[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
STEP OR STUMBLE: THE OBAMA ADMINISTRATION'S PIVOT TO ASIA
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ASIA AND THE PACIFIC
OF THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
DECEMBER 6, 2016
__________
Serial No. 114-239
__________
Printed for the use of the Committee on Foreign Affairs
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COMMITTEE ON FOREIGN AFFAIRS
EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida BRAD SHERMAN, California
DANA ROHRABACHER, California GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio ALBIO SIRES, New Jersey
JOE WILSON, South Carolina GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas THEODORE E. DEUTCH, Florida
TED POE, Texas BRIAN HIGGINS, New York
MATT SALMON, Arizona KAREN BASS, California
DARRELL E. ISSA, California WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina ALAN GRAYSON, Florida
MO BROOKS, Alabama AMI BERA, California
PAUL COOK, California ALAN S. LOWENTHAL, California
RANDY K. WEBER SR., Texas GRACE MENG, New York
SCOTT PERRY, Pennsylvania LOIS FRANKEL, Florida
RON DeSANTIS, Florida TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina JOAQUIN CASTRO, Texas
TED S. YOHO, Florida ROBIN L. KELLY, Illinois
CURT CLAWSON, Florida BRENDAN F. BOYLE, Pennsylvania
SCOTT DesJARLAIS, Tennessee
REID J. RIBBLE, Wisconsin
DAVID A. TROTT, Michigan
LEE M. ZELDIN, New York
DANIEL DONOVAN, New York
Amy Porter, Chief of Staff Thomas Sheehy, Staff Director
Jason Steinbaum, Democratic Staff Director
------
Subcommittee on Asia and the Pacific
MATT SALMON, Arizona Chairman
DANA ROHRABACHER, California BRAD SHERMAN, California
STEVE CHABOT, Ohio AMI BERA, California
TOM MARINO, Pennsylvania TULSI GABBARD, Hawaii
JEFF DUNCAN, South Carolina ALAN S. LOWENTHAL, California
MO BROOKS, Alabama GERALD E. CONNOLLY, Virginia
SCOTT PERRY, Pennsylvania GRACE MENG, New York
SCOTT DesJARLAIS, Tennessee
C O N T E N T S
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Page
WITNESSES
Richard J. Ellings, Ph.D., president, The National Bureau of
Asian Research................................................. 6
Derek M. Scissors, Ph.D., resident scholar, American Enterprise
Institute...................................................... 20
Ms. Kelley Currie, senior fellow, Project 2049 Institute......... 33
Mr. Barry C. Lynn, director, Open Markets Program, New America... 41
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Richard J. Ellings, Ph.D.: Prepared statement.................... 9
Derek M. Scissors, Ph.D.: Prepared statement..................... 23
Ms. Kelley Currie: Prepared statement............................ 36
Mr. Barry C. Lynn: Prepared statement............................ 43
APPENDIX
Hearing notice................................................... 62
Hearing minutes.................................................. 63
Richard J. Ellings, Ph.D.: Revised prepared statement............ 64
Mr. Barry C. Lynn: Material submitted for the record............. 75
STEP OR STUMBLE: THE OBAMA ADMINISTRATION'S PIVOT TO ASIA
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TUESDAY, DECEMBER 6, 2016
House of Representatives,
Subcommittee on Asia and the Pacific,
Committee on Foreign Affairs,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:00 p.m., in
room 2172, Rayburn House Office Building, Hon. Matt Salmon
(chairman of the subcommittee) presiding.
Mr. Salmon. Good afternoon. The committee will come to
order. The written statements will be included in the official
hearing record. And without objection, the hearing record will
remain open for 5 calendar days to allow statements, questions
and extraneous materials for the record, subject to the length
limitation in the rules.
Today marks my final hearing as chairman of this important
subcommittee. It is truly an honor to have served on this
subcommittee with my fellow distinguished members. My time as
chairman, focused on the world's most dynamic region, has been
punctuated with memories of meeting countless dedicated policy
and business professionals, insights that I will carry with me
beyond my tenure here on the grave--here on the Hill. Did I say
grave? And hopefully, leaving a lasting mark on our Nation's
Asia policy.
As the United States undergoes a notable transition, I
convene this hearing to review the current administration's
policy toward Asia, and to determine what tangible
accomplishments the United States has made. More importantly,
we will also form suggestions for the new administration's
policy toward Asia.
We have come to the end of an administration whose
signature foreign policy initiative has been a rebalance to the
Asia-Pacific. I have long championed enhancing our engagement
with the Asia-Pacific and our friends and our allies in the
region. They have welcomed the rebalance as a strengthening of
our regional relationships. But after 8 years of enhancing U.S.
efforts in Asia, serious challenges to U.S. interests persist,
and some of them have even grown. Today, I note that our
posture in Asia is not what we hoped for when the pivot was
introduced.
The TPP. As we reflect on the outgoing Obama
administration's efforts in Asia, the Trans-Pacific Partnership
may be end up being the administration's most lasting failure.
The administration chose to use this economic agreement as our
strategic anchor in Asia and tried to market the deal at home
by saying that it would allow us to write the rules for free
trade. Now, the prospect of TPP ratification in the United
States is effectively dead, and our closest Asian partners are
questioning the endurance of our leadership in the region.
This debacle endangers U.S. prestige in Asia, and it didn't
need to happen. The administration's own arguments implied that
China is now in a position to write the rules. And our national
reputation has taken a hit, because the administration tied it
to TPP without first establishing a national consensus by
addressing deep domestic concerns about the potential impact on
our economic viability.
As the next administration considers its economic and trade
ties with Asia, it may now be better to approach negotiations
bilaterally, perhaps starting with Japan. If we begin the
bilateral process with Japan, we may be able to add other
modern economies in the dialog in a more feasible approach
directed at a core group.
Without a concerted economic engagement with all parts of
Asia, China will fill the void with its willingness to fund
much-needed infrastructure without regard to intellectual
property, labor and environmental standards. China has been,
and will continue to be, a land of contradictions, of
challenges and opportunities. The need to strike a proper
balance of working together on economic prosperity, with a
willingness to stand firm when necessary, will continue under
our President-elect's tenure.
Our business community and economy are under threat from
regulations and policies designed to favor Chinese interests
and domestic champions. Threats from cyber-enabled economic
espionage and intellectual property theft continue unabated.
The current administration has been more willing to make
concessions and seems fearful of provoking China. I have been
alarmed to witness the escalation of infringement on Hong
Kong's self-governance and basic law with little to no U.S.
pushback. Many in Congress have been similarly unsatisfied with
the administration's halfhearted efforts to address Chinese
human rights abuses and regional aggression, particularly with
respect to the South China Sea.
Our regional allies and friends continue to call for
further U.S. engagement and assistance. And it is my
expectation that the next administration will seek to provide
substantive reassurance to the region.
Taiwan. A lot of hoopla about Taiwan in the last few days.
China has also been increasingly unreasonable toward Taiwan,
which is in a more precarious position than ever. I was able to
attend Tsai Ing-wen's swearing in. That was the third president
of Taiwan that I have been able to attend the swearing in. I
attended Lee Teng-hui's, the first truly elected president of
Taiwan. I then attended Chen Shui-bian's, and I was able to be
at Tsai Ing-wen's, much over the objections of some of the
folks here. I was, I think, was the highest ranking Member of
the Congress to--actually, I think I was the only Member of the
Congress that I attended. After completing yet another
successful democratic transition, Taiwan continues to prove
that a free flourishing economically successful Chinese
democracy in civil society is possible.
The surprise over President-elect Trump accepting a call
from President Tsai Ing-wen has been an unnecessary
distraction. The fact is, we are economically and militarily
engaged with Taiwan as directed by the 1971 Taiwan Relations
Act, and a phone call between principals should not garner such
outrage.
I am further dismayed that the same Washington elites and
press corps that hailed President Obama a hero for meeting with
Iran's President Rouhani, a key supporter of terrorism across
the globe, would become so distraught over a phone call. I
fully expect that President-elect Trump and President Tsai will
have a productive relationship that benefits both of our
economies.
North Korea will continue to be a challenge that we must
face head on. This has been one of the ultimate blunders of the
Obama administration in Asia, the so-called strategic patience
approach to North Korea. While Kim Jong Un has conducted
increasingly powerful nuclear and ballistic missile tests, we
have not seen anything that could be described as a strategy.
If the past gives any indication of what to expect, North Korea
could soon conduct another substantial provocation to welcome
the U.S. President to office. Congress has been vigilant about
applying pressure on the DPRK, and I anticipate that it will
continue to look forward to new levers to stop North Korea's
belligerent and dangerous behavior. Sanctions efforts led by
Chairman Ed Royce have helped squeeze the DPRK from vital
funding sources. Still, more can and has to be done, such as
further cooperation and intelligence sharing between our
allies, the Republic of Korea and Japan.
In addition, more can be done to increase the flow of
information into North Korea. We can do much more to assist the
people of North Korea to understand the truth of their reality.
