Transcripts For CSPAN Congress And NAFTA Negotiations 20180209

The last fewave minutes of this and take you live to washington or the role of congress in renegotiating the north American Free trade agreement. This is from John Hopkins School of international studies. [captions Copyright National cable satellite corp. 2017] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] nafta is significant because it is a copy hats of trade agreement comprehensive trade agreement and it is this template and model for the the unitednt that states negotiated, and it served as a template for certain provisions and bilateral trade negotiations. As soon as this year, congress will decide on what legislation to consider and amend on nafta. The will also consider ramifications of negotiating or withdrawn from nafta and how it would affect the u. S. Economy and Foreign Relations with partners, mexico and canada. Ande concerned Economic Leadership in the region, seat as a wherewithal to lower job losses. Key provisions may also be addressed in modernizing or renegotiating nafta. Which at this point is more than two decades old. Thatproponents maintain maintaining nafta and leaving economic relations with canada and mexico will promote a common valuesgenda with shared trade agenda. We are very lucky to have such a distinguished panel today. Center of strategic studies, i would like to introduce scott miller. He is currently a Senior Advisor at the Leadership Academy focusing on Leadership Development in private and public sector. Executive from 1997 to 2012, was a global director of trade policy for procter and gamble and let many campaigns supporting u. S. Free trade agreements and is a contributor to u. S. Policy for many years. Theas a member of International Economy policy. Deputy director of the Americas Program at sea i. S. , and he has 20 years of experience with the department of state and is an Intelligence Officer with the u. S. Army. His diplomatic assignments include the u. S. Embassy in argentina, barbados, and direct iraq. He is also a western hemisphere advisor for political affairs. A dandy the table, he is a Research Professor and director for canadian studies and a senior associate. He hasd research directed research, and is a member of the Advisory Board of the mcdonalds Lawyer Institute in ottawa, as well as a frequent mentator on comedian Canadian Media on bilateral issues. To start off todays mr. Miller, which elect a comment, and this is a question for the panel, which elect to comment on congressional oversight on nafta so far and wide as the role of trade promotion affect nafta negotiations . Thank you for hosting this event, it is a great pleasure being here. One of the reasons i found participating in this panel appealing is that it is a panel focusing on the right topic, the topic being how this Congress Deal with a trade agreement . A lot of coverage on nafta is about executive Branch Actions and takes the form of playbyplay. If you follow News Coverage on nafta, it is who said what, and what do we think about that. When you consider the role of congress you think about the endgame. The United States federal powers,nt has limited and one of those enumerated powers is foreign commerce, and it is article went in our constitution, the article dealing with commerce. Congress has the power to regulate commerce, and is the and called trade authority, or fasttrack, and to the executive branch to do the work of negotiating the treaty, ultimately a successful trade requires of any sort in implementing belt that is passed by both houses of congress and signed by the president. Congress,e deals with and because you are considering and game is a form of coalition politics. There has to be a set of elements to the agreement or changes to the agreement in the case of nafta that can garner the support of 218 house members and 51 senators, and the president. That is the endgame and important to think about and one of the reasons why the u. S. Position on nafta has been confusing. It raises the important question of what is going on and what congresss role is now . Congresss role has been somewhat behind the scenes. Theres a few reasons for that. We started negotiations from a u. S. Perspective with the president s promised to renegotiate nafta without a compelling coalition in support of that. You recall when the president decided to launch it and notify congress, most of the comments, sainte was hypocritical do no harm to the treaty. Saying do no harm to the treaty. You have a Republican House republican senate, republican president , and there are things they want to do together. Disagreed,hings they and there are tendencies in this congress to focus on things they want work on together, specifically tax reform. And regulatory changes made with the help of congress that by the administration. Nafta was somewhat controversial requestthis do no harm from congress or insistence from congress the kind of became a family conversation out of sight for a wild, at least for all of 2017 until the tax reform bill was signed into law. Now you are beginning to see, february 2018, youre beginning to see meetings. The members of the republican side of the Senate Finance committee had a meeting with the president in the white house on trade. And you will see quotes on that. All of a sudden congress is beginning to exercise its appropriate and constitutional ofe of not just oversight the executive, ultimately they have the power to determine what is and nafta. It is slow coming and frustrating for those of us want to see it sooner, but it is happening now. Us andk you for having posting this panel. Scott did a great job of outlining the constitutional responsibility of the oversight, but theres another dimension that is highly political. What i mean by that is that it started late but it up speed in late summer and early fall, and that is state delegations, governors and state legislators contacting their representatives and counterparts in washington and underscoring how important nafta was to their individual states. Farmtalking about exporting states and states will have a heavy automotive sector presence. There are 28 states left mexico as their number one export partner. Were talking about billions of dollars from corn, soybeans, grace from california, wheat, lots of different products. If nafta were to go away at mexico were to choose to engage in a trade war, though states in particular will suffer ba dly. Gop seatsvulnerable in play in those particular states, so you can connect the dots. You have on one hand the