product goes into the market place it will do what it says it will do and, in fact, that kind of regulatory foundation is common sense, it also is what enables innovation to be driven forward. because when you have some tests that aren't held to the same standard as other tests then the incentive for those who are coming from the device -- the traditional device industry developing fda-related diagnostics, incentive for them to stay in the business when someone else can create it without market and review is problematic. so it is kind of an interesting example of why things get very complicated but at the end of the day the fda role is to help speed innovation to patients who need that innovation but we want innovation that works and innovation that will make a difference in promoting and protecting their health and that will benefit our health care

system and the industries that are so much part of the united states economy. >> thank you for doing that. and i apologize, mr. chairman, for going so far over my time. >> no that's fine. senator murray do you have any closing remarks. >> dr. murray, well stated. thank you for both of your testimony. this was a good hearing. senator alexander, i look forward to working with you on that. >> thank you. and dr. collins, do you know off hand, you mentioned the success rate has declined over the years. what about the absolute number of grants? has that gone up? >> the absolute number of grants that we fund versus that we receive. it has bounced around, it was 10,000 -- >> 30 years ago it was -- >> i'd have to get you the number. >> i was trying to compare that to the success rate. >> but the biomedical community has grown. >> it would be interested to see

that. >> thank you to both of you. thank you for being here. very important that you were here and we thank you for your six years of service at fda. and i hope you'll accept our invitation to stay in touch with us, especially over the next year as we work on these issues. dr. collins, you're going to still be here. >> i am. >> and we're going to stay in close touch with you. this has been a good conversation and the fact that the two of you were here helps signal the importance of it. the attendance of the senators. of course by 2017 we'll be in the midst of the user fee discussion. but the issues we tend to get into are different from those. and what i would say to those in your agency and to the administration, this is a train on a track to get to the station. it will get somewhere. some of us are on the appropriations committee and we'll be working on the

sequestration, the funding levels. that is one thing that we with do. and there is also the question as i mentioned of the 42% administrative cost. if there are some things we need to do, some laws to change and some other agencies, if you could get that from 42% to 32%, that is $3 billion at one time. so there is the question of reallocation and other obstacles that you have run into that if you could change that that would make our life better. this is in no way trying to diminish the accomplishments of the fda or the nih, as to say we're in this exciting era, the house, the president the senate, are all headed in the same direction we would like to get there within a year or so and woed like to have -- and we'd like to have your help in doing that well. this is an unusual opportunity to get a result in a town that doesn't that often see the president and the republican

congress on the same train headed in the same direction toward an important station. so i think by you're being here you help to emphasize that. the hearing record will remain open for ten days. additional members may smib additional testimony within that time period if they like. the hearing will stand adjourned.

you've been watching the senate health committee as they look into medical innovation.

if you missed any of the hearing we'll show it later in the program schedule and available online shortly to see any time. go to c-span.org and make sure to check out the c-span video library. as the senate hearing winds down, the house is out this weekend but the senate is in session today. lawmakers working on anti-human trafficking legislation. votes are possible later in afternoon. can you see it live on our companion network c-span 2. and with the senator, edward brook passed away this year. senatorbrook a republican from massachusetts was the first african-american to be elected to the senate. we'll show you the service from the national cathedral tonight at 8:00 eastern and also on c-span 2. and join us tomorrow when secretary the state john kerry will talk about the action against isis before the senator foreign committee joined by

ashton carter at 9:30 a.m. eastern on c-span. this sunday on q&a, adrian berman director of the georgetown center farmed out, on how pharmaceutical companies log. >> a drug started seven to ten years before it comes on the market. and it is illegal to market it before it is approved by the fda, it is not illegal to market a disease. so drug companies have invented diseases or exaggerated the importance of certain conditions or exaggerated the importance of a particular mechanism of a drug for example, and then blanketed medical journals and medical meetings and other venues with these messages that are metropolitan to prepare the

minds of clinitians to accept a particular drug. and also to prepare the minds of consumers to accept a particular condition. >> sunday night at 8:00 eastern and pacific on c-span's q&a. the senate commerce sub-committee on marine safety and security held a hearing on the efficiency of the food and supply chain. they have presented remarks on the infrastructure weakness and stymied pork. this is about an hour and a 20 minutes.

>> this hearing will come to hearing. good morning. i am pleased to convene the senate sub-committee on surface transportation and merchant marine infrastructure safety and security for a second hearing which is entitled "keeping goods moving." to grow the economy and create new jobs we need an efficient and reliable intermodal transportation network. today's hearing allows us to explore this issue with a plr focus on infrastructure and man taining operations at our nation's ports. america's intermodal transportation network is the

foundation upon which u.s. businesses along all segments of the supply chain produce goods and get them to market. at our last hearing cabela's outlined how disruptions or efficiencies along our just in time shipping network shows increased cost and poor customer service and deepwater ports represent a key element of the u.s. transportation network and are vital to our economic growth. in fact, america's sea ports often serve as the key connection point for all modes of transportation. our west coast ports alone move 12.5% of u.s. gdp per year. a shut down of america's west coast ports even for a short period of time would have devastating economic consequences. according to a recent report by the national retail federation

and association of manufacturers, in the most severe coast, a 20-day west coast closure would disrupt 2500 jobs reduce u.s. gdp by almost 50 billion and cost the u.s. economy $2.5 billion per day. i've heard from businesses and consumers in my state expressing grave concerns about service disruptions at west coast ports. just last week my office heard from an omaha based company that manufacturers electric conductors with inputs from asia. this company is seeing the import time frame double sand costs triple because of current slow-downs. for many businesses changing shipping routes or modes is cost prohibitive. unfortunately whether they export agricultural goods or import retail businesses are being forces to opt for

airfreight or are rerouting projects to avoid losing market share due to misshipments. port congestion affects truckers and the competitiveness of the ports themselves. everyone has a stake in seeing the ongoing negotiation between pmi and ilwu resolved quickly. members of congress and the administration must pay close attention to the ongoing negotiation and the economic impact of service disruption at our ports. this is particularly important as we face the potential for ports on both coasts to be negotiating simultaneously in 2018, which is when the current east coast labor contract expires. i'm pleased that today's panel will represent a wide array of perspectives on the effect of recent disruptions in our nation's supply chain. i'm eager to hear further details from our panelists on

the challenges that slow-downs at our nation's west coast ports have posed to their industries and their consumers. i'm also looking forward to hearing about opportunities for congress, state and local governments an the private sector to work toward modernizing and enhancing our nation's ports, infrastructure for businesses workers and consumers. we need to explore the policy options to support port growth sand future volumes of freight to keep goods moving. i'd like to now invite my colleague senator blumenthal to make any opening remarks. senator. >> thank you, madam chairwoman senator fisher. thanks to our witnesses for being here today coming long distances and contributing your insights into one of the critical challenges that our country faces. not only the most glamorous or

noticed. but one of the most profoundly important to our economy to jobs and to our quality of life. so we thank you for being here. in the next remainder of this decade, the department of transportation estimates that freight will grow at least 10% in volume. not to mention the value of that volume to our economy. so far from diminishing, the importance of moving goods, a topic which brings us here today will only increase dramatically, and that estimate, in my view, is a conservative one. no individual part of the country, no city or town and certainly no region is an island. it all depends on transportation working together to move goods. we focus on passengers as we did last week in the tragic

collision in valhalla, new york. a tragedy that was preventible and avoidable, with proper safety procedures. the same is true in moving goods and in moving freight. safety has to be made number one priority. but we're all dependent on freight transportation just as we are on moving people, moving goods is equally important. we all depend on all of the modes of transportation, all of the types of transit, whether it is roads and bridges, rail, water, all working together and all fulfilling their vital functions. so i join in the hope that the parties to the west coast ports dispute can find a reasonable mutually-agreeable solution as fast as possible. time is not on our side.

