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tv   Key Capitol Hill Hearings  CSPAN  April 22, 2015 3:00am-5:01am EDT

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start mr. chairman, by , stipulating that tom donohue is an expert of presidents. he goes back to abe lincoln's days. [laughter] i think he is ably qualified to be an expert on those presidents. i want to thank you, chairman hatch -- senator hatch: you're goings to have that white hair before it's all said and done. mr. trumka: i want to thank you, members of the committee, and tom donohue. for strengthening labor and environmental provisions, for reforming investment rules, for finding the appropriate balance and regulatory measures and intellectual property protections, for fair rules of origin and finally including meaningful currency provisions among many other issues. far from being opposed to trade on principle, we have supported trade deals when warranted. some examples would be the jordan trade agreement, the african growth and opportunity act, the generalized system of
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preferences and the re-authorization of the import-export bank. key to reforming our trade policies we believe is abolishing the outdated, unaccountable and un-democratic fast track process. the trans-pacific partnership, now being negotiated by our government, includes 12 countries and about 40% of the world's g.d.p. and the t.p.p. is designed to be infinitely expandable. so it could be the last trade agreement we negotiate so it's especially crucial that we get the terms of this one right. and mr. chairman, the idea that fast track lets congress set the standards and goals for t.p.p. -- i'm not talking about other agreements but for t.p.p., is an absolute fiction.
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the agreement has been under negotiation for more than five years and is essentially complete. so the instructions that you send them will have no affect whatsoever. congress cannot set meaningful negotiating objectives if the administration's already negotiated most of the key provisions. i might also add, this will be the worst possible time to pass fast track for t.p.p. because the leverage that you have left for those issues that are remaining is right now. and you give that away if you pass fast track legislation. congress will lose that crucial leverage over any remaining provisions by agreeing to fast track at this late day. the administration has ignored congress' direct instructions to negotiate meaningful currency provisions and to reform the flawed investor state dispute
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settlement process. granting fast track now takes congress out of the picture until the agreement is complete. and while all fast track bills have gone through the charade of listing negotiatings' objectives, there have been no consequences when the administration willfully ignores or fails to achieve any or all of those objectives. america needs an entirely new trade negotiating authority, not minor tweaks at the margin. and the hatch-wyden-ryan bipartisan congressional trade priorities and accountability act of 2015 falls far short of doing that. congress must not agree to fast track a fast track bill right now, mr. chairman. the time allotted between the introduction of the bill hearings, committee
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consideration and floor action is really short. and it's a sign that i believe that if it had more time and more people knew about it, more people, not less people, would oppose it. a new and effective trade negotiating authority must do the following -- it must ensure that congress approves trade agreement partners before negotiations begin. create negotiating objectives that are specific to the individual trading partners that we're dealing with, because they're all different. ensure that congress, not the executive branch, determines whether the congressional trade objectives have been met. ensure congress has effective opportunities to strip expedited consideration provisions from trade deals that fail to meet congressional objectives or to
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incorporate congressional and public participation. increase access to u.s. trade policymaking, trade proposals and negotiating text for congress, congressional staff and the public. and include a broader trade and competitive package that addresses infrastructure training shortcomings and reform tax policies to ensure that all -- and i mean all can benefit from trade. a few comments about t.p.p. to the extent that we know. bipartisan majorities of the house and senate have insisted that currency manipulation must be addressed but the administration has failed to include any currency provisions in t.p.p. e.p.i., a study, said that u.s. could add as many as 5.8 million jobs to our economy by
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eliminating currency manipulation. on investment, the legitimate and serious concerns have been raised by both the left and the right about investor state dispute settlements. yet, the provisions of the t.p.p. have not addressed any of those concerns. on climate, without a border adjustment, t.p.p. will not stop manufacturing from closing up shops in the united states modification to t.p.p. countries with no carbon reduction scheme. in fact, you know, encourage china, not a member of this agreement, to move dirty manufacturing plants to countries that are partners to this and be able to send dirty products back here to the disadvantaged of american producers. on the labor side -- the status
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quo, the so-called may 10 agreement, needed further strengthening. the may 10 standards were first steps towards leveling the playing field for workers but they did little to ensure timely and effective action. let me list some of the problems. the highly touted labor action plan in colombia, combined with the may 10 language protecting workers' rights, has been totally ineffective. since that plan has been signed, 105 workers have been murdered for trying to exercise their fundamental worker rights in colombia since the labor action plan was implemented. mr. chairman, we've been told by ustr staff, their general counsel and ustr for labor told us repeatedly that murder of
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trade unionists and violence against trade unionists is not a violation of the labor provisions in our f.t.a.'s. so when people say this is the highest standard yet -- talking about labor -- you'll have to excuse me if i'm unmoved or i'm satisfied when they tell us directly, without any equivocation, that violence and the murder of trade unions for exercising their rights is not a violation of these agreements. now, we've asked for reasonable measures to strengthen the labor chapter, but ustr have ignored those requests. they're not there. i'd also say that human rights language in the hatch-wyden-ryan bill is not binding.
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and the fact that several very serious human rights violators several very serious human rights violators, vietnam, brunei malaysia, mexico, are , already in the t.p.p. demonstrates that fast track -- fast track objectives are ignored or irrelevant. in sum, to get this thing right, congress should not be constrained by misguided secrecy or speed or unaccountability of fast track. we really urge congress to reject the outdated and un-democratic process, known as fast track, and develop instead a new trade negotiating authority for the 21st century. this is going to affect 40% of the world's g.d.p. it may well be the last trade agreement that gets negotiated
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and the lives of workers are at stake and the livelihoods of workers are at stake here. it's important that we get it right. i can understand my friend, tom, advocating for fast track and t.p.p. his members have benefited by it, benefited greatly. but the average working folks in this country haven't. and we need a different deal. we need to have something that really works on our behalf and protects the lives of trade unionists from being murdered or having violence perpetrated against them and say that it doesn't, doesn't violate a trade agreement. mr. chairman, thank you for the opportunity to speak here today. and i look forward to working with you, senator wyden, to strengthen this legislation and make it better for the american
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worker. senator hatch: thank you, mr. trumka and mr. donohue. we know you're busy people and we know you're sincere people in your respective areas of the law. senator wyden, let's turn to you, first. senator wyden: thank you, mr. chairman. i indicated i want our colleagues ask their questions. i want to make very quick points. mr. trumka, with whom i agree so often, suggested there would be insufficient public scrutiny of t.p.p. colleagues, under this legislation, by law the american people will have t.p.p. in their hands for two months before the president signs it and months more before it is fully debated on the floor of the house and senate. so with that i want to have my colleagues ask questions. senator hatch: mr. donohue, as
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you noted in your opening testimony and as i've been saying for years now, since trade promotion authority expired in 2007, our countries other competitors in the world marketplace have not been sitting on their laurels when it comes to trade. indeed, there are hundreds of free trade agreements around the world that are currently in effect or under negotiation and the u.s. is a party to relatively few of these agreements. in your opinion, what's the cost of the united states if we refuse to pass new trade agreements while our competitors press forward with their own? mr. donohue: well, long-term refusal -- and we've been at it for a while -- to pass new trade agreements will basically provide markets across the world to our competitors, it will cost american workers ever growing number of jobs.
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it will have a measurable effect on the economy of the united states and it will make us far more insignificant in the -- less significant in the geopolitical, economic affairs of the world. this is the equivalent of going out and resigning from the rest of the world. we're going to say that none of this is important in terms of how we get our children and grandchildren into the economic system. we're going to say none of this is important in terms of what affect we're going to have on the general affairs of the world. and most of all, mr. chairman 95% of the people -- we all agree to this -- that we want to sell something to don't live in the united states. that's no reason to put together agreements that are totally irresponsible, but it is a reason to get out there in the marketplace and compete as we have since our founding, a
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failure to compete is a resignation from the global economy and the results would be one of the great tragedies of our time. senator hatch: mr. trumka, let me ask you a question. according to the ustr, average wages in export intensive industries in the u.s. are above those in nonexport intensive industries. the ustr also tells us with over $1 billion in services exports supporting an estimated 7,000 u.s. jobs, expanded services trade globally will unlock new opportunities for americans, unquote. according to the recent bureau of labor statistics data, close to 12% of those employed in service occupations are represented by unions. so mr. trumka, the administration details that it -- tells us that the free trade
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agreement under consideration will expand exports and create more jobs in export intensive industries, including services in turn that means more jobs in sectors with significant union representation and higher wages. with those data provided from the democratic union-friendly administration, why do you oppose agreements that can expand your membership and more importantly generate good-paying jobs, including many union jobs for middle-class workers? i just think that's a question -- what are your thoughts on that, mr. donohue, after mr. trumka finishes? mr. trumka: well, first, i'd like to comment on the question you asked tom. this isn't a choice between t.p.p. and no trade, that if we don't get no t.p.p. we don't get no trade. that's the way you made it sound and that's the way he answered. there's a lot of distance between there. what we're saying let's have a good trade agreement that really benefits people. look, those statistics that you quoted will also tell you for
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every trade deficit, every $1 billion in trade deficit -- and we have about 500 million -- billion dollars of trade deficit a year, there's several thousand, almost 15,000 jobs per -- 15,000 jobs lost per $1 billion of trade deficit. now, each one of the great agreements that we've signed so far has encouraged outsourcing and increase that deficit. it's sustaining. $500 billion a year takes jobs out of the country. i wish we could reverse that and bring it back. i swear -- i don't know where tom got his figures earlier that we have a surplus, a trade surplus. to have a trade surplus, no figure that i know of, because goods and services and everything else has been in deficit. so a good trade bill, mr. chairman, we could create jobs and it could benefit everybody. currently the t.p.p., as constituted, is not that bill. it doesn't address currency.