Committee Oversight and state governors calling the white house or congress saying if nafta goes away and we get into a trade war, my state is going to be hurt badly and we will lose seats in the house and a couple in the senate. That is important process started relatively late, it is an argument we should be for years, and it didnt start happening until last march when everyone thought the United States was about to withdraw. And then he saw a ton of activity from the chamber of commerce, trade associations, individual states. And also the canadian and mexican governments got into the act and realized they themselves should go to state governors and make the case for jobs tied specifically to their state and trait with either canada or mexico. I think canadians have visited every state and talk to every governor and said, them a chart, you can google right now and the datadians have the best wa on american jobs. Mexicans not as much, but they have played catch up and are doing well and it has had an effect. You were the one who inspired the panel and it wouldnt happen without you so thank you for that. I think you asked the right question and i want to echo what scott miller and Richard Miles have said with a couple of interesting twists. People remember trade policy history, president obama went to congress and asked for trade Promotion Authority in 2014, he was met by bewilderment. They werent sure why all of a sudden he wanted new trade agreements with asia and europe. A lot of republicans didnt trust obama on anything, so what they wrote is the bipartisan trade promotion and accountability act in 2015, and it was the most restrictive these of legislation on an administration so many conditions and strict deadlines that we had seen since the trade act in making 74 during the fordh administration administration. When donald trump became president , there was an open question, what he seek trade Promotion Authority to renegotiate nafta . And ultimately he did not. The authority granted to the Obama Administration was still granted to him, and he felt he couldnt get more leeway than congress had given obama, that he would be on a short leash. You might think this is all but what is fascinating is that as chaotic as we have perceived the Donald Trump Administration to be. They never missed a deadline under this bill. They have been faithful to its terms and announced things went theyre supposed to announce them. You have put out their thoughts and preliminary agenda and every thing is on schedule, and what that reveals is that the s seriousnessn about getting a deal and congresss role. A surpriseng that is to many of us when you look at what the administration set out in objectives, it is much more about canada than it is about mexico. The issues that Congress Cares about on trade are often things like lumber which affects a number of states from georgia to washington and oregon. We see gary, which is important in new york and wisconsin, getting a high profile we see dairy. Interesting is that the dynamic for canadians, they have been proactive in trying to engage inside u. S. Government, talking to states and so on. What is interesting is the politics in canada, i think the canadian and mexican partners are on the defensive because there is implicit accusations from the Trump Administration at nafta is the were still ever and we have to fix it and hes partners of ours are cheating. I think that trudeau government in canada took the view that it was going to stay calm, carryon, and get along with the Trump Administration to the extent it could not be allowed to be put on the defensive. As we saw the softwood lumber some ofntentious you may remember the dispute, the antidumping dispute between andand bombardier some canadian start to ask, we are being so nice to donald trump, icy beating us up all the time . All we are getting our trade penalties. Government thought they had to push back, and we act launched, which is a challenge the way the u. S. Calculates penalties and trade. It specifically deals with softwood lumber also goes to challenge a lot of trade remedy practice that goes back to 1974 and before the United States is going to be a tricky negotiation. But because it is such a broad challenge, it is also brought into a very negative way has brought into a challenge the way congress has written trade remedy laws. The u. S. Has written laws to protect industries and make sure cheatings treating a broad, they will defend the u. S. Industry. What is fascinating to me as canada chose to challenge them and challenge u. S. Law when congress is important to the determination of the deal. Thecriticism isnt towards Trump Administration or Obama Administration, it is a challenge in the way congress has written these laws. Canada is on both sides of this both praising congress and asking congress to do better. I think youll make negotiations tricky moving forward. How do you meet the needs of if what they approve is going to affect negotiations that are ongoing themselves . What will have to emerge is something that looks a lot Like Coalition politics. Some group of affected industries are parties are going to have to take a look at the negotiations as they stand and decide what they think about them as in terms of the effect on their businesses, states, markets, whatever it may be. And begin to form a set of coalition that will actively build support on congress. This happens every time you want to pass a bill in the house and senate, you have to do this work. It often emerges after negotiations start, so the fact it hasnt shown up now is not a surprise, but you there is usually an inkling of it beforehand. The u. S. Korea free trade started with a discussion and when they make comments they are taken with a fair amount of weight, but the emerging idea quickly built in to a substantial coalition that supported for your trade with korea. What has emerged get is a coalition in support with anything in particular in the United States. There is a coalition to not screw up nafta if i can generically characterize. This is funny because for 20 or so years, businesses and groups and firms across north america dealt with nafta as a fake the company, a set of commercial so naftafait acompli, wasnt perfect when it started, it isnt perfect today, but it was stable enough that people plan and build their business around it. You develop your Supplier Base and serve their customers based on those set of rules. Granted, so ar friend of mine who works for the farm bureau, an important so i asked david, what do we think about