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




 
  COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2019

                              ----------                              


                      THURSDAY, SEPTEMBER 6, 2018

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.

    The subcommittee met at 10:16 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Jerry Moran (Chairman) presiding.
    Present: Senators Moran, Alexander, Murkowski, Shaheen, 
Reed, and Van Hollen.

             BUREAU OF INDUSTRY AND SECURITY, INTERNATIONAL

                TRADE ADMINISTRATION, AND INTERNATIONAL

                            TRADE COMMISSION

                OPENING STATEMENT OF SENATOR JERRY MORAN

    Senator Moran. I call this subcommittee on Commerce, 
Justice, Science, and Related Agencies to order.
    No Senator would want to be in a hearing in which they 
could not be heard; so I think we have solved that issue.
    I will begin with an opening statement, recognize the 
Ranking Member, and introduce our witness panel. We will hear 
your testimony and then take questions.
    Welcome to today's Commerce, Justice, Science, and Related 
Agencies subcommittee hearing. The hearing will examine the 
fiscal year 2019 funding requests for, and activities of, the 
International Trade Administration, the Bureau of Industry and 
Security within the Department of Commerce, and the United 
States International Trade Commission. I welcome and thank our 
witness panel for being here.
    Collectively, the mission of these three agencies 
represented here this morning play a significant role in 
supporting the United States's economic prosperity, our 
national security, and our foreign policy through promotion and 
enforcement of our trade policies, laws, and agreements.
    The importance of the work that these agencies perform has 
been recently thrust into the spotlight as the administration 
continues to pursue aggressive trade strategies.
    In just the past few weeks, we have seen a preliminary 
agreement between the United States and Mexico on a revamped 
North America Free Trade Agreement; public hearings have been 
held regarding proposed tariffs on approximately $200 billion 
worth of Chinese products; and reporting is out there that the 
administration may soon implement these proposed $200 billion 
worth of additional tariffs on those products. All of these 
actions have a nexus with the agencies and the work they 
perform.
    The work of these agencies is particularly important to me, 
and my home State of Kansas, as trade and exports are how many 
Kansans make a living. Over 400,000 jobs in our State are 
supported by global trade. In order for these agencies to 
succeed, and to benefit my constituents and Americans across 
the country, Congress must make certain that the necessary 
resources are available to carry out their missions.
    Despite a noted increase in trade activity, the 
administration has requested less funding in fiscal year 2019 
than enacted levels of fiscal year 2018 for both the 
International Trade Administration and the U.S. International 
Trade Commission.
    Fiscal year 2019 budget request for the Bureau of Industry 
and Security is $120 million, $7 million above the 2018 enacted 
level.
    I hope our witnesses this morning will inform this 
subcommittee about their respective agencies and ongoing work, 
as well as shed more light on the administration's trade 
policies and strategy.
    Before recognizing the Ranking Member for her remarks, I 
will briefly introduce the panel.
    Ms. Nazak Nikakhtar is the Assistant Secretary for Industry 
and Analysis at the International Trade Administration (ITA). 
The Industry and Analysis Unit devises and implements 
international trade, investment, and export promotion 
strategies, and strengthens the global competitiveness of U.S. 
industries.
    I understand ITA has been providing considerable assistance 
to the Bureau of Industry and Security, and the United States 
Trade Representative, as it relates to Section 232 and Section 
301 investigations and resulting tariffs.
    I look forward to hearing you elaborate on ITA's 
involvement in those activities.
    Mr. Ashooh is the Assistant Secretary for Export 
Administration at the Bureau of Industry and Security, whose 
activities include managing U.S. export control and treaty 
compliance systems, and promoting U.S. strategic technology 
leadership.
    The Bureau of Industry and Security (BIS) is responsible 
for investigating the effects of imports on national security 
under Section 232 of the Trade Expansion Act of 1963. BIS is 
also in charge of the exemption process for tariffs implemented 
as a result of Section 232 investigations. I hope that we will 
hear about that work today.
    Lastly, Mr. David S. Johanson is the Chairman of the United 
States International Trade Commission. The United States 
International Trade Commission is an independent, quasi-
judicial Federal agency that administers U.S. trade remedy 
laws; provides the President, the U.S. Trade Representative, 
and Congress with independent analysis, information and support 
on matters of tariffs, international trade, and U.S. 
competitiveness; and maintains the Harmonized Tariff Schedule 
of the United States.
    Welcome to all of you. We look forward to your testimony 
today.
    I now do recognize the Ranking Member, the Senator from New 
Hampshire, Senator Shaheen.

                  STATEMENT OF SENATOR JEANNE SHAHEEN

    Senator Shaheen. Thank you very much, Mr. Chairman.
    I appreciate you organizing this important hearing to 
understand the budget and activities of three of our Federal 
trade agencies: the International Trade Administration, the 
Bureau of Industry and Security, and the U.S. International 
Trade Commission.
    These agencies are critical to a free flow of commerce, 
international trade markets for American businesses, and to our 
national security. The fiscal year 2019 CJS bill funds all 
three at levels higher than the President's request.
    Now, we did that to ensure that these agencies can continue 
promoting American goods and services overseas, and can take 
action to level the playing field for workers by holding 
foreign companies accountable when they engage in unfair trade 
practices.
    Unfortunately, the administration has also used these 
agencies to carry out what, I believe, is an ill-advised trade 
war that is putting up new barriers to trade for America's 
small businesses.
    I am particularly concerned that the administration's 
burdensome and opaque exemption process for steel and aluminum 
tariffs has created a mountain of red tape forcing small 
businesses to spend precious time and resources to rework their 
operations.
    In addition, the exemption process has resulted in a 
dramatic shift of resources away from helping small businesses 
find new markets for their products. In fact, it is my 
understanding that many staff at the International Trade 
Administration and the Bureau of Industry and Security have 
been shifted away from small business assistance to handle 
tariff exemption requests.
    Finally, serious questions have been raised about the 
legitimacy and fairness of the waiver exemption process as a 
result of recent reports of influence by the White House.
    Now, as we discussed at our last hearing with U.S. Trade 
Representative Lighthizer, we have also seen the ramifications 
of this trade war in our home States. I noticed, Mr. Ashooh, 
you were, like all of the panelists, checking out the headlines 
there, that you recognize a number of those news outlets from 
New Hampshire.
    A few weeks ago, I visited Hitchiner Manufacturing in 
Milford, New Hampshire. The company makes metal castings for 
the automotive and aerospace industry. Hitchiner is planning a 
new facility that will create 85 local jobs, but they have seen 
the cost of their raw materials increase precipitously since 
the administration implemented their steel and aluminum tariffs 
this year.
    Now, Hitchiner already prides itself on using domestically 
produced steel, but even U.S. made steel has increased in price 
with the administration's tariffs.
    I hope that the President will heed the warnings of Members 
of this subcommittee and end the trade war, and in particular, 
I urge the President to reach an agreement with Canada. Like 
all of us, I will be watching this issue very closely 
especially because Canada is New Hampshire's largest trading 
partner, as it is for all of the United States. Any new deal 
regarding NAFTA that cuts such a key ally out of the agreement 
will lose my support.
    Thank you all very much for being here today, and I look 
forward to your testimony.
    Senator Moran. Senator Shaheen, thank you very much.
    We will begin with Mr. Johanson and work our way to his 
left.
    Sir, you are welcome and recognized.
STATEMENT OF HON. DAVID S. JOHANSON, CHAIRMAN, UNITED 
            STATES INTERNATIONAL TRADE COMMISSION
    Mr. Johanson. Thank you, Chairman Moran, Ranking Member 
Shaheen, and Members of the subcommittee for inviting me to 
participate in this hearing.
    I am pleased to appear today on behalf of the U.S. 
International Trade Commission. The Commission is a unique 
agency. It is a small institution with less than 400 employees, 
yet its work impacts millions of Americans.
    The Commission is a professional agency that produces high 
quality work and meets its deadlines. Perhaps most unique, the 
Commission is, through statute, an independent and nonpartisan 
agency.
    I would like to thank the subcommittee for its continued 
support of the Commission. While the Commission has requested 
$97.5 million for fiscal year 2019, both Senate and House 
fiscal year 2019 Commerce, Justice, and Science appropriations 
bills have the Commission marked at $95 million.
    The Commission received its full request of $93.7 million 
in fiscal year 2018. The fiscal year 2019 request represents an 
increase of $3.8 million, or 4.1 percent over the fiscal year 
2018 request.
    Although the Commission is a small agency, it has a large 
and growing workload. The Commission has recently experienced a 
significant increase in its three core statutory functions:
    First, administration of the trade remedy laws;
    Second, fact finding and trade policy support; and,
    Third, administration of the Harmonized Tariff Schedule.
    Regarding the trade remedy laws, the number of Title VII 
antidumping and countervailing duty investigations completed by 
the Commission more than doubled over the past 5 years.
    Last year, the Commission conducted investigations under 
the Section 201 Global Safeguard laws for the first time since 
2001. In 2019, the Commission will begin statutorily required 
assessment reports for these actions. Given the success of the 
petitioners in these investigations, more Section 201 petitions 
might be forthcoming.
    The number of Section 337 investigations, which examine 
unfair practices in import trade, remains at historically high 
levels. Section 337 investigations most often involve 
allegations of violations of intellectual property rights. 
These investigations can be particularly complex.
    The Commission does not make trade policy. The Commission 
does, however, report on a wide variety of trade matters upon 
request from the Senate Committee on Finance, the House 
Committee on Ways and Means, the President, and the U.S. Trade 
Representative.
    The Commission responds to time sensitive requests for 
technical expertise and information from these entities. The 
number of trade policy requests directed to the Commission was 
markedly high last year and will likely remain at high levels. 
The Commission conducts fact-finding investigations for these 
same entities.
    Last week, the U.S. Trade Representative requested that the 
Commission prepare a report assessing the likely impact of a 
trade agreement with Mexico and with Canada--if it is willing--
on the U.S. economy. This will be a major project for the 
agency.
    The Commission maintains the Harmonized Tariff Schedule 
(HTS), which lists tariffs applied to imports into the United 
States. The HTS is a valuable tool for U.S. importers and was 
visited by almost 2 million users last year.
    Although the Commission has no role in the administration's 
investigations under Section 232 or Section 301, Commission 
resources are required to update the HTS each time a tariff 
level is changed. Largely due to the Section 232 and Section 
301 actions, the HTS underwent 11 updates in 2018 compared to 
three updates in 2017. In 2018 alone, Commission staff has 
spent almost 2,000 hours updating the HTS.
    Looking forward to fiscal year 2019, the HTS may require 
additional updates to reflect possible actions taken by the 
administration under Section 232 and Section 301, any new trade 
agreements, and possible passage into law of the Miscellaneous 
Tariff Bill, which was sent to the President this week after 
passing the Senate and the House. I would like to add that the 
Commission played a major role in the development of the 
Miscellaneous Tariff Bill.
    Finally, the Commission's requested budget supports 
information technology initiatives and technology upgrades 
necessary for the agency's effective operation.
    In conclusion, I thank the subcommittee for its 
consideration of the Commission's fiscal year 2019 budget 
request.
    [The statement follows:]
                Prepared Statement of David S. Johanson
    The U.S. International Trade Commission (USITC or Commission) is an 
independent, quasi-judicial, nonpartisan Federal agency with a wide 
range of trade-related mandates. The Commission provides tariff, trade, 
and competitiveness-related analysis and information to the Senate 
Committee on Finance, the House Committee on Ways and Means, the 
President, and the U.S. Trade Representative (USTR). The USITC 
maintains the U.S. Harmonized Tariff Schedule (HTS). The USITC also 
administers certain trade remedies; specifically, the USITC 
investigates whether imports have injured a domestic industry in the 
context of antidumping and countervailing duty and safeguard 
investigations and whether there are unfair practices or unfair methods 
of competition in import trade in the context of unfair import injury 
investigations. The Commission does not make trade policy; however, it 
does provide trade policy support to the Senate Committee on Finance, 
the House Committee on Ways and Means, the President, and the USTR.
                           budget highlights
    The Commission would like to thank the subcommittee for its 
continued support for the USITC and our mission. While the Commission 
has requested $97.5 million for fiscal year 2019, both the Senate and 
House fiscal year 2019 Commerce, Justice, and Science Appropriations 
bills have the Commission marked at $95.0 million. The Commission 
received its full request of $93.7 million in fiscal year 2018. Our 
fiscal year 2019 request represents an increase of $3.8 million, or 4.1 
percent, over our fiscal year 2018 request.
    The increased request level reflects a $2.0 million increase in 
personnel costs over fiscal year 2018. This increased level of funding 
will allow the Commission to staff fully the Commission's Offices of 
Operations and the General Counsel, which are heavily impacted by 
historically high investigative caseloads.
    The requested budget also supports several information technology 
initiatives and system improvements and upgrades. These include our 
continuous efforts to improve our cybersecurity posture and support 
data migration to the cloud; improve the Miscellaneous Tariff Bill 
Petition System (MTBPS), which is the web portal required by the 
American Manufacturing Competitiveness Act of 2016 for public 
submission of petitions and comments concerning temporary duty 
suspensions and/or reductions; and make significant upgrades to several 
of our public-facing systems, including our Electronic Document 
Information System (EDIS), DataWeb trade data website, HTS Data 
Management System, and creation of a data system to track the status of 
all trade remedy investigations.
                           increased workload
    The recent growth in trade-related actions has increased the 
Commission's workload in several ways. Below, this statement discusses 
the different types of trade policy actions and the role of the 
Commission in them, emphasizing the impact of each of them on the 
Commission's workload.
    The Commission conducts formal fact-finding investigations on a 
variety of tariff, trade, and competitiveness matters and provides 
trade policy support in response to formal and informal requests from 
the Senate Committee on Finance, the House Committee on Ways and Means, 
the President, and, by delegation from the President, to the USTR. This 
support assists these recipients with decisions related to trade 
negotiations, the enactment of legislation, or other policy actions 
that affect the competitiveness of U.S. industries and the overall 
economy. Staff resources devoted to trade policy support have increased 
significantly this year over previous years.
    The Commission is also charged with maintaining the Harmonized 
Tariff Schedule of the United States (HTS), which lists tariffs applied 
to imports into the United States. The staff of the Commission assist 
Congress and the executive branch to make all legal and statistical 
changes to the classification of goods in the HTS. Over the last year, 
over 1.9 million people conducted almost 7.3 million searches of the 
HTS, with a 26 percent increase in searches over the last 6 months. As 
the subcommittee is aware, the Trump administration has initiated 
section 232 investigations into national security-related tariffs 
imposed on U.S. imports of steel, aluminum, autos and auto parts, and 
uranium, and section 301 investigations into whether to impose 
additional tariffs on U.S. imports of products from China due to 
violations of intellectual property rights. Although the Commission has 
no role in investigating or making determinations for investigations 
under section 232 or section 301, every time there is a change to a 
tariff level, Commission resources are required to update the HTS to 
reflect that change. The recent section 232 and section 301 actions and 
other changes in the tariffs have resulted in eleven revisions to the 
HTS this year, compared to three revisions in 2017. This is a 400 
percent increase to date. Accordingly, Commission staff hours in this 
area have increased from 4,700 hours in 2017 to over 5,800 hours during 
the same period in 2018.
    The Commission also provides USITC DataWeb, a valuable online trade 
service tool used by Commission staff, external customers, and the 
public to organize U.S. import and export data for analysis. This year 
over 465,000 users conducted more than 726,000 sessions on DataWeb.
    The Commission does have a substantial role in section 201 global 
safeguard investigations, as described in more detail below. USITC 
Commissioners and staff devoted 11,270 hours to conducting 
investigations for last year's section 201 investigations into solar 
panels and large residential washing machines, the first such safeguard 
investigations since 2001. In fiscal year 2019, the Commission will 
begin the required mid-term assessment reports for both actions.
    The number of import injury investigations completed by the USITC 
under Title VII of the Tariff Act of 1930 has more than doubled since 
fiscal year 2013, increasing to 68 in fiscal year 2018 from 30 in 
fiscal year 2013. Section 337 caseloads have remained at historically 
high levels in the current fiscal year, with no indication of slowing 
down. The Department of Commerce (Commerce) has self-initiated one 
Title VII case and received funding to initiate more such 
investigations. Self-initiated investigations not only increase the 
quantity of investigations the Commission reviews, but they also 
require additional resources as compared to investigations that begin 
with petitions from industry. Finally, the Commission recently 
completed one cycle of the Miscellaneous Tariff Bill (MTB) under the 
American Manufacturing Competiveness Act of 2016 (AMCA). With regard to 
miscellaneous tariff bills passed in prior years, the number of 
individual MTBs presented to the USITC never exceeded 1,350 in any 
given year. As a result of the AMCA, the USITC received a total of 
3,162 petitions and 2,491 comments. The USITC delivered its final MTB 
report on August 8, 2017. The USITC is preparing to start the next 
cycle of MTBs in the fall of 2019.
   role of the u.s. international trade commission in selected trade 
                                actions
    The following table briefly summarizes the Commission's role, or 
lack of role, with regard to various trade actions. The remainder of 
this statement provides more detail and clarifies responsibilities of 
the Commission with regard to such actions.

                 SUMMARY OF U.S. INTERNATIONAL TRADE COMMISSION'S ROLE IN SELECTED TRADE ACTIONS
----------------------------------------------------------------------------------------------------------------
            Trade Action                                Role of USITC                       Relevant Statute
----------------------------------------------------------------------------------------------------------------
Title VII investigations              The Department of Commerce makes determinations   19 USC 1671 et seq.
 (Antidumping/Countervailing Duty or   as to whether dumping or countervailable
 AD/CVD).                              subsidies exist.
                                      The USITC makes determinations as to whether the
                                       domestic industry is materially injured (or
                                       threatened with material injury) by reason of
                                       subject imports.
                                      Implementation of AD/CVD tariffs requires
                                       affirmative determinations by both the USITC
                                       and Commerce.
 
 
Unfair Import Injury investigations   Section 337 investigations examine unfair         19 USC 1337
 (Section 337).                        practices in import trade. Most often, the
                                       USITC investigates and rules on allegations
                                       that imported goods infringe the rights of a
                                       U.S. intellectual property rights holder. If a
                                       violation is found, the USITC issues remedial
                                       relief, provided that the public interest does
                                       not preclude the issuance of such relief.
                                       Relief may take the form of exclusion orders
                                       barring entry of unfairly traded imports or
                                       ``cease and desist'' orders prohibiting unfair
                                       acts in the United States.
 
 
Global Safeguard (Section 201)......  The USITC makes determinations as to whether the  19 USC 2251-2254
                                       domestic industry is seriously injured (or
                                       threatened with serious injury) by reason of
                                       subject imports. If the USITC makes an
                                       affirmative injury determination, the USITC
                                       reports to the President a recommendation to
                                       remedy the serious injury.
                                      The President makes the final decision on
                                       whether to provide a remedy to the U.S.
                                       industry, and if so, the type and duration of
                                       the remedy. If the President puts a remedy in
                                       place, the USITC must revise the HTS to reflect
                                       the remedy and the USITC conducts a mid-point
                                       review investigation.
 
