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





       HEARING ON PRESIDENT OBAMA'S TRADE POLICY AGENDA WITH U.S.
                  TRADE REPRESENTATIVE MICHAEL FROMAN

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

                                HEARING

                               before the

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

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             July 18, 2013

                               __________


                          Serial No. 113-FC11

                               __________

         Printed for the use of the Committee on Ways and Means




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                      COMMITTEE ON WAYS AND MEANS

                     DAVE CAMP, Michigan, Chairman

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

        Jennifer M. Safavian, Staff Director and General Counsel

                  Janice Mays, Minority Chief Counsel










                            C O N T E N T S

                               __________

                                                                   Page

Advisory of July 18, 2013 announcing the hearing.................     2

                               WITNESSES

Ambassador Michael Froman United States Trade Representative, 
  Office of the United States Trade Representative
Testimony........................................................     7

 
       HEARING ON PRESIDENT OBAMA'S TRADE POLICY AGENDA WITH U.S.
                  TRADE REPRESENTATIVE MICHAEL FROMAN

                              ----------                              


                        THURSDAY, JULY 18, 2013

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

    The committee met, pursuant to call, at 9 a.m., in Room 
1100, Longworth House Office Building, the Honorable Dave Camp 
[chairman of the committee] presiding.

HEARING ADVISORY

                   Chairman Camp Announces Hearing on

               President Obama's Trade Policy Agenda with

                U.S. Trade Representative Michael Froman

Thursday, July 18, 2013

    House Ways and Means Committee Chairman Dave Camp (R-MI) today 
announced that the Committee on Ways and Means will hold a hearing on 
President Obama's trade policy agenda with U.S. Trade Representative 
Michael Froman. The hearing will take place on Thursday, July 18, 2013, 
in 1100 Longworth House Office Building, beginning at 9:00 A.M.
      
    In view of the limited time available to hear the witness, oral 
testimony at this hearing will be from the invited witness only. 
However, any individual or organization not scheduled for an oral 
appearance may submit a written statement for consideration by the 
Committee and for inclusion in the printed record of the hearing.
      

BACKGROUND:

      
    International trade is an engine for growth and job creation in the 
United States. While the United States is the largest economy and 
trading nation in the world, 95 percent of the world's consumers are 
abroad. Accordingly, the future success of American workers, 
businesses, farmers and ranchers is integrally tied with continuing 
America's strong commitment to finding new markets and expanding 
existing ones for U.S. goods and services.
    This hearing will provide an opportunity to explore with Ambassador 
Froman how the President's trade agenda will create new and expanded 
opportunities for U.S. companies, workers, farmers and ranchers. Those 
opportunities include ongoing negotiations such as the Trans-Pacific 
Partnership, the U.S.-EU Trade and Investment Partnership and the Trade 
in Services Agreement negotiations, as well as post-Doha negotiations 
at the World Trade Organization such as expansion of the Information 
Technology Agreement (ITA), a trade facilitation agreement and a WTO 
agreement on environmental goods and services. The hearing will also 
explore the need for Trade Promotion Authority legislation, which the 
President has recently requested, in setting out Congressional 
objectives, consultation, and consideration of trade agreements. In 
addition, the hearing will examine important enforcement priorities, 
including trade restrictive practices and non-tariff barriers from 
major emerging economies that prevent U.S. companies from competing on 
a level playing field and various bilateral and multilateral trade 
disputes and concerns. Finally, Ambassador Froman's testimony will 
provide an opportunity to discuss Bilateral Investment Treaty (BIT) 
negotiations with China, India, Pakistan and Mauritius, as well as new 
BITs and investment opportunities; discussions in other bilateral and 
multilateral forums; and the trade and investment relationship with new 
and emerging trading partners.
    In announcing this hearing, Chairman Camp said, ``Opening new 
markets and enforcing our trade rights support economic growth and job 
creation here in the United States. We are at a critical juncture to 
move forward aggressively on a number of trade fronts including 
negotiations on the Trans-Pacific Partnership, with the European Union, 
as well as negotiations for the Trade in Services Agreement. Trade 
Promotion Authority legislation is essential to concluding ongoing 
negotiations and providing important Congressional direction, 
particularly to the talks that are just now beginning. We must also 
continue to develop new trade and investment opportunities, and enforce 
our trading rights with important trading partners, including China, 
India, and Latin America, to maximize American competitiveness and 
ensure that we do not fall behind. The Administration's active and 
engaged leadership is critical to achieving these goals.''

FOCUS OF THE HEARING:

      
    The hearing will provide an opportunity to explore with Ambassador 
Froman current and future trade issues such as: (1) developing and 
passing of Trade Promotion Authority legislation; (2) seeking to 
conclude a successful Trans-Pacific Partnership agreement this year; 
(3) negotiating with the European Union for a comprehensive and 
ambitious trade and investment agreement; (4) negotiating a Trade in 
International Services Agreement that increases access for all sectors 
of our economy; (5) improving our important trade relationship with 
major emerging economies like China, India and Brazil, and addressing 
their trade barriers; (6) ensuring appropriate trade enforcement 
efforts; (7) advancing WTO negotiations, including ``post-Doha'' issues 
at the WTO such as Information Technology Agreement (ITA) expansion, a 
trade facilitation agreement and an agreement for trade in 
environmental goods and services; (8) negotiating Bilateral Investment 
Treaties (BITs) with China and India and exploring new BITs and 
investment opportunities; and (9) establishing long-term, closer ties 
with important trading partners.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
page of the Committee website and complete the informational forms. 
From the Committee homepage, http://waysandmeans.house.gov, select 
``Hearings.'' Select the hearing for which you would like to submit, 
and click on the link entitled, ``Click here to provide a submission 
for the record.'' Once you have followed the online instructions, 
submit all requested information. ATTACH your submission as a Word 
document, in compliance with the formatting requirements listed below, 
by the close of business on Thursday, August 1, 2013. Finally, please 
note that due to the change in House mail policy, the U.S. Capitol 
Police will refuse sealed-package deliveries to all House Office 
Buildings. For questions, or if you encounter technical problems, 
please call (202) 225-1721 or (202) 225-3625.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
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files for review and use by the Committee.
      
    1. All submissions and supplementary materials must be provided in 
Word format and MUST NOT exceed a total of 10 pages, including 
attachments. Witnesses and submitters are advised that the Committee 
relies on electronic submissions for printing the official hearing 
record.
      
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    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://www.waysandmeans.house.gov/.

                                 


    Chairman CAMP. The committee will come to order.
    Well, good morning, everyone. I want to welcome everyone 
here today and extend a special welcome to United States Trade 
Representative, Ambassador Mike Froman. First of all, let me 
congratulate you on your confirmation. You are now leading one 
of the most professional and productive agencies in the United 
States Government. We are glad to have you here, and we wish 
you very well in your new responsibilities.
    You take the helm of USTR at a critical juncture. We are in 
the midst of three major trade negotiations, all of which will 
need strong Administration leadership to complete. We are in 
deep into negotiations on the Trans-Pacific Partnership, which 
I hope will be finished this year.
    Earlier this month, you held the first round of 
negotiations for a U.S. EU Trade and Investment Agreement, 
which holds enormous potential economic benefit. A negotiation 
for a Trade in Services Agreement have begun, promising huge 
commercial gains and attracting new participants.
    We had initially seen some encouraging movement at the WTO 
on expansion of the Information Technology Agreement and a 
trade facilitation agreement, but that progress seems to have 
stalled, particularly with yesterday's announcement about 
China, forcing us to suspend ITA negotiations. We need to find 
a way around these obstacles in Geneva.
    Each of these negotiations will support more, better-paying 
jobs here in the United States by dismantling barriers to U.S. 
exports and creating robust enforcement mechanisms to prevent 
future barriers from emerging. These agreements will tackle 
tariff and nontariff barriers as well as new 21st century 
issues like state-owned enterprises, regulatory coherence and 
trade facilitation. In addition, these agreements help to more 
deeply integrate U.S. companies into the global supply chains 
that are the reality of today's marketplace.
    Quick movement on these negotiations is important because 
other countries are signing agreements that open markets and 
increasing their competitiveness at our expense.
    I look forward to continuing to work closely with you on 
each of these negotiations to ensure that each is ambitious, 
comprehensive and concluded as soon as possible. However, 
finishing these negotiations will not be easy. For example, in 
the TPP, I have serious concerns about Japanese nontariff 
barriers in the auto, insurance and agriculture sectors. In the 
EU, we face regulatory barriers to U.S. exports that must be 
resolved, particularly in agriculture.
    I look forward to hearing your testimony on these issues 
and working together to ensure that these barriers and others 
are fully addressed before any negotiation is completed.
    Another critical issue that has raised considerable concern 
is how to deal with currency in our trade agreements. I believe 
that currency misalignment is a serious problem, and I look 
forward to hearing more from you about how the administration 
plans to address this issue.
    Last Congress we passed, and the President signed into law, 
seven bipartisan trade bills, including legislation that 
implemented trade agreements with Colombia, Panama, and South 
Korea. I hope to build on that bipartisan cooperation to move a 
bipartisan Trade Promotion Authority bill. TPA is essential so 
that we in Congress can outline our priorities for you, 
establish how you consult with us, and create the mechanism for 
considering implementing legislation.
    It is no overstatement to say that the success of your work 
at the negotiating table absolutely depends on passing TPA, and 
we simply will not be able to enjoy the benefits of what we 
negotiate unless we have Trade Promotion authority.
    I look forward to hearing today from you, Ambassador, about 
how the Administration plans to engage on this issue as well. 
In addition to negotiations, we must also pay attention to the 
challenges and opportunities presented by trading partners 
around the world. Take, for example, the major emerging 
economies, China, India, and Brazil. Each provides enormous 
potential opportunity, but also significant and growing 
barriers. We must seek ways to engage these countries 
constructively and address trade and investment issues. We 
should use our bilateral investment treaty agenda as one tool 
to address these concerns and also seek to expand our agenda to 
new partners.
    Finally, I also note that we continue our work here in 
Congress on several important initiatives. I will continue to 
seek a path forward to pass as soon as possible the bipartisan 
Miscellaneous Tariff Bill, which Ranking Member Levin and I 
introduced yesterday, to provide tariff relief to U.S. 
manufacturers for products not made in the United States. Our 
bill remains a model of transparency with benefits available to 
any entity that uses the products covered by the bill, and I am 
very aware that last December duties increased for over 600 
products.
    Ranking Member Levin and I also introduced legislation 
yesterday to renew the Generalized System of Preferences, and 
we will continue to work together to find a path forward in 
this Senate that ensures that the Senate can move the bill 
without amendment. In addition, I hope to move a bipartisan 
customs reauthorization bill quickly.
    A robust international trade agenda puts U.S. job creators 
back on the offense. Let us seize this opportunity.
    Chairman CAMP. I will now yield to Ranking Member Levin to 
make an opening statement.
    Mr. LEVIN. Thank you very much, Mr. Chairman.
    And, Ambassador, on behalf of all of us, if I might say so, 
a warm welcome.
    With negotiations spanning the Atlantic and the Pacific 
illustrating that globalization is accelerating, we face major 
opportunities and challenges. I believe that this 
administration, in which you have played a key role, has, on 
some important occasions, demonstrated a broader vision of 
international trade. It has helped to create jobs through 
exports, while also looking actively at the impact of imports. 
It is working to incorporate enforceable worker and 
environmental standards in trade agreements. It has been more 
active in enforcement, from initiating WTO cases to applying 
the China safeguard on tires, to creating the ITEC. It has 
responded to a series of tragedies in the factories of 
Bangladesh, tragedies that have shaken conventional resistance 
to building some basic standards to shape the human impact of 
the heightened flow of international trade.
    As USTR, you face many challenges: forced localization in 
China and India, for example; continued concerns about labor 
rights in Colombia; evasion of antidumping duties; even the 
future success of the WTO.
    TPP can expand our imports in many sectors, including 
services which are also under negotiation in Japan. While there 
are many outstanding issues, Japan's engagement raises a 
broader policy question: whether and how to address one-way 
trade, a very unlevel playing field.
    The U.S. has had massive trade deficits with Japan for 
decades, the vast majority in the auto sector where Japan is 
taking advantage of a completely open U.S. market, while 
Japan's has been tightly locked to imports from us and anywhere 
else. If the principle of two-way trade really matters, and I 
believe it does, we need to chart a course to achieve it. What 
the U.S. negotiates with Japan could have important impacts on 
the U.S. economy and also how TPP would be received in 
Congress. I am working with stakeholders to develop a proposal 
and hope to share it next week.
    The Transatlantic negotiations also provide an opportunity 
to expand our exports and strengthen our economy. Just as 
important, they can establish new rules for global trade, 
promoting an equitable and market-based economic model over the 
emerging model of, in quotes, ``state capitalism.'' These 
negotiations won't be easy, but our relationship with Europe is 
unlike any other. We should build upon the strength of that 
relationship, and it should reflect our many common objectives 
and values, while also respecting our differences.
    The discussion on TPA has begun, and there is widely shared 
interest in getting it right. First, TPA sets the rules for 
engagement between Congress and the administration. A 
significant sustained role for Congress is critical. Today 
trade agreements address a broad and growing range of policy 
areas, so Members of Congress must play an active role in their 
development. There is also a chance that more effective, 
broader congressional involvement, and I would like to 
emphasize this, would help to establish more common ground in 
Congress for trade agreements.
    Second, the TPA process must be a vehicle in crafting a 
broader strategy, as we did in 1988, to tackle the increasing 
challenges and potential benefits of globalization and enhance 
U.S. competitiveness. Since we last considered TPA, the U.S. 
has experienced the largest trade deficits in our history, 
contributing to lost jobs. These imbalances have more than one 
ingredient. One source often stems from trading partners 
refusing to play by the rules.
    As the chairman mentioned, currency manipulation is a vivid 
example. There is precedent preparing TPA with currency 
legislation. We did so with the very first TPA bill in 1974, 
and we did it again in the 1988 act. The House and Senate have 
both passed currency legislation, and this issue needs to be 
part of the TPA, TPP and T-TIP. We are going to have trouble 
keeping these three things separate, aren't we?
    So I close to mention this of interest, I know, to you in 
your new position. With sequestration, USTR, like many other 
agencies, is working under difficult personnel constraints. We 
need to help ensure that the administration can continue--can 
continue to devote the needed resources not only to negotiating 
new trade rules, but to enforcing those that exist.
    So, Mr. Ambassador, it is nice to call you that, we look 
forward to working with you.
    Chairman CAMP. All right. Thank you.
    Chairman CAMP. We will now turn to our witness. I want to 
welcome Ambassador Mike Froman again to the committee, and 
thank you very much for being with us today. You have five 
minutes to present your testimony, and your full written 
statement has been submitted for the record. Mr. Ambassador, 
you are recognized for five minutes.