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it doesn't address the investment provisions. it doesn't address the labor provisions, and it doesn't address the environmental provisions. it doesn't address buy american provisions. there are a number of other things we listed and tried to make this agreement into something worthwhile. we've worked for five years to try to make t.p.p. an agreement that the american worker could benefit from. and precious few, fewer than you can count on one hand even made it into the u.s.'s proposal to our trading partners. obviously you can't achieve something if you don't even propose it and negotiate for it. so i'd love to work with you to create job better than t.p.p. but a lot better than nothing, because there's a lot of room between that and to imply that if t.p.p. isn't fast we're not
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going to do trade is just a misrepresentation, i believe. senator hatch: thank you. my time is up. senator cornyn. senator cornyn: thank you, mr. chairman. i come from a state that in 2013 counted an estimated 1.1 million jobs associated with trade. just the binational trade with mexico is estimated to support as many as six million jobs in the united states. and in terms of its impact on small and medium-sized businesses and the people they employ, 93.1% of the trade jobs were small and medium-sized enterprises with less than 500 employees. i actually believe that one reason why texas has done better than the rest of the country in terms of its economy and jobs is
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in large part been because of trade. we led the nation in overall exports since 2002 in beef cotton, petro chemicals, machinery and high-tech electronics. in 2014 alone, texas manufacturers and farmers set new records of exports with nearly $290 billion worth of merchandise to buyers around the globe. so i believe that this trade promotion authority proposal that we'll mark up tomorrow is -- represents real progress. the challenge i think we have is if absent a trade promotion authority or so-called fast track authority we're left with negotiations on behalf of 535 individual members of congress which is just not feasible. what i worry about, and mr. donohue, you alluded to this, is if we don't engage with asia as
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-- on this trans-pacific partnership proposal, which we haven't seen by the way, mr. trumka -- i'm looking, waiting to see what the contents of it are because i don't believe -- i do believe that impact of trade does not fall uniformly and there are things we need to do and there are things we will do with trade assistance authority to help people who are dislocated as a result of trade, learn new skills and new higher paying jobs. but mr. donohue, what would be the consequences to the united states long term if we don't do this? and let's say, countries like china that didn't to fill the void? mr. donohue: i think it's important to recognize we are the largest manufacturer in the world, with the most significant economy in the world.
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but that reality of what is going on around the world sees very large economies getting more productive and more engaged with one another on trade. it we are not made -- major players in the trading affairs of the world it will have a fundamentally negative effect on our economy, on jobs in the united eight, and our influence around the globe. mr. trumka is a very passionate representative of his ideas. i would say for the record, mr. chairman, all of our numbers on jobs from this deal or that deal all come from the commerce department. when i was talking about the significant benefit in jobs in recent trade agreements, it's very clear. i think there is another point we should all look at if you
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would allow me to make a point. you know, the jobs lost in the united states in manufacturing the great percentage of them wanted to countries. -- go to to countries. a country called efficiency and a country called productivity. the american business system the most efficient in the world has taken 40 plus percent of the jobs out of the manufacturing process, because of information technology, robotics process engineer and supply chain management. those 40% of the jobs are never coming back, but the way we get the jobs back, which mr. trumka wants, i want, and we all want is we do two things. number one, we encourage others to come here and produce their products. you could go around this country today and you would find representatives of europe
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looking for places to build their factories simply because their energy is three times more costly than ours. and the second thing that we need to do in a fundamentally, efficient way is to go out and produce more things in our manufacturing plants and in new manufacturing plants that we would build and export them around the world. those are the only ways to expand manufacturing jobs in the united states. >> i wasn't here when the north american free trade agreement was negotiated. i can tell in you my state it's viewed as a net positive. for that region of the country. as the central free trade agreement is. senator cornyn: part of the consequences, i visited with
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senator kaine, down in honduras recently, you remember the influx of minors moving into the united states, and our failure to have -- help our neighbors provide not only security but also help grow their economy where they live does have residual and impact on us in ways that perhaps we don't even recognize. so i appreciate the great work that you and the ranking member have undertaken on this and look forward to supporting the t.p.a. in tomorrow's markup. >> mr. chairman, might i comment, senator cornyn? senator, you indicated that we would have to have 535 different agreements without fast track. mr. trumka: that again -- there's a whole lot in between there. and i suggest that the following things to improve trade promotion authority. ensure that congress approves trade agreement partners before
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the negotiation begins. create negotiating objectives that are specific because they are different. ensure that congress, not the executive branch, determines whether the congressional trade objectives have been met. ensure congress has effective opportunities to strip expedited consideration provisions from trade deals that fail to meet congressional objectives or will incorporate congressional and public participation. we also think that we ought to integrate this with the rest of the things necessary to make trade work: infrastructure training, and tax policy. it's not we're saying you can't have it or shouldn't have it, it's this one, the one you're
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considering, abrogates too much power. you give too much power away you have no control particularly over this agreement which is completely negotiated. mr. donahue: mr. chairman, we all recognize that negotiation is a give and take. you have experienced it here in our own committee in recent weeks as you, working together have come up with a bill. that's exactly what happens in a trade negotiation. and the fundamental reality is we are in a new time. if we fail to inject ourselves at the right time and in a significant way in this trading process, those other large and growing countries are going to do it on their own. i know everybody believes america is so essential because they are because of technology because of our value system, and so on. we have got to keep the -- to keep that position we have got to enter into these agreements. we don't have to give away our value system. we have to deal with the things
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that are important, but there's no way that we can tell everybody else, look, just wait about 10 years. we'll get our stuff together. we'll think about it. we'll work about it. we have got to have an expedited system. we have to have a system that lets people that do this every day, all day, professionals, to bring you the results based on what you have told them you want. but tomorrow is too late. today is time to move on these issues. senator hatch: thank you. senator schumer. senator schumer: thank you, mr. chairman. thank you for holding this discussion today. i thank our ranking member for pushing hard to get it and i want to thank both of our witnesses, mr. trumka, my belief is the greatest problem america faces is the decline of middle class incomes. it's harder to stay in the middle class. harder to gain the middle class. i know of almost no one who has tried to reverse that trend than you. thank you for your work. mr. done hue, thank you for your
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-- mr. donahue, thank you for your strong advocacy and leadership. we have worked together on many issues. immigration above all. but export-import infrastructure. and most important, you're from st. theresa's parish in brooklyn. it's good to have you both here. we know the administration, when they tried to sell me on t.p.p., it's almost the geopolitics that prevails over the economics. we want to keep these countries in our orb rather than china's. if there's an economic web between them and china and not us, it's hard to do that. i agree with that goal. with that said, though, if that's one of the main goals of t.p.p., to lure countries away from china's influence, it makes perfect sense as part of the overall effort within t.p.p. or alongside t.p.p. to deal with china head on. to show them that there's not business as usual. china is our most rapacious trading partner.