nafta . They left after think it is great. They think it is they admitted that for the last 20 years there is not a nafta cap on the website of the farm bureau, and that is a problem. The problem is now solved, that we have the coalition to not harm nafta has materialized. Bureau,o the farm website, it is effective, there has been corrective action of the people who basically administered a set of commercial rules for 20 years now understand the political dynamic and are making their voices known. Seeing if itd in happens in canada and mexico as well, and what hasnt happened is that there is the pure idea of what a final product might look like if it might garner a majority of the congress. That is the mystery and what has been difficult to predict the duration of the talks and what the potential and state what look like. With thee are behind agreement, but it is not surprising because we got into a pledge, not because anyone ever asked for this. I think congresss attention and concern about nafta directly related to the perception of having negotiations are going and they started last august, i think most people thought this will be a standard trade negotiation with a u. S. Trade representative doing his job. By the time you got to november and early december, we had three or four rounds by then, and the mood in washington was very dark and pessimistic. One of those rounds had done toughadly, very statements coming, and a lot of people i talked to in town, and im sure scott, youre for the same thing, and chris, seniorlevel people with good access to is going on were betting that we were going to walk. Which is sobering to hear from people in the know. I think that panic has subsided and passed, and there is general consensus that the montreal round, while it didnt move the ball forward, it also didnt collapse. They didnt collapse, and so the expectation is that the mexicans may actually show flexibility on ive heard from a couple of people who are trust. I think the worstCase Scenario now, maybe the best Case Scenario now, the negotiations after the mexico city round may 2018 andormant until 2019, so my point being is that that pessimistic. Can Congress Block negotiations to get out of nafta legally . Was the governing trade act . What sort of lawsuits can be filed . A lot of talk about the mechanisms available to congress to stop the Trump Administration, you dont hear that anymore. I think he means we, the United States, when walk away from this unilaterally. Which is a good thing because if we pulled out, nobody knew what happened, the last president was 1866, Andrew Johnsons presidency, nobody knows. It is remarkable to me, hearing from both of you, i remember when nafta was passed it was very contentious debate in congress in november of 1993. Vote, and all a right, we committed to a north American Economy and will hear this discussion Going Forward, but what struck me was how silent the Business Committee was. In just the farm bureau but general people who benefited from nafta but nobody wanted to be out front defending it. We have this situation in geopolitics were critics have a field day, everyone raises complaints about something, but the people who benefit from it keep silent. Canada, a lot of skeptics came around and saw a boost to the economy and it were happy. Vitamin mexico, they saw that nafta is at the worst, but u. S. Was the only place he sought that nafta negativity. That create an interesting political dynamic, though cap and his campaign helped bring the voices of the critics of nafta to our attention. We have been ignoring and a lot of people didnt like nafta before, the internet has brought the Business Community and beneficiaries of nafta back into the public square. And the businesses who have taught to their employees about why change affects their jobs i think it is a credit to canadians want help for sure, but also a lot of people didnt even know that community was benefiting or affected by north american trade, so that the Business Committee coming forward has been a nice side effect of what scott miller mentioned as a notion that the Business Community having taken this on board decided they are open to changing nafta. Theyre against withdrawal, so they better do something to talk about why nafta is not a bad thing. I think it has been tremendously helpful, and picking up what richard said, donald trump captured the sense that nafta was not good. Agenda, and an theres a tremendous amount of flexibility. If you can come up with an agreement that satisfies the Business Community, and it is a better deal, would probably say it is a huge deal, fantastic deal. Luxurious. Then i think you will be able to sell it. Then if you move forward of a era, i think that will be a net benefit, even if it came with donald trump driving the car. I think it will be good that we are engaged in that and maybe something to watch in the month to come. I think donald trump is a transactional president. He often seems to want if you want something for you, wants you to do Say Something nice. After or from he challenged the Business Community to say how it is helping, or give your employees a bonus, and that is something the president for a much wanted and encouraged. Question, i amhe looking for that sign that businesses, once they see what the final nafta looks like, are willing to support and say, like this deal, is going to be good for our business and were going to invest more in north america. If you look before after, it will make congress feel much more comfortable, especially the comes before midterms and 2018, which it could still do. Going on exactly what you said, the issue of nafta has been politicized recently and and as an electoral issue, trade is very complex. It is difficult to understand and summarize. How do you think the pull to politics of nafta, and how it affects you in your daily life, how is it affecting the actions that congressman take Going Forward . Is a great question. View ofive you the long this. From the end of the civil war until 1980, trade politics were amazingly stable in america. There is an amazing book that is the size of a doorstop, and it is a history of american trade policy. One of the points. Erwin makes is that trade politics are 1880ishingly stable until or 1985, somewhere in there. The reason they were stable is because the benefits of trade were focused on key factor endowments that were closely tied to geography in the United States. You go back and know where the industrial midwest was in 1880, the industrial midwest was the industrial midwest, in