Silicon Valley Field Hearing on Digital Trade, Wednesday, September 25, 2013

The USITC is an independent, nonpartisan, factfinding federal agency. One of its responsibilities is to provide objective information to key U.S. trade policymakers on matters related to tariffs and trade.

The USITC conducts factfinding investigations at the request of the U.S. Trade Representative (who is the President’s cabinet-level official concerning international trade matters), the Committee on Ways and Means of the U.S. House of Representatives, and the Committee on Finance of the U.S. Senate.

The investigations yield reports that are provided to the requesters for their use in considering trade matters, developing trade-related legislation, and conducting international trade negotiations with other countries. The reports are published and released to the public, unless they are classified.

To supplement extensive staff field work, public hearings in Washington, DC, and other investigative activities, the USITC is conducting two hearings in the Silicon Valley to obtain information for two separate investigations.

The first concerns Digital Trade in the U.S. and Global Economies (Inv. No. 332-540). Requested by the U.S. Senate Committee on Finance, this investigation:

• will report on U.S. domestic and international trade in products and services that is facilitated by use of the Internet and Internet-based technologies; and
• is the second of two USITC investigations on this topic. The first investigation’s report was released to the public in August 2013 and can be viewed here. [link to first report]

The second investigation concerns Trade Barriers that U.S. Small and Medium-Sized Enterprises Perceive as Affecting Exports to the European Union (Inv. No. 332-541). Requested by the U.S. Trade Representative, this investigation will:

• report on trade barriers in the European Union (EU) faced by U.S. small and medium-sized businesses, particularly those who have exported to the EU;
• identify barriers by economic sector or by special issue;
• include information about barriers in individual EU countries; and
• include views of small and medium-sized businesses about ways to increase their participation in transatlantic trade.

For the Digital Trade investigation, the Commission is interested in particular in obtaining information and views on the following:

• the value and potential growth of digital trade;
• the contributions of digital trade to economic growth, job creation and employment, and innovation;
• the implications of digital trade for businesses and business practices, including business-to-business and business-to-consumer transactions, online purchases and sales, and production processes;
• the effects of digital trade on output, sales, productivity, and consumer welfare;
• the impact of digital trade on small and medium-sized enterprises; and
• international trade barriers and other obstacles to doing business via the Internet across borders.

For the Trade Barriers investigation, the Commission is interested in particular in obtaining information and views on the following:

• general trade barriers in the EU that constrain exports by small and medium-sized businesses of both goods and services;
• trade barriers in the EU that constrain specific economic sectors or any related special issues;
• specific trade barriers in individual EU countries;
• distinctions among the identified trade-related barriers – which barriers have the greatest effect?; and
• suggestions on ways to increase exports of U.S. small and medium-sized businesses to the EU.

Because we need your input. Hearings conducted by the USITC are a vital part of the investigations the Commission performs. The purpose of USITC hearings is twofold: they provide the USITC with an opportunity to gather information, and they provide you with an opportunity to appear and make your views known.

Digital Trade: Digital trade affects the U.S. economy in many ways. This is an opportunity for you to explain how and why digital trade is important for your company and the U.S. economy. Speaking directly with you provides the Commission with a unique opportunity to understand the role digital trade in your company, how it affects your business practices, and how it links and contributes to the broader U.S. economy. The Commission is also interested in hearing your views on the nature and impact of foreign barriers or other impediments to international digital trade. Additionally, the USITC plans to send a survey to U.S. companies about digital trade, and this hearing provides an opportunity for you to help the Commission finalize the survey (a draft of the survey for public comment is available at www.usitc.gov/332540comments).

Trade Barriers: The real-world views of small and medium-sized businesses actively involved in exporting are crucial to the study and to the USTR. We can only hear those views by speaking directly with companies like yours. Some of the USITC’s work in these investigations will be groundbreaking research, and much of it must be gathered first-hand. The USITC will conduct its research through a variety of means, including interviews with government and private sector entities, discussions with business organizations and business leaders, site visits, questionnaires, and its Washington and regional field hearings.

Information gathered from hearing participants and through written submissions will become part of the official records of the two investigations and will be used by the USITC in preparing its reports to the U.S. Senate Finance Committee and the USTR on the issues covered by the investigations. The reports will ultimately be released to the public.

A brief synopsis of field-hearing related information follows. The Secretary will provide witnesses with more detailed information on hearings procedures when they are entered onto the witness list.

USITC hearings are formal proceedings. They are on the record, and a court reporter is present to create an official transcript. Participants swear an oath that the information they are providing is true and complete. Hearings are open to the public; they are often covered by the news media.

Commission participants in the hearing include the six Commissioners, who may have a staff member assisting them; the Secretary to the Commission, who conducts the hearing proceedings, swears-in the witnesses, ensures time limitations are observed, and ensures that the official record is properly compiled; and the investigative staff, who are Commission employees charged with managing the investigations.

All witnesses must be sworn in by the Secretary prior to the hearing, and any copies of testimony that they bring will be distributed to Commissioners and staff by the Secretary.

The Secretary will call the room to order at 9:30 a.m., and the Chairman will open the hearing with an opening statement. The Commission will hear testimony from any Congressional, state, or local officials who wish to appear. The first witnesses, who will be arranged in a panel, will then be called. Each witness will deliver his or her testimony within the time allotted by the Secretary (this information will be provided to participants in advance).

At the conclusion of direct testimony from the panel, the Commissioners will ask questions of the witnesses. Questioning occurs in one-hour rounds, with each Commissioner having 10 minutes per round for their questions. There will be as many rounds as necessary until all Commissioner questions are asked and answered. The investigative staff may then ask questions of the witnesses.

At the conclusion of the staff question period, the witnesses will be dismissed and the next panel of witnesses will be called.

Witnesses may be asked to provide more detailed information or address other questions in the form of a post-hearing submission. At the end of the hearing, the Chairman will announce the deadline for responding to requests for post-hearing submissions as well as page limitations, if any.