preoccupied for some time. we cannot afford a self-inflicted wound to american leadership at the same time. the good news is that as i meet with members of congress, they're increasingly appreciating the benefits of the agreement and the cost of delay. and those costs of delay are high. we're already seeing our market share in priority products eroded by other countries who already have free trade agreements in place. the peterson institute has estimated a one-year delay in putting tpp into effect would impose a $94 billion cost on the u.s. economy. that equates to about a $700 tax on every american household. moreover, if we don't get it done soon, the other asia pacific countries aren't just going to sit around and wait for us. they'll move on. as new zealand's prime minister put it, these economies aren't going to stand still, beijing will step in and fill the void. so the choice isn't between the tpp and the status quo. it's between the tpp and what's likely to evolve in the absence of tpp.

as other countries move forward with their own market access, our businesses stand to see their market share in these key countries shrink rather than expand. and instead of seeing our roles put in place, we'll face adverse implications for the free flow of data and the integrity of the internet, for disciplining subsidies and enterprises and for kwaperating against counterfit medicines and consumer goods. we can play a leadership role and wriete in the rules or leav it to others whose interests don't necessarily align with ours. our failure to move forward would undermine american leadership.

>> allows governments to acquire banking data to be stored locally. the length of data protection provided to biologic pharmaceuticals, and the provision from the isds requirements. my first reaction upon seeing the tpp provisions was that usgr must have made the unusual political calculation that it would be a good thing to do to take a sharp stick and poke both senator mcconnell and senator hatch. hatch, because of the biologics, and mcconnell because of the tobacco carve hp out. it was a surprising way to smooth the way on the hill. certainly, the provisions as they came out really did nothing to strengthen republican support for the agreement. financial services problem appears to stem directly from the administration's decision to wrap up the negotiations last

october, frankly, before the negotiations were really finished. financial services pitted the united states against the united states. usgr versus treasury. usgr had placed a high priority on tpp and having no doubt a localization requirement for any sector. the treasury very much wished to maintain ability for the bank regulatory agencies to have u.s. access to data. and frankly, treasury won that dispute, and usgr was left in the rather uncomfortable position of coming back with an agreement that accomplished some things regarding data flows and not others. so subsequently, treasury and the regulatory agencies have thought about this issue more, and as ambassador froman mentioned, they now have a paradigm for going forward that appears to address these concerns. they can still regulate even if the data is on the other side of the border.

frankly, it would have been nice if the administration had done that homework in advance. the biological pharmaceuticals have received 12 years of data exclusivity in the united states under statute since 2010. the agreement ends up providing between five and eight years and i'm not going to go into all of the details of how that might sort out. but it's understandable why other countries might prefer to have the united states bear most of the costs for bilogics research and development and regulatory approval, and if they can get the generic versions more quickly, that looks good to them. but of course, the u.s. industry very much wants the broader global community to help fund the rnd costs. this issue is really very important to senator hatch. he is a copyright holder himself

and feels strongly about intellectual property issues. the obama administration has somewhat of a credibility problem regarding biologics. its annual wbudget submissions repeatedly have proposed shortening the 12-year timeframe to 7. this position was reiterated most recently in february 2016, when the budget proposal for 2017 once again shortened it to seven years. it might be challenging for the pharmaceutical industry and its supporters on the hill to think that usgr negotiators had been working really, really hard to get 12 years. then the tobacco carve hp out, it will be addressing in more detail by mr. ula, but my colleagues and i have written about isgs, that it really isn't an essential component of trade agreements because fundamentally, it does nothing to liberalize trade.

we could see through the past year or more that there was widespread opposition to isds among various nongovernmental organizations and this was giving a hint that that provision might complicate passage of tpp. what is clear that by turning around and excluding tobacco from the isds provisions, the administration has lost several republican votes in congress, and it appears to have gained a total of none. my big concern about the tobacco carveout is the precedent it sets for other products in future trade negotiations that might be politically unpopular. i'm particularly concerned frankly about what people in the european union might want to do with genetically modified organisms. why not carve them out? that's enough of my background comments. allow me now to introduce the panelists today in alphabetical

order. phillip levy is a senior fellow in the global economy at the chicago council on global affairs. i'm somewhat envious of philip because he has the luxury of working on trade issues from 700 miles outside of the capital beltway. since i used to do the same thing from minneapolis, i know how much better the world looks as you get away from the day-to-day machinations of what's happening in washington. but he's here with us today, and i appreciate that. he does have plenty of insight the beltway experience. just to mention a few, he has served as a resident scholar at the american enterprise institute, senior economist on trade in the council of economic advisers for george w. bush, and then went to the department of state on the policy planning staff for secretary rice. he's taught at academic institutions including the university of virginia, columbia, and yale. he holds undergraduate degrees in economist from the university of michigan and ph.d. from

stanford. gear ula is an international trade lawyer working with j.t. international at the firm's international headquarters in geneva. he also has an outside the beltway perspective, perhaps conditioned by close proximity of the wgo. prior to joining them, he worked for the european free trade association in geneva where he supported the negotiation of trade agreements and provided technical assistance. gear is a norwegian national who holds a law degree, a beautiful but rainy city on the west coast of the country. i won't try to speak any more norwegian. crayton serves as senior adviser to the law firm hogan levels. it's only fair to admit he has had an influence on me. i served in several -- he served

in several roles at usda and usgi in the 1970s which was before i knew him, but in the early 1980s, i was working in the senate, and it was not hard to become acquainted with him because he was the ceo of the chicago mercantile exchange and the agriculture committees on the hill were in the process of trying to reauthorize the commodity futures trading commission. he had clear views and he articulated them. the next thing i do after that, bill brock decided to retire as u.s. trade representative, so president reagan turned to clayton for some help in the trade policy arena. when he became ambassador in july of 1985, the u.s. dollar was very strong relative to other currencies and u.s. exports were suffering. in the midst of that doom and gloom, which frankly is not all that dissimilar to the situation we have today, crayton's message to those seeking protection from imports was basically, cheer up.

this large volume of imports is not the end of the world. rather, it gives us a lot of leverage as we talk to other countries about the need to liberalize, to open all our markets. and he did indeed negotiate a lot of liberalization with other countries. he was instrumental in starting the uruguay round in 1986 and successfully concluded the u.s./canada sga in 1988. he shifted to the department of agriculture where he served two years as secretary for president george h.w. bush, then moved on to a stint as chair of the national republican national committee. i'm a bit younger than clayton, but have been involved in many of the same issues and i have to admit, i have been much impressed. given how i tend to follow around in his tracks, i suppose i shouldn't have been surprised as a conversation that i had one fall a few years ago at an

october fest barbecue, grilling bratwurst in my neighborhood. a new neighbor came up, and i was visiting with him. he asked basically, what do you do for a living? trade policy, mostly. he said, hmm, you might know my father-in-law, and i did. so i really do have a hard time escaping crayton's influence. clayton holds degrees in agriculture economics as well as a law degree from one of his true loves, the university of nebraska. two other noteworthy items, one is that he serves as a valued member of the advisory board of the herbert a. steefal center for policy studies at cato. the other is that he was honored by the washington international trade association with its lifetime achievement award in 2014. he concluded his acceptance speech with this.

never give up working toward trade liberalization. never give up. perhaps none of us will ever completely escape his influence. mr. ambassador, the floor is yours. >> dan, thank you so very much. that was just a wonderful, wonderful introduction. thanks to dan ikenson, too, for inviting me to come over and participate in this program. i'm going to try to do my part fairly quickly to stay on schedule and not take time away from my colleagues up here. i would like to say two or three things with -- in response to what has been said already this morning, and then move on to what i'm supposed to be talking about here. first of all, in terms of tpp

justified congressional approval, you'll discover that my answer is a resounding yes, with more enthusiasm maybe than has been projected by some of the people here thus far this morning. and i say that not withstanding the fact that we have two presidential candidates who are taking the opposite view, including one that is the presumed leader of my republican party today. and all i would say to that is that first of all, the candidates are both wrong. dead wrong. and secondly, to the members of the press who are here, i wish you would begin to do your jobs and ask them the questions that have not yet been asked thus far. that is, if you don't like the tpp agreement, tell me why. please explain your position.