and that the businesses impacted by the slow-down, including many in connecticut are able to weather this time, and the impact economically. but looking beyond this immediate issue are the broader challenges of in vesting and making sure that we build the infrastructure that is vital to moving goods and people. just as one example connecticut has a freight infrastructure that is very much in need of that investment upgrading certain sections of our freight rail network to accommodate 268,000 pound weights in moving goods and services by rail which is the north american rail network standard is very very important. most freight railroads in the country are able to sustain freight cars weighing 286,000

pounds and this weight limit includes the weight of the car plus about 110 tons of cargo or 220,000 pounds. if connecticut doesn't upgrade its weight limits then our state could become a freight island. but of course if we are a freight island the rest of america can't reach us moving goods. and that is just one example of how clogged arteries can styme economic progress and job creation. so i'm very much looking forward to the testimony that we're going to hear today and to hopefully the initiatives it will enable us to take in the interest of all of america. thank you, again, for being here. >> thank you senator blummen shall. >> welcome to the panel today. i appreciate you taking time out of your schedules to being at

this hearing and providing the senators with more information on this very important topic. i would like to get right to it. so our first witness is mr. norman bessac, the vice president of international sales of cargo. so welcome. >> thank you chairman fisher and members of committee and sub-committee for inviting me to testify. trade maximizes the retail ranchers and farmers produce and we are able to sell them to the domestic and international markets where they have the most value. this creates the best opportunities for car gill, our customers, our farmers and ranchers and our hard working employees and where we operate. ports are an intergralt part of the supply chain. let me detail the challenges that occur when there are

problems with product. car gill has product processed through fresh beef and pork located in nebraska kansas, texas, iowa pennsylvania illinois, colorado and california. customers from around the world depend on high-quality fresh u.s. beef and pork to sell in supermarkets restaurants and food processing plants. fresh meat has a relatively short shelf life. it must be quickly packaged and shipped in temperature controlled trucks rail cars or containers to ensure product integrity and safety and to allow shelf life to sell once the product arrives. under normal circumstances, a container of fresh pork destined for asia usually arrived with more than 25 days shelf life. the industry is currently experiencing delays of two to three weeks on chilled product

due to the congestion in west coast ports. with this delay, our asian customers cannot count on a dependable supply of u.s. beef and pork so their canceling orders and looking to suppliers in chile and others to meet their needs. yesterday japanese customers canceled next week's chilled pork. i assume others are facing similar orders. this has created a tremendous amount of uncertainty. today the industry is faced with three choices. first, continue to ship product despite the current uncertainty. this can result in shorter shelf life an increased risk of potential spoilage and even complete product loss. second, we can airfreight the product at a tremendous expense. often three to five times the normal cost.

or third, don't manufacturer export products and adjust operations and procurement accordingly. if you take nothing else away from my testimony today understand that any of these choices result in negative effects to everyone in the chain. in particular farmers ranchers, customers and plant employees. today about 10% of u.s. beef and 25% of u.s. pork is exported. the u.s. meat export federation estimates that the global demand for u.s. beef and pork will reach 17.6 billion pounds and that is up 46% for beef and 42% of pork and most coming from the pacific rim. future growth to serve these maskts depend -- markets depends on a efficient and effective supply machine.

for reference, this is enough to provide 29.2 billion more four-ounce servings of beef or pork. our nation's advance has always been having a fair, robust and competitive transportation system that ensures we can compete in the global market. we must look at our situation not simply as manufacturers shippers labor and capital but through the lens of global competition. we ignore it at our collective peril. ports where the goods we make are loaded and exported for the world's consumers, functioning ports are imperative from both a labor and operational perspective. when ports don't operate the supply chain backs up, causing long-term problems for us, our industry, our farmer and rancher supplies, our customers and our employees. we ask you to take the steps needed to address the challenges i've outlined today so we can continue to help the world

thrive but meeting the needs of consumers around the globe. i look forward to your questions. thank you. >> thank you mr. bessac. miss katie farmer. miss farmer is the vice president of consumer products at bnsf. welcome. >> thank you. good morning chairman fisher and members of the sub-committee. thank you for the opportunity to be here to discuss the bnsf on the importance of the ports to the u.s. supply chain. intermodal is the movement of shipping containers and trucks by rail combined with a shorter truck movement at one or both ends. it is growth over the last decade is contributable to a number of factors fuel efficiency, highway congestion and truck driver shortage. there are two kinds of movement. the first is domestic intermodal which is the movement of 50 foot long trailers within the u.s.

the second is international intermodal in which goods manufactured overseas are in containers. they arrive at a port and those not distributed locally are loaded on to trains on dock or trucked to an off-dock or near-dock intermodal dock where they are sorted to move throughout the interior of the country. the containers are owned by the steam line and match back the empties with full loads westbound destined for asia or other internet markets. last year on aur railroad we handled post recession levels of freight and we did not deliver the service that customers have come to accept from bnsf. we had a $5.5 billion in 2014 and we have announced a $6 billion capital budget this

year. with this investment we have expanded the capacity of our network which we believe will continue to maintain the u.s. supply advance. the ports of los angeles and long beach is the busiest in the western hemisphere and a top gateway for a u.s. trade with asia. bnsf transports half of the shipment that go by rail out of the ports and 75% of the ports carried by bnsf are loaded on dock. the remaining are handled by the hobart port. bnsf is working to build a dock four miles from the port called the southern california internet gateway or skig eliminating use of the i-10 freeway.

our limits to build this have been challenged by local opposition groups and permit is tied up in the courts. we think that project will create operational efficiencies for the ports. west coast ports are facing challenges duing to congress and growing freight concerns are not the whole story since freight have not returned to levels since seen before the recession. there are several factors that are contributeingcontributing, including inadequate port infrastructure needed to handle the larger ships, limited infrastructure adjacent to the ports. operating restrictions from local communities and operating operatingin efficiencies but the most disruptive to the supply chain is a reduction of the productivity as a result of the negotiations between the port and imla. it has declined by more than 50%. the result is year over year

reduction by bnsf of as much as 20-30 trains per week carrying a minimum of 250 not being supplies. this is causing significant delays and increased costs for our customers. bnsf has taken numerous actions to serve the customer merz and ensure the fluidity of the network in the face of their problems including our modes and equipment management. during the 11-day shut down of port operations that occurred in 2002, freight permanently migrated away from the west coast. this is certainly a potential long-term consequence from the current situation. congress can play a role in keeping goods moving through sound infrastructure policy and uniform. my written testimony details bnsf's thoughts in those areas. thank you, and i look forward to your questions. >> thank you, miss farmer.

next we have dr. walter kemmsies from walter and monaco. welcome. >> okay. so good morning. it is well recognized that international trade is increasingly important to the u.s. economy. and that this trade -- mostly utilizes ocean-going vessels, particularly container vessels versus versatility of containers with a range of items of refrigerated goods to liquids and gases. and ports have an important rule in movement of overseas freight because they are major intermodal exchange points transporting cargo between ships and rail. they have the very embodiment of

intermodalism. and they are adapted to growing trade, and i would agree with blumenthal that the estimates are low and we should see higher growth rates provided the infrastructure is there. the ocean liners are responded to this by -- not only the larger trade volumes but to rising fuel costs and to stricter environmental impact regulations by investing in larger vessels and that means more cargo on ships in fewer ports because the time it takes to load and unload the ships because it is the time they do not earn revenue and given the cost of the large ships it is important they minimize the time they spend stationary, particularly sitting in ports. the ports are adapting to this

change in the global ocean vessel fleet. they are investing in dredging the access channels, investing in the berths and removing air draft restrictions. they have been acquiring larger ship-to-shore cranes that have greater reach and much greater lift capacity. they are densefying their terminals so you can stack the containers higher and also by automation. the investments made by the ocean liners in the ports are often not muched by the land -- matched by the land side portions outside of the gates. increasing capacity at ports has created congestion in port gate gateways around the world and in some parts of the u.s. in locations where land side planning and investment is not exactly what is happening on the water side, being the ports and

what is sapping in the access channels and the global fleet of vessels. so the shorter term issued such as the severe weather last year and the transition of ocean carriers moving away from providing chassises to their customers and allowing the financial sector step in and lease these has not been very smooth. and to some extent, this has impacted the effect of the larger vessels on congestion issues. and to what we would include the productivity losses that have occurred at the ports during the contract negotiations. but from my perspective we see the shorter term issues as masking some of the longer term trends driven by the larger vessels and therefore causing

