police department is similar to the community it polices? >> i believe that. and i was asking you that, because i wanted to share some of my real life experiences as a young african-american male. and why i think it's so important. first time i was pulled over, i got home from college i was on st. charles avenue the fancy part of town in my mother's car, and i didn't have my license on me. black officer stopped, and he went through the process to get my information, ran it came back to the car and said, i see a morehouse sticker on the back of your car. you went to more house? the man can't ride your back if your back's not bent. you need to go home. i never forgot that. while i was in the legislature i saw a white officer stop a car

full of white kids on the state capitol grounds he gave them a lecture and called their parents to come get them. in all of my experience, if that that white officer had stopped a car full of black kids, i don't think his answer would have been to lecture and call the parents. it may be the culture. you have to look at the entire system whether diversion programs are being applied evenly. once a kid gets a conviction his life goes in a completely different direction. he has a harder time getting financial aid to go to college. he has a harder time getting a job. and all of those things, and without a job, and without being engaged, it's hard to be a good parent. we have to make sure that our

law enforcement scheme. our law enforcement practices is not adding to the hurdles that many people are going to face anyway. so the question becomes how do we ensure that those officers who have a lot of discretion when they make a stop how young african-american minority males and women feel that that officer would give them the same lecture, same break as an african-american officer. officer who's looking at their vested interest. i hope you can answer that. >> the use of discretion is always going to be scrutinized. i reject the notion that every time a white officer stops a car full of black kids they don't necessarily go to jail and have their -- >> i don't think it's every -- it's going to be the majority of the time. >> okay. and if it's -- let's move beyond

that. when i talk to young people about, young people of color in a significant black population, i talk about lifestyle choices. when you engage in behavior and make flawed lifestyle choices, there has to be some accountability. it doesn't mean your life should be ruined, maybe there can be a learning experience. i don't think it will rest for a small amount of marijuana early in your life, it's going to be a life ruining experience it's not. will you recover. the biggest virtue greatest i should say that my parents instilled in me product of a two parent family, the ability to overcome obstacles. you make mistakes, you're going to fall down, you're going to fail. you're going to make some questionable decisions. learn from it and move on. that's a better message for individuals who have gotten into

these situations. i had a young man stop me on the street, he said, i'm a convicted felon, i can't find work. no one will hire me because of my felony conviction i said, do you have kids? he said, yes. how many? i said three. he said there's your job right there, to make sure your kids don't end up in the predicament you are, go home and be a good dad. he thanked me for it. i don't know whether he actually did it sometimes that message is a little more helpful to an individual than for me to commiserate in his misery and saying, it's unfair and yeah the man, and this and that that's not going to help the guy. i'm not going to let people indict them, we have the tendency to do sometimes. >> well, in closing, and i see my time has expired. i would say that two things, we should remove the barriers that

keep people from moving on, learning and getting past that mistake. which may have been a marijuana conviction. i think it's great advice to tell him to be a father at the same time, he has to get a job to put food on those kids you can't learn at school if you're hungry. >> recognizes gentlemen lady from washington. >> thank you mr. claire, and i want to thank all the witnesses for being with us today. >> king county sheriff from washington state. i had a question for you. i know that you've made many changes at the criminal justice system. toward a process that emphasizes the role as part of our community, as guardians and protectors rather than military warriors. i know after a long career as an

officer yourself. you got to the cjtc. you replaced the trophy case with the u.s. constitution, and put in place training procedures so they know what it feels like. instituting psychology classes, so they can better understand the people they work with. protecting and interacting with, i know your methods have not been without skeptics, i wonder if you could share with us why you think a new approach to training our young men and women is needed. especially today. and how these training methods translate to different outcomes or interactions in practice. i think we learned a lot through research and science about how to prepare officers to be more effective, that's been one of the biggest areas of resistance