       STATEMENT OF MICHAEL FROMAN, UNITED STATES TRADE 
       REPRESENTATIVE, OFFICE OF THE UNITED STATES TRADE 
                         REPRESENTATIVE

    Ambassador FROMAN. Thank you, Mr. Chairman, Ranking Member 
Levin, Members of the Committee. Thank you very much for having 
me here today. There is a long tradition of partnership between 
the Ways and Means Committee and the U.S. Trade Representative, 
and that is a tradition I plan to continue.
    As President Obama's advisor on international economic 
issues for the past 4 years, I have had the opportunity to work 
with many of you on a number of initiatives, including those 
that are now my full-time focus: opening markets for American 
goods and services and, in doing so, supporting jobs here at 
home.
    We have made important progress over the past 4 years. 
Exports are at an all-time high. Increases in U.S. exports have 
supported more than 1.3 million additional American jobs and 
have accounted for more than one-third of U.S. GDP growth over 
this period. I am pleased that you invited me here today 
because there is so much more that we need to do together.
    As President Obama has made clear, our focus must be to 
promote growth, create American jobs and strengthen our middle 
class. USTR can contribute to this effort in three important 
ways: First, by opening markets around the world so we can 
expand our exports; second, by leveling the playing field so 
that our people can compete and win in the global economy; and 
third, by ensuring that the rights and trade rules we have 
fought so hard for are fully implemented and enforced.
    Trade policy, negotiated and enforced vigorously to reflect 
both our interests and our values, gives our workers, farmers 
and ranchers, our manufacturers and service providers, our 
innovators, creators, investors in businesses of all sizes the 
best chance to compete around the world.
    The President has laid out one of the most ambitious trade 
agendas ever, and we at USTR are committed to getting it right. 
Last week, U.S. and EU negotiators completed the first round of 
Transatlantic Trade and Investment Partnership, or T-TIP, 
negotiations with the ultimate goal of enhancing what is 
already the world's largest trading relationship. And as we 
speak, USTR negotiators are in Malaysia, hard at work 
negotiating the groundbreaking Trans-Pacific Partnership, or 
TPP, a 21st century agreement that raises standards and 
introduces new trade disciplines.
    We are working on fresh, credible ways to energize 
multilateral trade liberalization at the WTO. We are working to 
negotiate a trade facilitation agreement, and we hope to make 
progress on an information technology agreement. Our services 
negotiators are hard at work negotiating a high-standard trade 
in services agreement, or TISA, that will allow our already 
competitive services providers to compete for global business 
on a more level playing field.
    If we are able to complete these agreements, and I say if, 
because let me be clear, it is better to have no agreement than 
a bad agreement, we will have created free trade with 65 
percent of the global economy. These agreements hold real job-
supporting export potential for manufacturers in Michigan and 
Pennsylvania, farmers and ranchers in Wisconsin and California, 
and service providers in New York and Massachusetts.
    Trade policy can only work, however, if it is fair. 
American workers are the most productive in the world. They 
deserve a level playing field to compete on, and this 
administration is taking a tough approach to trade enforcement, 
filing 18 cases to enforce our trade rights. The Interagency 
Trade Enforcement Center, or ITEC, has further enhanced the 
complexity, depth and reach of the administration's enforcement 
efforts.
    The Obama administration is committed to pursuing freer 
trade, but we are equally committed to enforcing our trade 
rights and providing skills and opportunities for workers, 
including through the Trade Adjustment Assistance Program, 
which expires at the end of this year.
    Trade is also a powerful tool for our broader development 
policy. I recently returned from Africa where President Obama 
announced a Trade Africa Initiative, working with a new 
generation of reform-minded leaders in some of the poorest 
countries in the world who are focused on pursuing policies of 
trade, not just aid; investment, not just assistance as the key 
to sustainable economic development.
    In that regard I am encouraged by the introduction 
yesterday by the leaders of this committee of a bipartisan bill 
to extend GSP, and I look forward to working with you to ensure 
the seamless renewal of AGOA before it expires in 2015.
    Trade policy fulfills its greatest potential when it is the 
product of close consultations between the administration, 
Congress, and a wide range of stakeholders. Transparent 
collaboration leads to better policies and better outcomes, and 
while USTR has done much to advance transparency in recent 
years, in my view, we can always do better, and here, too, I 
look forward to consulting with you as we explore what further 
steps should be taken.
    Let me say a word about an issue I know of importance to 
many of you, trade promotion authority, or TPA. As I said in my 
confirmation hearing, TPA is a critical tool, and as the 
leadership of our committees undertake a process to develop a 
TPA bill, we stand ready to work with you to craft a bill that 
achieves our shared interests.
    Finally, all of these things I have mentioned, all of our 
shared goals, are contingent on USTR having the resources to 
pursue its mission. We are managing our resources aggressively, 
and we will do our best to achieve our priorities with whatever 
resources we have, but to be frank, I am worried. At a time of 
unprecedented levels of activity, sequestration and other 
budget cuts are compromising USTR's ability to conduct trade 
negotiations and other market-opening efforts as well as to 
initiate new enforcement actions. Financial constraints are 
forcing us to make difficult decisions every day, and the 
opportunities we miss have real effect on whether or not your 
constituents are getting the full benefits of a robust trade 
policy and the jobs and growth promised by our trade 
agreements.
    With that, let me thank you again for inviting me to 
testify today. I am happy to take your questions.
    Chairman CAMP. Well, thank you very much.
    [The prepared statement off Ambassador Froman follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Chairman CAMP. Mr. Ambassador, I have been working with Mr. 
Levin and our counterparts in the Senate on a bipartisan, 
bicameral basis to develop TPA legislation. As I mentioned, I 
believe you need this authority to bring TPP to a close, as 
well as the other things you mentioned, the EU agreement, 
services and other negotiations, because, as I said, it gives 
the administration the backing of the Congress and a clear 
sense of what our negotiating objectives are.
    While we are making progress, we will not be able to do 
that without the administration's full involvement and 
engagement, and I welcome your statement both at your 
confirmation hearing and again today that the Administration is 
asking for TPA, that you believe it is a critical tool, but we 
really do need to be full partners in this venture if it is to 
succeed.
    What exactly are you and the President doing to help build 
the case for TPA?
    Ambassador FROMAN. Well, Mr. Chairman, I think the 
President and the rest of the administration has been very much 
discussing the importance of our trade agenda, the implications 
of our trade agenda for a larger economic policy, and are fully 
committed to moving forward with what is necessary to get our 
trade agenda done.
    With regard to TPA specifically, the bipartisan leadership 
of this committee and of the Senate Finance Committee I know 
are beginning a process or working on a process to develop a 
bipartisan TPA bill, and we stand ready to engage and to help 
in that process as requested.
    Chairman CAMP. Regarding TPP,as I said, I am committed to 
working with you on that, and I think a robust agreement will 
have significant benefits for the U.S. economy and support job 
creation and better-paying jobs here.
    Japan's scheduled entry next week, I think, raises some 
very significant concerns. Japan's entry into the negotiations, 
should not be allowed to undo the work that has already been 
completed. I think a robust package fully addressing Japan's 
nontariff and tariff barriers that have been long-standing, as 
Mr. Levin mentioned, particularly as they relate to auto, 
agriculture and insurance exports will be essential to 
obtaining my support for this agreement.
    But first, what steps are you taking to ensure that Japan 
will resolve these outstanding barriers to trade?
    Ambassador FROMAN. Thank you, Mr. Chairman. And this is a 
very important issue to us, as we appreciate your leadership 
and the leadership of Ranking Member Levin on this issue as 
well.
    Before--we had extensive consultations with Japan prior to 
agreeing to allow them to join TPP precisely on the issues you 
mentioned, on agricultural issues, on insurance, and on the 
auto sector, and we insisted on making progress on those issues 
before they were allowed to come in, and we reached some 
upfront agreements in certain areas, but also reached agreement 
on terms of reference for ongoing negotiations in these areas 
that will be linked to and part of TPP.
    So, for example, in the agricultural area, they moved 
forward with their agreement to allow American beef into their 
markets in 30 months and under. On the insurance area, there is 
a standstill for the introduction of new products through their 
postal system and an agreement to negotiate, and terms of 
reference for that negotiation, for further opening of that 
market. And on autos, very importantly, we reached upfront 
agreements both on measures to allow greater access to the 
Japanese market by more than doubling what they call their PHP 
program, which allows expedited entry of U.S. vehicles, but 
also we reached agreement on how the staging of U.S. tariffs 
will be done in the context of the overall TPP negotiations, 
and we laid out a negotiation on all the nontariff barriers, or 
many of the nontariff barriers that you referred to, and made 
it clear that negotiation of an agreement, an adequate and 
acceptable agreement on that, on those nontariff barriers, will 
be a key part of the TPP agreement, will be binding, will be 
subject to dispute resolution.
    So we share, very much share, your concern and your focus 
on the importance of opening up Japan's market as part of their 
entry into TPP, and we believe we have structured an engagement 
with them through TPP and in parallel to TPP that can achieve 
that objective.
    Chairman CAMP. As a follow-up to that, I have heard a from 
various stakeholders and Members of Congress about Japan's 
currency practices, and their past practices, you know, very 
serious concerns, particularly its uncoordinated intervention 
in 2011. Treasury flagged its concerns about those 
interventions in its semiannual currency report, and I have 
raised this issue with it before.
    Are you considering including provisions on currency in the 
TPP, and what would those provisions look like? What factors 
should be taken into account in determining the U.S. position 
with regard to those?
    Ambassador FROMAN. Well, Mr. Chairman, we share the 
concerns about--about currency. Clearly, obviously, Treasury 
has the lead on these issues, but these issues have been very 
much at the top of our agenda, engagement with countries of 
concern. China, for longstanding--there has been a longstanding 
dialogue with China about its currency policy, and whether it 
is through the G7 in the case of Japan, or the G20, IMF, 
elsewhere with regard to China, we made very clear the 
importance of exchange rates being based on market-determined 
forces and our opposition to--in the G20, for example, making 
it not just our opposition, but opposition of the bulk of the 
international economy to efforts to manipulate currency or to 
engage in competitive devaluation.
    So we do see this as a very important issue, and we 
explore, and we pursue it in the way that we think is most 
effective at each juncture.
    Chairman CAMP. I just think it is a real concern that we 
not allow this agreement to slip, that it needs to be concluded 
this year, and I think the active engagement of the 
administration on this issue is critical if we are to conclude 
TPP this year. So thank you for your responses.
    Mr. Levin is recognized.
    Mr. LEVIN. Thank you.
    Let me just say, Mr. Chairman, on currency, I think the 
administration needs to face up very directly to the question 
of inclusion of currency issues in both TPP and the discussions 
with Europe. And I don't think there has been satisfaction here 
with progress today, and so we just have to confront the formal 
introduction of this issue in TPP as well as with Europe.
    And let me just say this to--to TPP in Japan, there is 
immense pressure on Japan, and they really haven't been very 
unequivocal about addressing rice and other agricultural 
issues. And as a number of us said before, and I will spell out 
more of this in the coming days, I don't think what has been 
put forth so far on autos is likely to change decades of the 
same situation.
    Mr. Camp joined us in addressing this issue in Korea, and 
the agreement was changed and strengthened. Japan is an even 
sterner case. Nothing, to date, has ever worked. We are today, 
in terms of our access to Japan's auto, automotive, its parts 
as well as assembled vehicles, essentially where we were 34 
years ago. So we need to have a very emphatic dialogue on this, 
and I am sure we will.
    So let me just say a word and ask you about TPA. I think it 
is important, Mr. Chairman, that all of us work together on TPA 
to determine what kind of a TPA, and not simply say, ``Let us 
just do it.'' We have been through this before. In the 1980s, 
we had a fast track that was worked out that had rather strong 
bipartisan support. That fell apart in 2002, and it passed by, 
I think, three votes, keeping, as I remember, the vote open for 
awhile to see if those votes could be secured.
    And with the burgeoning globalization, I think we need to 
sit down on a bipartisan basis with the administration to 
determine issues like what will be the role of Congress; what 
will be the objectives stated in a TPA; what will be the role 
of Congress in seeing that these objectives are kept; and then, 
related to it, the whole issue of transparency; and what access 
not only Members of the Committee, very importantly, in 
finance, but others have to the negotiations that are under 
way.
    And I think we just want to have, on our side, your 
assurance that there will be a very active discussion of these 
issues, because simply to say, let us pass it, without focusing 
on its contents, I think, is a serious mistake substantively, 
and procedurally would likely lead to much more conflict 
instead of confluence. So just briefly your reaction.
    Ambassador FROMAN. Well, thank you, Congressman Levin. We 
certainly, as I said, stand ready to work with you-all in your 
process as you proceed to develop a TPA--a TPA bill to ensure 
precisely what you say, that it reflects our shared interests 
and our shared goals. And so we will look forward to--we will 
look forward to that.
    On transparency in particular, we think that is a very 
important issue. We think it is critically important that vis-
a-vis Congress, vis-a-vis our advisors, vis-a-vis the public, 
that we have a robust policy of engagement to ensure that we 
are getting the best input, and that we are also explaining 
what it is we are doing, how it is we are doing it, and why it 
is we are doing it. And we are looking at those, the whole 
array of policies and procedures that we have, to determine how 
best to take that forward. I think we have done a lot over the 