just what is it about tpp you don't like? do you just want to tear it up without understanding the consequences? you better defend that and the fact of the matter is there have been very few hard questions like that from the press with either candidate thus far, and i think that's most unfortunate. now, with respect to the cato analysis here, there's a couple items where i would have shaded it a little bit differently and maybe dan, you guys are correct and i'm wrong, but i was a little disappointed in the market access provisions. i would not have graded them as high as you all did. i thought we were lacking in ambition in market access. i particularly watched the agricultural parts of that where we certainly could have done much better on berry, for

example, with both japan and canada. and you know, the same thing is true in other market access. my original demand in that area where ustr were leading that negotiating team would have been a whole lot higher and more ambitious than it was. but nevertheless, i will always come to the point that president reagan made during my tenure, which is just as applicable here and which derek missed, i think, this morning in his emphasis. that is, you know, better moving forward than standing still. better moving forward than moving backwards. and tpp moves market liberalization forward. and the way president reagan used to put it is that, you

know, get all that you can, but at the end of the day, remember that half a loaf is better than no loaf at all. and if you evaluate tpp as half a loaf, and i think most of us probably would, maybe some of us would make it two thirds and some of us one third, but nevertheless, that's better than nothing at all. and i firmly believe it would be a big mistake to have nothing at all. the other point, which i think you guys at cato underestimated was the value of the sanitary provisions in this agreement. it is true that in these very difficult food safety kinds of issues, one can take these cases to the wto because it has excellent sanitary sanitary provisions we put in during the uruguay round, as a matter of

fact, at the insistence of the u.s. but those provisions move slowly. they're a lot faster than they used to be, but nevertheless, dp dispute settlement in the wto is a slow proposition. i don't know how fast it will be in tpp, but i hope faster than the wto and if so, you're likely to see companies -- countries, rather, using these sps provisions in the tpp rather than going to the wto. finally, i wanted to make two other quick points here, and then move on to the politics. one is that one advantage of tpp that really got no mention at all until just the tail end of the last panel discussion is the advantage of being on the inside of a trade agreement rather than on the outside. the benefits, if you will, of a

preferential treatment. with tpp, the u.s. is going to be on the inside. that's a lot better than being on the outside looking in. and you know, we should not underestimate that. look at the benefits in nafta, which is another agreement that people supposedly want to throw out now. but look what we have done to develop north american business enterprises. not u.s. or canada or mexico, but north american business enterprises who have a huge advantage in international competition over the rest of the world because they're on the inside rather than the outside of nafta. and then second, my other point here is u.s. leadership. we haven't talked about that a lot today. but i think that's really important in the tpp context. there's only one country that can lead what we would call the western world. that's the u.s. and tpp is an opportunity for the u.s. to exercise leadership

in asia, and these kinds of opportunities don't come around very often. you know, we need to take advantage of it. we have been sitting on our hands for a number of years now in terms of demonstrating the ability of the u.s. to lead internationally. we have backed off instead of asserting ourselves, and that needs to change, and it needs to change badly. we need to get that gun. to the politics and then i'll do it quickly. first of all, if there's to be any chance of getting this done between now and the election, which would contribute to the obama legacy for our president's eight years in government. they're going to have to be some tweaks to tpp as an absolute necessity. and my two colleagues are going to talk more about the tweaks and i won't do that here in

terms of the tobacco carveout and what we might do on the pharma provisions and biologics. but those have to be resolved. and this administration in negotiating tpp insisted on some provisions in these areas that trouble a lot of us. and trouble too many people in the u.s. congress for tpp to be approved, in my judgment. between now and the election. so first imperative would be to make those changes. i don't know whether the votes would be there even if those changes were made, but in the absence of fixing those issues and ambassador froman indicated this morning that they're working these issues. i'm not sure what that means, but they're going to have to work them harder or there's no chance whatsoever that this agreement will be approved by the congress between now and the

election. i still think the chances are between slim and none, but nevertheless, let's, you know, if you're the administration is really going to try to have this be a part of the president's legacy, they need to get off their derrieres and get this -- these changes done. now, assuming that we move beyond that, then the next question is, can you get approval of tpp in the lame duck session? and that's an interesting question. because it may depend a lot on the election outcome, not only in the presidential race but in the senate and house races between now and then. normally, i would say that there would be little chance at all of approving tpp or any other trade agreement in a lame duck session because it's too short. how do you take up tough,

complicated issues in a session that's that short? members of congress have just gone through tough election cycle. they're tired. they want to go home. they want to do their christmas shopping. they want to spend christmas holidays with their family. they don't want to talk about tpp. in the post-election period. but, they might. and the reason they might is because there may be some shifts in control. not just in the executive branch, but maybe in the legislative branch as well. and then you've got to say, irrespectf of how those come out, whether members of congress and the administration might say, is this a good time for a little bipartisanship in order to get a really tough issue off our agenda and start the next year fresh. you know, shouldn't we have a clean slate going into 2017? and if that's so, wouldn't it be

nice to get this issue off our backs in 2016 and the only opportunity left to do that is in a lame duck session. so don't write it off comple completely, because there may be some interesting bipartisan politics that could emerge in a lame duck session and get it done then. if that doesn't happen, and i think you would have to say the chances are well over 50/50 that nothing will happen until after the first of the year, and you have a new government. then what do you do? one of the risks, of course, is that then it spills all the way to 2018 or it just dies on the vine. because people get tired of waiting, and other countries in particular get totally frustrated with the united states and say, what kind of leadership is this? you know, you asked us to get approval of our government's tpp agreement, politically, we had to bite those bullets, and they haven't been all that tasty.

you don't even want to do that in the u.s. and therefore, you know, you need to suffer the consequences in terms of asian leadership. i think there will be a lot of that argument made if things spill into 2017, and maybe beyond. it's going to be difficult for the incoming administration which has to put a new government together, which means probably a new usdr and all of the entire top negotiating team. normally, it takes an incoming president close to a year to get his whole team in place and functioning effectively. which means that if this spills into 2017, it could easily spill into 2018, which is not a happy situation. the answer to that has to come from the people who would benefit most from this agreement. and that would be the commercial entities, agricultural and

nonagricultural in the u.s. who have considerable amount to gain from this. they would have to next january say, look, guys, we cannot wait until 2018. this has got to get done now. we'll give you all the support to get the votes in congress to have it happen. so there may be a good chance of getting it done in early 2017 if it spills that far, but that will only happen if the business community and the agriculture community weigh in in a big way and make it happen. and i'll stop right there. [ applause ] >> well, thank you. it's a pleasure to be here. and especially to speak after ambassador ueller. i find myself in agreement with him, including, i would like to see the tpp pass. i don't need to do this because he gave an excellent description

of many of the reasons why this is so important. i might be even more skeptical than him about the prospects for passage, although i agree with all the challenges he identified. i guess i would note that we have had repeated statements in the discussion about the tpp that it's really important that it passes. i agree with that, but that's not a plan. for getting a path. it's not the same thing as having a strategy. if you want to visualize it, imagine we're on one mountain peak and see another mountain peak nearby and say we really should be over there. great. but how do you get there? sort of what do you do. i want to come back to some of the points that the ambassador sketched and say, you know, what are the steps? how would this actually happen? and use that to justify who i have additional skepticism on that. the steps are laid out for us in trade promotion authority.

we know how you pass an agreement like this. it starts in the house ways and means committee. it's passed by the house ways and means committee, it then goes to the house floor, then senate finance, then the senate floor. if you get everybody approving and you have some protections that in the senate, for example, you know i have to worry about a filibuster, so if everyone approves, there you have your ratified trade agreement. it's a bit of a challenge to analyze the timing on these things because the tpa lays out often restrictions on the executive more than it does on congress. it does some, it will say here's the sort of maximum time period that the house ways and means committee can take to examine this agreement. we have already blown way past all of those things, the house ways and means committee could take up to 45 legislative days. i i'm not sure we have 45 legislative days left in the year, and that's just the house ways and means committee. inother challenge in analyzing these things is there's a

difference between the improbable and impossible. when it comes to congress, if there is the will, if jow have a majority that is eager to do something, with some of the protections included in tpa, blocking things like filibusters, there's little limit on what they could do should they get it together. but here's why this is problematic. one reason we all end up with the focus on the lame duck when we try to imagine scenarios where this would get passed is if you look at, say, the house calendar and it's available online, you see they're not around that much. that they meet until about mid-july, and then you start having conventions and you have elections. they come back, i think, for a little bit in september, and at the moment, are scheduled for two weeks, i believe, later in november. now, my understanding from people who have worked the legislative side of getting trade agreements passed is if you look over the last decade or

so and say what's the quickest one of these things has gotten done, they'll point to some less controversial agreements, say that one, that we managed to do in three and a half weeks. that's if it's uncontroversial. so the house isn't even scheduled to be around that long. plus, we're sort of assuming this would be the major focus of what they do. you may have frequently in a lame duck session, there's, say, budgetary issues that people kick down the road that need to be dealt with. just as there might be a reconsideration of whether you should address a trade agreement if you're looking at an upcoming change, you have a reconsideration of whether you should put forward and pass a supreme court nominee depending on what happens. that's occupying the same legislative body. so will congress be around for that period of time? and will -- of the time it's around, will it have enough to devote to trade agreements. additional issues, it's worth remembering as background just

the narrowness of the coalition support of trade, and the last real measure we had of this was the tpa passage a year ago. in the house, you had i think it had 218 votes, so just what you needed for passage. and of those, i think it was 190 republican votes and 28 democratic votes. this is why i wonder if we have a bipartisan surge to support this. that would be a real novelty in terms of where we have been on this. those are two of the things i would note as obstacles. one, that you really have not had great congressional support from the democratic side. so there was a time, particularly when the ambassador was usgr, when you did actually have a centrist coalition from both sides of the aisle that supported these things and came together to do important and necessary work. we have not had that for a while. we have had a partisan split and

