[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
THE U.S. REBALANCE IN EAST ASIA:
BUDGET PRIORITIES FOR FY 2016
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ASIA AND THE PACIFIC
OF THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
APRIL 23, 2015
__________
Serial No. 114-35
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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
TOM EMMER, Minnesota
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
The Honorable Daniel R. Russel, Assistant Secretary, Bureau of
East Asian and Pacific Affairs, U.S. Department of State....... 5
The Honorable Jonathan Stivers, Assistant Administrator, Bureau
for Asia, U.S. Agency for International Development............ 17
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
The Honorable Daniel R. Russel: Prepared statement............... 7
The Honorable Jonathan Stivers: Prepared statement............... 19
APPENDIX
Hearing notice................................................... 38
Hearing minutes.................................................. 39
The Honorable Alan S. Lowenthal, a Representative in Congress
from the State of California: Material submitted for the record 40
THE U.S. REBALANCE IN EAST ASIA:
BUDGET PRIORITIES FOR FY 2016
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THURSDAY, APRIL 23, 2015
House of Representatives,
Subcommittee on Asia and the Pacific,
Committee on Foreign Affairs,
Washington, DC.
The subcommittee met, pursuant to notice, at 1:08 p.m., in
room 2172, Rayburn House Office Building, Hon. Matt Salmon
(chairman of the subcommittee) presiding.
Mr. Salmon. Good afternoon. The subcommittee will come to
order.
I would like to thank our distinguished witnesses,
Assistant Secretary of State Daniel Russel and Assistant
Administrator for USAID Jonathan Stivers, for being here this
afternoon.
We called this hearing to assess U.S. foreign assistance to
East Asia and the Pacific for Fiscal Year 2016. This is a
critical topic because it is clear that the future of the
United States is inextricably linked with East Asia.
The region encompasses many of the greatest opportunities
for our country. What remains to be seen is what shape its
future will take because some of our greatest strategic
challenges also come from East Asia. For example, the United
States should assist in the peaceful resolution of maritime
disputes and military buildup in the South China Sea or we risk
tensions erupting into kinetic conflict.
The United States must engage in new trading relationship
with burgeoning regional powers in Asia through the Trans-
Pacific Partnership or we risk markets could remain restricted
to our businesses. The United States must retain its leading
role in ensuring the peaceful sharing of land, sea, air, and
cyberspace or we risk paving the way for less savory
alternatives, such as the dominance of authoritarian Chinese
rules and norms.
As a Pacific power, the United States must seek positive
outcomes for these challenges and others. We also need to
balance these challenges abroad with our financial constraints
at home, which will require allocating U.S. funds efficiently
and effectively.
The administration initially proposed a rebalanced Asia as
a centerpiece of its foreign policy. However, the follow-
through we have seen on the rebalance or the pivot has not
reached its full potential. Last week I spoke at an event with
Senator McCain, and he observed that we had not yet truly
pivoted. I agree.
The attention given to East Asia and the Pacific by the
administration does not seem to be indicative of a concerted
effort. In Fiscal Year 2015, the East Asia Bureau's budget is
the second smallest of any of the State's regional bureaus.
If we are ever to truly rebalance, the effective allocation
of foreign aid for the region, rather than the sheer amount we
spend, must be the critical factor for our foreign aid spending
in the Asia Pacific. I am eager to hear from our distinguished
witnesses today about their respective efforts on this issue.
In China, we are supporting sustainable development,
environmental conservation, and cultural preservation
initiatives in Tibetan areas as well as HIV/AIDS programs,
international narcotics control and law enforcement, and
democracy programs. Over the last few years, we have seen
reduced funding for democracy, human rights, and rule of law
programs, which I am concerned about because of increased
levels of repression from the Xi administration, which puts at
risk our efforts in these areas. The controls and limits on the
freedom of expression have indicated that the Chinese
Government intends to rule by law rather than uphold the rule
of law.
Moving to Southeast Asia, I have concerns about countries
in the Lower Mekong region, which includes Burma. Cambodia,
Laos, Thailand, and Vietnam. I see that this year's budget
request for the Lower Mekong Initiative is nearly 20 percent
lower than last year's. This broad initiative supports aid
programs and education, the environment, health, food security,
and infrastructure.
And I would be very interested to hear the reasoning behind
its deemphasis in this year's budget. I am particularly
interested to hear the witnesses' views on whether this
reduction will constrain the U.S. presence in the Lower Mekong,
especially now, in light of China's aggressive infrastructure
investments in the region and the U.S.'s exploration of closer
relations with nations such as Vietnam.
This year's budget requests reflect an increase and
involvement with Vietnam, which is a forward-looking decision.
Though our current efforts for Vietnam are still focused on
disease control and development, we are also working toward the
U.S.-Vietnam relationship of the future by helping to improve
governance, strengthen civil society, improve human rights
conditions, and to promote Vietnam's involvement in the TPP.
Our aim should be continuing to support Vietnam's
transformation to become a more responsible and inclusive
partner. I look forward to discussing these priorities with
Vietnam when I travel to the region in just a couple of weeks.
I am pleased to see that this year's budget request places
significant emphasis on enhancing the defense capabilities of
Indonesia, Vietnam, and the Philippines through foreign
military financing as well as training in anti-terror programs.
We have had longstanding and productive counterterror
cooperation with Indonesia, and helping the world's largest
Muslim-majority nation to deal with radicalism should continue
to be a top priority. Vietnam and the Philippines, as claimants
in the South China Sea, face heightened risk of state-to-state
conflict due to China's aggressive island-building in disputed
waters. So the security emphasis we see for these two nations
in this year's request is welcome, also.
President Reagan once said, ``We can't help everyone, but
we can help someone.'' Our mission here today is to hold a
dialogue about which ``someones'' to help. And it is a truly
exciting and daunting time to have these kinds of conversations
because the East Asia Pacific presents colossal opportunities
and vexing challenges. I give my sincere thanks to my
colleagues today and our witnesses for joining me in this
conversation today.