North Korea and provocation should always be met with
resistance, and I look forward to a new strategy on this front.
This year, the administration's relationship with a long-
time ally, the Philippines, fell apart. Newly elected President
Duterte came out strongly in opposition of the United States.
He has appeared to use the media to pit the United States
against China, in an effort to renegotiate the long-standing
alliance structure. Despite the trend of late, I am heartened
to see that the Philippines President, and President-elect
Trump, have shown each other mutual respect. And I am hopeful
that this pivotal alliance will be rekindled from the top down
and remain the force for good that it can be.
India. The administration halfheartedly sought to include
India in the pivot, but the deep well of potential in our
bilateral ties remains untapped. India struggles with
infrastructure challenges, energy issues and difficult
neighbors, but the two world's largest democracies are natural
partners. There is a strong appetite within the United States
to encourage India to take a stronger leadership role within
the region. Leadership does come with responsibilities. As
India seeks to garner closer commercial and defense relations
with the U.S., it must take steps toward important reforms that
will lay the foundation for increased ties.
I am skeptical that our interests in Asia have been
substantially advanced over the last 8 years. The outgoing
administration spoke often of intentions to refocus its efforts
in Asia, but left nearly everything undone. Its landmark trade
deal has failed. Being patient with North Korea has made us
less secure. We have lost footing with a longtime ally in the
Philippines, and our security guarantees throughout the region
have been called into question by destabilizing actors. Looking
ahead, I am very optimistic that the new administration, along
with what I hope will be a unified Congress, can rebuild
efforts in Asia, provide for a robust regional security, and
promote lasting U.S. prosperity.
I am going to turn to the gentleman from California, Mr.
Bera, to see if he would like to make an opening comment or
two.
Mr. Bera. Certainly. Mr. Chairman, I would like to take
this opportunity to thank you for your work over these last 2
years. Your leadership, your understanding of the region, your
fluency in the Chinese language has been great. It has been a
pleasure to travel to India, to China and to Taiwan with you.
So we are going to miss that expertise and we are going to miss
that leadership, and it really has been a pleasure for this
Member of Congress serving with you, and I look forward to--
hopefully, you will stay engaged in the region if opportunities
present themselves to continue to stay engaged, but the best of
luck in the future, and I do hope to continue working with you
in that.
I will leave my further statements for the hearing. So
thank you.
Mr. Salmon. I thank the gentleman. I recognize the other
gentleman from California, Mr. Rohrabacher.
Mr. Rohrabacher. Thank you very much, Mr. Chairman. Let me
just note what an honor and pleasure it has been to work with
you as friends and colleagues and patriots, trying to do what
is best for our country and just--you will be missed and we
hope that things go well. Let me just say we all are here for a
short period of time. Our goal is--hopefully our goal has been
to help make things better for the United States of America.
Some people think our goal is to focus on making it a better
world. That certainly is something positive, and that is,
frankly, perceptions of what is good for the whole world is not
necessarily what is good for the United States of America.
And we even have a new President who has made it very clear
that that will be his criteria, what is good for the people of
the United States of America. In that regard, I would suggest
that in your area, you have so ably overseen in these last few
years, that I would give the administration a D, I wouldn't
give them an F, I would give them a D. And as the chairman just
noted, what is going on with actions and hostile posturing and
belligerency on the part of China has increased. North Korea's
threatening behavior, as well as its actual arrogance, in
dealing with the issue of nuclear weapons. Again, much more
threatening than it was. And then we have the crumbling of our
long-term relationships with Malaysia and with the Philippines.
This, overall then, this pivot to Asia, that has been--in and
of itself, has been a failure, but overall, I give the
administration a D. And looking forward to hopefully next year,
even on the other side of the aisle if they want to give it a
rank, then maybe we will have an A. Let's see if we can all
work for that.
Mr. Salmon. The chair recognizes the former chairman the
subcommittee, Mr. Chabot.
Mr. Chabot. Thank you very much, Mr. Chairman. I want to
begin, again, by some of my colleagues who said thanking you
for your years of service to this House, and especially for
your stewardship of this committee. And I know that you know
you had big shoes to fill when stepping into this role, they
were mine. But you handled it very, very well, and have done a
great job as chair of this committee. So I want to thank you
for that. And we wish you the best of luck. I am sure you are
going to be very successful in whatever it is. Have you decided
yet? Or are you going to make an announcement here today?
Mr. Salmon. I don't know, I was going to try to be
Secretary General of the U.N. What do you think?
Mr. Chabot. Would you want that job?
Mr. Salmon. Not on your life.
Mr. Rohrabacher. See what we can do.
Mr. Chabot. Secretary of State Rohrabacher. But in any
event, the pivot, to get to the topic at hand here, I think it
has been one of the most frequently and poorly defined phrases
of the Obama administration. Some experts have argued that it
has been little more than an empty slogan. I hate to say that I
tend to agree with that. The pivot has really been a sorry
excuse for strategy. It has merely been a hodgepodge of
contradictory ideas that is, without question, signaled
indecision and weakness to challengers from Beijing to
Pyongyang to Moscow.
The past several years have been especially disconcerting,
particularly the administration's handling of China's growing
assertiveness from building islands to now militarizing them.
We failed to effectively stand up for our allies in the region,
such as Taiwan. And I have to say, although I know some folks
have been concerned about that, upset about that, I say more
power to him for having taken that call. And Chinese bullying
has to stop, and it has gotten worse and worse in recent years,
and I think this administration has done little to push back on
that. And I don't think you reward bad behavior, and I think
that is what has been happening. Beijing's behavior has been
more and more reprehensible, and it has been not nearly enough
pushback.
And as I am sure all my colleagues believe, you know, we
don't want to see any sort of military action in that part of
the region. But as Ronald Reagan believed, it is through
strength that you continue with the peace. Weakness invites
military action in war, and I think that is what is happening
now. And so I commend President-elect Trump for taking that
call. I look forward to hearing the witnesses' testimony this
afternoon, and I yield back.
Mr. Salmon. Thank you. Did any of the other committee
members wish to make an opening statement? If not, then we go
to the panel, we are really thankful to be joined today by Dr.
Richard Ellings, president of the National Bureau of Asian
Research. Great to see you again.
How is your wound from your baseball tournament? Are you
doing better?
Mr. Ellings. Broken thumb, but I'm here.
Mr. Salmon. Well, I am glad to see you.
Dr. Derek Scissors, resident scholar----
Mr. Ellings. Too much information.
Mr. Scissors. I have no injuries.
Mr. Salmon. No injuries? Good. I don't think you would tell
us if you did.
Ms. Kelley Currie, senior fellow at Project 2049
Institute. Great to see you again. And Mr. Barry Lynn,
director of New America's Open Markets Program. We thank the
panel for joining us today to share their experience and
expertise.
And I am going to start with you, Dr. Ellings. Would you go
ahead and turn your microphone on. And you all know the drill?
When it turns amber, it is time to wrap up. I think you have
about a minute to wrap up. I don't have a heavy gavel, but we
don't have the power of the filibuster over here in the House,
so you can't go on forever, so that is the drill. Thank you.
Go ahead Dr. Ellings.
STATEMENT OF RICHARD J. ELLINGS, PH.D., PRESIDENT, THE NATIONAL
BUREAU OF ASIAN RESEARCH
Mr. Ellings. Chairman Salmon, Congressman Bera, when he
gets here, Ranking Member Sherman and other extraordinarily
distinguished members of the committee, it is an honor to share
of my personal observations and views that are outlined in my
written testimony. I plan to get through them quickly before
they become obsolete. You know, there might be a Tweet. The
pivot, better called the rebalance, has been a policy that
might be termed enhanced more of the same.
I will make two contextual points, then assess the policy
and conclude by suggesting some concrete things Congress can do
working with the new administration.
First contextual point. For many reasons, this period of
history appears to be a hinge moment, as someone put it
recently. It is akin in too many ways to the years immediately
preceding World Wars I and II, highlighted by the
industrialization and rise of dissatisfied nationalistic
authoritarian powers. And yet, it differs from these eras in
noteworthy ways as well.
The nuances of this century's principle rising power,
China. The proliferation of nuclear weapons and America's
strategic engagement. The remarkable rise, power and ambitions
of China comprise the central issue. As China watchers like to
point out, the country has made enormous progress, but has all
kinds of horrible problems. Its chief problem is that its
unelected leadership under Xi Jinping is insecure and resorting
to tighter control, repressive measures, and nationalistic
appeals to bolster its popularity, capitalizing on historic
grievances.
Correspondingly as foreign policies have become more
aggressive, and at the same time, remain carefully calculated
and, frankly, farsighted. China has a grand strategy to
maximize its wealth, space and global influence, and to
marginalize its most serious competitors, most notably, the
United States. It has an eye for weak spots.
For many years, specialists have been predicting political
crisis, or change, in China, they have been wrong. And yet,
they are right about the future. But we have no ability now to
protect when change will happen, or what kind of change.
