[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]







                        U.S. TRADE POLICY AGENDA

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

                                HEARING

                               before the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            JANUARY 27, 2015

                               __________

                          Serial No. 114-FC02

                               __________

         Printed for the use of the Committee on Ways and Means




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                      COMMITTEE ON WAYS AND MEANS

                     PAUL RYAN, Wisconsin, Chairman

SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan
KEVIN BRADY, Texas                   CHARLES B. RANGEL, New York
DEVIN NUNES, California              JIM MCDERMOTT, Washington
PATRICK J. TIBERI, Ohio              JOHN LEWIS, Georgia
DAVID G. REICHERT, Washington        RICHARD E. NEAL, Massachusetts
CHARLES W. BOUSTANY, JR., Louisiana  XAVIER BECERRA, California
PETER J. ROSKAM, Illinois            LLOYD DOGGETT, Texas
TOM PRICE, Georgia                   MIKE THOMPSON, California
VERN BUCHANAN, Florida               JOHN B. LARSON, Connecticut
ADRIAN SMITH, Nebraska               EARL BLUMENAUER, Oregon
AARON SCHOCK, Illinois               RON KIND, Wisconsin
LYNN JENKINS, Kansas                 BILL PASCRELL, JR., New Jersey
ERIK PAULSEN, Minnesota              JOSEPH CROWLEY, New York
KENNY MARCHANT, Texas                DANNY DAVIS, Illinois
DIANE BLACK, Tennessee               LINDA SANCHEZ, California
TOM REED, New York
TODD YOUNG, Indiana
MIKE KELLY, Pennsylvania
JIM RENACCI, Ohio
PAT MEEHAN, Pennsylvania
KRISTI NOEM, South Dakota
GEORGE HOLDING, North Carolina
JASON SMITH, Missouri

                       Joyce Myer, Staff Director
                  Janice Mays, Minority Chief Counsel
























                            C O N T E N T S

                               __________

                                                                   Page

Advisory of January 27, 2015 announcing the hearing..............     2

                                WITNESS

Ambassador Michael Froman, U.S. Trade Representative.............     7

                        QUESTIONS FOR THE RECORD

Questions from Representative Nunes to Ambassador Froman.........    80
Questions from Representative McDermott to Ambassador Froman.....    82
Questions from Representative Reichert to Ambassador Froman......    83
Questions from Representative Boustany to Ambassador Froman......    87
Questions from Representative Roskam to Ambassador Froman........    94
Questions from Representative Becerra to Ambassador Froman.......    95
Questions from Representative Schock to Ambassador Froman........    96
Questions from Representative Reed to Ambassador Froman..........    98
Questions from Representative Young to Ambassador Froman.........   100
Questions from Representative Renacci to Ambassador Froman.......   101
Questions from Representative Holding to Ambassador Froman.......   102
Questions from Representative Sanchez to Ambassador Froman.......   104

                       SUBMISSIONS FOR THE RECORD

American Apparel & Footwear Association (AAFA)...................   106
American Council of Life Insurers (ACLI).........................   108
American Enterprise Institute....................................   110
American Institute for International Steel (AIIS)................   114
American Wire Producers Association (AWPA).......................   121
Brandon Baum, Adjunct Professor of Law...........................   125
Coalition for GSP................................................   126
FirmGreen........................................................   134
International Association of Professional Numismatists...........   135
International Wood Products Association (IWPA)...................   137
Kingdom of Bahrain...............................................   138
National Association of Manufacturers (NAM)......................   139
National Cotton Council of America (NCC).........................   149
National District Export Council, Incorporated...................   153
Outdoor Industry Association (OIA)...............................   164
Telecommunications Industry Association (TIA)....................   168
The Advanced Medical Technology Association (AdvaMed)............   170
The American Made Show and American Made Alliance................   174
The Integral Group...............................................   176
The Reddix Group.................................................   177
Trade in Services International..................................   179
United States Council for International Business (USCIB).........   183

 
                        U.S. TRADE POLICY AGENDA

                              ----------                              


                       TUESDAY, JANUARY 27, 2015

                     U.S. House of Representatives,
                               Committee on Ways and Means,
                                                    Washington, DC.

    The Committee met, pursuant to notice, at 2:04 p.m., in 
HVC-210, U.S. Capitol Building, Hon. Paul Ryan [Chairman of the 
Committee] presiding.

    [The advisory announcing the hearing follows:]

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                                                CONTACT: (202) 225-3625
FOR IMMEDIATE RELEASE
Tuesday, January 20, 2015
No. FC-02

                 Chairman Ryan Announces Hearing on the

                        U.S. Trade Policy Agenda

    House Committee on Ways and Means Chairman Paul Ryan (R-WI) today 
announced that the Committee on Ways and Means will hold a hearing on 
the U.S. Trade Policy Agenda with U.S. Trade Representative Michael 
Froman. The hearing will take place Tuesday, January 27, 2015, at 2:00 
p.m. in HVC-210 of the U.S. Capitol Building.

      

    Oral testimony at this hearing will be from the invited witness 
only. However, any individual or organization may submit a written 
statement for consideration by the Committee and for inclusion in the 
printed record of the hearing.

      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      

    Please Note: Any person(s) and/or organization(s) wishing to submit 
written comments for the hearing record must follow the appropriate 
link on the hearing page of the Committee website and complete the 
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waysandmeans.house.gov, select ``Hearings.'' Select the hearing for 
which you would like to make a submission, and click on the link 
entitled, ``Click here to provide a submission for the record.'' Once 
you have followed the online instructions, submit all requested 
information. ATTACH your submission as a Word document, in compliance 
with the formatting requirements listed below, by the close of business 
on Tuesday, February 10, 2015. For questions, or if you encounter 
technical problems, please call (202) 225-3625 or (202) 225-2610.

      

FORMATTING REQUIREMENTS:

      

    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
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not alter the content of your submission, but we reserve the right to 
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    1. All submissions and supplementary materials must be submitted in 
a single document via email, provided in Word format and must not 
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the Committee relies on electronic submissions for printing the 
official hearing record.

      

    2. All submissions must include a list of all clients, persons and/
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included in the body of the email. Please exclude any personal 
identifiable information in the attached submission.

      

    3. Failure to follow the formatting requirements may result in the 
exclusion of a submission. All submissions for the record are final.

    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TDD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.
      
    Note: All Committee advisories and news releases are available 
online at 
http://www.waysandmeans.house.gov/.

                                 

    Chairman RYAN. The hearing will come to order. Welcome to 
the Committee on Ways and Means hearing on U.S. trade policy 
with our U.S. Trade Representative, Michael Froman. The hearing 
will be conducted in accordance with the Rules of the House and 
the appropriate decorum.
    I want to start by thanking Ambassador Froman. I believe 
this is your second tour of duty today before a congressional 
committee. You and your team are doing very, very important 
work. We have a lot to discuss today. And this Committee is 
going to do everything we can to try to make this work a 
success.
    I want to just say a few things about trade. Expanding 
American trade is going to be one of our top priorities this 
year. And the reason? It is really simple: 95 percent of the 
world's customers live outside of the United States. I can 
think of few better ways to grow our economy than to grow our 
customer base. I believe Americans can compete with anybody, if 
given a fair chance. That is why we have to break down barriers 
to our exports by completing trade agreements.
    Right now there are several trade deals in the works, all 
of them showing promise. We are negotiating the Trans-Pacific 
Partnership with our friends in Asia, a Transatlantic Trade and 
Investment Partnership with our friends in Europe, the Trade 
and Services Agreement with countries around the world, and 
several agreements through the World Trade Organization. And if 
they are done well, all of them would help create jobs and 
expand opportunity. And all of them would help shape the kind 
of economy we leave to our kids.
    You know, the fact is, if we don't write the rules of the 
global economy, other countries will. Guess what? They already 
are. Other countries, like China, are putting in place new 
trade agreements among themselves. So, it is as simple as this: 
If we are not moving forward, we are falling behind.
    Look at the record. If you add up all the countries that 
don't have trade agreements with us, we run a big manufacturing 
trade deficit. And if you add up all the countries that do have 
trade agreements with us, we run a surplus. So I think it is 
pretty clear trade and trade agreements, they are good for our 
country. We need more of both. And the first thing we need to 
do to get there is to pass Trade Promotion Authority.
    Here is the issue. When the United States sits down at the 
negotiating table, everybody at that table has to trust us. 
They have to know the deal the Administration wants is the deal 
Congress wants. Because if our trading partners don't trust the 
Administration, if they think it will make commitments that 
Congress will undo later, then they won't make any concessions. 
Why run the risk for no reason?
    On the other hand, once our trading partners know that we 
are trustworthy, once they can see that we are negotiating in 
good faith, then they will be more willing to make concessions. 
That is why we have to pass this bill before negotiations are 
complete. To get the best deal possible, we have to be in the 
best position possible. We can't be negotiating with ourselves, 
we have to maintain a united front.
    Now, I am not saying to maximize our leverage we have to 
maximize the Administration's power. Actually, far from it. I 
would no sooner trust this Administration with more power than 
I would trust the Patriots with the footballs at Lambeau Field.
    [Laughter.]
    Okay. What I am saying--not Massachusetts.
    [Laughter.]
    But what I am saying is that this bill would maximize 
Congress' power. Let me explain.
    Nothing stops the President from negotiating a deal without 
instructions from Congress. Nothing. So, if we just waited 
until after the negotiations are done to make our views known, 
if we simply reacted to what the Administration put in front of 
us, well, we might just scuttle the whole deal.
    That means we have to get involved before the deal is done, 
not after it is finished. We have to be proactive, not 
reactive. That is what TPA does. We call this process ``Trade 
Promotion Authority.'' I think of it more as a contract.
    We say to the Administration, ``If you want this up or down 
vote, you are going to have to meet three requirements: Number 
one, you have to listen to us, the co-equal legislative 
representative branch of government; number two, you have to 
talk to us; and, number three, you have to remember Congress, 
we, get the final say.''
    First, TPA lays out our negotiating objectives for our 
trade deals. In short, we tell the Administration what targets 
to hit. It has to do things like eliminate barriers to our 
exports, protect our intellectual property, and eliminate 
unnecessary regulatory barriers in other countries.
    Second, TPA requires the Administration to consult with 
Congress. Any Member can meet with our Trade Representative's 
office at any time. Any Member can read the text. Any Member 
can attend the negotiations. It is like a TPA hotline.
    And, third, just to avoid any confusion, we put it right in 
the bill text: ``Congress gets the final say.'' If a trade deal 
requires any change in our laws, it is Congress that must 
approve them. And if the Administration violates any of these 
requirements, we can say, ``No deal.'' If it doesn't cooperate, 
it doesn't get the up or down vote that they want.
    We simply can't get the best deals without TPA, and that is 
why we have to pass it as soon as we can. So TPA is front and 
center. But there are several other measures that we must take 
to help the economy.
    I think what I said may not be in agreement with what the 
gentleman to my left says, but there are a lot of things that 
the two of us do agree on. We need to reauthorize the 
generalized system of preferences, which expired last year. And 
I am committed to ensuring that a seamless and timely renewal 
of the African Growth and Opportunity Act is done as soon as 
possible. Both of these programs would let developing countries 
send their products to our shores duty free. Stronger trade 
ties among our countries would help lift up their economies and 
our own.
    The Miscellaneous Tariff Bill, meanwhile, would eliminate 
duties on hundreds of products that we don't even make in our 
country, and that our manufacturers need to build their own 
products. This is just common sense, and we need to find a way 
forward. And I do look forward to bipartisan agreements on many 
of these issues.
    Finally, Congressman Brady has done solid work on the 
Customs Trade Facilitation and Enforcement Act. The bill would 
help streamline our customs procedures and enforce our trade 
laws. And Congressman Boustany, he has tackled the problem of 
trade remedy evasion in a very creative and a very effective 
way. We need to get this legislation across the finish line.
    So, we have a pretty ambitious agenda in front of us. I 
look forward to learning more about the Ambassador's testimony, 
and I look forward to this area, because it has the promise of 
creating more jobs for Americans. And I look forward to working 
with my colleagues on these issues.
    And, with that, I would like to yield to Mr. Levin for any 
time he might need.
    Mr. LEVIN. Thank you very much, and welcome, Ambassador, 
welcome.
    The Trans-Pacific Partnership is potentially a trade 
package of historic significance. Economically, the 12 
participants represent 40 percent of the world's GDP. New vital 
issues are being negotiated multilaterally for the first time. 
TPP has the potential to raise standards and open new markets 
for U.S. businesses, workers, and farmers. Or, on the other 
hand, to lock in weak standards, uncompetitive practices, and a 
system that does not spread the benefits of trade affecting the 
U.S. economy, job prospects, and wages for decades to come.
    At this juncture, there are many major outstanding issues 
in key subject matters of TPP. The resolution of these issues 
will decide the merits of TPP, and whether it is an agreement 
that builds on progress in recent FTAs.
    Last week I put forward a description of what I believe to 
be most effective resolutions of the major outstanding issues. 
Achieving these outcomes could lead to a landmark TPP agreement 
worthy of major bipartisan support, and my own. The outcomes 
will affect the paychecks of American families now and in the 
future. So we should focus on getting TPP done right.
    To achieve this, Congress, at this point, must not give up 
its leverage by passing TPA, where it can only say yes or no, 
until we here are fully confident that USTR is on a clear path 
toward effectively achieving these outcomes. Congress needs to 
assure itself of a fully active role in the effort to get TPP 
right. With the negotiations at a pivotal point--a pivotal 
point--within a few months, it is said, of final decisions 
being made on key specific issues and provisions, the 
congressional role must be instrumental.
    And we have played an active important role in the past. 
Numerous trade agreements have been improved, as a result. We 
put together provisions in the May 10th agreement on 
enforceable labor and environmental standards, as well as vital 
medicine provisions. We inserted into China PNTR provisions to 
strengthen enforcement of China's obligations--unfortunately, 
not utilized--as well as trade enforcement and human rights 
provisions in Russia PNTR. And we insisted, in the industrial 
provisions of the Korea FTA, that it be re-negotiated. And Dave 
Camp and I worked closely with the auto companies and auto 
workers, and the Obama Administration went back and got a 
stronger agreement.
    This may not be the course suggested by those who believe 
that more trade is, by itself, so positive, that any problem in 
TPP will work itself out over time. And, for some others, there 
is no feasible way to do TPP right. So both now focus on 
process, on the vehicle Trade Promotion Authority, and not on 
the vital contents of the TPP package that would be on that 
vehicle.
    Let me give a few examples why we need, right now, to focus 
on TPP.
    First, currency manipulation has cost the United States 
millions of jobs over the past decade. Bipartisan majorities of 
both the House and the Senate, and staunchly conservative, as 
well as liberal economists, have urged the Administration to 
include strong and enforceable currency disciplines in TPP. But 
the Administration has not yet broached that subject in TPP.
    On agricultural market access, we continue to hear concerns 
from farm groups. The TPP could lock in closed markets, 
particularly in Japan, but also in other countries. We must 
insist that tariffs be eliminated on virtually all agricultural 
products, and that there be significant access for the few 
products where tariffs are not eliminated.
    On investment, the Economist Magazine, the CATO Institute, 
foreign governments, and others from across the political 
spectrum, have expressed growing concerns that the investment 
provisions of our trade agreements, particularly the investor 
state dispute settlement mechanism, could unjustifiably 
interfere with each nation's sovereign right to regulate. 
Recent examples are Australia's regulations of tobacco, and 
Canada's handling of medicine patents. TPP needs to include new 
safeguards, as I proposed last week.
    Finally, TPP needs to preserve the provisions of the 
bipartisan May 10th agreement of 2007. For example, this is the 
first time the United States has ever negotiated a 
comprehensive trade agreement with a Communist trading partner. 
Vietnam must recognize that workers have the right to choose 
their own representatives, and we need to put in place an 
ongoing panel to ensure Vietnam's compliance.
    No less important are outstanding provisions on access to 
Japan's automotive markets, state-owned enterprises, rules of 
origin, environmental protections, and human rights. Giving 
Congress a fully effective role, as well as for representatives 
of groups with a big stake in TPP negotiations, is an effective 
way--and I emphasize this--to assure other nations that the 
USTR is bargaining with strong bipartisan support.
    Finally, in order for all of this to happen, all Members of 
Congress and cleared advisors must have full access to the 
negotiating documents, including to the positions taken by 
other nations on a secured basis, only where necessary. There 
has been some progress on transparency, but much more must 
happen. A full row for Congress at this important juncture in 
the TPP negotiations after 5 years with real transparency is 
absolutely essential. Nothing else will suffice.
    Thank you, Mr. Chairman.
    Chairman RYAN. Thank you. Ambassador Froman, thank you for 
your time today. The Committee has received your written 
statement, and it will be made part of the formal hearing 
record. If you wouldn't mind summarizing your remarks in 5 
minutes so Members can get on with the question and answer, I 
would appreciate it, and you are recognized.

