>> again, the security foundation is the essential component to all of this. without that you can't build the legal regime that's required. you can't combat the corruption that creeps in to these kinds of activities. so it is essential in that regard. we do, indeed, provide an important supporting role to those like the task force for stability operations, a.i.d., some international and nongovernmental organizations, that are also trying to help afghanistan with these. and so in that sense, we are an enabler for them in certain respects, as well. >> mr. chairman, i have a couple other hearings but i'm going to just ask two more questions and then turn it back, the remainder of any time i have. sir, one of the things we also noted and i'm a subcommittee chair on afghan contracting issues with the afghan police and the like, what's your

involvement, or military's involvement in curtailing the level of corruption with the security forces in afghanistan? any news to report on that? >> there is, senator, actually. in fact, the chairman of the joint chiefs of staff and i have pushed at general mcchrystal's request the establishment of a task force, led by two-star navy admil wh in fact, she was the joint contracting command, iraq commander when i was the commander in iraq, now she has one more star. she is going to head a task force that will go in and augment the contracting command that helps in iraq. that oversees this effort in iraq -- or in afghanistan. and then gets at who are not only the subcontractors, but the subcontractors to the subcontractors. literally, where is the money going? and is it all above board? and that's a hugely important component of dealing, again, with corruption issues, dealing

with warlordism and a variety of other challenges that cause issues for afghanistan. >> because as you know, it's $6 llion and counting with many more billions forthcoming. and then on the final note, mr. chairman, what type of cooperation are we getting from pakistan with regarding, you know, regarding the -- some of the terrorist activities that the taliban and the like that we're experiencing on the cross-border situations? >> pakistan has over the course of the last year, senator, conducted impressive counterinsurgency operations ainst thetalibani, pakistani taliban and some of its affiliates in the former northwest province in eastern sout waziristan and currently in orexi. there is no question that this is an organization primarily threatens them, although it is linked to the would-be times square bomber. so there is an external

component to this that has emerged. there clearly are other extremist elements that ttp has symbiotic relationships with. among them, certainly al qaeda, the hakani network, the afghan taliban and a number of others that do have sanctuaries in various parts of the border region of afghanistan. in some cases, the pakistani military has dealt with them as part of secing lines of communication for us and for themselves in their fight against the extremists that are threatening their rit of governance. in some cases there is clearly more work that needs to be done. general mcchrystal, admiral mullen and i have met with general kiani in a recent meeting. we have shared information with him about links of the leadership of the hakani network located in north waziristan that

had a -- that clearly commanded controlled the operation against bagram air base and the attack in kabul among others. and again, the challenge for the pakistani military, because i think it is important again to note what they have done over the course of the last year because it is significant, the challenge is a situation which they have a lot of short sticks and a lot of hornets nests and they have to figure out how to consolidate those to get through -- they've done good clearance operations. they've got to get further along in the hold, build and transition phases as well so that they can deal with more and more. they do realize, i believe, senator, that you cannot allow poisonous snakes to build a nest in your backyard with the understanding that those snakes will only bite the neighbor's kids. because sooner or later, they turn around and bite your kids. and i think that realization has grown ding this whole period of their experience with the ttp and its affiliates.

and as they recognize again what secretary gates terms a symbiotic relationship with the other exemist elements. they are all related. >> thank you for that very thorough answer, general. i appreciate it. thank you, mr. chairman. >> thank you, senator brown. and thank you foraising the issue of the security contractors. you know that -- as you know, the committees, the middle of a year-long investigation into these activities or the private contractors, not only because of some of the problems that have been created by them, but also because of the corruption issue which you raise a we're grateful for your bringing this to this committee's attention again. but also becse they are a draion the armed forces and >> next, admiral thad allen gives an update on the oil spill. then we look at louisiana coastal areas.

britain's exchequer announces the budget plan. then gary lauck testified about the u.s.-china trade relationship. on tomorrow's "washington journal," the white house armed service committee member todd a gain of about the decision to replace general mcchrystal -- todd akin about the decision to replace general mcchrystal, and then a liggett foreign a liggettmartonyi -- with martonyi. >> elena kagan, starting monday. what replay's every night at

9:00 p.m. eastern. >> bp has removed a containment cap over its leaking well in the gulf after a remote controlled vehicle collided with it. admiral thad allen spoke with reporters about the operation earlier today. they had been collecting thousands of barrels each day. this is 20 minutes. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> we are ready to begin.

>> you may began. >> i am the press secretary for admiral allen. he will be joined by the deputy assistant secretary of labor for occupational safety and health. following admiral allen's comments, he will have 10 minutes of questions and then 10 minutes of questions from the room. i would like to turn it over to admiral allen. >> thank you. good afternoon. a couple of developments to update you on, but as of midnight last time we were able to produce 27,097 barrels, which is a new high for us, a combination of the discover enterprise and the q 4000, which learned of natural gas and oil. of 10,000 four hundred 29 barrels. we did have an incident earlier

today where they noticed there was some kind of gas rising through the vent that carries warm water down that prohibits hydrates from forming. over and -- from an overabundance of caution, the discovered enrprise remove the containment cap and moving away until they can assess the condition. they indicated that the problem was remotely operated vehicle that had been around the lower marine riser package that bob into one of those jets, allowing the excess oil to come out. the close it, creating pressure and the pressure up the water been. there are noohydrates in the containment cap, they will attempt to reinstall it later today. if there are high bridge, they will have to rerun the pipeline and it would -- it will take considerabll longer. as i told you in the last couple of days, we are in the process of installing freestanding riser pipes allowing us to increase

production as we move into the month of july. the first freestanding riser pipe has been installed. they are testing a pressure release today and looking at putting an enduring system down. we are looking at potentially next tuesday bringing an additional production vessel on line. that is not withstanding removal of the containment cap today for the issue i just talkedbout. on a more somber note, we had two deaths reported on people who are involved in this response earlier today. one was an accident regarding swimming event and the other was a special operator in mississippi. we know this is a devastating thing to happen and we know the gulf shores police department is following up. i am pleased to present a coke presenter, and -- co-presenter.

we have had a number of questions over worker safety and exposure of workers to various types of hazards out there. i thought it would be informative for everyone to hear from the source about what we are doing together. a few weeks ago we signed an mou to lay out how we would work together moving forward. i would like to introduce him right now. >> thank you, admiral. i am going to talk about what osha has been doing and how we have been working with the national incident comnd and other agencies to protect workers who are cleaning up the oil spill, bowl all land and at sea. osha has been involved in protecting workers on this oil spill since the last week of april, since we immediately anticipated that workers were going to be mobilized to work on the cleanup and would possibly be exposed to a number of health and safety hazards. osha personnel were deployed to the gulf last week of april. we have had a presence that every staging area, louisiana,

mississippi,labama, and florida. we are doing air monitoring, air sampling, and have also been on the vessels of opportunity, observing health and safety conditions there, doing air sampling as well. we have almost 150 people in the gulf area, 25 of whom are assigned 100% of their time to the gulf clean-up operation, and we are bringing in a couple dozen more as well. we have also been involved from the beginning with bp and the incident command on the kind of training the workers will need. we have been preparing and working with other groups to prepare educational materials in a variety of languages, english, spanish, vietnamese. we have been aggressively ensuring that bp, the contractors, and everyone working down there are complying with health and safety standards and working conditions. including being supplied with

the appropriate personal protective equipment including gloves, coveralls, and respirators in certain cases. we have been taking samples of worker chemical exposures on the beaches and in the swamps, on the boats, and erywhere the workers are. we can discuss this mor but we have fou no exposure levels to any chemicals that are of any concern. the main problem we have been seeing and the main concern for worker health and safety has to do with heat. people working in very high keep conditions. very often they are working with chemical protective suits, gloves,hich exacerbates the heat problem. we have had a number of incidents including some hospitalizations, so we are very concerned about that, in conjunction with fatigue problems and the long hours people working. when we find problems, we are bringing them up immediately

with bp and the contractors and the joint incident command. we have had really no problems with employers down their complying with health and safety standards and addressing any of the issues we have raised. earlier in the process we had a few road bonds when we were trying to work out a relationship with bp and the contractors to ensure that when we identify a problem that it was handled not only immediately but in a systematic process across the wholeulf area. we manage to reach agreement and as that admirable mentioned, we have an mou with the joint incident command and basically do not have those problems. although continue to verify every day that workers are working safely, any problems we identify are being handled. i would be glad to answer any questions. >> i would like to make one other comment. there have been questions about

the dredging operations in louisiana. i would like to be very clear on this point. the federal government has not stopped the state of louisiana from dredging. we have asked them to work within the plan that was agreed to back in may when we declared that this was an appropriate oil spill response activity. we understood also that had begun thin internal constraints that would not damage the barrier islands. the state and the dredging contractor have certain obligations to meet, and we hope they do that. we are surprised and disappointed because this was identified as a priority. with that, i will be glad to take questions. >> we will begin with questions from the room. >> this rov th struck the valving system, has that caused

a completely unrestrained flow at this point? >> i was notified immediately. we have people on-site down in houston and i was told and have already had two conversations with bob dudley, who is telling the response for bp. >> i am trying to understand -- >> is not unrestricted because there are two different vessels that are producing out there. the discovery enterprise has terminated its operions while they checked to see if there are any hydrates and then they can reattach. there is more coming out than there would of been, but it is not totally unrestrained. >> a hurricane forecast timeline is shorter than the amount of time it takes to get materials and assets in the target area. how are you going to resolve that? >> we are discussing at right now with british petroleum.

we have been working with the national hurricane center and local coast guard commanders. depending on the type of vessel out there, it will take either a shorter or longer time to get on the scene and disconnect. q 4000 has a shorter release time and the discovery enterprise. if you look at the area between the yucatan channel and the straits of florida, that is the radius or perimeter. anything approaching that area should proudly take action at that point. we are concerned that those vessels are stabled in advance of a hurricne, their ability to be out there is marginalized as well. >> we noticed on the cameras that something had changed, the containment had been removed.

is this the first time something like this happen? >> i talked about what they called simultaneous operations. there is an unbelievable amount of rov's operating down there. early on, we were putting the riser insertion, it became dislodgeand had to be put back in. it was dislodged by an rov. one of the risks inherent in everything we are doing now there -- the fact we have had to bumps that have had some kind of consequences associated with them is a pretty good record. it will never be risk free out theree and we need to watch it very closely. >> you said you were notified immediately when it happened.

the operator of this particular rov, did they have immediate notification? >> i don't know exactly what the timeine was before i receive notification. we have a person on staff in houston. the minute they found about a i got an e-mail. i called bob dudley and we had a conversation about it and i notified the white house. mr. dudley is a native of mississippi. he has a lot of experience in the oil production part of the bp. i have had very frank and open conversation with him and i expect that to continue. we need to bring him into our unified command and make sure they understand what we are doing. they need to understand what we need from them. i continue to be very closely --

talk to him a couple of times a day. i think this is a positive step. >> were the fatalities work related are not customer >> it does not appear at this time that they are work-related. does not mean that we don't feel very badly about it. >> will take questions from the foul line. >> -- from the phone line. >> i hope you can what we forget what hapned, when was the cap removed, why would close in the event cause hydrates? can be reinstalled, and when will it be reinstalled? >> we are looking at all those things right now. my understanding was that they noticed there was some kind of burp the line. they thought they had hydrocarbons' coming up through the water line that is usually meant to carry hot water down to

deal with the hybrid problem. when they bought that line might have been compromised, they had the chance they might have hydrocarbon's coming up to that event into the discovery enterprise, with an abundance of caution they elected to remove the cap. when they moved away, to see if there is any product there, you have the chance for high rates to form. before they decide to move it back in, they have to check and see if there are any hydrates. if there are, they will have to reasserted after the hydrates used -- reinsert it after the hydrates are cleared. they know that one of the events was shot when they sent the second rov down to take a look. we are continuing to look into it.