Factfinding Investigations:
  --Industry and economic analysis..  Upon request from the Senate Committee on         19 USC 1332
                                       Finance; the House Committee on Ways and Means;
                                       or the President, and, by delegation, the U.S.
                                       Trade Representative (USTR); or upon its own
                                       motion, the USITC conducts fact-finding
                                       investigations and prepares reports on a wide
                                       variety of matters involving international
                                       trade and competitiveness.
 
 
  --Probable economic effects (trade  The USITC advises the President as to the         19 USC 2151
   agreement).                         probable economic effect on domestic industries
                                       and consumers of modification of duties and
                                       other barriers to trade that may be considered
                                       for inclusion in any proposed trade agreement.
 
 
                                      Once the President enters into a trade            19 USC 4201 note
                                       agreement, the Commission has up to 105 days to
                                       provide its report assessing the agreement's
                                       probable economic effects on the U.S. economy
                                       as a whole, on specific sectors of the economy,
                                       and on the interests of U.S. consumers.
 
 
  --Generalized System of             At times, certain articles may be designated as   19 U.S.C. 2151, 2163
   Preferences.                        eligible for duty-free treatment when imported
                                       from designated developing countries. The USITC
                                       advises the President as to the probable
                                       economic effect on the domestic industry and on
                                       consumers of such designations.
 
 
  --Sec. 1205.......................  The USITC is responsible for recommending to the  19 U.S.C. 3005
                                       President modifications it considers necessary
                                       or appropriate to conform the HTS with
                                       amendments to the Harmonized System Convention
                                       (maintained by the World Customs Organization),
                                       to ensure that the HTS is kept up to date, and
                                       to relieve unnecessary administrative burdens.
 
 
  --Other...........................  The USITC conducts other factfinding
                                       investigations under various statutes. Examples
                                       include analyses of trade preference programs
                                       that provide duty-free entry of imports of
                                       textile and apparel products from Nepal and of
                                       imports from countries covered by the Caribbean
                                       Basin Initiative.
 
American Manufacturing Competiveness  Under a process for the consideration of          19 USC 1332 note
 Act (MTBs).                           miscellaneous tariff bills (MTBs) instituted in
                                       2016, the USITC accepts and analyzes petitions
                                       and public comments regarding the temporary
                                       suspension or reduction of duties on specific
                                       products. In accordance with specific statutory
                                       deadlines, the USITC submits preliminary and
                                       final reports on received petitions to the
                                       Senate Committee on Finance and the House
                                       Committee on Ways and Means for their use in
                                       developing a comprehensive MTB for
                                       consideration by Congress.
 
 
Trade Policy Support................  The USITC responds to rapid-response requests     19 USC 1332
                                       for technical expertise and information that
                                       trade policymakers can use to inform the
                                       development of U.S. international trade policy.
 
 
Section 232 investigations into       The USITC has no role in investigating or making  19 USC 1862
 trade impact on national security.    determinations for investigations under section
                                       232. If the President takes action under
                                       section 232 (based on a report from the
                                       Secretary of Commerce), USITC staff will revise
                                       the HTS to reflect the actions of the
                                       President.
 
 
Section 301 investigations into       The USITC has no role in investigating or making  19 USC 2411
 trade impacts of violations of        determinations for investigations under section
 intellectual property rights.         301. If the President chooses to take action
                                       under section 301 (based on a report from the
                                       US Trade Representative), USITC staff will
                                       revise the HTS to reflect the actions of the
                                       President.
                                      Under the Commission's trade policy support
                                       role, USTR can request the USITC to assist with
                                       the section 301 process.
 
----------------------------------------------------------------------------------------------------------------

  antidumping/countervailing duty (ad/cvd) investigations and reviews
    By statute, the Commission makes determinations as to whether the 
domestic industry is materially injured (or threatened with material 
injury) by reason of subject imports. The Commission conducts 
investigations to gather data to create a record which is used to make 
determinations.
    The Commission conducts reviews of existing AD and/or CVD orders 
every 5 years that an order remains in place. Within these reviews, the 
Commission determines whether an order can be revoked without resulting 
in continued or recurrent injury to a domestic industry. If Commerce 
(or the USITC) determines that revocation is appropriate, Commerce will 
revoke the order.
    Commerce also plays a role in AD/CVD cases. Commerce is the 
administering authority and initiates the investigations. Commerce 
makes determinations on whether the subject product is sold in the 
United States at a price that is below that producer's sales price in 
the country of origin (home market), or at a price that is lower than 
the cost of production (AD) or is unfairly subsidized by the foreign 
government (CVD). Commerce can also self-initiate a case (i.e., there 
is no petition filed by a U.S. manufacturer(s) or union). We saw a 
recent instance of this in December 2017, the first since 1991, with a 
case on common alloy aluminum sheet from China self-initiated by 
Commerce. Such self-initiated cases have a particular impact on the 
USITC because we have less information to begin our processes than we 
would usually receive from a petitioner.
    In the event of an affirmative determination by both Commerce and 
the USITC, Customs and Border Patrol (CBP) enforces these decisions and 
collects the AD/CVD duties due on imported goods.
    Another significant portion of our workload in this area is 
defending our AD/CVD determinations in litigation challenging these 
determinations. Unlike many Federal agencies, the Commission has 
independent litigation authority and therefore employs its own 
attorneys to conduct its litigation. Trade remedy litigation is 
conducted at the U.S. Court of International Trade, the U.S. Court of 
Appeals for the Federal Circuit, and binational review panels under 
NAFTA. In addition, our staff assists the USTR in World Trade 
Organization (WTO) disputes involving either our import injury 
determinations or injury determinations by other WTO members that 
affect U.S. exports.
             global safeguard (section 201) investigations
    By statute, the Commission makes determinations as to whether the 
domestic industry is seriously injured (or threatened with serious 
injury) by reason of subject imports. The Commission conducts 
investigations to gather data to create a record which is used to make 
determinations. Global safeguards involve imports from all countries. 
The standard for injury in a global safeguard is higher (serious 
injury) than for AD/CVD cases (material injury), and imports must be 
the most important cause of injury (i.e., no other cause can be 
greater).
    If the Commission makes an affirmative injury determination, the 
Commission will formulate and report to the President a recommendation 
to remedy the serious injury (e.g., tariffs, quota, tariff-rate quota). 
The President makes the final decision on whether to provide a remedy 
to the U.S. industry, and if so, the type and duration of the remedy. 
In determining whether to take action, the President takes into account 
the potential effects on downstream industries, consumers, and the U.S. 
economy.
    If the President puts a remedy in place, the Commission must revise 
the HTS to reflect the remedy. The Commission then conducts a mid-point 
review investigation. (The mid-point depends on the imposed remedy--if 
the President imposes tariffs for 4 years, the mid-point would come 
after 2 years.) For the recent safeguard investigations involving 
washing machines and solar panels, the Commission will begin our mid-
point reviews in February 2019 and July 2019, respectively.
    Unlike AD/CVD investigations, Commerce does not play a role in 
investigating (or making determinations) in global safeguard 
investigations; the Commission is the sole administering authority.
           unfair import injury investigations (section 337)
    The USITC is responsible for investigating alleged violations of 
section 337 of the Tariff Act of 1930, as amended. Section 337 
prohibits certain unfair practices in the import trade. The unfair 
practice most frequently investigated by the Commission is patent 
infringement. In this context, section 337 prohibits the importation 
into the United States, the sale for importation, and the sale within 
the United States after importation of articles that infringe a valid 
and enforceable United States patent, provided that an industry in the 
United States, relating to articles protected by the patent concerned, 
exists or is in the process of being established. Similar requirements 
govern investigations involving infringement of other federally 
registered intellectual property rights, including registered 
trademarks and registered copyrights. In addition, under section 337, 
the Commission has general authority to investigate other unfair 
methods of competition and unfair acts in the importation and sale of 
products in the United States (such as products manufactured abroad 
using stolen U.S. trade secrets), the threat or effect of which is to 
destroy or injure a U.S. industry, to prevent the establishment of a 
U.S. industry, or to restrain or monopolize trade and commerce in the 
United States. The Commission may institute an investigation on the 
basis of a complaint or on its own initiative.
    Section 337 complaints are typically brought by private parties 
alleging that certain articles are sold for importation, imported, or 
sold after importation into the United States by means of an unfair act 
or an unfair method of competition.
    As set forth in the statute, the Commission, in accordance with the 
Administrative Procedure Act (APA), conducts proceedings to determine 
whether there has been a violation of section 337. The APA gives the 
parties the opportunity to make legal arguments before an 
administrative law judge (ALJ). The ALJ conducts a public hearing on 
the record. At the end of the evidentiary hearing, the ALJ will issue a 
final initial determination.
    If the ALJ's determination is appealed by one of the parties, or if 
the Commission on its own decides to review the ALJ's determination, 
the Commission will issue its own decision. If the Commission believes 
that a remedy may be appropriate, the Commission will request 
submissions from the parties, interested Federal agencies, and the 
public concerning the remedy in general and the public interest factors 
specifically. Finally, if a violation of section 337 is found, the 
Commission will make a finding on whether the statutory public interest 
factors bar relief or whether relief should be tailored to accommodate 
public interest concerns. While many investigations are ended by 
agreement of the parties or withdrawal of the complaint, those that are 
concluded on the merits are currently decided, on average, in 16.3 
months.
    If the Commission determines that a violation exists and that a 
remedy is appropriate, it issues an exclusion order directing CBP to 
block the subject imports from entry into the United States, and it can 
also issue cease and desist orders that direct the violating parties to 
stop engaging in the unlawful practices. The Commission's remedial 
orders enter into force unless disapproved for policy reasons by the 
USTR.
    Appeals of the Commission decisions in section 337 investigations 
are made directly to the U.S. Court of Appeals for the Federal Circuit. 
As mentioned above, the Commission's litigation activities are 
conducted by its own legal counsel.
                       factfinding investigations
    Under section 332, the Commission investigates a wide variety of 
trade matters. Upon request from the Senate Committee on Finance; the 
House Committee on Ways and Means; or the President, and, by 
delegation, the USTR; or upon its own motion, the Commission conducts 
fact-finding investigations and prepares reports on matters involving 
tariffs or international trade.
    When the President commences negotiations on a new trade agreement, 
or substantial revisions to an existing trade agreement, the Commission 
also advises the President as to the probable economic effect on 
domestic industries and consumers of modification of duties and other 
barriers to trade being considered.
    Once the President has notified Congress of his intent to enter 
into a trade agreement, section 105(c) of the Bipartisan Congressional 
Trade Priorities and Accountability Act of 2015 (TPA) requires the 
President to request that the Commission provide a report to Congress 
and the President that assesses the likely impact of the agreement on 
the U.S. economy, specific industry sectors, and consumers. The 
Commission has up to 105 days to provide its report once the President 
enters into the agreement. In the case of a comprehensive trade 
agreement, this is an extensive report detailing all aspects of the 
agreement and providing estimates of the economic effects, an 
undertaking that requires significant Commission resources. On August 
31, 2018, the USTR requested the Commission to prepare such a report 
after ``the President notified Congress of his intent to enter into a 
trade agreement with Mexico--and with Canada if it is willing. . . .''
    The Commission will base its report on the details of the agreement 
as made available. We note that section 106(a)(1) of the TPA requires 
that the President, at least 60 days before the President enters into 
the agreement, must publish the text of the agreement on a publicly 
available Internet website of the USTR.
    The Commission also conducts a wide variety of other factfinding 
investigations, as shown in the table above. Recent reports that have 
garnered public attention include investigations on business jets; 
aluminum; digital trade; exports by small and medium size enterprises; 
rice; agricultural trade with Brazil, China, and India; and U.S. 
exports to Cuba.
 american manufacturing competiveness act (miscellaneous tariff bills)
    In May 2016, the American Manufacturing Competitiveness Act (AMCA) 
introduced a new process for the consideration of miscellaneous tariff 
bills (MTBs). The Commission is now responsible for accepting and 
analyzing petitions and comments regarding the temporary suspension or 
reduction of duties for specific products. U.S. firms typically seek 
this relief for imported materials that are not available from domestic 
manufacturers. In accordance with specific statutory deadlines, the 
Commission submits preliminary and final reports on received petitions 
to the Senate Committee on Finance and the House Committee on Ways and 
Means for their use in developing a comprehensive miscellaneous tariff 
bill for Congress to consider.
    The Commission's report included certain information and 
determinations with respect to each petition and also categorized each 
petition based on whether it met the requirements of the Act without 
modification, met the requirements of the Act with certain types of 
modifications, or did not meet the requirements of the Act. It also 
included, with respect to each petition, the Commission's 
determination: (1) whether the duty suspension or reduction was 
available to any person that imported the article; (2) whether the duty 
suspension or reduction was likely able to be administered by CBP; and 
(3) whether the estimated loss in revenue to the United States from the 
duty suspension or reduction did not exceed $500,000 in a calendar year 
during which it would be in effect.
    The first cycle of the Commission's MTB reporting process was from 
October, 15, 2016, to August 7, 2017, and the second round will begin 
no later than October 15, 2019. The final report for the first cycle 
was submitted to Congress on August 8, 2017.
    If MTB legislation is passed by Congress and enacted by the 
President, Commission staff will need to modify the HTS to reflect the 
changes to those products for which a tariff reduction or suspension 
was granted.
    Commerce and CBP also have roles defined by the AMCA statute. 
Commerce issues a report that provides its determinations on whether 
there are domestic producers and whether any domestic producer objects 
to the petition for reduction or suspension of the duties. CBP makes 
determinations on whether any technical changes to the article 
description are necessary for purposes of administration when articles 
are presented to CBP for importation.
                          trade policy support
    The Commission responds to rapid-response requests for technical 
expertise and information that trade policymakers (the Senate Committee 
on Finance, the House Committee on Ways and Means, and the USTR) can 
use to inform the development of U.S. international trade policy. This 
trade policy support, provided under section 332 of the Tariff Act of 
1930, includes (1) providing information and analysis on current issues 
related to trade and competitiveness, (2) providing technical comments 
on draft legislation, (3) preparing draft tariff legislation and 
annexes for presidential proclamations, memoranda, executive orders, 
and final decisions by various agencies, (4) providing information and 
analysis in briefings and meetings, (5) temporarily detailing staff to 
our oversight committees and the USTR, and (6) assisting trade 
delegations, negotiating teams, and administration-led litigation teams 
in international dispute settlement forums.
                       section 232 investigations
    The Commission does not have any role in investigating or making 
determinations for investigations under section 232. Under section 232, 
the administration determines the effects of imports on national 
security. If the President chooses to take action (based on a report 
from the Secretary of Commerce) under section 232, Commission staff 
will revise the HTS to reflect the actions of the President.
                       section 301 investigations
    The Commission does not have any role in investigating or making 
determinations for investigations under section 301. Under section 301, 
the President may take action, including retaliation to obtain the 
removal of any act, policy, or practice of a foreign government that 
violates an international trade agreement or is unjustified, 
unreasonable, or discriminatory, and that burdens or restricts U.S. 
commerce.
    The Commission does not have any role in investigating or making 
determinations for investigations under section 301. If the President 
chooses to take action under section 301 (based on a report from the 
USTR), Commission staff will revise the HTS to reflect the actions of 
the President. At its discretion, USTR can request the Commission to 
provide trade policy advice to assist with the section 301 process.
                               conclusion
    In conclusion, the Commission would like once again to thank this 
subcommittee for its continued support of the USITC. To meet its 
mission, the Commission must maintain the staff, technological tools, 
and other resources needed to conduct fair and efficient 
investigations, as well as provide high-quality and objective 
information and analysis on a wide array of trade issues impacting 
millions of domestic workers.

    Senator Moran. Ms. Nikakhtar.
STATEMENT OF HON. NAZAK NIKAKHTAR, ASSISTANT SECRETARY 
            FOR INDUSTRY AND ANALYSIS, U.S. DEPARTMENT 
            OF COMMERCE, INTERNATIONAL TRADE 
            ADMINISTRATION
    Ms. Nikakhtar. Good morning, Chairman Moran, Ranking Member 
Shaheen, and Members of the subcommittee.
    Again, my name is Nazak Nikakhtar, Assistant Secretary for 
Industry and Analysis. Please do not feel obligated to have to 
pronounce my last name; Nazak is fine.
    Thank you for the opportunity to speak to you today about 
the role that the International Trade Administration, ITA, at 
the Department of Commerce, plays in helping the American 
economy grow through free, fair, and reciprocal trade and 
investment.
    ITA, with its trade professionals in Washington, across the 
United States and around the world, is responsible for 
strengthening the competitiveness of U.S. industry in the 
global marketplace, promoting U.S. exports, increasing 
investment in America, monitoring compliance with U.S. trade 
agreements, and enforcing U.S. trade law.
    I would like to thank the subcommittee for its support of 
ITA's efforts to combat unfair trade including our efforts to 
assist domestic industry by self-initiating antidumping and 
countervailing duty investigations.
    We are mindful of the subcommittee's fiscal year 2019 mark 
and we look forward to providing any information you need as 
you finalize the 2019 appropriations.
    ITA's analytical tools and sectoral intelligence help 
enable the administration leadership and colleagues across the 
U.S. Government to make informed decisions on complex trade 
issues based on concrete trade and industry data.
    The increasing pace of trade policy activities will 
significantly increase demand in fiscal year 2019 for ITA's 
analytical and sectoral expertise. This expertise is housed in 
Industry and Analysis, the unit I lead, as well as in ITA's 
Global Markets, and Enforcement and Compliance units.
    Our specialized knowledge has allowed us to provide 
critical analysis that the administration requires to develop 
policy and to respond promptly to challenges impacting U.S. 
industry and our national and economic security.
    Some recent examples of my unit's work, Industry and 
Analysis, include development of Section 232 tariff economic 
modeling, Section 301 tariff analysis, and Section 201 
safeguard analysis. In all of these cases, ITA's work has been 
critical to developing U.S. actions that are informed by 
comprehensive economic data.
    As you may know, ITA has undertaken a significant role in 
the Section 232 exclusion process for steel and aluminum 
products. Because of ITA's particular expertise in steel and 
aluminum, we are providing technical analysis and personnel for 
Commerce's Bureau of Industry and Security, BIS, for product 
exclusion requests.
    To address the surge of exclusion requests, ITA has 
deployed staff and hired contractors to assist with the timely 
evaluation of the tens of thousands of requests.
    During fiscal year 2018, ITA worked with BIS to process 
exclusion requests without jeopardizing our ability to enforce 
the antidumping and countervailing duty law, and conduct other 
critical programs that benefit U.S. industries and American 
workers. ITA will continue to prioritize this work next year.
    Commerce's fiscal year 2019 budget requested seven 
positions and $1.2 million for the Section 232 work. These 
seven positions will bring additional steel and aluminum 
industry and product expertise to help administer the exclusion 
program.
    Further, ITA and BIS play important roles in Commerce's 
review for the Committee on Foreign Investment in the United 
States (CFIUS). The National Defense Authorization Act, which 
enacted the Foreign Investment Risk Review Modernization Act of 
2018, FIRRMA, updates and modernizes CFIUS's authority by 
expanding the scope of transactions that the committee reviews 
to assess any national security concerns.
    Through ITA's Industry and Analysis unit, which leads and 
coordinates the Department's CFIUS work, we bring significant 
and varied expertise to bear on CFIUS's national security 
reviews, including ITA's analysis of the market conditions 
underlying each transaction and its potential impact on U.S. 
commerce. The Department also leverages BIS's expertise on dual 
use and emerging technologies and the defense industrial base.
    CFIUS is currently reviewing a record number of 
transactions. Those cases equalled 238 in 2017, up from a 5-
year high of 173 in 2016. In 2018, CFIUS cases are on track to 
reach approximately 240 cases. With FIRRMA, we expect CFIUS's 
casework to continue to increase.
    Commerce's fiscal year 2019 budget requests $1.9 million 
and seven positions within Industry and Analysis to strengthen 
trade policy analysis, including CFIUS.
    In sum, we are proud of ITA's trade enforcement work and 
our trade policy analysis where we utilize our expertise in 
international economics, industry sectors, foreign markets, 
trade negotiations, export promotion, and global 
competitiveness to help U.S. industries grow, and we are 
gearing up for a busier year next year in 2019.
    I look forward to answering your questions today, and I 
thank you, again, for this opportunity to testify.
    [The statement follows:]
           Prepared Statement of Statement of Nazak Nikakhtar
    Chairman Moran, Ranking Member Shaheen, and Members of the 
subcommittee, thank you for the opportunity to speak to you today about 
the role the International Trade Administration (ITA) in the Department 
of Commerce plays in helping the American economy grow through free, 
fair, and reciprocal trade and investment. ITA, with its trade 
professionals in Washington, across the United States and around the 
world, is responsible for strengthening the competitiveness of U.S. 
industry in the global marketplace, promoting U.S. exports, increasing 
investment in America, monitoring compliance with U.S. trade 
agreements, and enforcing U.S. trade laws.
    I'd like to thank the Committee for its support of ITA's efforts to 
combat unfair trade, including our efforts to assist domestic 
industries by self-initiating antidumping and countervailing duty 
investigations. We are mindful of the Committee's fiscal year 2019 
mark, and we look forward to providing any information you need as you 
finalize the fiscal year 2019 appropriations.
    ITA's unique expertise serves a critical role in shaping and 
carrying out the administration's trade initiatives. Our analytical 
tools and sectoral intelligence help enable administration leadership 
and colleagues across the U.S. Government to make informed decisions on 
complex trade issues--for example, on trade actions and the negotiation 
of free trade agreements--based on concrete trade and industry data. We 
do this by:

  --modeling the economic impact of policy options to ensure that 
        decisions advance the growth of U.S. companies and help 
        American workers;
  --enforcing U.S. trade laws to level the playing field for U.S. 
        companies;
  --providing the perspective of industries and trade analytics to 
        trade negotiators;
  --eliminating trade barriers; and
  --advocating for U.S. businesses abroad.

    In short, we help shape U.S. trade policy to support America's 
industrial base.
                    analysis and sectoral expertise
    I lead ITA's Industry and Analysis unit. The increasing pace of 
trade policy activities will significantly increase demand in fiscal 
year 2019 for ITA's analytic and sectoral expertise, which is housed in 
Industry and Analysis. Our specialized knowledge in these areas has 
allowed us to provide critical analysis that the administration 
requires to develop policies and to respond promptly to challenges 
impacting U.S. industry and our national and economic security. Some 
recent examples of our work include ITA's development of Section 232 
tariff scenarios, Section 301 tariff analysis, and Section 201 
safeguard analyses. In all these cases, ITA's work has been critical to 
developing U.S. actions that are informed by the best economic analysis 
available.
    ITA has a comprehensive ability to analyze and quantify both 
sectoral and global industry effects. ITA's sector experience and 
economic modeling capabilities have been built over the course of 
decades. We have industry experts with hundreds of years of combined 
experience gained from helping shape U.S. policy in specific sectors, 
including autos, advanced manufacturing, semiconductors, digital trade, 
travel and tourism, and textiles. Complementing this sectoral strength 
is our international economics capacity. With funding provided by 
Congress, the Department has invested over 1 million dollars in 
complex, economy-wide modeling programs that allow ITA to simulate the 
impact of different policy options. We have also made significant 
investments in training our economists, as 3 to 5 years of training are 
required to become proficient in using the models. We are 
reprioritizing within existing resources to meet new demands for 
sectoral and economic analysis and to meet new workload.
                     section 232 exclusion process
    ITA has undertaken a significant role in the Section 232-exclusion 
process for steel and aluminum products. Because of ITA's particular 
expertise in steel and aluminum, we are providing technical analyses 
and personnel support to the Bureau of Industry and Security (BIS) for 
product exclusion requests. To address the surge of product exclusion 
requests, ITA has redeployed staff (65 staff initially) and hired 
contractors (41 to date, some replacing detailed staff) to assist with 
the timely evaluation of the tens of thousands of requests. During 
fiscal year 2018, we have been able to work with BIS to process 
exclusion requests without jeopardizing our ability to vigorously 
enforce the antidumping and countervailing duty (AD/CVD) laws and 
conduct other critical programs that benefit U.S. industries and 
workers. ITA will continue to prioritize this work in fiscal year 2019. 
Commerce's fiscal year 2019 budget requested 7 positions and $1.2M for 
Section 232 in the regular fiscal year 2019 appropriations process. 
These 7 positions were to focus on bringing additional steel and 
aluminum industry and product expertise to help administer the program.
                            cfius expansion
    The Committee on Foreign Investment in the United States (CFIUS) is 
an interagency committee that conducts national security reviews of 
foreign investments in U.S. business. The ITA and BIS play important 
roles in Commerce's review for CFIUS. The National Defense 
Authorization Act also enacted the Foreign Investment Risk Review 
Modernization Act of 2018 (FIRRMA), which updates and modernizes 
CFIUS's authority by expanding the scope of transactions that the 
committee may review to assess any national security concerns.
    CFIUS transactions touch on virtually every sector of the economy. 
Through ITA's Industry and Analysis unit, which leads and coordinates 
the Department's CFIUS work, the Department of Commerce brings 
significant and varied expertise to bear on CFIUS national security 
reviews, including ITA's analysis of the market conditions underlying 
each transaction and its potential impact on U.S. commerce, and BIS's 
expertise on dual use and emerging technologies and the defense 
industrial base.
    CFIUS is currently reviewing a record number of transactions. CFIUS 
cases alone totaled 238 in 2017, up from a 5-year high of 173 in 2016. 
In 2018, CFIUS cases are on track to reach approximately 240 cases. 
FIRRMA modernizes CFIUS's authority by expanding the scope of 
transactions that the committee may review to assess any national 
security concerns. And consequently, we expect CFIUS casework will 
continue to increase. Commerce's fiscal year 2019 budget requests $1.9 
million and 7 positions within Industry and Analysis to strengthen 
trade enforcement and analysis, including CFIUS.
                               conclusion
    In closing, ITA is called upon to analyze the economic impacts of 
international trade policies because of our expertise in international 
economics, industry sectors, foreign markets, trade negotiations, 
export promotion, and global competitiveness. This requires:

  --robust economic analysis and careful evaluation of trade policy 
        options;
  --coordination with other government agencies, as well as diplomacy 
        with our trading partners;
  --creative thinking and problem solving; and
  --capacity to respond to emerging initiatives with staff and budget.

    Thank you, again, for this opportunity to testify. I look forward 
to answering your questions.

    Senator Moran. Thank you, ma'am.
    Mr. Ashooh.
STATEMENT OF HON. RICHARD ASHOOH, ASSISTANT SECRETARY 
            OF COMMERCE FOR EXPORT ADMINISTRATION AND 
            THE MANAGEMENT OF THE DEPARTMENT OF 
            COMMERCE'S NATIONAL SECURITY, 
            NONPROLIFERATION, AND FOREIGN POLICY 
            FUNCTIONS WITHIN THE BUREAU OF INDUSTRY AND 
            SECURITY
    Mr. Ashooh. Chairman Moran, Ranking Member Shaheen, and 
Members of the subcommittee.
    I am pleased to appear before the subcommittee today to 
address the Bureau of Industry and Security within the 
Department of Commerce.
    As Chairman Moran already mentioned, BIS's mission is to 
advance U.S. national security, foreign policy, and 
nonproliferation objectives by ensuring an effective export 
control and treaty compliance system, and by promoting U.S. 
strategic technology leadership.
    Before I proceed, I would like to thank the subcommittee 
for the reprogramming authorization that has been critical to 
the Section 232 steel and aluminum product exclusion process. 
Your support has provided essential resources to assist with 
the demands of this activity, and we look forward to keeping 
the subcommittee updated on our work.
    The recently enacted National Defense Authorization Act 
(NDAA) included the Export Control Reform Act (ECRA). Congress 
enacted the ECRA in part to address concerns over growing 
threats to sensitive U.S. technology. ECRA provides new 
authority to identify and appropriately control emerging 
critical technologies that are not currently subject to 
multilateral export control licensing requirements. BIS, 
working with other agencies, will assess whether more 
restrictive controls are warranted.
    BIS is reexamining our personnel needs to accommodate the 
significant new responsibilities due to ECRA. Furthermore, BIS 
has requested additional full-time employees for fiscal year 
2019 to deal with workload increases in other areas, which I 
will now discuss.
    As you have heard already, the Committee on Foreign 
Investment in the United States is an interagency committee 
that conducts national security reviews of foreign investments 
in U.S. businesses.
    The NDAA also enacted the Foreign Investment Risk Review 
Modernization Act, or FIRRMA, which updates and modernizes 
CFIUS's authority by expanding the scope of transactions to 
assess any national security concerns.
    BIS will play an important role as we implement FIRRMA, 
which expands the scope of CFIUS and allows CFIUS to take into 
account technology identified in the emerging technology review 
process that I just mentioned.
    The resources requested in the fiscal year 2019 budget are 
essential to ensure that BIS has the capacity to complete its 
comprehensive review of each transaction and provide expert 
support during CFIUS policy deliberations.
    In addition to CFIUS's workload increases, BIS requested 
additional resources for the Section 232 steel and aluminum 
product exclusion process.
    Since March, Commerce has been diligently working to 
implement its 232 exclusion process to ensure that duties and 
quantitative limitations protect our national security while 
minimizing undue impacts on downstream American industries.
    While my written testimony contains many statistics in this 
regard, the Section 232 investigations required significant BIS 
staff to support all aspects of the 9-month investigations, and 
now the exclusion process.
    On July 18, the Secretary of Commerce initiated a new 
Section 232 investigation into the effects of the imports of 
uranium on the national security. While we are still in the 
process of collecting public comments, the future resource 
impacts of the uranium investigation, and the potential for 
further Section 232 investigations, demonstrate the importance 
of the President's budget request for additional resources in 
fiscal year 2019.
    The Bureau has also experienced an increase in requests for 
enhanced BIS industrial base surveys and analysis from multiple 
U.S. Government agencies including the Department of Defense, 
NASA, and the intelligence community to help support informed 
national defense and technology policy decisions.
    BIS has requested an additional $4.1 million in the fiscal 
year 2019 budget for defense industrial base studies and 
additional Section 232 investigations.
    The range of challenges facing BIS, many driven by external 
or even global factors, has had a significant impact on our 
operation. As BIS strives to meet these challenges, I would 
like to reiterate the Bureau's gratitude to the subcommittee 
for its support.
    Thank you, again, for this opportunity to testify and I 
look forward to answering your questions.
    [The statement follows:]
                  Prepared Statement of Richard Ashooh
Mr. Chairman, Ranking Member Shaheen, and Members of the subcommittee:

    Thank you for the opportunity to appear before the subcommittee 
today to address the role of the Bureau of Industry and Security (BIS) 
within the Department of Commerce.
    BIS's mission is to advance U.S. national security, foreign policy, 
and non-proliferation objectives by ensuring an effective export 
control and treaty compliance system, and by promoting continued U.S. 
strategic technology leadership. As the Committee is well aware, 
current global realities continue to keep BIS at the forefront of 
supporting our national defense by protecting American technology and 
safeguarding the U.S. defense industrial base. BIS accomplishes this 
through authorities granted under the Export Control Reform Act, the 
Trade Expansion Act, and Defense Production Act, among others. There 
are significant policy initiatives underway or being planned under 
these authorities which I am happy to discuss this morning, especially 
with regard to their resource impacts on BIS.
    Before I proceed, I would like to take this opportunity to thank 
the Committee for the reprogramming authorization that has been 
critical to the Section 232 steel and aluminum product exclusion 
process. Your support has provided essential resources to assist with 
the demands of this activity, and we look forward to keeping the 
Committee updated on our work.
                 i. emerging/foundational technologies
    BIS's paramount concern is the security of the United States. 
Congress recently passed, and the President signed, the National 
Defense Authorization Act (NDAA) for fiscal year 2019, which included 
in Title 17 the Export Control Reform Act (ECRA) of 2018. Congress 
enacted the ECRA in part to address concerns over growing threats to 
sensitive U.S. technology. The ECRA provides permanent statutory 
authority to better regulate U.S. exports, thus helping to ensure that 
the U.S. maintains its technological advantage in science, engineering, 
manufacturing and other industries critical to our national and 
economic security.
    Most notably, ECRA provides new authority to identify and 
appropriately control critical emerging technologies. The President is 
to direct the Departments of Commerce, State, Defense, Energy, and 
other agencies as appropriate to lead a regular, ongoing interagency 
process to identify ``emerging'' and ``foundational'' technologies that 
are essential to U.S. national security and that are not currently 
subject to multilateral export control licensing requirements. BIS, 
working with these other agencies, will assess whether more restrictive 
controls are warranted. Such license applications would be reviewed 
under the well-established interagency licensing process. In fiscal 
year 2017, BIS processed 4,993 classification request applications and 
34,142 export license applications.
    The U.S. export control system is uniquely designed to identify and 
classify emerging technologies. The emerging technology described in 
ECRA complements and augments BIS's existing authorities to control 
technology for national security and other reasons.
    BIS is reexamining our personnel needs to accommodate the 
significant new responsibilities associated with the passage of ECRA. 
Furthermore, BIS has requested additional full-time employees for 
fiscal year 2019 to deal with workload increases in other areas which I 
will discuss.
                               ii. cfius
    The Committee on Foreign Investment in the United States (CFIUS) is 
an interagency committee that conducts national security reviews of 
foreign investments in U.S. businesses. The International Trade 
Administration (ITA) and BIS play important roles in Commerce's review 
for CFIUS. The NDAA also enacted the Foreign Investment Risk Review 
Modernization Act of 2018 (FIRRMA), which updates and modernizes 
CFIUS's authority by expanding the scope of transactions that the 
committee may review to assess any national security concerns. In CFIUS 
cases where technology transfer is of concern, BIS, as the 
administrator of the export control system under the Export 
Administration Regulations, is historically called upon to apply its 
expertise in this arena. BIS will play an important role as we 
implement FIRRMA, which expands the scope of CFIUS review and allows 
CFIUS to take into account technology identified in the emerging 
technology review process I described earlier.
    For a host of reasons, including technological advances and growing 
national security concerns, it comes as no surprise that in fiscal year 
2017 CFIUS has experienced a 45 percent increase in caseload work 
compared to fiscal year 2016. The average number of CFIUS cases per BIS 
analyst has risen from approximately 17 cases in fiscal year 2010/
fiscal year 2011 to 30 per analyst in fiscal year 2017. As of August 
16, 2018, BIS has reviewed 204 CFIUS cases in fiscal year 2018. The 
resources requested in the fiscal year 2019 Budget are essential to 
ensure that BIS has the capacity to complete its comprehensive review 
of each transaction within the established statutory deadlines and 
provide expert support during policy deliberations on complex cases and 
rigorous CFIUS reviews.
    BIS's budget request for fiscal year 2019 includes funding for four 
additional employees to assist with the expanded scope and number of 
expected BIS CFIUS reviews. This request was based upon the increase in 
CFIUS case volume and complexity that existed before FIRRMA was 
enacted.
       iii. defense industrial base & section 232 investigations
a. Section 232 Investigations
    On March 8, 2018, President Trump issued Proclamations 9704 and 
9705, imposing duties on imports of aluminum and steel. The 
Proclamations also authorized the Secretary of Commerce to grant 
exclusions from the duties if the Secretary determines the steel or 
aluminum article for which the exclusion is requested is not ``produced 
in the United States in a sufficient and reasonably available amount or 
of a satisfactory quality'' or should be excluded ``based upon specific 
national security considerations.'' On March 19, 2018, the Secretary 
issued an interim final rule setting forth the requirements that any 
directly affected party located in the United States, including U.S. 
businesses, must satisfy when submitting exclusion requests. In a 
proclamations issued on August 29, the President also authorized the 
Secretary to grant exclusions from the quantitative limitations on 
aluminum and steel applicable to countries exempted from the duties.
    Since March, Commerce has been diligently working to implement its 
exclusion process to ensure that duties and quantitative limitations 
imposed by the President protect our national security while minimizing 
undue impacts on downstream American industries.
    The Section 232 investigations required significant BIS staff to 
support all aspects of the 9-month investigations, which recommended 
that the President find that both steel and aluminum were being 
imported into the United States in such quantities and under such 
circumstances as to threaten to impair the national security of the 
United States, and to implement the product exclusion process created 
by the President in his proclamations imposing duties on the imports of 
these articles. In response to the exclusion process and surge in 
workload, the Commerce Department has worked to increase and organize 
staff. For instance, BIS has hired 15 contractors, with two more 
currently onboarding through the contracting process. Moreover, we have 
received considerable additional technical assistance and personnel 
support from our ITA colleagues. With this additional support we have 
been able to accomplish the following:

  --The number of requests pending in the initial review stage 
        decreased from 9,976 on June 25 to 1,218 on September 3.
  --On a weekly basis, we have been reviewing and posting about 1,700 
        requests and 900 objections.
  --To date, we have processed 10,380 steel applications (including 
        decisions and rejected improper submissions) and are currently 
        processing 25,045 active steel cases.
  --To date, we have processed 784 aluminum applications (including 
        decisions and rejected improper submissions) and are currently 
        processing 3,610 active aluminum cases.
  --To date, we have posted 4,051 steel and 222 aluminum decisions.