Second contextual point. Viewed from a global perspective,
power, no matter how the measure it, is concentrated heavily in
the Asia-Pacific. I characterize the balance in the region as
skewed multipolarity. It is skewed, in part, because China has
led a one-sided arms buildup.
Given the uneven dispersion of power, the extraordinary
pace of change in the balance of power, uncertainty in key
countries, and increasing questions about U.S. leadership,
ambiguity also describes the strategic environment. Ambiguity
is not good. When nations have a difficult time understanding
their strategic environment, many feel insecure and like to
expand their allies and defenses. Some nations see
opportunities to pursue ambitions.
In times like ours, nations are more prone to making
calculations that lead to conflict. Our capacity to remain
strong and committed, to exploit weaknesses in our competitors,
and to form and sustain effective coalitions, will be the test
of our leadership.
A quick assessment of the pivot. The intention to place
greater policy focus on the Asia-Pacific is great. It is
terrific, imperative, and goes back decades to the Clinton
through George W. Bush administrations.
President Barack Obama's high profile pivot in fall of 2011
aimed to strengthen our alliances and friendships, engage
China, bolster regional multiple lateral institutions, expand
trade and investment, add to our military presence, at least,
implicitly, in North Korea's nuclear program, advance democracy
and human rights, a pact, and familiar agenda. But announced at
full volume and short on specifics.
After 5 years, it is fair to judge the policy.
Notwithstanding, a senior State Department official's recent
statement that, and I quote, ``We're handing the next
administration a success story in Asia.'' Seriously, that was
said. ``The pivot and the predecessor policies on balance have
failed to prepare us for the challenges of today, let alone
tomorrow.''
We have not been operating from understanding of the world
as it actually exists. We have failed repeatedly to understand
and anticipate Russian intentions and policy, North Korean
intentions and policy, and most importantly, Chinese intentions
and policy. Furthermore, I see no evidence that we have
contemplated strategies to avoid facing some type of Sino-
Russian or Sino-Russian-North Korean-Pakistani coalition if,
for example, hostilities were to break out in the Korean
peninsula and in south Asia.
We are being compelled to position our world-leading
military forces farther and farther off the Asian coastline. We
have not come up with an effective answer to China's island-
based building in the South China Sea. We have failed to
prevent North Korea from achieving nuclear breakout.
Sequestration has prevented us from investing in many of
the systems we will need to deter--if deterrence fails, to
win--a future conflict in the region. In fact, we do not have a
military strategy for the Asia-Pacific. We continue to treat
trade with China as normal when the country is persistently
mercantilists. U.S. companies are increasingly twisted into
pretzels trying to operate in a market that is now the size of
America's. Companies try to avoid upsetting the regime. They
try to protect their IP unsuccessfully, and they compete with
increasingly strong Chinese companies that are favored in
myriad and mostly opaque ways.
Our regional leadership is weaker in part due to the
apparent demise in the pivot's economic centerpiece, the Trans-
Pacific Partnership. According to a smug daily, China daily
article published days ago with regard to trade ``China's happy
to write the rules with all its partners.''
Any further faltering of our commitment to rebalancing
would jeopardize, just to name one important example, our
strategic relationship with India. The hope for a political
liberalization of China has not developed from its accession to
the World Trade Organization, or from the world otherwise
engaging China. Indeed, by most measures, the regime is less
liberal, more repressive today than any time since it joined
the WTO. I would like to go when it is possible, when you think
it is reasonable through a number of specific suggestions that
answer each one of these issues.
[The prepared statement of Mr. Ellings follows:]
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Mr. Salmon. Thank you very much, Dr. Ellings. Dr. Scissors,
thank you. I understand this is your second time testifying
before the panel. Thank you for not letting us not scare you
off from the first time. We are really thrilled to you have you
here again.
STATEMENT OF DEREK M. SCISSORS, PH.D., RESIDENT SCHOLAR,
AMERICAN ENTERPRISE INSTITUTE
Mr. Scissors. Thank you, Mr. Chairman. I enjoyed the first
time, and hope I will enjoy the second time. Thank you to the
committee for having me a second time.
My remarks are going to be restricted to economics, which
is, of course, important in our engagement in the region, but
is only a partial view. I want to state that at the outset.
On the economic view, the next administration, the Trump
administration, can do much better than the Obama
administration did. However, that isn't going to be easy. We
are caught between, on one hand, a China that is engaged in
predatory trade that harms the United States, and American
commitments to open markets and competition that help the
United States. And while there is plenty of scope for U.S.
improvement, that does not mean we will be able to carry it
out. So I will try to address the future more than the past.
In terms of addressing the past, the Trans-Pacific
Partnership is the obvious issue on the economic side. I have
an odd view in America today which is, I didn't like the treaty
because it didn't liberalize enough, not because it was too
radical and too pro market.
I was at the Heritage Foundation for 5 years and at that
time, I wrote multiple pieces praising the idea of the Trans-
Pacific Partnership and praising the Obama administration for
initiating it. I thought it was a great idea.
When I saw the text in November of last year, I changed my
mind, because I actually read the agreement, which a lot of
people don't do, if I might say under my breath. Oh, there is a
microphone. I'm sorry. It did not create the opportunities for
American workers that all of us at Democrat, Republican,
conservative, liberal we want, and in particular, the U.S. is
the most comprehensive services exporter in the world, and
there are too many exceptions in liberalizing services trade.
And as a result, I, the International Trade Commission, others,
do not see gains for the U.S. from services liberalization in
the Trans-Pacific Partnership.
I won't spend a lot of time. The point is, the TPP doesn't
do what we need it to do economically. That is why President
Obama began to start talking about writing the rules instead of
economic benefits. He started talking about the diplomatic case
for TPP. Those are all true. But the number one role of a trade
agreement is to bring economic benefits through trade, and the
TPP does not do that. So I will not be sorry to see it go. That
is one point.
Turning in the other direction, something that I am worried
about, I have written about, I wrote in my written testimony, I
don't want the United States to swing all the way to the side
of being protectionists. The Trump campaign cited a think tank
that represents the labor movement, talking about how the trade
deficits costs U.S. jobs. That is not true. We ran trade
surpluses during the Depression, it did not help us on the job
front.
Our trade deficit plunged in 2009, it did it not help us on
the job front. Logically when we are rich, we buy more in the
way of imports, and when we are poor, we don't. If you force
the trade deficit down, and my colleagues may talk about this,
you are going to hurt America's rivals. It is true. You are
also going to hurt America's friends and allies, because we
trade with them and they are involved in supply chains. You are
going to damage the global economic system.
So I am going to talk in a second about sanctions against
China, because I think there are some that are necessary. I
don't want us to go too far to become a protectionist country,
where we think trade balance is good economic goal, because it
isn't.
Let's talk about sanctions in China. We can label China a
currency manipulator; it is a currency manipulator, so it is a
good label. It won't actually bring back U.S. jobs, because
when you try to connect China's currency value to U.S. jobs,
you don't get a connection.
Where we know the Chinese are harming us is blocking our
exports. When Americans get cheap imports, at least we get a
benefit from buying the cheap imports. It helps our consumers.
When a Chinese or other countries block our exports, there
is nothing for us but cost. And China does that. It is the
largest trading country in the world, so it is more important
when China does it, when Bolivia does it, for example. And they
protect their state-owned enterprises from competition, and
that is a serious barrier to U.S. exports, in particular, U.S.
services exports.
Reciprocity is a legitimate idea and a response. We
shouldn't be narrow minded about it, we shouldn't be
protectionist about it, but we should say, you are going to
block our trade, we don't have an obligation to allow all your
trade to occur.
Another issue that we are all familiar with is IP theft.
China the biggest stealer of intellectual property in the
world. Tens of millions of Americans have jobs supported by
intellectual property; it is not just about high-technology, it
is about any innovation. We need to act against companies that
have stolen or--that have received stolen intellectual
property, not just the thieves which the Obama administration
did in a small way, but the companies that have benefited and
compete against American companies because they have taken
stolen intellectual property from whoever who stole it. That is
a sanction that needs to go forward.
Something that I know you all have been discussing, and
will be discussed in the next Congress, is the Committee on
Foreign Investment in the United States, Chinese investment in
the United States generally is beneficial, but there are some
sectors where we do not want Chinese investment. And so, you
know, without getting into the CFIUS debate, I would say that
assigning more resources to reviewing investment is a benefit
for the United States, both economically and in terms of
national security.
I am already being warned, but I do want to talk a little
bit about positive steps, not just sanctions against China. I
would welcome the phone call, but I welcome it for a particular
reason, I think the U.S. could side a FTA with Taiwan. During
this administration, I think that would be a good idea.
Japan, as the chairman mentioned, is a superb goal, much
more complicated, much more difficult, harder politically.
Taiwan is 23 million people, they are not going to steal
American jobs, so we have an advantage in talking to Taiwan.
