[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
FY 2017 BUDGET PRIORITIES FOR EAST ASIA: ENGAGEMENT, INTEGRATION, AND
DEMOCRACY
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ASIA AND THE PACIFIC
OF THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
APRIL 19, 2016
__________
Serial No. 114-166
__________
Printed for the use of the Committee on Foreign Affairs
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COMMITTEE ON FOREIGN AFFAIRS
EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida BRAD SHERMAN, California
DANA ROHRABACHER, California GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio ALBIO SIRES, New Jersey
JOE WILSON, South Carolina GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas THEODORE E. DEUTCH, Florida
TED POE, Texas BRIAN HIGGINS, New York
MATT SALMON, Arizona KAREN BASS, California
DARRELL E. ISSA, California WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina ALAN GRAYSON, Florida
MO BROOKS, Alabama AMI BERA, California
PAUL COOK, California ALAN S. LOWENTHAL, California
RANDY K. WEBER SR., Texas GRACE MENG, New York
SCOTT PERRY, Pennsylvania LOIS FRANKEL, Florida
RON DeSANTIS, Florida TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina JOAQUIN CASTRO, Texas
TED S. YOHO, Florida ROBIN L. KELLY, Illinois
CURT CLAWSON, Florida BRENDAN F. BOYLE, Pennsylvania
SCOTT DesJARLAIS, Tennessee
REID J. RIBBLE, Wisconsin
DAVID A. TROTT, Michigan
LEE M. ZELDIN, New York
DANIEL DONOVAN, New York
Amy Porter, Chief of Staff Thomas Sheehy, Staff Director
Jason Steinbaum, Democratic Staff Director
------
Subcommittee on Asia and the Pacific
MATT SALMON, Arizona Chairman
DANA ROHRABACHER, California BRAD SHERMAN, California
STEVE CHABOT, Ohio AMI BERA, California
TOM MARINO, Pennsylvania TULSI GABBARD, Hawaii
JEFF DUNCAN, South Carolina ALAN S. LOWENTHAL, California
MO BROOKS, Alabama GERALD E. CONNOLLY, Virginia
SCOTT PERRY, Pennsylvania GRACE MENG, New York
SCOTT DesJARLAIS, Tennessee
C O N T E N T S
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Page
WITNESSES
The Honorable Daniel R. Russel, Assistant Secretary, Bureau of
East Asian and Pacific Affairs, U.S. Department of State....... 5
The Honorable Jonathan Stivers, Assistant Administrator, Bureau
for Asia, U.S. Agency for International Development............ 16
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
The Honorable Daniel R. Russel: Prepared statement............... 7
The Honorable Jonathan Stivers: Prepared statement............... 19
APPENDIX
Hearing notice................................................... 38
Hearing minutes.................................................. 39
Written responses from the Honorable Daniel R. Russel and the
Honorable Jonathan Stivers to questions submitted for the
record by the Honorable Matt Salmon, a Representative in
Congress from the State of Arizona, and chairman, Subcommittee
on Asia and the Pacific........................................ 40
FY 2017 BUDGET PRIORITIES FOR EAST ASIA:
ENGAGEMENT, INTEGRATION, AND
DEMOCRACY
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TUESDAY, APRIL 19, 2016
House of Representatives,
Subcommittee on Asia and the Pacific,
Committee on Foreign Affairs,
Washington, DC.
The subcommittee met, pursuant to notice, at 1 o'clock
p.m., in room 2200, Rayburn House Office Building, Hon. Matt
Salmon (chairman of the subcommittee) presiding.
Mr. Salmon. The subcommittee will come to order.
Members will be permitted to submit written statements to
be included in the official hearing record. Without objection,
the hearing record will remain open for 5 calendar days to
allow statements, questions, and extraneous materials for the
record, subject to the length limitation in the rules.
Good afternoon. And today, the subcommittee examines the
administration's Fiscal Year 2017 budget request for the East
Asia and Pacific region.
As we continue into what some are calling the Asian
Century, U.S. annual expenditures for East Asia and Pacific are
more and more important. Having lived in and traveled
extensively throughout Asia, I firmly believe this region is
driving the world's future. Our trade with Asia last year was
more than $1.4 trillion, and 40 percent of the world's trade
passes through the South China Sea alone.
The Obama administration has pushed efforts of its Asia
rebalance to facilitate U.S. engagement in the region in both
security and economic advancement, yet even after all the
administration's rhetoric, this bureau remains the second-
smallest of the State's six regional bureaus. While an increase
in high-level regional attention is important, the day-to-day
resources on the ground have got to match the commitment. I
look forward to the witnesses' justification of this
discrepancy today.
Most Members of Congress agree with the administration's
call for greater engagement with the Asia-Pacific region to
stimulate closer integration among our allies and partners to
promote democracy and rule of law. Congress must play an
important role in this conversation, and it is imperative,
especially in light of our continuing fiscal challenges, that
U.S. investment in the region be both effective and efficient.
Clearly, the Asia-Pacific region faces enormous challenges.
In a speech given earlier this month, Secretary of Defense Ash
Carter outlined the five main challenges that the United States
faces today. Two of them are situated in the Asia-Pacific. The
continued provocations of North Korea's rogue regime and the
threat that the South China Sea, one of the world's busiest
waterways, could be militarized. Secretary Carter went on to
describe the region as the single-most consequential region of
the world for America's future.
On North Korea I commend Chairman Royce's leadership in
increasing sanctions on this rogue regime. I would be proud to
join him in that effort, and now I am eager to see the
implementation of this important new law.
China's actions in the South China Sea continue to raise
the risk of conflict while simultaneously jeopardizing the
international rights, freedoms, and order. As China continues
its alarming trend of militarizing the South China Sea, the
United States must be firm in its resolve to support
international norms.
While I support the freedom of navigation exercises
recently conducted by the U.S. Navy, I would like to see even
more strategic clarity from the administration on the issue of
the South China Sea to ensure international norms and the rule
of law are followed.
Resourcing diplomatic and development responses to such
challenges can be especially difficult in the region because
strategic priorities do not always map directly to budget
priorities. We must work closely with our regional partners,
who continue calls for our assistance on issues like the South
China Sea through programs such as the 5-year Southeast Asia
Maritime Security Initiative, which seeks to foster regional
stability by improving the maritime capabilities of our
partners. I hope to hear from our panel more about this
initiative and others specific to the South China Sea conflict.
