strongest negotiating 
hand possible. The Bipartisan Congressional Trade Priorities 
Act I co-sponsored earlier this year with Chairman Camp 
includes robust provisions on the WTO as well as multilateral, 
plurilateral and bilateral negotiations, providing clear 
guidance to the Administration about the type of agreements 
Congress will accept. I call on the Administration to focus on 
passing Trade Promotion Authority as soon as possible--and to 
immediately work to lay the groundwork with their Democratic 
colleagues.
    We are going to wait on Mr. Rangel. He is on his way, to 
give his opening statement, and I think we will go right to 
you, Ambassador Punke.
    Before recognizing you, you know that you are limited to 
five minutes. Your written statement will be made part of the 
record, and you are now recognized.

 STATEMENT OF MICHAEL PUNKE, AMBASSADOR, DEPUTY UNITED STATES 
    TRADE REPRESENTATIVE AND U.S. AMBASSADOR AND PERMANENT 
 REPRESENTATIVE TO THE WORLD TRADE ORGANIZATION, OFFICE OF THE 
               UNITED STATES TRADE REPRESENTATIVE

    Ambassador PUNKE. Thank you very much, Mr. Chairman. 
Chairman Nunes, Ranking Member Rangel--I am anticipating his 
arrival--and members of the Trade Subcommittee, thank you for 
the opportunity to testify on the Obama Administration's 
priorities and recent developments at the World Trade 
Organization.
    The core of the Obama Administration's economic strategy is 
to create jobs, to promote growth, and to strengthen the middle 
class. The WTO is a critical part of that strategy. It sets the 
rules that govern the global trading system, and we believe it 
has the potential to do much more.
    That is why the United States led the charge at the WTO's 
Ninth Ministerial Conference last December in Bali to complete 
the Trade Facilitation Agreement, or TFA; the first successful 
conclusion of a multilateral trade negotiation in the two 
decade history of the WTO. It is why we are working on other 
major initiatives in Geneva, including a group of key 
plurilateral agreements which have the potential to 
reinvigorate the multilateral trading system and to help the 
WTO meet its potential.
    In Bali, WTO members concluded a package of significant 
results that include the TFA and important outcomes on 
agriculture and development. We are now actively engaged in 
implementing all of the Bali outcomes in keeping with the very 
specific timelines and procedures agreed to unanimously by all 
WTO members.
    The TFA is a huge accomplishment for the WTO, 
reestablishing that its members can reach significant 
multilateral outcomes. The rest of the Doha round remains a 
challenge. We are working to develop a post Bali work program 
by the end of this year. This will help to determine whether 
conclusion of the Doha Round is possible.
    The worst case scenario for the WTO after the Bali success 
would be renewed drift. The time has come for the WTO to 
conclude Doha, move forward, and take up new areas of trade. A 
final Doha agreement must address key U.S. priorities, 
including agriculture, and industrial market access and 
services. There will be no Doha result without balance across 
all of these areas and across all of the major trading 
countries. For Doha to succeed, as we have emphasized 
consistently, the emerging developing countries must carry 
their weight as well.
    In parallel with the Bali results and post Bali work, we 
have created other opportunities by leading regional and 
plurilateral negotiations with like-minded trade partners. The 
Trade in Services Agreement, or TiSA, represents a unique 
opportunity among 23 participants representing 50 WTO members 
to build a new agreement that incorporates the best of what the 
United States has been achieving in this sector in our free 
trade agreements.
    We have high expectations for TiSA to provide increased 
market access and potential rules to support expansion of 
services trade into the future.
    Just last week we launched negotiations on the new 
Environmental Goods Agreement with 13 other WTO members 
representing 86 percent of global trade in environmental goods. 
Elimination of tariffs on environmental technologies will make 
these goods more available and boost U.S. jobs.
    ITA expansion holds out similar promise for boosting 
simultaneously the WTO's credibility and exports of high 
quality American technology. If we are successful, and there is 
more work to do with our Chinese colleagues as you noted, Mr. 
Chairman, the ITA will be the first tariff cutting agreement at 
the WTO in 17 years.
    From day one, the Obama Administration has made enforcement 
a key priority to ensure that American stakeholders get the 
full benefits of the market opportunities we have negotiated. 
When direct engagement with the trading partner is not 
successful, we do not hesitate to use WTO dispute settlement. 
The United States has brought 18 WTO complaints since 2009. We 
have brought disputes in areas such as trade distorting 
subsidies, export restraints, import licensing barriers, local 
content requirements, retaliatory use of trade remedies, and 
non-science based SPS measures. Those disputes involve major 
trading partners, such as China, India, Indonesia and 
Argentina, and we have had significant successes.
    We will continue to prosecute and defend these disputes, 
launch new disputes as appropriate, and insist that WTO members 
live up to their obligations.
    To conclude, certainly we see challenges ahead, but also 
great potential for using WTO in other negotiations to promote 
opportunities for American workers, farmers, ranchers, 
businesses of all sizes, and most importantly, American 
families.
    In this regard, let me say something about trade promotion 
authority. To actively and effectively pursue these initiatives 
and bring benefits home to Americans, we will need TPA. TPA is 
the mechanism by which Congress has worked with Presidents 
since 1974 to give the Executive its marching orders about what 
to negotiate, how to work with Congress before and during 
negotiations, and how Congress will take up and approve or 
disapprove the final agreement.
    We agree with those that say that TPA needs to be updated, 
and we look forward to working with this Committee and Congress 
as a whole to secure a TPA that has as broad bipartisan support 
as possible.
    Thank you, and I look forward to your questions.
    [The prepared statement of Mr. Punke follows:]
    
    
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    Mr. NUNES. Thank you, Ambassador.
    I will now recognize the Ranking Member, Mr. Rangel, for 
the purpose of offering an opening statement.
    Mr. RANGEL. I will be brief and I thank you, Mr. Chairman, 
and I congratulate you for assuming this great responsibility, 
Ambassador. I congratulate the work that the World Trade 
Organization is doing and you guiding America for fairness and 
equity.
    I know that your job is to enforce the cases or to study 
the cases that are brought to you, but there are certain 
challenges that we have with cyber, with Internet theft, with 
intellectual property, and perhaps the WTO can issue guidelines 
so that countries will know that they should not have to wait 
until the offended country brings an action.
    Another problem that we face with the trade agreements as 
well as the President's authority is that it is hard to give 
the President authority to do or not to do when you have no 
clue as to what is going to be in the agreement. You know, it 
would be great if you had a TPA telling the President to do the 
right thing, but recognizing that there is a need for the 
negotiations not to be public and at the same time not know 
what authority to restrict or expand of the President 
legislatively is a very, very difficult job.
    But we value and welcome advice that you can give us as 
legislators so that we can be supportive of the Executive 
Branch, recognizing that trade does not involve 535 of us in 
order to reach a conclusion.
