[Senate Hearing 113-447]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 113-447
 

                        PRESIDENT OBAMA'S 2014
                          TRADE POLICY AGENDA

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

                                HEARING

                               before the

                          COMMITTEE ON FINANCE
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 1, 2014
                               __________

            Printed for the use of the Committee on Finance

                               ----------

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                          COMMITTEE ON FINANCE

                      RON WYDEN, Oregon, Chairman

JOHN D. ROCKEFELLER IV, West         ORRIN G. HATCH, Utah
Virginia                             CHUCK GRASSLEY, Iowa
CHARLES E. SCHUMER, New York         MIKE CRAPO, Idaho
DEBBIE STABENOW, Michigan            PAT ROBERTS, Kansas
MARIA CANTWELL, Washington           MICHAEL B. ENZI, Wyoming
BILL NELSON, Florida                 JOHN CORNYN, Texas
ROBERT MENENDEZ, New Jersey          JOHN THUNE, South Dakota
THOMAS R. CARPER, Delaware           RICHARD BURR, North Carolina
BENJAMIN L. CARDIN, Maryland         JOHNNY ISAKSON, Georgia
SHERROD BROWN, Ohio                  ROB PORTMAN, Ohio
MICHAEL F. BENNET, Colorado          PATRICK J. TOOMEY, Pennsylvania
ROBERT P. CASEY, Jr., Pennsylvania
MARK R. WARNER, Virginia

                    Joshua Sheinkman, Staff Director

               Chris Campbell, Republican Staff Director

                                  (ii)


                            C O N T E N T S

                               __________

                           OPENING STATEMENTS

                                                                   Page
Wyden, Hon. Ron, a U.S. Senator from Oregon, chairman, Committee
  on Finance.....................................................     1
Hatch, Hon. Orrin G., a U.S. Senator from Utah...................     3

                         ADMINISTRATION WITNESS

Froman, Hon. Michael, U.S. Trade Representative, Executive Office
  of the President, Washington, DC...............................     6

               ALPHABETICAL LISTING AND APPENDIX MATERIAL

Froman, Hon. Michael:
    Testimony....................................................     6
    Prepared statement...........................................    33
    Responses to questions from committee members................    41
Hatch, Hon. Orrin G.:
    Opening statement............................................     3
    Prepared statement...........................................   103
Wyden, Hon. Ron:
    Opening statement............................................     1
    Prepared statement...........................................   106

                             Communications

AARP.............................................................   109
Advanced Medical Technology Association (AdvaMed)................   115
American Chemistry Council (ACC).................................   119
American Council of Life Insurers (ACLI).........................   121
American Farm Bureau Federation..................................   123
Express Association of America (EAA).............................   129
United States Council for International Business (USCIB).........   136

                                 (iii)

 
                        PRESIDENT OBAMA'S 2014
                          TRADE POLICY AGENDA

                              ----------


                         THURSDAY, MAY 1, 2014

                                       U.S. Senate,
                                      Committee on Finance,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 11:15
a.m., in room SD-215, Dirksen Senate Office Building, Hon. Ron
Wyden (chairman of the committee) presiding.
    Present: Senators Rockefeller, Schumer, Stabenow, Cantwell,
Nelson, Menendez, Carper, Cardin, Brown, Bennet, Casey, Warner,
Hatch, Crapo, Roberts, Thune, Isakson, and Portman.
    Also present: Democratic Staff: Joshua Sheinkman, Staff
Director; Michael Evans, General Counsel; Jayme White, Chief
Advisor for International Competitiveness and Innovation;
Elissa Alben, International Trade Counsel; Jason Park,
International Trade Counsel; and Lisa Pearlman, International
Trade Counsel. Republican Staff: Chris Campbell, Staff
Director; Everett Eissenstat, Chief International Trade
Counsel; Shane Warren, International Trade Counsel; Richard
Chovanec, Detailee; and Kevin Rosenbaum, Detailee.

   OPENING STATEMENT OF HON. RON WYDEN, A U.S. SENATOR FROM
             OREGON, CHAIRMAN, COMMITTEE ON FINANCE

    The Chairman. The Finance Committee will come to order.
    For decades, American trade policy has been a story of
adaptation and change. In particular, the extraordinary
economic changes of the last generation demonstrate how
important it is that future trade policies are reformed to
reflect the times. For example, consider how technology has
transformed the American and the global economic landscape. In
the 1990s, an entire month's worth of Internet traffic data
would fit on a single hard drive that you can buy today for 50
bucks at any electronics store.
    More than 2 billion people now log on to the net regularly,
but Vietnam has a law on its books that calls into question the
ability of U.S. businesses to move their data in and out of
that country. Governments in China, Brazil, and Europe are also
considering developing systems that would effectively build
digital barriers to trade that nobody could have foreseen a few
decades ago.
    And when it comes to enforcing our trade laws, a key
priority, enforcement officials used to watch out for criminals
fleeing offices with armloads of trade secrets printed on
sensitive documents. Now hackers can break into a company's
servers and steal data from the comfort of their own desks and
classrooms or military facilities thousands of miles away.
    A generation ago, American workers and businesses competed
against a smaller, very different China. Today, bolstered by
enormous advantages provided to state-owned and -run
enterprises, Chinese government-backed steel and solar firms
are able to take entire segments of the American economy out at
the knees. They can do so because they sit on seemingly
bottomless wells of cash, hide their paper trails with opaque
accounting, and dodge the risks and borrowing costs that
American companies face.
    A third transformational change was the advent of unfair
policies like indigenous innovation that target our American
innovators. In the 1990s, India and China had limited technical
capacity. Now they can use highly technical standards to
advantage their domestic firms and extract American companies'
intellectual property for their own use. It is a shakedown,
plain and simple.
    Fourth, over the previous decade, currency manipulation has
reemerged as a major concern for our economy. China made
commitments to follow global trade rules when it joined the
World Trade Organization in 2000, but, when it comes to
currency as in so many other areas, China is keeping a finger
firmly planted on the scale and undermining those commitments.
Pick a product manufactured in China and imported to our
country, pick any product, and currency manipulation makes it
artificially cheaper. That is hurting our workers' ability to
compete.
    Finally, unlike 20 years ago, the American people expect to
easily find the information they want on key policy issues like
trade. Yet, too often there is trade secrecy instead of trade
transparency. It is time to more fully inform Americans about
trade negotiations and provide our people more opportunity to
express their views on trade policy. Bringing the American
people into full and open debate on trade agreements that have
the effect of law is not too much to ask.
    At present, many Americans are questioning if trade
developments have contributed to persistent, long-term
unemployment, stagnant wages for far too many, and the
inability of students with good degrees to find high-quality
jobs while they are saddled with debt. Last week's report
showing that America's middle class is no longer the best off
in the world raised additional questions. Responding
effectively to the trade changes of the last generation is
absolutely essential to instilling more confidence that trade
policy will be good for America's working families and bring
more of those middle-class Americans into the winner's circle.
    I am going to wrap up by saying that, fortunately, America
has big advantages to work with in the trade area. We have the
most skilled, productive workforce in the world, one that
foreign students want to join. The dollar remains the dominant
currency of the global marketplace. With the Internet's big
bang and the boom in high-speed networks, the U.S. exports $350
billion worth of digital goods and services each year on what
amounts to a new virtual shipping lane.
    The Internet also makes it easier for a craftsman, for
example, from Fossil, OR, where I was recently, population 470,
or a barbecue sauce maker from Memphis, TN, to reach their
customers around the world. So, policymakers have a lot to work
with.
    We do have classic issues that remain. There are overseas
barriers to bring down, and other barriers to eliminate. We
have had an open market, so clearly, if you do this right when
America negotiates, we can get more of an advantage out of it
than other trading partners. That is particularly good for
American products like wheat, dairy, and footwear that need to
be able to compete on a level playing field.
    So, colleagues, here is my bottom line: the new breed of
trade challenges spawned over the last generation has to be
addressed with imaginative new policies that are locked into
enforceable, ambitious, job-generating trade agreements. They
have to reflect the need for a free and open Internet and
strong labor rights and environmental protections. Nations do
not dismantle protectionist barriers or adopt these rules on
their own; they do so with reciprocal agreements reached
through negotiation. America has to establish new rules to
reflect today's trade norms and enforcement.
    We are looking forward to hearing from Ambassador Froman. I
just want to thank my colleague, Senator Hatch. Since I have
been chair of the committee, he has consistently tried to reach
out and work in a bipartisan way. I am very appreciative of
that.
    [The prepared statement of Chairman Wyden appears in the
appendix.]
    The Chairman. Senator Hatch, we welcome your opening
statement. Then we will have an introduction for Ambassador
Froman.