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none of the other countries in t.p.p. do what china does. which is not only do they manipulate their currency which has cost us millions of jobs and trillions of dollars of wealth unfairly flowing from us to them, they steal our intellectual property. that's been documented over and over again. and probably worst of all, when we have a good product, they don't let us in. we are at a new phase. we are doing high-end manufacturing. high-tech stuff. that's our hope and our future. we have already had the competition with china on furniture and toys and clothing. sort of low-end stuff. but if they start stealing our intellectual property in these areas and then they keep us out or they have us for us to join joint ventures that are 51% chinese government owned and take all that information to build their own industries from their protected market and then compete with us, i don't know of anything that is more
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frightening to me that will continue the thing that i believe is so important, which is to get the middle class incomes going again like it was in the grand era of america from 1950 to about 2000. so i think we can do two things. and i know what china does. small companies, big companies. i had a small company in upstate new york, they needed material from china, rare earth. 500 jobs. the chinese told them, you want those rare earth you got to make that in china. the guy said i know that's against w.t.o., but i can't spend five years not having the good and going through the long w.t.o. process. then i spoke to the business round table, just about every one of them is one of your members, i told them i thought china doesn't play fair and it's hurting our big companies. and that's why we needed currency. we need to do more against china
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alongside, within, or alongside t.p.a. the position of the business round table is against that. six of the major c.e.o.'s, all of whom you know, mr. donahue, we all know, came to me and said, we can't say anything. china retaliates against us. i appreciate that. it i was c.e.o. of one of these -- if i was c.e.o. of one of these companies, might do the same thing. but they said you keep it up. so my goal here is to do something about china. to do something about china, the most rapacious trading partner. i was disappointed in the efforts of president bush and i'm disappointed in the efforts of president obama. i dealt with five treasury secretaries on this issue of currency in particular from snow on. and none of them have done anything. this markup is a unique opportunity to stand -- to do something about the
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rapaciousness of china trade. it's the one point in time throughout this process where congress will have the opportunity to show to china and the world it's not business as usual because they are just killing us. they are just taking everything from us. in a not fair way. the w.t.o. non-compliant way and they thumb their nose and say take us to w.t.o. i say to my colleagues, now is the time if there ever was one if not now, when? we have been trying for a long time. this is a unique opportunity to do something about china. some of us are against t.p.a., other people are for it. but we can all agree, we had 60 people as mr. trumka mentioned signing a letter we ought to do something as part of this process with china and i hope we will. i hope we will. we cannot have weak tea. anything that is just discretionary, that says the administration could do something against china if they want to, i have been through the
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wars on this one. i have tried every administration, i spent hours with every treasury secretary, and they never will say china's a currency manipulator because the geopolitical forces are too strong the other way. unless we have something stronger than just given any administration, not just this one, more tools, it's not going to work. i hope we'll do something on currency. so my quick questions to each. mr. trumka, what do you feel about -- how do you feel about currency manipulation as part of this? mr. donahue, not on this particular bill, which i know you're strongly for, but do you believe we should be doing something on currency manipulation? that's it's a problem for our country, china's currency manipulation. mr. trumka: e.p.i. says currency manipulation alone cost this country five million jobs. if we eliminate we have the chance to gain almost six million jobs.
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we strongly support that. it needs to be part of the agreement. i would also say though, mr. chairman -- senator schumer, that some of our partners in t.p.p. have been identified as currency manipulators, malaysia, japan, and singapore. senator schumer: i do. my bill just applies to china. mr. donahue. mr. donahue: as we have debated many subjects, as we know, that the china card, so to speak, is an issue we'll be dealing with for many years. it's complicated by serious problems in china as well. economic problems. my view about this bill is that there is a very serious attention to currency. as it should be. and it is at a point where i would encourage moving ahead without major amendments.
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in terms of dealing with currency outside the bill, there are a lot of things here that are important. mr. trumka said, japan is a currency manipulator. they sure were back then. but they haven't been for a long time. people would accuse the united states of currency manipulation when we were dealing with the crises of recent years when we were handling and managing our interest rates and other factors that came out of the fed. the specific challenge that you raise about china is one that we will deal with for all of our lifetimes. i am very willing and very anxious to talk about other, beyond this agreement, other opportunities to get the facts
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straight, to look for ways to apply more -- i won't say aggressive, more successful pressure on these issues. i understand the point about this theft of intellectual property. i make a point that we are making a little progress but not enough. i understand what happens when they decide to make a product and don't need us any longer. the china issue needs serious discussion. we'd like to be a part of it. i don't think at this date and this time you can go beyond what we are talking about on currency in this bill. senator hatch: thank you senator schumer. i want to make it clear that i believe this is a serious issue. and that i don't think it should be part of this agreement, which has been very fastidiously worked out. but i am willing to hold hearings and do appropriate work
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after we pass this bill, if we can get this passed with everybody's attention. senator cantwell, you're next. senator cantwell: thank you, mr. chairman. i'm always struck when you two gentlemen are before the committee that there are many things that you actually agree on. and work force training and ex-im bank seem to be two of those. do i have that right? you're both supportive of like apprentice programs for job training? mr. trumka: we don't have enough of them. mr. donahue: the private sector spends something in the area of $60 billion a year on it. the public sector, rich and i have talked about this, the bill -- there will have to be a bill that job training and trade
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adjustment assistance, to follow all of these trade deals, but we really believe that has to be thought out more. we are doing all old things in job training. we can do new things to train people for new industries. we both agree we need to do those things in the private sector and in the public sector. senator cantwell: good. we are proposing some new things, but i definitely am a big supporter of t.a.a. and don't think we should be doing t.p.a. or t.p.p. without it. i just think that this is -- mr. donahue, could you please tell the republican presidential candidates that they are wrong about the ex-im bank? mr. donahue: well, thank you. let me say, senator, we don't do presidential politics. we do every other kind. wait. we talk to people that are in the public world about presidential policies. and you're damn right we tell them. because we -- senator cantwell: that the ex-im bank should be passed.
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mr. donahue: i have told probably three of them myself and we are -- have a little plan to have a visit with some of these people in the normal course of business and point out what the bank means to this country and to american industry in particular the thousands and thousands of small companies. senator cantwell: i want to say with my time that i'm a big -- i come from a big manufacturing state, and it has a lot of labor members in it, and it has a lot of people who support trade. in fact, probably one in three jobs are related to trade. i support having more bilaterals, multilaterals because a bunch have been done while we have been sitting around not having t.p.a. but at the same time i believe that we have to have these tools that work together, like the ex-im bank, and like trade adjustment assistance, and investment in apprentice programs, and the things that go along with this. so i just hope that we can get
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our colleagues here to understand that it's both. and i think you hold a lot of punch to make sure that we get these things done. otherwise, then it's only shareholders at the top level benefitting from these deals and not working people. and i think that i would put up our manufacturing skills against anybody in the world. mr. donahue: best in the world. senator cantwell: i also don't apologize for our country being a leader in aerospace manufacturing and making a great product that's worth hundreds of millions of dollars. when people talk about boeing being a lot of the ex-im bank, it's almost as if people want us to apologize we don't make a lot of chotchkies and ship them over to china for them to buy. we are lucky we make an expensive product with a lot of skilled workers. we want people to buy those planes. i hope people will stop and realize for one second that aerospace manufacturing is a lot of jobs in the united states of america. mr. donahue: it's bad thing to
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make predictions because then the people you want to work hard let up. the things that you have raised, the issues of job training and some of the related issues there, we could talk about community colleges and all of that, and the thing you raise on the bank, are issues that we are pushing very hard. and i feel we are going to get there. senator cantwell: thank you. thank you very much, mr. chairman. senator hatch: thank you senator cantwell. we'll turn to senator stabenow and then senator warner. senator stabenow: thank you for the hearing. when we are talking about trade we always need to start by saying we are in a global economy, we know we are going to trade. this is about whether we are exporting a product or jobs. it's a question of policy. we either have something that means we strengthen the middle class and it's a race to the top
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and we bring other countries with us, workers with us, or a race to the bottom. i will never forget sitting in greenville, michigan, with a company that was making refrigerators a number of years ago, we were trying all kinds of ways to keep them in west michigan. finally they turned to us and said you can't compete with $1.57 an hour in wages, sorry. we can't be erased down to that. this has got to be a race up. fundamentally when we are talking about fast track, let's talk about fast tracking the middle class so that we can make it a race up. one of those issues is very much currency manipulation plays. i know my colleague, senator schumer, is talking about this. and others are talking about this as well. senator graham offered a letter with 60 members of the us
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senate, that's magic number, 60 members who said we would not support trade agreements. we wanted trade agreements to include enforceable currency language. it needs to be in t.p.a. it needs to be in t.p.p. i'm wondering, mr. trumka, if you could talk -- i know you have talked about currency and the importance of enforcing it but talk more about what this means in terms of jobs. because from the numbers i have seen we have lost millions of jobs because we haven't enforced against china. or back when japan was doing it and they could do it again. it seems to me that's a very important part of enforcement. mr. trumka: absolutely. e.p.i. did a study and it estimates that correcting currency manipulation would create 5.8 million jobs in this country. that's almost six million jobs with currency manipulation being corrected. if you want -- if one of the reasons you want to vote for t.p.p. is because you want the u.s. to be a world leader, well, china is excluded from this agreement. china is a leader in that area and will continue to lead with
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currency manipulation and we do nothing about it. we won't change the rules for currency manipulation between us and those trading partners or china and those trading partners. it will have a dramatic effect and continual drain of jobs. everything you gain in this agreement by reducing tariffs and other things, can be obviated overnight by people manipulating their currency. i want to say this, tom, i want to put your mind to rest i don't like you to worry. the actions of the federal reserve do not constitute currency manipulation, according to the i.m.f. desk. you don't have to worry about that. and that canard can be put to sleep. mr. donahue: others would accuse us because of the use of the fed to support us during a crisis of manipulating currency.
