HEARING ON PRESIDENT OBAMA’S TRADE POLICY AGENDA
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
February 9, 2011
Printed for the use of the Committee on Ways and Means
COMMITTEE ON WAYS AND MEANS
WALLY HERGER, California
|SANDER M. LEVIN, Michigan
CHARLES B. RANGEL, New York
FORTNEY PETE STARK, California
JIM MCDERMOTT, Washington
JOHN LEWIS, Georgia
RICHARD E. NEAL, Massachusetts
XAVIER BECERRA, California
LLOYD DOGGETT, Texas
MIKE THOMPSON, California
JOHN B. LARSON, Connecticut
EARL BLUMENAUER, Oregon
RON KIND, Wisconsin
BILL PASCRELL, JR., New Jersey
SHELLEY BERKLEY, Nevada
JOSEPH CROWLEY, New York
JON TRAUB, Staff Director
Wednesday, February 9, 2011
U.S. House of Representatives,
Committee on Ways and Means,
The committee met, pursuant to notice, at 10:08 a.m., in Room 1100, Longworth House Office Building, Hon. Dave Camp presiding.
[The advisory of the hearing follows:]
*Chairman Camp. Good morning. The committee will come to order. We are opening the hearing on President Obama’s trade policy agenda. I want to welcome everyone here, and also extend a special welcome to our guest, United States Trade Representative Ambassador Ron Kirk.
Ambassador, this is the first time you have been invited to appear before this committee, so we are looking forward to a thorough discussion of the Administration’s trade policy agenda, and particularly the path you see forward on the three pending trade agreements.
International trade has been a cornerstone of United States foreign policy for the past 60 years. We must have a robust trade agenda to ensure our economic future and create U.S. jobs. While the President has often spoken about the merits of trade over the past two years, there is little to show for it. The American people are demanding more and more, and deserve more from this Administration when it comes to the job‑creating potential of our trade agreements.
Now, we have seen some steps in the right direction in recent months, and I appreciate your work and the President’s work on the South Korea agreement. But there is much more we need to do, and I fear we are ceding our influence and authority to the European Union, China, and countries that don’t have our best interests at heart, diminishing our influence on the international economy, foreign policy, and security issues.
Most pressing on the trade agenda are the pending agreements with Colombia, Panama, and South Korea. As I noted, the President’s leadership has helped move the South Korea deal forward. But there has been no similar action with regard to the Colombia and Panama agreements.
Where is the path forward for these agreements? Why isn’t there a clear identification of the outstanding issues, an outline of reasonable steps that must be taken to address those issues, a time frame for resolution, and a commitment to action?
While the President made positive reference to completing the agreement with South Korea in his State of the Union address, Colombia and Panama were mentioned only briefly, almost as afterthoughts, with no action plan or commitment, characterizing them as items the Administration intends to, and I quote, “pursue.”
But we already have trade agreements signed three and a half years ago. And Ambassador, I hope you will provide clarity on what the President meant and lay out today a concrete timeline for consideration of all three agreements. And as I have said repeatedly, I would like to see all these three agreements considered by July 1st.
And frankly, the lack of commitment on these critical, job‑creating agreements is hindering the rest of our trade agenda, most notably ATPA and TAA. The President’s unwillingness to engage, especially on Colombia, has ground everything else to a halt and our workers are suffering as a result.
The Administration’s strategy makes no sense. These agreements are important to U.S. strategic and economic interests, and they will help support jobs here in the United States ‑‑ 250,000 jobs, according to the President’s own measure. And given that our unemployment rate has been at or above 9 percent for the last 21 consecutive months, we must explore all possible opportunities to sell to the world and create and support existing jobs in the United States.
I am equally concerned that the failure to move these agreements will severely disadvantage U.S. business, workers, farmers, and ranchers who now sell their products in these markets. Other countries recognize the value of these markets and are signing agreements that lower barriers for their exports and seize our opportunities.
In addition to our pending trade agreements, we must focus on enforcing our rights worldwide. Take China. It is now our second‑largest trading partner overall and our third largest export market. While China presents the potential of 1.4 billion customers for our exports, China purposefully impedes market access for U.S. goods and services, and blatantly steals the intellectual property of American businesses. The litany of China’s trade‑distorting policies is deeply troubling and cannot be allowed to stand.
Part of our strategy for addressing these issues should include resumption of our bilateral investment treaty negotiations. I strongly support the Administration’s efforts to promptly conclude an ambitious Doha Round of negotiations at the World Trade Organization, and hope that renewed efforts over the past few months will lead to success.
I also strongly support the Administration’s efforts to negotiate the Trans‑Pacific Partnership. I hope the President will be able to conclude a high standard agreement when he hosts the APEC leaders in nine short months. Such an agreement would show our commitment to the fast‑growing Asia‑Pacific region as well as create American jobs by opening markets. A robust trade agenda puts U.S. business, workers, farmers, and ranchers back on the offense. Let’s seize this opportunity.
I look forward to hearing your testimony, Ambassador Kirk, on the Administration’s ideas on how to kick‑start the U.S. trade agenda. I will now yield to the ranking member, Sandy Levin, to make an opening statement.
*Mr. Levin. Thank you, Mr. Chairman, and welcome, Ambassador.
I am disappointed that we start today’s hearing without action to extend the Trade Adjustment Assistance program scheduled to expire in just a few days. TAA has been a good‑faith effort for nearly 50 years to assist workers who have lost their jobs through trade and globalization.
As a result of the 2009 reforms, an additional 170,000 workers are eligible for TAA, which will help them secure new good‑paying jobs. Starting Tuesday, tens of thousands of displaced workers in our country will be affected, and I strenuously urge my Republican colleagues not to let this vital program lapse.
Congressional Democrats have been actively working to shape a new trade policy that is responsive to the changing dynamics of a global economy. We rejected the passive hands‑off approach of the last Administration by embracing expansion of trade in ways that assess its impact and broaden the benefits from expanded trade.
Carrying out this new policy, we succeeded in pushing for the inclusion of enforceable worker rights and environmental standards, beginning with their incorporation in the Peru FTA. We have fought for vigorous enforcement of basic rules of competition with our trading partners. We have insisted that trade must be a two‑way street, not a one‑way street, in critical areas of trade.
This is in sharp contrast to the approach of the last Administration, whose view was that trade was good in and of itself and that more trade automatically was better, regardless of its terms. As President Obama responded, and I quote, “We just went through a decade where we were told that it didn’t matter. Just keep on importing, buying stuff from other countries, and everything is going to be okay. But it was built on a house of cards.”
The Obama Administration has undertaken a vital effort to implement a new and improved trade policy, for example, a commitment to the enforcement of existing trade agreements and trade laws. That was clear from the China safeguard action on tires. The previous Administration, on four occasions, refused to use that safeguard. Recent data indicates that the safeguard action has helped to make possible an increase in U.S. production and employment in U.S. tire manufacturing.
The commitment to enforcement is also clear from the filing of the first case ever on labor provisions in the trade agreement with Guatemala.
A commitment to two‑way trade was embodied in the President’s insistence that we go back and change the Korea Free Trade Agreement to finally knock down the barriers there, where automotive trade accounts for 75 percent of the $10 billion U.S. trade deficit with Korea. This would not have happened if the Republicans had succeeded in their earlier insistence that flawed agreements be approved.
Likewise, in the case of Panama, the Administration pushed for an agreement to address Panama’s status as a tax haven, and we understand Panama is working to ratify and implement that agreement now. This Administration has also been working on efforts started several years ago to ensure that Panama’s labor laws comply with basic international standards and with its FTA obligations. Because of our efforts, there are now important labor law changes pending before the Panamanian legislature.
With regard to Colombia, as we have pointed out repeatedly and as indicated consistently in the State Department and ILO reports, there are serious outstanding issues relating to the Colombia FTA. Colombian labor laws fall short of ILO norms, and workers struggle to exercise their rights to associate and collectively bargain.
Persistent problems include abuse of cooperative and other forms of contracting, employers’ direct negotiation with workers when unions are present, and prohibitions on the right to strike. Moreover, enforcement of labor laws is weak.
Union worker violence in Colombia remains unacceptably high, if not the highest in the world. Limited progress is being made in the investigation and prosecution of those responsible. Additionally, reports indicate that threats against union workers and others have increased. To date, there has been little concrete action to date to pursue these cases.
As I observed during my five‑day fact‑finding trip in Colombia last month, the new Santos administration has now articulated a different approach from its predecessor that provides an opportunity for serious discussions between the two governments on these concerns. But we should be very clear that the burden is on the Colombian government to act and address these concerns that have been made abundantly clear to them for years. The only adequate measuring stick is progress on the ground.
There are other areas where I believe we can do more to change U.S. trade policy, Mr. Camp, the chairman, has talked about China’s distorting, trade‑distorting policies. I also urge that the Administration take a more assertive stance to address China’s currency manipulation.
AAs I conclude, let me just say that we are already taking action on many fronts. Republicans have expressed impatience with changing U.S. trade policy and have called for us to return to the failed policies of the past and approve flawed trade agreements.
So let me be clear. We will not go back. Thank you, Mr. Chairman.
*Chairman Camp. Thank you.
Today we are joined by Ambassador Ron Kirk, the United States Trade Representative. Prior to his work in the Obama Administration, Ambassador Kirk had a distinguished career in both the private sector and government. Notably, he was the mayor of Dallas from 1995 until 2001, at which time, I should add, he saw firsthand the benefits of trade agreements and was a strong proponent for NAFTA.
Ambassador Kirk, we welcome you and look forward to your testimony. I would ask that you keep your testimony to five minutes. And Mr. Ambassador, your full written statement will be made part of the record. And you are recognized for five minutes. Welcome.
STATEMENT OF AMBASSADOR RON KIRK, UNITED STATES TRADE REPRESENTATIVE
*Ambassador Kirk. Thank you, Mr. Chairman and Ranking Member Levin, members of the committee. It is indeed an honor for me to have an opportunity to visit with you today.
In his State of the Union address, President Obama told America that the future is ours to win if we rise to the consulting. To compete for and win the jobs and industries of the future, America must out‑innovative, out‑educate, and out‑build the rest of the world.
USTR is doing our part to keep America globally competitive, and our work is producing results. U.S. goods and services exports through the first 11 months of 2010 were up $239 billion over the same time period in 2009, and we are on pace to reach or exceed President Obama’s National Export Initiative goal of doubling exports by the end of 2014.
To ensure that American firms continue to generate jobs and economic growth, opening global markets and efficient America’s trade rights must remain key components of our economic recovery effort. After extensive consultations with the business community, with labor, Members of Congress, in December we concluded a U.S.‑Korea trade agreement that is better for America’s auto industry and better for America’s auto workers, and it is winning widespread support here in Congress.
To bring home its promise, which is billions of dollars in exports and tens of thousands of jobs here at home, the President will submit the U.S.‑Korea trade agreement to Congress in the next few weeks, and looks forward to working with you to secure its approval this spring.
But we aren’t going to stop there. With that same engagement and cooperation, we want to work to address outstanding concerns relating to the Panama and Colombia trade agreements. If we are successful, we will move these forward as well.
I can tell you today that the President has directed me to immediately intensify our engagement with our partners in Colombia and Panama with the objective of resolving the outstanding issues as soon as possible this year, and bringing those agreements to Congress for consideration immediately thereafter.
But I must make it clear. There remain serious issues to be resolved before these agreements can be submitted for congressional consideration, and some of these issues go to our core U.S. values and interests, such as the protection of labor rights. Any timetable will be contingent on the successful resolution of these issues.
For example, with regard to Colombia, it will be imperative to resolve issues regarding laws and practices impacting the protection of internationally recognized labor rights, as well as issues concerning violence against labor leaders and the prosecution of the perpetrators.
Colombia and Panama have begun to take important steps, and we think that is a good signal. But more remains to be done. We will be consulting closely with you and major stakeholders, including labor and human rights groups, throughout this process.
We will not be left behind, however, as others open markets and take our market share. The President has made one thing abundantly clear, however. We will not sign agreements just for agreements’ sake. They must be enforceable and of the highest standard and in the interests of America’s workers, farmers, businesses, and entrepreneurs.
In the Trans‑Pacific Partnership, now the world’s most dynamic regional trade negotiating market, we are moving forward to unlock the Asia‑Pacific through a 21st century trade agreement. In the Doha talks, we seek an ambitious outcome in which all countries, including the advanced emerging nations, provide market access commensurate with their global economic roles.
And our efforts to bring Russia into the World Trade Organization will include working with you this year to grant Russia permanent normal trade relation status so that U.S. firms and workers fully benefit from Russia’s accession to the WTO.
This year, the United States will host the 21 economies of the Asia‑Pacific Economic Cooperation Forum. With them, we will work to make it cheaper, easier, faster for our firms to trade in a greener regional economy. And we are doing the same with our partners in Europe and throughout North America.
Aggressive enforcement will continue to accompany these efforts. We have kept our promise to hold our trade partners accountable, from steps to address a harmful surge of Chinese tires, to important wins at the WTO for our aerospace and agricultural sectors, to the first labor enforcement case ever brought under a U.S. trade agreement.
