[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

                               __________

        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

                              ----------                              
                                                                   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

                              ----------                              


                        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.]
                                     

                                     

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Material submitted for the record by the Honorable Alan S. Lowenthal, a 
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