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





 
                  H.R. ___, THE GLOBAL INVESTMENT IN 
                        AMERICAN JOBS ACT OF 2013
=======================================================================

                                HEARING

                               BEFORE THE

           SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 18, 2013

                               __________

                           Serial No. 113-32
                           
                           
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]




      Printed for the use of the Committee on Energy and Commerce

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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
JOE BARTON, Texas                      Ranking Member
  Chairman Emeritus                  JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania        FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska                  ANNA G. ESHOO, California
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
TIM MURPHY, Pennsylvania             GENE GREEN, Texas
MICHAEL C. BURGESS, Texas            DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee          LOIS CAPPS, California
  Vice Chairman                      MICHAEL F. DOYLE, Pennsylvania
PHIL GINGREY, Georgia                JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             JIM MATHESON, Utah
ROBERT E. LATTA, Ohio                G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington   JOHN BARROW, Georgia
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            DONNA M. CHRISTENSEN, Virgin 
BILL CASSIDY, Louisiana                  Islands
BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
PETE OLSON, Texas                    JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia     JERRY McNERNEY, California
CORY GARDNER, Colorado               BRUCE L. BRALEY, Iowa
MIKE POMPEO, Kansas                  PETER WELCH, Vermont
ADAM KINZINGER, Illinois             BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia         PAUL TONKO, New York
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
           Subcommittee on Commerce, Manufacturing, and Trade

                          LEE TERRY, Nebraska
                                 Chairman
LEONARD LANCE, New Jersey            JANICE D. SCHAKOWSKY, Illinois
  Vice Chairman                        Ranking Member
MARSHA BLACKBURN, Tennessee          G.K. BUTTERFIELD, North Carolina
GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
BRETT GUTHRIE, Kentucky              JERRY McNERNEY, California
PETE OLSON, Texas                    PETER WELCH, Vermont
DAVE B. McKINLEY, West Virginia      JOHN D. DINGELL, Michigan
MIKE POMPEO, Kansas                  BOBBY L. RUSH, Illinois
ADAM KINZINGER, Illinois             JIM MATHESON, Utah
GUS M. BILIRAKIS, Florida            JOHN BARROW, Georgia
BILL JOHNSON, Missouri               DONNA M. CHRISTENSEN, Virgin 
BILLY LONG, Missouri                     Islands
JOE BARTON, Texas                    HENRY A. WAXMAN, California, ex 
FRED UPTON, Michigan, ex officio         officio
  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Lee Terry, a Representative in Congress from the State of 
  Nebraska, opening statement....................................     1
    Prepared statement...........................................     3
Hon. Janice D. Schakowsky, a Representative in Congress from the 
  State of Illinois, opening statement...........................    12

                               Witnesses

Francisco J. Sanchez, Undersecretary of Commerce for 
  International Trade, United States Department of Commerce......    13
    Prepared statement...........................................    15
    Answers to submitted questions \*\...........................   110
Nancy L. McLernon, President and CEO, Organization for 
  International Investment.......................................    37
    Prepared statement...........................................    40
Linda Dempsey, Vice President, International Economic Affairs, 
  National Association of Manufacturers..........................    49
    Prepared statement...........................................    51
Matthew J. Slaughter, Associate Dean for Faculty, Tuck School of 
  Business, Dartmouth University.................................    62
    Prepared statement...........................................    64
    Answers to submitted questions...............................   111
Martin Baily, Senior Fellow, Economic Studies, Bernard L. 
  Schwartz Chair in Economic Policy Development, Brookings 
  Institute......................................................    69
    Prepared statement...........................................    72
    Answers to submitted questions...............................   113
Celeste Drake, Trade and Globalization Policy Specialist, AFL-CIO    81
    Prepared statement...........................................    83
    Answers to submitted questions...............................   115

----------
\*\ Mr. Sanchez did not respond to submitted questions.

                           Submitted material

Discussion draft.................................................     4


   H.R. --------, THE GLOBAL INVESTMENT IN AMERICAN JOBS ACT OF 2013

                              ----------                              


                        THURSDAY, APRIL 18, 2013

                  House of Representatives,
Subcommittee on Commerce, Manufacturing, and Trade,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:33 a.m., in 
room 2322 of the Rayburn House Office Building, Hon. Lee Terry 
(chairman of the subcommittee) presiding.
    Members present: Representatives Terry, Lance, McKinley, 
Pompeo, Kinzinger, Johnson, Long, Schakowsky, McNerney, and 
Barrow.
    Staff present: Charlotte Baker, Press Secretary; Kirby 
Howard, Legislative Clerk; Nick Magallanes, Policy Coordinator, 
CMT; Brian McCullough, Senior Professional Staff Member, CMT; 
Andrew Powaleny, Deputy Press Secretary; Shannon Weinberg 
Taylor, Counsel, CMT; Michelle Ash, Democratic Chief Counsel; 
Jacqueline Cohen, Democratic Senior Counsel; and Will Wallace, 
Democratic Policy Analyst.

   OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEBRASKA

    Mr. Terry. So welcome, everybody. Good morning to our 
panelists and guests. The purpose of today's hearing is to 
highlight the importance of foreign direct investment in the 
United States and learn more from our experts on how lowering 
barriers to foreign investment in our country can have 
significant benefits for our economy as a whole. I hate to 
steal the undersecretary's thunder, but his testimony lays out 
some of the facts that deserve being mentioned more than once.
    In 2010 U.S. affiliates of foreign firms employed over 5.3 
million workers--as I understand, that is now 5.6 as of today--
and the average salaries are 77,000 per year. These firms 
accounted for 41.3 billion worth of research and development 
efforts and 149 billion worth of capital expenditures in that 
same year. In the manufacturing sector alone, FDI inflows were 
nearly 84 billion in 2012, according to the National 
Association of Manufacturers.
    These statistics tell us a clear story: increasing capital 
in the form of direct foreign investment has positive effects 
on manufacturing, increased exports, job creation, and U.S. 
competitiveness. It is just that simple.
    Unfortunately, these rosy statistics fail to tell the whole 
story. Foreign direct investment in the United States has 
fallen drastically over the last few years, relative to other 
nations. According to the testimony we will here today from the 
organization for international investment, the U.S. share of 
foreign direct investment has dropped from 41 percent in '99 to 
17 percent in 2011.
    The reality is that, while the U.S. remains an economic 
leader, the other nations are catching up. The statistic I just 
mentioned is indicative of that. Companies want to manufacture 
in a country where there is fair corporate tax code, a high 
degree of regulatory certainty, and a set of policies that 
welcome investments into the country.
    The United States can't rest on its laurels. We need to 
take a hard look at some of our national policies and assess 
whether they are stunting our ability to attract companies to 
the U.S. that have proven they create jobs and will help grow 
our economy. The legislation that we will be introducing in the 
following days, the Global Investment in American Jobs Act of 
2013, is just the first step in that process.
    Given what we will learn in today's hearing from a panel of 
experts--and we have heard in our last three meetings focused 
on manufacturing that this should be a no-brainer. Investing in 
American jobs is not a partisan issue when companies like 
Toyota and Honda choose to open up manufacturing facilities in 
Kentucky or Texas or Tennessee or Ohio or South Carolina or 
Georgia. Notice Nebraska wasn't on there. Neither was Illinois, 
so there is room for improvement.
    Ms. Schakowsky. Yes.
    Mr. Terry. We heard from some of our executives just last 
week that when they opened the doors, thousands of jobs were 
created directly and indirectly. Local, state, and federal tax 
revenues went up not because marginal rates went up but because 
the economies in those cities and States grew and more people 
are working. We heard from these companies and how they helped 
change the communities they became part of, contributing 
through outreach programs like workforce training and 
charitable giving.
    If our legislation, the Global Investment in American Jobs 
Act of 2013, can succeed in highlighting what the U.S. needs to 
do to and attract more of our great companies to our shores, 
then it is a win-win for every American and workers.
    The U.S. can still be one of the most much attractive 
places in the world to invest capital. We have a large and 
affluent consumer base, a strong rule of law when it comes to 
intellectual property, and one of the best and most productive 
workforces in the world. It is my hope that today's hearing can 
help us highlight some areas where barriers on foreign direct 
investment currently exist so that we can build upon the 
positives I just mentioned and not only compete for but win the 
opportunities for foreign direct investment.
    I want to thank all of our panelists for coming here today 
and especially Mr. Sanchez. Thank you for being here as well. 
You are a key part of this effort and have done well.
    [The prepared statement of Mr. Terry follows:]

                  Prepared statement of Hon. Lee Terry

    Good Morning and welcome to our panelists and other 
guests.The purpose of today's hearing is to highlight the 
importance of Foreign Direct Investment in the United States, 
and learn more from the experts on how lowering barriers to 
foreign investment in our country can have significant benefits 
for the economy as a whole.
    I hate to steal Under Secretary Sanchez's thunder-but his 
testimony lays out some facts that deserve being mentioned 
twice. In 2010--U.S. affiliates of foreign firms employed over 
5.3 million workers making an average of $77,000 per year. 
These firms accounted for $41.3 billion worth of Research and 
Development efforts and $149 billion worth of capital 
expenditures that same year. In the manufacturing sector alone, 
FDI inflows were nearly $84 billion in 2012, according to the 
National Association of Manufacturers.
    These statistics tell a clear story: increasing capital in 
the form of direct foreign investment has positive effects on 
manufacturing, increased exports, job creation and U.S. 
competitiveness. It is just that simple.
    Unfortunately, these rosy statistics fail to tell the whole 
story. Foreign direct investment in the United States has 
fallen drastically, relative to other nations. According to 
testimony we will hear today from the Organization for 
International Investment, the U.S. share of foreign direct 
investment has dropped from 41% in 1999 to 17% in 2011.
    The reality is that, while the U.S. remains an economic 
leader, other nations are beginning to catch up. The statistic 
I just mentioned is indicative of that. Companies want to 
manufacture in a country where there is a fair corporate tax 
code, a high degree of regulatory certainty and a set of 
policies that welcome investments into the economy.
    The United States cannot rest on its laurels. We need to 
take a hard look at some of our national policies and assess 
whether they are stunting our ability to attract companies to 
the U.S. that have proven they create jobs and help grow our 
economy. The legislation that I will be introducing in the 
following days, the Global Investment in American Jobs Act of 
2013, is the first step in this process.
    I hope that every member of this subcommittee, on both 
sides, will be willing to cosponsor this legislation. Given 
what we will learn in today's hearing from our panels of 
experts and what we have heard in our last three hearings 
focused on manufacturing, it should be a ``no-brainer.''
    Investing in American Jobs is not a partisan issue-when 
companies like Toyota and Honda choose to open up manufacturing 
facilities in Tennessee and Kentucky and Ohio and South 
Carolina-we all win. We heard from some of their executives 
just last week. When they opened their doors, thousands of jobs 
were created, directly and indirectly. Local, state and federal 
tax revenues went up--not because marginal rates went up--but 
because the economies in those cities and states grew and 
because more people were working. We heard from these companies 
how they helped change the communities they became a part of--
contributing through outreach programs like workforce training 
and charitable giving.
    If my legislation, the Global Investment in American Jobs 
Act of 2013, can succeed at highlighting what the U.S. needs to 
do to keep attracting more great companies to our shores, then 
it is a win for every U.S. worker.
    The U.S. can still be one of the most attractive places in 
the world to invest capital. We have a large and affluent 
consumer base, a strong rule of law when it comes to 
intellectual property and one of the best and most productive 
workforces in the world.
    It is my hope that today's hearing can help us highlight 
some areas where barriers on foreign direct investment 
currently exist-so that we can build upon the positives I just 
mentioned and not only compete for, but win, opportunities for 
more foreign investment.

                                #  #  #

    [The discussion draft follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Terry. So I yield back the rest of my time and now 
recognize that Ranking Member, Ms. Jan Schakowsky.

       OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 
     REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

    Ms. Schakowsky. Thank you, Mr. Chairman. I am hoping that 
we can keep our run of bipartisan hearings and work. We have 
got a good string going so far. And I thank you for holding 
this hearing on draft legislation to attract further foreign 
investment in the United States.
    I welcome the witnesses, especially Mr. Sanchez, this 
morning as our first panelist and look forward to all of the 
testimony.
    In the interest of promoting good jobs and overall economic 
growth, I agree that we should consider ways to increase 
investment in this country, both domestic and foreign. The 
United States is the global leader in attracting foreign direct 
investment. There is more foreign direct investment in America 
than anywhere else, and we are consistently ranked as number 
one of the easiest places to do business.
    There is a strong incentive to invest in America. Our 
economy is continuing to recover from the Great Recession and 
we remain the best place on Earth to find talented, motivated 
employees. In order to access all that our country has to 
offer, foreign investors know that they will be required to 
meet labor, health, environmental, and consumer standards. 
Strong standards protect workers in the communities in which 
these foreign investments occur, and they are essential for 
long-term economic growth in this country.
    Our economy is built on the middle class and those who 
aspire to it, and it is imperative that our attempts to expand 
foreign investment strengthen rather than undermine worker 
protections, compensation, and job security. Just as the best 
American companies observe high labor standards, so must 
foreign investors understand that a well-compensated and well-
protected workforce will drive the future growth of their 
corporations and our overall economy. It is imperative that 
foreign investors respect our local, state, and federal 
environmental protections.
    I believe that climate change is the greatest challenge we 
face as a planet and as a Nation. Reducing greenhouse gas 
emissions, protecting our waterways from harmful toxins and 
chemicals, and shifting toward cleaner energy sources is 
essential if we are to thrive for generations to come. Our 
effort to encourage foreign direct investment should align with 
our efforts to combat climate change and help us transition to 
a clean energy future.
    Finally, it is essential that we maintain restrictions on 
former foreign investment and industries that are critical to 
public safety, national security, and a strong domestic 
workforce. Those restrictions help ensure the safety of the 
American people and the security of American jobs.
    I have listed some of the things that I am concerned about 
on foreign investment, but I look forward to hearing from our 
witnesses about how we can continue to drive foreign direct 
investment in the United States that promotes good jobs, a 
clean environment, and the security of the American people.
    And I want to yield the balance of my time to Mr. Barrow.
    Mr. Barrow. I thank the ranking member for her time. I 
appreciate it.
    I cosponsored this bill in the last Congress because it is 
a step in the right direction to grow American jobs. Every time 
I go home, I am reminded how investors overseas can spur jobs 
here at home by tapping into the infrastructure and workforce 
we have right here in America. Belgian companies like Solvay in 
Augusta, French companies like Alstom in Waynesboro, and Irish 
companies like Covidien in Augusta can invest in any country in 
the world. They are proud to invest in Georgia's 12th District. 
And the families that work for them take just as much pride in 
their work.
    We have the best workers in the world and we like it when 
companies all over the world compete for workers in Georgia. I 
will continue supporting job-creating efforts like this, and I 
look forward to today's hearing.
    With that, I yield back the balance of my time.
    Mr. Terry. Very good. No other requests for opening 
statements. Mr. Sanchez, we will recognize you for 5 minutes.

 STATEMENT OF FRANCISCO J. SANCHEZ, UNDERSECRETARY OF COMMERCE 
      FOR INTERNATIONAL TRADE, U.S. DEPARTMENT OF COMMERCE

    Mr. Sanchez. Chairman Terry, thank you very, very much. 
Ranking Member Schakowsky, distinguished members--is that 
better?
    Mr. Terry. Yes.
    Mr. Sanchez. Oh, that is a lot better. Distinguished 
members of the committee, thank you very much for inviting me 
to speak to you today about the Department of Commerce's work 
to attract and retain business investment in the United States.
    With your permission, Mr. Chairman, I will summarize my 
statement and submit my full testimony for the record.
    Mr. Terry. Thank you.
    Mr. Sanchez. Thank you, Mr. Chairman.
    At the outset, I want to thank the committee and the 
members of the House who have introduced legislation focusing 
on global investment. This is a clear recognition of how 
important the role that foreign direct investment plays in 
strengthening our economy. Such an effort reinforces a very 
simple truth: that, as a free market economy, the United States 
encourages investment from both domestic and foreign sources 
and that this investment leads to economic growth and job 
creation.
    In 2010, which was until this morning the latest available 
data we had, U.S. subsidiaries of foreign-owned farms employed 
5.3 million U.S. workers. As Chairman Terry just recognized, 
that number now is up to 5.6 million. And what is really 
important, I think, is that these are high-paying jobs with an 
average compensation of over $77,000 per year. And these firms 
also spend tens of billions of dollars expanding their 
facilities, purchasing equipment, and investing in research and 
development that keeps our economy at the cutting edge of 
innovation.
    So the bottom line: increasing the investment of attracted 
and retained investment to the U.S. is absolutely critical to 
growing our economy. And the good news is that the United 
States is the world's largest recipient of foreign direct 
investment. Companies from around the world choose to do 
business here in the United States and take advantage of the 
unparalleled business climate, which includes our innovative 
and stable market, a skilled and well-educated workforce, 
strong intellectual property rights protection and enforcement, 
and a stable regulatory climate.
    In addition, the United States has trade agreements with 20 
markets, giving firms with U.S. operations access to a global 
marketplace. In short, the U.S. is a great place to do 
business.
    Nevertheless, as the chairman pointed out, economies 
worldwide, as they open up and liberalize, we are now faced 
from these other economies increased competition to attract new 
investment projects and retain existing ones. Our States, 
regions, and local communities need a federal advocate to help 
win new investments because we are now competing with at least 
159 countries that have investment promotion programs, and on 
average these programs spend about $58 million annually.
    In this new climate, the U.S. needs to be actively engaged 
in foreign direct investment, making SelectUSA a valuable 
initiative. President Obama launched SelectUSA in 2011, as a 
first-ever U.S. government-wide initiative to promote and 
facilitate business investment in the United States. 
SelectUSA's unique services complement States' efforts and 
provide federal information and ombudsman services to firms 
seeking to invest, seeking to remain here, seeking to expand 
or, in many cases now, return to the United States. And this 
work is generating results.
    Since June 2011, SelectUSA has responded to over 600 
investor inquiries, assisted with over 100 ombudsman cases, and 
counseled nearly 140 U.S. cities, States, and regions. And that 
is just the start. We aim to build on this momentum in a 
variety of ways. One vehicle will be for SelectUSA to host an 
investment summit from October 31 to November 1 right here in 
Washington D.C. The SelectUSA investment summit is designed to 
highlight the benefits of the U.S. business climate to 
investors and help them engage with U.S. economic development 
organizations.
    In addition, SelectUSA will work to keep pace with the 
increase in investment, inquiries, cases, and, we hope, many 
successes. It will also continue to leverage the partnerships 
and relationships that we have with other federal agencies, as 
well as creating new ones. The Commerce Department will 
continue do all that it can to attract and retain business 
investment.
    I want to take a moment to thank the other agencies that 
have been diligently working to strengthen this initiative, and 
I want to thank you again for the opportunity to discuss this 
important topic. I welcome your questions.
    [The prepared statement of Mr. Sanchez follows:]
    [GRAPHICS NOT AVAILABLE TIFF FORMAT] 
    