    But thanks for the work that you do, and I am very 
concerned about China's violation of the principles of fair 
trade, which she agreed to do and seemingly it is up to the 
United States to bring the allegations to the WTO instead of 
having some way of making certain that countries fulfill their 
obligations to the organization without a country having to 
come forward and make the accusation.
    Thank you, Mr. Chairman.
    Mr. NUNES. Thank you, Mr. Rangel.
    I am now going to yield to the former chairman of the Trade 
Committee and our current chairman of the Health Committee on 
Ways and Means, Mr. Brady.
    Mr. BRADY. Chairman Nunes, first, thanks for your 
leadership and all the new energy you bring to the trade agenda 
in Congress.
    Ambassador Punke, you are doing a terrific job, not merely 
in representing U.S. negotiating agreements so critical to our 
economy, but the time you take in consulting with both parties 
in the House and Senate on the nuances, the politics, the 
dynamics, the details of these agreements, and I am not 
complimenting you merely because your wife and daughter are in 
the audience today, but they do need to hear that you have very 
broad support in the House, and we appreciate your work.
    Let me ask a broader question. You know, the Doha Round has 
lapsed now for nearly six years. There is real progress on 21st 
Century issues such as trade facilitation; moving these goods 
quicker, faster, cheaper across the borders for the benefit of 
consumers around the world. We are seeing progress in 
information technology, in services agreement, and 
environmental goods area.
    There are some who, because of the Bali Round, seem to 
believe the focus now should really go back to Doha, and this 
is not a good analogy, but it seems to me that after a dozen 
years, the Doha garden for various reasons simply is not 
producing.
    But in services and facilitation and information technology 
and others, I think we are seeing real growth, real results in 
those areas.
    I would like to see you and we as a country continue to 
focus on the garden that is growing, the results that are 
producing for the economy we have today. I would like to hear 
your thoughts on whether you agree on that approach or whether 
we ought to shift focus back to the Doha round.
    Ambassador PUNKE. Well, thanks very much, Congressman 
Brady, and I very much appreciated the opportunity I have had 
to consult with you and your colleagues in the time that I am 
back in Washington. It has very much informed our positions 
across a whole range of issues.
    But to answer your question directly about sort of the 
interplay between some of these plurilateral discussions in 
Geneva, like the ITA, TiSA, and environmental goods and the 
broader Doha agenda, I very much agree that the place where we 
have vitality and energy in the room and a sense of like-
mindedness among negotiating partners has been in the 
plurilateral discussions, and quite honestly, it is very 
refreshing after a long day in deadlocked discussions to step 
into some of these plurilateral negotiations and recognize that 
even if you are negotiating with people who might have a 
slightly different perspective, all of you are working towards 
the ultimate goal of a result in liberalizing trade.
    And so those plurilateral discussions are on their own 
track, and they will continue, and we will push them and lead 
in those discussions as we move forward.
    I do think that there is the potential for us to make 
progress on Doha despite the fact that we are now 14 years into 
that negotiation. But I think one of the points that you made 
is really critical there, and I think Chairman Nunes made a 
similar point. We cannot simply keep going back to things that 
have not worked in the past. I think about the Einstein maxim 
that, you know, the definition of insanity is to do the same 
thing over and over and expect a different result. There has 
been too much of that in Geneva.
    So Bali has given us a puff of wind in our sails, the first 
one in a long time in terms of a broad, multilateral 
discussion. We have an opportunity this year if we are willing, 
all of the members of the WTO, to wrestle with difficult 
questions like the appropriate role of emerging economies to 
make progress on Doha, but we can only make progress if we 
address those issues very directly.
    Mr. BRADY. And I am not trying to downplay Doha. In fact, 
having broader agreements obviously, I think, would be better 
for the global economy. It just seems to me the work that is 
being done in the other areas actually builds confidence, 
creates a better environment and provides some time where we 
can go back with more agreement on trying to grow that garden 
that is Doha.
    But right now I guess my point is I think the progress we 
are seeing is important in those agreements. I think they help 
build the type of dynamics that allow us to tackle Doha in the 
future. I do not want to shift focus at this point where we are 
seeing that growth.
    Ambassador PUNKE. Well, we agree with you that premise, and 
the worst case scenario from our standpoint is for Doha to 
continue to drift. We think there needs to be resolution with 
Doha, and we are pushing for that pointed discussion now.
    And I agree with you on another point, which I think that 
the plurilateral discussions have actually had a very virtuous 
impact on Doha because they have demonstrated very clearly to 
the small number of countries that do not want anything to 
happen in Geneva that there are options there for those that 
are seeking to use the institution in a productive way.
    Mr. BRADY. Right. Thanks, Ambassador.
    Thank you, Chairman.
    Mr. NUNES. Thank you, Chairman Brady.
    I now recognize the gentleman from Massachusetts, Mr. Neal 
for five minutes.
    Mr. NEAL. Thank you, Mr. Chairman.
    Just a quick thought on Mr. Brady's comments. The committee 
has been pretty bipartisan on trade, but just to pick up on 
something that Kevin said, I do think that the collapse of Doha 
aided the bilaterals and moved them up on the agenda. So I 
think there was that sort of benefit. If we cannot do the big, 
then let us proceed with the smaller bilaterals where we 
actually have had some success.
    But let me talk a little bit about the suggestion I made to 
President Obama at the White House about a month ago. I 
suggested that we really focus the European trade proposal, T-
TIP, and suggested that I thought that was easier for all of us 
to do, and I thought that the Pacific proposal is a longer 
climb, to be very candid, and I thought that an effort to build 
some confidence, Mr. Ambassador, that we might be able to focus 
on what is now almost 30 percent of the world's trade and 
investment.
    And it strikes me that the relationship that we have with 
Europe, given the difficulty it would be that we would make the 
argument that we were somehow trading down with countries that 
have a very similar quality of life and enjoy similar economic 
success, that we might embrace with more vigor that whole 
notion.
    I had a chance the other night at the Italian Embassy to 
once again make the case for moving T-TIP along, but there are 
some non-tariff barriers that remain important to U.S. exports 
to European Union, and the EU regulatory and legislative 
processes also do not typically provide essential and 
meaningful opportunities for WTO members and their stakeholders 
to comment on regulatory proposals.
    Could you speak to what could be done in T-TIP or at WTO to 
otherwise help coax our European counterparts to provide more 
meaningful opportunities to comment on regulatory proposals so 
that Americans, American small and medium size businesses are 
not at an economic disadvantage?
    Ambassador PUNKE. Thank you very much, Congressman Neal. 
That is one of the central goals for us in the T-TIP 
negotiations.