the president has not been able to rally his party for these votes. on the republican side, you have, as the ambassador sort of pointed out very well, you had a series of objections. when they volted for tpa, they were saying i see the potential for having an agreement that would really do good things. then they sort of voiced a bunch of concerns and i like the idea of it seemed like a sharp stick in terms of the response. it was by no means a master class in sort of building and maintaining congressional coalition. often, i think the way the tpp was negotiated, it was clearly an enormous urge nlsy to get it rapped up, and perhaps that was what motivated things, but there seemed to be much more eagerness to proclaim the most aggressive trade agreement ever than to solidify a coalition in support. that coalition, you can lose people off it. you had no room to lose people,

but you can lose some because of things like tobacco or financial services or biologics. if you're doing this in the lame duck, you can lose some to a principled objection, which is simply saying it's not right that congress moved major pieces of legislation like this in the immediate aftermath of an election. i don't know how many you lose, but you had room to lose essentially none. so i think these are some of the major concerns. on top of the question, has the administration even done what it needed to to win back the support of key members like chairman hatch. i want to move on, then. i don't see the path where this gets done in the lame duck. oh, final point on this before i move on. has anyone been watching how things have worked among republicans in congress lately? like the last year or two, the honor thy speaker, that kind of stuff. it has not exactly been a group that has fallen into line, saluted, and done whatever was

necessary. so, which this is what comes to mind for me when people talk about how, okay, we'll get past the election and everybody will immediately do what they're supposed to and realize whats necessary and they'll support this. it has been a fairly fractious group. so i believe there would be large numbers of republicans who would feel that way. i don't think there are 218 of them, so i think that's a real challenge. let's suppose we move beyond, and here's where i'm notably more pessimistic than the ambassador. so he quite rightly noted that more than just the presidential election matters, but let's start there. donald trump this week was talking about trade and to my mind, a very misguided fashion. and the ambassador is exactly right that he needs to be pressed on details, saying something should be better is insufficient. but he certainly does not seem inclined to be advancing this in rapid order. secretary clinton, who had previously supported the tpp,

will find herself in a tough position even if we stopped the conversation now. and i fear that her situation is going to get worse as the campaign progresses. she would find herself in a tough situation now because she's said she does not support the tpp as it stands, and some of the criteria that she set for improving it are exceedingly difficult. so identifying things such as currency manipulous. currency manipulation, this is highly problematic. probably the best you could possibly hope for in terms of getting a restriction, this gets to the core of what countries do with monetary policy, the best you could hope for is a sort of side agreement that states good intentions on everybody's part and a move for transparency. that is what ambassador froman delivered. she declared that insufficient and says i need more. she's set herself a much higher hurdle than, for example, bill

clinton faced when he was going to reverse himself on his nafta opposition. she's already ruled that out. addressing things such as rules of origin on autos, that was a big part of what japan thought it got out of the agreement. that would involve really opening things up completely. this is not a minor addendum. the other real problem, i think, is two problems that secretary clinton would have were she to ascend to the presidency. one of them is that she would likely be told even had she emerged unscathed from the rest of the campaign, that madam president, you essentially have 18 months to get done the big things that you want to get done in office. this is your time period. focus on that. does she want to make one of those things a tpp agreement which would alienate labor support and it's hard to say even that it splits the democratic party right now. it unites the democratic party

in opposition. and she might be facing one or both houses under democratic control. otherwise, a good thing for her, but not good on the tpp. that's a challenge. the final challenge that i'll note on this is as the campaign goes along, i think what you are going to see is donald trump -- we have already seen it this week, pressing her on the sincerity of her opposition and trying to pin her down. the concern is that we will move towards a read my lips, no tpp kind of commitment. as they sort of fight this out across battleground states in the industrial midwest. so that would pose a real challenge. as a guide for this, and i'll close here, what's the best sort of historical example we have? i think when president obama was elected in 2008, a number of his supporters who were pro-trade and multilateralests, had visions that three pending trade

agreements, colombia, panama, and korea, would be ushered through in sort of the lame duck session, so you could have a clean slate. you wouldn't have to deal with these things. you could step in, the arguments sound extraordinarily familiar to me. late 2008 these were all supposed to slip through. they were ultimately passed in the fall of 2011 after a great deal of arm twisting that came later. to me, that's probably the best and most optimistic model we have. so i'll stop there. thank you. [ applause ] >> good morning, everyone. i'm standing between you and lunch, but i'm try to make it as pleasurable as possible. and thank you very much for the introduction earlier. and the opportunity to speak here today. there have been several references to tobacco and a tobacco carveout, and in this presentsitation, i'm going to give you a little background into what this is all about.

what does it mean? and why is this so important? so coming from j.t. international, japan tobacco international, it might not be a surprise i'm going to tell you why this is a really bad policy. so, you repeatedly hear the tobacco business is stifling government's ability to introduce tobacco control policies. it's also alleged that some governments don't have enough money to pay for the legal fees to defend themselves against isds claims from the tobacco industry, and therefore, we are viewed as a big user or rather abuser of the isds system. what is the reality? tobacco is one of the most regula regulated products in the world. but in real life, the tobacco

industry has not used isds system very much. actually, just in two cases. these two cases are against what can be described as very extreme regulations for any other sector, but sort of passes down the line for tobacco. and we see that these regulations are in general not based on science and evidence, which are good hallmarks for good regulatory practices. since the commencement of these disputes, one has been dropped in procedural ground, a case between pmi and australia. they realized there's only one tobacco-related isds case left. the remaining 694 cases are against countries by other industry groups. so, 0.3% of the case load that is tobacco related really an abuse of the isds system?

i don't think so. claims that countries don't have enough money to defend themselves against tobacco industry claims, is that really true? let me give you a little bit of background. the tobacco industry pays $15 billion a year in taxes, excise taxes, to the tpp countries only. $15 billion. so in the tpp, there is still a little bit of money coming from the tobacco industry itself that could be used for whatever they want to do, for instance, protecting themselves against those not very numerous isds cases. in addition to that, bloomberg and gates have set up a fund that has several million dollars which allows governments to

tackle in case it will be challenged by tobacco industries. and that basis, i think it's safe to conclude there is money to mount a legal case against the tobacco industry if our country would like to defend extreme regulatory proposals. the big gain touted by the supporters of tobacco exclusion is public health. let's play a little game of where's waldo for trade experts. i challenge you to look up on the slide where you have the tobacco exclusion in the background and i would like you to find the words public health or even just health, mentioned in tobacco issues. they're not there. so, the drafters of the tpp tobacco exclusion have gone to great length in order to list all possible activities tobacco

companies are involved in, such as inspection, record keeping, reporting requirements. all of these are of such a threat to public health, but they should not be protected by isds. really, it's obvious that the goal has been -- not been to bring about any public health benefits but rather to introduce a measure which gives a lot of headlines and an allure that the government is regulating for the greater good. but in reality, this measure doesn't achieve anything except for excluding one industry from isds. what does this all mean? i'm not -- what does it all mean that the tobacco industry does not -- there are a number of protections in the tpp and the chapter which gives companies the possibility to challenge government directly. we have heard from some members

that cato are not too happy about these protections, but they are there. fair and equitable treatment means that industry can defend themselves against discriminatory regulations and tobacco might be controversial, but we're still a legitimate industry bringing about government revenue and a significant amount of foreign direct investments, especially to developing countries. why should the tobacco industry not be able to defend themselves against biased and discriminatory regulations? i don't know. i'm not sure if you're aware of this, but in certain countries, tobacco companies representatives are facing jail time and enormous astronomical fines because the challenging

governments introduction of some not very even-handed customs evaluation procedures. these procedures have even found to be in compliance with public health, but the legal challenge goes on against tobacco executives. now, why shouldn't we be able to protect people working for the tobacco industry just like any other industry, and we open the door for this. who is next? food, alcohol, mining? right? another protection in the tpp is about transfers. the tpp chapter insures that private companies like ours should be able to transfer capital profits. dividends, et cetera back to the company where the investment came from. part of normal business practice, right? it's beyond us why legitimate

industry, tobacco, should not be able to secure profits for its share holders by channeling profits back to its owners. performance requirements. this sounds very technical and boring, but it has a very practical side. performance requirements could be policy whereby a government says that all cigarettes should only be made by domestically grown tobacco. this is not how cigarettes are generally made. they're made from a hodgepodge of different tobaccos coming from all around the world. or you could imagine that government would say that a confection industry is only allowed to make chocolate from domestically grown cocoa. under the tpp, if such a government measure would be introduced, the confectionary industry would be able to challenge the government whereas the tobacco industry would not. this is really not fair.