            STATEMENT OF AMBASSADOR MICHAEL FROMAN, 
                   U.S. TRADE REPRESENTATIVE

    Ambassador FROMAN. Thank you, Chairman Ryan, Ranking Member 
Levin, Members of the House Ways and Means Committee. Thanks 
for the opportunity to testify. I will try to keep this short, 
so to maximize the time for questions.
    As a central part of the President's overall economic 
strategy, our trade agenda is committed to supporting more good 
jobs, promoting growth, and strengthening the middle class in 
the United States. At USTR, we are advancing those goals by 
knocking down barriers to U.S. exports, and leveling the 
playing field for American workers and businesses of all sizes. 
And, as we work to open markets around the world, we are 
enforcing our trade rights so that American workers, farmers, 
ranchers, and businesses get the full benefit of the economic 
opportunities the United States has negotiated over the years.
    Taken together, these efforts have contributed greatly to 
America's economic comeback. Since 2009, America's total 
exports have grown by nearly 50 percent, and contributed one-
third to our economic recovery. During the most recent year on 
record, 2013, U.S. exports reached a record $2.3 trillion, and 
supported a record-breaking 11.3 million jobs. And, at a time 
when too many workers haven't seen their paychecks grow in much 
too long, these jobs typically pay up to 18 percent more, on 
average, than non-export-related jobs.
    Over the past year, I have had the pleasure to travel 
around the country, and heard many of the stories behind these 
statistics. I listened to small business owners in Colorado, 
Maryland, and Ohio; farmers and ranchers in Iowa and Wisconsin; 
manufacturers and service providers in Texas and the State of 
Washington, and many others. And, across our country, what I 
heard was resoundingly similar: confidence that, as long as the 
playing field is level, our workers and businesses can win.
    Today, more small businesses are exporting than ever 
before. And, by tapping into global markets, these companies 
are able to increase their sales and their payrolls. And that 
success is all the more impressive when you consider that the 
United States is an open economy, and other countries aren't 
necessarily playing by the same rules. That is why we are 
working harder than ever to bring home trade agreements that 
will unlock opportunities by eliminating barriers to U.S. 
exports, trade, and investment, while raising labor, 
environment, and other important standards across the board.
    If we sit on the sidelines, we will be faced with a race to 
the bottom in global trade, not a race to the top. And, as the 
President said last week, we should be the ones to engage and 
lead.
    That leadership is apparent in our work during the last 
year to advance the Trans-Pacific Partnership, or TPP. The 
contours of a final agreement are coming into focus, and we 
have made important progress in the market access negotiations, 
and in addressing a number of 21st century issues such as 
intellectual property, digital trade, competition with state-
owned enterprises, and labor and environmental protections.
    Another promising area is the Transatlantic Trade and 
Investment Partnership, or TTIP. And with the new European 
Commission in place, the United States and the European Union 
are moving forward with a fresh start in TTIP negotiations, 
which will build upon the already $1 trillion in two-way annual 
trade.
    At the World Trade Organization, the United States is 
working to conclude an information technology agreement 
expansion deal, which would cover roughly $1 trillion in trade, 
while moving forward in negotiations on the Trade and Services 
Agreement, and the Environmental Goods Agreement.
    This will be a critical year for trade, and we look forward 
to continuing our efforts to engage the public, stakeholders, 
and Members of Congress in a robust discussion about how we are 
opening markets and creating opportunities for American 
exports; how we are raising labor and environmental standards 
to level the playing field for American workers; how we are 
promoting innovation and creativity, as well as access to its 
products; and how we are ensuring that governments will be able 
to regulate in the public interest, while giving Americans 
abroad the same kind of protections we guarantee domestic and 
foreign investors here at home.
    Mr. Chairman, as we move ahead, we are committed to 
providing maximum transparency, consistent with our ability to 
negotiate the best agreements possible. And we look forward to 
working with this Committee and others in Congress to determine 
the best way to achieve that goal.
    There is no other area of policy that reflects closer 
coordination between the Executive and Congress than trade 
policy. And, to further strengthen that cooperation, as the 
President made clear last week, we look forward to working with 
Congress to pass bipartisan Trade Promotion Authority. The 
previous TPA bill was passed over a decade ago, and an updated 
TPA bill is needed to address the rise of the digital economy, 
and increasing role of SOEs, and to reflect the latest 
congressional views on labor, environment, innovation, and 
access to medicines.
    TPA also establishes the timeline and process for the trade 
agreements that we bring home to be reviewed not only by 
Congress, but also by the American people. And again, the 
Administration looks forward to working with this Committee and 
the new Congress, as a whole, to secure a TPA that has 
bipartisan support.
    We also look forward to working with Congress to renew a 
number of other programs, including trade adjustment 
assistance, the Generalized System of Preferences, which 
expired in 2013, and the AGOA program, well before it expires 
in September this year. But we can only accomplish these goals 
and priorities through strong bipartisan cooperation between 
Congress and the Administration. And, together, we can ensure 
our trade policy continues unlocking opportunity for all 
Americans.
    Thank you again for the opportunity to testify. I am happy 
to take your questions.
    [The prepared statement of Ambassador Froman follows:]
    