           OPENING STATEMENT OF HON. ORRIN G. HATCH,
                    A U.S. SENATOR FROM UTAH

    Senator Hatch. Well, thank you, Mr. Chairman. I feel
exactly the same about you. I think we have a real opportunity
to have this committee do its work in a way that I think most
people on the committee would appreciate, under your
leadership.
    I appreciate you holding this hearing. I want to thank you,
Ambassador Froman, for appearing here today. As you know, we
hoped to hear from you over 3 months ago when the committee
held a hearing on the importance of Trade Promotion Authority.
Now, while I am disappointed that you declined my invitation to
participate in that hearing, I am glad you are able to be with
us today, and I appreciate you coming.
    President Obama's trade agenda is extremely ambitious. If
it succeeds, it will help shape global trade patterns for
decades to come. If it fails, it will result in billions of
dollars of missed economic opportunity for American workers and
for American job creators. Of course, the President's term is
not over yet, and the jury is still very much out.
    Even so, I am concerned. First and foremost, the fact that
Trade Promotion Authority, or TPA, is not renewed creates a
serious, and perhaps fatal, flaw in the President's trade
agenda. I do not believe you can conclude high-standard
agreements that will meet Congress's approval without TPA. I am
not the only one who holds this view.
    Indeed, in recent months, administration officials like
Agriculture Secretary Tom Vilsack and Jason Furman, Chairman of
the Council of Economic Advisors, have been quoted as saying
that TPA is a necessary component to conclude and implement our
ongoing trade negotiations.
    Ambassador Froman, I have no doubt in your capabilities or
those of your staff. In fact, I have every reason to believe in
those capabilities. But history tells us very clearly that,
without TPA, your trade agenda will almost certainly fail. That
is why I am very disappointed in the President's passive
approach on this particular issue.
    I am sure you can remember the enormous political effort
President Clinton put into successful implementation of the
North American Free Trade Agreement, and I am sure you can also
recall President Bush's total political commitment to renewing
TPA back in 2002. In those cases, war rooms were established
and each Cabinet Secretary made congressional approval of those
initiatives a public priority.
    Put simply, we are not seeing that level of commitment from
President Obama, which is disappointing to me and I think a lot
of others as well. Without more effort on the part of the
administration, I just do not think we can succeed.
    In addition, I am concerned about the President's
enforcement record. Despite a myriad of clear violations, we
have yet to see a single case brought against Russia in the
World Trade Organization. This is the case, despite the fact
that the administration told Congress during consideration of
PNTR that one of the major benefits of having Russia in the WTO
would be our ability to bring them to dispute settlement.
    I am also profoundly disappointed that the President
refuses to bring a WTO case against India for its continuing
efforts to undermine U.S. intellectual property rights. India
knows better. We know better, and we ought to be forceful about
this. I think it would help them as well. This failure to act
with regard to India exemplifies a pattern of corrosive neglect
within this administration when it comes to enforcing American
intellectual property rights. Countries around the world are
taking note of the President's failure to act in this area, and
this is feeding the perception that they can refuse to protect,
and even actively violate, U.S. intellectual property rights
with impunity.
    Finally, I am deeply concerned about the Office of the U.S.
Trade Representative as an institution. Ambassador Froman, I
sincerely appreciate the hard work and dedication of you and
your staff. I have a high opinion of you, as you know. I am
also deeply impressed by the caliber of your agency's career
staff and their personal commitment to the work of the USTR.
Yet despite your best efforts, the agency still ranks dead last
in employee job satisfaction among small agencies. Part of the
problem is USTR's failure to effectively play its traditional
role as a bulwark against other Federal agencies.
    Too often during the interagency process, regulatory
agencies are just saying ``no'' to cooperative participation in
international trade negotiations. For example, it was the
Department of Health and Human Services that alleged the need
for so-called ``policy space,'' resulting in USTR's proposal to
simply carve out tobacco products from the Trans-Pacific
Partnership negotiations. It was the Department of Treasury's
insistence on relegating the financial services discussion to
preexisting forums that resulted in USTR's position that
financial services should be carved out of our trade
negotiations with the European Union.
    Despite the strong support of U.S. agricultural and food
processor groups for a fully enforceable sanitary and
phytosanitary chapter in TPP, it was the Food and Drug
Administration's fear of dispute settlement that resulted in a
weaker USTR proposal which excludes certain disciplines from
dispute settlement.
    There is a clear pattern here. If this does not change, I
am worried that any agreement this administration negotiates
will never match the President's rhetoric of concluding high-
standard 21st-century agreements.
    Of course, the history of this administration's trade
agenda has yet to be written, and there is still time to
correct the course. But make no mistake, time is limited. I
want to help. That is why I worked with my House and Senate
colleagues for almost a year to negotiate the Bipartisan
Congressional Trade Priorities Act, a balanced, bipartisan
compromise which will empower our country to negotiate high-
standard agreements that will get the approval of Congress.
    Over 160 leading business and agricultural associations and
companies have come out in strong support of this legislation.
Like them, I strongly believe that approval of our TPA
legislation will help our Nation succeed in its ambitious trade
negotiations.
    That being the case, I am asking once again that the
President redouble his efforts and help us get this legislation
signed into law as soon as possible. The political clock is
ticking, and it will not be long until we lose the small window
we have to pass significant trade legislation this year.
    Ambassador Froman, I have high regard for you, as you know.
I look forward to your testimony today. I have to leave shortly
after we begin, but I appreciate your testimony today and will
be working with you to achieve a successful conclusion of a
strong, pro-growth trade agenda.
    I want to thank you again, Mr. Chairman. I am sorry I took
a little longer than usual.
    The Chairman. Thank you, Senator Hatch.
    [The prepared statement of Senator Hatch appears in the
appendix.]
    The Chairman. Ambassador Froman, thank you for your
patience. I understand also that you have your family here. Why
don't you introduce them to all of us?
    Ambassador Froman. Well, thank you. Thank you, Mr.
Chairman. My parents are in town, Abe and Suzanne Froman. My
wife, Nancy Goodman, and our long-time friend, Brenda
Schaeffer, are also here in town.
    Senator Hatch. Well, welcome.
    The Chairman. We are glad you are here. [Applause.]
    Public service is not for the faint-hearted, and we really
appreciate having family alongside us.
     Ambassador Froman, we have been working closely with you.
I know recently you have been out talking to Senators. That is
much appreciated. Why don't you make your opening remarks, and
then we will have questions from the Senators.