    We anticipate that the addition of authority to provide relief from 
the quantitative limitations will lead to more exclusion requests, 
further increasing the workload on BIS and ITA.
b. Defense Industrial Base Studies
    The Bureau has experienced an increase in requests for enhanced BIS 
industrial base surveys and analysis from multiple U.S. Government 
agencies including the Department of Defense, the National Aeronautics 
and Space Administration, and the intelligence community to help 
support informed national defense and technology policy decisions.
    Under Section 705 of the Defense Production Act of 1950 (DPA) and 
Executive Order 13603, the Department of Commerce is authorized to 
assess the health and competitiveness of the U.S. industrial base, 
encompassing the various technologies and supply chains necessary to 
ensure military readiness, emergency preparedness, and critical defense 
capabilities. The Office of Technology Evaluation (OTE) within BIS 
carries out these assessments using mandatory data collection 
authority, which enables industry and government agencies to share 
data, monitor tends, benchmark industry performance, and raise 
awareness of diminishing U.S. manufacturing and technological 
capabilities.
    BIS had requested an additional $4.171 million in the fiscal year 
2019 President's budget for Defense Industrial Base studies and 
additional Section 232 investigations. With these additional resources, 
BIS can begin to meet the growing interagency demand for detailed 
defense industrial base supply chain assessments, utilizing BIS's 
unique data collection authorities. This will enhance our ability to 
gather data and analyze the workforce, financial, production, and 
competitive challenges facing U.S. defense and high technology sector.
c. Section 232 on Uranium
    On July 18, 2018, in response to a petition request, the Secretary 
of Commerce initiated a new Section 232 investigation into the effects 
of the imports of uranium on the national security. On July 25, 2018, 
BIS published a Federal Register notice seeking public comment on this 
investigation. While we are still in the process of collecting public 
comments, the future workload and resource impacts of the uranium 
investigation and the potential for further Section 232 investigations 
demonstrate the importance of the President's budget request for 
additional resources in 2019.
    Thank you, again for this opportunity to testify. I look forward to 
answering your questions.

    Senator Moran. I thank all three of you.
    I am going to begin, at least my initial question, with Mr. 
Ashooh.
    Secretary Ross testified before this subcommittee in May. 
He stated at that time the Department of Commerce has received 
some 8,700-product exclusion requests in response to Section 
232 steel and aluminum tariffs.
    Recently, our subcommittee staff learned that as of August 
20, the Department of Commerce was in receipt of 31,000 
properly submitted exclusion requests; a more than threefold 
increase from May, and that the Department has only issued 
decisions for 2,871 or about 9 percent of those requests.
    It concerns me that approximately 90 percent of the 
submitted exclusion requests are still awaiting a decision, 
which has substantial impacts on many U.S. companies, including 
Kansas companies who are currently operating in limbo.
    First of all, I would ask you to confirm or adjust those 
numbers. Do we have the right numbers? And then elaborate on 
BIS's role in processing those exclusion requests. Then I will 
have a couple of other questions.
    Mr. Ashooh. Thank you, Mr. Chairman.
    There is no question there has been a significant number of 
exclusion requests. The number we have currently is 39,000 
almost 40,000. By the way, these numbers are all in my written 
testimony. So the subcommittee will have them.
    BIS has disposed of about 10,000 of those meaning that 
there are about 28,000 being considered right now.
    There is no question that any time spent for a company on a 
decision like this is too much time. So we have spent a great 
deal of time trying to accelerate that process and in fact, 
have taken a significant amount of time out of the process that 
needs to be considered here.
    But I would say, without the subcommittee's help, we would 
not be able to do the work we are doing.
    This requires human beings who know what they are doing and 
because of the reprogramming, we were able to bring on 15 
additional contractors, which may not sound like a lot for a 
Bureau our size. It was a very significant help. It helped us 
increase our processing time. And then, again, with the 
cooperation of other agencies, especially ITA, we were able to 
bring more people to the table here.
    We are still in the midst of benefitting from that. So we 
think these numbers are going to improve even further because 
the contractors were really only fully onboard in the past 6 
weeks or so.
    Senator Moran. On that topic, let me ask. You talked about 
taking some time out of the process and you also talked about 
additional resources being the reprogramming request that we 
approved plus moving personnel, I assume, around to address 
this issue.
    Where is the bottleneck? Is the process the right process 
and you just need more resources and people to implement it? Or 
the process is too cumbersome and needs to be altered?
    Mr. Ashooh. The process is a complicated one in that 
several reviews need to occur and there really is no substitute 
for that. We rely on ITA to do the industry analysis when 
weighing objections to exclusion requests.
    Just to back up a little bit. When a company requests an 
exclusion, if there is no objection, then the process is much 
quicker. But if there is an objection, we need to allow for 
that objection to be heard and reviewed, and we do rely on ITA 
to help us with that. BIS supplies the national security test 
as well; and again, no substitute for that.
    Where I think we can do better is we are reliant on a 
system that utilizes HTS codes to be as specific as possible. 
That is an area where we do not own that system. That is one we 
work with Customs and Border Protection (CBP). They own the HTS 
codes. And so, we are very reliant on a system that is not 
resident in Commerce. We work very well with CBP. They work 
very closely with us, but it is a very cumbersome system.
    We are looking at improvements to do that. Most likely, 
those improvements will involve some sort of IT solution, and 
that is underway, but it has not been implemented yet, but it 
is definitely one of the things in our job jar to work on.
    Senator Moran. Was the agency preparing for the change in 
the President or the administration's trade policy in advance 
of that change, or it has been playing catch up since then?
    Mr. Ashooh. Let me make sure I understand.
    Senator Moran. The question is, were you aware, or were you 
made aware that potential changes were coming in regard to 
tariffs, particularly in this case, Section 232 and therefore 
began ramping up your preparedness? Or has it been playing 
catch up since the determinations were made in regard to 232?
    Mr. Ashooh. Thank you, sir. I understand.
    The 232 process that BIS manages is a very methodical 
process. It begins with an investigation that has actually a 
fairly low bar to initiate an investigation. And so, the time 
spent on that investigation took the full 270 days that the 
statute allows.
    During that time, it really is more about understanding, in 
this case, the national security implications of imports on 
steel and aluminum. But this would apply in any case, that is 
where our attention and focus was on doing the proper study.
    Once recommendations are made to the President, that is 
when policy, and in this case tariffs to deal with capacity 
issues, were implemented. So I would not say that we were 
anticipating a remedy. All we were doing was coming up with 
recommendations that would then be up to the White House to 
determine.
    Senator Moran. I am going to fudge a bit on my time and I 
will try to be very generous to my colleagues.
    You mentioned the objection process and if there is an 
objection, it becomes a slower determination. I do not know 
that these numbers may have changed as the numbers I have 
quoted earlier have already.
    But the subcommittee is aware that as of August 20, the 
Department of Commerce had received some 15,000 industry 
objections, which apply to approximately 9,600 exclusion 
requests filed in response to Section 232 steel and aluminum 
tariffs.
    We understand that of those 9,600 exclusion requests, as of 
August 20, decisions had only been issued in 376 cases or 4 
percent. And of those 376 exclusion requests, for which a 
decision has been issued, the overwhelming majority, 356 or 
nearly 95 percent resulted in a denial of the exclusion.
    Are those accurate statistics and is there an explanation 
for what, seemingly to me, seems like a biased response, if 
there is an objection?
    Secondly, is there an opportunity the party, the 
corporation pursuing the exclusion to then respond to the 
objection or the denial of the exclusion?
    Mr. Ashooh. I am smiling because I was trying to keep up 
with your numbers and they differ slightly from mine which, I 
think, is timing. But I think the general trends are not wrong 
and certainly I will caucus with your staff after to make sure 
we get those numbers right.
    Of the posted decisions that we have, which are about 4,000 
posted, we do not like the processing time that it is taking. 
We allowed ourselves 90 days. We are within that, but that is 
still a long time and we understand that.
    As far as what is granted versus denied, one of the things 
we learned through a rule making that we have just concluded 
where we accepted public comments, and we listened very closely 
to those public comments, was that the existing exclusion and 
objection process that we have is not adequate, and that there 
needed to be more of a rebuttal process built in.
    Now, adding process means taking time, but we feel that the 
ability for companies to weigh-in in greater detail is very 
important. And so, we have just today issued a rule. It is on 
the BIS website, which is Bis.Doc.Gov that folks can review.
    What that does is implement a rebuttal process that will 
provide far more density and clarity to the objection process. 
All this is something that is quite transparent. It is all 
public when it is done and we are hoping that will alleviate 
some of the concern.
    Senator Moran. Does the rebuttal process take place after 
the objection is entered but before BIS makes a determination?
    Mr. Ashooh. It is before BIS makes a determination.
    Senator Moran. Thank you.
    Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    Assistant Secretary Ashooh, I am also going to begin with 
questions for you.
    At our last hearing with Ambassador Lighthizer, there was, 
I think it is fair to say, a great deal of frustration on this 
subcommittee with the administration's decision to determine 
that Canadian and European steel and aluminum represented 
threats to our national security.
    As you point out in your testimony, BIS is responsible for 
investigating the effects of imports on national security under 
Section 232.
    Do you believe that Canada represents a national security 
threat to the United States?
    Ms. Ashooh. No, Senator, and if I could elaborate a little 
bit.
    Senator Shaheen. Please.
    Mr. Ashooh. As you read from my testimony, BIS is a 
national security bureau. So outside of 232, the export control 
system is one we work with our allies very closely on. It would 
not be successful without strong partnerships with multilateral 
allies.
    In this particular case, because of the oversupply of these 
metals, it is a global issue. It is not one that you can simply 
aim at, say, China and deal with directly. It is a global 
supply issue.
    The remedies the administration chose are global in nature 
with the provision, and this goes back to earlier 
proclamations, to allow for special national security 
relationships with particular countries. Those are individual, 
bilateral conversations that the administration has.
    From our perspective at BIS, we work diligently on the 
product exclusion part, although country negotiations do not 
occur, obviously, within BIS, but what we do is try to make the 
process that we own work as efficiently as possible.
    Senator Shaheen. Can you describe the process that the 
administration engaged in, in making the determination that 
these were a national security threat?
    Mr. Ashooh. Well, again, I think the approach was when BIS 
made its recommendations in the wake of the investigations, we 
gave several options and you could legitimately go in several 
ways. So you could go a more narrow country by country approach 
or a broader approach from which you make exemptions.
    It was the latter that was chosen and in particular country 
cases, South Korea is a good example, a negotiated arrangement 
was done. Those negotiations are occurring. We all know Canada 
and the U.S. are having conversations now. My assumption is 
that would include the broad picture that includes steel and 
aluminum as well.
    Senator Shaheen. It is my understanding that the Department 
of Defense released a memorandum to Commerce, which stated, and 
I quote, ``DoD continues to be concerned about the negative 
impact on our key allies regarding the recommended options 
within the report and recommended targeted tariffs instead of a 
blanket approach.''
    Did you disregard this memo from DoD in making the 
determination or did you take that into consideration?
    Ms. Ashooh. Well, certainly, any 232 investigation, not 
only does the statute require close consultation with DoD, but 
it would be wrong and insensible for us not to do that.
    Having said that, the larger issue regarding country by 
country conversations is one that really occurs at the 
principal level, and I am sure those conversations occurred 
within the administration, and those go well beyond 232 
analysis.
    Senator Shaheen. Those are not shared with your agency?
    Mr. Ashooh. We are very focused on the methodical nature of 
the 232 process. We do the investigation. By the way, you 
consult with any agency that has equities. I mentioned uranium, 
close cooperation with Energy on that. So that is where our 
interaction occurs.
    But obviously, we are dealing with some fairly global 
issues here that go well beyond what BIS has implemented.
    Senator Shaheen. Well, I would point out that we had a 
hearing in the Foreign Relations Committee yesterday, and the 
subject of tariffs and trade came up. Former Ambassador Burns 
and Dr. Richard Haass both expressed their concern about the 
tariffs.
    I will just quote to you what Ambassador Burns said. He 
said, ``The E.U. is an instrument on the trade issue. It is our 
largest trading partner and investor. They are our competitors, 
the Europeans, as well as our partners. They would have been 
with us on a big trade action against China if we had not hit 
the Europeans first.''
    I guess the question that I have is as we look at some of 
these tariff decisions is whether they are actually made in the 
context of what is in the interest of the overall security and 
economic competitiveness of the United States? I would raise 
questions about whether those steel and aluminum tariffs 
against Canada and the E.U. really were done in that context. 
My time is over.
    Mr. Chairman, I look forward to further questions.
    Senator Moran. Senator Alexander.
    Senator Alexander. Thank you for being here.
    I would like to continue with aluminum. When Lighthizer was 
here, he said that he was not responsible for the decision to 
put tariffs on aluminum. He said you were. So let me ask you 
about it.
    What did your Department consider when you decided that 
buying aluminum from Canada was a national security threat? Let 
me give you an example.
    Arconic is a plant in Tennessee that buys aluminum to build 
auto parts. The majority of their imports are Canadian in 
origin and are produced at factories that are considered part 
of the U.S. defense industrial base, according to the United 
States statutes.
    Did you consider the fact when deciding that Canada was a 
national security threat that we have a statute that says that 
the factories that produce the aluminum are part of our 
national defense industrial base?
    Mr. Ashooh. Certainly, Senator we----
    Senator Alexander. Did you consider that? Yes or no?
    Mr. Ashooh. The Bureau considered many factors.
    Senator Alexander. Did you consider the fact that Canada is 
not only our ally and our neighbor, and sells us more than one-
third of our aluminum, but by statute is part of our defense 
industrial base, the plants that produce the aluminum that you 
have now put a tariff on?
    Mr. Ashooh. Yes, indeed, they are, sir. And our role at BIS 
was to do an investigation and make a recommendation to the 
President.
    Senator Alexander. Did you consider that?
    Mr. Ashooh. Yes, in the investigation.
    Senator Alexander. You did. So you thought it was still a 
good idea to consider Canada a threat even though we have a 
statute that says this aluminum is produced at plants that are 
part of our industrial base?
    Mr. Ashooh. Sir, I promise you, given the number of 
meetings we have had with Canada that point has been 
reiterated. They are an important----
    Senator Alexander. Well, what is your answer to that?
    Mr. Ashooh. Well, no. My answer, sir, is we made several 
options to the President for ways to deal with----
    Senator Alexander. Well, let me ask you about options. Did 
you consider a national strategic reserve of aluminum ingots in 
the same way we have oil reserves?
    Mr. Ashooh. That was not part of our task.
    Senator Alexander. Well, you said you considered options. 
That would have been an obvious one.
    Mr. Ashooh. One of our options, actually, would have 
excluded Canada from any----
    Senator Alexander. No, you said you included options. Do 
you know how many primary aluminum smelting plants we have in 
the United States?
    Mr. Ashooh. Sir, I think we have heard from all of them.
    Senator Alexander. How many are there?
    Mr. Ashooh. How many aluminum?
    Aide: Three companies.
    Mr. Ashooh. Yes, so we have three companies in the U.S.
    Senator Alexander. There are seven plants. Do you know how 
many employees work at them?
    Mr. Ashooh. Not off the top of my head but.
    Senator Alexander. Four thousand.
    Mr. Ashooh. Thank you.
    Senator Alexander. Yes, that is all the plants we have in 
the United States that make ingots.
    Now, what you have done is then place tariffs on everything 
that is used to make aluminum foil, pots and pans, and all this 
other stuff. But the only thing that might be of any kind of a 
national security interest would be the ingot that is made from 
bauxite, an ore.
    Why would you not consider a strategic reserve rather than 
put a tax on all the Americans who use aluminum products?
    Mr. Ashooh. Sir, our investigation found that we need a 
healthy, domestic industry in both steel and aluminum.
    Senator Alexander. I am talking about aluminum here and I 
am asking why you did not consider a strategic reserve when all 
you needed to do is make sure we have ingots?
    Mr. Ashooh. Because we do not feel that the----
    First of all, I cannot tell you that that was considered or 
not.
    Senator Alexander. Well, you are in charge of that area.
    Mr. Ashooh. I understand, sir, but the global----
    Senator Alexander. So you do not know what you are talking 
about. Is that what you are saying?
    Mr. Ashooh. No, the global overcapacity issue is what we 
were focused on, which would not be resolved by any kind of a 
reserve. It would be about strengthening the U.S. industry.
    Senator Alexander. So you want to protect. The U.S. 
industry is operating seven smelting plants. Alcoa operates 
three of those. They produce one-half of all the aluminum 
produced in the United States and they are against the tariff.
    Mr. Ashooh. Yes, sir.
    Senator Alexander. Did you take that into account?
    Mr. Ashooh. And we heard from them.
    Senator Alexander. Well, what is your answer to that? That 
makes absolutely no sense to say Canada is an enemy of the 
United States.
    The largest producer of aluminum in the United States is 
opposed to the tariff and still, you put a tax on Americans who 
buy aluminum foil in the name of national security, which is a 
real abuse of authority to begin with.
    Mr. Ashooh. A threat, they are not. They are our ally. They 
are important to our industry. What I am saying is the decision 
over whether a particular country negotiation would occur was 
allowed for in the proclamations on 232, but that would occur 
between countries, not between BIS or even the Department.
    Senator Alexander. You were asked to determine whether it 
was a national security threat. To begin with, that is 
farfetched and an abuse of authority.
    Second, you included in it countries that we are bound to 
defend if they are ever attacked. Plus the fact you are 
including plants that are part of our national security defense 
system that produce the aluminum that you are putting tariffs 
on.
    So you are putting a tax on Americans because we buy 
aluminum from our allies, and you did not even consider a 
strategic reserve.
    Do you know how long it would take to start up a smelting 
plant if we ever needed to do that?
    Mr. Ashooh. It is very difficult.
    Senator Alexander. How long would it take?
    Mr. Ashooh. Well, I do not know.
    Senator Alexander. I am sure that was part of your 
investigation.
    Mr. Ashooh. Well, it was and in some cases, there are 
plants that have been mothballed and started from scratch.
    Senator Alexander. There is one plant that is mothballed.
    How long would it take to reopen it?
    Mr. Ashooh. I am really not sure. Yes, at least months.
    Senator Alexander. At least months. Then you think a 10 
percent tariff would provide the incentive for Alcoa to reopen 
its curtailed plant?
    Mr. Ashooh. I am sorry?
    Aide: [Inaudible.]
    Mr. Ashooh. Yes, no. So we have----
    Senator Alexander. The answer is no because they have not 
reopened it.
    Mr. Ashooh. Well, but they are in the process of doing 
that.
    Senator Alexander. Are they?
    Mr. Ashooh. In fact, the target for what we are defining 
success as is 80 percent utilization and we do----
    Senator Alexander. Eighty percent?
    Mr. Ashooh. Yes.
    Senator Alexander. Utilization of what?
    Mr. Ashooh. Our ability to produce certain----
    Senator Alexander. Mr. Chairman, I am over my time, but I 
would like to come back with additional questions here, if 
there is time.
    Senator Moran. We will do that.
    Senator Reed.
    Senator Reed. Thank you, Mr. Chairman.
    I am going to associate myself with the remarks of Senator 
Shaheen and Senator Alexander. I caught the beginning and the 
end.
    But first, let me thank you all for your service. Mr. 
Ashooh, let me thank you particularly because you have been 
very responsive.
    Mr. Ashooh. I am sorry.
    Senator Reed. No, that is quite all right.
    Mr. Ashooh. I am sorry.
    Senator Reed. I just want to thank you, because you have 
been very responsive to questions that my staff has posed.
    Mr. Ashooh. Thank you.
    Senator Reed. I appreciate that, your skill.
    But let me follow up, because I feel the same way as 
Senator Alexander and Senator Shaheen.
    First, do you have a signed, legal opinion that you have 
the authority to invoke Section 232 against Canada? Do you have 
a signed, legal opinion? Has a lawyer given you an opinion 
saying that you have the authority in the Section 232 to invoke 
it against Canada?
    Mr. Ashooh. Our authorities from Section 232 come from a 
law that delegates that authority to the Secretary of Commerce. 
The Secretary of Commerce delegates----
    Senator Reed. That is fine.
    Mr. Ashooh [continuing]. The authority to conduct an 
investigation and make recommendations.
    Senator Reed. The premise of the investigation is that 
there is a national, at least a hypothetical national security 
threat.
    Mr. Ashooh. There may be.
    Senator Reed. There may be.
    Mr. Ashooh. Yes.
    Senator Reed. And that has to be validated, at least, by 
some factual basis. Otherwise, you could invoke this at the 
whim or the will of anyone.
    So I am asking, do you have an opinion? Are you following 
the law or are you making it up as you go?
    Mr. Ashooh. No, we are absolutely following the law. The 
law actually creates, as I said earlier, a low bar to initiate 
an investigation and that is primarily our job. We could 
initiate an investigation and not make any recommendations at 
all.
    Senator Reed. Now, let me jump to the conclusion. 
Everything you have said today indicates that you feel that 
Canada is not a threat to the national security of the United 
States. That, in fact, they are integral, as Senator Alexander 
points out, to our national defense.
    So there is only one conclusion that you will find that 
Section 232 does not apply to Canada.
    Is that correct?
    Mr. Ashooh. Section 232, under the investigation, we 
concluded that this was a global problem. There was no specific 
country recommendation other than an exclusion for Canada.
    Senator Reed. At the end of your report, you are going to 
have to conclude if Canada is subject to these tariffs.
    Correct?
    Mr. Ashooh. No, sir. We do not make conclusions. All we do 
is recommend what it would take to get to that 80 percent in 
utilization, and there are several ways to do it: specific 
countries or broad tariffs that are country agnostic.
    Senator Reed. And how is that related to national security?
    If you can suggest--and you are saying it, not us--that you 
could impose such rigid tariffs on Canada that they provide no 
steel to the United States?
    Mr. Ashooh. Again, the path to that 80 percent could be 
done many ways.
    BIS presented ways that that could be done, but ultimately 
that was a White House decision that differed from the 
recommendations that BIS made.
    Senator Reed. Yes, I think you are absolutely trying to do 
your best. I do not think you have the legal standing to invoke 
a national security tariff on Canada. You might have other 
reasons, but not national security.
    Here is the position. Here is the reality. Cut to the 
chase.
    When I go to Afghanistan, I have been there about 16 times, 
should I go up to one of those Canadian soldiers and say, ``Why 
are you not helping us because you are really impairing our 
national security?''
    That is how ludicrous your position is. Not yours 
personally, but the administration. You have tried to defend it 
as best you can, but I think it is indefensible.
    The other irony, I think, is that the whole point would 
seem to be to reduce the trade deficit with this effort.
    Correct?
    Mr. Ashooh. No, sir. This is not really a trade action, 
even though, certainly, tariffs and quotas are.
    Senator Reed. So it is for our national security. So we are 
going to be better off if we prevent companies in Canada that 
are providing critical parts to us and that are buying our 
equipment--excuse me, are also providing long range protection 
because of their radar sites for our national security from 
Russia or anyplace else--it is better that we invoke this 
investigation against Canada?
    Mr. Ashooh. Well certainly, sir, in every other thing that 
I do at the Bureau, we are working arm in arm with Canada. The 
proclamations that emerged from our investigation allowed for 
special national security relationships and those conversations 
that happen between countries.
    Senator Reed. My final point. We do have a special national 
security relationship with Canada.
    Mr. Ashooh. Yes, sir.
    Senator Reed. Therefore, how can you use a Section 232 
sanction against Canada, which is based on national security, 
in fact, something adverse for our national security? It makes 
no sense.
    Mr. Ashooh. What I can tell you is the conversations 
between countries is occurring at the White House level and 
that is still going on.
    Senator Reed. So your position is the President can do what 
he wants to do regardless of the law and regardless of the 
facts.
    Mr. Ashooh. Well, my position is we needed to do the best 
investigation we could on how to improve steel and aluminum 
production in the United States and that is what we did.
    Senator Reed. Thank you.
    Senator Moran. Senator Van Hollen.
    Senator Van Hollen. Thank you, Mr. Chairman.
    Welcome to all these witnesses. I understand that both 
Senator Shaheen as well as Senator Reed raised the issues of 
national security concerns with respect to using 232 against 
our allies. So I am not going to go deeply into that, but I 
believe Senator Shaheen referenced the Secretary of Defense and 
DoD memorandum that was sent.
    I would like to include that, Mr. Chairman, in the record.
    [The information follows:]
    