last few years, and I will just mention one example.
    You know, we now have had our negotiations. TPP, we started 
this, and we just did it again last week with T-TIP, we 
organized an event for stakeholders to come and be able to 
present directly to negotiators, not just U.S. negotiators, but 
our trading partners as well, and so they can have a direct 
dialogue with them. We had 350 people come to the session last 
week to be able to present those--their ideas. That is 
something that has never been done before, but as I said, I 
think we can always do better, and we look forward to working 
with you on that.
    Mr. LEVIN. Thank you.
    Chairman CAMP. Thank you.
    Time has expired, and because today's hearing has to end at 
11:00, in order to try to accommodate every Member who wants to 
ask questions, Mr. Levin and I have agreed that we would limit 
Members' questions to 3 minutes.
    Mr. Johnson is recognized.
    Mr. JOHNSON. Thank you, Mr. Chairman.
    Mr. Froman, first, I want to thank you for being here with 
us. It is a delight to see you, and while I was sad to see my 
good friend and fellow Texan Ron Kirk move on, I am sure you 
will be equally up to the task.
    As you know, trade is very important to our home State of 
Texas, and recent data shows that the Dallas/Fort Worth area 
alone was responsible for 26-plus billion in exports. Over one-
quarter of all manufacturing workers in Texas depend on 
exports. That is why I think it is critically important that 
Congress develop and pass bipartisan trade promotion authority 
that set out negotiating objectives.
    For the ongoing negotiations you have already outlined, do 
you think that your negotiations can be concluded and any 
agreement implemented without trade promotion authority? And is 
the administration, in your opinion, prepared to actively 
engage with the Congress to build political support for TPA?
    Ambassador FROMAN. Thank you, Congressman.
    We think TPA is a critical tool, and we stand ready to work 
with the committees as they develop a bill that addresses our 
shared interests and our shared goals. We are engaged in these 
negotiations, we will continue to pursue them aggressively, and 
we consult very actively with this committee, with the finance 
committee and other committees of jurisdiction to ensure that 
we have the input with regard to our negotiating objectives and 
how those objectives are translated into actual proposals at 
every step in this process. And so we feel confident that as we 
are negotiating, we are taking into account the input that we 
have received from our--from our committees of jurisdiction.
    Ultimately, to get through Congress, we think TPA would be 
very useful for the ultimate agreements to get through 
Congress, and in the meantime we will operate according to the 
longstanding procedures we have of consulting with you-all and 
your colleagues in the Senate and making sure that what we are 
doing with regard to our negotiating objectives are consistent 
with the input that we have from you.
    Mr. JOHNSON. Thank you, sir. Welcome aboard.
    Yield back.
    Chairman CAMP. Thank you.
    Mr. Rangel.
    Mr. RANGEL. Thank you, Mr. Chairman.
    And I join with the committee in welcoming you, looking 
forward to one possible bipartisan effort that this Congress 
can participate in. We do have a record of sorts in working 
together, and, with your help, we look forward to improving 
even on that. I would like to report that our staff feels very 
comfortable with the relationship we have with your office and 
ask you to continue that, because many times we have to depend 
on staff with our views, and it makes it a lot easier for us to 
get some type of agreement before something is presented to us 
than trying to convince each other that we are right.
    You have answered many of the questions that I have. I 
would be interested in seeing how America, as a result of the 
President's trip to Africa--exactly what plans we have to be 
competitive with China and other countries that have taken 
advantage of this economic growth that has taken place. And 
also, when you talk about supporting jobs, it is very important 
that your office understands that to a person that is 
unemployed or those protecting the workers, you say ``trade,'' 
and some people automatically think that means losing jobs.
    You have to help us in working with the Education 
Department and Department of Labor so that we can present new 
job opportunities that are going to be involved country by 
country, and where we are going to lose because we cannot 
compete, we have to talk about training and retraining as 
though we are just talking to Americans and not to importers 
and exporters, because we all are looking toward for the same 
goal.
    And again, I don't have to tell you that we have to be 
competitive with countries. With our automobile industry and 
what we have been through, I don't think it should be a hard 
sell that people should not put barriers up when we are 
competing with a good product. There were changes that we had 
to make in Detroit during the crisis, and made those changes. 
But we look forward to working with you, and when you think of 
trade, trade, trade, some of us have to--are forced to think 
about jobs, jobs, jobs.
    So, welcome on board.
    Ambassador FROMAN. Thank you, Congressman. That is a very 
healthy reminder that this is all about jobs, jobs, jobs in the 
U.S., and we need to do a better job of talking about how what 
we are doing through negotiations or through enforcement leads 
to greater exports, leads to greater jobs and higher wages, 
allows us to deal ourselves into global supply chains rather 
than being on the outside of them. And I look forward to 
working with you on Africa, on training, on the auto sector, 
and the whole array of issues.
    Chairman CAMP. All right. Thank you.
    Mr. Brady is recognized.
    Mr. BRADY. Ambassador, congratulations on your new role. 
Thank you for the critical role that you played in reaching 
sales agreements with Colombia, Panama, and South Korea. Our 
local businesses' workers are looking for new customers, and 
those agreements that you played a critical role on have 
leveled the playing field and allowed us to compete. So it is 
creating both new jobs in my region and neighborhood, and more 
secure jobs as well. So thank you for that role, look forward 
going forward.
    To that vein, I want to ask two questions, one about the 
Trans-Pacific Partnership, a critical region for those new 
customers, and the role of the bilateral investment treaties 
going forward. On the timetable for TPP, do you see that 
completed by the end of the year and being submitted to 
Congress shortly thereafter?
    Ambassador FROMAN. With regard to TPP, we have stated that 
our objective is to finish it this year. It is ambitious, but 
our negotiators are hard at work as we speak in Malaysia, and 
we are going to work very hard with Japan when they get in to 
bring them up to speed and not allow them to reopen or re-
litigate or delay the negotiations. So our focus is to try and 
get this done this year.
    Mr. BRADY. Do you think there is a good chance we can do 
that? Always the tougher issues come at the end, you know what 
I mean, a little more unpredictable as you are sort of near the 
finish line, but are you optimistic that we can finish in that 
timetable?
    Ambassador FROMAN. Yeah, I am. I think it is ambitious, but 
I think it is doable.
    Mr. BRADY. Great.
    On the bilateral investment treaties, those are important 
because they really take a big first step toward a level 
playing field, and they can also provide protections for 
American investment when we are chasing those customers around 
the world. We, as a government, in the first term the President 
took a look at the bilateral investment treaties. We sort of 
pulled the truck to the side of the road, took a look at the 
engine, made some adjustments, but now it is really time to get 
back on down the road, and it is an important tool.
    So, as we look at China, India, Pakistan, as we look at 
Africa and other areas, B, do you see bilateral investment 
treaties as an important tool; and, two, are you going to use 
them to advance our trade agenda?
    Ambassador FROMAN. Yes, Congressman. I think they are an 
important tool, and we will use them as appropriate. And I 
would just note that last week we had the strategic and 
economic dialogue with China here in Washington, and one of the 
outcomes was China agreeing to engage in bid negotiations on 
the basis of some of the key principles of our bid, including 
national treatments in the pre-establishment phase, and on the 
basis of coming up with a negative list rather than a positive 
list.
    Now, obviously, the devil will be in the details, and we 
have not yet even begun to negotiate, and it will be very 
important to make sure that those--those commitments are 
implemented fully, but it is a potentially very positive 
development both in terms of our bilateral relationship, but 
also what it will require China to domestically in terms of 
its----
    Mr. BRADY. No, I agree. I think that is an important role 
in China and in the other regions as well. Thank you, 
Ambassador.
    Chairman CAMP. Thank you.
    Mr. Neal.
    Mr. NEAL. Thank you, Mr. Chairman. Thank you, Mr. Chairman. 
Three questions quickly. I know this is an abbreviated 
opportunity to ask them.
    First, footwear in New England, we are down to New Balance, 
small operations after that, ensuring their success. They are 
the last ones to really--in New England to do athletic 
footwear, very important part of our economy, and certainly 
interested in what the administration's position is going to 
be.
    And on enforcement procedures with competition, can you 
address the issue of financial service and regulatory issues in 
the U.S. and EU? Did it come up in the first round of 
discussions? And an opportunity for you to hold forth on the 
President's goal as to whether or not we have been able to 
double exports, or are we on a path of doubling exports during 
the 5 years that the President has outlined, understanding it 
really is, last year, I think, the fastest part of American 
economic growth in trade and trade-related issues. So, 
abbreviate it, but the opportunity is yours, Mr. Ambassador.
    Ambassador FROMAN. Thank you, Congressman.
    On footwear, that is obviously a very sensitive sector, and 
we are looking at our domestic producers, our importers and our 
retailers to come up with a proposal that maximizes job 
creation and jobs supported by trade in footwear in the United 
States. But we are well aware of the sensitivities there, and 
indeed I will be visiting--I am planning to visit the New 
Balance factory sometime later this summer.
    Mr. NEAL. Thank you.
    Ambassador FROMAN. On financial regulation, yes, we have 
had extensive discussions with the Europeans about this, and 
our view is the following. The financial services sector is a 
key part of the Transatlantic relationship. It cannot be left 
outside T-TIP altogether. We think financial services market 
access belongs in a trade agreement, but since the financial 
crisis of 2008, 2009, there has been an explosion of regulatory 
cooperation activity bilaterally through the G20, through the 
FSB, the BIS, the IOSCO, IASB, and we think that those 
processes should be encouraged to make progress in parallel 
alongside the trade agreement so that when the trade agreement 
is done, we can look back and see that we have managed to bring 
the two markets closer together.
    Mr. NEAL. Lastly, are we on the President's----
    Ambassador FROMAN. On NEI. The President laid out goals of 
doubling exports and increasing jobs supported by exports by 2 
million. We have increased jobs supported by exports by 1.3 
million. I think we are broadly on track. On the doubling of 
exports, a number of markets around the world, we are at or 
above the run rate that would have as double exports, but to be 
frank, with the headwinds in Europe over the last couple of 
years, that has been a drag on our overall export growth, and 
we are going to need to continue to do everything we can do 
to--in terms of our export promotion efforts, but also opening 
markets and focusing on enforcement--to continue on the path 
towards doubling exports.
    Mr. NEAL. Thank you, Mr. Chairman.
    Chairman CAMP. All right. Thank you.
    Mr. Nunes.
    Mr. NUNES. Thank you, Mr. Chairman.
    Ambassador, welcome.
    I want to echo Mr. Rangel's comments that not only does the 
staff here work in a bipartisan manner, but we also enjoy this 
long-term relationship with your staff, and we hope that that 
continues.
    I would like for you to quickly address SPS enforcement 
mechanisms, specifically dispute resolution as it relates to 
the TPP. I know we have a short time, so I will leave it at 
that, and then I have one additional question.
    Ambassador FROMAN. This is a critical part of our--of our 
negotiation, and as we propose SPS-Plus disciplines in TPP, we 
want to make sure we have mechanisms for ensuring that those 
disciplines are fully implemented.
    The substantive disciplines of SPS-Plus are really rooted 
in the WTO and the WTO commitments, and there, of course, 
binding dispute resolution is available. The other elements of 
SPS-Plus are procedural elements, and most of those are also 
subject to dispute resolution in--under TPP. So we think that 
the bulk of the commitments that we are likely to achieve in 
TPP in the SPS chapter will be subject to enforcement either 
under the WTO or through this consultative mechanism in TPP, 
leading to a dispute resolution on the procedural elements.
    Mr. NUNES. Well, we look forward to continuing to work 
closely with you. As you know, American agriculture is strongly 
behind getting some type of enforcement mechanism in the TPP 
negotiations.
    I would like to, with the remaining time, for you to 
address our ongoing relationship and ever-improving 
relationship with Brazil. We had a hearing on Brazil about a 
month ago, and we are looking at possibly doing some 
legislation to kind of redouble our effort on our trade 
relationship with Brazil. And I know that you have met with 
them recently, and I know that they are--I think they are 
sending a delegation here in the fall, and, you know, what we 
can do from this committee and the Congress to improve those 
relations.
    Ambassador FROMAN. Well, thank you. Clearly Brazil is an 
incredibly important country in the hemisphere, and we think 
really has the potential to be an even closer economic partner 
of us going forward. We have had a lot of dialogue with the 
Brazilians, both business community to business community, but 
also over energy, over trade issues, and we try and make 
progress through these dialogues on our outstanding issues.
    The President visited there, as you know, a couple of years 
ago. We talked about wanting to be a strategic energy partner 
of theirs as they develop their new energy resources, and we 
have had discussions with them about, for example, pursuing a 
bilateral investment treaty, as that would be a next step 
towards deepening our relationship. They have not yet responded 
positively to that, but we will continue to have those 
discussions, including as high-level visits continue later this 
year.
    Mr. NUNES. We are looking at possibly consolidating the 
dialogues into kind of a more clairvoyant structure. Is that 
something that you would think would be helpful to get high-
level dialogue between not only your office, but also the 
Congress?
    Ambassador FROMAN. I am happy to talk further with you 
about that. We have got an energy dialogue, a CEO forum. We 
have a, I believe, a commercial dialogue as well, and we try 
and use each of these to make progress on their respective 
agendas. And, of course, our two Presidents have a good 
relationship and have an ongoing dialogue, and we expect to see 
more of that in the future.
    Mr. NUNES. I thank you, Ambassador.
    Thank you, Mr. Chairman.