 STATEMENT OF HON. MICHAEL FROMAN, U.S. TRADE REPRESENTATIVE,
       EXECUTIVE OFFICE OF THE PRESIDENT, WASHINGTON, DC

    Ambassador Froman. Well, thank you, Chairman Wyden, Ranking
Member Hatch, and members of the Senate Finance Committee.
Thank you for the opportunity to testify here today on the
President's 2014 trade policy agenda.
    The core of the Obama administration's economic strategy is
to create jobs, promote growth, and strengthen the middle
class. Through our trade policy, we are contributing to that
strategy by opening markets for Made-in-America exports,
leveling the playing field for American workers and businesses
by raising standards, and fully enforcing our trade laws and
our trade rights. We are unlocking opportunity for American
workers, farmers, and ranchers, for manufacturers and service
providers, for entrepreneurs and innovators, and we are doing
so in a way that promotes both our interests and our values.
    The Obama administration has made great strides in
promoting U.S. exports and creating jobs here at home. We
increased exports to a record high of $2.3 trillion in 2013,
contributing to a third of our total economic growth. Eleven-
point-three million Americans now owe their jobs to exports,
1.6 million of those jobs have been created in the last 4
years, and those jobs pay 13 to 18 percent more on average than
non-export-related jobs.
    Building on this success, the administration is pursuing
the most ambitious trade agenda in decades with negotiation of
high-standard trade agreements in the Asia Pacific and with the
European Union. Together, these negotiations would allow us to
access economies representing nearly two-thirds of global GDP.
    Last week during the President's visit to Japan, the United
States and Japan crossed an important threshold in our
bilateral market access discussions. In doing so, we have
identified a path forward on agriculture and autos, two of the
most challenging areas of our negotiations with Japan. Although
work remains to close the gaps, this milestone achievement,
spurred on by the President's direct engagement, will provide
significant momentum to the overall TPP negotiations.
    Through these negotiations, we are working to ensure that
TPP will open markets for U.S. goods and services, include
strong and enforceable labor and environmental commitments,
promote strong intellectual property rights protection and
enforcement, and include ground-breaking rules on issues like
state-owned enterprises and the digital economy.
    Looking across the Atlantic, we will continue this year to
make significant, steady progress toward a TTIP agreement with
the European Union, and later this month we will host the fifth
round of negotiations. Building on our success at the WTO, in
March we notified Congress of our intent to enter negotiations
on an environmental goods agreement with countries representing
nearly 90 percent of this $1.4-trillion market.
    We will move to conclude negotiations on the trade and
services agreement and the expansion of the WTO information
technology agreement. We are also working to conclude a
comprehensive review of the African Growth and Opportunity Act,
which expires next year. We look forward to working closely
with you to review and revitalize that program.
    Through our trade policy, we seek to promote sectors that
are vital to the U.S. economy. In 2013, our farmers and
ranchers exported a record $148 billion in food and
agricultural goods. In 2013, we exported nearly $1.4 trillion
in manufactured goods and nearly $700 billion in services. This
year, the administration aims to help our farmers and ranchers,
our manufacturing workers and service providers, build on this
record. As the chairman has said, we want to make it here, grow
it here, and sell it around the world.
    The United States is an innovation economy, and the Obama
administration is committed to protecting intellectual property
rights so that our inventors and creators enjoy the fruits of
their labor. Just yesterday, we released our 25th annual
Special 301 report, a tool through which we identify and
resolve intellectual property rights concerns around the world.
    Thirty million Americans' jobs rely on intellectual
property, and we will continue to use our trade agenda in 2014
to defend the intellectual property rights of our creators and
innovators by also ensuring access to affordable medicines and
a free and open Internet.
    The Obama administration also placed an unprecedented
emphasis on trade enforcement. Since 2009, the administration
has filed 17 WTO complaints, doubling the rate of cases filed
against China. In fact, a little over a month ago, the United
States scored an important victory on fair access to rare earth
minerals that are essential for maintaining U.S. manufacturing
competitiveness, including in the area of clean technology.
    Through our ongoing enforcement effort, we are leveling the
playing field and keeping markets open for agricultural
producers, manufacturers, and service providers. As we pursue
this agenda, we are committed to consulting with Congress and
seeking input from stakeholders, advisors, and the public. We
have held over 1,250 meetings with Congress about TPP alone,
and that does not include consultations on the rest of our
trade agenda. Our congressional partners preview our proposals
and give us critical feedback every step of the way. Any member
of Congress can review the negotiating text and receive
detailed briefings by our negotiators, and many have.
    We are taking steps to further diversify our advisory
committees, including opening up our advisory committees for
broader representation and launching a new Public Interest
Trade Advisory Committee which provides stakeholders focused on
consumer, public health, and other public interest issues
additional opportunities to inform our trade policy.
    Finally, let me say a word about Trade Promotion Authority.
The last TPA legislation was passed over a decade ago, and much
has changed since then, from the May 10, 2007 bipartisan
agreement on Labor, Environment, Innovation, and Access to
Medicines to the rise of the digital economy and the increasing
role of state-owned enterprises in the global economy. We
believe these issues should be reflected in a new TPA bill, and
we look forward to working with this committee and Congress as
a whole to secure TPA authority with broad bipartisan support.
    We also look forward to renewing Trade Adjustment
Assistance, which helps provide American workers with the
skills to compete in the 21st century, and we urge Congress to
expeditiously renew authorization of the Generalized System of
Preferences (GSP) program.
    In conclusion, our trade agenda will create growth, support
well-paying American jobs, and protect and strengthen the
middle class. At their core, our trade agreements include
strong, enforceable rules that promote U.S. values and U.S.
interests, and we look forward to continuing our close
bipartisan cooperation with Congress to accomplish our shared
goals and ensure that our trade policy creates opportunities
for all Americans.
    Thank you again for this opportunity, and I look forward to
answering your questions.
    The Chairman. Thank you very much, Mr. Ambassador. We are
going to be working very closely with you in the days ahead.
    [The prepared statement of Ambassador Froman appears in the
appendix.]
    The Chairman. At this point, I simply want to say to all
our guests that there are strong views with respect to trade,
and certainly everyone has the right to exercise their First
Amendment rights, but I would like to ask our guests in the
back in the green shirts to sit down now so that they can
respect the rights of others. I think it is also worth noting
that right now I intend to ask about some of these transparency
issues that I know people feel strongly about.
    Mr. Ambassador, first of all--and I touched on this
earlier--this is going to generate a lot of heated opinion. I
think we all understand that, with respect to trade. The reason
I described the changes that we have seen over the last
generation is that I think it is going to be important, on a
bipartisan basis, to find fixes to deal with those challenges.
I believe there is a need for unprecedented transparency in
trade, addressing these trade challenges, so let me ask you
about a couple of specifics about this.
    First of all, I want to make sure that there is enough time
for the public to review a Trans-Pacific Partnership agreement
before the President signs it. Can you commit this morning to
making the text of a Trans-Pacific Partnership agreement
available to the public in advance of the President signing it?
    Ambassador Froman. Mr. Chairman, we completely agree that
there needs to be a robust engagement strategy to involve the
public in trade policy, and that is why we worked so closely
with Congress; why every one of our proposals is previewed by
this committee, among others; why we work with the
congressionally mandated advisory committee system and are
broadening the membership of that committee to be more
representative; why we have created a public interest advisory
committee; and why we have engaged stakeholders more broadly,
having stakeholder events at our rounds of negotiation and
broad stakeholder calls, and have put more information out to
the public about our negotiating position. So we certainly
agree on the importance of robust engagement there.
    On the particular suggestion you mentioned, those sorts of
time lines have been part of TPA processes in the past, and we
are glad there is a discussion of this beginning. We like to
look at what past practice was and, on a bipartisan, bicameral
basis, work with you and the rest of this committee to
determine what the right time tables are.
    The Chairman. So the public can walk out of this hearing
knowing that the text of the TPP agreement will be available to
the public in advance of the President signing it? That, I
believe, is ``yes.''
    Ambassador Froman. Well, as I said, I think those sorts of
time tables have been part of the TPA discussion in the past.
There has been, as I understand, a range of practices in the
past, and we would like to work with you on a bipartisan,
bicameral basis to figure out what the right time tables are.
    The Chairman. The public also ought to be able to go to the
Trade Representative website to find out what is going on and
not to hear about it through leaks and, in effect, what amounts
to a rumor mill.
    Can you pledge this morning to provide a clear and
comprehensive description in plain English of the Trans-Pacific
Partnership so that the public can be informed about these
negotiations? This needs to be posted again online promptly, I
believe within 30 days. Can you commit to that?
    Ambassador Froman. Yes, Mr. Chairman. We believe that it is
important to have public information out there. We have been
experimenting with different approaches. We put out blog posts
on investment issues and environmental issues. We published a
description of all the negotiating objectives of our TTIP
initiative. Recently we tweeted from the negotiation rounds. We
try to find lots of ways to ensure that the public has
information about that, and we are happy to provide a summary
of the TPP negotiations as you request.
    The Chairman. One other issue on transparency. I am going
to leave this with you, because I want to ask a TPA question as
well. At your department, there is a point person for
intellectual property, there is a point person for agriculture,
there is a point person for a variety of different matters. It
seems to me, to give transparency more prominence, there ought
to be a specific person within your agency accountable. You can
call them a transparency officer, you can call them whatever
you want. I just do not want transparency to get short shrift
ever again. Can you commit to that this morning?
    Ambassador Froman. Well, we have a variety of ways that we
try to create transparency at the agency. Our Office of
Legislative Affairs does so with the Congress. We have an
Office of Public Engagement that is actively involved, reaching
out to stakeholders, and an Office of Public Affairs that is
putting out information for the public.
    Frankly, each one of our negotiators, when they are not
negotiating, they are either up here consulting with you and
your offices or engaging with stakeholders and the public. So
your suggestion, I think, is one of many ideas that we should
talk about in the context of TPA, in terms of how best to
ensure robust, consultative, and transparent products.
    The Chairman. Let me ask a question about TPA, and
particularly the relationship between TPP and TPA. It seems to
me that an upgrade in our trade policy is going to require an
upgrade to Trade Promotion Authority. You and I have talked a
bit in the past about what I call smart-track, which I think
would allow us to have that upgrade in the trade promotion area
through greater transparency, more strategic enforcement, and a
variety of other steps.
    It seems to me that when the substance is right, the time
will be right for TPA. What we want to do is make clear to our
trading partners that this committee is taking on TPA, that we
are going to work for the right TPA, we are going to work on a
bipartisan basis to get the right trade agreements through
Congress. So my question is, will you commit this morning to