Our agenda will only succeed if we make clear to the American public what is at stake in global markets and if we keep faith with America’s workers, including renewing trade adjustment assistance. We are also asking Congress to keep faith with some of the world’s poorest economies and create American jobs by renewing the generalized system of preferences in the Andean Trade Preferences Act, and let’s do so for a longer period of time than a few months.
I believe, Mr. Chairman and members of the committee, that we can use common sense to find common ground on trade. And I look forward to working with you, and I look forward to taking your questions. Thank you.
[The statement of The Honorable Ron Kirk:]
*Chairman Camp. Well, thank you very much, Ambassador.
As I listened to your testimony, I first want to say I appreciate your comments on the South Korea trade agreement. It was signed in June 2007. Korea is the world’s eighth largest economy. The E.U. agreement with Korea is expected to be effective July 1st, so I think your timeline of a few weeks is a very important one.
In terms of the other agreements with Panama having been signed in June of 2007 ‑‑ they have signed this tax information exchange agreement ‑‑ they recently signed trade agreements with the E.U. and Canada.
With regard to Colombia, it was signed in November 2006. Since that time, our exporters have paid over $3 billion in duties to Colombia. Canada will implement a trade agreement in June. The E.U. is soon to complete. Colombia is our largest export market in South America.
So with regard to those agreements, I appreciate the language that you want to complete those by this year. But frankly, those are statements I would have expected two years ago. We are seeing other countries move forward dramatically. We are losing market share in those countries as they develop trade relationships with other places. We need specific, concrete steps.
Can you tell me what specific things or items need to occur with regard to the Colombia and Panama agreements that would allow the Administration to move forward?
*Ambassador Kirk. Well, first of all, Mr. Chairman, let me assure you we share your concern with respect to the competitive market that is developing in South America and their very aggressive efforts to sign other free trade agreements.
But we also share a very firm belief, and an unshakeable belief, that the only way we can go forward in a manner that I think all of us would like to is that if we work together collaboratively, just as we did on the Korea FTA, and not just hear from those that, frankly, want me to cut the gas line and put the pedal to the metal and go forward; and not just those that, frankly, are stomping on the brake and say, do nothing. We have got to find a way to find common ground on some of those core values that, at least for the Obama Administration, we won’t compromise on.
And we want to get these done, but we want to get them done in a way that we address the underlying concerns about labor rights. This is a little bit different than Korea in which, frankly, we were addressing issues of market access. These are more fundamental issues.
But what we want to do, and what we will do, is intensify our engagement over the next several weeks, I am sending a team to Colombia next week. As you know, Ranking Member Levin, I think, visited Colombia during the January recess. Finance Committee Chairman Baucus is going to go down. We will then meet with all the stakeholders, human rights groups, and come up with a workable plan, and sit down with our partners in Colombia to address those.
*Chairman Camp. When you say “we,” are you planning to go to Colombia and Panama as well?
*Ambassador Kirk. I don’t know that I am going to go. USTR is sending a team. I may go, and I may want and see what the plans are, as they evolve, for the President’s visit to South America later this spring.
*Chairman Camp. Well, I guess my point was that the time for generalities has passed, to say, we need to continue to work forward on these. We really need specifics. And we need an action plan of benchmarks that we can meet to move this forward.
I think these have languished long enough, really far too long. And to the extent you can shed light on any specific items, I think we would be all enlightened.
*Ambassador Kirk. Well, I want to do that, Mr. Chairman. But we are using the same approach as we did last year when ‑‑ I think it was in June at the G20 Forum — President Obama directed our office to sit down and negotiate with our partners in Korea. We were able to do that in a reasonably efficient period of time.
We want to take that same approach with respect to Panama and Colombia. The issues are different. As I said, in Colombia there are longstanding concerns in terms of the rights of workers and violence against union organizers. In Panama, we have made good progress on a number of the issues in terms of addressing some of their labor law concerns.
As I understand, they have worked with our Department of the Treasury to address the issues of their having been labeled a tax haven by OECD, and are moving on the tax information exchange agreement.
*Chairman Camp. With Panama, is there anything left for the Panamanians to do?
*Ambassador Kirk. There are still a couple of concerns over some recent changes to their labor law. But we have been in consultation with the Panamanian government in trying to get those resolved to our satisfaction.
*Chairman Camp. All right. Thank you.
Mr. Levin may inquire.
*Mr. Levin. Thank you. Mr. Chairman, I think that your question has helped to frame the issue. You said, “the time for generalities”. They weren’t generalities. The issues with Korea were very specific. The way it was negotiated did not assure access to the market for our automotive goods. You worked on this. It was very specific.
They were shutting us out, shipping 500,000 cars a year. We were shipping 5,000. Hyundai has 1500 dealerships here, I think. Ford has one. Our automotive producers and their suppliers insisted that trade be a two‑way street. It was very specific.
If the Republicans had had their way, or the Bush Administration theirs, we would have approved the Korea Free Trade Agreement essentially having a major part of our economy shut out from their market when they had complete access to ours.
As for Panama, we started discussions. The issues were very specific. They related to the violation by Panama of basic international standards, as outlined in our State Department reports and in the ILO reports, in terms of worker rights, and its states as a tax haven. We tried to work with them, but then they elected someone as the Speaker of the House who had an arrest warrant out for him for killing an American, and those discussions stopped. It was very specific.
When it comes to Colombia, Mr. Ambassador has laid out the areas where there are issues. And we have been discussing these for years with the Colombians. The ILO and State Department reports have spelled these out year after year after year.
Now, there is a new administration in Colombia which says that it now wants to address these issues that were not satisfactorily addressed by the previous administration. And now the Ambassador has said that there is an effort to see if common ground can be reached.
So I think there isn’t a lack of specificity. There has been a lack of a willingness to work with us to resolve basic important economic issues.
Let me just ask you, if I might, Mr. Ambassador, about TPP and proceeding. You intend to table something next week, do you, in terms of TPP? And I think it is important we proceed, but in the right way. There will be a tabling of some proposals next week?
*Ambassador Kirk. Yes, there will. As you know, we have had four rounds of talks. We are moving very aggressively to meet our own goal, which is aspirationally, to craft a trade agreement for the 21st century with the highest standards in every area across the board. We will be meeting in Chile next week for the first round of more intense negotiations, and we will begin tabling proposals in certain categories at that time.
*Mr. Levin. Everyone should note that we have trade agreements with most of the participants in TPP. It is the newcomers in terms of a trade agreement, Vietnam and now Malaysia who raise some important issues, not only in terms of worker rights, which is important, but in terms of agriculture, et cetera.
And as we have discussed, I hope very much that before those proposals are tabled, that there will be further consultations with this committee regarding the specifics, including those relating to investment.
*Ambassador Kirk. We will. And we have ‑‑ and I think as you know, Mr. Chairman, we have had the most extensive consultations with this committee and your companion committee of jurisdiction in the Senate, as well as all of the stakeholders on TPP as we have ever done before, and we will continue that.
But this is an opportunity in which, one, I think we have all benefitted from the fact that we are starting with a blank sheet of paper, so to speak. We aren’t burdened by some of the arguments that have derailed some of our trade agreements in the past.
But it is an opportunity for the United States to be in the lead in crafting the architecture for what we hope will be the most advanced trade‑liberalizing free trade agreements in one of the most dynamic regions of the world.
*Mr. Levin. More consultation is needed. Thank you.
*Chairman Camp. Thank you. I just want to comment that I was concerned about market access on the South Korea agreement from the beginning. But that really sort of begs the question. I am not really interested in why these agreements weren’t passed two and a half years ago. I am interested in why they are not being passed now, given all that has happened.
So with that, I will recognize Mr. Herger for five minutes.
*Mr. Herger. Thank you, Mr. Chairman.
I have a timeline here of key President Obama Administration statements regarding the Colombia trade promotion agreement. Unfortunately, I won’t have time to go through all of it in my five minutes. However, I will like to have it included in the record, and I will just touch on some highlights.
[The information follows The Honorable Wally Herger:]
*Mr. Herger. Ambassador Kirk, the President’s 2009 trade policy agenda released in February of that year two years ago stated, “We are in the process of developing a plan of action to address the pending trade agreements in consultation with Congress. We plan to establish benchmarks for progress on that Colombia FTA.”
In April of 2009, during a speech at Georgetown University School of Law, you stated, “We are looking for new solutions to the issues that have dragged on in existing free trade agreements. At the Summit of the Americas, President Obama instructed me to lead a review of the Colombia agreement to deal with outstanding issues there.”
Now let’s skip to about a year later, in March of 2010, and your testimony at Senate Finance hearings. You stated that the pending FTAs were a priority, and that USTR was working to resolve the outstanding issues so that they could move forward with the agreements.
And in response to a question on the Colombia FTA, you stated the following: “We are hopeful we can come to some solution with Members of Congress over the next several months so we can go back to Colombia with specific goals. What we don’t want to do is keep moving the goalpost. This agreement is almost singularly to the benefit of the United States.”
Moving forward a few months to July 2010, in announcing the establishment of the President’s Export Council, the President again reiterated that the Administration was working to resolve the “outstanding issues” with the pending FTAs with the goal of submitting them to Congress “as soon as possible.”
Now, in 2011, during a speech at Third Way, Mr. Ambassador, you stated, “We took the time to do the Korea FTA right. And so we think it is important: Just as we have done with Korea, let’s not short‑circuit that process with Panama and Colombia. They are just as important to us.”
Mr. Ambassador, how much longer will the wait continue until the Colombia agreement is ready for Congress? It has been two years since the Administration announced its plan to develop benchmarks on Colombia. We waited a year. And then the Administration again stated that it is working on a list of recommendations for the Colombians.
Where are these recommendations, these benchmarks that the Administration wants to see in place? And again, how much longer do we have to wait until the Colombia agreement is ready?
*Ambassador Kirk. I appreciate your recitation of our commitment on that. We are firm in that. And hopefully, Mr. Herger, it won’t be much longer.
We share your concern. We want to move forward on these agreements. But the reality is there is a very wide ‑‑ you can tell from this committee, there has been a very wide divergence of thought as to how we ought to proceed. And one thing President Obama instructed me was to sit down with those on both sides of the aisle, stakeholders of every opinion, about how we are to go forward and see if we can’t find a common way forward.
But we also made a firm commitment, when we came into office, that we didn’t feel it was our responsibility just to pick up all of these trade agreements as they were and move forward. We took the time to take a step back and take a strategic look at how we wanted trade to fit into our overall economic policy and our number one goal. And that is how we get this economy going and how we create jobs.
And that included not only looking at and examining these free trade agreements, but the work that we have done on enforcement, the work we have done to engage labor and communities and business to come up with a plan that will allow us to do as we have done with Korea. And as I announced today, the President has directed us to do that same thing in the coming months with our partners with Colombia and Panama.
As Ranking Member Levin noted, we have new leadership in Colombia. Vice President Garzon was here last week. We have met with him. There is a renewed sense, I think, of urgency on both parts. And we will be meeting with them in the coming weeks and months to address those issues.
And it is different in the case of Korea because it isn’t just related to market access. It goes to some of those core values that I think many Americans want Congress to take into account as it relates to how we treat and respect the rights of workers. And that is an issue that, at least for the Obama Administration, we won’t compromise on.
*Mr. Herger. Well, Mr. Kirk, I appreciate that. But that sounds very much like we have been hearing for the last two years.
*Chairman Camp. And the gentleman’s time has expired.
Mr. Johnson is recognized.
*Mr. Johnson. Thank you, Mr. Chairman. First I want to welcome my friend from Dallas. Too bad you weren’t there; the Super Bowl might have been a better place to go.
*Ambassador Kirk. Unfortunately, I was there, sliding around. But I didn’t go to the game.
*Mr. Johnson. God bless you. Ambassador Kirk and I have known each other for a long time. I am glad he has finally had the opportunity to visit here on this committee. I would like the committee to know, for the record, he and I used to bet dinners, and he still owes me one.
Now, Mr. Ambassador, as a former mayor Dallas, I know you are well aware of the benefits of trade to our area. And I am sure you know the Dallas area is the ninth largest metropolitan exporter in the United States. In 2008 alone, Dallas exported almost $7 billion to both NAFTA and CAFTA. The numbers go on and on.
In three years before the U.S.‑Australia agreement, exports from Texas to Australia averaged $800 million. In the three years after that trade agreement, Texas exports averaged $1.3 billion per year, an increase of 66 percent.
Before the U.S.‑Chile agreement, Texas exports to Chile were declining. Since the agreement, Texas exports to Chile have increased by 107 percent.
You know, those numbers just tell me that we are spinning our wheels. This agreement was signed in 2007, and this is 2011, and we still haven’t finished them. Now, I would like to know why we are delaying because other nations in the world are taking our place in the trade environment. And it is because you haven’t been able to finish the job. And most of it, you are telling me, is labor‑related.
I would like to know your opinion on that and what you intend to do. And I will tell you what. You get these three agreements done, you don’t have to buy me a dinner.
*Ambassador Kirk. Sam, I have enjoyed your friendship, and we have shared a lot of plates of Mexican food over the years. And it would be loath for me to quarrel with a good friend in public, but I am not so sure who holds which last dinner. But we won’t make dinner contingent on these agreements.