>> just to follow up on that, why would be rov have bumped the cap? iust don't quite understand what happened. if you could give the precise time on when this happened, that would be great. i am looking at the scene right now from bp, and it is showing it looks like a dead dispersants braying on an open geyser. it is coming out -- looks like a dispersant spraying on an open geyser. could you just elaborate a little bit? >> regarding the two deaths, i don't have anymore iormation. we are terribly sorry, but these things occur, and our thoughts go out to theiramilies, but i have no other in permission to buu at this time. regarding the removal of the containment cap, as i was preparing to come to this press conference, i was advised of it. i have not gone back and got a minute by minute account.

the reporting i had was that sehow, theyound this after the fact, it appeared that one of the events had been closed. the assummtion is it was the result of an rov muffing into it and actual closing the bid. we do not know that for sure. -- closing the vent. i was just kidding debriefed as i was moving over here today. we will have an update later this afternoon -- i was just getting briefed. a gesture that you mention the possibility of running a pipeline to another platform, another installation somewhere in that area. i w wondering if you had any more specifics about what would need to be done to make that plan work, andave you found any possible targets are platforms that might be able to

take the production? >> i believe bp is in discussion with other industry producers that have rigs in the area that might be useful for that. i don't believe they have concluded that yet. i was asked whether or not there are anyedundancies are any recourse if we had hurricane are heavy weather that required us to move all the vessels from the scene. this is one wave you were connected to another drill site, you would not have to rely on the service vessels. when we get more on that, we will reported. -- we will report it. >> theris only about one-tenth of the authorize national guard troops. i was just wondering what is the limiting factor there. what is the delay there? >> there is no delay in acting on requests for national guard.

the total authorized is 17.5000. we have a little over 1100 or 1200 that have been called up to date. the governor makes a request of the federal on senior coordinator for a particular activity be carried out by the national guard. that is approved, and then the national guard is it employed in dispatch. we have had a number of requests. we have not turned down any request thus far. it is up to the governor when and how they want to employ the national guard. so far, the level of use of the national guard dictates the desires of the governor at this point. >> admiral, i notice going over the mileage figures the past few days, and june 20 it it was 59 miles, then it jumped up to 173 the next day and 171 yesterday.

is that a matter of reporting, or wasthere a lot of oil that hit in mississippi, alabama, and florida on the 21st? >> it tends to fluctuate. will we put that out, it is what we are dealing with in terms of impact control and what we are cleaning up. that could drop once the shoreline is cleaned up and could go back up if the beach i real oil. it is a snapshot of what we e dealing with any particular time. it can change dramatically with the concentration of oil. it will vary from day to day. >> thank you, everyone. that concludes today's breed. [captioning performed by national captioning institute] [captions copyrht national cable satellite corp. 2010]

>> our cameras recently followed members of the new orleans city they are joined by actress patricia clarkson, the daughter ofthe city council vice-preside. this is a half-hour. >> all the way out into barataria bay. then we will run all the way over here to cat island. it will be quite a run. one of my biggest concerns, when you get out there you will see, off the barrier islands -- they are gone.

when you get out there, you will not see no land at all. >> where the president and vice president of the city council. everything that happened in april affects not only the coastal parishes, jefferson, st. bernard, and plaquemine, but they also affect new orleans. we have made several trips out here and pass legislative reginald -- resolutions. we have offered all the help we can to our friends, because there is great regional unity. as we learn from the trading, the waters do not discriminate from one parish to another. -- as we learn from katrina. the devastation of the oil

spill, we will offer our support to all the other elected officials. >> we are here mostly to see it for ourselves and let the parishes who are more adversely affected right now let -- let them know that we care and are supporting them. one resolution we did in the council meeting was to re-enter -- reiterate what the regional planning commission said, that everybody from bp, the coast guard, and the president should listen to the individual parish presidents and mayors of the different cities. they know their territory, they know their people, they know their waters, and they know what to do. they should be listened to, do what they tell them, do what they need done and pay for it, and do it fast. they should have circle the

wagons around that oil spill from the beginning with every vessel. i hope we learn from that. it is very important to us that we also let our own business people in new orleans that depend on tourism, the seafood industry, know that we are trying to do our share to be on here and represent them, too, to avoid having any more of a negative impact. this is patricia clarkson, my daughter. she is here from new york. she came in for father's day. >> i wanted to personally thank him for his tireless dedication

to this tragedy. he has been masterful. they are very lucky to have him, and i think obama owes him lunch and the coastal region owes him lunch. this is my home town, i grew revenue here. it is very difficult when you are sitting way of north and not be right here in it. i want to see it. being able to really relate.

[wind noise] >> it is just black. this is worse than grand isle. >> there was a little bit, but not like this. >> this is blacker than grandchild. >> yes, i know. -- this is blacker than grand isle.

>> the beaches are clean double, but the marshes are not. >> ooce it reaches the market like that, what is the most effective way to clean it, if at all? is it going to get deeper? >> there are constantly working the boom and changing it out. >> so they keep moving the booms further back into the marsh? >> it will soak up on a like a paper towel, then after its black -- when the tides come in, they are pushing all the barrier booms out. you are constantly fighting the

boom. >> is depressing. >> it is not only killing the barrier islands, it is eliminating the nesting places for wildlife. >> it is destroying a way of life. >> your not only killing the fishing industry, the oyster industry, and wildlife habitat and killing the barrier islands, you are making it more vulnerable to hurricanes. the 100 your protection plan that we have spent five years and billions of dollars building is now not going to work as well. this is just unbelievable. >> as far as the eye can see, it is black. it is nothing but oil out here. >> when you say a 100-year plan,

it is predicated on all this. >> we just removed one of the3 plan. >> is not really doing anything the water is the same on one side of the boom as the other side. >> this was all land. it is no longer there. >> that took years with salt water intrusion. measure that, and within two years, will have no hurricane

protection, regardless of our 100-year plan. >> look at it, as far as the eye can see, it is endless. >> the sad part about this is, we cannot stop it. you clean it up, and the next week is the same thing. >> if the relief valves are not going to be built until august and we still have six more weeks, imagine what this is going to be like. >> by the time they do something, it will be [unintelligible] >> it used to be oyster bed rounds up through here. >> not anymore. >> what the nation does not really understand, this is not a louisiana crisis.

we are much more important city and state to the nation. this is a national crisis. we are the major part of the fishing industry of the united states. we are the strategic oil reserves of the northeastern part of the united states. when some of the national broadcasters weeks ago were saying if it goes up the east coast it will be a national crisis -- excuse me, the national crisis is right here. >> i have to tell you, i do think the nation is in mourning. >> i hope so. >> there are protests in new york. there are protests against bp everywhere across the nation. it is a staggering. it is disgusting. for every day this oil center, someone should be sitting in --

for every day this oil sits here, someone should be sitting in jail. some stupid, horrible, small executive should be sitting in jail. >> we will cut corners to save money, and now you see the impact of that. what the rest of the country is hopefully starting to understand, we have been the victims of the two worst man- made disasters in the history of our country. the impact of this is not something that will be here today and moral and next month. it is going to be here forever. your truly destroying a culture and the region. i hope people will get that. >> the louisiana purchase changed america from a very small, colonist to a

multicultural nation. it has been one of the greatest parts of america, and we are losing it. >> these need to be changed out. >> no, they get blacker than this. they were picked up this morning. >> you can see right on the tops of this. >> they will put fresh ones out in the morning. >> the men and women who have lost their jobs, are they the ones doing this? >> some of the unemployed fishermen have been employed to put the booms out, but it is not enough of them. [unintelligible]

>> those guys are skimming right now. they have booms on the back and they are skimming. >> it is not going to do anything. >> not when you have 80,000 barrels a day. x and six more weeks of that amount of oil? >> we still do not know if that is going to work. >> that is a good point, because there is no guarantee that the relief wells are going to work. point. >> the claims are going to exceed that at least tenfold. >> we have a nephew that live in alaska. my brother and sister lived in

alaska with some of her children at the time of the exxon valdez. they had damaged to their property. my sister-in-law has been dead 25 years. her son ggt the check a couple of months ago. it was interesting, and i did not get to stay in the council meeting. i was too worried about watching -- we had so many different issues going. i was watching to others at the same time. you said put it in escrow before was fashionable. >> we had a meeting last week with a member of the council and we stood up and ask questions. i said, how are we guaranteeing with all the liability of claims

and the shareholder value of bp going down, how are going to protect that we need to put money into an escrow account. all told, they are doing that, but we all agree, $20 billion in escrow and $100 million for the moratorium is also nothing. that is how the cover any of the vessels and the offshore supplies, in the of that. >> greater thannungesser -- president nungesser can tell you how many ancillary businesses there are in this region that service the oil field. the kinks multiple small businesses alike. b.g.e. it keeps multiple small businesses alive.

>> oh, my god, it is so sad. there is going to be a contractual agreements between the president and bp that no dividends are paid. they agreed verbally. i want to see it in writing. >> we have to learn from alaska. when you talk to the claimants, the first year after the spill, exxon was all over the place trying to honor claims. they will tell you after the first year, and after the news went away, the claim started to stop. >> you have t keep in mind, the exxon valdez was a ship that went down. this is still a producing well. it has already exceeded by far that disaster.

>> look, that is just amazing. >> this is the gulf of mexico here. that is barataria bay. >> i think it is short for a longer name. as i remember way back, that had a longer name that was in transit to the area. >> are they sending any kind of

animal efforts in here to try to help some of these pelicans? thank god. thank you very much for your work. >> thank you so much. >> in the past, some of the eggs got messed up and some of the nests got messed up. they are very selective about what they are going after. >> do these people work for bp? >> no, they work for wildlife rescue. >> there could be several movies out of this.