work with me and the committee on a bipartisan basis to make
sure that a strong 21st-century Trans-Pacific Partnership
agreement will be met with an equally strong 21st-century TPA
agreement so that we can lay out how these two critical trade
policies fit together?
    Ambassador Froman. Yes, Mr. Chairman. I am happy to work
with you and this committee on a bipartisan basis, and a
bicameral basis with your colleagues in the House, to develop
TPA with as broad bipartisan support as possible.
    The Chairman. Very good.
    Senator Hatch?
    Senator Hatch. Thank you, Mr. Chairman.
    Ambassador Froman, you are negotiating an ambitious trade
agenda, yet the administration does not have TPA, or Trade
Promotion Authority. In my opinion, this is hurting our ability
to conclude high-standard agreements which will, again, gain
the approval of Congress.
    We introduced a bipartisan, bicameral bill in January which
was supported by over 160 leading businesses and agricultural
associations and companies, a bill which Secretary of Commerce
Pritzker said will ``help expand market access for American
business, ensure a level playing field for companies selling
their goods abroad, and support the creation of American
jobs.''
    Now, if we are going to succeed in renewing Trade Promotion
Authority this year, I believe we need to act by June of this
year. For that to happen, we need to see a greater sense of
urgency and much more public engagement from the President and
the administration.
    Now, can you work with me and others on this committee to
help persuade President Obama to make a renewal of Trade
Promotion Authority a top priority for congressional action
within the next 2 months?
    Ambassador Froman. Well, Senator, we welcomed the
introduction of that bill in January.
    Senator Hatch. Yes?
    Ambassador Froman. We look forward to working with you,
with Chairman Wyden, and with the House Ways and Means
Committee to, as you pursue your legislative process, develop
Trade Promotion Authority and get a bill that has as broad
bipartisan support as possible.
    Senator Hatch. Well, as you know, the President called for
it in his January State of the Union speech, and the next day
someone on the Democratic side said, well, we are not going to
do that.
    Ambassador Froman. Well, we are prepared to work with this
committee, and when it is ready to have a legislative process
around Trade Promotion Authority, to move that forward in a way
that can get broad bipartisan support.
    Senator Hatch. Now, intellectual property is fundamental to
the U.S. economy. I am very concerned that U.S. intellectual
property rights are under attack around the globe and that your
office is not doing enough to fight back. India has been
pursuing trade policies that undermine U.S. intellectual
property in order to promote its own domestic industries.
    What they are doing seems to me to be a clear violation of
their World Trade Organization obligations. I believe that
enforcement action at the WTO may be the most effective tool
that we have to get India to change its behavior.
    Closer to home, Canada has embraced policies and patent
rules that undermine research and development investment, upset
the level playing field for the U.S. innovators, and of course
I believe that their actions violate Canada's obligations under
NAFTA and WTO.
    Now, in your testimony to the House Ways and Means
Committee, you spoke about the importance of enforcement. You
said, ``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.''
    Now, you also said that the administration has ``brought an
aggressive agenda to the WTO.'' I do not understand how you can
say this when this administration has not brought a single WTO
case involving intellectual property rights.
    So my question is, why has this administration not brought
a single case in the WTO on intellectual property, and, in
particular, why has the administration not brought a WTO case
against India on their harmful IP policies, and what is this
administration doing to ensure that Canada, a potential TPP
partner, complies with its current international trade
commitments?
    Ambassador Froman. Well, Senator, first of all, thank you
for your leadership on IP issues and for your encouragement on
the enforcement front. With regard to those issues, we remain
extremely concerned about the deterioration of the innovation
environment in India.
    We have been raising this at the highest levels and
throughout our dialogue with the Indian government about their
policies on patents and on compulsory licensing, and we have
been encouraging them to enter into a dialogue about other
mechanisms for addressing legitimate concerns about health care
in India and about access to medicines that do not violate our
intellectual property rights. India, as you know, is in the
midst of an election and a transition, and we look forward to
engaging with the new government of India, as soon as it is in
place, to pursue this issue with them.
    Similarly, on Canada, this is an issue that we have raised
with the Canadians directly. It is now the subject of
litigation in Canada, and we are continuing to engage them
bilaterally and in the context of other intellectual property
rights issues we have with them as a way to move this forward.
    Senator Hatch. Well, thank you. My time is up, Mr.
Chairman.
    The Chairman. Senator Schumer?
    Senator Schumer. Thank you, Mr. Chairman.
    Thank you, Ambassador Froman. You have a really tough job,
and you approach it with intelligence, integrity, and calmness.
So, thank you for your service here.
    I want to talk a little bit about currency manipulation. A
bipartisan majority of both the Senate and House have made very
clear we want strong and enforceable currency manipulation
language included in any TPP agreement. Strong language on
currency manipulation is a vital first step to earning
Democratic support to passing TPP in the Senate. We will have
to take a close look at every aspect of the deal, but I think
nothing can give TPP a fighting chance of being passed better
than strong currency reforms.
    Japan and other countries regularly distort their currency
exchange rates to push up trading surpluses with us. In the
last year alone, the yen has fallen about 25 percent against
the dollar. China is not part of TPP, but if we did this, it
would send a warning shot that, if they eventually want into
TPP, they will have to reform their currency as well, and it
might even get them to move on their own if they saw we made a
strong stand.
    It has real consequences for jobs here at home. A study by
the Peterson Institute for International Economics found that
foreign currency manipulation has already cost Americans
between 1 and 5 million jobs. Ending the manipulation would
reduce the trade deficit by as much as $500 billion in 3 years,
increase annual GDP by between $300 and $700 billion, and
create 2.3 to 5.8 million new jobs. So, it matters a whole lot.
    Now, I have long been an advocate in this fight against the
type of activity that China, Japan, and others do when they
manipulate their currency. I am not alone. Senators Brown and
Stabenow on this committee, Senators Graham, Sessions, and
Collins on the other side of the aisle have joined us. If we
brought our bill to a vote on the floor of the Senate, it would
pass again with broad bipartisan support. We could take
legislative action today and win.
    But administration after administration, including,
regrettably, yours, as well as President Bush, Democratic and
Republican, have taken the position that this issue can be
better dealt with through country-to-country negotiations than
through legislative changes. It has been 18 years since the
Treasury Department has designated any country a currency
manipulator, so I ask: what vehicle do we have at our disposal
to combat this type of activity which everyone says is wrong,
if not agreements like TPP?
    I hope the President raised this with the Japanese Prime
Minister last week. If he did not do it in strong terms, I hope
he will do it soon. I want to make very clear I cannot, and
will not, support a TPP agreement that does not include
objective criteria to define and enforce against currency
manipulation.
    You would not agree to play a game of baseball where your
team only got two strikes at bat and the other team got four.
But, if we enter into a TPP agreement without strong currency
language, no matter what else is in it, that is exactly how we
would be hamstringing ourselves. That is because currency
manipulation hurts our exports to other countries and
advantages their exports to us across the board, not just in an
industry here or there, but in every sector of the economy.
    Any country taking this sort of action that is so
detrimental to our Nation's economy should not at the same time
be granted preferential access to our market. So I guess my
question is, has currency manipulation been discussed in the
current negotiations on TPP, and what do you think the outlook
is for getting something real in the TPP bill, because it is of
great concern to many of us?
    Ambassador Froman. Well, thank you, Senator. Thank you for
your longstanding leadership on this issue. We agree that
currency manipulation is a critically important issue.
    As you know, from the start of this administration, from
the President on down, we have been pressing, for example
China, bilaterally as well as through the G-20, through the IMF
and elsewhere, to move towards a more market-oriented exchange
rate and to allow the currency misalignment to be adjusted
accordingly.
    The Treasury Department, of course, has the lead on this
issue, and I know you have had an opportunity to see Secretary
Lew up here as well and to engage with him as well. We are
continuing to consult ourselves with you, with stakeholders, to
determine how best to address the underlying issue.
    If you take China, for example, as I mentioned, from the
President on down, we have engaged with the Chinese. In June
2010, they began to allow their currency to move again, and it
has moved about 18 percent in real terms. Not fast enough, not
far enough, but we have made a certain degree of progress
there. Through the G-7 and the G-20, we make sure that
countries are focused on----
    Senator Schumer. My time is running out. Has it been
discussed in the TPP negotiations yet?
    Ambassador Froman. Not as of yet.
    Senator Schumer. I hope it will be, because it matters a
great deal to all of us. I regret that it has not been
discussed yet, given its level of importance.
    Thank you, Mr. Chairman. My time has expired.
    The Chairman. Thank you, Senator Schumer.
    Senator Stabenow?
    Senator Stabenow. Thank you very much, Mr. Chairman, for
this hearing. It is wonderful to see you again, Ambassador
Froman. I want to follow up on Senator Schumer's comments. It
is no surprise that I want to ask you about currency
manipulation as well. We have talked extensively about that.
    I am a little surprised to hear it has not come up yet. I
thought that this had been something that was being discussed.
But to emphasize, again, as you know, we have 60 Senators in a
bipartisan way who have written you a letter asking that we
have an inclusion of strong and enforceable currency
disciplines in all future trade agreements, 60 members, a
majority of members, who feel very strongly about that.
    So, when we talk about trying to pass TPP, I am not sure
how that passes, given the strong feelings that people have,
unless that is addressed. Two hundred and thirty members, 230
in the House, wrote a letter also.
    Senator Schumer talked in general terms about this, so let
me zero right in on one country, although this is certainly not
about one country. We know about China, we know what has
happened, the issues related in the past to Singapore,
Malaysia, Korea, different places, as you and I have talked
about. But let me talk about Japan, because we are doing
specific negotiations with Japan.
    As you know, Japan has not directly intervened in the
foreign exchange markets in more than 2 years, but the yen has
depreciated significantly against the U.S. dollar. And, while
the depreciation has not shown an impact on the number of U.S.
imports of vehicles--you shared some information with me on the
numbers--it does provide a massive advantage for Japanese auto
makers.
    In fact, at today's exchange rates, there is an estimated
benefit of $5,700 on every vehicle, so it is a windfall in
operating profits. It may end up in advertising, it may end up
in research and development, it may end up in cutting prices,
it may end up in cutting prices on vehicles in other markets
where U.S. auto makers are directly competing with the Japanese
around the world. So the reality is, $5,700 per vehicle is no
small thing.
    I guess to add insult to injury on Japan, on China, and
everything else, even though Japan is not currently
intervening--and I would ask you, if they are not currently
intervening in exchange markets, why would they not support
enforceable currency provisions in TPP; I am not sure why they
would not--are you not concerned about the competitive trade
advantage that these kinds of numbers show?
    Ambassador Froman. Well, Senator, yes, we are concerned
very much about currency and about making sure that there is a
level playing field. It has been important to the world that