northwest ohio, they make ohio today, and up the road there is a town and they were the leading producer of steam locomotives in america. That is what people did there, wheat belthe where people grew crops. In the Financial Services that were important to trade from the beginning there was a stable political geography reflecting factor endowments, so every agreement was voted on a bipartisan but geographically specific manner. If you are a senator from new york, didnt matter if you are democrat or republican, trade was good for new york so you are for trade. Ewise for South Carolina because of the concentration on industries in their state of South Carolina. That all changed, it changed in three important ways. Because of technology, what happened is, because of the information of technology revolution, medication costs fell to zero. Longdistance phone calls a dollar a minute everyone members the itemized longdistance calls . What do pay for longdistance today . The cost of electricity. It allowed joe graphic spread, and a lot of things it allowed jogeographic spread. The benefits and cost to be at a micro level it was at a firm industry, itthan was no longer geography, big of South Carolina. There are still momandpop for competition in debating sectors, but at the brandime there is hanes which is a Global Company with headquarters in South Carolina, and likewise you have bmw and volvo as two major exporters, foreign invested exporters in South Carolina. And tim scott has a different view of how politics work in his state than his predecessor did because of that technological change. It is harder to figure out, and secondly, we weaponize politics. Was a matter of political competitiveness and republicans house for and likewise from a wet Senate Leaders and bipartisan fashion who didnt like and turned it into the house, so we now have two major parties in our legislator which has recognized politics, including trade. Stokes, andbruce research, there has been a shift where the party bases are at different places than the party voters. Lets call it Labor Movement and Environment Movement and posttrade democratic members here that, democratic voters, the more urban and younger they are, they sport freetrade. Listen torepublicans the chamber of commerce, and underneath it the more rural and older your members are, they are against trade. You combine Technology First of all we weaponize politics, second, Technology Geography to affect firms, and your party base is at a different place than your party voters. What that means is nobody wants to vote on a trade agreement, so it is a mess. To what nafta has the politically in the United States, but in terms of mexico the reasons for that are remember when mexico entered nafta in 1994, was the same year they entered the organization for Economic Development for the rich individualized clubs, and mexico joint the Global Economy economy. The global it started skyrocketing after 1994, and you can see that. What that means is that nafta for mexico is their ticket into the industrialized world. It has political significance of being in the ranks of the Top Countries in the world, and that is when it is interesting that the mexicans have elections on july 1, and precampaign season, what calling campaign, the mexican election laws are strict, so they are not precampaigning, dare campaigning. Nafta is not a controversial subject and is not being used by any candidates as a weapon or tool. Nobody favors getting out. Even lopez on the far left is not proposing that mexico get up and walk off of nafta. There is consensus that nafta is good for mexico. That was not the case when they entered, there was strong opposition from agriculture there that is gone for the most part. In a strange way, as chris alluded to earlier, donald trump says that the United States leaving nafta strengthened the consensus about the good value has come out of nafta, so he has the nafta a favorite in terms of its perception in mexico. I think that is the case in canada. If you remember the 1988 election in canada, the conservative government, the progressive conservative at that point was running to defend the agreement just negotiated up and that if they got reelected tickets yet ratified. Divided was quite this is precursor to nafta, and what is interesting is that if the opposition hadnt been split between the new Democratic Party and the federal liberals, you might have seen the election go the other way. 1911amous election in rejected freetrade of the United States, and there is feared that this agreement was eoing to transform the canadian economy, but the fact that it didnt happen after the wrenching election where everything was out in the open, and everyone was afraid that the border was going to be raised. Andda group more prosperous change the politics in canada quite effectively. To sport nafta and freetrade is to such a point that Justin Trudeau and his father, peter trudeau, went been a skeptic, one of the commission to take a look and see if this would be good for canada, and he was coming around before he retired. Now his son is quite a progressive supporter of not only trade itself and openness, but also is talking about an aggressive trade agenda to allow inclusion for women and Indigenous People and others and has changed the politics of trade in canada. I want to pick up on something scott miller also raised, which is one of the more interesting stories we havent begun to debate, not only on campus but the wider public. A few polls have shown that there is a generational gap over trade. If you go to older people, many who were baby boomers who were in their 40s and 50s when nafta came in, felt their economic prospects did not improve or for some lost her job and became trade skeptics and many of them ended up feeling ultimately that they voted for donald trump. If you look at this generation, they are more cosmopolitan, to have friends in other countries, my generation was penpals and stamps, it is much more fluid, and so because of that, they see openness in value and are not threatened by people on the other side of the border and see collaboration not only in the classroom but their future lives as being a normal thing. I think the trick for politics going back to congress, you have a critique of nafta coming from an older generation, but the people you are building nafta 2. 