    
    
    
    Senator Van Hollen. I would just point out that the Defense 
Department in this memo says, ``DOD continues to be concerned 
about the negative impact on our key allies regarding the 
recommended options within the report,'' referring to 232, and 
I share those concerns.
    A question about NAFTA. Look, NAFTA has been around for a 
long time. I believe it needs to be modernized. I think some of 
the provisions that are reportedly been negotiated regarding 
autos is good news. But here is my question to you.
    What is the impact of us passing the proposal, which we 
have not seen yet, but the President has talked about, through 
the Congress approving it if Canada is not included? What is 
the impact on U.S. trade with Canada?
    Mr. Ashooh. Sir, you are looking at me, but the Bureau of 
Industry and Security is not a trade bureau. So I will defer to 
my counterpart.
    Senator Van Hollen. Okay. All right.
    Ms. Nikakhtar. Thank you, Senator. Could you clarify a 
little bit?
    Senator Van Hollen. My question is very straightforward. 
What happens if we pass this renegotiated deal with Mexico, and 
Canada is not included? What happens to U.S. trade with Canada?
    Ms. Nikakhtar. Well, I think that the U.S. International 
Trade Commission is preparing their report on looking at the 
impact of that. But my understanding, in terms of what I know, 
is that as of yesterday, the U.S. team was meeting with 
Minister Freeland on the NAFTA. . . .
    Senator Van Hollen. My question is this, please. The 
President has said if Canada does not agree to whatever changes 
that we want, we should go forward without Canada. And so I 
have a simple question. I would hope the administration has 
studied the impact on U.S.-Canadian trade if that happens.
    Have you done that?
    Ms. Nikakhtar. Well, I think that that is something that 
the United States International Trade Commission is doing.
    Senator Van Hollen. Okay. Just going down the table, 
passing the buck, but hopefully I am in the right place now.
    Mr. Johanson. Senator Van Hollen, the U.S. Trade 
Representative last Friday sent a letter to the U.S. 
International Trade Commission requesting that the Commission, 
per your Trade Priority Act, conduct an investigation on the 
probable economic effects of the agreement with Mexico and with 
Canada, if it is willing to join the agreement.
    Senator Van Hollen. With all due respect, you are saying if 
Canada agrees to join the agreement, Canada has not yet. The 
President's position is that the Congress should just go 
forward and pass this deal with Mexico without Canada.
    What I am hearing from you and the others is the 
administration has not conducted any analysis about what the 
impact on U.S.-Canada trade would be under those circumstances.
    Am I right?
    Mr. Johanson. Senator Van Hollen, our report will look at 
the agreement as it is presented to us. The U.S. ITC is not, it 
is an independent agency. It is not a trade policy agency and 
so we will simply look at the text of the agreement as given to 
us. We will evaluate that and the impact of the agreement on 
the U.S. economy.
    Senator Van Hollen. Mr. Chair, we have three witnesses here 
who deal with trade, and as far as I cab tell, there has been 
no analysis about what would happen to U.S.-Canadian trade if 
they are not included. At the same time, the President of the 
United States has said that Congress should just take it or 
leave it.
    Have we done an analysis of what would happen to the U.S. 
economy if we just pulled out of NAFTA entirely? And then, 
again, I believe there are changes that need to be made. But 
have we done an analysis of what would happen?
    Because last year, October last year the headline of 
``World Trade Online,'' ``Lighthizer says USTR has not analyzed 
impact of NAFTA withdrawal on the United States.''
    Have we done an economic impact of that since that time?
    Mr. Johanson. The ITC has not been requested to write such 
a report.
    Senator Van Hollen. Can I ask you this? The President 
tweeted the other day. He had a tweet, ``No political necessity 
to keep Canada. The new NAFTA deal. If we do not make a fair 
deal with the U.S. after decades of abuse, Canada will be out. 
Congress should not interfere with these negotiations or I will 
simply terminate NAFTA entirely and we will be far better 
off.'' That is the President's tweet.
    Do you know any basis for the President's comments?
    Mr. Johanson. I cannot comment on that. The U.S. ITC, once 
again, is not a trade policy agency. So I do not have a 
comment.
    Senator Van Hollen. Yes. I just find it astounding that the 
President of the United States has asked Congress to just pass 
this proposal that we have not even seen through here without 
Canada, if that is required, without having any clue as to what 
impact that will be on U.S.-Canada trade. And then says if we 
do not do that, he is going to terminate NAFTA and we will be 
far better off without any analysis. The administration 
supports that conclusion.
    Do any of the three of you know of any analysis within the 
U.S. Government that supports the conclusion that we will be 
far better off if we just get out of NAFTA entirely?
    Mr. Ashooh. Again, sir, that is not the purview of BIS.
    Senator Van Hollen. Okay.
    Mr. Ashooh. It would not be a good answer from me.
    Ms. Nikakhtar. I will try to be helpful here.
    We have not been asked in the International Trade 
Administration to do that yet. It may be coming. I do not want 
to presume to say that it was not going to happen.
    But I want to also underscore that USTR has been leading 
the NAFTA negotiations and the specific provisions of them. So 
perhaps they have done it. If they have, they have not shared 
that with us.
    Senator Van Hollen. I think you kind of answered the 
question. As I said, Lighthizer said last fall they have not 
done one and there is just zero evidence that they have. I 
would think that you would all know about it given your work on 
trade.
    Thank you, Mr. Chairman.
    Senator Moran. Thank you, Senator.
    This subcommittee has had--the timing may not have been as 
good as we have had with the witnesses today with the more 
recent developments in trade--but we have had Secretary Ross 
and then Ambassador Lighthizer in front of our subcommittee.
    Let me follow up on NAFTA and first of all indicate that 
Mexico and Canada are Kansas's two biggest trading partners. 
Canada was our number one purchaser of products from our State 
in 2017. This is an important issue for me.
    I have made clear all along that I want a NAFTA agreement 
and you only have a NAFTA agreement if you have three parties; 
the three parties that are currently engaged in NAFTA. But let 
me ask a timing question.
    Let us assume that my desires occur and that Canada is a 
participant in NAFTA. This is to you, Mr. Johanson. You 
mentioned that you have been requested to begin the analysis of 
a NAFTA agreement.
    Mr. Johanson. That is correct.
    Senator Moran. If leaders of the three countries sign a 
deal in November, the U.S. International Trade Commission still 
must complete that economic analysis before Congress can 
consider that agreement.
    Is that true?
    Mr. Johanson. That is per the Trade Priority Act, the TPA.
    Senator Moran. That requires you to act within 105 days 
after the agreement is signed.
    Mr. Johanson. That is correct.
    Senator Moran. And then it comes to Congress for our 
consideration.
    How long will it take you to complete that economic 
analysis?
    Mr. Johanson. That is hard to say. It is a complex, I 
assume, it is a complex agreement and largely touches upon 
issues of automobiles and automobile rules of origin, which are 
particularly complex.
    We will complete the report as soon as we can, but we, of 
course, have to make sure we cover all the bases and that we 
produce a report which is beneficial.
    Senator Moran. Let me ask, are there things that you can or 
are doing today that will be useful in that process and that 
are completed before the agreement is actually signed?
    Mr. Johanson. We are preparing the report right now. We 
cannot comment extensively. We do not have the text yet.
    Senator Moran. So is your point that you really cannot 
analyze an agreement until you have the text of the agreement?
    Mr. Johanson. Yes, it is. That is our point. Yes.
    Senator Moran. That makes sense to me.
    [Laughter.]
    Senator Moran. Though you were hesitant, which caused me to 
wonder about my sense, but that does make sense to me. I was 
trying to determine because I think 105 days, as I understand 
the scenario that needs to occur for a NAFTA agreement to be 
approved based upon Congress's actions here and the changes in 
administration in Mexico, et cetera, that I was trying to 
figure out if there was a way to frontload your effort so that 
you are well prepared if and when that agreement is signed.
    But I think your answer is a commonsense answer, which is 
you have to have an agreement. You have to know the details 
before analysis can be concluded or completed. Does that make 
sense?
    Mr. Johanson. Yes.
    Senator Moran. Before analysis can even begin.
    Mr. Johanson. Yes.
    Senator Moran. I want to try to spread the burden around, 
Mr. Ashooh, but I have a follow up question for you.
    Mr. Ashooh. I come here so rarely.
    Senator Moran. This one, I think, is pretty 
straightforward. We were talking about the backlog and the 
number of exclusion requests that are pending.
    How long do you think it will take to get those completed 
so that what is in the queue will have received an answer?
    Mr. Ashooh. There is not a single answer to that because 
there are a couple ways to go. Again, as I mentioned, whether 
there is an objection or not has everything to do with how long 
this is going to take. But we do have some numbers we can put 
against that for you, and I would be happy to supply those 
after this hearing.
    Senator Moran. I look forward to those answers.

    [The information follows:]

                        As of September 10, 2018

_______________________________________________________________________

Exclusion requests submitted--40,714 total (36,243 steel; 4,471 
    aluminum)
Rejected submissions (improper submissions)--6,989 total (6,420 steel; 
    569 aluminum)
Objections submitted--20,649 total (18,823 steel; 1,826 aluminum)
Rejected objections (improper submission)--2,508 total (1,367 steel; 
    1,141 aluminum)
Decisions posted--4,314 total (4,091 steel; 223 aluminum)
Decisions granted--2,414 total (2,302 steel; 112 aluminum)
Decisions denied--1,900 total (1,789 steel; 111 aluminum)
_______________________________________________________________________