Japan get back on a path towards economic growth. It is the
third-largest economy in the world, and it growing means that
there is a market there for our products as well.
    It has been important that the G-7 has expressed to Japan
the importance of pursuing domestic demand-led growth and being
focused on the domestic part of their economy. But it is
something that the Treasury Department, which has the lead, of
course, in this area, engages directly with Japan on and
something that we monitor very carefully.
    So we are concerned, as I had mentioned to Senator Schumer.
This is one reason why, from the top down, we have focused on
domestic demand-led growth, rebalancing the economy, both in
our bilateral discussions and through institutions like the G-7
and the G-20, as a key part of our overall international
economic policy.
    Senator Stabenow. Well, just, again, this is incredibly
important. Let me also say that nearly two-thirds of the U.S.
trade deficit with Japan is automotive goods, as you know. You
and I have also talked. I appreciate the focus on non-tariff
trade barriers. This administration oversaw a highly successful
restructuring of the automobile industry, saving over 1 million
jobs directly. We are now in a situation where we cannot even
get into the Japanese markets.
    If you are an auto dealer in Japan, you cannot put an
American vehicle or any foreign vehicle on your business, on
your car lot. I grew up on a car lot, so I recall that. But I
guess in closing I would just ask that you continue very
focused negotiations there as well. It does not take the place
of currency, but it is incredibly important that we open up
those markets as well.
    Ambassador Froman. Well, thank you, Senator. As you know,
we negotiated up front an agreement with Japan about the
phasing out of our tariffs, being the longest staging of any
tariffs in TPP, being back-loaded and being substantially
longer than the KORUS agreement. We have a parallel negotiation
ongoing about addressing the non-tariff barriers to Japan's
auto market, which, as you say correctly, has been historically
closed. We are making progress in dealing with issues like
standards and distribution and dispute settlements along those
lines. We still have more work to do, but we are making
progress in those negotiations.
    Senator Stabenow. Thank you very much.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Stabenow.
    Senator Cantwell?
    Senator Cantwell. Thank you, Mr. Chairman. Thanks for
holding this hearing. I know we have tried a couple of times
and it has been delayed, and I certainly appreciate your focus
on transparency, because I think this is a key word of our
generation, to have transparency.
    But I probably do come at this issue a little differently
than some of my colleagues. I like to say that before Jefferson
sent Lewis and Clark to the northwest, we were already trading
with China, and so our region of the country looks at this a
little bit differently. Probably one in three jobs is related
to trade, so I certainly support, for example, the
reauthorization of the Ex-Im Bank.
    As we approach this next reauthorization, I hope we do not
find a bunch of consternation of people who do not want U.S.
manufacturers to export and get help in getting U.S. products
overseas. I support the reauthorization and expansion of a
program for the small business called STEP, for State Trade and
Export Promotion, which is helping U.S. manufacturers and other
small businesses export products and get access to export
markets.
    I support the Trade Promotion Authority. I think China has
done--since our authority has lapsed--something like nine
agreements, the European Union 11, Japan eight, Korea six. So,
without Trade Promotion Authority, our hands are tied. The key
thing that I am interested in is this news article about the
rising middle class around the globe.
    To quote this article, it is going to grow from 2 billion
to almost 5 billion by 2030. So in the world market--again, to
quote this article--``global middle-class spending will rise
from $21 trillion today to $51 trillion in 2030.''
    Now, most of this is outside the United States of America,
so, if we do not have these agreements, then how do we get our
products into these markets? So I wondered if you could comment
on that and then comment on the point that, when you have TPA,
it becomes the standard.
    You could do lots of individual, long-term agreements. My
point is, while everybody else is doing deals, we are sitting
here, and we know where the growth opportunity is, and, if you
do a TPA, then it can set the standard for all these
agreements. Even people who are very anxious about the
situation should know, we want to set a standard of labor, or
environment, or what have you, and TPA helps us do that. Is
that correct?
    Ambassador Froman. Yes, absolutely. I completely agree,
Senator. Just to throw out another figure, right now there are
an estimated 500 million middle-class consumers in the Asia
Pacific region, and that is expected to grow to 2.7 billion by
2030.
    The question as we engage in TPP is, who is going to serve
that market? Are they going to be buying Made-in-America
products, or are they going to be buying products built by
somebody else? What are going to be the rules of the road for
that region?
    As you point out, TPP is an opportunity for us to set
certain standards for the Asia Pacific, and, more generally
throughout the international trading system, to raise labor
standards, to raise environmental standards, to ensure that the
Internet remains free and that you do not see a Balkanized
Internet or national clouds, and to make sure that we are
putting disciplines on state-owned enterprises and dealing with
all the challenges of the digital economy.
    So this is our opportunity to be at the table, to take
leadership, and to help set the rules of this vitally important
region. As you mentioned, TPP is intended to be a platform.
Right now there are 12 countries around the table, but there
are several more countries waiting in the wings that have said
they would like to join, when the 12 of us have reached an
agreement, and to sign on to the high standards that we are
able to negotiate.
    So it gives us a chance to open markets for our products in
this vitally important region in which we are going to see a
huge growth in middle-class consumers ready to buy our
agricultural products, our manufactured products, and take our
services, and at the same time to build a larger and larger
platform of countries that are willing to sign on to high
standards. That is a win-win for us.
    The alternative, as you say, is that other countries are
out there negotiating their own agreements at our expense,
getting market access at our expense. A lot of those other
countries do not put the same value we do on labor and
environment, or on protecting intellectual property, or on
putting disciplines around state-owned enterprises, or about
maintaining a free Internet. That is what we are pressing for
with our partners. We have a number of willing partners around
the table, and this is our opportunity to show leadership.
    Senator Cantwell. Well, market access is a key word,
because people do not realize that, when you lose market share
over a long period of time and then you try to go in and
compete, it is much harder. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Roberts?
    Senator Roberts. Thank you, Mr. Chairman.
    Mr. Ambassador, thank you for your aggressive leadership on
behalf of TPP and trade.
    I think I heard you say in your opening comments--and I
have written it down here--that you have met 1,500 times with
members of Congress on trade. Is that right?
    Ambassador Froman. Twelve hundred and fifty times just on
TPP.
    Senator Roberts. Twelve hundred and fifty?
    Ambassador Froman. Yes.
    Senator Roberts. All right. Of the 1,250, have you met with
the Majority Leader Harry Reid?
    Ambassador Froman. I have met with the majority leader.
    Senator Roberts. And his response to any movement on trade,
or TPA, or fast-track during this session of Congress was?
    Ambassador Froman. Well, I think Leader Reid's position on
trade agreements is well-known, but as a leader he has also
worked with the administration and worked on a bipartisan basis
to move trade agreements through the Senate.
    Senator Roberts. Did he give you any indication there was
any wiggle room, that we could do something like this in this
session like the chairman would like to see, and everybody else
would like to see?
    Ambassador Froman. I think what our view is, is that we
would like to see TPA move forward when this committee is ready
to work on it and move it forward. We look forward to working
with the chairman.
    Senator Roberts. The chairman is going to do a great job,
and so will the ranking member, and all the rest of us as well.
I just am worried a little bit about the majority leader. I
hope you can fill his glass. His glass is half empty. Make the
glass full if you could, sir. I am not going to mention the
Vice President's meeting--alleged Vice President's meeting--
with the House, assuring members over there, people worried
about union concerns, do not worry, we are not going to have
any trade bill.
    On April 4th, 44 of us wrote to you and Secretary Vilsack
to express our concerns regarding the European Union's
protectionist Geographical Indications, or GIs, a brand-new
concept which they are insisting upon in trade negotiations
under TTIP. If the EU were to have its way, common products
such as parmesan, bologna--and this is a lot of bologna--and
Black Forest ham would no longer be able to label themselves
that way. That is ridiculous.
    I am not interested in the EU dictating how we in America--
i.e., the bread basket to the world, more especially, Kansas--
can and cannot label our products. You responded to our letter,
and I appreciate that very much. But I would like to hear again
what our negotiating position is against the EU in regards to
Geographical Indications, and what assurance can you provide
the members of this committee, and more especially the
producers of meat and dairy and cheese, that a final agreement
with the EU will not prohibit these common food names?
    Ambassador Froman. Well, we share your concerns completely,
Senator, and we made very clear to the European Union that we
oppose their GI system, that we think it is unnecessary and
that it is inappropriate for our trade agreement. I will just
give you an example. We have several parmesan reggiano products
registered here in the United States, and the EU exports
billions of dollars of cheese and meats to the U.S. under these
various names.
    We are not able to export any of our feta cheese or any of
our parmesan cheese to the EU. So they are able to live quite
well under our system; we are not able to live nearly as well
under their system. We have made clear that we think the common
name approach and the trademark approach that exists here in
the United States is the more appropriate one.
    Senator Roberts. What was their response to the very
logical presentation that you have just now defined or
explained?
    Ambassador Froman. I have not yet convinced them. We will
continue to work and make clear that we think the common name
and trademark approach allows room for us to have access to
each others' markets.
    Senator Roberts. You might have them read ``Green Eggs and
Ham.'' That might do something.
    I have one more question with regards to COOL. Many of us
here who represent agriculture are waiting for a final ruling
from the WTO regarding mandatory Country of Origin Labeling, or
COOL. Do you have any idea when we can expect a final ruling?
    Ambassador Froman. I will have to get back to you on that.
It is still in litigation, and Canada and Mexico have not
dropped their case, so I will get back to you on the precise
timing.
    Senator Roberts. Well, if the United States were to lose
the case, again, large sectors of our economy, especially
agriculture, would be subject to retaliation from Canada and
Mexico. Are we taking any steps to prevent retaliation if it is
found that COOL does indeed violate our WTO obligations?
    Ambassador Froman. Well, we believe that the rule that has
been developed is WTO-compliant, and so we have argued that at
the WTO, and we will await the decision of the WTO. Then, as we
do in other cases, we will engage with our trading partners.
But we firmly believe that it is compliant.
    Senator Roberts. Thank you, Mr. Ambassador.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Roberts.
    Senator Isakson is next.
    Senator Isakson. Thank you, Mr. Chairman.
    Let me start out, not with a question, but with a
compliment and a comment. First of all, last August I was in
Ethiopia with you at the African Union, and I had 48 hours of
time to watch you work with the countries in Africa on the AGOA
Act and its possible extension, and I was very impressed and
think our country is fortunate to have someone like you as our
representative.
    Ambassador Froman. Thank you.
    Senator Isakson. My comment is, though, without TPA getting
done, I have little hope that we can get TPP or TTIP done. I
think what Senator Roberts said, and what some of the others
said, is something we really need to work on--this is just a
comment, not the question--to try to raise the visibility.