0 four is the millennial generation. That people in their 60s and 70s is not going to get their job back and they dont expected, the what they want is what america wants, which is a better life for their kids. Can we come up with a new nafta that goes back to the old nafta debate of closed borders . Certainly when you hear donald trump that is what you hear, are we going to get a agreement that is a net positive that will provide opportunities for the rising generation . Youe get to the latter, will see congress get on board because they will see something that will get them votes, not only does it make young voters happy but it will convince older voters that it will create greater opportunities for their kids, and that is the sweet spot. The actual borders. You mentioned the new nafta that they will be creating for the millennial generation mexico and canada have been trying to act causes and negotiations on security and environment issues, gender haves, social issues that not been negotiated in trade agreements like this, at least not in north america before. How do you see this affecting the possibility that congress in the u. S. Might want to verify ratified or exceaccept . There are three basic areas of work and nafta, one of which is the modernization of nafta. Freetrade. Style agreement to start negotiations today will have questions on labor and the environment. With equal prominence and full axis on the settlement, and that is what we do now. We didnt do that nafta, in fact they had side agreements after negotiations, and after 1994, there was zero commercial use of the internet, and today the way young entrepreneurs and Small Businesses go into and conduct International Trade is electronically. The digital trade is an enabler powerful,s is so particularly for Small Businesses, that it cant be ignored. There are other modernization elements as well, for instance, when we included nafta, there was an International Bar in mexico to the Energy Sector. Mexico, to its great credit has reformed its concentration, and theres a National Holiday monday industrialized oil industry, and now it is permissive of foreign investors. But because of the original band in the 90s, ban. Advanced renewable genius, and so, these are the modernization elements. The second is greatest hits. Softwood lumber. Sugar from mexico. Pharmaceuticals from canada. Dairy. Program of poultry and eggs. Theust didnt get done in original nafta, and then there is the third group were things have changed substantially and will like to improve them. Parse those out as a negotiator is the art of putting together something that would wind up appealing to congress. The greatest hits is the hall rdest to solve. The canadian told me we have been fighting over lumber for years. Where have you seen the most improvement from when nafta was first negotiated to now . What amazed me is the to which the existing rules of nafta were a great spur to innovation. For instance, automotive rules. The auto sector is large and politically sensitive and that goes back to the auto pact between trudeau and johnson. Auto politics have always been day, and what amazed me in the original nafta would call the big three involved in the negotiation of the rules for automobiles, and they were specifically trying to harm their japanese competitors. Competitor, they were trying to build a set of rules to build their supply chain. What happened in the meantime. All these foreign manufacturers look at the rules and said, that isnt bad, we can do that, and they did it. In this quarter in the United States, more vehicles will be produced by foreign automakers and the detroit three. First time in history. Everyone thought they would disadvantage for an Auto Companies at the start, but what happened is that these set of rules were stable enough that people build their businesses around it, and that immense creativity that is hard to measure in washington, nobody gets it. You can put it on a piece of paper and on a bill, but that dynamism is the product we have today. Lestert i have to defend pearson because he is the guy who did the auto pact with johnson. But trudeau got credit. Yeah, trudeau got credit. But what is amazing is we are being treated to an american way of doing business that people prefer not to think about. You talk about the sausage that congress is, and what happens in congress is that when something is popular and Everyone Wants to hitch a ride on that think that is popular whether it is a war funding bill or big budget. So you take issues that has nothing to do with the main project, but you attach them as amendments because the momentum is enough to get them through. Buto that all the time, certainly not a common practice in the canadian parliament. What we see in trade is that trade is important, that is a lot of money on the table and the Business Community gets behind it, and people with other concerns have tried to find a way to tie their concern to the trade agenda. I think that is what you see with canadians calling it the progressive trade agenda. With nafta, thanks to the Clinton Administration as they moved to ratification, there was a feeling of organized labor and the Environmental Movement that their issues workability ignored in the agreement. If the agreement went forward without their concerns, they would try to block it and fight it. For labor that make sense because labor was concerned about the effect of organized labor of growth, especially with nonunion firms. For the environment it was a bit of a stretch and felt the Economic Growth can only act to carbon in the atmosphere, and so on. The Clinton Administration realized what it was going to take to get a deal pact on to side agreements, the north American Commission of environmental cooperation and since that time, we have accepted that those issues blunt in the governing body. The Transpacific Partnership with have had elements built into the core agreement, but what has happened is that more and more of those sorts of issues that you wouldnt think are primarily related to trade want a seat at the table. Not necessarily because they are intricately involved in north american trade, but they recognize that this is important enough that they can hitch a ride and get something through. For example the First Nations committee and canada, which would call aboriginal communities elsewhere. Often not in the mainstream of canadian economy, they differ jobs and opportunities for people who live in their communities. The canadian government tried to reconcile with native communities, years of disputes and so on. They have added aboriginal communities to what they would like to talk about here. That we think it fits, as a practical matter, we talk about the politicization and how it affects things, the