then, the ultimate form of government intervention, exproeperatiexproe exproperations. you have invested tens of millions and you don't want it to vanish at the whim of the gump at any time. if you produce ice cream, you have this protection under tpp. if you happen to produce cigarettes, you don't. why would government exproeperations be more laudable for a tobacco industry than for instance a car factory without compensation? talking about industries, who is next? well, your guess is as good as mine. a lot of industries are controversial and you see some up on the screen here. some of these industries are even big users of isds. so opening the door to exclude an industry from isds can have ramifications that were not imagined. the governments that completed tpp keep repeating that exclusion of tobacco from the tpp is a one off and will not be

repeated for other industries, but what if other governments look at the tpp and take examples and say, hey, this is a great precedent. now we can start excluding any industry where we have a pet peeve against them. who's next? when will it end? i don't know. i wou to quote senator warren. i'm glad tobacco laws are protected from isds, but what about food safety laws or drug safety laws or any other legislation designed to protect our citizens. so the slippery slope is already there. just to conclude, i would like to remind you that the tobacco industry is not a big user of isds, 694 to 2. we're therefore presented with a policy based on scaremongering and not facts. it's also very badly drafted policy. the tpp tobacco exclusion meticulously lists all possible

activities tobacco companies are involved in, but includes not one reference to public health. really seeing why it would be allowed to exproeperation tobacco industry, this would not do anything to prevent anyone from picking up the habit of smoking or helping anyone to quit smoking. removing any effective ability to re-dress foreign investors only opens the door for discriminatory protection measures by government. frankly, it's a goal that free trade is one to promote? and someone will be next. tobacco is always at the forefront of extreme regulation, and it's easy to score some cheap points by introducing policies that get a lot of p publici publicity. but the tpp tobacco exclusion really does not address the issue that it's supposed to remedy. the tobacco industry is a legitimate industry, and tpp tobacco exclusion leaves us as

the only industry with no protection. this is not fair. the tpp tobacco exclusion would also not achieve any public health benefits. therefore this exclusion is entirely unnecessary. and the last thing, as we are in the u.s., let's recall that the usgr went against its own legislature when it agrees to this exclusion. the congress explicitly directed the usgr to protect the rights of investors equally abroad without product discrimination while insuring all u.s. investors the effective investor state dispute circumstances. this is in the senate finance committee tpa report. how about that for democratic control of the process? thank you. [ applause ] >> okay. well, when i call on you, please wait for the microphone to

arrive so that everyone can hear the question, and identify yourself if you would. and then let's focus on questions and avoid detailed c. i will take the moderator's prerogative and ask the first question. getting to gears issue, and realize that the u.s./australia fda does not include an asts provision. would the u.s. business community support tpp in that case? >> i don't speak for the u.s. business community. my guess is they'd have serious problems with it. it was a real push to get isds in. one of the key characters of the u.s. agreements is they all build on each other and serve as precedents. i think you would get a lot of push-back from removing isds all

together. >> though the business community did support the australia agreement, i recall. >> i think there's good reason to have an isds in tpp because i think there are times when american companies need that kind of protection internationally. but i fully agree that we should not have any discriminatory activity in there. the tobacco exclusion was wrong. i have no brief for the tobacco industry. i am a nonsmoker. i've been a non-smoker my entire life. but i don't want anybody discriminating against them any more than discriminating against anybody else. >> questions. right here. mr. gerwin. >> hello. i'm with the progressive policy institute. i have a question for ambassador yeutter.

first of all, thank you very much for mentioning the fact that our friends in the press need to press candidates much more strictly on their -- on the implications of their trade positions. there is a lot of rhetoric out there that people don't seem to get challenged on. i'd like to ask you a question from your experience as a trade and agricultural negotiator, along that line. one our candidates said in a speech in kansas that the day after he was elected, he would make sure we slashed japanese duties on american beef. can you tell us a little, from your experience, about the practicality of that statement? >> certainly. there's been a lot of commentary about tearing up the nafta agreement and starting all over. all of this rhetoric is just really troubling to me. i think most of it is shameful

and it's coming from both sides. some of it from the candidates, some of it from the staffers for the candidates. but there is a lot of loose language. and unfortunately, it's getting worse, rather than better. or at least it has in the last few days. i think that's just shameful. the rest of the world thinks we're crazy on these trade policies using -- i can understand how they come to that conclusion. but to be specific in answering your question, you can't do that. i mean we certainly can raise tariffs the following day on japan or anybody else if we want to, but we pay a price. i mean there is no free lunch. if we do that, japan will have the right to retaliate us, and they would. and they should. so we need to honor our obligations. we are a signatory to the world trade organization. we're a signatory to nafta.

we have a lot of trade agreements in the world. we ought to honor them all. when we start talking about tearing them up, that's just nonsense. we could end up -- i was thinking about this last night. if that really happened and we went through all of this carnage, i might not witness much of it in my lifetime at my age, but i worry about the carnage that would affect my kids, my grandkids and my great grandkids. and i'm just appalled with this loose language that is being thrown around today. >> i would just mention that, to the best of my knowledge, members of the press present with us today have not had an opportunity to interview any of the presidential candidates. i'm sure if they did, that there would be a detailed elaboration of trade policy issues. another question, please.

>> hello, my name is eric gomez with the tay toe institute. i've followed the tpp issue a bit generally from a foreign policy perspective for a while, and when we're talking about how the obama administration's going to sell this to congress, it seems like especially within the last year or so, more emphasis has been placed on the u.s. needs to be the strategic player in asia. it's not explicitly talking about china per se but everyone who knows about east asia could probably say, okay, this is meant to serve as some sort of counterweight to serve as influence. is this a strategy that should be successful or should it be the way to go? do you think it wou play well with congress and have a greater chance of succeeding than focusing more solely on the economic instead of the

strategic benefits? thanks. >> i can try, dan? phil may want to comment as well. it is a really, really good question. personally, i may be showing some of my political biases here, but you know, this administration does not have much credibility on foreign policy issues. there have not been very many success stories. i think tpp may be the most successful of all. nevertheless, as i pointed out earlier, we really do need to demonstrate leadership in asia because to some degree we are in competition with china for that leadership role. i don't see china, by the way, as an adversary in trade policy. i never have. i do not now, and i don't believe that i should in the future. but i also believe that if they are in the leadership role in asia, you will not have

principles and rules of international trade that are as effective as they would be if we are in a leadership role. in other words, they're going to be looser and will not have the disciplines that are necessary. so i want tpp to go into effect because that then becomes the base on which we build. the point i made earlier about being on the outside versus being on the inside is so valid here. it's not by accident that you have a whole slew of countries lining up wanting to join tpp already. and that's important. i think that's one of the great benefits of this potential agreement. flawed as it may be, it's the best eating on the plate at the

moment. as a consequence, you're finding as many as a dozen countries who would like to be in the next tranche of tpp negotiations. if that happens, that solidifies the fact that tpp is going to be the foundation of international trade in asia, for us and everybody else. i think that's good, and i think it gets to the point if you get through that second tranche and that's a few years down the road. ultimately china may see it to its advantage to join. >> i would agree with all of that. i don't think the administration's been that coy about saying either we write the rules or china writes the rules. i do think that resonates somewhat on the hill from those i've spoken with there. you asked about the trade-off between making that kind of strategic argument versus an economic argument. i think they'd handicap themselves a bit on the economic argument because you had a president who ran for office expressing extreme skepticism about the value of agreements

like nafta. he argued that it cost 1 million jobs. has not actually reversed himself on that, which means that their economic argument has to be you didn't like previous trade agreements but vote for this one. that's sort of self-inflicted wound is what then leads them over i think into the strategic argument. >> i just want to ask a quick question about -- >> and you are? >> sorry. i'm zeke schumacher. i guess i'm my own man. >> that's good. [ laughter ] >> thank you. with respect to this idea about who's writing the rules of the road, primarily, i think that seems to be a sticking point from a political perspective about why we should be engaging ourselves in some sort of international trade agreement from the first place.