Let me say this. I was incredibly honored and humbled when President Obama asked me to serve the Administration in this capacity. And frankly, Sam, you know there were a lot of people who were a little bit skeptical of me coming from Dallas, for the reasons you articulated.
We believe in trade. We understand it. We have seen the impact of it in our city and our state. Texas is the number one exporting state in the country. So you don’t need to convince me how important these agreements would be to our economy.
But when I raised my hand and took that oath, I agreed to be United States Trade Representative for the entire country. And like the congressman over here, my wife is from Detroit. And so I brought with me not just our passion for exports that we have in Texas, but I also brought with me the concern and frustration of all of my in‑laws in Detroit, in Cleveland, in Pittsburgh, who when I showed up and told them I was going to be the Trade Representative, thought I was a two‑headed monster because they believe they haven’t benefitted from trade.
And so what we have committed ourselves to doing is trying to find that common ground because the only way we can go forward in a way that allows our farmers and ranchers and manufacturers and states that want us to go is we have to keep faith with the rest of America that wants to know we have a trade policy that works for everybody and not just for some of us.
You know I like African proverbs, and one of my favorites is pretty simple. And it says, “You should take no comfort from the hole in my end of the boat.” And the problem of too much of our trade debate is in places sometimes like Texas or Florida or Washington, we just look at our heads and say, poor Pittsburgh. Poor Carolinas. Poor Detroit. And we aren’t going to get there.
That is why these agreements were stalled. I don’t have to tell you there are strong differences on this committee whether we go forward or not. What we have been doing is trying to not only craft trade policy that allows us to have open, fair access to these markets, address that asymmetry we have with many of them, but also helps us restore the American public’s faith that trade can work for us, that we can create jobs here.
That is what we did successfully, I think, with Korea, and that is what we are working to do with Panama and Colombia.
*Mr. Johnson. It will create jobs. Right.
*Ambassador Kirk. It will create jobs. But ‑‑
*Mr. Johnson. But how about getting it done, all three of them? All three of them. Can you tell us you will do that?
*Ambassador Kirk. I can do it if I can get this committee to come together and agree that just as important as it is to open up markets, it is equally important to make sure that we keep faith with America’s workers and we don’t compromise on our core values of standing up for workers’ rights. If we can come together on that, we can do anything. We did it on Korea. We need to do it on Panama and Colombia.
*Mr. Johnson. Thank you, Mr. Chairman.
*Chairman Camp. Thank you.
Mr. Stark is recognized.
*Mr. Stark. I would yield to Mr. McDermott.
*Chairman Camp. Mr. McDermott.
*Mr. McDermott. Thank you, Mr. Chairman. Welcome, Ambassador. Good to see you here. On a historical note, I would point out to the members of the committee, who want specifics. In five days, the TAA program ends. 150,000 American workers will be ending their trade adjustment assistance. Now, I wonder if you are serious. It was on the calendar yesterday, but you took it off the calendar. It is not on the calendar today. This is Wednesday.
Is it going to be on Thursday or Friday, and be passed through the Senate by Monday, so that 150,000 workers in this country do not lose their assistance? If you are serious about trade and you want to make it all about somebody else out there and ignore the people in the United States, the workers, you are going to have a tough time.
But let me move to another issue because there are other things besides Colombia and Panama. How are we going to work and move forward on intellectual property protection in China? How are we going to keep the focus on this issue in China? I know when the Chinese were here, with respect to the piracy of business software, they continue to be long on promises and very short on performance.
It practically didn’t come up when President Hu was here, and it doesn’t appear that the Chinese are stepping up to address the massive piracy which is underway in their enterprises, including the state‑owned enterprises which put U.S. companies at a competitive disadvantage.
It seems to me that the Chinese are very clever in how they have moved around. The Chinese audit authority has the ability to track how much money in the China procurement system is being spent. That is helpful, but it doesn’t end the piracy. They don’t check as to whether or not the software used in their government is legal.
Now, what is the plan? What do we need to do to help you enforce the good words that come out of Beijing? They are nice words. I appreciate them. But we would like to have some help from you about how we can help to enforce that.
*Ambassador Kirk. The issue of piracy and copyrighting of America’s intellectual goods and work product is one of our key concerns at USTR. It is a key component of our enforcement efforts, and it is a key part of our dialogue with China.
And I would only add one correction, perhaps, to your introduction of this subject. This issue did come up in President Hu’s visit with President Obama. He addressed it directly.
As you know, we recently concluded the Joint Commission on Commerce and Trade, which Secretary Locke and I take the lead, in December. We did get a commitment from the government of China to begin to address more rigorously the absence of using legitimate software in their government procurement.
During President Hu’s visit, we got two additional important commitments that, one, they are going to provide money for it. The Chinese have said they would do this a number of times, but they didn’t give their governments and sub‑governments any resources to purchase legitimate software. For the first time, they have committed to do that. And secondly, we did get them to make a commitment to audit that.
But as you know, our engagement with China is important. It is complex. There is the reason that we have regular engagements with China through the JCCT as well as strategic economic dialogue. And we will be as diligent as you say the Chinese are crafty in pressing them to make sure they honor and respect American intellectual property and copyrights because that is an extraordinary opportunity for our industries to grow into that market.
*Mr. McDermott. I would like to also just thank you. I appreciate that. If there are things that we can do, I hope you will let us know because I think this committee would be interested in trying to support the USTR in their enforcement efforts.
We know that the Bush Administration, Peru passed, the free trade agreement, after the agreement made on May 10th by Mr. Rangel and Mr. Levin with the President and the USTR in that Administration.
You are about to table something in Chile, and I hope that you don’t weaken the things that were agreed upon in that May 10th agreement that made possible the Peru agreement, particularly the access to medications. I think that is one of the issues that gets slipped under the table. We think of environment and we talk about labor, but sometimes the access to medication provision in there gets lost. I hope that that will be a part of what you table on Monday when you get to Chile.
*Chairman Camp. If you could just respond briefly because time has expired.
*Ambassador Kirk. I would say I don’t know that we are to that point we are tabling on access. But I would say, for us, the value of our Administration, the May 10th agreement represents a good, sound bipartisan agreement among Democrats and Republicans. And that is certainly something that we are going to reach for in every one of our agreements.
Now, we have the opportunity, from what we have learned over the last seven years, that there are some areas that weren’t addressed, like indigenous innovation and state‑owned enterprises. But that is something that we are using as something we are striving for, certainly in something as aspirational as we hope to achieve through the Trans‑Pacific Partnership.
*Chairman Camp. All right. Thank you.
The chairman of the Trade Subcommittee, Mr. Brady, is recognized.
*Mr. Brady. Mr. Chairman, thank you. I would like to ask consent to insert my statement for the record.
*Chairman Camp. Without objection.
[The statement of The Honorable Kevin Brady:]
*Mr. Brady. I want to thank you, Mr. Chairman, for holding this hearing. The way you build bipartisan support for trade is by shining a light on this job‑producing issue. And House Republicans, especially this committee, are going to conduct a very aggressive trade agenda, focused on three areas: finding new customers, and opening new markets in a level playing field for American workers and companies; secondly, resisting protectionism, both here and abroad, so that we can tear down barriers for American producers and companies; and thirdly, working both within the United States and with our trading partners to find innovative ways to move goods and services faster, better, and cheaper around this world.
Your presence today, Ambassador, we think is key to those goals, and we look forward to you as a partner in all of those. We will be not just a willing partner but an insistent partner moving forward on trade.
I appreciate, one, your openness and willingness to consult and listen and talk about all of these issues these past two years. I congratulate you on successful improvement of the South Korea Free Trade Agreement. I very much applaud the joining of the Trans‑Pacific Partnership. I think that is key to both job production, setting a state‑of‑the‑art agreement, and getting us directly into China’s back yard in that growing market.
Three points I hope you will take with you today from this committee. One, the time is up for Colombia and Panama. They have not only done all that we have asked, they have gone far beyond it, signing the original agreement with the United States, a contract with us.
Then they amended it at the direction of Democrat members and Republican members in a bipartisan May 10th agreement. Both agreed to improve labor standards, improve environmental standards, improve intellectual property rights standards, a whole host of demands that have been levied upon them, and they did it.
Then both went beyond that, reaching in Panama to the tax information treaty addressing more labor issues. They have done everything we have asked of them. It is time for Panama.
Colombia has done the same, spending a decade improving their rule of law, their labor rights, creating a peace where there was violence. They too have been waiting to jump, frankly, to meet our demands so that we can be actual trading partners. And I think it is embarrassing that we have not moved forward on them.
And so I hope you will understand, this isn’t about ‑‑ these three trade agreements need to be submitted in the first six months. It is not about embarrassing any party or the White House. It is about making sure America doesn’t further embarrass itself by turning its back on our trading partners and our workers in the meantime.
The second point is that Russia, indeed ‑‑ I think there are tremendous benefits to moving them into a rules‑based global system, and I applaud your work in that area. But as a priority, I think it is important to know that there is virtually no chance that a Russia PNTR will be moved ahead of Panama and Colombia.
I think it is critical that those be signed by the President before we take that up. Russia’s progress can be measured in months. Panama and Colombia’s efforts can be measured in years and years, and they deserve movement now.
Final point. The Administration is looking at reorganization of trade and exporting efforts. I think that is very important. But USTR is unique. It is a very lean, entrepreneurial, nimble agency in an economy worldwide that requires all that.
I am not interested in turning USTR from a cougar into a hippo on trade issues. Stay nimble. You will get great support from all of us.
I would like your comments on those points, and as well on TPP as a job opportunity looking forward. I know you are working hard on that. Can you address any of those issues?
*Ambassador Kirk. Yes. And I am aware of the time constraints, Mr. Chairman. Just let me say, Congressman Brady, we very much look forward to working with you and your leadership on the subcommittee.
Being from Houston and understanding the importance of that port, the one thing I would tell you, in TPP, also with our partners in North America, we really are looking at the logistics side of all of these, those non‑tariff barriers, to make it easier and cheaper to move those goods around. So that is a big part of what we are doing on that.
I hear your concerns and those of members of both sides on Panama and Colombia. I assure you we are ready to get started. We want to try to get those resolved.
With respect to USTR, I am exceptionally privileged to lead, I think, an agency that provides the best bang for the buck to the American taxpayers. There are only 230 of us. We do an extraordinary service in negotiating agreements, enforcing America’s rights. And that does make our work special and we want to keep that.
But at the same time, having been in business, you and I know if you don’t examine how you do what you do every three or four or five years, you are losing ground. So we welcome this review under the President’s commission. But we will also make sure that we don’t lose what makes USTR special, and our ability to help go out and create jobs with what we do.
*Mr. Brady. As a fellow Texan, thank you very much.
*Chairman Camp. Thank you.
Mr. Nunes is recognized.
*Mr. Nunes. Thank you, Mr. Chairman.
Mr. Kirk, welcome to the committee. And here, virtually everyone on this side of the aisle has asked you about specifics as it relates to Colombia and Panama. And we still haven’t heard any specifics. The ranking member, Mr. Levin, mentioned that these specifics do exist, although we still don’t know what they are.
I did hear you specifically say ‑‑ you mentioned something when Mr. Johnson was questioning. You mentioned the communities of Pittsburgh, Detroit, and the Carolinas as not benefitting from trade. So I thought that was getting close to specifics.
And I just wondered, how do those communities not benefit from the Colombian or Panama trade agreements?
*Ambassador Kirk. Well, first of all, if I said that, I misspoke myself. I think all Americans benefit from trade because, first of all, every family benefits when we make it easier and cheaper to put food on the table to feed your families, when we make it easier to provide the most advanced electronics to help your kids with their education.
But there are communities ‑‑ and I know you won’t find it a surprise ‑‑ that feel like that our trade policy has not operated to their benefit, that they have been harmed more than they have been helped. And it is a very broad brush. You get west of the Mississippi River and most of the members that I talk to, Democrat or Republican, are wanting me to move forward. You get into the Rust Belt and there is a little more cynicism about it.
And it isn’t just that. Our concern is an overwhelming majority of Americans now disagree with the proposition that trade has been good for us. We have to work ‑‑
*Mr. Nunes. Right. But when it comes specifically to Panama and Colombia, those countries have access into our market and we do not have access into their market. We would under these trade agreements if they were advanced.
*Ambassador Kirk. That is correct.
*Mr. Nunes. So if that is true, then why don’t we ‑‑ all we want are specifics. I think all Colombia and Panama are asking for is, specifically, what do you want us to do? They have gone beyond the labor chapter in the Andean Trade Preference Act. They have explicitly incorporated the International Labor Organization declaration into this agreement.
So all we want are specifics as to what is the Obama Administration asking Colombia and Panama to do before the President will submit these trade agreements to be approved by the Congress?
*Ambassador Kirk. Let me make it plain. There are different elements involved in Panama and Colombia. They are not the same. With respect to Colombia, we are decidedly focusing on the issue of labor rights, the violence against workers. There has been some progress, and obviously some of you are reading from perhaps different hymn books. But I would say there is a fairly strong divergence of thought on this committee, and among a number of our stakeholders, how much Colombia has ‑‑ the progress they have made in putting in place the necessary changes to their labor law to just provide those basic rights, to organize and such ‑‑ we are not asking them to mirror our rules here in the United States ‑‑ and to strengthen their judiciary, and the law enforcement, to bring those that have perpetrated this violence to justice.