And I turn the time over to Mr. Lowenthal for any opening
statements he might have.
Mr. Lowenthal. Thank you, Mr. Chairman.
And thank you, witnesses, for joining us today.
As you have just heard, we are at a critical junction for
U.S. foreign policy in Asia. And I look forward to hearing how
the United States can advance our security interests, our
quality of life and our human rights, and promote human rights
and democracy in the region.
With the ongoing negotiations on the Trans-Pacific
Partnership, there is no better time to have an open and frank
discussion about U.S. priorities in Asia. I believe that the
United States can play a key positive role in Asia by promoting
universal ideals of human rights.
Cambodia, a country with a long and bumpy and often winding
road to democracy, can benefit greatly from the United States'
assistance in building democratic institutions. In Vietnam, an
autocratic, authoritarian regime must be made to improve its
human rights record.
I would also like to highlight the challenges posed to the
United States' security interest by the, quote, deg.
``threat multiplier of climate change and rising sea levels,
which will disproportionately affect over 1 billion people who
live along the coast in this region, many of whom depend upon
the rivers, the estuaries, and the oceans for their
livelihood.''
As the United States seeks to build international consensus
to limit carbon emissions, we must also work with countries in
the region to prepare for an already changing climate.
Thank you, Mr. Chair. And I yield back.
Mr. Salmon. Thank you, Mr. Lowenthal. The Chair yields to
Mr. Rohrabacher.
Mr. Rohrabacher. Thank you very much, Mr. Chairman.
I have been around here for about 28 years now, and I have
always understood, being a Californian, that Asia plays a
significant role in the well-being of the people of the United
States of America. If we don't have good policy toward Japan
and China and the Philippines, Vietnam, Korea, that region of
the world, we will not prosper, nor will we be secure.
Those of us, as I say, in California know more about that.
And I served with Ronald Reagan in the White House, and he
certainly understood that. Today, however, there are serious
challenges, but they are over the horizon. They have yet to
come into view.
And I would suggest that the emergence of China as such a
powerful entity and a China that has had absolutely no
political reform--they have had lots of economic reform and
they have--people say, ``Oh, no. They are having all this
reform.''
No. They are not having any reform as long as they maintain
that the government has total control over the political
process. There are no opposition political parties there.
People are not permitted to have private newspapers that
criticize the government. They have hundreds of thousands of
people--or 100,000 people tracking down anyone on the Internet
that criticizes the basic nature of their system. And this is a
monstrous threat that is just over the horizon.
Let me note for my friends who are so aggressively
attacking Mr. Putin in Russia and their shortcomings in Russia,
which there are many, there have been numerous reforms in
Russia compared to China. Yet, we continue with a hostile
attitude toward Russia and more of an open attitude toward
China. So I am looking at that very closely.
And one thing that gives me heart that we will be able to
confront any emerging threat in the Pacific is that Japan now
is moving forward to basically step into its rightful role as a
major power in the Pacific and Asia. We have had for far too
long the stigma of World War II in which the Japanese were
totally wrong and committed some monstrous acts, just like the
Germans were totally wrong and committed monstrous acts.
But we forgave the Germans a long time ago. And we now have
the Germans actually involved with peace efforts in Ukraine.
They are sort of in charge of that. Well, Japan is ready to
step up into that role in Asia and the Pacific. And the United
States needs to have a strong partnership.
Next week we have President Abe coming to visit, to do a
joint session of Congress. I think this is a good way to
inaugurate a new era of relations between Japan and the United
States and, hopefully, a new era of security and a new era of
peace and prosperity in the Asia-Pacific region.
Thank you, Mr. Chairman, for holding this hearing today.
Mr. Salmon. Thank you.
Would you care to make some comments, Mr. Sherman? Any
opening comments?
Mr. Sherman. Just a few.
First, there is some confusion on the floor of the House as
to when I will be recognized to do a special order, this being
the 100th anniversary of the Armenian genocide. And so I will
need to balance my responsibilities here with that special
order.
With regard to these hearings, I will try to be brief,
showing up late.
And I do want to point out, Mr. Russel, that I hope that
you would be with others at State and the intel community,
giving our subcommittee and, perhaps, the Terrorism,
Nonproliferation, and Trade Subcommittee a classified briefing
on the China 123 Agreement that the administration has set
forth before us.
I would urge members and those staff members that have
classified clearances to go see the reports and classified
information on this and particularly focus on two things,
first, whether China is doing a robust or even adequate job on
making sure that its private and quasi-private entities are
adhering to nonproliferation standards.
And, second, I urge members and those staffers with
security clearance to focus on whether China is using nuclear
technology which they promised would be used only for civilian
purposes for military purposes. So I look forward to looking at
that issue.
As to the panoply of issues that we will deal with at this
hearing, I think other opening statements have covered that.
There is no more important region in the world for the United
States than Asia, which is why we have all chosen to serve
under the leadership of our chairman on this subcommittee.
I yield back.
Mr. Salmon. Thank you.
We thank the State Department and USAID for our
knowledgeable witnesses this afternoon.
Assistant Secretary Russel joins us from the State
Department's Bureau of East Asian and Pacific Affairs, and we
are grateful to Assistant Administrator Stivers of USAID's
Bureau for Asia for returning as this his second time
testifying before the subcommittee.
And, without objection, the witnesses' full prepared
statement will be part of the record. And members will have 5
calendar days to submit statements, questions, and extraneous
materials for the record.
And, with that, Mr. Russel, I will turn to you first.
STATEMENT OF THE HONORABLE DANIEL R. RUSSEL, ASSISTANT
SECRETARY, BUREAU OF EAST ASIAN AND PACIFIC AFFAIRS, U.S.
DEPARTMENT OF STATE
Mr. Russel. Thank you very much, Mr. Chairman, and Ranking
Member Sherman, members of the subcommittee. And thank you in
particular for the committee's support of our work with the
East Asia-Pacific region and for the opportunity also to
testify today about President Obama's Fiscal Year 2016 budget
request. And I am pleased, of course, to be here with my
colleague from USAID, John Stivers.