congestion problems we would expect to see in the u.s. supply chain. it is important that where we characterize freight movement is gaping at the expense of the u.s. ports and therefore the u.s. logistic industries. and to sum up i believe that failure to cut costs across u.s. ports by which i do not mean just cutting costs in ways that create competition between u.s. ports but rather cutting costs for the -- for the entire port system is required, otherwise u.s. ports will not be the winners in competition with the foreign ports. the spotlight on this is on the inland segment of the common road page, on railroad lines to provide service to market close to the port and infrastructure to access to markets further away. to defend our exports and

imports we need to focus oint inland segments of the product flow path on the railroad road lines, the crossings, the container transfer facilities and for trucks we need to think about dedicated freightways these will make u.s. exports more competitive. thank you. >> thank you, dr. kemmsies. next we have mr. john grueling. he is a member of the coalition for america's gateways and trade corridors. welcome, sir. >> thank you, madam chairwoman and members of the sub-committee, thank you for this opportunity. today i'm representing the will county center for economic development and the coalition for america's gateways and trade corridors which is a diverse group of 60 public and private organizations dedicated to increasing investment in america's multimode

infrastructure. and i'm here as ceo for the economic development and our responsibility here today is marketing the largest inland international container port in north america. will county has railways, several commercial waterways and last year we transported $65 billion worth of goods that are grown and delivered throughout the united states and the world. our first and last mile infrastructure requirements today total 3.6$3.6 billion of new investment just in our county and that does not include bringing our existing road infrastructure up to a state of good repair. our needs extend far beyond roads. increased utilization of freight by rail as we've heard is resulting in more at grade rail

crossings and impacting public safety. we need at the local level more infrastructure levels and to accommodate the freight of the future. the gross margin of freight has been stated. we believe by 2045 that increase will be about 45% putting more pressure on both existing and future infrastructure for freight. meanwhile 95% of the international consumers are now outside of the united states. so being at the beginning and the end of the -- of a major global supply chain u.s. companies have to understand and the government needs to understand that we need good infrastructure to reach those markets. u.s. government infrastructure investment as a percentage of gdp is currently less than 2%. our trade partners, canada china, mexico are spending 2-5

pipeline times more than that in infrastructure. and it can't just be mode that we look at when we talk about infrastructure. we need to look at all modes and make them work together. air, truck rail and water are together the key components of the global supply chain. the global situation is getting worse in a lot of respects but we have the opportunity to take advantage of what is going on internationally in the economy. the coalition for america's gateways and trade corridors asks congress to take the following steps in the upcoming service and transit operation. first we would like to you establish a freight program containing dedicated and flexible funding. freights should not compete with other mobility needs. freight movement occupies a special place in our transportation system as the elements supporting commerce,

competitiveness and that all-important word -- jobs. it should -- we should have a dedicating funding such as a freight trust fund that is committed to stoking our economic engine by approving efficiency safety, reliable and speed as which goods are moving. and second fund at a minimum of $2 billion per year a grant program. products of regional and national region with a grant program is needed to prioritize federal funding of projects that meet serve performance criteria to advance economic goals of this country. by prioritizing projects, we can identify important public benefits as well nonfederal support. a $2 billion grant program could leverage many times that amount in private investment and infrastructure. third, ensure robust economic investment in all modes.

where public benefit is derived, public investment must be made. because where roads come together, public assistance is needed to close the funding gaps. including rail access to cargo logistics or transfer facility, tunnel and bridges for port access and border crossing capacity enhancements and finally modify the national transportation policy to make it multi-ind modal and make it in the secretary's office and give it the attention it needs in our country to keep it healthy. thank you. >> thank you very much. we'll begin with a first round of questions five minutes. ly start.-- i will start. mr. bessac you talked about completing in a global market

and the effect that has and being with cargill and the emphasis with port, can you tell you what percentage of pork in this country goes for exports? >> certainly. senator, the pork is much larger than beef. about 25 -- between 20-25% and about 10% of beef is exported. >> and when you are looking at delays at our parts and you see other countries stepping forward and being able to fulfill some of those orders do you know what share of the market your company has lost and how you see that rippling effect throughout the industry? >> well, i guess going to cargill's share goes to be a bit

difficult. if you look at the u.s. pork or u.s. beef industry, we certainly has been the largest exporter around the globe. but as we have dealt with the congestion in the sports, also issues like currency and other forces in play in the market we've seen a substantial increase just in the past year to countries, the e.u., chile and i think certainly in the last couple of months have seen a substantial decline in our volumes. >> do you think that will be a permanent decline? will we be able to get the market back once the customers are used to have having new trading partners? >> i think any time you disappoint a customer it takes time to build trust back. and as i referred to in my testimony, there is a tremendous amount of potential for both beef and pork exports on the

global scale. we have a product that the world is looking for and values. i certainly believe that growth potential remains. but there is no doubt that we've disappointed our customer-base, primary japan, korea and in china over the last couple of months and that will take some time to rebuild trust. >> and in disappointing our customer base, what has been the loss in dollars to pork producers an the economy here in this country? >> well i don't know that i would be the best one -- i think north american meat institute estimated $40 million to $50 million per week. i could probably give you a better example. just this morning we have about 15 containers of chilled pork product en route to japan that our customers are either asking,

can you guarantee us it will arrive in a useful form with shelf life or not? and so for me that is about a million dollars i have to decide whether i'm going to put that into a port system and either slow down or close -- closing being a complete loss. so i hope that gives you some perspective. >> yes, thank you. and miss farmer with bnsf, i'm sure you have to look at the possibilities of a shutdown and a shutdown that would last for a possibly extended period of time. how does that affect the railroad in planning and what impact does that have your customers and on your thousands of employees that you have? >> sure.

so an example of this would be this weekend we were notified by the pma that vessel gains would not be working. and so what that -- the effect that has on our railroad is that in an average week during this period of the year, we would be moving somewhere in the neighborhood of 60 trains off of our docks in southern california. that number is reduced to 30 trains per week. the impact that has is that we cannot move the freight that wants to move off of the west coast so we'll move a limited amount off of the west coast into the interior of the u.s. and limit the ability for us to accept freight in the inland hubs and we have to turn the freight away that wants to move to the coast and in addition i talked about the capital expenditure, we have to restore that across the railroad because

we cannot send the volume out to the port and when we do that it sits on the main line and it causes a ripple effect in addition to the intermodal customers and so the impact for us, senator fisher, we cannot move the freight through and not using the valuable resources that we have. >> and that impact when you see the freight migrate from the west coast, what impact does that have on a local community? >> absolutely. i think when we look back at history and we know that during 2002 freight has permanently migrated away from that, to canada and to mexico. and we know that because of that, the local freight is not ending up in those communities and additional expenditures need to be made somewhere else that can be used when that freight can be used throughout the country. >> thank you very much. senator blumenthal. >> thank you, madam chair.

there seems to be no doubt among any of our panel members that solving this threatened impasse or crisis on the west coast is necessary to america's near term and longer-term competitiveness, is that correct? >> uh-huh. >> but moving on to the broader issue, let me go to mr. grueling's excellent testimony about our ongoing failure and it is a kind of slow-motion implosion of american competitiveness, the ongoing failure to spend more than 2% of our gdp on infrastructure investment, which is compared to 9% by china, 8% in india 5% in europe, and even in mexico 4%. and it extends not only to

rhodes and bridge-- roads that are crumbling and decaying and decrepit but not only into the crossing. in valhalla, new york, days ago we saw the consequences of possibly -- we don't know the causes yet -- but possibly a rail grade crossing that would have been made safer and could have prevented the deaths and injuries that occurred there. the fact of the matter is there are more than 2,000 crashes and collisions every year at our rail grade crossings causing more than 230 deaths and more than 700 injuries, not to mention the economic costs of those collisions which are very difficult or impocket to calculatecal -- or impossible to calculate.