trade ability people are going to start reading things. Particularly, the calculus is starting to shift that if people get a deal, then people will say, wait a minute, could you do something for me . I think it is a trade issue or piece of legislation become a much more complicated legislation with a blot more lot more easy riders along the way. From mexicos perspective, wanting nafta did among other ,hings that it made investors particularly u. S. Investors, feel safer investing in mexico. Investment surge in was mostly in the north where you had a similar factories, that it is paying off now because 20 years later, mexico open its Energy Sector and the development in the last five or six years has been incredible. Mexico gets half of its energy from the United States, half. Most of that is natural gas. They just had a few days ago a successful auction in mexico for oil and gas. Of 525 million, eventually that will generate 92 billion of investment into mexico. I do think investors in the United States those quantities of moneys would be thinking about that if they didnt think mexico had achieved a level of Investor Security and confidence. One of thet is biggest side effect of nafta, increasing investor confidence. They had the leaders in salinas and had no way to deliver they werent engaged with the world. Trade,rought about free but for instance, there was no such trade as notice and comment rulemaking in mexico before nafta because of that chapter on transparency. What u. S. To go shaders accomplished and canadian negotiators was to read the procedures act to mexican procedures. Mexican operations. All of a sudden, not only is that notable to foreigners, regulations are published in advance and open for comment and the government has to respond to the comment. That is like breathing air in the United States, but really important in mexico. Ideaomestic firms where no what the revelations were going to be part of transparency, so is right additions about investment and security of investment and what it has done for raising Living Standards in mexico. We can to take this for granted. It is an american habit of forgetting how things might have been at some point. Assuming it is ok. One of the things the u. S. Does, love us are haters, is an american thing we are willing to be the bad guy to put a little pressure on negotiations like this to encourage partners to make a difficult decision. When of the contentious issues is canadian dairy. Canadiane idea of stalinist chickens. [laughter] idea that it leads to higher prices and limited supply is not particularly efficient but quite politically potent, and the u. S. Is putting tremendous pressure on canada because it is trying to hurt canada, it is willing to be the back i slept can i can make a change. Mexico, we are willing to be a source of pressure that can help reformers do something that politically might not be possible. That is one of our habits. Muchd a comment on how Political Support there is for nafta in mexico today. I think all sides of the political spectrum recognize that mexico is a different and better place as a result of those reforms, and difficult to implement. Thank you. Primeards to canada, minister trudeau said would nafta over a bad nafta. I think the Prime Ministers remarks go to a couple of things, canadians are happy with nafta the way it is. The other thing is many canadians feel that although it will take action to make it happen, that if nafta disappeared, and it would go back to the u. S. Canada trade agreement. It is still on the books, and a belt,l it gives them suspenders, a second set of underwear to survive this. Thirdly, i think the Prime Minister is trying in his recent speeches, including california and chicago this week to signal that he is not willing to cave on canadian interest and the a firm defender of canada here. This dynamic that the u. S. Has it canada with a number of trade sanctions while the trudeau government is trying to engage constructively with the Trump Administration has put clinical pressure on the Prime Minister at home. Seen robert b critical and perhaps split talks from canada and do a deal on the site and come back to canada later. That theesting canadians have they are not serious about a deal. That puts pressure on trudeau and yes to stand up to that criticism and that is what he is trying to do. Lot on the mexican election, but canada should have been election next year, and a poorly this year as elections in two biggest provinces in the country, both currently run by liberals, ontario and quebec. Harbingers of what happens in 2019, a very political year, and trudeau is like anyone else in has to play politics. You might have been to fairly for too long, and he might suggest he has the ability to walk away, just as trump has been saying. Is the u. S. Congress concerned with the mexican elections . Once they start paying attention to them, they might be, and i think it is starting to happen. The other big issue we have with mexico is security operation, particularly in the area of heroin and opioids. 90 of the heroin in the United States comes from mexico. It is a huge switch. Point as also a transit fentanyl coming out of china, which is used, part of the opioid crisis. Haveo, to their credit, been cooperative and tried to shut that down with u. S. Agencies. Mexican authorities have also been cooperative of try to stem the flow of Central American migrants transiting to mexico from the United States. I think lester the year before there were more Central Americans detained on the u. S. Border than mexicans, so there is a feeling by some in mexico that they are doing the u. S. Dirty work in stemming this flow. Those programs will be potential he at risk if lopez on the left takes power, if you were to win, he might say, why are we doing this . So theres going to be a level some of the given past statements and positions, but at the same time, i think there is a surprising amount of acceptance that it would not necessarily be a disaster for the United States for some of the reasons we have already talked about. Take energy as an example, those are constitutional reforms. They might try to reform, but it will be difficult, but he could slow the process down in the auction off blocks. So theres concern on the sector on that, on security operation, that could be an issue, particularly if he has a different philosophy on going after cartels. Everything else, the u. S. Officials i have talked to dont see this as an end of the world scenario. It. We have elections in november. I think that is one