| 00:00:159 min. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Good morning. We have two buttons here. One is red and the other is green. Mr. Herger and I want to start on time, knowing that Members... |
| 00:09:165 min. |
Herger, Walter "Wally" - U.S. Representative, [R] California
Thank you, Chairman Levin. I look forward to our discussion on the importance of trade with China from U.S. economy-wide perspective. A... |
| 00:14:492 min. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Thank you very much. [The prepared statement of Mr. Reynolds follows:] Opening Statement of The Honorable Thomas M. Reynolds, a Representative in... |
| 00:17:236 min. |
Glickman, Dan - Chair and CEO
Thank you very much, Mr. Chairman. It is a pleasure to be here in this great august room. I served with both you and Mr. Herger. It is a... |
| 00:23:344 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Thank you very much. Pat Schroeder. Welcome. STATEMENT OF PATRICIA SCHROEDER, PRESIDENT AND CHIEF EXECUTIVE OFFICER, ASSOCIATION OF... |
| 00:23:3818 sec. |
Schroeder, Patricia S. - President and CEO
Thank you. It is so wonderful to see Chairman Levin and Chairman Herger--or Ranking Member Herger up there. Both of you got great promotions.... |
| 00:23:562 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
It may not last long. |
| 00:23:581 sec. |
Schroeder, Patricia S. - President and CEO
Yes. Yes. |
| 00:23:593 sec. |
Crowley, Joseph - U.S. Representative, [D] New York
Mr. Chairman, can I also say that so are we. |
| 00:24:027 sec. |
Schroeder, Patricia S. - President and CEO
That is great. Well, I want to say for the book industry--we know. You earned it. |
| 00:24:095 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
All right. We won't take that away from your 5 minutes. |
| 00:24:144 min. |
Schroeder, Patricia S. - President and CEO
Terrific. Well, I just want to say for the book industry, we really thank you for including us. America's book industry is about a $25 billion... |
| 00:29:115 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Thank you so much, Ms. Schroeder. Your turn. Thanks. STATEMENT OF GERALYN RITTER, SENIOR VICE PRESIDENT OF INTERNATIONAL AFFAIRS,... |
| 00:29:166 min. |
Ritter, Geralyn - Vice President
On behalf of PhRMA, I would like to thank you very much, Mr. Chairman and other Members of the Subcommittee, for organizing today's hearing... |
| 00:35:365 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Thank you very much. Mr. Baranay. STATEMENT OF PETER BARANAY, CHIEF EXECUTIVE OFFICER, ABRO INDUSTRIES, INC., SOUTH BEND, INDIANA |
| 00:35:415 min. |
Baranay, Peter F. - Representative
Good morning, Mr. Chairman and Members of the House Committee on Ways and Means on Trade. Thank you for giving me an opportunity today to... |
| 00:41:361 min. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Thank you very much. The Olympics are in Beijing in 2008. I would hope that we would set as a goal some major compliance by China by the... |
| 00:43:021 min. |
Herger, Walter "Wally" - U.S. Representative, [R] California
Thank you very much, Mr. Chairman. Again, I want to thank you for this very important hearing on an incredibly important hearing. Mr.... |
| 00:44:1537 sec. |
Glickman, Dan - Chair and CEO
Well, first of all, we have been working closely with Susan Schwab and USTR. We know they are talking to the Chinese government in a variety... |
| 00:44:5216 sec. |
Herger, Walter "Wally" - U.S. Representative, [R] California
Good. I appreciate that. Could you also describe the many efforts that you and your members have made to develop facts and evidence to use... |
| 00:45:0855 sec. |
Glickman, Dan - Chair and CEO
Yes. We have spent a great deal of resources in China and in the United States to determine the levels of criminal activity, the thresholds... |
| 00:46:036 sec. |
Herger, Walter "Wally" - U.S. Representative, [R] California
Absolutely. I would like comments from any of the other panelists in this same area. |
| 00:46:0939 sec. |
Schroeder, Patricia S. - President and CEO
Well, I would totally concur with what Danny says. We are working with USTR. We have been very pleased that they have been working so hard.... |
| 00:46:485 sec. |
Herger, Walter "Wally" - U.S. Representative, [R] California
Good. I think that point is so well taken. I am sure the Chinese are listening. |
| 00:46:53 |
Schroeder, Patricia S. - President and CEO
I hope so. |
| 00:46:534 sec. |
Herger, Walter "Wally" - U.S. Representative, [R] California
That we have been trying to work with them. |
| 00:46:57 |
Schroeder, Patricia S. - President and CEO
That is right. |
| 00:46:5718 sec. |
Herger, Walter "Wally" - U.S. Representative, [R] California
We prefer working with them first, but we are preparing the case. They are in the WTO. We do have a format now that we can move forward... |
| 00:47:152 sec. |
Schroeder, Patricia S. - President and CEO
You are so right. |
| 00:47:1730 sec. |
Glickman, Dan - Chair and CEO