    But I want to step back for just one minute. I do think, 
you know, USTR is a small agency as the people on this 
Committee know very well, but I do think we very much have the 
capacity to pursue multiple discussions at the same time.
    I work more on WTO and T-TIP issues. My colleagues back in 
the Winder Building work on TPP, but I do see us as having the 
capacity to pursue all of these things simultaneously.
    But with regard to T-TIP specifically and especially with 
regard to the regulatory issue that you have mentioned, one of 
our biggest goals has been to pursue the so-called horizontal 
regulatory issues, which is to say exactly the types of issues 
that you are raising.
    In the U.S. system, through our notice and comment process, 
all interested parties, foreign and domestic, have the 
opportunity to see draft regulations and to comment on them and 
to have those comments taken into account by regulators in 
making decisions about the final shape that regulations should 
take.
    We do not have those same opportunities in the European 
system, and that is something that we think is enormously 
important for our stakeholders to have. Transparency in terms 
of making regulations, access in terms of an opportunity to 
provide input at critical junctures, and then accountability on 
the part of European regulators to respond to those comments 
that they hear.
    Now, we are not seeking a guaranteed outcome, but we 
believe that that process in and of itself results in much 
better regulatory outcomes, and in a transatlantic context, it 
creates the opportunity for there being fewer impediments to 
trade as a result of unnecessary regulatory differences.
    So that is an issue that I appreciate your support on 
because it is something where we are working very hard.
    Mr. NEAL. Thank you, Mr. Ambassador.
    Thank you, Mr. Chairman.
    Mr. NUNES. Thank you, Mr. Neal.
    Mr. Reichert is recognized for five minutes.
    Mr. REICHERT. Thank you, Mr. Chairman.
    Welcome, Ambassador. So your wife and your daughter are in 
the audience. Is your brother here, too?
    Ambassador PUNKE. You know, he is in town, and he did not 
come today. So I guess I should be very offended.
    Mr. REICHERT. Yes, he is off the Christmas list.
    First of all, I just want to thank you for recognizing in 
your opening comments the importance of TPA. I think most 
members here recognize TPA is critical to any agreement 
associated with TPP, and we made it very clear on our side of 
the aisle that if an agreement comes to this Congress without 
TPA, it is dead on arrival.
    So I look forward to working with you and other members of 
our USTR, Ambassador Froman, et cetera, and the Administration 
on moving Mr. Camp's initiative forward for Trade Promotion 
Authority. It is bipartisan. It is bicameral. A lot of work has 
been done on it, and we need some help to move that forward 
here.
    I would also like to just thank you and your colleagues for 
the work at WTO in challenging Indonesia's import restrictions 
on agricultural products. Indonesia, as you know, is a top 
market for Washington's high quality apples, and it was very 
critical for them, and we appreciate your fighting for our 
growers in Washington State.
    I have got a couple of questions. I am happy to see that 
you have launched negotiations for a plurilateral agreement on 
environmental goods. This is a significant opportunity, I 
think, to increase our exports in environmental goods and lower 
prices for consumers.
    Are there major global traders in environmental goods that 
are not currently a part or a party to the negotiation?
    And what is your plan to bring them into the process?
    Ambassador PUNKE. Well, let me address that very 
specifically. We have faced this question in other plurilateral 
discussions about whether or not to sort of actively seek 
countries' participation in plurilateral negotiations, and I 
think the viewpoint that we have landed upon is that what makes 
the plurilaterals work is the fact that the countries that are 
there are like-minded and want to get a result.
    And as I mentioned earlier, that does not mean we do not 
have disagreements within the group. It does not mean we do not 
argue with each other and negotiate very hard for national 
interests, but there is a common desire to reach an agreement 
and to be ambitious.
    And so we have not done work; we have deliberately not done 
work to solicit members to come into the various plurilateral 
discussions, whether it is TiSA or the Environmental Goods 
Agreement, because our experience, and this is a metaphor that 
only works in Washington so I am very happy to be able to use 
it here; this does not work in Geneva. It is Tom Sawyer and the 
picket fence. We want people who want to paint the picket fence 
on their own. We do not want people negotiating before they 
come into the negotiation about whether they should be there.
    And we have had good success with that dynamic in the 
context of TiSA. We started the TiSA negotiation, for example, 
with 15 members, and we have had eight join that discussion 
without doing any recruiting. You asked if there are countries 
outside of the Environmental Goods Agreement that we would like 
to see in. There certainly are, and I would expect that we will 
have more that will see it as being in their own interest to be 
a part of that discussion.
    We are already hearing inquiries in Geneva, and so I think 
you will see that grow over time, but frankly, we already have 
a good set that. I think currently about 86 percent of global 
environmental goods trade.
    Mr. REICHERT. All right. Thank you.
    I am sure you have a timeline for negotiations, but could 
you elaborate on your plan to avoid a free rider problem?
    Ambassador PUNKE. There is a free rider problem that is 
built into plurilaterals that are based on goods trade because 
of the MFN principle in the WTO. In TiSA we have a very unique 
situation where the existing WTO rules explicitly allow us to 
have a plurilateral negotiation whose benefits are not provided 
on a MFN basis to the rest of the organization.
    Unfortunately, we do not have that same benefit when it 
comes to goods trade. And so whether it is ITA or environmental 
goods, whatever benefits the members decide among themselves, 
they have to share with the rest of the membership, and as you 
point out, that creates a free rider problem.
    What that means is that we really will not be in a position 
to conclude a deal if key players are not a part of it because 
there are certain players, for example, China, that we would 
never allow to be a free rider on something like the 
Information Technology Agreement or the Environmental Goods 
Agreement.
    Fortunately, China is a part of both of those discussions, 
although in the context of ITA, with mixed results to date, but 
that is the challenge of having key players inside of the 
negotiation so that they take on obligations and are not able 
to free ride.
    Mr. REICHERT. Thank you, Mr. Chairman.
    Mr. NUNES. The time of the gentleman has expired.
    I will now recognize the gentleman from Florida, Mr. 
Buchanan, for five minutes.
    Mr. BUCHANAN. Thank you, Mr. Chairman.
    I also want to thank the Ambassador for your service.
    Let me just start out on a general question. I get asked 
quite a bit about the effectiveness of WTO. I know it is the 
rulemaking body. It is the body, and you are the main 
interface. What is your general feeling about how effective it 
is in general as it impacts the world and then as it relates to 
the U.S.?
    Ambassador PUNKE. Well, it is something I spend a lot of 
time thinking about, and I have had the privilege of being in 
this job for about four and a half years now, and so I have 
seen this unfold over a little bit of a time frame here now.
    I guess to me there are a couple of lessons that I have 
drawn out of that, and the starting point, I think, is that a 
very frank acknowledgement that especially when it comes to its 
negotiating arm, the institution needs to do a lot better 
because the notion that we are 14 years into a negotiation is 
not a good way of advertising the WTO as a place for doing 
serious business.
