[Senate Hearing 115-462]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 115-462

                      NOMINATIONS OF DENNIS SHEA 
                            AND C.J. MAHONEY

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

                                 HEARING

                               BEFORE THE

                          COMMITTEE ON FINANCE
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                                 ON THE

                             NOMINATIONS OF

DENNIS SHEA, TO BE DEPUTY U.S. TRADE REPRESENTATIVE/U.S. AMBASSADOR TO 
 THE WORLD TRADE ORGANIZATION, WITH THE RANK OF AMBASSADOR, EXECUTIVE 
      OFFICE OF THE PRESIDENT; AND C.J. MAHONEY, TO BE U.S. TRADE 
  REPRESENTATIVE FOR INVESTMENT, SERVICES, LABOR, ENVIRONMENT, CHINA, 
   AFRICA, AND THE WESTERN HEMISPHERE, WITH THE RANK OF AMBASSADOR, 
                   EXECUTIVE OFFICE OF THE PRESIDENT

                               __________

                            JANUARY 17, 2018

                               __________

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                          COMMITTEE ON FINANCE

                     ORRIN G. HATCH, Utah, Chairman

CHUCK GRASSLEY, Iowa                 RON WYDEN, Oregon
MIKE CRAPO, Idaho                    DEBBIE STABENOW, Michigan
PAT ROBERTS, Kansas                  MARIA CANTWELL, Washington
MICHAEL B. ENZI, Wyoming             BILL NELSON, Florida
JOHN CORNYN, Texas                   ROBERT MENENDEZ, New Jersey
JOHN THUNE, South Dakota             THOMAS R. CARPER, Delaware
RICHARD BURR, North Carolina         BENJAMIN L. CARDIN, Maryland
JOHNNY ISAKSON, Georgia              SHERROD BROWN, Ohio
ROB PORTMAN, Ohio                    MICHAEL F. BENNET, Colorado
PATRICK J. TOOMEY, Pennsylvania      ROBERT P. CASEY, Jr., Pennsylvania
DEAN HELLER, Nevada                  MARK R. WARNER, Virginia
TIM SCOTT, South Carolina            CLAIRE McCASKILL, Missouri
BILL CASSIDY, Louisiana              SHELDON WHITEHOUSE, Rhode Island

                     A. Jay Khosla, Staff Director

              Joshua Sheinkman, Democratic Staff Director

                                  (ii)


                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Hatch, Hon. Orrin G., a U.S. Senator from Utah, chairman, 
  Committee on Finance...........................................     1
Wyden, Hon. Ron, a U.S. Senator from Oregon......................     4
Roberts, Hon. Pat, a U.S. Senator from Kansas....................     7

                         CONGRESSIONAL WITNESS

Moran, Hon. Jerry, a U.S. Senator from Kansas....................    10

                        ADMINISTRATION NOMINEES

Shea, Hon. Dennis, nominated to be Deputy U.S. Trade 
  Representative/U.S. Ambassador to the World Trade Organization, 
  with the rank of Ambassador, Executive Office of the President, 
  Washington, DC.................................................    12
Mahoney, C.J., nominated to be U.S. Trade Representative for 
  Investment, Services, Labor, Environment, China, Africa, and 
  the Western Hemisphere, with the rank of Ambassador, Executive 
  Office of the President, Washington, DC........................    14

               ALPHABETICAL LISTING AND APPENDIX MATERIAL

Hatch, Hon. Orrin G.:
    Opening statement............................................     1
    Prepared statement with attachments..........................    35
Mahoney, C.J.:
    Testimony....................................................    14
    Prepared statement...........................................    38
    Biographical information.....................................    39
    Responses to questions from committee members................    44
Moran, Hon. Jerry:
    Testimony....................................................    10
Roberts, Hon. Pat:
    Opening statement............................................     7
Shea, Hon. Dennis:
    Testimony....................................................    12
    Prepared statement...........................................    60
    Biographical information.....................................    61
    Responses to questions from committee members................    67
Wyden, Hon. Ron:
    Opening statement............................................     4
    Prepared statement...........................................    74

                                 (iii)

 
                   NOMINATIONS OF DENNIS SHEA, TO BE
                   DEPUTY U.S. TRADE REPRESENTATIVE/
                   U.S. AMBASSADOR TO THE WORLD TRADE
                     ORGANIZATION, WITH THE RANK OF
                  AMBASSADOR, EXECUTIVE OFFICE OF THE
                      PRESIDENT; AND C.J. MAHONEY,
                  TO BE U.S. TRADE REPRESENTATIVE FOR
                      INVESTMENT, SERVICES, LABOR,
                  ENVIRONMENT, CHINA, AFRICA, AND THE
                  WESTERN HEMISPHERE, WITH THE RANK OF
                      AMBASSADOR, EXECUTIVE OFFICE
                            OF THE PRESIDENT

                              ----------                              


                      WEDNESDAY, JANUARY 17, 2018

                                       U.S. Senate,
                                      Committee on Finance,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 10 a.m., 
in room SD-215, Dirksen Senate Office Building, Hon. Orrin G. 
Hatch (chairman of the committee) presiding.
    Present: Senators Grassley, Roberts, Portman, Toomey, 
Heller, Scott, Cassidy, Wyden, Stabenow, Cantwell, Menendez, 
Carper, Cardin, Brown, Bennet, Casey, and Whitehouse.
    Also present: Republican staff: Jay Khosla, Staff Director; 
Chris Armstrong, Chief Oversight Counsel; Brian Bombassaro, 
International Trade Counsel; Queena Fan, Detailee; Doug 
Peterson, International Trade Counsel; Shane Warren, Chief 
International Trade Counsel; and Nicholas Wyatt, Tax and 
Nominations Professional Staff Member. Democratic staff: Joshua 
Sheinkman, Staff Director; Elissa Alben, Senior Trade and 
Competitiveness Counsel; Michael Evans, General Counsel; Ian 
Nicholson, Investigator; and Jayme White, Chief Advisor for 
International Competiveness and Innovation.

 OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM 
              UTAH, CHAIRMAN, COMMITTEE ON FINANCE

    The Chairman. The committee will come to order. I want to 
welcome everyone to the committee and thank you for coming to 
today's session.
    As most of you should be aware, we are tackling a lot 
today. Today, we have a hearing on two important nominations. 
In addition, we have three items requiring a committee vote in 
executive session.
    And just to avoid any confusion, let me explain how and in 
what order I intend to accomplish these tasks today.
    We will begin with opening statements from myself and the 
ranking member. Thereafter, the committee will hear from any 
Senators wishing to give statements about items on the markup 
agenda.
    As always, I would encourage members to enter their 
statements in the record so that we can move expeditiously. 
This is doubly true today as we have nominees and witnesses 
here ready to participate in our hearing.
    Still, if any Senator does wish to deliver a statement, I 
ask, as always, that they limit their remarks to 3 minutes.
    After a few brief member statements, assuming we do not 
have a quorum at that point, I intend to introduce our witness 
panel and move forward with our hearing. I will likely move 
directly to votes when a suitable quorum is present, which may 
require a temporary pause in the hearing.
    With the order of events made clear, let me discuss the 
substance of our meetings today.
    Regarding the first item on the markup agenda, I need to 
welcome our newest member, Senator Whitehouse--where is he? Is 
he here? [No response.]
    Well, we will welcome him anyway. [Laughter.]
    We will welcome Senator Whitehouse to the Finance 
Committee. We look forward to working with him and to his 
contributions to the committee's various efforts.
    Our first vote will be in relation to changes in 
subcommittee assignments that have been circulated to the 
members. That promises to be a real nail-biter, as we all know. 
[Laughter.]
    Next, we will vote to once again report the nomination of 
Kevin K. McAleenan to be Commissioner of the U.S. Customs and 
Border Protection. We reported his nomination by voice vote 
just over a month ago, so I assume we will be able to do so 
again today.
    Finally, the third vote in our executive session will be to 
report the nomination of Alex Azar to be Secretary of Health 
and Human Services. We heard from Mr. Azar last week, and I 
believe he was very forthcoming in providing thoughtful 
responses when sharing his views and discussing his background 
with the committee.
    By any objective account, Mr. Azar is very well-qualified 
for this important position. He has close to 2 decades of 
experience, the right expertise, and the sound judgment that we 
expect. Further, he provided earnest and thoughtful responses 
to each of our questions.
    Some of my friends on the other side of the dais have some 
differing views, and we intend to hear from them today. After 
all, I feel strongly that both sides should be heard when we 
consider nominees with critical responsibilities such as the 
Secretary of HHS.
    However, because some members have made clear their 
intention of calling for a roll call vote on Mr. Azar's 
nomination, we may not have the vote on his nomination during 
this hearing. Instead, we will likely need to recess and 
reconvene the executive session until a time where all of the 
members who have expressed interest will be able to attend and 
cast their votes on this important nomination.
    That said, I think we can move through the other two votes 
expeditiously as soon as a suitable quorum is present. Any 
pause or interruptions in the hearing should be minimal.
    Regarding the hearing, we have two nominees before us 
today: C.J. Mahoney and Dennis Shea, who, if confirmed, will be 
charged with fulfilling some vital responsibilities. I want to 
touch on two areas of importance to me that will fall within 
each of their portfolios.
    First, Mr. Mahoney, you have been nominated to be the 
Deputy U.S. Trade Representative overseeing, among other 
responsibilities, trade in services.
    Mr. Shea, you have been nominated to be our Nation's 
Ambassador to the World Trade Organization, where promoting 
U.S. services trade will also be an essential part of your job.
    The United States exported more than $721 billion in 
services in 2015. That number reflects something that a Deputy 
of USTR should keep in mind every day he is on the job: no 
country in the world comes close to the United States in 
services trade. It is a key competitive advantage for our 
country and an important driver of our economy.
    If confirmed, each of our nominees would have the 
responsibility to establish international trade rules and 
negotiate international trade agreements that benefit U.S. 
services providers.
    For Mr. Mahoney, promoting U.S. services exports should be 
an essential goal of NAFTA modernization, particularly 
providing for the cross-border flow of data and ensuring a 
prohibition on forced data localization.
    For Mr. Shea, I hope that you will support plurilateral 
negotiations for a Trade in Services Agreement with trading 
partners who are willing to take on high-standard commitments.
    Second, I want to speak about President Trump's priority of 
confronting the challenges posed by China to the international 
trading system. This is a goal that I support.
    If confirmed, both of you will bear a heavy responsibility 
for rolling back China's most harmful trade practices, 
including intellectual property rights and trade secrets theft, 
economic espionage, artificial investment constraints and 
regulatory restrictions, and a persistent reliance on a state-
directed economic model that produces overcapacities and harms 
American businesses and workers.
    I look forward to hearing your views on how you believe the 
United States should address these challenges, including 
through the World Trade Organization, WTO.
    Before we get to that point, though, we need to move 
through the steps I mentioned before. As such, I would like to 
invite my friend and ranking member, Senator Wyden, to give his 
remarks, and then we will allow for members to deliver brief 
statements on the executive business before the committee as 
well.
    [The prepared statement of Chairman Hatch appears in the 
appendix.]
    The Chairman. So we will turn to Senator Wyden at this 
point.

             OPENING STATEMENT OF HON. RON WYDEN, 
                   A U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you very much, Mr. Chairman.
    As is often the case here, I guess we will have to call a 
few audibles this morning. So by way of announcing one, if and 
when Senator Whitehouse arrives, I would like to give him a 
formal greeting. It will not take but a minute or two on that 
matter.
    Now, given your discussion on the nominations, I will 
proceed with my comments on that, and then have some short 
remarks with respect to the trade nominees.
    Now our first obligation today is to vote on two 
nominations, Mr. Kevin McAleenan for CBP Commissioner, and Mr. 
Alex Azar for Secretary of Health and Human Services. This will 
be our second vote on Mr. McAleenan's nomination. The first 
time it passed by a voice vote. I said in December during that 
first markup, Mr. McAleenan is a well-qualified nominee who 
will have the right focus at the agency.
    The trade-related mission of the agency, which is key to 
defending American jobs from trade rip-off, too often gets 
short shrift. The agency has important new tools, thanks in no 
small part to the work this committee has done over the last 
few years to fight trade cheats and protect our workers. It is 
vital that those tools be put to good use.
    There have also been positive developments in my view, 
matters that Mr. McAleenan and I have spent a fair amount of 
time talking about. These positive developments relate to the 
search of Americans' personal electronic devices at the border.
    I continue to believe that Americans should not be giving 
up their constitutional rights at the border, and even with 
these positive developments, there is more work needed to be 
done to protect the Fourth Amendment rights of Americans. I 
intend to work closely with Mr. McAleenan on that nomination.
    I am pleased to be able to support Mr. McAleenan's 
nomination this morning.
    Now with respect to Mr. Azar's nomination for the Secretary 
of Health and Human Services: the last few days and weeks have 
helped illustrate to the American people that the Trump 
administration continues to be on a flat-out sprint in the 
wrong direction when it comes to health care.
    New data out yesterday shows that the number of Americans 
without health insurance jumped by more than 3 million people 
last year. It is a stunning and disappointing reversal of 
progress made since the Affordable Care Act became law.
    In my view, it is clear that the Trump administration 
continues to offer up policies that undermine, that in effect, 
sabotage the private health insurance markets. That is more 
than 3 million Americans who are one serious illness or injury 
away from financial ruin.
    New data shows the numbers of Americans, again, without 
health insurance jumped by more than 3 million people in the 
last year.
    Since the hearing on Mr. Azar's nomination, the 
administration has also moved in a regrettable fashion with 
respect to Medicaid. The vast majority of those on Medicaid, 
who count on it, already have a job or are unable to work due 
to old age or infirmity.
    The Centers for Medicare and Medicaid Services have adopted 
a new, and in my view dangerous, requirement that is going to 
relate to work. I have already mentioned the vast majority of 
people who count on Medicaid already have a job, and I think 
that this new proposal--and the way it is fashioned--is going 
to go after Americans who are just trying to get by, walking an 
economic tightrope, balancing the cost of food, rent, gas, 
electricity, taking care of their kids or elderly parents, or 
perhaps struggling with a chronic condition.
    This looks to me like an ideological backdoor scheme to 
slash Medicaid. These are steps in the wrong direction.
    A big step in the right direction would be making the 
Children's Health Insurance Program permanent. And as we have 
noted, colleagues, in committee discussions, Chairman Hatch, 
Senator Kennedy, our colleague, Senator Rockefeller--they are 
really the pioneers of this.
    I think it would be very fitting at this time, and a real 
tribute to our chair, our colleague, to make CHIP permanent. 
And we are going to keep pushing on that. The chairman and I 
have said at every step of the way, we are going to try to get 
as many years as we can and cover as many kids as we can.
    I will close my remarks with respect to the votes. With 
respect to the matter of Mr. Azar and his policies on 
skyrocketing prescription drug costs, the President famously 
said--his words in 2016--``price-hiking drug companies are 
getting away with murder.''
    The President has now nominated a drug company executive 
with a documented history of raising drug prices. The prices of 
a number of widely prescribed drugs more than doubled on his 
watch.
    We walked through that, Mr. Chairman and colleagues, here 
at Mr. Azar's hearing. We had a chart right here. We walked 
through all of these drugs that are vital to seniors and young 
people who are facing attention deficit disorders. Prices of 
these key drugs more than doubled on his watch. Mr. Azar could 
not provide a single example of when his company lowered 
prices.
    I regret that I have to say today I will be unable to 
support his nomination.
    Senator Whitehouse has arrived. I just want to give him a 
formal welcome. He has expertise in a host of issues that this 
committee is focused on, and I would also like to note that he 
carries on a fine tradition of Rhode Islanders who have served 
on the committee.
    Seven Rhode Islanders previously have served on the 
committee over the last 200 years, including Nelson Aldrich, 
who was chair from the nineteenth century, 1899 into the first 
20 years of the twentieth century, 1911; and Senator John 
Chafee, who served on the committee decades later in the 
twentieth century. And for a lot of us who arrived in the 
Senate when John Chafee was at his apex in terms of expertise 
in health care and environment issues, Senator Chafee was the 
gold standard. I think Senator Whitehouse is going to pick up 
on many of his priorities, and we know he is going to carry on 
this proud Rhode Island tradition as he carries it into the 
twenty-first century.
    Now, Mr. Chairman, I did not expect to make comments now 
about the trade nominees, but since you have indicated you 
would like to get that out as well, let me just briefly make 
some comments about our trade nominees.
    The Honorable Dennis Shea is nominated to serve as Deputy 
United States Trade Representative. Mr. C.J. Mahoney is 
nominated to serve as Deputy United States Trade Representative 
for Investment, Services, Labor, Environment, China, and the 
Western Hemisphere. That is going to be hard to fit on a 
business card.
    With respect to Mr. Shea, if he is confirmed to be the 
Deputy USTR in Geneva, he will be in charge of representing the 
United States at the World Trade Organization. Republicans and 
Democrats have now raised important concerns with the WTO, 
which is meant to be a rules-based organization that judges 
cases with an even hand.
    It remains capable of knocking down barriers and serving as 
a venue for America to get justice for exporters of everything 
from airplanes to wine. In some cases, the appellate body has 
overreached. In negotiations, the WTO can often be too slow and 
too unwieldy, and we cannot be caught flat-footed in the face 
of China's trade tactics.
    The Trump administration in my view has dropped the ball on 
some of these vital priorities. So we have to come up with some 
wins for red, white, and blue jobs. That is a deal on services, 
for example, and other priorities.
    And certainly, after all of the tough rhetoric in the 
campaign on trade cheats, the Trump administration has not 
brought forward a single original WTO case challenging trade 
barriers by any other country. So it is my hope that we will 
hear from Mr. Shea with respect to the administration tackling 
those issues.
    Next, Mr. Mahoney is up for an equally challenging job at 
USTR. He will be leading, as part of his job, NAFTA 
renegotiations to get the best possible outcome for workers and 
businesses.
    It is my view that NAFTA not only needs an update, it needs 
to be completely overhauled. We need high-standard, enforceable 
commitments on labor and the environment, removing chapter 19, 
which hampers our effort to fight unfair trade rip-offs and 
addresses challenges that are specific to dairy, wine, and 
manufacturing industries. It also has to set a high bar on 
combating currency manipulation, market distorting state-owned 
enterprises, and trade cheats.
    On top of that, as the nominee knows, I feel very strongly 
about ideas, information, and commerce over the Internet. That 
means a balanced approach to copyright and platform liability 
protections like those that are now part of U.S. law.
    I said it before: no administration should expect to have 
my support for trade agreements if it fails to include 
provisions that protect the Internet as an open platform for 
commerce, speech, and free trade--an ambitious agenda, but one 
worth fighting for.
    Finally, Mr. Mahoney, you have a big challenge with respect 
to China. We heard again in the campaign that the 
administration was going to get tough on unfair Chinese trade 
practices.
    We are now a year into the Trump administration. If the 
administration has a policy regarding trade with China, I am 
not sure anybody knows what it is.
    Senator Hatch and I, as well as other members of the 
committee, have laid out our concerns, but there has been a 
remarkable, truly stunning lack of action by the 
administration. We do not even have an Assistant U.S. Trade 
Representative for China. That is a position that does not even 
require Senate confirmation.
    So I cannot, for the life of me, figure out what the holdup 
is there. So if there is a plan to deal with China's trade 
practices, this committee and the American people want to know 
what it is, and we are in the dark today. If there is not a 
plan, then everything the American people heard in the 2016 
campaign about cracking down on China was just a bunch of empty 
campaign patter. And that is going to cost us jobs.
    So, Mr. Mahoney, we look forward to you having the 
opportunity to right the ship. We have heard good things about 
you, and you have gotten support from important, thoughtful 
people on both sides of the aisle. But we have a long way to go 
here.
    And as you know, we also have concerns shared by our new 
colleague, Senator Whitehouse, about transparency on trade. 
That is part of what is spelled out in black letter law. We 
need to see it enforced.
    Thank you, Mr. Chairman.
    The Chairman. Well, thank you.
    [The prepared statement of Senator Wyden appears in the 
appendix.]
    The Chairman. Senator Whitehouse, again, we are very happy 
to have you on this committee. You are a great friend, and I 
think you will enjoy this committee. It is a go-go committee, 
and other than some of the people, like my ranking member, we 
get along very well. [Laughter.]
    Senator Wyden. As the Jewish people would say, ``Oy.'' 
[Laughter.]
    The Chairman. That is right.
    Senator Whitehouse. Thank you, Mr. Chairman.
    I am honored to join a committee with so many respected 
colleagues, and I look forward to working very productively 
with you and the ranking member and all of my colleagues.
    The Chairman. Well, thank you. That means a lot.
    Do any Senators wish to speak on the nomination of Mr. 
Azar?
    Pat?

            OPENING STATEMENT OF HON. PAT ROBERTS, 
                   A U.S. SENATOR FROM KANSAS

    Senator Roberts. Yes. Thank you, Mr. Chairman.
    I have the honor of introducing C.J. Mahoney, the nominee 
to be a Deputy United States Trade Representative, along with 
my colleague and friend, Senator Moran.
    I had an opportunity to sit down and talk with C.J. during 
the process. I was impressed by his background. He is, by the 
way, a graduate of both Harvard and Yale.
    He also recognizes what happens with regards to farm 
country with our farmers, our ranchers, our growers who are 
going through a pretty tough time.
    I was really impressed by his background, his knowledge of 
trade issues. But what impressed me the most was his 
understanding of how trade decisions affect businesses and 
individuals all across our State of Kansas, and for that 
matter, all across the country.
    C.J. hails from Russell, KS, America, home of Bob Dole, who 
will today receive the Congressional Gold Medal. Like Bob Dole, 
like Jerry Moran and myself and many others, C.J. has strong 
ties to agriculture. His family owned a farm implement 
dealership, and he still owns land in Russell County as of 
today.
    C.J. understands how important it is for the U.S. to be a 
reliable supplier to our current trading partners, just how 
important that is, but also to expand markets to sell our 
products. This is especially important now due to the rough 
patch that farm country is currently facing. Just ask myself or 
Jerry Moran, who is constantly out in Kansas visiting with 
farmers and ranchers and growers and implement dealers and our 
community banks, everybody up and down Main Street.
    Kansas wheat is now pretty much under cover in storage, 
under tarp. We should be selling that crop to Mexico. That is 
where our wheat normally would go, but Mexico is buying wheat 
now from Argentina. The same thing for Kansas corn or for that 
matter, corn grown anywhere--in the State of Iowa, or wherever 
it is. Mexico is buying that from Brazil.
    That is not where we ought to be headed. We cannot, given 
the circumstances, in my view, take a step back in NAFTA, or 
pull the trigger on the termination of that trade agreement. I 
do not think that is going to happen.
    Members of the Ag Committee, myself, went up to talk to the 
President for about an hour and a half and also had an 
opportunity to talk to him on Air Force One about trade, how 
important it is. I think he understands it. So I think we can 
make some progress, and C.J. is going to be right there, and he 
is going to be of tremendous help to his family and his 
heritage, to Russell, KS.
    So I overwhelmingly support his nomination. I have no doubt 
C.J.'s Kansas roots will allow him to serve President Trump and 
Ambassador Lighthizer well in the Deputy USTR position.
    I told him to keep repeating to Ambassador Lighthizer, to 
Bob--whom I have known for 15 years in working for Senator 
Dole--that you cannot eat steel. Agriculture is still very 
important.
    So from that standpoint, I support the nominee. And I urge 
his nomination.
    Thank you, Mr. Chairman.
    The Chairman. Well, thank you.
    Is there any other comment by anybody else at this point?
    [No response.]
    The Chairman. Let me do this, then. I would like to extend 
a warm welcome to our two nominees today.
    Thank you both for coming. Before I introduce you in the 
order that you will provide your testimony, let me first 
recognize your friends and families in the audience. So if you 
would like to introduce them, that would be fine with me.
    Mr. Shea. Mr. Chairman, this is my wife, Elizabeth. 
Unfortunately, my 14-year-old daughter, Juliette, has that 
nasty flu that is going around. So she is watching this via 
webcast. I want to say ``hi.''
    The Chairman. We are happy to have you here, Elizabeth.
    Okay.
    Mr. Mahoney. Thank you, Senator. I would like to introduce 
my wife Becca; my mother Joyce, who came from Kansas to be 
here; as well as my father-in-law and mother-in-law, Bill and 
Susan Iverson; and other friends from Washington and Russell, 
including members of my second family at Williams and Connolly.
    Senator Wyden. Do any of them live in Wichita?
    Mr. Mahoney. My mother actually lives in Wichita, which I 
know is----
    Senator Wyden. Another plus. [Laughter.]
    Mr. Mahoney [continuing]. The hometown of a certain ranking 
member of this committee. Exactly. [Laughter.]
    The Chairman. Well, we are happy to have all of you here. 
We hope this will be a pleasant hearing.
    First, we are going to hear from Mr. Dennis Shea, who has 
been nominated to serve as Deputy United States Trade 
Representative in the Geneva, Switzerland office, with the rank 
of Ambassador.
    Mr. Shea currently serves as Vice Chairman of the U.S.-
China Economics and Security Review Commission, which annually 
assesses the security, economic, and trade relationships 
between the two countries, including China's compliance with 
its commitments to the WTO.
    Earlier in his career, Mr. Shea served as Counsel and later 
as Deputy Chief of Staff to then Senate Majority Leader Bob 
Dole. Senator Dole has known Mr. Shea for nearly 30 years and 
recently wrote a letter speaking very highly of Mr. Shea.
    ``Over the years, Dennis has demonstrated sound judgment, a 
strong work ethic, and an ability to work well across party 
lines, key attributes for the diplomatic position for which he 
is being considered. His past work in the Senate and his 
current work provide a strong foundation for serving as our 
Nation's representative at the WTO.''
    Those are just a few of the words of high praise from a 
former Majority Leader who is still held in high esteem around 
here.
    I ask unanimous consent that Senator Dole's letter be 
entered into the record.
    Without objection, it will be.
    [The letter from Senator Dole appears in the appendix on p. 
36.]
    The Chairman. Senator Talent also submitted a letter 
endorsing Mr. Shea, and I ask unanimous consent that his letter 
be entered into the record at this point, which, of course, it 
will.
    [The letter from Senator Talent appears in the appendix on 
p. 37.]
    The Chairman. Second, we will hear from Mr. C.J. Mahoney, 
who will be introduced by two of our good friends and 
colleagues, Senators Roberts and Moran.
    Senator Roberts, do you feel like you have made your 
introduction, or do you want to take the time to do it now?
    Senator Roberts. Mr. Chairman, I think I did that.
    The Chairman. Okay.
    Senator Roberts. I can do it again if you would like to 
hear it. [Laughter.]
    The Chairman. As much as I love to listen to you, I think 
we can----
    Senator Roberts. Well, that would indicate double support, 
but I think that Senator Moran can do that very ably, and I am 
waiting patiently to hear from my friend and colleague.
    The Chairman. That is great.
    Senator Moran, we thank you for joining the committee 
today. We are delighted to have you here, and we look forward 
to your introduction at this time.