Can I just reinforce what Mr. Levin said about the Olympics? They are going to have a billion people, maybe more, watching this on TV. They... |
| 00:47:476 sec. |
Herger, Walter "Wally" - U.S. Representative, [R] California
Absolutely. My time is about up, but anyone-- Ms. Ritter? |
| 00:47:532 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
You have about 10 seconds. |
| 00:47:557 sec. |
Herger, Walter "Wally" - U.S. Representative, [R] California
Ten seconds? Five seconds? |
| 00:48:0216 sec. |
Ritter, Geralyn - Vice President
Particularly for the complex issues in our area that straddle intellectual property and the drug regulatory regime, we appreciate the efforts... |
| 00:48:1819 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
All right. Let me just say--and Mr. Blumenauer is next, someone who is involved with China PNTR a bit, to understate it. It has been over... |
| 00:48:372 min. |
Blumenauer, Earl - U.S. Representative, [D] Oregon
Thank you, Mr. Chairman. I appreciate your punctuating that point. There are a number of us who spent a lot of time and energy in lesser... |
| 00:51:0240 sec. |
Schroeder, Patricia S. - President and CEO
I think you point out something very important. For Democrats who are free traders, as I am and you are, this is a very difficult thing... |
| 00:51:42 |
Blumenauer, Earl - U.S. Representative, [D] Oregon
Right. |
| 00:51:426 sec. |
Schroeder, Patricia S. - President and CEO
If they can shut the store down for 24 hours until Danny leaves town, they can shut it down for good. Same with the drug thing. |
| 00:51:482 sec. |
Blumenauer, Earl - U.S. Representative, [D] Oregon
Yes. Let me---- |
| 00:51:50 |
Schroeder, Patricia S. - President and CEO
They can do these things. |
| 00:51:5029 sec. |
Blumenauer, Earl - U.S. Representative, [D] Oregon
Let me be a little more specific. Using the example of the university, we are involved, a number of us are involved, with university exchanges.... |
| 00:52:1917 sec. |
Schroeder, Patricia S. - President and CEO
Well, we would love it if you would find out that if they are pirating books at the university copy center or that they are downloading... |
| 00:52:3650 sec. |
Glickman, Dan - Chair and CEO
I might say that this is one area I think that Secretary Gutierrez has been particularly effective in articulating this every time he is... |
| 00:53:2635 sec. |
Blumenauer, Earl - U.S. Representative, [D] Oregon
Mr. Chairman, I know my time is about expired, but this is an area that I would hope that we might be able to explore. I look in my State,... |
| 00:54:0115 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
All right. We will do that. There are also the abilities to file complaints with the WTO, which tends to turn talk into action. All... |
| 00:54:1636 sec. |
Weller, Gerald "Jerry" C. - U.S. Representative, [R] Illinois
Thank you, Mr. Chairman. Good morning to our panel. Mr. Glickman, I never had the privilege of serving with you in the House, but I had... |
| 00:54:5249 sec. |
Glickman, Dan - Chair and CEO
Absolutely. Even with the decentralization of the Chinese economy--I am not telling you everything comes out of Beijing because it doesn't.... |
| 00:55:414 sec. |
Weller, Gerald "Jerry" C. - U.S. Representative, [R] Illinois
Are you suggesting then that their enforcement is selective? |
| 00:55:459 sec. |
Glickman, Dan - Chair and CEO
It is selective. It is arbitrary. It is intentionally vague in some cases. In some cases, it is just not very well developed. |
| 00:55:5410 sec. |
Weller, Gerald "Jerry" C. - U.S. Representative, [R] Illinois
You mentioned earlier in your opening comments that there were 50 facilities that manufacture pirated DVDs. Do you know the locations and... |
| 00:56:0420 sec. |
Glickman, Dan - Chair and CEO
In most cases we do. In most cases we have given that information to the authorities. In some cases they have taken action, and in most... |
| 00:56:2412 sec. |
Weller, Gerald "Jerry" C. - U.S. Representative, [R] Illinois
So, when it comes to enforcement, do they only enforce when they are reminded that they need to? Or do you see any proactive efforts other... |
| 00:56:3618 sec. |
Glickman, Dan - Chair and CEO
There has been, as Pat said--and I don't know about in the pharmaceutical area--but there has been some, I would say, less than full effort... |
| 00:56:5432 sec. |
Weller, Gerald "Jerry" C. - U.S. Representative, [R] Illinois
Mr. Baranay, you shared your experience with going through the litigation process to address, and you were successful. $64,000 doesn't seem... |
| 00:57:261 min. |
Baranay, Peter F. - Representative
I think it is clear that as the Chinese economy develops from, shall we say, the world's manufacturing floor or the world's factory floor... |
| 00:58:454 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Ms. Ritter, do you agree? |
| 00:58:495 sec. |
Ritter, Geralyn - Vice President
Well, I am---- |
| 00:58:544 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
You have got 20 seconds this time. |
| 00:58:5833 sec. |
Ritter, Geralyn - Vice President