>> it is so beautiful and content here. for centuries. they are so gorgeous. and they are uniquely ours. >> i cannot even imagine, even if they are drenched in oil, that their reproductive systems, their digestive systems will not be forever damage. >> why don't we have 30 voteboa? >> why are there not at least 10 boatwright here. just for this pelican island, right here. >> there is nobody here on the

water in terms of the recovery available. >> one of wildlife and fisheries. >> there are no votes. there is -- note boats. there is one vote here to help with the peeicans. it is ridiculous. -- 1 boat here on this entire ireland for the pelicans. >> at different times of the day -- >> there are so many birds, and they all have oil on their bellies. >> we are right on the gulf of mexico. this is the gulf of mexico right here. >> it is about 70 miles from here, and it is coming directly into the gulf of mexico and into

the basin, which is where we are right now. >> they need a place closer. >> how far do they have to travel, when they were already in distress? that is ridiculous. >> we came from our growtmyrtle. >> shame on bp. >> these are all doable things. it is just a question of resources and putting people to work. >> the experts, people who know how to clean the birds -- what are they putting restrictions? nobody can answer this? look at this bird flying around,

he is just going to gather up more oil. >> i think we need to start heading back. >> listen to what the sheriff says. >> they are just staging. whenever the weather gets bad like that, they get inside and everybody comes into their boats to wait it out. as soon as the weather breaks, they will be back out there again. >> they are out there picking up booms. >> with the backing clear, that will suck it up of the barges. >> there was a great story on one of the cable stations this week.

in ohio where they had high unemployment, they took a warehouse and indeed the warehouse. they are putting several hundred people around -- putting several hundred people to work or around a plot, providing what is needed -- working on around-the-clock. >> this boat has two tanks full of oil. they have a vacuum truck with a hose to suck it out and stored in these trucks. >> i am very happy that we win on this trip. i appreciate the help to set this up. for the rest of the country that

may be watching this, it is really important that you understand the impact of this to not only all of us in louisiana but the impact to the united states. this is an environmental disaster, an economic disaster that will directly hit in the pockets of america. we have to be able to stop the oil and it capped as soon as possible, and then we need help. we need bp to live up to their legal obligations. it is a good start with the $20 billion in escrow, but that is going to be a drop in the bucket by the time we are done with this. this is a multi generational topic we are facing. new orleans since out of louisiana are vitally important. we have gone through to the worst man-made disasters in history of the united states. we do not want a handout. we just want to be able to get back on our feet. i am from the midwest, not a native of this area. my friends in chicago and milwaukee and everywhere else

around the united states, i hope you will continue to come down to this part of the country. new orleans is open for business. i am very busy -- i am very happy that i came down and saw this and having to be to one of my colleagues on this visit. >> is even more disturbing than you think. living here generational leap, and knowing this area, it is still more -- worse than i expected to see. the sad part that i am reminded of when i come back out here is how few barrier islands we are left with. i can remember in my lifetime the loss of barrier islands. i do not need a scientist or anyone else to tell me. i see it with my own eyes. that is sad when is disappearing that fast. that is the first thing we have to take note of, because we are

in for a 100-year flood plan to be finished by 2011. we have just wiped out one key part of it with the oil spill if we lose more barrier islands in this area and the grand isle area. we have to take note of where we are. i don't want promises, especially with the $20 billion. i want contractual agreements signed on the line, and i want much more than $20 billion put into escrow, with a commitment that no dividends will be paid, no high salaries will be paid until every person economically affected in this area is made whole. i think the president should do that.

>> coming up next, the government's new budget plan. then commerce secretary gary lauck testified about the u.s.- china trade relationship. and later, president obama announces the removal of general mcchrystal as commander in afghanistan. >> this weekend on "booktv" recounting the death penalty trial of willie mcgee, and the beginnings of the civil rights movement. afterwards, jerry van dyke spent years in a dark cell after being captured by taliban fighters. he writes about it. and inside account of rupert murdoch's purchase of "the wall

street journal." join us on switcher ontwott -- twitter. >> starting monday, watch the confirmation of elena kagan seen replays every night at 9:00 eastern on c-span2. to learn more, check out our latest book, providing unique insight about the court, available in hardcover and as an e. burke -- ebook. >> george osborn unveiled a package of spending cuts and tax increases to balance the government budget. among the proposals is an increase in the sales tax from 17.5% to 20%. you also hear a response from the acting labour party leader,

harriet harman. this is an hour and 10 minutes. >> at the end of the speech, copies will be available. it is not appropriate to intervene. chancellor of the exchequer. >> mr. deputy speaker, this emergency package deals with our record debt. it pays for the past and plans for the future. it supports a strong enterprise- led recovery. it rewards work and protect the most vulnerable in our society.

yes, it is tough, but it is also fair. this is an emergency budget, so let me speak plainly about the emergencies with a spirit -- emergencies we face. the coalition government has faced the largest deficit of any economy in europe with the exception of ireland. 1 pound out of every 4 pounds we stand is thorough. when we have not inherited is an incredible -- a credible plan to reduce this, this at the moment when the fear of sovereign debt is the greatest risk of the european economy. questions that were asked of the liquidity and solvency of banking systems are now being asked of the government's that stand behind those banks. i do not want those questions ever to be asked of this country.

we have announced a review of the savings. we have received the report for budget responsibility. the power the chancellor has had for centuries now reside with an independent body immune to the temptations of the political cycle, and we have decided on a massive unfunded commitments and reserve that greeted us on entering office. this is early action, and it has earned us credibility in the international market. it deals decisive -- it meant the but it has been listened to. many of our european neighbors has risen, and lower market interest rates have supported

our recovery, but unless we deliver on the promise of action with concrete measures, the credibility will be lost, and the consequence for britain would be severe. higher interest rates, a sharper rises in unemployment, and potentially, a catastrophic loss of confidence. and we cannot let that happen. this budget is needed to deal with our country's debt. this budget is needed to give confidence to our economy. this is the unavoidable budget, and i am not going to hide hard choices from the british people or bury them in small print of the budget documents. the british public are going to hear them straight from me. our policy is to raise from the ruins of an economy built on

debt and new balance the economy where we save and invest and export, an economy where the state does not take almost half our national income, crowding out endeavour, an economy not overly reliant on the success of one industry, but were all industries grow, an economy where prosperity is shared among all sections of society and all parts of the country. .

moving." for many years the united states

and china relationship has been marked by imbalances. we have a significant trade imbalance. we have a worse debt and balance. there is a lack of balance between china's currency policies. our trade balance, the focus of this hearing. china continues block exports, inferences u.s. intellectual property as unaceptable. china discriminates against u.s. companies through a so-called indigenous invasion policies. china dumps millions of products on the u.s. market, and china improperly subsidizes many of its exports. to build up a successful relationship we must address these and bounces. we must restore balance. to do so we must keep moving forward. a forward movement requires forward thinking. china has changed dramatically. it is now the world's largest

exporter , the fastest-growing economy, consumer demand increasing exponentially, its growth domestic product upring. china is capitalizing. it is protecting its domestic industries, taking a more active role in the world trade organization, and finding its place in the global economy. china has kept moving, but the united states has not. america's approach to china remains the same. but united states continueso pursue the same dialogue. these dialogues have helped keep the u.s.-china economic relationship but discussions are merely a means to an end. dialogue alone is not a

measurable results. we cannot rely on discussion alone. we've sought ambitious outcomes. we ended up with promises to keep talking. hearing what the treasury secretary put forth, the u.s. g.r. and commerce will play key roles in the success of the strategy. first the administration must devise a comprehensive administration-wide plan to improve u.s.-china economic relations. each agency must develop a strategy to develop its part of the administration-wide plan of the u.s.-china relationship. we need an administrative-wide single plan. we don't have one. the strategy will include allies. it cannot end the. it must include measurable steps

in progress. the united states must work multilaterally to address the trade issues with china. commerce remains a robust relationship. our agencies must use those relationships to identifyand address common concerns raised by china's trade practices. the united states must look carefully at the tools offered by international institutions much lik wgl. i applaud the strong commitment to enforce the obligations. since 2004 there have been veral cases filed against china. i urge them to consider carefully whether or not they should bring additional cases to ensure that china adheres to the commitments. with china's existing obgations notufficient they must seek to strengthen them. china's long promise for the government per current

agreement. the united states must seek a time line. we should seek leverage to ensure that china keeps to that time line. the united states must take strong and the lateral action to addressur trade imbalance, even as we pursue multilateral action. must seek a suspension of china's indigenous insion policy and must dismantle chinese barriers to u.s. and other exports. and congress must apply our anti duty lawto subsidize chinese imports. china opened the door to appreciating this currency. congress must carefully consider whether china's currency practices onstitute an improper subsidy. taking thee steps will help to achieve results, measurable results. taking these steps will help the

united states-china relationship to keep moving. doing so should help the united states-china economic relationship to find a new balance. senator grassley has a scheduling conflict. we will proceed. he sends his regrets. he is very conscientious. he wants to attend all hearings that he possibly can. the scheduling conflict was one that he could not avoid. okay. i would now like to introduce gary locke and ron kirk. welcome. as is or usual practice your statements will automatially be included in the record. i urge you to summarize. to the point. it right down to it. okay. >> thank you very much.

thank you for this opportunity to discuss this important topic. the administration and congress do need to work together to ensure our economic relationship is more balanced and provides more benefits for american workers and businesses here in america. over the last 20 years including as the governor of wasington state helped double exports i have watched the transformation of the chinese economy and seen firsthand how expanded trade of paternities the benefit to both of our countries. last month i lead a clean energy trade mission of 24 u.s. companies to china. on the final day we traveled. assembling solarpanels. in fact, more than 90 percent of the products assembled were made in the united states. this is a model of what trade can be, not a zero sum game

where increased trade needs to do jobs either in america or in china. there is simply no escaping the importance of the chinese market to u.s. exporters and companies operating in china. in 2009 as exports to the rest of the world did 20 percent ports actually remained stable. now thanks to strong chinese demand and the recovery in prices of agricultural products our exports are growing faster than overall u.s. exports. growing interconnectedness would be impossible, of course, without real progress. progress, which includes china's recent currency announcement has not happened by accident. has taken hard work, and we have a plan to build upon it. along with the united states trade representatives and the department of treasury the commerce department has worked hard to remove barriers preventing u.s. companies from getting free and fair access to china's market. the most recent round which we

cochaired it yielded results that restored market access for american farmers cant remove the barriers for clean energy companies. the chinese also agreed to end duplicates regulations for medical device manufacturers and implement new internet and intelltual property, especially relatingo tehnical journals. far more needs to be done before we can be sure that chinese policies affecting u.s. businesses in china are once again headed in the right direction. the commerce department will continually -- will continue to rigorously enforce u.s. and international trade laws. 2009, is iniated 22 an-dumping and countervailing duty in the instigations against imports in chin a 47% increase. as you know, commerce import administration is reviewing allegations into countervailing duty cases in which the