The region faces a plethora of additional challenges from
the growing threat of radical Islamist terrorist organizations
and the influence of ISIS to the difficulty of establishing a
region-wide system of trade rules that are free, fair, and
uphold high standards. Our trade agreements help strengthen
institutions and the rule of law while deepening our ties with
our trading partners and regional allies.
I continue to support the Trans-Pacific Partnership and
believe it will ultimately assist in regional economic trade
activity, heightened regional trade standards, and promote
increased economic growth for both the U.S. and our trade
partners.
I was recently at a symposium put on by the McLean
Institute in Sedona, Arizona, and James Clapper was there. And
I remember him saying that TPP is probably worth three aircraft
carrier or is the equivalent of three aircraft carrier. I am
interested in hearing the panel's thoughts on utilizing
development assistance funding to bring non-TPP members closer
to TPP standards.
We were also in Indonesia, and they are interested in a
second round. Their President, in meeting with President Obama
in January, identified that they would like to be part of a
second round. Philippines is very, very interested, Taiwan. You
know, it is going to be interesting to see how it all plays
out, but I think all of them are looking with great
anticipation for this to finally be ratified and move on and
see other opportunities arise in the days and years to come.
And today, we are going to discuss the many challenges and
opportunities we face in the region and the administration's
commitment to the rebalance in the context of the Fiscal Year
2017 budget request for East Asia and Pacific region. Given the
heightened challenges in the region, the United States must
fully commit to increasing integration amongst our allies and
partners and continuing to promote peace and democracy. Making
sure we understand these missions from a place of organization,
efficiency, and effectiveness is equally important, so I am
really grateful for our witnesses' willingness to join us
today.
And I would like to recognize Mr. Sherman for any comments
he might have.
Mr. Sherman. Thank you.
We can all agree on the importance of the East Asia-Pacific
region. It is a diverse and dynamic region. We have seen
significant progress there politically. We have seen democracy
in Burma or Myanmar move forward. But keep in mind, democracy
is not touted as a system that necessarily protects minority
rights. And the Rohingya continue to suffer, whether it is from
the military or even from some of the democratic leaders in
Myanmar/Burma.
The economic progress has been more than significant. World
Bank says extreme poverty in the region has dropped from 29
percent in 2002 to 4 percent in 2014.
While we all agree that the region is important, I think we
are going down the wrong path because we are being war hawks
about some islets that remain uninhabited to this day. That is
how useless they are. And we are incredibly doves when it comes
to jobs for the American people. You would think that the
American Government might have lost touch with the citizens it
claims to represent, which I think is obvious to anyone looking
at our current political system.
Looking first at these maritime disputes, we have to be
careful about how we deploy our limited resources. Pivot to
Asia should mean we send a trade delegation to Tokyo to say we
have got to deal with this trade deficit rather than sending
aircraft carriers to defend islets for Japan that they are
unwilling to defend at their own cost.
Let's look at these islets. There is no oil. If there was
any oil, it is not our oil. And the countries who say that it
would be their oil are unwilling to increase their defense
budgets but are banking on their ability to redirect our
defense budget because, while our defense budget may not
increase, our allocation of it to protect their islets, which
have their oil but there is no oil is their best investment.
And Japan, for example, continues to have a 1 percent GDP
ceiling on what they spend for their own defense.
The chairman brings up the trade agreement, as our
witnesses do in their opening statement. This is a trade
agreement so manifestly against American interests that
everyone running for President swears they are against it even
those who may think otherwise. The American people will see
this agreement become law only through chicanery and trickery
like ratification during a lame-duck session.
I hope that we can put enough light on this so we not only
ask candidates for President where do they stand on it, but we
get a clear statement from every candidate for President will
they withdraw from it if chicanery is used to ratify it during
the month of December of this year.
This agreement is so terrible for American working families
that it is being sold as good national security policy. Suffer
for your country; your country needs you. This is terrible
national security policy.
First, it is a Trojan horse for China to bring its imports
into the United States, goods that are admitted to be 60
percent made in China. In reality, 80 or 90 percent made in
China get fast-tracked into the United States with no
supervision and no tariff, a one-way free trade agreement for
China.
Second, this deal puts the U.S. Government's stamp of
approval on the idea that trade agreements don't control
currency manipulation. So the idea that we should be so proud
that we wrote the rules, no, these are Wall Street's rules that
have mutilated the American middle class. We shouldn't be proud
for passing them, and oh, by the way, the one rule China wanted
we wrote for them even though they didn't even have to show up
for the negotiations. And the key thing, the most important
part of this agreement is the part that is not in it, nothing
on currency manipulation.
As to North Korea, we clearly have a problem. What worries
me most is that North Korea will sell fissile material or a
nuclear weapon. In 2007, Israel destroyed a nuclear facility, a
nuclear bomb facility in Syria. What is less well-known is that
it was all North Korean equipment and technology.
North Korea was only willing to sell technology and
equipment in 2007 because they didn't have very mean weapons
and they needed nuclear weapons in their own belief to defend
themselves from us. They now have 12 nuclear weapons. They will
be developing three a year or at least enough fissile material
for three a year. I don't know whether the next one goes on
eBay, but I do know that the amount North Korea would demand
would exceed the resources of ISIS or any other terrorist non-
state actor, but Iran and other state actors would have enough
money to really interest the North Koreans.
Finally, as Washington warned us, we have to avoid the
tendency of many countries to go looking for dragons to slay--
funny that he used the term dragon--looking for enemies we
don't need.
China has domestic political problems, so they fan
nationalism over islets. We do the same thing perhaps for our
own political reasons. We were told that these islets, for
example, sit astride trade routes involving hundreds of
billions of dollars of trade. Yes, it is all trade in and out
of Chinese ports, and if China had military control of these
islands, they could blockade their own ports.
So we exaggerate the importance of these islets in order to
meet domestic political needs. What the Pentagon needs
politically most is a worthy adversary. They don't like
focusing their attention on non-uniformed, asymmetrical
opponents. China offers the only hope of a worthy uniformed
opponent. We don't need another opponent. We need to calm down
and realize these islets are islets that remain uninhabited
even though they are off the coast of the most populated
continent for a reason.