I do agree that we have been able to get some collaboration from the Chinese authorities. As I mentioned in my testimony, raids and seizures... |
| 00:59:312 sec. |
Weller, Gerald "Jerry" C. - U.S. Representative, [R] Illinois
Thank you. |
| 00:59:333 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Okay. Thank you, Mr. Weller. Mr. Pascrell. |
| 00:59:362 min. |
Pascrell, William "Bill" J. Jr. - U.S. Representative, [D] New Jersey
Thank you, Mr. Chairman. Good morning, panel. Ms. Ritter, China is seeking to build its own domestic pharmaceutical industry. It already... |
| 01:02:161 min. |
Ritter, Geralyn - Vice President
I think you have said it extremely well. We are at a critical time in China. China does want to develop this industry. They have got the... |
| 01:03:201 min. |
Pascrell, William "Bill" J. Jr. - U.S. Representative, [D] New Jersey
Yes. Those jobs are significant, no more significant than the person who works in a textile factory or in a small parts factory that, on... |
| 01:04:593 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Thank you. Mr. Brady. |
| 01:05:0254 sec. |
Brady, Kevin - U.S. Representative, [R] Texas
Thank you, Mr. Chairman. Thanks to the panel. These aren't new issues, but you have made very compelling arguments why we need to turn the... |
| 01:05:567 sec. |
Glickman, Dan - Chair and CEO
I do not think it was the wrong thing to do. I, as I said before, was somewhat involved in this when it happened. |
| 01:06:03 |
Brady, Kevin - U.S. Representative, [R] Texas
Absolutely. |
| 01:06:0327 sec. |
Glickman, Dan - Chair and CEO
I was involved with a different industry then, where I think the benefits were more clear than they are in other industries, but I would... |
| 01:06:301 min. |
Brady, Kevin - U.S. Representative, [R] Texas
Those tools are the ones that got us progress in the advance to micro systems, computer boards, and in the fiber board issues already. Your... |
| 01:07:311 min. |
Schroeder, Patricia S. - President and CEO
I think that is a hard one. You ask a very difficult question. I have always been a free trade Democrat, which is a little lonely on my... |
| 01:08:3711 sec. |
Brady, Kevin - U.S. Representative, [R] Texas
So, being out of the trade field while other countries developed trade agreements that favored books from other countries or products from... |
| 01:08:4830 sec. |
Schroeder, Patricia S. - President and CEO
It harms our members and we want to be in there, but when we had a WTO accession that would have been helpful to us and it still hasn't... |
| 01:09:1842 sec. |
Glickman, Dan - Chair and CEO
It is like--I think generically, I think that the President needs fast track authority. I think the problem is that the old--Reagan used... |
| 01:10:0019 sec. |
Brady, Kevin - U.S. Representative, [R] Texas
Well, I think right now we are looking at trying to find common ground on workers rights, environmental rights, trade adjustment, because... |
| 01:10:1926 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
I think I will because we want to try to stick to our time limits. Let's have some further discussions about China PNTR and the involvement... |
| 01:10:453 min. |
Crowley, Joseph - U.S. Representative, [D] New York
Thank you, Mr. Chairman. Thank you for your presence today and your discussion. I have a number of constituents who have come to my office complaining... |
| 01:14:1556 sec. |
Schroeder, Patricia S. - President and CEO
We do work very closely with the Chinese Publishers Association, which is amazing. They are very strong. Piracy hurts them equally. They... |
| 01:15:1156 sec. |
Ritter, Geralyn - Vice President
There is an association of research-based pharmaceutical industries in China. A lot of the members there are subsidiaries of global companies,... |
| 01:16:072 sec. |
Crowley, Joseph - U.S. Representative, [D] New York
Mr. Chairman, can Mr. Glickman---- |
| 01:16:09 |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Yes, please. |
| 01:16:0948 sec. |
Glickman, Dan - Chair and CEO
I would just say a lot of the management of the Chinese film industry is government, but a lot of the creative side we work with quite closely... |
| 01:16:5720 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Thank you. There are two, maybe three of us left. So, let's see if we can work ourselves in. That means we will start the second panel... |
| 01:17:172 min. |
Kind, Ronald "Ron" - U.S. Representative, [D] Wisconsin
Well, thank you, Mr. Chairman. I want to thank you for holding this very important hearing. I want to thank the witnesses for testifying... |
| 01:20:1130 sec. |
Schroeder, Patricia S. - President and CEO
Let me just say with education you are absolutely right. It is a very difficult thing to get any government to try and deal with educational... |
| 01:20:412 sec. |
Kind, Ronald "Ron" - U.S. Representative, [D] Wisconsin
Right. |
| 01:20:4344 sec. |
Schroeder, Patricia S. - President and CEO
The problem is, those are very expensive materials to create, very, very. When they pirate it all, what can you do? Stopping campus piracy... |