people being offended that somehow by improving our training that we are criticizing what used to be, and that's not the case we learned more. in terms of pepper spraying the recruits, many people misinterpreted that as an attempt to get them to feel empathy. the reason we do that, we want to put them in a fight for their life stress situation. so they can learn for themselves that they can overcome extreme pain, extreme fear, and still carry on. when i talk about a guardian mind-set, i have to continually reemphasize, this is not a kinder gentler way of doing our job. we want to create strong effective police officers who have the confidence that they don't have to behave in an intimidating manner. when someone has confidence, that tends to de-escalate as

well. i think that when we were too focused on the boot camp method of training. it reflected away from our ability to train officers to be thinkers. when they were so worried about simply getting the right answer. memorizing checklists, it took away from those critical thinking skills. what we tried to shift toward is more of an officer training the military officers type training where you really focus on critical thinking and confidence. >> and do you think that -- yesterday president obama signed an order restricting certain military equipment from going to police, and do you think that's also part of this transition? how do you feel about that? >> i want to be clear that many of those pieces of equipment, that police departments obtain through the 1033 program are very much needed in the field when i was sheriff i can't tell

you how many times i needed that armored personnel carrier to either rescue an officer that was pinned down behind gunfire or a citizen that was pinned down behind gunfire. an armored personnel carrier allows police officers and hostage negotiators to get closer to the scene, to actually find ways to resolve the conflict without gunfire. unfortunately,when that program started, there wasn't a lot of accountability and training that went with it. i believe that's what the changes in the law focused on. they will be able to get armored personnel carriers they are necessary to have in the field. the weapons, the rifles, those types of equipment those are necessary necessary. and they're less expensive. i hope there's an opportunity for people to understand the benefits of that program but the necessity of the accountability that comes with it. >> thank you. and thank you, mr. chair, i'll yield back. >> thank you.

the chair will now recognize his friend from new york, mr. jeffries. >> thank you. and thank you for your work on reform as well. as we try to work through the challenges we face in america. in a democracy we need a balance between effective law enforcement on one hand and a healthy respect for the con sti dugs for civil rights and liberties in the future. what people want is to make sure that the constitutional principle of equal protection under the law applies to everyone. and there's concern that in certain instances, that's not the case. the overwhelming majority of police officers are hardworking individuals who are there to protect and serve the community. that is my position, i believe that is the position of everyone who is genuinely interested in

police reform. we can't ignore the fact that we have a problem, in some instances with the excessive use of police force, and the fact that often it is the case when a police officer crosses the line they are not held accountable by the criminal justice system. and that creates consequences in terms of a distrust in many communities. perhaps leading to the absence of cooperation. let me just start with sheriff clark. you mention in your testimony that black on black crime is the elephant in the room that few want to talk about, is that correct? >> yes, sir. >> we've had a very robust discussion about it today, have you been satisfied? it's come up several times. >> not at all. >> you're not satisfy add? >> i agree it's a problem, 80% of whites kill whites correct? >> i won't dispute that figure. >> actually it's 83%. is white on white violence a problem in america that we should also have a robust

discussion about. >> violence in america in general is problematic, but if you look at the rates that's where it starts coming a little more into balance in the data i've seen, the white on white crime does happen, 80% figure you put out there. but when you look at the rates of it, these two are not even close. >> the rates are roughly ekwiv lentz in terms of the context of people who live next to each other, and housing segregation patterns, and where people tend to live in america. ethnic violence tends to occur racial violence within the same group. elevating it beyond that fact is irresponsible. we all want to deal with the black on black violence problem. that was mentioned there's a cooperation issue. i don't think i've heard the

phrase mentioned, blue wall of silence. if we're going to have a conversation about cooperation, when someone crosses the line, seems to me it makes sense that we have to deal with what may be another term, the blue wall of silence. the overwhelming majority of officers are good officers. but what often occurs, when an officer crosses the line, the epic is not to cooperate or participate or speak on what a bad apple officer has done. professor ramirez, would you agree that that's perhaps something we should be focussed on? >> i think it's a serious problem, both at the federal and state level, as i said earlier in my own experience in trying to prosecute police officers. i had problems. here's just one problem, the fbi and dea said we wouldn't serve subpoenas on a case, in which