There are countries, India, Indonesia, Philippines Vietnam,
these are very rapid growth countries. I would not call for
FTAs for these countries, they aren't ready, and we aren't
ready. But trying to improve trade relations with these
countries would bring economic benefits to the United States;
there the important countries in the region to focus on
economically.
My last point before I stop, we don't normally think of
corporate tax reform as bearing on the Asia-Pacific, but in
this case, there are plans in the works that have border tax
adjustments, and those border tax adjustments will affect our
trade with the Asia-Pacific, they will affect our partners. Our
partners will want to know what is going on, they will want
some input, even though this is a domestic American issue. We
can have pro-competitive, wonderfully beneficial U.S. corporate
tax reform. I actually think that this committee and people
interested in the Asia-Pacific should be part of that
discussion. Thank you.
[The prepared statement of Mr. Scissors follows:]
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----------
Mr. Salmon. Thank you.
Ms. Currie, you are also back for a second time, so
welcome, and thank you.
STATEMENT OF MS. KELLEY CURRIE, SENIOR FELLOW, PROJECT 2049
INSTITUTE
Ms. Currie. Thank you, Mr. Chairman. And I also want to
echo the plaudits of your colleagues and your leadership of
this committee--subcommittee, and note that you will be missed
and your leadership will be missed. Thank you to all the
members of the committee. I do want to submit my written
testimony for the record.
Mr. Salmon. Without objection.
Ms. Currie. With one small correction that I have already
noted to your staff.
The views that I am presenting today are my own and not
necessarily those of Project 2049 Institute or its other
scholars, but I am, nonetheless, grateful for the opportunity
to share the them with you today.
Since Donald Trump's election victory last month, there has
been a great deal of commentary on the future of the Obama
administration's pivot to Asia. While the focus on the degree
to which the pivot will continue under Donald Trump is
important, much of this discussion has tended to focus on hand-
wringing about President-elect Trump, while ignoring the
serious deficiencies of the Obama administration's policies,
both in terms of the conceptual failures, and the failures of
the implementation.
The whole furor around the call nicely highlighted one the
most serious conceptual weaknesses of the pivot. The failure to
link intensified engagement in the Asia-Pacific with
fundamental principles that historically have undergirded
successful U.S. foreign policy for decades. These principles
include privileging relationships with those countries that
share our fundamental values; basing policy decisions on the
way the world is, not how we wish it would be; operating based
on an understanding and appreciation of both the importance and
the limits of U.S. leadership; and making sure U.S. commitments
are backed up with serious sense of purpose, and the resources
necessary to reassure partners.
The Obama administration was intermittent at best in its
adherence to these principles in Asia. And this inconsistency
was tantamount to abandonment for those who rely on American
strength, and those who seek to undermine it.
Asia's un-democratic leaders seem to understand
opportunities are created by the gap between rhetoric and
reality, and showed a consistent willingness to step into and
exploit that gap for their own gain.
Looking around the region, it is hard to argue that on
balance, there has been an improvement in terms of human rights
and democracy, the subject I have been asked to speak to on
today's hearing.
In particular, in the past 6 years, since the Obama
administration launched the rebalance, China's party state has
embarked on the most extensive campaign of repression since the
cultural revolution, and has firmly closed the door on any
prospect of political liberalization under CCP rule. Even in
the Obama administration's poster child for the pivot, Burma,
the Tatmadaw appears to be engaging in ethnic cleansing in
Rakhine state, while simultaneously intensifying attacks on
communities in Kachin and Shan states. Meanwhile, the Obama
administration, having given away all potential leverage by
prematurely lifting sanctions on the military, watches
helplessly as Aung San Suu Kyi struggles with an
unreconstructed Tatmadaw that has retained control over the key
levers of power in the country. And I want to note Mr. Chabot's
excellent work on Burma, and hope that that will continue going
forward.
As the Obama administration drops serious U.S. commitments
to support human rights and democracy across Asia in favor of
an amorphous people-to-people pillar in the rebalance, abusive
authoritarian regimes sought not only to normalize their
behavior toward their own citizens, but engaged in broader
efforts to normalize such abusive behavior within the
international system.
Both the U.S. and the U.N. system have utterly failed to
address the challenge of authoritarian rights abusing regimes
that are immune to criticism and international mechanisms. In
the case of China, the U.N. essentially has given up on its
human rights mechanisms, so it is little wonder China's
neighbors view U.N. criticism with thinly disguised disdain.
By failing to consistently and vigorously stand up for
human rights and liberal values in the Asia-Pacific, and within
the international system, the U.S. has created an environment
where authoritarians feel empowered to argue that their legal,
political, and moral perspectives are equally valid, or perhaps
even better choices for the countries of the region and beyond.
The idea that we can best support democracy and human rights in
Asia by not talking about them, or by casting our own values as
just one option among any number of other valid choices has
proven to be manifestly false.
Going forward, I would like to make some suggestions on how
we can craft a more realistic, yet also fundamentally
idealistic foreign policy toward the Asia-Pacific and broader
Indo-Pacific region. Such an approach would benefit not only
the U.S. interest over the long term, but would also support a
firmer foundation for regional peace and security.
We should start any deliberation on our policy choices from
the premise that our values are our interests. When faced with
competing policy choices, the one that adheres most closely to
our values should be weighted accordingly. I would also note
that free trade works best with free nations. Economic freedom
should be a two-way street, and that is impossible when one
partner is an authoritarian government. And many of the points
that Derek has raised relate directly to this premise.
Our alliances need to move beyond the hub and spokes system
to become truly networked in a way that revolves less around
the U.S., and is more based on the reality of regional peace
and security needs.
Diplomacy has got to stop meaning we pretend some
unpleasant situation will just go away on its own, or get
better if we ignore it, or use misleading euphemisms to discuss
it with our partners. The U.S. Foreign Service and our
governance and democracy assistance programs need root-and-
branch reforms to deal with this new reality.
Finally, I would add that we need to have Congress reassert
itself as a strong voice in support of human rights and
democratic values and U.S. foreign policy. Several recent
policy errors in Asia might have been avoided entirely if the
administration had treated Congress in a less highhanded
fashion, and genuinely consulted with its members and staff
before making policy decisions. Thank you very much.
[The prepared statement of Ms. Currie follows:]
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----------
Mr. Salmon. Thank you very much.
Mr. Lynn.
STATEMENT OF MR. BARRY C. LYNN, DIRECTOR, OPEN MARKETS PROGRAM,
NEW AMERICA
Mr. Lynn. Thank you, Chairman Salmon, and thank you to the
other members of the committee. I would also like to submit
written testimony.
Mr. Salmon. Without objection.
Mr. Lynn. The Obama administration's pivot to Asia was a
grave mistake. I say this not because I believe we can ignore
Chinese provocations in Asia; we cannot, either in the South
China Sea or the East China Sea or anywhere else. The pivot was
a mistake because it focused mainly on countering military
power with military power, but ignored the complex set of
threats posed by China's use of trade power. China is a
mercantilist nation that wields many political and economic
tools to concentrate control over industrial capacity. Chinese
leaders do so to provide jobs for their people, and to
concentrate more money, hence more power in their hands. They
do so also to be able to exert influence over nations that
depend on that capacity, including the United States.
Over the last 5 years the Obama administration did nothing
to address growing U.S. dependence on China for goods that
Americans need every day; things like drugs, chemicals and
electronics. On the contrary, the administration proposed a
trade deal, the TPP, that if approved, would only have shifted
certainly vital industrial capacity further into Chinese
control.
Extreme concentration in China of vital industrial capacity
exposes the United States to coercion by China, and may
actually increase the likelihood of conflict by tempting
Chinese leaders to take risks they would not otherwise take.
Extreme concentration of industrial capacity by creating
numerous single sources of supply, also raises the danger of
cascading industrial crashes, much like the ones that crippled
world production after the great Japanese earthquake of 2011.
Liberal trade has served U.S. interests in many ways since
the Second World War, but in recent years, the uncontrolled
shifting of jobs from the United States overseas has harmed
millions of Americans. During this period, our national trade
deficit has piled up dangerous levels of debt, and has provided
Chinese leaders with cash they can use to increase China's
influence in the world and to reduce America's. But to
understand the full extent of the danger posed the radical
shift in trade policy in the mid 1990s, we must look also at
the structure of supply chains. We should study what exactly is
made in China, and how much of any vital good comes from China.
Looking at supply chains is what allows us to map our
vulnerabilities in a time of conflict, and a way to judge
whether the pivot to Asia was well-designed.
Twenty years ago, the United States depended on China for
nothing that we needed day to day. But the U.S. embrace of WTO
postnational trade policy in the 1990s freed China, often in
alliance with large U.S. corporations to use trade power to
consolidate control over many assembly activities and
industrial components. This includes the basic ingredients for
some of the Nation's important drugs, including antibiotics and
some of the most vital inputs in our industrial food system
such as ascorbic acid.