    Chairman CAMP. Mr. Doggett, and after Mr. Doggett I will 
proceed two to one.
    Mr. DOGGETT. Thank you, Mr. Chairman.
    Thank you, Ambassador, for your testimony. With your stated 
objective of finishing the Trans-Pacific agreement by the end 
of this year, what do you view as the deadline for Congress 
approving fast-track authority for President Obama?
    Ambassador FROMAN. Well, thank you, Congressman. I don't 
think it is for me to give a deadline to Congress.
    Mr. DOGGETT. Just tell us by when you think you--I 
understand you are a diplomat first off.
    Ambassador FROMAN. We look toward to working with you as 
you-all proceed with your process on TPA. I think our 
negotiators are going to proceed apace, and they are proceeding 
apace as we speak. I think having TPA before we bring an 
agreement to Congress is very important.
    Mr. DOGGETT. So it will be sometime next year?
    Ambassador FROMAN. I think getting the TPA right is 
important, and I think getting it in time to--before the bill--
the trade agreement is ready to be submitted to Congress would 
be a great help.
    Mr. DOGGETT. And the thinking of the Obama administration 
is that it cannot get the Trans-Pacific Partnership Agreement 
approved in the fashion that it would like to have it approved 
without fast-track authority.
    Ambassador FROMAN. I think traditionally, I think all but 
one trade agreement in history, I believe, in the--at least 
since the 1980s, has been approved under some form of trade 
promotion authority, and I think that that is likely to be the 
most productive way of moving forward on TPP as well.
    Mr. DOGGETT. So you are not saying you couldn't do without 
it. Actually during the time I have been on this committee, I 
think most of the trade legislation has been approved without 
fast-track authority. But you would view it as essential to 
your work, or are you saying you can do without it?
    Ambassador FROMAN. Well, no, no, no. I think, again, I was 
just assuming between trade agreements and trade legislation, I 
think with the exceptional of the Jordanian FTA, all other FTAs 
have been approved under some form of fast-track authority. I 
haven't thought through what it would mean to try and proceed 
without that kind of authority, but I am happy to work with the 
committee, and, of course, we stand ready to work with you as 
you work on your process.
    Mr. DOGGETT. In your work on TPP, has USTR undertaken or 
requested that anyone undertake any studies concerning the 
economic subsectors where we will see job growth and those 
where we will see job loss?
    Ambassador FROMAN. I think there has been a lot of work 
done by various think tanks and other research centers. I am 
not aware of what has been done when TPP started 2\1/2\ years 
ago. Oftentimes there is a study done by the ITC, and I am not 
sure whether that was done in this case or not, but I am happy 
to look into that and get back to you.
    Mr. DOGGETT. It is not--isn't that a factor in your 
negotiations?
    Ambassador FROMAN. Well, we certainly are looking to open 
markets for all of our sectors, and we consult very closely 
with stakeholders and get their perspective on where they see 
the opportunities for expanded exports and job creation, and 
that helps inform our priorities as well.
    Chairman CAMP. All right. Thank you.
    Mr. Reichert.
    Mr. REICHERT. Thank you, Mr. Chairman.
    And welcome. Good to see you again. I want to echo some of 
the comments made by Members here. The working relationship we 
had with the Ambassador Kirk and his team, I hope, continues 
with our staff. And I know that our staff is in continuous 
conversation with yours, and we hope that continues.
    I just want to make a quick comment about TPA. We know that 
you don't have to make a formal request for that authority, It 
is Congress' job to move forward with that, but I think there 
is a perception that goes back to, I think, the Korean 
agreements and goes back to the ascension of Russia into the 
WTO world that the administration wasn't, you know, as actively 
involved in that process and those processes as we would like 
to see. And so I think there is the perception today that the 
administration may not be as aggressively involved as we would 
like to see them be in helping us promote the idea of the 
tremendous need for TPA, so I am going to encourage you to be a 
more active--and the President to be more active in that 
regard.
    But I also want to ask a question. On TPP, you mentioned 
that you, you know, have a focus to get this done by the end of 
the year. I want to get a little bit more specific. I would 
like to know what your strategy is to get it done by the end of 
the year, and is there anything we can do to help you get that 
accomplished?
    Ambassador FROMAN. Well, our strategy is to work very hard, 
and we are working around the clock.
    Mr. REICHERT. Any more details than that?
    Ambassador FROMAN. I am happy to go through more details 
with you, but, look, the team at USTR is doing a phenomenal 
job. It is a very complex negotiation; 11 and soon to be 12 
countries in the negotiation. We have 29 chapters. Many of the 
issues we are dealing with are new issues, issues that none of 
the countries around the table have negotiated before in any 
agreement, and that is an ongoing mutual learning process.
    We have done a lot of work over the last 2 years to close 
out chapters, close out issues, park issues. They are engaged, 
as we speak, right now in trying to move that agenda forward, 
and they will be meeting with the Japanese at the end of this--
at the end of this round to welcome them into the discussions 
and bring them up to speed on the status of the negotiations.
    But we have--our strategy is to work country by country, 
issue by issue, and to get a sense, as we--particularly as we 
enter the end game of where the trade-offs are going to be and 
how best to come up with a deal that everyone will find in 
their mutual interests, but that raises the overall standards 
and achieves the level of ambition that we set out.
    Mr. REICHERT. So we know that your staff works hard, so the 
fact that they work hard, and that is your strategy, we can 
count on them, the timeline being the end of the year.
    Ambassador FROMAN. Well, that is our objective. As I said, 
it is ambitious, but it is doable, and we are going to do 
everything we can at all levels of government to try and make 
that happen.
    Mr. REICHERT. Thank you, Mr. Ambassador.
    I yield back.
    Chairman CAMP. All right. Thank you.
    Dr. Boustany.
    Mr. BOUSTANY. Thank you, Mr. Chairman.
    Welcome, Ambassador.
    The Trade in Services Agreement, or TISA, has massive 
potential, commercial potential, and could be a major source of 
job creation for U.S. firms. And if you look at our economy, we 
have a competitive advantage in this area clearly, with 75 
percent of the U.S. GDP being in services, 80 percent of the 
private sector employment, and currently 30 percent of our 
exports.
    As I look at TISA, 70 percent of the world market is 
represented with those countries, and yet several high-profile 
events have come and gone. I was glad to hear you mention TISA 
in your testimony today, but in previous occasions, we have not 
heard the White House or the administration put the kind of 
emphasis that needs to be put on this agreement. I think it 
should be given as much emphasis as TPP and the EU 
negotiations.
    I sent a letter this week, earlier this week, talking about 
some of this, and I just want to get your assurances that TISA 
will be given the priority it really deserves going forward, 
because I think the potential is immense.
    Ambassador FROMAN. Well, Congressman, I totally agree, and 
we think this is really one of the most promising areas of 
trade globalization going on in the world right now. And we 
have a terrific ambassador in Geneva in the form of Michael 
Punke, who is leading those negotiations with our team back 
here. And as you say, it represents 70 percent of the global 
services market, so we think it is a very significant--it could 
be a very significant market that we hope other countries may 
join over time.
    So we very much agree with you on the importance to our 
economy, to our jobs in the United States, to promoting growth 
here in the United States, and we are optimistic that we will 
continue to make progress.
    Mr. BOUSTANY. Yeah. My home State is Louisiana, and we are 
an energy-producing State, and in the energy sector this could 
be really beneficial. I was with Chairman Nunes down in Brazil, 
and they are struggling with the right kind of expertise and 
technology to develop deepwater resources as well as shale. 
Other countries have the same concerns. We have the expertise. 
We have the engineering services and so forth.
    Mr. BOUSTANY. Yeah. Agreed.
    Ambassador FROMAN. So we should move forward. Yeah, thanks.
    Mr. BOUSTANY. I yield back.
    Chairman CAMP. Thank you.
    Mr. Thompson.
    Mr. THOMPSON. Thank you, Mr. Chairman. Thank you for having 
the hearing.
    Ambassador, thank you for being here, and congratulations. 
We look forward to working with you.
    The chairman started off talking about some tariff and 
nontariff barriers as it pertains to agriculture, and I would 
like to pick up on that. I represent an area that has a very 
significant agricultural component. We produce some of the best 
wines in the world, and some of the T-TIP and TPP countries 
present some pretty good barriers for our product. And so I 
would like to be able to get a good commitment that we work 
together to make sure that we lower these barriers and work to 
protect this important agricultural product that we have. The 
2006 bilateral Wine Trade Agreement with the U.S. and the EU 
was a good start, and I would like to make sure that we 
continue that.
    Along the same lines, counterfeit and imitation wines that 
are made by other countries that try and capitalize on our 
brand are a real problem, and our geographical indicator system 
works well, and I would like to make sure that we work to 
protect that as well.
    And another agricultural product that is important to 
California is our rice, and recently the President and Japan's 
Prime Minister sent a joint statement that said, and I will 
paraphrase, all tariffs are on the table. And the U.S. rice 
industry would like to very much make sure that this holds true 
to rice, and that we don't exempt rice in any agreements that 
are coming in, and that we include them and you work with them 
as we work towards facilitating this particular market.
    And then lastly you had sent a letter to some of our Senate 
colleagues talking about apparel rules in textiles, and I think 
you said that appropriate balance between divergent views was 
important, and I hope we can find more opportunity for trade 
liberalization other than just short supply issues. And I look 
forward to working with you on all of these issues.
    Ambassador FROMAN. Well, thank you, Congressman.
    Let me just say that with regard to the agricultural 
issues, agricultural trade is at an all-time high. Our exports 
last year, I think, were $140 billion. We see this as a 
tremendous opportunity for expansion. We are working very 
closely with Secretary Vilsack and USDA to ensure that we are 
doing everything that we can to promote agricultural trade in 
all of our agreements. That is why, as Congressman Nunes 
mentioned, the SPS-Plus agreement is important in----
    Mr. THOMPSON. Some of our tariff and nontariff barriers are 
at an all-time high. Also, if you look at China, when we send 
our U.S. wine there, we are paying about 56 percent combined 
tax and tariff, and it is terribly prohibitive.
    Ambassador FROMAN. These are all issues we want to work on 
in the context of these hearings.
    Mr. THOMPSON. Thank you.
    Chairman CAMP. Thank you.
    Mr. Buchanan.
    Mr. BUCHANAN. Thank you, Mr. Chairman.
    And I really look forward--and congratulations, Mr. 
Ambassador. Looking forward to working with you, and I am sure 
the committee does, on a bipartisan basis.
    I am from Florida, and these trade agreements, the FTAs we 
just did with Panama and Colombia are huge to Florida. And I 
just see the--what trade means to Florida with 14 ports is 
550,000 jobs, so $70 billion in economic activity.
    But I also grew up in Michigan. So I take a look at--just 
curious, from your standpoint, you look at a lot of the coastal 
communities, huge benefits in terms of trade, the President 
talking about doubling trade, 95 percent of the marketplace 
outside. But then you will see different parts of the country, 
somewhat the Midwest and other areas, that don't benefit as 
much as the--many at times the coastal communities. What is 
your thought on that, what we could do more to help more States 
feel like it is a win-win for them as well on trade?
    Ambassador FROMAN. Well, thank you very much, Congressman. 
From our perspective trade is part of the broader economic 
strategy of creating jobs and promoting growth, strengthening 
the middle class, and that has got to work across the country. 
And, obviously, different parts of the country will be affected 
in different ways, but it is one reason we put so much emphasis 
on our manufacturing policy in the administration and making 
sure that our trade policy is supportive of our manufacturing 
policy. We want to make sure that it is--even as we export 
additional services, and we export additional agricultural 
products, that we are also building a stronger manufacturing 
capability in the United States.
    Mr. BUCHANAN. Another quick question because we only have 3 
minutes. The question I wanted to really kind of get to is I 
was in Beijing in January, and, you know, they have AmCham, 
which is about 4,500 members in the chamber, U.S. businesses in 
the chamber there. And, of course, you have heard this a lot 
about intelligence properties; it is still the biggest issue. 
An article that The Times had put out a little while back, it 
said that it is costing the U.S., I think, $48 billion in 2009. 
I think it would--if they improved their IP protection, it 
would mean $87 billion to the U.S. and create 2 million jobs.
    I know you worked on that, and it is something that is a 
big issue, but I can tell you, that is a very big issue to our 
country in terms of job creation, the additional economic 
opportunities for companies in the U.S. Where are we at on 
that?
    Ambassador FROMAN. Well, it is a very high priority, and as 
recently as last week when we had the strategic and economic 
dialogue, intellectual property rights, trade secrets, cyber 
thefts all featured very prominently in that discussion.
    We need to keep on pressing China to make progress there. 
We have made some progress. We reached an MOU on access for our 
films, which----
    Mr. BUCHANAN. I think it is about enforcement. I mean, you 
might get agreement, but then try to get something implemented.
    Ambassador FROMAN. Absolutely. And we want to see more 
legalization of software; the use of legal software by 
government agencies, by SOEs, by others. And they have stepped 
up their efforts in certain respects. It is not enough, it 
hasn't gone far enough, it hasn't gone fast enough.
    The one thing I would say that gives us some hope is that 
they are beginning to see in their own country developers of 
intellectual property, and as that happens, there is more of a 
constituency within China that wants to see better enforcement 
of intellectual property rights. We need to capitalize that--on 
that and press for further resources being put into 
enforcement, further metrics and benchmarks, and ensure that 
they are not stealing our intellectual property.
    Chairman CAMP. Thank you.
    Mr. Nunes, for the purposes of UC.
    Mr. NUNES. Thank you, Mr. Chairman.
    Mr. Thompson reminded me that there is actually a letter 
that was sent to Mr. Froman and Secretary Vilsack on the SPS 
measures, and I just want to submit that for the record.
    Chairman CAMP. Without objection.
    [The information follows: The Honorable Devin Nunes]