And I realize that our hearing today is about the State
Department and a USAID budget, but the Pentagon budget follows
foreign policy or at least it should, and that is the big
budget we have got to worry about.
I yield back.
Mr. Salmon. We are grateful to be joined today by
Assistant Secretary Daniel Russel of the Department of the
State's Bureau of East Asia and Pacific Affairs and Assistant
Administrator Jonathan Stivers of the U.S. Agency for
International Development Bureau for Asia. And we are thankful
to these witnesses for sharing their time with us today.
And I am going to start with you, Mr. Russel, and then Mr.
Stivers when he has concluded. Thank you.
STATEMENT OF THE HONORABLE DANIEL R. RUSSEL, ASSISTANT
SECRETARY, BUREAU OF EAST ASIAN AND PACIFIC AFFAIRS, U.S.
DEPARTMENT OF STATE
Mr. Russel. Chairman Salmon, Ranking Member Sherman,
members of the subcommittee, thanks very much for your
leadership in supporting strong U.S. relations with the East
Asia and Pacific region. Thank you also for the opportunity to
testify today about our progress in the rebalance and the
relevance of the President's 2017 budget request.
And, Mr. Chairman, if I may in particular thank you for
your tremendous leadership of this subcommittee and your strong
support for our engagement in the Asia-Pacific. You will be
sorely missed in Fiscal Year 2017 when this budget is realized.
This is also the last budget for President Obama, and so I
would like to start with just a quick recap of what we think we
have accomplished with your support over the last 7 years and
the foundation that we think that we can lay through this
budget for the next administration.
First, since security starts with friends, we modernized
our longstanding treaty alliances with Japan, South Korea,
Australia, and the Philippines, and we forged new security
partnerships at the same time that we developed existing ones
with partners like Singapore and New Zealand. This makes us
much more effective in addressing both conventional security
threats but also other threats such as countering violent
extremism, blocking the flow of foreign terrorist fighters,
preventing human trafficking, and other transnational crimes.
Second, to create jobs at home and to secure our standing
in the region, we stepped up economic engagement, concluding
the U.S.-Korea Free Trade Agreement, revitalizing APEC,
pursuing a new bilateral investment treaty with China, and most
important, negotiating the Trans-Pacific Partnership, which is
a new kind of economic agreement that sets high standards for
protecting workers and the environment while at the same time
supporting job-creating small businesses and an open internet.
Third, we have helped build up the region's institutions
and support rule of law and peaceful dispute resolution. Our
investments in ASEAN and the region-wide East Asia Summit have
renewed confidence in American leadership and strengthened the
region's ability to deal with tensions like those in the South
China Sea.
Fourth, we have engaged intensely with China, investing the
time to get to know its leaders, to advance cooperation, and to
put a floor under the relationship so that it can withstand
tensions. While serious concerns in areas like human rights and
China's behavior with regard to maritime disputes with its
neighbors remain, we have worked toward cooperative engagement
on areas like cybersecurity, on shared proliferation concerns
with Iran and North Korea, global health, climate change, and
others.
Fifth, we have upgraded relations with emerging partners
like Indonesia, Malaysia, Vietnam. We have importantly
supported the democratic transition in Burma and promoted
democracy, good governance, and universal values and human
rights as an essential element of our policy.
The support and the funding provided by Congress has of
course been essential, and the $1.57 billion East Asia-Pacific
request for 2017 builds on these accomplishments, including by
addressing maritime security concerns and promoting economic
opportunities.
The $873 million in foreign assistance request supports and
expands on our objectives of regional security cooperation,
advancing economic growth and trade, promoting democratic
development, strengthening regional institutions, as well as
addressing war legacies. The other $646 million provides
essential increased funding for personnel, operations, and
public diplomacy to meet growing demands driven by the
rebalance.
Now, contested maritime claims in Southeast Asia and
destabilizing actions such as Chinese land reclamation,
construction, and militarization of disputed areas make it
harder for countries in the region to resolve disagreements
peacefully. And the lack of maritime domain awareness also
encourages trafficking, piracy, and illegal fishing.
So the President's 2017 budget request will support our
work with regional partners to build their capacity to maintain
free and open access to the maritime domain through enhanced
maritime security capabilities and maritime domain awareness.
Thank you very much, and I look forward to answering any
questions.
[The prepared statement of Mr. Russel follows:]
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Mr. Salmon. Thank you, Mr. Russel.
Mr. Stivers?
STATEMENT OF THE HONORABLE JONATHAN STIVERS, ASSISTANT
ADMINISTRATOR, BUREAU FOR ASIA, U.S. AGENCY FOR INTERNATIONAL
DEVELOPMENT
Mr. Stivers. Chairman Salmon, Ranking Member Sherman,
distinguished members of the subcommittee, thank you for the
invitation to testify today on the role of USAID in advancing
U.S. foreign policy priorities in East Asia and the Pacific.
President Obama's budget request for the East Asia-Pacific
region is $873 million. That is a 12 percent increase over
Fiscal Year 2015. This request is in recognition that America's
security and prosperity are inextricably tied to the region,
and it enables us to consolidate our gains and strengthen the
Asia-Pacific Rebalance policy.
In the coming years, the countries of this region are
expected to continue high growth rates and play an increasingly
pivotal role in world affairs. But just how this region's
development and economic growth take shape is critical to our
own future.
Already home to a majority of humanity, by 2030 Asia is
projected to add more people than any other region, putting
unprecedented pressure to provide access for energy, clean
water, food, quality education, and health care.
But despite the impressive gains of the region, they
continue to grapple with evermore complex development
challenges, including severe economic disparities, food
scarcity, urbanization, poor governance, and suffocating
pollution and environmental degradation. Human trafficking
continues to be an enormous problem, and an unacceptable
proportion of women in the region continue to experience
gender-based violence.
At USAID, our mission is to end extreme poverty and promote
resilient, democratic societies while advancing our security
and prosperity. At its core, the Asia-Pacific Rebalance is
about strengthening our relationships not only with countries,
but more specifically, with the people of the region in an
effort to improve their lives.