Given that private corporations often run their supply
chains on a just-in-time basis in which goods are produced only
as fast as they are consumed, there are often no backup
supplies anywhere. The United States has long been in the
practice of providing trade sanctions to other nations to
achieve political ends. This includes, in recent years, North
Korea, Iran and Russia. These sanctions are often highly
effective. In 1956, the United States used trade sanctions to
force Britain and France to pull their military forces out of
Egypt after they attempted to seize the Suez Canal.
The extreme concentration of industrial capacities in China
give leaders in Beijing the ability to impose similar sanctions
on the United States in the event of an actual conflict, or
even in the run-up to a potential conflict. What would the
United States do in the event of such a cutoff of vital
supplies? Would we try to tough it out? Would we cede to
Chinese demands? Would we escalate to the use of cyber or
military power? How would the public react? In every case, we
have no idea what the answer might be. It appears that no
agency of the U.S. Government has studied, in any depth
whatsoever, the issue of U.S. industrial dependence on China.
Liberal U.S. trade policy in the half century to the mid
1990s helped provide the foundation for a period of
unprecedented peace, and prosperity, and stability in the
world. It is now clear that the extreme changes to U.S. trade
policy in the 1990s upset those balances, in large part, by
paralyzing the United States' ability to counter the
mercantilist policies of China, and thereby to prevent a
dangerous concentration of capacity, control, and power. Rather
than waste more time on the TPP, or to attempt to treat a trade
problem with military power, as we are largely doing with the
pivot, the U.S. Government must figure out how to lessen our
extreme and growing dependence on industrial capacity located
inside China in ways that would make our Nation, indeed, the
world as a whole, more politically and economically secure.
Thank you.
[The prepared statement of Mr. Lynn follows:]
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----------
Mr. Salmon. Thank you. When I first came to Congress in
1995, Warren Christopher was the Secretary of State. And I was
on this Foreign Affairs Committee, a brand new member, and
having done a lot of things in China and Taiwan, I'd been a
missionary for the Mormon Church in Taiwan, the same time Jon
Huntsman was, back in 1977 to 1979. So I remember asking the
question of Mr. Christopher, Secretary Christopher, what is our
policy toward China? And he said, well, it is strategic
ambiguity. I listened to that and I tried to understand it, and
I tried to understand it. And I guess they came up with the
idea, that we basically just say that if you do something, we
are not sure what we are going to do, but we will let you know
afterward. That never worked in any other relationship I've
ever had. I don't know why we think it works with China. But it
has been the policy of multiple administrations to practice
strategic ambiguity.
Dr. Ellings, you said that we needed more clarity. Where
can we be more clear on things? And has strategic ambiguity
served us well?
Mr. Ellings. I remember a Herblock cartoon when
Christopher--I am giving away, I guess, our mutual ages here--
but in any case, right after his first trip to China there was
a Herblock cartoon in which Christopher was sitting before the
President reporting, and his head was in his lap. China had
basically eaten his shorts. But in any case--yeah, you might
not be surprised, that I think we have a lot of specific things
to do. I would start, number one, I mean, our credibility is
everything. We need to rebalance truly, which means to end
sequestration and make the investments we need to make
appropriate responses to the challenges. We have not done a
strategic assessment that is realistic, and we need one.
Credibility, as I said, is everything. We have got to work
so hard with our allies, and win their unambiguous alignment
with us.
I think also, we have to do something once we do the
strategic assessment we--they are very specific things, UUVs,
UAVs, more subs. We have to invest in these things. Burden
sharing, frankly, has been raised by the President-elect; it is
not unreasonable. I think our allies understand their common
interest with us. I think as we define new things ahead,
those--the burden sharing can proceed. And number one of
anything else, I would put in THAAD, and anything else we need
with regard to North Korea, and simply tell China, We are going
to do this until you figure out that it is in your interest to
end your support of their nuclear program. Only China has that
capacity, and we have got to get THAAD in there and whatever
else. It is the first leverage we really have. And so I am a
huge, huge supporter of that. I can go on. Anyway, on the
military side, that is what I----
Mr. Salmon. I actually share your enthusiasm for that. And
one of my concerns is with some of the political problems that
President Park is facing in South Korea that might jeopardize
our deployment plans. I hope not; I hope this is something that
the new administration really pushes, because we have done
nothing to properly motivate China, who is the 800-pound
gorilla in those Six Party talks with North Korea. North Korea
has an overdependence on them for energy and food, and they
could make the difference, but they have been unwilling to so
far. And I think that motivates them in the right direction.
Mr. Ellings. I totally agree with your concern about the
situation domestically in South Korea is jeopardizing that
deployment. So we need a plan B. We need the deployment. If it
is not on the peninsula, then where is it going to be? It is
our only source of leverage, and frankly, we have to defend our
allies. We will not be credible. This is a real threat. It is
not theoretical; it's not down the road; it is the kind of
poster child of the failure of the pivot.
Mr. Salmon. Ms. Currie, you talked a little bit about human
rights. I remember when I first came to Congress, one of the
raging debates was every June, we had Jackson-Vanik, where we
would debate most favored trading status for China. And every
year, it was kind of the same thing. And I remember when we had
to push for PNTR, permanent normal trade relations with China.
I think I had a private debate with Mr. Rohrabacher, and I
remember saying to him that if we passed PNTR that because of
constructive engagement, we would see phenomenal improvements
in human rights and the like. I had just attended, not long
before that debate, a hand-over ceremony for Hong Kong, and I
had predicted that that would be a smooth transition, it really
would be one country, two systems. And Mr. Rohrabacher, I will
say to you right now, with egg all over my face, I was wrong.
Those changes didn't materialize, they did for a time, under
President Jiang Zemin, I think that he carried on a lot of the
visions of Deng Xiaoping, and I think that he moved in the
right direction. But the two presidents subsequent to him moved
back the other way and they increased their iron grip on the
people and reversed, I think, some very positive human rights
improvements.
And so I ask you, Ms. Currie, without putting Jackson-Vanik
back in place, I am not sure whether that is possible, how can
we do an adequate job focusing on the issues of Hong Kong and
their self-determination and human rights abuse and all the
other things we really care about; how can we do that
effectively?
Ms. Currie. I was a young congressional staffer during
those discussions, and staffed one of your colleagues,
Congressman John Porter, who joined you on that trip for the
hand-over and engaged in these frequent discussions with Mr.
Rohrabacher, and with you at that time. And there was a lot of
genuine soul searching, I think, on both sides. I think that
there was good faith belief on both sides, both against PNTR
and in favor of it. There were many people who genuinely
thought that their view on that was the way to improve the
situation in Hong Kong.
I have recently had a number of conversations with a friend
of mine, Jim Mann, who wrote a wonderful book about 10 years
ago called The China Fantasy, that kind of talked about how we
all wanted to believe that economic liberalization would bring
political liberalization in China. I think that it comports
with our values and with our ideas about how our own country is
set up, and we just kind of instinctively appeal to people.
Unfortunately, we then didn't follow up by doing any of the
things that could have actually made that a reality. And by--
and that the opposite has happened, that the economic
liberalization has strengthened the regime by giving it more
tools for oppression, made it more powerful and more
influential in the world. And now we have to deal with that
reality. But the tools actually remain essentially the same
going forward.
First of all, I think one of the--like I was saying before
about the pivot, one of the fundamental mistakes was--and my
colleagues sort of alluded to this here, that we tried to
compete in the region in areas that are strengths for Beijing
and relative weaknesses for us, for instance, on the economic
playing field, and trying to displace China as an economic
partner in the region somewhat. Whereas, you know, these things
may or may not--we can argue about the relative strength of the
U.S. and China and economics and military in the region. But
one place where we clearly have an advantage over Beijing is on
our values and our ideas. And yet, we abandoned that playing
field for the past 8 years; we just left it there and didn't do
anything.
What is remarkable when you travel around the region and
get outside of China, within China, I just have to kind of set
it on the side for now, but our ideals, even when we fall short
of them ourselves--I am talking about human rights and
democracy--are far more attractive to the people of the region
than Beijing's authoritarian ideals, which are only attractive
to other authoritarians. And when we stop talking about those
ideas, and we stop defending the international order, people
notice. It has an effect on them and their willingness to
defend those ideas also. And this goes to trade, it goes to
human rights, it goes to a whole host of issues that then make
the whole problems harder for us, and open more doors for
Beijing to have more influence in more countries in the region.
So I think that, kind of, as first principles, we have got
to get back to proudly saying, yes, the United States believes
in these ideas. And even when we don't always live up to our
ideals, they are still our ideals, and we are willing to defend
them and fight for them, not just rhetorically, but by other
means as necessary, and that is where the resources that Dr.
Ellings talked about come in, and being able to back up or
commitments to our allies, privileging relationships with
allies that share our values, privileging not just military
alliance relationships, but also trade relationships with those
who share our values, which then are also easier because we
have shared platforms for understanding how to get along with
each other, and trade with each other, and then backing those
up with real meaningful things, and having consequences on the
other side for those who don't share our values.