                STATEMENT OF HON. JERRY MORAN, 
                   A U.S. SENATOR FROM KANSAS

    Senator Moran. Mr. Chairman, thank you very much, and 
thanks to the ranking member, Senator Wyden.
    There seems to be a bit of a Kansas flavor to today's 
hearing. Senator Wyden from Wichita, KS, Senator Roberts and I, 
as well as a couple of folks who had the honor of working for 
our former Kansas Senator, Bob Dole.
    It is a great day to be here with these Kansans, and it is 
particularly an honorable day to be here when Senator Dole is 
going to be recognized by the United States Congress.
    It is an honor for me to introduce C.J. Mahoney, to join 
Senator Roberts in doing so. As was indicated, he is to be the 
Deputy United States Trade Representative for Investment, 
Services, Labor, Environment, Africa, China, and the Western 
Hemisphere.
    C.J.'s resume is compelling. It is an impressive 
professional background: Harvard with honors in 2000; law 
degree from Yale, where he was editor-in-chief of the Yale Law 
Journal; clerk for a Ninth Circuit judge; and then clerk for 
Justice Anthony Kennedy on the United States Supreme Court.
    He is a partner in the law firm of Williams and Connolly, 
and he successfully has represented clients in international 
and domestic arbitration. He is a visiting lecturer at Yale Law 
School and a member and leader of numerous professional 
organizations.
    C.J.'s success in life to date demonstrates a tremendously 
promising future at USTR and beyond. In my opinion, it is due 
to his significant intelligence and talents, but also his 
strength and personal character.
    I have known C.J. for 23 years. He was the student body 
president at Russell High School. That gave him national 
attention when Senator Dole asked him to second his nomination 
in 1996 at the Republican National Convention in San Diego, and 
he did so from the courthouse steps of his hometown in Russell.
    That made C.J. a celebrity in our part of Kansas and across 
the State and affiliated him with our Senator who has received 
such high regard, Senator Dole. It allowed me the opportunity 
to take advantage of C.J.'s interest in politics, and he was a 
driver and a companion as we traveled the First District of 
Kansas in my search for votes and the opportunity to serve the 
United States House of Representatives.
    C.J. has some unique capabilities. I am a bit of a loner 
and would prefer, generally, to drive myself and be alone as I 
make those miles, but C.J. was such a compelling companion and 
enjoyable conversationalist, someone whom I enjoyed having 
conversations with. I learned a lot about him and his family as 
human beings.
    Senator Roberts and I are always proud of people who come 
from our State, but coming from a hometown like Russell and 
small-town Kansas causes people to grow up in a special way 
that creates a love for their community, a respect for their 
neighbors, a willingness to find common ground and compromise 
and understanding that not everyone agrees on everything, but 
we live in a small community in which we have to figure out how 
to get together, get through the day, and make sure that good 
things happen at home.
    C.J. grew up in that kind of family with an understanding 
of how everyday life works and how important it is for 
decisions made in our Nation's capital to have a positive 
impact on people who are generally struggling to get through 
the day to earn a living, put food on their families' tables, 
and to save for their future retirement and their kids' 
education.
    C.J. exemplifies those things. He brings that Kansas 
character and appreciation for others, along with that 
intellectual and capable talent that he has.
    The First District of Kansas covers about two-thirds, 
three-fourths of the State, so there were 66 counties at the 
time, growing to 69. So we spent a lot of time together, and 
just on a personal level, it is an honor to be here to 
introduce C.J.
    We had one more opportunity to spend some time together. 
C.J. was my first intern as a new member of the United States 
House of Representatives, and I spent time with him in that 
capacity. This brings us, again, full circle. I was an intern 
for my Congressman, and Senator Roberts was the then-Chief of 
Staff to Congressman Sebelius. So you have boss-intern, boss-
intern in the room today. I only hope that I can make as much 
difference as I expect C.J. to do in his lifetime in the 
position that Kansans have allowed me to occupy.
    You have a great opportunity to confirm somebody who is 
highly qualified as the type of person you would want in this 
capacity. And I look forward to the committee's questions for 
C.J. and would encourage each of you to get to know him as a 
person and find that we have a person whom you would--all of 
us, regardless of philosophy, the political party, view on 
trade even--want in that capacity where hard work, character, 
and a desire to accomplish a goal is so important.
    Thank you, Mr. Chairman, for the opportunity to speak on 
behalf of C.J.'s nomination.
    The Chairman. Well, thank you, Senator.
    Those are pretty good recommendations coming from a really 
good Senator. So, we appreciate you very much.
    Senator Carper. Mr. Chairman, could I be out of order for 
just a moment?
    The Chairman. Senator Carper.
    Senator Carper. C.J., we have a lot of Senators and others 
who come introduce witnesses or people who have been nominated 
for positions, important positions like this one. Sometimes we 
come in and we are just uncertain as to how we are going to 
vote. I was, like, adamantly opposed to your nomination before 
that introduction. [Laughter.]
    And I grew up in a Southern Baptist church in Danville, VA. 
You can put me now at almost persuaded. [Laughter.]
    That was a beautiful introduction.
    C.J.--my driver is also C.J. He started 3 weeks ago, and he 
was on his way to pick me up at my house. We drive around the 
State in my 2001 Chrysler Town and Country minivan, which just 
went over 467,000 miles.
    I do not know what you drove when you were driving for 
Senator Moran. But C.J., the second week he was pulling into my 
street to come and pick me up, some guy rear-ended and totaled 
his car while he was trying to get to my house.
    So he had a rough start. I am going to tell him to continue 
to prevail and keep his nose to the grindstone, and he will 
turn out well, maybe, just like you. [Laughter.]
    So thank you. Thanks for joining us. We welcome you both 
today.
    Senator Moran. Mr. Chairman, if things go as they should 
and this committee confirms C.J., I would be able to call my 
driver ``Mr. Ambassador.'' [Laughter.]
    Senator Roberts. If the gentlemen would yield, with your 
Chrysler with over 400,000 miles----
    Senator Carper. Four hundred and sixty-seven----
    Senator Roberts. Four hundred and sixty-seven thousand 
miles, I would just--Jerry will not say this, but he drives 
around in a pickup with jeans and a ball cap, and just goes 
around and talks with folks. So he has the pulse of Kansas, and 
he has had good experience with it because my former boss, 
Keith Sebelius, did that. Bob Dole did that. It is a heritage 
out in Kansas.
    If you want to sell that Chrysler, we could probably keep 
using it out there.
    The Chairman. I have heard all I want to hear about 
Chryslers.
    At this point, Mr. Shea, we are going to have you begin 
your opening remarks.

  STATEMENT OF HON. DENNIS SHEA, NOMINATED TO BE DEPUTY U.S. 
    TRADE REPRESENTATIVE/U.S. AMBASSADOR TO THE WORLD TRADE 
ORGANIZATION, WITH THE RANK OF AMBASSADOR, EXECUTIVE OFFICE OF 
                 THE PRESIDENT, WASHINGTON, DC

    Mr. Shea. Chairman Hatch, Ranking Member Wyden, and 
distinguished members of the committee, it is a great honor to 
appear before you today.
    I am humbled by President Trump's decision to nominate me 
to serve as U.S. Ambassador to the World Trade Organization. I 
am particularly grateful to Ambassador Lighthizer for his 
confidence in recommending me for this position.
    As Ambassador Lighthizer stated during the recent WTO 
ministerial in Buenos Aries, the WTO has done an enormous 
amount of good over the past 23 years. But as he rightly points 
out, the WTO needs to improve in a number of areas.
    Too many countries fail to live up to their WTO obligations 
without any consequence. Too many, including some of the 
world's wealthiest nations, seek exemptions from these 
obligations by claiming status as developing countries. The WTO 
has shifted from a forum with a focus on facilitating 
negotiation among sovereign states to a litigation-centered 
institution.
    If confirmed, I expect that institutional reform at the WTO 
will be a major part of the U.S. agenda. Along these lines, the 
U.S. recently tabled a proposal that, if adopted, would bring 
about improved compliance by all WTO members with the important 
transparency and notification requirements of the various WTO 
agreements.
    Let me note that, as a former staffer to someone who has 
been frequently mentioned here today, Senator Bob Dole, I 
appreciate the critical importance of the agricultural sector 
to the U.S. economy. If confirmed, I will work with my 
administration colleagues, including USTR's Chief Agricultural 
Negotiator, to pursue the objectives outlined by the 
administration's Task Force on Agriculture and Rural 
Prosperity--namely, opening markets abroad to American 
agriculture, ensuring fair and science-based regulatory 
treatment for American products, and implementing strong 
enforcement policies that hold our trading partners to their 
WTO commitments.
    As the committee knows, I have had the privilege of serving 
on the bipartisan U.S.-China Economic and Security Review 
Commission for more than 10 years. From 2012 to 2017, I served 
as either the Commission's Chair or Vice Chair, and I have some 
of my colleagues, former and present, here with me today. I am 
very grateful to Senate Majority Leader McConnell for giving me 
this opportunity.
    In its annual reports to Congress, the Commission has 
extensively documented China's continuing failure to abide by 
both the spirit and letter of many of its WTO obligations. 
Areas of concern include market access barriers, particularly 
in the services sector, forced technology transfers, 
intellectual property theft on an unprecedented scale, 
indigenous innovation policies, discriminatory use of technical 
standards, massive government subsidies that have led to 
chronic overcapacity in key industrial sectors, and a 
restrictive foreign investment regime.
    New challenges include the Made in China 2025 plan and the 
country's growing digital protectionism.
    In recent months, the Chinese leadership has sought to 
portray China as the prime defender of the global trading 
system when the reality, as reflected in China's compliance 
with its own WTO obligations, is quite different. While I 
intend to work constructively with my Chinese counterparts in 
Geneva, I am convinced that challenging the distortions created 
by China's mercantilist practices must be a top U.S. priority.
    A critical issue now pending before the WTO is whether 
members, including the United States, are legally obligated to 
treat China as a market economy under their own trade-remedy 
regimes. As both the USTR and U.S. Department of Commerce have 
made clear, China is and remains a non-market economy and 
should be treated as such. Bolstering support for this position 
within the WTO--a position also shared by the European Union--
will be a critical task.
    Let me close by saying that, if you send me to Geneva, I 
intend to wake up each and every morning asking myself these 
questions: What can I do today to advance American interests? 
What concrete steps can I take to improve the economic well-
being of our Nation's workers, farmers, ranchers, and 
businesses, both large and small?
    You have my assurance that I will work closely with this 
committee and its staff not only to report about what is 
happening at the WTO, but also to seek your input on key 
decisions.
    Mr. Chairman, Ranking Member Wyden, thank you for the 
opportunity to share these comments, and I look forward to your 
questions.
    The Chairman. Thank you very much.
    [The prepared statement of Mr. Shea appears in the 
appendix.]
    The Chairman. Mr. Mahoney, we will take your testimony now.

     STATEMENT OF C.J. MAHONEY, NOMINATED TO BE U.S. TRADE 
 REPRESENTATIVE FOR INVESTMENT, SERVICES, LABOR, ENVIRONMENT, 
  CHINA, AFRICA, AND THE WESTERN HEMISPHERE, WITH THE RANK OF 
 AMBASSADOR, EXECUTIVE OFFICE OF THE PRESIDENT, WASHINGTON, DC