As you pointed out, Mr. Chairman, in your opening remarks,
our strategy toward the region reflects the fact that the U.S.,
as a Pacific power and as a trading Nation, finds the Asia-
Pacific region hugely consequential to our interest. It is
consequential for our security, for our economy, and its
importance will only grow.
Over the last 6 years, the administration's rebalance
policy has established what I would call a new normal. It is a
pattern of relations that is marked, first, by sustained
engagement with the region by the President, by the Secretary
of State, other Cabinet members in the Government and, second,
marked by an unprecedented and extensive collaboration with our
Asian allies, with our partners, on a full range of regional
and global issues that face us.
And the results of this policy and the benefits to the
people of the United States are very clear. One, we are safer.
We are safer because our alliances in the region, especially
with Japan and South Korea, the Philippines, and Australia,
have never been stronger. And that is shown by updated defense
guidelines, by increased host nation support, by rotational
force agreements. And we have also built closer security
relationships with other new partners and longstanding
partners, like Singapore or New Zealand.
Second, our economy benefits. Since 2009, U.S. exports to
East Asia are up about 23 percent and we are nearing conclusion
of the Trans-Pacific Partnership, TPP, agreement. This is a
trade agreement that also has unprecedented protections for
workers, for the environment, and the digital economy. We
welcome warmly the introduction of bipartisan, bicameral
legislation for trade promotion authority, which will help us
complete this agreement.
Third, Mr. Chairman, we are promoting stability in the
region. Our deeper engagement with China has helped our two
Governments to make progress on areas of common interest, like
climate and bilateral investment, helped us to calm tensions
with the military-to-military dialogue that we have
established. It facilitates the exchange of ideas and of
commerce by extending student visas and business visas while
always standing up for human rights, standing up for
international law, standing up for American workers and
businesses. And throughout the region, our commitment to
universal values is key to the strength of the American brand.
Fourth, I mention our work to strengthen regional
institutions and organizations, like APEC, like ASEAN, like the
East Asia Summit. This supports economic growth and also helps
us manage complex disputes like those in the South China Sea,
and our engagement with nations like Indonesia, Malaysia,
Vietnam, and Burma position us to participate in the dynamic
Southeast Asia area, a youthful area with a fast-growing middle
class that already numbers in the hundreds of millions.
The $1.4 billion budget for East Asia and the Pacific in
2016 helps us build on these accomplishments. Our requested
increase of $75.4 million, which is 6 percent over 2014, will
allow us to maintain a robust presence as a preeminent trade
and investment partner, a security guarantor, a champion of
democracy, development in good governance.
And the $845 million for foreign assistance sustains and
expands our funding for the region in areas such as regional
security cooperation, inclusive economic growth and trade,
democracy, regional institutions, and war legacies in Southeast
Asia and the Pacific.
I would add, Mr. Chairman, that 2015 is a very big year for
the U.S. in the region. We have got anniversaries, the 70th
anniversary of World War II, 50th anniversary of Singapore's
independence, 50th anniversary of normalization between Japan
and Korea, 20 years since normalization with Vietnam. The ASEAN
economic community will be launched this year, a step forward
in regional integration. And four Asian leaders will visit the
White House, beginning, as you mentioned, with Japanese Prime
Minister Abe next week.
We have a lot to discuss. And I am happy to take your
questions once my colleague has made his statement. Thank you.
[The prepared statement of Mr. Russel follows:]
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Mr. Salmon. Thank you.
Mr. Stivers.
STATEMENT OF THE HONORABLE JONATHAN STIVERS, ASSISTANT
ADMINISTRATOR, BUREAU FOR ASIA, U.S. AGENCY FOR INTERNATIONAL
DEVELOPMENT
Mr. Stivers. Chairman Salmon, Ranking Member Sherman,
distinguished members of the subcommittee, thank you for the
invitation to testify on the role of USAID in advancing our
foreign policy goals in the East Asia and Pacific region.
It is an honor to appear here before the committee again.
Having worked in the House of Representatives for almost two
decades, this side of the Capitol always feels like home to me.
And it is also a pleasure to be here alongside my colleague,
Assistant Secretary Daniel Russel.
The President's budget request of $845.6 million for the
East Asia-Pacific region represents an 8-percent increase over
Fiscal Year 2014, laying the foundation for strengthening our
relationships in Asia.
It is an exciting and pivotal time for U.S. policy in Asia.
Hundreds of millions have been lifted out of poverty, and
economic growth is strong. Yet, the region still has the bulk
of the world's poor; 70 percent of the world's malnourished
children; a majority of all natural disasters occur in this
region; and a host of other development challenges related to
governance, human rights, trafficking, and gender empowerment.
President Obama's Asia-Pacific Rebalance policy recognizes
that our future is inextricably tied to this region. In Asia,
we are working through three primary approaches to implement
USAID's mission to end extreme poverty and promote resilient
democratic societies, while also advancing our own security and
prosperity.
First, we are institutionalizing USAID's new model of
development, which leverages the private sector, innovation,
and regional approaches to do more with less. In the last 5
years, USAID has moved from just 8 percent of its resources
programmed for this model, which leverages the private sector,
to 40 percent.
Second, through the Presidential initiatives on Global
Health, Feed the Future, and Climate Change, USAID is helping
to achieve historic results that improve health, fight disease,
increase food security, and help communities manage a changing
environment.
Third, USAID is promoting democratic governance and
empowering reformers. Solutions to challenges will ultimately
come from the people of the region, and our best chance of
promoting democratic change and human rights is to empower the
reformers. For this reason, this budget request includes
increases in funding for democratic governance and human rights
for almost every country in the region, representing the
administration's desire to robustly fund such programs.
Next, I will delve deeper into select countries. In Burma,
this is a pivotal year with national elections scheduled for
November. At the core of our efforts is our support for civil
society organizations that are working to hold the government
accountable and to help those resisting discrimination and
violence.