    
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    Chairman RYAN. Thank you. I have a lot of questions, but I 
will keep it to a couple, in the interest of the Members' time.
    Last week the President came, gave us the State of the 
Union, and called for Congress to pass Trade Promotion 
Authority. And, look, I don't agree with the President on a 
whole lot. But, on this one, I agree. And so, we have here a 
bipartisan opportunity to make a good difference for trade, for 
jobs, and to pass bipartisan legislation--to make divided 
government work, in other words.
    We are going to have to update TPA, we are going to have to 
have a smart rewrite of the law that is appropriate. The 
question I have, because this has to be a bipartisan effort, is 
what is the Administration doing to build support among 
Democrats for TPA?
    Ambassador FROMAN. Thank you, Mr. Chairman. We have been 
engaged for much of the last year-and-a-half with Democrats and 
Republicans on the Hill to brief them on TPP, and to engage 
them and make sure they are aware of what it is we are 
negotiating. And I want to thank Mr. Levin, in particular, for 
the process that he has organized over the last year that 
allowed us to have some deep-dive discussions on various issues 
on TPP. And we have a whole-of-government effort, including the 
White House and the Cabinet, that are out there, talking about 
TPP, the importance of it, and, of course, also TPA.
    So, we are fairly mobilized, and we are consulting with 
Members of Congress. We have--as I said, the Cabinet and the 
White House, including the President, are very much engaged on 
this issue. And we look forward to working with you to secure 
progress there.
    Chairman RYAN. I am from Wisconsin. Our license plate says, 
``America's Dairyland.'' But we are quickly becoming the 
world's dairyland. So I want to go into dairy with you, if we 
will.
    In 2013, our dairy exports grew by 41 percent. Exports are 
becoming only more important than the entire U.S. dairy sector. 
They are becoming bigger than the beef sector, which is still 
pretty high. So it is pretty impressive. This is why we need to 
open up more markets for our dairy products in TPP countries.
    And this is my concern. I am concerned that Japan is not 
doing nearly enough, and that Canada is not even negotiating to 
remove significant tariff and non-tariff barriers to U.S. 
dairy. I am concerned that TPP countries might restrict the use 
of many common food names under the guise of ``geographical 
indication requirements.'' The EU, for instance, insists that 
countries adopt these unjustified GI protections if they want 
to have trade with their members. We need to address these 
trade barriers.
    Look, this is my favorite cheese. It is Wisconsin Gouda, 
smoked Gouda, made in Monroe, Wisconsin, and smoked at Swiss 
Family Smokehouse in Evansville, Wisconsin. For generations, we 
have been making Gouda in Wisconsin. And for generations to 
come, we are going to keep making Gouda in Wisconsin, and 
cheddar, and feta, and everything else. So, it is extremely 
important that we do not allow these countries we are entering 
into trade agreements to use these kinds of improper barriers 
to block U.S. dairy exports.
    So, give me a status report on where things stand on these 
non-tariff and also tariff barriers with TPP, EU, and Canada, 
in particular.
    Ambassador FROMAN. Well, we couldn't agree with you more, 
and we are approaching--let's take dairy market access, really, 
in three ways.
    One, as you said, is to eliminate tariffs, or reduce 
tariffs wherever we possibly can. Second, to deal with SPS 
issues, sanitary and phytosanitary issues, to make sure that 
other countries apply sanitary and phytosanitary standards 
based on science, and not on politics. And, third, on the 
geographical indications. We think all three are important to 
having effective market access there.
    We are making good progress in TPP on market access, 
including in dairy. We are not done yet, but we have been 
working with Japan over the better course of a year on the 
issues, going line by line through dairy, which is one of their 
sensitive products, and determining where there can be tariff 
elimination and where there can't be tariff elimination. And it 
is a priority for our producers, working with the Government of 
Japan, to find a way to create meaningful market access. As I 
said, those negotiations aren't finished yet, but we have made 
good progress.
    On the SBS standards, I think we are making progress on 
ensuring that they are based on science.
    And on geographical indications, I think you are--our 
system, in our view, works for Europe and the rest of the 
world. There are 18 trademarks registered in the United States 
to Parmesan Reggiano. And the European Union sells hundreds of 
millions of dollars, if not billions of dollars, of cheese in 
the United States. But we can't sell cheese in Europe.
    And so, we believe our system of trademarks and common 
names is the appropriate way to go. We are working with our TPP 
partners to find a way for them to operate, both with the 
United States and the European Union, as partners. That 
protects our ability to access those markets.
    Chairman RYAN. Canada?
    Ambassador FROMAN. And on Canada, we have been engaged with 
them from before they came into TPP, and made it clear that 
this was an issue that was of great interest to us. They also 
underscored that it was sensitive to them. We are working with 
them, and we hope that we will be able to achieve a successful 
outcome there.
    Chairman RYAN. So we still have a ways to go to close these 
things out. That is pretty clear, I think, and most people on 
this Committee would agree with that.
    I could go on, but I will--in the interest of time, I would 
like to yield to the Ranking Member, Mr. Levin, for any 
questions he might have.
    Mr. LEVIN. Thank you. I asked anybody if they had some car 
keys. I didn't bring mine. You raised cheese.
    Chairman RYAN. I have----
    Mr. LEVIN. I know. These are the best keys we can find.
    [Laughter.]
    Chairman RYAN. I thought you would have your universal with 
you.
    Mr. LEVIN. But, so, it relates to--here we go.
    Chairman RYAN. If the gentleman will yield, the reason I 
have the cheese here is because it is a bet from Mr. McDermott. 
I lost a bet with Dr. McDermott, so it is actually his cheese.
    Mr. LEVIN. Where is the cheese?
    [Laughter.]
    Chairman RYAN. So if you want to go ahead and pass it on 
down to him, he can have his cheese.
    [Laughter.]
    Mr. LEVIN. Jim, you want to come up here? I don't want it. 
Take a picture with it.
    Chairman RYAN. And some free-range organic----
    Mr. LEVIN. But, look, I hope that doesn't come from--
thanks.
    You know, I was tempted to raise car keys, because one of 
the issues is the domestic industry has been unable to get cars 
into Japan. We have been trying for decades. And we need to 
have more than a negotiating objective. We need, all of us, to 
be involved in how an objective is being implemented 
specifically. We need to be involved in that process. And I 
could ask you about that, and I know you would say good 
progress has been made. But there are outstanding issues, in 
terms of what will really happen.
    And the same is true, Mr. Chairman, in terms of dairy. I 
think it is--I would liken it to a TPP. I think we need to be 
very actively involved as the specifics are put together.
    And when Mr. Froman, Ambassador, says to you, ``It is good 
progress,'' I think he is saying that sincerely. But, in terms 
of ag products, we need to know what the heck is going on, and 
be able to lean in if it isn't going well, or how it should go, 
on a regular basis. That is our challenge. It is not broad 
challenges, it is specific provisions. So, I just want to 
emphasize that.
    Let me just turn now to another issue I want to ask you 
about, because I could ask you about currency, but you are not 
the Secretary of the Treasury. On currency, which has so much 
to do with the livelihood of Americans, their paychecks, that 
issue hasn't yet been broached in TPP. There has been no 
discussion. And, as you and I have talked, Mr. Chairman, we 
need to be very much involved in pushing that issue, and 
getting it into the TPP negotiations, because it impacts the 
paychecks of American workers and the prosperity of American 
businesses.
    And so, we can talk as much as we want--and we should--
about the importance of exports. We also have to look at the 
path of imports. And currency has had a major impact on the 
imports that have come into this country, and displacement. And 
we have to have that full rounded picture, and our 
participation in how we address TPP so it comes out with a 
product that meets our needs and has a strong base of 
bipartisan support.
    So, let me just say--ask you about transparency. We 
discussed this last week, and I think--I can't speak for you, 
but it was a subject of interest to both of us. So, we haven't 
been able--we, Members of this Committee--to look at all the 
documents, to have staff write down what is in the text. And 
also, for us to know not only what other nations are proposing, 
but the specific proposals of other nations.
    And I think, for us to be able to actively help frame a TPP 
that is worthy of support, we need to have that access. And so 
that isn't a matter of negotiating objectives, it is a matter 
of the specifics that we need to be part of. We need to find a 
way to do that.
    So, there is just 41 seconds left, if you would respond, 
please.
    Ambassador FROMAN. Well, thank you, Congressman. And, 
clearly, consultation with Congress is a vital part of these 
negotiations. And it is not just the number of consultations, 
it should be also the quality of the consultations. And we look 
forward to addressing any of those specific issues that you 
want to address to get into details, and to dive deeply into, 
chapter by chapter, issue by issue.
    As you know, all Members have access to the negotiated 
text. Several dozen have taken advantage of that. And we 
continue to look for ways that we can expand transparency and 
participation, and there are a wide range of views on that 
issue, including among Members of this Committee and of the 
Senate Finance Committee, and we look forward to working with 
you and the Chairman, since it does touch upon the jurisdiction 
of this Committee, to determine the best way forward on that 
issue.
    We can always do better on transparency, and we are 
committed to working with you to find the best way forward.
    Mr. LEVIN. Okay, thank you.
    Chairman RYAN. And I think we are all in agreement we need 
to come to resolution on this.
    Mr. Johnson is recognized.
    Mr. JOHNSON. Concern has been raised by some that Congress 
and the American people may not be adequately consulted during 
trade negotiations.
    Let me ask you. Doesn't TPA actually strengthen 
congressional executive consultations? Yes or no?
    Ambassador FROMAN. Well, yes, Congressman, it is a 
mechanism by which Congress can update the procedures that they 
think are appropriate for consultations before and during----
    Mr. JOHNSON. Well, are you listening to us? That is what 
the question is, I guess.
    Ambassador FROMAN. Yes, absolutely. And part of our efforts 
to consult with this Committee, and more broadly, is to ensure 
that we have your input.
    I also just want to correct a misperception that is out 
there that somehow this is going to get voted on before there 
is adequate time for the public and Congress to review it in 
great detail. Of course, it will be public for months and 
months before there is any vote in Congress, under traditional 
grants of Trade Promotion Authority. And there will be 
hearings, and there will be questions, and there will be 
scrutiny. And that is very much part of the process.
    At the end of the day, it is only Congress that can decide 
whether the trade agreement goes into effect or not. And we 
will make that judgement.
    Mr. JOHNSON. Yes, I hear you. Let me ask you. Is the 
President, this Administration, committed to following TPA 
requirements to the letter?
    Ambassador FROMAN. Yes. I mean we follow--we have--are very 
much committed to working with you on TPA and in TPA, following 
the requirements with regard to the various provisions----
    Mr. JOHNSON. Okay, and we are negotiating trade deals in 
the Asia Pacific and with Europe. And I wonder if you could 
tell us how TPA helps lead to better job-creating trade 
agreements for America?
    Ambassador FROMAN. Well, these trade agreements are going 
to open up markets for our exports. They are going to help 
level the playing field for our workers and our firms. They are 
going to help protect American jobs and protect American 
workers. They are going to create fairness, in terms of a level 
playing field. And, ultimately, they put us, not other 
countries who may not share our interests and our values, in 
the driving seat, in terms of setting the rules of the road for 
the international trading system.
    So, in all those regards, this is an important step forward 
for defending American workers and American jobs.
    Mr. JOHNSON. I agree with you. And what is the 
Administration doing to help show Americans that job-creating 
potential, or trade agreements, to build support for TPA?
    Ambassador FROMAN. Well, we are mobilizing our entire 
Cabinet and our White House, our whole government is out there, 
talking about this. We have been out, myself and Secretary 
Pritzker, Secretary Lew, Secretary Kerry, Secretary Vilsack, 
Secretary Perez, have all been out talking with--around the 
country talking about the importance of moving ahead with this 
trade agenda.
    I will tell you that today we re-launched our website, and 
on the website it has State-by-State material, in terms of the 
benefits of trade on a State-by-State basis. And we continue to 
develop that material as we--as the agreements are coming--the 
final agreement is coming into focus. And we are going to 
continue to work with you to make sure we get that information 
out to the public.
    Mr. JOHNSON. Good for you. Have you ever been to Texas?
    Ambassador FROMAN. I have been to Texas.
    Mr. JOHNSON. Okay. Thank you, Mr. Chairman.
    Ambassador FROMAN. Thank you.
    Mr. JOHNSON. I yield back.
    Chairman RYAN. Thank you. Dr. McDermott is recognized.
    Mr. MCDERMOTT. Thank you, Mr. Chairman. I didn't get my 
salmon over here to give you in exchange.
    Mr. Froman, global access to affordable biologics is a key 
component of this negotiation. And, unlike small molecule 
drugs, biologics are derived from organisms. They are used to 
treat cancer, rheumatoid arthritis, MS, and a variety of other 
things. In many ways, they represent the new frontier of 
medicine.
    For example, some of the drugs that have showed promise in 
Ebola are biologics. The prominence of these drugs in the lives 
of patients will grow in the coming years. In the next 5 years, 
for example, one-quarter to one-third of all new medicines 
approved by the FDA are expected to be biologics.
    Now, while these drugs represent the most--the next 
frontier, they are also very expensive. The annual cost of the 
biological drug Herceptin, to treat breast cancer, is $48,000. 
In Peru, one of the 12 countries that is part of the Trans-
Pacific Partnership, breast cancer is the leading cause of 
death among women. But the cost of a drug like Herceptin is out 
of reach for working-class women in Peru. According to World 
Bank figures, the gross domestic product per capita in Peru is 
$6,270. That is seven times--takes 7 years' work to buy 
treatment for the cancer.
    Before entering Congress, I worked in Africa, and worked on 
the AIDS epidemic, and I saw what we were able to do by using 
generics in the treatment of that epidemic. We brought it under 
control. So, my question really comes down to this: Why is the 
U.S. Trade Representative's office putting forward provisions 
that would threaten access to affordable biological drugs in 
the TPP negotiation?
    Let me be specific about what I mean. A USTR provision is 
setting data exclusivity for biologics, meaning that the patent 
holder has the data, and nobody can make a generic until that 
exclusivity runs out. Your tabling something at 12 years would 
mean a longer time for people to wait for lower-cost drugs. The 
President is advocating a 7-year period of data exclusivity in 
biologics. So a little bit more than half. I don't understand 
why you are going twice the length of what the President is 
talking about. Or is that--is there just no clarity?
    Are you willing to tell us what you are really adopting? 
Because a 12-year standard, if we adopt it in TPP, would make 
it impossible for us to have it after 7 years in the United 
States. That means people who could have access to the drugs 
because of the cost of generics being markedly reduced, would 
be denied them for 5 years more because of a trade agreement we 
made with Trans-Pacific Partnership.
    And I don't understand how you think that works. It seems 
to me there ought to be one standard for the world. And I don't 
think that it ought to be a long one. If the President says 
seven, let's--why aren't we talking seven? Why are you talking 
12?
    So tell me about this data exclusivity, how long you think 
you are going to negotiate, where it is today. Because some 
countries don't have any data exclusivity. Some have a 5-year 
standard. Some have a 7-year standard. And we are talking 12. 
Where are we going?
    Ambassador FROMAN. Thank you, Congressman. Thank you for 
all your leadership on that issue.
    Look, this--we have 40 million Americans whose jobs are 
related to IP-intensive industries. And our goal is, on one 
hand, to promote innovation and creativity in this country, and 
also to ensure access to affordable medicines, particularly in 
developing countries, consistent with the May 10th framework 
that Mr. Levin, Mr. Rangel, and the previous Administration 
worked out. And that is the position----
    Mr. MCDERMOTT. Are you saying that what you are putting 
forward on the table now is consistent with what we did in Peru 
in the May 10th agreement?
    Ambassador FROMAN. So that is the approach we have been 
taking to these negotiations, where we look at where countries 
are, and their stages of development, and have a differentiated 
approach, depending on where they are in their development.
    Now, you are absolutely right. Five countries have zero 
years of protection, four have 5 years of protection, two have 
8 years of protection, and we have 12 years of protection. And 
this is an area where, right now, there is no consensus among 
the countries about where to end up. But the approach we have 
been taking is to ensure both the promotion of innovation--
because without the innovation you can't have generics, and you 
can't have biosimilars down the road--but also ensuring the 
affordable access to medicines, depending on a country's level 
of development. And that is the approach that we are taking in 
TPP.
    Mr. MCDERMOTT. And you are saying the President has not 
said 7 years?
    Ambassador FROMAN. I think it is well known that, in the 
President's budget, is proposed 7 years. Twelve years is 
currently the law of the land. And the practice that we use in 
our trade agreements, if Congress has spoken on a particular 
element like that, that is our initial position.
    Chairman RYAN. Thank you. Mr. Brady.
    Mr. BRADY. Thank you, Mr. Chairman, for calling this 
hearing. Ambassador, thanks for your good work on leveling the 
playing field for our American companies and workers around the 
world.
    You know, the world has changed. It is not enough to simply 
buy American; we have to sell American all throughout the 
world. And the world's economy has changed since we last did 
Trade Promotion Authority. It has been 13 years. The 
economies--the existing TPA is outdated, and doesn't reflect, 
really, the 21st century economy our businesses and workers are 
competing in.
    I have noticed that the bipartisan draft from last year 
includes a balanced currency provision that creates tools for 
the Administration to seek and address currency manipulation. I 
think that balanced approach is the right one and, going beyond 
that, creates real risks and challenges--especially risks--to 
the United States.
    One risk--challenge is that it will miss the mark. In 
truth, savings and investment in a country drives much of the 
value of their currency. Monetary policy and fiscal policy 
does--is a huge part of it, as well. Japan is a great example. 
The currency intervention didn't have an impact; monetary 
policies had a huge impact on depreciating the yen.
    There are challenges in getting this right. Both at the WTO 
and the IMF, the currency rules are already fully enforceable. 
But, as both the Bush and the Obama Administrations have noted, 
that often this is a challenge in setting the standard, 
defining manipulation. And there is a concern that will 
distract from more likely efforts to address currency 
manipulation around the world.
    And here is my point. Defining manipulation of currency, 
you really--is dependent upon defining the intent of a country. 
And that creates risks for the United States where it could 
expose us to litigation in the trade agreement.
    For example, particularly quantitative easing, which--a 
country could argue that the Fed's QE reduced the value of the 
dollar by almost 8 percent, whether that was the intent or not. 
Not only would we be tied up in litigation, it really would 
distract from real efforts. And I think that also helps shield 
real currency manipulators like China, who are outside of 
current trade agreement negotiations and wouldn't be subject to 
these new obligations. And so, not only does it create risk, 
you miss the real target on currency manipulation.
    So, my question to you is, isn't the Obama Administration 
committed to ending currency manipulation? And will you be 
using 
all your tools within TPA and across a broad spectrum of multi-
national organizations, to address currency issues?
    Ambassador FROMAN. Well, thanks, Congressman. Yes. I mean 
currency misalignment is a top priority for the Administration. 
And from day one we have worked to create a more level playing 
field by encouraging countries to move toward market-determined 
exchange rates, and to deal with persistent misalignment.
    The Secretary of the Treasury, obviously, has the lead on 
this issue, and I know he will be here next week, and may speak 
on this further, if you like. But we have been engaged, whether 
it is directly with countries like China, where, from the 
President on down, we have pressed China to move toward a more 
market-determined exchange rate. In June 2010 they began to let 
their currency appreciate. It has now appreciated about 15 
percent in real terms. Not far enough, not fast enough. We are 
continuing to press them for market-determined exchange rates.
    We have been pushing in the G7 where appropriate, the G20, 
the IMF. We are using every mechanism possible to try to 
achieve that objective.
    Mr. BRADY. Are the tools within the TPA provision, as 
drafted, helpful to you as you address this issue around the 
world?
    Ambassador FROMAN. Well, I think, as this Committee and the 
Finance Committee proceed with a TPA bill, we will want to have 
conversations with you about that.
    Mr. BRADY. Right.
    Thank you, Chairman.
    Chairman RYAN. Thank you. Mr. Lewis.
    Mr. LEWIS. Well, thank you, Mr. Chairman. Thank you for 
holding this hearing.
    Mr. Ambassador, thank you for being with us today, and 
thank you for spending so much time meeting with Members of 
this Committee. Mr. Ambassador, I happen to believe that trade 
policies should be a reflection of the values that we share, as 
a Nation, and as a people. I would like for you to speak to the 
issue of human rights, labor rights, and environmental issues.
    Ambassador FROMAN. Well, thank you, Congressman. And I 
completely agree that this gives us--our trade agenda gives us 
an opportunity to promote our values, as well as our interests, 
in a critical part of the region and around the world.
    That is why it is so important, what we are doing in TPP, 
for example, on labor and the environment. Again, building off 
of the May 10th agreement, this agreement will have the 
strongest possible labor and environmental provisions, and they 
will be fully enforceable. They will be in the core of the 
agreement, and they will be fully enforceable, including with 
the availability of trade sanctions, just like any other 
provision of the trade agreement. That is what we are seeking 
in this negotiation.
    And we will take labor provisions, as an example, and be 
able to apply them now to half-a-billion people. And that is a 
huge transformation from where we were 22 years ago, with 
NAFTA, where labor and the environment were considered side 
issues. And, over time, there has been a bipartisan consensus 
that has emerged that it should be treated like other issues in 
a trade agreement. So I think that is a very important 
development there.
    We are also working specifically with countries where labor 
issues are particularly acute, whether it is Vietnam or other 
countries, to work with them to figure out how they can bring 
their labor regime into conformity with international labor 
standards.
    And, again, this is only possible because we are engaged 
with them in TPP. If we didn't have TPP as our avenue for that 
engagement, there would be no possibility of improving the 
lives of workers in these countries and, hence, leveling the 
playing field for our workers. This is both important to do as 
a matter of values, creating dignity of work around the world, 
but it is also very important to leveling the playing field for 
our workers and our businesses who are competing right now 
against low-wage workers around the world.
    Mr. LEWIS. Mr. Ambassador, you mentioned Vietnam. Are you 
free to tell Members of the Committee where we stand with 
Vietnam? It is only one labor union, by law.
    Ambassador FROMAN. We are working with them, and having a 
series of conversations about how to bring their system into 
conformity with international labor organization standards, 
including on rights of association, collective bargaining, 
forced labor, child labor, non-discrimination, acceptable 
conditions of work, which include minimum wage, maximum hours, 
and safe workplace conditions, and what kind of capacity 
building they are going to need as part of that. I am happy to 
arrange a time to sit down and brief you in more detail about 
that.
    Mr. LEWIS. Mr. Chairman, I would like to yield the balance 
of my time to Mr. Doggett.
    Mr. DOGGETT. Thank you, Mr. Lewis.
    Chairman RYAN. The gentleman is recognized for 1 minute, 38 
seconds.
    Mr. DOGGETT. Ambassador, would you be willing to place 
several copies of the latest bracketed draft with the 
negotiating position of each of our trading partners here in a 
secure room in the Capitol, so that Members and their staff 
with high security clearance would be able to go in, study it, 
take notes, and review it for as long as they feel it is 
necessary, in order to be good partners with you?
    Ambassador FROMAN. This is one of the ideas that has been 
suggested, and we are hoping to have a conversation about that 
with the Chairman, the Ranking Member, and also the Finance 
Committee, to determine what the best procedures are for----
    Mr. DOGGETT. My understanding is----