    Mr. Mahoney. Thank you, Chairman Hatch, Ranking Member 
Wyden, and members of the committee.
    Let me start by thanking you and your staff for holding 
this hearing today, as well as for your professionalism and 
engagement throughout this nomination process.
    I also thank my home State Senators, Senator Roberts and 
Senator Moran, for their gracious introductions and for being 
here today.
    I am deeply honored to have been recommended by Ambassador 
Lighthizer and nominated by the President to serve as the 
Deputy United States Trade Representative for Investment, 
Services, Labor, Environment, Africa, China, and the Western 
Hemisphere.
    One of my goals, if I am confirmed, is to ensure that USTR 
has a constructive and transparent relationship with this 
committee and the House Committee on Ways and Means, consistent 
with the framework set forth in TPA. An important part of 
USTR's mission is to facilitate a partnership between the 
executive and legislative branches on trade policy. I am fully 
committed to that goal.
    USTR's chief priority in the Western Hemisphere at present 
is the renegotiation of the North American Free Trade 
Agreement. I fully support the goals set forth in USTR's 
published negotiating objectives for NAFTA. These negotiations 
are an opportunity to modernize the agreement and to create a 
more level playing field for American workers, especially those 
in the manufacturing sector.
    At the same time, however, as a Kansan, I am fully 
committed to preserving and enhancing the gains that our 
country has achieved in NAFTA, notably for agricultural goods. 
Especially at a time of already depressed commodity prices, it 
is important that U.S. agriculture lose no ground and maintain 
its reputation as a reliable supplier.
    While the NAFTA renegotiation is a critical priority, I am 
mindful that our single greatest trade challenge is our 
relationship with China. In the past 3 decades, China has 
succeeded in lifting millions of its citizens out of poverty. 
That is an amazing achievement that should be celebrated.
    But it has become increasingly clear that China is 
sustaining high levels of economic growth by pursuing an 
unfair, mercantilist economic policy that distorts world 
markets and inflicts harm on its trading partners, including 
the United States. Moreover, while much of China's growth is 
attributable to its relatively uninhibited access to the U.S. 
market, China maintains too many barriers to its own domestic 
market in too many sectors.
    Years of dialogue have yielded some progress but not nearly 
enough. It is time for new thinking and a new approach. 
Ambassador Lighthizer is committed to that. So am I.
    I would also oversee USTR's Africa portfolio if I am 
confirmed. I look forward to working with my African 
counterparts to strengthen America's trading relationship with 
this dynamic and strategically important region.
    Another of my priorities, if confirmed, is to be a champion 
for America's services sector. This is an area where, as the 
chairman noted, the United States enjoys a tremendous 
competitive advantage. But too many barriers to market access 
remain, particularly in the fast-growing area of digital trade.
    I have full confidence that America's workers, farmers, 
service providers, and entrepreneurs can succeed in global 
markets. But to do so, they need greater and freer access to 
those markets, robust protection for intellectual property 
rights, and assurance that our trading partners are playing by 
the rules. That is where USTR comes in, and that is where my 
full attention and energy will be devoted, if I am confirmed.
    Again, I thank the committee and look forward to your 
questions.
    The Chairman. Well, thanks to both of you.
    [The prepared statement of Mr. Mahoney appears in the 
appendix.]
    The Chairman. I have some obligatory questions that I ask 
all nominees who appear before this committee.
    First, is there anything that you are aware of in your 
backgrounds that might present a conflict of interest with the 
duties of the office to which you have been nominated?
    Mr. Shea. No, Senator.
    Mr. Mahoney. No, Senator.
    The Chairman. All right.
    Second, do you know of any reason, personal or otherwise, 
that would in any way prevent you from fully and honorably 
discharging the responsibilities of the office to which you 
have been nominated?
    Mr. Shea. No, Mr. Chairman.
    Mr. Mahoney. No, Senator.
    The Chairman. Third, do you agree without reservation to 
respond to any reasonable summons to appear and testify before 
any duly constituted committee of the Congress, if confirmed?
    Mr. Shea. Yes, Mr. Chairman.
    Mr. Mahoney. Yes, Senator.
    The Chairman. All right.
    Finally, do you commit to provide a prompt response in 
writing to any questions addressed to you by any Senator of 
this committee?
    Mr. Shea. Yes, Mr. Chairman.
    Mr. Mahoney. Yes, Mr. Chairman.
    The Chairman. All right.
    We will turn to Senator Grassley for his questions.
    Senator?
    Senator Grassley. First of all, one question for Mr. Shea, 
and then one question for Mr. Mahoney. And then I have a 
question both of you could answer.
    Mr. Shea--congratulations to both of you, by the way.
    Mr. Shea. Thank you, sir.
    Senator Grassley. In your testimony, you state that one of 
your top priorities at the WTO will be addressing the fact that 
too many members claim ``developing nation'' status. That 
status, which is determined by the country itself, is very 
advantageous for avoiding routine trade obligations that every 
WTO member ought to have.
    What ideas or proposals do you have for limiting the 
ability of countries to self-certify as ``developing''?
    Mr. Shea. Well, Senator, thank you very much for the 
question.
    Ambassador Lighthizer, at the recent ministerial in 
Argentina in December, made the exact point that you are 
making, that too many countries are self-designating themselves 
as ``developing countries'' and as a result getting special and 
differential treatment.
    One of the things that countries receive when they are 
developing countries is more latitude, for example, on the 
issue of notifications of their subsidies. The U.S. has tabled 
a proposal late last year that would put, actually impose, some 
consequences for countries that fail to properly and timely 
notify their subsidies, because after all, transparency is 
essential to the system.
    That proposal was well-received by some, as I understand 
it, and will be taken up later this quarter at the WTO.
    So one of the things I would do, if confirmed, would be to 
be a strong advocate of that proposal as one way of trying to 
force countries, particularly the advanced developing 
countries, to assume greater responsibility.
    Senator Grassley. All right.
    Mr. Mahoney, both you and Mr. Shea wrote in your testimony 
that China is implementing a mercantilist economic policy to 
the detriment of others, and we know that about the United 
States for sure.
    I certainly agree with you that China gets unfettered 
access to our markets while throwing up barrier after barrier 
for our companies. I hear complaints from every American 
business that operates in China. However, China also buys vast 
amounts of Iowa soybeans and pork. Recently, we were able to 
get beef in there.
    How, specifically--for Mr. Mahoney, then--will your 
approach to this China conundrum differ from previous 
administrations?
    Mr. Mahoney. Well, Senator, thank you for the question.
    Our policy over the past 2 decades with China has been 
focused primarily on dialogue, which the last two 
administrations have promulgated, as well as bringing actions 
in the WTO. And while there has been some progress, the 
progress all too often has been of the manner of one step 
forward and two steps back.
    So I do think that we need new thinking, including using 
trade tools that we have not used in the recent past. The 301 
investigation that Ambassador Lighthizer has launched with 
regard to intellectual property, I think is a step in the right 
direction.
    That does not mean we are not also going to use the other 
tools that we have used, including the WTO. I think that that 
is important as well.
    But we need new thinking, and we need to consider 
approaches that we have not followed in the more recent past, 
so that we can change the dynamics in this relationship.
    Senator Grassley. For both of you: how do you each feel 
about currency manipulation being addressed in trade agreements 
in the future? And I would like to--before you answer--go on 
record saying that I believe that we should address currency 
manipulations in trade agreements, because currency values have 
an immense impact on imports and exports.
    But what are your opinions on that question?
    Mr. Shea. Well, I would agree with you. We have seen with 
China in the past--they have obviously manipulated the currency 
to get an export advantage. And it has been a sustained problem 
over time.
    You know, I would work with--if confirmed, I would work 
with my colleagues at the USTR to figure out whether that is 
the best negotiating approach, to put currency in a trade 
agreement.
    I feel strongly that it is. We should call the Chinese out 
on it. In the past, we were very reluctant to do that back 
when, in fact, they were engaged in that practice.
    Senator Grassley. Mr. Mahoney?
    Mr. Mahoney. I agree as well, Senator. Currency 
manipulation is a quintessential unfair trade practice. It has 
devastating effects on America's workers.
    I know this is an issue that the Congress has instructed 
the USTR to put in future trade agreements through the TPA 
legislation. And I also know it is something that is in USTR's 
published negotiating objectives for NAFTA.
    I fully support that. I hope that we can get a currency 
provision in NAFTA that, hopefully, will serve as a template 
for other trade agreements.
    Senator Grassley. Thank you both very much.
    The Chairman. All right.
    Senator Wyden?
    Senator Wyden. Mr. Chairman, I understand Senator Portman 
has to be out the door by 11. So why don't I let him go before 
me. And then if I could follow him, that would----
    The Chairman. Great.
    Senator Portman?
    Senator Portman. First, thank you very much to the ranking 
member for his generosity.
    I have had the opportunity to be here this morning to hear 
glowing introductions of both of you, and to hear from my 
colleagues on the other nominees. And let me just say I am 
delighted that you are willing to step forward. You both are 
bright, qualified individuals.
    Dennis, you and I got to work together quite a bit in your 
previous roles, and we need you. And we need you right now. I 
am sure Bob Lighthizer is very eager to have you on board.
    As a former USTR, I can tell you those deputies are 
absolutely essential. Dennis, I am sure you know Peter 
Allgeier, who did a terrific job for me at WTO. And I have 
talked to him.
    C.J., if you have not reached out to Karan Bhatia or Susan 
Schwab yet, they would be terrific people to talk to. And I 
know they would love to give you input.
    I appreciate what you said on currency manipulation. I am 
one of those Republicans who actually agrees it does affect 
trade, and we ought to deal with it.
    With regard to NAFTA, C.J., I think you are going to have 
an opportunity to do so. My understanding is the Mexican 
government is open to it as long as it does not affect the 
conduct of monetary policy, as they say, which is not the idea.
    So I hope you will include it, even though they are not 
manipulators, because it would present a precedent for the 
future.
    To Mr. Shea, on WTO, you talked about China. I know you 
have a background in this, on China playing by the rules.
    Let me ask you about a specific case. Just as an example, 
right now you are going to be inheriting, should you be 
confirmed, a key WTO case on subsidies to producers of primary 
aluminum.
    Currently, China provides subsidies through artificially 
cheap loans. They also do it through artificially low-priced 
inputs for aluminum production, including energy--which, 
obviously, is key to that--and coal and electricity costs.
    I have supported filing this case, because I know it will 
help. We have a manufacturer in Ohio, as an example, Pennex 
Aluminum in Leetonia, just as one example of the many Ohio 
companies and American companies that would benefit directly 
from it.
    I think if we are able to compete on a level playing field, 
we will be fine with regard to aluminum and other products. But 
it is not fair.
    So, more broadly, I want to hear you talk about how we 
protect our interests at WTO. But specifically, can I get any 
of your thoughts on this aluminum subsidies case?
    Mr. Shea. Yes, thank you, Senator.
    First on the aluminum case, in my capacity on the U.S.-
China Commission, we have written extensively on subsidies in 
the aluminum sector as well as in steel and other industrial 
sectors.
    My understanding of this case is it is part of an overall 
review in the administration of all things aluminum. So, if 
confirmed, I would hope to work closely with you on that.
    I think a very important case in the WTO that affects all 
sectors of our economy, particularly industrial sectors, is the 
nonmarket economy status.
    We did not agree--the WTO members did not agree--that after 
a certain period of time, market conditions would automatically 
be deemed to exist in China, regardless of what the facts on 
the ground might reveal. And as you well know, the facts on the 
ground in China reveal a nonmarket economy.
    State-invested enterprises control key sectors of the 
economy. They pursue government-directed industrial policies. 
They receive preferential treatment from State banks. The State 
banking sector is overwhelmingly controlled by the government.
    Senator Portman. Mr. Shea, I think it is really important 
that you continue to hold firm on our position and keep the 
Europeans on board too, because at some points they have 
waivered. And my understanding is right now they are willing to 
stick with us, because the facts on the ground do not defend 
the Chinese position, which is that they ought to become a 
market economy, particularly our trade cases that are pending 
that you are talking about, but also our antidumping cases and 
our countervailing duty cases.
    So I thank you for that. I am glad you have that 
background.
    Mr. Mahoney, just quickly on exports: one thing that I 
think you will find as you get into this job is that, where we 
have a trade agreement, a free trade agreement with another 
country, we do pretty well. In fact, we only have trade 
agreements with 10 percent of the global economy, yet we send 
47 percent of our exports there. We actually have a trade 
surplus in the aggregate with our trading partners.
    Sometimes the administration--I am concerned that there is 
too much criticism of trade agreements, when in fact trade 
agreements are not really the issue. China is not in a trade 
agreement with us, nor is Japan, nor is Europe, as an example.
    In Ohio, I will tell you we send 60 percent of our exports 
to our trading partners. About half go to just two--Canada 
being number one, Mexico being number two.
    So in terms of the importance of NAFTA, what you said 
earlier, I hope you will continue to work with us on that. We 
have a national trade deficit, yes, of $500 billion, but it is 
actually not the fault of our trade agreements. You want to 
open more markets.
    I hope that you will, in this job, be willing to open even 
more markets for our farmers and our service providers and our 
manufacturers. In Ohio, it is one out of every four jobs, 25 
percent of our manufacturing jobs, factory jobs are exporting 
jobs.
    Can you speak briefly about that?
    Mr. Mahoney. Yes, Senator.
    I agree with you. I think that reducing barriers to 
American exports is what I see as central to the job that I 
will have, if I am confirmed.
    We tolerate too many barriers to market access, 
particularly in agriculture and services, where we maintain 
such a tremendous competitive advantage. And services is an 
area where we have an aggregate trade surplus of $250 billion, 
which would reduce the overall trade deficit by a third, I 
think, the last time that the numbers were available in 2016.
    So I think that it is absolutely critical that USTR be on 
the front lines trying to reduce barriers to American exports 
in other countries, and I am fully committed to doing that.
    Senator Portman. Thank you, Mr. Chairman.
    Thank you all.
    The Chairman. Senator Wyden?
    Senator Wyden. Thank you, Mr. Chairman.
    I have just a couple of questions. I know on our side, both 
Senator Brown and Senator Stabenow are real experts on this 
trade issue, so I look forward to their questions as well.
    First one, Mr. Mahoney, is an issue that is important in 
terms of follow-up. As you know, the chairman and I, along with 
our counterparts in Ways and Means, wrote the President and 
said we have six priority areas. And we were talking, for 
example, about manufacturing. We were talking about 
agriculture, a host of 
market-distorting practices with respect to China, solar to 
semi-
conductors.
    My question is, if confirmed, will you commit to brief the 
Finance Committee within 30 days on the administration's 
strategy for addressing these issues the chairman and I have 
focused on? We just want to make sure that we really come out 
of the box strong.
    As you know, I am very favorably inclined towards your 
candidacy here, your nomination. Is that a commitment you can 
make, that you will, within 30 days, brief us on the 
administration's strategy for the big six issues that we asked 
about with respect to China?
    Mr. Mahoney. Yes, sir. I would be happy to have the 
opportunity to brief the committee.
    As I said in my opening statement, I think that one of the 
important missions of USTR is to foster a productive 
relationship between the executive and legislative branches on 
trade policy. I am excited to be involved in that and would 
look forward to the opportunity to brief you at any point,
    Senator Wyden. I heard you say ``brief the committee.'' I 
did not hear ``within 30 days.''
    Mr. Mahoney. Yes, within 30 days.
    Senator Wyden. Great. Terrific.
    Mr. Mahoney. I am happy to make that commitment, Senator.
    Senator Wyden. All right.
    So, let us talk about the other concern that I have, and 
that is about transparency. Transparency goes right to the 
heart of what I think a smart trade policy is.
    And I have talked with Senator Stabenow and Senator Brown 
about this. And we really have a kind of coming together. We 
have some core principles, and they really take from those who 
are for free trade and those who are for fair trade. And we 
call it ``smart trade.''
    Right at the core of a smart trade policy is transparency 
and making sure that no longer will Senators go to town hall 
meetings--as has been the case for a lot of years--where 
constituents will ask us about trade policy, and nobody has any 
idea what is going on. The chairman and I, with the support of 
colleagues on both sides, sought to change that, as you know, 
in the debate last year, and we have to get back on track with 
respect to transparency.
    As you know, we have not had public summaries of the 
negotiating objectives with South Korea. That is something that 
we are concerned about. It is critical if we are going to raise 
the bar with respect to transparency.
    Now, Bob Lighthizer was just up here a few minutes ago, and 
we were talking about a host of issues. You are going to be the 
transparency point person. And sometimes you have to be careful 
for what you wish for. That is part of the TPA authority bill 
we passed in 2015.
    If confirmed, will you include that in that first briefing 
within 30 days, what you are going to do on transparency 
issues?
    Mr. Mahoney. Yes, Senator. I would be happy to make that 
commitment. I know how important the transparency provisions of 
TPA were in getting the legislation passed. I know how 
important that is to you and other members of the committee, 
and I am fully committed to that goal.
    Senator Wyden. Well, I know from our private conversations 
that you understand the intensity of feeling from members on 
both sides about raising the bar on transparency. I think you 
are up to it.
    The only reason I am asking for that 30-day commitment is, 
I just want to make sure that these issues do not get lost. We 
have gone a long time since the 2016 campaign. You heard my 
opening statement. We have not had a lot of progress in some of 
these areas. I think you are up to changing that.
    I support both of these nominees this morning, Mr. 
Chairman. I look forward to my colleagues' questions.
    The Chairman. Well, thanks so much, Senator.
    Senator Brown?
    Senator Brown. Thank you, Mr. Chairman.
    Thank you both for the discussions we had, maybe back in 
November. Thank you so much.
    I have a few questions for each of you, and I would like 
your answers, if possible, to be ``yes'' or ``no.'' No trap, I 
just want to get some information out here.
    Starting with Mr. Shea, I am concerned that many WTO 
decisions, particularly those by the appellate body, have 
undermined U.S. trade remedy laws at the expense of 
manufacturers and workers in our country. Do you agree that 
many of those decisions were an overreach by WTO and a major 
concern for our country, Mr. Shea?
    Mr. Shea. Yes.
    Senator Brown. Thank you.
    China, as you know, has brought a case against the U.S. and 
the EU at the WTO for continuing to apply nonmarket economy 
status in our antidumping case methodologies. Do you agree that 
China is a nonmarket economy and that winning this case must be 
a priority for us at the WTO?
    Mr. Shea. Yes.
    Senator Brown. Thank you.
    I appreciate the administration's support on nonmarket 
economy status. We know that our allies in Western Europe stand 
with us on that. We need your work to make sure they continue 
to stand with us.
    I have an op-ed you published in December 2016 with your 
colleague, Carolyn Bartholomew, in which you say Chinese state 
enterprises should not be allowed to purchase U.S. companies. 
Senator Grassley, a very distinguished, very senior member of 
this committee, a Republican, and I introduced a bill that 
would require a review of certain foreign investments made in 
the U.S., particularly those made by state-owned companies.
    The point of this bill is to ensure that foreign 
investments made here--we know about CFIUS and national 
security issues--are in our economic interest as a country. 
There is no mechanism for doing so, as I think you know.
    If confirmed, will you commit to working with Senator 
Grassley and me on this legislation so we can give the 
administration the tools it needs to ensure foreign investment 
in the U.S., that it is good for our economy and good for our 
workers long-term?
    Mr. Shea. Yes.
    Senator Brown. All right. Thank you.
    Mr. Mahoney, if you could be as good as Mr. Shea, I will 
turn to you. [Laughter.]
    Mr. Mahoney. I will endeavor to be.
    Senator Brown. Thank you for that, in many ways.
    One of the main problems with the current NAFTA agreement 
is that its labor and environmental standards are 
unenforceable, last-minute side agreements the Clinton 
administration negotiated. We have lost U.S. jobs to Mexico as 
a result.
    Do you agree that one of the key ways to improve NAFTA in 
the current negotiations that a number of us are working with 
Ambassador Lighthizer on is to include strong labor and 
environmental standards and make sure they are fully 
enforceable?
    Mr. Mahoney. Yes, Senator. I believe that including those 
in the main agreement--including labor and environmental 
standards that are consistent with TPA--is an important goal. I 
fully support it.
    Senator Brown. We know from now 20-plus years of NAFTA how 
undermining labor standards, environmental standards, hurt our 
competitiveness and hurt our ability to keep jobs in this 
country.
    Last question, and thank you both again. Given that China 
has not lived up to its trade obligations to the WTO, I do not 
believe we should reward their bad behavior with a bilateral 
investment treaty that people talk about.
    If confirmed, will negotiating between the U.S. and China 
be a priority?
    Mr. Mahoney. Senator, my understanding is that the 
administration does not have a final point of view on that, but 
I certainly share your concerns about China's reluctance to 
live up to prior agreements that it has entered into in the 
United States. So I think that anything we do on that front, we 
need to do cautiously.
    Senator Brown. Is there any effort at USTR that you see to 
move forward on any bilateral investment treaty?
    Mr. Mahoney. Senator, again, I am not aware of what the 
status of that is. I know it is one of the agreements that the 
administration is reviewing, but my understanding is that a 
final decision has not been made.
    Senator Brown. Thank you, because I know the President 
talks in terms of wanting to do bilateral agreements. But this 
is one that, if you and Ambassador Lighthizer move forward on, 
you should move forward with great caution, talking to us, 
listening to members of Congress, many, many, many of us who 
have great concerns about any kind of bilateral investment 
treaty with the People's Republic of China.
    Mr. Mahoney. Absolutely, Senator. I would do that.
    Senator Brown. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Brown.
    Senator Cantwell?
    Senator Cantwell. Gentlemen, thank you so much, and 
congratulations on your nominations.
    You know, there has been a lot of discussion about the 
renegotiation of the NAFTA agreements. But for Washington, the 
agriculture community has benefited greatly. I think it is 
something like a 200-percent increase in agriculture exports.
    Now, as people have talked about the negotiations, some are 
concerned about provisions that would treat perishable and 
seasonable products differently that could lead to retaliatory 
measures. So I think in 1996, the export value of Washington 
food and agriculture was $2.6 billion. Today it has grown to 
$6.8 billion. So it has been positive.
    So how do we make sure that the status of the proposed 
seasonal and perishable trade remedy--what do you think the 
status of that is, and how do we avoid pitting one part of the 
country against another?
    Mr. Mahoney. Senator, I am certainly aware of that issue. I 
note that it is something that Congress addressed in the TPA 
legislation. Given that I am not a cleared negotiator, I am not 
familiar with the proposals that the U.S. has put forward to 
deal with that issue.
    I certainly understand that this is an area where there are 
a lot of strong opinions. Agriculture is not a monolith. There 
are different interests in different parts of the country.
    I can commit to you that if I am confirmed, I will listen 
to the views of all stakeholders to make sure that we come up 
with an appropriate solution.
    Senator Cantwell. So how would you plan or prioritize so 
that one region was not harmed over another, particularly if it 
might be done for political purposes? I am not interested in 
changing NAFTA and the 200-percent agriculture increase in 
Washington State for somebody to say, ``Hey, Florida, I did 
something for tomatoes,'' and basically screw the apple, or 
pear, or cherry industry. That is just not good policy.
    Mr. Mahoney. Well, Senator, I think that this is an area 
where, again, it is important to solicit input from all 
stakeholders. Again, I am not familiar with the text that has 
been tabled on this, but it has to be appropriately crafted.
    I understand the concerns that have been voiced by growers 
in certain parts of the country. I also understand the concerns 
that have been voiced by growers of seasonable and perishable 
goods in Florida and Georgia.
    This is an area where we need to strike an appropriate 
balance, and I am committed to doing that.
    Senator Cantwell. So if you were in this position in the 
future, you would not pursue policies that did that? Is that 
what you are saying?
    Mr. Mahoney. Senator, I am committed to following TPA. And 
I know that one of the things that the Congress instructed USTR 
to do in TPA was to ensure that growers of seasonable and 
perishable goods have access to import protections, but at the 
same time, I understand that there are concerns among certain 
parts of that same sector that they could face retaliation if 
there are changes. So that is why I think it is important that 
we hear from everyone and we craft an appropriate solution.
    Again, I am not sure exactly what is----
    Senator Cantwell. A solution that does not put them in that 
place, that does not cause those kinds of challenges?
    Mr. Mahoney. We certainly need to take all of this into 
account. My goal is to advance the interest of agriculture, not 
to undermine it in any way.
    Senator Cantwell. Thank you.
    So what do you think we need to do to further bump up the 
opportunities for U.S. agriculture products to reach new 
markets? What do you think some of those----
    Mr. Mahoney. Well, I think there are a few things. For one 
thing, the NAFTA negotiations aim to achieve that, particularly 
with regard to the Canadian dairy sector, which is an area 
where our producers continue to be shut out.
    We have opportunities, I think, in Asia, Africa--the 
relationship with Argentina is showing some signs of progress. 
So I think that in all of these areas we need to be active, 
including through discussions about FTAs with appropriate 
candidates.
    Senator Cantwell. Here is what I would like you to think 
about. I am for going and doing as many bilaterals as we can 
possibly do. Propose them to Congress. Let them decide which 
ones of these agreements they think are good.
    But when we fail to open up new and developing markets and 
other people come and get a foothold, get 30 percent of market 
share, it is very hard to come in behind that.
    So the one thing we know how to do in the United States of 
America is grow product. We are the best. Let us make sure that 
we are opening up all of these developing countries by getting 
more workforce out there in the discussion with these countries 
about opening those opportunities.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Toomey?
    Senator Toomey. Thank you very much, Mr. Chairman.
    I want to thank our witnesses for being here today and for 
being willing to serve in these really, really important posts.
    Mr. Mahoney, I want to talk to you about NAFTA a bit here. 
In your testimony, you state that the U.S. Trade Rep's chief 
priority in the Western Hemisphere at present is the 
renegotiation of NAFTA.
    You go on to say, ``I am fully committed to preserving and 
enhancing the gains that our country has achieved in NAFTA.'' I 
am glad to see that because, in my view, NAFTA has been 
terrific for the United States. It has been terrific for 
Pennsylvania. It has been good for our economy, and it has been 
good for even security purposes. It has elevated the standard 
of living in all three countries, and that is a good thing.
    I am sure you are aware of this data, but just as a 
reminder for the committee, according to the U.S. Commerce 
Department, American goods exports to Mexico are exceeded on an 
annual basis only by one country in the world, and that is 
Canada.
    So we sell more goods to Mexico than anywhere in the world, 
except Canada. And if you add those two countries, Mexico and 
Canada, U.S. exports to Mexico and Canada combined--just those 
two countries--exceed all of the U.S. exports that we have to 
China, Brazil, India, France, Germany, UK, Japan, and several 
other countries combined.
    Our economies are significantly integrated. We have massive 
sales in Pennsylvania. Sales to Mexico, exports to Mexico 
increased 500 percent since NAFTA.
    So I mention all of this because I do fear that there are 
some in the administration whose view is that the highest 
priority goal needs to be to eliminate the trade deficit. Now, 
we have a trade deficit with Mexico.
    It seems some want to get to managed trade, rather than 
free trade. And I am very concerned that if we do that, we will 
not achieve one of the goals that you stated here of preserving 
and enhancing the gains that our country has achieved in NAFTA.
    I am 100-percent in favor of finding ways to export more to 
Canada and Mexico. And that is a very, very worthy and 
important goal, but I hope you would not support--and I would 
like to ask for your comments on supporting policies that would 
be designed to increase the cost to American consumers of 
products because they happen to originate in those countries.
    What would your view be on using tariffs or quotas to curb 
imports from Mexico and Canada?
    Mr. Mahoney. Well, Senator, I agree with you that these are 
two hugely important trade relationships, and I think that the 
renegotiation of NAFTA gives us an opportunity to strengthen 
those relationships. My hope is that these renegotiations are 
successful and the result is more trade between all three of 
these countries in a way that sets us all down the path to a 
more prosperous future.
    I do think that NAFTA, given that it is 23 years old--it 
makes sense to see what has worked, see what has not worked, 
include provisions such as digital trade that would not have 
been relevant when the agreement was first enacted. The 
negotiating objectives for NAFTA--which are at this point my 
best insight into what our strategy is, given that I am not at 
the negotiating table--I think are all reasonable and I think 
are aimed at reducing barriers to trade, and facilitating trade 
at the same time, by including provisions such as labor and 
environmental chapters in the agreement, which is----
    Senator Toomey. I understand, but you are not really 
responding to my concern about measures that would be designed 
to impede imports from Mexico and Canada. I just want to urge 
you not to go down that road.
    I am sure you are fully aware that any country subject to 
those sorts of behaviors on our part can and would retaliate. I 
am sure you will acknowledge that the chemical goods, the 
machinery, the food manufactures, the transportation equipment 
that Pennsylvania, for instance, exports to Mexico and Canada, 
they can buy that somewhere else.
    And if we go down the road of penalizing and blocking 
imports from those countries, they will retaliate; right?
    [No response.]
    Senator Toomey. Also, I wonder if you have given any 
thought to--and I will close with this, Mr. Chairman. I am 
going to run out of time.
    But there has been considerable research about the extent 
to which our trade deficit is erroneously magnified in the 
sense that multinationals have had incentive to book revenue 
outside of the United States. So it is not that the economic 
activity happened outside, but they had an incentive to show it 
that way. That tends to exaggerate the magnitude of the 
deficit.
    The tax reform that we have just adopted and that the 
President has signed into law dramatically diminishes the 
incentive for multinational companies to do that. And I think 
it is very likely that that change will show a significant 
reduction in the trade deficit.
    Now, have you given any thought to the scale of that, to 
that phenomenon? Do you agree that tax reform is likely to 
reduce that phenomenon?
    Mr. Mahoney. I am aware, generally, of the provisions that 
Congress enacted in order to discourage booking of revenue 
overseas and to bring cash back into the United States. I think 
that will have a positive impact on the trade deficit, and I 
certainly hope that that is the case, as well as to increase 
the incentives for American companies to invest in the United 
States.
    Senator Toomey. Well, thank you. I just want to urge you to 
do the important work of opening up markets to American 
exports, but do not punish American consumers.
    Thank you.
    The Chairman. Thank you, Senator.
    I appreciate both of you testifying. We are going to get 
you both out. We really appreciate you.
    I have to leave, so the Senator from Oregon is going to 
continue the committee until we get past the last few 
questioners. So forgive me for having to go to the floor, but I 
think both of you are excellent, excellent nominees, and we 
will do everything in our power to get this done for you.
    Mr. Shea. Thank you, Mr. Chairman.
    Mr. Mahoney. Thank you.
    The Chairman. The next one is Senator Stabenow.
    Senator Stabenow. Thank you very much, Mr. Chairman.
    Welcome to both of you. Congratulations on your 
nominations.
    I have similar concerns to other colleagues who have asked 
questions, and I do want to, just for emphasis, speak about 
some of those again.
    Let me start by saying we are in a global economy. We need 
to trade. It needs to be fair, and it needs to be smart. My 
mantra is always, we want to export our products, not our jobs.
    So in a large State like Michigan, our farmers need 
markets, no question about it. You cannot move the farm, but 
you can move the factory. So we have to look at different parts 
of our economy differently.
    One of my concerns on the tax bill that was just passed is 
that there were no efforts to close loopholes that were 
actually helping to send jobs overseas, which is a big concern 
of mine.
    Day one, the President said he was going to call China a 
currency manipulator. It has been a year now. That has not 
happened. We know we have lost at least 5 million jobs related 
to that.
    So now when we look at NAFTA--and I know other colleagues 
have mentioned this as well--but it is not just NAFTA, it is 
TPP, it is the auto industry being deeply concerned about 
having a currency regime template to follow. I would ask, Mr. 
Mahoney, do you support including an enforceable currency 
measure in the new NAFTA agreement?
    Mr. Mahoney. Absolutely, Senator.
    Senator Stabenow. Thank you.
    And do you see that as a template for future trade 
agreements?
    Mr. Mahoney. I certainly hope so. I know this is something 
that Ambassador Lighthizer and the President care deeply about. 
It is also something that the Congress addressed in TPA, and it 
is something that I am fully committed to.
    Senator Stabenow. And the last scheduled negotiating round 
we know is in March at this point. Would you advise the 
administration and fellow negotiators to stay at the 
negotiating table and continue to go over outstanding issues, 
currency being one of them, until that can be resolved and 
currency is included?
    Mr. Mahoney. Yes, Senator. I have heard the President and 
Ambassador Lighthizer both make comments about the timetable. 
It is in everyone's interest to move quickly, but at the same 
time, it is important that the negotiations accomplish what 
they need to accomplish. And I agree that currency is one of 
the important goals.
    Senator Stabenow. It is very much so.
    Let me turn to a different topic, and, Mr. Mahoney, I would 
continue with you.
    When we talk about not moving the factory, when we talk 
about having a level playing field on trade, enhancing and 
strengthening labor and environmental standards have to be a 
top priority in NAFTA negotiations in order to make that 
happen. Michigan workers cannot compete when their labor 
standards, particularly in Mexico, go unenforced and wages in 
other countries are too low.
    I have sat with CEOs saying, you can give me all the 
incentives and tax breaks you want, but you cannot compete with 
$1.50 an hour in Mexico. And that is a race to the bottom. That 
has been what has been happening for the middle class in this 
country, and certainly in Michigan. And it has to stop.
    When labor groups and unions in other countries are 
mistreated or unable to collectively bargain for better wages 
and working conditions, that harms the men and women in 
Michigan who are working hard every day on the assembly line or 
in other areas. The same goes for environmental issues.
    So I would ask, do you support strong and enforceable labor 
and environmental standards in the NAFTA negotiations?
    Mr. Mahoney. Senator, I fully support the labor and 
environmental provisions that are in TPP, and with regard to 
labor, the core ILO standards.
    I agree with you that if we are going to open up our 
workers to competition, we need to make sure that the playing 
field is level. One of the ways we do that is by ensuring that 
workers in other countries have basic protection such as the 
core ILO standards.
    Senator Stabenow. All right.
    Here is my concern. The President said that he was going to 
pull out of TPP because it was a bad deal for workers. You are 
saying you would accept the standards in TPP, which are clearly 
not strong enough. So why would they be strong enough for 
NAFTA?
    Mr. Mahoney. Senator, I meant TPA, the Trade Promotion 
Authority.
    Senator Stabenow. Well that is also--current TPA, you are 
talking about as being the strongest we are going to do on 
worker provisions and the environment. Again, the President 
indicated that the current trade regimes were not a good deal 
for workers or for people in this country as it relates to the 
environment.
    So why would they be good enough for NAFTA?
    Mr. Mahoney. Senator, one of the problems we have had with 
NAFTA with labor and environment has been that the labor and 
environment agreements were side agreements. They were not 
subject to the dispute resolution mechanisms that applied to 
other parts of the agreement.
    We have seen, in recent years, the Mexicans enact 
constitutional reforms that are designed to strengthen 
protection for workers, but we need to make sure that those are 
implemented and enforced. There is also a big part of this that 
is about ongoing enforcement and monitoring.
    USTR, as you know, works with the Labor Department to 
ensure that all of our trade partners are living up to their 
labor obligations. I am certainly committed to making sure that 
that happens if I am fortunate enough to be confirmed.
    Senator Stabenow. Well, this is an area of deep concern to 
me, because it goes to the fundamentals of a level playing 
field and whether or not we have a middle class in this 
country, or if we are telling Americans it is just going to be 
a race to the bottom. And that is a bad deal for us.
    Mr. Chairman, I have other questions regarding China and 
their protectionist approach and closing their markets, but I 
will submit those for the record.
    Thank you.
    Senator Wyden [presiding]. So ordered.
    Senator Whitehouse has agreed to wait 5 more minutes before 
he asks his first questions on his first day as a new member, 
as he wishes to do a courtesy to our colleague from New Jersey, 
Senator Menendez.
    Senator Menendez. Thank you, Mr. Chairman.
    I thank my colleague from Rhode Island for his courtesy. He 
can have all of the M&Ms from my office that he wants, that he 
comes by and takes. [Laughter.]
    Mr. Mahoney, when Ambassador Lighthizer was last before the 
committee in June, he emphasized how important it is that we 
obtain enforceable labor provisions in the agreement. I am 
following up on Senator Stabenow's comments.
    Press reports suggest that the administration is advocating 
for an optional dispute settlement mechanism in NAFTA, which 
would mean the parties could choose whether or not to subject 
themselves to the enforcement of the deal, including labor 
obligations.
    Do you believe that an optional dispute mechanism is an 
effective way to make labor standards enforceable in NAFTA?
    Mr. Mahoney. Well, Senator, since I am obviously not a 
cleared negotiator yet, I am not familiar with the exact 
proposals that the United States has tabled. I think having a 
mechanism to ensure the enforceability of labor and 
environmental standards is important. It is something that is 
spelled out in TPA, and it is also reflected in USTR's 
published----
    Senator Menendez. You understand what an optional dispute 
mechanism is, right?
    Mr. Mahoney. Conceptually I do, but again, I am not 
familiar with exactly what the proposal is on the table.
    Senator Menendez. Well, let me ask you this. Will you 
commit to this committee that any trade agreement you would be 
part of negotiating would contain enforceable labor provisions 
that go beyond those the American people and the President 
rejected in TPP?
    Mr. Mahoney. Senator, I am fully committed to following the 
law, which is, of course, the----
    Senator Menendez. You are going to be negotiating part of 
what the law is, so I am trying to figure out what you will do 
if you are negotiating.
    Mr. Mahoney. Right.
    Senator, as I said, I am fully committed to seeing to it 
that we have enforceable labor and environmental standards 
consistent with what Congress has directed USTR to negotiate in 
TPA. I think it is critical that if we are going to open up our 
workers to competition from workers abroad that we ensure that 
there be basic rules and that the playing field be level. I am 
fully committed to that.
    Senator Menendez. Let me ask you this. I have asked this 
question of several nominees in their confirmation hearings. I 
would like to ask it of you as well.
    When this committee was debating Trade Promotion Authority 
2 years ago, it passed my amendment that barred fast-track 
procedures for any trade agreement with a country on Tier 3 of 
the State Department's Trafficking in Persons report, a group 
of countries that have failed to combat human trafficking. 
Following that amendment, we saw an unprecedented 
politicization of the TIP report where countries were upgraded 
based on unrelated factors, one of those being trade.
    If confirmed, you will be overseeing our trading 
relationships with several countries that have poor records on 
combating trafficking. Will you commit to the committee that, 
if confirmed, you will not take any action to attempt to 
influence the TIP report?
    Mr. Mahoney. Senator, I am certainly aware of your 
leadership on this issue. I think it is important that those 
decisions be made based on the facts, and I will certainly 
commit to do that, and to----
    Senator Menendez. I am sorry. What is ``that''? I am 
sorry--to ``commit to do that.'' What is ``that''? To not 
influence the TIP report?
    Mr. Mahoney. Sorry. Again, to the extent that I am involved 
in the TIP report, I will make sure that any advice I give with 
regard to that is based on the facts----
    Senator Menendez. The facts sometimes will tell us very 
clearly that the country that is trafficking, human trafficking 
in violation, ultimately should not have that preference. But 
sometimes there are those, whether it be for trade or for other 
purposes, who will actually try to influence a TIP report and 
have a tier designation that is not what that country should 
get based upon its human trafficking.
    That is what I am trying to determine: that you are not 
going to put trade over human trafficking when the Congress of 
the United States, in law, has said that a country who is 
trafficking in persons and violating our standards will not 
have a preferential treatment.
    Mr. Mahoney. Senator, absolutely, I believe that what 
should govern this are the facts and the conditions. This is a 
hugely important issue, and the determinations that are made 
with regard to that report need to be based on the conditions 
on the ground.
    Senator Menendez. Well, let me ask you finally. The 
President says he wants to accommodate China in our trade 
disputes if they will apply pressure to deal with North Korea--
something that I have not seen happen. We had the largest ever 
annual trade surplus in goods with the United States. I do not 
know how you ``make America great again'' with a $275-billion 
surplus.
    What do you think is going to be necessary to deal with 
that trade deficit?
    Mr. Mahoney. Senator, I think we need a new approach. The 
approach that we have had over the last several years has 
involved repeated dialogues with the Chinese, which have 
yielded only incremental progress, as well as bringing disputes 
in the WTO. We have been successful in many of those disputes.
    But we have not fundamentally altered China's behavior. So 
what I think we need to do is consider a new approach, 
including new tools that the U.S. has not used in recent years.
    The 301 investigation that Ambassador Lighthizer has 
started regarding intellectual property, I think, is a good 
first step. There are, obviously, the 232 investigations that 
have been started by the Department of Commerce.
    I think we need to keep all of our options on the table. 
Ultimately, we need to bring the Chinese to the table and 
negotiate a political solution to some of these issues. But it 
is going to take a changed negotiating dynamic in order for us 
to achieve the kind of progress that we need----
    Senator Menendez. I look forward to following up with you 
on these issues.
    Mr. Mahoney. Thank you, Senator.
    Senator Wyden. Senator Whitehouse?
    Senator Whitehouse. Thank you very much.
    You may have to sit back a little bit so that I can see, 
given our geography here at this point.
    In the Senate, there are moments of considerable 
bipartisanship. One area of bipartisanship has been the Ocean's 
Caucus that exists in the Senate. I think it includes more than 
a third of the membership of the Senate, and it is fairly 
evenly balanced between the two parties. Senator Murkowski of 
Alaska and I founded it sometime ago, and its work has produced 
four treaties and two pieces of significant legislation, all 
passed through the Senate by unanimous consent.
    One of those pieces, the most recent one, comes much thanks 
to Senator Sullivan of Alaska, and that is the Senate's first 
legislation on marine plastic debris in the oceans. One of the 
recommendations in that legislation is that the Trade 
Representative pay more attention to this issue.
    One of the reasons that we hand it to the Trade 
Representative to pay attention to this issue is a study, which 
I will provide you a copy of after the hearing, that shows that 
the vast majority of the marine debris and waste that ends up 
in the ocean comes into the ocean as the result of a failure of 
upland waste management. And a very few countries are, 
primarily, responsible for that upland stream of plastic debris 
that ends up in the oceans.
    You will not be surprised that China is the leading 
offender, followed by Indonesia, Philippines, Vietnam, Sri 
Lanka, and Thailand. Those all being Pacific and Indian Ocean 
countries, the obvious geographic result for us is that, while 
we do beach cleanups in Rhode Island with trash bags to pick up 
the plastic waste, in Alaska, they have to do those beach 
cleanups with dumpsters and front-end loaders and barges. And 
in some cases, there are tons of plastic waste per mile of 
coastline.
    This is an issue that has some real significance. We are 
headed for a crossover point in about 2050, if nothing changes, 
where the mass of marine plastic waste in the oceans will be 
greater than the mass of living fish in the oceans. I do not 
think that is the place where we want to be. It would be very 
hard to explain to our grandchildren why we did nothing on 
that.
    We also face the hazard of what this plastic does when it 
breaks down into smaller and smaller physical pieces and then 
enters the food chain, very often at the very lowest levels of 
the food chain, and then climbs back up through the different 
trophic levels, and suddenly, we humans are eating things that, 
unprecedented in the history of the planet, now have all of 
this plastic baked into their diets. And we do not know what 
that means.
    So those are two important issues. I have a general concern 
that environmental issues get very short shrift in trade 
negotiations and even shorter shrift in trade enforcement.
    This seems like an area where we could have a very 
significant bipartisan win. And because the issue is negligent 
upland waste management and because America has very good waste 
management companies, it would seem to me that this could be 
actually a trade win for us if we could get China, Indonesia, 
Philippines, Vietnam, Sri Lanka, Thailand, and some of these 
other countries to accept as part of their trade 
responsibilities with us that they will clean up their act in 
upland waste management.
    Give me some reassurance that this is an issue that each of 
you would be willing to consider in trade negotiations, given 
its clear bipartisan support here in the Senate and given its 
potential impact in the future.
    Mr. Mahoney. Senator, I certainly look forward to working 
with you and other of your colleagues who are interested in 
this issue. In general--I am glad that you mentioned 
bipartisanship in trade policy. I think that that is really 
important. I am really excited about finding any areas, 
including potentially this one, where there is----
    Senator Whitehouse. Bipartisan--passed by unanimous 
consent.
    Mr. Mahoney. Wonderful.
    Senator Whitehouse. You do not get much more bipartisan 
than that.
    Mr. Mahoney. Absolutely.
    Senator Whitehouse. So, sorry to interrupt.
    Mr. Mahoney. Just to emphasize, I think that these areas 
where we have bipartisan consensus are something that I am 
particularly excited about moving forward on.
    And then this issue--I look forward to having a follow-up 
conversation with you, hopefully.
    Senator Whitehouse. All right.
    Mr. Shea. Well, thank you, Senator. I am very privileged to 
answer your first question on the Senate Finance Committee.
    Senator Whitehouse. Make it a good one. [Laughter.]
    Mr. Shea. Well, I will try.
    Thank you for educating me about the issue. I have read 
news reports about this place in the Pacific where this huge, 
enormous----
    Senator Whitehouse. The Pacific gyres?
    Mr. Shea. Yes. Exactly. So I appreciate the education. I 
know at the WTO, one of the things I expect to work on would be 
illegal fishing subsidies, subsidies for harmful fishing. That 
is something that the WTO intends to take up. They kind of 
passed the last ministerial, but over the next 2 years they 
hope to have an agreement on harmful subsidies that promote 
illegal fishing and over-fishing.
    Senator Whitehouse. I appreciate that.
    And the four treaties, in that first bipartisan unanimous 
consent piece of legislation, were all related to illegal 
pirate fishing, and specifically the legislation with the Port 
State Measures Agreement, which you will also have the 
opportunity to enforce.
    So I hope that you can take the signal from the 
bipartisanship of this and from its environmental and trade 
significance that here is an area that, although new to trade 
negotiations because nobody has bothered to deal with it 
before, is important and is something that you would have the 
backing of the Senate as you pursued it.
    Mr. Shea. Thank you.
    Mr. Mahoney. Thank you very much, Senator.
    Senator Wyden. Thank you, Senator Whitehouse.
    Getting important bills done by unanimous consent--suffice 
it to say, we know that sometimes around here it is hard to get 
people to order a soda by unanimous consent. So that is welcome 
news.
    And again, we welcome Senator Whitehouse to the committee.
    Senator Whitehouse. Thank you.
    Gentlemen, I am going to support both of you.
    Senator Scott, somehow I miss your coming in sometimes.
    Senator Scott. Yes, sir.
    Senator Wyden. You just have to kind of get my attention. 
We welcome your questions, and please proceed.
    Senator Whitehouse. It is a question of our remote 
geography now.
    Senator Wyden. I think so. Senator Scott and I have laughed 
about how this happened once before----
    Senator Scott. Yes, sir.
    Senator Wyden [continuing]. In the tax debate, and I 
apologized then, and I apologize once more.
    Senator Scott. Well, the apology is accepted. Thank you 
very much.
    Senator Wyden. There you are.
    Senator Scott. Welcome to the committee, my good friend.
    Thank you both for being here this morning.
    I have the great pleasure of representing South Carolina. 
And South Carolina, without any question, should be considered 
the juggernaut of trade and exporting.
    You think about the industries represented in South 
Carolina--transportation would come to mind very quickly. I 
think Boeing is the largest exporter in our country. One of 
their home places is in South Carolina.
    You think about the more than 500,000 South Carolina jobs 
connected to trade. Six thousand South Carolina companies 
export goods and services in excess of $2.2 trillion. It is a 
big deal, trade in South Carolina.
    When Robert Lighthizer, the Trade Representative, came 
before our committee and asked for my support, I gave it to 
him. As part of that process, he said he would be open, 
transparent, and available.
    I have made one call to Mr. Lighthizer to talk about a 
trade-specific issue in South Carolina. I was met with 
crickets. So while you both are, I think, very qualified, I 
will be putting a hold on your nominations until I find more 
responsiveness from Mr. Lighthizer.
    The reality of it is, I do not ask for much. You can not 
call me back, but you cannot disrespect the companies and the 
trading partner that is South Carolina. And without more 
responsiveness, and without a commitment for more 
responsiveness, I will not be voting for any nominees in the 
trade space.
    Thank you.
    Senator Wyden. Senator Scott, have you completed your 
questions?
    Senator Scott. I have completed my statement.
    Senator Wyden. Very good.
    Senator Scott. I will save the questions for Mr. 
Lighthizer.
    Senator Wyden. Very good. I thank my colleague.
    So, unless anyone else has slipped in outside of my eye 
range, we are at the conclusion of the hearing.
    As the chairman indicated, both of us are very favorable 
towards the two of you. You have some heavy lifting to do, both 
of you, certainly on China issues, which is one of the reasons 
why I mentioned, for Mr. Mahoney, that commitment to getting 
briefed within 30 days on exactly what is being set in motion 
with respect to China.
    Digital trade, labor, the environment--I am very pleased 
that Bob Lighthizer has picked up on the digital trade issue. 
At his nomination hearing, I started to talk about the Internet 
being the shipping lane of the 21st century. And he looked up 
from where he was sitting--where you all are--and he said, ``I 
think a prominent member of the Finance Committee was the one 
who talked about the Internet being the shipping lane of the 
21st century.'' And I said, ``I have heard of trying to work 
for the favor of the committee, but that is a little much.''
    So he is prepared, and I think you all are also prepared. 
So we look forward to supporting your nomination.
    I want to close just by way of saying that before the 
presidential campaigns got going, I started to talk about this 
effort to get beyond free trade and fair trade. And we said, 
well, let us call it trade done right.
    But the point is, you can call it what you wish, but we 
have to break through this polarization, because this is too 
important for our country. It is especially important to my 
State. One out of five jobs in Oregon revolves around global 
trade, and the trade jobs pay better than do the non-trade 
jobs, because they often reflect a high level of productivity, 
a high value-added component.
    If there is one thing that everybody agrees on--we have to 
have policies that raise wages. Trade done right is an 
opportunity to do it.
    So we just have one last bit of procedural work to do. On 
behalf of the chairman, let me just state that if any member 
has written questions for the record, we would ask that they be 
submitted by close of business this Friday.
    Unless you gentlemen have anything to add--and I do not 
believe you do--with that, the Finance Committee is adjourned.
    [Whereupon, at 11:50 a.m., the hearing was concluded.]