We employ three primary approaches. First, we are
pioneering a new model of development that focuses on
maximizing our impact and our funding through public-private
partnerships, science, innovation, and regional solutions.
Second, we are building pathways out of poverty through
Global Health, Feed the Future, and Global Climate Change.
And last, we are empowering reformers to improve democratic
governance and human rights. And for this reason, this budget
request includes significant increases in democratic governance
and human rights in almost every country in the region.
Next, a brief overview of the key countries: In Burma, the
November elections resulted in the first civilian-led
government in more than 50 years. USAID was proud to be the
lead donor, providing $18 million in support of the election,
including: Incorporating international standards in the
election procedures, training poll workers, political parties,
election observers; and voter education and supporting more
than 300 civil society organizations. We helped digitize 33
million names from scratch into the voter list in a country
with few computers and hundreds of dialects.
We know that democracy is about more than just elections
though, which is why our support for this next phase of the
democratic transition is so important. The people of Burma have
high expectations and low capacity to deal with the challenges
on almost every front. The government has prioritized issues
such as national reconciliation, reform of the political power
structures, economic growth, agricultural development, and
health care. USAID will continue our strong support for the
people of Burma on each of these priorities through our budget
request.
We remain deeply concerned about the humanitarian and human
rights situation in Rakhine State, and USAID continues to
support vulnerable populations throughout the country,
including the Rohingya.
In Cambodia, our primary goal is supporting and
transitioning to a democracy that respects human rights. Civil
society, while not fully respected there, has grown in vibrancy
and strength in recent years thanks in part to our assistance.
On food security, our Feed the Future initiative has helped
increased yields and drive down malnutritional stunting in
children under 5 by 21 percent in the areas where we work.
Indonesia's continued progress and democratic system set an
example for its neighbors, but the country faces major
governance, economic, and security challenges that could
undermine its young democracy. Our anti-corruption investments
have resulted in increased prosecution and the country's
ranking on the Transparency International's Corruption Index
has improved by 30 spots.
On health, we have helped Indonesia become polio-free. And
last year's devastating forest and peat fires cost the country
over $16 billion. We partnered with the U.S. Forest Service to
send forest specialists, but we know that prevention is the key
to solving this challenge.
USAID is supporting something called the Indonesia Palm Oil
Pledge, which is an innovative commitment by the world's
leading palm oil producers to transition to sustainable
production.
In the Philippines, our Partnership for Growth initiative
has helped address the main impediments to inclusive and
sustainable growth. The results have been striking. Philippines
has emerged as one of the fastest-growing economies and a more
reliable trade and investment partner. And for the first time,
the country received investment-grade sovereign debt ratings
from three of the world's leading credit agencies. Yet, lack of
formal access to land is a key driver of poverty, a driver of
conflict, and an obstacle to national development.
In Vietnam, USAID supports the implementation of reforms
critical to potential TPP participation, including launching a
new labor program this year that will support the rights of
workers and improve working conditions. In addition, USAID is
focused on addressing war legacies, health and disabilities,
and reducing susceptibility to climate change and natural
disasters.
Mr. Chairman, committee, in an interconnected world,
development plays an indispensable role alongside defense and
diplomacy in advancing our security and prosperity. While we
must focus on immediate crises throughout the world, it is also
essential that we address the root causes of poverty, conflict,
and instability, to help shape a better future for humanity.
That is the heart of our work in the East Asia-Pacific region.
Thank you, and I look forward to your counsel and
questions.
[The prepared statement of Mr. Stivers follows:]
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Mr. Salmon. Thank you very much.
Just to give you a heads-up, we could get be getting buzzed
for a vote any time now, any time between 25 past until 20
till, so we are going to be up here on pins and needles.
Mr. Russel, I completely support 100 percent the
administration's stated goal of a rebalanced Asia. In fact,
when I look at the priorities that you have outlined in your
speech, I didn't really find anything that gave me pause. I
support everything that you said 100 percent.
And, Mr. Stivers, the same goes for you. And as I have gone
throughout the region and I have met with your personnel, both
of you, I am so impressed and so amazed at how much they
accomplish with the resources that they have. And I guess that
leads to my question.
I mentioned that in my opening statement that while we have
identified Asia as one of the most important priorities on the
globe for this administration and for us as a country, it still
remains pretty low as far as the resources, out of the six
regions, second from the bottom. What is it going to take for
us to be able to get the resources completely necessary? I know
some of the Embassies that I have gone to seem like they have
just about everything they need, but some of those Embassies
that I have been to, they need more than they have got. They
don't have all the resources that they need.
And again, I want to state for the record that your folks
are some of the most amazing people I have ever met in my life,
incredible leaders. And the ranking member mentioned kind of a
nexus if you will between DOD and what you do with State
Department and USAID. I believe that what you all do is keeping
us out of war. And it is probably for less than 1 percent of
the total budget, the job that you do is incredibly worth what
we commit to it.
But are we giving the resources necessary for this region?
And if not, how do we get there, Mr. Russel?
Mr. Russel. Well, Mr. Chairman, first of all, thank you
very much for your heartfelt and kind words. And in particular,
thank you for your personal travel to the East Asia and Pacific
region. That really makes a big difference not only to your
understanding and Congress' understanding of the issues but to
our folks. So we thank you for that.
Thank you also for your comments about the men and women
who staff our Embassies in the East Asia and Pacific region. We
are in the people business, and as a bureau, we have made it a
point of pride to seek out and attract and to develop the best
people in the Foreign Service community.
We have throughout the lifespan of this administration
consistently sought to fund the rebalance. We have sought and
prioritized funding. And our foreign assistance budget, as Mr.
Stivers mentioned, is up about 12 percent. Our overall budget
compared to Fiscal Year 2015 is up about 11 percent.
We have also deepened our collaboration and coordination
with partners, industrialized nations in the region, in
particular such as Japan, the Republic of Korea, Australia, and
outside the region like the EU in order to try to leverage our
collaborative efforts to promote our agenda.
It is quite true that other regions may have more trouble,
more crises, and more countries, and that accounts for some of
the disparity between the regions. But like you, I argue that
we have by far and away the best people.
Mr. Salmon. Mr. Stivers?