    Ambassador FROMAN [continuing]. Addressing that.
    Mr. DOGGETT [continuing]. That something similar was done 
back during NAFTA at different stages. And it seems to me that 
this negotiation over TPP has been going on for years, but 
there are strong restrictions on the ability of Members of 
Congress to study it.
    Has any step been taken since I raised this concern in our 
meeting with you last Wednesday, to provide greater access to 
Members of Congress, and let us have the opportunity to know, 
if we are concerned about cheese in Wisconsin, what position 
the Canadians are taking?
    Ambassador FROMAN. Well, we are having conversations with, 
again, the Chairman, the Ranking Member, and the same on the 
Senate side, precisely around those questions.
    Mr. DOGGETT. Well, I have great confidence in both of them, 
but all of us have a vote on this that is the same as theirs. 
Why shouldn't all Members of Congress be able to get access 
with their secured staff, and take such notes as they may feel 
necessary in order to record where various trading partners 
are--or what position they are taking?
    Ambassador FROMAN. Well, as you know, every Member of 
Congress can access the text. Several dozen have, including 
some Members of this Committee. And we are happy to arrange a 
time to come up and show you whatever text you would like to--
--
    Mr. DOGGETT. There are severe limitations on it. I will 
continue a little later.
    Chairman RYAN. Yes, you will have time when you have time.
    Mr. Nunes is recognized.
    Mr. NUNES. Thank you, Mr. Chairman.
    And, Mr. Froman, I want to thank you for always making 
yourself available for myself, and I think the other Members, 
taking the time to go down to USTR. And you have been willing 
to share the information, and I would encourage all the Members 
to go down and do that.
    I am going to be very brief. I am going to submit five 
questions for the record. I also would like to reiterate the 
Chairman's comments or concerns about Japan and Canada, as it 
relates to agriculture, in general. Japan still has to go 
farther. Canada has to put an offer on the table, or they could 
blow this entire deal up.
    And then, finally, I would just encourage you to pass TPA, 
help us pass TPA, sooner, rather than later. We are going to 
need the Administration's help on that.
    I would like to yield, with the Chairman's permission--
support, I mean, to the gentleman from Ohio, Mr. Tiberi.
    Chairman RYAN. The gentleman is recognized.
    Mr. TIBERI. Thank you. Ambassador Froman, you have 
communicated the enormous benefits of trade to the United 
States economy over and over again. And, as you know, 
international trade supports nearly 40 million U.S. jobs. And 
the share of U.S. jobs tied to trade has actually doubled in 
the past 20 years. In addition, trade-related jobs pay an 
average of 18 percent more than non-trade-related jobs in the 
United States. And the President and you have both said that 
U.S. economic growth depends on exports and doubling, tripling 
exports, because 95 percent of the world's consumers live 
outside of the United States of America.
    As Chairman Ryan said, we have a number of major 
negotiations ongoing right now, and I, for one, want to make 
sure that you and your team have all the tools necessary to 
show our trading partners that there is a strong partnership 
between this Administration and this Congress, because the 
trading partners will then know that we are serious, and they 
will put their best offer on the table.
    In that vein, can you explain to us in simple terms what 
renewing TPA means for you and your negotiating team, as you 
begin to finalize these negotiations in coming months?
    Ambassador FROMAN. Well, Congressman, we have been working, 
on the one hand, to proceed with TPP negotiations, and to 
complete elements of those negotiations consistent with 
ambitious, comprehensive, high-standard benchmarks that we have 
set for ourselves.
    On the other hand, we have indicated that we want to work 
in parallel with Congress, bipartisan, Democrat, Republican, 
House and Senate, to proceed with TPA. And I think that has 
allowed us to continue to proceed with the negotiations and 
continue to make progress. And we look forward to also making 
progress on the TPA bill.
    Mr. TIBERI. Another issue. China and several other 
countries have repeatedly targeted U.S. exports by biased 
remedy investigations, often in retaliation for legitimate 
trade actions taken by the United States.
    And one, specifically, the Grain-Oriented Electrical Steel, 
the GOES dispute, is one that hits close to home for me and my 
district. It is a dispute in one of a string of WTO disputes, 
as you know, that demonstrates China's systematic abuse of its 
trade laws to support its own industrial policies. And through 
a severe lack of transparency and due process, you know the WTO 
has ruled in our favor, in the United States' favor. And I 
really appreciate the work that you and your team have done 
thus far, specifically on the GOES issue.
    China has made some encouraging new commitments. However, 
many of us are concerned about the implementation of these 
commitments. As we go forward, what are you and the 
Administration going to do? These are jobs in my district, for 
instance, manufacturing jobs in Zanesville, Ohio. So we win, 
but yet, we still don't win, if you know what I mean. How can 
we improve on this? What are the metrics?
    Ambassador FROMAN. Well, look. I think we have to be very 
aggressive in holding China and our other trading partners' 
feet to the fire when it comes to applying their trade remedy 
laws in a WTO-consistent way.
    We have brought 18 cases before the WTO, the most ever 
above anybody, 9 of them against China. And a few of them in 
this particular area, which is the misapplication of their 
trade remedy laws: the steel case; the autos case, which 
affected, I think, over $5 billion of U.S. auto exports; a 
poultry case, where they were doing the same thing, and 
applying their trade remedy laws. We have won each one of 
those, and we are going to continue to press them to bring 
their application of their trade remedy laws into compliance 
with their WTO obligations.
    Mr. TIBERI. I look forward to working with you on that.
    Ambassador FROMAN. Thank you, sir.
    Mr. TIBERI. Thank you.
    Chairman RYAN. Thank you. Mr. Becerra.
    Mr. BECERRA. Thank you, Mr. Chairman.
    Ambassador, thank you for being here again, and for all of 
the work that you are trying to do. I want to touch on the 
subject of currency because, to me, that is--if a country is 
going to cheat by devaluing its currency for the exclusive 
purpose of making its products look cheaper by keeping its 
currency value down, it obviously hurts American companies and 
American workers, because it is tougher for us to sell our 
products to those countries that are devaluing their currency. 
It makes it tougher for our companies to compete with those 
competitors in that devalued country when it comes to selling 
those products, our products, against their products in other 
countries, because they have that advantage when it comes to 
currency.
    And I am very concerned that we have yet to hear that this 
is an issue, currency manipulation, that will be included in 
any trade agreement. And I know that often there is discussion 
about how you can do this through other fora, but my sense is 
that we are not taking this as seriously as we should. From 
left and right, economists tell us that we can--we are losing 
somewhere between 1 million to 3 or 4 million jobs by allowing 
countries to manipulate their currency and still bring products 
into the United States, dump them in our country.
    So, I am wondering if you can go through with me the four 
factors that the IMF considers relevant to determining whether 
a country is manipulating its currency.
    The first one is excessive foreign exchange reserves. If a 
country has really large surpluses in reserves of foreign 
currencies, and it still has a really low-value currency, 
something is up. Well, my understanding is that the United 
States has the 19th largest foreign exchange reserves, less 
than countries like Thailand and Algeria. In fact, our 
reserves, our foreign exchange reserves, are 25 times smaller 
than China's. Would that be a factor that we would concern 
ourselves with if we are trying to include currency 
manipulation in any agreement, because we might be concerned 
that someone would accuse us of currency manipulation?
    Ambassador FROMAN. Well, Congressman, let me answer the 
question this way. As you know, this is an issue of high 
priority. And, you are right, we have been pursuing it through 
a number of means, whether it is bilaterally through the IMF, 
as you note, as well as through the G7 and the G20.
    I think we share the same concern about the impact of 
this----
    Mr. BECERRA. Ambassador, I am going to run out of time. I 
am trying to figure out if--which of these factors we are 
concerned will impact us, and we will be accused of foreign 
manipulation, or manipulation of our currency, if we don't 
include--if we try to include a deal on currency manipulation 
in a trade deal.
    So, do you think that we could be accused of holding 
excessive foreign exchange reserves?
    Ambassador FROMAN. Again, I am going to defer to the 
Treasury Secretary, who is in charge of this.
    Mr. BECERRA. Okay, so let me ask----
    Chairman RYAN. If the gentleman would yield just very 
briefly, we are going to have the Treasury Secretary here on 
Tuesday.
    Mr. BECERRA. I understand. But, again, Mr. Ambassador, you 
have been talking about intellectual property. That is usually 
handled by the World Intellectual Property Organization. You 
have talked about issues of labor. That is usually handled by 
the International Labor Organization. So I am hoping that you 
are willing to talk about currency manipulation, which is one 
of the, I think, severest forms of imbalanced and unfair trade 
that a country could engage in.
    Sometimes it is tough for some countries that don't have 
real strong institutions to enforce laws when a business is out 
there, undercutting American industry. You know you have to go 
after those businesses. But when a country itself is 
manipulating its currency to gain an advantage over Americans, 
American companies and American workers, that, I think, is 
despicable.
    And if we don't try to do something to avert that, we are 
essentially sending a very clear signal to those countries: 
``We want to deal with you; we don't care if you enforce, 
because we are going to let you, yourself, violate the 
agreements, so you can let your businesses do the same thing.''
    The second factor that the IMF typically considers in 
determining whether a country is trying to manipulate its 
currency to its advantage is that the country has a long and 
sustained surplus. I think we can move very quickly past that 
one, because it has been quite some time since the United 
States has had a long and sustained surplus.
    The third factor would be protracted, large-scale 
intervention and currency markets. We rarely--unless you can 
tell me otherwise--purchase foreign currencies. And certainly 
we haven't done it in some kind of protracted or large-scale 
manner.
    And the fourth factor that the IMF considers is fundamental 
misalignment of currency. Fundamental misalignment, meaning it 
is valued in ways that it shouldn't be. If anything, our dollar 
right now is over-valued, not under-valued.
    And so, I am wondering where of those--which of those four 
factors we are concerned--we would be found in violation of if 
someone were to attack us for trying to manipulate currency by 
doing the quantitative easing policies that the Federal Reserve 
has done, which has helped keep interest rates low, and has 
helped a lot of Americans afford to buy a home, and a car, and 
so forth. I just am concerned that we see no action on the part 
of the Administration on something that, bipartisanly, an 
overwhelming number of Members agree on.
    Chairman RYAN. Thank you, Mr.----
    Mr. BECERRA. So I hope you will get back to us on that.
    Chairman RYAN. Thank you.
    Mr. BECERRA. Thank you, Mr. Chairman. I yield back.
    Chairman RYAN. Mr. Reichert is recognized.
    Mr. REICHERT. Thank you, Mr. Chairman. Welcome, Mr. 
Ambassador. It's good to see you again. Thank you for all your 
hard work and for meeting with the Friends of TPP Caucus, and 
also for meeting with the Committee last week. And I know we 
are working on some additional meetings, possibly even with the 
President, to help with your efforts on TPA and TPP.
    But I wanted to just initially raise an issue that you and 
I spoke about last week, I think, and it is really a critical 
issue, and I know kind of outside your sphere of 
responsibility. But I am hearing increasing concerns from my 
constituents about the West Coast Port contract negotiations. I 
understand there has been some minor progress made in the last 
couple of days, but, simply put--and I know you recognize 
this--the longer these negotiations continue, the greater the 
impact on our economy and the American workers.
    From my district alone, I have heard from apple growers and 
hay producers who have lost half of their businesses and, in 
turn, have had to lay off employees because they are unable to 
export their products without delay. One grower in my district 
has laid off 200 employees out of 1,000. And if this goes on, 
in another couple of weeks we will lose another 40 jobs, 
waiting to see, you know, how these negotiations turn out. And 
they are on track to lose $1 million a week. So this is--it is 
critical.
    In the short term, Washington apple and pear growers have 
lost an estimated $70 million in sales. In the long term, they 
are worried about the loss of business, their reliable 
producers, and if they will be able to recover some of their 
losses, and recover some of their customers, because they are 
going to lose that customer base. So this is a devastating way 
to realize how important trade is to communities in Washington 
State and across the country.
    And I just bring this to your attention, and hopefully you 
would encourage the Administration, the President, and others 
to become engaged and involved in this process.
    Ambassador FROMAN. Well, thank you, Congressman. And thank 
you for your leadership on the TPP, Friends of TPP Caucus.
    My understanding is that the parties to the dispute have 
requested Federal mediation, and the Federal Mediation Service 
has agreed, and is involved now in mediating that dispute. And 
we are hopeful that it gets resolved at the bargaining table.
    Mr. REICHERT. And I share that hope with you. Also, just to 
dig a little deeper into a question that Mr. Tiberi posed, and 
that is the importance of TPA. I wonder if you could apply it 
to a specific topic that the Chairman brought up, and that is 
dairy, in Canada and Japan.
    How important, really--you know, I want to maybe hear from 
you how you are going to sell TPA. If I am somebody opposed to 
TPA, how would you tell me--how would you sell that to me, you 
know, as it applies to Canada and Japan and the dairy-producing 
parts of our country, how important and how critical that is, 
and how it might impact your negotiations there in a positive 
way?
    Ambassador FROMAN. Well, look. Historically, TPA has been 
an expression of the fact that the United States is negotiating 
with one voice, and that there is support, both in Congress and 
the Executive, for moving ahead. Our trading partners are 
following our political process and our policy process here 
closely. And, as a result, we have been able to continue our 
work in parallel on moving the TPP agenda forward, including on 
market access, as we move forward with Congress to make 
progress toward bipartisan Trade Promotion Authority.
    Mr. REICHERT. Do you have a timeline on TPP?
    Ambassador FROMAN. Well, we are in the end game, and the 
number of outstanding issues have been reduced greatly. But the 
ones that remain are still significant, and our negotiators, as 
we speak, are meeting with the 11 other countries to try to 
resolve issues.
    So, I hate to put a deadline on it, because I think the 
timetable has to be determined----
    Mr. REICHERT. I know----
    Ambassador FROMAN [continuing]. By the substance. But I 
think all the leaders around the TPP countries have focused on 
trying to get this resolved in a small number of months.
    Mr. REICHERT. My last issue is localization requirements. 
Any comments on that?
    Ambassador FROMAN. It has been a key part of our TPP 
effort, as part of our digital economy chapter. This is the 
first trade agreement that will bring into the digital economy 
fundamental principles from the real economy. And one of the 
key factors there has been to push against requirements that 
require companies to build redundant infrastructure in a 
country in order to serve that market.
    Mr. REICHERT. Are you making progress?
    Ambassador FROMAN. We are making progress. We are not done 
yet, but we are making progress.
    Mr. REICHERT. All right. Keep up the good work. I yield 
back.
    Ambassador FROMAN. Thank you, Congressman.
    Chairman RYAN. Mr. Doggett.
    Mr. DOGGETT. Thank you, Mr. Chairman.
    And thank you, Ambassador. Again, returning to the subject 
of secrecy, I think there is a big difference between quantity 
and quality on transparency. And, as you know--and I have 
attempted to resolve this in a private arena--when a Member of 
Congress goes in to take a look at this agreement, they can't 
take notes, they can't be sure what position is being taken by 
which of the various trading partners in TPP. And, if they have 
a Chief of Staff or a trade rep who is--has a security 
clearance that would allow them to look at documents about 
ISIS, they cannot look at what the position of the Vietnamese 
is in this trade agreement.
    That is not practicing transparency, it is practicing 
secrecy. And I can't find a legal basis for that type of 
restrictive environment. And I would just urge you to take 
immediate steps to change it, and to do something similar to 
the process that I outlined, so that there is ready access for 
us to be partners with you on this.
    A second issue that I think goes to the heart of this, the 
Chairman referred to generally in his opening statement. Every 
trade agreement and every bit of trade legislation that has 
been considered here in this Committee that I participated in--
I voted for more of them than I voted against, but each time we 
hear the promoters say something about all the jobs that will 
be created, we hear the detractors talk about all the jobs that 
will be eliminated. Practice may be that both had some truth. 
But I am interested in knowing more about whether the 
Administration has analyzed whether previous claims about our 
trade agreements did produce net job growth, agreement by 
agreement.
    For example, in the most recent round, we had the U.S.-
Korea Free Trade Agreement. Isn't it accurate that, while the 
Administration claimed that there would be thousands of new 
jobs created through that trade agreement, that to date we have 
actually experienced job losses, net job losses?
    Ambassador FROMAN. Thank you, Congressman. Let me start 
with Korea and work backward.
    First of all, let's take all of our FTAs together. As the 
Chairman said, if you take FTAs as a group, we have a trade 
surplus.
    Mr. DOGGETT. Yes, I heard that----
    Ambassador FROMAN. And manufacturing----
    Mr. DOGGETT. Just focus on Korea for a minute.
    Ambassador FROMAN. And manufacturing services, agriculture, 
and that trade surplus have been growing.
    Our Korea agreement started going into effect exactly when 
Korea started going into an economic downturn. And it 
underscores the fact that trade balances, bilateral trade 
balances, are much more a factor of macro economics than they 
are of trade agreements. Notwithstanding that, during a period 
of time when Korean imports from Japan declined by 12 percent, 
and Korean imports from China declined by 3 percent, Korean 
imports from the United States climbed by 2 percent. And that 
was, in part, because we were able to reduce barriers, on a 
relative basis, to key markets.
    During this period of time our auto exports have grown by 
80 percent in value terms. Our big three have grown by over 20 
percent a year--from a low base, but they are growing. And when 
we dis-aggregate the numbers--because you and others have 
raised this question, so we spent some time looking at this--
the decline of certain exports during that period were 
accounted for completely by corn, where we had a drought in 
this country and we stopped exporting corn, and by a decline of 
the export of coal, which reflected the decline in the Korean 
economy.
    Now that the Korean economy is coming back----
    Mr. DOGGETT. There may be many other well-justified reasons 
why this happened, but to date we have not experienced the job 
growth that the Administration predicted. Isn't that right?
    Ambassador FROMAN. Last year our goods exports to Korea 
were up 7 percent----
    Mr. DOGGETT. I am just asking you about the job growth out 
of that----
    Ambassador FROMAN. Well, it is----
    Mr. DOGGETT [continuing]. Out of that----
    Ambassador FROMAN. For every billion dollars of increased 
exports----
    Mr. DOGGETT [continuing]. At the beginning, 7,000 jobs.
    Ambassador FROMAN [continuing]. It supports----
    Mr. DOGGETT. We haven't had that, have we?
    Ambassador FROMAN. For every billion dollars of exports--
first of all, Korea is still being implemented. Not all of the 
tariff cuts have been put in place. But for every billion 
dollars of increased exports, it supports somewhere between 
5,400 and 5,900 jobs in this country. Last year, our goods 
exports increased by 7 percent. Our services exports increased 
by 25 percent.
    Mr. DOGGETT. I am glad to hear that, but we have not 
achieved what the Administration said we would have. But if you 
feel that we need to take the long-term view, rather than just 
a couple years, would you react to the Department of 
Agriculture report in October that we will not see, as I read 
it, any measurable effect on U.S. real GDP in 2025, relative to 
the baseline on agriculture exports from TPP?
    Ambassador FROMAN. Well, we think everyone is expecting 
there to be significant agriculture export increases. We have 
reached a record level already last year at $150 billion. And 
this agreement will bring down tariffs, and----
    Mr. DOGGETT. You disagree with the report that bringing 
down those tariffs won't increase GDP?
    Ambassador FROMAN. I think there are a number of reports 
out there, including the Peterson Report, the--a number of 
others----
    Mr. DOGGETT. I am referring to USDA October 2014.
    Ambassador FROMAN. Well, I am happy to take a look at that 
and come back to you on it.
    Chairman RYAN. The time of the gentleman has expired. Dr. 
Boustany is recognized.
    Mr. BOUSTANY. Thank you, Mr. Chairman.
    Ambassador Froman, I want to thank you for your fine work 
and your team, and I also want to thank your team for bringing 
negotiating text over to my office for review, and answering a 
lot of questions about our negotiating position and our 
interlocutors, as well. So it was very helpful, and I hope to 
continue to do so.
    I want to talk about China for a moment. Since the Third 
Plenum, the Chinese leadership have consistently talked about 
how the market will play a greater role. And yet, their 
government actions seem to belie this statement, particularly 
with anti-monopoly law and other elements that they are using 
to create discriminatory practice.
    So, what is the Administration's strategy for 2015 to deal 
with this? Can you give us some insights? I know we have JCCT, 
SNED, and so forth, high-level negotiations, but what are we 
really doing to try to get to the bottom of all this?
    Ambassador FROMAN. Well, we have all those issues very much 
on the table, as you said. And you are absolutely right, that 
if you read the Third Plenum statements, there are a number of 
positive comments out there about letting the market play a 
greater role. And part of what we are doing, whether it is in 
there pushing on the way they look at technology, intellectual 
property rights enforcement, forced localization, the 
application of their anti-monopoly law, or the liberalization 
of various sectors, we are pressing them to take actions that 
are consistent with their own words in the Third Plenum.
    One of the areas we are doing that through is the Bilateral 
Investment Treaty negotiations, where we expect that, this 
year, they will give us a so-called ``negative list.'' And the 
importance of the negative list is that it means that China 
will open up its economy for various activities, except for 
things that are specifically regulated on that negative list. 
So if the negative list is very long, then they are not 
terribly serious about opening their economy. If it is short, 
and targeted, then it will help reinforce reform within China. 
And that is certainly something that we want to encourage.
    Mr. BOUSTANY. And do you feel like we are making progress 
in narrowing down that list?
    Ambassador FROMAN. We have not yet seen the list. They are 
playing--they have told us they will be giving us the first 
version of that list the first part of this year.
    Mr. BOUSTANY. The first part of this year. Okay. 
Congratulations on getting a little bit of a breakthrough at 
APEC on ITA. Can you give us a little indication of the status 
in Geneva now on the actual tariff reductions?
    Ambassador FROMAN. Well, that breakthrough with China 
allowed us to restart the negotiations in Geneva. This is an 
agreement that will cover $1 trillion of trade. It is estimated 
to add $190 billion to the global economy, and support 60,000 
additional jobs in the United States.
    We are now pressing the parties to try to reach closure on 
it. I think there is a fundamental dispute between Korea and 
China over various products, and we are encouraging China to 
show some flexibility and to try to bring closure to this.
    Mr. BOUSTANY. Last year I asked you about the Jones Act and 
the Administration's position on maintaining our policy with 
regards to the Jones Act. Is that still the Administration's 
position?
    Ambassador FROMAN. It is. There are a number of parties who 
are interested in expanding access to our maritime services. 
This has always been a sensitive issue for us, and we made that 
clear.
    Mr. BOUSTANY. I appreciate that. With regard to shrimp 
imports into the United States, Malaysia and Vietnam have been 
problematic in regard--with regard to subsidies that they use. 
And we feel, down in the--on the Gulf Coast, that this creates 
unfair competition. So, in the context of our negotiations in 
TPP, I hope we will be addressing these issues, as well. I know 
we have a lot of work to do with Malaysia and Vietnam.
    And finally, as my time is running down, the investor state 
dispute settlement mechanism, this is very important for a 
number of our industries. The energy sector, in particular. 
Could you give me a little indication of where we are with that 
in negotiations?
    Ambassador FROMAN. Sure. The purpose of investor state is 
to give Americans abroad the same kind of protections that we 
provide under U.S. law, under our Constitution, to domestic and 
foreign investors in the United States. And the United States 