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mr. trumka: you agree it isn't currency manipulation. mr. donahue: i agree it isn't in standard terms and people recently have come out and tried to agree within the international organizations that going ahead and dealing with interest rates that way wouldn't be manipulation, and they did it because all of europe has now gone to do that to try and save their own economy. senator stabenow: foreign currency issues versus domestic. we have economists from the right and left who have said here with the fed -- what is done here with the fed is not what we are talking about when we talk currency manipulation. i can say as we approach not just t.p.a. but after this t.p.p. and the ability to open up with japan which right now is closed. i grew up with father who had a car dealership.
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they couldn't put a car dealership in japan. they couldn't put cars in japan from the united states. cars made in michigan in japan right now. so trying to open that up. but one of the concerns that i -- great concerns i have is when we see japanese auto makers who have made their whole profit in the past based on currency manipulation. let's compete fair and square. that's what i'm very concerned about as we move forward in these trade agreements. thank you very much. senator hatch: senator warner. senator warner: thank you, mr. chairman. gentlemen, it's great to see both of you again. a couple points i want to make. one, i do fear at times that the analogies back to nafta, thank goodness we are in a different world at this point. america is much more competitive on manufacturing. american energy costs because of things like you again both have supported like keystone and others make us more competitive.
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i think having a trade agreement strengthens our hands in terms of attracting jobs. i agree and one of the things that senator schumer and senator stabenow mentioned was currency manipulation, it needs to be addressed. on the currency manipulation the way i read senator schumer's bill, this will be a prospective tool, but japan wouldn't apply right now on currency manipulation. there's a question whether china would with its current action. should we add more tools to our tool kit going forward as somebody who has lost money against companies in china through manipulated currency? absolutely. who have stolen our intellectual property? absolutely. but the notion of doing nothing right now and continuing a status quo would be a disaster for america. vis-a-vis china and the region. i point out to my colleagues, i wish senator schumer was still here, because most of his argument until he got to currency was in favor, you could argue, in favor of t.p.a. and t.p.p.
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because clearly america's position has weakened and it seems to be retreating. i point out the new york sometimes article of saturday that points out the fact that we have, as a congress, have not taken up the i.m.f. reforms. we as a congress have not ended up doing export-import bank. that we have -- the chinese have started to create a brand new financial institution that is focused on asia, but ultimately could contest america in terms of the dollars of reserve currency. these are things if we want to truly protect american jobs, we ought to be worried about. so what do we do? well, there's 40% of the world we are talking about here, china's not part of t.p.p., who is going to set the framework for that region? i believe it ought to be american led. and i think the work of the chairman and the ranking member both in terms of the added transparency, adding intellectual property, and --
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the fact there are not as strong standards on environment and labor as you like, but at least there are standards. and i believe they are standards that can be enforced which has not been the case of what's happened in the past. if we take these 11 nations and combine them in what i hope would be an american-led trading entity, that this will give us an ability to actually increase our leverage vis-a-vis china who long-term, i believe we have to watch on every account, both in terms of intellectual property theft, in terms of trade advantage, in terms of currency. but let's not miss the opportunity for america to once again reassert its national and international leadership in trade in a way that i believe will actually increase jobs, increase job opportunities, and my fear is that refighting the battles of the 1990's in 2015 is not the format we ought to be looking at. let me just close with one
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question to mr. donahue, although rich you can come back to me as well. i.s.d.s., we have folks, members of the senate who are saying this could open up a whole new can of worms. the ambassador has said repeatedly it does no. there are exceptions in the isds language that's been put forward. this is a tool that's not been used in the past. it is being ramped up and could undermine our labor and environmental laws. do you want to make a comment? mr. donahue: senator, it's an issue that can't stand the argument. it's so much stronger than the argument when you look at it. we have -- there are 3,000 trade agreements that have these provisions.
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we have never lost, never lost one of these issues. they have no authority to impede on federal law. if we ever lost a negotiation, it would be somebody had to pay money. but it is -- it's been in trade agreements. it provides a rational way to address issues. the only reason anyone would bring this up is a reason not to do what we are about to do here is because they didn't want to do it. this argument doesn't carry the water. i think it's very important to understand something. we disagree 80% of the time. but we get along pretty well. i respect his positions. what's going on here is that the people who don't want to do the trade bills under the current
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circumstance would like to stop this bill because it's the only way they could do it. i think to leave those trade bills on the side of the road to deny, as the senator from michigan said, the opportunity to create lots more serious jobs in manufacturing, and to sell to that 95% of the people around the world that want to buy our stuff, would be a serious mistake. i respect richard's real strong views here, but i am telling you he's going to have a hell of a lot more members if we do these deals than he is if we don't. senator hatch: your time is up. mr. trumka: may i respond, mr. chairman? first of all, senator, this isn't, again, an issue about doing nothing or having t.p.p. this is about making t.p.p. worthy of every american and not just the members. they are going to do real fine.
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-- not just tom's members. they are going to do real fine. no matter what, they are going to do fine. it's everybody down below that that is when you say, these are some standards, they are better than no standards. we were told by the ustr general counsel that murdering a trade unionist doesn't violate these standards. the perpetuating violence against the trade unionist doesn't violate these agreements. excuse me, excuse me if i'm not willing to accept that standard because i think the country can do better. with regard to isds, look, this is a special privilege for companies. no individual gets access to isds. we haven't lost a case yet. we won a couple by technicalities that we would have lost. there was just a case in nova scotia two weeks ago. stone quarry. they wanted to expand a stone quarry. all around it was an environmentally sensitive area.
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they denied the permit to expand the stone quarry. the isds panel said you're entitled to damages. they are going to collect because they didn't get an extension of their boundaries into a sensitive environmental area. this will affect food safety, it will affect the environment, it affects trade unionists, i can tell you that. this is a secret tribunal that you can't control because once you give them instructions, once that panel is impaneled, they have the absolute power to do what they want to do. and they have interpreted the language that you have given them, fair and reasonable economy beyond any stretch of an imagination. so senator, we can do a lot better and american workers deserve a lot better than what we are getting with t.p.p. or with this version of fast track.
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senator hatch: senator casey. senator casey: thank you, mr. chairman. i appreciate the hearing. i thank mr. donahue and mr. trumka for being here. i especially want to note mr. trumka's pennsylvania roots and he's using that villanova law degree today. i'm grateful for the opportunity because it's important we debate this. even an issue that tends to divide the country and even divides both political parties between and among themselves at times. my concern here with both trade promotion authority and t.p.p. the trade deal itself, is the same concern i had about nafta and every other agreement since then. what is the impact not just broadly on pennsylvania, that's my first priority, but in particular what it means for workers and wages.
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and unless it can meet the test of -- that i set forth with regard to workers and wages, it's very difficult for me to support either trade promotion authority or the trade deal itself. let me focus first on wages. i would argue that -- very similar to what senator schumer said about the middle class, our central challenge as a country our central domestic challenge is how do we solve this wage problem? there was a recent report by the economic policy institute which very graphically and in a very alarming manner set forth the correlation between wages and productivity, world war ii basically 48 to 73. almost perfect alignment. so if productivity was up as it was in those years, 97%, wages went up 91%.