| 01:21:27 |
Kind, Ronald "Ron" - U.S. Representative, [D] Wisconsin
Right. |
| 01:21:2716 sec. |
Schroeder, Patricia S. - President and CEO
Allowing the world to download everything free would kill all of us. You are seeing movies digitized, too, aren't you? The Chinese are saying... |
| 01:21:4351 sec. |
Glickman, Dan - Chair and CEO
I think it was John Maynard Keynes who once said, ``For every complicated problem, there is a simple and a wrong solution.'' This is the... |
| 01:22:34 |
Kind, Ronald "Ron" - U.S. Representative, [D] Wisconsin
Thank you, Mr. Chairman. |
| 01:22:343 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Mr. Meek. |
| 01:22:373 min. |
Meek, Kendrick - U.S. Representative, [D] Florida
Thank you, Mr. Chairman. I am excited by the fact that we are having this hearing here today because this is so very, very important. As... |
| 01:25:4524 sec. |
Glickman, Dan - Chair and CEO
One, Congressman, I would make sure that there are resources for USTR, for Customs, for the enforcement at the borders. It strikes me that... |
| 01:26:0938 sec. |
Schroeder, Patricia S. - President and CEO
I would also say that when you meet with the Chinese, ask them to do enforcement that passes the straight face test. We got all excited... |
| 01:26:4753 sec. |
Ritter, Geralyn - Vice President
Excuse me. I would echo some of these themes, and particularly the one of enforcement. Fake Chinese medicines are a threat not only to Chinese... |
| 01:27:4030 sec. |
Baranay, Peter F. - Representative
If I could echo what Chairman Levin said, I think the timing with the Olympics in 2008 is extremely auspicious. I think that the world will... |
| 01:28:101 sec. |
Meek, Kendrick - U.S. Representative, [D] Florida
Thank you, Mr. Chairman. |
| 01:28:114 min. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Well, thank you. An excellent question, and an excellent panel. You represent four vital sectors--motion picture, publishing, pharmaceuticals,... |
| 01:33:065 min. |
Goodish, John H. - Executive V.P. and COO
I am happy to testify today about a topic that is crucial not only to the U.S. steel industry but to all American manufacturers. That is... |
| 01:38:333 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Thank you. Frank Vargo, welcome. STATEMENT OF FRANKLIN J. VARGO, VICE PRESIDENT OF INTERNATIONAL ECONOMIC AFFAIRS, NATIONAL ASSOCIATION... |
| 01:38:366 min. |
Vargo, Franklin J. - Vice President
Thank you, Mr. Chairman, Mr. Herger, Members of the Subcommittee. I am very pleased to be here on behalf of the National Association of... |
| 01:44:464 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Thank you very much. [GRAPHIC] [TIFF OMITTED] T0304A.009 Mr. Bassett. STATEMENT OF JOHN D. BASSETT, III, CHAIRMAN AND CHIEF... |
| 01:44:504 min. |
Bassett, John D. III - Chairman and CEO
Thank you, Mr. Chairman and Members of the Subcommittee. Good morning. My name is John Bassett. I am the Chairman of Vaughan-Bassett Furniture... |
| 01:49:495 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Thank you. Mr. Tyrone. STATEMENT OF JAMES C. TYRONE, SENIOR VICE PRESIDENT OF SALES AND MARKETING, NEWPAGE CORPORATION, DAYTON,... |
| 01:49:545 min. |
Tyrone, James C. - Senior Vice President
Mr. Chairman, Mr. Herger, Members of the Subcommittee, I would like to thank you for the opportunity to appear before you today on the issue... |
| 01:54:563 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Thank you so much. Dr. Navarro. STATEMENT OF PETER NAVARRO, PH.D., PROFESSOR, UNIVERSITY OF CALIFORNIA, IRVINE, THE PAUL MERAGE SCHOOL... |
| 01:54:597 min. |
Navarro, Peter - Associate Professor
Thank you for the invitation. My message to you today is a simple one. The Administration has underestimated the scope of the China problem... |
| 02:02:38 |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Thank you very much. Well, there are eight of us, and there may be one or more joining us. We are going to try to finish by 12:30. Why don't we... |
| 02:02:381 min. |
Herger, Walter "Wally" - U.S. Representative, [R] California
Thank you very much, Mr. Chairman. I think the point that Chairman Levin made really is right on. We need to be enforcing these rules. I... |
| 02:04:191 min. |
Vargo, Franklin J. - Vice President
Mr. Herger, I don't have the answer to that. Certainly, their labor laws are very, very different from ours. You read so many instances... |
| 02:05:343 sec. |
Herger, Walter "Wally" - U.S. Representative, [R] California
Yes. Anyone else have a comment, like to comment on this? |
| 02:05:3725 sec. |
Navarro, Peter - Associate Professor
Well, I would just refer you to that table. Labor costs are about 40 percent of the China price advantage. If you were to tighten up everything... |
| 02:06:022 sec. |
Herger, Walter "Wally" - U.S. Representative, [R] California
Thank you very much. |
| 02:06:0424 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