has been at the leading edge of reforming ISTS, updating it, 
upgrading it, to make sure it is absolutely clear that 
governments can regulate in the public interest.
    We have closed various loopholes that we believe have been 
subject to abuse. We have raised certain safeguards, added 
additional safeguards about dismissing frivolous claims, being 
able to award attorneys fees, opening it up and making it more 
transparent so that civil society organizations and others can 
file briefs and see what the result is. But we think that, 
fundamentally, it is important that the 23 million Americans 
who work for firms that have investment abroad have the same 
kind of protections that we provide here, in the United States.
    Mr. BOUSTANY. I thank you. And with the final seconds, just 
give assurances that the Trade and Services Agreement is still 
a top priority, as well.
    Ambassador FROMAN. It is a top priority, and we are making 
good progress, and we hope this will be a very productive year 
in that regard.
    Mr. BOUSTANY. Thank you. I yield back.
    Chairman RYAN. Thank you.
    Mr. Thompson is recognized.
    Mr. THOMPSON. Thank you, Mr. Chairman.
    Ambassador, thank you for being here. I agree that trade is 
a very critical part of our job creation in this country, but I 
also agree with my friend from Washington State, that it is 
hard to make it work when you can't get your product to market. 
And Washington is not the only State with port problems on the 
West Coast.
    As you know, the Port of Oakland is experiencing some real 
problems. And I have had a couple of businesses in my district, 
one who couldn't get product to the UK during the holiday 
season, and that was a big hit for them, and another that has 
just about had to suspend all their business activities because 
they can't--they couldn't get the stuff in that they need to 
produce the product they sell.
    So, anything and everything you can do to nudge the 
Administration into speeding up this settlement is critically 
important, because we can do all the trade in the world, if we 
can't get what we make on the boats and get it overseas, it is 
not going to help us much.
    On one issue that we have talked about in the past, and 
that is the issue of rice, what is the status of the expanded 
market access for U.S. rice with Japan in both terms of the 
quality and--quality of the access, and quantity of additional 
U.S. rice allowed into Japan? And do you think they have put 
their best deal forward?
    Ambassador FROMAN. I would say this is one of the 
outstanding issues on market access with Japan. And we are, as 
you suggest, pressing for both the quality and the quantity of 
the access to be increased.
    Mr. THOMPSON. It is extremely important for, not only 
California, but a number of the rice States. And this is an 
important issue for me.
    You visited my district back in 2013, and thank you very 
much for doing that. And you met with a range of folks who are 
involved in the wine business in my home county. And those home 
county folks, they talked to you about the issue of a--to 
develop a multilateral system to protect regional wine names 
and appellations, such as Napa Valley. And in many different 
countries, there is a huge problem with this. As you know, we 
constantly fight this battle with China.
    But can you expand on how our trade agreements will help 
protect the names of appellations of origin, such as the United 
States, U.S. Government recognized delineated grape-growing 
areas, or viticultural areas?
    Ambassador FROMAN. Well, we are working with stakeholders 
on that issue, and distinguishing what we can do there from the 
broader approach on geographical indications. But it is 
something that is important, and we have, as you know, a global 
world wine group that works on common practices in this regard, 
both labeling and other issues related to the wine trade. And 
we are active in that group to try to promote those interests.
    Mr. THOMPSON. I just can't emphasize enough how this is 
something that we just can't acquiesce on. This is a huge 
problem for that community, not just in my district, but 
throughout the country. And if we are not able to solidify good 
protections, this is a--it is a huge, huge problem. And the 
enforcement is also important, so I would hope that you take a 
real good look at that.
    And can you give us an update on the short supply list, and 
how many products are on the list, what percentage of the 
current trade is covered by the list, and how any future 
changes will be accommodated?
    Ambassador FROMAN. I can get back to you on some of those 
specifics, in terms of numbers. I will say that our approach to 
the textile and apparel parts of this negotiation is to combine 
our role with a short-supply list, strong rules of origin, and 
customs cooperation and enforcement to ensure that all those 
rules work well together.
    We are not quite done yet in that negotiation, but we are 
close, and we are working to try to resolve the outstanding 
issues. And I can get back to you on the specific numbers of 
how many products are on the list.
    Mr. THOMPSON. And how about the immediate elimination of 
duties on performance apparel that utilizes the short-supply 
list?
    Ambassador FROMAN. I believe we have been working very 
closely with the outdoor industry, the outdoor apparel 
industry, and I believe we are coming up with a solution that 
they find to be quite constructive on that.
    Mr. THOMPSON. And that includes the outdoor footwear folks, 
as well?
    Ambassador FROMAN. I believe so, yes.
    Mr. THOMPSON. Thank you. I yield back.
    Chairman RYAN. Thank you.
    Mr. Roskam is recognized.
    Mr. ROSKAM. Thank you, Mr. Chairman.
    Ambassador, thanks for what you are doing for our country. 
I appreciate it very much, and I know my constituents do, as 
well. I have two questions. One is kind of a blue-sky question, 
and then one is more technical.
    The blue-sky question is this. You know, you think about 
all the things that we are talking about here. But if you step 
back, this could be great. I mean this could be really great if 
TPA happened, and TTIP, and so forth. In your opinion, how 
great could it be? So what is the growth that we are talking 
about, in terms of potential--you know, there are all sorts of 
estimates, but can you give a range for, you know, what you 
think is realistic, based on your experience? What is the 
growth that we could expect from TTIP, for example, the growth 
that we could expect from TPP, if you have put pen to paper.
    Ambassador FROMAN. Well, let me take a step back and try to 
answer that.
    I do think we are on the verge of something very important 
here, because through TPP, and through TTIP, and through the 
rest of our trade agenda, by focusing on protecting workers and 
protecting jobs here, by creating a fair and level playing 
field, by raising standards abroad, and by making sure that we 
are the ones who are defining the rules of the road, consistent 
with our interests and our values, not ceding that to other 
countries, we are creating a network of high-standard 
agreements that puts us at the center of a free trade 
arrangement that, ultimately, will encapsulate two-thirds to 
three-quarters of the global economy.
    And what that means is--and I see this--virtually every 
couple weeks I am visited by some company who comes and says 
that, because of the strengths of the American economy, the 
attractiveness of the market, the fact that we have strong rule 
of law, an entrepreneurial culture, a skilled workforce, and 
now we have affordable--abundant sources of affordable energy, 
when you layer on top of that these trade agreements, it makes 
the United States the production platform of choice. It makes 
the United States the place that companies want to put their 
next factory, their next production facility, both to serve the 
U.S. market, but also as an export platform for Asia, Latin 
America, and Europe.
    So, without getting into the numbers, per se, because there 
is a wide range of numbers, I think we are really on the verge 
of something quite significant, in terms of positioning the 
United States going forward in a very positive way.
    Mr. ROSKAM. I mean is this, like, 1 percent growth in GDP? 
Is this \1/2\ percent growth? Is it 3 percent? Can you even----
    Ambassador FROMAN. As an example, the Peterson Institute, 
who has done one of the studies of this, has suggested a .4 
percent growth per year, just because of TPP, based on the 12 
countries, I believe. On TTIP, there is a wide range of 
estimates, depending on what, ultimately, we are able to 
accomplish, in terms of trying to bridge our regulatory and 
standards differences. And so it is hard to estimate until that 
comes into greater focus.
    Mr. ROSKAM. My next question is far more pedestrian. It is 
about catfish. So we have these catfish rules that I don't 
think the Administration likes particularly well. There's a lot 
of people in Chicago that don't like them particularly well. 
They are duplicative, and so forth.
    Number one, is this on your radar screen? Number two, are 
you able to sort of navigate through--so that we don't get into 
a trade war hassle with Asia over catfish rules?
    Ambassador FROMAN. Well, it is very much on our radar 
screen. I know Secretary Vilsack, it is very much on his radar 
screen. And we hope to be able to proceed in a way that is 
consistent with our obligations.
    Mr. ROSKAM. Thank you. I yield back.
    Chairman RYAN. Mr. Blumenauer.
    Mr. BLUMENAUER. Thank you, Mr. Chairman.
    Thank you, Ambassador. I appreciate people dealing down 
with the details. Details matter greatly. I want to identify 
myself with the comments you have heard about the goal here of, 
for example, as we are studying these, being able to have a 
staff member in the room with us. I think that ought to be a 
no-brainer. I think it would be helpful--it would help every 
single Member here, and I think we ought to just clear that 
way.
    I also strongly identify with what you have heard about the 
concerns for engaging currency manipulation with Secretary Lew, 
with you, at every juncture. This is a huge reason why we have 
lost manufacturing jobs in this country. And I hope, going 
forward, we have currency provisions strengthened so that we 
don't fall victim to that in the future.
    I appreciate my colleague, Mr. Thompson, mentioning apparel 
and footwear. The responses I am getting are very encouraging, 
and I appreciate your hard work in putting up with some of us 
talking about it. I think it is going to make a big difference. 
It makes a big difference in my community. Apparel and footwear 
is one of the reasons why we are, I think, the fourth-largest 
metropolitan area in the country, in terms of value exports. We 
have a surplus, both in terms of goods and services. Our State 
has a surplus with China. But being able to deal directly with 
these items in the way that--the spirit that has been offered, 
I think makes a huge, huge difference.
    I would--there are two items that are of concern to me. I 
will briefly outline them, and get your response now, or I'll 
be able to follow up after the hearing.
    The first deals with environmental provisions. And I 
appreciate that not all the 14--or the 12 countries are on the 
same page, environmentally. And I appreciate that the United 
States has been pushing, because many of our trading partners 
aren't there at all.
    The area of illegal fishing drives me crazy. We are in a 
situation now where we have a third of the world's fisheries 
involved with these dozen countries. They are engaged in a 
practice absolutely not sustainable, a pretty reckless 
practice. And I have--originally, our conversations have been 
positive. I picked up some things from the advocacy groups, but 
I would appreciate elaboration on that.
    The second deals also in the environmental sector. I have 
been deeply concerned about illegal logging. I have spent a lot 
of time on it. I have raised concerns with you about how 
aggressive we are in enforcing the provisions that we have 
negotiated with Peru. Illegal logging puts American companies 
at more than--put aside the havoc that it wreaks 
environmentally, the corruption, the harm to indigenous people, 
it puts American forest products and manufacturers in the hole 
about $1 billion.
    Let me just use, for example, an example of Japan. Japan 
is--we are in the final stages here, you have lots of 
provisions you are dealing with. They are the fourth-largest 
consumer of wood-based products, and they import a disturbingly 
high percentage of high-risk timber products. Their legality 
verification system is entirely voluntary, as near as I can 
tell, and has serious design weaknesses that limit its ability 
to eliminate illegal products from the Japanese market.
    Can you talk about the work that you are doing, and how 
this might make a difference with illegal logging, specifically 
as it relates to Japan?
    Ambassador FROMAN. Well, thank you, Congressman, and thank 
you for taking the time to read the text and give us some input 
on it throughout the negotiations.
    Yes. I mean these areas, like illegal fishing and illegal 
logging, are one of the innovations of TPP. They are part of 
this conservation chapter, which goes beyond what we have done 
before, in terms of addressing environmental issues that are 
central to this region: wildlife trafficking; illegal logging; 
illegal fishing; the subsidization of over-fishing; issues 
around shark finning; and protection of the marine environment. 
All of this will make this a very strong agreement.
    And the TPP countries, we are pressing them to take on 
obligations to deal with exactly what you are saying, which is 
to take action to address their illegal logging practices that 
are affecting trade with their markets. We are doing this, 
country----
    Mr. BLUMENAUER. Comment about Japan.
    Ambassador FROMAN. Well, all the countries will be taking 
on obligations to deal--to strengthen their capacity to combat 
the trade of illegal logging, the products of illegal logging, 
as well as in these other areas, and we are working with each 
country to determine whether they have the procedures in place, 
and what kind of procedures they will need to pursue in order 
to address them.
    Mr. BLUMENAUER. Thank you.
    Chairman RYAN. Thank you.
    Mr. Smith.
    Mr. SMITH OF NEBRASKA. Thank you, Ambassador, for being 
here today and sharing your insights. I think this hearing is 
particularly productive, and proof that we can tackle issues of 
common interest, and address the challenges that we see within 
a particular issue, especially as it relates to trade. And I 
know that these initiatives are very important, and you see 
that, and I appreciate the priorities that you see behind 
trade.
    We know it is important to our economy, as an entire 
country. I know that the United States is the largest exporter 
of food and agriculture commodities. And, to brag a little bit, 
Nebraska's third district is the largest agriculture district 
in the country. So there is a lot of cheese that wouldn't exist 
without corn. We may not produce a lot of cheese, although we 
have a little bit in Nebraska, and we are happy to ship some to 
Wisconsin and points beyond.
    But with ag interests in mind, I know that other Members 
here on the dais have referenced the dispute taking place at 
our ports, and I do want to add emphasis. The concerns that are 
out there, especially with products such as pork and beef that 
are allowed to spoil, and not just reducing the value a little 
bit, but eliminating the value all together, in many cases. And 
so, I would hope that we can get these issues resolved. I know 
it is not an issue of your particular jurisdiction, but I hope 
that you can address that with the rest of the Cabinet and 
other interested parties in the Administration.
    Switching gears just a little bit, certainly I want to 
thank you for your efforts to engage the Chinese. It has been 
discussed a little bit as it relates to the S&ED and JCCT, but 
engaging the Chinese as it relates to biotechnology and 
innovation, certainly in the agriculture sector. And can you 
tell me how the Administration will keep this issue elevated 
throughout the course of the year, as it relates to the new 
strategic ag innovation dialogue?
    Ambassador FROMAN. Well, thank you, Congressman, for 
mentioning that dialogue. This was one of the outcomes of the 
JCCT in December. We were able to secure the approval of three 
specific biotech event applications, but, even more importantly 
perhaps, the commitment to engage in a dialogue about their 
biotech approval process more generally, and how to bring it 
into line with international practice and international 
standards.
    So, this is a dialogue that USDA and USTR will co-chair, 
and will co-chair with a number of Chinese ministries on their 
side. And we are hopeful that this will help bring their system 
into conformity, so as to open further trade between ourselves 
and China.
    Mr. SMITH OF NEBRASKA. And thank you. In a related vein, 
the European Union has not approved a single biotechnology 
product for import since the fall of 2013. Can you discuss how 
the United States plans to address ag biotech issues in TTIP?
    Ambassador FROMAN. Well, we have raised this issue 
directly. I have had my third meeting with my counterpart, the 
new trade commissioner there. And at each one of these 
meetings, this issue has been raised.
    We share the concern that they did not approve any biotech 
events over the course of 2014. There are, I think, now, as you 
say, 12 in the pipeline. And these are applications that have 
been approved by the European Food Safety Administration as 
being safe. And our position, overall on these issues--and 
were, generally, in TTIP--is that we are not trying to force 
anybody to eat anything in Europe, but we do think the 
decisions about what is safe should be made by science, not by 
politics. And we are encouraging them to move ahead, consistent 
with their WTO obligations, consistent with the European Court 
of Justice case that ruled against them for not approving such 
events in the past, and we are trying to encourage them and the 
new Commission to take these up.
    Mr. SMITH OF NEBRASKA. Thank you, I yield back.
    Chairman RYAN. Mr. Kind.
    Mr. KIND. Thank you, Mr. Chairman. Ambassador Froman, I 
want to thank you for your testimony today. But also, I want to 
just quickly commend you and your USTR team for the level of 
engagement that you have had with this Congress thus far. This 
Committee, obviously, some of the breakout sessions we have had 
with Mr. Levin, with other Members who are not on the 
Committee, the numerous meetings and walk-throughs you have had 
with Members of my own coalition that I am leading, the New 
Democratic Coalition, and we do appreciate the access to text, 
and being able to walk through, with your team, specific 
questions or concerns that we have. And it is that level of 
engagement and partnership and transparency that is going to be 
crucial as we move forward in the coming days.
    You indicated that you are in the final round now of 
negotiation with TPP. One word of caution. Obviously, these 
trade debates and votes are always difficult on the Hill, 
especially with the economic anxiety that still exists 
throughout the country. Having the best possible agreement that 
you can get is going to be crucial to finding the support that 
we need to get it across the finish line.
    But a week-and-a-half ago my Green Bay Packers thought they 
were in a game that was 56 minutes long, not 60 minutes long, 
and literally fumbled the ball, and lost the game. I encourage 
you not to do the same thing in the course of these 
negotiations. We are, right now, the strongest locomotive 
engine when it comes to global economic growth. And I can 
imagine that your negotiators across the table will be asking 
for us to make the biggest and last-minute concessions in order 
to get to yes in this agreement. But we need market access, we 
need May 10th, we need SOEs, we need all that as part of this 
agreement, so it is as strong as possible, so we can begin 
leveling the playing field for our businesses and our workers.
    And I also appreciate the fact you took time last year to 
come into Wisconsin, my district, met with a lot of our 
businesses, large and small, but also did a visit to a family 
dairy farm and met with many of the family farmers there, too, 
expressing what TPP is all about, and the potential for trade 
in our region.
    Oftentimes there is a lot of focus, or a lot of discussion 
or rhetoric that these trade agreements are nothing but SOPs to 
big businesses, done behind closed doors with a lack of 
transparency. But there is an important aspect of this when it 
comes to small business economic growth and sales.
    And I wanted you to just take a moment to explain what the 
benefits are to small businesses throughout Wisconsin and the 
rest of the country with TPP, for instance, because today, if 
you are a small business with a good product or service and you 
are on the Net, there are no boundaries any more. So these 
agreements could have a tremendously important role for small 
business growth in our communities, as well. If you want to, 
take a moment to address that aspect of these negotiations.
    Ambassador FROMAN. Absolutely, Congressman. And thank you 
for your leadership on--with the New Dems and, more broadly, on 
these issues. You are absolutely right. We have 300,000 firms 
in the United States that export: 98 percent of them are small- 
and medium-sized businesses, businesses with fewer than 500 
employees. And yet, only about 10 percent of small businesses 
export, and most of those export to only one country.
    And so, the opportunity is immense, including, as you say, 
through the Internet and through the digital economy. I have 
met with a number of different people who participate in 
something called Etsy. Etsy is an online platform, about 88 
percent women, who sell baby clothes and toys, sometimes part-
time out of their homes, and they are selling them all over the 
world. And when they engage through Etsy with their--the 95 
percent of the customers of the world who live outside our 
country, they are using telecommunications services, software 
services, electronic payment services, express delivery 
services. Those are all issues that we are addressing in TPP, 
making sure that those services stay open, that our providers 
can continue to provide them and expand their access in these 
markets, to make it possible for small- and medium-sized 
businesses all over the country to engage in global commerce.
    And that is just one of the many ways. This is the first 
trade agreement that is going to have a specific chapter on 
small- and medium-sized businesses, making sure that, from soup 
to nuts, this agreement works for them, that they become part 
of global supply chains, that they are able to take advantage 
of the growth of global markets.
    Mr. KIND. And, finally, it seems as if battle lines are 
being drawn pretty quickly around here in regards to TPA or 
TPP, and it is a little perplexing to me, because we don't have 
an agreement yet. And how can you come out in favor or in 
opposition to something that doesn't exist yet? And the same is 
true for TPA. We don't even have language yet, and yet, 
somehow, Members are starting to take positions already on 
things that are still in the works, and still being negotiated.
    And I keep coming back to this one issue, and that is, if 
we do turn our back on TPA or these negotiations in TPP or 
TTIP, what are the consequences to the United States? Not only 
economically, but as far as global leadership.
    Ambassador FROMAN. Well, I think the consequences are 
serious. I think the President referred to them the other 
night.
    You know, we really face three alternatives: There is the 
status quo, which a lot of people feel aren't working for 
middle-class Americans, for working Americans; there is the 
trading system, where the rules of the road are defined by 
others who don't necessarily share our values or our interests, 
where they carve up markets at our expense, where they don't 
protect intellectual property, they don't take on SOEs, they 
don't preserve a free and open Internet, they don't respect 
labor and environment. That has to be worse for our workers and 
our firms than the status quo. And then, there is TPP, which 
gives us an opportunity to set the rules of the road for the 
most important, fastest-growing region of the world, and 
potentially, even more broadly, based on our values and our 
interests. So there is a tremendous amount at stake here.
    Mr. KIND. Thank you.
    Chairman RYAN. Thank you. Those bells are votes. We will do 
one more Republican, one more Democrat. That is 10 minutes of 
questions. That gives everybody time to get to the votes. There 
are three votes. We--it looks like the walk-off time is 4:15. 
We will recess, subject to the call of the Chair, after the 
second questioner, and then resume immediately after the third 
and final vote. So, for Members, please come back immediately 
after, we will resume.
    At this time it is Ms. Jenkins' turn.
    Ms. JENKINS. Thank you, Mr. Chairman, and thank you, Mr. 
Ambassador, for being here. I wanted to talk a little bit about 
Trade and Services Agreement negotiations. They have grown to 
include over 50 countries so far. The service sectors, as you 
well know, in these countries account for half of the world's 
economy, and over 70 percent of global services trade. As such, 
the Trade and Services Agreement has massive commercial 
potential, and must, along with our TPP and EU negotiations, be 
a top priority for Congress, the Administration, and U.S. 
industry.
    Services represent roughly 80 percent of the U.S. GDP, and 
75 percent of U.S. private-sector employment. So, increasing 
our service firms' export opportunities promises to be a major 
source of well-paying American jobs. Existing trade rules on 
services trade are over 20 years old, and I am enthusiastic 
about TSA's potential to update these rules among its Members 
and the incorporations protected for U.S. services suppliers 
that we have developed in our trade agreements and recent 
bilateral investment treaties.
    But I hope our negotiating partners share our level of 
ambition. Could you just share with us what USTR will be giving 
a high standard TSA, the priority that it deserves, pressing to 
incorporate our best trade agreement protections for U.S. 
service suppliers?
    Ambassador FROMAN. Well, thank you, Congresswoman, and that 
is very much high on our agenda. You have described it well, 
both in terms of the implications for the U.S. economy, and for 
the 75 percent of American workers who work in the services 
sector. And where we see some of the fastest potential growth 
in exports, we expect to come out of services, both directly, 
and because services and manufacturing are so much more 
intertwined than they used to be. So we are very much pursuing 
a high-standard agreement in Geneva, with those 49 other 
countries representing 70 percent of the global services 
market.
    We have had a pretty good year last year, in terms of 
making progress in the negotiations. We have a good beginning 
of a set of rules. And I think 21 out of 23 negotiating 
entities have tabled offers. And we expect that this year will 
be an important year for making progress in those negotiations.
    Ms. JENKINS. Thank you. Glad to hear it. I yield back.