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that's the way it ought to work. since 1973 for a whole variety of reasons, not simply because of trade, obviously, but certainly trade, i believe, is a substantial factor, we have a -- in the united states of america, productivity up 74% in those 40 years, wages up 9, not 91, 9%. neither political party has come up with an answer to that central challenge. part of the debate -- part of this debate, i think -- probably should say part of the resolution of that problem is what we do on trade. not the only part of the solution. so we see now that a recent paper by economists at the university of pennsylvania as well as other universities found that when workers are displaced by trade, and they switch jobs they suffer real wage losses between 12% and 17%. i guess, mr. trumka, going to
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ask you, and some of this you set forth in your testimony, what is the best approach in terms of using our trade policy to address this wage problem or lack of wage growth? mr. trumka: first of all you have to get it right on the trade authority. the fast track authority. i have laid out a series of things that would make it right so that congress has more control and can actually certify when they believe the objectives have been met. then when you look at it, we have laid out a whole chapter. in fact, we worked with the european union in anticipation of t-tip and laid out an entire chapter about how to make labor standards better so that we don't destroy their standards in europe or our standards here. i would love to submit that to you and put it into the record. senator casey: thanks very much. i want to say for the record as
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well, in this section of your testimony at the very end about labor, and i'm quoting here when you analyze the so-called may 10 provisions and how they have fallen short, i think very few americans, very, very few, very tiny percentage of americans, know the story about what's happened in some of these countries to trade unionists. the number in colombia on murders you said was 105. that's evidence enough. even if it doesn't rise to the level of the gravity of a murder, just the intimidation and the threats failure to any kind of enforcement mechanism in place. what are we doing about that? i think virtually nothing as a country. so that's why, i think, your proposal as it relates to having
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-- giving congress more of a role in terms of weighing in on who these trading partners are and who gets in -- who gets into our agreements, is a pretty reasonable and appropriate approach. i know i'm over time. thank you. senator hatch: thank you senator. senator menendez is next. senator menendez: thank you, mr. chairman. let me say at the outset i think we all have the same goal in mind and that is jobs for our families. markets for our businesses that together build a stronger american economy. and trade may offer some new opportunities but it also brings its challenges. we talk about breaking barriers to trade or ending barriers to trade, but i have a broader view of what those barriers are than just simply tariffs and regulations. for example, lower labor and environmental standards abroad make foreign workers with fewer skills, less expensive than highly skilled american workers
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with greater expectations for higher living standards. i think the failure to protect our intellectual property in other countries leads to cuts in the values of or investments and value of our products in international markets. so at the end of the day, for me, and i have -- i voted -- i just haven't had a knee-jerk reaction against all trade bills. i voted for some i thought the balance was right. for me trade bills have been about protecting, providing opportunities for my state's workers and our businesses in a world where competition is not always fair and not always open. it seems to me we should have the standards we set for any trade deal and the deals themselves on how well they deliver on those priorities. with that, let me ask you, president trumka, i heard your comments in the office when i was getting ready to come, now -- i know you're very
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passionate about workers' rights. i think a barrier to trade is also the ability to enforce the provisions of our trade agreements, which i think have sadly not gone in the direction that i'd like to see. and those include the provisions of trade agreements as it relates to negotiated labor standards. so can you talk a little bit -- you started with my colleague, senator casey, about colombia. about the lack of enforcement mechanisms and would you support an amendment that would mandate that all countries must meet negotiated labor standards prior to any new trade deal going into effect with them? in other words, to verify before we trust countries who have lax labor standards. mr. trumka: i would. the other thing i would suggest is the wage standard that's talked about in most of the trade agreements, including
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t.p.p., is the minimum wage. it doesn't talk about anything beyond the minimum wage. the minimum wage happens to be 65 cents an hour. the lack of enforcement is one of the major problems of labor standards and environmental standards. the may 10 agreement was a step in the right direction, but it doesn't get us there. the truth is that the guatemalan situation where you're dealing with gross violations of the i.l.o. standards has been going on for six years now. with no end in sight. colombia, we have had 105 trade unionists killed since the labor action plan was put into place and there's nothing they can do about it. that's why senator, getting the rules right now is so important. because no matter how great the enforcement, if the rules that you have are inadequate, no matter how great the enforcement, they don't get there. and the rules or the standards that are being told to us that
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are in t.p.p. are inadequate to protect american workers and discourage american manufacturers and employers from sending jobs offshore. so we are all for enforcement and i'm sure tom would agree that we want to eliminate every one of the cheaters that we can. but if you don't have the standards to enforce, you can't get the job done. senator menendez: i agree you need the right standards. even if we had standards some of us might agree to, we haven't had the enforcement mechanisms. let me ask you, president donahue, i have long advocated for a strong intellectual property protection in any trade deal. does the chamber believe that protecting innovation through strong i.p. protections is an important priority in any trade deal? mr. donahue: the chamber
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senator, has a major broad system both international and domestic, on dealing with counterfeiting and the theft of intellectual property. we put a great deal of money in it. we work with individual countries and groups of countries. we have had significant improvement in about 70% of the countries which are giving us much better protection of intellectual property. we are also doing it at home. because you can lose your intellectual property here in the united states faster than you can get ready to go to work. the points made about china and others, there are still issues where there's a sophisticated way of going after intellectual property. senator menendez: the current u.s. standard is 12 years of patent protection for biologics. this is an incredibly important industry in my home state of new
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jersey. do you think our trade deals should protect that standard? mr. donahue: i don't exactly know the answer to that but i will tell you something. i know more about the protection of biologics and patent deals on pharmaceuticals just in my own family. i'm dealing with that issue now. and i want to do anything i can to protect america's ability to drive the innovation that they are in biologics pharmaceuticals, and other things that we are doing. you can't catch up with me on that deal. senator menendez: i'm glad to hear that. i know that you have to run after me on that part. i look forward to working with you on that issue. senator hatch: your time is up. let me just say it was kennedy and myself who drove that
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12-year data exclusivity without which we would not have a biological empire in this country. so you're talking the truth. i appreciate you raising it. senator isakson. senator isakson: thank you, mr. chairman. i appreciate the opportunity and learned a lot from listening to other questions. i am one that favors doing business. i sold houses for 33 years of my life before i came to congress. i never saw the perfect deal but i made a lot of deals. had a meeting of the minds. this is not a perfect deal. the question i have in my mind is to make sure this is the best deal we can get to move forward for our country. i give you this premise. two years ago a mission to india, all american jobs had gone to india, remember that tom, when all the help desks were going with india? we went to meet with mr. murtry, the owner of the largest traded company on nasdaq.
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he had a campus in india where he was doing backroom operations for hospitals, emergency rooms. we asked him this question, we said mr. murtry, all of america's so scared, all of our jobs are going to india because of what you're doing with lower wages and more technology and things like that. what would you tell the american people? why should we not fear india? he said a very simple reason. when i started my business, i drove an indian car, i banked with a bank of india, and drank an indian soft drink. today i drink coca-cola, i bank with citibank, and drive with ford. the point being when you do business with people, you end up doing business both ways. american products were then being sold in india. today interestingly enough, 12 years later, the help desk has come back to the midwestern united states and left india because the standards have grown in india for wages, labor laws and things like that where they went to a comparable playing field with the united states. i believe doing business is good for america. i respect the middle class.
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mr. trumka, i was in savannah, georgia, yesterday where we have a new plant, caterpillar has come into georgia from japan. where they have been building tractors in japan, they are building them in georgia. that's good for manufacturing jobs in georgia. those are the middle class jobs. it's very important that we promote jobs that promote trade because 1.2 million georgians jobs' directly are dependent on trade. we are the eighth largest state in the union. we have over 10 million people. i want to make sure we continue to trade, a vibrant trade policy, not one that looks the other way at labor standards but one that's realistic enough to continue to do business. because if you do business with people you have a better chance to influence your rights than if you don't do business with them. would you agree with that, tom? mr. donahue: the history of the u.s. economy from our very beginning was doing business with people around the world to bring us products we didn't
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have, innovations we had yet achieved, and it shifted to where we are shifting products and innovations all around the world which has given us over time more influence around the world than we otherwise would have had. we could sit here for a week and talk about the value of america's export of ideas and values and products. i think the argument here should come down on this particular bill to finally, after all these years, putting us in a place to do more of what we have done for years to sell american products, to move american ideas and values, and i hope we don't screw it up looking for the perfect or seeking to get rid of this bill because we really don't want to do the trade bills. mr. isakson: mr. trumka, i have a lot of respect for what you do and represent. one of the things you told me
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and means a lot to me is workers' rights and making sure people are treated right, but you have a better way of influencing your values or exporting your values overseas if you're doing business with somebody rather than if you're folding your arms and not doing. one example, swaziland swaziland is in africa. i do a lot of work in africa with the african growth and opportunity act which i think , this week we'll hopefully extend for 10 years. in that, swaziland was a participant until we learned they were beating up their workers for not working hard enough and long enough. we withdrew them on -- suspended them on a temporary basis. they came back to the table and treated workers right because doing business with america was more important than abusing workers. my point is, and i would like you to respond to this, don't we have better leverage by having influence by doing business with people to encourage them to do better in terms of treating their folks, who do we have to insist on it being a part of the deal? mr. trumka: first of all, it is important to do business with people.
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but the rules are important. because the rules and the trade agreements that you have been talking about have been resulting in a $500 billion deficit in this country each and every year, trillions and trillions of dollars flowing out , not coming in. that's why it's important for the rules. it's also important for the rules whenever you engage them to have the ability to help correct those things. if they are going to agree to the i.l.o. core standards, quite frankly if we are willing to agree to the i.l.o. core standards, because we haven't been willing to do that yet, then you got a chance to really influence them. and improve their conduct. but if all you do is say, all you have to do is comply with your minimum wage and then when they don't even comply with their minimum wage, we don't have the ability to influence or change it, it goes the opposite way. senator, they look at the united states as perpetuating that bad treatment not correcting it. and we are better than that.