    But I think in terms of lessons learned that one of the 
most important ones is the importance of creative approaches, 
and that is something that I think the U.S. has pushed very 
hard in the WTO context, is not falling into this trap of 
trying the same thing over and over again and expecting a 
different result.
    That is one of the reasons why we have pushed 
plurilaterals, for example, so aggressively over the course of 
the last four years. I think it is critical that we make the 
WTO relevant for our stakeholders today, and that goes back in 
some ways to, for example, addressing the issue of emerging 
economies. It is impossible to have a meaningful discussion 
about an issue like agricultural subsidies, for example, if two 
of the four largest agricultural subsidizers in the world, 
namely, India and China, are not a part of that discussion.
    Mr. BUCHANAN. Let me get a couple more questions here.
    Ambassador PUNKE. Sorry.
    Mr. BUCHANAN. Let me just jump to just in terms of the TF 
agreement. What I have read is there is a trillion dollars in 
benefit to the global economy, 21 million jobs. It could impact 
not only a lot of U.S. companies, but others.
    It seems like the countries that would benefit the most are 
the ones that are in terms of India and Africa, I guess, half 
of the benefit would ideally go to them. What is the holdup? 
Why are they not supportive, and what are we doing about it?
    Ambassador PUNKE. Well, that is a very important question. 
You know, we had a very important agreement at Bali with trade 
facilitation, as you mentioned, and the agreement is very 
explicit about the timelines for implementing trade 
facilitation and for implementing other parts of our work plan 
in Geneva.
    We have been concerned about statements by a handful of WTO 
members indicating that they intend somehow to link these 
already agreed implementation deadlines to issues that are not 
a part of trade facilitation and that have different deadlines.
    There has been a lot of mixed signals on that front over 
the course of the last several weeks, including with regard 
specifically to India, and so we are hoping that by the time 
that we have this meeting in Geneva next week in the General 
Counsel that we will be able to move forward and all of us do 
what we committed to do, which is implement, adopt the protocol 
of accession on the timeline that we agreed.
    Mr. BUCHANAN. Yes. And let me just close with this one 
point. Many of us were in Tokyo a month or so ago, and as 
relates, you touched on TPA. You know, a lot of at least the 
comments that I got back, everybody was concerned that we 
should put that in place. The Administration should have. The 
TPA should get passed.
    People are concerned as it related to our ongoing 
relationships. They are afraid that they would get something 
negotiated and it would not get done. What is your sense of 
where we are at and what we have got to do to get it done?
    Ambassador PUNKE. Well, Congressman, we are very committed 
to getting TPA. I think Ambassador Froman has practically 
camped up here over the course of the last six weeks in terms 
of the outreach that he has done personally.
    Other members of the cabinet have been involved in this, 
whether it is Secretary Kerry, Secretary Lew, Secretary of 
Commerce, Secretary of Agriculture. The President has 
indicated, including in the State of the Union Address, his 
commitment to seeking and achieving a trade promotion authority 
agreement.
    We are looking for an agreement that has the broadest 
bipartisan support possible. At the same time, as you 
mentioned, we are committed to ambitious outcomes in all of the 
negotiations that we are working on, and I think it is possible 
and it has been possible based on our experience at the table 
for those two tracks to proceed at the same time.
    Mr. BUCHANAN. Thank you.
    Mr. NUNES. The time of the gentleman has expired.
    I now recognize Mr. Smith for five minutes.
    Mr. SMITH. Thank you, Mr. Chairman.
    I thank you, Ambassador, for your presence here today and 
your service. I think obviously you have got an important job, 
and we appreciate your service.
    We know that the WTO rules-based talked about enforcement 
and dispute settlement and the ways to truly level the playing 
field on international trade, and we know that tariff 
elimination is a high priority, but it seems that the non-
tariff trade barriers are becoming more and more of an issue, 
and obviously that creates increases in costs and uncertainty, 
and they are often at the borders of countries which can least 
afford it.
    Last year the subcommittee held a hearing on India, as you 
know. At the time I provided an example of a Nebraska company 
faced with inconsistent tariff rates and unreasonable 
regulatory requirements in India. Even though the market does 
exist for the product, and this was a common theme throughout 
the hearing.
    While India is not the only WTO partner unfairly blocking 
imports through non-tariff barriers, this does reflect on the 
overarching fact that a number of our global trading partners, 
even those with the large markets and a huge trading presence 
continue to unfairly block U.S. goods and most notably in 
agriculture.
    So for this reason and many others, we here on the panel 
were encouraged by the WTO Trade Facilitation Agreement 
announced last year in Bali, and while the goal is to have non-
tariff barriers addressed completely, this agreement is 
designed to address the cost and time associated with clearing 
customs, and customs facilitation would be a very positive 
step, especially the perishable goods such as agricultural 
products.
    And now we are hearing reports certain countries, like I 
said India, for example, are backing out of commitments to meet 
the agreement. The one thing I hear again and again in the 
trade arena is the importance of this accountability, and I am 
just wondering if you could reflect a bit on the time line.
    We know that the interim deadline is quickly approaching, 
and can you discuss the timeline that is involved here?
    Ambassador PUNKE. Well, with regard to trade facilitation 
specifically, the Bali agreement is crystal clear on the time 
line. By July 31st, which is to say in two weeks, the members 
of the WTO are to have concluded this so-called protocol of 
accession, which is a very short agreement that essentially is 
the launching document for everyone to go seek domestic 
ratification.
    Also by the 31st of July developing countries are to submit 
their first report about the time lines that they anticipate 
with regard to the implementation of some of the specific 
obligations in the trade facilitation agreement. So that 
deadline is crystal clear.
    Now, you mentioned as did others that there have been some 
inconsistent signals from India, and we are extremely concerned 
about that. We are working very hard in the Obama 
Administration to get off to a good start with the new Indian 
government. At Bali when we concluded the Trade Facilitation 
Agreement, we worked very closely; we negotiated very hard with 
India. They negotiated very hard with us, but we reached an 
agreement, and obviously we have an expectation, as you pointed 
out that our trading partners will live up to their 
commitments.
    It also is critical to the WTO and the credibility of the 
WTO that this one agreement that we have been able to achieve 
in its 20-year history not evaporate six months after it was 
concluded.
    So for all of those reasons, this is a source of an awful 
lot of work on our part in trying to make sure that everyone 
sticks to what was agreed and implements the agreement starting 
with July 31st.
    Mr. SMITH. Would you agree that perhaps failure of reaching 
an agreement here actually negatively impacts consumers not 
only here at home but abroad?
    Ambassador PUNKE. There is no question in my mind that the 
Trade Facilitation Agreement has enormous benefits for every 
member of the WTO, and there is overwhelming academic evidence 
that the biggest benefits of trade facilitation accrues in 
developing economies that are less integrated into the global 
economy.