USAID is helping prepare for the elections by building the
capacity of the election commission, training domestic election
observers, supporting voter registration and education, and
strengthening the capacity of political parties. In Rakhine
State, USAID continues to support humanitarian assistance to
the Rohingya population. This is a dynamic period in Burma and,
as it progresses, we will be reassessing the nature of Burma's
needs in close consultation with Congress.
In Cambodia, promoting democratic governance and human
rights continues to be our highest priority. Civil society,
while not fully respected by the government, has grown in
vibrancy and strength in recent years, thanks in part to USAID
assistance. In health, USAID has helped Cambodia meet its
Millennium Development Goals on child and maternal mortality
ahead of schedule. The country has set an ambitious goal of a
zero incidence rate for HIV/AIDS by 2020. To combat human
trafficking in Cambodia, technology developed by USAID partners
is raising awareness of safe migration to reduce the number of
victims and prevent trafficking.
Indonesia is a democratic success story, but there are
major governance challenges. USAID is partnering to support the
Anti-Corruption Commission, strengthen the judicial system, and
promote Indonesian civil society. USAID also partners with
Indonesia to protect and manage ocean and coastal resources.
USAID has helped secure a commitment by the world's leading
palm oil producers to transition to sustainable production that
breaks the link with deforestation.
In the Philippines, our Partnership for Growth initiative
promotes economic growth and good governance. It has
contributed to the Philippines becoming one of the fastest
growing markets for U.S. food and farm products. Since Typhoon
Haiyan struck, we have strengthened our partnership to mitigate
the risk and impacts of natural disasters and rebuild typhoon-
affected communities. Lack of formal access to land ownership
is a key cause of poverty and a driver of conflict. Land reform
is a USAID priority and we continue to work to improve the
regulatory environment and streamline the land registration
process.
In Vietnam, USAID's Governance for Inclusive Growth program
provides technical assistance to improve compliance with trade
agreements, rule of law, and improve our access to Vietnam's
growing market for U.S. exports. In addition, USAID is focused
on addressing war legacies, health and disabilities, and has
reduced susceptibility to climate change and natural disasters.
Mr. Chairman and members of the committee, the future
development and growth of the East Asia and Pacific region is
ever more important to our own future. I appreciate the
opportunity to testify today, and I look forward to hearing
your thoughts and any questions.
[The prepared statement of Mr. Stivers follows:]
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Mr. Salmon. Thank you.
Now time for member questions. I will start it off.
I am extremely worried that the existing model of U.S.
funding for programs in China is going to be impossible to
sustain because the recipients of the funds for China
predominately have been U.S.-based NGOs and universities.
However, China's National People's Congress is moving ahead
with legislation right now called the Overseas NGO
Administration Law. Though subject to typically opaque
procedures, it seems that this law will block virtually all
foreign funding in Chinese civil society and hamstring NGOs
operating on the Chinese mainland.
How could this law affect State's activities in greater
China, including democracy, human rights, rule of law? And how
will State approach China about current deliberation on this
legislation?
Mr. Russel.
Mr. Russel. Thank you, Mr. Chairman.
Human rights and universal rights--not American values, but
universal rights--is a major element of our ongoing dialog with
China. In that connection, we miss no opportunity to underscore
the importance that we place not only as Americans, but in our
partnership and our bilateral relationship with China, on the
vitality and the ability of civil society to operate freely and
to act.
We have, from President Obama and Vice President Biden on
down, repeatedly made the point directly to China's leadership
that NGOs, that civil society, that the free exchange of ideas,
and the ability of citizens to engage and participate in
political life of the nation is a critical element to
sustainable economic growth.
We have made the point that, for China to avoid the middle
income trap and to move from a manufacturing economy to an
information economy, which is what the 21st century requires,
it is essential that they allow groups to operate, including
and especially NGOs, both foreign and domestic. This is an
important part of our dialogue.
In terms of funding----
Mr. Salmon. Are we communicating that pretty robustly with
our counterparts in China?
Mr. Russel. Yes. I have been in meeting after meeting, as I
mentioned, with the President, the Vice President, and the
Secretary of State, in which we have emphasized that point. I
myself have met with Chinese NGOs during my visits to China.
There are areas where the Chinese authorities allow them to
operate, but there are constraints. And we believe strongly
that the direction that China would be well advised to move in
is in loosening, not tightening, those constraints.
In terms of funding, I will defer to my colleague, Mr.
Stivers. The bulk, though, of the programs that we support are
aimed specifically at the communities in Tibet as part of our
effort to sustain the linguistic, religious, and cultural
traditions there.
Mr. Salmon. If they do pass this law and it becomes
imminently more difficult to go through NGOs and universities,
do we have a Plan B?
Mr. Russel. Well, we are in discussion. We looked seriously
at that set of issues. We want to ensure that Chinese
university students and groups, including NGOs, continue to
have the opportunity to visit the United States, to study in
the United States, and that we, as well as international NGOs,
can operate to the benefit of the Chinese people as well as the
international community.
Mr. Stivers. Thank you. Thank you, Assistant Secretary.
I just want to clear up, in terms of USAID's perspective,
there is no funding in this budget request for the Chinese
Government or that would benefit the Chinese Government.
Certainly they can fund their own development programs.
The funding in this request focuses on Tibetan communities,
one of the most vulnerable and repressed populations in the
world. And this committee and you, Mr. Chairman, and Mr.
Sherman and Mr. Rohrabacher have really been leaders on that
over the years. And I worked a bit on that when I was a staffer
in Congress, in terms of that assistance.
There is a small amount of health funding that is part of
our regional funding, which does affect southern China. But the
funding in this request is for the Tibetan community in the
Tibetan Plateau.
Mr. Salmon. Thank you.
I am going to run out of time. But I do have one other
question, and it relates to the situation in Hong Kong.
The situation in Hong Kong's Umbrella Movement in the pro-
democracy protests of 2014 have evoked worldwide sympathy, but
failed to gain true universal suffrage for the Chief Executive
elections.
I was there for the hand-over ceremony. I remember all the
promises that were made about one country, two systems, and it
is not materializing as it was promised it would.