Those are the issues that we are trying to focus on. We want to take advantage again of the fact‑finding mission of your ranking member. Again, Chairman Baucus is going to go down. We are sending a team. We are going to do everything we can to expedite that, Mr. Nunes, so that we can agree what ‑‑
*Mr. Nunes. But Mr. Ambassador, aren’t these matters outside the confines of the trade agreement that was signed on May 10, 2007?
*Ambassador Kirk. Yes. In many cases, they are. But I think they are issues that the American public believe are sacrosanct for us. I mean, again, the reason I gave you that recitation about my experience around the country, part of the American public’s frustration, the biggest thing I have heard, is one, nobody else plays by the rules but us. And it wasn’t just China. They felt like our trading partners weren’t playing by the rules, and we wouldn’t stand up and enforce our rights. We have addressed that.
But the other thing is people’s concern that we will sign an agreement with anything. If somebody has benefitted, we will sign it, and we don’t care how they treat their workers or if it undercuts our workers or creates an unlevel playing field.
And that is why we think it is important to address that, not just to find a way to go forward, but to begin to get Americans’ confidence that trade works for us. We can create jobs here, and we aren’t creating incentives to just move production to another country that may not respect the rights of those workers.
*Mr. Nunes. Well, I know that President Obama is going to go down to South America. He is going to visit Brazil. And I just think before we go on ‑‑ and I don’t have a problem with him going to Brazil; I think it is a positive step.
But with Colombia still sitting out there, and he is going to that hemisphere, and for that trade agreement to be sitting out there, I just don’t know what credibility the President will have or the Administration will have when we still have pending trade agreements from 2007 and we are operating outside of the confines of those trade agreements asking for things that, quite frankly, Mr. Ambassador, go outside of all the rules of engagement on making these trade agreements.
And I will submit ‑‑ I want to thank you, Ambassador, and I will submit, Mr. Chairman, for the record a question on the Mexico trucking issue.
[The information follows The Honorable Devin Nunes:]
*Chairman Camp. All right. Thank you.
Mr. McDermott is recognized.
*Mr. McDermott. Thank you, Mr. Chairman. Thank you, Mr. Stark, for giving me another five minutes.
I would like to go on with the question of China. In section 301, the green technologies issue, there was a letter from us, 178 Democrats and three Republicans, asking you to look into what was going on there in terms of their green technology and wind turbines.
It is my understanding you have decided to find a case on the wind turbine issue, and we are very much pleased by all of that. You said, in doing that, that you lack the tools and the resources to uncover all the evidence within the statutory time frame.
Tell us what you need to make it possible for you to do this in other areas and in a more timely fashion because we want to work hand‑in‑glove with you to make these things work for our workers, for our economy.
*Ambassador Kirk. Well, first of all ‑‑ and we do appreciate your letter, and as you know, a 301 petition was filed last fall regarding China’s industrial policies in a number of the energy areas. There were five different complaints alleged.
The good news is we were able to successfully resolve the overwhelming majority of those by directly engaging and confronting China through our office at USTR, but also through JCCT. We did initiate consultations through the World Trade Organization on China’s, we think, illegal subsidy of projects in the wind area. We are beginning consultations there.
I want to be careful in this environment in which I know at the same time this committee is meeting, your budget committee is meeting. And you are in a horribly constrained environment. And we are asking American families to tighten their belt and make decisions, and I know it is too easy sometimes for all of us to just come and say, give us more resources.
Now, having said that, we have a very strong team at USTR, but we are not all lawyers. That 223 employees is everybody, from top to bottom. And if we are going to have the robust enforcement that we have committed ourselves and engaged on, one of the things we are going to be looking, perhaps, through this organization is how we can strengthen our resources there because we have great legal talent that understands the law and can prosecute cases.
We are woefully short, frankly, on the investigative side, so in many cases, we have to rely on the resources of other agencies. Something as simple as when we take on a case with China ‑‑ in the tires case that Congressman Levin mentioned, we exhausted our translation budget in three months on one case with China because of the amount of money we had to spend on translators.
But we are working with other agencies to see if we can’t address that, and we will be happy to come back and visit with the committee on ways that will add the resources to make sure that we can stand up for our rights and America’s workers.
*Mr. McDermott. Can I ask further? We have talked a little about the Korean Free Trade Agreement, and I would like to hear from you what you think the positives impacts were. We are arguing or fussing about the timeline and when will it be up here and all that. When it happens, give us an idea what you anticipate will be the positive impacts on the economy.
I understand you estimate $10 billion as opposed to $1 billion in Colombia, so it seems like a much bigger deal. But where is that going to happen in the economy?
*Ambassador Kirk. Well, first I want ‑‑ and I do appreciate that. The $10 billion number is one that the ITC estimates. We don’t do the economic estimates. They take that away from us. We think that is a fairly conservative number because the way we capture trade data right now is much more heavily weighted to manufactured and exported goods. It is not as precise as it relates to services.
We talked a lot about what this will do to level the playing field in the automotive sector. But this is going to be very good for all American manufacturers because we are going to see a reduction in those tariffs immediately, the elimination of most of them in the first five years, and 80 percent of our exports to Korea are in the manufactured goods sector.
For those of you from farm states, this is a great win for us. Our beef exports are up 187 percent. We are now exporting almost $500 million worth of beef in Korea. The tariffs on those are going to come down immediately. It is also going to help grains and soybeans and others, so those sectors are going to benefit as well.
Where we really see an opportunity for us to gain market access is in Korea’s service market. It is a $560 billion market that we for the most part have had very little penetration. For the first time, we are going to have access to that.
So we think the $10 billion number is compelling. The 70,000 jobs, we actually believe that is a fairly conservative number. The other important thing, it gives us a foothold, again, in one of the most economically dynamic regions in Southeast Asia and strengthens what is already a very strong strategic partnership between the United States and South Korea.
*Chairman Camp. Alright. Thank you.
Mr. Tiberi is recognized.
*Mr. Tiberi. Thank you, Chairman. Thank you, Ambassador, for your leadership, and thank you for being here today. As you may remember, I am from Ohio, one of those Rust Belt states that you talked about. I know you have an Ohio connection as well.
A quick question: The President has talked about doubling exports. Can we do that without passing any additional trade agreements?
*Ambassador Kirk. It would be difficult. And again, one of our passions for getting Korea and the others right, Mr. Tiberi, is to do that. Now ‑‑
*Mr. Tiberi. Thank you.
*Ambassador Kirk. ‑‑ I would tell you, to this point our exports are running at about 17 percent per annum clip, which is above the 15 percent needed. But certainly if we can get not only Korea but Panama and Colombia and Trans‑Pacific Partnership done, it will make that goal much more ‑‑
*Mr. Tiberi. And increasing exports means increasing jobs, growing the economy. Correct?
*Ambassador Kirk. Yes, sir.
*Mr. Tiberi. You talked about cynicism, and you were absolutely right on. In my state, in my district, there is a ton of cynicism with respect to trade, and there is a disconnect between trade and exporting. And I appreciate your leadership. It has been absolutely fantastic.
However, there is a farmer in this room from my district. His name is John Davis. And he is cynical as well with respect to Washington, D.C., and here is why.
If you sat at his farm home in the fall of 2008 during the election, you would have seen a Candidate Obama talk about repealing NAFTA, how CAFTA was bad, how trade has cost jobs. If you would have sat in his farmhouse during the last election in 2010, you would have seen more money than I have ever seen spent in Central Ohio, as well as in the Cleveland market, in the Cincinnati market, about how trade has cost hundreds of thousands of jobs in our state. Trade is the big bogeyman with respect to how Ohio’s economy has suffered.
And so if you are John Davis sitting in this room and you want to hear about cynicism, how do we stop that cynicism when every two years in an election we have people running for office making trade the bogeyman? Nobody, nobody, understands that you are going to ‑‑ in my state, at least, other than people who work this every day who you talk to who maybe run companies or farm like John Davis, that we could, for instance, with Panama, by passing Panama, we can double agriculture exports from the United States, which means, again, more healthy farmers.
But that is the minority. It is not the majority of Ohioans because all they see coming from leaders, like President Obama when he was campaigning in 2008, that trade costs jobs. That puts a tremendous amount of pressure on you and on me and everybody else up here when we try to tell them, no. Exporting and trade actually is going to grow our economy.
And I think the President is disadvantaged when now he says, we are going to grow the economy by exporting ‑‑ and, by the way, not talking about trade agreements ‑‑ because he is one of many who has said trade has cost us hundreds of thousands of jobs.
As you know, Canada is Ohio’s largest trading partner and has created a ton of jobs in Ohio. And Canada is a great ally, not just a great trading partner. So how do you, as the point person, who has been dealt a very difficult hand and has handled it very professionally, help bridge that disconnect with the American people and the people in the Rust Belt that no, trade is good, trade can be very good, trade can actually grow our economy, exports mean trade, and it can actually create more jobs in America and create a better America for all of us and our kids?
*Ambassador Kirk. Well, you heard Mr. Brady talk about my work as a mayor, and I always tried to govern myself with one principle, that the truth is always an option. And unfortunately, I don’t know that either one of your statements is wrong.
And one thing we are doing is going to place like Cleveland, and going to Detroit, not just going to Dallas and Washington and others, and talking truthfully about what the promise of trade is. But it also means then that we have to have a less tin ear to those that say we need help.
So one of the things you do ‑‑ and I agree; I think it was Congressman McDermott ‑‑ we do need to pass trade adjustment assistance. And we need to enforce our rights as we did in the tires case. And then we can get people to sit and listen. We can make the case and help them understand trade can help create jobs in Ohio.
*Mr. Tiberi. Well, Ambassador, I hope that your leadership ‑‑
*Ambassador Kirk. Obviously, Rob Portman made a good case of it because he ‑‑
*Mr. Tiberi. Yes. Well, I hope you use your leadership to help us get Colombia and Panama across the line as well because if we are indeed going to double our exports in the next several years, it is critical that we pass Colombia and pass Panama in the very near future.
*Ambassador Kirk. Yes.
*Mr. Tiberi. Thank you. I yield back.
*Chairman Camp. Thank you.
Mr. Davis is recognized.
*Mr. Davis. Thank you, Mr. Chairman.
Ambassador Kirk, before asking my question, I would like to comment briefly on the Japan Post insurance issue, which I know you are aware of, which is a matter of serious concern to many of us on the committee.
Members of both parties are watching closely to see how the Japan Post privatization is handled. This issue is very important to U.S. insurance companies. I know you have worked hard to encourage Japan to reform Japan Post in a manner consistent with its WTO obligations, and I am concerned that the privatization efforts to date may not fully be in compliance with its commitments as a member of the WTO.
Mr. Ambassador, we support your efforts and those of your predecessors and hope that you can achieve a successful resolution to this issue soon. I will be submitting a question for the record pertaining to this important issue.
But for my question today, I would like to come back a little bit closer to home, to some of the agreements that have already been touched on. I would like to hear your thoughts on the geopolitical or geostrategic aspects of two of our pending free trade agreements, Panama and Colombia.
They are key U.S. allies in Central and South America where Venezuela’s anti‑American president, Hugo Chavez, seeks to undermine U.S. interests and dominate the political landscape. Panama and Colombia are also key links in the north‑south inter‑American drug trade. By not implementing these agreements, we are allowing some in Latin America to question our commitment to the region.
I am not alone in this belief. In May 2008, five former heads of the United States Southern Command wrote an open letter to Congress strongly urging support for the Colombia Free Trade Agreement. In light of the significant U.S. strategic interests in the region, I am concerned that the failure to move these agreements could precipitate a setback for U.S. influence in the region.
Do you share these concerns? And if you do, would you mind elaborating on them for a moment?
*Ambassador Kirk. Well, let me say that we have examined our relationship in Latin America from every standpoint. Now, I am always ‑‑ I try to be guided by the reality that the only reason the Office of U.S. Trade Representative exists is because Congress mandated that there be someone that looked at these purely from sort of a commercial standpoint, not a strategic one. That is why we are no longer housed in the State Department.
Having said that, we fully understand the strategic importance of our relationship with Colombia. We applaud the work of both the Uribe administration and now the Santos administration in working with us on the drug interdiction areas. But that is why I think it is that much more important that we are willing to try to find bipartisan compromise to move forward on these agreements that stalled in May 2008.
In Panama, everywhere I have gone from the Port of Baltimore to the Port of Orlando is getting ready and building infrastructure here to take advantage of the widening of the Panama Canal and the impact it can have on our port facilities here to handle greater transshipment of goods back and forth.
So yes, we have examined all of those elements of the benefits of that. And I think it just creates a great imperative for us to come together on this other issue so we can allow these agreements to move forward.
*Mr. Davis. I guess I would like to go to a deeper level on it. The concern that I have ‑‑ and I appreciate, as Mr. Tiberi noted, you have been dealt a difficult hand in dealing with this. You understand firsthand the issues of the benefits of trade.