that is just one failure to invest in infrastructure. and let me ask you as the $2 billion that you recommend for a fund for investment. would it make sense to do it through a public financing authority or infrastructure bank such as has been proposed and advocated by myself or other members of this committee, a bipartisan proposal that would make available not just $2 billion or very possibly more? >> i think the concept of a set-aside through a public infrastructure bank broader utilization of public and private activity bonds, along with some other finance mechanisms, i think we need to bundle these together. anything that costs a lot of money these days will take more than one source or resource to make it happen. and back in illinois we don't like to talk about gas tax but we think in illinois to solve

some of the state road and infrastructure problems, a gas tax is something we should be looking at. but i do believe that loan guarantees, broader use of the existing bond programs tifia and rif would help in meeting the demand that we have and i do believe that the multiple solutions will be necessary. >> my understanding is that both tifia and rif are under-utilized and billions of dollars have been left on the table in terms of internal problems highlighted by the inspector general recently, would you agree with that. >> would you -- i would agree. i think the time of the preapplication and that review and the uncertainty that comes bo when there is -- about when there is delays when a hot

project becomes not other so hot of a project when they look at other pieces to accomplish. but broader of the utilization of the funds and making sure we are using our full complement every year would go a long way. i think better utilization of existing programs makes sense. >> and rif is a multi-billion dollar opportunity that is lost, literally every day, to american intermodal transportation and i welcome the emphasis that all of our panel have put on intermodal transportation because as you've expressed it is the transportation growth process of the future. >> that is right. >> do you have any differences with the points that mr. grueling has just made? >> i would say from bnsf's perspective, certainly as you

know, we are privately funded but we certainly have a vested interest if making sure that the chain runs sufficiently and we on freight. we think that is a good thing. >> through an infrastructure bank? >> again we don't necessarily want to drive that decision but we certainly want to be part of the conversation. >> thank you. my time has expired. thank you all. >> thank you, senator blumenthal. senator daines. >> thank you madam chair. i get to represent the state of montana. in our state it's agriculture. it's a $5 billion industry. as we know in ag you have to be able to export. like senator fisher we don't have a lot of ocean front property in montana. i don't think nebraska does either and so the supply chain becomes critically important. in fact 80% of montana's wheat

is exported. it's nearly $1 billion in 2013 and primarily through the west coast ports. we're very proud of our ranchers and our farmers who not only feed america, they feed the world now. miss farmer i heard concerns from our producers in montana about the back log we had, nearly 3400 cars passed through the region. can you tell us what the current status of the rail back log is now in montana? >> as i have responsibility for intermodal, i'd be happy to follow up with specific statistics around the back log but what i can tell you is that like any measurement on a year-over-year basis, because of the capital that we've invested, because of the milder winter that we've had, by any metric that you look at we are far

improved from last year. we are making significant progress from delivering the service that your constituents in montana have come to expect from us and we will continue to make progress along those lines. what i would say is concerning to us is one of the ways that agricultural products get to the west coast as we discussed is through the use of containers that can move in hopper cars or containers. what i can say is that as we limit the in bound flow of containers into the interior of the country, it makes it more difficult for me to be able to move that product for export so that's certainly of concern to us. >> well, i can tell you too, last summer our montana ag producers were not so concerned about the rail back log, it was the issues going on with the west coast ports. i used to be a supply chain guy myself. i worked for procter & gamble for 12 years was in the supply chain, and have anna preesh appreciate

the chain is only as good as the link. if we can't get the harvest to market then we cannot realize the great potential of our ag industry. the port of vancouver and labor dispute that we had going on that we see going on in long beach and in l.a., it is having a great impact in creating dwindling confidence on i think our global market, the ability for us to be able to deliver. in thinking about our global opportunity as our competitors continue to improve their products, the differentiator long term will be in excellent customer service to ensure when we say the product is going to be there, it will be there. and as has been said when we lose as center fischer mentioned, when we lose the ability to deliver our customers will look elsewhere to find those same products.

in fact, i got a rather haunting e-mail from the president of an outdoor products company that manufactures in montana. they have leading global market share. they're the only producers of these products that produce in the united states. the rest are producing in china. this u.s. manufacturer the president of the company e-mailed me about his concerns what's going on as we speak today about the west coast port slowdowns, the international long shore and warehouse unions are putting their interests, he says, ahead of their customers and he said this. if something doesn't happen soon we'll have no choice but to reduce our current hiring plans and potentially layoff some of our current staff. in your view, what if anything, can be done as we look at these challenges right now with these west coast ports being virtually either slowed down or shut down? >> you know certainly we're not party to the negotiations between the tma and the ilwu, but it is clear to us that there

needs to be some speedy resolution of this. the biggest opportunity that i think is in front of us is that it is going to take us several weeks to work off the back logs that exist once some type of resolution comes to bear. we have an opportunity in front of us and that is that chinese new year is upon us. that will give us several weeks of reduced freight in bound on the west coast that will allow us to catch up. i couldn't agree with you more that it is very concerning. we need to find a way to be able to resolve this but, again we're not party to those negotiations and as such, you know, we just -- the urgency is really where we're focused. >> thank you. i'm out of time madam chair. >> senator clovochar. i'm losing my voice here. i want to thank everyone for coming and especially mr. bessac from cargil which is a great

minnesota company. biggest private company in the country. we have worked extensively with them on these transportation issues, so thank you for being here. i am very glad that we were able to pass the user fee increase from the river act and i appreciated all the work that people who transport on the river did to get that bill done. as you know, it was part of the able act. can you talk please about what the increased revenue will mean for upgreating locks and dams on our nation's waterways system? >> senator, i'm sorry my area of expertise is in port/exports. i know cargill is very interested in building a strong infrastructure so that we can compete on the global scale. i'd be happy to get you a written answer from our corporate affairs staff so we can answer that. >> okay. you're glad that we passed the bill so you can get more infrastructure improvements?

>> >> yes. >> that was supposed to be an easy question. >> could talk about how this works and if you're able to get things out as mr. daines talks about. we're on lake superior so the port matters so much. i was once placed on the ocean committee. i was the only senator that didn't have an ocean on the ocean subcommittee. he said next year come back and ask for one. in any case can you talk about how inland states depend more on this river traffic? >> absolutely. as you know, the demand for safe wholesome food products around the world continues to increase as population increases and we need very effective, reliable modes of transportation whether it be a river, railroad truck

or ocean vessel to efficiently move those products to their best value consumer and our farmer and rancher suppliers depend upon us to be able to take those crops and move them efficiently and get the best value so we can in turn pay them a good value for the hard work that they do raising those crotches crops and that livestock. >> thank you. can you talk about the ports and the rail and the intermodal issue? >> over the last 15 20 years the number of hours of outage -- unscheduled outage at america's locks and dams particularly on the mississippi waterway has increased substantially. it has made barge traffic less predictable and agricultural shippers have been finding alternative routes. and perhaps the easiest way to

see this is when you look at the port of new orleans share of u.s. agricultural exports, it used to be close to 65% 10 15 years ago and today it's about 45%. it is an impediment for formers to get product down the river reliably and loaded onto the handy max vessels. this does create permanent damage. rather than look at threats of job cuts or not making investments, there are actual quantitative facts that can be assessed here. under a free trade agreement there are quotas for the trade of agricultural goods, corn, soy, and other grains and oil seed. if a shipment is delayed beyond a calendar year, then the quota for that year is made. you'll allow small growth rates say 2 to 3%.

if they don't make it then it's applied. it will be filled by others. >> exactly, it will hurt us competitively. >> the other question on public/private partnership. the neighbors to the north and south are bringing goods in from mexico and canada. canada is the biggest trading partner, it's placed on international falls in minnesota. there was an issue from a bridge that i'm not going to get into. i've been working on this as hid of the interparliamentarian group with the canadians. we started to do a lot of public/private partnerships. and so do you think this is a

smart way to go? i want to get it rolled out on the northern border as well? >> we definitely think it's a smart way to go. connecting modes of transportation and waterports. knowing that the users will pay their share knowing that money is being invested on that specific infrastructure. we can't afford to build you know $150 million bridges without some infusion of private equity. it's in canada. we have a great example down in the ohio river of a toll bridge that was built with private equity funding. one of the construction companies actually paid part of the bill. keep their people employed. so it is a good way -- a good approach to these. >> thank you. just to be clear, this project is more about the customs process. >> right. >> you know it's to try to speed up the back and forth

between the countries with the new dawn in north america. so thank you. >> thank you. thank you, senator. senator campbell. >> thank you, senator. thank you for having this important hearing on movement of freight. when i think of this issue i think of washington state and all the products that come through on their way to asia. we have a short period of time seen something like a doubling in the size of the ships over the last five years so yes we have a lot more capacity and we obviously have a rising middle class in asia and they want higher -- they want more u.s. product so the question is what are we going to do to meet that demand as it relates to improving our infrastructure. one of the things that's occurred is the recommendations of the freight mobility board which was chaired by mort downie. somebody you're familiar with, mr. greuling and ms. farmer, somebody from the railroad