What are we doing with the administration?With State? What
are we doing to try to make some headway on that issue? I am
very, very fearful that it is going to get more dicey before it
gets better.
Mr. Russel. Mr. Chairman, I have visited Hong Kong. I have
met with senior officials there. We have a very active consul
general, and we engage both in the mainland and Beijing and
directly in Hong Kong with the authorities in all of the
political parties and protagonists as well as the business
community.
We have made it clear to the Chinese authorities that the
international community and the United States expect them to
honor their commitments under the basic agreement. We have made
clear that the introduction of universal suffrage is a key
element to living up to the promise of one country, two
systems.
And we have also underscored that the role that Hong Kong
plays in the Chinese as well as the international economic
community is a function of its tradition of openness and
respect for the rule of law. That is a central tenet of Hong
Kong's success and, therefore, of China's success.
We believe that a society with the greatest degree of
autonomy that listens to the voices of its citizens is going to
thrive, and we have made that very clear.
Now, it is for the Hong Kong Government and the legislative
council, LegCo, and the people of Hong Kong to decide
specifically about the pending proposal from the government
with regard to universal suffrage. And so, on that score, we
will defer to them.
But we have made clear the importance that we place on
allowing Hong Kong's residents to have a meaningful choice in
the selection of their own Chief Executive.
Mr. Salmon. Not to have to pick from some list that Beijing
has given them, a list of three people that they have
determined that they can choose from.
We are going on a codel in 2 weeks to Hong Kong. Eliot
Engel, the ranking member of the full committee, is
accompanying me. Mr. Lowenthal, I believe, is as well.
And we intend to meet with some of the student protestors
and some of the folks that are very, very concerned about the
eroding of democracy in Hong Kong, and we intend to make a big
issue of it.
And we hope that we can work very closely together with
State throughout the next weeks and months and years to make
sure that we get accomplished what the Hong Kong people deserve
and the world deserves. Thank you.
Mr. Sherman.
Mr. Sherman. Thank you, Mr. Chairman. And thanks for an
order of questioning that will allow both myself and Mr.
Lowenthal to complete our responsibilities here.
There is talk about whether our aid programs would benefit
China. Over in the Ways and Means Committee, they are looking
at an agreement that will be of tremendous benefit to China,
namely, the TPP and the TAA and the fast-track bill that goes
with it in two ways.
First, it enshrines the idea that you can do a free-trade
agreement and have absolutely no title about currency
manipulation. Second, it will contain the rules of origin so
that goods that are 60, 70, even 80, percent made in China can
then go to Vietnam for a little additional work, slap a ``Made
in Vietnam'' sticker on it, and duty-free entry into the United
States while we get no access to the Chinese market.
So I know the chairman wouldn't want to see our aid money
go to China, but I think that many, many of our jobs will be
going.
I want to thank the chairman for working with me--or I am
working with him--on the bill to help Taiwan enter INTERPOL.
Who could be against international crime fighting? And I hope
very much that the administration--I should actually ask the
administration.
Mr. Russel, will you be working in every way for Taiwan to
able to be part of INTERPOL?
Mr. Russel. Thank you very much, Congressman Sherman.
Let me begin with TPP. And perhaps I will not surprise you
by saying----
Mr. Sherman. I have got very limited time. I will ask you
to focus on INTERPOL.
Mr. Russel. Okay.
Mr. Sherman. That was kind of my opening statement.
Mr. Russel. Well, without a doubt, though, with all due
respect, TPP benefits the United States and our partners
immensely. And we hope that it will----
Mr. Sherman. Mr. Russel, I will interrupt you. I have asked
you to focus on INTERPOL, but I will respond.
These deals are part and parcel of an effort that has
destroyed the American middle class over the last 30 years. And
to say it is going to benefit the United States when there
isn't a single economic study of any merit that says that it
will raise wages in the United States and a program that tells
us that we count all the jobs that we get from exports without
subtracting the jobs we lose from imports, an economic analysis
that leaves out the rules of origin that I focused on--I will
use my time to make those points and ask you to answer the
question about INTERPOL.
Mr. Russel. We strongly support and have been active in
helping to promote Taiwan's international space and its active
participation in appropriate organizations, including INTERPOL.
We want Taiwan to be a member of organizations for which
statehood is not a prerequisite, and we want Taiwan
appropriately to interact, whether as an observer or as the
beneficiary of technical programs and other kinds of
institutions.
We very much agree that Taiwan is a net contributor to
international law enforcement, and we are looking for ways to
build on that.
Mr. Sherman. Good.
The focus of our hearing is on rebalance and budget, but we
are leaving out at this hearing the big rebalance budget
effect. And that is what is happening over in the Pentagon,
where they are engaged in a reconfiguration of our military,
starting with research and then procurement, that will end up
costing this country literally trillions of dollars as we over
the next decade or two devote a very expensive military not to
defending the United States from those who have killed
Americans, but, rather, to help fight over a few islets that
are of so little economic value that they are completely
uninhabited.
And we will be told, ``Oh, but there is oil there.'' There
isn't. But if there is, it is not our oil. And we will be
spending far more on this than the countries who claim these
islets where there isn't any oil that might belong to them. So
this is the real budgetary rebalance.
Mr. Russel, I hope you would provide for the record a
comparison of Japan's military budget to whatever share your
study would indicate is the share of our military budget
devoted to the Asia-Pacific region.
Because every time I talk to the Pentagon about training,
about procurement, about research that will help us in the war
on terrorism, their response is, ``We have limited money and we
are gearing up to fight China.'' And it is a very bad idea. Oh.
And, by the way, there is no oil. And it is not our oil.
I yield back.
Mr. Russel. Thank you very much, Congressman Sherman.
There are two indispensable ingredients to America's future
prosperity. Number one is security in the Asia-Pacific region.
Number two is free trade and open markets. And our rebalance
strategy, including TPP, secure those interests for us. We
are----
Mr. Sherman. Mr. Russel, I thought my time had expired.
Because I usually do get to control the time.