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    Chairman CAMP. Ms. Jenkins is recognized.
    Ms. JENKINS. Thank you, Mr. Chairman.
    Thank you for being here.
    Strong intellectual property right protections are 
essential to the success of U.S. and EU economies. In the 
United States alone, intellectual property-intensive industries 
account for over 50 million jobs, nearly 6 trillion in output, 
and a trillion in exports.
    So a couple questions. First, what barriers for IPR-
intensive trade in goods and services do U.S. companies face in 
the EU? And, second, in what areas is there potential for 
greater convergence between U.S. and EU IPR practices, and how 
can the United States and the EU enshrine high levels of 
protection in those areas in which harmonization is not 
pursued?
    And I would be interested in hearing about not only 
patents, trademarks and copyrights, but also about protection 
of trade secrets from disclosure by governments.
    Ambassador FROMAN. Well, it is--intellectual property is a 
critical part of our economy, as you said, and it is a critical 
part of our relationship with the EU as well. And we both have 
quite high levels of IPR protection, although they are somewhat 
different in terms of the number of years of protection or 
exactly on how they are implemented.
    We see the T-TIP negotiations as giving us an opportunity 
to work together with the EU to raise the standards overall for 
the global community, for the global economy, and to work vis-
a-vis third countries where we have common interests to help 
strengthen intellectual property rights enforcement.
    On a bilateral basis we have our differences. Geographical 
indications is one area, and we want to make sure we protect 
the trademarks and the common product names of our products. 
But we see more commonality in terms of the overall levels of 
protection between the U.S. and EU than with a number of other 
markets, and as a result we see the opportunity to really work 
together to set high standards around the world.
    Ms. JENKINS. Okay. Thank you. I yield back.
    Chairman CAMP. Thank you.
    Mr. Blumenauer.
    Mr. BLUMENAUER. Thank you, Mr. Chairman.
    Welcome, Ambassador. We have appreciated the 
professionalism, and the hard work, and the skill of the USTR. 
Look forward to working with you, the other committees, 
members.
    I appreciated our earlier conversation about the importance 
of labor and environmental protections, which, I think, working 
with you for the extent to which we are able to protect and 
enhance, I think that makes it better for everybody all the way 
around.
    My friend Mr. Neal referenced the footwear industry. You 
talked about going to New England. I think that is terrific.
    I would ask unanimous consent to enter in the record a 
letter that we had submitted with my friend Aaron Schock, 
almost 50 Members of the House, that talked about the value 
chain of footwear.
    [The information follows: The Honorable Earl Blumenauer]