participated in that. the question is how do we move forward on those recommendations and would you support a dedicated funding source to freight so that we can raise the importance of why moving this product is so critical to our economy and infrastructure and that tiger loan isn't going to get it done. >> are you asking me? >> yes. ms. farmer and mr. greuling. >> certainly we support anything to make our ports more competitive. we're excited about the working together of seattle and tacoma so we will certainly stand together to work with them. we believe that the tiger grants were a good thing that we need more funding around those kinds of issues and so from our perspective, anything we can do to make them more competitive we're certainly in favor of that as well. >> senator, certainly our four points with the coalition that number one is to establish a fully funded dedicated freight

program, and we believe that that needs to be at least $2 billion a year. and this is not a program that's going to pick winners and losers in the transportation field. this money should be spent on what makes the most economic sense in terms of performance for the entire system. and we believe that setting priorities on a national scale for the projects of national regional significance is one of the mechanisms to do that, but -- and also the establishment of a separate freight office within the u.s. dot to strictly focus on the multi-modal needs nationally. >> what do you think we need to do to get people to understand this from either an economic impact or some of the things that your organization has done in studying the economic development associated with this? >> in all -- a lot of what we do at the center and through the coalition is education. you may see this brochure that

we recently produced through the coalition, follow that on, and it shows the supply chain of an almond to germany in hamburg. i think that helps. i think local jurisdictions and state jurisdictions need to understand and look at freight more on the national level and think in terms of interconnectivity, not just what's good for elm street or what's good for my river, but look at the whole national system and make sure that they're aware that what we do at the national level and the local level interconnect and we really need to make sense of that when it comes to funding. >> mr. bessac did you have something you wanted to add to that? >> the only -- i guess more of a comment, senator. you hear lots of numbers talked about, $2 billion for infrastructure infrastructure. i go back to the numbers senator fischer mentioned in a port.

if the ports were closed today, it would be $2.5 billion per day to the u.s. economy. and i would submit we're very close although they're not officially closed, i think we're very close to that at this moment. and so i guess my comment is simply it seems like a very wise investment in an expense that the u.s. taxpayers and consumers are paying today daily because we don't have the free flow of goods. >> well i think you know, we learned the lesson in washington because we're at the tip of the spear and so that congestion caused so many problems that we learned that if we were going to be competitive and not lose that business, that we had to make the improvements. now we need the improvements made all along the system, not just right there. we need to understand that we will lose the economic impact.

people will go to other ports or start buying products from somewhere else just because they can get more predictable time frames for its delivery. >> thank you, senator cantwell. i believe we have some more time and i know members have more questions so we're going to do a second round. take a big sigh here. but i'm interested mr. bessac and ms. farmer, when we look at freight transportation systems and we look at the midwest and some of the challenges that we have with, how would you address those challenges where we have that lack of containers and other members of the panel if you would like to jump in on that as well. >> certainly i'll go ahead and start, chairman fischer.

i think that what you'll see is that we've proven in normal times that we have sufficient containers to be able to move the product that wants to move export. in fact, last year we moved 236,000 units of grain in a box back to the west coast. we worked very closely with the ocean carriers and the trucking companies and they are able to scale relatively quickly to be able to meet the demands. what bnsf has been very focused on is improving our velocity, because as you well know when we look at the speed with which we can turn these assets, we can create more capacity for the supply chain in the market. if we invest in our infrastructure, if we have expansion in our infrastructure so we have a thoughtful approach to investing to get us the velocity we need which will generate the capacity for the midwest to have the containers they need. >> anyone else? >> there is a structural deficiency in that for the exports and our exports tend to

be agriculture, large-scale capital goods and energy products. these come from places where not a lot of people live and therefore not a lot of containers arrive for imported goods so there is a structural gap that has to be addressed. and from where i sit and what i see in the data, i don't think it will be addressed very simply by trying to match or reposition containers because every time you have these congestion issues, things do get paralyzed. it may be necessary to pursue an alternative solution such as using 53 foot domestic containers and then doing cross dock operations like we do with the imports, but in reverse so we can press these onto the container ships. >> thank you. >> senator the demand is there. empty containers, quite frankly are in a premium in certain locations. in our case we are receiving grain and dried distiller's grain and corn and soy bean meal from six different states that

are being trucked in, transloaded in and shipped out on the bnsf and the u.p. to the west coast. when you think about the cost to that transportation just to get to an empty container shows clearly that we've got this very high demand. and really we can't afford to build more ports, we just need to use the existing ports as efficiently as we can. that applies to both inland ports and water ports. that's going to be the solution. and tie it altogether with highways and railroads and we've got a winning situation. >> that ties in to what i want to ask dr. kemmsies with making our ports efficient. what role do you see for automation? is that going to help make our ports more efficient more competitive and what success do you see us having in that regard? >> well, i don't think it's possible to operate the ports with the larger vessels coming

without some degree of automation. it's not eventually full automation. these ships, as i've mentioned, in testimony earlier, they have to be on the water as much as possible, not sitting at ports. so if you were to look at an 18,000 teu vessel, which is the largest size that's really currently operating, it takes 4 1/2 days if you can do 35 gross moves an hour on the 24/7 basis. to maintain productivity like that without some form of automation i think is impossible. i have yet to see it demonstrated, so we seem to have to move in that direction. if we do that then i do see u.s. ports being able to maintain anna ability to compete particularly to the north and the south. >> thank you doctor.

senator blumenthal. >> thank you. what is the cause of the shortage of container cars in this country? i'll ask that question to whomever or all of you if you want to answer it. >> senator i think from our perspective i'm not sure there's a net shortage. i think the real issue is where the empty containers are versus where the demand for the containers is. >> and what accounts for that imbalance? >> well, a lot of it has to do with the system that we have set up, the intermodal system today. we can handle over 3 million containers at our yard. 1.5 coming in, 1.5 going out. places in down state illinois, minnesota, indiana don't have that kind of in-bound capacity, therefore, they don't have the available containers to ship out. it's a market balance to some degree. building more containers is not

necessarily there. >> senator blumenthal, what i would say is i don't believe that there's a net shot taj of containers. how do we get them to the interior of the country. with that, with bnsf, what the western roads have done is that we have found ways to find the ability to load those containers consolidate grain loading around our intermode al hubs. so where there's a surplus that is naturally made by the goods that come off the west coast for example, at our logistics park kansas city facility. the majority of grain or very large percentage of the grain comes from the state of kansas. so as we can draw that closer to our logistics park, we then have the empty containers there that can then be loaded out. in addition to that, we have to keep continuing to invest so our velocity is good so the containers are there. i don't any in total there's a net shortage.

the issue is how do we stay competitive through the ports, over the railroads into the right places to get those containers into the interior of the country. >> but the ports are just one key to a multi-modal system. >> absolutely. >> where rail is obviously very important to moving a lot of those containers to the right places so they can be there at the right times? >> absolutely. >> let me ask you, you know, going back to the infrastructure investment issue, and mr. bessac mentioned this figure of $2 billion, the possible loss of $2 billion if this impasse or crisis continues which would be very, very very unfortunate but it strikes me as an example of how possibly there are costs to lack of recognizing the porchs importance of investment and smart policy.