Mr. Stivers. Thank you. Thank you.
This Fiscal Year 2017 request, if adopted, we think would
better accomplish a lot of our goals. We think it is
appropriate considering the crises all over the world and the
budget environment that we are in. But we are doing our part to
become more efficient, to leverage the private sector more, to
work with our allies who have similar interests--Australia,
Japan, the Asian Development Bank.
And just a word on our people in the field, our AID
missions, I mean, they are working in some of the poorest
villages, helping sick families with our partners, hungry
children, education. They are going into these villages with
their ``From the American People'' USAID hat to really
represent the best in American values and deeds. And that
engagement with the people, despite, you know, disagreements we
may have with governments, is really important in terms of
strengthening what we believe in as Americans.
Mr. Salmon. Mr. Sherman----
Mr. Sherman. Thank you.
Mr. Salmon [continuing]. I yield to you.
Mr. Sherman. I can't possible match the chairman's level
of niceness. I will comment, however, that I have and will
continue to vote for the higher levels of tax revenue that will
be necessary if we are actually going to be spending the money
that you have recommended to us and that you would recommend to
us if the resources were available.
I see that we are providing significant aid to Myanmar/
Burma. How much of that is going to help the Rohingya and other
ethnic minorities?
Mr. Stivers. Thank you, Mr. Sherman, for that question and
for your attention to the plight of the Rohingya in the region.
It certainly is a human rights and humanitarian crisis
there. Last year, we provided $85 million in food aid,
lifesaving humanitarian assistance to vulnerable populations
within the country of Burma, of which Rakhine State and the
Rohingya received a significant amount of that.
In addition, we support civil society and voices of
tolerance in terms of trying to get at some of the root causes
of the disagreements and the conflict between the different
groups.
Mr. Sherman. I note that our aid to Vietnam will include
almost $22 million to help them participate in the TPP. What
will that money be spent on?
Mr. Stivers. Thank you for that. Certainly, you know, the
rule of law, human rights, and labor are all issues that hold
us back from a more robust partnership there. And whatever your
position is on the----
Mr. Sherman. But if they don't get the money, are they
going to be in compliance?
Mr. Stivers. Well, whatever your position is on the TPP--
--
Mr. Sherman. Right.
Mr. Stivers [continuing]. We believe that getting Vietnam
or any country to achieve high standards on trade to better
promote U.S. exports, on the environment, labor, state-owned
enterprises, IPR, anything we do to increase the standards----
Mr. Sherman. Will this money----
Mr. Stivers [continuing]. Would be better.
Mr. Sherman [continuing]. Be spent to help their exporters
comply with standards to export to the United States or will it
be spent to help our exporters import to Vietnam? How would you
spend----
Mr. Stivers. This is----
Mr. Sherman [continuing]. $21.75 million to help us export
to Vietnam?
Mr. Stivers. This is technical assistance, rule of law
assistance that we provide to help show them how to better
comply with these agreements. And certainly, you know, there
are many aspects of TPP, of which market access and export
promotion is one of them.
Mr. Sherman. I will just point out to go to my district
and say you are going to have to compete on a level playing
field with 60-cent-an-hour labor, with places where if people
organize unions, the party just plants drugs on them and
arrests them, claims they are drug dealers, and that we have to
spend $22 million in order to help them sell us stuff for 60
cents?
Mr. Stivers. We hope to improve the conditions there.
Mr. Sherman. It will help--yes. And we will be dealing
with the budget before we deal with TPP, so if we are not
members of TPP, would this money still be spent or would you
reprogram it?
Mr. Stivers. This assistance is important regardless of
TPP. Again, it is high trade standards that we want the country
to adhere to. So regardless if TPP moves forward or not, I
think it is important that Vietnam has as high of standards as
possible, and that is what we are helping them do.
Mr. Sherman. State and DRL have declined to pursue
distributing physical media such as hard drives and CDs to
North Korea because of the risk to our partners. What can we do
to get information and make it accessible to the people of
North Korean, Mr. Russel?
Mr. Russel. Well, Congressman, we are working to try to
improve access to international information to the North Korean
people. It is quite true that possession of CDs or thumb drives
is a punishable offense in the DPRK, and we are concerned about
not putting either third parties or the North Korean people
themselves in immediate physical risk.
Nevertheless, the North Korean people are benefiting from a
range of programs, including Radio Free Asia and the work that
we are doing together with the Republic of Korea.
Mr. Sherman. I point out that all over the world we help
people who want to risk their lives to make their countries
better. Congress has said, for example, that we are going to
provide weapons to the right Syrian forces, and so we don't
fail to provide those weapons on the theory that whoever uses
them will expose themselves to danger.
It seems like you are saying we won't provide the thumb
drives in northern China to patriotic North Koreans who are
willing to risk their lives and bring them into North Korea. Is
there a reason why we are unwilling to help these patriotic
North Koreans?
Mr. Russel. We work to provide access to information for
the North Korean people directly and with our partners in the
ROK.
Mr. Sherman. I hope we do thumb drives as well. Thanks.
Mr. Salmon. Short question from Mr. Brooks.
Mr. Brooks. I hope it will be short.
I am looking at what committee staff has given me, and tell
me if I have got it correct, that this hearing does not include
anything in the Near East but rather it is limited to East Asia
and the Pacific?
Mr. Stivers. That is right.
Mr. Russel. That is correct.
Mr. Brooks. That is correct. And according to committee
staff notes, the Fiscal Year 2017 budget request increases
funding for East Asia and the Pacific 11.9 percent. Is that
accurate?
Mr. Russel. Foreign assistance budget, that is correct,
sir.
Mr. Brooks. And you are familiar with the financial
condition of Puerto Rico right now and how that is a major
issue on Capitol Hill?
Mr. Russel. I am aware of it through----
Mr. Brooks. Of the existence of it. And you need to turn
on your microphone. I am not sure if it is hitting the record
very well.
Well, Puerto Rico, by way of example, has a debt that is
unpaid, at risk of default that averages out to $20,000 per
Puerto Rico resident, $20,000 apiece. In contract, America's
per-capita debt approximates $60,000, again, $60,000 per person
for the United States. We are looking at what is happening in
Puerto Rico when it is $20,000.