    Let us have that debate. Sherrod Brown and I will have
significant differences on TPA and TAA, but we ought to discuss
those differences in a debate that achieves a result rather
than talking about it across the board in terms of comments. So
that is just my editorial comment.
    My two big points, or questions, are these: you mentioned
the Trade in Services Agreement in your remarks. TISA is very
important in Georgia. There are 3.2 million service-related
jobs in our State--insurance, financial services, package
delivery--that depend on good, good, good trade and services
agreements with the world. First of all, what kind of progress
are we making on a TISA agreement? Second of all, what goals,
within our goals as a country, affect TPP and TAA in terms of
trade services?
    Ambassador Froman. Well, thank you, Senator. Thank you very
much for your involvement and leadership on the Africa issues
in particular, and we look forward to working with you on the
AGOA renewal and review that are currently under way.
    On services, we are making good progress in the TISA talks.
We have countries around the table representing about 70
percent of the global services market. We have defined a text
that is being worked out now, and virtually all the parties
around the table have tabled offers, and we are working through
those offers. So we are making good progress, and there is a
good work program ahead over the course of the next several
months.
    Services, as you mentioned, are a vital part of our
economy. We exported over $700 billion in services last year,
and therefore they are also a key part of our trade
negotiations, both in TPP and in TTIP, so we are seeking market
access in those negotiations for our critical services.
    I would say one more thing, because you mentioned express
delivery and logistics. In December, we reached a WTO agreement
on trade facilitation, which is the first multi-lateral
agreement that the WTO has reached in its 18-year history.
    It is a very important agreement for reducing the costs of
shipping goods around the world. It helps small and medium-
sized businesses enter the global economy, and it is very good
for all those companies that are involved in shipping and
logistics, and many of our companies have an active role to
play in that.
    Senator Isakson. And your working out that agreement in
terms of package delivery, by the way, indicates how important
a comprehensive agreement like TISA will be for all other types
of financial services--insurance and other service products. So
WTO has not been as successful as I would have liked to have
seen it over the last 20 years in furthering trade services
agreements, so this TISA, I think, is going to be very, very
important.
    Lastly, and I do not know that this is a question, but I
want to bring something to your attention. Are you familiar
with the Greater Brazil plan?
    Ambassador Froman. I am not.
    Senator Isakson. Brazil is putting punitive tariffs on U.S.
products and limitations on procurement of U.S. goods and
services by governments in Brazil and subdivisions of the
Brazilian government, to the extent that they are shutting us
out of their market.
    There are hundreds of U.S. companies that have invested
millions of dollars building facilities in Brazil. They employ
thousands of Brazilians. They build products for the world but
also products for Brazil. They effectively are being totally
shut out from competition in the Brazilian marketplace, and it
is beginning to really hurt, and it is a bad precedent for the
western hemisphere. If we do not stand up for those companies
that have made those investments and see to it that trade is as
fair as we can make it with Brazil, then other countries will
see it as an opportunity to do the same type of thing.
    So I would like to bring it to your attention, which I
have, and encourage you to get involved in the diplomacy world
to see what we can do to ratchet up Brazil's attention that we
understand what they are doing and that there are consequences
to treating the United States that way.
    Ambassador Froman. Senator, I am happy to follow up on
that. We are looking for ways to engage with the Brazilians to
deepen and broaden our economic relationship. We have had a
dialogue with them about some of their localization policies,
which we think create adverse barriers to trade, and we are
happy to engage on this issue as well.
    Senator Isakson. The localization policies are a part of
the Greater Brazil plan, by the way, so I am glad you are on
that. Thank you very much, Mr. Ambassador.
    Ambassador Froman. Thank you.
    The Chairman. Thank you, Senator Isakson.
    Senator Cardin is next.
    Senator Cardin. Well, thank you, Mr. Chairman.
    Ambassador Froman, it is always a pleasure to have you
here. You are not going to be surprised by my question on how
we are advancing on good governance in the TPP negotiations.
The TPP countries are a diverse group of countries. Several
have real challenges in good governance and basic human rights
and in dealing with similar issues of corruption.
    I am going to ask you to give me an update as to how the
negotiations are proceeding, because I know, when you are
dealing with trade, you have a country's attention. They are
more likely to do things to improve the governance issues and
anti-corruption matters when they know that it will have an
impact on the willingness of a country to open up its markets.
We have, of course, very strong anti-corruption laws here, so
it is difficult for our companies to be able to participate in
countries where bribery is a standard practice.
    Anticipating that you might give me some glowing progress
reports, you could also respond as to whether you are willing
for us to put into any TPA bill that we might be considering,
negotiating objectives that are strong on negotiating the rule
of law, anti-
corruption, and similar matters consistent with the U.N.
Universal Declaration of Human Rights.
    Your comments?
    Ambassador Froman. Well, thank you, Senator. And thanks for
your leadership on these issues. We have worked to address
these issues in TPP in a number of ways, generally on good
governance through a series of transparency measures, good
regulatory policy, opening up processes that could otherwise be
susceptible, for example, to corruption. In addition, we have
some specific anti-corruption elements of the TPP negotiation
that we are still negotiating with our partners.
    Then on issues of rights, in particular our focus has been,
as you and I discussed, on labor rights and focusing on the ILO
core principles--forced labor, acceptable conditions of work--
making sure that countries commit to those and have plans in
place to achieve those. As you say, this process is an
important process for bringingcountries to the table on issues
that they have previously perhaps not engaged on.
    I will just mention in the context of Vietnam, which you
and I had the opportunity to discuss the other day in your
office, we are engaging with them on labor issues. It is a
particularly challenging set of issues for that country, as you
know. We have also made clear the need for them to make
progress on other human rights issues. They have recently
released a couple of dissidents, and we are encouraging them to
take further action to improve their human rights situation.
    Senator Cardin. I would just point out that basic human
rights go beyond the labor issues. Labor issues are very, very
important to me, do not get me wrong, but fighting corruption,
fighting for the enforcement of rule of law, making some
fundamental changes in a country that we are going to be
competing with, to me, needs to be a priority. And since you
did not directly respond, I assume that you do not object to
strong objectives in the negotiations to deal with these
issues?
    Ambassador Froman. We will look forward, in the context of
the legislative process, to working with you on a bipartisan
bill.
    Senator Cardin. And let me talk about labor for one moment.
I will start with environment. There was a time when we could
not talk about environment in trade bills, and then, in NAFTA,
we said we would use sidebar agreements, and that did not work
very well. Then we realized we needed to get them into the core
agreement if we are going to have something that is
enforceable.
    Then in Colombia, we decided to use the Labor Rights Action
Plan. I had offered an amendment so that that would be part of
the core agreement, so we could take action if they did not
follow up on it. That was not incorporated into the Colombia
agreement. Now we have the Congressional Monitoring Group for
Labor Rights questioning whether Colombia, in fact, is
implementing the Labor Action Plan as it was anticipated at the
time.
    My point is this. If we are going to make progress on
environment, on labor, on basic human rights, good governance,
et cetera, it really needs to be part of a core agreement in
order for it to be taken seriously. We have their attention
until the agreement is executed, but once it is executed,
unless it is part of the enforcement mechanism, it is very
difficult to get the type of action we expect.
    Ambassador Froman. Well, Senator, we completely agree. I
think your description of the history is an important one.
Twenty years ago, labor and environment were afterthoughts or
were side shows, side agreements. Now they are central to what
we are negotiating in TPP, and that is a very important
development, because we are able to take these labor and
environmental standards, that perhaps four or five countries
have committed to as part of trade agreements, and now have 40
percent of global GDP sign onto it. It becomes more of a global
standard as TPP gets done and TTIP gets done.
    Senator Cardin. I agree. And let me thank you for your help
on the heavy truck issue in Colombia, how their regulations
could undermine the exporting of heavy trucks into Colombia. I
appreciate the cooperation we are receiving from you.
    The Chairman. Senator Cardin, thank you. Thank you for
raising human rights and the rule of law. I think these issues
are also critical to trade enforcement, and I look forward to
working with you, and of course the Ambassador.
    Senator Thune is next.
    Senator Thune. Thank you, Mr. Chairman.
    I will echo what some of my colleagues have said about
encouraging you to engage as forcibly as you can with Congress
on TPA. I think it is really important that we get that done
and get it done soon.
    I am increasingly concerned about reports from our
agricultural producers and seed companies about China's
unwillingness to approve new agricultural biotech products. It
is a critical market for American agriculture--$16 billion last
year in corn, beans, and dried distillers grains.
    But we are told this year, according to the Feed and Grain
Association, that corn exports are down 85 percent from a year
ago and that corn shipments that Beijing has rejected have cost
grain companies $427 million in lost sales and reduced prices.
    So, given the situation in China, I am wondering--I think
the folks who were impacted by this would like to see this
issue elevated as much as possible. Would you support utilizing
existing venues such as the U.S.-China Joint Commission on
Commerce and Trade and the U.S.-China Strategic and Economic
Dialogue to raise these issues in a forceful way with the
Chinese government? Perhaps you could talk about other steps
that USTR might be taking to ensure that agriculture/
biotechnology concerns are consistent in high-level U.S. trade
policy priority.
    Ambassador Froman. Yes. Absolutely, Senator. In fact, in
December we had a meeting of the Joint Commission on Commerce
and Trade that Secretary Pritzker and I co-chair, and Secretary
Vilsack also participates actively in, and this was one of the
top issues on the agenda, talking about their biotech approval
process, the need for it to become regularized and more fluid.
And it is something that we are continuing to work on and
continuing to raise at the highest levels in China.
    We raised it with the Vice Premier, as well as the Minister
of Agriculture, and we are going to continue to raise it. We
have some opportunities in the coming months for engaging China
on this and other issues.
    Senator Thune. But some of these venues I mentioned, like
the U.S.-China Joint Commission on Commerce and Trade, the
U.S.-China Strategic and Economic Dialogue, are those venues
that you think would be appropriate to do that?
    Ambassador Froman. Absolutely. The JCCT, the first one you
mentioned, is one we did in December, and we will have an
opportunity to do that later this year. I know that Secretary
Vilsack has also been in touch with his counterpart, following
that visit, to talk about follow-up on that and some other
agriculture-related issues.
    Senator Thune. All right. Good. I hope you can keep it a
high priority.
    There are a lot of us in Congress, myself included, who
have been frustrated by the whole issue of not being able to
get the Keystone Pipeline approved. It is something that I
believe is clearly in America's economic and national security
interest. I was going to ask you some questions, and you can
probably answer this, hopefully, ``yes'' or ``no.''
    But is USTR providing comments to State as part of the
inter-agency review process for the presidential permit of the