so what somewhat perplexes me is why the folks who run our transportation system, including your railroad and others who are here have not been more vociferous or vehement advocates of specific solutions to the infrastructure problems in the way that maybe will move policy makers, including folks who are sitting on this panel to take some action. in other words we'd welcome you to be more vigorous advocates for the system that is your responsibility and trust to run and ultimately your shareholders have very significant investments. >> absolutely. as i mentioned earlier, senator blumenthal, we agree from the standpoint that we absolutely have to continue to manage our network, invest in capital

expenditures that make sense going forward. we also want to -- we have a vested interest in remaining engaged in that conversation. we believe that a national transportation policy is a good thing with a focus on freight and so i think that we've been very active relative to those discussions and participation in national transportation policy planning. >> thank you. thank you all for being here today. >> thank you senator blumenthal. senator daines. >> a follow-up question and thank you, madam chair. senator blumenthal i completely agree that we need to continue to invest here if we are going to maintain our global competitiveness. i think, ms. farmer, you mentioned about some of the roadblocks of proposed export facilities we're experiencing on the west coast. i was out at one of those proposed facilities last summer. the gateway pacific terminal. i was standing there with a

member of the rail union from montana. i was standing with a tribal member from montana that would benefit from expanded exports. we see both the jobs as well as the tax revenues that would be created by expanding exports and yet delay after delay after delay in trying to get this port built, and it sits literally right in between two existing ports. it's zoned properly. it's environmentally sound and yet there's great concern that how in the world are we ever going to move forward here in infrastructure investment with endless delays and uncertainty. i'm looking for help here around what we can do to try to -- i'm not suggesting there's not a thorough review process but one that provides some degree of certainty and reasonablebility in that process. ms. farmer any comments on that thought? >> i would say, senator we certainly agree. we are working very closely as

you know with the state of montana to put together our export platform. we like you, are anxious to have the ability to continue to grow, to be able to export. you know we believe that there needs to be some improvement, whether it's around permitting reform. we've talked about that multiple times in the past. we believe that extending the environmental review position of mat 21 to the railroads would be helpful and you know, further expediting the process looking at these things concurrently. basically reducing the time line that these things take but in general what i would say is that we completely agree that we are anxious to export product to continue to grow to improve the competitiveness of the u.s. supply chain, both your exports and what we've talked about here as far as imports as well. >> we've talked about the need for the state of the art productivity and so forth. the proposed ports would be

exactly that. mr. greuling, what are your thoughts? you're somewhat of an expert on this issue. >> senator i think that we suffer from jurisdictionalitis with three four, five different governmental units controlling the infrastructure, the federal government has this same issue. the agencies they have to touch the time it takes to go through the nepa process the environmental review. in fact, i would comment that we have actually seen some improvement on that under leadership from congress and the administration. and we applaud that. it shouldn't take 10, 12 years to do an eis statement on a bridge. clearly that is an issue. so multiple agencies maybe working a little closer together on collaboration and, again, we think a national freight office could help sort of quarterback that initiative especially for these major important freight

projects. >> i think what's highlighted today in some of the testimony is what's happened with these choke points on our west coast ports allowing more optionality and so forth when they come up. if we only have one way out it's nice to have multiple choices to ensure we protect our economic interests and compete globally. thank you. that's all the questions i have. >> thank you senator daines. we've been joined by the chair of the committee, senator suh. do you have questions please? >> thank you madam chair. senator blumenthal, thank you for holding this hearing. it's an important subject. i appreciate the fact that your subcommittee is focused on this. reliable supply chain is important to our economy. the ports are a vital link to that chain. what's frustrating are things you can't control and these things are i guess i would say

self-imposed problems. they're really unforced errors. they are if you try and quantify this it's having profound impact on the economy. i know some of you in the panel have already testified to that effect. and cargill 40 million a week, i've talked with tysons in my state in south dakota and they've shared with me that we've got beef and pork sitting in freezers sitting in the ports instead of asian markets. while we've got these ships waiting to export our nation's products. that affects jobs. tysons employs 41,000 people. the usga says there are that number of people employed in this. it affects people all across the country. workers in south dakota and other places that are dependent on, like i said a reliable supply chain. outdoor gear inc., family-owned business in south dakota. they're a wholesaler receives

95% of its inventory from west coast ports. has been forced to miss deadlines, pay for late delivery penalties and pass up important sales opportunities, including in december, which is the -- of course the holiday peak season. so this is an issue that just really needs our focus, and it's a huge drain on the economy. and i just urge all sides to come to a resolution in this dispute to find a solution as soon as possible. we just can't afford to drag this on and have this kind of -- have our economy pay this kind of price. and if we can get this behind us, we can start focusing our energy and creativity on a lot of the other long-term infrastructure challenges that desperately need our attention as well. in that light i wanted to ask a question. i know that i think all of you have attempted to quantify what some of the financial and economic impacts of this have been, but the question i'd like

to pose is once this is resolved, how long will it take to unwind this and to get those networks working in around efficient way again and where things are sort of normalized. what are we talking about once we get a -- hopefully which will be very soon a resolution to this issue? >> so senator, i'd answer from our side as the exporter. i think it's an excellent question. our best estimate is unchilled shipments, it will take at least a month to get back into a normal flow where we can get those products moving through to the high value markets in japan and korea at least a month. if you move over to the frozen side, the products that we would send to japan korea china, mid east, all around the globe, our best estimate is three to four months before we're back to a normal flow. we've moved through the back log of goods that we have and that

number continues to increase every day. >> senator, from our perspective at the railroad, we certainly stand ready to be able to help the back log, but what i would say is because of the challenges that we face with not being able to move freight, we have had to store locomotives and equipment across our network. so there will be some period of time that it will take for us to be able to go and get those assets reposition them to the port, be able to be in position to handle that. but what i would tell you is we are anxiously awaiting the ability to do that. we will be ready to do that. we have a unique opportunity, as i mentioned earlier before you stepped in, in that chinese new year is coming and when chinese new year hits we will see less vessels that will be headed towards the west coast. it would give us an opportunity if there was a speedy resolution to this current pma/ilwu know dpoesh yagss that we could use

the time to work off the back log that exists at the ports. >> i guess i would reiterate madam chair, again thank you for having this hearing, that this is not something that's confined to the west coast. this is a -- this has a ripple effect throughout our entire economy. having a -- an efficient transportation system is really one of the keys to our advantage, our competitive advantage in the global economy. when you see this kind of thing happen and recognize the impacts that it has, i would just encourage all the parties. the sense of urgency. it's coming to a resolution. we just can't continue to keep this going on and not expect that it's going to have some very, very detrimental and adverse impacts on a whole range of sectors of our economy. thank the panel for your great testimony today.

>> thank you for holding this hearing. you andersen tore blumenthal are joining us on this issue. i know a lot of questions have already been asked. your written testimony -- the inland ports indicates that we've been more impoor oriented than export oriented. can we just expand for a few minutes on the significance of the inland ports particularly with the panama canal development and agriculture opportunities and trade as well as manufacturing. >> most of the growth in trade was on the import side and when we look at the various segments of the freight movement industry in the u.s., the larger projects that were done by rail, by highway and at the port level, they were focused on being able to handle the imports more

efficiently. a lot of the dredging, for instance is not really done because we were trying to export more goods. our goods are very heavy. they require deeper draft vessels, but the motivation when you read the economic analysis or the cost/benefit analysis was essentially focused on the import side. and maybe you can look at it from that side to say well this is an import bias but when we look at the projects and where we haven't had funding for infrastructure, you get the same message. that's what i meant. we have seen a chronic system underfunding and we see a deterioration of the infrastructure there. >> i think from the locks to the ports them sefls obviously i

would be focused on the mississippi river based on where i grow up and where i am, but the inland ports serve a geographic area because you serve a geographic area both ways and i hope we can begin to focus more on those ports. the other question i have for ms. farmer i think you all have tried in bnsf for a long time to do a california project. the california international gateway perfect gateway. permitting delays have been a big problem. i'm working on legislation to try to streamline permitting for railroad projects. do you want to talk about how the kind of problems you've had trying to serve that market in a better way? >> absolutely. so southern california international gateway would be, as i've mentioned, the greenest intermodal facility in the world when built. we've been working for a decade to try to do this. we've faced local opposition and

what i would say is that that is indicative of projects that we see across our network. so it's not just the south southern california international gateway project. we really are in favor of permitting reform. i know and i appreciate your leadership in this area. as i spoke to earlier, we really believe that extending the environmental review position of mat 21 to the railroads would be a great first step. we believe it's important to shorten the time frames. we know that we're not trying to eliminate the review process we're just asking that there be a reasonable time. we need to shorten the time frame that the agencies could possibly look at this concurrently as opposed to sequentially and so it's just important for us that we are able to move forward. the projects that will add capacity to this supply chain. >> may i make a comment on that? we're the program managers for the jasper ocean terminal on the savannah river and the report that we gave the board last year

we pointed out that if we were to start the application process then it would be 13 years before the port could become actually, you know turnkey operational. and then we have to justify this on the basis of analysis, so i had the unfortunate position of having to forecast what volumes will go through a port that doesn't exist in 13 years. so i think this is an example of how far the process has gotten off kilter. >> would you like to comment on that? >> i would, senator. what's interesting about this discussion about freight movement and the problems we have in this country it's all about choke points whether it be a problem at the ports whether it be congestion on the highways, whether it be at grade closing for a rail crossing, whether it be an extended period of time to get permitted for a project, those are all choke points. what's unfortunate about that is

america has a distinct and very unique advantage in this global marketplace and to think that our transportation system is one of the primary reasons why we're being held back on imports, more importantly exports it's almost criminal. it's a shame. i think there's a lot to do better to help with that situation. >> thank you. thank you, chairman. >> thank you senator blunt. any other questions from senators? so with that i would say this hearing record will remain open for two weeks and during this time senators are asked to submit any questions for the record. upon receipt the witnesses are requested to submit their written answers to the committee as soon as possible. with that i conclude the hearing. i thank the witnesses for just great responses here and the information you provided us

today. thank you so much. the hearing is closed.