petitioners claim that china's currency policy constitutes a canter available subsidy. given the scrutiny that such decisions face that counsel's office and i are monitoring these cases. if the facts and law warrant the decision to investigate, an investigation will proceed. make no mistake, the obama administration is committed to reorienting our economic relationship with china. we share your concerns about new indigenous, intellectual property protection, and market access. american firms operating in china and exporting to china should come as a matter of basic fairness ave the same opportunities as chinese companies. we are committed to ensuring that china lives up to its existing international commitments. they can't stop there. the global playing field want the level until china takes on a broader range of commitments that would bring it in line with the world's other large trading

partners. our strategy to steadily expand the opportunities must be continually wreak calibrated to better address our key commerci concerns. we must also maintain a cooperative programs that have long-term benefits and dialogues that enable us to demonstrate the importance of an open, transparent, and fair trading system. those programs have yielded concrete results with the direct benefits to the american people. i'm confident they will continue to do so. thank you for the up to 92 appear before you today. i look frward to answering your questions. >> thank you, secretary. we deeply appreciate your statement. >> chairman, members of the committee, thank you for this opportunity to join the secretary in discussing the complex, yet the evolving trade and economic lationship between the united states and china. mrchairman, as you have noted, america's interests require an

proach to china in strategic and well coordinated met. that is why the obama administration is speaking with one voice, pressing for change with enhanced dialogue, enforcement of america's wto rights, and negotiations that include key trading partners whenever appropriate. we are working together with the white house in the strategic and economic dialogue. driving the joint commission on commerce and trade to achieve a mo robust and outcome oriented relationship u.s. t our work is driven by our central mission to open markets, in force american trade rights, and dismantle obstacles that could cripple opportunities for american workers, farmers, ranchers, manufacturers, and our service suppliers. since joining the world trade

organization in 2001 china has made many important economic reforms and remove trade barriers and opens markets to u.s. exports. this has created new american opportunities for our exporters, as our manufactured goods have tripled during that time. china's strong recovery from the recent global recession has also facilitated growth in export sectors were manufactured goods and chemical products to agricultural goods. in fact, goods and services exports to china now exceed $85 billion. let's be clear. china's implementation of its wto commitments is incomplete. we all know that we have serious concerns about chinese policies that limit or otherwise skew the playing field in our trade relationship. we are committed to addressing

these concerns by insisting clear prrities and working in a result diven dialogs. our top priorities include addressing indigenous innovation and other discriminatory industrial policies, often intended to benefit chinese enterprises and let our exports as well as improving enforcement of intellectual property rights and ending on science based regulaons that block u.s. agricultural exports. these issues will top the agenda at our revitalized jaycee ct this s fall. our 2009 achieved important progress includi important market access for american productsad emoval of troubling rules affecting the sales of intimation security products. we are also working through the round of negotiations toward

better market access for u.s. firms and the multilateral context. frankly a greater contribution from china. i also know many members of this committee are concerned about china's currency practices. he recently hed prsident obama in response to china's recent actions state tat it was a constructive step that can help safeguard the recovery and contribute to a more balanced global economy. he will discuss these and other issues with china directly at the upcoming g-20 summit in toronto. treasury secretary also welcomes china's announcement but noted the real test will be how far and how fast china allows its currency to appreciate. we will continue to monitor and raise this issue in every forum mr. chairman, you recently suggested our administration should be willing to take strong

action on trade issues regarding china. we are prepared to use the full range of enforcement options where dialogue fails. the united states under the obama administration has said the most active and uccessful of any wto in bringing wto dispute settlement cases. our most recent case a challenge to china's use of export restraints on key raw materials, which have hurt u.s. workers and companies in the u.s. steel, aluminum, and chemical sectors. you have our commitment to continue to coordinate with other agencies across the government as well as the congress to execute a comprehensive and effective china srategy. we will also work to open up their markets for america's exporters. in closing let me simply reiterate the importance of getting our relationship right.

we look forward to working with you to make that happen. >> thank you. but me ask a question. would anybody in our country have a defense relatedquestion, whenever a congress has a defense related question what cabinet secretary does that member of congress go to? >> it would be the secretary of defense. >> right. let's assume i have a foreign policy question. what cabinet secretary? >> the state department. >> let's assume a question about economic policy. who does he/she go to? >> well, there is not one cabinet secretary. we share the responsbilities.

but i would submit that we are working in the mst coordinated fashion under the direction of the white house to approach china and a strategic manner that you have articulated and asked us to do so. >> we will go to congress for this. i mean, i am sure many countries, they are not dumb. divide and conquer. there is no one agency to get to. where do we go? >> well, i don't know that the united states has ever had a department or a secretary that is focused on any one country, -- >> i'm talking about our economic policy. you can break it dwn. it can beat china more generally. i interrupted you. >> well, i think as the

ambassador indicated the economic relationship with respect to economic policies, domestic policy, international policy and with respect to trade policy depends on the jurisdiction. while we do have segregated responsibilities the ust are in forces and focuses on our government relationships and our treaty obligations. commerce deals with private entities. nonetheless we are all very coordinated. i consult with the ambassador vvry extensively as we go into these meetings. as we meet with foreign officials. we do the same with both the white house and secretary-designate. >> i am very concerned that this is not sufficient. therefore accountable. we have all these different departments doing different

things. economic. i understand the good intent. i also think that we are inefficient and not sufficiently focused given the intense competitive pressures. as we ha got to reorganize ourselves so that we are focused much more on economic progress and jobs with special attention to our foreign competitors. otherwise , very complex. doody, obligations as well as different obligations. i just think it behooves us to come up with a ingle department head. the white house personnel come and go. presidents come and go. i just don't thinkt is sufficient that we designate somebody and the white house who

is to work and coordinate all of this. as a consequence of our failure to have a person we need defense policy. we don't do that great in economic picy. one of the big reasons is it is so splintered and desegregated. it is so spread out. it is so unfocused. it behooves all of us, in my judgmentto try to figure out a way to get much more focused than we currently are. >> certainly i would agree with you. we need a more coordination. i think this administration has tried to do just that. i would also remind you that in the state of the union the president laid out a national export initiative and created an export promotion cabinet, specifically to drive us in a more strategic manner and coordinated manner in our trade and export policy. we will be presenting a plan to

the president in september. we will be happy to come back and share it with this committee, as well. we welcome your thoughts. >> my time is about to expire. we need measurable resus. until we get focused on what i'm suggesting we need measurable results. let me just ask you this question. what percent, what is the piracy software rate in china? >> we have spent quite a bit of time with the industry. >> what is your best guess? wehave heard anywhere from at least of the government used software, almost 70 percent of what they used is pirated. i have spent a lot of time with some of the softwardevelopers that have a calculaton.

they know for every pc sld they expect to sell roughly 200 something dollars worth. >> about 80% is my understanding. the first 25% is legit. the rest is pirated. that is just their policy. one of my main questions, what are you doing about it? benchmarks commit dates by which that 80 percent can reduce? do you have dates and benchmarks and goals? how are we going to sove this? i want results. ll us your results plan? >> well, we have used all of the two that we had. working with the industry to

approach china, to strengthen the intellectual property rights, particularly on enforcement and privacy. >> do you have a timetable? >> soon as we can. i don't have the specific metrics you are asking for. we will. >> with all due respect, if you don't have a timetable you don't have a policy. >> we will, thank you, mr. chairman. i appreciate it. it is around 79%. don't think there is much doubt about that. mr. ambassador, on june 21st there was an announcing air administration official the stated since china has agreed to a very modest increase in the value of its currency this had significantly changed the dynamics of the g-20 meeting by moving the currency issue ban. is that accurate? is the chinese currency issue not going to be the dominant

issue? >> not been permitted by, however this unnamed official is, i cann speak to the accuracy. i would only reterate what president obama stad. i'm paraphrasing. this was a welcome sign, but we don't see this as the end of that discussion at all. the president made it clear that this would be the subject of continued concern and talks at the g-20 summit. >> a related question, calling for the united states to adopt a multilevel approach. specifically the chinese are more likely to respond positively to a multilateral coalition rather than bilateral pressure from the united states, especially if that coalition contains a number of emerging market and developing countries

who causes the chinese frequently planted champion. is the administration taking steps to put such an international coalition together? if so, what are those steps? are there similar movements underway to address the international property rights that in china? >> let me speak. on the latter act and speak much more definitively. we have had some of our greatest successes in pushing back on some of china's policies as it relates to intellectual property. when we have done so working in coordination and in particular with the european union canada and in some cases some of these emerging markets. i think you do know that the issue of china's currency, at least has been reported in the papers, one that has been addressed not oy by the united states, but expressions of concern from the european union, korea, and other countries. i would have to defer to

secretary geithner and the president to the extent of our foreign nations. >> if you would refer to him. >> yes. >> we welcome both of you. the conventional research. 15 percent and 20 percent of all products made in china are equivalent to 8% f china's annual gross domestic product. unfortunately this problem seems to be getting worse. i remember back in 1995. the chinese pledge to close down all large intellectual rights violators. that obviously did not happen. i also remember the chinese and the republican and democrat administrations. the chinese have even launched a yearlo campaign against piracy in 2005. i cannot discern any lon-term overall benefit from that

particular exercise. most surprising today i am unaware of a published specific and detailed plan for permanently solving the issue of intellectual property violations. such a plan is not included in the joint strategic plan and intellectual proprty enforcement which was relead just yesterday, if i recall correctly. why should we believe this administration would be any more effective? >> center, while the strategic intellectual property rights enforcement plan released yesterday did not speak specifically to china i can assure you the issue of enforcement of the intellectual property rights is at the top of every discussion agenda we have for china, both in the strategic economic dialogue and in the jcct. have had some areas of success.