And my question is with this kind of increase that you want
to spend in faraway lands where America seems to be on a path
to insolvency and bankruptcy without the will in Congress or in
the White House to be financially responsible and properly
manage our resources, what can you tell the constituents of my
district, Alabama's 5th Congressional District, that would help
convince them that this is a worthwhile expenditure given the
rather precarious financial condition that their country is in
and the increasing risk that America is going to suffer from a
debilitating insolvency and bankruptcy?
Mr. Russel. Congressman, my answer would be that the East
Asia and Pacific region is a larger export market for U.S.
exports than Europe is, than Canada or Mexico is. And the----
Mr. Brooks. Are you suggesting we have to pay them money
to get them to buy our products?
Mr. Russel. Our strategy is to invest in U.S. national
interests. And the U.S. has a national interest in tethering
itself to the most dynamic economic growth region on planet
Earth, East Asia and the Pacific. We derive phenomenal benefits
not only in economic and commercial terms but also in security
and other aspects from our sustained investment in the Asia-
Pacific region.
Mr. Brooks. So, as I understand it, your whole argument is
based on potential trade arrangements----
Mr. Russel. No, I----
Mr. Brooks [continuing]. With these nations?
Mr. Russel. No, Congressman. I think that there is a
compelling case for why the U.S. national interests, both
economic and security, rests in intensified engagement with the
Asia-Pacific region. This is a part of the world that is
demographically growing at an extraordinary rate, that is a
major consumer of American products, that is receptive and
attracted to the American brand that is moving steadily in the
direction of universal values that America has championed----
Mr. Brooks. Right, Mr. Russel, I appreciate your insight.
I apologize for having to cut you off. But I can sense some
antsy Congressmen because we have had votes called and we are
nearing the point where we will miss the points and we have got
to go over to the United States Capitol and the House Floor in
order to cast those votes. If you want to add anything when we
resume, that will be great. Unfortunately, I won't be here
because I have other hearings. I have got Strat Forces
Subcommittee and other things that are coming up that I will
have to attend to after votes. But thank you for your insight.
Mr. Salmon. And we will reconvene after the vote on the
Floor.
Mr. Connolly. Mr. Chairman, I promise I am just going to
take a minute----
Mr. Salmon. Fire away.
Mr. Connolly [continuing]. Because I can't come back.
Mr. Salmon. Okay.
Mr. Connolly. I thank the chair.
I just want to say to my friend from Alabama with whom I
recently traveled to China, I can tell you that my constituents
would answer his question. We need to be engaged. This is a
very important part of the world where we cannot afford to
retreat and withdraw. And it is always a false choice to say to
us we can either afford domestic investment or foreign aid but
not both. I mean, it sounds good, but we are talking about less
than 1 percent of the United States budget, and it is a tool
that helps us avoid military engagement and that can have long-
term return on it. So it is an investment worth making if the
United States is going to live up to its responsibilities as an
engaged world power.
I thank the chair.
Mr. Brooks. Amen.
Mr. Salmon. And you do have bipartisan agreement here on
that.
Mr. Brooks. Absolutely.
Mr. Salmon. Thank you. We will reconvene after the vote.
Thank you.
[Recess.]
Mr. Salmon. We will reconvene this hearing.
Mr. Russel and Mr. Stivers, I wanted to give you a chance
to maybe respond to the last question, resources for the State
Department in general, why is it important? And you got a
little bit of a chance to answer that.
The other thing I really wanted to focus on, the ranking
member spoke about these rocks and uninhabited islands that are
totally unimportant and maybe you could tell us why they are
important. I will give you a chance on both of those.
Mr. Russel. Well, thank you very much, Mr. Chairman. The
U.S. is a Pacific nation, and our future is inextricably
intertwined with the growth of the Pacific region. The good
news is that, both for demographic and for economic reasons,
the trend lines are by and large good in Asia. Poverty has
diminished dramatically, GDP, economic growth, internet
penetration, education, women's rights, human rights, civil
rights. There are some very, very positive trends and
developments, much of which can be attributed, I believe, to
the leadership exercised by the United States in championing
universal rights but also in providing a security climate that
allows for that economic growth.
And the stability and the security of the Pacific region is
a vital U.S. national interest. It is not a luxury item. And we
would, as you pointed out, ignore it at our peril because this
is the ounce of prevention that spares us the many pounds of
cure that would be required to try to influence events if we
weren't present in a credible and influential way.
The economic and the security pieces go hand in hand with
what our companies do. I have discovered from traveling in the
region again and again that the American brand is very much a
function of the way that our companies operate with respect to
rules and investment and growing people and in fairness. We are
giving people in the Asia-Pacific region hope, we are giving
them opportunity, and they are repaying us with good governance
and open markets. It is a bargain.
Mr. Salmon. Just to interject, and I get to see that
firsthand. You know, what is interesting is we wring our hands
every year over this discretionary budget. I just might point
out that we could zero out all discretionary spending, all your
funding for State Department, USAID, national parks,
transportation, military. We could zero it all out and we would
still have a heck of a deficit going, and that is because this
place never really talks about the one place where if we made
some changes actually would probably get us closer to a
balanced budget, and that is dealing with our nondiscretionary
accounts or our mandatory spending. And those areas eclipse
everything.
And in a few years if Congress--I am leaving, but if
Congress continues to put its head in the sand on dealing with
entitlement spending and not doing anything about it, there
won't be any money for discretionary spending. So this is money
well, well, well spent, and I am anything but a big spender.
And anybody who knows me knows that. But this is money that is
incredibly well spent, and that is why I hounded you a little
bit about even, you know, focusing more resources on the region
because it is so critical to our livelihood, to our domestic
policy as far as jobs and to our national and international
security.
Mr. Stivers?
Mr. Stivers. Thank you for the chance to answer that
question.
Well, we live in an interconnected world right now, and it
is getting smaller and smaller. And East Asia is not a faraway
land. It is right here in terms of our security and stability.
We know infectious disease knows no borders. If we don't try to
work on these issues--that is where the avian flu came from in
terms of Southeast Asia--it is essential that we are engaged on
these issues.
We know some of the drivers of violent extremism, denial of
civil liberties, harsh authoritarian rule, corruption,
impunity, if we don't help these countries and these reformers
in these countries try to address those issues, those are
really the root causes of some of the problems that we are
seeing globally and also that affect us here in the United
States.