    Mr. Terry. Thank you very much.
    At this point we will start our questions, and I really do 
appreciate you being here.
    Mr. Sanchez. Thank you, Mr. Chairman.
    Mr. Terry. It means a lot to us. And so your statement was 
very strong about the need and the importance of direct foreign 
investment, and I appreciate the strength of that statement.
    So you agree that we should take a look at approaches to 
make U.S. more competitive in attracting these foreign 
companies to invest here? That is your mission, right?
    Mr. Sanchez. That is part of our mission is to make sure we 
maintain a competitive business climate.
    Mr. Terry. Does the Commerce Department currently have any 
expertise in evaluating policies that affect our 
competitiveness in the world marketplace in attracting foreign 
investment?
    Mr. Sanchez. One of the things that the International Trade 
Administration has--and that is the business unit that I have 
the privilege of overseeing--is manufacturing services. And it 
does a lot of outreach to our business sectors. And so we are 
constantly interacting with them, getting feedback from them on 
what is working and what is not working. And we try to keep 
that dialogue going constantly, and as we learn that, share it 
with relevant agencies.
    Mr. Terry. So with that type of collaboration you feel 
comfortable that you could provide us with a study of where we 
can improve or remove barriers?
    Mr. Sanchez. Well, we are not the only agency that can 
contribute to that, but we certainly have a lot to say on it 
and we would welcome the opportunity to be a part of that 
dialogue.
    Mr. Terry. I appreciate that. Now, if a study like this is 
undertaken, who would you rely on in your staff to help piece 
this together?
    Mr. Sanchez. Well, we have a number of----
    Mr. Terry. Is he sitting here today, or she?
    Mr. Sanchez. I think part of that team----
    Mr. Terry. I think the one with the grin is probably, yes--
--
    Mr. Sanchez. The one who is feeling the weight of the new 
task. I am sure part of that team is right here in this room. 
We would probably draw on a number of people within the 
International Trade Administration, but I suspect we would want 
to draw on other relevant business units within the Department 
of Commerce, including NIST, PTO, Bureau of Economic Analysis, 
as well as reaching out to other relevant agencies.
    Mr. Terry. Well, I would appreciate that. And 180 days, do 
you feel that that is an appropriate time period? What is your 
feedback?
    Mr. Sanchez. Mr. Chairman, I probably would want to look at 
the scope of the study before I gave you a specific number, but 
if Congress mandated us to do that, we would certainly make 
every effort to provide a good study within the time requested.
    Mr. Terry. Fair. You went through a series of numbers--or 
the number of countries that we compete with is what, 160 did 
you say?
    Mr. Sanchez. Well, there are at least 159 that have active 
investment promotion programs and the average budget for those 
programs is about $58 million.
    Mr. Terry. So did you have any initial beliefs of where we 
should focus to remove barriers, or become stronger--ways to 
strengthen our ability to attract the foreign investment in the 
United States?
    Mr. Sanchez. As I mentioned in my testimony, we already 
start with a good attractive business climate. If you look at 
indicators that are put out by The World Bank, the World 
Economic Forum, and other groups, we consistently rank most 
often in the top 5, perhaps sometimes in the top 10, as one of 
the best places to do business. So we, fortunately, start from 
a very good place.
    One of the things that we have to do, and this is why 
SelectUSA was launched, is we have to recognize that more and 
more countries are seeking in foreign investment. And so we can 
no longer just rest on our laurels, we can no longer just say, 
look, we are a great place to do business; come. We have to 
actively promote. And I think that is one of the areas that we 
need to really pay attention to and that is what SelectUSA 
seeks to do. And your attention to this legislation into this 
effort is indicative that you and this committee recognize 
that.
    Mr. Terry. And in that regard of working in a collaborative 
way you mentioned in your statement with SelectUSA of working 
with the States. What do you feel the States' roles are and 
what have you seen from the experience of trying to attract 
foreign investment? How are the States doing? What should they 
be doing better? Who is doing best?
    Mr. Sanchez. Well, I think--and I believe this is the 
philosophy of SelectUSA--is that the States have the primary 
role of promoting foreign direct investment. That has been 
their role; it should continue to be. SelectUSA should be more 
of a facilitator, a supporter of those efforts.
    So there are things that we are able to do that helps them. 
For example, SelectUSA is leveraging the offices that the U.S. 
and Foreign Commercial Service have in 72 countries around the 
world and 100 cities here in the United States. And that is an 
important value added that we provide. Most States don't have 
that kind of coverage. In fact, no State that I know of has 
that coverage. My home State of Florida has 14 offices abroad 
and I believe that is the largest grouping of offices that any 
State has anywhere in the world.
    So presence outside of the United States is very important, 
helping them reach out as we get leads, connecting them to the 
economic development organizations. So I think these are the 
kinds of things that we play a very good complementary role 
with the States.
    Mr. Terry. Thank you very much. And my time is expired. And 
I now recognize the Ranking Member, Jan Schakowsky.
    Mr. Sanchez. Thank you, Mr. Chairman.
    Ms. Schakowsky. Thank you, Mr. Chairman, and thank you, Mr. 
Sanchez.
    Before I begin our hearing I want to say congratulations. I 
understand that you are among a short list of candidates being 
considered for the United States trade representative and I 
wish you the very best of luck.
    Mr. Sanchez. You are very kind. Thank you very much.
    Ms. Schakowsky. I have a question about greenfield 
investment, new investment versus merger and acquisitions. 
Preparing for this hearing presented us with some conflicting 
information. On the one hand, we are told that the reason we 
need to do this study and to promote foreign direct investment 
is because the United States is losing investment, as our 
chairman pointed out, losing investment opportunities to other 
countries such as Mexico and India, developing countries. I 
would agree that we should be concerned if that is the case and 
we need to promote that U.S. is the best place to invest.
    Now, the other hand, the most recent data available 
indicates that 85 percent or more of the foreign direct 
investment occurs through mergers and acquisitions. So if the 
vast majority of FDI is used to acquire preexisting United 
States' businesses that were previously owned by Americans, I 
am less clear about the benefits.
    In many cases, a large foreign firm is expanding into the 
United States by buying out smaller U.S. businesses. In these 
situations, the end result is often either the same number of 
jobs or even somewhat fewer jobs. In fact, a recent study 
concluded that despite the productivity gain that is associated 
with foreign ownership, any dollar of foreign direct investment 
from merger and acquisition sales has a weaker effect on growth 
than a dollar of foreign investment that stems from greenfield 
investment, which occurs when an investor builds a new 
productive unit from scratch.
    So my question is, if you could tell me what the Department 
of Commerce is doing, what you are doing, your administration 
is doing to distinguish between these two types of foreign 
direct investment and what changes could be made to the draft 
legislation so it focuses more intensively on greenfield 
investment?
    Mr. Sanchez. Thank you very much, Representative 
Schakowsky, and again, thank you for your kind words at the 
start of your question.
    SelectUSA starts with the premise that the United States 
has an open investment environment. And I agree with you that 
new investment that creates new jobs is very, very appealing 
and we have had the privilege, through SelectUSA, of working 
with a number of companies that have made those kinds of 
investments.
    I would also point out, however, that oftentimes there are 
investments being made acquiring companies that can use that 
added revenue, or in some cases if they don't get that revenue, 
those businesses might shut down. And so attracting foreign 
direct investment that takes over an existing company isn't 
always a net negative. In many cases it is a net positive. And 
so we look at it more broadly, that we are attracting 
investment and that that investment does a number of things. 
They often buy new equipment. They often expand facilities. 
They then, in turn, often add to our exports because what they 
manufacture here often then gets re-exported.
    So we will continue to focus on supporting investment here 
that, our hope is, will add to the net jobs, as most of the 
foreign direct investment, I believe, has, though I have not 
had the opportunity to read this study. And I will do so, and I 
would appreciate if I could get a copy of that study.
    But generally, we focus on helping attract this investment 
that has all this ripple effect net positive activity for our 
economy.
    Ms. Schakowsky. Let me get one more question. The Bureau of 
Economic Analysis at the Department of Commerce is responsible 
for measuring foreign direct investment. BEA used to carry out 
a survey of businesses that differentiated between growth and 
greenfield investment and investment growth from merger and 
acquisition. In 2008, it had to cancel this survey for budget 
reasons but the President's 2014 budget proposes to reinstate 
it. Why not get quickly here--the GAO, NBER, and the National 
Academy of Public Administration have each recommended that BEA 
expand its foreign direct investment data and that provided 
specific recommendations to the Bureau on what parts of its 
efforts would be most viable to expand.
    So I commend the Department of Commerce for seeking to 
resume this collection. Yes or no, should the Congress 
appropriate funding for this survey differentiating between 
Greenfield investment and investment through acquisitions?
    Mr. Sanchez. As I said, Representative Schakowsky, I have 
not read this study, though it sounds like you make a 
compelling argument for taking a hard look at this since we 
have done in the past through our Bureau of Economic Analysis. 
And we certainly were closely with the Bureau of Economic 
Analysis and I would certainly work closely with them to get 
this information either through their efforts or through other 
appropriate efforts.
    Ms. Schakowsky. It used to be that regardless of the policy 
decision we make as a consequence of having this information 
would inform how we move forward. So I thank you for that.
    Mr. Sanchez. Thank you.
    Ms. Schakowsky. I yield back.
    Mr. Sanchez. Thank you very much.
    Mr. Terry. The gentleman from Missouri is now recognized 
for 5 minutes.
    Mr. Long. Thank you, Mr. Chairman and thank you for being 
here today.
    And Ms. Schakowsky was making reference to a trade position 
that you may be up for, and trade was one of the few things 
that we were able to handle in a very good bipartisan fashion 
in the last Congress up here. So good luck in that endeavor, 
and if I can be of any assistance to you, I would love to. We 
got the Columbia, Panama, and Korea Free Trade Agreements done 
last year that they had not been able to do for 6 or 8 years.
    And we also were successful in extending permanent normal 
trade relations to Russia, which didn't do anything except help 
our manufacturers. We were already trading with Russia and a 
lot of people didn't realize that when Russia went into the WTO 
last July, that if we didn't change some things and change the 
old Jackson-Vanik law that dated back to the Cold War era--that 
we needed to get rid of that so that we could help our 
manufacturers and farmers here at home.
    So thank you and good luck on your endeavor there.
    Mr. Sanchez. Thank you very much, Congressman.
    Chairman, would you invite me to come regularly to testify 
before this committee?
    Mr. Long. I haven't gotten to the bad part.
    Mr. Sanchez. Yes.
    Mr. Long. I still have time.
    Mr. Sanchez. Oh, no.
    Mr. Terry. You may want to wait.
    Mr. Sanchez. Thank you very much.
    Mr. Long. But what is SelectUSA's function with regards to 
state and local development organizations, and to what extent 
are the Federal Government's efforts duplicative of the state 
and regional economic development organizations?
    Mr. Sanchez. Thank you very much for the question, 
Congressman.
    As I mentioned to Congresswoman Schakowsky, SelectUSA plays 
a facilitator role and we are very much a demand-driven 
organization, demand driven largely by state and local 
governments who seek out our assistance. And so, for example, 
we have done about 140 consulting engagements with state and 
local governments in helping them seek out opportunities, work 
better with the Federal Government on foreign direct investment 
initiative.
    Mr. Long. And you have done that through SelectUSA?
    Mr. Sanchez. Yes. SelectUSA, which was stood up in June of 
2011, and we have worked with state and local governments from 
the very start. It really is the cornerstone of how SelectUSA 
works.
    Mr. Long. Well, I have a personal friend, good friend, that 
works for the State of Louisiana. I am from Missouri--but for 
the State of Louisiana in this type of economic development. 
And my thought was it might be better to allow them to compete 
than for businesses to handle the promotion and leave the 
Federal Government out of it. The Federal Government is always 
overreaching, always trying to do too much. We have the 
sequester going on and I just question whether this is 
necessary.
    Mr. Sanchez. Well, first of all, the State of Louisiana has 
been a great partner with us. We recently worked on an 
investment by a South African firm by the name of Sasol that is 
going to make a very, very important investment in the State of 
Louisiana. And at the request of the State of Louisiana, we 
worked very, very closely with them in a number of ways.
    One thing that we are doing in that particular example is 
introducing that company to the relevant federal agencies that 
they are going to have to interact with. So just a few months 
ago, after the announcement, we put together a meeting with all 
of the relevant federal agencies at the Department of Commerce. 
They all came. The CEO of the U.S. subsidiary had a chance to 
present their project to these federal agencies. So that is one 
example of how we are working at the request of the State of 
Louisiana to support their FDI promotion efforts.
    And again, as I mentioned in an earlier response to 
question, through the U.S. Foreign Commercial Service we have 
offices in 72 countries around the world. No State has that 
kind of reach outside. The State of Florida has 14 and that is 
the most of any State. And we are able to leverage those 
offices to identify potential companies, potential targets. And 
we are going to continue to play the facilitator role, not the 
lead role, but the facilitator role.
    One more thing, Congressman, is that we are competing 
against 159 other countries that use the full weight of their 
efforts of their governments to advocate on behalf of 
investment in their country. And when we are competing, say 
against Mexico or Canada or perhaps a country in Europe versus 
United States, it really does help to have a federal advocate 
supporting that investment right here in the United States.
    Mr. Long. Wouldn't you agree that it would go a long way is 
if we tried to make this the best place in the world to do 
business?
    Mr. Sanchez. It is and I am all for that.
    Mr. Long. I think we have got some work to do there and I 