    So I believe that the single most important development 
outcome that we achieved in Bali was the Trade Facilitation 
Agreement, despite the fact that we did not call it a 
development agreement.
    Mr. SMITH. Right. Okay. Switching gears just a bit before I 
run out of time, we know that Mexico and Hong Kong have lifted 
their remaining age-based restrictions on U.S. beef, and I was 
just wondering. You know, there are several other countries 
that have not lifted those age-based restrictions even though 
scientific evidence abounds relating to that.
    Is the Administration considering pursuing some WTO action 
on that topic?
    Well, congressman, my home town is in Torrington, Wyoming, 
which is about eight miles from the Nebraska border, and right 
on the border is a feedlot. So this is an issue that I 
understand perhaps from a similar perspective of you, despite 
being slightly across the border.
    We are dedicated in this Administration and at USTR that 
international rules on trade be based on science, and we are 
pursuing that principle across numerous issues, including our 
efforts to promote beef exports, and we will very much continue 
to do that.
    Mr. SMITH. Okay. Very well. Thank you very much.
    Mr. NUNES. I thank the gentleman.
    The gentlelady from Kansas, Ms. Jenkins, is recognized for 
five minutes.
    Ms. JENKINS. Thank you, Mr. Chairman. Thank you for holding 
this important hearing, and we thank you, Ambassador, for being 
here and for your good work.
    My home State of Kansas is a major producer of beef and 
pork, and as was shown in this Committee's last hearing, the 
U.S. livestock industry is very frustrated with difficulties of 
opening the Japanese market, and I can assure you that my 
constituents share that frustration.
    But the truth is the European Union has never come into 
compliance with the WTO findings in the beef hormones and 
biotech cases, sanitary and phytosanitary cases in which the 
U.S. has prevailed. Do you have any suggestions on how the U.S. 
should manage the EU's failure to respect its obligations under 
the WTO SPS agreement? Do you believe that ultimately a 
Transatlantic Trade Investment Partnership offers a better 
opportunity to get the EU into compliance?
    Ambassador PUNKE. Well, I think what is critical with 
regard to all of these difficult issues, and certainly the 
issues that you cited are among some of the more difficult 
issues that we have bilaterally, whether it is Japan or the 
European Union, is that we use all of the tools in our toolbox 
to promote our interests.
    And so you mentioned WTO rules and WTO litigation, and as 
you pointed out, those are tools that we are applying and have 
applied in the context of Europe. Europe, in fact, is paying 
compensation having lost a case on beef hormones.
    Now, that being said, as you point out, we are not yet 
satisfied in terms of our efforts to ensure that our bilateral 
trade is conducted on the basis of science. I think that T-TIP 
does provide an opportunity, another opportunity, for us to 
pursue this conversation with Europe. We are doing that.
    In fact, as we speak USTR has a team of negotiators in 
Brussels who are engaged in the sixth round of T-TIP 
negotiations. There is a specific interaction over the course 
of this week on SPS issues, and part of that discussion 
includes issues like beef hormones. Part of that discussion 
includes issues by biotech.
    And so we are not where we need to be yet in terms of 
results, but we are at the table literally today and using 
every one of the tools that we have at our capacity to try and 
achieve a science-based result.
    Ms. JENKINS. Okay. Thank you, Mr. Ambassador.
    I yield back.
    Mr. NUNES. I thank the gentlelady for yielding.
    The gentleman from Louisiana, Mr. Boustany, is recognized 
for five minutes.
    Mr. BOUSTANY. Thank you, Mr. Chairman.
    And, Ambassador Punke, congratulations on Bali, and thank 
you for the outstanding work you are doing along with your 
team.
    I want to revisit the Trade Facilitation Agreement because 
of the recent hurdles that have emerged, and given the 
importance of this, first multilateral since the formation of 
the WTO in 1994. This is really important, and all the nations 
will benefit, especially the African countries, India, Brazil 
and so forth.
    And yet everything seemed to be a go. We were just two 
weeks away from the deadline for the protocol of accession, and 
now India has created this difficulty by trying to merge some 
food security issues which should be dealt with in 2017, and I 
am trying to understand what exactly is going on with that 
because we have a new Indian government under Prime Minister 
Modi who has touted themselves as a pro business individual, 
somebody who wants to engage more not only in opening up the 
business atmosphere within India, but also internationally. 
This is baffling to me, and so I was hoping you might shed a 
little more light on that.
    Second, the members of the African Union who have also 
raised a separate issue, I think it is with funding or to help 
build capacity for the facilitation agreement. Are the Indians 
and Africans collaborating on this or are these two separate 
developments?
    Ambassador PUNKE. Well, I do not know the degree to which 
there is interplay between the Indians and Africans in terms of 
their discussions. They are raising in some cases slightly 
different issues, and so maybe I will address them separately.
    With regard to India, as you pointed out, there have been 
conflicting signals even in the last 24 hours as to where India 
intends to come down on fulfilling its obligation under the 
Trade Facilitation Agreement, and we are certainly hopeful that 
the more positive signals that we have heard are the ones that 
will prevail in Geneva at the General Counsel meeting next 
week.
    Ambassador Froman left Washington yesterday for a meeting 
of G-20 ministers in Sydney. I will be joining him there on 
Saturday, and this is an issue that we will be raising along 
with other G-20 members very directly with India in an effort 
to get clarity on exactly where the Indians stand.
    I do remain hopeful that the positive signals will be the 
ones that prevail.
    With regard to Africa, you point out I think one of the 
most perplexing aspects of this, which is that what every 
African country is doing domestically is seeking to improve its 
trade facilitation systems. What the Africans are doing 
regionally is regional cooperative efforts to improve trade 
facilitation.
    And so the notion that we would not also cooperate on this 
issue multilaterally in the WTO is perplexing, and that being 
said, we were able to reach an agreement, and the more recent 
signals from most of the Africans have been positive in terms 
of following through on their obligations.
    There are a couple of outlier signals from a very small 
handful of African countries, but obviously we're hopeful that 
they will also respect their obligations by the time we get to 
the key moment next week
    Mr. BOUSTANY. Yes, I hope so. I know the Administration put 
forth this Power Africa initiative. Mike Froman has been very 
much involved in it. That ought to be a clear signal that the 
United States is committed, but given the fact that trade 
facilitation will help these countries immensely, it is truly 
perplexing that they have taken this initial step. I hope we 
can get through it because earlier, as you said, this Trade 
Facilitation Agreement has basically the impact of creating a 
virtual cycle with regard to Doha, and the actions of India and 
Africa, these African countries threaten to take us back to 
where we were with the impasse on Doha, and that is a big 
concern I have.