But when we talk about raising the issues of the ILO standards, we talk about various perspectives, out of concern for the Colombians, let alone the Panamanians, we have had their militaries come and plead with us, militaries across Central America and the Colombians, to bring these agreements about because of their internal security issues.
And labor leaders in Colombia have come and pleaded to have us bring this forth. And those would have are strong organized labor advocates in the Democratic caucus have chosen to ignore the very voices that they say they are trying to help.
And I guess my concern is, considering that Colombia is more in compliance, as I understand it, with these ILO guidelines than we are, don’t you think that this rhetoric is a little bit ‑‑ not yours ‑‑ but a little bit dissonant? That we need to actually agree that this needs to move forward? It needs to move forward urgently both for economic and national security concerns?
*Ambassador Kirk. Well, we want to address all of the outstanding concerns. I am not going to comment on your interpretation of the Democratic members of this committee’s understanding of those ILO commitments.
And I would say ‑‑ and I appreciate Mr. Tiberi’s concerns. But I enjoy the work that I have, and I think the President has demonstrated great courage and leadership in articulating to the American public how we can win, but we can win by having trade agreements that fairly reflect our values, that open up markets, that are enforceable. And if we can work in a manner to get those done, then I think we will get to a place that we are not having this conversation next year.
But the longer we want to sit and try to decide which party is to blame for not moving it forward, that is how you end up with these agreements being stalled for four years. And so I think it is time to look. Let’s find common ground. Let’s stop pointing fingers at one another and figure out a way to move these forward.
*Chairman Camp. Thank you. Before I recognize Mr. Lewis for five minutes, after Mr. Lewis we will go to three minutes of questioning. I know the Ambassador has to leave at 12:30, and I want to give everybody an opportunity to ask a question of you.
So with that, I will recognize Mr. Lewis for five minutes.
*Mr. Lewis. Thank you very much, Mr. Chairman. Mr. Ambassador, I want to thank you for being here today, and thank you for your service.
We have heard a great deal about delay. Wait. Is it better to rush and get an agreement, or to wait and get it right? Now, Mr. Ambassador, you know I am very concerned about the issue of human rights, workers’ rights, environmental issues. Some of these concerns and issues are long‑seated problems in Colombia.
You know, it is all right to talk the talk, but sometimes we need people to walk the walk. And I am not sure that the leaders, even the new leaders, are prepared to walk the walk. There are too many killings, too many violations of human rights, too many people disappearing.
And as you said, and I agree with you, our trade agreements, our trade policies, should reflect our core values. Could you just elaborate? What are you going to do to see that the people in Colombia do the right thing? As someone said before, the time is always right to do right, and if we don’t stand for something, we will fall for anything.
*Ambassador Kirk. Congressman, thank you for your question. Thank you for your service. You are a hero to so many of us who value and respect human rights, and we appreciate your advocacy and leadership on that.
I will say what I have said to others. We think that there has to be a way for us to respect the sense of urgency that America take advantage of these opportunities to conclude these free trade agreements so we can say to that farmer, here is an opportunity for you to grow your business. We can say to our manufacturers.
But we have to keep faith with the American people that want us to have a trade policy that reflects those values. And so, again, my simple answer is we believe we have to be responsive to both, and we can do so.
I know you have spent years studying and devoted to the issue of human rights, labor rights in Colombia. I would tell you we are greatly encouraged with not only the rhetoric but the actions we have seen of the Santos administration, and that is part of what is driving the President to encourage us to intensify our negotiations.
I know for some there is still an unacceptable level of violence. But we do believe, not only under the current Administration but under previous Administrations, Colombia has made great strides. We think we can build on that and work with the new Administration, work with those of you on the committee on both sides, and come up with the path forward that allows us to address their sense of urgency but your concerns about making sure we do so in a manner that takes care and respects the rights of those workers.
*Mr. Lewis. Thank you very much, Mr. Ambassador.
Mr. Chairman, I didn’t take my five minutes. I think I took about three.
*Chairman Camp. All right. Thank you.
Mr. Reichert is recognized for three minutes.
*Mr. Reichert. Thank you, Mr. Chairman.
Welcome, Mr. Ambassador. I have enjoyed working with you, and you do enjoy your job, I have noticed that, although it is a tough one.
The bottom line is that we want to sell American, and that is really the message. And I think you are delivering that message loud and clear. I am pleased to be a part of the Export Council initiative with Mr. Tiberi and yourself and Secretary Locke. And the goal, as I understand it, so far in the two meetings we have had is to create two million jobs by doubling exports.
As I have said in some previous trade hearings, we haven’t done that, doubled exports, since 1995, between the period of 1995 through 2007, and during that period of time, we passed nine trade agreements.
So one of the first questions I was going to ask is whether or not you thought that passing the Korean Free Trade Agreement, or not passing, would impact the doubling exports initiative. And your answer was, it would be difficult.
So I also want to say that I really appreciate your recognizing right up front Washington State’s issues as far as Canada attracting new customers into their ports and not into the Port of Seattle and Port of Tacoma when we first visited, and the importance of Korea to Washington State, as Korea is its fourth largest trading partner.
So what will be the impact of further delays in passing the Korean agreement through Congress? What do you think they might have on meeting that the Export Initiative’s goals? And do you believe, as I and many colleagues on both sides of the aisle do, that we will lose hundreds of thousands of American jobs if the E.U. implements its agreement with Korea before we pass ours? And connected with that, we know that China has already increased its exports ‑‑ or imports to Colombia by over 200 percent. We are losing market share.
If that is true, we are going to lose thousands of jobs with these two things happening. Doesn’t the same hold true with Colombia and Panama?
*Ambassador Kirk. Yes. First of all, Congressman, thank you for hosting us during the road show with the ASEAN ministers when we were in Washington. Thanks for working with us on the Export Council.
And in the interest of time, the answer to all your questions is yes. I would add one thing, briefly. When we look at Korea, we tend to look at the 70,000 jobs. It is important to note four years ago we were the number one exporter in the Korean market. Today we are number four and sinking fast.
So there are two ways to look at this. You can look at this and say, we pass it, we have the opportunity to reap the benefit of those 70,000 jobs. If we don’t pass the Korea Free Trade Agreement, we put at risk 270,000 jobs that are now tied to all that we export to Korea.
And I would say to those of you concerned about Panama and Colombia, I think it is a bit easy to look at Korea because it is $10 billion. From our Administration ‑‑ I can certainly speak for me ‑‑ every job is important. So whether Panama is a billion‑dollar market or Colombia is a $2 billion market, they represent opportunities for some small business. And that is why I think it is important we find a way to bridge our differences to move forward on those as well.
*Chairman Camp. Alright. Thank you.
Dr. Boustany is recognized.
*Mr. Boustany. Thank you, Mr. Chairman. Ambassador Kirk, I am glad we finally have you in front of our committee, and so welcome.
Look, I appreciate the work done on the South Korean Free Trade Agreement. I know it is going to help workers. It is going to help us grow jobs and business. But I can’t pass up this opportunity to say that rice, which is very important to my state in Louisiana, was excluded.
We know no trade agreement is perfect. But I do believe procrastination really hurts us from a standpoint of prestige, credibility, and leverage. So it is time to move forward on this agreement.
By contrast, if we look at Colombia, our commodities, including rice, are included in this agreement, and we have seen amazing statistics whereby U.S. exports of commodities have plummeted just over the past year or two because we have not moved forward and other countries are moving forward with Colombia and free trade agreements.
So I hope that we will get to the point where we stop hurting our farmers and rural communities and get moving on these because it is going to help us export our commodities going forward.
I want to raise an issue. You and the President have talked extensively over the past two years about enforcement as a very important part of your trade policy. I have a mid‑sized Louisiana company that cannot get payments on nearly $3.7 million in business with China, products that they sold to China.
I believe having a robust bilateral investment treaty with China is imperative. Other countries are doing this. If we are going to regain a competitive footing and help especially small and mid‑sized firms, as the President has expressed interest in doing, we need a robust dispute settlement mechanism to handle this. And I think we are falling behind.
So what is the delay on the part of the Administration in moving forward in getting a bilateral investment treaty specifically with China?
*Ambassador Kirk. Well, first of all, Congressman, thank you for your comments about agriculture. And parenthetically, I will tell you this year America’s exports were up dramatically, almost $106 billion, according to USDA. They are forecasting that 2011 could be our highest year ever. We may reach as high as $114 billion, and that is extremely important to all of America’s farmers and their workers and families. And we will be looking to try to address some of your concerns about rice within TPP and others.
With respect to enforcement, we are trying to do two things with China. We are seeking a BIT with China. It would be helpful. We have had four negotiating rounds thus far. We are moving on parallel tracks because, one, we had already begun a process to review our BIT model because we believed it needed updating; it hadn’t been revised in almost ten years.
We are hopefully at the very end stages of that. We have had extensive consultations with our committees of jurisdiction, the business community, and there are only just a couple of issues that remain to be resolved. But we are going to try to get that work concluded as soon as possible as well, and then we can go forward, not only with hopefully concluding our BIT with China, but with India as well.
*Mr. Boustany. Thank you.
*Chairman Camp. Thank you. The chair recognizes Mr. Neal.
*Mr. Neal. To you, Mr. Chairman.
Mr. Ambassador, I want to weigh in, as Mr. Davis did, on the issue of Japan Post. It is a very important issue to my constituency, and we have gone back and forth on that with USTR over a number of years. And I hope that you are going to continue to vigorously pursue that issue in terms of reform.
Let me just, if I can, Mr. Ambassador, take us to an issue that I think is important here. Our friends on the other side suggested repeatedly that there has been these delays that we have constructed into these FTAs. In many ways, the easiest bilateral was Panama, and the problem was the complication that was offered by the assembly speaker, who murdered, I believe, an American soldier, who was alleged to have murdered an American soldier.
The Bush Administration correctly pulled back on that bilateral because of that human rights violation. So we can’t say that we are going to, as Mr. Lewis pointed out, dismiss certain bad behavior with human rights if it is a Republican president, and then insist that human rights ought not to be a consideration if it is a Democratic president. And I think that is the point that Mr. Lewis and I were trying to shop with you.
But could you give us an update on where we are with the Panama bilateral, and what has happened with domestic politics there that might ensure an easier path to completion?
*Ambassador Kirk. I will try to. And thank you for your comment. You are correct in noting that one of the reasons Panama stalled was the complication of I think it was the head of their assembly that had been convicted in a court in Florida, in fact, of murdering a U.S. soldier. And the Bush Administration wisely said, we aren’t going to do business with you.
After that person was removed from office, we began to engage Panama on ways we could address the outstanding issues we had presented to them. Then we had the intervening complications of the OECD designated Panama as a tax haven.
And we were engaged with the previous Administration, and we met with them in the Summit of the Americas. Mr. McDermott, in fact, was there, and others. And that Administration told us, frankly, if you are telling us that we are going to have to put in place a tax information exchange agreement, we are not sure that we want this deal.
But the bottom line is we were able to progress beyond that. We have a new Administration in place. They do value this relationship as we do. We have made great progress on a number of the issues on labor. They have been working with Treasury to address the tax issues.
I do understand they have initialed the tax information exchange agreement. There is some legislation that needs to be passed to address a corollary issue relating to bearer shares. But frankly, we are making very good progress with Panama, and we will be working with them on the coming months to see if we can’t address those outstanding issues.
*Mr. Neal. Well, thank you, Mr. Ambassador. The point that I think that also needs to be raised, that this committee’s history, certainly in the 22 years that I have been a member, has been largely bipartisan. I think that as we try to find a path forward on these issues with these bilaterals that are hanging out there, we really want to ensure that the language that is offered here makes certain that going forward would be a bipartisan undertaking. Thank you.
*Mr. Brady. [Presiding] Thank you.
The chair recognizes Mr. Heller.
*Mr. Heller. Thank you, Mr. Chairman. And Ambassador, thank you for being here. Appreciate your spending some time and effort and energy in this committee with us.
From a state that is struggling, Mr. Ambassador [sic], with almost 15 percent unemployment, we talk about these free trade agreements and their impact and what they would mean to a state like Nevada. Clearly they are incredibly important. In fact, trade, as you probably well know, has certainly helped Nevada.
Since its inception in 1864 to the year 2000, we went obviously from zero trade to $1.5 billion. But then from year 2000 to the year 2008, it went from a billion and a half to almost 6.2 billion, an increase of 266 percent in just nine years.
Now, the President has challenged all of us to double exports in the next five years. I would argue that Nevada has already done this. From 2004 to 2008, our exports jumped 110 percent. And we did this by taking valuing of fast‑developing markets, helping Nevada companies access these markets such as China.
In 2000, China was Nevada’s 24th largest export market. In 2008, it was our third largest. Similar examples with India, from 28th in 2000 to 17th, or Brazil from 26th to 20th. So trade has always been very, very important for a state like Nevada, and clearly, as we move forward with this economy, trade is going to play a big part in picking this state up.
Mr. Boustany talks about rice, and rice is important in Louisiana. And mining is very important in Nevada. And I would like to share a real story. We have some miners here in the building, and some of their concerns are with pending free trade agreements.