but, it seems to me that sparta didn't join the delian league just because it was the biggest bloc around. at the same time, you have russia and china creating alternative venues for trading oil and that sort of thing to wti and brent and so on, so forth. so why are we expecting china on one hand to sort of step in to a vacuum that not executing tpp is presumed to create, and on the other hand, if they do step in to that vacuum, why does it necessarily cause a problem if we're hoping that they might join tpp? what's wrong with us joining with whatever multi-national coalition or trading bloc eventually forms regardless? if the ultimate benefit is the economic of the american consumer and business environment. >> i'll start in on this. i think the u.s. does it because

this is in ourself interest. it is within ourself interest to have sort of a stable political situation in asia. we have huge interests there. it is in our interests to get other countries to lower their barriers. i agree that it is not that we are opposed to china. there is a different conception of what commercial regulation ought to be. the u.s. has a very advanced economy. a lot of the way we interact with other countries in the world involves provision of services, it involves investment, it involves high intellectual property content. if this sounds familiar from all the chapter headings you were seeing earlier, that's no mistake. this is saying how do we succeed and how do we do business? if you look at the kind of trade agreements that china's putting forward, they probably reflect more the way that china engages commercially with the world where they are much simpler, it is just border barriers and it would do a much worse job of serving u.s. interests. so even from an economic standpoint we'd be worse off

from the standpoint of proving ourselves reliable partner to keep the peace in the region, it would be very damaging to withdraw. >> phil is so correct in that respect. as you probably know, china already has a regional trade agreement sort of under way in asia which is viewed by some at least as a bit of a competitor to tpp. that agreement is not really going anywhere at the moment because everybody's -- not everybody. most everybody's putting their attention and emphasis on tpp which is to our advantage. the fact of the matter is, if you switch and go the other way and follow the chinese lead with their agreement, you end up with a lot less effective rule making in the trade arena. in other words, there will be a lot more games played under that

agreement than will ever be played under tpp. and it's not to our advantage to give other folks a chance to play games because that works to our -- you know, we like to play by the rules. not everybody else in the world does. >> question right here. >> this may not be fair to the speakers, but i'm really struck by the fact that the multi-lateralism that wto has literally barely been mentioned today. if you think back to the nafta and uruguay round, those two agreements pushed forward simultaneously even two or three years ago i think there would have been more discussion about tpp in the context of the multi-lateral negotiations simultaneously or the interface between them. i know it is late in the day, but i'd like to hear some comments from the speakers about if you think especially about a tpp process that might roll into

2017, 2018, i mean where -- is there any wto window? or is tpp the only trade agreement, leaving aside dispute settlements, so on, the only trade agreement on which the next administration is going to organize the u.s. position on trade? are there any windows there or any interface between these things, or is the wto, as a negotiating forum, just not on the agenda for the next five years? again, my/po apologies. it could be a day's seminar, not a five-minute session. >> i'll do the best i can. phil can supplement. because i'm probably more biased than anybody from having been such a participant in the multi-lateral process during my days as uscr, particularly in the uruguay round. i'm sad about that, as a matter of fact, that since the uruguay round, the wto process just

hasn't worked very well. part of that is because there are so many more countries in. it was about 100 when we did the uruguay round. and, man, it wasn't an easy task to herd those 100 cats. now you've got to herd a lot more than that, almost double. the negotiators have found that to be very, very difficult. when we finish the uruguay round, to just give you a personal touch to this, i said that i thought it might be the last round of trade negotiations ever. and maybe i will turn out to be correct in terms of successful multi-lateral trade negotiations. i'm sorry about that, but it's been happening since then. our hope with tpp and with ttip,

if you can do tpp, then do ttip, you cover a vast amount of world trade. then if can you fold those agreements into the wto, you could in a significant way improve the wto and do it without having 180-nation trade negotiation. so i still have some hope for that. but we've got to get tpp right and we've got to get tpp approved before we can even think about whether that can be a base for maybe a partial wto negotiation that would move a lot of that outcome into the wto. phil? >> so i agree with all of that. what i would add, i like this image of trying to herd 100 cats. one of the things that was available though in the uruguay round was you at least have one effective thread which was that if a country wanted to be

recalcitrant, wanted to hold out, you said well then you won't be a founding member of the wto. but that's a one-time trick. i think this is what we found in the doha talks, was that you do that, now you've got 150-some countries, maybe 160. and now you've got to try to get unanimity. the big split that we saw comes back to this question about the u.s. approach versus the chinese approach. do you try for sort of high standards and ambition or do you try for something that's sort of much less ambitious and much less useful. countries ended up split and it's not been clear how you move pass that impasse. just as the ambassador said, there is a path sort of from the ground-up where you do tpp and ttip and they come together, then others join. it would be nice if you do it from the top-down. a dozen years of trying has not been very effective. >> well, i'm not going to try to herd cats. rather, i'll just say that we need to conclude now. i will provide guidance for how

to get to lunch. people will tend to respond well. lunch is served upstairs one level in the egger conference center on the second floor. take the spiral staircase up. there are restrooms on the way, on the second floor, at the yellow wall. i thank you all very much for being here, for your participation. please join me in expressing appreciation not panel. [ applause [ n

>> if you missed any of the discussion on the transpacific partnership agreement, go to the c-span.org library. coming up at 1:00 p.m. eastern, ntsb chair christopher hart will talk about transportation safety. he'll give a luncheon speech at the national press club here in washington. he'll also address the development of self-driving cars and how the country is expected to adjust to having them on the road. watch that live on c-span again starting at 1:00 p.m. eastern. a little bit later a look at the state department's 2016 trafficking in persons report. susan coppage, the ambassador at large to monitor and combat trafficking in persons, will brief reporters about that report. it was released earlier today by secretary of state john kerry. here's a bit from that announcement this morning. >> when we talk about human trafficking, we're talking about

slavery. modern day slavery that still today claims more than 20 million victims on any given time. and all 20 million are people, just like everybody here. they have names. they have, or had, families in many cases. and they are enforced to endure a hell, a living hell in modern times that no human being should ever have to experience. in some places particularly where vialent evialent extremi found a temporary safe haven, the atrocities are both rampant and overt. a 34-year-old survivor recalls approaching one of her captors in syria, a member of the tourist group daesh. she pleaded with him to hamt the

incessant rape of a 12-year-old girl, telling the terrorist she's just a little girl. he replied, no, she's not a little girl. she's a slave. >> you can watch all of secretary of state john kerry's remarks online and see today's follow-up state department briefing taking a deeper look at the traffic report live at 2:00 p.m. eastern on our companion network c-span. this fourth of july weekend, book tv has four days of nonfiction books and authors on c-span2. on friday starting at 9:30 a.m. eastern, book tv features an interview with california senator barbara boxer, discussing her political career. former pro basketball player kareem abdul-jabbar weighs in on current political issues. senate majority leader mitch h mcconnell on his life in politics. saturday at 10:00 p.m. eastern

on "after words," we discuss "the rice of the rocket girls," the women who propelled us from missiles to the moon to mars in which she chronicles an elite group of women and their contributions to rocket design, space exploration and the first american satellite. she's interviewed by lisa rand. >> in the beginning they did a lot of trajectories. so they calculated the potential of different rocket propellants and they did trajectories for many of the early missiles. they worked on the corporal and the sergeant. then things changed when the space race happened and nasa was formed. then these women's roles began changing. they ended up becoming the lab's first computer programmers, and they had these just incredibly long careers at nasa. 40, 50 years. one of them still works at nasa today. >> and on sunday, "in-depth" is live with author and documentary

filmmakers sebastian younger who will take your calls, texts and e-mails questions from noon to 3:00 p.m. eastern discussing his latest book, "tribe." he is also the author of "war," "a death in belmont," "fire," and "a perfect storm." then a q&a interview with former politics and lawyer mark green, author of "bright infinite future." then on monday at 2:30 p.m. eastern, book tv tours the vivian g. harsh collection. the largest african-american history and literature collection in the midwest. housed at the chicago public library's woodson regional branch. for the complete weekend schedule, go to booktv.org. u.s. cyber command deputy commander and assistant defense secretary discussed how

the pentagon has been working to counter the presence of isis online. witnesses discuss military action to counterthe online presence and the need for cyber command to be established as a unified combatant command. in april the obama administration directed u.s. cyber command to start ducting cyber attacks on isis. committee will come to order. i would like to welcome our witnesses today as the committee examines military cyber operations. i note that just about exactly

two months ago, president obama confirmed for the first time that the u.s. is conducting cyber operations against isis. and as the leadership of the department of defense was discussing this, they said it was the first time that cyber command has been given the guidance to go after isis. just like we have an air campaign, we want to have a cyber campaign. and some of the press went on to discuss that secretary carter was pushing for u.s. cyber command to have greater freedom to launch attacks and to address tactical cyber threats against isis. >> the department defense capabilities to fight and win the country's wars and be prepared and ready to execute those missions remain on solid footing regardless of which domain we are talking about,

including the cyber domain. the department has been developing organizations capabilities and personnel needed to operate in cyber since at least 2010. billions of dollars have been spent. and yet the perception -- and y'all can disagree with this if you think i'm wrong. the perception is that the threat is still multiplying faster and growing faster than at least our laws and regulations, policies, rules of engagement are developing. still a fundamental question. what is the role of the military to protect civilian infrastructure in the united states against cyber attack? i do not suggest we're going to get the definitive answer to all of those questions today. but i think that it is important that we discuss not only those, but the tactical use of power.