    Senator Moran. Again, Mr. Ashooh, earlier this year, this 
subcommittee communicated to BIS certain requirements and 
expectations to improve the transparency in the 232 process.
    For example, we asked that BIS make several updates to its 
webpages for Section 232 of steel and aluminum exclusion and 
rejection process, and to begin providing this subcommittee 
with monthly reports on certain components of the Section 232 
process.
    I wondered if you were aware of that request. And if you 
are not, would you become aware and then let us know when you 
can meet those requests and have them fully implemented?
    Mr. Ashooh. I am aware.
    Senator Moran. So what is the status?
    Mr. Ashooh. Well, the status is I was grateful to see that 
I think we have a few more days to respond to you.
    Where we are with that is we want to be as responsive as we 
can to your letter. As you might expect, we are getting similar 
requests and our goal--again, not to get too caught up in 
reporting the points--is to try to satisfy these requests in a 
way that is responsive to all the parties asking.
    And so, they are very reasonable requests in your letter, 
and I do not recall them all, but the ones you just mentioned 
certainly, I think, we will be able to comply with and we will 
work very hard to get you a response.
    Senator Moran. Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    I am going to follow up on the issue of transparency in the 
exclusion or the exemption process because Assistant Secretary 
Ashooh, I was troubled to see a report from the McClatchy news 
organization that OMB Director Mulvaney has been lobbying on 
behalf of one of his former constituents for an exemption from 
the steel tariffs. And as the discussion has shown, there is 
concern about transparency in the process. You acknowledged 
that.
    Has BIS received any communication from the White House or 
from Mr. Mulvaney regarding a specific exclusion application?
    Mr. Ashooh. No, not to my knowledge. I will say, as the 
Chairman pointed out, this is a pretty complicated process.
    Senator Shaheen. Right.
    Mr. Ashooh. And we really are relying on the experts to do 
it and that is what we are doing. There is very, very little in 
the way of external.
    Oftentimes, people will come in, and try to meet with folks 
who have a concern, and we will meet with those affected 
parties. But beyond that, we keep the external communications 
and influences on this to an extreme minimum.
    Senator Shaheen. Do I understand you to say definitively 
that no one in your agency has heard from anyone in the White 
House or from Mr. Mulvaney with respect to any particular 
applications?
    Mr. Ashooh. It is a big agency and I do not want to say 
nobody has heard from anybody.
    Senator Shaheen. Can I ask you if you would check with your 
agency and report back to this subcommittee?
    Mr. Ashooh. I will certainly check, but I would also 
reassure you that BIS has the responsibility to implement this, 
and I am running BIS. So I have not and I think that is the 
point I want to make.
    Senator Shaheen. Thank you. I appreciate that.
    The other thing that has been pointed out is that there is 
really a disproportionate burden placed on small businesses 
because this is a very arcane process.
    Has there been any special outreach to small businesses or 
any kind of training to help them navigate this process when 
they have an issue?
    Mr. Ashooh. Yes, Senator, although I think we need to do 
more. Within BIS, we pride ourselves on that kind of outreach 
in everything else that we do in the export control world, et 
cetera. We have an office dedicated to outreach. As with 
everything else we need to kind of, on the exclusion process, 
get up to altitude.
    This is a different community, so we are trying to adjust 
to that community. This is where partnerships have been very 
helpful to us, associations who are force multipliers on this. 
But I do not want to mislead you.
    We need to do more in that.
    Senator Shaheen. I am glad to hear you say that and then I 
would urge you to do everything you can because small 
businesses are so critical to increasing trade in this country.
    Along those lines, I want to ask Assistant Secretary 
Nikakhtar, I understand that one of your major 
responsibilities, and you talk about this in your testimony, is 
to help small and medium sized businesses get access to 
international markets.
    In New Hampshire, we have really benefitted from the 
services that have been provided from the Department of 
Commerce because we have seen a 46 percent increase in exports 
in the past 5 years, in large part due to investments that we 
have made at the State and Federal level into trade.
    I was struck in your testimony when you talked about the 
number of staff that you have redeployed to help Mr. Ashooh's 
agency with the exclusion process. That had to be a challenge 
in terms of the support that you are trying to provide for 
small and medium sized businesses.
    I know you say in your testimony that you have not 
jeopardized the ability to vigorously enforce antidumping and 
countervailing duty and conduct other critical programs. But it 
defies credulity here to think that you could have had 65 staff 
and contractors working on the exclusion process and still been 
able to do all of the work that the agency needs to do in other 
areas.
    It seems to me in a time when the President is talking 
about increasing exports and trade to address our trade deficit 
that we have actually been reducing the resources that we need 
in order to do that.
    Can you talk about what your agency needs in order to 
continue to support small and medium sized businesses get 
access to international markets?
    Ms. Nikakhtar. I would love to do that and thank you for 
the very important question.
    First, I want to start out with saying that we have all 
been working incredibly hard to manage all these competing 
priorities. I will tell you that a lot of us have put in 
extraordinarily long hours. Anytime a company wants to meet 
with anybody in my office to talk about how their company, how 
their industries are being impacted, I do not turn away a 
meeting. My secretary and my entire staff know to not turn away 
a meeting because everything we do has incredible importance to 
companies.
    I will also tell you from a personal experience that I used 
to represent U.S. industries before I joined the administration 
and I personally know, and I represented companies in some of 
the most economically depressed regions in the United States, 
and for me, this is personal. And for me, one lost job is one 
lost job too many. So I take this very seriously and my staff 
takes it very seriously.
    So we have actually stretched ourselves. I think all of us 
have been in the position where you just have been dealing with 
an onslaught of work that you just have to stretch yourself, 
but you make it happen. But is it sustainable in the long run? 
Absolutely not.
    So to the issue of have we been addressing small and medium 
sized companies' concerns? Absolutely.
    Now, sometimes the reality is that you sometimes have to 
shift resources, but what we have been doing very carefully, 
what we have been very careful to do is where can we shift 
resources from things that are not pressing right now. That is 
where we shift resources from.
    We maintain priorities. We maintain interactions, and 
interfacing, and responsiveness to companies that need us right 
now and the ones who do not need us right now, we are shifting 
those resources to help with the 232 exclusion process and 
other parts of the administration's priorities.
    But, as I said, this is completely not sustainable. So we 
do anticipate needing an increase in resources and human 
capital just to get all of this done. We are happy to work with 
you more closely on getting something implemented that 
alleviates some of the strain that has been put on us and 
enables us to do the things that we have put on hold that are 
not so pressing. Those are going to be important in the long 
run, so we can address those too.
    Senator Shaheen. Well, thank you. I think this subcommittee 
agrees with you, which is why we have increased resources for 
your agencies despite the budget request from the 
administration, which would have reduced them.
    Ms. Nikakhtar. We appreciate that.
    Senator Shaheen. Thank you, Mr. Chairman.
    Senator Moran. Senator Murkowski.
    Senator Murkowski. Mr. Chairman, thank you.
    Appreciate you all being here. Ms. Nikakhtar, I want to 
thank you for being here before the subcommittee. We are all 
very interested in what is going on with trade in Alaska. Our 
trade, number one, is seafood. So I want to shift the 
conversation a little bit to seafood.
    The International Trade Administration is tasked with 
increasing trade opportunities abroad and promoting the global 
trade of American products, and this includes our seafood 
products.
    Until recently, we have had a pretty good story with our 
trade relationship between Alaska and China. Of our salmon 
exports, 40 percent of those go to China; 54 percent of our cod 
exports go to China. In 2017, we saw roughly one-third of 
Alaska's seafood exports end up in China. This is about $1 
billion to us; so this is considerable.
    We just recently hosted Chinese seafood buyers who want to 
learn more about what we are producing sustainably in our 
Alaskan waters.
    Now, we have steep Chinese tariffs on these exports, a 
pretty significant trade barrier and this is on top of a loss 
of market share due to the Russian embargo on American seafood, 
which has been around since 2014. So we are dealing with that 
and we have challenging import quotas that currently exist in 
the E.U., and Japan, and South Korea.
    My question to you this morning is what specific actions 
are the International Trade Commission taking to reduce the 
trade barriers that are impeding the trade of U.S. seafood, 
both in China and elsewhere, but really because such a 
significant share of the Alaskan market is with China?
    Can you speak to what we are going to be doing to reduce 
those trade barriers? And inform me as to whether or not ITA is 
engaging with the National Marine Fisheries Service in this 
discussion about international seafood trade and the impacts?
    Ms. Nikakhtar. I appreciate that question. I will start 
with saying that I used to represent the aquaculture industry 
for many years, and the seafood trade is near and dear to my 
heart.
    Senator Murkowski. Good, so you get it.
    Ms. Nikakhtar. I will also say that my husband is an 
obsessed fisherman, so the seafood industry, in large part, is 
my history. It is almost, in a way, like family and I take it 
personally to want to do more to help that industry.
    I have had some discussions with U.S. seafood producers 
about their challenges and to promoting their exports. I have 
opened the door for continued discussions.
    Senator Murkowski. If we have individuals within the 
seafood industry that need to raise concerns, you are 
suggesting you are one that they should come and visit with?
    Ms. Nikakhtar. Absolutely, absolutely. And if once we 
understand the specific nature of their challenges, some of the 
data. We also work in partnership with the National Oceanic and 
Atmospheric Administration (NOAA), for example, and 
specifically with respect to trade issues. They leverage a lot 
of our expertise in trade.
    And so, if there are areas where we can coordinate within 
agencies at Commerce or outside, we are happy to do that.
    When you walk into the doors of Commerce, I hate to sound 
corny, but it says, there is a billboard that says, ``Help 
American Economies Grow.'' And so what I cannot do is if 
industries do not come to my office or come to Commerce, and 
explain exactly what has happened to them so we understand with 
specificity where those challenges are, we cannot help them.
    So we absolutely invite, what I was saying earlier, we 
absolutely invite industries and companies to come talk with us 
about issues. And what I said earlier was I have never turned 
an industry or a company away.
    Senator Murkowski. Well, I have some folks who are going to 
be coming to you next week. We are ready to make introductions.
    Ms. Nikakhtar. My doors are always open. I always tell my 
staff, I say, ``Do not worry if I need to stay late to 
accommodate more meetings.'' That is how I understand what is 
happening.
    But I will also say that we have foreign commercial service 
officers who have market intelligence about how trade barriers 
are preventing U.S. exports. So we work with those mechanisms 
where we can.
    But if we can actually hear from stakeholders and industry, 
and they can describe their specific challenges to us, that 
gives me more ammunition to help them out.
    Senator Murkowski. Let me ask, because when we had 
Ambassador Lighthizer before this subcommittee in July, when we 
were talking about some of these issues, he said that the 
resolution to our dispute with China is going to take time. He 
said China is a longer term problem, for instance, than NAFTA. 
The implication is that we just have to kind of wait it out.
    But the seafood producers in my State, they are watching 
this trade dispute over technology transfer, cyber threat, and 
they are seeing the seafood industry losing market access for 
products like, again, salmon and cod, which is not an 
acceptable answer to them to just kind of wait it out.
    And so they have asked, what you will hear from them is: 
what is the strategy here? Because they are not seeing that 
this is a winning strategy with China to just wait things out. 
They are asking how long they are going to have to endure the 
tariffs on their seafood exports before the administration acts 
to resolve, rather than escalate, these trade disputes. So that 
is what you are going to be hearing from them.
    I am over my time, but if you can share with us, what that 
strategy is, I think, here in open testimony that would be 
greatly appreciated.
    Ms. Nikakhtar. If I may just speak to that. With the 
administration, the U.S. is working on the China trade 
strategy, but we have always had the open channel to present 
good ideas to them, which is why the Secretary has always 
encouraged that. And so, I am always happy to hear from 
industry and develop a strategy that works for them and then 
present it to the administration.
    Senator Murkowski. Well, know that they are very anxious. 
That time is clearly of the essence here. I am going to take 
you up on your offer.
    Ms. Nikakhtar. Please do.
    Senator Murkowski. And see that these folks have an 
opportunity to visit with you. Perhaps we might want to have 
further sit downs as well because this is too important and 
extraordinarily significant to the economy in my State.
    Mr. Chairman, thank you.
    Senator Moran. Thank you, Senator.
    Senator Alexander.
    Senator Alexander. Thank you, Mr. Chair.
    Mr. Ashooh--and thanks to all of you for your service to 
our country at difficult jobs--are you the one doing the study, 
the investigation that the President asked for in preparation 
for considering tariffs on autos and auto parts being imported 
into the United States?
    Mr. Ashooh. We are a contributor to that study, but it is 
actually being led by ITA.
    Senator Alexander. By whom?
    Mr. Ashooh. I will defer to Ms. Nikakhtar.
    Senator Alexander. You are doing it?
    Ms. Nikakhtar. The Secretary has given our office 
delegation of authority.
    Senator Alexander. So you are doing it.
    Ms. Nikakhtar. Yes.
    Senator Alexander. What is the status of it?
    Ms. Nikakhtar. So the investigation is ongoing.
    Senator Alexander. And when will it be finished?
    Ms. Nikakhtar. So we are working to expeditiously complete 
this investigation. However, the final survey responses from 
the industry are coming in this week. And so, we are analyzing 
those.
    Senator Alexander. When do you guess it will be finished?
    Ms. Nikakhtar. The industry, and every time I talk to 
industries, they ask the same question.
    Senator Alexander. Well, a year or a month?
    Ms. Nikakhtar. Expeditiously. We are looking forward. . . .
    Senator Alexander. But did the President not say in his 
meeting with the European Union president that he was not going 
to impose those tariffs?
    Ms. Nikakhtar. This is the tough spot. The President's 
discussions with his counterparts are not influencing the fact 
that we need to conduct an investigation.
    Senator Alexander. But the President asked for this. The 
President asked you to do this, correct?
    Ms. Nikakhtar. The President has asked us to conduct the 
investigation.
    Senator Alexander. But did he not subsequently say that he 
was not going to impose those tariffs on autos?
    Ms. Nikakhtar. And I appreciate that question and what I 
would like to make clear----
    Senator Alexander. Well, he did say that.
    Ms. Nikakhtar [continuing]. Is that the investigation is 
separate from the imposition of tariffs. We are just looking at 
what is happening to the industry.
    Senator Alexander. But he asked for the investigation. 
Right?
    Ms. Nikakhtar. He asked for the investigation.
    Senator Alexander. And you did not stop your investigation 
when he said he had decided not to do that.
    Ms. Nikakhtar. The investigation is ongoing.
    Senator Alexander. So if he changed his mind, your 
investigation is going to be there ready for him.
    Ms. Nikakhtar. The investigation, what I think is 
incredibly worthwhile about the investigation----
    Senator Alexander. I do not want to hear about that. I want 
to know whether it is ongoing. You did not stop your 
investigation because the President said he was not going to 
impose the tariffs. Correct?
    Ms. Nikakhtar. We did not stop the investigation----
    Senator Alexander. Okay, thank you.
    Ms. Nikakhtar [continuing]. Because we are studying the 
industry.
    Senator Alexander. Mr. Ashooh, when I used to work in the 
Nixon administration a long time ago, and when I was a very 
young lawyer, I went back to Nashville and the first thing that 
happened was they imposed the wage and price controls.
    I had only been in law practice for about 6 months and I 
was suddenly the most popular lawyer in town. And it was not 
because I was the best lawyer in Nashville. It was because 
somebody thought I knew somebody in the Nixon administration, 
and they did not know what to do about this new Soviet-style 
bureaucracy that was determining wage and price controls, which 
reminds me of the process that you have.
    What I found back in the 1970's was, it was confusing. It 
was arbitrary. It led to politics, perhaps even the potential 
for fraud. People were hiring lawyers. They did not know what 
to do.
    Now, I have heard you say you have had about 40,000 
requests for exemptions from the tariffs. You have made 
decisions on 10,000. It will be months before you can make 
others.
    I am hearing from Tennessee companies that say, ``We buy 
imported steel, specialty steel, and we are going to have to 
lay people off if the price goes up.''
    I hear from our big tire companies that they buy steel cord 
to make their tires stronger, none of which is made in the 
United States.
    I hear from Bush Brothers who can one-third of the beans, 
they buy tin-plated steel, and the U.S. does not make enough of 
it.
    Should a Member of Congress call you about that? Is that 
appropriate or is that not appropriate?
    Mr. Ashooh. Well, they certainly have.
    Senator Alexander. They have?
    Mr. Ashooh. Well, most are in the form of letters.
    Senator Alexander. So you think it is appropriate for a 
Member of Congress to become involved in these decisions?
    Mr. Ashooh. Well, they are not involved.
    Senator Alexander. All would be involved, would it not?
    Mr. Ashooh. They express a concern over a particular case.
    Senator Alexander. So that does not affect your decision if 
an important Member of Congress calls you up and says, ``I am 
really worried about my company in Tennessee and I am a good 
supporter of the President.''
    Would that help?
    Mr. Ashooh. It is only helpful to the extent they share 
information of a factual nature that we have not heard before, 
which is rare because the companies----
    Senator Alexander. I have known a lot of people who have 
gotten into trouble in Washington for calling agencies that are 
making independent decisions just to say, ``Well, I am not 
calling to affect your decision. I am just calling to ask when 
you might make a decision. And as you know, I am really 
interested in this.''
    I do not call your agency about these decisions because I 
do not think they ought to be political decisions. In fact, I 
do not think you ought to be making them at all, which is not 
your opportunity to decide.
    Mr. Ashooh. Understood. There is no political influence on 
the decision.
    Senator Alexander. But you are saying that Members of 
Congress are calling you.
    Mr. Ashooh. We get lots of letters. We definitely get lots.
    Senator Alexander. Do you think that is appropriate?
    Mr. Ashooh. It is not for me to tell them not to write. 
Generally speaking, we take information from many, many 
sources.
    Senator Alexander. They write, but do they also call?
    Mr. Ashooh. No one has spoken to me. No one has called me.
    Senator Alexander. So no one has called you directly.
    Mr. Ashooh. Certainly not, no.
    Senator Alexander. Thank you, Mr. Chairman.
    Senator Moran. I am going to see if we can wrap up, but I 
will not cut anyone off. We will make certain that everybody 
has a chance to ask a final set of questions if they find that 
necessary.
    Ms. Nikakhtar, let me go back to Senator Shaheen's line of 
questioning.
    Would you reiterate for me how many staff from ITA has been 
assigned to BIS to help with 232 exclusions?
    Ms. Nikakhtar. Yes, and this year 60 staff, 65 staff from 
ITA were deployed to E&C to assist with the exclusion process 
and then there are 41 contractors in addition, but 65 internal 
staff.
    Senator Moran. And from which units were those staff 
deployed?
    Ms. Nikakhtar. From Global Markets and from Enforcement and 
Compliance, but the majority from Global Markets.
    Senator Moran. And so, what does the diminution of those 
employees do? You talked about increasing your efforts. I 
appreciate what you had to say, work harder.
    Ms. Nikakhtar. Yes.
    Senator Moran. But what is not being done? You said we 
prioritize to things that are important today. Global Markets, 
what does that mean to me and Kansans who want to have access 
to global markets, if you are reducing the number of people who 
are fully engaged in their jobs there?
    Ms. Nikakhtar. Yes, thanks for that.
    So for Global Markets, the vast majority of those people, 
the 45 from Global Markets, they have been deployed part-time, 
and so what they have basically done is wear two hats. They 
have helped with the exclusion process where they can, but they 
have really tried to manage their own work, and where they are 
needed to, they have asked colleagues to help cover.
    And so, I really do not want to leave the impression that 
anything is not being attended to. It is that we are stretching 
and we are having staff cover for each other.
    For example, if you are in Global Markets and you are 
studying a particular market, and there is no immediate crisis 
in terms of dealing with that industry at that moment, then you 
do need to have your colleague cover in that specific sector or 
in that specific area. You can actually help with the exclusion 
process and sort of leave your normal day job for X number of 
hours, leave it be, attend to something else, and then come 
back to it.
    If there is something pressing, we do not detail those 
people. This is just something that if you can put on the 
backburner and, in everybody's job we have instances where 
something--everything is important--but there is something that 
can be put on the backburner, and I will address it in a few 
weeks.
    And so where they cannot, we ask colleagues to cover or we 
will not deploy those people at all.
    Senator Moran. Let me ask you this. So what you are 
attempting to do is to assure me that no work is not being done 
that needs to be done. I am particularly interested in our 
efforts to find opportunities for businesses across the country 
to perform in world markets and global markets.
    I will let you have a consultation.
    [Discussion.]
    Ms. Nikakhtar. My colleague just raised a good point too. 
That as we have brought in contractors, we have dropped down 
the number of deployment.
    But to your question, we are mindful of the fact that we 
need to also address industry's issues, and so it is really 
hard to, difficult to sort of communicate. The items that are 
pressing that need to be attended to, we are not ignoring those 
by any means. It's just the staff are stretched. They are 
trying to do a lot more in a single day. They are wearing 
multiple hats. They are pushing themselves a little bit more.
    If there are certain things, for example, analysis of 
market barriers in a certain industry that you can wait a few 
weeks on getting back to that, you do because you have to deal 
with this other priority.
    Senator Moran. Will you take this into account in your, and 
I guess BIS, in ultimately what the administration requests in 
your budget in your out year planning? Would you expect to be 
requesting additional resources?
    Ms. Nikakhtar. In terms of what we see in the horizon for 
fiscal year 2019, I think we have requested additional 
resources and additional resources would help immensely, 
because then we can have folks do what they need to do during 
the day to further help U.S. industries and have extra 
personnel.
    Senator Moran. Can you and Mr. Ashooh, if we impose Section 
232 sanctions on automobile and uranium imports, this 
circumstance, the challenges that you already are facing in 
resources are additionally exacerbated? Is that true?
    Ms. Nikakhtar. We are very mindful of the fact that any 
232, if it goes into some remedy that requires exclusion is 
going to put an enormous strain on Department resources.
    In terms of the ongoing, I cannot speak to uranium, but I 
can certainly speak to autos. We are not there yet.
    As soon as it is on the horizon--and it is my 
responsibility which I take very seriously--as soon as we see 
something happening where we would need additional resources, 
of course, we are going to work through the proper channels. 
Because anything that is detrimental that happens to industry 
that is on my watch, it is my responsibility to make sure that 
things do not go off the rails.
    Senator Moran. I am going to come back to that, but let me 
ask Mr. Ashooh, anything to add to that resource out years and 
ultimately potential administration budget request?
    Mr. Ashooh. Well, I do and thank you for the opportunity to 
comment on it.
    So the budget that you have before you, the fiscal year 
2019 budget, includes an increase for anticipated Section 232 
investigations. At the time we did this, put the budget 
together, as you know, several months ago, we had a request on 
the uranium, but we were not sure it was going to move forward. 
It since has. So that was a prescient request of ours because 
it turned into being fact.
    But I would also like to just reassure the subcommittee, 
the relationship between BIS and ITA is one that is not just 
limited to 232. The industry expertise resides in ITA, and so 
it is not necessarily that there are large numbers of people 
moving and doing a job differently to get these out the door.
    What it is, is that they are being asked to provide the 
expertise that they always do in other areas of the work we do 
in this case, which has seen us through.
    So it is that there is a fair amount of work that did need 
to be added to and that is why we have the contractors. But as 
far as what we rely on ITA for, it is the industry expertise 
that they are known for and we use quite frequently.
    Ms. Nikakhtar. And that is a good point, if I may add. We 
do, within the Department of Commerce, shift resources when 
there is a surge in one area and not a surge in another area. 
What we are seeing now is a surge in a bunch of areas, and so 
that underscores the fact that we are getting a little bit 
stretched.
    But we do, to Assistant Secretary Ashooh's point, we do 
shift resources when we see a particular surge.
    Senator Moran. Well, I remain very concerned that the 
exclusion process is required or a circumstance in which it is 
necessary because of 232 actions.
    So that set a stage that you have discovered that, again, 
you are not policymakers, but there are those who are listening 
who are, with unanimity on this panel, concerns with the 
direction that the administration is going in regard to 232, 
has gone in regard to 232, and is looking for further 
opportunities in automobiles and uranium.
    So I am sorry that this exclusion process is consuming the 
amount of effort and resources that it is, and it exacerbates 
the problem at a time in which our businesses across the 
country need every global market they can get. Part of what you 
indicate is not happening, but the potential exists for us to 
focus on figuring out whether somebody is deserving of an 
exclusion, when resources should be devoted to making certain 
that the opportunities exist for those markets in the first 
place.
    So I want to make certain that those, perhaps off this 
panel, but you do visit with people who make policy decisions, 
understand the challenges that I see happening for Kansas 
businesses. We are an export State. We live by what we sell 
around the globe and the exclusion process is damaging in many 
ways.
    What I am learning in this conversation is it has the 
potential, if not already realized, it has the potential to be 
damaging in our efforts to find even more markets for those in 
Kansas and across the country.
    Let me turn to Senator Shaheen, and then Senator Alexander, 
and then we will wrap up.
    Senator Shaheen. Well, thank you, Mr. Chairman.
    Just to add a point to that. The focus of the 
administration on reducing the trade deficit has been solely on 
the enacting of tariffs on goods coming into the United States.
    But if we are really serious about cutting the trade 
deficit, we have also got to focus on American exports. We have 
to help about 95 percent of small and medium sized businesses 
who are not getting into those international markets, get into 
those international markets.
    That is where, I think, the administration is making a 
mistake because, as has been pointed out in this testimony, it 
has reduced the resources that are needed to help those 
businesses. We have to flip the formula here and make sure we 
can get back to helping our businesses get into those 
international markets.
    I want to go back to an issue that Assistant Secretaries 
Ashooh and Nikakhtar, you both raised in your testimony, and 
that was about the new changes to the CFIUS legislation that 
was signed into law with the defense authorization bill.
    Given those changes, have you had a chance to review those 
and do you think you are going to need additional resources as 
you look at enforcing the new reforms to CFIUS?
    Ms. Nikakhtar. Thank you for that question.
    Without question, we are going to see an incredibly drastic 
increase and we would like to work through the proper channels 
to communicate what resources needs will look like.
    Mr. Ashooh. Yes, our budget, again the fiscal year 2019 
budget includes an increase to add positions to deal with the 
increasing caseload that we were already aware of.
    Since that time, when we put the budget together, the law 
passed and includes the emerging technology review that I 
referenced in my statement. That will have, in addition to the 
normal caseload, a burden on Commerce, on BIS that we are still 
evaluating as far as the resource impacts.
    But we greatly appreciate the working relationship we have 
with this subcommittee and we will continue that as we 
determine what those specific resources are.
    Senator Shaheen. Do you expect to get additional funding as 
part of the new fee structure that is part of that change?
    Mr. Ashooh. We are told that that is the plan. Although 
that is a very new thing, so there is not an existing 
methodology to do it. That will be part of the rulemaking, but 
that is our understanding.
    Senator Shaheen. Is that the case with your agency as well?
    Ms. Nikakhtar. Well, we are working very closely with the 
budget folks to figure out exactly, to figure out how we 
implement what we need and identify with precision what we 
need. We have a good sense of it, but we are working closely 
with the budget folks at the Department.
    Senator Shaheen. Thank you.
    Thank you, Mr. Chairman.
    Senator Moran. Senator Alexander.
    Senator Alexander. Thank you, Mr. Chairman.
    Mr. Ashooh, I am not sure I understood. You talked about 8 
or 80 percent utilization. What were you saying about that? 
What did that mean?
    Mr. Ashooh. So the concern that appeared in our 
investigation was that U.S. industry is on the decline.
    Senator Alexander. What is?
    Mr. Ashooh. Steel and aluminum.
    Senator Alexander. On the decline.
    Mr. Ashooh. On the decline, right. And the concern is that 
we would have no domestic industry, so that action would need 
to be taken to raise the capacity utilization in the U.S. for 
both steel and aluminum. It is a similar problem. The numbers 
are different, but a similar problem.
    Senator Alexander. But what is the 8 or 80?
    Mr. Ashooh. Eighty percent was the target.
    Senator Alexander. Eighty?
    Mr. Ashooh. Eighty, yes, 80 percent.
    Senator Alexander. That you would produce 80 percent of the 
aluminum?
    Mr. Ashooh. No, that we would try to increase the existing 
capacity utilization and I may get these numbers wrong, but I 
can supply them for you.
    But before any remedy was implemented, aluminum utilization 
was somewhere around 57 percent, something like that.
    Senator Alexander. Fifty percent of what?
    Mr. Ashooh. And we calculated this.
    Senator Alexander. But 50 percent of what?
    Mr. Ashooh. The existing suppliers, primary aluminum 
suppliers were producing about 57 percent relative to what they 
could present but for the market factors.
    Senator Alexander. Do you know how many of those existing 
aluminum suppliers support the tariff you have imposed?
    Mr. Ashooh. Well, certainly----
    Senator Alexander. I think the answer is none. I know Alcoa 
does not and they produce half of it.
    Mr. Ashooh. Yes. No, but we are seeing an increase in that 
capacity. Again, we are not there yet, but we know that 
several, I think Century Aluminum announced an opening of three 
pot lines and that is what we----
    Senator Alexander. Three pot lines?
    Mr. Ashooh. Yes, we want to see that production capacity go 
up.
    Senator Alexander. What did you determine was the reason 
for the reduction in capacity?
    Mr. Ashooh. There are several. A lot of them have to do 
with specific decisions made by a lot of those producers.
    Senator Alexander. Why do we not produce more aluminum in 
the United States?
    Mr. Ashooh. Ultimately, this is a global issue. I mean----
    Senator Alexander. No, it is not. It is one issue. Because 
it takes a lot of electricity to produce aluminum and the cost 
of electricity is much too high in the United States to make 
that practical, and it is cheap in other places like Canada, 
where they have a lot of water. That is the whole thing.
    You run electricity through bauxite. You produce an ingot 
and from the ingot, you make everything. So all we need is the 
ingots to make.
    So how will you have to raise the tariff to overcome the 
cost of electricity that is the only real problem with 
producing more aluminum in the United States?
    Mr. Ashooh. Well, again, we are still facing a country such 
as China which does not factor in the elements you just 
mentioned about electricity. I mean, they are willing to, at a 
loss, produce.
    Senator Alexander. China. We import 15 percent of our 
aluminum from China. We import about 30 percent from Canada. 
What is the problem with Canadian aluminum?
    Mr. Ashooh. Which is why it is a global issue; it is not 
just a China issue.
    Senator Alexander. Well, now you are talking in circles 
here.
    If your goal is to increase capacity in the United States, 
how big a tariff do you have to have in order to make it 
profitable for companies in the United States to pay for the 
increased electricity? Will 10 percent do it?
    Mr. Ashooh. So the three options that we recommended to the 
President, you can do tariffs or quotas in order----
    Senator Alexander. But you did not include a strategic 
petroleum reserve.
    Mr. Ashooh. No, that was not. Now that you have mentioned 
it, it is something that----
    Senator Alexander. Well, I am not the only one in the world 
can think of a strategic petroleum reserve. I would think that 
would be your job.
    Mr. Ashooh. And I will admit that I was not here during 
that first part of these investigations, but what I will say, 
the lessons we have learned on things like ongoing 232's on 
uranium is to not automatically think in terms of import 
restrictions, but rather look at creative ideas.
    Senator Alexander. Yes, well, I do not want to get off on 
uranium. We will probably need a domestic supply of uranium by 
about 2050 and we are already funding ways to look at that. So 
I do not know what the sudden urgency is there.
    But back to aluminum, Alcoa says that the aluminum tariffs 
have added $100 million already to the cost of aluminum. You 
could buy a lot of ingots and put them in a strategic reserve 
for $100 million and not increase the price of aluminum to 
aluminum users all over the country.
    Mr. Ashooh. Sir, I am going to commit to you. I am going to 
look at that. Again, it was not part of the investigation. It 
probably should have been, but I will continue to look at that.
    Senator Alexander. Okay. Well, I do not think the 
administration knew what it was doing when it put the tariff on 
aluminum, and I do not think the investigation made any sense.
    I mean, we have seven smelters operating in the United 
States. My guess--guess only--is that a 10 percent tariff might 
produce a little bit more. I do not know what your 80 percent 
utilization figure is at all.
    You are not going to be able to produce in the United 
States most of the aluminum ingots we need unless you increase 
the price of aluminum by a massive amount of money. It would be 
much cheaper for the Government just to operate its own 
aluminum plants because all you need is the ingot or recycled 
aluminum, and then you can make foil, and pots and pans, and 
all of that. But you have put tariffs on every aluminum thing 
coming into the United States.
    So I hope you will, if asked to investigate this again, 
look at the small production of primary aluminum. Understand 
that almost the entire reason for it is the high cost of 
electricity and think of a more sensible way to address the 
concern.
    Thank you, Mr. Chairman.
    Senator Moran. Thank you, Senator Alexander.
    Mr. Johanson, I want to make sure you have an opportunity 
to talk about your resource needs.
    You indicated in your written testimony that Section 232 
and Section 301 actions taken by the administration have 
resulted in 11 revisions to the Harmonized Tariff Schedule. And 
accordingly, that is 1,000 hours increase over what you 
expended to accomplish that tariff schedule in 2017. It seems 
like a large investment of resources by ITC to support those 
efforts.
    Looking forward, if President Trump's proposed tariffs on 
an additional $200 billion of Chinese goods go in effect, does 
ITC have adequate resources to continue with regard to the 
tariff schedule?
    Mr. Johanson. The ITC is very busy right now. Our budget 
request reflects what we think will be sufficient to cover our 
needs going into fiscal year 2019.
    I will tell you my biggest concern as a commissioner is 
about our staff. We are operating at a very high level right 
now. I mentioned before that our trade remedy cases are up, 
have doubled in the past 5 years. This is true involving the 
Harmonized Tariff Schedule, which we must update frequently 
these days due to administrative actions, actions of the 
administration and otherwise.
    I have walked the halls of the building talking to staff 
members who have announced that they are leaving. We have had a 
number of key people leave. They have said they are burned out. 
That is a situation now.
    As it stands right now, they tell me that they can go to a 
private firm, and make much more money with the same hours. It 
becomes kind of easy for them, but they do tell me they enjoy 
working at the agency. They like the work. They are valued, but 
they are simply overworked at this time.
    Senator Moran. Thank you, Mr. Johanson.
    I think my final set of questions is, again, for you. I 
want to talk just a moment about solar panels and module 
imports.
    Earlier this year, several of my colleagues and I sent a 
bipartisan letter to Secretary Perry, to Secretary Ross, and 
Ambassador Lighthizer urging USTR to exclude 72 cell, 1,500 
volt utility scale solar panels from Section 201 safeguard due 
to concerns that the tariffs will raise the price for these 
panels, jeopardizing investments on solar energy and jobs in 
the country, but certainly in my State of Kansas.
    We are over 8 months since those duties and we still have 
no decision that has been in that exclusion. Although 
recommendation was made in an effort to protect the domestic 
solar industry, it appears that that recommendation also does 
harm to others in that sector, in that economic sector.
    Is it reasonable that members of the domestic solar 
industry should have to wait months for a decision on their 
exclusion request?
    Mr. Johanson. Yes, Senator Moran. Issues of exclusion are 
up to the Administration. The ITC is an independent agency and 
we do not address exclusions. That is not within our mandate.
    Senator Moran. Anyone else? Ma'am.
    Ms. Nikakhtar. Yes, Chairman Moran. Thank you for that 
question.
    We have reviewed all the exclusion requests at the 
International Trade Administration, and the exclusion process 
is an interagency process, and we have communicated our views 
to the USTR. Hopefully, we are hopeful that this can be 
resolved in an expeditious manner, but we have communicated our 
views.
    Senator Moran. Are you suggesting that I am regretful that 
I do not have Ambassador Lighthizer at this hearing to ask that 
question?
    Ms. Nikakhtar. I think it is an interagency process too.
    Senator Moran. More than Ambassador Lighthizer.
    Ms. Nikakhtar. Yes, it is. The Department of Energy is also 
involved as well. So I am happy, however, to and I will commit, 
too, that I will do this as soon as I get back to the office, I 
will call USTR and make sure we are working together to 
complete this expeditiously because I know that uncertainty in 
industry is pretty tough.
    Senator Moran. Thank you very much for that commitment.
    This is a theme in part of mine and other Members of this 
subcommittee's questions today is the uncertainty. We are 
trying to increase business in the United States. We are trying 
to increase employment through the trade policy.
    But there is a corresponding detriment that occurs in which 
jobs are lost, and that particularly occurs when there is 
uncertainty or a lapse of time before decisions are made.
    Again, we talked about this from the very beginning from my 
first question, but I would highlight that again for the 
opportunity for others outside this room and you as well to 
know that it is a worthwhile pursuit to see that we increase 
employment in the United States. Decisions that are not made 
have the opposite effect.
    Senator Shaheen has a follow up.
    Senator Shaheen. Yes, thank you.
    I would just like to follow up the conversation with Mr. 
Johanson about your employees and the challenges that they are 
facing.
    I assume that the pay raise that we were hoping to give 
Federal employees this year would be very much appreciated by 
your employees who are looking at the challenges they are 
facing.
    Mr. Johanson. I think it is safe to say that it would, but 
that, of course, is up to the administration, to Congress as 
well.
    Senator Shaheen. Yes, well, I think the Congress has 
already spoken on that. So hopefully the administration will 
implement what the Congress has directed with respect to 
spending because that is the way the Constitution is supposed 
to work.
    Thank you.
    Senator Moran. Senator Shaheen, thank you very much.
    It is my practice to ask the witnesses in every hearing I 
chair if whether they have something they feel like they failed 
to say, want to say, something they want to clarify? Any of you 
would like to add something to today's record for our benefit?
    Ms. Nikakhtar. I would like to end this on a positive note. 
Senator Shaheen mentioned in terms of, all of you, in terms of 
increasing exports. ITA has just finalized a testing method, a 
new to market tool which helps U.S. exporters identify new 
markets to export to.
    So it is an algorithm new to ITA. The economists that 
prepared it are in our group. But you enter the product that 
you are going to sell. You can select regions that you want to 
sell to around the world, or just globally entirely, your risk 
tolerance to the market, business in a market, and it will give 
you export markets that you can export your products to.
    Once you identify these markets, you give us a call, and we 
will help you penetrate those markets, and make the buyer-
seller connection. That is going to be launched. We are very, 
very proud of it and I really do hope that we get the 
opportunity to continue working with your staff to spread the 
news.
    Senator Moran. Thank you.
    Senator Shaheen. Yes, we hope we have lots of employees at 
your agency who can help implement that, that they are not all 
working on the exclusion problem.
    Ms. Nikakhtar. We would love to have more employees. Thank 
you.
    Senator Moran. Anyone else?
    Mr. Johanson. Senator Moran, Senator Shaheen, I would 
simply once again like to thank the subcommittee for 
considering the ITC's budget for 2019. Thank you, again.
    Senator Moran. You are very welcome.