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and we can do better than that if we can write the right rules and we have an agreement we can enforce. then we can be a positive force for good around the world. but this trade agreement will not do that. mr. isakson: mr. chairman, let the record show i gave both sides a chance to make their case. senator hatch: you're up, senator brown. senator brown: thank you, mr. chairman. senator wyden, thank you. mr. trumka, mr. donahue, good to see you both. mr. trumka, a lot of people accuse you and me of being against trade and protectionist and being stuck in the last century or even the one before the last century. did a.f.l. oppose this from the beginning? mr. trumka: we engaged almost
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five years ago, we submitted dozens and dozens, a couple hundred suggested language changes to make the agreement better. we did and still want to be able to support t.p.p., but in its current standards, it falls far short. senator brown: you could see from the amendments a number of us will offer, there will be a lot of them, mr. chairman, as you may have heard by now, that we will be offering on thursday, or wednesday, i guess, you could see that this trade agreement, the t.p.a. and t.p.p. could be improved significantly if -- if you would take two or three ideas that you have tried to constructively engage u.s.t.r. or the staff of this committee in to give me just some ideas of where we could do much better than we are doing on this. mr. trumka: with regard to t.p.a., first of all ensure that congress approves trade agreements before -- partners
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before they are negotiations begin. that you create objectives that are specific to each individual trading partner. that congress and not the executive branch determine whether congressional trade objectives have been met. we have submitted a whole chapter on labor to make it better. we have submitted a chapter on currency. we have submitted a chapter on isds, and we submitted a chapter on the environment that doesn't include procurement rules and a number of other things that we think could make t.p.p. not only a good agreement, but one worthy -- senator brown: what has been accepted? mr. trumka: less than three or four changes have even been offered from our trade reps. they haven't been included in our proposal, no. senator brown: i have tried to engage in the process both as a member and staff level with the u.s. trade representative. i pushed for currency discipline
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i pushed for better enforcement , of labor standards, for improved state-owned enterprise language for modified investor straight provision, literally more than a dozen more. if i were anti-trade, like you i wouldn't take the time, wouldn't bother, wouldn't get my staff to put the time in. ustr claims they have had 51 meetings. the ambassador sat where you are sitting late last week. they claim they have had 51 meetings with me and my staff. that may be true. we have asked them for the list of meetings. and true to form they haven't responded as they so often don't to members of this committee let alone the rest of the house and senate. when they do with me, it's not to exchange ideas or to rethink how we do things, it's to tell me why i'm wrong, that my concerns are not valid. the administration has taken this approach that you're either with us or against us on trade. nothing in between. and i have heard your testimony through all of this about talking about there's t.p.p.
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there's present law, there's something in between that's much more desirable that we could get real agreement on. i just wonder why on trade agreements when we have seen what kinds of permanence they bring and how they affect all americans, why there is so much hostility to changing the direction of trade policy, the american public, as you point out, is pretty cynical about this and skeptical about congress's learning nothing where this t.p.a. with some exceptions, but minor, is not much different from t.p.a. of 10 years ago. it's been 13 years since congress passed fast track. yet the bill we are considering today is fundamentally the same. again, with small minor , relatively insignificant exceptions. i'm going to continue my effort tomorrow to improve u.s. trade policy. i think we have real opportunity in this amendment process. my question then for you, mr. trumka, last question is, could you comment in sort of a general but substantive way on what's at
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stake if we don't improve u.s. trade policy? what happens to our country? i heard mr. donahue's vision that the world falls apart, more or less if we don't engage. china takes over the world. and maybe colonizes the united states, i'm not sure where he was going with that. if you would give us your view on what actually happens if we don't do this as written today. mr. trumka: t.p.p. is 40% of the world g.d.p. and t tip another 20%. that means it will cover 60% of the world's economy. if it's not done right, you'll see the continuation of wage stagnation. you'll see the continuation of a growth between inequality growing in this country. you will see the middle class continue to shrink and get decimated. you will also see eventually the
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weakening of our economy because you can't continually have a massive trade deficit every year that sucks jobs out of the country and not be able to remedy that in some way or another. so one way to remedy is you stop buying other products, i guess. that would create a tremendous hardship on our economy and on the american worker. something none of us -- senator brown: i heard somebody, i will close with this, not a question, just a statement, that a billion dollars in service trade can translate into 7,000 jobs. that's great. it's a little bit, though, like saying the cleveland indians scored six runs yesterday. well, yeah but the tigers scored eight. when you talk about a billion dollars in services, trade 7,000 jobs, what is it when the surplus, when we are buying so much more than we are selling, china, $300 billion a year, and how many jobs is that? president bush the first said 13,000 jobs for every billion
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dollars in trade deficit. it's pretty significant job loss that we continue to add to with one trade agreement after another. i'll stop there, mr. chairman. thank you for your indulgence. senator hatch: senator wyden would like to make a comment. then we'll turn to senator grassley. senator wyden: thank you very much, mr. chairman. i passed at the beginning because i wanted all of my democratic colleagues to have a chance to speak first. while senator brown is here i just want to be clear that i think he has had a very valid point that the playbook on international trade has to change. trade agreements in 2015 have to be very different than trade agreements from the 1990's. the president, to his credit, said in the state of the union that passed agreements haven't lived up to the hype.
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we have to make sure that our trade policies are not part of a time warp. 25 years ago, nobody had an iphone nobody was texting, china wasn't an economic powerhouse. i will do this briefly because i didn't ask any questions early on, what is different with respect to the legislation that will be considered this week and in effect the old playbook? the first area in which it is different -- and especially appreciate senator brown focusing on this -- is on trade enforcement. trade enforcement has to focus on protecting american jobs, high skill american jobs that paid good wages. people think, why in the world would you be talking about a new trade agreement if you are not enforcing the laws on the books? you see this in the legislation. it includes the bipartisan
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enforce act. to go after tax cheats. it includes an upgrade on 301 something i think our friends and labor have been absolutely right about. it includes a measure to have warning bells go off with this legislation, the united states will aim higher in trade deals. in the 1990's, labor and environment were basically an afterthought. if you had said in the 1990's you are going to have enforceable labor and environmental issues, people laughed at you. that is not the case and a longer. they will be enforceable embedded in the text for the first time. there will be a new provision to focus on human rights. i touched on secrecy questions. i can tell you, having been a
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young commerce men in those days, lots of people in the congress were in the dark about what was being debated with respect to trade. those days are over. the american people will be able to sit at a town hall meeting for up to four months with the actual text of the agreement so they can ask questions of their members of congress. the legislation goes further than any trade promotion bill to protect american sovereignty. it guarantees that trade deals cannot change u.s. law without congressional action. it guarantees that foreign companies will have no more rights in international tribunals than in international courts today. no back doors to skirting the laws. finally, legislation that chairman hatch knows about because we had a lot of spirited conversation about it, it protects congress's ability to put the brakes on a bad deal.
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it is an opportunity for congress to stop a bad deal in its tracks. the last point i will make response to why i have been in this from the beginning. i think mr. trumke is spot on in talking about the middle class and how important it is that they get a better break. wages have been stagnant for them for a lot of years. here is the way i was looking at it. it was kind of the defining judgment i made in getting into this. in the developing world, the middle class is going to double between now and 2025. that means there will be a billion middle-class consumers in the developing world. and i want them to buy our products. i want them to buy our computers our wine, our cars. our helicopters and bikes.
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that is a chance for people to get highly skilled, high wage jobs. i think everybody knows we are going to have a spirited debate. fee have seen some of that today. i want to tell mr. trumke and mr. donahue that i will work closely with both of you in the days ahead. i'm committed to doing this in a way that works for middle-class families businesses. we can get trade done right and it will be a winner for american families. mr. chairman, thank you for the opportunity to wrap this up. i look forward to working with you and our colleagues tomorrow. senator hatch: senator grassley will be our last witness. i expect you to be the last witness. senator grassley: since i was absent i do not want the
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witnesses to think i do not have an interest in this trade issue. i had a hearing on the juvenile justice reform in the judiciary committee that i chair. i just got done with that. but i thought i ought to come by and speak my support for moving ahead on trade agreements. to me, it is common sense when 95% of the people who live outside the united states and we are in exporting nation that whatever we can do to get our products into other countries and particularly countries with higher trade barriers that leveling the playing field -- a word we use around the hill -- so many times, it gets overused. but having a level playing field
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for exports. those jobs pay 15% above the national average. it seems to me it is the thing we need to pursue. common sense being that 95% of the people are outside the united states. that is where the market is. a want to complement the chairman and the ranking member for moving ahead on this package of bills we have. particularly on giving the president the authority he needs. and we have given to presidents on and off since world war ii to do what they can to level the playing field for american exporters and jobs connected with that. i yield. senator hatch: this morning, congress received a letter signed by nearly 300 manufacturing organizations.