All right. Let's follow our procedure that we outlined. Mr. Reynolds, you will be next, if that is okay. He didn't have a chance the first... |
| 02:06:2838 sec. |
Reynolds, Thomas "Tom" - U.S. Representative, [R] New York
Some firms are impatient with the U.S. trade remedies law in context with China because it is expensive to bring many of these cases, and... |
| 02:07:0634 sec. |
Navarro, Peter - Associate Professor
Let me say two things about that. First of all is that the WTO rules really overly narrowly define just what a subsidy is. So, the kinds... |
| 02:07:4059 sec. |
Vargo, Franklin J. - Vice President
Could I add to that? What you say is certainly true. These trade cases are expensive. They are lengthy. For our members, particularly our... |
| 02:08:394 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
I think Mr. Bassett wanted to say something. |
| 02:08:433 sec. |
Reynolds, Thomas "Tom" - U.S. Representative, [R] New York
I am sorry, I didn't hear the Chairman. |
| 02:08:46 |
Levin, Sander Martin - U.S. Representative, [D] Michigan
What? |
| 02:08:461 sec. |
Reynolds, Thomas "Tom" - U.S. Representative, [R] New York
I didn't hear you. |
| 02:08:478 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
I think Mr. Bassett wanted to comment on that. You shook your head. Mr. Bassett, did you want to comment on that issue? |
| 02:08:5528 sec. |
Bassett, John D. III - Chairman and CEO
I only have one comment. I thoroughly enjoyed listening to the professor give us the percentages of what each of these advantages are. I... |
| 02:09:23 |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Amen. |
| 02:09:2312 sec. |
Bassett, John D. III - Chairman and CEO
Exchange part of this puzzle is out there. I think so often, if we can't put the puzzle together, nothing happens. |
| 02:09:3515 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
I thought you would have words of wisdom. No, seriously. I think you sum it up beautifully, if I might say so. Mr. Blumenauer, Mr.... |
| 02:09:501 min. |
Blumenauer, Earl - U.S. Representative, [D] Oregon
Thank you, Mr. Chairman. Again, I think this panel was extraordinarily helpful in terms of getting at the big picture from a variety of... |
| 02:11:302 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Mr. Goodish, do you want to say a word about that? |
| 02:11:323 sec. |
Goodish, John H. - Executive V.P. and COO
I guess I am not following the question exactly. |
| 02:11:3539 sec. |
Blumenauer, Earl - U.S. Representative, [D] Oregon
I am wondering if these products that you are talking about that have been lavishly subsidized, that have not been in full compliance of... |
| 02:12:1437 sec. |
Goodish, John H. - Executive V.P. and COO
I think it would be very difficult for us as the manufacturers to be able to assure you that they do not. When you go to stamping plants... |
| 02:12:5121 sec. |
Tyrone, James C. - Senior Vice President
As it relates to paper products, I would actually be very surprised if they did not. The reason that would be the case is the countries... |
| 02:13:1234 sec. |
Blumenauer, Earl - U.S. Representative, [D] Oregon
I realize my time is expired, Mr. Chairman, but I would like to explore--I am not interested in a lot of bureaucracy; I am not interested... |
| 02:13:462 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
It is an interesting point. Interesting. |
| 02:13:482 sec. |
Blumenauer, Earl - U.S. Representative, [D] Oregon
Thank you. |
| 02:13:505 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
We will try to follow up. Mr. Weller. |
| 02:13:5552 sec. |
Weller, Gerald "Jerry" C. - U.S. Representative, [R] Illinois
Thank you, Mr. Chairman. This is a helpful panel, and as we go through this process looking at what we consider illegal subsidies, discussion... |
| 02:14:4749 sec. |
Vargo, Franklin J. - Vice President
Well, to begin with, many of our companies don't have the resources to have investigators go over and see just why the prices are so low.... |
| 02:15:363 sec. |
Weller, Gerald "Jerry" C. - U.S. Representative, [R] Illinois
Others want to comment on that question? |
| 02:15:391 min. |
Goodish, John H. - Executive V.P. and COO
I think it is correct. It is extremely difficult for us to be able to gather the facts on exactly what the manufacturing cost is. You can... |
| 02:17:051 sec. |
Weller, Gerald "Jerry" C. - U.S. Representative, [R] Illinois
Anyone else? |
| 02:17:0644 sec. |
Tyrone, James C. - Senior Vice President
If I may, it was certainly our observation of the prices being offered by Chinese producers relative to our costs that led us to believe... |
| 02:17:502 sec. |
Weller, Gerald "Jerry" C. - U.S. Representative, [R] Illinois
Thank you, Mr. Chairman. |
| 02:17:523 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Mr. Pascrell. |
| 02:17:552 min. |
Pascrell, William "Bill" J. Jr. - U.S. Representative, [D] New Jersey
Thank you, Mr. Chairman. In your testimony, Mr. Vargo, on page 8 of that testimony you talk about America's trade deficit. Two paragraphs... |
| 02:20:131 min. |
Bassett, John D. III - Chairman and CEO