And certainly our values of democracy and human rights are
absolutely essential to our work in our foreign assistance. We
don't believe that less than 1 percent of our U.S. budget going
to development and working with our allies is too much to
provide.
Mr. Salmon. Let me just ask a follow-up question. Nothing,
you know, is static. Nothing stays the same forever. And, you
know, if our leadership from the region evaporates, what could
potentially happen?
Mr. Russel. Mr. Chairman, there is a tremendous hunger in
the Asia-Pacific region for sustained and continued U.S.
presence and U.S. leadership because the stability and the
predictability that we have provided over the last 6 plus
decades has enabled citizens in the region to build the kind of
life that citizens everywhere seek.
I think that with respect to the question that the ranking
member asked about the South China Sea, the answer lies in one
word: Rules. It is not about the rocks; it is about the rules.
And we profit when we live in a rules-based world. We suffer
and I would add we will spend a hundredfold in seeking to claw
back the space in which we can exercise our rights if we let it
slip through our fingers, if we don't continue that investment.
Building a rules-based system in the Asia-Pacific region
benefits the United States in a very direct way, and whether it
is with respect to security and the peaceful resolution of
maritime disputes, ensuring that the rules apply equally to big
countries and to small, or whether it is with respect to trade,
TPP, of course we believe, should be ratified by the U.S.
Congress not only because of the issue of U.S. credibility but
because it is such an important strategic opportunity. Forty
percent of global GDP is represented by the 12 partner
countries. We are looking at the majority of the world's
middle-class consumers living and working in the Asia-Pacific
region in just a matter of a few years.
Whether or not we operate in a transparent, high standard,
rules-based environment in the Asia-Pacific is going to be a
determinant of whether the American people benefit and whether
the American economy flourishes or not.
Mr. Salmon. I just want to have one last question.
I know I mentioned that a couple weeks ago I attended an
international summit held by the McLean Institute, and many of
the speakers expressed grave concerns about the fact that on
these islands that have really no value, as was mentioned or at
least by the ranking member, if they have no value, then why is
China building runways on them? Why is China putting radar on
them? Why is China putting weapons on them? It is a reason. It
is causing our allies in the region great, great, great
concern.
I think it is about rule of law, but I think it is also
about boundaries that have to be clear for any civilization.
And I guess it does get back to rules, rules that have been in
place for a long, long, long time. And if we as the one free
beacon of liberty and hope can't stand to protect and secure
rule of law, then I don't know what we are here for.
Last week, Defense Secretary Ash Carter visited an American
aircraft carrier while it was sailing in the South China Sea,
the second time he has made such a visit. And it highlighted
once again this tension. And there are U.S. national security
concerns. How does this year's budget request complement and
operationalize the response to these tensions within State and/
or USAID, and how does State and USAID's efforts complement
DOD's response in our FON ops?
Mr. Russel. Well, Mr. Chairman, we have an FMF request on
the order of $86.6 million that provides funding for a variety
of maritime security intitiatives and improvements among our
partners and our allies. Much of this is oriented at capacity-
building and maritime domain awareness.
The coastal countries in the South China Sea want and need
to have the ability to monitor what is transpiring in their
environs and their territorial waters and in their EEZs. And
frankly, seeing what is going on is helpful in avoiding crises
and avoiding incidents and accidents.
We are supporting their efforts also with an eye toward
their ability to respond to disasters and humanitarian
assistance, given the number of climatic incidents and typhoons
and so on.
The goal, as you alluded to, Mr. Chairman, is not to create
an advantage of one claimant over another. We have no interest
in that, and that is not what we are about. What we are seeking
to do is to ensure that the countries adhere peacefully to the
rule of law and, importantly, take no actions to abridge
universal rights and international legal principles like
freedom of navigation, freedom of overflight, unimpeded lawful
commerce. That is a U.S. interest. It is a universal interest
and a universal right that mustn't be abridged. That was the
rationale behind the visits by Secretary Carter.
The FMF programs that we are putting forward in our request
directly complement the Department of Defense's Maritime
Security Initiative. We consult and cooperate closely and
anticipate that we will be able to ensure that the two programs
dovetail as we move forward.
Mr. Salmon. For whatever it is worth and then I will close
my questioning and yield to the ranking member, but for
whatever it is worth, I think that there needs to really be, I
think, a stepped-up effort on behalf of all of us to reach out
to the ASEAN folks to be more of a voice of clarity on these
issues in the region. And I think that the more we speak in
unison with some of the international bodies associated with
this issue, I think the more that we will find success because
I truly do think China is kind of testing its boundaries. And I
really believe that. The more clarity we provide, the more we
are able to avoid any kind of a conflict. Do you want to
comment on that?
Mr. Russel. Well, the U.S. engages directly with the 10
members of ASEAN. Of course, we also engage with China and
other neighbors in the region through a series of platforms,
the preeminent one being the East Asia Forum. President Obama
has made it a point throughout his Presidency to attend on an
annual basis, and he importantly hosted the 10 leaders of ASEAN
in February in an informal summit in California, which allowed
for a day-and-a-half of in-depth conversation on a range of
economic and security issues.
One thing that came through loud and clear is the shared
conviction among all the leaders that the economic imperative
to promote and sustain stability in the Asia-Pacific region is
a common responsibility. We discussed things that each country,
both claimant countries and non-claimant countries can do. We
also discussed the importance of direct engagement and dialogue
with China.
President Obama met with President Xi Jinping on March 31
here in Washington on the margins of the Nuclear Security
Summit, and had a very, very direct discussion of our concerns
and our interests with respect to the South China Sea.
We still have a long way to go. The pattern of behavior by
Chinese forces and actors remains troubling. But I believe that
we have a real dialogue with the Chinese, and that they have
heard us loud and clear.
Mr. Salmon. Thank you.
Mr. Sherman.
Mr. Sherman. Thank you.
Mr. Stivers, I see we are reducing our aid to Mongolia. Any
particular reason?