yield back.
    Mr. Sanchez. Thank you.
    Mr. Terry. Thank you, Mr. Long. I now recognize the 
gentleman from California, Mr. McNerney, for 5 minutes.
    Mr. McNerney. Thank you, Mr. Chairman.
    Mr. Sanchez, I appreciate you coming to my district a year 
or two ago. It was a very successful event and we heard a lot 
of positive feedback from that.
    Mr. Sanchez. Well, thank you. We did an export promotion 
event as I recall.
    Mr. McNerney. That is right. I appreciate that.
    I am also interested in ensuring that the American firms 
are able to find local talent to fill skilled labor positions, 
and I support the SelectUSA initiative.
    I am also curious about any partnerships you may have with 
educational institutions. Does the initiative include efforts 
to address deficiencies in our educational system to make sure 
that our workers are attractive to businesses as they move into 
this country?
    Mr. Sanchez. We are very much aware that, while we have a 
very well-educated workforce, we have some gaps in technical 
training. And although the Department of Commerce does not 
itself have programs that are focused on education or technical 
training, we are working very closely with the Department of 
Labor, with the Department of Education, with the Department of 
Defense that has programs in place of finding jobs for 
returning military personnel, as well as spouses of military 
personnel.
    So we certainly provide feedback and look for ways to work 
with our federal agencies in identifying ways that we can help 
with this gap in technical training.
    Mr. McNerney. But you don't have the relationships with 
universities, or technical schools to give them guidance in 
what would be useful to employers?
    Mr. Sanchez. The Department of Commerce certainly interacts 
regularly with educational institutions, but we defer to our 
sister agencies who have a more direct role in education, 
whether it be the Department of Labor or the Department of 
Education.
    Mr. McNerney. Well, you have been around many districts in 
this country and seen a lot of what the local governments due 
to attract investment and businesses to come into their 
communities. Could you give us just a couple of little examples 
of how that has been helpful or hurtful to the effort of local 
communities? Some of the things that the local communities have 
done that have been helpful, if you could, and some that have 
been hurtful, just to give us an idea of what might be useful.
    Mr. Sanchez. Well, I would say the first thing is just 
showing up. And that is actually having a presence in the 
market, letting the world know that they are open for business, 
they want to attract foreign direct investment. And so those 
communities and those States that really make this a priority, 
really put together a robust promotion program, are going to do 
better. And so I would encourage States to take an active role. 
And part of the role of the SelectUSA is helping States and 
helping local communities put together robust export promotion 
programs.
    Mr. McNerney. So, for example, right now, Governor Brown, 
the Governor of California, is in China promoting California as 
a place to do business and you are suggesting that that is 
helpful and positive.
    Mr. Sanchez. Increasingly, governors and other local 
leaders are going overseas to attract foreign direct 
investment, and I think that that effort should pay dividends. 
It seems to in a number of States, and I am sure it will pay 
for California to be active internationally.
    Mr. McNerney. What about the negative side? Are there 
things that some of our local governments are doing that are 
detrimental to our trade attractiveness?
    Mr. Sanchez. Well, I believe that just like the United 
States needs to be attractive, create a good business climate--
and generally we do that, at least as evidenced by the 
indicators of the World Economic Forum, the World Bank, and 
other indicators, so do local communities and state 
governments. So to the extent that they create attractive 
business climates, there are going to do well. And to the 
extent that they don't compete as effectively with other 
communities--and I would say I am using the term communities 
not just within the United States, but they are now competing 
with communities around the world. I would say communities need 
to measure themselves against communities worldwide. And that 
to me is an important effort for States and communities that 
want to be serious about attracting investment.
    Mr. McNerney. Well, you know if I was a Beijing businessman 
and I was breathing the air in Beijing day in and day out, I 
would look at the San Francisco Bay Area and say, hey, this is 
a much cleaner place. I would like to go there. Does that come 
in to the calculations at all for those folks, do you think?
    Mr. Terry. May I suggest Omaha's air is even cleaner than 
San Francisco's.
    Mr. McNerney. I yield back.
    Mr. Terry. All right, the gentleman from West Virginia, Mr. 
McKinley, you are recognized for 5 minutes.
    Mr. McKinley. Thank you. Secretary Sanchez, at the risk of 
ending the kumbaya questioning that have occurred here, I have 
got two questions that I am curious where you may be coming 
from on. The easier one, perhaps, first is, we of numbers of 
businesses in our district that they are small companies that 
have been victims of dumping, and Commerce has told them that 
they can file an action and they have pursued that but they 
find out it is going to cost, for example, in this one 1.2 
million to file an action. These small companies can't afford 
$1.2 million to fight that, so they are giving in. And as a 
result, we are seeing more dumping occurring here in this 
country.
    Is there a role for the government, perhaps, to step in for 
companies that are undervalued or have the inability to come up 
with $1.2 dollars to fight? Is there someplace that we might be 
able to help them?
    Mr. Sanchez. Congressman, I share that frustration. I have, 
under the----
    Mr. McKinley. What is the solution? I don't want the 
whining because that is what I am doing.
    Mr. Sanchez. Yes.
    Mr. McKinley. I am trying to find what is the solution?
    Mr. Sanchez. We make every effort to help companies prepare 
for an antidumping petition. Within the budget constraints that 
we have, within the staffing constraints that we have, we make 
every effort to provide advice and counsel for them. That has 
its limits, but we do everything that we can to help small and 
medium-size companies that feel that they are being hurt by 
companies that are dumping. And so within those constraints, we 
do everything that we possibly can and I suspect that we are 
not able to do all that we could or all that would like to----
    Mr. McKinley. We really you don't have--other than maybe 
giving some help, there is no way to help pick up that cost for 
them?
    Mr. Sanchez. Within the existing budget that we have, we do 
what we can.
    Mr. McKinley. OK. Second question is further to do with 
dumping. We know that foreign companies, their dumping doesn't 
all occur in one; it can be spread out over different 
businesses. But one company may be--so it is called, as you 
know, is targeted dumping. And this administration has just 
come out in supporting some recent determinations on targeted 
dumping, particularly about Fu Fang Biotechnical. And that 
decision or that report has just come out in early March. Are 
we revisiting that or is this something that--because we know 
that Fu Fang had 68 percent of its sales varied among different 
customers, so they can dump on one and then charge more in 
another, and that avoided their dumping charge. How can we 
protect that if the administration is saying I will support 
that? And they have that--he signed off on this on March 4, 
said he agrees with that process.
    Mr. Sanchez. Congressman, I need to review that particular 
case before I respond on that. I do know that we do, I believe, 
a very good job within the constraints that we have of 
enforcing our trade laws, we also do it in compliance with our 
international obligations. And I would need to look at this 
little more carefully, and I would be happy to do so and get 
back with you.
    Mr. McKinley. I hope you can, because we are seeing--just 
20 some years ago we had a very vibrant steel industry in the 
northern section of West Virginia with 30,000 steelworkers. We 
now have less than 1,000 steelworkers. Now, think about that. 
Primarily, they will say up and down the line that this had to 
do with trade and dumping. And I hear a lot of people talking 
about trying to help but I don't see the activity. I don't see 
where that has really stepped in. People said we will look at 
it. We will reconsider that. But in the meantime, nearly 30,000 
steelworkers have lost their jobs.
    And here it is again where people are saying they can't 
come up with $1.2 million to fight back against these 
agreements and then the administration coming out and saying 
they are going to support this decision. I just wanted to 
question you about that. If you can find it--I don't see a 
number on it, but I will be glad to give you my copy.
    Mr. Sanchez. Thank you. I promise to look into it and get 
back to you.
    Mr. McKinley. OK. Thank you very much.
    Mr. Sanchez. Thank you, Congressman.
    Mr. Terry. Thank you, Mr. McKinley. Mr. Pompeo of Kansas, 
you are recognized for 5 minutes.
    Mr. Pompeo. Thank you, Mr. Chairman. Good morning, Mr. 
Secretary.
    In your written testimony you expressed that one of the 
concerns foreign companies often have in considering direct 
investment is their difficulty entering and exiting at U.S. 
borders. A major employer in my district, Learjet, has a major 
foreign direct investment from a company called Bombardier in 
Canada. They are a great employer in our district. They have 
done a phenomenal job of taking care of our team in Kansas and 
building a great airplane.
    They have a shuttle in which they fly employees back and 
forth from different facilities in Mexico and Canada. They 
bring team members; they bring parts back and forth. They have 
been prevented from flying directly in to Wichita because of 
the Customs and Border Protection folks said they don't have 
the requisite staff on site. It forces Bombardier to clear 
customs someplace else late at night. It is very, very 
challenging and costly and, I think, discouraging to them to 
continue to grow their asset in Kansas. I know the company has 
worked very hard to try and coordinate with customs. Our 
offices have tried to do the same. We have engaged your folks, 
the ombudsman's office, in that process. But we have had little 
success, to be honest with you, getting CBP to become engaged.
    Thoughts on how that process may be strengthened so that 
companies that do put their capital risk in America can get in 
and out and do the things they need to do, both to be 
successful in their endeavors but also to grow jobs in America?
    Mr. Sanchez. Well, Congressman first of all, thank you for 
reaching out to SelectUSA to let us work on that. Bombardier 
has been a great source of foreign direct investment. They 
spent a lot of money here, created a lot of jobs, and I believe 
we are still working on that case. What I can tell you is that 
I will personally follow up with our team and also reach out to 
Customs and Border Patrol and see what options that might 
exist.
    I know that over the last several years they have made a 
special effort to balance the needs of security at the border 
with making sure that they don't impede legitimate business. 
And I applaud them for that effort and we are going to continue 
to work with them more broadly on policies that make it easy 
for businesses like Bombardier to invest here. And I will 
personally look into this one in particular.
    Mr. Pompeo. Thank you, I appreciate that. Actually, this is 
happening in districts all costs country, the same issue. And 
so it is just very important that these folks can get in and do 
the business they need to do here or they will ultimately be 
discouraged from those investments.
    Changing topics just a little bit, we had a long hearing on 
the Keystone XL pipeline yesterday, lots of different views, 
but I would be interested in your take. Do you think that this 
kind of highly visible, highly politicized discouragement of 
foreign direct investment is being observed by other folks who 
may want to bring capital to America and has an impact on their 
decisions to invest here in the country?
    Mr. Sanchez. Well, Congressman, I think that everything 
that we do, particularly from an investor's point of view, gets 
looked at. I will say this: that in general, this case I know 
there are a lot of strong opinions on both sides. One of the 
good things that we do have going for us is that energy costs 
here are going down. And that is increasingly becoming an 
attractive incentive to bring investment to our shores. So we 
certainly are focusing on ways to highlight that and it is my 
hope that we will continue on that path and we will be able to 
use that as an opportunity to bring more investment here to the 
U.S.
    Mr. Pompeo. Great. I appreciate it. I just think when 
companies want to come here and do business and follow our laws 
and all of our processes that to have an administration just 
make it so difficult and so political and put them through the 
ringer, I think the world watches when these things happen and 
I don't think it is productive to what it is that you all are 
trying to accomplish and what we are trying to do here through 
this legislation this morning.
    You know, the last thing I will say, so we have a piece of 
legislation we are debating that directs this interagency 
study. I think there are lots of studies out there. I think we 
all have a pretty good handle on what folks are looking for 
when they make capital decisions to decide whether to invest 
here or not. So I am happy to take a look at this and see what 
it is going to cost and how much burden it is going to place. 
But I think we all have a deep recognition of what it is, what 
folks are really looking for when they are trying to figure out 
where to spend their money and invest. So thank you for being 
with us this morning.
    Mr. Sanchez. Thank you, Congressman.
    Mr. Pompeo. I yield back, Mr. Chairman.
    Mr. Terry. Thank you, Mr. Pompeo. And that concludes our 
questions for you, Secretary Sanchez. I appreciate your time. 
We tell witnesses after they are finished testifying that we 
may have written questions that will be submitted to you and I 
know I have a few. But they are along the same----
    Mr. Sanchez. Great.
    Mr. Terry [continuing]. Lines of just trying to gather 
information to help us guide our efforts here. So if you can 
respond to those in a timely manner, we would greatly 
appreciate it.
    Mr. Sanchez. I look forward to receiving your written 
questions and I thank you and the ranking member and the 
members of this committee for the opportunity to speak on this 
very important topic, and I appreciate your interest in this. 
Thank you very much.
    Mr. Terry. Well, thank you for your efforts.
    And now, we will take a slight pause as we rearrange chairs 
for the next panel.
    Thank you, everybody. I want to introduce this panel. We 
have Nancy McLernon, President and CEO of the Organization of 
International Investment; Linda Dempsey, Vice President of 
International Economic Affairs of the National Association of 
Manufacturers; Matthew Slaughter, Associate Dean for Faculty, 
Tuck School of Business, Dartmouth University; Dr. Martin 
Baily, Senior Fellow of Economic Studies at the Bernard 
Schwartz Chair of Economic Policy Development with the 
Brookings Institute; then, last to testify in line would be 
Celestine Drake with the Trade and Globalization Policy 
Specialist with the AFL-CIO.
    And welcome, all of you. Thank you for coming here today. 
And we will start right away. Each of you will have 5 minutes. 
At 5 minutes if you are still talking, I will lightly tap and 
that will mean summarize.
    So now, Ms. McLernon, you may begin.