For example, in Panama, their concern is that they have taken a lead based on encouragement from the government that there will soon be a free trade agreement; but in their efforts to mine and do the research and development which they are doing, what they are finding is that the corruption in the government in Panama right now is making it very, very difficult for them to make a profit even though the ore, the mineral they are able to find, has been very good.
And a lot of these international or national mining companies, of course, come out of the State of Nevada. And sharing their concern with me, I guess I will put it in your lap. How would you address this?
I mean, they pay the licensing. They pay the fees. But then they pay the fines. They have a corrupt government that they have to make under‑the‑table payments, and it is making it very, very difficult for them, obviously, and their shareholders to produce or to make a profit.
How would you respond to that, and in light of perhaps a Panama Free Trade Agreement coming through, be able to give them some encouragement?
*Ambassador Kirk. One, I would want to follow up and get more specifics on that. Secondly, I wasn’t much of a lawyer, but the lawyer I was would tell you that what you framed to me was a hypothetical because American companies don’t pay bribes because that would be in violation of the Foreign Corrupt Practices Act. So first of all, we are not going to put anybody ‑‑
*Mr. Heller. It is tough out there. It is tough out there.
*Ambassador Kirk. ‑‑ at risk of that. But I don’t mean to make light of it.
*Mr. Heller. I understand. I understand.
*Ambassador Kirk. If we could maybe have a conversation afterwards, I could learn a little more about that.
But I would say one of the values of all of these free trade agreements ‑‑ and, for example, why we want Russia in the WTO, and China ‑‑ is then we do have them in a legal rules‑based environment that we can address some of these issues.
But I will be happy to follow up with you. And I would say ‑‑
*Mr. Heller. I would appreciate that.
*Ambassador Kirk. ‑‑ but we don’t talk enough about travel as a part of our exports. And as Congressman Reichert can tell you, on our Export Promotion Council, that is one element that we are looking at. And since I was in your great state for the CEC Council, it is refreshing to see that the tourism and the dollars that those foreign businesses bring ‑‑
*Mr. Heller. It is helpful.
*Ambassador Kirk. ‑‑ are helping to bring Nevada back.
*Mr. Brady. Mr. Chairman ‑‑ thank you, Mr. Chairman. Thank you very much. And thanks for being here today.
*Mr. Herger. [Presiding] Thank you. And I do appreciate President Martinelli’s effort both to resolve outstanding issues so we can move forward on Panama as well as create a business climate that is welcoming for foreign investment as well.
The chair recognizes Mr. Roskam.
*Mr. Roskam. Thank you, Mr. Chairman. Ambassador, thanks for your time today.
Ambassador, earlier you said that the Administration was going to move forward on the Korean Free Trade Agreement in a matter of weeks. That sounds like a processed answer, and a lot of thought was given to that.
Is that a matter of weeks that can mean months, or is that a matter of weeks, the common understanding of weeks, that is, less than a month?
*Ambassador Kirk. Well, I went to public schools in Texas. But for us, weeks means weeks.
*Mr. Roskam. Good. So less than 30 days we can expect that?
*Ambassador Kirk. We are ‑‑ listen. We are trying to finalize the text. As you know, we are operating under trade promotion authority, and so there is a fairly structured process by which we submit this to this committee and Finance, and you began your, I think, mock hearings on those.
We very much are concerned, as you are, that we want to get this agreement before the Congress and passed so that at least we aren’t putting our exporters in a competitive disadvantage.
*Mr. Roskam. Great. But just so that I am clear, the common understanding of weeks is less than a month. And that is what really we are looking at. Is that right?
*Ambassador Kirk. Yes, sir.
*Mr. Roskam. Great. How about Colombia?
*Ambassador Kirk. You may have missed my introductory remarks. But the President, just as he did last year in directing us to see if we couldn’t conclude our negotiations on Korea, has directed us to intensify our engagement with Colombia so that we can resolve those outstanding issues this year.
And we have had, I think, a fairly exhaustive discussion of the sense of urgency and the sense of concern from members on both sides. And we are going to find some way to find some common ground that will allow us to address those and move forward.
We will send a team to Colombia next week. The vice president was here. Two weeks ago he met with myself, members of the Administration, the Secretary of State. We are encouraged with their new leadership. We hear your message. We are going to move forward as quickly but thoughtfully as we can.
*Mr. Roskam. Turning just briefly to China, I want to highlight an experience in a nutshell. And I will follow up with you with a letter, Ambassador. A corporation in my district, Fellows Manufacturing, is involved in essentially a nightmare scenario with a joint venture that has gone south. And they have not been able to get the legal remedies that they deserve.
I think it is a very, very serious example of manipulations on the part of some in China that are taking advantage of an incredibly significant manufacturer in the Chicago area. Because our time is truncated, I won’t belabor the point. But I did want to highlight it because I think it is an area where the Administration and Congress can work forthrightly to advocate and defend American manufacturers who in some cases, and in this case, a quick reading of this story, it sounds like the wild west.
So I know you don’t have the benefit of the details, but I will follow up and get these to you for your consideration.
I yield back.
*Mr. Brady. Thank you. I inadvertently recognized a member who was not here at the gavel at the outset, so in fairness, would like to recognize Mr. Rangel.
*Mr. Rangel. Thank you, Mr. Chairman, and it is just a great pleasure to see you here, and even a greater pleasure to hear about the progress that is being made with our dear friends in Korea. I first went there in 1950 under different circumstances, but I cannot believe the tremendous advancement that they have made economically and in terms of democratic principles.
Quite frankly, it is much more difficult to alter agreements that already have been made rather than be involved in the first instance of discussion. You have done a fantastic job and I am so pleased to hear that.
You know better than most people that we have reached a point, due in part to high unemployment, that when you say trade, people believe you are selling out the “Made in the USA,” and you are transferring jobs across. And of course, whether Republican or Democrat, business or labor, I don’t think we do a good job in identifying exactly where is the job creation.
It just seems to me, as a former mayor, that if you are selling anything, the bottom line is, what is in it for me, Jack? And that is how you sell things. That is what politicians do.
So if you had asked me as to what this does for America, I would relate so closely to Detroit as well as Nevada and the pain that we feel as Americans. When you see this type of pain, you know if it is good for Detroit, it is good for us. And you have really overcome a big obstacle.
But what about the rest of the jobs, whether in services or agriculture? Why don’t members, Republican and Democrats, come and say, Rangel, we need that bill; it is going to help us to have jobs? I don’t hear that type of thing. I hear it from the Chamber of Commerce. I hear it from the Republicans. I hear it from business people, and certainly those that have a concern about making America great because we have to trade in order to survive.
But how do you reach out to see what jobs are going to be created? Of course, if they are for New York, that would be great. But if they are not, they should be good for the country. I don’t get that response on trade.
*Ambassador Kirk. Well, Mr. ‑‑ forgive me, Mr. Chairman ‑‑ Congressman Rangel, thank you for your kind words. Thank you for your service to our country. And one, we would love nothing more than to work with you, with the members, to provide you that data.
Again, we are reasonably small. But I can tell you, in the case, we can get data for every member, every district, at least to the degree we have collected what every one of these free trade agreements means in your communities.
And I can tell you, in the case of Korea, there is not a member here that does not have at least tens of thousands of workers that won’t be benefitted from our passing this agreement. Some may be in manufacturing. Some may be in the services and insurance. Some may be in agriculture. Some may be those small businesses. We tend to overlook the fact that many of the beneficiaries of trade are those small businesses who are suppliers to either Caterpillar or Chrysler or Ford, and they may not even realize that they are benefitting from trade.
But we would welcome the opportunity to sit down with any member and at least give you the best data that we have. And then hopefully you can help educate us on what some of those opportunities are.
*Mr. Rangel. Thank you, Mr. Ambassador. “Kamsa Hamnida”, as they say.
*Mr. Brady. Thank you. The chair recognizes Mr. Gerlach.
*Mr. Gerlach. Thank you, Mr. Chairman. Mr. Ambassador, thank you for testifying today.
Whenever you talk about trade in Pennsylvania, the first word that comes up is China. Everybody is so concerned about the current trade policy, or lack of trade policy, that we have relative to that growing economy. And we have heard from so many different businesses and entrepreneurs in Pennsylvania that the currency manipulation problem is one that is greatly impacting adversely their ability to trade their products in China and have a fair price for a Chinese product here in the United States.
In the testimony you shared with the committee before you started at 10:00 a.m., you have a paragraph here that says, “Engagement with China, including through the Joint Commission on Commerce and Trade, has been very productive, showing results in addressing indigenous innovation policies, improving intellectual property rights, including securing greater use of legal software.”
That is wonderful progress and we applaud you for that. But there was no mention of the currency manipulation problem that continues to be such a problem.
So my question to you is, first of all, what was the specific discussion, if you know, between President Hu and President Obama when they met recently on this issue? And what can you tell me the specific plan is of the Administration to try to get this currency manipulation problem resolved once and for all?
*Ambassador Kirk. Well, I appreciate your concerns about China. It is a complex but long‑term and extraordinary opportunity for America’s businesses and exports, just as they are trying to move 600 million people from an agrarian society to one in which they can have a need for and afford the types of products, services, goods produced in this country. So first of all, we think it is worth the time and effort.
Secondly, my remarks were deliberately drafted to reflect those areas that USTR can most impact. And I hope I don’t sound evasive, but as you know, our Secretary of the Treasury has the responsibility to address the currency issue, and I know he has spoken on that. And so I don’t want to say anything that attracts or detracts from the stance that Secretary Geithner has enumerated on that.
I will tell you that in every occasion that President Obama has engaged President Hu ‑‑ and it is instructive to note we have progressed to a point where it was a big deal 10, 15 years ago that an American president entertained his Chinese counterpart once in a term. President Obama and President Hu have now had eight face‑to‑face meetings. When you include G20, G8, every four, the President does address the issue of China allowing its currency to flow to national norm. So we do that.
But our work at USTR is to make sure we are responsive to those other concerns. You have heard other members talk about their concerns about intellectual property rights, piracy, indigenous innovation, and that is where we think we can add the most value, is that while the currency issue is important, what we hear from small businesses is their fear of putting a product in China and, just frankly, having stolen it. We hear businesses who are there that are concerned about their indigenous innovation policies.
So we think the time and energy we spend on those areas can be just as important to your businesses as addressing the currency issue.
*Mr. Gerlach. The House last session, late in the session, did pass a bill ‑‑
*Chairman Camp. [Presiding] I am afraid the gentleman’s time has expired.
*Mr. Gerlach. Oh, okay. Thank you, Mr. Chairman.
*Chairman Camp. Mr. Buchanan is recognized for three minutes.
*Mr. Buchanan. Thank you, Mr. Chairman.
Ambassador, I appreciate you being here today. And I share, I think, the intensity we just talked for a couple of minutes your views just as much on doing what is best for Americans and America and American companies. We need to continue to fight for them in terms of all the trade agreements.
I do want to say I applaud the effort that you guys have moved forward on Korea. I think that is very important. But let me mention to you as it relates to my district, and really the State of Florida. We have 14 ports in Florida, but I have a port in our area, Port Manatee. It is the closest port to the Panama Canal.
It is something that we have been working on for a lot of years. They are doubling the capacity in terms of Panama. I have been down there, have had the Ambassador in our area. We have met with the President. And we have had delegations from the port to go down there because, again, they are doubling the capacity. I think they are spending $5 billion in terms of improvements in that area.
I am very concerned that these things go on for four years. You mentioned you have been in business. I have been in business. I have been in complicated deals before, maybe not as complicated as this, but I am very concerned when these things run on. There is the saying that you can’t manage it if you can’t measure it.
And I think that is what we are talking about, is having some reasonable time frames, because it is affecting us in terms of our jobs. We have got 20,000 good‑paying jobs, directly and indirectly, with our port. We think we can double that. But here we are. We have been waiting six months, nine months, some as long as two or three years.
It seems to me at some point you can’t get the perfect deal. You get as much as you can get done, my experience 80, 90 percent, and then we need to move on. But I think it is imperative that Panama and Colombia, we get those off the table because to me it is a lot about politics. And if we don’t do something now, we are going to run into more politics coming up here shortly. So we need to get that done. So I just want to get your comment.
And the second thing, I do share a lot of concern about China and a lot of issues with China. But what happens, because we can’t move forward here, we don’t get a chance to get to the China discussion. So it is imperative we get this done in the next six months, I think, for the sake of the country, Florida, as well as my district.
*Chairman Camp. Well, thank you. The other point is, Panama was started in 2004, and here we are in 2011. After seven years the law declares you legally dead, and we don’t want Panama to die. We want it to keep going.
So with that, I would recognize Mr. Doggett for three minutes.
*Mr. Doggett. Thank you, Mr. Chairman.
It is always good to see a fellow from Austin do so good and do so much important work on the world stage. I appreciate your service, Ambassador.
I voted, as a member of this committee, for most of the trade agreements that have come here, and hope to vote for more. If we were looking at it solely in terms of trade impact, the three agreements we have been discussing would be very easy to support.
These Bush/Cheney trade proposals are very much at the margins. Even the Korea agreement, much larger than the other two, was described by the International Trade Commission as having a probable negligible impact on output and employment in the United States, as you know, in its study.