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urging swift actions to renew trade. this motion will be entered into the record at this point. i want to thank my colleagues for their participation today. i want to thank our heavyweight witnesses for joining us today. i have great respect for both of you. and i have known you for a long time. i want everyone to know that i recognize there are passionately held views on both sides of these issues. and that these debates are not easy for anyone. no one has had a picnic you. you all know where i stand when it comes to trade. i want to convince everyone to support tpa. i wish we could report a tpa bill unanimously but i think it is clear we cannot do that. senator wyden and i have done our best to create a process so that this legislation is
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bipartisan. so far, i really think we have been successful. i think most people would agree with that. this is important for our country, important for our industry. in the end, i think we will have members from both parties supporting our bill. i want to personally thank senator wyden once again for his help on this effort. it has been very difficult for him and many of my colleagues on the democrat side. and mr. trumka, you have not help them much with your criticism. mr. trumka: i appreciate that. senator hatch: i would expect nothing less. but senator wyden deserves a lot of credit. i think it is important we move forward. i'm looking forward to a more lively discussion tomorrow as we mark up the bill.
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let me just say that i have tremendous respect for both of you. mr. donahue, you have been around here a long time. you are no shrinking violet. you handle your self very well and represent the business community about as well as anybody i have seen. mr. trumka, i think you represent the unions very well. you are a tough guy, a smart guy. even though we disagree on this bill, i have paid strict attention to you too. this is basically your administration that is doing this. i am trying to help the president on this bill. i think they are right in pushing it the way they have. but i still have the obligation to appreciate you as well. we are going to have to find some things we can work on together. we have in the past, but i think
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we have to find some things to work on together. i'm going to count on you to help me understand that, ok? with that, let me say that i have been really appreciative for you to stay this long and to answer any question everybody has asked. with that, we will recess until further notice. thank you. [captions copyright national cable satellite corp. 2015] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org]
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>> in terms of the enforced bill that is now part of the senate version of the customs organization, that has met resistance in the house for the same issue to fight division of duty. through you see a compromise -- do you see a compromise? senator hatch: we have worked this out over years between both
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houses. and between both parties. and it is a sensitive thing that we have to get through. you know, i am not going to be very enamored with most amendments. >> do you expect the house floor to be first before the senate for the tpa bill? senator hatch: we expect the senate to be first. we have to do our job here for congressman ryan for his committee to do their job. >> is that from senator schumer? senator hatch: as i understand each of them have an amendment. he will have to see how that works out. >> you do not know if it is germane or not? senator hatch: we will rule on it to mark.
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-- tomorrow. >> the full senate vote, when do you expect that? senator hatch: i have to go, you guys. >> the outlook for the vote count tomorrow on the legislation? for the vote tomorrow, the markup. senator hatch: i do not know we will do much more tomorrow. as you can see, there are some people -- >> do you think you will get a good amount of democratic support? senator hatch: we are on track. thank you.
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>> the senate finance committee is meeting to markup pending trade measures and include a fast track trade authority to give the president broad authority and give congress a chance to consider treaties with an up or down vote without amending them and see the meeting as it gets underway live 10:45 eastern on our companion network c-span 3. >> on the next "washington journal" house foreign affairs member re esks d ribble has the latest on the proposed policy challenges including iran, the situation in yemen and isis. then michael capuano of the financial services committee talks about regulations and the rule of dodd frank as it approaches its fifth
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anniversary. after that our spotlight on the magazine issue continues with christian science michael farrow on the effectiveness of cybersecurity. those conversations plus your calls, tweets and emails. our show is live at 7:00 a.m. eastern and 4:00 pacific on c-span. >> here are a few of the book festivals we'll be covering this spring on c chance 2's book tv. weekend we'll be in the stat capital for the annapolis book festival. in the middle of may we'll revisit maryland for the gaithersburg festival with tom davis and martin frost as well as former senior advisor to president obama, mr. axel rod and close it out in new york city where the publishing industry showcases the upcoming books. the first beak in june we're live for the chicago tribute
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lit fest including our three-hour program with lawrence wright and your phone calls, this spring on c-span 2's book tv. >> coming up on c-span, a look at expanding u.s. trade with cuba as the two countries normalize recommendations. then "washington journal" is live with your calls and today's news. and live later, the house debates a cybersecurity bill to allow threat information sharing. >> next, the senate agriculture committee looks at expanding produce and farm equipment trading with cuba. the discussion includes farmers and ranchers along with officials from the agriculture and commerce departments and discuss opportunities and challenges of trading with the island nation following president obama's announcement in december to normalize relations. legislation is being sponsored in the senate that would
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comprehensively lift the trade embargo. hearing runs 2:10. >> quiet down. let it go. let it go. >> i was going to say that myself. >> good morning. the committee will come to order. i call the meeting on agriculture, nutrition and forestry to order. at the beginning of this congress, i was extremely hopeful that trade would be one area where we could work across the aisle to find agreement. i still maintain that hope. we certainly hope that's the case. we're working very hard in the finance committee to make that happen as well as this committee. tomorrow the senate finance committee will markup the trade promotion authority bill. that allows our negotiators to garner the best deal possible for american exporters.
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t.p.a. is good to agriculture and i look forward to getting it passed. international trade of american agriculture products is critical, absolutely critical it the nation and to the nation's economy and critical to our ranchers and farmers. we're talking 71,000 jobs, about $12 billion. i've long fought to eliminate barriers to trade and believe we should continue to work towards new market access and opportunities for our agricultural products and that's what we're here about to talk about here as of today. the united states and cuba has a long history of instibblet. we know of the relationship between our two countries, both present and future. some are concerned about human rights. rightfully so. others about social economic
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ideology. but those concerns are not what this committee will focus on this morning. today we are here to discuss the role of agriculture. opportunities and challenges in cuba. for over 50 years agriculture exports to the island have seen many ups and downs, sometimes due to the politics and sometimes due to mother nature and the tropical storms she brings. this is not an issue we are going to be able to fix overnight. it will take effort, hard work and decision to bills and congress to normalize trade with cuba. the decisions are made regarding increased trade with cuba must be made very carefully. four months ago, the president announced a major shift to u.s. policy towards cuba. it is my hope that in the future the president will work with the congress to determine the best path forward. foreign policy does not happen in a vacuum. we have to take a realistic approach and work out a step by step plan towards lifting the
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embargo. . this is a goal that should include congress, will include congress. today we'll hear from a impressive panel of experts from the regulators responsible for providing our policies towards cuba to the producers who seek to grow the market for their products. i understand that like myself, many of our witnesses here have traveled to cuba to see firsthand what challenges and opportunities do exist. i look forward to hearing about what we might be able to achieve with more trade with cuba but also need to hear about the difficulties that lie ahead. if we want to be successful in creating a new of engagement with cuba, we'll have to really put in the work. agriculture has long been used as a tool, not a weapon, a tool for peace and stability. it is my hope that cuba will embrace the practices of free trade, enterprise and commerce so that both countries can gain
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from increased relations. earlier this year, the u.s. agriculture coalition for cuba was launched. they have shared a statement and additional information in support of our work today and i ask unanimous consent it be entered in the record this morning. without objection. i look forward to hearing from our witnesses and with that i recognize our distinguished chairwoman emeritus, senator stabenow for any of her remarks. senator stabenow: i appreciate the opportunity to work with you on trade opportunities between the united states and cuba and to work with all the committee. we thank those who are with us, the officials and industry representatives testifying today, for your part in the process. we look forward to hearing from you. improving trade with cuba represents not only a great opportunity for american farmers and ranchers and manufacturers but a meaningful way to help rebuild trust
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between our two countries. after more than 50 years of stalemate, it's time for a new policy in cuba. when i visited cuba earlier this year with senator leahy who is really one of the senate's experts if not the expert, i think, on various pieces of cuban culture and economy and so on for so many years, we visited just days after the president eased trade restrictions. this is the second time i had the opportunity to be in cuba with senator leahy and senator flake and others, and it was very different the second time with people instead of being very reserved and cautious cubans were coming up to us and were very eager to develop a new relationship and was a very different tenor but can only do that with meaningful steps that will soften the barriers
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between us and eventually eliminate them. and america's farmers and ranchers are uniquely positioned to lead the way and i agree with senator roberts' key position. consider this, in 2014 the u.s. exported just over $290 million in agricultural goods to cuba. good start. this is a country only 90 miles off our shore. we can do a lot better than that. cuba's own import agency estimates it will receive approximate $2.2 billion in u.s. dollars worth of food and agriculture this year. and we can do even better than that. that type of economic potential deserves a chance to succeed and is one reason why many of the largest producer groups, trade associations, companies within agriculture have come together to increase engagement. many on the committee as senator roberts indicated, have taken the opportunity to go to cuba in addition to senator
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leahy who, again, he and his staff have been real leaders in this effort in developing our relationship with cuba but senator klobichar and highcamp and bozeman are working in a bipartisan way as well and we appreciate your leadership and efforts. the idea of democratic ideas and human rights we share as americans and are best realized through engagement and believe our bedroom officials are on every product our farmers and ranchers send to cuba. last week's actions by the president is a step forward in normalizing the relationship and will test the commitment of the cubans to this process. but even while we're making significant progress in rebuilding our relationship, the policies governing trade between our countries are not yet designed to allow a steady flow of goods and services. so mr. chairman, i look forward to working with you and others on the committee to find a path for u.s. financial
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institutions to be able to safely and securely work with cuban purchasers including extending the lines of credit to look for broader range of goods and services and supplies that we can export to cuba. these measures are not only good for business but they will help cuba's agriculture capacity and make the island a better trading partner in the long run. and i know that working together we can write the next chapter in the u.s.-cuban relationship. thank you. >> thank you, madam chairwoman, i now have the pleasure of introducing a friend and colleague of mine, senator leahy, the undeclared but yet accurate king of the dairy policy. and the dairy policy posse who comes in at 11th hour and 59th minute to help us write a farm bill from time to time for a brief remark, sir. so you may go manage a bill on the floor in your very snappy attire.