one of our challenges in the campaign that you referenced, china intends to seek enforcement through administrative remedies. we continue to push them very aggressively y including them and highlighting their shortcomings in our special 301 report and other forums to put in place a much stronger law enforcement regime that would help to protect the rights of intellectual rights holders as well. but i'd think our biggest aid is going to be the growth of china's burgeoning entrepreneurial community that is beginning to see the damage to their own entrepreneurial efforts of this that in piracy and copywriting. >> go ahead, mr. secretary. >> yes. i would like to also comment on the multilateral pressure. we have seen the results and fruits of multilateral pressure on china with respect, for instance, on their recent proposal on the renovation. because of a vry concerted,

coordinated multilateral comment and protestion to china's proposed policies the chinese withdrew that, suspended it, or have delayed it. >> i missed that. what did they withdraw? >> they have not withdrawn, but that did not act on it. they came up with the second version. we have still all commented on it. >> second version of? >> the in ditches innovation policy. >> they're going to withdraw? >> no, they came out with a second version following a multilateral concerns. they came out with the second version, or a revised version. they have, however, delayed the release. that was part of the results of the strategic and economic dialogue where they have now agreed to enter into consultation and discussion with the u.s. and others on how to achieve innovation without necessarily, as we are concerned about, the way in which they are

doing it that would discriminate against u.s. companies. a multilateral approach has been successful so far in china not moving forward with their proposed indigenous innovation policy. we are still very concerned about the more recent draft. the good news is they have not moved forward to employment or to compile the list of favored preferred innovation companies as they had originally scheduled. now we are in discussions with them on the next steps. let me just say that with respect to counterfeing we do have proposed a third ipr attache. we already have two in china. they work specifically with u.s. companies. to attack some of these issues. d even to. some of the more provinces with more hi technology are moving aggressively or more

aggressively on violations because they recognized that it is in their own economic self interest to protect innovation. there are also moving forward with respect to ipr and counterfeiting issues with respect to food or medicine because they know it affects the health and safety of their own residents. with respect to so many other goods, whether it is shoes, dvd is, ormovies, the enforcement is not there. we must continue to put pressure on them and use every tool that we can to have them halts these violations. >> thank you. >> one more. >> the chairman has been kind enough to let me ask one more. if you care to comment. as chairman baucus has pointed out, 79 percent of all business software being used in china has been pirated. however, according to the

international intellectual property alliance the owners of the notorious chinese web site called tomato garden were recently convicted by a chinese court. since 2003 this website falitated the downloading o 10 million copies of the windows xp software. this is a posiive development. this seems to be an exception to the rule. the alliance notes that 99 percent of all music files being downloaded in china are pirated. 99 percent. in addition there were over half a million member titles who were illegally down loaded in china. therefore my question is, why were they convicted when other large-scale illegal websites remain open fo business? what other lessons to be learned? >> i should be brief. >> i will get back to you.

i can't speak to why we have not been able to get china to move more aggressively. we do work with them and encourage them in evercase to bring lgal enforcement and have strenuous and real enforcement. its in our interest and in china's interest that they do so. this is of the highest importance to us. i would love to tell you that there was just a silver bullet we could fire. it is a major problem, but it is one of the reasons it gets such high attention within my office and within the department of commerce as well. >> thank you. >> thank you. >> thank you. thank you for allowing us to have this series of hearings. gentlemen, as you know, the pacific rim countries are a fast and growing market for u.s. exporters. i am of the view that to tap th potential of these markets is a

prerequisite to achieving the president's goal of doubling exports in the next five years. also, as you know, china is projecting an enomic model in the pacific that is, unfortunately, harmful to american interest. if you rights for workers, state-owned enterprises, disregard for intellectual properties. i want to ask you this afternoon about the opportunity to create an alternative mel. i believe that opportunity is going to present itself at the trans pacific partnership, another round is coming up in the next few months. here is the question. the key country for looking at this would be a vietnam. vietnam may not be able to implement it today all of the commitment that the uned states has come to expect over

free trade agreements, but i would very much like to see us get some short-term benefits, particularly improved access to that market for our exporters, fort greene goods, for the value added kind of products of would like to see us get in to vinam. so my question to you is, what would you think about the idea of the trans-pacific partnership, trying to come up with a more pragmatic pathway that would get as these short-term benefits, improved access to the vietam market to, but to in effect to the vietnamese say when you improve workers' rights, when you protect intellectual property we can use this as a pathway to a

broader agreement, what would amount to a free-trade agreement. what do you think of this idea? what are your thoughts? i don't want to see china with an economic model that is hostile to our workers and intellectual property and our principles to get a bigger toehold in countries like vietnam. are you open to those kind of ideas, either one of you? >> senator, if i might, since we have taken the lead on pushing forward with the trans-pacific partnehip, i would agree with you almost in total, except for i want to leave open the issue of whether we would seek a different path for vietnam. >> sscretary, before you do that, and i appreciate that. understand that this is not so much a differen path. it is an alternative way to get on the path that right now we are not getting on.

>> well, let me warn you. the good news, and in the interest of brevity, in terms of the introductory comments about the imprtance of the market, particularly as sort of a competitive hedge against china embraces very much our rationale for why the united states made the decision that president obama announced that we would move forward aggressively to engage in this transpacific partnership. the good news, we have completed. two rounds have been neotiated. we jus completed the second round in san francisco last week. the key to this new trade agreement in this critical region of growth is that all the partners, including vietnam, senator, have agreed to the highest standard pre trade agreement that we can negotiate, particularly on those issues that you have specifically enumerated, the rights of workers in terms of protecting the environment, or particularly enhancing trade in environmental

goods and services, intellectual property rights, and at least at this stage the good news is to this point vietnam has said, we understand that the bar has been set very high. we ascribe to those beliefs. i think it may be a bit premature at this point. ef and has one more round in which to make a determination. right now we would like to keep encouraging them to walk down this path with us in which they would agree to the highest standard that the other eight countries have all agreed to. if we can achieve that then we not only achieve your goal, but one that is even stronger. >> ambassador kirk is our lead negotiator with respect to the trans-pacific partnership. obviously vietnam provides enormous opportunities for u.s. companies. u.s. companies can help the people of vietnam achieve a higher standard of living, which then creates a win-win

situation. the leers of vietnam would much -- oftentimes prefer to enter into a relationship with the united states. >> we need to capitalize on it. >> here is my only point, and it might time has expired. it is hard to support a full free trade agreement with vietnam when the country has no track record of enforcing intellectual property and getting us the improvements we need in a workers' rights. we want to get to exactly the place you're talking about. i just think we need to achieve some conrete objectives now like getting us in tese markets for our green products and value added agriculte and the like while we get on the path to a free-trade agreement. >> thank you very much. >> thank you, mr. chairman. welcome to secretary locke and ambassador kirk.

first let me say i appreciate your efforts on the actions that have been taken. i can only say on behalf of the people of michigan that we need many more, and we need to be aggressive the focused. i am pleased to be a part of the export council that the president has established throh your leadership. but in my judgment if we don't address trade enforcement issues will be exporting jobs and not products. we want to export products, not our jobs. that is the whole point of what we are talking about. if we do not get a handle fully on what china is doing i dot kn how we meet the president's export goals. that is of great concern to me. the actions that you take, i would say the message from the people of michigan is, whether or not you act on currency as a subsidy effects the people of my state and jobs. whether or not you act on the wto agreements, whether or not you act on currency or

intellectual property rights are what happens and procurement, all of those stains directly relate to our people and and ws happening in terms of jobs right now. as you know senator schumer and i have combined two bills into one on currency that gives very clear authority and requirements to vote in terms of both identifying and currency as a subsidy, which it is. getting artificial discounts to bring a product in every single day. it is unfair, and it is a violation. we paid to the definition under the international mnetary fund. it is wto complaint. we also have specific requirements for us t r under

we've have been told there were items being purchased from china but exhibit a in this came from

my colleague in the house this had made in china made in the united states in fact it was the gm plant five minutes from our house in lansing. we don't need to be purchasing these from china when they are made in the united states. we also know that tigers and the bullets, ammunition as well have een purchased from china and so i would like you both to react on currency but also whether it is you will work with us to close the loopholes on the buy america provisions and make it very clear we are not going to do business and provide american tax dollars to china unless they open up the process to businesses. >> let me take a first stab at this. we are pleased with the support

we received multinational with respect to china's proposed innovation proposal and policy just as it was through multilateral concerned and comment the chinese withdrew their previous filtering software proposal so we do know that the more that other nations join in these issues and focus on the issues and the better the response will be. and we are very pleased china has made recent announcements regarding its currency in this ambassador kirk indicated the issue of currency the rebalancing of the world economy. obviously it will still be a very central part of the g20 discussions. we have been -- the chinese indicated they hope to present a proposal with respect to the government procurement agreement this summer d we look forward to analyzing their proposal they

might submit. with respect to the census purchasing the have said that you've talked about, all this since this bill -- census bill spend money to help us achieve a 72, 73% meal bac response rate with respect to the 2010 census, much higher than folks ever thought possible. it matched the mail back response rate of the year 2000 despite the predictions to the contrary we couldn't even come close to the 2000 response rate. and a lot of that depended on the media through minority media outlets and publicity by mayors but also promotional materials. >> with all due respect i appreciate that but it doesn't mean they had made in china. >> i assure you the schedules and purchases were made through

u.s. companies, companies that were on the gsa schedule and had to comply with the buy america act and we can work with you on that the buy america act does not limit products coming fm other countries if it is under a certain dollar value. but i can also tell you that for instance we are proud that you in a rate the bags used. there are 600,000 in the murders across the country and this was 12 million-dollar contract we provided to the industry is for the blind in milwaukee and it is 12 million-dollar contract supporting some 100 jobs in wisconsin and the industry for the blind did purchase some component parts for those bags outside the united states and some of it may have included china. thebuy america provision was

through american input whether the actual selling and the design and printing and so forth. the same thing with the hon. more than 50% of the value was american contribution. >> because of currency manipulation the of 40% discount on the price as well. mr. chairman i don't know if the senator wanted to respond to at. >> we've got to move on. >> gentlemen, thank you for your public service. the chinese struggle it has been a sad tale. defective products the chairman listed at his opening comment called the trade goes on the first and it was defective chinese toys years ago we had a consumer product safety

commission the did absolutely nothing for years even at the beginning of this administration we couldn't get the acting chairman of their. finally we are able to get inas tannin balm and she is cracking the whip. she then deal her research that took a long time. it outguesses sulfur. when you go and it smells like rotten eggs. the epa and hhs and the cdc say that they can't see any metal whole of the facts. but the examination certainly found out what the sulfur-type gases do is it curves every medal in the house so you go into one of these houses and all the air conditioning coils are

corroded. they have to be replaced. every piece of metal in the house is corroded. and as a result, the values have just plummeted and here is the poor homeowner. the bank won't work with them on their mortgage, the insurance company says we don't know you. they go to the home builder and the home builder has gone bankrupt and here is the poor homeowner living in a house that is not livable, and they can't sell it because the value has plummeted. now there is a courageous federal judge in new orleans that has issued two or thr rulings and the question is not whether or not these companies are reliable, the question is what is the damage and what he has basically said is the only

way you could limit the situation is to strip it down to the studs in the walls, everett felt all of thewiring and the pipes and start over. and of course that is a huge expense. that's the ruling of the court. so i come back to you. i went to china last summer. i was blown off. really. inez tennenbaum has been a couple times, you have as well. we now have the finding by the consumer product safety commission that there are ten companies that brought this in. mine of the ten companies or companies owned by the government of china. duri the nuclear security

summit i sought out and talked to the president of china and i asked him has anybody briefed you about this and he said no and i said well mr. president you need to get briefed because this is a problem and you have a great credibility problem with a defective product that has been shipd from china in by a number of companies and is harming our people and is going to discourage or quality goods. can you tell us what in the world we can do from here because the end of the day the government of china has to be financially responsible. senator, i know you raised this issue when we presented the president's agenda. we continue to stand ready to assist and work with consumer