    Finally, I just want to quickly ask you about China and the 
ITA. I was in China in March, as you know, and we pushed them 
really hard. I think the whole of government we are pushing. Do 
you think we will get a breakthrough at APEC with President Xi?
    Ambassador PUNKE. Well, I am extremely hopeful we will have 
an agreement, but we are not there yet. As you pointed out, 
China is hosting APEC this year, and we had been without even 
dialogue with China for almost six months prior to the APEC 
meeting in Chengdu.
    There was incremental but positive progress on ITA on the 
margins of the Chengdu meeting in May. I was in Beijing last 
week with Ambassador Froman and with a number of members of the 
President's cabinet in the context of the S&ED discussions. We 
pushed this issue very hard, not just Ambassador Froman, but 
also Secretary Kerry, also Secretary Lew, and we made more 
incremental progress.
    But we still are not where we need to be in, I think, 
achieving what the chairman referred to as a sufficiently long 
list where China is making an appropriate contribution to the 
overall agreement.
    We are going to keep pushing, and I think we can get there, 
but we are not there yet.
    Mr. BOUSTANY. Mr. Chairman, I think we need to send a 
strong signal to the Chinese to reach that level of ambition on 
ITA. I mean, they are one of the world's largest exporters of 
technology products, and for them to really in effect wreck 
this deal is not good.
    This is an opportunity for the new leadership in China to 
step up internationally and to provide leadership and do the 
right thing for the international community.
    Thank you. I yield back.
    Mr. NUNES. I thank the gentleman.
    The gentleman from Illinois, Mr. Roskam, is recognized for 
five minutes.
    Mr. ROSKAM. Thank you, Mr. Chairman.
    Ambassador, I want to shift gears if I could and move from 
the details and on the ground sort of insights that you have 
been able to provide, and I have learned a great deal from this 
morning and I thank you for that, to a little bit more of a 
philosophical question, and so let me lay a premise out, and I 
would be interested if you think my premise is right, and what 
your observations are as somebody that is driving U.S. trade 
policy and really having an impact all around the globe.
    And here is what I have observed. I think that there is a 
palpable ambiguity in the United States on what the U.S. role 
should be in the world today. On the political left, and I do 
not want to over-characterize it, but you will get my drift; on 
the political left there is this feeling, and it kind of a 
hangover from Vietnam, a hangover from the debate about Iraq 
and weapons of mass destruction, and so forth, and there is 
this natural reluctance to assert American power around the 
world.
    On my side of the aisle, in my party, there is a growing 
isolationism that is now becoming manifest in our debates and 
so forth, and it is shrouded in budget talk. You know, we 
cannot afford this, and so forth.
    And so here is my question. So what have you observed as 
somebody who is really uniquely on the global scene and 
interacting all around the world literally? How does trade fit 
into the assertion of American influence?
    And I am not talking sharp elbowed ``have it our way,'' but 
I am of the view that the United States and our presence around 
the world is a good thing.
    An Asian Ambassador yesterday put it very elegantly to me 
in my office, and he said, ``We miss you more than ever,'' 
meaning the United States.
    Can you give me your observations about how trade fits into 
this overall influence that we are trying to have, you know, as 
the Navy puts it, as a global force for good? It sounds like a 
bumper sticker, but it is a very apt way of trying to describe 
this.
    How does trade fit into this whole milieu?
    Ambassador PUNKE. Well, I think it is a very interesting 
question and a very interesting premise. I would disagree with 
the Asian Ambassador who would indicate in any way that the 
U.S. has been missing, and I think in listening to your 
question what I thought of was actually just the opposite in 
the following sense.
    One of the things that I think is unique about this moment 
historically in terms of U.S. leadership is the degree to which 
we have put ourselves really at the center pivot of critical 
discussions. We are at the center pivot of a discussion about 
Asian trade through TPP. We are at the center pivot of a 
discussion about Atlantic Trade in T-TIP. We are at the center 
pivot of an effort to make the WTO a more productive place 
through leadership in TSA and ITA and environmental goods.
    So I really see us as being very well positioned right now 
if we can consummate those agreements, and that is the question 
that I think from a philosophical standpoint is the challenging 
one, is how do we build a bipartisan coalition that is 
supportive of trade and those agreements that I just described 
because the key thing from my perspective is that those 
agreements are the way that we have an opportunity to not only 
create economic opportunities for U.S. stakeholders, but also 
to promote our values globally.
    And the thing that is frustrating to me sometimes is I 
think that sometimes opponents of these agreements forget that 
this is not happening in the abstract. Our rivals are out there 
very actively seeking to put their own systems in place, and 
for example, in the context of TPP, we can be very certain that 
if TPP did not succeed that the Chinese would be quite happy to 
fill that vacuum with their RCEP agreement, and I can guarantee 
you that values and concerns that we have about things like 
environmental protection, consumer protection, labor rights 
will be far better served under TPP than they would be under 
Chinese leadership.
    Mr. ROSKAM. It seems that one of the areas where we can all 
work together, the Administration and this Committee, in 
particular, and you sense a strong bipartisan commitment to 
free trade is to articulate at home how this is a winner for 
us, how this is a winner for our consumers, how this is a 
winner for our producers, and we need to shun the sort of 
thinking that says, ``No, this is a zero sum game, and the only 
way somebody else benefits is at our expense.''
    And so to the extent that we can be actively participating 
with you in that debate, I would be honored to play that role.
    Mr. NUNES. The gentleman yields back.
    And I recognize the gentleman from Connecticut, Mr. Larson 
for five minutes.
    Mr. LARSON. Thank you, Mr. Chairman, and thank you, 
Ambassador for your service.
    Following along with a number of the concerns that my 
colleagues have addressed, I always like to try to take it back 
to my district and to a place called Augie & Ray's. I do not 
know that you have been there, Ambassador, but if you ever get 
the chance, I highly recommend it. Larson's special is not bad.
    But it is at Augie & Ray's that you hear the unfiltered 
opinion of the community, and I am talking about everybody from 
the Chamber of Commerce to the insurance industry to the 
machinists at Pratt & Whitney, and it is there that we see this 
growing skepticism and divide about trade, and it is a great 
irony coming from a State that is primarily an export State 
that relies on trade.
    I think a lot of the angst comes from both the 
implementation of trade agreements with unenforceable 
provisions, aka such as the labor provisions in NAFTA, and also 
the enforceable provisions that while useful, often require 
years of deliberation and considerable amounts of money before 
the enforcement actually takes place.
    While the Administration clearly has been aggressive in 
utilizing the enforcement mechanisms available in the WTO, it 
is clear that more must be done to ensure that nations are 
living up to the standards that they agreed on, Mr. Roskam's 
point, I think, that that would better have the public have a 
stronger feeling about it.