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    Mr. BLUMENAUER. I would hope that you would be able to 
visit Portland, Oregon, and look at part of that supply chain. 
I represent people who manufacture shoes in the United States, 
Danner Boots, King Footwear. We have got a whole range of 
others, however, because although less than 1 percent of 
footwear is manufactured in the United States, the vast amount 
of the value chain is here. Companies like Nike, New Balance, 
King, others--not New Balance--well, New Balance also--their 
design, promotion, the intellectual property, the engineering, 
the sales, the marketing, a huge amount of the value is here. 
And we are trapped in the past with a tariff structure that is 
outmoded, long ago ceased to actually have any rational bearing 
on the marketplace, and, in fact, translates into a very 
substantial sales tax, particularly on the lower-end product. 
And it would be exciting if we could have some meaningful work 
with the treaty negotiations that you are under way with to do 
something meaningful in terms of tariff reduction to be able to 
promote that entire value chain.
    I mean, do you have any thoughts or observations? You can 
accept the invitation to come visit us. We would be happy to 
put tech and and and wine into the mix as well.
    Ambassador FROMAN. Thank you. Thank you, Congressman.
    You know, I would say on the footwear issue in particular, 
and this goes to some other products as well, we have got 
multiple interests at stake, as you say: the domestic 
producers, those who are assembling product that is being 
imported, the retailers, the consumers. And one thing we have 
to do is weigh all those interests and find the best possible 
path, and one in particular that supports the most jobs in the 
United States.
    And so we are looking at all those issues. We recognize the 
sensitivities. And we hope to be able to strike a balance that 
addresses the multiplicity of interests at stake.
    Mr. BLUMENAUER. Well, I appreciate that. And, as I say, we 
would be able to show you in our community people who are 
manufacturing, but also the design, the production, the 
engineering, the sales, thousands of very high-paying jobs 
right here in the United States that support that mechanism 
that you talked about.
    Chairman CAMP. All right. Thank you.
    Mr. Paulsen.
    Mr. PAULSEN. Congratulations, also, Mr. Ambassador. I echo 
the comments of some of my colleagues.
    I want to shift gears and just talk about India real quick. 
You are aware that many U.S. businesses and investors are 
facing issues that are significantly impeding their ability to 
compete in India. And, as you know, Congressman Larson and 
myself, we recently sent a letter with 170 of our colleagues 
ahead of last month's U.S.-India strategic dialogue urging the 
administration to make India's deteriorating environment for 
intellectual property a focus for that dialogue.
    I know last week India announced a review of its 
preferential market-access policy, which requires information 
technology products to be produced in India as a condition of 
sale. That is a policy that would violate fundamental global 
trade rules, obviously. But that review does not solve the 
problems facing the information technology sector in India. It 
doesn't do anything to address the serious concerns in other 
sectors, including the solar industry. And it doesn't do 
anything to address discriminatory tax treatment or stop the 
blatant theft of American intellectual property.
    The primary forum to discuss bilateral trade investment 
issues is the Trade Policy Forum, which USTR cochairs, but it 
hasn't been held since 2010. When do you expect to hold the 
next Trade Policy Forum? What can we do to support you in these 
efforts? And what is the administration doing to ensure that 
U.S.-India trade and investment relationship is on a positive 
trajectory down the road?
    Ambassador FROMAN. Well, thank you, Congressman. And this 
was very much at the center of the agenda last week when we had 
the U.S.-India CEO forum. We had the Finance Minister, the 
Trade Minister, and Deputy Chairman of the Planning Commission 
in town for a series of meetings precisely on that issue of the 
investment and innovation environment in India, how it is 
affecting our bilateral economic relationship, how we might be 
able to address it.
    And I had very good conversations with my new counterpart, 
the Trade Minister Sharma there, and we have agreed to have our 
staffs work closely together to tee up and try and resolve a 
number of the outstanding issues so that we can have a 
ministerial-level Trade Policy Forum sometime in the future. 
But we want to make sure that the groundwork is laid and that 
we are making progress towards resolving those issues in the 
run-up to that meeting.
    Mr. PAULSEN. And what can we do to help support you in that 
effort, knowing that this is a town--Congressman Crowley and 
others, we had a little meetings also with the Finance Minister 
recently, had a great conversation to keep that dialogue going. 
But what else can we do to support you in your effort?
    Ambassador FROMAN. I think it has been very important for 
India to understand the breadth of concern in the business 
community, in Congress, the bipartisan basis of that concern. I 
think it helps focus the attention on what needs to be done. It 
is one thing if we say it to them, but if they are hearing it 
also from a variety of other sources, I think that is very--
that is very positive, and I would encourage you to continue 
that.
    Mr. PAULSEN. Thank you. I yield back.
    Chairman CAMP. Thank you.
    Mr. Marchant.
    Mr. MARCHANT. Welcome, Ambassador.
    I represent 700,000 people that live and work within 30 
minutes of the--one of the great trade hubs in the United 
States, DFW Airport. Trade agreements equal high-quality and 
high-paying jobs in my district, and it isn't just--it is an 
equation that is a district equation. And so we are very 
interested in your success and want to let you know that we are 
more than willing to help in any way.
    My question is about the TPP. The TPP is meant to be a 
living agreement that could eventually be the basis for a free 
trade area for the Asia-Pacific. Such a free trade area would 
further integrate the United States into the supply chains that 
cross the Asian-Pacific region, benefiting our exports and 
increasing our competitiveness.
    I understand that now the focus is properly on completing a 
high standard and ambitious TPP agreement; however, we need to 
lay the groundwork so that the Pacific Rim countries from Latin 
America through Asia that meet the high standards will 
eventually join and increase the value of TPP. What is the USTR 
strategy for ensuring that this can happen?
    Ambassador FROMAN. Well, thank you. And, as you said, our 
focus right now is trying to complete this agreement this year 
with the 12 countries that will be part of it, but we have 
always envisioned this as a living agreement, as a platform to 
which other countries could ultimately accede if they so 
wished. And we heard expressions of interest, formal and 
informal, from a number of other countries who are following 
TPP's progress with great interest, and who we expect may want 
to join in a second tranche of countries sometime in the 
future. But our focus for now is just bringing this first 
tranche to a close.
    Mr. MARCHANT. Mr. Chairman, I would like unanimous consent 
to submit a question for the record concerning our relationship 
with Taiwan to the Ambassador.
    Chairman CAMP. Without objection.
    Mr. MARCHANT. Yield back.
    Chairman CAMP. All right. Mr. Davis.
    Mr. DAVIS. Thank you very much, Mr. Chairman.
    Let me add my congratulations, Mr. Ambassador.
    You know, as we experience globalization, there seem to be 
more and more small, moderate, minority-owned, women-owned 
businesses who are trying to get into the pipeline and make use 
of opportunities to do business abroad. How helpful does your 
office expect to be to help these individuals make connections, 
contacts, and get moving?
    Ambassador FROMAN. Well, thank you very much for asking 
that question, because getting small and medium-sized 
businesses into the export business has been a major focus of 
the administration, and we want to do more on that.
    A couple of years ago, Ambassador Kirk launched an SME 
initiative at USTR. And more broadly in the administration, 
through the National Export Initiative, and through the works 
of the Export Promotion Cabinet, we made increasing the number 
of small, medium-sized businesses who export a major objective. 
And we went at that by, one, increasing the availability of 
trade finance and working with community banks, who have the 
best relationships with small and medium-sized businesses, to 
bring them into the trade finance business. We also looked at 
the array of points of contact that the administration, the 
government has with small and medium-sized businesses, the SBA, 
the commerce offices around the country, to ensure that they 
were trained and capable of providing small and medium-sized 
businesses with the kind of advice they need about how to begin 
to export, how to evaluate a market, and how to navigate their 
ways through the various procedures that they need to navigate. 
So this has been a major priority of ours.
    In TPP itself, we have a small and medium-sized business 
chapter. And the objective there is to be able to look back at 
TPP as it is being implemented to ensure that the benefits of 
TPP are also going to small and medium-sized businesses and to 
make adjustments as appropriate.
    So this is a high priority for us. We agree these are the 
drivers of jobs in the United States, and we think there is 
much more that we could do to help these companies become part 
of the global economy.
    Mr. DAVIS. Thank you very much. We had a great relationship 
with Ambassador Kirk and look forward to working with you.
    I yield back.
    Chairman CAMP. All right. Thank you.
    Mr. Reed.
    Mr. REED. Thank you, Mr. Chairman.
    And thank you, Ambassador, for being here today. And I 
offer my congratulations and also my personal thanks for all 
the hard work on Korea in particular that you were involved 
with and that we worked on with Korea, Colombia, and Panama.
    I represent upstate western New York. I have got companies 
like Nucor Steel, Corning Incorporated. So I am very concerned 
about making sure that we are enforcing our trade provisions to 
the fullest extent possible to make sure we have that level 
playing field that is critical to the future of America and 
American manufacturing in particular. So just want to make sure 
I have a clear understanding that you and I agree that 
enforcing our trade remedy laws is something that protects 
American jobs, good for American jobs.
    Ambassador FROMAN. Absolutely.
    Mr. REED. And when it comes to intellectual property, for 
example, at Corning Incorporated, and the trade secrets and 
things like that, would you agree with me that being able to 
point at our U.S. criminal and civil laws is critical in your 
negotiations as you go in regards to the trade agenda across 
the world?
    Ambassador FROMAN. Well, certainly the whole area of trade 
secret theft has been of great concern to us and a high 
priority. And Corning is one of the specific cases we have 
advocated for aggressively with China to try and see if we can 
help resolve that case.
    I don't know enough about the criminal and civil laws to 
comment on the relation between that and what we are doing on 
the trade side other than to say that we have underscored that 
trade secret theft is unacceptable, and that it is important 
that these issues, both the individual cases, but also the 
broader message from the Chinese leadership that trade secret 
theft won't be tolerated, has got to be a critical part of 
moving forward.
    Mr. REED. Well, I so appreciate that commitment, because 
that is an important piece to me, obviously.
    Is there anything that you would recommend to us from a 
legislative perspective to champion to put you in the best 
position to accomplish your job in regards to that trade secret 
initiative?
    Ambassador FROMAN. Well, I would say the following, and I 
mentioned it in my opening statement a bit. Our--my biggest 
worry at the moment is really about--is about resources. USTR 
is lean, it is nimble, but it is highly constrained at the 
moment for all the reasons that we know, between sequestration 
and other budget cuts, and it is forcing us to make hard 
decisions between what negotiations we can engage in and how, 
what other market-opening measures we want to pursue, and what 
enforcement cases we can bring.
    And so I am quite concerned that we will manage our 
resources to the best of our ability, we will do the best we 
can to meet our various priorities, but, frankly, I think USTR 
gets the biggest bang for the buck of anyplace I know. And I 
think making sure that we are fully resourced to be able to 
achieve the kinds of enforcement gains and negotiating and 
monitoring gains that you identify are very important.
    Mr. REED. I appreciate that, and if there is anything you 
need from our office, don't hesitate to reach out. I look 
forward to working with you, I truly do, Ambassador. Good luck.
    Chairman CAMP. Thank you.
    Mr. Griffin.
    Mr. GRIFFIN. Thank you, Mr. Chairman.
    Thank you for being here. I want to talk to you about SPS 
enforceability. And I think my colleague, Mr. Nunes, talked a 
little about this.
    I believe that you discussed the current arrangement, which 
is to go through WTO procedures to deal with this, as opposed 
to having something in the agreement itself. Is that a fair 
characterization?
    Ambassador FROMAN. Well, in TPP, as we seek to negotiate--
and, of course, we are still in the midst of negotiating--as we 
seek to negotiate what we are calling SPS-Plus disciplines, we 
want to make sure that they are fully implemented. Many of the 
SPS disciplines, SPS-Plus disciplines, go to a future 
elaborating how countries' WTO commitments are to be 
implemented. So, for example, that regulations be based on 
science, it describes how that science should be applied, or 
what kinds of relevant science there are to apply and how that 
should be discussed. Those underlying commitments, those 
underlying commitments to apply science, are subject to WTO 
dispute resolution.
    Mr. GRIFFIN. Right. And that process is laid out in the WTO 
agreement, not in the agreement that is being negotiated here.
    Ambassador FROMAN. What we have got in TPP is both the WTO 
dispute resolution process on the substance of the SPS 
commitments, but also separate TPP disputes element on the 
procedural enhancements that we are seeking to achieve.
    Mr. GRIFFIN. I have looked at this and talked with some of 
my constituents, and I am concerned that there are not enough--
there is not enough teeth and efficiency in using the WTO 
dispute resolution process as opposed to elevating this and 
creating a more effective mechanism in the agreement itself. 
And this is something that I think we should pursue.
    And let me ask you this: If there are voices in the 
administration, in the Federal Government, that disagree with 
me, where do those voices come from? Are they FDA? Are they 
worried about their science being under scrutiny? What--I mean, 
the FDA is already science-based, so where is the rub there?
    Ambassador FROMAN. We approach this in--by trying to figure 
out what is the most efficient, quickest way to resolve issues 
as their arise. And that is a little bit what is behind the 
consultative mechanism that we have proposed in TPP, because we 