there's a police officer as a defendant. here's a second problem. they tried to testify in the case in favor of the police officers, saying that they had made their own independent evaluation of the case. this is a case by the way, that was adjudicated guilty against all officers and they were incarcerated for 10 to 20 years after the trial. as you know in boston, we had a problem with the fbi that there were fbi agents who were engaged in a series of misconduct with whitey bolger and that went on for many years and was not prosecuted. >> thank you. my time is getting ready to expire. you mentioned that the use of force should be examined in terms of factual data, and not an emotional narrative of false narratives. was the reaction to the eric garner case who was choked to death using a procedure that had been banned by the nypd for more

than 20 years, wasn't resisting arrest, said, i can't breathe 11 times on 11 different occasions? there was no response by all the police officers who were there? was that a false narrative that people are reacting to sir? >> mr. chair, congressman, first of all, he wasn't choked to death. not from the report i had seen. he wasn't choked to death. >> the medical examiner ruled a homicide by asphyxiation -- in the ghetto, that's being called choked to death, sir? >> well, we could have this discussion later on then about the facts, because we could be here for a while. my understanding is he died of a heart attack. okay? but anyway, you said he wasn't resisting arrest. he was resisting arrest. he was told he was under arrest.

he wouldn't do so that's why i put in my remarks here the reference from thomas sole about the law enforcement officers tell someone they're under arrest, and they can't use force to ex-cute that arrest, we don't have the rule of law when it's merely a suggestion for them that they're going to jail or put their hands behind their back. those are behaviors like in the instance of mike brown in ferguson missouri where different choices by the individual could have helped the situation. in other words, mike brown was told to get out of the street. >> my time has expired. for you to come here and testify that eric garner is responsible for his own death is outrageous.

if we are going to have a responsible conversation we have to be able to at least agree on a common set of reasonable facts that all americans can interpret, particularly in this instance, because they caught the whole thing on videotape and i yield back. >> thank zs. >> thank you, mr. chairman and thank all the witnesses for being here, for your thoughtfulness obviously, you've spent a lot of time on these issues, through your career, rather than just the time here today. it is a difficult issue. i saw a report of this morning from the task force, and understand we have a member here, but it quotes the task force as saying, the u.s. department of homeland security should terminate the use of a state and local criminal justice system including through detention, notification

transfer request ss. i'm wondering, to fix the problem that we saw explode there in ferguson and in baltimore, is there anybody, any one of our witnesses that thinks preventing state and local law enforcement officers from notifying the feds about people illegally in the country that would do anything to solve the problem in ferguson or baltimore? >> anybody? i mean, i'm also perplexed, having been a prosecutor rode along with law enforcement back in those days a district judge handling felonies, court repeals, chief justice.

we have a real problem with the federal government not picking up criminals, they would tell our local law enforcement, this person is illegally in the country, so we have jurisdiction. and this -- the task force makes a comment about nonserious criminal offenders i think it was nine dwi's a fellow had that was in my court. he finally came to felony court after he heard and killed some folks. i sentenced him to prison because he was not being deported and about six months later he's back in my courtroom, because he said through the interpreter, well the federal people took me to the border and told me to walk across the bridge and when they left he came back across. he came back, got drunk again and another accident. i'm having trouble with the task force thinking this is going to

solve any problems with regard to racial difficulties in our cities. i just -- and perhaps you can help me out here. i know you had a great career, you served your community your country now. i mean do you see getting immigration of -- i mean just having state and local law enforcement to avoid any discussion about immigration? is that really going to help problems in our cities? >> as i recall, the recommendation doesn't say there should be no cooperation. it's -- the discussion we had in the task force involved the balance of public safety and there are many communities where there are large groups of undocumented people living in