      STATEMENTS OF NANCY L. MCLERNON, PRESIDENT AND CEO, 
ORGANIZATION FOR INTERNATIONAL INVESTMENT; LINDA DEMPSEY, VICE 
PRESIDENT, INTERNATIONAL ECONOMIC AFFAIRS, NATIONAL ASSOCIATION 
  OF MANUFACTURERS; MATTHEW J. SLAUGHTER, ASSOCIATE DEAN FOR 
FACULTY, TUCK SCHOOL OF BUSINESS, DARTMOUTH UNIVERSITY; MARTIN 
  BAILY, SENIOR FELLOW, ECONOMIC STUDIES, BERNARD L. SCHWARTZ 
CHAIR IN ECONOMIC POLICY DEVELOPMENT, BROOKINGS INSTITUTE; AND 
 CELESTE DRAKE, TRADE AND GLOBALIZATION POLICY SPECIALIST, AFL-
                              CIO

                 STATEMENT OF NANCY L. MCLERNON

    Ms. McLernon. Good morning. Chairman Terry, Ranking Member 
Schakowsky, and distinguished members of the subcommittee, I 
want to thank you for the opportunity to testify this morning. 
I applaud your leadership in holding this timely hearing on 
legislation to enhance the Nation's ability to attract and 
retain global investment.
    The Organization for International Investment is an 
association exclusively comprised of U.S. subsidiaries of 
global companies. Our mission is to ensure the United States 
remains an attractive and the most attractive location for 
global investment.
    This hearing comes at a time when the United States is at a 
crossroads facing serious economic and fiscal challenges. And 
while the U.S. remains the top location for foreign direct 
investment, its share of worldwide FDI has dropped 
significantly over the past decade. This really is a national 
challenge, one that impacts every State in every congressional 
district in this country. Simply put, it is no longer enough 
for the U.S. to merely be open to global investment. We must 
proactively have a strategy to leverage all the tools within 
our reach if we hope to remain competitive for high-value FDI. 
For this reason, my organization and our member companies 
strongly support the Global Investment in American Jobs Act of 
2013.
    FDI has long been a catalyst for economic growth in this 
country. U.S. subsidiaries of global companies in-source 5.6 
jobs to the United States and support an annual payroll of over 
$400 billion. Their employees earn an average compensation well 
above the private sector average pointing to the high-end 
nature of the activities that they have in this country. These 
companies are in high-value fields like advanced manufacturing, 
life sciences, R&D, and engineering, generating the types of 
jobs and economic activities that enhance U.S. competitiveness. 
Furthermore, they reinvest heavily in their U.S. operations and 
spend heavily on new equipment, upgraded facilities, and new 
construction, all of which demonstrate a long-term commitment 
to their U.S. operations.
    I will give you a few examples: Astellas pharmaceutical R&D 
facility in Northbrook, Illinois; Case New Holland exporting 
Unionville tractors from Racine, Wisconsin; Philips Healthcare 
developing advanced medical imaging technologies in Highland 
Heights, Ohio; and Rolls-Royce partnering with local Virginia 
schools to teach STEM education and train manufacturing workers 
in Prince George County.
    But in spite of all these vital contributions, the extent 
of their impact throughout the economy is actually not very 
widely understood. FDI has traditionally occupied something of 
a blind spot in U.S. policy. The growing importance of global 
cross-border investment makes it essential for FDI to play a 
more prominent role in U.S. economic policy in the years ahead. 
And the potential for additional FDI provides a tremendous 
opportunity for economic growth in the U.S.
    As I mentioned earlier, the U.S. share of global cross-
border investment has dropped. We currently garner about 17 
percent. There is no reason we cannot grab more market share. 
Additionally, the United Nations estimates that multinational 
companies are currently sitting on some $5 trillion in cash in 
the wake of the global economic downturn. We can give those 
companies a reason to unleash that investment here.
    While there are no magic formulas, enhancing U.S. 
competitiveness for FDI will certainly require progress in key 
macro policy issues, including reforming our tax code, 
advancing a more expensive Free Trade Agreement, modernizing 
America's infrastructure, implementing a program with energy 
policy, and developing a workforce that can compete for the 
jobs of the future.
    But importantly, we must also make sure that once the U.S. 
wins a new investment that we provide good aftercare and we 
ensure that the U.S. subsidiaries of global companies have the 
ability to succeed and grow their business here on a level 
playing field with homegrown companies. The U.S. must avoid 
policies and regulations that disadvantage or discriminate 
against companies that are headquartered abroad.
    Given our unique advantages, the U.S. is fully capable of 
improving its competitive edge for FDI. We have an enormous 
domestic market, abundant natural resources, strong rule of 
law, and a culture of innovation and productivity. We need to 
couple those advantages with a better understanding of what 
kinds of policies and best practices position the U.S. to 
successfully recruit global companies.
    The Global Investment in American Jobs Act seeks to do just 
that. The legislation recognizes that the U.S. cannot compete 
for 21st century investment with a 20th century policy mindset. 
It aims to equip policymakers with a forward-thinking strategic 
approach to capture new investment in this increasingly 
competitive, yet opportunity-rich, global environment. The 
interagency review and recommendations would provide Congress a 
roadmap for further action to attract global manufacturers, 
service providers, and innovators to our shores. If enacted, 
the legislation will send a powerful message at home and abroad 
that the U.S. is working to improve its investment climate for 
FDI in a thoughtful and bipartisan manner.
    I would like to thank the subcommittee again for the 
opportunity to testify and I look forward to questions.
    [The prepared statement of Ms. McLernon follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Terry. Well done. Ms. Dempsey, you are now recognized 
for your 5 minutes.

                   STATEMENT OF LINDA DEMPSEY

    Ms. Dempsey. Thank you. Good morning, Chairman Terry, 
Ranking Member Schakowsky, and members of the subcommittee. I 
welcome the opportunity to testify today on behalf of the 
National Association of Manufacturers, the oldest and largest 
industrial trade association in the United States.
    The NAM represents small and large manufacturers in every 
industrial sector and in all 50 States, including many foreign-
headquartered companies that manufacture throughout our Nation. 
As this subcommittee knows well, manufacturing is the engine 
that drives the U.S. economy by creating jobs, opportunity, and 
prosperity. A robust international trade and investment 
approach are vital to the success of manufacturing in the 
United States.
    In particular, FDI into the United States plays a critical 
role in growing manufacturing. While fluctuating yearly, 
foreign investment in manufacturing has shown substantial 
growth since 2003, with important benefits for the U.S. 
economy. In 2012, FDI inflows into the United States in 
manufacturing equaled nearly $83 billion, accounting for nearly 
half of those inflows.
    While the United States has remained the largest recipient 
of FDI through 2012, we have heard from my colleague that 
global competition for FDI is rising sharply and the U.S. share 
of that FDI is on the decline. From the NAM's perspective, we 
should be working to help grow FDI into the United States, 
which grows manufacturing and jobs, innovation, and economic 
opportunities.
    The NAM's 2013 Growth Agenda presents four goals for 
manufacturing resurgence in America. The NAM's first goal is 
very much the subject of this hearing: to make the United 
States the best place in the world to manufacture and to 
attract FDI. The goal of the legislation before this 
subcommittee is an important one: to spur policy improvements 
that will help the United States further attract FDI, including 
through requiring an interagency review of policies and best 
practices with recommendations for further action. We hope the 
report will result in concrete proposals and action and 
encourage the Subcommittee to continue working on this 
legislation and moving it forward.
    We also recommend that the report consider the 
recommendations from the President's Council on Jobs and 
Competitiveness, which called for a national investment 
initiative.
    The U.S. open investment policy that this legislation 
reaffirms is supported through a number of different aspects of 
U.S. law, regulation, and policy. The United States generally 
treats FDI on a nondiscriminatory basis, unless there is a 
threat to national security as determined by CFIUS.
    The U.S. open investment policy is also supported through 
the U.S. Bilateral Investment Treaty program, BITs, which began 
about 4 decades ago. The United States has in place 38 BITs 
including, most recently, with Rwanda that secure reciprocal 
and open investment frameworks with interested countries. The 
BIT program helps secure U.S. investment abroad, which is also 
focused on reaching consumers and is a huge driver of U.S. 
exports, as well as R&D and capital expenditures here in the 
United States. A robust BIT program, which includes the strong 
investor state enforcement mechanisms, is a vital part of the 
U.S. open investment policy.
    Yet, given the increasingly competitive environment for 
FDI, the United States cannot stand still. From the 
manufacturing perspective, the United States faces significant 
challenges of our own making. It is 20 percent more expensive 
to manufacture in the United States than in other major 
industrialized nations. The United States continues to have the 
highest corporate tax rates among major industrial countries, 
and 2/3 of all manufacturers pay taxes at the individual rate.
    To make the United States the best place in the world to 
manufacture and attract FDI, we urge Congress and the 
administration more broadly to work together to create a 
national tax climate to promote manufacturing and embrace an 
all-of-the-above approach to energy, modernize and invest in 
infrastructure, ensure that the benefits of regulations justify 
their cost, implement commonsense legal reform, reduce 
healthcare costs, and ensure robust export opportunities for 
manufacturers in the United States, including through an 
aggressive trade policy agenda, have open markets, and provides 
competitive export financing, and works to ensure that our 
trading partners protect intellectual property and play by the 
rules.
    By addressing the multitude of these policies that shape 
global competitiveness, the United States will be able to 
increasingly attract and retain the kind of foreign investment 
to sustain and grow manufacturing here in America.
    Thank you.
    [The prepared statement of Ms. Dempsey follows:]
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    Mr. Terry. Wow, perfect timing.
    Mr. Slaughter, you are now recognized for your 5 minutes.

               STATEMENT OF MATTHEW J. SLAUGHTER

    Mr. Slaughter. Thank you, Chairman Terry, Ranking Member 
Schakowsky, and fellow members. Thank you very much for 
inviting me to testify on these important and timely issues of 
how global investment can contribute to American jobs and 
overall economic strength.
    In my remarks, I will stress that although the U.S. 
subsidiaries of global companies have long made large 
contributions to U.S. jobs and overall economic strength, the 
past need not be prologue. There recently were some trends that 
America's attractiveness to these companies may be waning. To 
support the U.S. economy amidst a still-fragile labor market 
and overall recovery, policymakers should strive to sustain an 
environment in which global firms can thrive here.
    Research for the United States and many other countries has 
long documented that globally engaged companies tend to perform 
better than purely domestic companies do. The U.S. subsidiaries 
of global companies, despite accounting for far less than 1 
percent of all U.S. businesses, perform large shares of 
America's productivity-enhancing activities that lead to high 
average compensation for American workers.
    For the most recent year of data available, 2010, or as of 
this morning, 2011, contributions of these companies included 
the following: 5.8 percent of all private sector output, over 
14 percent of all nonresidential private sector capital 
investment, almost 18 percent of U.S. exports of goods, and 
over 14 percent of the total research and development perform 
by all U.S. companies. All of these activities contribute to 
millions of well-paying jobs in America.
    In 2011, these U.S. affiliates employed 5.6 million 
workers, 5 percent of total private sector employment. In 2010, 
their total compensation averaged over $77,000 per worker, more 
than \1/3\ above the average for the rest of the private 
sector. Of these jobs, nearly 2 million were manufacturing and 
the U.S. subsidiaries of global companies have long had 
relatively high unionization rates. In 2007, over 12 percent of 
these firms U.S. employees were covered by collective 
bargaining versus just about 8 percent for all private sector 
workers.
    And finally, U.S. subsidiaries of global companies support 
U.S. jobs through their supply chains. In 2010, these 
subsidiaries purchased almost $2 trillion in intermediate 
inputs from other U.S. companies.
    Despite these strengths of the past, over the first dozen 
years of the 21st century two worrisome trends emerged 
regarding the presence and dynamism of U.S. subsidiaries in 
global companies. First, although many of their non-employment 
activities continued to grow, their U.S. employment did not. 
There were about the same number of Americans working in these 
companies in 2011 as in 2002.
    The second worrisome trend is that the U.S. share of global 
foreign direct investment has fallen sharply. The U.S. share of 
the world stock of FDI fell from over 41 percent in 1999 to 
only about 17 percent in 2009.
    Taken together, these two worrisome trends of the past 
decade suggest that the U.S. economy has become a less 
attractive location for global companies to establish and 
expand their operations. And these trends have emerged while a 
steadily rising share of the leading global companies are 
headquartered outside of America. The options that the world 
presents to global companies have expanded dramatically in 
recent years due to policy liberalization and related 
accelerated economic growth in so many countries. The United 
States cannot rest on past success and take the U.S. engagement 
of these global companies for granted.
    A vigorous optimistic future for inward investment in 
America is very possible, but achieving this optimistic future 
will require crafting new U.S. policies to boost FDI inflows 
and the related employment and other productivity-enhancing 
activities of these companies.
    An important first policy step would be for the Secretary 
of Commerce to oversee an interagency review and report of 
America's global competitiveness in attracting FDI, as 
specified in the Global Investment in American Jobs Act of 
2013. The baseline information from this report would provide 
an excellent guide to refining U.S. economic policies and 
promotion and ultimately U.S. economic performance.
    Let me here recommend second important policy step: higher-
quality U.S. Government data. U.S. Government statistics 
currently do not capture the full extent and evolution of the 
U.S. operations of global companies. This is in no way a fault 
of the dedicated public servants working at these statistical 
agencies. Rather, it simply reflects the fact that many of the 
business surveys conducted and analyzed by these agencies were 
created decades ago in ways that today fail to encompass the 
modern and ever-evolving complexity of business in America.
    Here in the 21st century, if we want to best craft U.S. 
economic policies to support American workers and their 
families, then we need to find a way to update and expand many 
of our key economic statistics on how these global companies 
work.
    Thank you again for your time and your interest in my 
testimony, and I look forward to answering any questions that 
you may have.
    [The prepared statement of Mr. Slaughter follows:]
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    Mr. Terry. Thank you. And Dr. Baily, you are now recognized 
for your 5 minutes.