    So I have three questions that I want to pose to you, short 
ones, but what more is the Administration doing to ensure that 
American businesses, manufacturers and laborers are playing on 
a level playing field?
    And that is the whole gist at Augie & Ray's, is that they 
are not. They feel that we write tax policies that make it 
easier for people to go overseas, and then we end up in trade 
agreements that further hurt labor here at home.
    So what are we doing further to level the playing field 
with their competitors?
    Also, and again, this is something that Mr. Boustany raised 
as well, and I think it is generally held on the committee, our 
overarching concerns with China who consistently retaliates 
when the United States brings an issue to the WTO for 
enforcement. It seems that these types of retaliatory actions 
have in many ways stalled the United States' ability to move 
forward on issues like addressing currency manipulation, which 
again has broad bipartisan support here in Congress and would 
have a real beneficial impact on the American workforce and 
send a clear message that, yes, we are staunchly persistent in 
wanting to enforce this.
    And last, because it is at that same place and because it 
is, again, an export State and a lot of small businesses and 
major manufacturers, they rely heavily on the Import-Export 
Bank.
    Has the USTR taken a position on the Import-Export Bank? It 
faces expiration this fall, and yet it is a vital tool, again, 
in terms of leveling that playing field.
    Ambassador PUNKE. Well, thank you, Congressman. Let me try 
and work my way through those starting with the initial 
observation you made about the importance of labor and 
environment provisions being fully enforceable.
    We agree with that, and one of the things that we have made 
a hallmark of our efforts to negotiate in TPP and T-TIP is to 
seek labor and environment provisions that are not only fully 
enforceable but also subject to dispute resolution the same as 
any other obligation in the agreement, including in the 
instance where a party prevails in dispute resolution and the 
losing party does not come into compliance, that there would 
even be the potential of trade sanctions to enforce those 
obligations.
    So we agree with you that that needs to be a central part 
of the way that trade agreements are negotiated in the 21st 
Century.
    To touch briefly on the other specific issues that you 
raised, what are we doing about leveling the playing field? 
Part of that, I think, is a very aggressive and constant effort 
with all of our major trading partners to open up new 
opportunities so that there is not the ongoing situation where 
the U.S. market is more open than the market of our most 
important competitors.
    You know, the truth of the matter, and this is something 
that I think is relevant to the philosophical question that was 
raised by Congressman Roskam, is that the U.S. market is 
largely already open. We made that decision beginning 60 years 
ago at the end of World War II.
    So we are more open than a lot of the countries that we are 
most worried about, and the only way that I know of to bring 
that into better alignment is to negotiate trade agreements 
where we lower the barriers that our competitors still 
maintain. But that requires us to engage and specifically to 
engage in trade negotiations and bring back trade agreements.
    The other aspect of that, I think is enforcement and 
demonstrating that we do not just negotiate the agreements and 
then they go away, but rather that there is vigilance there and 
that we will ensure that other countries live up to their 
obligations.
    I think enforcement has been a hallmark of this 
Administration just in the WTO context alone. We have brought 
18 WTO enforcement cases.
    One of the things you mentioned is concern about the 
Chinese using inappropriate retaliatory litigation when we 
brought legitimate cases. That is something we have pushed back 
against explicitly, and I might add also successfully in terms 
of their misuse of their domestic anti-dumping laws. So that is 
a place where we are very focused.
    The last point you raised, which I will just . . . though 
very briefly . . . because my position will not surprise you, 
is our position with regard to Export-Import Bank. Of course, 
USTR is strongly in line with the position of the 
Administration about the importance of extending the Ex-Im Bank 
and maybe the additional perspective that we bring to that is 
to see what our competitors are doing.
    And we know what we are up against, and I think the Ex-Im 
Bank is one of the things that helps to level the playing field 
in exactly the way that you were talking about.
    Mr. LARSON. Thank you.
    Thanks for the latitude, Mr. Chairman, also.
    Mr. NUNES. No problem. The time of the gentleman has 
expired.
    I now recognize the gentleman from Wisconsin, Mr. Kind, for 
five minutes.
    Mr. KIND. Thank you, Mr. Chairman. Thanks for holding this 
very important hearing.
    Ambassador Punke, it is very good to see you again, and 
thanks for your service to our country.
    Let me ask you, Ambassador Punke, while I have got you 
here, a resources issue. I mean, right now we are engaged in 
TPP negotiations, T-TIP negotiations going on, trying to figure 
out a way to salvage and resurrect the Doha Round, the 
potential for plurilateral negotiations to help spur Doha. You 
have directly been involved in the ITA negotiations, especially 
with China. We have got the Environmental Goods Agreement that 
is pending, Trade in Services Agreement, Trade Facilitation 
Agreement coming out of the Bali Ministerial Round.
    Is our team in Geneva and is our USTR team being stretched 
to the limit right now in regards to our negotiating capacity, 
given all of these different items, which are tremendously 
important in their own right, but how are we doing as a 
Congress in making sure that you and the entire USTR team have 
the resources that you need in order to do an adequate job of 
representing this country with so many balls up in the air at 
the same time?
    Ambassador PUNKE. Well, Congressman, thank you very much 
for that. We certainly are very grateful for the support that 
we have had from you specifically, but from the committee more 
broadly in terms of resources for the Office of the U.S. Trade 
Representative.
    Look. We pride ourselves on being lean and mean at USTR, 
and we will always make do with whatever resources we are given 
and life off the land or do whatever else is necessary to make 
sure that we are fulfilling our mission.
    I think Ambassador Froman was asked this question a couple 
of months ago and noted the fact that there had been recent 
months particularly during the sequester when we were perhaps a 
little bit leaner than we wanted to be. I think we are in a 
slightly better position as of the last couple of months, and 
it has been gratifying, I think, to have the ability to field 
the teams in the places that we need to field them in order to 
engage robustly in all of the negotiations that you described.
    So we appreciate your support. We will make the most of the 
resources that we are given, and we know that in the type of 
budget environment that we are in, that all of us have to be 
very accountable in terms of how we spend scarce resources, but 
we will continue the conversation with you about resources and 
USTR.
    Mr. KIND. All right. I gave you a softball. I gave you a 
chance to ask for more, but I am not hearing a specific list of 
concerns right now.
    What about retention? Obviously you have been in place for 
about four and a half years, a little over four years. 
Obviously a lot of this requires a lot of experience, 
background, relationship building, too. How are we doing in 
keeping the team constitutes?
    Ambassador PUNKE. We are doing pretty well, given the fact 
that USTR's very talented staff has lots of opportunities. I 
think one of the things that I love about the agency that I 
work at is that people are very dedicated to their mission. 
They genuinely love their work, and so people tend to stick 
around.
    That is not true across the board, and there are areas 
where, you know, we always would hope for a longer retention, 
but I think as a general matter we are doing okay.