But there is much more at stake, and particularly in Panama, than just trade. Panama has made a name for itself not only as a place of a canal, but as one of the leading tax havens in the entire world. It has been an equal opportunity offender. It didn’t discriminate against us. It wouldn’t cooperate on taxes with anyone.
As recently as four months ago, the OECD outlined a long list of deficiencies in Panama’s legal framework. They have refused, about as much as any country in the world, to cooperate anywhere on taxes.
You have indicated you are getting close to being ready to submit this agreement. Can you assure us that before you do so, that Panama will have provided full compliance in making all the necessary changes to correct these deficiencies and to fully implement them? It appears that this trade agreement is about the only thing we have to ensure they do what they should have done many years ago.
*Ambassador Kirk. Congressman, I can tell you that we have worked with the Panamanians. We made it very clear last year that it was, frankly, their call to make, that if they did not choose to engage us on the issue of addressing the tax questions, then we would accept that.
I would say that we have engaged them. Treasury has taken the lead, so I want to be careful because you asked a fairly precise question.
*Mr. Doggett. Okay.
*Ambassador Kirk. I can tell you we have had very good engagement with the Panamanians under the new Administration ‑‑
*Mr. Doggett. I appreciate that. Given the short time, I will just say, just as there have been seven years in which it could be declared legally dead, there has been seven years for Panama to fully implement and make the changes necessary to stop being a tax haven. It hasn’t done it, and that remains a big concern to me in looking at that agreement.
You and President Obama have spoken eloquently of the need to make significant changes in our trade policy, and to recognize that it is not just about moving widgets across borders, it is a broader issue that encompasses the environment and working standards.
I have some concerns. Mr. Lewis indicated that the performance has not been quite up to the standards of the speeches, specifically on the question of opening up the process and involving more public representatives in the way our trade policy is developed.
You had Lisa Garcia come and testify at our committee almost two years ago. She could not identify any example where having public representation on these trade advisory committees had caused harm, as some have alleged in trying to block increased public representation.
I wrote you shortly after that, and I gather you and your staff, now having had almost two years, are unable to identify any substantive experience where having the public involved in this process through representations of environmental representatives or health representatives has caused a problem. Have you found any such problem in the history of USTR?
*Ambassador Kirk. Well, I don’t ‑‑
*Chairman Camp. The time is expired. So if you could just briefly answer.
*Ambassador Kirk. I think we have submitted it. And if we didn’t get it to you this morning, we did get your letter and we have submitted an answer. President Obama is committed, not just in trade policy, to opening up the advisory process in our government to all Americans.
And we have done our best to strike that balance between the statutory mandates we get from Congress in the composition of our technical advisory committees, but in opening it up to other voices as well. And I think ‑‑
*Mr. Doggett. And you have found no problem, have you?
*Chairman Camp. Thank you. Thank you. You can submit an answer in writing, Mr. Ambassador.
*Mr. Doggett. Just a yes or no would be helpful.
*Ambassador Kirk. Let me get back thank you.
*Chairman Camp. Mr. Smith is recognized.
*Mr. Smith. Thank you, Mr. Chairman. Thank you, Ambassador, for your service.
As we have heard, obviously the U.S. agriculture sector is a vibrant economic engine that contributes significantly to our export efforts. We also know that there are some non‑tariff trade barriers that do exist around the world, and that these actually keep United States’ farmers from meeting the demands, the global demands, that we also know exist.
And so as we pursue science‑based regulatory efforts, we know that perhaps some of our trading partners are not. And we know that we have got very innovative producers here. Can you tell me what USTR is doing to make sure that our trading partners are truly focusing on science‑based standards as a regulatory effort rather than more political results or even efforts?
*Ambassador Kirk. Well, we have a good story here, Mr. Smith. And in the interest of time, if I could, we do two things. One, for the reasons you articulated, one report that you mandate we deliver to you is what is called a 301 report in that we have to tell you how our other partners are complying, say, for example, in intellectual property.
I made the decision when we came in the office that that was good enough. We now issue a similar report on, specifically, the sanitary and phytosanitary standards. We will be submitting that to you soon. That is one thing.
But secondly, we have pursued in every forum compliance with sound scientific standards, and it has helped us. We, for example, settled a longstanding case with the European Union on their excluding our beef. We are now shipping 20,000 metric tons, almost $250 million, into that market.
After we had the H1N1 scare, almost 28 economies cut off U.S. pork exports. We are back in, I think, all of those economies but one. We have dealt with everything from poultry in Russia to beef in China. But it is one of our highest priorities, and we would welcome your thoughts on how we can perhaps even do better.
*Mr. Smith. All right. Thank you, Ambassador. And Mr. Chairman, I do have some other questions that I will submit for the record. Thank you.
*Chairman Camp. All right. Thank you, Your Honor.
Mr. Schock is recognized.
*Mr. Schock. Thank you, Mr. Chairman.
Mr. Ambassador, thank you for being here, and I look forward to working with you on these issues, which are important to our country and even moreso to my district, the issues of trade.
I guess, to be very frank with you, it is a little frustrating to hear the talk about these groups that have labor concerns ‑‑ not that people don’t have legitimate labor concerns, but who the groups are and who the Administration truly is working with and looking to for signoff on the issues of labor concerns. Let me give you an example.
I have a very large UAW presence in my district. They manufacture heavy equipment that would benefit, that right now is put at a competitive disadvantage when doing business in Latin America. I can assure you those labor workers would support having a level playing field in our country to do business in these countries.
When I traveled to Panama and Colombia a year and a half ago with then‑Majority Leader Hoyer, we met with labor unions in Colombia who, interestingly, the trade groups, who I thought would be opposed, were actually in support of these agreements. But it was actually the public sector unions ‑‑ the teachers, the garbage collectors ‑‑ who were opposed to trade, not because they were concerned about human rights, but simply for political reasons.
There had been significant progress made then, and continues to be. President Uribe went through, line item by line item, the work that he had done. The ILO just last year removed Colombia from its labor watch list. Since then, 14 Colombian labor union leaders representing 79,000 of Colombia’s workers have signed off in support of the agreement.
The president of the United Workers Confederation in Colombia stated that, “Never in the history of Colombia have we achieved that much progress,” and views it as satisfactory and supports the agreement.
So I guess I am looking for some specificity on who are we ‑‑ because we are not going to get complete agreement. And many of the same labor issues that we had with Peru were satisfied with the May 10 agreement, which is what is in the current Panama and Colombia agreements. And Peru was passed with strong bipartisan support. There were those who opposed it, but it got strong bipartisan support.
So if we have those same labor and environmental concerns, the same language, in Panama and Colombia, and the Administration is saying, wait, who are we looking to specifically to sign off?
*Ambassador Kirk. Well, first of all, I don’t know that we are looking for any one group to sign off. And we have made it plain: no one has a veto over the Obama Administration’s trade policy save the President. But we listen to all voices, just as we did on Korea.
I have met with members of this body that have expressed concern. We have labor advisory committees. We have statutorily mandated technical and public advisory committees. I do as you have recommended. When I have come to Illinois or have gone to Washington, I sit down and meet with the workers themselves. I don’t just listen to their representatives in Washington.
We have published a notice in the Federal Register. We have gotten all those comments. We take all of that information, and then we try to come up with the best decision. Just as we did in the case of Korea is what we want to do here.
*Chairman Camp. All right. Thank you.
Mr. Crowley is recognized.
*Mr. Crowley. Thank you, Mr. Chairman. And Mr. Ambassador, welcome once again. It is good to see you again, and thank you for your hard work. I know sometimes it feels as though it is a thankless job, but you have done some remarkable work as it pertains to the Korean Free Trade Agreement, making the agreement a better agreement for the U.S.
I want to thank as well Mr. Levin as well as Mr. Camp for their work and engagement with you in your office in making that agreement a better agreement. I know there is work to be done on Colombia and Panama, particularly on the ground in Colombia as it pertains to human rights and to the rule of law there. And I know that your engagement over these next months will have an impact in making that agreement a better agreement as well. I look forward to that.
But one country that I want to look at, if I could, just divert for a moment, is India. I have once again assumed the chairmanship of the India caucus here in the House, as co‑chairman along with Ed Royce. And I know that Secretary of Commerce Gary Locke is in India right now working on a trade mission, seeking opportunities for U.S. companies to help expand our opportunities for exports to India.
But one issue which I have been interested in for a very long time is the investment caps in the Indian insurance industry. Right now, American companies can only own up to 26 percent of the value of an insurance company within India, even though we have been, I have been working to increase that number to 49 percent.
What is the status as you know on that issue, and what more can be done to ensure that our service companies can export their services on a more level playing field?
*Ambassador Kirk. Well, I appreciate your leadership on the Indian subcommittee. And this, we spend so much time on China, sometimes we neglect the opportunities, the growth markets and needs in India and Africa as well.
As you know, President Obama lead an export mission to India as part of his Southeast Asia trip last year. And I will be honest: We have been extraordinarily frustrated at the slow pace of opening that market. We have a number of engagements with India.
I lead a trade policy forum in which we have raised these issues of them opening their economy for more. This would be a case that when we can finish our BIT review, we are also looking to perhaps get India to sign a bilateral investment treaty which would remove those caps, not only in insurance, but liberalize their markets across the board.
There is great opportunity for Americans in the retail, in the agriculture, in the manufacturing sector. Some of this we are trying to address if we can get, frankly, the right balance in a Doha Round. The rest of it we are going to continue to see if we can’t find the right buttons to push in our bilateral engagement.
*Mr. Crowley. As you see, my time has run out, Mr. Ambassador, I thank you and the chairman for the opportunity. I do have other additional questions that I will submit to the Ambassador, and I look forward to your response, especially as it pertains to the TPP. Thank you.
*Chairman Camp. Thank you.
Mr. Lee is recognized.
*Mr. Lee. Thank you, Mr. Chairman.
And Mr. Ambassador, I won’t dwell on this subject too long, but I think it is worth repeating, and that is the issue of jobs. We are sitting on over 9 percent unemployment again, and why I think Congress gets such a bad name is we don’t listen to the American people.
I think you have ‑‑ I have heard you pretty loud and clear, and also even Ranking Member Levin when he was in Colombia, that in Colombia we have made improvements. And your belief is that all three of these trade agreements will create jobs here in the United States.
Yet we have sat for seven years. And I know you are trying to move things along, but it worries me when we keep saying weeks, and I went back and I ‑‑ you look at some of these timelines. The talk and the rhetoric that we have here, I think the American people are tired of it. And this should be a nonpartisan issue. This is about putting people back to work in this country.
To shift, then, to another point because I think all three of these will put people back to work, and that is really what our job is, is to help people in this country. But another area of mine, and I came from manufacturing, and that is the issue of IP and the issues surrounding China.
And we all want to increase our trade there. But China has been using indigenous innovation policy for quite a while, and it is their opportunity to circumvent international trade rules and basically compel American companies to hand over their IPR.
And I know from your point just recently ‑‑ we just had the meeting of the JCCT. I was hoping that you could go into some specific metrics that the Administration has put forward to help remedy the situation.
*Ambassador Kirk. Well, one of ‑‑ and again, I want to make it plain. We are going to have to be constantly vigilant with China, Congressman. But one of our victories this time was getting them to agree to de‑link the IPR issue from indigenous innovative.
This has been one of the highest concerns to our business community in terms of China’s efforts to try to have us transfer technology in order to bid on that. But we were able to successfully, between JCCT and then the followup engagement with President Hu and President Obama, at least get them to commit that they would de‑link those two.
There was also a question ‑‑ China had a very creative application of having to comply with their standards and experience in order to be able to bid on some of their projects, even though we had American companies that had experience all over the world. We were able to get them to agree to use that experience as well.
But I don’t want to, in any means, downplay the challenge ahead of us. But this was one area where we did have some success, and we will continue to monitor that.
*Mr. Lee. I thank you. And I would again urge you to try to push these trade agreements forward. It is very difficult to look our constituents in the eye when there are no jobs for them to be had, and we have a solution to help.
*Ambassador Kirk. Thank you.
*Chairman Camp. Thank you.
Ms. Jenkins is recognized.
*Ms. Jenkins. Thank you, Mr. Chair, and thank you for holding this important hearing. Thank you, Ambassador Kirk, for being here today and for your service.
As you briefly touched on in your opening remarks, Russia has been seeking to become a member of the World Trade Organization for more than 16 years. Russia’s joining the WTO on the right terms would be good for both our countries, strengthening the rule of law in Russia, and promote closer economic ties.
Last fall our two governments made very encouraging progress in resolving a number of key outstanding bilateral trade issues, and work continues on the multilateral terms of Russia’s accession to the WTO.
But with that said, Russia has much work to do on various longstanding issues of concern, such as IPR enforcement, barriers to U.S. agriculture exports, and other non‑tariff barriers. Such trade concerns, combined with broader foreign policy and human rights concerns in Congress, is going to make it difficult for Congress to consider PNTR legislation.
Is Russia’s WTO accession a top Administration priority? And if so, what exactly is the Administration, and more specifically, what is the USTR doing or planning to do to address such congressional concerns and lay the groundwork to consider such major trade legislation?