Keystone XL Pipeline?
    Ambassador Froman. I do not believe we are. I do not
believe we are involved in this.
    Senator Thune. All right. So there is not anything that you
are furnishing in terms of comments to the members of the
committee that is looking at this?
    Ambassador Froman. I will come back to you to confirm,
Senator, but I do not believe we are involved in this.
    Senator Thune. All right. If you are, I would be interested
in knowing. There are concerns that are being raised about
whether or not any challenge could be brought under NAFTA if
the Canadians decided, if the ultimate rejection of the
pipeline is the outcome, that they might be able to utilize
NAFTA to raise trade considerations. So I would be interested,
and I am sure many of my colleagues would be too, as to what
the implications of that might be.
    I have talked to you about this in the past, but I also
wanted to raise the issue of the EU's decision last year to
impose a 10-percent duty on U.S. ethanol exports. You have
previously indicated that USTR is considering a challenge to
the EU tariffs at the World Trade Organization, and I am
wondering if you could comment briefly on where USTR is in the
decision-making process and when American ethanol producers
might expect a decision from the administration.
    Ambassador Froman. We are continuing to look into that
issue and develop our options with regard to that. We have not
yet made any decision and will certainly consult closely with
you as we go through that process.
    Senator Thune. I wanted to mention one other thing, and
that is--and you have heard this many times from our
agricultural groups--the importance of market access for
agriculture in the Japanese market.
    For those of us from farm country, making sure that TPP
results in significant new market access opportunities for U.S.
agriculture is going to be critical, and I am wondering maybe
if you could elaborate on the President's discussions on this
topic with the Japanese Prime Minister last week, and how would
you characterize those market access negotiations with Japan
following the President's trip to Asia?
    Ambassador Froman. Well, thank you. As you point out,
access to Japan's market is a critical part of our overall TPP
initiative. We have made clear that we have products that we
sell into Japan, and we need to address their historic
barriers. Japan has been a market that has had very high
barriers in the past.
    While we were there last week, the President and the Prime
Minister engaged on this and other TPP-related issues, among
other things, and we made some significant progress in our
discussions. We did not reach an agreement, but we reached a
milestone in terms of beginning to sort out the parameters of
how we would deal with market access in some of their more
sensitive areas. So we have further work to do, certainly, but
we think that there was enough progress there to give further
momentum to the TPP negotiations overall.
    Senator Thune. Thank you.
    Mr. Chairman, my time has expired. Thank you.
    The Chairman. Thank you, Senator Thune.
    Senator Menendez?
    Senator Menendez. Thank you, Mr. Ambassador, for your
service. I want to commend you as well for your outreach and
your responsiveness. I cannot always say that about
administration officials, but in your case I can, so I want to
say it. I appreciate it.
    You are aware of my concerns with India's pharmaceutical
patent violations and my concerns with Canada's patent utility
regime. In the Special 301 report issued by the department
yesterday, you issued fairly strong statements about the need
for improvement in both countries' IP regimes, which I both
support and applaud.
    Nevertheless, as we are looking at TPP and other elements,
I am convinced that our economy is increasingly based on
innovation. I am looking for the administration to demonstrate
that it has a long-horizon, whole-of-government view and
strategy on advancing international IP policies, one that I and
other members can get behind and support.
    So, can you give me a sense of what is the administration's
strategy, specifically with regards to emerging economies, when
IP protection and enforcement is inadequate?
    Ambassador Froman. Well, first of all, as you know,
yesterday we issued the Special 301 report. We focused on a
number of problem areas. As I mentioned earlier, we have been
very concerned about the deterioration of the innovation
environment in India.
    We are looking forward to them getting through their
election and for us to be able to engage with the new
government on that, and to have a real dialogue about how they
can address their legitimate public policy interests in public
health and access to medicines while still respecting the
intellectual property rights of innovative companies, including
from the United States.
    Similarly on Canada, we have made clear our concern about
their utility approach to patents, and we are going to continue
to engage bilaterally and in our other discussions with them
about that and other IP-related issues.
    In TPP, we have a robust intellectual property rights
agenda that enhances innovation, which at the same time takes
as its touchstone the May 10, 2007 bipartisan agreement which
noted that there should be differentiation among countries
depending on levels of development.
    We are working with individual countries to ensure that
they are strengthening their intellectual property rights
regimes consistent with their levels of development and that we
are able to promote innovation and at the same time promote
access to medicines. We are working individually with each
country in TPP, and we are very much focused on improving the
overall level of intellectual property rights protection across
the region, including on small molecules and on biologics.
    Senator Menendez. And while you are clearly in the lead on
this because of the trade value that you obviously possess in
your portfolio, are there other elements of our government
promoting our interests in intellectual property rights--the
State Department, Commerce, others?
    Ambassador Froman. Yes. We work very closely, for example,
with the Commerce Department and the Patent and Trademark
Office. We work with the Intellectual Property Rights
Coordinator at the White House. We work with the State
Department, we work with Health and Human Services, and with
the Department of Justice. We work with several other agencies
on an inter-agency basis in the process of this negotiation.
    Senator Menendez. On another matter, Bangladesh submitted
their latest GSP action plan progress report to USTR in mid-
April, and I understand that it was reportedly discussed during
the Trade and Investment Cooperation Forum meeting a few days
ago.
    Given recent reports of union suppression in the garment
sector, how realistic is the Bangladeshi government's self-
assessment of their progress on the action plan's requirement
to ensure protection of unions and their members from anti-
union discrimination and reprisal? What is your assessment of
their progress on this requirement?
    Ambassador Froman. Well, as you know, we suspended GSP
based on the labor rights and the worker conditions in
Bangladesh. We developed an action plan with them of the steps
necessary for them to take. Our view, discussed earlier this
week in Bangladesh, is that they have taken some steps, but
there is still a lot of work to be done. So we are going to
continue to engage with them on the remaining work that needs
to be done and encourage them to take those actions.
    Senator Menendez. Finally, our trade policy agenda report
of 2014 talked about U.S. goods exports to Latin America and
the Caribbean increasing about 175 percent from 2003 to 2013,
the fastest rate of export growth to any region in the world,
almost a 40-percent increase over the previous 3 years, which
is pretty dramatic. Are there other opportunities in Latin
America that we need to pursue based upon that tremendous
growth?
    Ambassador Froman. Well, Senator, I think there are further
opportunities that we can pursue. In TPP, of course, we have
not only Asian countries at the table, but also countries from
Latin America: Mexico, Peru, Chile. We are following with great
interest the development of the Pacific Alliance in this region
as they open up their markets to each other. There are other
countries in Latin America that potentially would like to join
TPP in the future.
    In response to Senator Isakson's question, we are still
looking for ways to engage with Brazil to deepen and broaden
our economic relationship there, and to build upon the network
of free trade agreements that we already have with Latin
America and the Caribbean, and deepen our relationship with
them accordingly.
    The Chairman. Thank you.
    Senator Carper is next.
    Senator Carper. Thanks, Mr. Chairman.
    Ambassador Froman, very nice to see you. Thanks for coming.
I was just leaving as you introduced your wife and your family
here. It is very nice for you to come here and to have his
back. So, thank you.
    I know a number of questions that I thought of asking have
been asked. I am going to go back to one and maybe re-plow some
ground, but not too much, I hope.
    But, as we negotiate trade agreements, other countries are
obviously actively negotiating agreements to reduce barriers
and increase the trade between themselves and other nations.
For example, Japan and Australia, as you know, both of which
are involved with us in the Trans-Pacific Partnership, recently
concluded a bilateral free trade agreement. Earlier this year,
I think Colombia, Mexico, Peru, and I think Chile, three of
which are also in the Trans-Pacific Partnership, concluded
their own agreement.
    As you know, many of our negotiating partners are seeking
deals with China and with Europe. While many of these free
trade agreements may not be as ambitious as the Trans-Pacific
Partnership is expected to be, what do you think is the effect
of so much negotiation, so many agreements, even with our own
negotiating partners, that do not involve our country? What is
the effect?
    Ambassador Froman. Well, Senator, I do not think these are
necessarily mutually exclusive efforts, and I think as
countries pursue bilateral, trilateral, or other regional
arrangements, if it allows them to open their markets and
liberalize trade, it can be a very positive step forward.
    I think it does underscore--and this goes to Senator
Cantwell's question earlier--the importance of us being at the
table and us being engaged, because, if we are not engaged at
the same time in negotiating market access and helping our
partners to establish the rules of the road going forward, then
we are going to be left out of the game, and we are going to be
left on the sidelines while other people serve those markets,
while the rules of the system do not necessarily reflect our
interests or our values.
    So, if we want a trading system that has higher labor
standards, higher environmental standards, protects
intellectual property rights, puts disciplines around state-
owned enterprises, protects the digital economy and allows for
a free Internet, and we want market access to the fastest-
growing markets in the world, we need to take the field, we
need to be at the table, we need to be engaged, we need to be
showing leadership, because, as you point out, other countries
are not waiting for us. They are moving ahead without us. It is
not a static situation. That is why TPP and TTIP are so
important, because it is our way of engaging the global economy
in a way that is both consistent with our interests and with
our values.
    Senator Carper. Good. Thank you.
    I want to talk a little bit--and I mentioned this to you in
the anteroom before we came in--about poultry. I have never
discussed poultry with you before. Actually, I do every time I
see you. But I do talk about other subjects. Whenever a trade
representative is here, I am always quick to turn to poultry.
    People say, why do you talk so much about poultry with the
trade representative? I say, we live in a State where there are
more chickens per capita than in any other State in the Nation,
some 300 chickens per capita, and agriculture is a pretty big
industry in Delaware. About 80 percent of it is poultry-
related. We raise corn and soybeans, we feed the chickens, we
process the chickens, we sell them all over the country and all
over the world.
    We used to sell about 1 out of every 100 chickens we raised
outside of the U.S.; today it is 20. We do that in spite of the
fact that countries--oh, gosh, like Canada--continue to impose
restrictions on part-poultry products. I think Australia, New
Zealand, and Japan are using non-scientific barriers or quotas
to prohibit and restrict trade of U.S. poultry products to
those countries.
    So expanding imports into these countries means a whole lot
more income for our poultry farmers in the U.S. and for those
in larger supply chains and creates more jobs here in America.
I am told that if we could actually start selling poultry in
the EU, that it is about a $600-million market. And we would
not have to take all of that, but it would be nice to have a
piece, maybe a thigh and a wing, in that market.
    But as your team negotiates the Trans-Atlantic Trade and
Investment Partnership and the Trans-Pacific Partnership, I