of the reasons the nafta talks are more constructive than six months ago. For me the turning point was the phrase of senator doug jones. When the republicans lost the most Winnable Senate seat in america, there was serious consideration by the white house, but lots of people involved in republican politics, and probably the president himself, realizes the loss of a said it majority, he loses the ability to confirm judges and all sorts of officials. Life gets a lot harder. If you look at some of the states where democratic incumbent senators are fading voters this year and trump won the state, many of states are in play. Heidi heitkamp. Dakota, aied north big win. 75 of exports to north dakota go to canada and mexico. That could have a constructive effect on things Going Forward. And on the politics, normally, the way the u. S. Government is perceived in canada and mexico is this group in congress that are caught up in domestic politics and say all sorts of negative things about mexicans and canadians because they bring up disputes there e about. Arf then you have the president who is the head of state who takes , who saysiew them this i canadians are great friends. We saw that over obama and bush and so far. Now we have a president who is unusual in that he is a combatant in the arena. He is willing to say tough things about canada or mexico. Theres no one in the american body politic to say the things you have to say that we have friends and allies, that there are things that endured. That endure. That has turn politics off. Thank you come and before we move on, does the congress communicate well with its colleagues in canada and mexico . Could that play a factor in the negotiations . One of the interesting things is mexican and canadian legislators, the Prime Minister, they are doing a lot to talk to congress. Congress in its own way has been focused on its issues. You see the ambassador for toada, for mexico talking representatives, passing on information, trying to engage. It is not congress that is communicating very well. It is that canada and mexico are unlike the british or the chinese. They have come to play a little bit in american politics. They know they have to talk to the principal players. It changed the way our International Relations are in north america. There much more intermestic. They are not too foreign. That brings us Something Different in north america that u. S. Relations and other parts of the world. The point and i would agree the canadian and a c washington probably has Canadian Embassy in washington probably has more facts and more at their disposal about the relationship with canada than anybody in the u. S. They have professionalized that relationship, and it cuts down to the district level. It is really impressive when you look at it. Consider in concept as a Government Relations effort. Canadianut what the embassy in washington has done a the past 10 or 15 years as real standard for how you do this job i think there job job. I think there are 36 million americans that identify as mexicanamerican or whatever. That plays a role. You have a fair number of hispanic in congress or staffers. The communications between the two bodies and at the executive level is very surprisingly good. One statement if you think about it, a couple days or a week ago when tillerson was in mexico city, at the end of their practice press conference, the mexican minister got a question about relations with the United States, and he said relations are actually better now than the Previous Administration from which is stunning to think about. The Mexican Foreign minister says that in mexico. He did not have to say that. That comports with things i have heard from officials, that the relationship line the scenes is surprisingly good, certainly between state and Foreign Ministry and at the National Security couple and those levels. I think there is a lot of communication going on behind the scenes that is surprisingly good. The same level of condition with canada and u. S. . Absolutely. One of the things that people often forget is there is a group where members of congress, u. S. Canada, or u. S. Mexico, and those troops meet once or twice a year, they traveled to each others countries, and this is legislators knowing each other. Beyond that there is the council of state governments, regular interactions between provincial and state legislators, governors, premiers, so that the political class, if you call it that, or the active politicians, regardless of party, have opportunity to interact with each other, and theres something about politicians talking to politicians which is like two people in the common business, that builds trust. They understand each other. Things are different, but they know what the other person is about. That has tilts a sickening that has built a real thickening of the trust. Some of you will remember a book that laid out trust as the foundation of economic integration. That has grown in north america on a personal level. If thatdoes go off does not go off the rails not, we can credit those interactions. At the end of each they can we like each other enough to do the right thing. Thank you. I would like to open up the floor for questions. If you have any questions, do you mind going to the microphone in the back . Thank you. Question regarding what canada has caused thats called called thepills poison pills. Procurement issues. Is there any coalition in congress that you see supporting any of the poison pills . So far, no, and it has been one of the more disruptive elements of this negotiation. Usually, administrations are solicitous in terms of seeking views of congress and beginning to build support early. Early on in negotiations, our u. S. Trade representative was an astonishing professional, and said to the house ways and means committee, i have an audience of one. There was some tension in the early days and particularly most of what is the u. S. Administration, what the trouble administration tabled as their headline demands in this case is the sunset clause, which everybody thought was nuts. You already have a withdrawal clause. They were talking if the numbers had not changed in five years that it would terminate. Totally opposed by anybody who values predict ability, which is who everybody which is everybody who has a balance sheet. Why would you negotiate an agreement cannot be to settle a dispute or anything . That was is our great the rules of origin, this created a spectacle that i have never seen which is the u. S. Decided to propose rules of origin on