*Ambassador Kirk. Thank you, Congresswoman, for your concerns. But you partly answered our question in the first part of your recitation of what we have done. The President expressly directed our office to work with our colleagues in Russia to address a number of the outstanding bilateral concerns we had.
We did work on that successfully over the summer. We met the President’s September deadline for that. That, for the most part, we think addressed the overwhelming majority of the bilateral issues. Russia’s accession then moves to the broader committee structure within Geneva, in which we will continue to engage them on those other concerns.
Now, we are frustrated. You mentioned agriculture and their adherence to sound science. And as you know ‑‑ or maybe you don’t know ‑‑ we have had an extraordinary challenge getting our poultry and beef back into their market. But that also makes the case why we want them in the WTO, so that we have them in a form that we can address many of those concerns.
On the human rights component of that, as you know, the State Department takes the lead in addressing those. But we understand and appreciate all your concerns, and want to work you and other Members of Congress to address those so that we can move forward at the appropriate time.
*Ms. Jenkins. Thank you, Mr. Ambassador. And I will yield back.
*Chairman Camp. Thank you.
Mr. Kind is recognized for three minutes.
*Mr. Kind. Great. Thank you, Mr. Chairman, and thank you for holding this hearing.
Mr. Ambassador, thank you for being here and for the work you are doing in the Administration to try to advance a proactive, forward‑looking trade agenda which is crucial, obviously, for economic growth and job creation back home. We will look forward to working with you on the pending bilaterals.
I am glad to see that the President has tasked you now to see if we can get Panama and Colombia put to bed at some point in the future. The bilaterals are important in their own right as stand‑alone measures. But the real game changer, as you know, is really the multilateral round of discussions; the Doha Round.
I apologize for having to step out. We had a meeting with the Treasury Secretary a little bit earlier. But I just want to impress upon you how important it is for us not to give up the ghost yet when it comes to Geneva and the multilateral round. That is what can have the most significant impact, not only for global prosperity and growth, but for bringing the emerging and developing countries into the global trading regime as well.
I know we have had some hurdles there, not least of which are some of the agricultural provisions. And another item that hopefully is going to be teed up in this next session of Congress, is the next Farm Bill reauthorization and some of the reforms that I and others feel, that we need to move forward in a bipartisan fashion.
We have the Brazil cotton case still hanging over our heads. We have elected now to deal with that by subsidizing Brazilian cotton producers as opposed to reforming our own domestic cotton program, which we should be doing, but also the so‑called amber box payments under the Title I commodity programs and the work that needs to be there.
Given my history with the multilateral round, and having talked to many of the trade ambassadors that are involved in those ongoing conversations, so many times the roads do come back to our farm policy, both here and in the E.U.
I know the Administration is anticipating engaging the Congress when it comes to the next Farm Bill and the work and some of the changes that we have to pursue in order to assist an important trade agenda at the same time.
So I humbly advise, let’s not take our eye off of the Doha Roundeven though it has been tough the last few years trying to get it back on track. I know there are a lot of interested people to see what we can do to advance that, and that we don’t all just become all‑consuming with these bilaterals right now. You can understand why, given that they are in front of us and pending. Hopefully, we will be able to advance on those later this year, too.
Thank you again.
*Chairman Camp. Well, thank you.
Mr. Paulsen is recognized.
*Mr. Paulsen. Thank you, Mr. Chairman. And thank you, Mr. Ambassador, for your leadership on this issue. We really do appreciate it.
Just real quickly, you mentioned one of the benefits we have of the South Korea trade agreement is going to be our ability to engage in more services, having a market there. The same thing exists, obviously, with Colombia and Panama in particular. I mean, 70 percent of their GDP comes from the service sector, and it is really important, I think, to give the U.S. access, a market foothold there. So we have got tremendous opportunity there.
But I want to ask a question about the potential benefits of what you might see with the Trans‑Pacific Partnership, and also what the timing of that might be. We have participants right now in the TPP that include four of our existing trade agreement partners, and then four new countries which do not have trade agreements with us right now.
So with respect to our existing trade partners, in what ways do you see the TPP would add economic value to our existing trade agreements? And with respect to our potential new agreement partners, what areas do you think those talks might offer us the most promise for American jobs and exports in the future?
*Ambassador Kirk. Well, in the broader sense ‑‑ and thank you for your question — we think the TPP is an extraordinary opportunity for the United States because it is our belief and part of our rationale in reaching the decision to engage with this original group of countries is our hope is obviously that this will effectively become the free trade agreement, at least of those 21‑member APEC economies, and perhaps the architecture for what could be the largest, most dynamic trading area in the world in Southeast Asia.
With respect to our trading partners, obviously, we want to be assertive. We are not looking to re‑trade our existing market share. But there are lots of areas that we can further enhance trade by looking at regulatory coherence, addressing some of the non‑tariff barriers. Obviously, with these new markets, with Malaysia, Vietnam, those are an extraordinary for American businesses across the board.
We have a very ambitious goal. I don’t know ‑‑ I mean, it is sort of our aspirational goal. But the thought was, start with a small enough number of like‑minded economies, work very aggressively, put everything on the table, and let’s just see where we are by the time that our leaders meet at the APEC leaders forum in the fall.
And at least right now we are on that pace. But I will admit this next meeting in Chile is the first time we will begin to table offers, so this is where the negotiations will become a little more challenging.
*Mr. Paulsen. And maybe I can just ask, because I know the President’s own economic council and the U.S. business community have both urged the goal of seeking a conclusion to the TPP agreement by maybe even this November, when the United States is going to host APEC, I think, in the President’s home state of Hawaii.
Do you agree that that goal of concluding the TPP agreement would be an important, I mean, concrete deliverable in that time frame, if possible?
*Ambassador Kirk. If we could meet that goal, that would be exceptional. But again, there are a lot of moving parts. I want to make ‑‑ right now, I mean, the spirit of engagement among all of the economies is the right mood. But I am also tempering this a little bit because I know now we are getting into the guts of it.
*Mr. Paulsen. Thank you, Mr. Chairman.
*Chairman Camp. All right. Thank you.
Mr. Berg is recognized.
*Mr. Berg. Ambassador Kirk, thank you for being here today.
Now, you and I both know how critical trade is for the United States and for us to recover from our current situation. And I know there is a lot of concern we have heard today, and just concern by the American public about trade.
The National Export Initiative, the goal of doubling exports, is a laudable goal and certainly one that I support. But in order to make that happen, we need to get the American people behind us. And you have done a tremendous effort in going out and speaking on the advantages of trade across this country, and I commend you for your efforts in doing that.
But it seems to me ‑‑ and maybe you can discuss in more detail how yourself and the Administration are going to get the American people behind more trade, especially the three trade agreements that we are looking at right now.
*Ambassador Kirk. Thank you for your kind words about our work. One, I think ‑‑ and I have heard from all of you, and I know we have differences, maybe on Panama and Colombia. What I haven’t heard, refreshingly, from any of you is a difference we all understand right now.
What the American public care about right now, as Mr. Rangel said, it is jobs. It is jobs. What is in it for me? And one, we have got to do a better job of articulating to the public how, when we provide opportunities for Americans to sell what we make, grow, produce around the world. That can help create jobs here.
And for whatever reason, we have had a political environment that Americans are a little more skeptical of that, but I think having an honest discussion with the American public and an honest presentation of the reality of what trade does and doesn’t do.
But I do think it is important ‑‑ and I trust you will not take this as a political statement ‑‑ keeping faith with the commitment we have made to the American public. And I do think renewing trade adjustment assistance is one way to do that, to say to those communities that feel that they have gotten the short end of this that you have heard us and you are going to honor your commitments.
I think making sure that we honor our commitments to those poorest countries in the world. The work that we do in enforcement ‑‑ when I take on China and stand up to them for American steelworkers, we absolutely got criticized. But we didn’t spark a trade war. And in fact, every one of those tire companies, for example, has increased capacity, has added workers, and are making more tires.
So I think listening to the American public, being responsive to those that have concerns and honestly addressing those, making sure that we enforce our engagements, and then make sure we draw a connection between opening up markets around the world and creating jobs here at home.
And the more that we do that with one voice and we stop attacking one another here in Congress, the better chance we are going to have to convince the American public of the wisdom of what we are doing.
*Chairman Camp. All right. Thank you. Thank you very much. I want to thank Ambassador Kirk for his time this morning and for his testimony, and also thank all of the members for their thoughtful questions.
And let me note for Ambassador Kirk that members may submit questions for the record. And if they do, I hope you will provide a prompt and full response. Ambassador Kirk has ‑‑ all right. I guess we are not quite done.
We have a few more minutes, and we have a member who just came, Mr. Pascrell. So he is recognized for three minutes. We have had members that have been going back and forth to the Budget Committee ‑‑
*Ambassador Kirk. I understand.
*Chairman Camp. ‑‑ as members of the Ways and Means Committee are on that committee also.
*Ambassador Kirk. I frankly am flattered by the attendance and the number of members that have stayed for being here. I really appreciate it.
*Chairman Camp. Thank you. Mr. Pascrell is recognized for three minutes.
*Mr. Pascrell. I appreciate that, Mr. Chairman. And thank you, Ambassador. We discussed one of my major issues earlier before I went to the committee.
Right off the bat, I want to stress how important it is that the Congress pass an extension of our trade adjustment assistance program. I think that is important to everything we have worked on in the last 14 years. It is Critical. Would you agree?
*Ambassador Kirk. Yes, sir. You may have missed my closing remarks, but ‑‑
*Mr. Pascrell. I am disappointed that we were going to bring a bill to the floor yesterday extending the programs and, of course, it didn’t happen. It was pulled. I strongly believe we can accomplish this in a fiscally responsible way without cutting the vital worker training programs we are trying to protect.
I want to thank you for being here. I believe we have been taking some important steps. We still have work to do to ensure that our trade policy reflects our values and the benefits of trade. I told you this morning what my prism is to look through on every trade deal. I will not back off from that. You know where I stand. It is not going to be a fait accompli by any stretch of the imagination, and I respect your candidness on the matter.
The Trans‑Pacific Partnership negotiations really represent the Obama Administration’s best opportunity to reshape our trade policy. It also presents significant challenges. I have two questions regarding the TPP.
One of the countries involved in negotiations, Vietnam, is classified by our own government as a “non‑market economy.” They don’t have a democratic government, and many of their major industries are controlled by the state.
As you negotiate the Trans‑Pacific Partnership, what efforts are you making with regards to state‑owned enterprises in countries like Vietnam? We have this problem in a lot of countries, which are owned or controlled by foreign governments. These are very serious problems. This is very serious to our competitiveness and leveling the field. What will you do if these countries will not be able to enter our market, if they won’t be able to enter our market and act in their government’s national interest instead of the company’s commercial interest?
*Ambassador Kirk. Thank you for your candor both now and this morning. I would say to you one of the reasons we are excited about this TPP. It is an opportunity to bring a country like Vietnam into this global system. One of the areas that we are frankly looking to expand on in our investment chapter is to take this opportunity to address the challenge of state‑owned economies.
And that is one of the issues that we are specifically going to engage Vietnam on that. As well, it’s for some other countries, the challenges brought on by some of these indigenous innovation policies.
*Mr. Pascrell. Thank you. Thank you, Mr. Chairman, for your courtesy.
*Chairman Camp. Thank you.
Thanks again, Ambassador Kirk. You have spoken to many elements of the Administration’s trade policy agenda, and I am encouraged by your statements on the South Korea agreement.
I am disappointed that the Administration has not been more forward‑leaning on plans for Colombia and Panama’s trade agreements as members of this committee, including myself, have repeatedly said American employers, workers, farmers, ranchers, are put at a disadvantage every day that we delay here in Washington.
So I continue to hope that the Administration will lay out a clear plan with specific areas of concern, a specific timetable for considering all three of these agreements in short order. And I strongly believe that we should consider all of the agreements, all three of them, in the next six months, and hope that we can work together to make that happen. Again, thank you for your testimony today.
But for now, the committee is adjourned.
[Whereupon, at 12:20 p.m., the committee was adjourned.]
MEMBER OPENING STATEMENTS:
The Honorable Jim McDermott
QUESTIONS FOR THE RECORD:
The Honorable Ron Kirk
SUBMISSIONS FOR THE RECORD:
National Pork Producers Council
National Association of Manufacturers
National Association of Wheat Growers
U.S. Chamber of Commerce
Emergency Committee for American Trade
American Jewish Committee
National District Export Council Inc.
California Table Grape Commission – 1
California Table Grape Commission – 2
National Oilseed Processors Association
National Potato Council
California Chamber of Commerce – 1
California Chamber of Commerce – 2
Retail Industry Leaders Association
United States Council for International Business
Securities Industry and Financial Markets Association – 1
Securities Industry and Financial Markets Association – 2
International Dairy Foods Association
Association of Global Automakers, Inc.
Pharmaceutical Research and Manufacturers of America
General Electric Company
American Federation of Labor & Congress of Industrial Organizations
Public Citizen’s Global Trade Watch
American Manufacturing Trade Action Coalition
US – China Business Council