    Chairman RYAN. Mr. Pascrell.
    Mr. PASCRELL. Yes, sir. Thank you, Mr. Chairman. 
Ambassador, thank you. I think that you have been more 
forthright than the last five reps, trade reps, put together. 
That doesn't mean I agree with you.
    [Laughter.]
    You know what is fascinating about the Peruvian trade deal, 
one of the very few I have ever voted for, was that there was 
movement before the agreement on the part--and I don't want to 
only talk about one country, as compared to the TPP--but there 
was movement on the part of Peru before the final agreement. 
There was effort made to have the other party show good faith. 
And I think that is critical. I think it is critical. I mean we 
have some major hurdles we have to cross over before we get to 
a final agreement.
    The testimony before our Committee earlier this month, 
Professor Simon Johnson of MIT and the MAF, noted that, from 
1986 to 2006, there was little change in average income for the 
bottom 90 percent of wage earners, while the top 1 percent 
experienced a gain of around 50 percent. The gains for the top 
one-tenth of one percent were even higher. The President 
referred to something along these lines in the State of the 
Union. This is particularly egregious because, during the same 
time period, the GDP in this country nearly doubled.
    So, productivity growth amongst workers has increased by 50 
percent. Trade isn't the only story here. But it is an 
important chapter. And I believe this is a very important 
decision we are going to make on the TPP. So increased 
international trade grows the pie. That is what economists tell 
us. But the gains go to the investors many times, the 
executives, the shareholders, and--at the expense of the 
workers. Now, that is not the case all the time, but it is too 
often. The political fault lines around trade are really boiled 
down to that reality.
    So, the question the Administration needs to ask itself, I 
think, the question that Members of this Committee need to ask 
themselves, is how can we make sure the benefits of trade are 
more broadly shared. Now, I don't think you can do it through 
Trade Promotion Authority, or the individual agreements alone. 
We need strong rules to ensure that we have a level playing 
field, like tough environmental and labor standards. We had 
that with the Peruvian agreement. It was not an easy thing to 
come to. Thanks to Members on this Committee who went down to 
Peru and worked things out, we had an agreement with Peru that 
we are proud of.
    For many of us, enforceable provisions on currency are 
absolutely essential. You have heard that over and over. But we 
can't simply look at these deals in a vacuum. These challenges 
of globalization go far beyond just our trade policy. We need a 
more progressive Tax Code. Labor needs a bigger seat at the 
table. We need more investments in education and infrastructure 
to keep our workers in our country competitive. You have heard 
that today, too. We have had these things. If workers were 
really sharing in the benefits of trade, these deals would be 
far less controversial.
    It is clear that our current trade policies have not worked 
for all Americans. There may be winners, but there are plenty 
of losers. There is a reason they are politically 
controversial. I wouldn't make light of that, either. I would 
strongly urge you to work with us, as you put together trade 
legislation this year, so that we can address the concerns many 
of us and our constituents have.
    Mr. Froman, one area where I think we can improve is the 
enforcement of these deals. When I went back, historically, to 
each of these deals and what happened after, you know, from 
NAFTA on, the enforcement mechanism, it leaves a lot to be 
desired, if not enforcement itself. Having strong language on 
the environment and labor rights doesn't mean anything if we 
can't make sure our partners are living up to their end.
    As the TPP alone represents 40 percent of the world's GDP, 
I believe you said, and the USTR will need the resources to 
enforce this deal, do you think--do you think--that the current 
enforcement resources in the different agencies, international 
agencies that you pointed out before, are adequate to protect 
American workers and businesses? Do you really believe that?
    Ambassador FROMAN. Well, thank you, Congressman, and I 
agree with much of what you said. And I think it is absolutely 
important that we take those concerns seriously. And the only 
thing I would say is I would distinguish between globalization 
and its impact, as well as technology, and the impact of trade 
agreements. Because, in my view, trade agreements are how we 
shape globalization. It is how we level the playing field. The 
forces that you are talking about that have had an effect on 
wages include technology, they include globalization. We have 
the opportunity now to shape that, to improve that.
    I think, on the enforcement question, I couldn't agree 
more. And I think we would very much like to work with this 
Committee and, of course, the other relevant committees, 
appropriators, and others, to make sure that the enforcement 
resources are there.
    This President created something called the Interagency 
Trade Enforcement Center based at USTR, with a lot of active 
support by the Commerce Department and other departments. And 
that has allowed us to up our game, when it comes to monitoring 
enforcement. But there is more that we could do, both to 
authorize that, and to make sure that, whether it is at USTR or 
other agencies around the government, such as the Department of 
Labor and others, they have the adequate resources necessary to 
fully enforce these obligations.
    Chairman RYAN. Thank you.
    Mr. PASCRELL. Thank you, Mr. Chairman.
    Chairman RYAN. The member's time has expired. We--now we 
are going to adjourn--or recess, excuse me. We are going to 
recess, subject to the call of the Chair. I might note that Mr. 
Levin, Rangel, and myself, at 4:30, have to convene the Joint 
Committee on Taxation for the purposes of organizing that 
committee. This hearing will continue on, and then we will 
return after that subcommittee is organized.
    So, we are--we stand in recess, subject to the call of the 
Chair.
    [Recess.]
    Chairman RYAN. The Committee will come to order. The Chair 
will advise the audience that disruption of congressional 
business is a violation of law, and is a criminal offense. 
Please come to order.
    Now the Committee stands in recess, subject to the call of 
the Chair.
    [Recess.]
    Mr. REICHERT [presiding]. Thank you. This hearing will come 
to order. Thank you for your patience, Mr. Ambassador. We 
appreciate your returning and letting the rest of the Members 
ask their questions.
    Just as a reminder, this hearing will be conducted in 
accordance with the Rules of the House and appropriate decorum.
    And the first Member that is recognized for his 5 minutes 
is Mr. Paulsen.
    Mr. PAULSEN. Thank you, Mr. Chairman. And let me just start 
by thanking Ambassador Froman, just for your responsiveness, 
for your leadership, and your engagement with my office, 
myself, and Members of both sides of the aisle, just to make 
progress on all of these issues. You have been very open and 
responsive, which I think has really helped move the needle 
forward on some real big opportunities for the United States 
and our trade agreements, obviously: TTIP, TPP, et cetera.
    And let me ask you this. You know, we have seen a very 
disturbing trend in recent years whereby countries, they've 
been ignoring international commitments and standards, and this 
veiled attempt to support certain domestic industries and 
constituencies, and a lot of times, of course, those decisions 
can be very short-sighted. They ultimately discourage 
innovation, investment, and job growth.
    And, you know, you look at a country like Indonesia, for 
instance, that has put in place these onerous local 
requirements--content requirements that have to be satisfied by 
U.S. products, such as mobile devices, in order to be sold in 
Indonesia. Or you look at India, for instance, that has 
challenges with our intellectual property issues. And, you 
know, what are you doing, going forward, to enforce, you know, 
existing IP and intellectual property commitments to deter 
these countries from weakening these types of standards in 
their own IP regimes, whether it is India or China, or other 
trading countries?
    And maybe you can just speak a little bit to your efforts 
to help secure those protections that mirror U.S. law through 
the Trans-Pacific Partnership Trade Agreement. I know you were 
in India recently with the new government, and you can give us 
a little background, maybe, of the substance of your meetings, 
and if you feel we are making progress.
    Ambassador FROMAN. Thank you, Congressman. Let me perhaps 
take that in two parts. On the intellectual property rights 
piece of this, within TPP we are certainly working to get the 
strongest possible standards, consistent with also ensuring 
access. And that will also have strong enforcement mechanisms 
around administrative actions and other actions that need to be 
taken to ensure that not only do the rights exist, but that 
countries are fully committed to enforcing it. Of course, India 
and China are not part of TPP, and so we have been engaging 
bilaterally with them on these issues.
    And I would say, you know, with China, we have had some 
progress over the last few years, as there is a rising group of 
Chinese entrepreneurs and innovators who now see value in 
having intellectual property rights, and seeing them enforced. 
So I am hopeful that we are going to continue to make progress 
there. We have a long way to go, in terms of the legalization 
of software and the protection of patents and other issues. But 
I think we are hopeful about making progress there.
    Similarly, we have engaged with the new government in 
India, and we have engaged broadly, because we have some common 
interests. You know, we have Hollywood, they have Bollywood. We 
have a common interest in seeing copyright rules be strong 
around the world, and be fully enforced. We are working--the 
Government of India has just put out a draft intellectual 
property rights policy for public comment, and we are providing 
comments, along with, I am sure, a number of other countries 
and stakeholders.
    And so, we are hopeful to be able to engage with them in a 
constructive way, even in the pharmaceutical area, to look at 
all of the issues that relate to--of access to affordable 
medicines, which go way beyond intellectual property rights. It 
goes to issues like the fact that they have tariffs on certain 
imported medicines, or that there may be distribution issues in 
India that we can address. We want to look at this 
holistically, in an effort to try to move that agenda forward.
    Mr. PAULSEN. Can you comment just real briefly on the 
market access barriers that are recognized by USTR Section 
1377, ``Review on the Compliance with Telecommunications Trade 
Agreements,'' and the National Trade Estimate Report on Foreign 
Trade Barriers in respect to Indonesia? And maybe explain a 
little bit of what else you plan to do to help change the 
trajectory of the Indonesian protectionism that may exist in 
that area.
    Ambassador FROMAN. Yes, we have had some good, high-level 
engagement with the new government in Indonesia. As well, the 
President met with President Joko Widodo in November, I just 
met with my counterpart last week. And we are both committed to 
trying to address the issues in our bilateral relationship to 
deepen our trade and investment relationship.
    One issue you mentioned in your previous question was the 
issue of localization, forced local content. And that is an 
issue that is popping up all around the world. And it is, in my 
view, the next form of protectionism. And so it is something I 
think we need to be aggressive about. And part of being 
aggressive about it is engaging with countries who have a 
legitimate interest in wanting to build a manufacturing sector, 
as we have a very strong policy here of wanting to have a 
strong manufacturing sector, and engaging them about the 
importance of being part of a globally-competitive supply 
chain, as opposed to erecting walls around their country, and 
supporting the development of less competitive domestic 
industries.
    So, it is going to be an ongoing effort with Indonesia and 
with others, but we are now engaged in that dialogue.
    Mr. PAULSEN. Thanks, Mr. Chairman.
    Mr. REICHERT. Mr. Young is recognized for 5 minutes.
    Mr. YOUNG. Mr. Ambassador, it is great to be with you 
today. I appreciate you staying around for this----
    Ambassador FROMAN. Sure.
    Mr. YOUNG [continuing]. Hearing that has been extended for 
a while. I want to reiterate many of my colleagues' emphasis on 
Trade Promotion Authority. I have been very encouraged that you 
and the Administration continue to indicate that you are going 
to be seeking Trade Promotion Authority, and will do whatever 
it takes to earn bipartisan support for that effort. And 
please, let us know how we could be helpful in that regard.
    With respect to the Trans-Pacific Partnership negotiations, 
I have a specific concern, and it pertains to a sector very 
important to my home State of Indiana. Broadly, it is the life 
sciences field, but that includes pharmaceuticals and medical 
devices. And, as you negotiate with Japan, in particular, but 
also many of the other countries that are parties to the Trans-
Pacific Partnership Agreement, transparency and concern about 
fair reimbursement are major issues, especially seeing as a 
number of these countries have national health systems that are 
very different from our own.
    I just want to make sure that all parties, businesses as 
well as consumers, understand that their decisions about 
reimbursement for pharmaceuticals and medical devices are made 
on the merits, according to optimizing healthcare outcomes, and 
nothing else. Could you speak to this matter, please? And, 
specifically, indicate whether the Japanese are being helpful.
    Ambassador FROMAN. Well, we are--we have been proposing 
something called a Transparency Index to promote the kind of 
transparency and due process that we have here, in the United 
States, under U.S. law, in something called the National 
Coverage Determination under Medicare, where an individual can 
make an appeal to how a medical device should be covered under 
insurance. It doesn't determine the level of reimbursement. It 
is about making sure that there is fairness and due process. 
And it doesn't have any effect in our country, because it is 
already part of U.S. law, and doesn't have any effect on 
Veterans Affairs or Medicare, Medicaid, or anything of that 
sort.
    But we do think this is a helpful step toward greater 
regulatory transparency, and it is something we have been 
promoting with the other countries. We don't yet have a full 
agreement on that by other countries, and I am--and I will have 
to think through what Japan's position is on it. I am happy to 
get back to you on that. But it is something that we think 
would help promote greater transparency and, ultimately, help 
ensure that life-saving technologies make their way to the 
patients who need them around the region.
    Mr. YOUNG. Thank you for that information. The other 
concern I have relates to high-level intellectual property 
protection. The establishment of those high-level standards, 
but also the enforcement, which was--you just spoke a bit to 
that.
    Specifically, I want to know about Canada. There has been 
some real challenges in how Canada has been dealing with our 
patents. They have--the manner in which their courts have dealt 
with 
them has been inconsistent--at least according to our country's 
reading--inconsistent with the TRIPS intellectual property 
agreement to which both Canada and the United States are 
signatories.
    The so-called utility or usefulness standard is something 
that their courts are supposed to follow. Instead, they seem to 
be deviating from that, requiring our pharmaceutical companies 
and others to provide them with evidence that seems more 
appropriate to regulatory development. And they are also not 
considering evidence after a patent application has been filed.
    Perhaps you could speak to what USTR and others are doing 
to address Canada's behavior in this area.
    Ambassador FROMAN. We have engaged with our Canadian 
counterparts for some time on this. We have raised it directly 
with them. It is now the subject of litigation, and I think, as 
a result, the Canadian authorities are waiting to see what 
happens as a result of that litigation before determining what, 
if any, action they feel is appropriate.
    Mr. YOUNG. Okay. Is there anything else that we, as Members 
of Congress--I have roughly 50 seconds left--can be doing to 
help you get broader support within Congress for Trade 
Promotion Authority, so that we can ensure that the standards 
that are struck in this agreement are as high as possible, that 
they protect our workers, and also open up foreign markets?
    Ambassador FROMAN. Well, I think the kind of discussions we 
are having today, the executive session we had the other day, I 
think these are immensely helpful, in terms of generating 
support within Congress to understand what is at stake for the 
U.S. economy, for U.S. workers and businesses, particularly for 
small- and medium-sized businesses, what the alternatives are, 
what happens if we are not there protecting workers and 
American jobs, if we are not there leveling the playing field 
in a fair way, if we are not the ones setting the rules of the 
road, and ceding that to others.
    And so, I think this Committee, of course, has a privileged 
position in this, has always been closer to these trade 
agreements than any other committee, and my hope would be to be 
able to work with all of you to help develop a broader 
understanding of that throughout the Congress.
    Mr. YOUNG. Well, we will keep doing our part. Thank you. I 
yield back.
    Mr. REICHERT. Thank you. Ms. Sanchez, you are recognized.
    Ms. SANCHEZ. Thank you, Mr. Chairman.
    Ambassador Froman, thank you so much for joining us here 
today. I have several questions. I want to just jump into them. 
And I apologize if I am repeating what some of my colleagues 
may have asked.
    I want to focus on the substance of the TPP and its 
possible effects on copyright industry. And a lot of that 
industry is based in Southern California, in the area that I 
represent.
    Foreign sales from our domestic copyright industry total 
roughly $140 billion per year. And I just want to point out 
that that is twice the size of all of our agricultural exports. 
So I just want to put it in context, to show the importance of 
this industry within the United States economy.
    We have seen this trend, unfortunately, in recent years, 
where some countries are trying to ignore international 
commitments and standards in an attempt to support certain 
domestic industries and constituencies in their countries. And 
these kinds of policies ultimately, I think, discourage 
innovation, investment, and job growth.
    The difficulty that we--that I have had in prior trade 
agreements is the issue of enforcement, because you can have an 
agreement, but if there is no enforcement of that, or weak 
enforcement of that, you know, it is not worth the paper that 
it is written on.
    So, if you could, please describe what your agency is doing 
to enforce existing intellectual property commitments, and what 
it is doing to try to deter other countries from weakening such 
standards in their own IP regimes and, you know, whether that 
is Canada or India. And, in the current round of negotiations, 
how are you trying to secure IP protections for the United 
States?
    Ambassador FROMAN. Well, thank you, Congresswoman. And we 
certainly agree that the creative industries, the innovative 
industries in the United States, which employ 40 million 
Americans, it is a key part of our economy, and we want to make 
sure we are both enhancing and strengthening the protection, 
and also the access to their products, whether it be copyright, 
or in other areas.
    So, in TPP, for example, we are promoting strong copyright 
rules, strong enforcement mechanisms, whether it is on 
camcording or the illegal downloading of copyrighted material 
from satellites or from cable. We are trying to find the right 
balance, consistent with U.S. law, with regard to ISP 
liability, and the relation to that to copyright enforcement.
    And, of course, all of those obligations, under TPP, will 
be both higher than TRIPS from the WTO, and fully enforceable, 
under the TPP dispute settlement mechanism. So it will be a 
stronger enforcement process than currently exists.
    For the parties who are not part of TPP--and you mentioned 
India--we engage with them directly and, using all the tools at 
our disposal, whether it is our review of policies on an annual 
basis, our engagement at high levels, to try to move their 
policies in the right direction. And, as I mentioned, I think, 
on China we have made some progress, although we have a long 
way to go. I think with India we are now engaged in a dialogue, 
a high-level dialogue, around some of these issues, and we hope 
to make progress through that, as well.
    Ms. SANCHEZ. I just want to emphasize, don't keep your--or 
keep your eye on the ball there, because it is critically 
important for U.S. jobs.
    I also just want to echo a sentiment of one of my 
colleagues that we are pleased that the Administration is--has 
committed to trying to keep Jones Act protections in place for 
the U.S. shipbuilding industry. It is also an important 
component for our national security, as well.
    And just, with my remaining time, I think I would be remiss 
if I didn't raise the issue of past trade agreements and the 
effect on our U.S. manufacturing sector, because manufacturing, 
although in recent years is on the upswing, you know, it took a 
hit for many, many years.
    Sixty percent of manufacturing workers who lose jobs to 
trade and find re-employment typically take pay cuts. And 35 
percent of those workers lose more than 20 percent of their 
pay, according to the Department of Labor. For the average 
manufacturing worker earning over $47,000, that is at least 
$10,000 that they lose per year. And that race to the bottom, I 
think, has contributed to the suppression of U.S. worker wages 
at the same time that worker productivity has gone up 
dramatically.
    So, given that the past is a very strong guide here for 
where we want to be in the future, because we obviously don't 
want to repeat those mistakes, how can you guarantee that the 
TPP is going to help working families in this country?
    Ambassador FROMAN. Well, we certainly are firmly in 
agreement that what we need to be doing through these trade 
agreements is helping to drive more manufacturing and more 
production and higher wages in the United States.
    It is interesting that, if you take our FTA countries, as a 
whole, we have a trade surplus, including a trade surplus in 
manufacturing, and that that trade surplus has been growing 
over time. So I think we have to distinguish between 
globalization and technology, on one hand, and the impact of 
trade agreements on the other.
    Globalization and technology, as you mentioned, have had an 
effect on wages and on manufacturing, although we are glad to 
see almost 800,000 new manufacturing jobs created over the last 
4 years in this country. And trade agreements can help further 
that by making the United States an even more attractive place 
to build manufacturing plants, so that we can produce things 
here and send them all over the world. And that is exactly what 
we are trying to do through TPP.
    Mr. REICHERT. The gentlelady's time has expired.
    Mr. Meehan, you are recognized.
    Mr. MEEHAN. Let me thank the Chairman, and let me thank 
you, Ambassador, for your being here, and giving us the 
opportunity to speak with you so extensively.
    And I want to follow up on the gentlelady's questioning 
from California. I have been interested in this issue of the 
free flow of information in a variety of different contexts. 
Having previously served as a cyber chair in another committee, 
I am watching the development of the opportunities, but also 
the tremendous challenges globally.
    So, one of the first things that sort of is by analogy--and 
I think you have touched it, but I am interested in how this 
kind of a process will work--was the flow of, you know, 
information that--in the past we had trading agreements, and in 
order for people to get their products into foreign markets, 
you used to have to have a manufacturing facility or otherwise 
built there, in order for them to open it up.
    Now, of course, without borders, we can move information a 
lot easier. But we are beginning to see the beginning of people 
saying that, you know, you have to have some kind of a server 
located in a particular country, or some kind of data 
processing being done locally.
    Are we taking steps to assure that whatever determinations 
are made are being done fairly, so that we don't have those 
kinds of----
    Ambassador FROMAN. Yes----
    Mr. MEEHAN [continuing]. Impediments put into it? And how 
are you doing that?
    Ambassador FROMAN. Well, certainly. I mean a key part of 
TPP is to address this kind of issue, and in most areas, to 
insist that it not be necessary to build redundant 
infrastructure in a country in order to serve that market, and 
to maintain the free flow of data information cross-border, in 
order to be able to provide those cross-border services. So, in 
most areas, that is an area that we are trying to lock in in 
TPP.
    There are legitimate privacy issues and other legitimate 
regulatory issues that we need to accommodate. But, as a 
general matter, that is what we are trying to land.
    Mr. MEEHAN. How are we dealing with those questions of 
privacy and other things? Because it is opening the door to 
some very unique situations in which some people are saying, 
okay--the ability in how we move information here, there may be 
higher standards being created someplace in Europe.
    One of the concepts when I was in Italy, the concept of an 
individual's right to their own private identity and, 
therefore, requirements that you must get approvals for uses of 
names. It is not the same--maybe it is the right place to go, 
but it is not the way we are doing it here. So how do you 
protect against more restrictive covenants that are being--they 
are saying, ``Well, fine. We don't care if your service 
provider is here, but any service provider that is doing 
business must accord by these laws.''
    How do we, in this globally developing area, make sure that 
American interests are represented so that we can fairly see 
resolutions of these sort of undefined rules of the road?
    Ambassador FROMAN. Well, this is going to be an area that 
we are going to have to have some serious discussions on, with 
our--particularly in Europe, where privacy concerns are very 
high. And we want to make sure what we are doing is recognizing 
legitimate privacy concerns, while at the same time they are 
not being used as just an excuse to create national internets 
or national clouds, and to allow the Internet and technology to 
develop in such a way as, for example, to have small businesses 
be able to access markets all over the world.
    So, we will be working with our counterparts on that to, on 