product safetyommission. you specifically asked me if i would elevate this to the level of our discussions with our colleaes at the jcct in april. we did that. we will do it again and chairwoman inez tenenbaum was in china the same time that we were there rows part of her investigation. but cpc yes has the lead on this and we will assist them ad work with you in any way we can to try to help bring some relief. islamic bu nothing has worked this far. what we have to have is that the highest level of government, and i'm looking at two of them right now, we have to have fist pounding to get the government we got to come and get the government of china to face the reality they owned companies that mind this product that was defective that is ruiing american people's lives in a

number of states not just my sta. >> center, we will be happy to work with you in any way we think we can. >> senter nels and i can tell you i've raised on numerous occasions my trips to china about this issue and i will personally committed to raising it even to the highest levels i possibly can and press upon the chinese agencies the responsibility. as a personal style lot of remodeling of houses and a lot of dry wall in you put in drywall and if you know as this case the trouble coming from the ten chinese companies you don't know whether it is five panels or 50 panels or 100% of the panel's in your house that might have to be taken out and i've seen the pictures of the devastating corrosi effects it has on the wiring you name it and it is heartbreaking when you have to tear off all that stuff and replace every single piece

not just the dry wall and the morning and keeping that goes on but also the subsystems within the house and this is an economic catastrophe for the homeowners and all it takes is one or two sheets of four by eight drywall that can ruin the entire house and we need to do something about it. >> thank you, senator nelson. senator bunning is next in line. >> tha you. secretary locke and ambassador kirk, i know you are both brilliant man. do you know the difference between communist china and the u.s. government as far as negotiations are concerned? in other words, if the secretary of the treasury would go to

china and try to negotiate with the trade minister or whoever, the number one person supposedly that deals with treasury things they don't have to abi by any law in china and the secretary of the easury has to abide by the laws letter made by the people that are sitting around this up here. that is the problem. all of yougreat negotiations mean zero and ave no effect on the chinese gvernment. if they did, senator nelson probably would be solved. if they did, our currency

problem with china would be solved because we have heard the last 12 years that i sat on this committee the we were going to negotiate one-on-one with the chinese. senator nelson also said he got blown off when he went to china. six members of the trade subcommittee of this committee went to china and got blown off by the trade ambassador were the head of the trade commission or whatever you call that person in china. they would not meet with the people who make the laws in the united states of america. therefore, we have a

miscommunication. all of your negotiations and good will in a meeting with those head of the chinese government's mean absolutely nothing because you have to abide by the u.s. laws. an example, as of april 15th of this yar the department of treasury was to issue a currency report stating whether china was in violation of currency manipulation. we are still waiting on the report. but e law of the united states states that that report was due on the 15th of april and another

one on the 15th october. our secretary of the treasury doesn't have discretion. so i want you to explain to me how you expect to make progress with people who have no respect for the law they say they are abiding by with policies of personal responsibilities, cds, intellectual property, what ever. they make the law and say they have to abide by it but they don't enforce it. now, tell me how we can deal with it. another -- i will give you another for instance. we went to china and we said you know we would like to clean up the atmosphere, and we would

like to reduce emissions in the united states as close to zero as possible and they've thumbed their nose at us and said you go right ahead. we are not going to do it. we are not going to put any restrictions on the burning of coal in the republic of china. how can you trust these people? ambassador kirk? >> briefly. >> well, just as said -- >> you get one question. >> you do, you get one. >> welcome thank you, mr. sherman. >> senator, i would argue the underlying proposition of the difficulty of china's transformations from a communist state economy to one in hich the yep made certain commitments to abide by will rall and the wto drives the was an authority

this policy to have to engage china frequently to keep our hand to continue to negotiate with them in every forum possible other it is through the strategic or economic dialogue, the jcct to read we take them to the wto and it is frustrating but stayed the table because this is a relationship to big to ignore. they offer this for the united stat to try to help china understand extraordinary means they have to transform the lives of 600 million people who live on less than $2 a dayis one that the united states can be a partner in if ty see this as an opportunity and improve their quality-of-life to open up the econy to those where the united states has an extraordinary gift come extraordinary talent and resources to do so but there isn't one silver bullet. this first reading to all of us but i would submit to you we do have cases where we have been

able to argue, convince, hold, and china ha seen the wisdom and changed their behavior. it's not occurring at a rate fast enough i think any of us find acceptable but the broad opportunity for the growth and health of our economy mandates we continue to stay engaged and work with china as president obama said to get them to rebalance their economy and erall industrial policies. >> thank ou, senator schumer. >> thank you mr. chairman. on the senate floor we have now spent several weeks discussing jobs bills, tax extenders and state fiscal relief and the senate is poised to take a small business legislation on every one of these initiatives is important. it almost universally manufacturing see the biggest single step we can take to create jobs domestically to improve the lot look for domestic manufacturing is to get china to reform its

exchange-rate policy. in other words, if china appreciate its currency and move toward a floating exchange rate it would do more for jobs in the united states than any stimulus program that we could pass into law and would help china's economy as well. after reinstating the dollar nearly two years ago china's centl government finally made an announcement last weekend the head of the g20 meetings but would gradually allow them to appreciate. the following day facing domestic pressures, they backtracked on that statement. on monday they allowed the chinese to appreciate by 4% cut in on tuesday the manipulated the market by buying enough dollars to erase half of the gas. this is typical of the chinese government when it comes to practices. one step forward almost immediately followed by a step back. the only purpose is to fend off pressure. it's the same pattern we've seen for years. i've been working on thiwith

senator gramm for five years and we are tired, fed up and we are not reading. nothing ever changes unless you force the chinese to act. that's why senator gramm, stabenow and sali are determined to bring our bill to the floor soon. we are not placated by these public pronouncements. we want action. we are tireddof the chinese government teasing us along here, pulling back a little they're hoping baby steps and public statements will convince enough members that real reform to our domestic currency is not necessary. the chinese will keep treating us like they have laws on a yo-yo. unless we make a serious push for our legislation, and that is what the six of us, three democrats and three republicans, are going to do shortly. our bill commands broad support bo inside and outside the congress n the finance committee nearly all of the committee's democrats supported a similar bill in the last congress, and every republican who was on the committee is the time voting in favor of that

legislation i'm optimistic we would win the floor vote by a significant margin. one of the reasons our bill was necessary is that the government has not taken sufficient action and unfortunately that includes both treasury and commerce. u.s. manufacturers filed more than a dozen allocations allegations the chinese government keeps its currency artificially low level providing expert with the unfair trade adntage the commerce department refuses to exercise the authority under the current law to investigate, and i emphasize again, we don't have to change law because commerce has the authority right now. mr. cretary, with all due respect this is becoming similar to how the treasury department treats the currency report. over and over again dating back more than five years the government finds it a technical reason to delay action under both republican and democratic administrations. the executive branch refuses over and over again tuesday the obvious and exercise its

authority under lock and that's why legislation has become necessary, no deily. we have to move it soon. malae recognize the issues are tough and i know in some cases the government has taken action. for example, ambassador locke, i want to recognize under your leadership the u.s. tiahrt initial initiated more trade action in china the last 18 months than the bush and administration did in the previous eight years. so progress is being made. t on the currency issue, not enough is being done. you can't do it little product y little product. currency affects every product and factory, services, imports, exports. and we are losing jobs and wealth every day we are making america less of a power everyday because we allow the chinese to do this and we don't take any action in response. let me turn to my questions or question, just have one because i only have 35 seconds left.

why has your department, secretary locke, refused to act on allegations that chinese manipulation of currency puts our products at an unfair advantage, and when will commerce fulfill its statutory responsibilities and initiate the qassam currency? i'm finished. >> tha you very much, senator. i agree the appreciation of the currency would do more to help the sale of the u.s. goods. it is the essential to the world economic rebalancing that president obama has supported and called for and urged the chinese leaders in all of his face-to-face discussions with them. with respect to the actions by the the part of commerce we have considered the issue of whether certain currency practices involving multiple exchange rates constituted counter available subsidy in the past. but in some cases we have ruled where there are multiple

exchange rates come specifically geared toward exports, that wod be an offense we would rule against. but none of these cases did they involved an allegation of an exchange rate such as that in china. in the past several cases there have been allegations about the unified exchange rate of china. but from our international trade ministration folks to the general counsel's office we have felt they did not meet the specific, very specific requirements of the u.s. law. in the two cases that are now before us, where the allegations have been amended we are taking a very hard look at this very specific issue. we are taking a very hard look at and te facts and the law merit and investigation we will launch the investigation.

>> this subject is fundamental. i believe frankly the u.s.-china relationship managing the relationship right on both sides of the sitting. in many ways to determine the standard of livi of the united states and china of many countries of the world. this is the most important relationship in the world, u.s. and china and it's got to be handled properly and correctly balanced with the firm beach will respect. and i think that what you are hearing now mr. investor and mr. secretary is a conern that we've got to be -- more self-respect for this kind of stand up because if we don't we

with the consequences are. we don't want to go overboard. we don't want to to get in touch of china and we don't want china to to get into just the concern is that in china to get a vintage of last. and the subject the senator from new york raised all of us have en involved with for some time now and it's difficult and the first question that i asked of you in this hearing is who is in charge of the demonic policy i'm concerned frankly is backtracked pursuant to policy for fear that would upset strategic issues and policy issues, foreign policy issues, defense policy issues, the administration may or may not have whether it is north korea, u.n. sanctions against iran, whatever it is and we are not able, as a country we don't stand up for our economic

interests. they should be dealing. i think the economic policies we pursue with china should be the linked from these other foreign policy and other strategic concerns. now i'm going to be introduced a bill that is before the currency one senator schumer and i have worked with an senator grassley and i have workewith and other senators. i think we have to start moving with more respect to currency. my judgment is china took one beebee step to get it off its back and that is not going to work and we have to show that we are serious. [inaudible] we need to move much more than we have in the past. >> thank you mr. chairman,

mr. secretary, ambassador kirk, good to see both of you. ambassador kirk, for many years china has washington agricultural products particularly apple's and --potatoes because they say that they are prohibited for something other than based on sound science so what is the ustr and to open up markets of apples and potatoes? >> this is one of those mixed challenges where we have when the but major hurdles with china because of their application of non-scientific standards to borrow certain products. the good news is we have a trade balance, one of the few areas we have a surplus with china is on exports. on the picture we are running in the specific areas mother does

for apples or senator schumer's district we continue to be frustrated but continue to work with secretary vilsack and our team from the department of agriculture to get china t just follow international standards and if they will apply the internationally recognized sanitary standards we believe america's farmers, exporters will be just fine. but getting them to that point i will be honest with you has been difficult. there is a component of the jcct discussions every year that we deal specifically with the agricultural standards and issues and continue to press those when we meet again this all but certain spific cases like stores where we have those we pressed as individually as well. >> if i could secretary locke i want to ask about a separate issue which is what the inspector general recommendation said that no one should withhold