just hope that opening up agricultural exports--I think Senator
Thune had mentioned this earlier--specifically poultry
exports--I do not think he mentioned that--is a top priority
for some of us on this committee.
    Just take a minute or two, if you would, please, to discuss
what you and your team are doing to increase market access for
our agricultural products in the recent trade negotiations. Do
you think we can find an agreement that opens up the poultry
market in some of these agreements, and how are you preventing
nations from erecting new trade barriers to our chickens? Thank
you.
    Ambassador Froman. Well, Senator, I would be----
    Senator Carper. I do not mean to squawk so much.
[Laughter.]
    Ambassador Froman. I would be disappointed if you did not
raise chickens.
    The Chairman. Before we start a pun-o-rama, I want to get
Senator Brown in too.
    Senator Carper. Good.
    Ambassador Froman. Let me just say that agriculture is a
high priority in our market access discussions. It is an area
of high growth in terms of our exports, both in terms of
reducing tariffs and other barriers, but also, very importantly
as you point out, addressing SPS barriers, non-science-based
barriers that have kept our poultry, as well as other products,
out of certain markets. So both in TPP and TTIP, those are high
priorities.
    Senator Carper. Thank you so much.
    The Chairman. Thank you, Senator Carper.
    Senator Brown?
    Senator Brown. Thank you, Mr. Chairman. I am so
appreciative that you are doing this hearing.
    Mr. Ambassador, thank you for working together in
cooperation in the work you are doing.
    I want to start with a ``yes'' or ``no'' question. I have a
number of things I want to talk about, and I would appreciate
your doing that. You responded to Senator Stabenow's and
Senator Schumer's questions about currency. Senator Stabenow
pointed out that a strong majority of House members have
insisted, by signing their name to a letter, a strong majority
of Senators have insisted, that currency be part of TPP.
    My question is--and I really want you to answer this
``yes'' or ``no,'' because I want to get into some detailed,
kind of in-the-weeds investor state questions--are you prepared
to risk defeat of TPP by not including meaningful currency
provisions in this agreement?
    Ambassador Froman. I am sorry, I cannot answer that ``yes''
or ``no.'' All I can say is, we are continuing to work, the
Treasury Department and ourselves, on this issue to see how
best to address the underlying concerns.
    Senator Brown. And you are unwilling--I will ask you
``yes'' or ``no'' this way. Do you plan to include strong
currency provisions? I know you say you are working on
currency, but are you planning to put a provision in as strong
as the letters that you have received--that you have not yet
answered, by the way--about currency?
    Ambassador Froman. Again, we are continuing to consult with
you, with other members, with stakeholders, about how best to
address the issue. That is all I can say.
    Senator Brown. All right. All right. That is the best I am
going to get. All right.
    I want to talk about investor state dispute settlement.
Multinational companies conduct risk assessments--including
assessments of foreign countries--before they invest there. The
Boston Consulting Group, for example, provides risk-management
assessments that cover regulation, governance, organization,
culture, process, among others. Multinational corporations can
purchase private insurance policies to mitigate risks
associated with overseas investment to protect themselves.
    AIG, for example, offers a multinational insurance program
with coverage options to address multinational exposures. U.S.
Overseas Private Investment Corporation, OPIC, offers political
risk insurance to encourage U.S. investment abroad. OPIC's
services are available in more than 150 countries and have
supported more than $200 billion of investment.
    So, U.S. companies going into these countries are planning
for every kind of eventual problem through insurance, through
risk assessment, through studies, through OPIC's political risk
coverage. They are doing this investment in other countries
with their eyes wide open.
    In addition, we know that ISDS, Investor State Dispute
Settlement, has given big tobacco companies the ability to
threaten small developing nations. Even the threat of a lawsuit
from a big tobacco company in a small, developing, not very
wealthy country has encouraged some of these countries not to
pass anti-tobacco public health laws.
    So we know that the presence of ISDS has empowered big
tobacco to go into the developing world and have their way.
With all the other protections that companies have built in in
the private sector, we have market-based options for these
companies to protect themselves, we have the U.S. OPIC,
Overseas Private Investment Corporation, to protect these
companies. Why do we need ISDS to protect these companies while
we are giving that power to tobacco, to big tobacco, to
undercut public health laws?
    Ambassador Froman. Well, Senator, underlying investor state
dispute settlement is the notion that we provide here in this
country, both to domestic and foreign investors, a certain
degree of protection under our court system, non-discrimination
and the like, but not every country around the world does. Our
investors have been subject, in many countries around the
world, to discriminatory practices or expropriation.
    There are 3,300 agreements around the world on investment,
the vast majority of which have some form of investor state
dispute settlement. The U.S. is party to 50 of those
agreements, but countries all over the world have been signing
agreements over the last 50 years that have some degree of
investor state dispute settlement.
    The standards in those agreements vary significantly. What
we are trying to do through TPP is to raise the overall
standards of the investor state dispute settlement regime. So
provisions that would allow the frivolous cases to be dismissed
or attorneys' fees to be awarded, provisions that have allowed
non-parties, NGOs or others, to participate in ISDS procedures
by filing briefs, we would like to see greater transparency
around those. Also, we would include provisions to ensure that
governments can regulate in the interest of public health,
safety, and the environment and not be unduly subject to those
sorts of challenges.
    So through TPP--and I would say this is true of labor, it
is true of environment, it is true of ISDS--we are trying to
take what is the status quo and raise standards, improve the
standards, and try to create new standards that can help
strengthen the overall system internationally.
    Senator Brown. Thank you. For the record, Mr. Chairman,
OPIC does provide insurance for expropriation, so that flag is
often raised, I think, a bit less than necessary. Thank you.
    Thank you, Mr. Ambassador.
    The Chairman. I intend to work very closely with the
Senator from Ohio on these matters as well.
    We are getting towards the end, Ambassador Froman. I want
to get at the enforcement issue and then provide a recap, I
think particularly on where we are on transparency and Trade
Promotion Authority.
    A lot of Americans, when they hear the debate about future
trade agreements, the first thing that they say is, well, you
people in Washington, DC are not enforcing the ones we have, so
why are we talking about new ones before we enforce the ones
that we have? Too often it seems that when we have a trade
agreement, we honor it, while our trading partners do not.
    There are a variety of excuses. They say that they may not
have the resources to do it. They may say that there are
political concerns. But at the end of the day, we do not have
the enforcement effort that is so important. Our experiences
with China, Korea, Russia, and others make clear that we lose
out if we let agreements go into force before countries are
able to comply with the commitments that they have made.
    So my question on the enforcement issue is, outline what
steps your office is willing to take, the USTR, to put in place
a new commitment to trade enforcement.
    Ambassador Froman. Well, we are very committed to trade
enforcement. We are happy to talk about what further steps we
can take. I have mentioned that we have brought more WTO cases;
we have brought cases against China at twice the rate as
before.
    We have brought the first-ever case on a labor issue vis-a-
vis Guatemala, and we are continuing to pursue that. We have
created this interagency Trade Enforcement Center at USTR with
great support from the Commerce Department, as well as from
other departments.
    That has allowed us to put together more complex cases than
we have ever been able to put together before, where we have
people from all over the government, a whole-government
approach--the people with language resources, country
expertise, domain subject knowledge--and are able to put
together these very complicated cases that can have a systemic
impact.
    So we are very much focused, and we agree with you
completely, that part of the deal of negotiating new agreements
is to ensure that we are monitoring, implementing, and
enforcing our existing agreements, and we are very much focused
on doing that.
    The Chairman. And there is no question in my mind that you
all are stepping up the effort to enforce trade laws. In
particular, I was pleased with the work the USTR did on the
critical minerals issue, which I think is almost a model for
how to tackle a major trade enforcement issue. I just want you
to know that, even though I think you are stepping it up, I
think there is a lot more to do.
    The reason why is that, for those of us who have been
supportive of trade--and I have voted for every market-opening
agreement since I have been in public service--we need to have
a better response to people who say, why are you talking about
new trade agreements before you have tougher enforcement of the
ones that are on the books?
    So let me provide a recap of where I think we are. On the
transparency issue--and you and I went back and forth on some
of the semantics of trade law--the American people are going to
insist on being able to review the TPP agreement before the
President signs it, and so am I. I think that the law is very
much in sync with that.
    On the TPA issue, it just seems to me--and I think we agree
on this, and I am just sort of recapping now--that we need a
TPA upgrade that reflects the needs of a modern trade
agreement.
    For the people whom I have the honor to represent at home,
one out of six jobs in Oregon depends on international trade.
The trade jobs often pay better than do the non-trade jobs.
They reflect a higher level of productivity. So, as we work
through these issues, these issues of the future, some of which
I now call smart-track--and we are going to be fleshing that
out in the future--I just want it understood that we are going
to be working closely in partnership with you.
    I think you know that there are strong views on this
committee, and I happen to think we can forge a bipartisan
agreement to do trade policy right, here in the U.S. Senate. If
you would like to have the last word, we are happy to give it
to you. You have been a patient person. Today has been
something of an unorthodox day even by Senate scheduling, and
we appreciate your patience.
    Ambassador Froman. Well, Mr. Chairman, thank you very much.
We very much look forward to working with you as the
legislative process on TPA proceeds and very much want to
partner with you on that.
    On the transparency issue, our goal is to release the terms
of the agreement as soon as we can. Once we have an agreement,
we will want to make sure that the terms are made public as
early as possible. But of course that means we have to reach an
agreement, and that is where our focus is right now: trying to
reach the best possible agreement for the American people on
TPP and on TTIP.
    The Chairman. I understand that. The reason that I have
focused on it is that I just returned from seven town hall
meetings at home in Oregon. This comes up all the time, and it
reflects the generational changes that we have seen in trade
policy that I listed earlier.
    I remember supporting those agreements in the 1990s with a
full head of hair and rugged good looks and that sort of thing.
Of course, nobody was online and expecting elected officials to
give ongoing information. When I talk about transparency--and I
want to emphasize this point--nobody is talking about making
available what I call proprietary information.
    In other words, if you are talking about Coca-Cola, of
course you would not make the secret sauce in Coke available.
That is proprietary information. But terms of a trade agreement
that affect various policy issues with respect to Coca-Cola and
other products is what I think the American people are going to
insist on. I think, based on our conversations, that we are
going to be pursuing that together and will do so on a
bipartisan basis.
    So, the hearing record here in the Senate Finance Committee
is going to remain open until May 5th. I thank you again, Mr.
Ambassador, and I look forward to working with you in the days
ahead.
    The Finance Committee is adjourned.
    [Whereupon, at 1:50 p.m., the hearing was concluded.]



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