                            A P P E N D I X

              Additional Material Submitted for the Record

                              ----------                              


              Prepared Statement of Hon. Orrin G. Hatch, 
                        a U.S. Senator From Utah
WASHINGTON--Senate Finance Committee Chairman Orrin Hatch (R-Utah) 
today delivered the following opening statement at a Finance Committee 
hearing to consider the nominations of Dennis Shea and C.J. Mahoney:

    As most of you should be aware, we are tackling a lot today.

    Today, we have a hearing on two important nominations. In addition, 
we have three items requiring a committee vote in executive session.

    Just to avoid any confusion, let me explain how and in what order I 
intend to accomplish these tasks today.

    We will begin with opening statements from myself and the ranking 
member.

    Thereafter, the committee will hear from any Senators wishing to 
give statements about items on the markup agenda. As always, I would 
encourage members to enter their statements in the record so that we 
can move expeditiously. This is doubly true today as we have nominees 
and witnesses here ready to participate in our hearing. Still, if any 
Senator does wish to deliver a statement, I ask, as always, that they 
limit their remarks to 3 minutes.

    After a few brief member statements, assuming we do not have a 
quorum at that point, I intend to introduce our witness panel and move 
forward with our hearing. I will likely move directly to votes when a 
suitable quorum is present, which may require a temporary pause in the 
hearing.

    With the order of events made clear, let me discuss the substance 
of our meetings today. Regarding the first item on the markup agenda, I 
need to welcome our newest member, Senator Whitehouse, to the Finance 
Committee. We look forward to working with you and to your 
contributions to the committee's various efforts.

    Our first vote will be in relation to changes in subcommittee 
assignments that have been circulated to the members.

    That promises to be a real nail-biter.

    Next, we will vote to once again report the nomination of Kevin K. 
McAleenan to be Commissioner of the U.S. Customs and Border Protection. 
We reported his nomination by voice vote just over a month ago, so I 
assume we'll be able to do so again today.

    Finally, the third vote in our executive session will be to report 
the nomination of Alex Azar to be Secretary of Health and Human 
Services. We heard from Mr. Azar last week, and I believe he was very 
forthcoming in providing thoughtful responses when sharing his views 
and discussing his background with the committee. By any objective 
account, Mr. Azar is very well qualified for this important position. 
He has close to two decades of experience, the right expertise, and 
sound judgement. Further, he provided earnest and thoughtful responses 
to each of our questions.

    Some of my friends on the other side of the dais have some 
differing views, and we intend to hear from them today.

    After all, I feel strongly that both sides should be heard out when 
we consider nominees with critical responsibilities such as the 
Secretary of HHS. However, because some members have made clear their 
intention of calling for a roll call vote on Mr. Azar's nomination, we 
may not have the vote on his nomination during this hearing. Instead, 
we will likely need to recess and reconvene the executive session until 
a time where all of the members who have expressed interest will be 
able to attend and cast their votes on this important nomination.

    That said, I think we can move through the other two votes 
expeditiously as soon as a suitable quorum is present. And any pause or 
interruptions in the hearing should be minimal. Regarding the hearing, 
we have two nominees before us today. C.J. Mahoney and Dennis Shea, 
who, if confirmed, will be charged with fulfilling some vital 
responsibilities. I want to touch on two areas of importance to me that 
will fall within each of their portfolios.

    First, Mr. Mahoney, you have been nominated to be the Deputy U.S. 
Trade Representative overseeing, among other responsibilities, trade in 
services. Mr. Shea, you have been nominated to be our Nation's 
ambassador to the World Trade Organization, where promoting U.S. 
services trade will also be an essential part of your job.

    The United States exported more than $721 billion in services in 
2015. That number reflects something that a Deputy USTR should keep in 
mind every day he is on the job: no country in the world comes close to 
the United States in services trade. It is a key competitive advantage 
for our country and an important driver of our economy.

    If confirmed, each of our nominees would have the responsibility to 
establish international trade rules and negotiate international trade 
agreements that benefit U.S. services providers.

    For Mr. Mahoney, promoting U.S. services exports should be an 
essential goal of NAFTA modernization, particularly providing for the 
cross-border flow of data and ensuring a prohibition on forced data 
localization.

    For Mr. Shea, I hope that you will support plurilateral 
negotiations for a Trade in Services Agreement with trading partners 
who are willing to take on high-
standard commitments. Second, I want to speak about President Trump's 
priority of confronting the challenges posed by China to the 
international trading system. This is a goal that I support. If 
confirmed, both of you will bear a heavy responsibility for rolling 
back China's most harmful trade practices, including: intellectual 
property rights and trade secrets theft, economic espionage, artificial 
investment constraints and regulatory restrictions, and a persistent 
reliance on a state-directed economic model that produces 
overcapacities and harms American businesses and workers.

    I look forward to hearing your views on how you believe the United 
States should address these challenges, including through the WTO.

    Before we get to that point though, we need to move through the 
steps I mentioned before. As such, I'd like to invite my friend and 
ranking member, Senator Wyden to speak, and then we'll allow for 
members to deliver brief statements on the executive business before 
the committee as well.

                                 ______
                                 

                            Senator Bob Dole

                         The Atlantic Building

                     950 F Street, NW., 10th Floor

                          Washington, DC 20004

                            January 16, 2018

The Honorable Orrin Hatch
Chairman
The Honorable Ron Wyden
Ranking Member
U.S. Senate
Committee on Finance
219 Dirksen Senate Office Building
Washington, DC 20510

Dear Orrin and Ron,

    I am writing to offer my endorsement to the nomination of Dennis 
Shea for Deputy U.S. Trade Representative and U.S. Ambassador to the 
World Trade Organization.

    I have known Dennis for nearly 30 years. Earlier in his career, 
Dennis served as my counsel in the Office of the Senate Republican 
Leader and later as Deputy Chief of Staff. Dennis was also a trusted 
policy aide during my 1996 presidential campaign, handling a broad 
range of sensitive and important issues. Following the campaign, I 
asked Dennis to join me in private legal practice.

    Over the years, Dennis has demonstrated sound judgment, a strong 
work ethic and an ability to work well across party lines--key 
attributes for the diplomatic position for which he is being 
considered. He has a successful track record of getting things done. 
His past work in the Senate and his current work on the U.S.-China 
Economic and Security Commission provide a strong foundation for 
serving as our nation's representative at the WTO.

    I am confident that Dennis will be a positive addition to the USTR 
team, and I urge that he be supported by the Finance Committee and 
confirmed by the U.S. Senate.

            God Bless America,

            Bob Dole.

                                 ______
                                 

                            James M. Talent

                 Former United States Senator, Missouri

                            January 16, 2018

The Honorable Orrin Hatch           The Honorable Ron Wyden
Chairman                            Ranking Member
U.S. Senate                         U.S. Senate
Committee on Finance                Committee on Finance
 219 Dirksen Senate Office Building 219 Dirksen Senate Office Building
Washington, DC 20510-6200           Washington, DC 20510-6200

Dear Mr. Chairman and Senator Wyden:

I understand you are holding a hearing on January 18th on the 
confirmation of Dennis Shea to the position of Deputy United States 
Trade Representative in the Geneva office. I want to take this 
opportunity to submit for the record this letter in support of Mr. 
Shea's nomination.

I have served with Mr. Shea for 6 years on the U.S.-China Economic and 
Security Review Commission; during most of that time, Mr. Shea served 
as the Republican Chairman or Vice-Chairman of the Commission. Mr. Shea 
has done a really superb job in that position, which carries with it 
considerable authority and responsibility. He has a balanced judgment, 
a wide ranging understanding of the issues (including trade issues, 
which are a substantial part of the Commission's portfolio), a 
commitment to fairness, and great management skills. Under his 
leadership and that of his Democratic counterparts, the Commission has 
developed into an important and influential advisory body to the 
Congress.

In addition, I have gotten to know Mr. Shea well personally, and I can 
attest to his honesty, dedication, and character. I feel certain that 
he would faithfully and effectively execute trade policy and would be a 
most cooperative partner with your Committee as you oversee those laws 
in the interest of the American people.

In short, I believe Mr. Shea would be a credit to the Trade 
Representative's office and hope you see fit to report out his 
nomination favorably to the full Senate.

I would be happy to provide any further information you request.

Sincerely,

James M. Talent,
Former United States Senator, Missouri

                                 ______
                                 
    Prepared Statement of C.J. Mahoney, Nominated to be U.S. Trade 
  Representative for Investment, Services, Labor, Environment, China, 
   Africa, and the Western Hemisphere, with the Rank of Ambassador, 
                   Executive Office of the President
    Chairman Hatch, Ranking Member Wyden, and members of the committee, 
let me start by thanking the committee--and your staff--for holding 
this hearing today and for your engagement and professionalism through 
this nomination process.

    I also thank my home State Senators, Senator Roberts and Senator 
Moran, for your gracious introductions and for being here today. I am 
proud to hail from Russell, KS, which is also the hometown of the 
former chairman of this committee, Senator Bob Dole. I note that this 
hearing is being held on the same day that the Congress is honoring 
Senator Dole with the Congressional Gold Medal. Any achievements I have 
had certainly pale in comparison to Senator Dole's. But I think it says 
something quite remarkable about our country that not one, but two 
people who grew up in the same small town of 4,500 in Western Kansas 
are appearing on Capitol Hill on the same day.

    I would like to recognize the members of my family who are here 
today--my wife Becca, my mother Joyce, and my mother- and father-in-
law, Susan and Bill Iverson. I'm also joined today by friends from 
Kansas and Washington and members of my second family at Williams and 
Connolly, including two of my mentors, John Buckley and Bob Barnett.

    I am deeply honored to have been recommended by Ambassador 
Lighthizer and nominated by the President to serve as the Deputy United 
States Trade Representative for Investment, Services, Labor, 
Environment, Africa, China, and the Western Hemisphere.

    One of my primary goals, if I am confirmed, is to ensure that USTR 
has a constructive and transparent relationship with this committee and 
the House Committee on Ways and Means, consistent with the framework 
set forth in TPA. An important part of USTR's mission is to facilitate 
a partnership between the executive and legislative branches on trade 
policy. I am fully committed to that goal.

    USTR's chief priority in the Western Hemisphere at present is the 
renegotiation of the North American Free Trade Agreement. I fully 
support the goals set forth in USTR's published negotiating objectives 
for NAFTA. These negotiations are an opportunity to modernize the 
agreement and to create a more level playing field for American 
workers, especially those in the manufacturing sector. At the same 
time, however, I am fully committed to preserving and enhancing the 
gains that our country has achieved in NAFTA, notably for agricultural 
goods. Especially at a time of already depressed commodity prices, it 
is important that U.S. agriculture lose no ground and maintain its 
reputation as a reliable supplier.

    While the NAFTA renegotiation is a critical priority, I am mindful 
that our single greatest trade challenge is our relationship with 
China. In the past 3 decades, China has succeeded in lifting millions 
of its citizens out of poverty. That is an amazing achievement that 
should be celebrated. But it has become increasingly clear that China 
is sustaining high levels of economic growth by pursuing an unfair, 
mercantilist economic policy that distorts world markets and inflicts 
harm on its trading partners, including the United States. Moreover, 
while much of China's growth is attributable to its relatively 
uninhibited access to the U.S. market, China maintains too many 
barriers to its own domestic market in too many sectors.

    Years of dialogue have yielded some progress, but not nearly 
enough. It is time for new thinking and a new approach. Ambassador 
Lighthizer is committed to that; so am I.

    I would also oversee USTR's Africa portfolio if I am confirmed. I 
look forward to working with my African counterparts to strengthen 
America's trading relationship with this strategically important 
region.

    Another of my priorities, if confirmed, is to be a champion for 
America's services sector. This is an area where the United States 
enjoys a tremendous competitive advantage. But too many barriers to 
market access remain, particularly in the fast-growing area of digital 
trade.

    I have full confidence that America's workers, farmers, service 
providers, and entrepreneurs can succeed in global markets. But to do 
so, they need greater and freer access to those markets, robust 
protection for intellectual property rights, and assurance that our 
trading partners are playing by the rules. That's where USTR comes in, 
and that is where my full attention and energy will be devoted if I am 
confirmed.

    Again, I thank the committee and look forward to your questions.

                                 ______
                                 

                        SENATE FINANCE COMMITTEE

                  STATEMENT OF INFORMATION REQUESTED 
                               OF NOMINEE

                      A. BIOGRAPHICAL INFORMATION

 1.  Name (include any former names used): Curtis Joseph (C.J.) 
Mahoney.

 2.  Position to which nominated: Deputy U.S. Trade Representative for 
Investment, Services, Labor, Environment, China, Africa, and the 
Western Hemisphere (with the rank of Ambassador).

 3.  Date of nomination: July 27, 2017.

 4.  Address (list current residence, office, and mailing addresses):

 5.  Date and place of birth: November 23, 1977, Russell, KS.

 6.  Marital status (include maiden name of wife or husband's name):

 7.  Names and ages of children:

 8.  Education (list secondary and higher education institutions, dates 
attended, degree received, and date degree granted):

        Russell High School (1992-1996).

        Harvard College (1996-2000); A.B. (2000).

        Yale Law School (2003-2006); J.D. (2006).

 9.  Employment record (list all jobs held since college, including the 
title or description of job, name of employer, location of work, and 
dates of employment):

        McKinsey and Company, business analyst, New York, NY (2000-
        2003).

        Securities and Exchange Commission, Enforcement Division, 
        summer intern, Washington, DC (summer 2004).

        Research assistant to Professor William Eskridge, Yale Law 
        School, New Haven, CT (summer 2004).

        Gibson, Dunn, and Crutcher, summer associate, Washington, DC 
        (summer 2005).

        Law clerk to the Judge Alex Kozinski, United States Court of 
        Appeals for the Ninth Circuit, Pasadena, CA (2006-2007).

        Law clerk to Associate Justice Anthony Kennedy, Supreme Court 
        of the United States, Washington, DC (2007-2008).

        Williams and Connolly LLP, associate (2008-2014); partner 
        (2015-present), Washington, DC.

        Yale Law School, visiting clinical lecturer, New Haven, CT 
        (2015-present).

10.  Government experience (list any advisory, consultative, honorary, 
or other part-time service or positions with Federal, State, or local 
governments, other than those listed above):

        N/A.

11.  Business relationships (list all positions held as an officer, 
director, trustee, partner, proprietor, agent, representative, or 
consultant of any corporation, company, firm, partnership, other 
business enterprise, or educational or other institution):

        Director, Yale Law School Fund Board.

        Trustee, Paul R. Mrockowski Irrevocable Trust.\1\
---------------------------------------------------------------------------
    \1\ I do not understand this question to call for the names of 
clients I have served at Williams and Connolly LLP. But I note that a 
list of those clients is attached hereto as Exhibit A.

12.  Memberships (list all memberships and offices held in 
professional, fraternal, scholarly, civic, business, charitable, and 
---------------------------------------------------------------------------
other organizations):

        Phi Beta Kappa (2000).

        John Carroll Society (2008 to present).

        Federalist Society (2003 to present).

        Yale Law School fund board (April 2017 to present).

        Blessed Sacrament Parish (2008 to present).

        International Bar Association (2015 (approx.) to present).

        Chartered Institute of Arbitrators (2015 (approx.) to present).

        Y-ADR steering committee of the International Institute for 
        Conflict Prevention and Resolution (CPR) (2015 to present).

        Mory's Association (2004 to present).

        Metropolitan Club (summer member 2017).

        Kansas Bar Association (2007 to present).

        District of Columbia Bar Association (2008 to present).

13.  Political affiliations and activities:

        a.  List all public offices for which you have been a 
        candidate.

       N/A.

        b.  List all memberships and offices held in and services 
        rendered to all political parties or election committees during 
        the last 10 years.

       McCain for President (volunteer legal work).

       Romney for President (volunteer legal work).

       Fiorina for President (volunteer legal work).

        c.  Itemize all political contributions to any individual, 
        campaign organization, political party, political action 
        committee, or similar entity of $50 or more for the past 10 
        years.

           I do not have complete records,\2\ but based on my 
        recollection and information on the FEC website, these are my 
        contributions over the past 10 years:
---------------------------------------------------------------------------
    \2\ I note that only my donations to Senator Cotton appear on the 
FEC website under the donor name ``Curtis Mahoney.'' The other amounts 
indicated are to the best of my recollection.

---------------------------------------------------------------------------
       Senator Tom Cotton (R-AR) ($1,700).

       Senator Jerry Moran (R-KS)/Moran for Kansas/Free State PAC 
(approximately $1,000).

       Representative Elise Stefanik (R-NY) (approximately $250).

       Tim Nelson for MN State Senate (D-MN) (approximately $100).

       Jeff Yarbro for TN State Senate (D-TN) (approximately $1,500).

       John Couriel (R-FL) for FL Legislature (approximately $200).

       Joshua Hawley (R-MO) for Attorney General (approximately $100).

14.  Honors and awards (list all scholarships, fellowships, honorary 
degrees, honorary society memberships, military medals, and any other 
special recognitions for outstanding service or achievement):

        Phi Beta Kappa (Harvard College).

        Bennett Prize for best thesis in American government (Harvard 
        College).

        Emerson Prize for best paper on legislation (Yale Law School).

        Fellow of the Chartered Institute of Arbitrators.

15.  Published writings (list the titles, publishers, and dates of all 
books, articles, reports, or other published materials you have 
written):

        ``Our Turn to Be Angry,'' The Harvard Crimson (1998). http://
        www.
        thecrimson.com/article/1998/9/18/our-turn-to-be-angry-
        pbabdmittedly/.

        ``Treaties as Contracts: Textualism, Contract Theory, and the 
        Interpretation of Treaties,'' 116 Yale L.J. 824 (2007), http://
        www.yalelawjournal.org/note/
        treaties-as-contracts-textualism-contract-theory-and-the-
        interpretation-of-treaties.

        ``Dealing with `Known Unknowns' in Document Exchange: A Comment 
        on the ICCA Congress Session on Early Stages of the Arbitral 
        Process,'' Kluwer Arbitration Blog (2014), http://
        kluwerarbitrationblog.com/2014/04/29/dealing-with-known-
        unknowns-in-document-exchange-a-comment-on-the-icca-congress-
        session-on-early-stages-of-the-arbitral-process/.

        ``Managing and International Commercial Arbitration,'' CPR 
        Corporate Counsel Manual for Cross-Border Dispute Resolution 
        (2017).

        ``USA,'' The International Comparative Legal Guide to 
        International Arbitration (2017), https://www.wc.com/
        portalresource/lookup/poid/Z1tOl9NPluKPtDNIq
        LMRVPMQiLsSwW3Cm83!/document.name=/IA17_Chapter-59_USA.pdf.

16.  Speeches (list all formal speeches you have delivered during the 
past 5 years which are on topics relevant to the position for which you 
have been nominated):

        I have spoken on panels at various arbitration conferences and 
        made legal continuing education presentations to lawyers during 
        the past 5 years, but none of these was a ``formal speech'' 
        with a prepared text. Each was on a topic relating to 
        arbitration or appellate law. I have retrieved and attached 
        slides I discussed on international arbitration.

17.  Qualifications (state what, in your opinion, qualifies you to 
serve in the position to which you have been nominated):

        The position of Deputy United States Trade Representative 
        involves dispute resolution, negotiation, and coordination of 
        interagency teams. I believe that my experience, both as an 
        attorney representing clients in high-stakes transnational 
        litigation and arbitration and, prior to that, as a management 
        consultant working primarily for large, multinational 
        corporations, has prepared me well to perform all three aspects 
        of the job. My law practice focuses on complex litigation, with 
        an emphasis on international arbitration, a forum that is 
        similar to WTO dispute resolution in many respects. I have been 
        responsible for formulating the litigation strategy in these 
        disputes (including on issues of treaty interpretation), 
        managing teams of lawyers across different jurisdictions, and 
        negotiating complex settlement agreements with foreign parties. 
        As a management consultant, I assisted clients in analyzing 
        investments in foreign markets. In order to serve my clients, I 
        have been required to master (often rather quickly) complex 
        subject matter in various industry sectors, including in the 
        technology, financial services, energy, and agricultural 
        sectors. Through these experiences, I feel I have gained a good 
        sense of the challenges facing American businesses overseas, 
        particularly in Latin America, a region to which I have had 
        substantial exposure in litigation and arbitration matters in 
        recent years and which would be part of my portfolio at USTR if 
        I am confirmed. These roles have also required me to interact 
        with and communicate my clients' position to counterparties 
        from different national and legal cultures. I am confident that 
        the legal, negotiation, and management skills I have honed in 
        my career will enable me to be an effective advocate for our 
        Nation's businesses, workers, consumers, farmers, and ranchers.

                   B. FUTURE EMPLOYMENT RELATIONSHIPS

 1.  Will you sever all connections with your present employers, 
business firms, associations, or organizations if you are confirmed by 
the Senate? If not, provide details.

        Yes.\3\
---------------------------------------------------------------------------
    \3\ I do not understand this question to ask whether I will resign 
from any of the religious or social organizations I listed in answer to 
Question A.12.