its finalization of practical alternatives on the marine operations center but noah went ahead with that process which you think the agency acquisition process is above reproach? >> no our acquisition process is within noe and other agencies of the department of commerce made a thorough review and that is why wesked for separate outside review of the acquisition experts from other federal agenes and private sector to come and who are very concerned about the fact that we have defect consistency and evaluation for instance the new home porting of the ships in the northwest of the inspector general indicated the defects were not sufficient to overturn that and still the award should have gone to the alternate site which was newport but nonetheless -- nonetheless the

underlying findings are very troubling and do not give me confidence with the confidence that the american public expect on any type of acquisition procurement process. we have seen that with the census bureau years ago with respect to billions of dollars spent on handheld computers that did not work where we paid the money and got othing for it. we have seen it with noah satellite procurement, that was in the collaboration with the defense department and nasa. >> with all due respect i have no information from the inspector general that says that he should go ahead and that it's the lowest cost site so we have asked the inspector general if that is the ca and they said no. where are you getting the information? begin report from the inspector general just last week prior to my phone call with you indicating problems the inspector general's office on covered but his conclusion these

defects would not have changed the fact the ultimate award was still the lowest cost and nothing to reverse the contract. but i'm happy to discuss that wi you. >> i would love to see the document that says so. when my staff called after our phone call i think the response was the inspect general's office last that was the answer that know what was given in the document i am reading from may 26th basically says noah should examine whether it sufficiently complied with the requirement to consider existing federal facilities before pursuing the new lease acquisition. so we are talking millions of dollars year to the u.s. taxpayer by the fact that this facility did not go through a process and which existing federal facilities were considered. the inspector general said go back and do that homework and you guys said let's go ahead.

i don't think the inspector general was giving you a blanket go ahead authority to have such a document i would love to see it. >> let me indicate also agree th you that it would have been preferable to consider outside existing federal facilities instead of trying to lease from separate governmental agency whether state, local or private sector. i think in looking at all of this it would have been preferable and that is why we need to have a fair review of the acquisition process within the department of commerce and especially noah in terms of are we asking for catholic versions of things when in fact we should be looking at more readily available suitable facilities or product and services before we procurer. >> i don't think the general said to go ahead. i have a letter saying you shouldn't go ahead so an inspector general's as an agency shouldn't be taken action costing taxpayers money because

they haven't done a thorough review the next step as congress gets involved in saying you shouldn't allocate money to such projects. we look forward to discussing this further. >> senator menendez? genex mr. secretary, mr. ambassador, thank you. i want to echo the remarks of senator schumer and the chairman of the china currency practices and i heard what you said but i heard that before in terms of we are taking a hard look at. we are taking a hard look at this question for some time it seems and china makes a declaration they are going to start moving in that direction and it's quite the texas two-step, one step rward, two steps back. i think you might know a bit about that in terms of dancing. they do a dance with us it is pretty harsh. the cities in china i our

banker. their prices are lowered our prices are higher at the end of the day they are collecting our dollars and then they come back and buy our treasury bills and so there are bankers. we cannot consistently have t lack of currency floating the currency they should allow to take place as ost countries in the world per met to be manipulated as they do. so as long as we're taking a hard look they are going to continue to collect our dollars. we will continue to be the customers at the bank that is not a good position for american businesses and products and services. i'd like to get a sense of what is wrong with for example the legislation of the chairman and senator schumer have discussed which basically says, if you allow your currency to float, great but if you don't allow

your currency to float there is a tariff, there is a consequence china does theeright thing they want these consequences. if china or any other country is the wrong thing there is a consequence. what's wrong with that? how is that of protecting the interest of the united states and being fair practices we are supposedly supposed to be observing universally. >> senter menendez i have not and i don't believe ambassador kirk has taken the position or indicated we are opposed to that legislation. >> do you suppt it? >> we haven't taken the position on the legislation. i would be happy to look at it and comment and work with your office and senator schumer on that but let me just say when you asked why are we taking a hard look given the scrutiny our decision and commerce will to some judicial review the general counsel's office, my office and the office and folks in people in the department of international administration are taking a hard look at the facts and the law of the specic

case. and if they warrant a decision to investigate we will investigate and allow the investigation to prceed. >> i appreciate that and your statement is pretty clear you are reading from it and i understand that. the problem is we see no concrete action we take to get the chinese to ultimately live under the same standards we live under. we are asking for something they should uniquely do. every other country in the world largely let's their currency fluctuate and this is about america. i hear about your desire to export more but this is about american jobs. about america's's economy at the enof the day and right now we are at a competitive disadvantage in this respect. so i support the chairman. i will move forward and look forward to joinng him because, you know, i see the g20. we are going to make is a major issue that she 20 and i read comments we are going to move

away because chinaade some comment that is going to change its practice. it's done that before and they go riht back to the same business and we take it off the g20 agenda. it would be absolutely wrong so i hope we are going to pursue it vigorously at the g20 agenda. >> let me ask another area which is intellectual property coming from new jersey that is importanto us. you know, china's policy to implement indigenous innovation policy is one of the huge problems. no other government in the world restrictgovernment procurement market access on the basis of intellectual property or brand name ownership has china does requiring local ip ownership as a condition for access to the market is not only unprecedented , it fails to recognize the collaborative cross border and cool nature of resource development that produces innovation. now, we sent you a letter and i

appreciate your response to share concerns, but i just like the currency practice other than sharing our concerns taking a hard look at it, what are we going to do? what are we going to do for example in another area of intellectual property protections and a very significant for this nation and certainly my state is the area of piracy, copyrighted u.s. scientific technical and medical journals by chinese companies. you know, in new jersey over 2,000 people unemployed by such entities, so give me a sense of what we are going to be successfully pursuing re as it relates to bothf the indigenous property issues and intellectual property issues and this other area of intellectual journals and one of. i mean, between the currency practice and i will stop here and say the chinese are great, they are prolific and filing complaints under the wto. but they do that anat the same

token ere in the midst of doing a host of things tha put us at adisadvantage. >> senator, thank you. we agree with you. stat i want to ask you to exhibit the two-step either. [laughter] >> in texas we have least try to take two steps forward, one step back and that we we get somewhere. we share your frustration and discuss this with the chairman and senator wyden to read the good news is we are attacking indigenous organization working with china in every floor possible too get them to strengthen their property rights. we have some measure of progress during the recent strategic economic dialogue. we made our concerns on this indigenous innovation policy. one of our top three initiatives we did get china to agree not to forward with the second circuit. i think that is the word you were looking for, mr. chairman, they had issued. but we also forced them through a more honest discussion of how

this would apply in extending it to government procurement as well. in terms of taking china on within the wto since i had been privileged to serve and to confirm to me as united states trade representative under president obama the u.s. trade reps have taken lowercase is successfully against china in the wto than any other member of the wto a number of those cases have been involved in a volatile property rights in particular we are looking at copyright's and protection in those areas, the scientific journals you referenced and we have had some success i those but we recognize this is great to be an ongoing effort until china develops its own indigenous entrepreneurial activity that can join making that case with us to china of with the real cost of pirating and theft of intellectual properties to the chinese government and in the interim we continue to push them

to put in place a more effective law enforcement regime and where appropriate again we have not hesitated to pursue actions and remedies within the wto. if there is a specific matter involving one of your constituents will follow-up with i would be happy to do so. >> thanks, senator. i would like to ask you, ambassador i would like to make headway on agricultural products. china has a total ban on the u.s. become a total. japan looks them be an unrestricted basis as does korea on an unrestricted basis. as you know we have bense on acceptable. one of the stories that can out of the last year's jcct as you know is we did get them to open the market back up to pork which they had restricted after the

h1n1 scare and we are resuming those exports. we continue to press them working with secretary vilsack from the department of the agriculture to open the market back up to beef which we have been excluded for far too long. as we have mentioned to senator cantwell what we are trying to get china to do in every case is just follow the internationally accepted standards and act on a sound science chris cemetery products. the good news is we do have surplus in our agriculture exports for china, the frustration, we have specific products like beef and poultry in which they have just been -- >> again you are using he word at the press encourage and talking. i believe frankly no country of drastically out of the goodness of its heart eckert lowers the

entry barrier. they ask them to do something. unless it is in their own advantage of economic advantage to do so. we need to leverage. we need to leverage. the country's lot produce a trade barrier out of the goodness of their heart unless there is much richer. then it is no longer in the goodness of their hard on the self-interest. what leverage do we have. senator, i would agree and tell you the lawyer in me says is not always constructive for me to lay out the bt leverage here i would hope you recognize what we are able to achieve injapan and the european union and in the %%ief time i've been here with respect to be briefed understand leverage and how to use that but my background -- sprick how many do you have? >> we always have the threat -- >> we've lost a lot of leverage

it is a bad thing to do we joined the wto. is that per had a lot of unilateral action -- it could act unilaterally but it is difficult to do now since we all warrant the wto, have to o through the wto. which may or may not be successful. what do we have honestly? >> senator, i for one don't readily dismiss the leverage and the threat of taking the case to the wto and its value to the united states. we have seen tremendous results from that not respectto china. other trading partners as ell. but we work with the like-minded countries, we look at our ability to retaliate against china where appropriate. but we will use all of the tools congress made available to us all through our legislation through trade remedies to the

wto. >> what would be the commerce finding a subsidy with respect to the chinese currency, china subsidizing its proucts of the services of the united states because it feels toappreciate. that enables us to countervail against china. i forget which senator it was why congress has not taken action to a the answer i got as it is something about the basket of currencies which is said, ambassador, secretary locke come it sounded to me like a little bit of rationalization and dodging you don't want to take it on. what is wrong with the allegation china alone is subsidizing its products because

it fails to let them appreciate? >> there is no disagreement that the chinese currency is undervalued. there is no disagreement is absolutely crucial for the appreciation to occur and with respect to the questions you posed to ambassador kirker part of the leverage we have is international opinion and the more that we can pursue these matters, ultilaterally just as we have with respect to the indigenous innovation, the green them software filter andow on currency >> i'm sorry world opinion i don't think quite got that. we need more than just an opinion. more actual leverage, economic leverage. >> if you recall the united states move forward on 421 tire ks when a lot of people were

saying we should not do that. >> by united states made the right decision then. >> so we will use every tool within our tool kits that is legitimate, thats appropriate, that is legal. as baquet me ask this question to you need more tools? is your toolkit large enough? to y have te right tools in the tool kit? have you done inventory of your tool kit? to find out what you have, are the appropriate and do you want more? >> i think whatou are seeing is an administration that is willing to use the tools we do have compared to the prior administrations where we are not afraid to use those tools and we are using them. >> with all due respect you didn't answer my question to read have you done an inventory of your tool kit? do you have the proper tools? >> i think we have sufficient tools. >> you do? gove if you go back and look in