Mr. Stivers. Well, thank you for that. Mongolia is a
middle-income country, and they also had an MCC compact, which
was $285 million over 5 years to address constraints of growth
that I believe it is coming to a conclusion. We have a small
democracy and governance youth program there. We believe that
is an appropriate footprint considering our other challenges in
the region.
Mr. Sherman. The chairman of our full committee had field
hearings in Los Angeles, as you remember, to focus on the rule
of law in the Philippines and particularly the seizures of land
by politically connected individuals. Mr. Russel, have you
followed up on that and can you report to us that the abuses we
learned about in that hearing have been at least partially
addressed by the Philippine Government?
Mr. Russel. Well, we continue to engage on an ongoing
basis with the national and the local authorities in the
Philippines on a range of good governance programs. And I am
sure Mr. Stivers can build them out. We think that the
Philippines has made progress under the leadership of President
Aquino in strengthening the rule of law throughout the
Philippines, but we still see a considerable amount of work yet
to be done.
Mr. Sherman. I hope you deal with the chairman's staff on
that and see if we can be specific because there were specific
items brought to our attention of that filtering.
Mr. Stivers?
Mr. Stivers. Thank you. Thank you for the chance to--
certainly, Chairman Royce has just been a champion on this
issue, but land rights is one of the top priorities if not the
top priority of people in the Philippines, Cambodia, Burma,
Indonesia. It rises to the top of any poll in terms of
concerns, and so we are addressing that issue in most of these
countries.
In terms of the Philippines, in August we launched
something we called the SURGE program, which does exactly some
of the things you talked about. It works with the local
governments in terms of helping them better organize the way
they handle land titles from a programmatic view.
Mr. Sherman. Yes. Even if you have got land title, if
armed thugs with political support can deprive you of the use
of your land, force you to sell, there is a problem. But I am
going to move on to another issue.
Mr. Russel, our trade deficit with Japan is enormous. It is
often not talked about because it is smaller than the trade
deficit we have with China. Part of the reason for that deficit
is explicit, direct, open currency manipulation by the
Japanese. Are we doing anything, and do you predict that next
year the trade deficit will be lower than this year? So are we
doing anything, and is it going to be successful in reducing
the deficit?
Mr. Russel. Well, with all due respect, Congressman
Sherman, I will leave the issue of currency to the Department
of the Treasury and I will stay out of the predictive business.
But----
Mr. Sherman. But you are willing to advocate for the role
of the U.S. trade representative but you won't go on the--okay.
Please proceed.
Mr. Russel. The Japanese Government has----
Mr. Sherman. But wait a minute. I do want--how can you
possibly advocate for a trade deal on the one hand and have no
opinion on currency manipulation on the other? I mean, I could
see you saying you are not going to talk about trade and you
are not going to talk about currency, but you are talking about
currency and you are not talking about currency.
Mr. Russel. Well, what I will talk about is America's
national interest, and we have a national----
Mr. Sherman. But your----
Mr. Russel [continuing]. Interest----
Mr. Sherman [continuing]. Testimony has been that this is
a good trade deal for working American families, and yet you
have no opinion on--I want to go on to just one last thing as
my time expires, and that is we will sanctimoniously and with
great hubris tell everybody in Asia that we are going to teach
them about democracy, and yet you know and I know that the plan
of the administration is to sneak this trade deal through the
United States Congress during a lame-duck session. And I would
hope that you would respond just for the record as to how it is
going to undercut our ability to be an example of democracy if
we use chicanery to pass the one thing through our democracy
that Asian countries are looking at. They will watch us as we
sneak it through in the dead of night and then next year, the
State Department will be lecturing them about democracy. So I
would hope you would respond for the record on that because I
see my time is expired.
Mr. Russel. I categorically reject the assumptions that
underlie your question, Congressman.
Mr. Sherman. Well, if the assumptions are wrong, can you
promise me that the administration will not use the lame-duck
session to try to pass a trade deal that they can't pass
through a democratic body in any other way?
Mr. Russel. What we have done and the effort that I have
been a part of is to create a transparent and high-standard
agreement that opens the door for U.S. businesses to----
Mr. Sherman. Mr. Russell, if I can interrupt----
Mr. Russel [continuing]. Trade----
Mr. Sherman [continuing]. And reclaim my time----
Mr. Russel [continuing]. With lower tariffs----
Mr. Sherman. Mr. Russel, you love this agreement so much
that you are part of an administration that will use chicanery
to pass it, and then you tell us that is okay because it is a
really loveable agreement. That is no way to show democracy to
the world. It is not----
Mr. Russel. Congressman, I have a very----
Mr. Sherman [continuing]. Like you can use underhanded
chicanery to thwart democracy but only for a really, really
good purpose.
Mr. Russel. Congressman, I have a very robust toolkit of
diplomatic resources, but underhanded chicanery does not----
Mr. Sherman. If we use----
Mr. Russel [continuing]. Number among them.
Mr. Sherman [continuing]. Underhanded chicanery to pass
this trade deal, which is the one most visible thing America
will do in affecting the Pacific region, they will watch what
we do, they will watch how we do it. And if we use chicanery to
pass it and then tell them that democracy should be skirted
around if you have a really good reason, then I do not think we
will be effective advocates for democracy in Asia.
Mr. Russel. Congressman, I am proud of America's record as
an advocate for democracy, and I am proud of the TPP agreement
that this administration has negotiated.
Mr. Sherman. I hope we can be proud of the process through
which it is submitted to Congress.
And I yield back.
Mr. Salmon. Well, I don't think that the administration is
going to be given charge of the congressional schedule. I don't
think Mitch McConnell or Paul Ryan will give that up.
Mr. Sherman. Mr. Chairman, under the Trade Promotion
Authority Act, it is the President who determines the entire
schedule. He submits it, and then we have to vote on it within
90 days. I believe it is 90; it could be 60. So we have,
through legislation, which I opposed, given the executive
branch control of our schedule when it comes to voting on this
agreement, and I fear--and I have given the administration a
chance to douse those fears--that chicanery will be used in the
timing of the voting on this deal.
Mr. Salmon. All right. Well, thank you very much for
coming to this hearing. We really appreciate it, appreciate all
your hard work and the good things that you are doing in the
region. Thank you very much.
And this committee is now adjourned.
[Whereupon, at 2:37 p.m., the subcommittee was adjourned.]
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