Mr. Salmon. Thank you very much. I recognize Mr. Bera.
Mr. Bera. Thank you, Mr. Chairman.
As I look back on the last 8 years, there are some areas
that I think have been pretty successful. Obviously, I am a
firm believer in the pivot to Asia. I do think we can look at
kind of the renewed vigor in the U.S.-India relationship as an
area of opportunity, not necessarily a straight shot, but
clearly where we are today compared to where we were 8 years
ago, but the opportunities. Some of this is on the Indian side
with the ascendancy of Prime Minister Modi, and some of the
reforms he is trying to make domestically. That is clearly an
area that I do think we have had some success. That said, it is
a region fraught with challenge. And I know many of us sit with
an open mind with the incoming administration, you know, and
are very open to how they will approach the region, but they
are going to have to hit the ground running. I mean, we have
talked a lot about China. We have touched on the complexity in
North Korea. The internal challenges that are facing Korea as
they address some of their political turbulence.
We look at a new administration in the Philippines. We
still got major unresolved issues in the South China Sea and
how to approach that from a position of strength. And that is
an area that I have disagreed with the administration on, I
think. It is much more difficult for us to resolve the South
China Sea today than had we approached it much more
aggressively 1 year, or 2 years ago. With that said, we are
where we are. And going forward, I think there are a couple of
things that we have to do and the panel has touched on the
importance of reassuring our allies about our commitment to the
region.
Our economic commitment, our diplomatic commitment, the
commitment of our military assets as well. I think it is very
important not to be ambiguous about our commitments to our
allies, but to be very clear that we are there with them.
We have to understand that it is going to be a shared
commitment, with countries with similar sets of democratic
values, you know, countries like Australia, New Zealand, et
cetera, that it won't be the United States in this commitment
by themselves. It will be a shared commitment.
We also have to be--you know, the TPP is where it is at. As
someone who supported the President's ability to go out and
negotiate the deal. We are where we are.
And there is a lot of rhetoric on the campaign trail on
both sides. I think we have to explain the benefits of opening
up global markets to our own domestic, you know, community
first, to our workers and make sure if we are negotiating these
deals and moving forward, that we are explaining the benefits
in job creation, that people are understanding that. And that
everyone, you know, from the frontline workers to the
shareholders are benefiting equally from, you know, opening up
these markets. But the reality is, we can't withdraw and have
an isolationist policy. These are the fastest growing markets
in the world.
On a fair playing field, I will put U.S. companies and U.S.
workers up against anyone. The criticism of prior deals and
perhaps even TPP is because we weren't always on a fair playing
field. And that was fine maybe in the 20th century when we
could be a bit more benevolent, we could, you know, allow
countries like Japan and others to rebuild. But we are in a
competitive global environment now. We have to make sure that
the deals we are negotiating are fair and balanced, not just
for the countries we are trading with, but for our own workers.
I have taken up a lot of my time without asking a question.
You know, maybe, Dr. Scissors, you talked about the danger
of having an isolationist trade policy. And maybe if you could
just touch on some that for our own domestic population, why
that would be a bad--this would be a bad time to withdraw from
the world.
Mr. Scissors. Well, I will try to do so quickly. I think--
and also because you touched on part of this, these are the
fastest growing economies in the world. The Philippines is
probably number one now. India, because of recent internal
steps is probably going to be number two. Vietnam is there as
well. Indonesia is a little lower, but it is also 250 million
people. That is a nice market.
If we want opportunities for our workers beyond the
American market, the American market is the most important in
the world, but if we want to add to that, the Asia-Pacific is
where it is at. And I think, you know, everybody on this
committee understands that.
So I think what you want to say is use some of the language
that people have used so far, which is to say 1 billion more
consumers. You have 350 million consumers in the U.S. You have
three times that many more that you could add, to give people
some idea of what is out there. But, and this is where we
haven't succeeded, couple that with the concrete steps we are
actually taking to take advantage of it.
I am picking on the Obama administration a little bit here,
because I am trying to make a larger point, which is when you
talk about markets and you talk about dynamism, you then don't
go back to talking about diplomacy and strategic gains. That
doesn't deliver gains to American workers. You have to say what
is in the agreement is not a rule that we make instead of
China. What is in the agreement is rules that open our markets
and get us the following benefits.
And I think what is missing and what might be easier, as we
discussed here and as has been discussed in the campaign, it
might be easier to do this bilaterally. It was a really
difficult undertaking the Obama administration went to bringing
such disparate countries together, Japan, Vietnam, Canada,
Peru. I mean, this is really hard. And so maybe the way to do
this both in terms of success, the solidity of the agreement
and the communication is to say, look, let's simplify it. This
is one country that is growing rapidly and has a lot of people;
there are a lot of opportunities for us, this is concretely how
we are going to do it.
I do not, as I said, fault the Obama administration at all
for trying TPP. From the country's standpoint, we need to learn
why it didn't work. Why both major presidential candidates
opposed it. And my response is, we couldn't deliver concrete
economic benefits. We do this bilaterally, we can't necessarily
have the giant benefits you are talking about, but step-by-
step, start with one bilateral agreement, add another. Who
wants to negotiate with us first.
As Kelley said, who are our best partners in terms of
values? I think we can go back and say, look, each of these
agreements are with good partners that have created
opportunities. Each step may be small, but we are heading
toward the Asia-Pacific being open, and all that potential
benefit that everyone here sees.
Mr. Salmon. Thank you.
Mr. Brooks.
Mr. Brooks. Thank you, Mr. Chairman. I am going to miss
you.
Mr. Salmon. I will miss you too.
Mr. Brooks. I hope things go well in Arizona.
Recently, President-elect Donald Trump had a telephone
conversation with President Tsai Ing-wen of Taiwan. And many in
the news media and diplomatic community went apoplectic. I
would like for you to, please, share your view on whether
Donald Trump's phone call with the Taiwan President was wise or
unwise, advanced or retreated the interests of America? And I
will just work my way across.
Dr. Ellings?
Mr. Ellings. Sure. I am very, very pleased to answer that
question. As you say, it has been, I think, basically a tempest
in a teapot. But, yeah, there has been a lot of hot air and so
on expended on this.
First of all, there are strategic as well as democratic
value reasons you might want to refurbish a relationship with
Taiwan. China has put tremendous pressure on Taiwan. It is not
in an enviable strategic position. At the same time, it has
developed a remarkable democracy.
I happened to be by the way, Chairman Salmon, also at Tsai
Ing-wen's inauguration. There are strategic realities that
strike fear in many Americans' hearts, but my view is, I think,
a sober one that this actually--this call to a still President-
elect Trump is strategically useful, justified. There is no
reason we can't have conversations while in the meantime China
can act so aggressively and feel impervious to these kinds of
things.
Mr. Brooks. All right. Thank you, Dr. Ellings.
And I am going to work around a little bit. Each of you
have about a minute. But the folks on my right haven't had much
time. So I am going to go to Mr. Lynn then Ms. Currie and to
Dr. Scissors.
Mr. Lynn?
Mr. Lynn. I basically agree that the President-elect
Trump's taking of that phone call was probably a good thing.
And, you know, one of the things that all of these nations, in
that region, have not been talking about but need to talk about
is the fact that all of their industrial systems are so
entirely interdependent. I mean, for the same reason that it is
dangerous for the United States to--for the Obama
administration to pretend that there might be a military
solution in the South China Sea or the East China Sea is just
as dangerous for the Chinese to believe that there is a
military solution, vis-a-vis Taiwan.
Any military action in that zone by the United States, by
the Japanese, by the Chinese, will create an immediate
disruption of supply systems on which we all depend, and will,
within a matter of days, seize up the entire world's industrial
system.
Mr. Brooks. Mr. Lynn, thank you for your insight. I am
trying to reserve some time for Ms. Currie and Dr. Scissors.
Ms. Currie.
Mr. Currie. Thank you. I think it was both the right thing
to do and a smart thing to do for the reasons that my
colleagues have indicated. And also because--you know, one of
the things that drives me the most crazy, as a former State
Department employee, is the tendency we have to use euphemisms
and construct these, you know, world scaffolds around what we
do that don't have any connection to reality.
And with a single phone call, President-elect Trump and
Tsai Ing-wen together--she had agency in this, which is another
thing that people seemed to completely miss, that she was the
other party on the other end of the phone call who made a
decision to do this as well. But, you know, this is--they kind
of blew that up a little bit. And that was very well done and
warranted, I think.
Mr. Brooks. Thank you.
Dr. Scissors?
Mr. Scissors. I will be brief. I don't really care about
the phone call. What I want to see is what U.S.-Taiwan
relations are going to look like in a Trump administration. If
the phone call says the Trump administration is going to be
more active in talking to Taiwan about issues in the South
China Sea, about arms sales, about what I would like to talk
about, which is improving the economic relationship, that is
fantastic, then it is a great idea.