your tool kit. go back and see what's there i would like you to come back. do you have the right tools? perhaps you can come up with ideas. it is a two-way street. we will help you. >> we appreciate that. >> briefly i would like to say secretary locke did make an importt point. it doesn't matter how many tools you have in your tool box if you don't have the political will to use them and i do think this administration deserves a tremendous amount of credit in moving forward not just with inand other trading partners that have operated in a way against the interest of the u.s. manufacturers and workers and armers to hold them accountable and we will do that but we would certainly welcome the opportunity to have that discussion with you if we need new resources. >> senator wyden. >> thank you. mr. secretary, i did not expect to get into the noah fleet in

oregon this afternoon but since my colleague of washington raised the issue i think it's important to now set the record straight and clear the cloud that was placed over this award. if you had it correct over the three-year process in three years of looking at this the various agencies, it is like an alphabet soup of government, noah, the inspector general or the general accounting office, no agency ever said that there was any practical alternative to newport; isn't that correct? >> i'm not aware f any decision or recommendation otherwise. >> very good. >> my second point goes to the heart of your work and to the heart of the administration's interest in promoting science. colleague from washington essentially seemed to say that she was interested in

politicizing the process that after all of this one thing and effort to have a transparent open process she was interested oerturning this and blocking the funding and breaking off the work that is done in newport. wouldn't this introduce politics into every award that goes through your department if after all of this, all of this work that was open and ransparent, the review of all of these agencies that now have the congress overturn thefinding, block it, within this introduce politics into your agencies work that would change the commerce department dramatically and not for the better? >> welcome given the fact senator cantwell is a good friend of ne i would not want to characterize her statement as

trying to politicize the process. >> mr. secretary, i don't know what you call it, she said she was interested in effect blocking the funding, overturning the contract, the when forward with the inspector general process as you know the inspector general doesn't even have the legal authority in the area. setor cantwell, good friend of mine, has a few better friends and allies in the samet. i just want to set the record straight let's go to the substance if you had congress overturn this award to newport at this point block funding in effect through without wouldn't have dramatic implications for all of the other work that the commerce department does in your effort to put science first? >> it's very important that the

congress as it exercises its proper oversight rules be very careful whle ensuring proper procedures and impartiality in procurement decisions that it be mindful of the ultimate goal of saving the taxpayer dollars and getting good value for those dollars. in the case of newport all of the analysis indicated that it offered the lowest cost of all the proposals and that while the initial reward field to consider the issue of flood plain what would be the impact it during the flood of the rivers were to rise and what impact that would have on the docks by the very nature are in water and the question is for the box

sufficiently high swindel of river levels rise will still be operational. the inspector general, the general accounting office said that in making the award to newport we failed to properly address that particular issue competing sites. they were also on the rivers that will rise during the high water mark reflecting and still the conclusion was that the newport site was the best value for the american tax payer which is why we stood by it. >> so can we remove the cloud over this award this afternoon once and for all mr. secretary? this has been vetted and refitted and examined by all of these agencies and seems to me that it's time to remove the cloud that was just placed here again even by your characterization you said the inspector general found nothing

but suggest newport was the right place for this award. is it possible to remove the cloud over this award this afternoon? >> given that the inspector general and the reports that i saw last week sai that there was nothing in his findings that would say that we should change the award going to newport we intend to move forward because it provides the best value for the american taxpayer and we need to move forward and have facilities for all of the ships so that no law can move forward with its mission. >> so in your judgment, just as the noah report said when it said final determinationhis is now final, newport has the award that's begun work as you know it's gone on for quite some times this is final, correct? to make its final with respect to the bird of commerce and noah. knowing the congress may have

other -- to make its final unless there is an effort in the united states congress to politicize and i want folks to know omy watch i am not going to let that happen. i don't think is right for my state or tax payers and i think it means the objective of the obama administration in this area which was to put this audience before politics that this had been the objective in this area would be substantially de raybould if after all of this work but yearsof effort through open and transparent process over the award was finally made and you have described it in my view as a final word you said a final in your judgment to then at this hour say we are still going to try to overturn the funding. we are going to have the congress try to block the work that is ongoing and think it has

great implications for the way science decisions are made. for taxpayers in this country and on my watch i'm not to let that happen. mr. chairman, thank you. >> i want to give you more tools d one of them is enhancing the special 301. this is a bill which basically provides that if a country fails miserably to improve after the so-called names and change list under the special 301 the u.s. could prohibit federal government procurement in the foreign country prohibit new financing by opec and also united states could withdraw treatment for which the foreign country qualifies as a gsp. i'm trying to give more tools so

we can do more. i don't know the answer is yet with the focus should in the administration's we have an administration economic policy and also for entry par policy. i must say the words come haunting back to me 20 or 30 years ago. a member of congress speaker -- when japan was growing, stand number one, all of that. and several members of congress and myself met with sony head of the time to read and i said if the presidential election, send

if the president -- give me carte blanche, whatever economic policy you recommend the poicy will implement. what would you recommend to enhance america's economic provision in the world what would you recommend? without skipping the eat he said you need department of international trade. department of commerce, department of housing, the board of education, a department of agriculture, need department of trade. if you need to compete in the wod you have to have that focus. that was his perception, that was his observation 20 or 30 year ago. we do believe we need to have something like that if we are going to compete in the world and i urge you all to think about that. ..

can you help us together to figure this out, so that we can measure the progress. where we can economically, with the pure kirk -- procurement code, with this appearance and whatever this may be. as you can tell, this is getting beyond the place where this is just talking. i am going to keep working and i will find a solution here. i have to leave right now. >> thank you very much, mr. chairman. i will not be very long and you will be happy because we can go back to discussing trade for a few minutes. i want to ask you about the question of antidumpin

i want to talk to you about the a vision of these orders, and this is a growing problem and we know that the chinese are among the most common violators. in both of those areas. and of course without adequate enforcement, american firms are going to continue to lose business and jobs to unfair imports. last month commissioner bersin was up and he told us that the enforcement of the trade laws particularly in those two areas, antidumping and countervailing duties is going to be a specially important part of his work. secretary locke what are your plans to work with commissioner bersin to further prevent the evasion of our unfair trade laws? >> as chairman baucus indicated, and as ambassador kirk indicated when we have tools we have to use them and as i noted in the opening statement, the number of

antidumping and countervailing duty cases this year exceeds last year's by almost 50%. and when we impose those antidumping margins, it is important that they are followed. weave received some reports of companies in china trying to evade that by routing their products through another country and having marked as coming from that other country to avoid the pain of those duties. so we are working with the customs and border agents and that office to really try to share information, that when we learn of this, whether through web sites or advertisements within china or esewhere, any country that tries to do this, that we need to alert and work with customs and border officials so that we are watching for these items coming on the docks and coming in the various ports so we can impose those duties. >> the other question i wanted to ask you secretary locke

involves green energy and essentially green goods, and my office recently put out a report that indicates that u.s. exports off a number of these environmental goods seems to be overstated, accounting for roughly 10% of previous. given the fact that china and a lot of our competitors are already pushing very, very aggressively and very hard to get these markets seems to me, first up we are going to achieve the prsident exports of double exports in the next five years and particularly his agenda for green energy, we have got to tap these markets. we are not going to be able to do it if we can even track how we are measuring our ability to get these green goods into promising markets. what is going to be done to at least improve how we measure

green goods trade? >> well, the census bureau does more than just conduct. the census bureau is a repository of a whole host of statistics and economic figures surveying companies as well as individuals, and part ofheir job and part of their mission has involve cataloging green jobs and the green economy and they came out with a report just recently trying to chronicle exactly the extent of the green economy. we are working with them now and i think we should be using their definition. part of it is reporting. >> so we will get a better system to ensure that we curately measure green goods trade? >> given the work the census bureau has done we think we are in a better position to more accurately document export of green jobs. i think it has been a problem of companies having different definition so when they report

to whether they are trade associations or to the commerce department they are exporting what they call green goods those definitions don't-- aren't necessarily consistent and now with the work of the census bureau and the reports issued by them i think we will have greater consistency so that companies are able to report things under the right categories. >> what we have found is that the evidence with respect to our exports, environmental goods suggest that we were overstating what we were sending into these markets and if we are overstating what we are sending and we already know we are lagging behind, we have got it big problem so i need your office to keep me apprised of that. >> it may turn out that we are actually exporting but the item or the service may not actually be a green eyed amaury green service. it is still an export but it may be in the wrong category but with the work of the census bureau trying to have tighter definitions and better serve a analytical data, we hope that we will have more accurate

descriptions >> as you and i noin the real world of pacific north northwest, this is a jobs issue. we are making a huge push to get our wind turbines, solar panels into these countries. a prereisite of getting this done is to be able to track these numbers accurately, so i am going to be following up with you on this and to me, an essential issue if we are going to turn this around. one question for you ambassador kirk, we all are reading these reports about how china outperforming the united states in the space. renewable energy and green goods and the various products that relate to energy efficiency. you are going to be the point man in turning this around. can you update us on specific requests that you have made, certainly with the most recent negotiations, but also i would like to have your outline for

example what specifically you believe will be accomplished between now and the end of the year that let's us tap this market? >> first of all, i want to be clear. i wish i was a part of this. we have the lead responsibility in terms of negotiating our new trade agreements, whether it is the transpacific partnership or working for our partners at apec and others to try to promote and encourage the movement of these environmental goods and services. particularly at the lowest tariffs and we will be doing that. as you mentioned in your earlier comments, we have a great opportunity to dispense specific partnership in the next round to have a further expansion and deepening of that that this is an area where the coordination, corporation that we have across the administration works quite well. secretary locke has been perhaps the most energetic advocate of our developing a green economy and working for our export

initiative has absolutely taken the bull by the horns, so to speak. to make sure that we deal with the issue of our lack of capacity, so that we can create the jobs that are so desperately needed not just in the pacific northwest but when i had a chance to visit ranking member grassley's district in iowa earlier, he has got a compan that used to be involved, a company that was formerly involved and maytag washing machines, and they are now making the blades for some of these wind turbines. you have companies and manufacturers from texas and michigan. this can be a real job creating industry if we manage this appropriately and we are going to do that across the administration. if i might, senator wyden i know our time is coming to a close but i did want to respond to one thing that chairman baucus said and i want to make it absolutely clear. this administration is acutely focused on the needs of

americans to find the jobs we so deeperately wants to accompany this economic recovery, and we believe having a smart, thoughtful, aggressive export policy is the way to do that. we share the concerns of this committee about some of our challenges with china, but i want to make sure we don't give the american public the impression that it would be in the best interest economic interest, of the united states of america to withdraw from the global trading community. 95% of the world's consumers live someplace elsother than the united states. the fastest growing region economically, as you noted, is in the asian pacific realm and then including china, india, russia and brazil. it is critically important that we deal with the ises that we address but at the same time that we