 2.  Do you have any plans, commitments, or agreements to pursue 
outside employment, with or without compensation, during your service 
---------------------------------------------------------------------------
with the government? If so, provide details.

        No.

 3.  Has any person or entity made a commitment or agreement to employ 
your services in any capacity after you leave government service? If 
so, provide details.

        No.

 4.  If you are confirmed by the Senate, do you expect to serve out 
your full term or until the next presidential election, whichever is 
applicable? If not, explain.

        Yes.

                   C. POTENTIAL CONFLICTS OF INTEREST

 1.  Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated.

        Note that my only individual stock holding is International 
        Business Machines, which I will divest if confirmed. All of my 
        other securities holdings are in third-party managed retirement 
        funds or widely held mutual funds.

        See attached Exhibit A (list of clients served during my time 
        at Williams and Connolly LLP).

                               Exhibit A

Below is a list of all clients Williams and Connolly LLP has billed \4\ 
for my time since I started at the firm in 2008, where either (i) the 
firm's representation of the client is a matter of public record; or 
(ii) I have received permission to disclose the fact of the 
representation for purposes of this disclosure.
---------------------------------------------------------------------------
    \4\ I have not included the names of clients I have represented on 
a pro bono basis. Nor have I included the names of clients who were not 
billed for my time.

21st Century Fox and Affiliates     AES Corporation
Airlines for America                American Academy of Actuaries
Archdiocese of Washington           Ave Maria University
Ave Maria Law School                Bank of America
Bayer AG/Bayer Corporation          Cahill, Gordon, and Reindel LLP
Carlyle Group, T.C. and Affiliates  Catholic University of America
Cato Institute                      Contourglobal and Affiliates
Coventry Group LLC                  Kevin B. Cox
D.C. Preservation                   Danaher Corporation and Affiliates
Delta Air Lines, Inc.               FBR and Co.
Federal Realty Investment Trust     Fjordtech Industries, Inc.
Genentech, Inc.                     Georgetown University
G-I Holdings, Inc.                  Frederick Heebe
William Held                        Hunton and Williams
Intel Corporation                   Kaplan Higher Education
Howard Karawan                      Charles and David Koch
KPMG LLP                            Nancy Lane
Jesse Litvak                        Louis Dreyfus Company and 
                                    Affiliates
M&T Bank Corporation                Man Diesel
MacAndrews and Forbes and 
Affiliates                          Medstar Health
Merck and Co., Inc. and Affiliates  Missouri Wine and Spirits 
                                    Association
Morrison and Foerster LLP           Morzan Empreendimentos e 
                                    Participacoes
Ltda and Affiliates                 Henry Nicholas
Oneida Indian Nation                Pakistan, Islamic Republic of
Gregory Patton                      Pernod Ricard USA
Pfizer                              Prime Institutional Group LLP
Rocky Mountain Christian Church     Rogers Group
Lily Safra                          Samsung Electronics America, Inc.
Gonzalo Sanchez de Lozada           School Choice Foundation
Douglas Shulman                     Sonic Automotive, Inc.
Southeast Toyota                    Sprint
Takata Corporation                  Textron Inc.
TLC Network                         Tria Beauty
UBS AG UBS Financial Services       UMC Development LLC
United Methodist Church             U.S. Chamber of Commerce and 
                                    Affiliates
Utah Highway Patrol Association     Walt Disney Company
Washington Post                     Willis Towers Watson PLC

In addition to the matters listed above, the firm has billed for my 
time in the following non-public matters in which disclosure of the 
representation arguably would cause prejudice to the client and/or 
where the client has not consented to the disclosure:

      Representation of a private equity firm in a non-public, 
internal investigation regarding compliance issues.

      Representation of a technology company in connection with an 
ongoing Department of Justice investigation.

      Representation of various entities affiliated with the Roman 
Catholic Church, including individual U.S. dioceses, regarding, inter 
alia, issues of religious liberty and alleged clerical abuse of minors.

      Representation of South Korean auto manufacturer regarding 
potential petition for certiorari.

      Representation of U.S. public official in connection with non-
public Department of Justice Investigation.

      Representation of Brazilian businessman in connection with 
confidential arbitration proceedings.

      Representation of former officer of U.S. bank in connection with 
bankruptcy proceedings.

      Representation of private equity executive in connection with 
confidential arbitration.

 2.  Describe any business relationship, dealing, or financial 
transaction which you have had during the last 10 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated.

        See attached Exhibit A (list of clients served during my time 
        at Williams and Connolly LLP).

 3.  Describe any activity during the past 10 years in which you have 
engaged for the purpose of directly or indirectly influencing the 
passage, defeat, or modification of any legislation or affecting the 
administration and execution of law or public policy. Activities 
performed as an employee of the Federal Government need not be listed.

        I testified on behalf of my client, the Archdiocese of 
        Washington, in connection with DC City Council bill no. B22-
        0028.

        I assisted in preparing another Williams and Connolly partner 
        in testifying on behalf of the Archdiocese of Hartford in 
        connection with legislation pending before the Connecticut 
        legislature regarding statutes of limitations.

        I co-authored a white paper on behalf of my client, the School 
        Choice Foundation, analyzing the Establishment Clause 
        implications of scholarship tax credit legislation.

 4.  Explain how you will resolve any potential conflict of interest, 
including any that may be disclosed by your responses to the above 
items.

        I will divest my IBM shares and abide by the ethics agreement I 
        have executed.


 5.  Two copies of written opinions should be provided directly to the 
committee by the designated agency ethics officer of the agency to 
which you have been nominated and by the Office of Government Ethics 
concerning potential conflicts of interest or any legal impediments to 
your serving in this position.

 6.  The following information is to be provided only by nominees to 
the positions of United States Trade Representative and Deputy United 
States Trade Representative:

        Have you ever represented, advised, or otherwise aided a 
        foreign government or a foreign political organization with 
        respect to any international trade matter? If so, provide the 
        name of the foreign entity, a description of the work performed 
        (including any work you supervised), the time frame of the work 
        (e.g., March to December 1995), and the number of hours spent 
        on the representation.

        No.

                       D. LEGAL AND OTHER MATTERS

 1.  Have you ever been the subject of a complaint or been 
investigated, disciplined, or otherwise cited for a breach of ethics 
for unprofessional conduct before any court, administrative agency, 
professional association, disciplinary committee, or other professional 
group? If so, provide details.

        No.

 2.  Have you ever been investigated, arrested, charged, or held by any 
Federal, State, or other law enforcement authority for a violation of 
any Federal, State, county, or municipal law, regulation, or ordinance, 
other than a minor traffic offense? If so, provide details.

        No.

 3.  Have you ever been involved as a party in interest in any 
administrative agency proceeding or civil litigation? If so, provide 
details.

        Yes. I was the victim of identity theft in approximately 2000. 
        An American Express credit was taken out in my name, without my 
        knowledge or consent. The bill was not paid, and American 
        Express filed suit against me in the District Court of Russell 
        County, KS to collect the amount owed. I did not know about the 
        account until I received notice of the suit. The individual 
        responsible for taking out the account in my name filed an 
        affidavit taking responsibility, the outstanding amount was 
        paid, the matter was dismissed, and the credit bureaus removed 
        mention of this episode from my credit report.

 4.  Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense? If so, provide details.

        No.

 5.  Please advise the committee of any additional information, 
favorable or unfavorable, which you feel should be considered in 
connection with your nomination.

        N/A.

                     E.  TESTIFYING BEFORE CONGRESS

 1.  If you are confirmed by the Senate, are you willing to appear and 
testify before any duly constituted committee of the Congress on such 
occasions as you may be reasonably requested to do so?

        Yes.

 2.  If you are confirmed by the Senate, are you willing to provide 
such information as is requested by such committees?

        Yes.

                                 ______
                                 
           Questions Submitted for the Record to C.J. Mahoney
      Question Submitted by Hon. Orrin G. Hatch and Hon. Ron Wyden
    Question. The President's submission of your nomination to Congress 
includes information on the country, regional offices, and function of 
USTR that would come under your responsibility, consistent with section 
141(b)(5)(A) of the Trade Act of 1974, as modified by the Trade 
Facilitation and Trade Enforcement of 2015. That submission indicates 
that China would be part of that responsibility. However, conversations 
with you and Mr. Gerrish, also nominated to the position of deputy 
USTR, have raised questions about the scope of your responsibilities 
with respect to China.

    Will you have primary responsibility for trade matters with respect 
to China?

    Will the Assistant USTR for China Affairs report to you?

    Will you be the point person for interagency discussions with 
respect to China?

    Please describe your responsibilities with respect to China, as you 
understand them.

    Answer. I will perform duties related to China as assigned to me by 
Ambassador Lighthizer. My understanding is that Jeff Gerrish, if 
confirmed, will have responsibility for Asia, including primary 
responsibility for China, and that I would assist Ambassador Lighthizer 
and Mr. Gerrish on matters involving China. My understanding is that 
the Assistant USTR for China would report to Mr. Gerrish. I anticipate 
that I would work closely with the USTR China office and the 
interagency on such matters when delegated responsibility.

                                 ______
                                 
               Questions Submitted by Hon. Orrin G. Hatch
    Question. While the TiSA negotiations remain pending, American 
workers will rely on our existing trade agreements to support their 
ability to export services. As Congress made clear in the TPA law, our 
principal negotiating objective for trade in services is to expand 
competitive market opportunities for U.S. services and to obtain fairer 
and more open conditions for trade in services.

    How you will fulfill this negotiating objective for services in the 
framework of our existing trade agreements, including the NAFTA and 
Korea trade agreements?

    Answer. The U.S. service sector is a key driver of the U.S. economy 
and plays an important role in supporting and strengthening the U.S. 
manufacturing and agriculture sectors. Maintaining a vibrant U.S. 
services sector and expanding U.S. services exports is vital to a 
healthy U.S. economy. If confirmed, I look forward to working with you 
to evaluate the best options available to pursue U.S. services trade 
objectives as an integral part of the administration's trade policy.

    Question. The United States has a complex trading relationship with 
China. As a general matter, we and China can benefit greatly from trade 
with each other. Yet, as a practical matter, American businesses have 
experienced serious problems in their efforts to access the Chinese 
market, and they often find themselves competing on an uneven playing 
field with Chinese companies. Such problems include government policies 
that destroy the value of intellectual property and policies that lead 
to overcapacity in some sectors.

    Could you please explain how you plan to work toward improving the 
U.S.-China trading relationship, and how you will measure your success 
in making such improvements?

    Answer. China, by far, poses the greatest trade-related risk to our 
economy due to its unfair trade practices and distortive, state-led, 
economic policy. If I am confirmed, I will look at how I can best work 
to ensure that our engagement with China is effective and results-
oriented. In my view, we need to consider all available options, from 
actions in the WTO to section 301. The President has made clear that we 
need to restore balance to the U.S.-China trade relationship, and that 
means reducing our very large bilateral trade deficit and ensuring that 
trade is freer, fairer, and reciprocal.

    Question. Multiple foreign governments have subjected U.S. 
companies to competition investigations that lack adequate due process 
protections. USTR recognizes the seriousness of this problem and has 
put forward negotiating objectives in NAFTA to help address the issue. 
This is an important step forward to ensuring U.S. companies are 
accorded due process by our foreign trading partners during competition 
investigations.

    If confirmed, do you agree that the NAFTA competition obligations 
should serve as a baseline to pursue fair treatment by our trading 
partners of U.S. companies in competition proceedings?

    Answer. I understand that USTR proposed text for a NAFTA 2.0 
competition chapter that fulfills the negotiating objective agreed to 
by Congress in the 2015 TPA bill and was reflected in USTR's NAFTA 2.0 
Negotiating Objectives. I also understand that the three NAFTA parties 
reached agreement on the text of the competition chapter in October of 
last year. While I have not seen the classified text, I understand that 
the new NAFTA competition chapter substantially updates the original 
NAFTA and goes beyond anything the United States has done in previous 
free trade agreements to provide increased procedural fairness in 
competition law enforcement so that parties are given a reasonable 
opportunity to defend their interests and are ensured of certain rights 
and transparency under each nation's competition laws. My goal, if 
confirmed, would be to pursue high standard commitments on competition 
policy in any future agreements, and I hope that the new competition 
chapter in NAFTA can serve as a template for these efforts.

    Question. American exporters use duty drawback to lower costs in 
order to be more internationally competitive. Drawback is restricted in 
NAFTA by article 303, while FTAs after NAFTA and the U.S.-Chile FTA do 
not contain similar language.

    What is your position on the inclusion of drawback provisions in 
NAFTA renegotiations?

    Answer. If confirmed, I will review the issue of duty drawback in 
NAFTA and consider how these and other provisions regarding trade in 
goods can best promote the competitiveness of U.S. firms and workers.

                                 ______
                                 
                 Questions Submitted by Hon. Ron Wyden
    Question. Millions of Americans are employed in the service sector 
in fields like science and technology, which accounted for about a 
third of U.S. exports. The United States has a competitive advantage in 
services with a $249 billion surplus in services trade with the world 
in 2016. Yet, this administration seems to be ignoring this crucial 
part of our economy altogether. In my view, we need to revitalize 
manufacturing at the same time that we seek new ways to support and 
grow the services sector. In fact, manufactured products are 
increasingly incorporating digital services; kitchen appliances made in 
the United States need to be part of the smart home to be competitive 
in tomorrow's marketplace.

    Do you agree that pursuing the Trade in Services Agreement (TiSA) 
negotiations would serve U.S. interests in lowering barriers to U.S. 
exports in services, particularly digital services?

    Answer. The U.S. service sector is highly innovative and a key 
driver of the U.S. economy, accounting for over 70 percent of GDP. 
Maintaining a vibrant U.S. services sector and expanding U.S. services 
exports is vital to a healthy economy and a core objective of U.S. 
trade policy. I understand that USTR is currently seeking strong 
services commitments in the ongoing NAFTA renegotiations and is also 
evaluating the full range of options available to pursue these 
objectives more broadly, including the Trade in Services Agreement. I 
am absolutely committed to expanding market access for service 
providers and look forward to working with you as we chart the best 
course forward.

    Question. The NAFTA renegotiation is a chance to set a high-water 
market in many areas. The United States leads the world in the Internet 
economy--and that is in part due to the United States having the most 
innovation-friendly laws and policies in the world as I described in my 
opening statement. But U.S. leadership is threatened overseas by 
countries that block or discriminate against U.S. Internet services and 
adopt policies that stifle innovation.

    If confirmed, do you commit to pursuing strong commitments in NAFTA 
which mirror U.S. law?

    Answer. I recognize the enormous importance of the Internet economy 
to the United States and the growing importance of the Internet as a 
platform for distributing content and providing services. TPA directs 
our trade negotiators to secure commitments from other countries to 
adopt innovation-enabling laws and regulations similar to those in the 
United States. I fully support this objective and, if confirmed, would 
commit to work with you and the Congress to achieve it.

    Question. In its updated public summary of negotiating objectives 
for the NAFTA renegotiation, USTR stated that it would ``establish 
rules that limit non-IPR civil liability of online platforms for third 
party content,'' and ``seek provisions governing intellectual property 
rights that reflect a standard of protection similar to that found in 
U.S. law, including, copyright and related rights (including, as 
appropriate, exceptions and limitations).''

    Are you committed to fully pursuing these objectives?

    Answer. I am committed to fulfilling all NAFTA negotiating 
objectives, including rules on non-IPR intermediary liability and other 
digital trade-related objectives, as well as ensuring strong standards 
of protection and enforcement for intellectual property rights, to 
ensure that U.S. online platforms have the same types of protections in 
foreign markets that have helped make the United States the most 
innovative economy in the world.

    Question. For several years now, foreign government subsidies and 
other market-distorting policies in the steel sector have resulted in 
massive global steel overcapacity--estimated by the OECD at nearly 700 
million metric tons.

    If confirmed, can you tell me how you and the rest of the USTR team 
will get countries like China to eliminate their steel excess capacity?

    Answer. I share your concern that the current global overcapacity 
problem in the steel industry is having a detrimental impact on U.S. 
workers and companies. At the core of this problem is China's non-
market economy system, which is creating global oversupply and excess 
capacity in these and other sectors.

    To address this serious problem, if confirmed, I am committed to 
working with colleagues across the administration to address the root 
causes of the problem through the use of the tools made available by 
law. In addition, I understand that the administration is also fully 
engaged in working closely with other countries, including through the 
Global Forum on Steel Excess Capacity, to respond firmly to the causes 
and consequences of steel excess capacity.

    Question. Mr. Mahoney, I understand you will be responsible for 
China policy in your role at USTR in Washington. There is no question 
that China's mercantilist trade policies have been a serious challenge 
both for American workers and the rules-based trading system as a 
whole. The President seems to be of two minds on China trade: some days 
he seems ready to take action and on other days he says he will trade 
away action for China's cooperation on North Korea. That is 
unacceptable. China has a trade strategy and it is not giving it up in 
exchange for favors from the United States in other areas. The United 
States needs a strategy, too. Last April, Senator Hatch and I, together 
with our counterparts on the House Ways and Means Committee, wrote to 
the President and identified six priority areas for the administration 
in its engagement with China, ranging from market distorting policies 
affecting manufacturers and agriculture to China's efforts to dominate 
advanced technologies from solar to semiconductors, where the U.S. 
traditionally has had the lead.

    What are the top three trade challenges you see this year with 
respect to China and how would you address them?

    Answer. The United States faces numerous trade challenges with 
regard to China. The three I highlight below by no means are the only 
challenges we face, but they are among the most significant.

    First, I agree with you that excess capacity is a major problem. 
China has expanded capacity in sectors like steel, aluminum, and solar 
panels well beyond what market signals would have generated, and the 
resulting over-production has been causing serious harm to our 
industries and workers.

    Second, China's ``Made in China 2025'' industrial plan and other 
Chinese industrial policies are a major cause of concern for the United 
States. The 2025 plan provides massive subsidies to 10 value-added, 
high technology manufacturing industries, calls for preferences for 
Chinese products, services, and technologies, seeks to extract 
technologies from other countries and sets explicit goals for 
dominating China's domestic market as a precursor to going global and 
seeking increased market shares abroad. We need to protect our 
technology, ensure a level playing field and an open market in China, 
and work to discourage China from creating severe excess capacity in 
these industries.

    Third, China's inadequate enforcement of intellectual property 
rights is also of serious concern. Particular problem areas include 
online infringement, trade secrets protection, and a weak patent 
regulatory system.

    If confirmed, I look forward to working with you to ensure progress 
in all of these areas. I am committed to the use of the full range of 
appropriate U.S. trade policy and enforcement tools to achieve this 
end.

    Question. The administration has mentioned the importance of labor 
commitments in trade agreements and the need for tougher enforcement of 
those commitments. But so far, it has taken no enforcement actions and 
the reports it was supposed to deliver on country-specific labor 
investigations have either been released late or not at all. The report 
on labor conditions in Colombia was released 4 months late. No reports 
have been produced in the investigations of the Dominican Republic, 
Peru, or Honduras. As for NAFTA negotiations, there are growing 
concerns that the administration is not going to get anything more than 
what the last administration did in TPP.

    Will you commit to working with the Department of Labor to ensure 
that enforcement reports are timely released in all pending trade cases 
before the Department?

    Answer. FTA partners should be held to their obligations, including 
those relating to labor standards. Lower labor standards in other 
countries create an unfair competitive advantage and harm American 
workers. I am aware of the Department of Labor's report on labor issues 
in Colombia and, if confirmed, I am committed to ensuring that 
compliance and enforcement of trade laws are priorities. I am also 
aware of the administration's close engagement with Colombia, as well 
as Honduras, Peru, and the Dominican Republic, to ensure that these FTA 
partner countries live up to their obligations, and I will work with 
Labor Secretary Acosta and his team to continue these efforts.

    Question. Do you think it would be an acceptable outcome on NAFTA 
if the administration gets the same labor commitments from Mexico as 
the Obama administration got in the Trans-Pacific Partnership 
agreement? If not, where do you believe improvements are needed?

    Answer. I strongly believe any new or renegotiated trade agreements 
should build on what the United States has achieved in past agreements, 
while meeting the objectives laid out by Congress in the 2015 TPA 
legislation. In the case of Mexico, the important constitutional labor 
reforms that were developed while the TPP was being negotiated have 
been enacted, and Mexico is now considering follow-up legislation to 
fully implement the reforms. I certainly believe both the United States 
and Mexico will want to make sure NAFTA 2.0 builds on these important 
and ongoing reforms in Mexico.

    Question. This administration, including the Office of the U.S. 
Trade Representative, has fallen short on transparency and 
consultations with Congress, stakeholders and the public. Getting more 
transparency in our trade policy has been a top priority for me. 
Together with nine other Democratic members of this committee, I wrote 
to the President last week expressing concern that this administration 
is heading off track on transparency. It has issued no public summaries 
of its negotiating objectives with Korea. To put it simply, we won't 
end up with trade deals that benefit all Americans if we can't talk 
about proposals at town halls. That is why I insisted on new 
requirements to raise the bar when it comes to transparency.

    If confirmed, do you commit to consulting closely with Congress and 
follow the letter and spirit of all transparency and consultations 
requirements established by the Trade Promotion Authority bill passed 
in 2015 and the enforcement bill passed in 2016?

    Answer. If confirmed, I commit to following the consultation 
requirements mandated by law and to work closely with Congress in 
pursuing trade negotiations.

                                 ______
                                 
               Question Submitted by Hon. Chuck Grassley
    Question. Foreign governments are increasingly using competition 
laws to advantage their own companies or otherwise protect them from 
U.S. competition. Such actions risk stifling U.S. investment, 
innovation and competitiveness.

    What tools does USTR have available to combat these unfair trade 
practices?

    Answer. I agree that the recent escalation in use of competition 
laws to the detriment of U.S. companies is an issue of concern. I 
understand that USTR has been using a number of mechanisms, including 
direct bilateral communications with the relevant competition 
authorities, to ensure that U.S. companies are able to defend their 
interests to the fullest extent possible and be treated fairly under 
foreign competition laws. I fully support this effort.

                                 ______
                                 
       Question Submitted by Hon. Mike Crapo, Hon. Pat Roberts, 
                        and Hon. Michael B. Enzi
    Question. In the context of the Joint Committee on Commerce and 
Trade (JCCT), China made commitments to exchange information with the 
Commerce Department regarding its excess capacity in soda ash.

    What does the administration's abandonment of the bilateral trade 
dialogue with China mean for the JCCT commitment on soda ash?

    Answer. China does not have a good track record of following 
through on commitments that it made in the JCCT or any of the other 
high-level bilateral dialogues that we pursued with China. If 
confirmed, I will work with you as well as the U.S. soda ash industry 
in an effort to find the best path forward for addressing the 
industry's concerns about excess capacity in China's soda ash industry.

                                 ______
                                 
      Questions Submitted by Hon. John Cornyn and Hon. John Thune
    Question. Mr. Mahoney, if confirmed, you would play a lead role in 
the NAFTA renegotiations. As I have indicated to the President and 
Ambassador Lighthizer, I strongly support NAFTA, which has created 
significant market access for South Dakota agricultural commodities in 
Canada and Mexico. I believe it is critically important that we 
preserve and strengthen the benefits that NAFTA has provided to our 
agricultural industries in particular and to U.S. exporters more 
generally.

    With that said, what do you see your role being in the 
renegotiations and what are your top priorities for a modernized NAFTA?

    Answer. If confirmed, my role as deputy would be to oversee several 
of the offices within USTR, including the office of the Western 
Hemisphere, which, in turn, oversees NAFTA. If confirmed, I look 
forward to working with Ambassador Lighthizer to advance this 
administration's trade agenda with respect to NAFTA and my other areas 
of responsibility. As I stated in my hearing testimony, I am fully 
aware of the gains the agricultural sector has achieved as a result of 
NAFTA and am fully committed to preserving and enhancing those gains.

    Question. Given the importance of trade agreements to agriculture 
and the U.S. economy generally, please describe how you would work to 
preserve existing trade agreements and to open up new markets.

    Answer. The administration is committed to maintaining and 
expanding export markets for our farmers, ranchers, and food processing 
industries. If confirmed, I would be committed not only to preserving 
existing benefits to American agriculture but also to improving 
existing agreements, such as NAFTA. I would also work to expand market 
access for the U.S. agricultural sector in countries with whom the 
United States does not have a free trade agreement. The President has 
stated that the United States is open to negotiating trade agreements 
with any like-minded country that is willing to trade on fair and 
reciprocal terms. If confirmed, I would look forward to working with 
you, other members of Congress, and agricultural stakeholders, 
consistent with Trade Promotion Authority, to identify priorities for 
opening new markets or updating other existing agreements.

                                 ______
                                 
Question Submitted by Hon. Richard Burr, Hon. Johnny Isakson, Hon. Rob 
  Portman, Hon. Patrick J. Toomey, Hon. Dean Heller, Hon. Tim Scott, 
                         and Hon. Bill Cassidy
    Question. Drawback was initiated for the purpose of creating jobs 
and encouraging manufacturing and exports. Article 303 of NAFTA doesn't 
allow access to drawback.

    Please analyze the advantages and disadvantages to the United 
States as compared to Canada and Mexico concerning our lack of access 
to duty drawback through NAFTA. Further, please analyze the advantages 
and disadvantages of not allowing duty drawback on NAFTA originated 
goods transferred through the United States.

    Answer. If confirmed, I will review the issue of duty drawback in 
NAFTA and how these and other provisions regarding trade in goods can 
best promote the competitiveness of U.S. firms and workers.

                                 ______
                                 
              Questions Submitted by Hon. Debbie Stabenow
    Question. Agricultural exports support an estimated 26,000 jobs in 
Michigan, both on and off the farm. Canada and Mexico are top markets 
for many of the food and agriculture products we grow and make in 
Michigan. At a time when many Michigan farmers are struggling with 
uncertainty and low prices, it is essential that any final NAFTA 
agreement does not jeopardize access to these markets.

    If you are confirmed, will you commit to working with me to make 
maintaining and expanding markets for Michigan agriculture a priority 
in any revised NAFTA agreement?

    Answer. The administration is committed to maintaining and 
expanding export markets for our farmers, ranchers, and food processing 
industries, including those in Michigan. If confirmed I would be 
committed to not only to preserving existing benefits to American 
agriculture but also improving NAFTA. I would consult you, other 
members of Congress, and agricultural stakeholders, consistent with 
Trade Promotion Authority, on the United States' approach to and 
positions in the negotiations.

    Question. The U.S. sugar industry, which supports 142,000 jobs 
across the country and thousands of jobs in Michigan, is greatly 
impacted by our trading partners in the Western Hemisphere. 
Unfortunately, our U.S. producers have been hurt by very low prices and 
volatility caused by Mexico dumping large volumes of sugar on the U.S. 
market. I am hopeful that this dumping will be curtailed by the revised 
antidumping and countervailing duty suspension agreements negotiated 
last year. However, if Canada is granted additional U.S. market access 
for sugar and sugar-
containing products in a revised NAFTA agreement, I am concerned that 
this could cause further harm to our domestic sugar industry and 
undermine these revised suspension agreements.

    If you are confirmed, will you commit to working closely with me 
and representatives of the U.S. sugar industry to address these 
concerns?

    Answer. I am aware of the concerns you note. As you are aware, 
authority over sugar imports is divided between USTR and the U.S. 
Department of Agriculture (USDA). If confirmed, I commit that USTR will 
work closely with you, other members of Congress, USDA, and sugar 
stakeholders should sugar-related issues with Canada arise in the NAFTA 
negotiations.