And I will simply say MFN for China devastated the American
middle class. And now we are going to squeeze what is left of
them to be able to finance efforts to confront China militarily
while we then figure out ways, without an agreement where China
is a signatory, to shift our jobs to China just in case there
are pockets of middle class prosperity somewhere in America
that haven't yet been devastated by this policy.
So I yield back.
Mr. Salmon. The gentlemen's time has expired.
Mr. Lowenthal.
Mr. Lowenthal. Thank you, Mr. Chair.
And thank you, Mr. Rohrabacher, for allowing me to jump
forward. I really appreciate that.
I, along with Chris Van Hollen, Congressman Van Hollen,
Congressman Peters, and more than 50 of our House colleagues
sent a letter supporting the President's Green Climate Fund
request of $500 million. This fund would be used to invest in
resilient and low-emission development in East Asia and around
the world, Mr. Chairman. I would like to, Mr. Chairman, enter
that letter into the record, if I may.
Mr. Salmon. Without objection.
Mr. Lowenthal. What I would like to ask Mr. Russel and,
also, Mr. Stivers, if he wants to, is: How do you see the
international Green Climate Fund helping to invest in
sustainable development in East Asia that will result in what
the Department of Defense calls reducing the threat multiplier
of climate change? How do you see this helping? And how else is
U.S. foreign assistance supporting Asian and Pacific nations'
efforts to deal with climate change?
Mr. Russel. Well, thank you very much, Congressman
Lowenthal. I will speak to the first part of your question and
then defer to Mr. Stivers.
First of all, thank you. Thank you and your colleagues for
the support that you have extended to the President's Green
Climate Fund initiative. We think that it addresses directly
one of the world's greatest challenges and the East Asia and
Pacific region in particular.
Given the vulnerability--the huge vulnerability of the
region to the effects of climate change, global warming, and
rising sea levels, as well as the impact on fish stocks and
sustainable food security, we are determined and committed to
get at this problem.
No one has been more active and vigorous than Secretary
Kerry. And advancing the efforts to deal with and mitigate the
effects of climate change are major parts of our Asia-Pacific
strategy.
Last November President Obama announced a $3 billion pledge
for the Green Climate Fund and the U.S. commitment to reduce
carbon pollution. He has worked, as you know, last year to also
induce the Chinese to follow suit with strong commitments for
carbon emission reduction.
And he has also elicited tremendous support from partner
countries, most notably from Japan, whose prime minister will
be here this weekend and has pledged $1\1/2\ billion to the
Green Climate Fund. Our work with Asian countries on climate is
an example of what I would call the rebalance going global.
But for the specifics--Jon.
Mr. Stivers. Thank you, Mr. Lowenthal, for that question
and for your leadership on climate change issues.
Climate change is affecting the people of the East Asia-
Pacific region. In support of the President's Global Climate
Change Initiative, we are helping with cleaner energy sources,
adaptation and sustainable land practices, and disaster
resilience.
In the Mekong Delta, 1 meter of sea level rise will
inundate 40 percent of the land where 18 million people live. I
was just there a few weeks ago to see what USAID is doing. And
we are helping farmers adapt to increased salinization of the
rivers, droughts, and with new farming techniques for salt-
resistant crops for local communities, and to raise their
awareness for best practice as they deal with these issues.
And so USAID has a number of initiatives in many countries
in East Asia-Pacific, which is extremely vulnerable to climate
change.
Mr. Lowenthal. Thank you.
I don't know if I am going to get a chance to have you
answer this, but I just want to put it out on the record.
This year marks 20 years since the United States normalized
relations with Vietnam. We have increased in recent years our
engagement with Vietnam on trade and the TPP negotiations, as
well as shared security interests.
My question is: Has the United States' engagement and
assistance to Vietnam further respect--has it furthered respect
for human rights and dignity?
I personally believe Vietnam has done little to improve its
human rights record in recent years and continues to jail those
who have spoken out. Bloggers, labor activists, religious
leaders, all have been imprisoned.
And talking about labor, you mentioned, Mr. Russel, about
improvement in labor relations. Well, Vietnam has one union,
the Communist Party, and denies all other unions the ability to
exist. It still does.
How is the TPP going to help that?
Mr. Russel. Thank you very much, Congressman.
Briefly, the answer to your question is yes. Our
comprehensive partnership and our engagement with the
Vietnamese, in the first instance, has led to some milestones
on what will still be a long road toward legal reform.
Vietnam ratified the U.N. Convention Against Torture, the
U.N. Convention on the Rights of Persons with Disabilities.
They have committed to and we are keeping score on their
progress on institutional reforms, including revision of the
Criminal Code, and that is something that we are supporting.
With respect to the TPP, I am convinced that we would not
be seeing nearly the progress that we do see, including on
labor, were it not for the promise of the economic benefits
that come from free trade with the United States and the other
members.
What we are seeing are commitments that are enforceable,
with sanction provisions, as in any trade agreement, for
noncompliance on labor. We are seeing significant changes in
the climate, including bringing steps to bring Vietnam up to
International Labor Organization standards, which is a
prerequisite for membership in TPP. We are working and will
work to develop the capacity, and we will work to ensure that
there are proper enforcement mechanisms in place. That is for
labor.
I think it is also important, even though Congressman
Sherman has left, to say that, on environment, the TPP
Agreement, even if it didn't have a single trade provision,
would be the best and strongest environmental agreement that
the U.S. has ever entered into. And for a country like Vietnam,
with problems of wildlife trafficking and overfishing, illegal
logging, that is hugely important.
Mr. Salmon. Mr. Russel, I am going to give you another
chance. His time has expired, but I am going to give you
another chance on the TPP when it gets to a second round of
questions because I know you have got a lot of burning things
inside you want to get out of there. So we will give you
another chance.
I will turn the time over to Mr. Rohrabacher.
Mr. Rohrabacher. Okay. Thank you very much.
And let me just note that, when you base decisions on
nonsense, it shouldn't be surprising to anybody that we come up
with bizarre policy advocacy.