neighborhoods that commit crimes and are victimized by crimes and because there is such a fear of being deported a lot of victims don't call the police, because they're afraid of deportation. this is particularly a problem in domestic violence situations. this is a -- >> i know, i saw that same concern by the big group of people illegally here in the gallery that were trying to disrupt. i've seen people illegally here in this gallery disrupting and i didn't note a lot of concern about law enforcement deporting them, because you have to be pretty ignorant about what's going on in this country to think that you're at risk for deportation. anyway, i'm more concerned about the victims who are victims of crime. needlessly if we would enforce at least the immigration laws on those who commit crimes. and we're not doing it, what i see is a disregard for law

enforcement because they're not going to help, because this person is illegally in the country so nothing's going to happen to them i end up being the one victimized, i hear that as much as anything, i appreciate your sensitivity to these issues, i know the first couple of murder cases i worked on as a prosecutor we had -- it was an african-american shot an african-american in both cases. they were both in bars. we had people in the community, including the african-american kmoont saying, they shouldn't have been there, it's not that big a deal. i found it offensive then that anybody would care about the race. and when somebody kills somebody else, it's not a big deal. i'm still concerned after all these years. we prosecuted those. we had concern we didn't care what the race was of the victim or of the defendant.

a killing is a killing, and i'm glad that you all care about law enforcement in america. >> gentleman from texas yields back. the gentleman from texas after the gentleman from rhode island. >> thank you, mr. chairman. thank you to our witnesses. i think everyone on this committee brings their own life experiences. i was a criminal defense and civil rights lawyer, most cases involved complaints of police brutality, i went from that to being mayor of providence where i was the acting public safety commissioner for eight years, overseeing the providence police department and proud to report that in those eight years we brought the crime rate to its lowest rate in 40 years. i bring my own set of experiences and have deep deep respect for law enforcement. nothing will be seared in my mind more directly than april

17th of 2005 when a police officer in providence was murdered in the providence police headquarters. i understand the hard work of our police and the importance of what they do, i think we do have to focus on systems which build good review and detection of police misconduct good oversite and civilian reviews, prosecutions all of that. what i want to focus on i think the fact is, those are important to do, and we have to do them to rebuild trust. in many ways it's too late when those problems have already occurred. i want to focus on what do we do to help insure those situations don't occur. how do we build a mutually respectful relationship between police and community? i have a police chief who said, you should have a family doctor a family lawyer and a family police officer. we built the policing in which there were lieutenants in charge of a neighborhood, and they knew the residence of that neighborhood. everyone had their cell phone

numbers, they were on housing boards, nonprofits, they became part of that community. that's what helped result in the lowest crime rate in 40 years that's good, not only for the community, but the police officers, the good police officers, who deserve to have the respect and trust of their community. at the core of this, as my chief used to always say, the most powerful weapon i have the most powerful piece of equipment is the trust of the community. and that is the single best tool i have to reduce crime in the city. we saw the results of that kind of attitude. what i'd like to hear from the witnesses, i think there are two ways to help achieve that kind of par dime. accreditation is one and community policing implementation is another. not a unit within your department but the entire department embracing this attitude of service and guardianship. what are the impediments, mr. harley. providence went from a department that was under investigation by the department

of justice and other investigations to an accredited police department. that's a hard process is it resources, is it -- how can we help more departments go through this process so we know they have standards and practices in place that respect this important balance that was mentioned between keeping communities safe and respecting the civil rights of individuals? what can congress do to assist many more police departments to go through that accreditation process? >> i will tell you, it's a complicated picture for us it costs to be involved in these programmings. we talked about funding. i also think it's critically important that there's a broader awareness that there's other resources inside the law enforcement community. if you've been involved in it yourself, you spoke to -- you know, there's a police accreditation coalition out there, that brings tremendous resources, some organizations

simply don't have the capacity to develop policy to support the accreditation itself. those organizations exist. >> should we consider requiring departments over a certain period of time to develop a plan to reach accreditation? i mean, it's a pretty good gold standard of policing, that police departments, i think universally aspire to -- should we rather than encourage it should we be considering some system where we're requiring departments at least to ash tick u late a plan to get to that place? >> i think the requirement to consider how you might implement is important. the way we're structured to review agencies and assess their credibility if you will doesn't have inves ta ga tory authority nor are we seeking that. it becomes a regulatory body which in some ways prevents the integrity of the process. i think incentives to support operations is critically important.