think by being able to raise these issues through a formal 
process, forcing the parties to come to the table to try and 
resolve them can help expedite some of the resolution.
    We think we have struck the right balance by leveraging off 
the scientific expertise of the WTO, because it really is a 
very science- and technical-heavy set of issues, while at the 
same time adding a consultative mechanism that will allow us to 
force parties to the table and get the procedural elements 
addressed in the context of TPP.
    Chairman CAMP. All right. Thank you.
    Mr. McDermott.
    Mr. McDERMOTT. Welcome.
    I don't know if you got promoted or demoted, leaving the 
White House and going over to Trade.
    The last 2 years as you have worked on this TPP, the issue 
of access to medicines has been central to some of our 
concerns, and it seems like the language you have put in is 
really a step back for the May 10th agreements that Chairman 
Rangel and Mr. Levin made with the White House in terms of 
trade agreements.
    The proposal you put out did away with the word 
``guarantees.'' I think that is what poor countries really want 
are guarantees of access to the medicine within 5 years of 
their introduction in the United States. You got a lot of 
negative feedback at the time that first came out, and since 
that time, you have said you are in a period of reflection. Can 
you tell us where you are on your decision about that?
    Ambassador FROMAN. Thank you, Congressman. And thank you 
for your leadership on this issue.
    This is a critically important issue, and we are committed 
to finding the right balance to strike between protecting 
innovation, but also achieving access to--access to medicines. 
We are in the process of engaging with our TPP partners to 
educate them as to what is in U.S. law. We took the feedback on 
our original proposal very seriously. We received a wide range 
of feedback. And we are in the process of figuring out how we 
want to take it forward, consistent with some of the principles 
that you laid out that strikes that balance between----
    Mr. McDERMOTT. Is there any language presently written that 
we can look at?
    Ambassador FROMAN. We have not tabled--we have not tabled 
new text on this issue. We are in the process of dialogue with 
our TPP partners about what the principles of a chapter on this 
might look like.
    Mr. McDERMOTT. So the only tabled proposal is the one of 
February or wherever?
    Ambassador FROMAN. We never tabled that proposal. We 
briefed the committee here and our stakeholders on it.
    Mr. McDERMOTT. You never tabled it.
    Ambassador FROMAN. Correct.
    Mr. McDERMOTT. Okay. Let me ask you a second question. This 
committee does a lot of things here, but most of them are 
irrelevant. But it seems to me that we ought to be dealing with 
GSP if we are serious about our relationship with the rest of 
the world. Can you just tell the committee why GSP ought to 
pass in the next 2 weeks and not expire on the 1st of August?
    Ambassador FROMAN. Well, thank you. Thank you very much for 
that. And I--we very much agree that GSP has both its 
development dynamic to it, but also very importantly it helps 
importers of products who can't otherwise access those products 
to bring those products in and provide them to American 
consumers at lower costs. So we think it is both good for 
American consumers, but also good for development. We were 
comforted to see and welcomed the introduction yesterday of the 
bipartisan bill by the leadership of this committee to renew 
GSP, and we think that is important.
    Chairman CAMP. All right. Thank you.
    Mrs. Black.
    Mrs. BLACK. Thank you, Mr. Chairman.
    And welcome, Ambassador. We look forward to working with 
you.
    I want to turn to the issue of data. One of the most 
important 21st century issues is the protection of cross-border 
data flows, which, of course, is critical not just for service 
companies, but to any globalized company in any sector. Firms 
with global sales forces must be able to transfer the sales 
data back to their headquarters, and many companies across the 
sectors that centralize the processing of their data must be 
able to do so, as you know, seamlessly. The emergence of the 
digital trade also depends on the free flow of data across 
borders.
    In both the EU and the United States, data privacy is 
protected, but we do have different systems for providing that 
protection. So respecting the difference of those privacy 
approaches, how can we ensure a robust protection for cross-
border data flows in the EU negotiations, in the Trade in 
Services Agreement, and also in TPP? And in what other ways has 
the digital revolution impacted services trade in a manner that 
should be reflected in these negotiations?
    Ambassador FROMAN. Well, thank you very much.
    And clearly the impact of the--of digital--the digital 
economy, of digital trade is playing an increasing role in all 
of our trade agreements, as you say. In TPP we have a 
particular focus on it, but we will also be talking about it 
with our European colleagues and in the services agreement.
    We think the free flow of data is important for all the 
reasons that you say. And also, as technology develops, and the 
cloud develops, we want to make sure that businesses are able 
to structure its operations in a way that makes maximum sense. 
At the same time, obviously, there are privacy concerns. We 
want to take those seriously, and strike the right balance, and 
ensure that we are able to achieve those privacy concerns 
without distorting the free flow of data as part of the digital 
economy.
    So those are active issues for discussion right now in TPP. 
We have begun that dialogue with the EU as well. And my sense 
is it is going to become an increasing part of our trade 
agreements going forward, and we would be happy to work with 
you and get your input on how you think we ought to be thinking 
about this.
    Mrs. BLACK. I appreciate that. We can all certainly 
appreciate the fact that data must be protected. It is a very 
important part of businesses and a very important part of the 
flows.
    Are you feeling in negotiations at this point in time that 
there is any really good case model that you could say, yes, 
this is going to work for all of our agreements?
    Ambassador FROMAN. You know, I think TPP is farthest along 
in terms of the negotiation at the moment, and we will have to 
see where we come out on that. But I think we need to remain 
flexible to determine how best to raise standards and create 
new disciplines in each of our agreements depending on the 
particular partners that we're working with.
    Mrs. BLACK. Thank you. I look forward to working with you.
    I yield back.
    Chairman CAMP. Thank you.
    Mr. Kind.
    Mr. KIND. Thank you, Mr. Chairman.
    And, Mr. Froman, thank you for being here and for your 
service to our country. We look forward to working with you and 
the administration on a robust fair trade agenda that can help 
spark the economic growth and job creation that we need in this 
country right now. And you have a lot on your plate.
    Let me just raise a couple of the concerns, and then happy 
to follow up with you on. But I appreciate USTR's report on 
Russia and WTO compliance and what further action needs to be 
taken. I and most of the members on this committee did support 
Russia PNTR. We felt it was important to get the sixth largest 
economy into a global rules-based trading system, but there are 
shortcomings that I feel need to be addressed, not least of 
which, being from Wisconsin, their exclusion of dairy products 
since 2010. And I am hoping that with your assistance--and I 
will follow up with you as I did with Ambassador Kirk--that we 
may look at practical steps to be taken to see if we can get 
Russian and the Customs Union there to open up their markets to 
our dairy products.
    Canada right now is revising their standards on dairy 
products, too. We are concerned about the possible exclusion of 
more exports into the Canadian market.
    And then finally, just pivoting to TPP quickly, as you 
probably have seen, Prime Minister Abe's LDP Party has been 
taking a lot of agricultural--at least attempting to take a lot 
of our agricultural products off the table when it comes to TPP 
negotiations: rice, wheat, barley, pork, beef, dairy, sugar. 
Obviously that is very disturbing. You had mentioned earlier in 
your testimony the large agricultural exports, roughly 140 
billion a year. We feel we can do even better than that. Japan 
is a late entry in TPP negotiations. Hate to see us go down the 
road of allowing them to unilaterally try to exclude certain 
products from negotiations, and I am sure we will enjoy your 
support on that as we move forward as well.
    But there is a lot that has to be addressed. And, as you 
know already, it is going to be important to keep not only this 
committee, but other Members in the Congress informed as far as 
the state of negotiations, especially the large new class that 
has joined the Congress recently, too, who have never been 
through a trade debate or a trade discussion. Try to get them 
information as well.
    But I would be interested in your perspective on Russia and 
where they are right now with their new-found WTO obligations.
    Ambassador FROMAN. Well, thank you very much. And we agree 
that it is very important to stay focused on ensuring that 
Russia implements the commitments it made when it acceded to 
the WTO. And there were, I think, four or five areas that we 
asked them to take action on. They have taken action on a 
couple of them, but a couple of them still remain outstanding.
    You know, I would note that when we were talking about PNTR 
for Russia, one thing that we underscored, the value of 
bringing them into the WTO, is that they would be subject to 
certain disciplines and subject to dispute resolution when they 
failed to meet those disciplines. There is now a case being 
brought against them on the auto recycling fee in the WTO, and 
we will be joining that case.
    And so I think that is exactly the sort of process we want 
to see. Obviously, we would prefer for them to implement all 
their commitments assiduously, but if they don't, we will 
certainly go to dispute resolution as necessary.
    Just with regard to Japan, it was very important to us that 
Japan agreed before we let them into the TPP that everything is 
on the table. There are no upfront exclusions. Now, obviously, 
every country has its sensitivities, and those will all be 
subject to negotiation, but we have not agreed to any upfront 
exclusions with regard to Japanese agriculture.
    Chairman CAMP. Thank you.
    Mr. Kelly.
    Mr. KELLY. Thank you, Mr. Chairman.
    Mr. Ambassador, welcome and congratulations.
    On the TPP, I am really interested in this. Now, I know if 
we are going to get the economy back on track, we have got to 
go after the global market. There is just no question about 
that. And in the district--and we all have been talking about 
our districts and how important the ability to sell things all 
over the world is to each of our districts individually.
    But on the TPP, though, you have got a heavy, heavy load 
there. And I am wondering, we talk about this and this sense of 
urgency, because I would just say that sooner, of course, is 
better than later, and as you see us approaching that, the 
challenges that you are going to have trying to get there, and 
I wonder--because geopolitically right now I don't think there 
is more important trade policy that we can get than in that 
part of the world, especially with the influence of China and 
all the rest of the members that are talking, NGOs, nations 
that are talking to you. So the biggest challenges you see.
    And then on top of that, what can we do to help you here? 
Is there anything we can do to help you? Because I am looking 
at what you are doing, I don't know how you are going to get it 
done as quickly as you want to get it done. And I know you said 
we are going to work really hard. But the biggest challenges 
you see.
    Ambassador FROMAN. Well, thank you for underscoring----
    Mr. KELLY. This is a big deal.
    Ambassador FROMAN.--the challenges ahead.
    You know, this will be a complicated process to bring TPP 
to a close as well as these other negotiations that we are 
working on. But there is a lot of political will among the 
countries around the table, because they see this as an 
opportunity to set high standards, to introduce new 
disciplines, to have a positive impact on the multilateral 
trading system, and that, I think, has mobilized and motivated 
our trading partners to work with us to try and resolve these 
issues. But there will be very difficult issues that will 
require some tough trade-offs at the end of the day to ensure 
that we can get this done.
    You know, I would just add to what I said to Congressman 
Reed. I think our biggest challenge right now is the resource 
challenge, simply not having--we have open positions we can't 
fill. We have travel budgets that are constrained that we can't 
send negotiators to all the rounds we would like to send them 
to, and we have meritorious enforcement cases we would like to 
bring but don't have the capability of necessarily bringing 
them all.
    And so I think where you all can help, I think, in the 
short run is in trying to ensure that we have the necessary 
resources and support to get our job done.
    Mr. KELLY. Well, I appreciate what you are doing. I think 
the closer relationship we have with these countries who--the 
better we are as partners also in a world that is constantly 
now undergoing some changes. China, to me, really scares that 
part of the world. And when I have been over there, I have 
talked to those folks, have a read pretty good relationship 
with South Korea, I don't know how we--if we don't. Now, of 
course, this is a huge lift for us, but for that part of the 
world, if we aren't the biggest player, and we are not the most 
influential, then we are going to lose out. And again, if 
people to look to us to be the leaders, we need to be able to 
do that.
    So thanks for what you are doing. Any way we can help, 
please let me know.
    Ambassador FROMAN. Thank you.
    Chairman CAMP. Thank you. Thank you.
    Mr. Pascrell.
    Mr. PASCRELL. Mr. Chairman, thank you.
    Ambassador Froman, congratulations on your confirmation. I 
am sure those of us on--all of us on the Ways and Means look 
forward to having a great relationship with you.
    My other colleagues have mentioned today different policies 
that would improve our competitiveness hand in hand with the 
trade promotion authority: legislation on currency 
manipulation, strong enforcement of our trade laws, trade 
adjustment assistance, just to name a few.
    I would like to bring your attention to something that we 
worked on the last 2 years. The Bring Jobs Home Act would 
provide tax credit for companies that bring jobs back into the 
United States of America. These are the kinds of policies we 
need if we are to get the most out of our trading 
relationships.
    I want to zero in on the Trans-Pacific Partnership, if I 
may. I would like to talk about our domestic textile industry, 
that which is still alive, that is. I was glad to learn of your 
support for this rule during your recent Senate confirmation.
    I want to draw your attention to a bipartisan letter from 
Representatives Howard Coble, Patrick McHenry, and I sent to 
you, which was signed by 167 House Members, including many of 
my colleagues who sit on this committee.
    And I--I would like to ask, Mr. Chairman, unanimous consent 
to have this letter entered into the record.
    Chairman CAMP. Without objection.
    [The information follows: The Honorable Bill Pascrell]