one hand, ensure that legitimate privacy concerns are respected 

and, on the other hand, to ensure that we are allowing 
technology to evolve in such a way as to take advantage of the 
interconnected----
    Mr. MEEHAN. You have a lot on your plate. And I know the 
many issues that you have to deal with and negotiate, these are 
complex things. Do you have the resources and the focus to be 
able to do this, not just on a unilateral basis--I shouldn't 
say--not on a one-on-one basis, if a particular country is 
taking an approach differently, but, you know, multiple 
countries?
    You have multiple chapters of the agreement in multiple 
countries that are affected. Is everybody going to speak with 
one voice in the resolution?
    And really, the final question, how do you enforce 
something if we have a disagreement with somebody, and we say--
you have mentioned that there are some capacities to take this 
to a higher--you know, a higher resolution. How does that 
enforcement concept work, and what kind of teeth are there in 
there for us?
    Ambassador FROMAN. Well, let me answer the last question 
first, which is, you know, one of the strengths of TPP is that 
there is a strong dispute settlement and enforcement mechanism 
across the whole agreement, across all of the--across virtually 
all of the obligations, whether it is labor and environment, or 
intellectual property, or these commercial commitments around 
cross-border data flows, and other issues.
    And so, that allows the countries to come together, if 
there is a concern, to consult, to establish an arbitration 
panel, if necessary, for that arbitration panel to make a 
judgement about whether there is a violation. And, ultimately, 
if it is not remedied, for there to be the application of trade 
sanctions, and trying to do so on a time-defined basis, so that 
there can be real recourse.
    I think, on your previous question, we have a terrific team 
at USTR. We are a small agency, about 250 employees, but they 
are incredibly dedicated. They work incredibly hard. They are 
incredibly professional. And we may be lean, but we have the 
capacity, I think, to address all these American interests.
    Mr. MEEHAN. Well, thank you. We will be working along with 
you on those. Thank you.
    Mr. REICHERT. Mrs. Noem, you are recognized.
    Mrs. NOEM. Thank you, Mr. Chairman. And, Ambassador, South 
Dakota's number-one industry is agriculture. So that is 
obviously a big priority for us. It supports over 20,000 jobs 
in the State. And when our ag sector hears about Japan's 
resistence on TPP negotiations to open it up and to have good 
discussion on products like pork and beef and dairy, that is 
alarming for many of them. And we tend to start losing support, 
then, for TPP, which--I don't blame them, because it is a big 
issue back home.
    But while Japan argues that they are not taking any 
products off the table, they certainly are refusing to fully 
liberalize a lot of their individual tariff lines when it comes 
to those product categories. So that is a concern for me, and 
not necessarily a question, just something I know we have 
discussed here today.
    But, following up on that, Japan isn't the only country 
that is causing some concern. We are also looking at Canada and 
the fact that they are refusing to make any open offer on 
dairy, poultry, and egg markets. And so, as a close neighbor to 
my home State, that is also very concerning for people back 
home, and another thing that we will be watching very closely 
as the negotiations continue.
    But I did want to discuss with you the EU agreement a 
little bit. I know some of their ag tariffs are high, and have 
to be reduced. But a lot of my producers back home are even 
more concerned about the non-science-based regulations that are 
blocking our country's market access. And so, we need to rely 
on sound science, when it comes to our trade standards. Would 
you expand on some of the key barriers that we do face when it 
comes to that agreement, and what our exporters are dealing 
with? And how do you plan to address some of those barriers 
that are currently out there?
    Ambassador FROMAN. Sure. First, let me just say, with 
regard to the Japan agriculture market and those questions that 
you raised, we are working very closely with our commodity 
groups--beef, pork, dairy, et cetera--as we negotiate with 
Japan to ensure not just that all products are covered, but 
that there is commercially meaningful market access in our 
priority areas. And we will stay closely in touch with you----
    Mrs. NOEM. I appreciate it.
    Ambassador FROMAN [continuing]. And them on that.
    With the European Union, we completely agree that it is not 
just an issue of tariffs, it is an issue of standards, and 
making sure that those standards are science-based, and that 
they are not using other restrictions such as GIs to keep our 
products out. And so that is the array of issues that we will 
be engaging with them on.
    We know that they have certain sensitivities in that area, 
but we are committed to opening their market. Our ag exports 
have grown very significantly over the last several years, to 
now a--over $150 billion. But our ag exports to the EU have 
been relatively flat during this whole period. And we want to 
make sure that our made-in-America products could make it into 
those markets.
    Mrs. NOEM. Great. Just a last comment that I would make is 
that we have been watching the dispute that has been going on 
at the ports, as well. And we have a lot of products that need 
to be moved in a timely manner. So, I know resolution is being 
worked on, but I also wanted to emphasize how important it is 
to the products that are coming out of our State, as well.
    So, thank you for your time today.
    Ambassador FROMAN. Thank you.
    Chairman RYAN [presiding]. Thank you. Mr. Larson is 
recognized.
    Mr. LARSON. Thank you, Mr. Chairman, and thank you so much 
for your opening remarks. And our Chairman is always good at 
analogies. And I don't want to deflate anything he had to say 
at the outset in noting that everybody on this Committee is a 
Patriot.
    And certainly, Ambassador, you are. And I want to thank you 
for the enormous amount of time and work and effort and 
persistence, echoing the remarks of a number of people, most 
notably Mr. Kind, who have spoken.
    I would also, Mr. Chairman, for the record, like to submit 
a letter from--a letter signed by Walter Jones, Duncan Hunter, 
and Mr. LoBiondo; and a letter submitted by Ms. DeLauro, 
DeFazio, and Mr. Doyle for the record.
    Chairman RYAN. Without objection.
    [The submission of The Honorable John Larson follows:]
    
    
    