>> i have a few seconds. i wonder if any of the witnesses have any suggestions on how we might encourage or incentivize departments to really transform themselves into this community policing line. i know you talked about a community policing institute, i think the other part of that which no one has mentioned today, we have to figure out ways to require our police departments to ensure they reflect the diversity of the communities they serve. we have too many departments across this country that don't look like the people they serve, and the value of people coming from the neighborhood who understand the cultural traditions, the social moreys, the different parts of the neighborhood, and return back to that neighborhood after work at night is incredibly valuable, and i don't know that we've heard enough about, how do we ensure police departments that reflect the diversity of the communities they serve. >> in my experience the most important thing to lead someone to go into a career of law enforcement is to have a personal connection to someone who's already a cop.

the way you get that is by building community trust and those connections. i know it's popular to say that officers should live in the communities where they police. in my county, most of our officers can afford to live there, it's not realistic. when you assign a deputy or officer to a neighborhood for a long period of time those connections grow. when that officer or deputy is rewarded for participating in the community not just enforcing the law, but also participating, that connection grows. it's the anonymity that really is the enemy here. >> this is on diversifying police departments. i just wanted to add a fact. in massachusetts, we have a civil service system in every police department chief who's been chief while i was there has tried to diversify the police department. the top scorer in massachusetts the person who got the highest grade on the exam they have to

take to be a police officer was 328th on the list. and the reason for that is a whole series of preferences, mostly veterans preferences. i think a lot of the police chiefs are trying to figure out how they can reform the civil service system such that they can diversify the police department, they're stuck. they need some help. do they need an inspector general, do they need a state institute or some fact finding process that can look at to what extent there are legal and civil service challenges for police chiefs who are trying to diversify their police departments? >> thank you. >> i'm way over here on this end. thank all of you all for being here here. i'm a former prosecutor in

houston, normer judge. i spent 30 years at the courthouse. i tried people who assaulted and killed police officers both as a prosecutor and a judge. i've tried cases as a prosecutor, police officers who have killed individuals charged with violation of the law. so i've seen both sides of this perspective for a long time having only stride criminal cases. the sheriff, i'll start with you. do you have any idea how many arrests, felony arrests are made a year by police agencies in the country? >> no, i don't. >> would you care to guess? >> no. >> or you just don't have -- >> i don't have any idea either that's why i'm asking. >> does anyone know how many arrests are made by police officers? >> it's available through the -- i'm sorry, mr. chair and congressman.

it's available through the bureau of statistics. the fbi would have some data on that as well. >> we'll find that out, then. >> would you say or not, that the vast majority of those encounters with the police and a citizen are done according to the rule of law on the part of the peace officer? >> without a doubt. >> how many would you say are not? there are some violation of the law, of the rights of those accused in felony cases. >> the law of averages is what i'm basing that on. >> what would it be? >> i wouldn't care to assign a number to it, because i don't know. >> majority or minority? >> it's very low. >> it seems to me that when -- that any police agency needs to have a plan for all

circumstances, would you agree with that or not? >> some type of response to community policing, a protocol, whether it's a one on one arrest? i'll give you an example. i'm sure you're familiar with the event that took place in waco the town of the chairman's alma matter baylor this weekend, where you have five motorcycle gangs. three of which the cosacks the bandidos assemble in a place trouble ensued, shots are fired and a dozen police officers are there. nine people are killed, others are wounded. the shooting stopped the police made -- 11 12 police officers

arrested 170 individuals. do you think that having a plan to respond to types -- that type of situation is important for a local police agency to have? apparently they did. they had some plan involved. >> without a doubt but i also think that in the moments leading up to there the question i asked is, what kind of intelligence they had or information that this thing was going to go down, just in terms of these rival groups coming together. >> i'm sure they had lots of intelligence, it appears they had intelligence. it's part of a plan, is it not? to respond based on the intel you get from what's taking place or may take place? >> right and part of that response really needs to be the preplanning, the prestaging premarshally of resource ss you

have that together. the planning is huge. >> police planning and response, so that the rule of law has followed the circumstances is critical, is it not? >> yes. >> how many types of events were there last year? >> i know they added 238 names to the wall. it's up nearly 90%.