If it is just something that occurred while he is still a
private citizen, and we don't act with the Taiwanese, then it
doesn't mean anything and it doesn't add up to anything. I
would even say, I am perfectly happy talking to the mainland
while we are talking to Taiwan. They want to be involved in the
conversation, fine. As long as the U.S. is talking to Taiwan
figuring out where we can cooperate more, that is what matters.
If this was the first step, great.
Mr. Brooks. All right. Thank you for your insight.
Mr. Salmon. Thank you.
Ms. Gabbard.
Ms. Gabbard. Thank you, Mr. Chairman.
Thank you all for being here.
I am going to keep my question brief, because I would like
to hear responses. But my question is about North Korea. I
represent Hawaii. We are in the middle of the Pacific and
within range of North Korea's intercontinental ballistic
missiles. And obviously, the continued progress that they make
in miniaturizing their nuclear weapons is deeply, deeply
concerning.
Everyone talks about how essential China is to the
denuclearization of North Korea, but very few people have any
concrete ideas on exactly how to get China to take action, to
actually change the dynamic here. So if each of you could just
comment briefly on that question and taking into account what
is happening on the peninsula and the relationship between the
peninsula and Japan and China and us.
Mr. Ellings. Shall I start?
Ms. Gabbard. Yes.
Mr. Ellings. Thank you so much. Well, you just kind of
asked me to talk about my favorite subject. I have been writing
and thinking about this literally for 30 years.
And so I think it boils down to this--by the way, I live in
Seattle. And Seattle also, in those concentric rings, has JBLM,
which are forces to reinforce the peninsula. The Bangor Trident
Missile Base, we are just like you, a number one target. So I
feel it personally.
My view, as I stated earlier, is that the clearest thing we
can do, in which the Chinese have obviously signaled they would
like us least to do, is get THADD into South Korea. And I would
put in a broader antimissile system combining Japan at sea and
on the peninsula. We expressed earlier concern that President
Park's difficulties put at risk our ability, perhaps, next year
to deploy THAAD there. That is a terrible development. I do
worry about that. So we have to have plan B and C here.
But we have got to do it. And I will tell you not having
learned from the INF issue and what we did in the early 1980s,
that is something I think we all need to study here. If we had
a robust antimissile system in northeast Asia, I think China
would do what is necessary to denuclearize the north.
Mr. Scissors. I don't mean to avoid your question, but it
is security, so I am going to yield to my colleagues.
Ms. Currie. I would add a couple of things. Go after the
palace economy more vigorously--we have not implemented all the
sanctions, the economic sanctions tools that we have in our
disposal to go after North Korea's palace economy and hold the
Chinese to account for their role in propping up the palace
economy that surrounds Kim Jong-un and the people around him,
and allows them to live in a lifestyle that is completely
attenuated from the way that the rest of the North Korean
people live.
So there are many things that we can do to make them more
uncomfortable and put pressure on the regime in that way. And
the Chinese don't like it, but, again, as Dr. Ellings said, we
need to just tell them, look, this is what we are going to do.
You aren't being helpful, and so we are taking these things
into our own hands.
And then the other thing that I would do is throw
everything we have diplomatically, politically that we can
behind the U.N.'s commission of inquiry on human rights in
North Korea, because that inquiry has gotten under the skin of
the Kim regime in a major way. They really don't like being
brought up in the U.N. on human rights charges, in this way,
and it really bothers them. And I don't think we have fully
explored the limits of how we can take advantage of that
process.
The Chinese also don't like having to defend them at the
U.N. and having to expend diplomatic capital on the North
Koreans at the U.N. on human rights.
Ms. Gabbard. Thank you.
Mr. Lynn. Just adding to what Ms. Currie said, is supply
lines matter. And one of the ways to exert pressure upon the
North Koreans is to really push the Chinese to become serious
about putting pressure on the North Koreans.
As we may remember in the run-up to the Iraq war, North
Korea was acting in an extremely belligerent way, and there was
a sentiment that they might have taken advantage of the focus
of the U.S. military in the Middle East to engage in some kind
of action in their area, and the Chinese cut off the supplies
of a number of goods into North Korea, and that brought the
North Koreans to heel.
Ms. Gabbard. Thank you.
Thank you, Mr. Chairman.
Mr. Ellings. I just wonder if I could just add something
here----
Ms. Gabbard. Sure.
Mr. Ellings [continuing]. That I think is really important?
I think no pressure directly on North Korea will work.
Direct pressure on North Korea, no matter how we have done it,
their regime requires the nuclear weapon. And so there is no
way direct pressure without pressure on China is going to work.
And China's interest--if we don't put enough pressure on
China, China's interests are in North Korea as a buffer, and as
North Korea as an irritant to us; it pins our troops down; it
keeps our attention. If there is a war, it is another front. So
North Korea is a core interest of China. And so what we have to
make clear to China is we understand it is a core interest, but
its nuclearization is our core interest.
Mr. Salmon. You know, it is interesting, they say that the
reason they are hesitant to jump in and do what needs to be
done is that it would destabilize North Korea, and there would
be this onslaught of refugees coming across the North Korean
border into China.
I think the real reason is that they fear a one Korea. They
fear a unified Korea, and they fear an increased U.S. presence
that is on the peninsula. So I think that is what the real
issues are. And so I think that the provocative answers that
have been given about motivating China are real, and they would
work.
One of the things I have been pushing for the last year is
the deployment of THAAD, and I think, as you said, Dr. Ellings,
that increasing that to possibly Japan as well and other
ballistic defense systems is absolutely imperative.
China is not going to care unless you make them care. And
they are not going to do it out of the goodness of their
hearts. They are only going to do it if they feel compelled to
do it, because not doing it costs more than doing it. That is
what the answer is.
Mr. Rohrabacher--oh, have I missed you? I am so sorry.
Mr. Perry. General Perry.
Mr. Perry. Thank you, Mr. Chairman. Doing, as always, a
fabulous job.
I am thinking about the conversation, initially, strategic
ambiguity. And I am just wondering what appears to be--what is
the President-elect's propensity for unpredictability. You
know, strategic ambiguity in the sense that it was described by
the chairman was essentially--we didn't know what the heck we
were doing. But when you want to be ambiguous, knowing that you
want to be that, is probably a strength, right?
So my question is, are there specific conditions that we
should articulate like a floor or ceiling with China? And then
remain ambiguous about some other things where maybe we
remain--we maintain some flexibility to get them to head where
we want to go? And I just want to--I would like to, actually,
start with you, Mr. Lynn.
What are your thoughts on that? Are there some specific
things that we should articulate, and what would they be?
Mr. Lynn. Well, one of the things that we absolutely want
to articulate is that we--to increase the security of both the
United States and China, to increase the security of all the
nations in the region and indeed of the world, we want to
reduce the number of cases in which all key components are
located in China. And that is going to require the cooperation
of the Chinese.
When you have all of the certain kind of chemical industry
built up in China, the Chinese can do a lot to prevent us from
moving any of that capacity abroad. We think of industrial
activities as something that moves around. That is not the
case. But it is in everybody's interest that industrial
capacity be much more widespread. It creates a resilient
system, and it means that when mistakes are made, as they will
inevitably be made in human society, bad things are less bad.
Mr. Perry. Ms. Currie.
Mr. Currie. Well, I will talk about something that we
continually articulate as kind of a floor in the region with
China, which is our statement that we will not accept China
changing the status quo on Taiwan or militarizing the South
China Sea by force or coercion. And we make these statements
all the time, but then we don't actually do anything to back
them up.
So I think we have floors. I think we have articulated them
over time, but the Chinese don't actually see them as floors.
It is not the problem that we don't have floors, it is just
that they are very holey and not very stable and not very
sturdy and not viewed by the Chinese as meaningful.
And so I think, again, being consistent, being public about
what these basic things are is one thing, but then having
meaningful consequences when the Chinese start to push on them
and stomp on them and try to poke holes in them and making sure
that we are doing things to push back.
And whether it is strengthening Taiwan's defenses,
deploying THAAD, being more active in our regional diplomacy
within ASEAN about the South China Sea issues, to push back on
the salami-slicing tactics, negotiating more bilateral
investment treaties, more bilateral trade agreements to
encircle China with more open economic freedom, any and all of
these things. You know, it is not an either/or we need to----
Mr. Perry. Do you think that our inability as maybe you
describe it--and so if I am describing it incorrectly let me
know--but our ability to stand firm on how we articulate the
barriers or the constraints that we have, is that a function of
our governance, our form of governance, that we say one thing
but we have a hard time--it requires legislation; it is not
something the executive could do unilaterally? Is that what the
deal is, or is that we talk big but then we don't follow
through?
Mr. Currie. I think it is the latter. We have all the
legislative tools in place. You have the Taiwan Relations Act,
you have a Tibet Policy Act; you have a raft of legislative
pieces over the history of the past 25 years.
Mr. Perry. So it would be your opinion that the executive
can make all the difference in this instance?
