S. HRG. 113–227 NOMINATION OF MICHAEL FROMAN HEARING BEFORE THE COMMITTEE ON FINANCE UNITED STATES SENATE ONE HUNDRED THIRTEENTH CONGRESS FIRST SESSION ON THE NOMINATION OF MICHAEL FROMAN, TO BE UNITED STATES TRADE REPRESENTATIVE, WITH THE RANK OF AMBASSADOR EXTRAORDINARY AND PLENIPOTENTIARY, EXECUTIVE OFFICE OF THE PRESIDENT JUNE 6, 2013 ( Printed for the use of the Committee on Finance U.S. GOVERNMENT PRINTING OFFICE 87–359—PDF WASHINGTON : 2013 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Nov 24 2008 15:41 Apr 08, 2014 Jkt 000000 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 R:\DOCS\87359.000 TIMD COMMITTEE ON FINANCE MAX BAUCUS, Montana, Chairman JOHN D. ROCKEFELLER IV, West Virginia ORRIN G. HATCH, Utah RON WYDEN, Oregon CHUCK GRASSLEY, Iowa CHARLES E. SCHUMER, New York MIKE CRAPO, Idaho DEBBIE STABENOW, Michigan PAT ROBERTS, Kansas MARIA CANTWELL, Washington MICHAEL B. ENZI, Wyoming BILL NELSON, Florida JOHN CORNYN, Texas ROBERT MENENDEZ, New Jersey JOHN THUNE, South Dakota THOMAS R. CARPER, Delaware RICHARD BURR, North Carolina BENJAMIN L. CARDIN, Maryland JOHNNY ISAKSON, Georgia SHERROD BROWN, Ohio ROB PORTMAN, Ohio MICHAEL F. BENNET, Colorado PATRICK J. TOOMEY, Pennsylvania ROBERT P. CASEY, Jr., Pennsylvania AMBER COTTLE, Staff Director CHRIS CAMPBELL, Republican Staff Director (II) VerDate Nov 24 2008 15:41 Apr 08, 2014 Jkt 000000 PO 00000 Frm 00002 Fmt 0486 Sfmt 0486 R:\DOCS\87359.000 TIMD C O N T E N T S OPENING STATEMENTS Page Baucus, Hon. Max, a U.S. Senator from Montana, chairman, Committee on Finance ............................................................................................................ 1 Hatch, Hon. Orrin G., a U.S. Senator from Utah ................................................. 3 ADMINISTRATION NOMINEE Froman, Michael, nominated to be United States Trade Representative, with the rank of Ambassador Extraordinary and Plenipotentiary, Executive Of- fice of the President, Washington, DC ............................................................... 6 ALPHABETICAL LISTING AND APPENDIX MATERIAL Baucus, Hon. Max: Opening statement ........................................................................................... 1 Prepared statement .......................................................................................... 37 Froman, Michael: Testimony .......................................................................................................... 6 Prepared statement .......................................................................................... 39 Biographical information ................................................................................. 41 Responses to questions from committee members ......................................... 50 Hatch, Hon. Orrin G.: Opening statement ........................................................................................... 3 Prepared statement .......................................................................................... 127 (III) VerDate Nov 24 2008 15:41 Apr 08, 2014 Jkt 000000 PO 00000 Frm 00003 Fmt 0486 Sfmt 0486 R:\DOCS\87359.000 TIMD VerDate Nov 24 2008 15:41 Apr 08, 2014 Jkt 000000 PO 00000 Frm 00004 Fmt 0486 Sfmt 0486 R:\DOCS\87359.000 TIMD NOMINATION OF MICHAEL FROMAN, TO BE UNITED STATES TRADE REPRESENTATIVE, WITH THE RANK OF AMBASSADOR EXTRAORDINARY AND PLENIPOTENTIARY, EXECUTIVE OFFICE OF THE PRESIDENT THURSDAY, JUNE 6, 2013 U.S. SENATE, COMMITTEE ON FINANCE, Washington, DC. The hearing was convened, pursuant to notice, at 11:10 a.m., in room SD–215, Dirksen Senate Office Building, Hon. Max Baucus (chairman of the committee) presiding. Present: Senators Wyden, Schumer, Menendez, Carper, Cardin, Brown, Casey, Hatch, Grassley, Thune, Burr, Isakson, and Port- man. Also present: Democratic Staff: Mac Campbell, General Counsel; Amber Cottle, Staff Director; Chelsea Thomas, Professional Staff Member; Hun Quach, International Trade Analyst; Tiffany Smith, Tax Counsel; Savanna Cochran, Intern; Laurie Dempsey, Detailee; Bruce Hirsh, Chief International Trade Counsel; and Rory Murphy, International Trade Advisor. Republican Staff: Nicholas Wyatt, Tax and Nominations Professional Staff Member; Richard Chovanec, Detailee; Kevin Rosenbaum, Detailee; and Rebecca Nasca, Staff As- sistant. OPENING STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE The CHAIRMAN. The hearing will come to order. William Shakespeare once said, and I quote him, ‘‘Nimble thought can jump both sea and land.’’ The USTR brings both nimble thought and nimble action to bear on the complex world of trade negotiations and enforcement. And this nimbleness allows them to address the challenges of trade pol- icy across sea and land. The USTR is lean; it is effective. With fewer than 250 employees, it punches beyond its weight to break down foreign barriers to U.S. goods, services, and intellectual property. And it negotiates the rules of trade that expand commerce, promote growth, and create jobs. USTR requires leadership that is equally nimble—leadership that can harness USTR’s strengths and the strengths of the U.S. Government as a whole. It needs a leader willing to put in the miles to meet with foreign counterparts and drive a hard bargain. (1) VerDate Nov 24 2008 15:41 Apr 08, 2014 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 R:\DOCS\87359.000 TIMD 2 A leader willing to partner with us here in Congress to develop trade policies that work. And a leader willing to put in the hours to understand the challenges facing U.S. businesses, farmers, and ranchers—ranchers like Jim Peterson who are fighting to sell more U.S. beef around the world and are facing unscientific barriers in places like China. I am pleased that we have such a leader before us today. Michael Froman is the right person for this job. For the past 4 years, he has demonstrated a mastery of trade policy development and im- plementation. He understands the small details, and he sees the big picture. He has closed out trade agreements, guided global economic policy, and promoted initiatives that have boosted America’s exports by more than 40 percent. And he has skillfully represented the United States at global forums like the G–8 and the G–20. He is more than capable to do the job at hand. We should confirm his nomina- tion, and we should do it quickly. President Obama has outlined an ambitious trade agenda, one that requires a strong trade representative like Mr. Froman who can hit the ground running. The time is ripe. The United States has an opportunity to share in the rapid growth of the Pacific re- gion and to unlock further economic gains from our already deep ties with Europe. USTR seeks to complete the Trans-Pacific Partnership negotia- tions by the end of the year. It will soon be ramping up free trade agreement negotiations with the European Union, and it is hard at work in Geneva on a multilateral services agreement, expanding opportunities for U.S. information technology products and reduc- ing border delays around the world. These trade policies will make a difference here at home. As a group, the TPP countries are the largest international market for U.S. goods and services. Last year, U.S. exports to current TPP countries totaled nearly $260 billion, representing 40 percent of total U.S. goods exports. And breaking down trade barriers in TPP countries will make a real difference. Japan relaxed its beef restrictions earlier this year, and our beef sales are almost 50 percent higher. Japan’s average agricultural tariffs are more than 20 percent, while ours are only 5 percent. When those tariffs come down, our sales will go up. And the Transatlantic Trade and Investment Partnership will also stimulate economic growth and job creation. The European Union purchased close to $460 billion in U.S. goods and services last year, supporting 2.4 million American jobs. A comprehensive agreement that tackles long-standing regulatory and agricultural barriers could add even more jobs here at home. My home State of Montana shows how critical an ambitious trade agenda is to good-paying jobs. Montana’s manufacturers, farmers, and ranchers rely upon open markets to create and main- tain jobs. In fact, one in six manufacturing jobs in Montana comes from exports. In the last decade, Montana’s goods exports to FTA partners have increased by 250 percent. Last year, Montana’s wheat growers exported 85 percent of their crop. Because of the tireless efforts of U.S. trade negotiators, ranchers from Clyde Park can now export American beef to Korea, and farm- VerDate Nov 24 2008 15:41 Apr 08, 2014 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 R:\DOCS\87359.000 TIMD 3 ers from Churchill can export American seed potatoes to Congo. We must fulfill the promise of our ambitious trade agenda. Confirming Mike Froman quickly will be the first step, but we are not done there. The next step will be to pass Trade Promotion Authority and Trade Adjustment Assistance. With so many trade initiatives moving to completion and getting off the ground, we need TPA now to guide and support USTR. And we need TAA, Trade Adjustment Assistance, to ensure that our workforce remains ready to compete with anyone, anywhere in the world. I am pleased that the administration supports TPA and worker assistance. Mr. Froman, I look forward to working with you to renew TPA and TAA in the