coming up tonight at 8:00 eastern, today's memorial service for former senator edward brooke who passed away earlier this year. senator brooke a republican from massachusetts was the first african-american to be elected to the senate. the service from the national cathedral in washington tonight starting at 8:00 eastern on cspan 2. join us tomorrow when secretary of state john kerry is set to testify about the requested authorization for military action against isis. he'll be appearing before the senate foreign relations committee and will be joined by new defense secretary ashton carter. see that hearing live beginning at 9:30 eastern tomorrow on cspan.

this sunday on q andrighetto a dr. adrian garr mon will talk about how pharmaceutical companies lobby congress and what medications to prescribe. >> the promotion of a drug actually starts 7 to 10 years before a drug comes on the market, and while it's illegal for a company to market a drug before it's been approved by the fda, it's not illegal to market a disease. so drug companies have sometimes invented diseases or exaggerated the importance of srn conditions or exaggerated the importance of a drug and blanketed medical meetings and magazines meant to prepare the minds of clinicians to accept a particular drug and also to prepare the minds of

consumers to accept a particular condition. sunday night on cspan's q and a. u.s. freight representative michael froman appeared to answer questions on president obama's trade policy agenda including the tpp, trans-pacific partnership, which is currently being negotiated between the u.s. and 11 other nations. also proposal for renewing trade proposal authority which would grant president obama broad authority to negotiate trade agreements with just an up or down vote by congress. the senate finance committee is chaired by senator orrin hatch of utah.

the committee will come to order. good morning it's a pleasure to welcome everyone to the hearing on the nation's trade agenda. i want to thank ambassador froman for taking time being here today with all the obligations he has, i have to said that the trade agenda is looking up since the last time you testified. things seem to be improving with our ongoing trade negotiations for example, while significant gaps remain, the administration seems to be inching ever closer towards a conclusion of the trans-pacific partnership agreement. morale at the office of the united states trade representative after a long period of decline is beginning to rise. of course, there is still a lot to be done and renewal of trade promotion authority or tpa is at the top of my list, but even in that regard things seem to be looking up. compared with this time last year this administration is much more engaged at all levels in

making the case for renewal of tpa. president obama's strong call for tpa in the state of the union was welcome though in my opinion it was long overdue. i hope that he'll follow his latest call to action with a real concerted effort to help us get tpa through congress. here in the finance committee we're doing all we can to help in this effort. although the bill i introduced last year with chairman camp and brockus received strong support, i'm currently working to see if there's a way to address several issues that were raised. we're working with chairman ryan as well. though there may be some improvements we can make to the bill i want to make things clear. the time for tpa is now. tpa is how congress tells the administration and our negotiating partners what a trade agreement must contain to be successfully enacted into law. tpa empowers our negotiators to get the best deal possible for american workers. now to succeed in getting tpa

renewed, we will need an all out effort by the administration to make the case for why tpa is so vital to our nation's ability to fairly engage in international trade and to enhance the health of our own economy. simply put trade means jobs. today 95% of the world's consumers led outside the united states. these potential customers account for 92% of global economic growth and 80% of the world's purchasing power. to maintain a healthy economy we need the opportunity to sell american products in these markets. right now the united states is engaged in some of the most ambitious trade negotiations in our nation's history. the first, which i already mentioned, is the trans-pacific partnership or tpp. renewal of tpa is key to the success of this agreement. without tpa, the administration will not be able to bring back the high standard agreement congress needs to ensure its

enactment. let me be clear here it would be a grave mistake for the administration to close tpp before congress enacts tpa. doing so is to doubt whether congress could have gotten the better agreement, ultimately eroding tpp and jeopardizing passage in congress. there are also some key outstanding issues that need to be resolved in tpp. as i have stated in the past my support for tpp by no means ensures that i will ensure any version of tpp that hans to be submitted to congress for approval. for me the agreement must achieve a very high standard for the protection of intellectual property including 12 years of data protection for biologics and strong copyright and trademark protections. the intellectual property provisions of tpp must also effectively address the theft of trade secrets and ensure effective implementation and enforcement of ip obligations.

provisions to enhance digital trade and address state owned enterprises are also critical as is real market access for u.s. exports. there are other major negotiations that are ongoing and i am confident that renewal of tpa will help -- would help and will help bringing those to successful conclusions as well. most notably, there is the trans atlantic and trade rin vestment partnership. ttip must include financial services regulation and strong investor state dispute settlement mechanisms. the agreement must also achieve a high level of i.t. protection and effectively address the systemic misuse of geographic limitations to create market barriers. i'm also hopeful the administration will be able to conclude negotiations to update the information technology agreement. i expect we will see progress in

advancing the negotiation of a trade agreement and environmental goods agreement. all of this represents a very ambitious agenda for your office and for the administration as a whole. if i haven't been clear up to now, let me restate, tpa must be considered an essential element for all of these endeavors. i believe congressional renewal of tpa will unleash new energy in our international trade agenda helping to propel our economy to greater growth and prosperity. history shows that trade agreements concluded with trade will have trade opportunities and more importantly higher paying american jobs. this year we truly are at the precipice of opportunity. the only question is whether both parties in congress and the administration can work together to put in place the necessary tools to seize this opportunity. i certainly think we can and i will do everything in my power as chairman of this committee to

ensure our mutual success. ambassador, i look forward to your testimony today and with working with you to enhance a strong pro-growth trade agenda. i'd like to turn it over to senator widen for his opening remarks. >> thank you very much chairman hatch. good to be working with you and having the ambassador here. today's global economy seems to move at a million miles an hour. so clinging to yesterday's outdated trade policies is a loser for the millions of middle class american workers counting on political leadership to create more high skill high wage jobs. trade agreements meade to bulldoze the trade barriers and open new markets to exports made by america's middle class, the things we grow and raise build or forage. done right trade agreements can help grow the paychecks of

middle class families. it will take an economic recovery from a walk to a sprint. according to a report by the commerce department international trade administration, many export driven jobs from precision welding to engineering design offer higher pay and more generous benefits in jobs that are not tied to exports. american workers who design products like machinery, electrical gear or transportation equipment can get into the winner's circle when the goods they make are exported. the goal of trade agreements should be to take the fruits of american labor and to ship them to markets around the world. that said it is easy to understand why many american workers are frustrated when they haven't seen a meaningful pay raise in decades or worse, they've lost their job and fallen out of the middle class. when discouraged americans argue

they've been hurt by trade, those voices must not be ignored. those voices have to be heard and those who favor a trade agenda that takes on the challenges of a heighter competitive global economy have a responsibility to make the case that it's going to work for the middle class. i'm raising that issue especially because the president said in the state of the union address, it hasn't always lived up to the hype. it will flip wages help create middle class jobs and expand the winner's circle. it's important to hear what safeguards are going to be in place to ensure that any workers impacted by trade have access to retraining, health coverage and other sources of support that connect them to new opportunities. briefly, i'm going to wrap up by mentioning three key issues.