cyber power. the president talked about how the leadership of the department has talked about. it's a significant change just in the past few months. so we'll look forward to hearing from our witnesses about those and other topics. but first i'd yield to the distinguished ranking member for any comments he'd like to make. >> thank you, mr. chairman i agree with your comments about the complexity and importance of cyber. and the most interesting thing i would like to get out of this hearing is how is the organization coming together? i think that's the major challenge. it's been quite a few years since we've recognized the importance of cyber in different aspects in our national security apparatus, in addition to additional -- different aspects of the department of defense have attempted to address that problem. so we have a lot of people working on it. how coordinated are they? that's the great challenge, making sure we're getting the most out of the resources we're putting into this because it is a constantly evolving threat,

and. threatens everything. every aspect. the least little device can be an entrypoint to a cyber attack. so, how do you get a point to attack. so, how do you get a comprehensive look at making sure that you control -- control is a bit of an optimistic statement. have some measure of understanding of where the threats are and how best to address them. so how the various branches of the military and our broader cyber vulnerabilities, as the chairman mentioned a lot of those vulnerabilities exist in the private sector and we've had defense contractors who have been hacked before that have created problems. so, how do you we comprehensively address this incredibly complex and ever-evolving problem? i think that's the great challenge. i will say that i very much approved of what secretary carter did, where he had the -- i forget what he called it, but basically invited hackers to try to find their way in. you'll learn from that. i think that was one of the best, most cost-effective ways to do it. instead of sending some contract

out to some company and going through a complex process. just take those people out there who are really good at this and say come at us, show us our vulnerabilities. i thought that was a very wise way to learn a lot in a cost-effective manner. again the real challenge is having a comprehensive approach to such an ever evolving and challenging problem. as the chairman mentioned, the legalities of it in terms of are our laws and regulations keeping up with it, to make sure that you and the executive branch have the authorities you need to best protect us and, in some cases use cyber as an offensive weapon where necessary. that those legal questions are also very complicate and ones that why would like to be helpful with, if we can. with that i'll yield back and look forward to the testimony. >> i thank the gentleman. i also want to mention that, of course, on the front lines for oversight of this issue, i very much appreciate the emerging threats and capabilities

subcommittee chairman wilson and the ranki ining member who work this area day to day. i think it is also important, though, for all members to look at these larger cyber issues, which is why we're doing this hearing with the full committee today. let me welcome our witnesses, mr. thomas aet kin, acting assistant secretary of defense for homeland security and global defense. without objection, any written material you'd like to submit will be included in the record. thank you all again for being here. mr. atkin, the floor is yours. >> thank you. i am pleased to testify today, along with my colleagues, lieutenant general kevin mclaughlin and brigadier general tuna moore on the department's efforts in cyberspace and how we are improving american's cyber

security posture. it is an honor to represent the department and i am proud of the progress we have made in this challenging demain. the closed hearing this afternoon will go into greater detail on some of the challenges that we face in cyberspace, and the department's efforts to address those challenges. i wanted to highlight a few you things here this morning. first, the threat. today, we face a diverse and persistent threat in cyber space from state and non-state actors that cannot be defeated through the efforts of any single organization. our increasingly wired and interconnected world has brought prosperity and economic gain to the united states. however, our dependence on these systems also leaves us vulnerable and cyber threats are increasing and evolving. posing greater risk to the networking systems of the department of defense and other departments and agencies. our national critical infrastructure and other u.s. companies and interests. while dod maintains and uses

robust and unique cyber capabilities to defend our networks around the nation, that alone is not sufficient. securing our systems and networks is everyone's responsibility. from the commander down to the individual. and this requires a culture of cyber security. more broadly, preventing cyber attacks of significant consequence against the u.s. homeland requires a whole of government and whole of nation approach. to that end, dod works in close collaboration with other federal departments, our allies and the private sector to improve our nation's cyber security posture and to ensure that dod has the ability to operate in any environment at any time. since cyber strategy was signed by secretary carter, the department has devoted considerable resources to implementing the goals and objectives outlined within the document. when secretary signed the document, he directed the department to focus its efforts on three primary missions in cyber space.

one, defend the department of information, department of defense information networks to assure our dod missions. two, defend the united states against cyber attacks of significant consequence and, three, provide full spectrum cyber options to support contingency plans and military operations. another key part of our strategy is deterrence. dod is supporting a comprehensive whole of government cyber deterrent strategy to deter attacks on the u.s. and our interests. this strategy depends on the totality of u.s. actions, to include declaratory policy, overall defensive posture, effective response procedures, indications and warning capabilities and the resiliency of u.s. networks and systems. i am proud to say that the department has made important strides in implementing dod cyber strategy since it was signed in april 2015. my colleagues and i look forward to going into greater detail on

our strategy as the hearing proceeds, as well as to discuss how our thinking and incorporation of cyber operations is evolving. the department is committed to defending our u.s. homeland and u.s. interests from attacks of significant consequence that may occur in cyberspace. i look forward to working with this committee and congress to ensure that the department has the necessary capabilities to keep our country safe and our forces strong. i thank you for your support in these efforts and i look forward to your questions. thank you. >> general mclaughlin? >> chairman thornberry, ranking member smith, distinguished members of the committee, i'm honored to appear before you today representing the men and women of u.s. cyber command. it's my pleasure to do so alongside assistant secretary brigadier general moore and thomas atkin, two men who keenly recognize the challenges the

department faces in the cyber domain. i would like to focus my opening remarks on the ongoing efforts to build capability and capacity in the cyber mission force. the cyber mission force, with unique teams designed to defend dod information networks, support combat missions give u.s. cyber command and the department a means to apply military capability at scale in cyber space. we recognize that success in accomplishing our missions is dependent on three factors, quality of our people, the effectiveness of their capabilities and proficiency that our people bring to bear in employing these capabilities. encompassing a robust, active component along with both national guard and reserve force being fully integrated at all echelons from highest headquarters down to the

tactical forces represent in the cyber force. as of june 10 this year out of a target total of 233 teams that will be part of the cyber mission force, we have 46 teams that are at fully operational capable status and 59 that are initial operating capability status. these teams currently surprise 4,684 total people that we will build to eventually 6,187 when we finish. it is important to note that teams that are not fully operational are already contributing to cyber space efforts as the command operates on a full-time and global basis. nation and every combatant commander can call on cyber mission force teams to bring cyber space effects and support of their operations. such work occurs daily, for instance, in the fight against isil where our teams are conducting cyberspace operations in support of u.s. central command's ongoing efforts to degrade, dismantle and ultimately defeat isil. training the force to be prepared for its varied missions is impairty.

u.s. cyber command's annual cyber guard exercise which concluded last friday provides realistic training in which federal, state, industry and international partners can use their skills against a determined opposition force. the response to cyber guard from our public and private partners has been tremendous. dozens of critical infrastructure companies have expressed interest in it. allowing policy makers to observe the types of issues we see in real cyber attacks and helps us generate a playbook that should save the federal government precious time and stress in responding. in this year's exercise, u.s. cyber expects to certify teams to ensure they have training skills and to make an immediate impact in today's fight. our command prides itself in being a learning organization, exercises like cyber guard and other premiere exercise, cyber flag, which is ongoing at this moment, are key lessons learned, opportunities for us.

we also look at everything we're learning and the growing set of real-world operations and collaboration from the private sector, academia to provide valuable insights to the command and allow our teams to develop and implement new tactics, techniques and procedures. although our people are undoubtedly our most important asset, i would be remiss not to highlight the importance of specialized tools, infrastructure and capabilities that the cyber mission force needs to execute its missions. ongoing efforts to develop tools such as the persistent training environment, the unified platform, cyber situational awareness and the joint information environment must continue to be resourced. these capabilities are critical in ensuring that they're equipped to counter adversaries. changing tactics in cyberspace will require well trained, well resourced and agile force. with that, thank you again mr. chairman and members of the committee for inviting me to

appear before you today. i assure you that u.s. cyber command is committed to the mission of ensuring the department of defense mission assurance, deterring or defeating strategic threats to our interests and infrastructure, and achieving joint force xhancommander objectives. the growing capabilities and compassive the cyber mission force adds to our ability to perform this mission. the u.s. cyber command team appreciates the support of this committee that it has shown and looks forward to our continuing partnership with congress to address the challenges and opportunities in cyberspace. i am happy to take your questions. thank you. >> general moore? >> thank you, chairman thornberry, ranking member smith, members of the committee, thank you for allowing me to speak on behalf of joint staff. the inherent global nature of cyber space threats causes and creates numerous challenges for the department of defense. additionally, our war-fighting capabilities are increasing aligned on the cyber domain and

it is integral to the advantages we enjoy in everything from high-tech weapons and communication systems to our ability to rapidly deploy forces around the globe. furthermore, trying to keep up with the rate at which technology is advancing in this rapidly changing environment is extremely challenging. while our adversaries and potential adversaries continue to increase their capabilities, they also share these challenges. all of that said, we have made significant progress, including the continued build of our cyber mission force, challenging our adversary's ability to operate freely in cyberspace and continue to improve more effectively our ability to defend our networks, weapons systems from malicious cyberspace actors. in regards to building our cyber capabilities -- >> you can watch the rest of this event at c-span.org. we leave it now to take you live to the national press club in washington where the american constitution society is hosting

a discussion on big decisions and surprises for the supreme court term that just ended on monday. live coverage. >> -- who believe that the law should be a force to improve the lives of all people. acs works for positive change by shaping the debate on vitally important legal and constitutional issues such as the ones you will hear discussed today. i think many of you who have been to these reviews year in and year out, so you may recognize that i have often said, what a blockbuster term we've had! well, you know, i guess i'm just going to have to repeat myself because this year was no exception. but this year was, in part, not an exception to the blockbuster term, but for reasons that we could not have anticipated.