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 Mr. LARSON. Thank you, Mr. Chairman.
    In so many respects, this is like the Superbowl of trade. 
And I think the one thing that everybody wants to recognize--
and it has been repeated on this Committee--is that we want to 
make sure that there is full and open transparency. People want 
to be participants.
    In other words, we don't want to find ourselves in the 
situation of the Packers being on the sidelines this weekend, 
and watching the Patriots participate. All of us being 
Patriots, some of us may be more Seahawkish about trade than 
others. But, nonetheless, this is the--this is where we come.
    And, Ambassador, you did a couple of things, and I think 
that cuts to the chase with respect to transparency and the 
concern that has developed. And, oftentimes for people just 
trying to sort through TPP versus Fast Track, and you know--so 
it is--those things can become complicated to the average 
American citizen, let alone Members of Congress. And I believe 
it was Mr. Kind who pointed out what are the consequences of 
not taking action.
    And so, my questions would be, first, would you commit to 
continued transparency? And, as is outlined in these letters by 
a number of Members who, as you heard here from a number of our 
colleagues, are skeptical about the transparent effort and the 
ability for America to come out of this on--advantaged. And 
then, who the losers will be, but especially, as you outlined 
previously, what are the consequences of no agreement?
    Ambassador FROMAN. Well, we are certainly committed to 
continuing and improving on transparency, in the broadest sense 
of it, in terms of--for example, again, I hearken back to the 
meetings that Mr. Levin organized with the Ways and Means 
Democrats, and other Democrats from the Caucus, including some 
of the people you mentioned, about various issues in the 
negotiation, and having deep dives on those issues, so that we 
can answer questions and concerns, because we----
    Mr. LARSON. But, truly, Mr. Doggett's questions that he 
posed, in terms of being able to go into the room, being able 
to take people who have clearance from the staff--I mean these 
were bipartisanly expressed today. I think those will go a long 
way toward ending the skepticism and doubt that exists, and 
will help to get everybody pulling together for a patriotic 
outcome.
    Ambassador FROMAN. Well, we will look forward to, I think, 
working with the Chairman, the Ranking Member on this 
Committee, and also on the Finance side, to take up those 
ideas, and determine how best to move forward.
    Mr. LARSON. Thank you.
    Chairman RYAN. Thank you. The gentleman has a minute left, 
so I will just indulge. The Packers are an export-related team. 
It refers to meat packers putting beef products on ships in 
Lake Michigan out to the St. Lawrence Seaway and on to 
exporting. Two of the team owners are right up here on the 
dais, and we thank the gentleman for acknowledging and----
    Mr. LARSON. I always want to acknowledge the Chairman, and 
I know----
    Chairman RYAN [continuing]. Very good export-related----
    Mr. LARSON. I believe it was Walter Mondale who said, 
``Where is the beef? And where is the cheese on top of it?'' 
You know, we want to make sure that we are----
    Chairman RYAN. Always--cheese comes always with beef in 
Wisconsin. Thank you.
    Mr. Holding.
    Mr. HOLDING. Thank you, Mr. Chairman. Mr. Ambassador, just 
so you hear from--all the way from the West Coast to the East 
Coast about the West Coast port situation, even us in North 
Carolina are impacted by this. Our pork products to Asia are 
being delayed, and we have even developed specialty pork 
products for Asia for that market. And so it is impacting us. I 
know you have already said the Administration will work 
diligently to resolve this, and I encourage you to do so.
    To hearken back to the question that you had about 
biologics, we all know the United States is the world leader in 
biologics, you know, and has made great advances in medicine. 
And you know, the business model that has worked to propel and 
make this research cost viable is to have 12 years of data 
protection. And that is the law of the land here. And I 
appreciate that, you know, that is the position that you are 
advocating in the trade negotiations. Correct?
    The President has suggested 7 years. So, with the 
President's suggestion of 7 years out there, do you think that 
undermines your bargaining position in the trade negotiations?
    Ambassador FROMAN. I think our trading partners have a wide 
range of views on this, as reflected by the fact that five of 
them have zero years, four of them have 5 years, two of them 
have 8 years. And we are the one that has 12 years. And so I 
think the key is having this dialogue with them about the 
importance of both promoting innovation, making this region a 
center for innovation, creating an innovation ecosystem, while 
at the same time addressing the issues of access to affordable 
medicines, particularly in developing countries.
    And so, those are the ways we are going about this, and we 
are having a dialogue with these countries. But this is, 
clearly, one of the most difficult outstanding issues.
    Mr. HOLDING. So, the President's suggestion of 7 years does 
or does not undermine your bargaining position?
    Ambassador FROMAN. I think they understand that our--the 
law of the land is 12 years. We have made the case of why there 
needs to be an extended period of data protection, and how to 
ensure that there is affordable access to medicines, as well.
    Mr. HOLDING. So it does or does not undermine your 
bargaining position?
    Ambassador FROMAN. I don't think it undermines our 
bargaining position.
    Mr. HOLDING. If you were to accept something as low as 5 
years, what do you think would be the impact of accepting 5 
years of data protection on our biologics industry here, in the 
United States?
    Ambassador FROMAN. That is something I would have to look 
to the industry for feedback on, but we have been certainly 
advocating how extended periods of data protection can help 
promote innovation, not just in our country, but around the 
world, and then make sure that drugs are introduced to markets 
earlier. And so that is the argument that we are taking to our 
trading partners.
    Mr. HOLDING. But one would suspect 5 years of data 
protection would not be beneficial to our biologics industry 
here, in the United States.
    Ambassador FROMAN. I think what drives the development, as 
I understand it, of our biologics in the United States is the 
period of protection that we provide here in this country.
    Mr. HOLDING. Thank you. Just to switch gears, India was 
mentioned earlier and, you know, I understand it is not part of 
the pending trade agreements. But with the President's recent 
trip to India--I guess he arrived back today--is there anything 
that you would like to relay regarding trade and the promotion 
of trade relations, business relations, with India?
    I note that it has grown from $14 billion in 2000 to $93 
billion in 2012, and they are our 11th largest trading partner 
now. So did anything from the visit transpire that portends 
some better trade relations and promotion of business between 
the two countries?
    Ambassador FROMAN. Well, as the President noted while he 
was there, we think there is great potential to further 
develop, to go from that $100 billion that currently exists, to 
something much higher. And there is a lot of excitement and 
interest in the kind of policies that the new government has 
expressed, and India has expressed interest in.
    And I think the key now is to, through our dialogue with 
them, explore how those policies are going to be put in place, 
and whether they are going to address the business environment 
in such a way as to increase trade and investment.
    I had a good--there was a trade policy forum meeting in 
November of last year, the first one we have had in 4 years, 
where we laid out an important series of work plans, on 
intellectual property, on manufacturing, on services. And I am 
following up with the government, including during my recent 
visit there with the President, to determine how best to take 
those issues forward.
    Mr. HOLDING. Good. I have a few questions regarding IPR and 
TTIP in the EU, which I will submit for the record. But thank 
you for your time.
    Ambassador FROMAN. Thank you.
    Mr. HOLDING. I yield back.
    Chairman RYAN. Thank you. Mr. Rangel is recognized.
    Mr. RANGEL. Thank you, Mr. Chairman, and thank you, 
Ambassador, for your patience with this Committee. You 
certainly have spent a lot of hours with us, and you have been 
very patient with us, and I want, really, to be able to help to 
find out whether or not, at the end of the day, we can end up 
with--on the same page.
    I think you will agree that the greatest opposition to this 
trade bill and any trade bill in our great country is the 
general feeling that jobs will be lost. If you don't think that 
is the major problem, then I would like to remove myself from 
this line of questioning, because everywhere I go there are 
committees organizing. They say they don't know what is in the 
bill, but they are against it. They don't want to give the 
President the authority to negotiate a bill. And I don't think 
we have done an effective job in explaining how we made out 
with NAFTA or Korea.
    So, if you disagree with me, just for the sake of those 
people who really believe that trade is going to be a job 
loser, there is no question in my mind that your position is 
that this is an economic growth job builder, and the future of 
America is going to be dependent on our ability to effectively 
compete and make America stronger. And that necessarily means 
that jobs will be created, even though it is difficult to 
determine which industries will be the winners and losers. But 
you are convinced--and you represent our country--that America 
is going to come out ahead.
    If that is so, then I would like to say we should be 
prepared to assume the responsibility to meet this great 
economic opportunity with these jobs. It would be disgraceful 
if you have done your job, and hundreds of millions of jobs 
would be available, and then we find out that we forgot to ask 
somebody what skills will be necessary for our workforce.
    Also, how would we transport this new opportunity in this 
great Nation, with its bridges and its roads crumbling? Will we 
be prepared for this great economic opportunity?
    And, since in every agreement there are winners and losers, 
do we have the structure there to support those great Americans 
who, through no fault of their own, would lose their jobs as 
they open up the doors for progress for the rest of the country 
and the world?
    That is my way of asking you, ``Where the hell are the 
jobs?'' And, until I can go into town hall meetings or speak to 
reporters and they ask, ``What is in it for me,'' I can't say, 
``Cheese,'' I can't talk about what is going to happen with the 
pharmaceutical corporations. My community, and communities like 
that throughout this country, have to find something to blame 
their loss of income and jobs on. And it looks like trade is 
the best thing to kick, because it can't fight back. Those who 
have lost their jobs complain. Those that have gained 
opportunities believe that they got it on their own.
    So, I need someone from your shop that deals with preparing 
America for these great opportunities that are going to exist, 
and I don't want to take your time, because I now understand 
why they give the title to our trade negotiators as being a 
diplomat. Because you are that. But if there is someone without 
your diplomatic skills that can share with me where the hell 
the jobs are going to come from, and which ones we are going to 
lose, I would like to get out there with the flag and the plan, 
and say that, of course, some people are going to feel pain. 
But most people are going to prosper. We have a middle class 
out there that we are losing. You talk about spoiled 
businesses. If they are not working, they can't buy.
    So who is it, besides you, that has this work plan all 
there, so that I can work on that part of it? Who would you 
recommend?
    Ambassador FROMAN. Well----
    Mr. RANGEL. Mr. Excellency?
    Ambassador FROMAN. Congressman, we will find some 
undiplomatic people on my staff to work with yours. And I think 
Secretary Perez and I would be happy to work with you on that, 
because I know it is an issue that you have raised before about 
making sure that our people are prepared to take the jobs that 
are going to be created by this.
    Let me just say, while I don't have details down to the 
level of the district, for a State like New York, which has 
more than 300,000 people whose jobs are tied just to the export 
of goods, not including services, 41,000 companies export from 
the State of New York, 94 percent of whom are small- and 
medium-sized businesses.
    And when we look at the opportunities for New York State to 
take chemicals, New York exports about $5 billion in chemicals, 
but there is 35 percent tariffs in some of the TPP countries 
that will go to 0. New York exports $27 billion of consumer 
goods. There are 85 percent tariffs in some of the TPP 
countries that will go to 0. Machinery--I could go sector by 
sector.
    And while it is hard to say exactly how many jobs each of 
those moves on the tariff lines are going to create, we know 
that New York is one of the great beneficiaries of 
international trade, and will continue to be so, because we 
have competitive workers in New York. We have competitive 
industries, whether it is in manufacturing, services, or 
agriculture. And in each of these areas we are opening markets.
    Let me say one final thing, Mr. Chairman, if I can. There 
are--we obviously do have sensitive sectors in our country. Mr. 
Levin talked about autos. We could talk about textiles. We 
could talk about footwear. These are areas where we have higher 
tariffs than in some other areas. And what we have done is 
worked very closely with the textile industry, with the 
footwear industry, and, obviously, with the auto industry to 
make sure that whatever we do in this area is taking into 
account the sensitivities that they face. So we are trying to 
deal with the issue of how to deal with our sensitivities.
    Ultimately, one of the things that we have made clear is 
that we think TAA, Trade Adjustment Assistance, ought to be 
reauthorized as part of this process, because it is important 
that we give our people and our workers the skills that they 
need to compete in this global economy.
    Mr. RANGEL. Thank you, Mr. Chairman.
    Chairman RYAN. Thank you.
    Mr. Smith.
    Mr. SMITH OF MISSOURI. Thank you, Mr. Chairman.
    Ambassador, in October of last year, the Government of 
Turkey self-initiated an anti-dumping case against the U.S. 
cotton exports. Turkey has been the number-two exporter for 
U.S. cotton, export market for U.S. cotton for the last recent 
years. Some of my colleagues and myself have written you and 
the Commerce Secretary of our concerns about this case. What is 
the U.S. Government doing, up until this point right now, in 
this investigation?
    Ambassador FROMAN. We have engaged with the Government of 
Turkey to express our concern about this. Of course, every 
government, every country, does have the right to bring trade 
remedy actions, provided they do so consistent with the WTO. 
And our industries avail themselves of our anti-dumping and 
countervailing duty laws, as well.
    What our role is at USTR is if a country is bringing an 
action under their trade remedy laws in a way that violates the 
WTO commitments, as China has done in a series of cases, we are 
able to bring a case to the WTO and have those cases undone. 
And so we are monitoring this case closely to see how it is 
proceeding. We are making clear to the Government of Turkey our 
concerns about it. And we stand ready to take action if we 
believe that, at the end of the day, they have applied their 
trade remedy laws in an inappropriate fashion.
    Mr. SMITH OF MISSOURI. Thank you. I have great concern, 
just about statements that I have read from media clips that 
members of the government in Turkey have said the reasons why 
they brought action. So that is why I bring this case up.
    On a total--on the other side of this coin, I am also 
deeply concerned that the United States companies legitimately 
who use the anti-dumping and countervailing duty orders to 
protect themselves from trade violations, these orders are not 
always effectively enforced. I have a couple of questions.
    First, what improvements could be made to our trade 
agreements to improve enforcement of the anti-dumping and 
countervailing duty orders at the border?
    Ambassador FROMAN. One thing we have been doing in TPP is 
to have a chapter and a series of obligations around customs 
cooperation and enforcement. And we work very closely with the 
Department of Homeland Security and Custom and Border 
Protection on their role of enforcing trade laws and trade 
measures, as well. So TPP will give us a further opportunity to 
strengthen that kind of cooperation with other Customs 
organizations, so there isn't circumvention by countries of any 
dumping and countervailing duty orders.
    Mr. SMITH OF MISSOURI. Okay. Also, Ambassador, in 2012 the 
World Organization for Animal Health awarded U.S. beef with the 
highest safety designation possible. Despite this high safety 
rating, countries like Japan, China, Korea, Taiwan, and Vietnam 
continue to have age-based restrictions on U.S. beef products. 
With U.S. beef having the highest safety designation possible, 
these restrictions are beginning to look like non-tariff trade 
barriers. What is USTR doing to open the remaining markets that 
currently have age-based restrictions on U.S. beef?
    Ambassador FROMAN. We are working very closely with the 
Department of Agriculture, as well as with our stakeholders in 
the beef sector, to further open markets consistent with that 
OIE finding. And we are pleased that we have been able to open 
up Japan, Korea, Hong Kong, Mexico, a number of other 
countries, to some of our beef exports. And we are continuing 
to press ahead with that.
    One of our areas of concern remains China, which had 
promised to take the steps forward on opening their beef market 
last year, and have yet to do so. And we were just in--as I 
mentioned, in Chicago with the JCCT, including with Secretary 
Vilsack and Secretary Pritzker, in our efforts to press them to 
move forward with opening their beef market.
    Mr. SMITH OF MISSOURI. Ambassador, I represent probably one 
of the most diversified agriculture districts outside of the 
State of California. We grow everything in our district but 
citrus and sugar. We grow a lot of rice.
    And so, it is my understanding that, before the 1962 
embargo with Cuba, Cuba was the number-one importer of U.S. 
rice. Cuba is currently the second-largest importer of rice in 
the Americas. What do you think the benefits of normalizing 
relations with Cuba would have in the U.S. agriculture 
community in crops like rice?
    Ambassador FROMAN. Well, I know that our agricultural 
community is excited by the potential opportunities that 
normalization provides. I don't have a lot of direct 
information about the rice market, per se, but we are happy to 
get back to you on that.
    Mr. SMITH OF MISSOURI. I would appreciate it. Thank you, 
Mr. Chairman.
    Chairman RYAN. Mr. Davis.
    Mr. DAVIS. Thank you, Mr. Chairman. And thank you, 
Ambassador, not only for your skilled diplomacy, but also for 
your patience.
    We appreciate your efforts to craft new trade agreements, 
such as the Trans-Pacific Partnership agreement, in such a way 
that benefits U.S. jobs. Of course, I come from a job-producing 
area. I represent a part of Chicago in the western suburbs of 
that city which, over the years, we have proudly claimed as the 
Candy and Confectionary Capital of the United States.
    To maintain our competitiveness with world markets, we need 
to ensure that we have an adequate supply of sugar at 
reasonable prices. Unfortunately, we have a sugar program that 
unduly limits the availability of sugar, which causes Chicago-
based companies to pay as much as 50 percent more for sugar 
than their overseas competitors, who have access to world 
markets.
    To help improve our prospects for keeping confectionary and 
baking jobs in Chicago and other places, the TPP could provide 
new market access for TPP countries that have sugar for export, 
whether it is raw sugar from Australia, or refined sugar from 
Canada. With the TPP negotiations nearing conclusion, my 
question is, do we have commitment to provide commercially 
meaningful access to TPP countries that have sugar available 
for shipment to the United States?
    Ambassador FROMAN. Well, Congressman, you know this is an 
area of--that has traditionally been very sensitive in our 
trade negotiations. And we have committed that whatever 
additional access there might be to the U.S. market, to the 
U.S. sugar market, won't undermine the U.S. sugar program. But 
we are working with our stakeholders and with our trading 
partners to try to find a solution here that addresses--that 
finds the right--pardon my pun--sweet spot in that regard.
    Mr. DAVIS. I certainly appreciate that position. But I am 
also concerned about the Department of Commerce agreements that 
were signed back in December of last year, which placed new 
limits on sugar imports from Mexico, and significantly raised 
prices for American consumers and food manufacturers.
    Although I know that you, as the U.S. Trade Representative, 
were not a party to this new managed trade deal with Mexico, 
can we expect that any future trade agreements, whether with 
Mexico or other sugar exporting countries, will allow them to 
have fair access to the U.S. market, so that we have as 
competitively priced sugar that our manufacturers can have 
access to, so that people in the food and sugar industry can, 
in fact, continue to work and produce jobs?
    Ambassador FROMAN. Well, as I said, we are working to 
strike the right balance between allowing further trade and 
protecting the U.S. sugar program, which is the law of the 
land. And so, we are continuing to work on this issue. It is 
one of the outstanding issues in our agricultural negotiations 
with our trading partners, and we will continue to work on 
that.
    Mr. DAVIS. Thank you very much. And there are always 
concerns about enforcement of labor and environmental standards 
in any of these negotiations. Could you just comment on how 
those negotiations seem to be going?
    Ambassador FROMAN. Absolutely. Well, we are not done yet. 
We have made very good progress in those negotiations, I think 
we are heading in the right direction. And that is both in 
terms of setting strong obligations in the labor and 
environmental area, and making sure, consistent with the May 
10th agreement, that they are fully enforceable, they are in 
the core of the agreement, and they are fully enforceable, with 
the same type of dispute settlement process, the same timeframe 
as any other provision in the trade agreement, including, 
ultimately, the availability of trade sanctions, if the problem 
is not remedied.
    And so, this, I think, will take that issue much further, 
in terms of applying to 40 percent of the global economy, and 
solidifying the notion that labor and environmental issues--
again, consistent with the May 10th agreement--should be 
treated as seriously as other commitments in the trade 
agreement.
    Mr. DAVIS. Thank you very much, and I yield back. Thank 
you, Mr. Chairman.
    Chairman RYAN. Thank you.
    Mr. Kelly.
    Mr. KELLY. Thank you, Chairman.
    Ambassador, thank you for enduring. You know, we have 
talked about a lot of different things today. Mr. Tiberi talked 
about electrical steel in Zanesville. I also have the same 
company that I represent in Butler, Pennsylvania. It was Armco 
Steel, it is now AK Steel. I believe we build or make the 
finest electrical steel in the world. We are concerned about 
that.
    Then we also talked about the free flow of information, 
data flow, and how countries could game us and keep us out of 
that, out of being able to compete, or overreach in their 
ability, and eliminate the competitive edge. So I sent a letter 
to you, along with Mr. Kind, back in October. And I would like, 
Mr. Chairman, to submit it into the testimony today, if there 
is no objection, that addressed the situation.
    But I really want to get down to what we are talking about 
here, and maybe you can help, because everybody has talked 
about things that concern them and their district. The reality 
of this is what leverage do we have. I mean, we go into these 
negotiations in good faith, I really--I agree with that. We--I 
think we have this kind of a naive belief that somehow people 
are going to negotiate with us in good faith, and that, 
somehow, because we have these trade agreements, they are not 
going to take advantage.
    Now, Mr. Meehan talked a little bit. So what are the teeth? 
I mean how do you enforce this? So you find somebody who is not 
acting in the right way. What do you do? What is the 
enforcement? How--are there any teeth there that really could 
force them back into a situation that they agreed to?
    Ambassador FROMAN. Well, yes. And the way these trade 
agreements work, and the way that TPP works, is that there will 
be a strong dispute settlement mechanism across--virtually 
across the board of the agreement, so that if you believe a 
country is violating its obligations, you can trigger 
consultations, you can trigger the formation of an arbitration 
panel who--that then makes the determination, in a limited 
period of time, of whether that country is in violation or not. 
Then it assesses damages, and the country either comes into 
compliance or you can impose trade sanctions, commensurate with 
those damages, against the other country. And that is--it is 
the existence of that dispute mechanism and the various stages 
along the way that hold other countries' feet to the fire.
    Mr. KELLY. If you can, though, give me a little bit of an 
idea. Time is always of the essence with these. So people run 
out the clock on us, and an opportunity gets lost. If we are 
truly going to have an economic recovery, and if we believe 
that 95 percent of the market is outside our country, I look at 
this--so I keep wondering. You know, so, if we--because my 
whole life I have been in the negotiating business, but I had 
to have a product that somebody wanted to own and I wanted to 
sell.
    But we are, right now, engaged in a situation where, 
geopolitically, the relationships that we build are--really, 
would be the determining factor of how we get countries to 
behave the right way, whether it is through sanctions, which we 
have used to certain effect. But how do you build that?
    And, again, I keep going back to this. I know we have these 
things in place. But, really, how do you enforce them? How do 
you get people to do that because of the time element? They can 
run out the clock on this. By the time you get done going 
through all those mechanisms, you have lost the sale.
    Ambassador FROMAN. One thing we have worked to do in TPP is 
to ensure that the dispute settlement process is time-bound, 
that it is faster than, you know, other dispute settlement 
procedures at the WTO or otherwise. And, in some cases--for 
example, with the Japan auto as part of our agreement--that 
there is a specific accelerated dispute settlement mechanism 
with real teeth to enforce the obligations that we secure 
there.
    And so, we are fully committed to doing that. And it is 
that, the existence of that dispute settlement, that tends to 
get countries to abide by their commitments.
    But it is--to broaden out, it is our engagement through 
this process--these countries want to be in partnership with 
us. They want to be economic partners, they want to be 
strategic partners with us. And TPP gives us that opportunity 
to work with them across a wide range of----
    Mr. KELLY. Listen. I believe, philosophically, that what 
you are saying is correct. The reality of this whole situation 
is if we can't get you some kind of leverage, all the good 
faith in the world, and all the great talk in the world, and 
all the open-heartedness in the world is fine, if it--if we 
just talk about it.
    I have just watched what is going on in the world today, 
and our world is becoming more and more unstable. If we are 
really going to be the defenders of freedom and liberty around 
the world, we better be the strongest economic machine that is 
out there, or people aren't going to pay attention to us. My 
great fear is that, while we sit and wonder about what we can 
do to help you get there, the rest of the world is--they are 
going to progress, they are going to move on. We are going to 
miss our chance.
    And I really--I am greatly concerned about that. I have 
watched us lose too much market share because of what we go 
through. The debate becomes too heavy. The results get dragged 
out too long. We lose an opportunity to gain market share and 
then sit back and wonder what it is we are doing wrong.
    Some of the things we are talking about, if we can't get 
the American people to understand that these agreements provide 
features and benefits that add value to our people, to our 
economy, we can't possibly get the sale made. And that is where 
I am concerned right now. We talked about all these things that 
affect us, whether it be cheese or cars or steel or any 
intellectual properties.
    But the bottom line is, we have to have something people 
want to buy, and we have to be able to be in a position that 
they are the ones--we are the ones they want to buy it from. We 
can't enforce--we can't get people to think the way we think if 
we are not attached, economically or geopolitically. It just 
doesn't work any other way. There is no other reason to want to 
be with us. And that is the thing that I worry about, because 
what is going on with TPP, what is going on in Europe, we are 
going to lose those markets and sit back and wonder why we lost 
them----
    Ambassador FROMAN. I agree.
    Mr. KELLY [continuing]. It was because of our inability to 
react quickly.
    Chairman RYAN. Thank you.
    Ambassador FROMAN. Thank you.
    Chairman RYAN. Last, but certainly not least, Mrs. Black 
from Tennessee.
    Mrs. BLACK. Thank you, Mr. Chairman. Thank you to all of 
the Members that have stayed around. And especially you, 
Ambassador, thank you for being here today and being so patient 
to answer everyone's questions. I really appreciate that. I 
also want to thank you for your response to my letter that--
regarding the inclusion of the children's electronic education 
devices on the list of the--on negotiation for the expansion of 
the information technology agreement.
    And, for those who really--who don't realize this, there 
are books and toys that are duty free. But because these 
computer devices don't fit in one of those categories, even 
though they are educational, they are not duty free. So I plan 
to reintroduce my ETEACH Act in the coming weeks, and I look 
forward to our continuing dialogue.
    I know that many of my colleagues have talked about how 
this would benefit us here in this country. And so, the 
significant benefits here are not only to the manufacturers, 
but also to the consumers, especially our young children. By 
one estimate, updating the ITA would boost global GDP by $190 
billion, and would increase our U.S. exports by $3 billion, 
creating over 60,000 American jobs. So, for many purposes, this 
is, I hope, something that can get done.
    I know we have bipartisan support from Members of our Trade 
Committee here. I think about two-thirds of them have signed 
on. And I look forward to the continuing conversation, and hope 
that you will be able to make this happen. I wondered if you 
might give me some encouragement of where this might be at this 
point in time.
    Ambassador FROMAN. Well, we had this breakthrough with 
China back in November, which allowed the ITA negotiations to 
get restarted in Geneva. We have further work to do to try to 
bridge differences between countries. We are encouraging the 
countries, particularly Korea and China, to resolve their 
differences. We are encouraging China to be more flexible in 
accommodating what needs to be done in order to resolve these 
issues. And we are hopeful that we will continue to make 
progress toward an agreement, as you say, that can have such a 
significant impact on U.S. jobs, on U.S. exports, as well as on 
the global economy.
    Mrs. BLACK. So, it is my understanding that China really is 
the barrier that is there right now?
    Ambassador FROMAN. At this stage, there are differences of 
views between Korea and China, and we are trying to find ways 
to bridge those differences, and are encouraging China to be 
flexible in its approach in order to resolve the outstanding 
issues.
    Mrs. BLACK. Thank you. And I appreciate everyone staying 
around for my question, and I will yield back.
    Ambassador FROMAN. Thank you.
    Chairman RYAN. Thank you.
    Well, Ambassador, you started here, what, at 2:00, I think? 
And then you did the Senate Finance Committee this morning, 
right?
    Ambassador FROMAN. Indeed.
    Chairman RYAN. So you definitely earned your pay today. 
Thank you very much for indulging our Committee Members. I 
think this was an excellent hearing. I think a lot of the 
Members got the points they wanted to get across, and the 
questions they wanted to ask answered. I appreciate your 
indulgence on this, and we will see you very soon, because we 
have a lot of work to do.
    So I appreciate your time, I appreciate your expertise, and 
this Committee stands adjourned.
    Ambassador FROMAN. Thank you.
    [Whereupon, at 5:30 p.m., the Committee was adjourned.]
    [Questions for the Record follow:]
    
    
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