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>> thank you, mr. chairman, i like being with a chairman who knows how to comb his hair. senator brown: i appreciate that so much. just let it go, ok. senator leahy: i can't come as well as you do on the tones on your phone. but i commend you for holding this. all seriousness, this is an important hearing. here is cuba 0 miles from our shores. we have the ability to help them gain control of their own lives but we can also expand american farmers selling their product. there will be some winners as part of normalizing trade with cuba. i agree we have to temper our hopes and remember that cuba's economy is in shambles as people are suffering. but i would note that what
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senator stabenow said and she wouldn't spend time with the agriculture committee on our last trip, i've been going to cuba numerous times in the last 20 some odd years. this last trip, you saw a huge difference, seeing american flags in the stores, american flags on the taxis, a lot of these taxis are mid 1950's automobiles and have flags of different countries, never seen american flags on it before but now we saw them. now, we're not going to have an immediate commercial windfall for american agriculture but cuba has used our embargo as a phony excuse for its own failed policies. now we have a chance to create a more efficient and less burdensome opportunity for cubans to buy u.s. products. canada and the european union
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are there already. last time we were there talking about things that we produceed that they were bringing in from new zealand. withstand we're 90 miles away. i think american agriculture often has been the bridge in normalizing with countries. this will allow us to do that but also let the cuban people see that their own government, not the united states is paying for the poverty and repression in their country. i say all that really to applaud you for doing this. i think we can all learn by this and afford my next trip down there. senator brown: thank you, sir. i thank for you your comments and know you have to manage a bill on the floor. that's something we're doing differently this year, we're actually managing bills. good luck in that respect. senator leahy: haven't been here in 40 years. nice to go back to the old way.
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senator brown: welcome to our first panel of witnesses this morning, the honorable michael skew serves as undersecretary for farm and agriculture services, under secretary skews has previously served as the deputy undersecretary for farm and foreign agriculture services as well as secretary of agriculture for the state of delaware. welcome, mr. undersecretary. i look forward to your testimony. mr. seuse: i'm pleased to come before you today to discuss agricultural trade with cuba. as you know, in december, president obama announced policy and regulatory changes to chart a new course in u.s. relations with cuba. the measures also seek to expand opportunities for america's farmers and ranchers to sell goods in cuba.
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in january the treasury department published regulatory changes including the revised interpretation of the term cash in advance and authorization for u.s. banks to stab correspondent accounts at cuban banks. these changes have been sought by members of the u.s. agricultural community. 15 years ago congress lifted the decades old ban on export of agricultural products to cuba. but despite this opening, u.s. government agencies including usda remain prohibited from providing export assistance and credit guarantees to exports to cuba. as secretary bill sack has said, he can't use a single dollar for trade promotion funding for trade with cuba. these restrictions aply to usda's very successful market development programs like the market access program and farm development program. the policy changes announced by the president are significant.
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but legislative hurdles remain. bills have been introduced to open trade with cuba including legislation sponsored and co-sponsored by members of this very committee. usda stands ready to provide technical assistance to congress as it considers further openings with cuba. if the embargo is removed we could be poised to become a major agricultural trading partner with cuba. cuba depends on imports to feed its 11 million citizens. according to the world food program, cuba imports is about 80% of its food, which means potential for our producers here is significant. the united states has potentially huge advantages in exporting to cuba. chief among them is location. we're less than 100 miles away, as has been pointed out meaning lower shipping cost and transit times especially compared to our current top competitors, brazil and the
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members of the e.u. in fiscal year 2008, u.s. agricultural exports to cuba reached 658 million. however, by the end of last fiscal year, they had fallen to $300 million. at the same time, global agricultural exports to cuba have doubled over the past decade to approximate $2 billion. right now the largest u.s. agricultural exports to cuba, poultry followed by soy bean, meal soy and corn. i am confident u.s. agricultural exporters can capture the market in cuba but don't want for minimize the obstacles. kuna is a country with limited foreign exchange. we're behind our foreign competitors. our policy requires all u.s. imports to be channeled through one state corporation, allen
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port. the policy changes towards cuba is one example of opportunities to help our farmers and ranchers build on their agricultural exports. in fiscal year 2014, agricultural exports reached a record $152.5 billion and supported nearly one million american jobs. the potential for u.s. agricultural exports around the globe is in fact considerable. it is critically important the congress consider and pass bipartisanship trade authority legislation introduced last week. t.p.a. will ensure america's farmers, ranchers and food processors receive the greatest pen from trade agreements currently being negotiated. in conclusion there is potential for expanding agricultural exports to cuba over time. agriculture served as a bridge
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including understanding and a change of ideas among people and have no doubt agriculture will play an important role as we expand our relationship with the cuban people. thank you, mr. chairman and members of the committee. senator brown: we thank you, sir. mr. matthew borman, currently serves as deputy assistant secretary of commerce for export administration. in this position, mr. borman is responsible for implementing the bureau of industry and security controls. on the export of dual use items for national security, foreign policy nonproliferation and short supply reasons. welcome, mr. borman, and i look forward to your testimony. i thank undersecretary seuse for being on time. just would remind the witnesses that most senators can read all of their staff can read, feel free to summarize your statement, sir.
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mr. borman: thank you, mr. chairman and thank you, ranking member stabenow and members of the committee. it's a pleasure to be here. of course i'll address the role of the department of commerce in regards to agricultural trade with cuba. as you know, in terms of the cuban embargo the congress is responsible for regulating exports to cuba and the treasury department is responsible for financial transactions including travel. as you know, on december 17 of 2014, the president announced the most significant changes in cuban policy in more than 50 years. as the president noted these changes are intended to create more opportunities for the american and cuban people by increasing commerce, travel, and the free flow of information. to implement these changes, we at the department of commerce and bureau industry and security amended our export regulations on january 16, 2015 to expand the authorization for exports and reexports of certain categories of items to cuba.
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principally expand the communication devices to help with the flow between cubans and the outside world and, banded the ability for u.s. exporters to send gift parcels and consolidated packages to cuba without a license and then we created a new license exception for support for cuban people. in our system the license exception means as long as the exporter complies with the regulations, they don't have to come to commerce and submit a license application and wait for the government to say yes or no and give them a license. exporters always feel license exceptions facilitate trade in whatever topic they cover. the principal focus of the license exception support for cuban people is getting it in the hands of those in cuba. under the license exception, u.s. persons are able to export building materials for building in cuba and able to export
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items going to the private agriculture in cuba and the co-ops without a license and generally things that go to private sector entrepreneurs so the focus is to make it easier for the export in the private section in cuba. the license also authorizes the export of items to the international infrastructure to cuba to facilitate communication among the cuban people and between the cubans and outside world. you'll notice there is a little focus on agriculture and we did not change our primary regulatory process for agricultural exports to cuba and the reason we didn't is that's governed by the trade sanctions. we have an expedited process in place so anyone who wants to export to cuba comes to
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congress and we refer to the state department and get a position from the state department and give them an answer typically in 12 days. it's an expedited process but still is a licensing process. and largely sanctioned. under that process exporters can get an online application and we screen those to make sure they're not involved in terrorist or proliferation activities. the last requirement is those exports licensed must be made within one year of the license within the year of the license. last we processed 56 applications valued at about $2.4 billion. that's what we authorized. as you heard, the actual