Ms. Currie. I think forceful leadership that is principled
and consistent and actually has a plan for when things don't
work out according to the fiction they have created in their
head----
Mr. Perry. Okay.
Dr. Scissors?
Mr. Scissors. Yes, I have two specific answers. And one is,
I think we have already provided the ceiling. America's
commitments to open markets have helped. It is not the main
thing, but it has helped raised hundreds of millions of Chinese
out of poverty. We have played our role in helping China's
development for the past 35 years. So I don't think whatever we
do going forward--anyone can doubt that the U.S. has tried to
accommodate China and done well for the Chinese people in our
policies to now. Where I would put the floor is to enforce
American law. The Chinese steal intellectual property. They are
breaking our law.
I will give you a small case but one that infuriated me. We
had a Federal court a few months ago say the Chinese vitamin C
makers can violate U.S. antitrust law, but they were told by
the Chinese Government to do it, so they have sovereign
immunity. That is outrageous. I am not a lawyer. I have no idea
about the legal foundations of the decision. I am saying as a
matter of policy, so the Chinese Government can tell Chinese
companies to break U.S. law and it is okay?
I think our credibility on accommodating China to this
point is extremely high. I can't imagine another country that
would have run the global economy the way we did that would
have helped the Chinese.
And the floor comes from, we have laws. You have to obey
them, and I don't want to hear excuses about the government
told you or not.
Mr. Perry. Quickly, Dr. Ellings, with the chair's
indulgence.
Mr. Ellings. Yeah, two quick comments. On the question of
IP theft, the Congress and the President signed a bill that
provided the power to respond with all the powers that the
President has to stop terrorists in using the banking system
and so on. The President has the power to stop IP thieves
overseas and has not done it, so we have no credibility.
Number two. This is really a kind of the most important, I
think, strategic point to make. Ambiguity is never what you
want to have in a strategic situation, ever, unless you are
forced into it out of weakness.
And so what my concern is, since we have not decided on a
military strategy in Asia, we have not figured out what, in my
view is, a plan to show unambiguously that with our allies we
can win a battle in the commons without striking China
directly, that is credible. If we have to strike China
directly, then we are raising the specter of them striking back
at our homeland. So we need unambiguous capacity to win over
the commons, and that is the critical strategic issue facing us
today.
Mr. Perry. Thank you, Mr. Chair.
Mr. Salmon. Thank you.
Mr. Rohrabacher.
Mr. Rohrabacher. This ambiguity stuff, I will tell you
that--let's face it, when you talk about ambiguity, what they
really mean is they don't know what the hell they are going to
do. And it is not we don't know what our reaction are or we
have a reaction that we don't want the enemy to know. We don't
know.
I have been saying that for a number of years, and no one
has ever come forward and say, well, let me tell you the secret
plan. No one has ever done that.
It is fitting from the last hearing of this subcommittee
that we note one thing, that we have been talking about the
Pacific today and very little reference has been made to Japan.
And Japan is the most important player in the region. And
Japan, if there is going to be peace and prosperity, the United
States has got to maintain its incredibly positive relation
with Japan. And let us not end this hearing without reaffirming
that because--and let me just note, and how could we actually
send messages, then, in terms of China or North Korea? Well, I
bet if we decided to aggressively and publicly support the
rearming of Japan and the reintroducing of the Japanese Navy
into the Pacific rather than putting that entire burden on the
American taxpayers, I think there would be a message there, and
it would be a message they would pay attention to.
So basically, perhaps as well, when the Chinese start
stealing all of our technology, maybe then we could go to Japan
and have a very open and--how do you say--mutually beneficial
treaty that would then show that these other people are being
left out because the Japanese are playing honestly with us now
and are trying their very best to be good friends. So
recognizing the role of Japan, I think, is essential when we
try to plot out what is going on in the future.
Mr. Scissors, I certainly agree with you totally about the
TPP. And let me just ask you whether or not you have looked at
the patent section of the TPP? I was told over and, again, oh,
no, there is nothing in there that would change the patent law
of the United States.
Is it still in there, the provision that eventually I saw
there, that said that we will endeavor to change our patent
law, which right now means that when an inventor files for a
patent, that patent is secret, until that--that patent
application is secret until it is issued, until the patent is
issued?
The TPP that I read said we will endeavor to change that
rule, and after 18 months, we are going to publish for the
whole world to see our patent applications even before the
patent is granted, which I would label the Steal American
Technologies Proposal. Is it still in there?
Mr. Scissors. Well, so--the answer--there is an overarching
answer, which is the Congress can always override our trade
agreements. There is a clause in all of our trade agreements
that this will not infringe on the Congress' ability.
Now, what you are--I think this is still a real issue. If
the default changes, if the Congress must do something to
change American law to a certain area instead of just do
nothing, that has an impact on the U.S.
I think the big issue in data protection is most of our
partners in the TPP and around the world don't protect data in
exactly the way you are talking about, the way we would like,
and the TPP doesn't solve that problem.
Mr. Rohrabacher. Okay.
Mr. Scissors. And I don't want it to set a precedent of not
solving the problem going forward.
Mr. Rohrabacher. Okay. Well, let me accept that. But let me
also accept that anybody--because I fought--as my colleagues
know, I have fought these efforts by multinational U.S.
corporations to change the patent law for the last 25 years.
And one of the first things, fights, I was in was to make sure
American inventors wouldn't have to publish their patent
applications until they got their patent issued. And we won
that here, and I see no reason for it to be in the TPP
whatsoever.
In terms of what we need to do in terms of China and such--
and thank you very much for noting that over these years I have
actually been very aggressive in talking about predicting what
would happen is if we would treat China as if it was any other
democratic state.
Japan has a great democracy. They protect people's rights.
China doesn't do any of that. But, yet, at times we end up with
trade policies and treating China better than we do Japan. How
ridiculous is that? And what has it resulted? It has resulted
in--because, again, others were making the argument, and thank
you for acknowledging that, that if we just really treat China
well, they are going to come out and be friendly to us, and
they are going to become liberals. I call that the hug-a-Nazi-
make-a-liberal theory, which has been disproven over and over
again.
So I think that what we are doing now is we have to be very
realistic. I think we have a new President that is basically
not going to be seen as someone--as a faint-hearted leader.
This is not what Donald Trump is going to be. He is going to be
a strong leader. He is also going to appreciate friends. It is
little simple things like that. And like, if it is not in the
interest of the American people specifically, I am not going to
do it. These are simple principles but, basically, they are
pragmatic moves by a person of principle and of courage as
well. So I am actually very optimistic.
I remember when everybody went crazy over this Taiwan phone
call. I was saying, they are sending the exact message to
Beijing that we want to send them. We are no longer a bunch of
pushovers here. We have people--we have a strong leader, and we
are going to make sure the world is a safer place, and that the
gangsters and dictators of this world better understand that.
And so with that said, one of the other things that has
made this a safer world is the hard work of people like you,
Mr. Chairman. And we are all very grateful. And I am very
pleased now to be the last witness before you take off. We
started well over 20 years ago. And I don't know how much
longer I am going to be here, I don't know where I am going to
be, but I may end up surfing in California, just drinking
tequila for the rest of my life, who knows. But the fact is the
two of us started out a long time ago, and you have done a
great job for our country. And I know this isn't the end of it.
This is the end of this phase of that.
So thank you very much. God bless you. There we go.
Mr. Salmon. Well, let me just say that in many ways, this
last hearing for me was very cathartic. I kind of started out
my China experience as a missionary in 1977 to Taiwan. And I
was there for 2 years. I was there when Jimmy Carter severed
diplomatic ties with Taiwan, and I remember the reaction of the
people there.
I remember my heart being broken at the time, because I
grew to love and respect the people of Taiwan so very much. And
in the time since then, they have gone from an autocratic
regime to a thriving democracy. At the time it was Chiang Kai-
shek's son that was the president of Taiwan, and there weren't
freely held elections. Since that time, there have been--become
one of the more robust democracies in the entire world.
And I was there at the swearing in for Lee Ten-hui, and I
remember at the time China lobbying missiles in the Taiwan
strait. With our policy of strategic ambiguity, it was
frustrating. It was very, very frustrating. But to be able to
have a panel of experts such as yourself sit there and talk
about credible, thoughtful solutions to moving forward and
making that region of the world a prosperous place and a
unified place was very cathartic for me. So I thank you from
the bottom of my heart.
This committee hearing was planned long before the infamous
phone call over the weekend. But to hear virtually everybody on
the panel say it was a good idea, it was a good thing, or it
can be a good thing if the policy moves in the right direction,
I think is a good message. And I hope that the press corps and
this country is picking up on it, because I don't think there
are any more talented people in their expertise on China, in
fact, probably most are far beneath your realm.
So thank you for your great ideas and your thoughts and
your comments, and I greatly appreciate it.
And with that, this committee is now adjourned.
[Whereupon, at 3:30 p.m., the subcommittee was adjourned.]
A P P E N D I X
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