It is bizarre for me to sit here and listen to people talk
about financing in the millions of dollars--American tax
dollars an environmental program on the mainland of China,
which, of course, is the world's worst human rights abuser and
a country that is right now taking ever more aggressive stands,
for example, the declarations of--territorial declarations,
alone--what China has been saying in the South China Sea and in
the shipping lanes that would strangle Korea and strangle
Japan.
For us to be talking, ``Oh, well, the environment is going
to let us work together with these guys,'' that is such utter
nonsense, especially giving American dollars to their project
in China. We'll let the American people decide what is absurd
and what isn't.
Let me note, when the Chinese started building these
islands out of rock piles in the ocean and then start making
them--claiming that they are territory and, thus, gives them
the right to control huge, vast areas of the Pacific Ocean,
maybe somebody will see that that is an aggressive act and
deserves so much outrage on our part that we wouldn't be even
considering providing China with millions of dollars for their
global warming program.
China is at this time, for example, behind Hun Sen in
Cambodia. I mention Hun Sen. Who is Hun Sen's greatest friend?
It is Beijing. Who is North Korea's best friend? Beijing. And
China has a horrible relationship with gangster regimes
throughout the world. They are robbing the people of their
resources in any country that they are engaged in by making
deals with gangster regimes that have no rightful role in terms
of what we believe in, democracy.
So one thing that I mentioned earlier on, the one thing to
give us hope is that we have a new rising power in a democratic
Japan reasserting itself as an influence in that region of the
world. Japan can counterbalance what has been, basically, China
run amuck with the acquiescence of America's business community
and America's, it seems, environmentalists.
We were told a long time ago, if we build up China's
economy, there would be political reform. Well, there has been
no political reform. They haven't become more modernistic in
terms of the way they deal with other people's rights. In fact,
this theory that I always called the ``Hug a Nazi. Make a
liberal theory'' didn't work.
And it is not working in Vietnam as well. In Vietnam, they
do not have--everything you cited was fine about how they are
making their economy more efficient. Well, making the economy
more efficient for a Nazi-like regime is not something that we
should be bragging about. We should be supporting the people of
Vietnam against their oppressor.
And we certainly support the people in Cambodia and
elsewhere that are suffering under--and even as we talk we have
China reaching an agreement with Pakistan in order to take over
a port in the Balochistan region of Pakistan. And one wonders
who is being bribed there. Who is being bribed to give away an
important maritime asset in that country of Pakistan?
So I would like to just suggest that we need to look at
these matters in a much more serious tone. I'm sorry that I
just can't believe that, after 18 years of steady weather and
steady climate and no big jump in the temperature, which we
were promised by those people who believe that CO2 emissions
cause increases in the temperature--I don't buy it anymore, and
most Americans don't, especially if it is going to mean that we
have to go along with giving money to Chinese programs.
Thank you very much. I have got to go. Please feel free to
say everything bad about what I just said. I have got to be on
the floor.
Mr. Stivers. Just real quick, Mr. Rohrabacher, I just want
to assure you that we provide no assistance to China on the
environment. The example I was using was in Vietnam.
I have shared many of your concerns about China from my
time working almost 18 years for Ms. Pelosi. And so I have been
fortunate to work alongside you and your staff on a lot of
these issues.
But I can assure you there is no environmental assistance
we provide in China except for a little bit on the Tibetan
Plateau that helps the Tibetans, but none that benefits China.
Mr. Rohrabacher. Thank you very much.
Mr. Salmon. Mr. Russel, did you want to make a comment?
Mr. Russel. Yes. Very briefly, if I may, Mr. Chairman, in
response----
Mr. Rohrabacher. I've got to run off. I have a speech on
the floor.
Mr. Salmon. I will pass it on to him.
Mr. Russel. Japan is indeed our great ally and great
friend. We are honored to welcome a visit of the Japanese Prime
Minister to Washington and thankful and grateful that the
Congress will host him for a speech.
Our partnership and our security alliance with Japan is a
major element, in fact, the cornerstone of our regional
security policy and, indeed, our rebalance. And Secretary
Kerry, along with Secretary Carter, will be announcing the
details of our revised defense guidelines on Monday in New
York, and this will represent a very major milestone in
increased Japanese contributions to the South China Sea and
China. I would be prepared to address that, if you wish.
Mr. Salmon. That would be great.
I do have a couple of other questions I would like to--and
maybe you can weave it in. But I just wanted to--Mr. Sherman
asked you about the involvement of Taiwan in INTERPOL and asked
you if you were supportive, and you did say that you are
supportive of Taiwan doing that.
Could we get a commitment of support from State for--for
the legislation that would do that?
Mr. Russel. Mr. Chairman, I won't speak to the legislation
itself. Please allow me to consult with my colleagues and
review----
Mr. Salmon. That will be fine. In fact, I don't expect you
to have read it by now.
But barring the fact that it does what it says we are doing
and it is in concert with what you said your position is as far
as Taiwan participating, we are hoping that you will support it
and hoping that you will get back to us because we are hoping
that we can get it marked up and passed through this Congress
and on the President's desk and get it signed and start moving.
The second thing I wanted to ask--and then at the very--my
last question is going to be to just give you an opportunity to
expound a little bit more on TPP. Mr. Sherman raised a lot of
concerns about TPP and its economic benefit to the United
States, to individuals, jobs here in the United States.
And he also mentioned that his fear was that, in Vietnam,
they could actually make the product in China, send it to
Vietnam, slap a Vietnamese label on, so the country of origin
doesn't really matter. I would love you to address that, too,
if you can.
But before that--and I am just going to give you the
microphone and let you say whatever you want about TPP. You do
your best.
But my other question is about the Asian Infrastructure
Investment Bank. And many of our allies have joined that.
Australia just recently said that they are going to join. In
fact, really, the only significant holdout is Japan, who is, I
think, trying to be a good friend and partner of the United
States.
What is our strategy on that going forward? It doesn't seem
like continuing to oppose that is going to be of much value.