You are right on. Well, not only are the jobs we are losing--one of the problems I am having right now is so many of my suppliers have disappeared.... |
| 02:21:153 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Chocolate. |
| 02:21:185 sec. |
Bassett, John D. III - Chairman and CEO
The proposition is that you can buy flowers for Valentine's less expensively today than you ever bought them. |
| 02:21:23 |
Pascrell, William "Bill" J. Jr. - U.S. Representative, [D] New Jersey
That is correct. |
| 02:21:2317 sec. |
Bassett, John D. III - Chairman and CEO
Which probably is true. I can't argue with those facts. If the only premise for trade, gentlemen, is is the price cheaper, then we are right... |
| 02:21:4019 sec. |
Pascrell, William "Bill" J. Jr. - U.S. Representative, [D] New Jersey
Well, doesn't it get you nervous, though, when the representative of trade says that to this Committee in response to a particular question?... |
| 02:21:593 sec. |
Bassett, John D. III - Chairman and CEO
I agree with you. Let me tell you the example I use when people ask for it. |
| 02:22:021 sec. |
Pascrell, William "Bill" J. Jr. - U.S. Representative, [D] New Jersey
Sure. |
| 02:22:0315 sec. |
Bassett, John D. III - Chairman and CEO
I come from a very small Southern town in Southern Virginia. Years ago, when I was a young man, there used to be a lot of bootlegging going... |
| 02:22:182 sec. |
Pascrell, William "Bill" J. Jr. - U.S. Representative, [D] New Jersey
I will take your word for it. |
| 02:22:2028 sec. |
Bassett, John D. III - Chairman and CEO
But it was against the law to make it, to own it, or to drink it. It was illegal. The ox that was getting gored was the Federal and State... |
| 02:22:484 sec. |
Pascrell, William "Bill" J. Jr. - U.S. Representative, [D] New Jersey
Mr. Chairman, can I ask one more quick question? |
| 02:22:525 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Yes. I don't think we wanted to finish on that point. [Laughter.] Though I think it is a very good one. |
| 02:22:572 sec. |
Pascrell, William "Bill" J. Jr. - U.S. Representative, [D] New Jersey
Very illustrative. |
| 02:22:593 sec. |
Navarro, Peter - Associate Professor
Can I just make one quick point on this? |
| 02:23:022 sec. |
Pascrell, William "Bill" J. Jr. - U.S. Representative, [D] New Jersey
Yes, sir. |
| 02:23:048 sec. |
Navarro, Peter - Associate Professor
There is a lot of focus in blue collar manufacturing and how all those jobs have gone. I come here today to tell you that the same thing... |
| 02:23:121 sec. |
Pascrell, William "Bill" J. Jr. - U.S. Representative, [D] New Jersey
Absolutely. |
| 02:23:134 sec. |
Navarro, Peter - Associate Professor
If we lose those jobs as well, it is going to be us living the peasant life. |
| 02:23:172 sec. |
Pascrell, William "Bill" J. Jr. - U.S. Representative, [D] New Jersey
I agree with you. |
| 02:23:194 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Mr. Pascrell, one other thing. Don't lose the power of Mr. Bassett's last point, though. |
| 02:23:2322 sec. |
Pascrell, William "Bill" J. Jr. - U.S. Representative, [D] New Jersey
I will not lose that. Thank you for bringing that up. Mr. Vargo, back to the question. What is your organization doing to protect... |
| 02:23:4557 sec. |
Vargo, Franklin J. - Vice President
Several things. First of all, we are pressing hard to ensure that the rules are followed, particularly in this case in subsidies. We are... |
| 02:24:421 sec. |
Pascrell, William "Bill" J. Jr. - U.S. Representative, [D] New Jersey
Thank you. |
| 02:24:431 min. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
I wasn't going to mention this. We have a minute left before we are supposed to recess. Mr. Vargo, the Korea FTA is being negotiated. They... |
| 02:25:5418 sec. |
Vargo, Franklin J. - Vice President
Mr. Levin, could I just quickly respond? We have been pressing hard for a free trade agreement with Korea, not because of tariffs but because... |
| 02:26:123 min. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
It has to be measurable. We have to find a way to tie their benefit from reduced tariffs to our access in a measurable way. That is the... |
| 02:29:322 sec. |
Herger, Walter "Wally" - U.S. Representative, [R] California
Why don't we go into it? |
| 02:29:346 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Okay. So, we welcome formally, more officially, the USTR, Trade Representative Karan Bhatia. Welcome. THE HONORABLE KARAN K. BHATIA,... |
| 02:29:408 min. |
Bhatia, Karan K. - Deputy Trade Representative
Thank you very much, Chairman Levin, Ranking Member Herger. Let me start by noting that I'm really delighted to be able to be here today... |
| 02:38:301 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Take your time. Take your time. |
| 02:38:311 min. |
Bhatia, Karan K. - Deputy Trade Representative
Thank you. On subsidies and IPR, these are two clearly critical topics. They are two topics that perhaps pose some of the greatest challenges... |