                     ADDITIONAL COMMITTEE QUESTIONS

    If there are no further questions this morning, Senators 
may submit additional questions for the subcommittee's official 
hearing record.
    We would request from you, from ITA, BIS, and ITC, that 
there be a response within 30 days.
    [The following questions were not asked at the hearing, but 
were submitted to the agencies for response subsequent to the 
hearing:]
                 Questions Submitted to Richard Ashooh
               Questions Submitted by Senator Jerry Moran
    Question 1a. Please provide updated numbers of total exclusion 
requests and objections regarding the Section 232 steel and aluminum 
tariffs.

    Answer. As of April 22, 2019, BIS had received 88,044 exclusion 
requests: 76,807 steel and 11,237 aluminum. There are 41,965 objection, 
rebuttal and surrebuttal filings: 38,353 steel and 3,612 aluminum.

    Question 1b. The total number of exclusion requests approved and 
denied by BIS?

    Answer. As of April 22, 2019, BIS had approved 27,839 exclusion 
requests (23,483 steel and 4,356 aluminum) and denied 12,805 exclusion 
requests (11,443 steel and 642 aluminum). As of April 22, 2019, the 
number of exclusion requests that are in the BIS decision period is 
3,925. The number of exclusion requests that are still undergoing the 
objection, rebuttal, and surrebuttal process is 15,539.

    Question 1c. The number of objections that were approved and denied 
by BIS?

    Answer. Exclusion requests with objections are granted or denied. 
As of April 22, 2019, the total number of exclusion requests ultimately 
granted following an objection: 403 (383 steel and 20 aluminum). As of 
April 22, 2019, the total number of exclusion requests ultimately 
denied following an objection: 3,747 (3,739 steel and 8 aluminum).

    Question 1d. The average wait time before decisions are made by BIS 
on both exclusion and objection requests?

    Answer. As of April 22, 2019, for steel exclusion requests it has 
taken an average of 123 days from the time of filing to post final 
decisions for requests with no objections and 271 days for those with 
objections. For aluminum exclusion requests, it has taken an average of 
153 days from the time of filing to post final decisions for requests 
with no objections and 186 days for those with objections. In both 
cases this includes an average of 74 days that requests in the pipeline 
were held pending implementation of the rebuttal process and 35 days 
due to the lapse in appropriations.
    This time period includes the Department's review of exclusion 
requests, any objections, the 30-day public comment period, and 
coordination with U.S. Customs and Border Protection to confirm that an 
exclusion request is administrable.

    Question 2. When does BIS anticipate that it will have issued a 
decision on all exemption and objections requests that the Department 
is currently in receipt of?

    Answer. As of April 22, 2019, BIS had 34,093 active cases. Through 
fiscal year 2019 funded contract support and process improvements, BIS 
anticipates to process decisions more rapidly.
    BIS accepts exclusion requests and objection submissions on a 
rolling basis. BIS continues to evaluate Section 232 exclusion requests 
efficiently and in a timely manner. We continue to make improvements to 
the exclusion process to ensure that requesters receive their decisions 
as quickly as possible. BIS's goal is to have decisions on the 34,093 
active cases we are currently in receipt on by the end of Spring/early 
Summer 2019.

    Question 3a. Through your testimony, we now know that the 
Department of Commerce originally underestimated the number of Section 
232 steel and aluminum product exclusion requests that would be 
submitted and has received more than double the amount of exclusion 
requests it once expected.
    Was the Department's estimation of the resources needed to process 
exclusion requests based on the original underestimation of the number 
of Section 232 steel and aluminum product exclusion requests?

    Answer. Yes.