    Question. Last year, Chairman Roberts and I wrote a letter to 
Secretary Perdue and Ambassador Lighthizer urging them to engage with 
their counterparts in Canada about Canada's new dairy pricing scheme, 
which has displaced U.S. exports of ultra-filtered milk and depressed 
world prices. I appreciate the administration's attention to this 
issue, but I remain concerned about this policy change and the 
potential for it to cause further harm to U.S. producers.

    If you are confirmed, will you commit to fully examining all 
options to address this issue, both in the context of the NAFTA 
negotiations and otherwise? Will you commit to briefing my staff about 
the actions USTR is taking to address this problem?

    Answer. I know Canada's dairy program imposes substantial barriers 
to market access and that this is an issue of great importance for 
America's dairy farmers. If confirmed I will certainly examine all 
options for addressing this issue and would be happy to brief your 
staff.

    Question. Michigan farmers can compete as well as anyone in the 
global marketplace when the playing field is level. Unfortunately, our 
trading partners do not always play by the rules, and I have heard from 
many farmers who are facing unfair import competition or unwarranted 
barriers to export markets. Many of these challenges are with trading 
partners who will fall in your area of responsibility if you are 
confirmed. For example, Michigan asparagus growers have struggled with 
dumping from Mexico and Peru for several years.

    If you are confirmed, will you make fair treatment of U.S. 
agricultural products a top priority? How will you press countries that 
violate their trade commitments to change their unfair trade practices?

    Answer. Ensuring fair treatment of U.S. agricultural products is a 
top priority for this administration. I am fully committed to that goal 
and, if confirmed, I will commit USTR to look into the matter of 
asparagus imports from Mexico and Peru.

    Question. If confirmed, your portfolio will include addressing our 
ongoing trade challenges with China. China's expanding protectionist 
approach and closing of their markets has created economic harm to 
businesses in Michigan seeking to export their products from 
polysilicon to electric bus batteries. At the same time, Chinese 
companies flood the U.S. market with goods, many times underpriced, 
putting American companies at a competitive disadvantage. In addition, 
the issue of excess steel overcapacity, particularly from countries 
like China, continue to harm the steel industry and steelworkers all 
across the country, including in Michigan.

    What specific steps will you take to counter China's behavior and 
make headway on this issue?

    What steps will you take to address the problem of excess steel 
capacity, particularly by China?

    Answer. I am aware of the market access issues you identify and, if 
confirmed, will work with others in the administration, members of 
Congress, and stakeholders to eliminate barriers to the Chinese market 
and ensure greater reciprocity in our trading relationship with China 
in general. With regard to the issue of steel, China needs to stop 
engaging in unfair trade practices and fix its vast excess capacity 
problem. While China has taken some steps to reduce excess capacity in 
its steel sector, there has not been much if any progress so far; 
China's steel capacity and production remain roughly the same and 
China's steel exports to the world remain high. I understand that USTR 
is currently conducting a review of all the available tools to address 
the serious overcapacity problems in steel and other products. At the 
same time, we need to address the root causes of excess capacity, and 
as part of that effort I understand that USTR is continuing to work 
closely with other leading steel producing countries in the Global 
Forum on Steel Excess Capacity and other contexts. The goal of the 
Global Forum is to work with other governments to take effective steps 
to address excess steel capacity in China and elsewhere by addressing 
the underlying causes such as subsidies and other types of government 
assistance.

    USTR is also working with the Department of Commerce, Customs and 
Border Protection, and other agencies to ensure that we enforce our 
trade remedy laws effectively at the U.S. border. In addition, as you 
know, the Department of Commerce conducted an investigation of steel 
trade pursuant to section 232 of the Trade Expansion Act of 1962 and 
submitted the results of the investigation to the President earlier 
this month.

                                 ______
                                 
               Questions Submitted by Hon. Maria Cantwell
    Question. The solar panel and polysilicon trade dispute between the 
United States and China appears to be deadlocked. Currently, the 
Chinese market accounts for about 80 percent of the global demand for 
polysilicon. However, retaliatory duties imposed by China on U.S. 
exports of polysilicon have crippled our leading domestic 
manufacturers. Despite growing global demand for solar products, key 
U.S. polysilicon manufacturers continue to shrink. This is directly 
contrary to the economic interests of the United States and the stated 
goals of the Trump administration.

    Do you believe that the prolonged trade dispute over solar products 
has been harmful to our domestic polysilicon industry, and has resulted 
in the loss of thousands of jobs?

    Are you aware of Chinese efforts to use the situation described 
above to lure U.S. polysilicon manufacturing capability to China and 
capture their more advanced manufacturing technologies?

    Please describe what concrete actions you would take, if confirmed, 
to obtain access for U.S. polysilicon manufacturers to Chinese markets 
as soon as possible.

    Answer. I share the concern about the harmful impact that Chinese 
duties are having on U.S. polysilicon producers. I understand that 
China imposed duties on U.S. polysilicon exports in retaliation after 
the United States imposed legitimate antidumping and countervailing 
duty measures on Chinese solar products that were found to be injuring 
the U.S. industry. I note the statement made recently by the Trump 
administration in connection with the President's imposition of section 
201 safeguard relief for U.S. producers of solar products:

        The U.S. Trade Representative will engage in discussions among 
        interested parties that could lead to positive resolution of 
        the separate antidumping and countervailing duty measures 
        currently imposed on Chinese solar products and U.S. 
        polysilicon. The goal of those discussions must be fair and 
        sustainable trade throughout the whole solar energy value 
        chain, which would benefit U.S. producers, workers, and 
        consumers.

    I support that approach and, if confirmed, I look forward to 
working with you on this issue.

    Question. U.S. companies are concerned about China's proposed draft 
regulations that, when combined with existing Chinese law, would 
require U.S. cloud providers to transfer valuable intellectual 
property, surrender use of brand names, and hand over operation and 
control of their businesses to Chinese companies in order to operate in 
China. These are requirements that no other countries apply to foreign 
cloud providers, and Chinese cloud providers continue to operate in the 
United States without these restrictions. U.S. cloud companies are 
strong catalysts for economic and jobs growth around the world, and it 
is unacceptable to think that they could be locked out of China 
entirely.

    Please describe what concrete actions you will take, if confirmed, 
to level the playing field for U.S. cloud companies in China?

    Answer. I recognize that U.S. leadership in the technology sector, 
including in the area of cloud computing, is a tremendous competitive 
advantage that we must maintain. I share your concern about the 
requirements China seeks to impose on U.S. cloud providers. I agree 
that our trade policy should ensure that U.S. companies in this sector 
can thrive globally, including in China, where I recognize that 
barriers have been severe and contrast sharply with the open market 
Chinese companies enjoy in the United States. If confirmed, I will make 
reducing barriers U.S. companies faces in this sector--in China and 
elsewhere--a priority.

                                 ______
                                 
                Questions Submitted by Hon. Bill Nelson
    Question. As you know, Florida fruit and vegetable growers are 
dealing with the problem of Mexican agricultural goods being unfairly 
subsidized and dumped into the U.S. during the winter months--including 
tomatoes, blueberries, strawberries, cucumbers, and bell peppers. 
Florida growers say they have had a hard time bringing forward a trade 
case on the issue due to the seasonality of the dumping. However, some 
growers in other parts of the country object to a level playing field 
for Florida growers, fearing it could disrupt their relationship with 
Mexico.

    In general, do you believe fair rules for perishable goods should 
be held hostage to histrionics, or should they be judged on their 
merits?

    Answer. I understand that in the context of the NAFTA negotiations 
the United States has made a proposal to address this issue which is 
rooted in the provisions contained in Trade Promotion Authority since 
2002. As Ambassador Lighthizer has consistently stated, our aim is to 
maintain and improve market access for American agriculture, 
manufacturing, and services. If confirmed, I intend to maintain and 
strengthen export opportunities for our farmers and ranchers, to help 
ensure that our agricultural products are treated fairly, to promote 
the strength of our manufacturing sector, and to expand opportunities 
for our services, including digital services. At the same time, when 
U.S. farmers believe that they have been injured by unfairly traded 
goods, those farmers should be entitled to seek a remedy.

    Question. Will you commit to support the administration's current 
position of recognizing the seasonality of trade abuses against 
regional fruit and vegetable growers?

    Answer. I support the administration's negotiating objectives on 
this issue, which were set forth in its published negotiating 
objectives for NAFTA 2.0.

    Question. What do you believe you could add to the administration 
that is currently missing?

    Answer. Ambassador Lighthizer has assembled an impressive team to 
combat the significant trade challenges our Nation faces. As a trial 
litigator with an international practice, I routinely litigate high-
stakes matters before international tribunals and negotiate with 
foreign parties. The skills I have gained in my career thus far will, I 
believe, enable me to play an integral role in helping to advance the 
administration's trade agenda.

    Question. If the President said something that you knew was false, 
would you perpetuate the falsehood if asked about it?

    Answer. Any advice I give or statements I make in my capacity as 
Deputy USTR will be based on the facts as I understand them.

    Question. Some argue that free trade creates an incentive for 
companies to move to low-wage countries that have little to no 
workplace regulations. What do you plan to do to address that concern?

    Answer. I agree that lower labor standards in countries that have 
low wages, such as Mexico, affect American workers and businesses. I am 
committed to ensuring that NAFTA and other trade agreements meet the 
negotiating objectives that Congress has set out in TPA, including 
those regarding labor rights. The administration has undertaken a 
comprehensive review of U.S. trade policy to determine how best to 
ensure strong labor commitments for future trade negotiations, 
beginning with NAFTA. If confirmed, I will work with you and other 
members of Congress as we update and improve the NAFTA and examine ways 
to improve our relationship with other key trading partners as well.

    Question. Do you believe most regulations that seek to protect 
consumers from fraud and abuse, protect worker rights, and preserve the 
environment help make America great, or do you believe they are mostly 
bad for America and a barrier to prosperity?

    Answer. If confirmed, my responsibilities will be limited to trade 
policy. I do believe, however, that our trade agreements need to be 
structured in a way that gives Congress and the President sufficient 
flexibility to enact laws and regulations relating to consumer 
protection, labor conditions, and the environment. At the same time, it 
is important to ensure that our trading partners do not use domestic 
regulations to create unjustified trade barriers to American goods and 
services.

    Question. If confirmed, how would your view on regulations 
influence your actions as Deputy U.S. Trade Representative?

    Answer. If confirmed, my task will be to pursue trade agreements 
that are consistent with the objectives set forth in TPA, create a 
level playing field, and ensure that our trading partners do not use 
regulations to create unjustified trade barriers.

                                 ______
                                 
              Questions Submitted by Hon. Robert Menendez
    Question. During your confirmation hearing, you suggested that any 
advice you give in the formulation of the State Department's 
Trafficking in Persons (TIP) report would be based on the facts.

    What is your understanding of USTR's role in drafting and making 
ranking recommendations for the TIP Report?

    Answer. I understand that the Department of State is responsible 
for the TIP report. My understanding is that USTR works closely with 
the Department of State, as well as the Department of Labor and other 
agencies, to coordinate policy on trafficking and forced labor issues.

    Question. What specifically will your role be in that process?

    Answer. Again, I understand that, as part of the interagency 
process, USTR works with Department of State, the Department of Labor 
and other agencies, to coordinate policy on trafficking and forced 
labor issues, but the State Department is responsible for the TIP 
report.

    Question. Do you support language in trade agreements, like the 
consistency plan with Malaysia in TPP, that works to address human 
trafficking in our trading partners?

    Answer. I understand the importance of this issue and look forward 
to working with you and other members of Congress to determine how best 
to address it in the context of trade negotiations.

    Question. Will you commit to this committee that, if confirmed, you 
will not take any action to influence the TIP report?

    Answer. As noted, I understand that USTR works closely through the 
interagency process with the Department of State, as well as the 
Department of Labor and other agencies, to coordinate policy on 
trafficking and forced labor issues. I would expect to play a role in 
that process. At the same time, I understand that the Department of 
State is responsible for the TIP report, and I agree with the concern 
you voiced at the hearing that commercial interests should not 
influence the factual determination that the State Department is 
required by law to undertake before issuing the report. I commit that I 
will not attempt to manipulate TIP rankings or otherwise improperly 
influence the TIP report.

    Question. Our trade agreements only protect American workers to the 
extent that we aggressively enforce the provisions meant to reduce 
outsourcing and raise standards.

    What is your plan for strengthening the enforcement of the labor 
provisions in our trade agreements?

    Answer. The administration wants strong, enforceable trade 
agreements that work for the American people, and, if confirmed, I will 
work to ensure that all of our trading partners maintain fair labor 
practices to help level the playing field for American workers.

    Question. Will you commit to brief my staff, and the committee at 
large, quarterly on your labor enforcement agenda?

    Answer. I commit to regular engagement and briefings with your 
staff and the committee at large, as required under TPA. Consulting 
with the committee as frequently as possible will be a priority for me.

    Question. If confirmed, you will be overseeing our trade 
relationships with the entire hemisphere. And given the 
administration's focus on trade deficits, it surprises me that the 
western hemisphere hasn't gotten more attention given the fact that we 
have trade surpluses with several of our trading partners in the 
region.

    If confirmed, what will be your priorities for expanding our trade 
relationships with the other countries in the region?

    Will your primary focus be to explore new agreements or renegotiate 
the ones we already have?

    Answer. The President has made clear that NAFTA is one of his key 
priorities. I look forward, if confirmed, to working with Ambassador 
Lighthizer to modernize and rebalance this agreement so that it 
delivers the full benefits of trade to the workers, service providers, 
farmers, and ranchers of the United States. I believe the successful 
renegotiation of the NAFTA will provide a template for expanding trade 
opportunities with our existing trade agreement partners, and with 
other countries in the Western Hemisphere that want new or closer 
economic ties with the United States.

    Question. China has had a decades-long pattern of manipulating 
their currency, stealing our intellectual property, dumping products 
onto world markets, and systematically skirting their trade 
obligations. Leveling the playing field for American workers by taking 
aggressive action to stop China from gaming the international trading 
regime was a key theme of the President's campaign, and I hope the 
administration will follow through on that promise.

    Do you believe that China is a currency manipulator?

    If confirmed, what are you going to do to ensure that countries 
stop manipulating their currency?

    Answer. Currency manipulation is an issue on which President Trump 
campaigned, and I understand that he and his administration remain 
focused on this issue. It is my understanding that the administration, 
with the Department of the Treasury in the lead, is examining the full 
array of policy tools available to combat currency manipulation, 
including trade commitments. I fully support that effort.

    Question. Colombia is trying to join the OECD, but several U.S. 
industry sectors say that Colombia first needs to fulfill international 
commitments it has already made before it should be allowed to join. In 
particular, there are components of Colombia's National Development 
Plan and its regulation of biologic medicines that disadvantage the 
U.S. biopharmaceutical industry and may violate both the WTO TRIPS 
Agreement and our free trade agreement with that country.

    Do you believe Colombia should address these issues and fulfill its 
commitments to the United States before USTR supports Colombia's 
accession to the OECD?

    Answer. I understand that the United States, and USTR in 
particular, has been clear throughout the OECD accession process for 
Colombia that it needs to address a range of concerns in areas such as 
IPR, market access, and labor conditions. If confirmed, I will continue 
to use processes such as OECD accession to achieve trade and economic 
reforms that strengthen the ability of U.S. firms to compete in 
Colombia and other markets and ensure a level playing field for 
American workers.

                                 ______
                                 
              Questions Submitted by Hon. Thomas R. Carper
    Question. President Trump withdrew the United States from the 
Trans-Pacific Partnership (TPP)--a trade deal he called ``the greatest 
danger to our country yet''--and promised that he could negotiate a 
much better deal. Since our withdrawal from the TPP, China continues to 
move forward with the 16-member Regional Comprehensive Economic 
Partnership and the 11 remaining TPP parties are looking to finalize a 
TPP without the United States.

    The President and Ambassador Lighthizer have expressed a preference 
for bilateral trade agreements. Which countries would you suggest we 
approach for such negotiations?

    What else should the administration be doing to ensure that the 
world does not continue to move forward, particularly in Asia, with 
growing Chinese influence?

    Answer. As the President made clear in his recent speech at the 
World Economic Forum, the United States is committed to strengthening 
our trading relationships with like-minded countries that are willing 
to trade on a fair and reciprocal basis. As you know, the United States 
already has trade agreements with several of the TPP countries and 
substantial trade relationships others, namely Vietnam and Japan. I 
look forward to working with Ambassador Lighthizer, others in the 
administration, and members of Congress to identify appropriate 
candidates to engage in future trade negotiations, including countries 
that were part of TPP.

    Question. Many of our trading partners deploy new and increasingly 
sophisticated tools, including price controls and discriminatory 
competition enforcement, to give their own industries a leg up at the 
expense of the United States' innovative industries. In some cases, 
such countries are flouting international trade rules and failing to 
faithfully implement competition and IP-related trade obligations to 
the United States. Such actions devalue U.S. IP, lead to unfair 
treatment of U.S. companies, and otherwise stifle investment, 
innovation and job growth.

    If confirmed, will you commit to using all trade tools available to 
protect U.S. companies from such unfair treatment overseas?

    Answer. I share your concerns and commit to using all available 
trade tools to address unfair trade practices, including those 
involving IPR, price controls, and competition policy.

                                 ______
                                 
             Questions Submitted by Hon. Benjamin L. Cardin
    Question. When evaluating potential trade agreements, provisions 
that set high standards on labor rights, the environment, human rights, 
and anti-corruption obligations are particularly important to me. While 
I had some concerns about TPP, it contained significant improvements 
over past trade agreements, especially regarding human rights and good 
governance measures.

    Though some of these improvements apply to our NAFTA trading 
partners, others do not. Nonetheless, I think it is critically 
important to create a very high standard in the NAFTA negotiations that 
preserves the gains made on human rights and anticorruption commitments 
in TPP. This will send an important signal to any future parties to 
U.S. trade negotiations. It will also help create a more level global 
playing field for our workers, especially if we require the same high-
standard agreement with all of our trading partners--as opposed to 
creating a patchwork of agreements that are inconsistent on these 
issues.

    What are your views on incorporating high standards on labor 
rights, human rights, the environment, and anticorruption measures into 
a modernized NAFTA?

    Will you ensure that even provisions that meet these high standards 
but do not necessarily affect our NAFTA trading partners be 
incorporated into the ongoing NAFTA renegotiations?

    Answer. I strongly believe any new or renegotiated trade agreements 
should build on the best text available, including in some cases what 
the United States has achieved in past agreements, while also meeting 
the objectives laid out by Congress in TPA. On labor and the 
environment, if confirmed, I am committed to working with Ambassador 
Lighthizer and members of Congress to strengthen our trading partners' 
labor and environmental standards by including strong obligations on 
these issues into the core of a renegotiated NAFTA which would be 
subject to the same dispute settlement mechanisms and trade sanctions 
as the rest of the agreement. Regarding anticorruption, I understand 
USTR has proposed an anticorruption chapter in the renegotiations that 
would include high standards. I also believe that the NAFTA can serve 
as a model for other agreements and, if confirmed, would work to 
achieve that goal. As to human rights issues, I support and will abide 
by the objectives set forth by the Congress in TPA.

    Question. Several industries in the United States, including the 
heavy trucking and pharmaceutical sectors, face major market-distorting 
government activities in Colombia that limit U.S. access. These actions 
are inconsistent with both Colombia's existing international 
commitments, including the U.S.-Colombia Trade Promotion Agreement and 
the standards for membership in the Organisation for Economic Co-
operation and Development (OECD), which Colombia seeks to join. These 
distorting activities are undermining jobs and manufacturing in the 
United States.

    Under your leadership, what concrete steps will USTR take to press 
Colombia to reverse these barriers?

    Answer. I understand USTR has worked over a period of years to 
address barriers to U.S. goods entering Colombia. This includes using 
the tools and processes made available under the U.S.-Columbia free 
trade agreement, and the OECD accession process that Colombia has yet 
to complete. If confirmed, I will work to ensure that Colombia is 
meeting its international obligations and adhering to the high 
standards of organizations like the OECD.

                                 ______
                                 
               Questions Submitted by Hon. Sherrod Brown
    Question. In your testimony before the Finance Committee, you 
indicated that you believed a renegotiated NAFTA should include 
enforceable labor standards that are consistent with Trade Promotion 
Authority (TPA).

    Do you believe TPA serves as a ceiling for labor obligations in 
U.S. free trade agreements? Do you believe the Trans-Pacific 
Partnership labor chapter should serve as the basis of the labor 
chapter in any renegotiated NAFTA?

    Answer. In any negotiations, I would seek to achieve the goals laid 
out by Congress in TPA. The administration wants strong, enforceable 
trade agreements that work for the American people, and, if confirmed, 
I will work to ensure that all of our trading partners maintain fair 
labor practices to help level the playing field for American workers.

    Question. As you know, the U.S. lost the trade case that it brought 
against Guatemala under the CAFTA-DR agreement for failing to meet the 
agreement's labor obligations. Do you believe a renegotiated NAFTA 
agreement should include updated labor chapter text to reflect the 
dispute panel's decision in the Guatemala case and to guard against any 
future losses for the United States?

    Answer. I am aware that USTR has stated its strong disagreement 
with some of the interpretations reached by the panel in the Guatemala 
case, including with respect to whether Guatemala's failure to adhere 
to its labor obligations affected trade. No FTA panel can set 
``precedent'' for future panels, but I understand the concerns you and 
others have raised regarding this matter. If confirmed, I look forward 
to consulting closely with you and your colleagues on these important 
issues in the future.

    Question. In your opinion, what improvements should be made to the 
state-to-state dispute settlement provisions in NAFTA to ensure timely 
responses and remedies in the event of labor or environmental 
violations?

    Answer. On NAFTA, I am committed to ensuring that the renegotiated 
agreement strengthens our trading partners' labor and environmental 
standards and, if confirmed, I will work to ensure that these 
commitments are included into the core of NAFTA and are subject to the 
same dispute settlement mechanisms and trade sanctions as the rest of 
the agreement.

                                 ______
                                 
             Questions Submitted by Hon. Michael F. Bennet 
                     and Hon. Robert P. Casey, Jr.
    Question. China has put forward very aggressive strategic plans 
which are at direct odds with many of the areas which the United States 
enjoys a competitive advantage.

    How do you intend to work with Commerce and the other arms of the 
Federal Government to take a coordinated approach to ensure our past 
experiences, such as the outright assault on our steel and aluminum 
industrial base, cannot be repeated?

    Answer. We have numerous trade issues with China, including those 
you identified. China also has begun to pursue a range of problematic 
industrial policies, such as Made in China 2025, designed to create or 
accelerate artificially China's ability to become a manufacturing 
leader in several high technology, high value-added industries, like 
information technology, aviation, electric vehicles, and medical 
devices.

    I am fully committed to using the full range of U.S. trade policy 
and enforcement tools to address China's aggressive strategic plans, in 
coordination with other parts of the government through the interagency 
process. If confirmed, I will look forward to working with you on these 
matters.

    Question. What tools do you view as available to you through U.S. 
trade law to address some of the well documented violations from China 
when it comes to state sponsored economic espionage, including cyber 
enabled economic espionage? Of the tools available to you, please 
discuss how you hope to work in coordination with our ambassador to the 
WTO and other agencies, such as Commerce and the U.S. Treasury to 
address some of these issues?

    Answer. The United States has a wide range of tools available to 
combat the problem you identify, including the ongoing section 301 
investigation, coordination with our allies, and potentially recourse 
in the WTO. If confirmed, I will work closely with the ambassador to 
the WTO, the Departments of Commerce and State, and other parts of the 
U.S. Government through the interagency process to ensure a coordinated 
and effective response to this serious issue.

    Question. Can you discuss how you intend to coordinate with Mr. 
Shea, if you are both confirmed, and our Europeans allies on China 
market economy status as well as China 2025 strategy and their actions 
related to forced tech transfer and economic espionage?

    Answer. I understand that the administration already has a number 
of personnel working on the market economy status matter, the Made in 
China 2025 industrial plan, and technology transfer issues. If 
confirmed, I will work with Mr. Shea and others to help guide and 
support this team in its important work.

    Question. According to the American Iron and Steel Institute, the 
steel industry employs about 19,000 people in Pennsylvania, and is one 
of Pennsylvania's biggest economic drivers.\1\ The steel and aluminum 
industries are facing a crisis because of global overcapacity, stemming 
from China. This issue is exacerbated by the administration's failure 
to act on its 232 steel investigation. Delay has resulted in a 
sustained increase in imports of steel to the United States compared to 
last year.
---------------------------------------------------------------------------
    \1\ https://www.steel.org//media/Files/AISI/Public%20Policy/
Member%20Map/2016/Pennsylvania.pdf?la=en.

    Can you share what actions you intend to take to press China and 
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other countries on overcapacity?

    Please discuss how you will work with our allies, including the EU, 
on taking collective action on this issue.

    Answer. I share your concern that the current global overcapacity 
problem in the steel industry is having a detrimental impact on U.S. 
workers and companies. At the core of this problem is China's non-
market economy system, which is creating global oversupply and excess 
capacity in these and other sectors.

    To address this serious problem, if confirmed, I am committed to 
working with colleagues across the administration to address the root 
causes of the problem through the use of the tools made available by 
law. In addition, I understand that the administration is also fully 
engaged in working closely with other countries, including through the 
Global Forum on Steel Excess Capacity, to firmly respond to the causes 
and consequences of steel excess capacity.

    Question. It is our view, and I hope one we share, that Americans 
can out-compete anyone in the world if the playing field is level. That 
requires strong, enforceable labor and environment provisions. The 
labor provisions the United States agreed to in TPP are completely 
inadequate. This is a view many of the Democrats on this committee 
share, as do my constituents in Pennsylvania.

    Do you believe TPA is a floor or a ceiling with respect to strong 
commitments on labor?

    Answer. TPA represents Congress's direction to the administration 
for negotiation of trade agreements. I understand there are different 
views about how to apply that direction regarding labor provisions. If 
confirmed, I will work closely with Congress to ensure that labor 
provisions in our trade agreements are consistent with Congress's 
intention.

    Question. Is it your belief that going beyond the objectives 
outlined in TPA would be a violation of TPA?

    Answer. I am committed to adhering to TPA objectives and 
requirements, and, if confirmed, I will consult closely with you and 
the committee at large on these important issues.

                                 ______
                                 
  Questions Submitted by Hon. Mark R. Warner and Hon. Claire McCaskill

    Question. The President has suggested that terminating NAFTA would 
result in the ``best deal'' for our country.

    What do you predict would be the immediate impact on American 
exports if the President announces withdrawal?

    Answer. I understand USTR's priority is to renegotiate NAFTA so 
that it works for all Americans. Any renegotiation necessarily creates 
some uncertainty. If confirmed, I would work with Ambassador Lighthizer 
and the Congress to reach a NAFTA 2.0 that enhances the benefits for 
U.S. workers, service providers, farmers, and ranchers under the 
existing agreement.

    Question. In Missouri, 64 percent of our food and agricultural 
product exports are sent to our NAFTA partners, Canada and Mexico.

    In your testimony you mentioned your commitment to preserving and 
enhancing the gains our country has achieved in NAFTA, particularly for 
agricultural goods. Can you elaborate on how you plan to achieve this 
goal?