| 02:40:136 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Thank you very, very much. So, let's have a good back-and-forth for a few minutes. |
| 02:40:19 |
Bhatia, Karan K. - Deputy Trade Representative
Great. |
| 02:40:196 min. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Others may join us, but with Mr. Herger and myself, this is an important gathering in our eyes. Let me just repeat what I said both on the... |
| 02:46:193 sec. |
Bhatia, Karan K. - Deputy Trade Representative
Yes, that's right. |
| 02:46:2223 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Okay. Now they identified 70, and that's only a partial report, 70 subsidy programs, and they're probably just the tip of the iceberg. Your... |
| 02:46:453 sec. |
Bhatia, Karan K. - Deputy Trade Representative
The case that we have--the consultations? |
| 02:46:485 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Right. It's not a case. These are the consultations. So, they cover how many of the 70? |
| 02:46:5313 sec. |
Bhatia, Karan K. - Deputy Trade Representative
It's not a simple area. There are 9 subsidies at issue. Some are in those 70 and some are things that we found on our own. So, they're not--it's... |
| 02:47:0622 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
By the way, a lot of these subsidies, some of them were known years ago. I won't bother you with the list, but many of them were known as... |
| 02:47:281 sec. |
Bhatia, Karan K. - Deputy Trade Representative
Yes, that's right. |
| 02:47:293 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Okay. So, that leaves a lot of them out. |
| 02:47:321 sec. |
Bhatia, Karan K. - Deputy Trade Representative
That's correct. |
| 02:47:3314 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
So, tell us as quickly as you can the strategy why those 9, what about all the others? |
| 02:47:4711 sec. |
Bhatia, Karan K. - Deputy Trade Representative
Should I go ahead and respond now, Mr. Chairman? Okay. Would you like me to respond--you had a couple of other points that I'd be happy... |
| 02:47:582 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Touch on everything. |
| 02:48:001 sec. |
Bhatia, Karan K. - Deputy Trade Representative
Okay. Why don't we start maybe with this last one. |
| 02:48:012 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Okay. |
| 02:48:033 min. |
Bhatia, Karan K. - Deputy Trade Representative
Then I can go back through some of the others. The Chinese subsidy notification was filed last spring after we pushed substantially--during... |
| 02:51:422 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Please. |
| 02:51:445 min. |
Bhatia, Karan K. - Deputy Trade Representative
In response. Actually, perhaps I could just add one final point on subsidies. I think your focusing this hearing on subsidies is extremely... |
| 02:57:401 min. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Just briefly--by the way, Mr. Vargo's testimony about the drop in exports in manufacturing we want to look at. Let me just say on the pipe... |
| 02:58:541 sec. |
Bhatia, Karan K. - Deputy Trade Representative
Yes. |
| 02:58:5520 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Subsidization is clearly part of it. We had better get ready to handle the issue of their increased imports here from subsidized industries.... |
| 02:59:158 sec. |
Herger, Walter "Wally" - U.S. Representative, [R] California
Thank you, Mr. Chairman. Welcome to our Committee. |
| 02:59:231 sec. |
Bhatia, Karan K. - Deputy Trade Representative
Thank you. |
| 02:59:241 min. |
Herger, Walter "Wally" - U.S. Representative, [R] California
Thank you for the work that you're doing. Really listening to the testimony and the questions from both sides of the aisle, it really sounds... |
| 03:00:5145 sec. |
Bhatia, Karan K. - Deputy Trade Representative
Congressman, there are three cases, three requests for consultation, basically, the commencement of cases in the WTO that we have pursued.... |
| 03:01:3610 sec. |
Herger, Walter "Wally" - U.S. Representative, [R] California
How many cases have other trading partners that you--in addition to what you've just mentioned, Japan, other trading partners, how many... |
| 03:01:462 sec. |
Bhatia, Karan K. - Deputy Trade Representative
Against China? None. |
| 03:01:4843 sec. |
Herger, Walter "Wally" - U.S. Representative, [R] California
So, as few as we've brought, no one else has brought any. This leads into my question. My concern is the fact that other countries would... |
| 03:02:314 sec. |
Bhatia, Karan K. - Deputy Trade Representative
I think, Congressman Herger, there's probably a couple part answer to that. |
| 03:02:355 sec. |
Herger, Walter "Wally" - U.S. Representative, [R] California
I might ask, these other countries are experiencing the same concerns we are, aren't they? |
| 03:02:402 sec. |
Bhatia, Karan K. - Deputy Trade Representative
Yes. Yes they are I think. |
| 03:02:422 sec. |
Herger, Walter "Wally" - U.S. Representative, [R] California
It's not just the United States that's---- |
| 03:02:442 min. |