                   STATEMENT OF MARTIN BAILY

    Mr. Baily. Thank you. Thank you, Chairman Terry and Ranking 
Member Schakowsky, and the other members of the committee for 
the opportunity to present my testimony today. I would like to 
submit the full statement for the record if I may. And there 
are a couple of typos in it that I would like to correct before 
it gets submitted, which I just discovered.
    I do think that making America the location that attracts 
good foreign companies is a very important task. And I think 
really the same things that attract foreign companies will 
encourage American multinational companies to invest more in 
the United States. And as one of the earlier panelists noted, 
there is a lot of money sitting out there that we would love to 
see invested here to improve the recovery.
    There have been quite a few numbers already put out here 
and I am going to just comment on them rather than reprise what 
is in my testimony. I just want to comment on a couple of them. 
One is, I think, it is obviously a concern if our share of FDI 
has gone down. I think there is a certain thought that it is 
inevitable with emerging economies growing. They are much 
poorer than we are. They are growing faster than we are. There 
is going to be more investment taking place in those economies 
than in the U.S., so I don't think we should get down on 
ourselves too much if we find that investment elsewhere is 
growing relative to the U.S. I think that is just part of life.
    And the second point I would make is to note that really a 
lot of the investment that comes from overseas is going into 
manufacturing. I think that is important. We have heard that 
the manufacturing sector is important. It is an area where we 
maybe haven't had enough domestic investment. We would like to 
see more. We want exports to grow. We want to get a more 
balanced trade picture for the United States so I think it is 
particularly helpful that foreign investment comes into the 
U.S.
    One thing, though, to remember, since a lot of the 
investment is concentrated in manufacturing and since 
manufacturing employment generally has been on a rather 
declining trend as a fraction of total employment, we are going 
to see that the employment in foreign companies in the United 
States is not necessarily going to look as good as investments 
in some other industry just because of the industry that they 
tend to be in. And again, I don't think that is something that 
we are necessarily going to change because manufacturing is an 
area with a lot of productivity growth, a lot of automation, 
and so employment growth tends to be slower there or declining 
there relative to other industries.
    The other point I would notice on the investment is that so 
much of it comes from Europe and Japan, really our friends and 
allies, and I think that does make a difference in the way that 
we think about it. Many of these companies are used to 
operating with environmental regulations. They are used to 
operating with their labor standards and so on. So I think a 
lot of the companies that are coming in such as from Germany, 
from Switzerland, and so on, these, by and large, are going to 
be good neighbor companies in terms of what they do and the 
practices that they have.
    I say a little bit in the testimony about pros and cons. 
Since I have only got 2 minutes left, I am going to talk a 
little bit about what I think might be the best ways to make 
the United States more competitive.
    The first thing I will say is we need to get the 
macroeconomics right. I know it is a hard concept to get 
across, but I think as long as we have a shortage of national 
saving over national investment in our economy, we are going to 
be running trade deficits because one is the counterpart of the 
other. So while I don't want to balance the budget tomorrow, I 
think that would be disastrous in a weak recovery. I do think 
that is something we need to do over the next 10 years. We have 
to make room for more export growth, more manufacturing growth, 
and one way to do that is to get a better balance between 
saving and investment.
    The second point I would make is on trade agreements, and I 
think that is something where, you know, it would be great to 
work on a multilateral basis. If not, we do need to work, as I 
think you said here, on bilateral agreements. That is where one 
of the typos is. One of the major German auto companies that 
has invested in the United States to serve the U.S. market has 
decided to locate one of its other plants in Mexico because 
that is a location where they are going to export from 
primarily. And they feel they have better trade agreements 
operating in Mexico than they would in the United States. So, I 
think, that is a sign that we need to do more on the trade 
agreement side if a company that, say, wants to wants to export 
into Latin America decides to locate in Mexico rather than in 
the U.S.
    On the corporate income tax, I agree with the sentiment 
generally. I think, you know, again, we need to get more tax 
revenue from somewhere. I don't see how we are going to balance 
the budget over 10 years if we don't get more tax revenue. But 
we have to recognize that corporations are mobile. We have to 
be in step with other countries around the world, both in terms 
of what our marginal tax rate is and whether or not we tax 
companies on their foreign earnings or whether we tax them on 
the activities that they do here in the United States. So I 
think basically we need to get our corporate tax in line with 
where our competitors' is.
    I am running out of time here, but just quickly I think we 
do need to do a bit more to improve the skills of our 
workforce. There are good community colleges that are doing 
that. The Department of Defense has shown some tremendous 
ability to give them their soldier skills in short periods of 
time, so I think there are a lot of things we can do in terms 
of vocational training and technical training to improve the 
quality of our workforce. And it is not that the workers are 
bad; it is just that they don't have some of the skills that 
they need.
    And then, finally, I will mention taking advantage of the 
energy boom and that has been mentioned here already. I think 
this has been a massive change--a game changer--for the U.S. 
economy, this discovery of energy sources. I think there are 
environmental concerns about it, absolutely. But I think we can 
meet those concerns and have cheaper energy, cheaper natural 
gas, which will really increase the attractiveness of the 
United States, both for domestic companies and for foreign 
companies. Thank you.
    [The prepared statement of Mr. Baily follows:]
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    Mr. Terry. Thank you very much, Dr. Baily.
    And Ms. Drake, you are now recognized for 5 minutes.