    Mr. KIND. What is your assessment of where Doha is at the 
current state? Obviously we have a new General-Director 
Azevedo, who has tried to resurrect and breathe new life into 
it and that, but to say it has been disappointing as far as 
lack of progress would be an understatement. Here I think you 
appreciate that, too.
    But this was the opportunity of being able to bring those 
developing and emerging economies into the global trading 
system, and it just seems to be a disappointment so far.
    Ambassador PUNKE. Well, we are at a critical juncture just 
over the next two weeks because Bali gave us a chance, but over 
the next two weeks we will find out whether or not WTO members 
are sticking to their Bali commitments. If they stick to their 
Bali commitments and we can continue to point to trade 
facilitation and the other Bali agreements as areas where it 
worked, that gives us a chance of grappling with the bigger 
issues like the one that you pointed out of the appropriate 
role of the emerging economies.
    If Bali falls apart, it is very difficult to imagine that 
we are going to be able to have that conversation about post 
Bali in any kind of a credible way.
    Mr. KIND. Geographic indicators at EU, is this 
insurmountable or do we have tools with WTO to help?
    Ambassador PUNKE. Well, it is a huge issue with the EU, as 
I know you know well coming from where you come from, and I 
will say very clearly in the context of T-TIP that we will not 
be bringing the European system of geographic indications to 
the United States.
    At the same time, we will be pressing very hard for access 
for our agricultural products in the geographic indication 
domain into the European market, and that is a conversation 
that is difficult and very significantly different viewpoints 
obviously between us and the European.
    But I have discovered something quite interesting in my 
time in Europe over the last four and a half years that we are 
injecting into that conversation, and this will be of interest 
to you, I think, Congressman, and that is I have discovered the 
phenomena of something called German feta cheese, and I have 
also discovered the phenomena of something called French 
gruyere, and I am not an expert on cheese the way that people 
form your State might be, but I do know that gruyere is not in 
France, and so that is the type of anomaly that we are pointing 
out to our European colleagues in trying to address this issue 
of geographic indications in the context of T-TIP.
    Mr. KIND. All right. Thank you, Mr. Ambassador.
    Thank you, Mr. Chairman.
    Mr. NUNES. Thank the gentleman.
    The gentleman from Minnesota is recognized for five 
minutes.
    Mr. PAULSEN. Thank you, Mr. Chairman.
    And, Ambassador, just I want to reiterate just a thank you 
for your daunting and continued efforts in leadership in 
advancing the trade agenda.
    A couple of things I want to just touch on real quick. As 
you well know, health care is playing a very increasing role in 
the U.S. and global economies, and there is no doubt it is the 
largest private sector employer in the United States. It is one 
of the largest and fastest growing sectors in the world 
economy. It is also one of America's key economic drivers of 
innovation and cutting edge research.
    And it is not just pharmaceuticals or medical devices that 
a lot of folks just think of. We are actually talking about 
opportunities in our health care service delivery now in terms 
of express delivery, hospital design, doctors, nurses, 
insurance companies, health IT systems, as well as logistics.
    You know, my colleague on the committee, Ron Kind, who was 
just speaking a minute ago, and I have even gone so far as to 
ask Ambassador Froman to consider adding a position that would 
have USTR dedicate a position on health care trade. Can you 
just comment or add some thoughts about the role or the 
importance that you see right now that this sector has in your 
work in Geneva or in trade negotiations?
    Ambassador PUNKE. Well, thank you for that question, 
Congressman Paulsen.
    There is no question that we see health care as being an 
enormously important sector in all of the manifestations that 
you described. You know, just last week in Beijing we were 
pressing the Chinese specifically on the information technology 
agreement with regard to tariffs on things like MRI machines, 
CAT scans, implantable medical devices.
    But we are also very aware, as you point out that health 
care is not just goods. It is also significantly services, and 
one of the, I think, most helpful or most hopeful fora for 
seeking to promote those type of opportunities in terms of U.S. 
services is through TiSA.
    You mentioned insurance. You mentioned health IT logistics. 
You mentioned, you know, the provision of health care services 
themselves. All of those are issues that are under discussion 
in the TiSA context right now, and we see enormous potential.
    Obviously those are also part of the various bilateral and 
regional agreements. So we are very focused on that issue set.
    Mr. PAULSEN. Good. And let me follow up with sort of a 
different topic here. When the TRIPS agreement was negotiated 
20 years ago, there was some disagreement whether intellectual 
property was truly a trade issue, and developments since then 
have certainly answered the question. The answer is yes, and 
IPR is now actively traded whether it is in the form of cross-
border licensing agreements or sales of IPR portfolios or a 
cloud computing services and other services that allow foreign 
clients to have access to U.S. companies' intellectual property 
rights.
    In fact, IPR now accounts for the major portion of the 
value of many of U.S. exports. If you take the iPod, for 
example, the value of Apple's IPR accounts now are far more 
than the value of the final product in terms of shipping and 
distribution and assembly.
    Yet there are a lot of countries within the WTO that 
continue to question intellectual property rights, especially 
copyrights and patents for innovative medicines.
    What are you doing to ensure that WTO members comply with 
those TRIPS obligations to help build greater understanding 
within the WTO of the importance of IPR?
    Ambassador PUNKE. Well, it is an ongoing focal point for us 
in terms of enforcement. And I talked earlier about the premium 
that this Administration has placed on enforcement and 
specifically on intellectual property enforcement, whether it 
is with regard to the TRIPS agreement and our opportunities in 
the WTO to pursue this multilaterally; whether it is with 
regard to a new negotiation like T-TIP where we have another 
country in the form of the European Union that actually has 
quite high standards with regard to intellectual property, and 
we see the potential to work together to create a standard that 
can be pointed to in future negotiations with other parties, 
whether it is with regard to a country like China or India, 
which was mentioned, as places where we have significant 
concerns about intellectual property compliance and we are 
pursuing enforcement; whether it is through bilateral 
discussions or litigation.
    We are using the whole toolbox across the whole range of 
issues precisely because I think we recognize that what 
intellectual property is about is innovation and protecting 
innovators, and we obviously want to continue to be an 
innovation society.
    Mr. PAULSEN. Thank you, Mr. Chairman. I yield back.
    Mr. NUNES. I thank the gentleman.
    Ambassador, I would like to thank you for your testimony 
today. Our record will remain open until July 30th, and I urge 
interested parties to submit statements to inform the 
committee's consideration of the issues discussed today.
    This hearing is now adjourned.
    [Whereupon, at 11:17 a.m., the subcommittee was adjourned.]
    [Questions for the record follow:]
    
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    [Submissions for the record follow:]

                      Alexan International, Letter


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                      Ambassador Glassman, Letter

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                     Institute for Liberty, Letter

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                     Stewart and Stewart, Statement
                     
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