>> i have some more questions, i'll submit them in writing. >> the gentle lady from texas has the floor. >> in unanimous consent may i say one or two points, mr. chairman, for this committee. first of all, let me ask the chairman to have unanimous consent to enter into the record, following documents a statement, and testimony from the american civil liberties union. 13688 which provides federal standards for acquisition of military equipment. a letter from mr. conyers mr. scott, mr. cohen requesting a hearing in 2014. >> mr. scott, mr. cohen, mr. conyers, and then an article

entitled law enforcement warrior problem to be added into the record. >> without objection. >> mr. chairman, if i might, in thanking the witnesses, just make one simple comment and that is i want to express to all of you the significance of your testimony. the judiciary committee, how very serious about coming forward in the spirit of recognizing the pain of an officer's death and the pain of apprehension about police and maybe their death. i believe we can find that common ground. i hope you will allow us to inquire -- we did not get to question everyone. i hope you will make yourself resources as we write to address

a mother's pain as well find that place. by quoting a philosopher, treat people as if they were what they should be. you help them become what their capable of being. if we're to keep our democracy there must be one commandment. i think this is what you're speaking of, everyone deserves justice, we do not deny your officers justice and we have to let the civilian population, no matter who they are, know that they will get justice that is what this committee's purpose is. maybe those who lost loved ones, maybe the young people who are raising the signs because of their passion black lines

matter, i can't breathe, let's give all of those persons dignity. all of the men and women you represent, you have represented, i yield back to the chairman. >> the gentle lady yields back. >> i want to thank our panel of witnesses for your expertise. i respect your experience, your cleaningality. and i could not help but think judge poe was talking. we are all in part beneficiary but also part prisoner of our own background our own experience. prosecutors may not have the benefit of a judicial view. i think it's a good idea for us

to rely on the experiences of well intentioned people, and there are a lot of issues raised. all of which are important. i think hakeem mr. jeffries, touched upon it. it impacts the prosecution. i saw the failure to cooperate and the faces of moms and dads who were trying to get justice for their murdered young people other witnesses would not cooperate. i think we all want a justice system that is respected, we have to have a justice system that is respected. we're not going to make it, i hope this is the first of many hearings, on behalf of all the other members who participated, we want to thank you for your participation. this concludes today's hearings.

we have five legislative days to submit questions. with that we are adjourned. senator rand paul who is running for the republican presidential nomination, has been talking on the senate floor about his opposition in government surveillance since 1:18 eastern this afternoon. a couple headlines we see in politico politico. on the hill, paul wages patriot act filibuster with call for rebellion. the washington times, rand paul's lonely nsa filibuster, we'll take a look at the

kentucky republican talking live in the chamber. >> based on flimsy or mistaken interpretations of the national law, all in the name of our national security. the bulk collection program has disputed and not arguably clear to our national security. there's not one clear instance of the plot being foiled. i've long been concerned about the scope and reach of our opportunities. that's why in 2011 i voted along with my colleague from kentucky against the straight reauthorization of the patriot act i believe then as i believe now it would be responsible to not take steps to address concerns about unlawful surveillance. particularly this month, the u.s. circuit court deemed illegal. the senator from kentucky has been expounding on behalf of the

usa freedom act. a bipartisan bill passed by the house by an overwhelming margin, i think it was 338 to 88. it would only allow the federal government to seek call records -- >> chris coons talking to senator paul on the senate floor. legislation was approved by the house last week it doesn't go far enough to reign in the intelligence community. keith barnes of the patriot act are set to expire at the end of the month. tomorrow we'll cover a senate confirmation hearing for president obama's choice to lead the transportation security administration. the nominee vice admiral peter neffenger. if confirmed he will replace john pistol, who left his post at the end of 2014 the tsa has been run by an acting

administrator for the past four months. that confirmation hearing tomorrow will be live here on c-span3 beginning at 10:00 a.m. eastern. now we'll hear from south korean ambassador to the u.s. on korea's prospects for joining the trans pacific partnership. korea and china's free trade agreement. from the korea economic institute of america in washington, d.c.. this is about 50 minutes.