                   STATEMENT OF CELESTE DRAKE

    Ms. Drake. Thank you, Chairman Terry, Ranking Member 
Schakowsky, members of the committee. Good morning. I 
appreciate the opportunity to testify on behalf of the AFL-CIO 
on the critical issues of economic development and job 
creation. I have submitted written testimony for the record and 
will highlight a few key points here.
    Any discussion of where our economy is going should begin 
with a discussion of where we have been. Between the Great 
Depression and 1980, America's economic strategy centered on 
policies designed to ensure a virtuous cycle of rising 
productivity, rising wages, and increase public and private 
investment that led to even greater productivity. Regulatory 
policy was critical to this strategy, including food, product, 
and workplace safety, a strong minimum wage, and the National 
Labor Relations Act giving workers the right to organize and 
bargain collectively. This national strategy led to the period 
of the highest sustained economic growth in American history 
and gave birth to the modern American middle class.
    Since 1980, the United States has embraced a different 
economic strategy, one that has reversed the prior pattern of 
shared prosperity. We have sought to maintain our status as the 
world's largest consumer market while at the same time seeking 
to compete globally by lowering our labor costs. As part of 
this approach, the overall direction of regulatory policy since 
1980 has weakened worker protections to reduce labor costs, 
left consumers and investors at the mercy of bad actors on Wall 
Street, and even promoted consolidation instead of competition 
in certain sectors. The result has been, not surprisingly, a 
series of financial bubbles and skyrocketing consumer debt.
    As the Committee looks to increase foreign direct 
investment as one of the many tools we can deploy to help 
restore the American dream, the AFL-CIO would like to be a 
partner in that effort. We welcome foreign investment, as you 
do, but we caution that the review proposed in the discussion 
draft of the Global Investment in American Jobs Act of 2013 
should be performed carefully, lest its recommendations prove 
more harmful than helpful.
    While we welcome the changes made from last year's version 
of the bill, we continue to have serious concerns. For example, 
by not excluding from the review laws and regulations of 
general applicability, it is possible that those performing the 
review will consider financial services policies, such as Dodd-
Frank, or important worker protections, including occupational 
health and safety rules, as near barriers to investment. 
Instead, we suggest that the review regard them as important to 
providing a good investment climate that includes a stable 
financial system and healthy and productive workforce.
    As you know, the U.S. is a premier destination for foreign 
investment. In comparison to other countries in which investors 
are required to create joint ventures for nearly every 
investment or pressured to transfer important technology or 
intellectual property, the U.S. has a very open system. There 
are, of course, a few important limitations on foreign 
ownership and control, such as those in the aviation and 
communication sectors. Again, the AFL-CIO encourages the 
Committee to ensure the review takes a balanced look at these 
limitations and consider their very important public purposes 
before simply categorizing them as barriers to investment.
    These policies are designed with important purposes, 
including national security and domestic economic growth. In 
some cases they may even encourage investment as foreign 
enterprises seek to become American enterprises to expand their 
reach, which brings me to a final caveat. The AFL-CIO urges the 
Committee to ensure that the review recognize that while FDI 
can contribute to the creation and maintenance of high-skilled, 
high-paying jobs, such an outcome is not inevitable. State-
owned and -controlled enterprises in particular may not invest 
with a goal to operate in the U.S. for the long-term, but 
instead, could acquire strategic technology that could, at 
worst, jeopardize our national security. They may also engage 
in predatory or anticompetitive behavior that our trade 
remedies cannot reach to their operations here, or they may 
operate their businesses in ways that could reduce average 
wages, benefits, and working conditions instead of lifting them 
up.
    Given these risks, we also encourage the Committee to 
consider reversing the current policy of providing foreign 
investors with extraordinary legal rights through FTAs and 
investment treaties.
    In sum, we look forward to working with you to promote the 
growth of the American economy through investment that creates 
high-wage, high-benefit jobs that restore the path to middle 
class. I thank the committee for its time and would be pleased 
to answer any questions you may have.
    [The prepared statement of Ms. Drake follows:]
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    Mr. Terry. Thank you, Ms. Drake.
    And now, we go to the question part of our hearing.
    And so my first question will be to Ms. McLernon, Ms. 
Dempsey--well, we will just go right down the panel. Give me 
your opinion in helping us prioritize what is the most 
significant barrier/incentive that is either blocking or 
helping foreign investment in the United States. In essence, 
what is the low-hanging fruit? Ms. McLernon.
    Ms. McLernon. Great question. So I think what is really 
important about this bill is that it seeks to uncover those 
very things. We mentioned all the macro issues here today that, 
in general, can provide a better business opportunity. But our 
policies over the long haul don't really take a look at the 
impact that they will have on companies that are not 
headquartered outside the United States, what type of impact it 
will have on them that it does not have on companies that are 
headquartered here.
    Mr. Pompeo talked about something that was simple in terms 
of getting executives in and out. But there are also more 
direct hits in terms of government contracting, access to 
grants. We want a level playing field for these companies and, 
as I said, not to just win the investment, but ensure once they 
are here that they have every opportunity to succeed. And 
sometimes that discrimination is direct and obvious, but many 
times it is inadvertent.
    And what I think that this legislation and what this study 
can do is it puts investment policy front-brain. We can think 
about these things before policies are enacted so that we don't 
have to go and patch things up afterwards in order to make it 
OK for a foreign company to be here.
    Mr. Terry. Ms. Dempsey.
    Ms. Dempsey. Thank you. I agree a lot with my colleague on 
the FDI side, but I think we cannot lose sight as this 
legislation does not, that there are business climate issues 
that affect both domestic and foreign manufacturers. And this 
legislation, I think, will be important, frankly, to both. Some 
of these issues will be foreign investors looking at the U.S. 
market. But there are other issues that will impact, I think, 
manufacturing more broadly in the United States and are 
relevant.
    Mr. Terry. Mr. Slaughter.
    Mr. Slaughter. I echo the previous two comments. I would 
add, I think, one of the most immediate things the U.S. can do 
to improve the investment climate would be reform our tax code. 
On a lot of indicators we have one of the highest-burden tax 
codes in the world, both in terms of the statutory effect of 
tax rates and the complexity of our tax code. So I would put 
that at the top of the list.
    Mr. Terry. Mr. Baily.
    Mr. Baily. The three things that I hear most from 
companies: number one, that they have to spend a lot of money 
on training and skills so that they would like to see a better 
job. And that is, obviously, a state and local function to an 
extent. The second is taxes, which you have mentioned. And 
again, it is not that our corporate tax collects a whole a lot 
of revenue, but I think the complexity and the marginal tax 
rates are a concern. And then the third thing I hear is really 
the complexity of, sort of, permissions and environmental 
rules, and it is not--a want to make clear, I don't want to 
dismantle our environmental rules----
    Mr. Terry. No.
    Mr. Baily [continuing]. But the speed of getting 
permissions, the ability to coordinate across agencies and 
between the federal, state, and local government makes for a 
lot of complexity and a lot of delay. And that is what I hear 
is a concern.
    Mr. Terry. Ms. Drake.
    Ms. Drake. Thank you. We think one of the main things 
inhibiting investment here is the misperception that it is too 
expensive to invest in manufacturing in the United States. And 
we hear this from firms that have re-shored and explained that 
they thought it was going to be so much cheaper to invest and 
produce elsewhere. And when they really that looked at the 
numbers and the extra cost of producing elsewhere and shipping 
back to the United States, they found that it is a good deal 
and there is a good value here. So I would echo what 
Undersecretary Sanchez said about getting the word out and 
doing promotion.
    Mr. Terry. OK. Ms. Dempsey--well, I tell you what. We can't 
answer this in 50 seconds so I will put the rest of my 
questions in written form to you all.
    And at this time, I will recognize Jan Schakowsky for her 
questions.
    Ms. Schakowsky. Thank you. I wanted to ask Ms. Drake. A 
portion of your testimony is rights provided to foreign 
investors should not exceed rights of domestic investors. Can 
you elaborate on exactly what you mean by that?
    Ms. Drake. Absolutely. So a foreign investor, if the 
foreign investor is from a country with which the United States 
has an FTA, a Free Trade Agreement; or a BIT, a Bilateral 
Investment treaty, has certainly legal rights through the 
investment chapter and through the process guaranteed by the 
investment chapter, which is investor-state dispute settlement, 
to have a complaint that may have reduced the expected profit 
or somehow didn't provide what the international law calls the 
minimum standard of treatment, and skipped domestic court, so 
skipped state courts and federal Article III constitutional 
courts--go to an international arbitration panel and pursue 
this challenge. And it is, in some ways, similar to the 5th 
Amendment takings challenge under the Constitution, but it has 
got a broader definition of what property is; it has got a 
broader definition of what a takings would be.
    And we hear from small domestic manufacturers that they 
simply can't challenge their complaints about local, state, and 
federal regulations and laws in the same way. And they feel 
that all investors in the United States should have to go 
through the same system that respects our democratic process 
and democratically enacted laws and regulations.
    Ms. Schakowsky. So let me ask just a broader question then. 
How would you revise, including, I imagine, taking what you 
just said into account, that the current draft of the Global 
Investment in American Jobs Act to achieve the goals that will 
not only attract foreign investment but also look at our 
domestic workers.
    Ms. Drake. For that particular issue, we would add a 
provision that asked the Department of Commerce to really look 
at the FTAs and BITs that we have made and whether the 
extraordinary legal rights given to foreign investors somehow 
inhibit or discourage domestic industries and make an unlevel 
playing field. So just with that addition of something to look 
at, we think it could be very useful.
    Ms. Schakowsky. In your testimony, Dr. Baily, you draw a 
distinction between greenfield investment and investment that 
stems from merger and acquisition, and I asked Secretary 
Sanchez about that, too. Do you think there would be merit in 
the following one: BEA, once again, conducting a survey that 
distinguishes between greenfield investment to having the 
review and report and the draft bill under consideration take 
this difference into account?
    Mr. Baily. I would certainly like to see that additional 
data. I think it would be very helpful. So yes, I would. I do 
think that there are advantages that you can get from 
takeovers. There are obviously some takeovers you don't want 
and you mentioned those about proprietary technology and so on. 
You have to be careful. But in many cases a company that gets 
taken over may have been in difficulty. The new company may 
bring in investments, and we have seen that in the steel 
industry and other places.
    So I am not against takeovers, necessarily. But I agree; it 
would be helpful to know what is what and what the data says.
    Mr. Schakowsky. There was one other section, Ms. Drake, 
that was of interest to me that had to do with a Chinese 
company and somehow our, not inability, but making it difficult 
for CFIUS to actually secure the information that we need to 
make sure that information they get from American companies 
isn't used in the wrong way and counter to CFIUS rules. I 
wonder if you could talk a little bit about that?
    Ms. Drake. CFIUS actually has a very small mandate and it 
doesn't really look at greenfield investment. It doesn't look 
at equipment sales contracts. And so there are various ways 
that it may not be catching all of the investments or equipment 
purchases or other contracts here that could have an impact on 
our national security. So consistent with some recommendations 
made by the U.S.-China Economic and Security Commission and 
even the Heritage Foundation, which you won't find me quoting a 
lot, we would recommend that that the Committee take a look at 
possibly expanding the mandate of CFIUS so that they can really 
look at all of their potential investments that they need to 
not with an eye of stopping FDI at all but just to make sure 
that we are protecting our national security and economic 
security in the way that we need to.
    Ms. Schakowsky. Things that have dual purpose, for example?
    Ms. Drake. Yes. There is an example in my written testimony 
of AVIC acquiring Nexteer and it is this steering technology 
that also has a military purpose, and that transaction has 
already gone through, but there is some question now about the 
technology being transferred to China. Will it be used for 
military purposes? And the information seems to all be in 
China, and there is no way, at this point, to really know if it 
will be used against the United States in a military way or it 
won't be.
    Ms. Schakowsky. OK. I thank you for your testimony and your 
suggestions.
    Mr. Terry. Thank you.
    At this time, I recognize the vice chairman of the 
committee, Mr. Lance.
    Mr. Lance. Thank you, Mr. Chairman.
    To Dean Slaughter, in your testimony you indicate that 
there are two worrisome trends. First, although many related to 
non-employment activities, U.S. employment flatlined from 2002 
to 2010 and then dipped from 2007 to 2010. Would you elaborate 
briefly to us on that?
    Mr. Slaughter. Sure. So over much of the past 10 to 20 
years before the decade of the 2000s the presence of the U.S. 
affiliates of foreign multinational companies had grown on a 
lot of dimensions, employment being an important one. 
Employment had almost doubled over about a 15-year period. But 
employment has not been growing, and I think again from the 
broad policy perspective that, I think, many of us share of 
trying to have good jobs and good wages, one of the really 
important things is these global companies tend to have a whole 
nexus of productivity enhancing things of investing a lot in 
human resources, investing a lot in capital of new ideas 
through R&D. So those tend to be good jobs at good wages.
    And so thinking about, per the topic of this hearing, 
policies that could try to allow that employment to increase 
would be great.
    Mr. Lance. And Ms. Drake, might you respond to that as 
well? I would certainly be interested in the position of your 
great organization.
    Ms. Drake. Thank you very much. The data on, for instance, 
the high wage rates paid by foreign investors is really good 
information. We would like to see further expansion to get down 
into the weeds on that information because foreign investment, 
approximately, it is--roughly 40 percent of all foreign 
investment is in manufacturing.
    Mr. Lance. Yes.
    Ms. Drake. Manufacturing tends to have higher wages anyway. 
And in the U.S. economy overall, there is only about 10 percent 
of the employment is in manufacturing. So there--I think there 
are some deeper questions about whether it is really bringing 
wages up. And if it is, we should do everything that we can to 
promote it. But if we find that in certain sectors foreign 
investment is negatively affecting wages and benefits, we 
should look at that and see if we can do anything in a policy 
way to turn that around so that all foreign direct investment 
would be good for workers in bringing wages and benefits up.
    Mr. Lance. What sectors in particular are you referring?
    Ms. Drake. Well, one particular concern is auto 
manufacturing. And there has been a trend for foreign auto 
manufacturers to hire a lot of temp workers. And there is an 
article from the Washington Post that I would like to submit 
for the record that talks about this use of temp workers. And 
what it has done is it makes it less competitive than for 
existing American auto manufacturers to not do the same thing. 
So as there are competitive forces on wages and we want those 
competitive forces to be bringing wages up rather than down.
    Mr. Lance. Dean Slaughter, would you comment?
    Mr. Slaughter. I just echo Ms. Drake on the concern about 
measurement, but some of the best academic and policy work that 
has been done on this shows that when you control for industry, 
you control for location in the U.S. of manufacturing plants 
that are part of multinational companies, they tend to pay 
consistently about 10 to 15 percent more. And not just for the 
non-production workers but for the production workers as well. 
We can up measurement on these things. As always, it is really 
important and more data would be great. But there is a lot of 
evidence that these wages are high.
    Mr. Lance. And then, Dean Slaughter, you say secondly, a 
worrisome trend is that the U.S. share of global FDI has fallen 
sharply. And we are working in a bipartisan way on this issue. 
Could you elaborate briefly on that aspect of your testimony?
    Mr. Slaughter. Sure. I picked up on something that Dr. 
Baily said, which is I think as there is faster economic growth 
in China and India and a lot of parts the world, I think it is 
inevitable that that faster growth will bring some decline in 
the U.S. share of world FDI flows.
    Mr. Lance. Yes.
    Mr. Slaughter. But what is striking is how much more 
dramatic the fall in FDI shares for U.S. have been compared to 
our share of GDP or other economic measures. And so that gets 
to the need to have a policy environment that supports the 
growth of these companies here.
    Mr. Lance. And this is a relatively new trend only in the 
last decade, your second point, and that is why we are trying 
to work through this issue in a bipartisan capacity?
    Mr. Slaughter. Yes. So in the '90s, it was the opposite.
    Mr. Lance. And was that due to the stronger economy in our 
country in the 1990s in your judgment?
    Mr. Slaughter. So that had a lot to do with it. We had a 
strong productivity boom in the second half of the 1990s and 
that overall strong growth and jobs and incomes was part of 
what attracted these companies here.
    Mr. Lance. And might I respectfully suggest that was due to 