the first is there must be tough trade law enforcement. there's never been a greater need for the u.s. to back its workers and businesses by strongly enforcing our trade laws and agreements. in the face of unfair schemes by foreign governments and companies that undercut our jobs and our exports, trade enforcement is essential. just ask any one of the hundreds of workers that work in my state at solar world, a solar panel manufacturer manufacturer. when the chinese made an end run around our trade laws, it threatened solar world and its employees, the company fought back and won. that victory preserved 900 good paying oregon jobs. american trade enforcers have to keep at it because china and other governments won't stop trying to get around the trade laws any time soon. with 21st century trade agreements toughen forcement also needs to hold foreign governments accountable for commitments to uphold strong labor rights and environmental

protections. those are bedrock elements of a trade agreement and they cannot be ignored or pushed to the sidelines. the second issue to address is technology. just as containers changed trade in the 20th century, the internet is changing trade in the 21st enabling more efficient ways to exchange goods and services internationally. three decades off in a town like mount vernon didn't have the internet as a tool to access global markets. today that entrepreneur does. that access could be direct or through internet platforms. the nation's trade policies must take advantage of economic areas where there is clearly advantage u.s.a. that means promoting and protecting a free and open internet, keeping open what is in my view the shipping lane of the 21st century.

the last point i want to mention is transparency. the american people have made it clear they are not going to accept secretly written agreements that don't see the light of day until the very last minute. that was too often the way things worked in the past. it's not good enough anymore. nor is it enough to respond to important questions with the same inadequate refrain that somehow some way people are going to benefit from trade deals. the american people have a right to know what's at stake in negotiations before they wrap up. our trade policies are stronger when the american people are part of the debate and when their elected officials in congress can conduct effective and vigorous oversight. furthermore, transparency is also critical for trade promotion authority bill. once it's ready that bill must be available to the public and there has to be a fair and open process for its review and consideration and chairman hatch and i have been discussing these

and other issues. finally, whatever a member of this committee feels with respect to trade let's have a serious debate and work together on a bipartisan basis to find as much agreement as possible. my focus is going to be on finding new opportunities to sell red, white and blue american goods overseas, helping our businesses create high skill, high wage jobs and growing paychecks for middle class families. chairman hatch thank you for the opportunity this morning to discuss these important issues. we're glad the ambassador's here and i look forward to his views. >> well, thank you, senator widen. we appreciate your work in this area and we're highly hopeful we can continue to work in a bipartisan way to do this very important work. well we're so happy to have you here, mr. ambassador, that i don't think you need an introduction beyond we're very pleased to see you working in

this area. we believe you're one of the best people we've had in this area and we intend to work with you and ensure that we get this work done. you come here with all the credentials and an awful lot of experience in this administration. so we're looking forward to working with you and we'll turn the time over to you. >> well, thank you, chairman hatch, ranking member widen, members of the finance committee, thanks for this opportunity to talk about the president's trade agenda. 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 american middle class. at ustr we're advancing those goals by knocking down barriers to u.s. exports and leveling the playing field for american workers and businesses of all sizes. as we work to open markets around the world we're -- >> telling the american people the truth. you're trying to run this through congress on a fast

track. it's going to hurt the american people. they're going to off shore our jobs and lower our wages. >> let's have order. all right. remove this person from the room. anybody else -- anybody else does this, we're going to -- >> be able to protect our workers from deplorable conditions. the american people are -- >> no dpp! >> okay. >> supersized tax code ksh -- >> remove these people. a democracy, not secrecy. >> no dpp. >> no gpp. no gpp! no gpp! no gpp! no gpp! >> all right.

let's take -- now, look the committee will be in order. comments from the audience are inappropriate, out of order. if there's any further disruption, the committee will recess until the police can restore order. let me say this, i understand that some people have strong feelings about the subject we're talking about today. that's fine. the first amendment guarantees your right to express your views, but we have to allow civil discussion to occur in the context of this hearing. so far, people who are protesting, i ask that you respect the rights of others, respect this committee and remain quiet so the hearing can continue. and we would appreciate having the signs removed, as well, show some courtesy here. but we're not going to put up with it. and if we have to recess this committee, we will, which would be a shame. but -- and we'll recess until order is restored. so let's have no more of that. and i ask -- i ask our capitol

hill police to make sure that we don't have any more of this type of activity. we turn the time back to you. >> you're not representing your people properly. no, you're not. take him out. >> corporate -- costing americans jobs. >> okay. okay. mr. ambassador? >> as we work to open markets around the world -- >> if any signs go up again we're going to throw you out of the meeting, too. let's stop the cheap politics. ambassador? >> mr. chairman. as we work to open markets around the world we're enforcing our trade rights so that american workers, farmers, ranchers and businesses.

1/3 of our economic growth. and most recent years on record, u.s. exports reached a record high of $2.3 trillion and supported a record breaking 11.3 million jobs. at a time when too many workers haven't seen their paychecks grow much too long these jobs typically pay up to 18% more on average than nonexport-related jobs. over the past year, i've traveled 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, i've heard the same resounding message. 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. these companies are able to increase their sales and payrolls. and the success is all the more impressive when you consider the united states is an open economy and others aren't necessarily playing by the same rules. that's why we're 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'll be faced with a race to the bottom and 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 transpacific partnership or tpp. the contours of a final agreement are coming into focus. and we've 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. at the november tpp leader's meeting, all 12 countries reaffirmed their commitments including a comprehensive high standard agreement as soon as possible. another promising area is the transatlantic trade and investment partnership. with the new european commission in place, the united states and the european union are moving forward with a fresh start in the ttip negotiations. which will build upon the $1 trillion in two-way annual trade. in november, president obama and eu leaders reaffirmed their commitment to an ambitious, comprehensive and high-standard ttip agreement. at the world trade organization the united states is working to conclude a wto 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.

we look forward to continuing our efforts to engage the public, stake holders and members of congress in a robust discussion about how we're opening markets and creating opportunities for american exports. how we're raising labor and environmental standards to level the playing field for american workers. how we're promoting innovation and creativity as well as access to its products. how we're ensuring the 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. as we move ahead we're committed to providing maximum transparency, consistent with our ability to negotiate the best agreements possible. we look forward to working with this committee and others in congress to determine the best way to achieve that goal. mr. chairman there's no other area of policy that reflects closer coordination between the executive and congress than trade policy. to further strengthen that cooperation as the president made clear last week we look to congress to pass bipartisan trade promotion authority.

tpa puts congress in the driver's seat to define our negotiating objectives and strengthens congressional oversight by requiring consultations and transparency throughout the negotiating process. the previous tpa legislation was passed over a decade ago. and updated tpa bill is needed to address the rise of digital economy, the increasing role of soes and to reflect the latest congressional views on labor, environment, innovation and access to medicines. tpa also establishes the time line and process for the trade agreements we bring home to be reviewed, not only by congress but also by the american people. tpa is congress' best tool to ensure there's ample time for public scrutiny and debate on u.s. trade agreements. and 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 other programs including trade adjustment assistance, which expired in 2013 and the program

well before its expiration in september of this year. we can only accomplish these shared goals and priorities through strong bipartisan cooperation between congress and the administration. together we can assure that our trade policy continues unlocking opportunity for all americans. once again, thank you for the invitation to testify, and i'm happy to take your questions. >> thank you, mr. ambassador. last year i expressed my disappointment that you refused to bring a wto case against india. refused to grant a patent on an important drug that treats hepatitis "c."

their rationale is based on a patentability standard. it is out of step with the rest of the world in which many believe is inconsistent with the obligations under the world trade organization. now, would you express to us today your plan to take meaningful action against india's breaches of our various companies' intellectual property rights. >> i returned yesterday, as a matter of fact, and in all of these areas, we have laid out a work program with the government of india to address these and other outstanding issues. recently, the government of india published a draft

intellectual property rights proposal, policy proposal that is now open for public comment. and we are in the process of providing comments on that draft proposal. and we are committed to continuing to engage with them to underscore areas of work that needs to be done and copyright in trade secrets, as well as in the area of patents. i believe we've got a good dialogue going now with the new government. >> i hope you'll follow up on that. china's leadership continues to pledge that the market will play a greater role in china's economy. yet, if the government continues to use laws instrument of industrial policy, this is increasingly pronounced in the use of china's antimonopoly law. now, how will you ensure china administers the law in a nondiscriminatory and transparent manner. >> well, this has been an area of strong interest of ours. at the recent joint c