obviously there were many cases of great importance before the court. cases dealing with whether access to abortion would remain a reality for the women of texas and elsewhere. the constitutionality of the dapa immigration program and the continued viability of collective bargaining agreements that provide for fair share fees just by way of example. but the term, as we all know, was overtaken by the passing of justice scalia and the resulting vacancy on the court. some consequential decisions were made, and some were not. cases were remanded to lower courts for further consideration. some ended in ties leaving critical questions unanswered, and in some case differing understandings of the law in different parts of the country. given. senate's continuing refusal to consider the nomination of d.c.

circuit chief judge merrick garland to fill the vacancy on the supreme court, much uncertainty lies ahead. but we do have an amazing guide to lead us through this discussion with a very distinguished panel. a truex pe expert on the suprem court, and a friend of acs, tom goldstein. tom is one of our nation's most experienced supreme court practitioners. he has served as counsel to a petitioner or respondent in ruffle 1 roughly 10% of all of the court's merit cases for the past 15 years, personally arguing 38. in addition to practicing law, tom has taught supreme court litigation at harvard law school since 2004, and previously taught the same subject at stanford law school for nearly a decade. he's also the co-founder and publisher of scotus blog which

is the only web blog ever to receive the peabody award. in 2010 the national law journal named him 1 of the 40 most influential lawyers of the decade, and legal times named him 1 of the 90 greatest washington lawyers of the last 30 years. so who better could navigate these uncharted waters for us? so please join me in welcoming tom goldstein. [ applause ] >> thank you all so much for being here. thank you to the folks as well who are watching through our friends at c-span. it is an incredibly exciting time, not just to be following the supreme court as it has been for several terms, but to be do it through this organization and its eyes as we take a look at what could be an incredible transition in the supreme court. the changes that might well be

afoot in the court -- of the court's jurisprudence are actually astonishing, could be historic, and could chart a path for the next quarter century or more depending on what happens between now and the end of november. we have a great group of people knowledgeable both are particular fields that they're going to talk about and about the court generally. and our goal really is to do this in two parts, to talk about some very specific and very important cases, to give reactions to what it is that the court has done and not been able to do. but also then to take a longer term look around the corner and over the horizon at what is going to happen at the supreme court in different scenarios. it's probably impossible to overstate a situation in which you have a court in a 4-4 ideological balance and a presidential election coming up. it becomes even more difficult to overstate it when you think

about the actuarial situation that the court finds itself in where each of us knows and hopes and prays that justice ginsburg will live forever. but the prospect that she will voluntarily resign to go run marathons or some other thing is out there, as with justice breyer and justice kennedy. so the next president has an enormous president in either the next four or eight years to shape the court in what could be a 7-2 direction one way or the other. and so we want to cover some very specific cases and then talk with you about some broader trends, and then leave time for questions at the end. i thought that we would start with christina swarns, litigate director of the naacp and legal defense fund who has an unbelievable broad portfolio of litigation around the country involving issues not just of race, but many other things. and also has a merits case next

term. but i thought that christina, maybe you could start us off talking about affirmative action. >> thank you, tom. it's a pleasure to be here. it is a pleasure to share the stage with my distinguished colleagues. so, yes, i would love to talk about fisher. as you all know, fisher 2 is the second round in the supreme court of abigail fisher's challenge to the university of texas's admissions policy. this was obviously a big surprise in terms of the way the court decided this case, especially with justice kennedy writing the majority opinion. i think there is a lot that can be said about this decision but i think i'd like to talk about it in terms of what it reflects about the arc of justice kennedy's thinking on issues of race conscious admissions. i think it demonstrates a sort of remarkable evolution in the way he looks at these issues, and i think it does offer some insight into how we might how

the court might rule going forward on these issues. in talking about fisher i think we should start by talking about anthony kennedy in grodder because it frames an understanding of what he did in the fisher case. as you know, in gruder, the united states supreme court upheld the university of michigan law school's race conscience admissions programs in 2003. judge kennedy issued a scathing dissent regarding the court's decision in that case. he lambasted the broader majority an bunch of grounds. he accused the court of failing to adhere to strict scrutiny and meaningfully apply strict scrutiny to its valuation of the university of michigan's policy and its implementation of its goals. and specifically, he said that in that case, the majority

conflated sort of the deference that the university was due. while the university was due deference in terms of identifying compelling objectives in terms of its educational goals, it was not entitled to that same level of deference in terms of the way it implemented that goal. what he said -- i'll just quote him was -- preferment by race when resorted to by the state can be the most divisive of all policies, containing within it the potential to destroy confidence in the constitution and in the idea of equality." he was very unhappy with this decision, i think it is fair to say. he accused the grudder court of performing a perfunctory review of the michigan's process of accepting the university of michigan's assurances that its process met strict scrutiny, and he actually mocked the concept of critical mass. again, i will quote him. he said, "real review of the university of michigan's admissions process,

"demonstrates beyond question why the concept of critical mass is a delusion used by the law school to mask its attempt to make race an automatic factor in most instances, and to achieve numerical goals indistinguishable from quotas." he really did no the like this decision. he went on to complain that the university had failed to provide its admissions personnel on how to reconcile making individual e ovevaluations with the objectiv of securing critical mass. so he really came out very strongly against the way the university of michigan administered its race conscious admissions policy in 2003. fast forward to last week and we have a very different anthony kennedy. what he issued -- he writes for the majority. he issues a straightforward decision that affirms the 5th circuit's decision saying that the university of texas' race conscious admissions policy is narrowly tailored. you know, in that decision, in

the fisher decision, he actually embraces grudder, notwithstanding how harsh he was in its dissent. he comes out initially in the decision and makes clear that the principles that were articulated in fisher 1 and that had been repeatedly articulated with respect to issues of race conscious admissions continue to apply. a university can consider race in its admissions process, but obviously will be subjected to strict scrutiny. a university's decision to pursue educational benefits that flow from diversity is entitled to deference. but the university, of course, bears the burden of proving that there are no race neutral alternatives that are available and workable. these are the principles articulated by the court repeatedly, and he again re-affirms them in this case. and then, however, when he applies that to looking at abigail fisher's challenge to the university of texas' process, he really takes down

each of her complaints one by one. and in many instances, her complaints really echoed his in grudder. so it is a fascinating read. she begins by saying that he says that the university of texas failed to precisely define the level of minority enrollment that would actually constitute critical mass. and therefore would be impossible for the court to assess whether or not the university of texas had met its goal of achieving critical mass. and citing to grudder, justice kennedy says, absolutely not. and i will quote from him. he says, increasing minority enrollment may be instrumental to these educational benefits, but it is not, as petitioner seems to suggest, a goal that can or should be reduced to pure numbers. indeed, since the university is prohibited from seeking a particular number or quota of minority students, it cannot be faulted for failing to specify the particular level of minority enrollment at which it believes the educational benefits of diversity will be obtained.

so he flips it sort of on his head. right? had he says you, the university, cannot count students of color. so abigail fisher, your request for them to identify a particular number of students as a goal, as a defense in igs of kr -- definition of critical mass is rejected. he continues and says, of course -- the goal of achieving critical mass cannot be amorphous and has to be sufficiently measurable. he says of course the university of texas met that goal because they laid out clear and specific objectives, like destruction of stereotypes, of promotion of cross racial understanding, preparing a student body for an increasingly divorce workforce, cultivating a set of leaders with legitimacy in the eyes of the citizenry. that's consistent with the university's obligations and said it met its goal in that regard. abigail fisher also says -- she accuses of university of texas of not needing to consider race because in her view, it had already achieved critical mass

with the non- -- the race-neutral policies it had administered. he goes through those and he says absolutely not. the record shows that there was not critical mass based on the goals identified by the university. she says consideration of race is not necessary because it only had a limited impact on advancing the university's compelling interest. and he just disputes that saying it is contradicted by the record saying there is evidence there was a meaningful impact on diversity demonstrated by the numerical increases of black and latino students in the school. he also said -- ill a he quote him again -- the fact that race consciousness played a role in only a small portion of admissions, decisions should be a hallmark of narrow tailoring, not evidence of unconstitutionality. so again the fact that this is a small component, this affects a small group, is evidence of the constitutionality of the process here. last, she says there are alternative race-neutral means available of reaching university schools. again justice kennedy refutes