bipartisan cooperation, a Democratic president, and Republican 
control of the House in the late 1990s.
    Mr. Pompeo. Do it again.
    Mr. Slaughter. Absolutely.
    Mr. Lance. I hope that is possible. Thank you, Mr. 
Chairman.
    Mr. Terry. Thank you, Mr. Lance. Let's see, Mr. Long.
    Mr. Long. I am hard to miss. What do you mean let's see?
    Mr. Terry. Yes, I meant get out of the way.
    Mr. Long. OK. Thank you, Mr. Chairman.
    Ms. Drake, you just mentioned temporary workers, hiring a 
lot of temporary workers. Describe to me what a temporary 
worker is.
    Ms. Drake. A temporary worker is hired through a temp 
agency and many of them very large the United States. And the 
temp agency is then the actual employer of record, responsible 
for the wages and taxes and benefits of that worker. And they 
can be on a short-term--when these agencies started, it was 
your secretary is sick; you need a temp for the day. As this 
Washington Post article describes--and it is not just foreign 
employers that are doing that, it is an economy-wide trait----
    Mr. Long. What date is that? What date was that that came 
out?
    Ms. Drake. Oh, this is an older article. It is Monday, 
October 11, 2004. But this is still the pattern. Temporary 
workers can be hired from anything to----
    Mr. Long. I think I was still in high school.
    Ms. Drake. That makes you younger than me. They can be 
hired for 30 days, 90 days. Some are temps for 2 years or 
longer in many places. It makes it--typically, the temps are 
paid less, have lower benefits than the permanent workers, and 
their goal is to someday be hired on as a permanent employee.
    Mr. Long. OK. I am actually, if I decipher and tried, 4 or 
5 months older than the AFL-CIO. So we both came along in the 
same year.
    I had a constituent come to me the week before last, I 
believe, maybe 2 weeks ago. I was home and they said we are 
coming to see Roy Blunt, our Senator; we are coming to see 
Claire McCaskill, our Senator; and we are coming to see you 
because we want you to understand, Congressman, how onerous 
this ObamaCare, Affordable Care Act, whatever you want to call 
it. I don't think ObamaCare is a pejorative anymore or ever was 
or whatever because the President calls it that. But anyway, 
let us call it ObamaCare. And they said we want you to know 
what this is doing. And I said, well, what do you mean? He 
said, well, we have 53,000--this is a local employer. 
Obviously, they have tentacles across United States. They have 
places of business in several States. He said we have 53,000 
employees and the best we can decide is we are going to have to 
take those employees and go--not have anyone over 30-a-hour-a-
week employee.
    Is this of concern to you at the AFL-CIO that--are you 
hearing these types of things about complying with ObamaCare 
and how we are going to get it done by 2014?
    Ms. Drake. I don't work in the healthcare department but 
from what I know of we are not hearing those complaints. We are 
concerned that those complaints are being made. We think that 
the Affordable Care Act was a bipartisan compromise. I know 
that there were a lot of Republican ideas incorporated into the 
bill and every attempt was made to make it affordable for 
employers, for workers, for the country. And we would hope that 
employers would do their best to provide the healthcare for 
their workers through the system in the ACA so that they have 
healthy productive workers.
    So we wouldn't want to prejudge that it is going to be 
something that is unaffordable or is not to work. We strongly 
believe the opposite.
    Mr. Long. I had you define temporary worker for me but I 
don't think I am going to ask you to define bipartisan because 
we might have a different understanding of that if ObamaCare 
was a bipartisan effort.
    But I want to read from an article in the Wall Street 
Journal. It wasn't back in 2004; it was the day before 
yesterday. A labor union representing roofers is reversing 
course and calling for the repeal of the federal healthcare law 
citing concerns the law's cost for ensuring members. Organized 
labor was instrumental in getting the Affordable Care Act 
passed in 2010 but more recently has voice concerns that the 
law could lead members to losing their existing health plans, 
which is what my constituent told me. He said, Billy, we 
provided much better healthcare. Now, we are going to have to 
cut everyone back to a temporary status or less hours.
    The United Union of Roofers, Waterproofers, and Allied 
Workers is believed to be the first union to initially support 
the law and later call for its repeal. And on the Republican 
side, we have tried several different ways, which is debatable 
whether those will work or not. Whenever you vote 32 different 
ways to defund the Act and do away with it, and when you don't 
have the White House and you don't have the Senate. But now 
that it has gotten through the Supreme Court and they have 
ruled that it is the law of the land and it is coming to 
fruition, I am just going to ask you to be on guard because 
when you start having people that employ 53,000 people telling 
these stories--and they are not uncommon. This is not some far 
out there, somebody in a tinfoil hat--I hear tapping----
    Mr. Terry. That is not hearing things.
    Mr. Long [continuing]. That is dreaming these things up. So 
in all honesty, I think this is just going to compound until we 
find out that we at least need to delay implementation at the 
least. When you have roofing unions that supported the thing 
saying it is not doable. So I am not trying to pick on you but 
I am just--the AFL-CIO, I want to see what you are hearing. And 
thank you all for your testimony here today.
    Mr. Terry. Thank you, Mr. Long.
    Ms. Drake, you suggested an article be entered into the 
record. Was that already part of your statement that is part of 
the record?
    Ms. Drake. It was not.
    Mr. Terry. OK. So ordered. \*\
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    \*\ [The information was unavailable at the time of printing.]
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    Ms. Drake. Thank you very much.
    Mr. Terry. At this point, the gentleman from West Virginia.
    Mr. McKinley. Thank you, Mr. Chairman.
    In Ms. Schakowsky's earlier remarks she was talking about 
the jobs in our manufacturing and how important it is for our 
middle class. And if you were here during my comments with 
Secretary Sanchez was the concern about the loss of our steel 
industry in northern West Virginia. We have, indeed, both of 
those were owned--they were foreign investments, major foreign 
investments. One of the prime reasons that we lost both of 
those 30,000 jobs was because of trade. So I am just curious. 
Ms. Dempsey, maybe you can--and Ms. Drake, you can ply into 
this.
    But in some consideration to try to encourage more further 
investment in America, how conceivable would it be, and what 
would be the effect for people considering investment if they 
were made aware that through a trade agreement or a trade 
settlement that a company is found to be coming in 
inappropriately putting business out? As I understand, that 
money, those penalties now go to the U.S. Treasury. What would 
be the message if we could put it in this bill or in this study 
to see that that money goes back to the individual companies 
that are aggrieved, and not only the companies that are 
aggrieved but also to the employees that have lost their job as 
result of this. I think it is far more helpful to our middle 
class if we are helping the people that have been hurt rather 
than the Federal Government getting the largess of that.
    What would be the effect of that, do you think, if 
investors knew that their companies could be protected?
    Ms. Dempsey. Perhaps I can start, Congressman. Thank you. 
You know, I started my career as a trade remedy lawyer bringing 
it cases for the last U.S. fan manufacturer here in the United 
States for the U.S. steel industry in the 1990s. And these are 
important issues and we at the NAM take enforcement of our own 
trade laws just as importantly as we take enforcement of other 
countries' obligations and trade agreements and everywhere 
else.
    The issue you raise about where the disbursement of the 
funds goes is something that had been tried in the United 
States and we lost the WTO ruling on this. It is not something 
that is viewed in the international rules as a way forward.
    I will say that I believe that the strong enforcement you 
generally see in the United States for our trade remedy laws--
not that it is perfect--but the strong enforcement is something 
that attracts companies here, that they know that there is a 
better chance that they will be operating on a level playing 
field, that the competition from imports will be on a level 
playing field. The one issue we have heard the most, though, 
from our companies right now is an issue that is before the 
Ways and Means Committee which is if there is circumvention of 
those anti-dumping and countervailing duty orders, they take 
too long to get enforced. And so we support something called 
the Enforce Act so that those rules are enforced.
    But the issue of the payments back is a complicated one. I 
think there are other things in terms of domestic manufacturing 
we need to do to improve the opportunities for those companies, 
as well as the manufacturing community at large.
    Mr. McKinley. Ms. Drake.
    Mr. Baily. Can I make a quick comment on that? Would you 
give me 30 seconds? No, you want to talk to her.
    Mr. McKinley. After her.
    Mr. Baily. Excuse me.
    Ms. Drake. Thank you. I think your idea on remedies is a 
good one. And as the AFL-CIO tends to disagree with many of the 
strictures sent down by the WTO--so maybe that is something 
that can be addressed with WTO reform.
    To get to your earlier question to Undersecretary Sanchez 
about who can bring a case and is there adequate assistance for 
cases, we would support a broader definition that cities and 
communities could bring cases, that workers could work together 
with cities and communities and the employers to get the 
resources needed because these cases are very expensive. And we 
would support the Department of Commerce providing additional 
assistance beyond what they are currently doing.
    And I think one other thing with regard to your dumping 
concerns, with these state-owned enterprises investing and 
operating in the United States, it is possible that they are 
getting subsidized inputs, tax rebates, no-cost financing so 
that they can be here essentially producing what would be a 
dumped product if they made it in their home market, but they 
are producing here and our current trade remedy laws can't 
reach them.
    Additionally, there has been some recent investments by 
Chinese state-owned Corporations, SinoPac, for instance, in oil 
investment. And I am not a practicing trade remedy lawyer but I 
spoke to some before this hearing and it is not clear that if 
they import what would be dumped product to themselves that our 
trade remedy laws could get at that because if it is within the 
same company, it may not enter commerce, and it may not be 
subject to our anti-dumping laws.
    So there are a lot of interesting things to look at here in 
order to make sure that competition is level and balanced and 
that domestic companies and domestic jobs are really 
strengthened rather than put at risk.
    Mr. McKinley. Thank you.
    Mr. Terry. I would request, respectfully, a unanimous 
consent for an additional minute so that Mr. Baily can answer.
    Mr. Baily. Thank you so much.
    While it is clear that we need to enforce our trade laws 
and it is true that trade has been an important issue in the 
steel industry, with all due respect, I would say that I doubt 
if the loss of almost 30,000 jobs is really attributable to 
trade, because if you look at a steel plant today compared to 
one some years ago, now you see, you know, four people and some 
computer monitors, whereas before, you saw lots of people down 
on the production lines. It has become a very automated company 
that doesn't hire a lot of people.
    And the second thing is, is that we have had a terrible 
recession so that the demand for steel, it really collapsed in 
the recession. It is coming back now, but I don't think it is 
where was. So I think there are some domestic issues also 
associated with some of those jobs.
    Mr. McKinley. When China is producing six times the amount 
of steel that we have, and just a few years ago we were both 
producing the same quantity of steel, it tells me something is 
going on in China, whether it is currency manipulation or what.
    Mr. Terry. All right. Thank you, Mr. McKinley.
    And now, Mr. Johnson of Ohio is recognized for 5 minutes.
    Mr. Johnson. Thank you, Mr. Chairman.
    Dr. Baily, before I ask my question, I am not sure--I live 
in steel country, as Mr. McKinley does. I don't know what steel 
plants you go to where you have got four, five people running 
computers that produce steel. That is not the way it is 
produced along the Ohio River in the plants that are in my 
district. You have got hundreds and hundreds and hundreds of 
people that are employed in those.
    But let me get to my question. I like trade also. I believe 
in fair trade. You know, the idea of free trade to me is a 
vernacular that troubles the American people. You say the term 
free trade; it conjures up ideas of Chinese ships pulling up to 
docks and offloading technology and products that disadvantage 
of our workers back here at home. I have advocated for a while 
changing the vernacular to talk about export optimization 
agreements rather than free trade agreements, because that is 
really what we are trying to get to. We make it here, we 
innovate here, we sell it there.
    So with that in mind, you recommend that the U.S. enter 
more free trade agreements. Where do we stand relative to 
similarly situated nations in terms of the number of trade 
agreements enforced?
    Mr. Baily. I will make a quick comment and then I am going 
to defer to my friend Matt Slaughter, who can probably give you 
a much better answer than I can. Yes, to say it is only four 
people, obviously, that was a bit of an exaggeration. But 
productivity really has gone up.
    Mr. Johnson. Oh, I agree with that. I agree with that.
    Mr. Baily. And you got the electric arc furnaces and so 
on----
    Mr. Johnson. I am sorry. I have got 5 minutes so let's go 
to the free trade questions.
    Mr. Baily. So let me defer the answer to the free trade 
question if I may to----
    Mr. Johnson. OK.
    Mr. Baily [continuing]. Dean Slaughter.
    Mr. Slaughter. So the U.S. has about 23 trade agreements 
enforced with other countries in the world. Many of them are 
older, many of them are--no disrespect to our trading 
partners--with relatively small countries for which--and you 
want to talk about export optimization; they are not large 
markets. So part of how we ideally get out of the world 
financial crisis is build more jobs and activity in America, 
link to selling things to the rest the world. I think there is 
a tremendous opportunity for the United States to expand the 
free trade access that we have to a number of other growing 
countries.
    Mr. Johnson. And in terms of export, increasing exports, 
right?
    Mr. Slaughter. Absolutely.
    Mr. Johnson. Yes.
    Mr. Slaughter. Imports have a lot of values as well but 
absolutely on growing exports.
    Mr. Johnson. We are on the same page. The administration is 
currently engaged in TPP negotiations and plans to enter 
negotiations with the EU this summer. Are there other glaring 
omissions other than TPP and EU in our stable of free trade 
agreements in your mind?
    Mr. Slaughter. Sir, what I will add, I guess, is we can 
think about organizing not only on country lines but industry 
lines as well.
    Mr. Johnson. Um-hum.
    Mr. Slaughter. So if we think about manufacturing deftly 
managed through United States, but we have a lot of large and 
growing industries and services for which there is a lot of 
barriers in trade and investment around the world. So as a 
complement to think about negotiating with countries, I think 
there is great value in thinking about finding industries in 
which a lot of Americans work throughout a lot of districts 
where we could open up foreign markets.
    Mr. Johnson. Sure. Dr. Baily, you also testified that we 
should take advantage of the natural gas energy boom, and I 
certainly agree with that. Much of that steel manufacturing 
that I talked about in eastern and southeastern Ohio is a 
result of that. If production were to slow or to be stopped 
altogether in oil and natural gas, in your opinion, how would 
that impact our ability to attract or retain FDI?
    Mr. Baily. It feels a little like a leading question but I 
think there is no question as to the answer, which is that if 
it were----
    Mr. Johnson. She mentioned lawyers earlier. A lawyer 
doesn't ask a question they already don't know the answer to, 
right?
    Mr. Baily. But it certainly would make the U.S. less 
attractive for investment for both domestic companies and 
foreign companies.
    Mr. Johnson. Great. Great. What do you think, as it relates 
to trade, as it relates to manufacturing, if you could name 
three things that we should do to bring manufacturing back here 
to America--I met with a bunch of labor folks this morning that 
are concerned about their jobs being outsourced. If there were 
anything that we could do, two or three, what would be the top 
three things that you would recommend we do to improve our 
position where our trade is concerned and retain manufacturing?
    Mr. Baily. Well, Chairman Terry asked us a somewhat similar 
question and I think I give the same answer here. I think we do 
need to do more to make sure we have the skills in the 
production workers. We have the finest universities in the 
world, but many particularly of our young men are not going 
to----
    Mr. Johnson. So workforce development?
    Mr. Baily. Workforce development. Number two is harmonizing 
our corporate tax with the rest of the world so that it is less 
complex and the marginal rate is lower.
    Mr. Johnson. We are on board.
    Mr. Baily. And then the third is around--as I said, I am 
strongly in favor of our environmental standards; we need 
those. And I am concerned about global warming but we need to 
make sure that you can get permissions and there is 
coordination between States and the Federal Government and 
among federal agencies and that that process can move more 
quickly.
    Mr. Johnson. Thank you, Dr. Baily.
    Mr. Chairman, thank you for the time.
    Mr. Terry. Thank you, Mr. Johnson.
    And that concludes the members from asking questions. No 
one is left.
    So I want to thank all of our panelists for your incredible 
testimony and help today. It really has been a great assistance 
to us. You gave us more to think about including, Ms. Drake, 
where I think you turned around a few conceptions. We were 
under the impression that we should be exempting from any 
consideration of labor laws, and I think you are suggesting 
that we need to have that discussion in this. So we will have 
to vet through that, which means we also have the opportunity 
to submit written questions to you, which my members will have 
only 10 days to get to you.
    So that is my admonition to my colleagues is they have 10 
days to get their questions put together. We would appreciate a 
quick turnaround in your answers for those questions.
    And at that, that concludes this hearing.
    [Whereupon, at 11:27 a.m., the subcommittee was adjourned.]
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