    Answer. I understand the importance of preserving the gains 
achieved through NAFTA over the past 20 years. If confirmed, I will 
ensure USTR continues to work with members of Congress and food and 
agricultural trade advisors to improve and modernize trade rules 
related to non-tariff trade barriers that affect agriculture and to 
expand market access in areas that remain largely closed to U.S. 
producers, such as the Canadian dairy market.

    Question. The United States is a leader in digital services, due to 
the emergence of the Internet and rise of cross-border data flows. Data 
flows, which were practically nonexistent just 15 years ago, have grown 
exponentially, and are essential for technological advances that are 
cornerstones of our economy.

    How will trade negotiations ensure that we protect and expand 
opportunities for digital services? If confirmed, how will you address 
issues of forced data localization, the transfer of private keys, and 
attempts to force U.S. companies to hand over their software source 
code?

    Answer. I recognize the enormous and growing importance of digital 
trade to the U.S. economy. I also recognize the significant challenges 
our companies face as a result of restrictions on data transfer and 
rules forcing the localization of data. I understand that USTR is 
already seeking to address these issues, for example, in the ongoing 
NAFTA renegotiations and in discussions about possible new e-commerce 
rules at the WTO. If confirmed, I will look forward to working with the 
Congress to consider a broad range of tools, including trade 
negotiations, to bolster America's competitive position in the digital 
realm and thereby to strengthen the U.S. economy.

    Question. The Trade in Services Agreement (TiSA), currently being 
negotiated by countries that represent nearly 70 percent of the world's 
service market, has the potential to expand growth opportunities for 
the U.S. services industries. Eliminating service trade barriers could 
increase U.S. services exports by as much as $1.4 trillion, supporting 
as many as 3 million new jobs in the United States.

    How do you plan to address trade barriers in the services market?

    Answer. The U.S. service sector is highly innovative and a key 
driver of the U.S. economy. Maintaining a vibrant U.S. services sector 
and expanding U.S. services exports is vital to a healthy economy and a 
core objective of U.S. trade policy. I understand that USTR is 
currently seeking strong services commitments in the ongoing NAFTA 
renegotiations and is also evaluating the full range of options 
available to pursue these objectives more broadly, including the Trade 
in Services Agreement. I look forward to working with you as we chart 
the best course forward.

    Question. NAFTA enables U.S. firms to participate in Mexican and 
Canadian government procurement on a non-discriminatory basis. Because 
of the reciprocal access provided in NAFTA, U.S. businesses can 
successfully secure contracts worth hundreds of millions of dollars 
with government entities in Canada and Mexico. Doing away with these 
rules is counterproductive.

    Will you ensure that you will preserve the procurement provisions 
in NAFTA so that U.S. firms do not incur irreparable harm?

    Answer. I understand that procurement opportunities in Canada and 
Mexico are important to many U.S. firms. If confirmed, I will work to 
advance the interests of American businesses competing for government 
contracts abroad, including through the NAFTA renegotiation.

    Question. The USTR plan for modernizing NAFTA includes raising the 
de minimis Customs threshold that facilitates the flow of low-value 
goods. In 2016, Congress raised the U.S. threshold to $800 as a way to 
cut the red tape that burdens small U.S. businesses as they expand into 
international markets. The Canadian and Mexican de minimis thresholds 
are significantly lower than the U.S. threshold.

    How will you work to level the playing field for small businesses 
and achieve parity for the United States?

    Answer. Canada and Mexico are the top export destinations for small 
business, with over 84,000 U.S. small businesses selling to customers 
in Canada and 55,000 to customers in Mexico, respectively. The 
administration's objectives for the NAFTA include many priorities 
identified by small business stakeholders, including providing for a de 
minimis shipment value in Canadian and Mexican law comparable to the 
U.S. de minimis shipment value.

                                 ______
                                 
             Questions Submitted by Hon. Sheldon Whitehouse
    Question. Extreme weather events and global sea level rise borne of 
climate change threaten manufacturing and transportation 
infrastructures around the world. Do you believe that climate change 
poses a threat to the global supply chains upon which world trade 
depends? How do you propose the U.S. Government address the threats 
that climate change poses to global supply chains and the economy?

    Answer. If confirmed, I will not have responsibility for climate 
policy. And I note that the Trade Facilitation and Trade Enforcement 
Act of 2015 specifically prohibits USTR from using trade agreements to 
establish new obligations or change U.S. laws relating to greenhouse 
gas emissions. That will be a question for the Congress and 
administration officials who are responsible for environmental policy.

    Question. Do you believe that U.S. trade negotiating objectives 
should include multilateral environmental agreements that seek to 
address climate change?

    Answer. If confirmed, I am committed to adhering to the negotiating 
objectives set out by Congress in TPA and the Trade Facilitation and 
Trade Enforcement Act of 2015, which specifically prohibits using trade 
agreements to establish new obligations or change U.S. laws relating to 
greenhouse gas emissions. If confirmed, I am committed to working with 
you and other members of Congress to ensure that our trade agreements 
comply with congressional guidance in this area.

    Question. In determining the appropriate remedies in the imported 
solar panel case, should the administration look at broader effects, 
for instance, how tariffs might harm the deployment of renewable energy 
in the United States?

    Answer. As you know, the administration has already taken action in 
the solar safeguard manner, after considering the findings and 
recommendations of the International Trade Commission. Section 201 of 
the Trade Act of 1974 authorizes the President to take ``all 
appropriate and feasible action within his power which the President 
determines will facilitate efforts by the domestic industry to make a 
positive adjustment to import competition and provide greater economic 
and social benefits than costs.'' If confirmed, I will seek to ensure 
that, in providing its recommendation to the President, the Trade 
Policy Committee considers all effects of potential section 201 
actions, whether alleged by the parties or found to exist by the 
International Trade Commission.

    Question. Do you agree that trade isn't always a zero-sum game, 
that some policies that hurt our competitors may also hurt Americans?

    Answer. Trade policy is an enormously complex area, and, on any 
given issue, there potentially are competing interests and conflicting 
points of view. I am committed to hearing all points of view and 
working with members of Congress to develop trade policies that are 
informed by the facts and best advance the interests of the country as 
a whole.

    Question. If the petitioners in the solar case do not resume 
production, should any tariffs or other trade relief be considered?

    Answer. It is my understanding that one of the two petitioners in 
the section 201 proceeding on solar cells and modules is still 
producing. The other is in bankruptcy but plans to resume producing 
once import relief under section 201 takes effect.

                                 ______
                                 
  Prepared Statement of Hon. Dennis Shea, Nominated to be Deputy U.S. 
 Trade Representative/U.S. Ambassador to the World Trade Organization, 
     With the Rank of Ambassador, Executive Office of the President
    Chairman Hatch, Ranking Member Wyden, and distinguished members of 
the committee, it is a great honor to appear before you today. I am 
humbled by President Trump's decision to nominate me to serve as U.S. 
Ambassador to the World Trade Organization. I am particularly grateful 
to Ambassador Lighthizer for his confidence in recommending me for this 
position.

    Before I go any further, I want to introduce my wife Elizabeth and 
our daughter Juliette. Elizabeth and Juliette are the two most 
important people in my life, and I want to publicly thank them for 
their love and support.

    As Ambassador Lighthizer stated during the recent WTO ministerial 
in Buenos Aries, the WTO has done an enormous amount of good over the 
past 23 years. But as he rightly points out, the WTO needs to improve 
in a number of areas. Too many countries fail to live up to their WTO 
obligations without any consequence. Too many, including some of the 
world's wealthiest nations, seek exemptions from these obligations by 
claiming status as developing countries. The WTO has shifted from a 
forum with a focus on facilitating negotiation among sovereign states 
to a litigation-centered institution.

    If confirmed, I expect that institutional reform at the WTO will be 
a major part of the U.S. agenda. Along these lines, the U.S. recently 
tabled a proposal that, if adopted, would bring about improved 
compliance by all WTO members with the important transparency and 
notification requirements of the various WTO agreements.

    Let me note that, as a former staffer to Senator Bob Dole, I 
appreciate the critical importance of the agricultural sector to the 
U.S. economy. The United States is the world's leading agricultural 
exporter, with exports of food and other agricultural products 
supporting nearly 1.1 million full-time civilian jobs.

    If confirmed, I will work with my administration colleagues, 
including USTR's Chief Agricultural Negotiator, to pursue the 
objectives outlined by the administration's Task Force on Agriculture 
and Rural Prosperity--namely, opening markets abroad to American 
agriculture, ensuring fair and science-based regulatory treatment for 
American products, and implementing strong enforcement policies that 
hold our trading partners to their WTO commitments.

    As the committee knows, I have had the privilege of serving on the 
bipartisan U.S.-China Economic and Security Review Commission for more 
than 10 years. From 2012 to 2017, I served as either the Commission's 
chair or vice chair. I am very grateful to Senate Majority Leader 
McConnell for giving me this opportunity.

    In its annual reports to Congress, the Commission has extensively 
documented China's continuing failure to abide by both the spirit and 
letter of many of its WTO obligations. Areas of concern include market 
access barriers, particularly in the services sectors; forced 
technology transfers; intellectual property theft on an unprecedented 
scale; indigenous innovation policies; discriminatory use of technical 
standards; massive government subsidies that have led to chronic 
overcapacity in key industrial sectors; and a restrictive foreign 
investment regime. New challenges include the Made in China 2025 Plan 
and the country's growing digital protectionism.

    In recent months, the Chinese leadership has sought to portray 
China as the prime defender of the global trading system when the 
reality, as reflected in China's compliance with its own WTO 
obligations, is quite different. While I intend to work constructively 
with my Chinese counterparts in Geneva, I am convinced that challenging 
the distortions created by China's mercantilist practices must be a top 
U.S. priority.

    A critical issue now pending before the WTO is whether members, 
including the United States, are legally obligated to treat China as a 
market economy under their own trade-remedy regimes. As both the USTR 
and U.S. Department of Commerce have made clear, China is and remains a 
non-market economy and should be treated as such. Bolstering support 
for this position within the WTO--a position also shared by the 
European Union--will be a critical task.

    Let me close by saying that, if you send me to Geneva, I intend to 
wake up each and every morning asking myself these questions: What can 
I do today to advance American interests? What concrete steps can I 
take to improve the economic well-being of our Nation's workers, 
farmers, ranchers, and businesses, both large and small?

    You have my assurance that I will work closely with this committee 
and its staff not only to report about what is happening at the WTO but 
also to seek your input on key decisions. It will be a two-way street.

    Mr. Chairman, Ranking Member Wyden, thank you for the opportunity 
to share these comments and I look forward to your questions.

                                 ______
                                 

                        SENATE FINANCE COMMITTEE

                  STATEMENT OF INFORMATION REQUESTED 
                               OF NOMINEE

                      A. BIOGRAPHICAL INFORMATION

 1.  Name (include any former names used): Dennis Clarke Shea.

 2.  Position to which nominated: Deputy U.S. Trade Representative/U.S. 
Ambassador to World Trade Organization.

 3.  Date of nomination: July 11, 2017.

 4.  Address (list current residence, office, and mailing addresses):

 5.  Date and place of birth: October 9, 1961, Philadelphia, PA.

 6.  Marital status (include maiden name of wife or husband's name):

 7.  Names and ages of children:

 8.  Education (list secondary and higher education institutions, dates 
attended, degree received, and date degree granted):

        Regis High School, New York, NY (1975-1979).

        Harvard College, Cambridge, MA (1979-1983), A.B., 1983.

        Harvard Graduate School of Arts and Sciences, Cambridge MA 
        (1982-1983), A.M., 1983.

        Harvard Law School, Cambridge, MA (1983-1986), J.D., 1986.

 9.  Employment record (list all jobs held since college, including the 
title or description of job, name of employer, location of work, and 
dates of employment):

        Assistant, accounting department, Cravath, Swaine, and Moore, 
        New York, NY (Summer 1983).

        Summer associate, Mudge, Rose, Guthrie, Alexander, and Ferdon, 
        New York, NY (Summer 1984)

        Summer associate, White and Case, New York, NY (Summer 1985).

        Associate, Skadden, Arps, Slate, Meagher, and Flom, Washington, 
        DC (1986-1988),

        Counsel, office of the Senate Republican Leader, Washington, DC 
        (1988-1991).

        Candidate for U.S. Congress, New York, NY (1991-1992).

        Deputy Chief of Staff and Counsel, office of the Senate 
        Republican Leader, Washington, DC (1993-1995).

        Policy Director/Senior Policy Advisor, Dole for President, 
        Washington, DC (1995-1996).

        Counsel, Verner, Liipfert, Bernhard, McPherson, and Hand, 
        Washington, DC (1997-1998).

        Consultant, AEI/Brookings Institution project on the 
        independent counsel statute, Washington, DC (1998-1999).

        Director, BKSH and Associates, Washington, DC (1998-2002).

        Executive Director, President's Commission on the U.S. Postal 
        Service, Washington, DC (2003).

        Assistant Secretary for Policy Development and Research, U.S. 
        Department of Housing and Urban Development, Washington, DC 
        (2003-2005).

        Senior advisor to the chairman, National Republican Senatorial 
        Committee, Washington, DC (2005-2006).

        Vice president for government affairs--Americas, Pitney Bowes 
        Inc., Washington, DC and Stamford, CT (2007-2009).

        Member, U.S.-China Economic and Security Review Commission, 
        Washington, DC (2007-present).

        Principal, Shea Public Strategies LLC, Alexandria, VA (2009-
        present).

10.  Government experience (list any advisory, consultative, honorary, 
or other part-time service or positions with Federal, State, or local 
governments, other than those listed above):

        Member, Advisory Committee on International Postal and Delivery 
        Services, U.S. Department of State, Washington, DC (2008-2009).

11.  Business relationships (list all positions held as an officer, 
director, trustee, partner, proprietor, agent, representative, or 
consultant of any corporation, company, firm, partnership, other 
business enterprise, or educational or other institution):

        Principal, Shea Public Strategies LLC.

        Consultant, Bipartisan Policy Center.

        Consultant, J. Ronald Terwilliger Foundation for Housing 
        America's Families.

        Consultant, Make Room Inc.

12.  Memberships (list all memberships and offices held in 
professional, fraternal, scholarly, civic, business, charitable, and 
other organizations):

        Member, Bar of New York State.

        Member, Bar of the District of Columbia.

        Member, Harvard Club of Washington, DC.

13.  Political affiliations and activities:

        a.  List all public offices for which you have been a 
        candidate.

       Candidate for U.S. Congress, 7th Congressional District of New 
York, 1991-1992.

        b.  List all memberships and offices held in and services 
        rendered to all political parties or election committees during 
        the last 10 years.

       Fundraiser/manager, Pitney Bowes Political Action Committee 
(2008-2009).

       Volunteer, Trump for President (2016).

        c.  Itemize all political contributions to any individual, 
        campaign organization, political party, political action 
        committee, or similar entity of $50 or more for the past 10 
        years.

       Collins for Senator (9/9/2007)--$1,000.

       McConnell for Senate 2014 (2/28/2008)--$1,000.

       Elizabeth Dole Committee Inc. (4/25/2008)--$500.

       Elizabeth Dole Committee Inc. (6/26/2008)--$1,000.

       Elizabeth Dole Committee Inc. (9/30/2008)--$500.

       Pitney Bowes Inc. Political Action Committee (10/31/2008)--$100.

       Pitney Bowes Inc. Political Action Committee (11/14/2008)--$100.

       Pitney Bowes Inc. Political Action Committee (11/28/2008)--$100.

       Pitney Bowes Inc. Political Action Committee (12/15/2008)--$100.

       Pitney Bowes Inc. Political Action Committee (12/31/2008)--$100.

       Pitney Bowes Inc. Political Action Committee (3/31/2009)--$100.

       Pitney Bowes Inc. Political Action Committee (4/30/2009)--$50.

       Bluegrass Committee (12/28/2009)--$500.

       Shelby for U.S. Senate (3/22/2010)--$500.

       Friends of John McCain (4/22/2009)--$500.

       McConnell Senate Committee 2014 (5/06/2010)--$500.

       Jane Norton for Colorado Inc. (5/14/2010)--$500.

       Dan Coats for Indiana (5/27/2010)--$500.

       Friends of John McCain (6/01/2010)--$250.

       David Vitter for U.S. Senate (6/21/2010)--$500.

       Collins for Senator (8/6/2010)--$250.

       Carly for California Inc. (9/30/2010)--$500.

       Romney for President Inc. (6/27/2012)--$500.

       Romney for President Inc. (10/25/2012)--$250.

       Romney Victory Inc. (10/25/2012)--$250.

       National Republican Senatorial Committee (9/15/2014)--$500.

       Lindsey Graham 2016 (12/10/2015)--$300.

       Friends of John McCain (9/9/2016)--$250.

       National Republican Senatorial Committee (11/06/2016)--$250.

14.  Honors and awards (list all scholarships, fellowships, honorary 
degrees, honorary society memberships, military medals, and any other 
special recognitions for outstanding service or achievement):

        Harvard National Scholarship (1979-1983).

        Harvard Graduate National Scholarship (1983-1986).

15.  Published writings (list the titles, publishers, and dates of all 
books, articles, reports, or other published materials you have 
written):

        Annual Reports, U.S.-China Economic and Security Review 
        Commission (2007-2016) (signed as member of the Commission).

        Op-ed, ``A Home for Housing Reform,'' U.S. News and World 
        Report (April 3, 2017) (with Michael Stegman).

        Research paper, ``Underscoring the Importance of Competitive 
        Contracting at HUD: Why Performance-Based Contract 
        Administrators Are Critical'' (April 2017).

        Op-ed, ``To Preserve Stability in the Asia Pacific, Finish the 
        Pivot,'' Wall Street Journal (March 17, 2017) (with Jim 
        Talent).

        Research paper, ``Forging an Enduring Bipartisan Consensus on 
        Affordable Rental Housing,'' Bipartisan Policy Center (February 
        22, 2017) (with Michael Stegman).

        Op-ed, ``Here Are 4 Steps Ben Carson Should Take as HUD 
        Secretary,'' HousingWire (January 10, 2017) (with Anand 
        Parekh).

        Op-ed, ``Affordable Housing Policy: A Bipartisan Path 
        Forward,'' Affordable Housing Finance (December 15, 2016) (with 
        Michael Stegman).

        Op-ed, ``Ban China's State Firms From Acquiring U.S. 
        Companies,'' Wall Street Journal (December 8, 2016) (with 
        Carolyn Bartholomew).

        More than 30 opinion columns for MSNBC.com on political, legal, 
        and cultural topics (1997-1999).

        Article, ``Shooting Starr,'' National Review (November 9, 
        1998).

        Article, ``Impeaching Abusive Judges,'' Policy Review (May 
        1997).

        Op-ed, ``Cleaning the Rules of Campaign Finance,'' The 
        Washington Times (April 20, 1997).

        Op-ed, ``All Quiet on the Preference Front,'' The Washington 
        Times (March 14, 1997).

        Op-ed, ``Innovative Program to Combat Crime,'' The Washington 
        Times (February 27, 1997).

        Op-ed, ``Winning Back Reagan Democrats,'' The Washington Post 
        (February 16, 1993).

        Article, ``Unions, Union Security, and Union Membership,'' 11 
        Seton Hall Legislative Journal (May 1987).

        Book review, ``The New Urban Reality'' (P. Peterson, ed.) 23 
        Harvard Journal on Legislation 667 (1986).

        Comment, ``Union Restrictions on the Right to Resign: A 
        Proposal for a New Reasonableness Test,'' 22 Harvard Journal on 
        Legislation 551 (1985).

16.  Speeches (list all formal speeches you have delivered during the 
past 5 years which are on topics relevant to the position for which you 
have been nominated):

        House Space, Science, and Technology Committee, Subcommittee on 
        Space, hearing on ``Are We Losing the Space Race to China?'' 
        (September 27, 2016).

        U.S. Senate Committee on Banking, Housing, and Urban Affairs, 
        hearing on ``Evaluating the Financial Risks of China'' (July 
        14, 2016).

        House Foreign Affairs Subcommittee on Europe, Eurasia, and 
        Emerging Threats, hearing on ``China's Energy Engagement With 
        Central Asia and Implications for the United States'' (May 21, 
        2014).

        House Armed Services Committee, hearing on the ``2013 Report to 
        Congress of the U.S.-China Economic and Security Review 
        Commission'' (November 20, 2013).

        House Committee on Science, Space, and Technology, Subcommittee 
        on Investigations and Oversight, hearing on ``The Impact of 
        International Technology Transfer on American Research and 
        Development'' (December 5, 2012).

17.  Qualifications (state what, in your opinion, qualifies you to 
serve in the position to which you have been nominated):

        For the past 10 years, I have served as a member of the U.S.-
        China Economic and Security Review Commission, and each year 
        since 2012, I have served as either the Commission's Chairman 
        or Vice Chairman. The Commission is a 12-member congressional 
        advisory body charged with annually assessing the economic, 
        trade, and security relationship between the United States and 
        the People's Republic of China. The United States Congress 
        created the Commission when the U.S. granted Permanent Normal 
        Trade Relations to China, opening the way for the country's 
        accession to the World Trade Organization (WTO).

        A key focus of the Commission's work is assessing China's 
        compliance with its WTO obligations. As the Commission has 
        documented in its annual reports, China's compliance record has 
        been and continues to be deficient as it pursues a set of 
        industrial policies that have adversely impacted workers, 
        farmers, and businesses here in the United States. I am eager 
        to join President Trump's trade policy team to address these 
        deficiencies, advance U.S. interests at the WTO, defend 
        American businesses against unfair claims from foreign nations, 
        and reform the WTO dispute settlement system. I am committed to 
        the administration's goal of increasing market access for U.S. 
        exports and dismantling trade barriers through a vigorous 
        enforcement agenda.

        I believe my policy and legal background will enable me to hit 
        the ground running if confirmed as Deputy USTR. As the Chairman 
        and Vice Chairman of the Commission, I have traveled 
        extensively throughout the Asia Pacific, leading delegations 
        that have interacted with representatives of governments 
        throughout the region. I believe this experience has also 
        prepared me well for the diplomatic component of the Deputy 
        USTR's responsibilities. In addition, as a former Senate 
        staffer, I appreciate the important role that Congress plays in 
        helping shape U.S. trade policy and look forward to working 
        closely with the members of the Senate Finance Committee if 
        confirmed.

                   B. FUTURE EMPLOYMENT RELATIONSHIPS

 1.  Will you sever all connections with your present employers, 
business firms, associations, or organizations if you are confirmed by 
the Senate? If not, provide details.

        Yes.

 2.  Do you have any plans, commitments, or agreements to pursue 
outside employment, with or without compensation, during your service 
with the government? If so, provide details.

        No.

 3.  Has any person or entity made a commitment or agreement to employ 
your services in any capacity after you leave government service? If 
so, provide details.

        No.

 4.  If you are confirmed by the Senate, do you expect to serve out 
your full term or until the next presidential election, whichever is 
applicable? If not, explain.

        Yes.

                   C. POTENTIAL CONFLICTS OF INTEREST

 1.  Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated.

        I am not aware of any.

 2.  Describe any business relationship, dealing, or financial 
transaction which you have had during the last 10 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated.

        I am not aware of any.

 3.  Describe any activity during the past 10 years in which you have 
engaged for the purpose of directly or indirectly influencing the 
passage, defeat, or modification of any legislation or affecting the 
administration and execution of law or public policy. Activities 
performed as an employee of the Federal Government need not be listed.

        From 2007-2009, I registered as a lobbyist for Pitney Bowes. 
        Issues covered:

        H.R. 2829, Financial Services and General Government Act, and 
        the revenue forgone provision affecting the U.S. Postal 
        Service.

        Issues relating to the delivery of military mail.

        Implementation of the Postal Accountability and Enforcement Act 
        and related issues.

        Funding for search-by-radius capability for National Sex 
        Offender Public Registry.

        H.R. 3163/S. 334, the Healthy Americans Act, and issues 
        relating to health-care reform.

        Regulatory restrictions on the use of the mail for the delivery 
        of proxy materials.

        H.R. 689/S. 1356, The Industrial Bank Holding Company Act of 
        2007, and similar legislative proposals restricting commercial 
        ownership of industrial loan corporations.

        H.R. 2764, Consolidated Appropriations Act, 2008.

        Issues related to mail screening at executive branch and 
        Federal agencies.

        H.R. 281, Universal Right to Vote by Mail Act of 2007 and S. 
        979, Vote by Mail Act of 2007 and electronic voting issues.

        H.R. 1, the American Recovery and Reinvestment Act, provisions 
        concerning the disclosure of health data.

        Employee Free Choice Act.

 4.  Explain how you will resolve any potential conflict of interest, 
including any that may be disclosed by your responses to the above 
items.

        If confirmed, I will sign the ethics agreement and will take 
        the actions specified in it.

 5.  Two copies of written opinions should be provided directly to the 
committee by the designated agency ethics officer of the agency to 
which you have been nominated and by the Office of Government Ethics 
concerning potential conflicts of interest or any legal impediments to 
your serving in this position.

 6.  The following information is to be provided only by nominees to 
the positions of United States Trade Representative and Deputy United 
States Trade Representative:

        Have you ever represented, advised, or otherwise aided a 
        foreign government or a foreign political organization with 
        respect to any international trade matter? If so, provide the 
        name of the foreign entity, a description of the work performed 
        (including any work you supervised), the time frame of the work 
        (e.g., March to December 1995), and the number of hours spent 
        on the representation.

        No.

                       D. LEGAL AND OTHER MATTERS

 1.  Have you ever been the subject of a complaint or been 
investigated, disciplined, or otherwise cited for a breach of ethics 
for unprofessional conduct before any court, administrative agency, 
professional association, disciplinary committee, or other professional 
group? If so, provide details.

        No.

 2.  Have you ever been investigated, arrested, charged, or held by any 
Federal, State, or other law enforcement authority for a violation of 
any Federal, State, county, or municipal law, regulation, or ordinance, 
other than a minor traffic offense? If so, provide details.

        No.

 3.  Have you ever been involved as a party in interest in any 
administrative agency proceeding or civil litigation? If so, provide 
details.

        No.

 4.  Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense? If so, provide details.

        No.

 5.  Please advise the committee of any additional information, 
favorable or unfavorable, which you feel should be considered in 
connection with your nomination.

        None.

                     E. TESTIFYING BEFORE CONGRESS

 1.  If you are confirmed by the Senate, are you willing to appear and 
testify before any duly constituted committee of the Congress on such 
occasions as you may be reasonably requested to do so?

        Yes.

 2.  If you are confirmed by the Senate, are you willing to provide 
such information as is requested by such committees?

        Yes.

                                 ______
                                 
         Questions Submitted for the Record to Hon. Dennis Shea
               Questions Submitted by Hon. Orrin G. Hatch
    Question. I support the WTO's mission to negotiate multilateral 
trade agreements. Unfortunately, WTO negotiations have been ineffective 
in recent years, as many countries have refused to engage in serious 
discussions to reduce trade barriers. While the United States must 
continue to lead at the WTO, we cannot wait on the unambitious. That is 
why I also strongly support plurilateral trade agreements among like-
minded countries, including the proposed Trade in Services Agreement, 
or TiSA.

    Do you agree that the stalled TiSA negotiations should be reopened? 
And if so, what steps will you take to reinvigorate and lead those 
negotiations?