Bhatia, Karan K. - Deputy Trade Representative
I think that is a fair point. To some extent, China's commitments, have, as we've described, been phased in over the course of time. So,... |
| 03:04:5017 sec. |
Herger, Walter "Wally" - U.S. Representative, [R] California
Sir, are we working with them? You mentioned that the EU did join us in two of these, Japan. Do we have others that are working with us?... |
| 03:05:0730 sec. |
Bhatia, Karan K. - Deputy Trade Representative
We are. We are, Congressman, and we do a fair amount--I think there is not a meeting that goes by where I don't meet with my EU counterpart,... |
| 03:05:371 sec. |
Herger, Walter "Wally" - U.S. Representative, [R] California
Very good. Thank you. |
| 03:05:381 sec. |
Bhatia, Karan K. - Deputy Trade Representative
Thank you. |
| 03:05:393 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Thank you very much. Mr. Crowley. |
| 03:05:423 sec. |
Crowley, Joseph - U.S. Representative, [D] New York
Thank you, Mr. Chairman. Mr. Bhatia, welcome to the Committee. |
| 03:05:452 sec. |
Bhatia, Karan K. - Deputy Trade Representative
Thank you. |
| 03:05:4742 sec. |
Crowley, Joseph - U.S. Representative, [D] New York
Mr. Bhatia, my city, New York, has a strong competitive advantage in the financial services sector, something that myself and a number of... |
| 03:06:293 min. |
Bhatia, Karan K. - Deputy Trade Representative
Congressman Crowley, the financial services commitments that China made are a very high priority for us. We recognize fully the importance... |
| 03:10:0918 sec. |
Crowley, Joseph - U.S. Representative, [D] New York
Figuratism is a form of subsidization as well, I believe. I think that's what's going on China when it comes to the financial services sector... |
| 03:10:274 min. |
Bhatia, Karan K. - Deputy Trade Representative
Thank you. Mr. CROWLEY, but this case only covers 7 of the 70-plus subsidies China recently reported to the WTO four years after the... |
| 03:14:5125 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Thank you. Let me just ask Mr. Crowley, Mr. Crowley, before you have to go, is it possible that a Chinese requirement that a financial services... |
| 03:15:162 sec. |
Bhatia, Karan K. - Deputy Trade Representative
Mr. Chairman---- |
| 03:15:185 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
I think in answer to Mr. Crowley you said that there was a new regulation. |
| 03:15:231 sec. |
Bhatia, Karan K. - Deputy Trade Representative
Yes. |
| 03:15:246 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
That it, I thought you said required that the entity be a subsidiary? |
| 03:15:3023 sec. |
Bhatia, Karan K. - Deputy Trade Representative
The issue is subsidy versus branching, is what we're talking about here. So, that these are regulations that the Chinese have put out to... |
| 03:15:535 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Their regulation says what regarding being a sub or a branch? |
| 03:15:5821 sec. |
Bhatia, Karan K. - Deputy Trade Representative
The regulations allow foreign banks that have incorporated in China to provide the range of services that we're looking to allow our companies... |
| 03:16:196 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
So, they would allow a completely foreign- owned bank to have a full range of services? |
| 03:16:255 sec. |
Bhatia, Karan K. - Deputy Trade Representative
We are trying to figure out whether the regulations as applied are going to permit that or not. |
| 03:16:307 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
If they don't, it would be out of compliance? |
| 03:16:3749 sec. |
Bhatia, Karan K. - Deputy Trade Representative
It would, I think, Mr. Levin--I don't want to misspeak to you on whether there would be a WTO case there or not. I do know that our industry... |
| 03:17:261 min. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Okay. Lastly, when you referred to the request for consultations, when you referred to that, it's interesting that the footnotes, in the... |
| 03:19:0436 sec. |
Herger, Walter "Wally" - U.S. Representative, [R] California
Maybe one last question, Mr. Chairman. Mr. Bhatia, the USTR brought the prohibited subsidy case against China because these prohibited subsidies... |
| 03:19:401 min. |
Bhatia, Karan K. - Deputy Trade Representative
Congressman Herger, that is challenging. I don't deny the fact that the case we were able to bring, we were able to bring because it was... |
| 03:21:301 sec. |
Herger, Walter "Wally" - U.S. Representative, [R] California
Very good. Thank you. |
| 03:21:312 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
Well, thank you very much. It's been very useful. |
| 03:21:331 sec. |
Bhatia, Karan K. - Deputy Trade Representative
Thank you. |
| 03:21:342 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
We'll be seeing much of each other. |
| 03:21:363 sec. |
Bhatia, Karan K. - Deputy Trade Representative
I look forward to it. |
| 03:21:3931 sec. |
Levin, Sander Martin - U.S. Representative, [D] Michigan
We stand in adjournment. |