good afternoon, i'm the president and ceo of career economic institute of america. welcome you this afternoon for what would be an interesting exchange on issues involving the future of free trade in east asia from china to tpp. this is going to be an interesting forum and we welcome you here this afternoon it's my opportunity to introduce to you the ambassador, and then dr. lee. when they finish we'll need hopefully 10 minutes for questions. and then troy will be bringing up the first panel my opportunity to meet the

ambassador goes back to about a year before he became the ambassador. it was june of 2012 i had an interesting conversation little did i realize he would become the u.s. ambassador to korea. little did he realize he would become the ambassador. i was so excited. i spent an hour with him, and learned about a tremendous background. he will be our first speaker. he'll be followed by dr. lee. he's president of the korea institute for economic policy. long, long background in international trade. he's also korea's chersherpa to the g-20. he wears hats ambassador

lee, the podium is yours. [ applause ] >> thank you so much. can you hear me? it's such a warm day, and i should congratulate you and thank you for bringing the heat and bringing the humidity in coming to this get together thank you so much. there are so many people i should be thank inging. i should be thanking dr. young from coming from korea to here. i have to tell you, and you will agree with me. this is not a group of penniless -- thank you so much. having said that. this is something we were

chatting just before coming in, the timing of this seminar. i've been ambassador for about two years now, the issue of trade policy. the issue of trade policy has never been higher in this town for the past two year ss now we understand congress. we hear all the things about white house. how white house is deploy inging. and all the economics they in fact are continuing to educate us us. so as i listen to all those

discussions, i ask myself when i'm korean ambassador in washington, d.c., i have something call eded chorus fta. does chorus can make a contribution to the ongoing deliberations to the ongoing discussions here in this town what is your answer? >> my answer is, yes. resulting yes. the reason i say that is because it's very simple. it's already three years that chorus fta has entered into the course. it's been operating very very, very well. i said very three times, why? because i try to look at trading goods. trading goods in korea and the united states. it's very impressively.

for example, when it comes to pharmaceuticals, increased by more than 100%. when it comes to automobiles. here i should be very careful. careful. why? >> there is james coming from ford but for the past three years the export of automobiles from the united states to korean increased by 140%. and then if you look at the agriculture products the other day i was coming to visit somewhere in california an agriculture town and meeting with the members of the chamber of commerce and there was an expert on orange and he said i'm so glad. why? because my orange being exported to korea it increased by 50% last year. and there was another grower who grow almond and he said my export of almond to korea grow

70%. wherever i go i hear those wonderful things and my first very that goes for trading goods. and it is increasing very, very impressively. last year, you export to korea. u.s. export to korea, it increased by 9%. what is happening? korea, in fact, is the sixth largest trading partner for the united states. we caught up after -- we used to be seventh largest. and we caught up with one country and we became the sixth largest trading partner for the united states. do you know which country used to be the sixth largest? just ahead of korea? it used to be uk. so we become the second largest trading partner. second very goes to trade and services. and when it comes to trade and

services i don't have to remind you that you in the united states are the most competitive provider of service and trade. you wouldn't be surprised but there is a trade surplus in favor of the united states by $10 billion. and then it is increasing very impressively again. so that is my second very. my third very that goes to investment. investment from korea into the united states, it used to be far smaller than investment from united states to korea. but they change it. since some time like 2005-2006. so last year, korean export to -- korean investment in the united states, it was $3 billion larger than u.s. investment in korea. so all these things are happening. and to a large extent i think it is because of korea-u.s. fta. so as korean ambassador here in

washington, d.c. i'm very encouraged by all these developments but at the same time more importantly i hope that korea-u.s. fta could in fact serve as a best-case scenario in the ongoing deliberations and discussions in this town about trade and trade policy. and what we are doing today thanks to the arrangement by honorable manzullo and my colleagues at kei, and the top-notch panelists here in washington, d.c., i think it will be a good occasion where we can just spread the words about how well korea-u.s. fta is working and will continue to work in the days to come. thank you so much. [ applause ]