    Answer. The U.S. services sector is highly innovative and a key 
driver of economic growth. Maintaining a vibrant U.S. services sector 
and expanding U.S. services exports is vital to a healthy economy and a 
core objective of U.S. trade policy. I understand that USTR is 
currently seeking strong services commitments in the ongoing NAFTA 
renegotiations, engaging with a group of 70 WTO members about possible 
new e-commerce rules at the WTO, and also evaluating the range of 
options available to pursue services trade objectives more broadly, 
including the Trade in Services Agreement. I look forward to working 
with you as we chart the best course forward.

    Question. I strongly support the inclusion of robust and 
enforceable dispute settlement procedures in our trade agreements. Such 
procedures ensure that our trading partners comply with their 
commitments, including those concerning the protection of intellectual 
property. As you know, many WTO members, including very large 
economies, routinely violate their IP obligations. And yet, in the 
context of the WTO, the United States has not initiated an IP dispute 
against a single country for more than a decade.

    How do you intend to use the WTO system, including its dispute 
settlement procedures, to protect IP and to ensure that countries 
comply with their IP obligations?

    Answer. If confirmed, I will consider all available tools to 
address serious deficiencies in IP protection and enforcement and to 
ensure that our trading partners comply with their IP obligations. 
Those tools include our trade remedy laws, WTO litigation, 
negotiations, and other mechanisms under U.S. law.

    Question. Many industries in the United States are increasingly 
concerned about the need for stronger U.S. leadership and engagement 
within international organizations, including the World Trade 
Organization. There have also been growing concerns and the U.S. 
Government doing more to push back against initiatives at an array of 
international organizations that undermine core U.S. economic interests 
and manufacturing.

    Last year's biased High-Level Panel on Access to Medicines that 
attacked U.S. innovation--a deeply flawed and biased report that 
attacked U.S. innovation and intellectual property and sidestepping the 
real conversation about access to medicines, a report that was roundly 
condemned by the U.S. Government and not endorsed by the U.N. Secretary 
General--is a good example. Yet this problematic report continues to 
resurface in international initiatives, including several on the agenda 
for next week's World Health Organization executive board meeting.

    How would you make sure that USTR sought to defend innovation and 
intellectual property against problematic initiatives at international 
organizations, and engage to reset the conversation to ensure 
initiatives that do not undermine American interests?

    Answer. The Trump administration is committed to ensuring that U.S. 
owners of IP have a full and fair opportunity to use and profit from 
their IP around the globe. If confirmed, I will ensure that this 
objective is not undermined by our trading partners in international 
organizations, including by working with other agencies, such as the 
Department of State and the Department of Health and Human Services, to 
preserve U.S. trade equities in the UN and WHO respectively.

                                 ______
                                 
                 Questions Submitted by Hon. Ron Wyden
    Question. This administration, including the Office of the U.S. 
Trade Representative, has fallen short on transparency and 
consultations with Congress, stakeholders and the public. Getting more 
transparency in our trade policy has been a top priority for me. 
Together with nine other Democratic members of this committee, I wrote 
to the President last week expressing concern that this administration 
is heading off track on transparency. It has issued no public summaries 
of its negotiating objectives with Korea. To put it simply, we won't 
end up with trade deals that benefit all Americans if we can't talk 
about proposals at town halls. That is why I insisted on new 
requirements to raise the bar when it comes to transparency.

    If confirmed, do you commit to consulting closely with Congress and 
follow the letter and spirit of all transparency and consultations 
requirements established by the Trade Promotion Authority bill we 
passed in 2015 and the enforcement bill passed in 2016?

    Answer. If confirmed, I commit to consult closely with Congress, 
including members and staff on the Senate Finance Committee, and to 
follow all transparency requirements set by law.

    Question. I have raised serious concerns about efforts by China to 
undermine American aluminum producers through massive subsidies that 
distort world market prices, circumvention of trade remedies decisions, 
and other means. The United States has brought a case before the WTO, 
arguing that Chinese Government support of the aluminum industry has 
caused serious prejudice to the United States. This is one of the most 
effective ways of responding to broad-based efforts by foreign 
governments to tilt the competitive field in favor of their companies.

    Will you actively prosecute this case before the WTO, and be 
willing to bring similar cases for other industries where the facts 
warrant it?

    Answer. I understand that USTR is conducting a review of all 
available tools to address the severe overcapacity problems in the 
aluminum sector and other sectors, working to address the root causes 
of those problems, and pressing China to stop the unfair trade 
practices that have led to this situation. Those tools include our 
trade remedy laws, WTO litigation, negotiations, and other mechanisms 
under U.S. law.

    If confirmed, I will vigorously support the enforcement and defense 
of our trade remedy laws, and will aggressively utilize all available 
WTO mechanisms to help combat the distortive trade practices that have 
led to severe excess capacity situations like the one we see in the 
aluminum sector.

    Question. I share many of the administration's concerns about WTO 
dispute settlement. The Appellate Body has overreached and needs to be 
reined in. There are critical issues in front of the WTO including 
China's demand for market economy status. But the administration has 
not yet told Congress or its trading partners what reforms it needs to 
resolve its standoff with the Appellate Body.

    If confirmed, will you commit to make this issue a top priority and 
work with me and other Finance members on your strategy to address it?

    Answer. Across administrations and with bipartisan support, the 
United States has repeatedly expressed its grave concern with over-
reaching by the WTO Appellate Body. I appreciate your personal 
interest, and that of other members of the committee, in this critical 
issue for U.S. economic interests. If confirmed, I look forward to 
coordinating closely with you and the committee on an appropriate 
responsive strategy.

                                 ______
                                 
      Question Submitted by Hon. Chuck Grassley, Hon. Mike Crapo, 
               Hon. Pat Roberts, and Hon. Michael B. Enzi
    Question. Since 2012, India has imposed an anti-dumping duty on 
imports of soda ash from the United States. The Indian Government had 
recommended that the duty be withdrawn effective July 3, 2017, but the 
decision is being challenged in court and the duty remains in place 
while the court case is pending.

    U.S. domestic soda ash producers have expressed concern with the 
Indian court's legal justification for extending the soda ash duty. As 
the Deputy USTR and U.S. Ambassador to the WTO, do you commit to 
assisting the U.S. soda ash industry to ensure the WTO-consistent 
application of India's anti-dumping laws and practices?

    Answer. Yes, if confirmed, I will work with the administration to 
ensure that India, as well as all WTO Members, abide by their WTO 
obligations under the WTO's anti-dumping agreement.

                                 ______
                                 
      Questions Submitted by Hon. John Cornyn and Hon. John Thune
    Question. The United States has raised concerns about the 
effectiveness of the WTO Dispute Settlement Body.

    Do you agree with those concerns? What kind of dispute settlement 
panel reforms do you think need to be made before the panel vacancies 
can be filled?

    Answer. The WTO dispute settlement process suffers from many 
systemic issues, and I agree with the concerns voiced by the President, 
Ambassador Lighthizer, and others. If confirmed, I intend to devote 
significant attention to this problem and look forward to working with 
you and others on the committee to help reform the WTO.

    Question. Given the importance of trade agreements to agriculture 
and the U.S. economy generally, please describe how you would work to 
preserve existing trade agreements and to open up new markets.

    Answer. I agree that carefully crafted trade agreements can be a 
significant benefit to the U.S. economy, including our agricultural 
producers. Markets can also be opened for our exporters through 
negotiations, enforcement actions, and other mechanisms. If confirmed, 
I will use the entire set of tools available to open markets around the 
world for the benefit of U.S. workers, farmers, ranchers, and 
businesses.

                                 ______
                                 
Questions Submitted by Hon. Richard Burr, Hon. Johnny Isakson, Hon. Rob 
  Portman, Hon. Patrick J. Toomey, Hon. Dean Heller, Hon. Tim Scott, 
              Hon. Bill Cassidy, and Hon. Debbie Stabenow

    Question. If confirmed, your portfolio will include addressing our 
ongoing trade challenges with China. China's expanding protectionist 
approach and closing of their markets has created economic harm to 
businesses in Michigan seeking to export their products from 
polysilicon to electric bus batteries. At the same time, Chinese 
companies flood the U.S. market with goods, many times underpriced, 
putting American companies at a competitive disadvantage. In addition, 
the issue of excess steel overcapacity, particularly from countries 
like China, continue to harm the steel industry and steelworkers all 
across the country, including in Michigan.

    What specific steps would you take to counter China's behavior and 
make headway on this issue?

    What steps will you take to address the problem of excess steel 
capacity, particularly by China?

    Answer. With regard to the issue of steel, China needs to stop its 
unfair trade practices and fix its vast excess capacity problem. While 
China has issued measures to begin addressing the severe excess 
capacity in its steel sector, there has been little, if any, progress. 
I understand that USTR is currently conducting a review of all the 
available tools to address the serious overcapacity problems in steel 
and other products. At the same time, we need to address the root 
causes of those problems, and as part of that effort I understand that 
USTR is continuing to work closely with other leading steel-producing 
countries in the Global Forum on Steel Excess Capacity and other 
contexts. The goal of the Global Forum is to work with other 
governments to take effective steps to address excess steel capacity in 
China and elsewhere by targeting the underlying causes such as 
government subsidies and other government assistance.

    USTR is also working with the Department of Commerce, Customs and 
Border Protection, and other agencies to ensure that we enforce our 
trade remedy laws and measures effectively at the U.S. border. In 
addition, as you know, the Department of Commerce conducted an 
investigation of steel trade pursuant to section 232 of the Trade 
Expansion Act of 1962 and submitted the results of the investigation to 
the President earlier this month.

                                 ______
                                 
               Questions Submitted by Hon. Maria Cantwell
    Question. The solar panel and polysilicon trade dispute between the 
United States and China appears to be deadlocked. Currently, the 
Chinese market accounts for about 80 percent of the global demand for 
polysilicon. However, retaliatory duties imposed by China on U.S. 
exports of polysilicon have crippled our leading domestic 
manufacturers. Despite growing global demand for solar products, key 
U.S. polysilicon manufacturers continue to shrink. This is directly 
contrary to the economic interests of the United States and the stated 
goals of the Trump administration.

    Do you believe that the prolonged trade dispute over solar products 
has been harmful to our domestic polysilicon industry, and has resulted 
in the loss of thousands of jobs?

    Are you aware of Chinese efforts to use the situation described 
above to lure U.S. polysilicon manufacturing capability to China and 
capture their more advanced manufacturing technologies?

    Please describe what concrete actions you would take, if confirmed, 
to obtain access for U.S. polysilicon manufacturers to Chinese markets 
as soon as possible.

    Answer. I share the concern about the harmful impact that Chinese 
duties are having on U.S. polysilicon producers. I understand that 
China imposed duties on U.S. polysilicon exports in retaliation after 
the United States imposed legitimate antidumping and countervailing 
duty measures on Chinese solar products that were found to be injuring 
the U.S. industry. I note the statement made recently by the Trump 
administration in connection with the President's imposition of section 
201 safeguard relief for U.S. producers of solar products: ``The U.S. 
Trade Representative will engage in discussions among interested 
parties that could lead to positive resolution of the separate 
antidumping and countervailing duty measures currently imposed on 
Chinese solar products and U.S. polysilicon. The goal of those 
discussions must be fair and sustainable trade throughout the whole 
solar energy value chain, which would benefit U.S. producers, workers, 
and consumers.'' I support that approach and, if confirmed, I look 
forward to working with you on this issue.

    Question. U.S. companies are concerned about China's proposed draft 
regulations that, when combined with existing Chinese law, would 
require U.S. cloud providers to transfer valuable intellectual 
property, surrender use of brand names, and hand over operation and 
control of their businesses to Chinese companies in order to operate in 
China. These are requirements that no other countries apply to foreign 
cloud providers, and Chinese cloud providers continue to operate in the 
United States without these restrictions. U.S. cloud companies are 
strong catalysts for economic and jobs growth around the world, and it 
is unacceptable to think that they could be locked out of China 
entirely.

    Please describe what concrete actions you will take, if confirmed, 
to level the playing field for U.S. cloud companies in China?

    Answer. I recognize that U.S. leadership in the technology sector, 
including in the area of cloud computing, is one of our great national 
strengths and a source of our international competitiveness. I agree 
that our trade policy should work to ensure that U.S. companies in this 
sector can thrive globally, including in China. I recognize, as I 
understand USTR's leadership in Washington does, that barriers in China 
have been severe and contrast sharply with the open market in the 
United States. If confirmed, I will vigorously support USTR's efforts 
to reduce barriers to U.S. companies in this sector.

                                 ______
                                 
                Questions Submitted by Hon. Bill Nelson
    Question. Please describe how your previous work helped prepare you 
for the role you seek to serve as Deputy United States Trade 
Representative.

    Answer. My experience in the public and private sectors in law and 
policy has prepared me to navigate the blend of legal, economic, and 
policy concerns inherent in international trade matters. More 
specifically, my position as a Commissioner on the U.S.-China Economic 
and Security Review Commission has given me a deep knowledge of China's 
market-distorting activities and practices, which are a major source of 
concern for global trade. I look forward to helping develop and 
implement solutions in Geneva that benefit U.S. trade interests.

    Question. Please describe how U.S. interests are served through the 
World Trade Organization (WTO). In other words, how does it benefit the 
United States?

    Answer. On a day-to-day basis, the WTO provides opportunities for 
advancing U.S. interests through its negotiating arm and dispute 
settlement body, as well as more than 20 standing committees (not 
including numerous additional working groups and working parties). 
These groups meet regularly to permit WTO members to exchange views, 
work to resolve questions of members' compliance with commitments, and 
develop initiatives aimed at systemic improvements. If confirmed, I 
look forward to leading the USTR WTO team, which has a track record of 
building coalitions of like-minded members to effectively pressure non-
complying economies to bring measures into conformity with WTO rules, 
advancing transparency and predictability in global trade rules, and 
averting the need to resort to dispute settlement.

    Question. If the President told you he wanted to withdraw from the 
WTO as soon as possible, what would your response be?

    Answer. The United States' commitment to the WTO is an historic one 
that has endured for decades. I intend to ensure that the U.S. 
participation in the WTO is working to advance our national economic 
interests. This includes, in particular, an assurance that other WTO 
members are fully implementing their own obligations and that U.S. 
sovereignty is protected.

    Question. What specific changes would you make to the WTO to make 
it work better?

    Answer. Some aspects of the WTO's functions clearly need 
attention--judicial over-reach by the Appellate Body is the prime 
example. Improved transparency and better ways of dealing with 
development in a WTO context are other priorities. Advanced developing 
countries, in particular, must be willing to contribute commensurate 
with their status in the global economy.

    Question. What do you believe you could add to the Trump 
administration that is currently missing?

    Answer. I look forward to providing additional resources to 
implement the President's trade agenda. I am aware that USTR has a very 
full plate and I will provide daily support and leadership to the 
agency's WTO office.

    Question. If the President said something that you knew was false, 
would you continue the ruse if asked about it?

    Answer. If confirmed, I intend to rely on and communicate the facts 
as I understand them.

    Question. Do believe China is currently a currency manipulator? If 
so, please explain why. If not, why not?

    Answer. Currency manipulation is an issue on which President Trump 
campaigned, and one on which he and his administration remain focused. 
It is my understanding that the administration is examining the full 
array of policy tools available to combat currency manipulation, 
including trade commitments.

                                 ______
                                 
              Questions Submitted by Hon. Robert Menendez
    Question. Mr. Shea, as you know, China is demanding market-economy 
status at the World Trade Organization, even though it does not meet 
any of the six U.S. statutory factors used to determine market-economy 
status. I remember Ambassador Lighthizer's comments before this 
committee last year that it'd be ``cataclysmic for the WTO'' if it 
granted China market economy status. I also know that China is 
challenging the EU at the WTO over the same issue, and that we 
supported the EU with a third-party submission.

    What steps will you take to ensure that the WTO does not side with 
China on the market economy issue, if confirmed?

    And should the WTO side with China, how would you advise Ambassador 
Lighthizer to respond?

    Answer. Many WTO members, including the European Union (EU), 
currently apply a non-market economy methodology to China in 
antidumping proceedings. If confirmed, I commit to doing everything I 
can to persuade these members to work with the United States in 
strongly defending our right to continue to apply a non-market economy 
methodology to China at the WTO.

                                 ______
                                 
             Question Submitted by Hon. Benjamin L. Cardin
    Question. In my role as ranking member on the Senate Foreign 
Relations Committee, I often get questions from our allies on U.S. 
economic leadership and the level of engagement that can be expected of 
the United States in multilateral institutions, including the World 
Trade Organization. Many domestic industries in the United States are 
also increasingly concerned about the need for stronger U.S. leadership 
and engagement, particularly on transparency and promoting good 
regulatory practices in international organizations.

    In your role as a leading U.S. voice in Geneva, how would you seek 
to work constructively with officials at the WTO and other 
organizations to push for transparency, accountability, and reform that 
would support U.S. economic interests and leadership?

    Answer. The United States' commitment to the WTO is a historic one, 
and progress on trade issues in Geneva often relies on U.S. leadership. 
If confirmed, I intend to work closely with my counterparts in Geneva--
both from other WTO member countries and the WTO Secretariat--to push 
forward on the necessary reforms to the WTO that Ambassador Lighthizer 
has identified. I also intend to be involved in trade issues in the 
OECD with the goal of further encouraging member-driven decision-
making.

                                 ______
                                 
               Questions Submitted by Hon. Sherrod Brown
    Question. As I mentioned in your confirmation hearing, I am 
concerned that many decisions by the WTO have undermined U.S. trade 
remedy laws.

    If confirmed, how would you seek to defend and protect U.S. trade 
remedy laws from additional and unfounded attacks at the WTO?

    Answer. I agree that having a strong trade remedy regime must be a 
key priority for the administration. I intend to fully defend U.S. 
interests to ensure that this is the case both at the WTO and in other 
international forums. I will also work with other like-minded countries 
to ensure that the problems that lead to the increased use of trade 
remedies as a response to unfair trade (e.g., overcapacity due to over-
subsidization) are addressed appropriately and conclusively to ensure 
that market-oriented conditions exist in the industries effected.

    Question. Should the United States consider not complying with WTO 
decisions if USTR considers them be an overreach and unfounded?

    Answer. I am very concerned with WTO decisions that go beyond the 
scope of what the United States agreed to in Uruguay Round negotiations 
or that otherwise impact laws passed by Congress and regulations 
promulgated by the U.S. Government. If confirmed, I look forward to 
working with you to consider the implications of such decisions.

    Question. In your confirmation hearing, you identified the need to 
improve transparency among WTO members, particularly on subsidy 
programs, and the need to ensure member countries are treated as 
developed or developing appropriately. Are there any other changes you 
would seek to make at the WTO if confirmed? Do you believe the U.S. 
should propose a comprehensive package of WTO reforms?

    Answer. If confirmed, I will seek to work with other WTO members on 
reforming the WTO. However, I do expect that the United States will 
need to lead this process. Some aspects of the WTO's functions clearly 
need attention--judicial over-reach by the Appellate Body is the prime 
example. Improved transparency and better ways of dealing with 
development in a WTO context are other priorities. Advanced developing 
countries, in particular, must be willing to contribute commensurate 
with their status in the global economy.

                                 ______
                                 
             Questions Submitted by Hon. Michael F. Bennet 
                     and Hon. Robert P. Casey, Jr.
    Question. Mr. Shea, China has put forward very aggressive strategic 
plans which are at direct odds with many of the areas which the United 
States enjoys a competitive advantage.

    How do you intend to work with Commerce and the other arms of the 
Federal Government to take a coordinated approach to ensure our past 
experiences, such as the outright assault on our steel and aluminum 
industrial base, cannot be repeated?

    Answer. I understand that USTR is conducting a review of all 
available tools to address the severe overcapacity problems in steel, 
aluminum and other sectors, working to address the root causes of those 
problems, and pressing China to stop the unfair trade practices that 
have led to this situation. Our tools include WTO litigation, 
negotiations, and other mechanisms under U.S. law. In addition, USTR is 
working with the Department of Commerce, Customs and Border Protection, 
and other agencies to ensure that we enforce our trade remedy laws and 
measures effectively at the U.S. border. As you know, the Department of 
Commerce also conducted investigations of the steel trade and aluminum 
trade pursuant to section 232 of the Trade Expansion Act of 1962 and 
submitted the results of those investigations to the President in 
January 2018.

    If confirmed, I will vigorously support the enforcement and defense 
of our trade remedy laws, and will aggressively utilize all available 
WTO mechanisms, to help combat the distortive trade practices that have 
led to severe excess capacity situations like those in the steel and 
aluminum sectors.

    Question. What tools do you view as available to you through the 
WTO process to address some of the well documented violations from 
China when it comes to state sponsored economic espionage, including 
cyber enabled economic espionage? Of the tools available to you, do you 
hope to work in coalition with our allies to address these issues?

    Answer. In August 2017, the U.S. Trade Representative initiated a 
section 301 investigation related to China's forced technology 
transfer, intellectual property and innovation policies and practices, 
including cyber-enabled trade secrets theft. If confirmed, I will work 
closely with USTR's leadership in Washington on all appropriate next 
steps in circumstances where it is determined that WTO action may be 
appropriate.

    Question. Can you discuss how you intend to coordinate with Mr. 
Mahoney, if you are both confirmed, and our Europeans allies on China 
market economy status as well as China 2025 strategy and their actions 
related to forced tech transfer and economic espionage?

    Answer. I understand that the administration already has large 
teams working on the market economy status matter, the Made in China 
2025 industrial plan, and technology transfer issues. If confirmed, 
both Mr. Mahoney and I will help guide and support those teams in their 
important work.

  Questions Submitted by Hon. Mark R. Warner, Hon. Claire McCaskill, 
                      and Hon. Sheldon Whitehouse
    Question. Extreme weather events and global sea level rise borne of 
climate change threaten manufacturing and transportation 
infrastructures around the world. Do you believe that climate change 
poses a threat to the global supply chains upon which world trade 
depends?

    How do you propose the U.S. Government address the threats that 
climate change poses to global supply chains and the economy?

    Answer. If confirmed, climate policy will not be part of my 
portfolio. However, I do believe that environmental policy should be 
set through congressional legislation.

    Question. Do you believe that the U.S. trade negotiating objectives 
should include multilateral environmental agreements that seek to 
address climate change?

    Answer. If confirmed, I will adhere to the negotiating objectives 
established by Congress in TPA and the Trade Facilitation and Trade 
Enforcement Act of 2015. Those laws specifically prohibit creating new 
obligations or changing U.S. laws relating to greenhouse gas emissions 
via trade agreements. If confirmed, I will work with you and other 
members of Congress to ensure that trade agreements comply with U.S. 
law.

    Question. In determining the appropriate remedies in the imported 
solar panel case, should the administration look at broader effects, 
for instance, how tariffs might harm the deployment of renewable energy 
in the United States?

    Answer. Section 201 of the Trade Act of 1974 authorizes the 
President to take ``all appropriate and feasible action within his 
power which the President determines will facilitate efforts by the 
domestic industry to make a positive adjustment to import competition 
and provide greater economic and social benefits than costs.'' I am not 
in a position to discuss what the administration considered in the 
proceeding on solar cells and modules. If confirmed, I will seek to 
ensure that, in providing its recommendation to the President, the 
Trade Policy Committee considers all effects of potential section 201 
actions, whether alleged by the parties or found to exist by the 
International Trade Commission.

                                 ______
                                 
                 Prepared Statement of Hon. Ron Wyden, 
                       a U.S. Senator From Oregon
    This morning the Finance Committee meets to discuss two nominations 
for important trade-related positions in the administration. The 
Honorable Dennis Shea is nominated to serve as Deputy United States 
Trade Representative stationed in the Geneva office. And Mr. C.J. 
Mahoney is nominated to serve as Deputy United States Trade 
Representative for investment, services, labor, environment, Africa, 
China, and the Western Hemisphere. Try fitting that on a business card.

    I'll start with Mr. Shea. If confirmed to be the Deputy USTR in 
Geneva, Mr. Shea will be in charge of representing the United States at 
the World Trade Organization. In my view, both sides, Republicans and 
Democrats, have raised important concerns with the WTO, which is meant 
to be a rules-based organization that judges cases with an even hand. 
It remains capable of knocking down barriers and serving as a venue for 
America to get justice for its exporters of everything from airplanes 
to wine. But in some cases, the WTO's Appellate Body has overreached.

    In negotiations, the WTO can be too slow and too unwieldy to make 
progress in important areas and seems, at times, to be caught flat-
footed in the face of China's trade tactics.

    Meanwhile, the Trump administration has seemingly dropped some 
vital priorities altogether. A deal on environmental goods that would 
be a win-win for red, white, and blue jobs and the fight against 
climate change--stalled. A deal on trade in services, which would help 
cement our lead in tech--stalled.

    And furthermore, after a whole lot of campaign talk about getting 
tough on trade cheats, the Trump administration has not brought forward 
a single original WTO case challenging trade barriers by any other 
country. It's not for lack of wrongdoing around the world. So it's my 
hope that Mr. Shea can articulate today what this administration hopes 
to accomplish in Geneva.

    Next, Mr. Mahoney is up for an equally challenging job at USTR. A 
big part of his role will be leading the NAFTA renegotiations to get 
the best possible outcome for American workers and businesses. It's 
long been my view that NAFTA should be completely overhauled.

    That means high-standard, enforceable commitments on labor and the 
environment; removing chapter 19, which hampers our ability to fight 
unfair trade ripoffs; and addressing challenges that are specific to 
dairy, wine and key manufacturing industries. NAFTA must also set a 
high bar on combating currency manipulation, market-distorting state-
owned enterprises and trade cheats that work every day to evade our 
trade enforcers and undercut U.S. jobs.

    On top of that, it's important to protect the free exchange of 
ideas, information and commerce over the Internet. In this context, 
that means a balanced approach to copyright and platform liability 
protections like those found in U.S. law. I have said it before, and 
I'll say it again: no administration should expect to have my support 
for a trade agreement that fails to include provisions that protect the 
Internet as an open platform of commerce, speech, and the free exchange 
of ideas of all kinds.

    That's an ambitious agenda, but it's worth fighting for. The Trump 
administration cannot throw its hands up after 6 or 9 months and say 
it's too hard to do this right.

    If confirmed, Mr. Mahoney will also face a big challenge with 
respect to China. A key part of the Trump campaign's economic message 
was getting tough on China's unfair trade practices. Well, we're now 
almost exactly a year into the Trump administration. If the 
administration has a policy regarding trade with China, I'm not sure 
anybody here knows what it is. Senator Hatch and I, as well as other 
members of this committee, have laid out our concerns on this issue. 
But there's been a rather stunning lack of action from the 
administration. It hasn't even named an assistant United States Trade 
Representative for China--which is a position that doesn't even require 
Senate confirmation.

    So if there is a plan to deal with China's trade practices, then 
this committee and the American people are in the dark as to what it 
is. If there is not a plan, then everything the American people heard 
in 2016 about cracking down on China was just a bunch of empty campaign 
patter. And that's inevitably going to cost jobs here at home.

    So it's my hope that Mr. Mahoney, if confirmed, can right the ship 
and make some forward progress on these issues. This is not academic 
stuff--when you talk about renegotiating NAFTA and taking on China's 
trade tactics, there are thousands and thousands of U.S. jobs hanging 
in the balance.

    I also need to add that the administration has a long way to go in 
terms of transparency on trade. And it's not just for sport. The 
administration is required to meet certain benchmarks for transparency 
that are spelled out in black-letter law. And it needs to improve on 
that front.

    I want to thank Mr. Mahoney and Mr. Shea for being here today. I 
look forward to questions.

                                  [all]