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    Mr. PASCRELL. Mr. Froman, have you reviewed this letter?
    Ambassador FROMAN. I am not familiar with the specifics of 
the letter, but I am happy to discuss it with you.
    Mr. PASCRELL. The letter supports the inclusion of strong 
rule of origin language, which has really hampered us in other 
trade agreements; in this case, the yarn forward rule. I 
understand that you are negotiating strategy has yarn forward 
at its center. Can you update this committee on your 
negotiations over the rule of origin?
    Ambassador FROMAN. Well, thank you very much. And you are 
right that we have--we want to very much pursue a policy that 
addresses both our domestic manufacturing interests in the 
textile and apparel sector, as well as our other interests and 
strike the right balance. And we think yarn forward at the 
center of that proposal makes a lot of sense, and that is the 
proposal that we are currently negotiating with.
    With regards to rules of origin more generally, those are 
being discussed among our TPP partners, and we are looking to 
make sure that across all sectors we are dealing ourselves into 
supply chains by making sure the rules of origin support that; 
that having manufacturing and production here in the U.S. is 
made more attractive by the rules of origin of TPP so that 
companies can make their decisions in a way that enhances job 
creation, creates jobs here in the United States.
    Mr. PASCRELL. So you are willing to work with the industry 
to find the proper trade tariff reduction arrangement that does 
allow for a reasonable approach, particularly during the 
transition period?
    Ambassador FROMAN. Yes. I said we are very much in touch 
with the stakeholders and obviously with the staffs of the 
committees here as we try and work through these issues of yarn 
forward and rules of origin more generally.
    Chairman CAMP. All right. Thank you.
    Mr. Becerra.
    Mr. BECERRA. Thank you, Mr. Chairman.
    Ambassador, thank you for being with us. A couple quick 
points and then one crucial question.
    Enforcement. More and more that I have watched and been 
here, my sense is that my vote on any trade deal will now hinge 
on enforcement, because I find that a trade deal is a hollow 
agreement if our trading partner doesn't or won't play by the 
rules. And so the last thing we need is to tell American 
businesses or American workers that we struck a good deal with 
a trading partner, then find that the other side doesn't follow 
the rules, and we are losing jobs, hemorrhaging jobs and the 
rest.
    Secondly, I hope that you will take a deep interest in the 
whole issue of currency manipulation. On a bipartisan basis 
more than 230 Members of this House, Republicans and Democrats, 
sent a letter to the President last month saying, please, 
please consider language on currency manipulation when it comes 
to any future trade deal, because what we find is that 
somewhere between 1 million to 5 million American jobs have 
been lost, shipped overseas because of currency manipulation by 
other countries where they artificially depress their currency 
so they can export more things to us. And so I hope you will 
really take a crucial look at that and let us know that you 
will be defending the American interests of both work and 
business.
    Intellectual property. I am from Los Angeles, so, to me, if 
we can't protect intellectual property, again enforcement 
provisions are crucial, we are going to lose some industries 
that have been net exporters of goods.
    And finally the question to you. As I just mentioned, I am 
from the Los Angeles area. The Los Angeles area, because of our 
two ports, Los Angeles and Long Beach port, we account for some 
10 percent of all U.S. trade in the U.S., and that is now 5 
years running. We are the largest port in the Nation, and we 
are one of the largest ports in the world. Lots of folks in Los 
Angeles depend on the ports for their jobs; lots of Americans 
throughout the country do as well.
    I know you have to travel all over the place, all over the 
world, including the west coast. I would love it if the next 
time you find yourself going through Los Angeles, you will give 
me a chance to introduce you to some of those folks in Los 
Angeles who create American jobs, keep American businesses 
thriving. And can I ask you, if you do have a chance to go to 
Los Angeles, we can count on you to perhaps spend a little time 
with some folks there in Los Angeles?
    Ambassador FROMAN. Absolutely. I would be happy to do that.
    Let me just say on enforcement in particular, we very much 
agree. In our view this administration's view has been that it 
is not enough to negotiate an agreement and to implement it; 
you need to make sure that it is being fully enforced as well. 
And that is why we brought 18 enforcement actions over the 
course of this term. We brought the first super 301 case--or 
301 case in 15 years against China for subsidizing unlawfully 
their wind energy business. We brought the first 421 case on 
tires. We have brought an aggressive agenda to WTO, and we are 
continuing to focus on that, including through the standing up 
of the Interagency Trade Enforcement Center. So we are very 
much in line with your perspective on that.
    Mr. BECERRA. Thank you. Look forward to seeing you in Los 
Angeles.
    Yield back, Mr. Chairman.
    Chairman CAMP. Thank you.
    Mr. Crowley.
    Mr. CROWLEY. Thank you, Mr. Ambassador. Great to have you 
before your committee. Congratulations to you. Look forward to 
working with you, continuing the relationship we have developed 
over the past few years. And thank you for your endeavors.
    And I want to point out in particular we appreciate the 
time and the effort that you and the administration have given 
and put on the enforcement of trade rules, as were mentioned. 
As America exports more, we need to make sure that foreign 
barriers to trade are not erected to prevent the free flow of 
American goods and services, because it is one thing to have 
trade, but it is another thing to have trade deals that work 
for us and for our partners. So please keep up that focus on 
enforcement. I think it is paying off and will continue to do 
so as well.
    One of the major problems for service exporters like those 
from New York, my hometown, is having to compete with state-
owned industries in other countries. What do you envision for 
the USTR in terms of how you view those enterprises? And how do 
you see these issues coming into play in the deals that are 
being negotiated right now? Japan post comes to mind, for one, 
as it pertains to TPP.
    Ambassador FROMAN. Well, thank you very much. And I very 
much enjoyed working with you, and look forward to doing so 
going forward.
    Certainly the role of state-owned enterprises is absolutely 
critical, and that is why in TPP this is one of the areas of 
new disciplines that we are working to introduce into the 
agreement to ensure that state-owned enterprises whose--that 
are focused on competing with commercial firms, are engaged in 
commercial activity, that they play by the same rules and are 
subject to the same kind of disciplines as private firms, and 
that we deal with their inherent subsidies and their other 
inherent advantages in an appropriate way.
    And equally on our bilateral investment treaties, I 
mentioned progress made last week with China in terms of their 
moving forward and wanting to negotiate a bilateral investment 
treaty with us. We have made clear that SOEs will be a critical 
part--looking at their SOE sector will be a critical part of 
that negotiation as well. And we at USTR, working with our 
colleagues at the State Department to co-lead that effort, are 
very much looking forward to engaging with them on that.
    Mr. CROWLEY. Thank you, Ambassador.
    I just want to also follow up briefly on my colleague Mr. 
Paulsen and his referencing to India. I did not sign on to that 
letter of over--almost 150 Members, but that doesn't diminish 
my interest in the issue. I am the cochair of the India Caucus 
here in the House, and I am concerned about that level you 
talked about in terms of the unprecedented nature of the coming 
together of U.S. industries and the concern for their 
opportunities, or diminished opportunities, within India, and I 
appreciated your response as well and look forward to working 
with you and the administration moving forward on a positive 
growth agenda between our two nations.
    I do view India and the U.S.--it is probably our most 
important ally in this century, and we have to get this right.
    So thank you, Mr. Chairman. Thank you, Mr. Chairman, for 
holding this committee meeting today.
    Chairman CAMP. Thank you.
    Mr. Larson and then Mr. Smith. Mr. Larson is recognized.
    Mr. LARSON. Thank you, Mr. Chairman. Thank you for 
conducting this hearing.
    Ambassador, welcome, and thank you for your outstanding 
service to the Nation. I want to thank you for your testimony 
today, and I wanted to follow up and echo on the comments of my 
colleague Erik Paulsen.
    Over the last few months, I have become concerned on what 
we have heard regarding the environment for American businesses 
operating in India. Whether it be patent violations and 
compulsory licensing in pharmaceutical industries, piracy 
within the software and film industries, local content rules in 
the technology sector, or forced globalization in green tech 
industries, the news coming out of India has not been good for 
American innovators.
    These challenges are of great concern to me because of what 
they mean for American businesses and American workers. America 
is at the heart of the nations of innovators, and millions of 
American jobs, including thousands in my State of Connecticut, 
rely on this very important innovation. I know that both of and 
the President get it, and I appreciate the fact that you stated 
recently at the U.S.-India Business Council that we must begin 
to address these challenges.
    Could you please expand on those recent comments in detail 
for the committee what specific steps you will take over the 
next year to combat the increasing challenges that Mr. Paulsen 
and myself outlined?
    Ambassador FROMAN. Well, thank you. And to build on what 
Congressman Crowley also said, this is a very important 
relationship. And we should--we shouldn't ignore the fact that 
our economic relationship has developed significantly over the 
last few years; that there are vast areas of good cooperation, 
defense sector, counterterrorism, and a number of other areas. 
It is a strong relationship.
    I think the frustration we are all hearing from the 
business community and others is that this relationship is not 
nearly achieving its potential precisely because of the 
policies that you identified. And that is the message we 
conveyed to our Indian Government counterparts last week both 
from ourselves, but also from the American business community, 
and the American business community that is interested in 
India, that wants India to succeed and wants to invest there. 
And our hope is that through these dialogues, including the 
Trade Policy Forum, other high-level dialogues, including the 
Vice President will be going there, I believe, next week and 
will be conveying similar messages, that we can help the Indian 
Government move towards addressing some of these concerns.
    We have seen some movement. Even this week they lifted 
certain caps on foreign direct investment in certain sectors. 
And so they have taken some steps, but the key is for them to 
be able to convey that India is a place that people want to do 
business, and that people can rely on as a place to do 
business. And that is in our mutual interest. And so we very 
much look forward to working with them through all these 
mechanisms to try and address those issues.
    Chairman CAMP. All right. Thank you.
    Mr. Smith.
    Mr. SMITH. Thank you, Mr. Chairman.
    And thank you, Ambassador, for your presence here today.
    I guess I want to add emphasis to some of the issues--some 
of my colleagues talking about SPS and how important it is, and 
especially more specifically to, obviously, agriculture. We 
know that there is more U.S. pork sent to a Central American 
country of 7.7 million population compared to the 28 European 
countries that make up 500 million population. I think that 
there needs to be some dispute resolution contained in the 
agreements moving forward. And can you, I guess, respond to 
that and add anything you might have had to say previously?
    Ambassador FROMAN. Well, thank you. And we agree that 
agricultural opportunities for export are significant. We are 
exporting at an all-time high now, but there is much more that 
we can do, and it is a central part of what we are doing in TPP 
and T-TIP as well.
    And I would just say with regard to T-TIP, we have worked 
very closely with our European colleagues, even before we 
launched negotiations, to underscore the importance of 
resolving some of these SPS issues, and to work with them to 
resolve some longstanding disputes, including over lactic acid, 
live swine, and a variety of other areas. We have underscored 
that is going to be important looking forward to address these 
outstanding issues.
    On the issue of dispute resolution itself, as I mentioned, 
most of what we are seeking in TPP, what we call the SPS-Plus 
chapter, the underlying disciplines are subject to dispute 
resolution either in the WTO or under the consultative 
mechanism that we are proposing in TPP. And we think that is 
the appropriate way of moving forward to ensure that there are 
efficient ways as issues arise of getting them resolved on an 
expedited basis. But we very much agree that this is a critical 
area of our trade. It is a critical area of these negotiations. 
We want to make sure that we have mechanisms to ensure that 
they are fully implemented.
    Mr. SMITH. Okay. Thank you. I yield back.
    Chairman CAMP. Thank you.
    Ms. Sanchez is recognized.
    Ms. SANCHEZ. Thank you, Mr. Chairman.
    And Ambassador Froman, congratulations on your 
confirmation, and thank you for being here to discuss the 
administration's trade agenda.
    You are obviously stepping into the U.S. Trade 
Representative at a very exciting time. The administration is 
negotiating agreements with the European Union, the Pacific Rim 
countries, and working on a new international services 
agreement. We also have the issue of congressional action on 
trade promotion authority, or fast-track authority, and the 
expiring Generalized System of Preferences program, and 
hopefully tougher trade enforcement rules.
    I guess the main point that I want to express to you is 
that in the past I have been highly critical of past U.S. Trade 
Representatives, because all too often I think that our trade 
deals that are negotiated are unfair to American workers, and 
that they erode our U.S. manufacturing base. So I just want to 
share with you a few of the priorities that I think we should 
keep in mind as you continue your work in that office.
    First of all, strengthening Customs enforcement to create a 
level playing field for American industries is something that I 
am very interested in seeing.
    Aggressively trying to crack down on currency manipulators. 
One of my colleagues mentioned that that results in huge job 
losses for American businesses.
    Ensuring high levels of labor and environmental standards 
in our trade negotiations, and specifically trying to build on 
the bipartisan May 10th agreement.
    And also promoting U.S. manufacturing and opening up access 
to foreign markets.
    So I look forward to hopefully working with you and my 
colleagues to ensure that our trade agenda keeps in mind those 
priorities.
    You have been asked questions about aggressively cracking 
down on antidumping and countervailing duty violators. That is 
an area that I am pleased to see progress on with this 
administration, but I think we can be doing more there. So I am 
going to ask you a question specifically about the Trans-
Pacific Partnership, because I do have some concerns there.
    Clearly Japan's late entry into the Trans-Pacific 
Partnership has created concerns for the U.S. automotive 
industry. And, for instance, the Japanese automotive companies 
control more than 94 percent of the domestic Japanese market, 
making Japan one of the most closed auto markets in the world, 
and that is despite the fact that Japanese auto tariffs are at 
zero percent. So with the TPP negotiations, how does the USTR 
hope to effectively address Japanese nontariff barriers?
    Ambassador FROMAN. Thank you very much.
    Obviously Japan's auto sector has been an area of concern 
for--as Ranking Member Levin said, for decades, and it is still 
very much a concern today. And that is why prior to allowing 
Japan to come into TPP, we insisted on negotiating certain 
upfront commitments both in terms of the reduction of tariffs 
in the U.S., but also in terms of access to their market, more 
than doubling of the PHP program, which provides for expedited 
entry of imports into Japan, but also agreed on the terms of 
reference for a specific parallel negotiation on the auto 
sector that will be part of TPP, will be binding, will be 
subject to dispute resolution. And those negotiations are 
focused directly at those nontariff barriers that you mention.
    We are looking forward to working with the auto industry 
here and auto workers here to get our best understanding of 
their priorities for that negotiation. But this is a high 
priority for us, and we want to make sure that we achieve 
concrete results through these negotiations.
    Chairman CAMP. All right. Thank you.
    Mr. Schock.
    Mr. SCHOCK. Thank you, Mr. Chairman.
    Thank you, Ambassador. We are all excited that you are in 
your new post, and confident that we are going to do even more 
on trade in the coming years with you at the helm.
    I just want to bring up some--two specific concerns that I 
have had, one of them that I brought up repeatedly to the 
previous trade ambassador and, in my opinion, really haven't 
gotten a clear answer on.
    U.S. biologics is an important industry in our country. 
From my home State of Illinois, we have several of the big 
pharmaceutical companies based there. Current U.S. law 
basically guarantees them 12 years to be able to recapture 
their investment in U.S. biologic medicines and 
pharmaceuticals.
    On several occasions the administration in its budget and, 
we have heard, in some of the discussions has opened the door, 
if you will, on the potential to roll back 12 years' protection 
to perhaps a 7-year protection, as was put in the President's 
budget. Obviously, that concerns that industry, certainly 
concerns me as their representative, if we are going to change 
current U.S. law which protects them up to 12 years to 7 years, 
which would be, you know, more than a 50 percent reduction in 
how many years they can recapture their earnings or their 
investment.
    Can we get some answer from you on whether or not that is 
still a position the administration holds, or is the 
administration's position going forward that they are going to 
negotiate trade agreements like they did in Korea in TPP that 
upholds current U.S. law; i.e., the 12 years?
    Ambassador FROMAN. Well, thank you----
    Mr. SCHOCK. Let me just--why the nonclarity? In other 
words, unless you are adamant that you are going to go to 7 
years, all this is doing is creating uncertainty within the 
pharmaceutical industry and making them not want to invest. If 
we are going to stick to current law, which is what we did in 
Korea, moving forward--and it is current U.S. law, by the way, 
and I don't know how we agree to a trade agreement that isn't 
consistent with U.S. law. Let us just say that so we remove the 
doubt, and we can move on to other important things.
    Ambassador FROMAN. Thank you for that. And obviously, this 
is a very important issue in terms of protecting innovation in 
the U.S., which is a high priority.
    We are currently engaged with our TPP partners in 
discussing how U.S. law works, the distinction between small 
molecules and biologics, the timeframes that are in U.S. law 
for each, and beginning that process of consultation with them 
about why U.S. law operates the way it does.
    We have not tabled text yet in this particular area, but we 
are in the process of socializing the issues around current 
U.S. law with our trading partners, and obviously this will be 
subject to negotiation. But for--but at the current time, our 
focus is on educating our trading partners as to what is in 
U.S. law, why it operates the way it does, and how it operates.
    Mr. SCHOCK. Do you believe you can negotiate a free trade 
treatment and agree to text that is inconsistent with current 
U.S. law?
    Ambassador FROMAN. Well, I think what we need to do is to 
achieve the highest level of protection possible for our 
innovative industries, and the first step in that process is 
educating our trading partners about what is in U.S. law and 
why it operates the way it does.
    Chairman CAMP. All right. Thank you.
    Thank you very much, Ambassador Froman for your testimony, 
and with that, this hearing is adjourned.
    [Whereupon, at 10:55 a.m., the committee was adjourned.]


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