>> okay. i've prepared a presentation because being an economist i need to talk about numbers and it's best to show charts rather than just talk. the issue i'm going to cover all related to trade but there are a couple of other things i would like to touch base on. as i was traveling around i noticed there is a misperception of what is going on in korea. so i've prepared some issues that i'd like to clarify for the sake of communication between korean and united states relating to external issues that korea is facing at the moment which are not easy to address. so let's -- let me talk about the rising surplus which many people are talking about including people in the united

states. as you can see, the surplus largely tributed to the growing surplus in korea. so the net services are still negative but not large relative to the overall trade growth. we did a structure using the arrow of decomposition trying to figure out what is contributing to the growing current account surplus. i'm not going to bother you with the details but the bottom of this essentially there are key factors like the slower world trade, terms of trade effect exchange rate. this is domestic demand, dd and other unidentified issues. but in the last couple of years we found in terms of trade and

domestic demand to be the major contributor to the growing account surplus in korea. so this is the same chart cut to three years for clarification. and here we are missing actually the other component because the sharp drop in oil prices also contributing to growing account surplus. but domestic demand has contributed significantly. the exchange rate in terms of continue bug contribution has been very small except for one quarter and another quarter earlier on which i will come back to later. we asked why domestic demand in korea was slowing. and the answer is that we have poor growth in consumption, particularly private consumption. now private consumption has now falling below 50% on top of that you have the government

consumption which is about 15% and of course investment which accounts for about 30% which relative to our history is not high. and it's not actually holding up well. giving the sluggish growth in consumption and investment that is 95% of domestic demand and that is slowing and not growing very rapidly. i show you the nominal growth in consumption versus the inflation rate. and the consumption has been almost flat for the last ten years. this is a fact that not many people outside of korea knows. oops. you know don't be discouraged about this chart. i'm not going to explain all this. the point i tried to make here is the macro approach that we use to assess external balance and the point i'm trying to make

here is that the situation is difficult to solve through macroeconomic policy situation. neither the macroeconomic policy, exchange interest rates are actually having a notable impact on domestic demand and the fiscal policy has only a very short term impact and reverts back to very slow growth. i did a decomposition and looked at the impulse response function and we found that after the crisis meaning the 2008 global financial crisis, you can see a 1% standard deviation of korea's short term interest rate has hardly any impact on the domestic demand. this can be explained in many different ways but i have just prepared a couple. first one is on consumption.

it seems that interest rate is not impacting consumption much because it seems to affect private sector's balance sheets interest rate affects private sector balance sheet on the to the extent that the overall growth in consumption is not picking up even though we have a large, notable output gap and inflation is very on a declining trend. and recent moves on the interest rate has not really had any impact. and on investment, as you know, if the policy rate goes down, which is very short term, the maturity structure on the long term is influenced term premium. but long term interest rate which is key for investment pick up is not affected by korea's

short term policy rate but u.s. long term rates. this is the problem that we face in korea. so investment follows u.s. monetary policy rather than korea monetary policy. this is shown here clearly. the two things aligning. this one is korea's long term interest rate. this is u.s. long term interest rate measured at ten-year t-bond and the correlation has gone up to 80.8. whereas before it was about half. and even the country risk premium seems to be collapsing. this is just a general trend in tandem with the global mispricing of risk, generally. short term correlation with the point that i mentioned, the short term interest rate in korea, three-month cd which has decent transmission working from