Do we have a Plan B as far as how to work with them and
make sure that the World Bank and the IMF work in concert with
what they are trying to do for the region, that we are looking
out for the United States' interests? So that is my question.
And then you have at it with TPP.
Mr. Russel. Thank you very much, Mr. Chairman.
My brief comment on South China Sea in response, first, to
Congressman Rohrabacher's point is simply this: He mentioned
rocks. He mentioned sand. The issue isn't about rocks. It is
about rules. The issue isn't about sand. It is behavior.
And the United States has for going on seven decades been
the guarantor of the security in the Asia-Pacific region that
has enabled not only our economic growth, but the growth of the
countries in the region, including China.
And that is the responsibility that we will not abrogate.
We will take the measures necessary to preserve that and
freedom of navigation and mitigate the risk of coercion against
our treaty allies.
Mr. Salmon. I am so glad you brought that. I support that
100 percent.
Mr. Russel. Mr. Chairman, our strategy vis-a-vis AIIB is to
use direct persuasion with the Chinese, consultations with
friends and partners, and the elements of the multilateral
development and other banking systems to try to ensure that the
AIIB evolves into a high-quality, transparent, responsible
actor that functions in tandem with multilateral development
banks and by the same standards that have been developed for
multilateral development banks.
It is, I believe, telling that so many major economies held
back on a decision to join the AIIB as a founding member until
they were satisfied that, number one, the elements in the
articles of agreement would be, from their point of view,
minimally sufficient to warrant joining, and, second, until
they became convinced that, by joining, they would be able to
exert influence from within that would help bring the AIIB to a
level of governance, of transparency, of standards, of
oversight that they consider to be on par with other
multilateral development banks.
Our strategy, Mr. Chairman, is to use those other banks
like the Asian Development Bank, like the World Bank, in which
we have a tremendous leadership role and a long history and a
lot of money invested to partner with the AIIB in an effort to
address what is, in fact, a genuine need, a need for
infrastructure investment in the Asia-Pacific region. We are
insistent, however, that that investment should be responsible.
It should have appropriate safeguards in terms of debt
sustainability and environment and so on.
So the canard that we somehow sought to block the
development of a new bank is misguided, but the fact that we
are determined and committed to help ensure that China and the
other founding members caused that bank to operate at
international standards is absolutely right. And Japan is an
important partner with us in that effort.
With regard to TPP, first and foremost, although I am not a
trade expert, I know that the safeguards to prevent back-door
entry to products from non-TPP countries is a central element
of the design of the rules pertaining to rules of origin, and
that is--that is a principle that has suffused the design and
the negotiations of TPP.
More broadly--and it is perhaps precisely because I don't
come from the trade world--what is so striking and so valuable
about TPP is, number one, the strategic value. This agreement
is seen in the region, if not the world, as an example of the
United States exercising leadership to establish high
standards, inclusivity, and free markets.
We must succeed. Our credibility, as well as our economic
interests, are deeply interlinked. We are the preeminent rule-
setter, and to set rules that will benefit both the countries
of TPP and around the Pacific Rim growing economies and the
United States, including and especially of the U.S. middle
class, is our responsibility as well as our interest.
But I mentioned other non-trade elements, including
environment. But there are more. There are very fundamental
good governance provisions in the TPP agreement that go to the
heart of our collective concerns about the Vietnamese
Government, for example, and about the kind of rules-based
system that we want to see prevail in the Asia-Pacific region.
The agreement has anticorruption provisions and dispute
settlement mechanisms that are entirely consistent with
American values and American procedures. I mentioned labor
standards with built-in enforcement mechanisms.
And the digital economy, which is the new frontier, is
another area in which TPP contains meaningful protections to
intellectual property at the same time that it promotes freedom
of information and cross-border migration of data and
electronic information.
It also has a chapter on development, which I know Mr.
Stivers can speak to. This is a first-ever development chapter
in a trade agreement, and it will help promote broad-based
economic growth.
The last thing I would mention--I'm sorry to go on long--is
that the agreement also focuses very heavily on small- and
medium-sized enterprises. That is part and parcel of the
advantages that it offers to the United States and to working
men and women here. It is also of tremendous advantage in the
region in terms of promoting microenterprise, worker
participation, access to the global economy, and the
flourishing of nongovernmental organizations.
Mr. Salmon. I am going to ask one last question and then
let you guys wrap up. And I really appreciate you taking the
time today. But I spoke last night before a group of
stakeholders in the region, and these are the questions I was
asked. And so I want to throw them out to you, too, and they
are along the lines of TPP.
Do we expect or anticipate a second round of TPP? And along
with that, do we expect that China will later want to
participate with TPP? And what is the likelihood that Taiwan
would be included in a second round of TPP?
Mr. Russel. I don't want to walk too far out onto the thin
ice of speculating on policy and trade matters, Mr. Chairman,
particularly at a moment when the TPP negotiations are going on
hot and heavy.
However, I will take a few tentative steps in saying first
that the line of important economies and countries, a line that
includes countries like the Republic of Korea and a line that
very clearly includes Taiwan, is starting to snake around the
corner, so to speak.
There is a tremendous interest in joining TPP. I think that
is a healthy sign. And I at the same time will accept the
caution by my friend and colleague and master, Mike Froman,
that he needs to concentrate on first things first. Job number
one is to close the agreement.
The question of China is something that is widely
discussed. I think that the way to look at it is this: The
world would be a better place if China were in a position to
meet the requirements on trade, on openness, on protection of
intellectual property, on environment, on labor standards, that
are requirements for membership in TPP. So the short answer is
we should be so lucky.
Mr. Salmon. I am going to get the transcripts of what you
just said and carry that in my pocket with me because I think
that was a really great answer. I really appreciate you taking
the time.
Mr. Stivers, did you have any final comments that you
wanted to make?
I really appreciate you both taking the time to come and
testify before us today.
And, without objection, this hearing is now adjourned.
[Whereupon, at 2:15 p.m., the subcommittee was adjourned.]
A P P E N D I X
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Material submitted for the record by the Honorable Alan S. Lowenthal, a
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