    Question 3b. If so, what measures has BIS taken to ensure that 
staffing levels match the actual number of Section 232 product 
exclusion requests that have been received?

    Answer. The Department originally requested an additional $4.17 
million and 17 positions in the fiscal year 2019 budget to support 
BIS's Industrial Base Survey and Assessment activity, which includes 
administering the Section 232 product exclusion request/objection 
process and conducting Section 232 investigations. The BIS fiscal year 
2019 Enacted budget provided $4.55 million specifically for contract 
support to administer the product exclusion process. BIS is assessing 
the resource implications of its ongoing Section 232 activities and 
will work with the Department and the Office of Management and Budget 
on appropriate action if funding shortfalls are identified. In 
addition, BIS continues to receive extensive support from the 
Department's International Trade Administration (ITA). ITA is analyzing 
requests and objections, and now rebuttals and surrebuttals, to 
determine whether domestic production capacity can support the product 
needs of exclusion requesters, and providing its recommendations to 
BIS, which renders the final decisions based on the facts presented to 
the Department.
    Further, based on a collaborative effort from both ITA and BIS, the 
Department is implementing a dedicated 232 Exclusions Portal that will 
substantially streamline the exclusion process, provide transparency to 
all external stakeholders, and provide users with a real-time status on 
each of their exclusion requests. The Exclusions Portal will also 
provide the Department with the ability to analyze submitted data more 
efficiently and thereby render determinations on exclusion requests 
more expeditiously.
    Moreover, the Exclusions Portal will further allow for better and 
more timely collaboration between government agencies (i.e., BIS and 
ITA in the Department of Commerce and Customs and Border Protection 
(CPB) in the Department of Homeland Security that both contribute to 
the processing of 232 exclusion requests). The current Section 232 
exclusions process for steel and aluminum is implemented on three 
separate web portals: Regulations.gov, FDMS.gov, and MAX.gov. These 
three silo systems require BIS, ITA, and CBP to expend extra effort 
verifying data submitted by the public and extracting, editing, and 
manually sharing this data, which can lead to delays and slower 
adjudication of exclusion requests. The Department administered 
Exclusions Portal will modernize the 232 exclusion process leading to 
one unified system that will allow for enhanced collaboration and 
result in faster processing times and decisions for industry.)
    BIS looks forward to launching the Exclusions Portal in Spring 
2019.
    [Note: As part of the reporting requirements of the Consolidated 
Appropriation Act, 2019, the Department shall provide quarterly reports 
to the Committees, due not later than 15 days after the end of each 
quarter, on the implementation of the exclusion process, which shall 
include: (a) the number of exclusion requests received; (b) the number 
of exclusion requests approved and denied; (c) the status of efforts to 
assist small- and medium-sized businesses in navigating the exclusion 
process; (d) Department-wide staffing levels for the exclusion process, 
including information on any staff detailed to complete this task; and 
(e) Department-wide funding by source appropriation and object class 
for costs undertaken to process the exclusions.]

    Question 4a. How is BIS estimating its resource needs for out-years 
in light of the possible need to re-examine all steel and aluminum 
exclusion requests and the uncertainty as to whether the ongoing 232 
investigations into automobile and uranium imports will result in 
further tariffs?

    Answer. The BIS fiscal year 2019 Enacted budget provided $4.55 
million specifically for contract support to implement the product 
exclusion process. BIS is assessing the resource implications of its 
ongoing Section 232 activities.

    Question 4b. Will BIS require more resources if tariffs are 
implemented as a result of the ongoing Section 232 investigations into 
automobiles and uranium?

    Answer. BIS will assess its need for any additional resources if 
and when the President takes actions on any Section 232 investigation.

    Question 4c. Will the need to re-process Section 232 steel and 
aluminum exclusion requests next year require an equivalent level of 
resources in 2019?

    Answer. At this time, the Department anticipates needing an 
equivalent level of resources in 2019 in order to have the capacity to 
process steel and aluminum product exclusion requests expeditiously. 
The Department began issuing its product exclusion decisions on June 
20, 2018. It accepts new exclusion requests and issues decisions on a 
rolling basis.
    On September 11, 2018, the Department published an interim final 
rule amending its March 2018 product exclusion regulation, which 
established procedures for rebuttals and surrebuttals. Each exclusion 
request requires the Department to review the entire record before it, 
including the exclusion request and any objections, rebuttals, and 
surrebuttals, along with any separately filed confidential business 
information. These comprehensive reviews to determine whether the 
product is produced in the United States in sufficient and reasonably 
available quantity and in a satisfactory quality necessarily take time. 
In addition, the Department takes national security considerations into 
account before issuing a decision. While these procedures produce a 
well-informed review and decision process, they have also increased the 
volume of information that must be reviewed and analyzed before a 
decision can be issued on an exclusion request. Again, BIS is assessing 
the resource implications of its ongoing Section 232 activities.
                                 ______
                                 
                 Questions Submitted to Nazak Nikakhtar
             Questions Submitted by Senator Jeanne Shaheen
    Question 1a. The Miscellaneous Tariff Bill (H.R. 4318) was passed 
by Congress, and signed by the President this week. This will reduce 
tariffs for approximately 1700 different HTS Codes through the end of 
2020. While many of the reductions involve intermediate products that 
will assist U.S. manufacturers in lowering their costs, a not 
insignificant number of the reductions involve finished products that 
will be sold directly to consumers. Footwear products are good example 
of this. It is critically important that importers do not misuse these 
tariff reductions by making slight and non-substantive changes in 
finished goods that compete with domestically manufactured products in 
order to eliminated tariffs on the imports.
    What steps will the administration take to monitor the situation to 
make sure that the MTB legislation is not misused by allowing importers 
who compete with domestic manufacturers to zero out their tariffs by 
making meaningless modifications in their products?

    Answer. Under the American Manufacturing Competitiveness Act (AMCA) 
of 2016, the Department of Commerce does not have a statutory role in 
monitoring the impact or use of MTB legislation following its 
implementation.
    Section (3)(c)(2) of the AMCA strictly defines the role of the 
Department of Commerce in the MTB review process, including what 
Commerce should consider for its report. Commerce is tasked with 
producing a report including a determination of whether domestic 
production of the article exists. Domestic production is defined under 
the act as producing, ``an article that is identical to, or like or 
directly competitive with, an article to which a petition for a duty 
suspension or reduction would apply, for which a domestic producer has 
demonstrated production, or imminent production, in the United 
States.'' Slight or cosmetic differences between products would not 
negate the possibility that the products would be considered competing.

    Question 1b. Is there a role that domestic manufacturers can play 
to notify your agencies when such activity is occurring so that timely 
enforcement of our trade rules is possible?

    Answer. There is no provision in the AMCA to review MTB provisions 
or modify them before they expire in 2020. However, information from 
U.S. companies concerning potential competition with domestic 
manufacturers could be used to analyze any petitions for renewal of 
MTBs in the 2019-2020 cycle.
    Also, the United States International Trade Commission (USITC) is 
required under the AMCA to produce a report on the impact of the MTBs 
no later than a year after the enactment of the MTB law. Per the AMCA, 
this report will contain, ``a broad assessment of the economic effects 
of such duty suspensions and reductions on producers, purchasers, and 
consumers in the United States, using case studies describing such 
effects on selected industries or by type of article as available data 
permit.'' We defer to the USITC with respect to whether input from 
domestic manufacturers could be useful. Companies can also contact 
Customs and Border Protection (CBP) if they believe that competitors 
are incorrectly or falsely claiming their products are classified under 
MTB provisions.

    Question 2a. How much has ITA spent on the Section 232 exclusion 
process?

    Answer. In fiscal year 2018, ITA spent approximately $7.1 million 
on the Section 232 exclusion process. ITA estimates that it will spend 
over $8.0 million on the Section 232 exclusion process in fiscal year 
2019.

    Question 2b. Could you provide a list of how many staff are being 
shifted, for how long, and what are their normal roles?

    Answer. ITA currently has 40 DOC detailees assigned to the Section 
232 product exclusion process, including 38 ITA employees, one employee 
from the Bureau of Economic Analysis, and one employee from the 
National Institute of Standards and Technology. These employees examine 
requests from importers seeking to have the steel or aluminum product 
that they import excluded from tariffs. In conducting this examination, 
the ITA Section 232 team reviews the initial exclusion request, all 
subsequent objections submitted by the domestic steel and aluminum 
industries, and all rebuttal and sur-rebuttal comments received. The 
ITA analysis focuses on whether U.S. manufacturers can produce (and 
deliver in a reasonable time period) a product identical to or 
substitutable for the imported product. ITA's analysis of the exclusion 
requests involves intensive coordination and collaboration with the 
Bureau of Industry and Security. The length of details will be 
determined by the number of exclusions requests, objections, rebuttals 
and surrebuttals received. Before joining the Section 232 exclusion 
team, reassigned or detailed staff worked in import policy analysis, 
international trade compliance enforcement, economics, and 
international trade promotion.

    Question 2c. Which company has ITA hired to assist with the 
process?

    Answer. Trident Technical Solutions, LLC, from Tampa, Florida, was 
hired to provide a total of 52 staff ``evaluators'' to examine requests 
for exclusion from Section 232 steel and aluminum tariffs and 
objections to those requests. The staff is composed of research 
analysts/evaluators, administrative specialists and project managers.

    Question 2d. What are the qualifications of the contractors hired 
to assist with the process?

    Answer. The evaluators must be able to conduct comprehensive 
analysis to determine, on a product-specific level, the ability of U.S. 
steel producers to supply steel products required by importers 
requesting the exclusion. Knowledge of the U.S. steel industry and 
downstream markets, while not required, is beneficial. The evaluators 
are required to prepare reports of their findings and provide 
recommendations regarding the resolution of exclusion requests and 
objections to those requests. The minimum education requirement is a 
BS/BA in analytical disciplines or 2 years of working in an analytical 
and/or research environment. Upon joining ITA's Section 232 exclusion 
team, all evaluators receive extensive training with respect to steel 
and aluminum products as well as instruction in how to examine and 
analyze exclusion requests. Evaluators and other members of ITA's 
Section 232 team closely collaborate with our NIST steel and aluminum 
expert whose current work involves complex, multipath and high rate 
testing of materials such as carbon fiber composites and advanced high 
strength steel. ITA has also hired two consultants with a combined 
experience of approximately 60 years in the steel and aluminum industry 
and who also provide valuable input to the exclusion analyses. The NIST 
expert and consultants have PhDs in Material Sciences & Engineering and 
Metallurgy.

    Question 3a. Commerce is losing twice as many Foreign Service 
Officers as it is hiring. We understand that this is the third year in 
which we've seen this trend, with no formal intake process offered to 
candidates for over 3 years.
    How does Commerce intend to maintain its Foreign Service Officer 
corps in order to keep its operations in 76 countries adequately 
staffed?

    Answer. ITA has a planning level of 260 Foreign Service Officers 
(FSO). With FSO rotations and mandatory training, this staffing level 
permits up to 7 percent reduced on-boards below planning while still 
maintaining the current operational tempo.
    As of February 28, 2019, ITA has an FSO headcount of 226 officers. 
As officers retire or are separated from the Foreign Service due to 
time-in-class restrictions, new officers are brought on board through 
an assessment process. ITA has onboarded 18 new FSOs since September 
2015 and plans to exhaust its current FSO candidate Rank Order Register 
(the culmination of the most recent assessment process) in August 2019. 
ITA plans to conduct a new FSO hiring assessment in Fall of 2019. 
Hiring from the resultant Rand Order Register is dependent upon 
candidates obtaining Top Secret security clearances and medical 
clearances, and available budget resources.

    Question 3b. Can you provide us with clear numbers of Commerce FSOs 
over the years, both in aggregate and at each separate grade?

    Answer. These staffing numbers are as of February 28, 2019 of each 
of the years reflected below:

------------------------------------------------------------------------
                                   2015
----------------------------------------------------------------
CM.............................................................    1
MC.............................................................   10
OC.............................................................   26
FS-01..........................................................   42
FS-02..........................................................   62
FS-03..........................................................   35
FS-04..........................................................   51
                                                                --------
  Total........................................................  227
------------------------------------------------------------------------


------------------------------------------------------------------------
                                   2016
----------------------------------------------------------------
CM.............................................................  2
MC.............................................................  13
OC.............................................................  22
FS-01..........................................................  45
FS-02..........................................................  58
FS-03..........................................................  35
FS-04..........................................................  68
                                                                --------
  Total........................................................  243
------------------------------------------------------------------------


------------------------------------------------------------------------
                                   2017
----------------------------------------------------------------
CM.............................................................  2
MC.............................................................  15
OC.............................................................  29
FS-01..........................................................  41
FS-02..........................................................  57
FS-03..........................................................  39
FS-04..........................................................  54
                                                                --------
  Total........................................................  237
------------------------------------------------------------------------


------------------------------------------------------------------------
                                   2018
----------------------------------------------------------------
CM.............................................................  2
MC.............................................................  13
OC.............................................................  24
FS-01..........................................................  49
FS-02..........................................................  60
FS-03..........................................................  42
FS-04..........................................................  52
                                                                --------
  Total........................................................  242
------------------------------------------------------------------------


------------------------------------------------------------------------
                                   2019
----------------------------------------------------------------
CM.............................................................  1
MC.............................................................  11
OC.............................................................  23
FS-01..........................................................  51
FS-02..........................................................  61
FS-03..........................................................  44
FS-04..........................................................  35
                                                                --------
  Total........................................................  226
------------------------------------------------------------------------


    Question 3c. If it is the case that 20 percent of Commerce FSOs are 
either in training or assigned within the United States, should the 
Department maintain a larger float of FSOs if it is to continue to be 
in 76 countries?

    Answer. ITA believes the existing planning level of FSOs is 
sufficient. Any expansion of the FSO pool will require additional 
resources.

    Question 4. Commerce has a growing number of Foreign Service 
Nationals (or Locally Engaged Staff) vacancies--I understand that there 
may be approximately 70 such vacancies worldwide. How does Commerce 
plan to fill these positions overseas so that when U.S. companies need 
assistance, they don't have to wait for months to get help?

    Answer. As of February 28, 2019, ITA has 672 LES onboard and 68 LES 
vacancies. ITA assesses its ability to fill LES vacancies on an ongoing 
basis.

    Question 5. Despite consistent Congressional support, Commerce has, 
over the past 10 years, had a steady decline in the number of U.S. 
field-based Trade Specialists, based in U.S. Export Assistance Centers. 
In any given State, that means that Commerce is only able to help 
approximate 10 percent or fewer U.S. export-ready companies--who need 
help to identify new markets, find trustworthy local partners, and 
overcome barriers. New technology is helpful but is no substitute for 
the in-depth assistance that these Trade Specialists provide, in 
conjunction with their overseas counterparts. How does Commerce propose 
to replenish its U.S. offices so that we can be confident that you can 
help a greater, not a smaller, number of U.S. companies?

    Answer. While ITA's U.S. Field staffing has declined, ITA 
continuously reviews its network of U.S. Export Assistance Centers 
(USEACs) to ensure resources are deployed to best serve the evolving 
needs of U.S. businesses. For example, ITA pursued multiple rounds of 
opportunities for ITA employees to move to select domestic locations to 
provide coverage to critical sectors and locations in the U.S. Field.

    Question 6a. Commercial Service operations appear to be incurring 
increasing administrative overhead, cutting into Commerce's ability to 
use appropriations to hire and retain essential trade professionals in 
the field.
    Does Commerce believe that the increase in overhead is justified?

    Answer. All business units of ITA, including Global Markets, are 
allocated a proportional level of shared agency costs. These costs are 
not merely administrative; they include a wide range of critical 
operational costs such as information technology modernization, 
information security, visa and passport processing, the Department's 
Working Capital Fund, and employee transit benefits. The activities 
benefit all business units. In addition, ITA's Global Markets unit also 
must solely fund costs levied by the Department of State for overseas 
operations (i.e., the overseas International Cooperative Administrative 
Support Services program (or ICASS), and the overseas construction and 
facility maintenance program (Capital Security Cost Sharing/Maintenance 
Cost Sharing program, or CSCS/MCS). Each shared activity has one or 
more governance programs to review and manage costs. ITA will continue 
to engage with these governance programs to fully understand and verify 
ITA costs.

    Question 6b. If not, how does Commerce propose to wring 
efficiencies out of this growing overhead?

    Answer. ITA will continue to strive to be efficient in its 
operations to ensure resources are used in the most effective manner 
possible for the benefit of ITA, its customers, and the public.

    Question 6c. If the growing overhead is justified, is Commerce 
planning to request additional funding in the fiscal year 2020 budget 
so that it can maintain staffing in the U.S. and overseas?

    Answer. ITA will work closely with the Department to raise 
awareness of ITA's operational needs and work to balance those with 
other budget priorities of ITA, the Department, and the Federal 
Government.

    Question 7. USTR Lighthizer told the Committee that the 
administration is pursuing new trade facilitation agreements in a 
number of locations. For instance, the administration plans to open up 
new markets in Africa for U.S. companies as a result of new bilateral 
agreements. Does Commerce have a plan to place staff in these posts, 
since it's been well-established that once an agreement is being 
implemented, U.S. companies need additional assistance on the ground to 
identify and resolve trade agreement violation, win new foreign 
government contracts, and find trustworthy local partners?

    Answer. ITA is not planning on opening new posts in Africa at this 
time based on a combination of the expenses associated with opening new 
posts and limited available resources at this time. However, ITA will 
continue to assess where existing resources can be best allocated.

    Question 8. The administration would like to bolster our trade 
finance capabilities in order to counter mercantilist policies from 
other countries, most particularly China. Given that Commerce has 
traditionally played a key role as liaison at post for the Overseas 
Private Investment Corporation and has played a leading role on 
educating U.S. companies about trade and investment finance options, 
what plans does Commerce have for bolstering staffing in the field to 
help identify new opportunities for U.S. firms and work with them to 
ensure that they have a level playing field?

    Answer. ITA agrees that trade finance is a critical and much-needed 
resource to improve the international competitiveness of U.S. 
businesses, and further agrees that developing new capabilities in 
trade finance is imperative. To this end, ITA is participating with 
OPIC and the other trade agencies in an interagency process to develop 
an implementing plan for the new International Development Finance 
Corporation (IDFC). This plan will include approaches for increasing 
interagency capacity to deliver outreach on IDFC finance programs in 
support of new opportunities for U.S. firms, as well as potential IDFC 
support for staffing in key markets and additional training for agency 
staff. Training would include details on general project finance, 
infrastructure opportunities, and trade and investment finance options. 
In collaboration with industries, ITA is also assessing other viable 
options to improve trade finance for U.S. businesses. ITA will continue 
to assess where existing resources can be best allocated but it does 
not anticipate bolstering staffing in the field at this time based on 
available budget resources.

                         CONCLUSION OF HEARINGS

    Senator Moran. And with that, the subcommittee stands 
adjourned.
    [Whereupon, at 12:04 p.m., Thursday, September 6, the 
hearings were concluded, and the subcommittee was recessed, to 
reconvene subject to the call of the Chair.]