this and takes it down one by one. none of fisher a he proposed alternatives were workable according to the decision. university did not and should not have had to alter the weight given to things like socioeconomics or academic factors because he says you don't have to choose between a diverse student body and academic excellence. and he also rejects her pursuit of expanding the top ten -- the race neutral policy. so at the end of the day, this is a very different ant in i kennedy than we had in 2003. i guess obviously i haven't had dinner with him so i can't explain in firsthand how he got there relative to where he was in 2003. but we know a few things. right? in 2007, in parents involved, he made clear after the grudder decision that there was -- he acknowledges the continuing relevance of race and he in fact

disputes justice roberts -- he criticized justice roberts for his all too yielding insistence that race cannot be a factor inned a missions. then in fisher 1 we know that he was talked back from striking down the university of texas' affirmative action policy by justice sotomayor and her compelling and powerful description of the experience of students of color. and then that was in 2013. one year later we all watched the united states explode in a fury of race-based violence. and unquestionably, that was something that he saw and absorbed, like we all did. 2015 he announces inclusive communities where once again he acknowledges the continuing prevalence and significance of the role of race. then one year later he announces the decision in fisher 2. so it seems clear that at the end of the day, justice kennedy has really evolved on the question of the role of race in

admissions in university admissions. this case obviously represents a big win for the civil rights community and we think a right decision. it demonstrates that at least four times over the last four decades the supreme court has upheld race conscious admissions in the university setting, twice in fisher. and at this point we only have three justices with clear and unambiguous opposition to race conscious admissions. so i think it suggests a new looking forward in terms of how the court will deal with these issues going forward. >> what does that mean as a practical matter? would you expect to see expansions of these programs? do you think that universities and the civil rights community think of this as kind of the high water mark for what they are able to do? what would you and someone who follows these issues so carefully think will be the next stages? because texas had a relatively unique program. >> it did. >> what we would see in other

public university context. >> you know, i think this re-affirms -- certainly without question, right? -- the constitutionality of programs that take into consideration race. obviously each of those programs has to be considered individually because these are so deeply individual -- deeply specific analyses. i don't know that i could say every single program that's out there will meet what justice kennedy has set forward today. i think that the courts -- the school, universities, have the confidence to know -- i think it is a big change that justice kennedy does in fact see a role for race conscious admissions and is willing to affirm that role. i think that that should give universities confidence to think about how they he can tailor their programs in a way that meets the concerns that he's identified. >> do you think more broadly than affirmative action, do you read in justice kennedy's opinion anything that speaks more broadly about a shift in attitude by him on questions of race more generally?

for example, with respect to racial gerrymandering? civil rights litigation that involves race? or do you think this is specific to this context? >> you know, this is -- listen, this is a straightforward application of grudder. >> many thought not. >> well -- >> maybe thought the straightforward application of r grudder would kill it. >> he adheres to what the majority says. he quotes it extensibilively throughout the decision. in terms of a wider view of race, i don't know that i'd say that this particular decision opens a floodgate in terms of where he is on race. i would say that the evolution i described coming from where we started in 2003 with justice kennedy in grudder demonstrates an evolution of his view on issues of race overall. >> well, let me just bring you in.

will, you've been involved in the most significant cases in terms of a civil rights perspective. i wonder if you had a if you y takeaway -- were you surprised? did you have a sense of what you take from this? >> i was of course surprised. i read fisher one. we greed with the standard of the court set in fisher one. we thought a straightforward application of it would have led to a different result. it didn't. if you trace justice kennedy's trajectory to fisher one, it's a straight line and then it's a real shift. in terms of the decision itself, i don't know a lot to add beyond what justice alito said. justice kennedy didn't respond. having read the coverage of the case, i have yet to see anybody respond to the points justice

alito made. i don't think there are effective responses. but, you know, the votes weren't there so the votes weren't there. i would make two broader points, if i could. the first is i think what's more interesting than what justice kennedy said is what i would call the liberal bloc of the court didn't say. justice marshall shotood up for his point of view. he wasn't just going to go along with justice powell. he stood up for a version of the constitution that me and my clients don't share, but it's a real view. the use of benign racial preferences. no one wrote to defend that vision of the constitution on the liberal side. no one stood up for that. they simply were willing to sign onto anything justice kennedy was willing to write. so when we're -- when we're talking about people standing up for views, i think that's quite notable.

and i would add, it's not true on the other side. we talked about parents involved. that opinion could have been assigned to justice kennedy. they needed his vote and they knew it would be decisive. but they were unwilling to simply join the opinion. they would -- they would say what they had to say and let him write separately knowing that his view would control, but it would not be there view. i do think that's striking. last, in terms of the future, we always did see this as a unique case, that the way the top 10% plan operated in texas filling up 75% of the seats. we thought made it a unique case in our favor in that it created more diversity, at least in terms of racial ethnic diversity at university of texas than it had when it had previously used racial preferences. we entered the case thinking, this is an interesting case

study. what happens when a school is forced to abandon racial preferences, moves to a race neutral alternative, gets more minority enrollment. we thought those unique factors would lead to an interesting case, but not one necessarily that would be decisive for all programs. while the result is disappointing, i don't think it tells us altogether what's going to happen going forward. my clients have sighed harvard college over the use of racial preferences. it has side the university of north carolina chapel hill. as i read fisher, it invites a more funndamental challenge. for learning more about the kinds of students that are being admitted through these policies, how students are performing,

what does the racial makeup of the class look on graduation day? and so i know from our perspective, we're going to be asking for all the material we need to meet the standard of evidentiary support that justice kennedy says we need to have. >> walter dellinger is in the house. former acting soliciting general of the united states. could you talk about politics and bribery and all the kinds of things that we know you know so well? and -- from secondhand experience at best. in the mcdonald case. >> sure. could i just make a brief comment to emphasize something christina said that addresses the mystery that both of you addressed of the shift by justice kennedy. i think you cannot underestimate

a fact that christina mentioned. and that is, what happened in the culture. i mean, the larger issue which the court has been grappling with since bauchy, to what extent is race still an important culturally relevant category. to what extent does race really matter? in which the only time discrimination raises its head is when disappointed applicants to an elite college bring a lawsuit. it's reflected in justice alito's descenting opinion. he's deeply offended by the depth of -- i believe his terms or odious and perny shus racial discrimination. that racial discrimination against people of color is a thing of the past.

some of that is reflected in the opinions that justice kennedy has written and signed previously. i really think the combined effect of charleston and chicago and baltimore and above all else, ferguson, missouri, the ferguson report makes it hard to maintain the position that we're beyond race having to matter anymore. the black lives matter movement i think really did affect justice kennedy. to some extent, there was a debate between justice sotomayor who wrote an assent about what's happening to young men of color with police practices in ferguson citing james baldwin and coates and michelle alexander and mass incarceration. that descent compared to fisher make a very nice pair of a debate. in some sense, i think sotomayor won the debate with kennedy

about whether race matters in that sense. mcdonald -- [ laughter ] -- not a person of color. [ laughter ] there are some folks watching usually at 2:00 in the morning on cspan who will not be as familiar with the mcdonald case as though of us in the 202 area code that read the "washington post." this starts with a businessman named johnny williams who had a nutritional supplement product that he wanted to bring on the market made of some kind of residue of tobacco materials. but he needed to get fda approval, he needed studies. he needed something that a state could provide. so not having ever met governor mcdonald before he was a governor, mr. williams -- what he was seeking was to have virginia university study and their researchers study the benefits of this nutritional supplement to have the state

health plan cover this nutritional supplement, and to in other ways use the state of virginia as a value didator of benefits of this. he pro voided awesome gifts. it really makes you think being governor of virginia is a good life. he provided free use of his ferrari for the governor to ride back and forth from vacations. the governor's wife admired the rolex that mr. williams was wearing, said she's sure her husband would love to have one and a $40,000 or $50,000 rolex was provided. let's assume for a moment that in exchange for these benefits, governor mcdonald arranged several state officials would be brought to the governor's mansion for luncheons.

he and his staff would make calls asking researchers to meet with mr. williams, otherwise providing williams with access to the virginia decisionmakers. he was convicted under the hobbs act with the jury finding that the actions that were taken by the governor were taken in exchange for and as a result of the -- provided by mr. williams. the supreme court unanimously reversed mcdonald's conviction and they did so by limiting the reach in the following way. the jury might have found that what mcdonald bought for his money was access, referrals, setting up of meetings with the appropriate officials. and that under the instruction, the jury need not have found that the governor was urging a particular result. maybe the governor just wanted

these university researchers to meet with mr. williams. and that, the court thought, to give a narrowing construction to what is an official act. so what you have here is benefits being provided to the governor, arguably the jury could have found in exchange for, and the government undertook to prove that, the actions that the government -- the governor took. but what the court said is, we're going to narrowly limit what counts as an official act. the governor did not make an official decision, nor need the jury have found that the governor urged a particular action or decision on the part of those to whom access was provided in exchange for the money. now, this may seem like a -- a somewhat shocking result given the level -- sort of