automobiles, which first, they could not explain the benefits to the United States of these roles when asked by trading partners, and, second, generated flyin from many fractures, the association of presenting autoparts suppliers. You had executives flying to washington telling their leaders that they hate these roles and cannot live with them and will hurt their companies. They were poison for everybody there was one more missing, which was government procurement. The proposal by the administration was were going to buy america and so are canada and mexico. That would be the headline. Ad what canada would accept proposition where they have a smaller share of u. S. Government procurement than qatar escapes me. Those were their proposals. Nobody liked them or agreed or supported them that i ran into, at least public a. Interpreted them in a dispositive way. I thought they were creating a narrative for withdrawal. The string of tweets announcing our withdrawal would say the canadians refused these totally reasonable proposals, so we are withdrawing. Things have changed. That has not happened. We are talking less about them. At the same time, the word poison pill was used in the last round regarding a canadian proposal. Who knows . Views as a buddy who trade agreements as coalition politics, i could not see how any of those added to the coalition. They mystified me. Whether they persist, we will find out. It is interesting. We have talked about when nafta was negotiated there was not an mercenet, not an ecom economy, but there was not a social media. One of the things that has made this fascinating is trade negotiators always have outrageous proposals, they go back and forth, they call things poison pills, but we have all ringside seats. Poisonnadians talk about pills, it was a signal that people were concerned with nasa the canadians intended, which is these things are designed to force canada and mexico to walk away. They are designed to blow up nafta. That got people concerned that the administration was down for destruction. I suspect they thought of themselves that they were making an outrageous offer and hoping for middle ground. But the way that played out in the wider world was not at all what they expected. Now they started to use rhetoric get some of the canadian ideas written i think poison pill probably is a constructive way of referring to these things, because it gets people alarm trip on those issues, and on sunset, in addition to the withdrawal clause, we every other meetings of what is called the north american trade commission, a free trade negotiation. We of done a number of updates to that without reopening the agreement on customs rules and minor things. We have the security and prosperity partnership. We have the working Group Structure for a while. We had both the be on the border and Regulatory Counsel with canada and the council with mexico as well as the 21stada 20s First Century border commission. You had things going on, and yet he took negativity in with the idea of those things we could basically beef up those ongoing negotiations and not have this predisposition to kill nafta. Of origin,ve rule the proposal does not make it pretty happy. Moved in removable parts. We have seen automotive suppliers going in and saying, if the goal is to raise the rule of origin higher than 60. 5 , the only rule that is higher than 50 than in nafta, if we are going even higher come and mexico suggested maybe 70 is tolerable, have you do it . Is what you would hope for because it will not come out of negotiators. It will come out of the industry. Government procurement, that has not in a concern, but maybe we will come up with a set aside, something. It has opened the door. On the dispute settlement, i do not know where we will go. The u. S. Seems to the you can resolve this in trade courts. In canada and mexico, courts tend to favor the government. So if you had to go in front of the canadian International Trade group and criticize the way the government applies the law, usually you expect them to side with the government. What is interesting is our judges tend to be skeptical of the government case. Court of claims, they will lose. In that case, maybe the americans were more confident this would sell because they were used to their own experience. The poison pill like which was unhelpful. The somewhat outrageous demands on the other hand might have been helpful in that they started a conversation and will come to a point where we hopefully have a deal that contains an element. At least those will be an outline of an agreement. I think it is working now. You have a larger audience. My name is chris. Im a current student. Securityt about the concerns and looking more broadly at congress, do you think that some of the debates about immigration, probably not daca, the wall, could be used to gum up the works . We talked about how trade agreements are becoming more progressive. Could some members of congress tried to sneak something in . Fory pelosi just spoke eight hours. Is that not realistic . Anything is possible. You cannot rule out what a member of congress will not do. It is very unlikely because i think to try to deal with something as politically sensitive and contentious as immigration within the context of a trade agreement, this trade agreement, i think you would have a course of chorus of various folks rising up saying that is not going to happen. You got the hardcore faction of the republican party, now not just against illegal immigration or against legal immigration, which is a huge seachange in republican thinking. It does not address the problem of immigrants who are here undocumented. To try to pull that into nafta negotiations is completely undoable. I cannot see anybody seriously propose that. Will somebody make a speech proposing that like nancy pelosi . Maybe, but i do not think it will go anywhere. Nafta had a special visa classic available to execute canadian nationals for work in the u. S. And not in in substantial numbers. I read this week the administration has discovered this provision. 2. 0 retainsif nafta that. We can talk about movement of people for business reasons being different than immigration, if there is an visa, it isuing of immigration, and it gets caught up in that net. For some reason, the lack of social media and no way the glaciations happened in the 90s, nafta contained a provision where there is a special visa class, im not how it survives, but maybe we will just forget about again. , it was interesting, the administration maybe change through rulemaking. It used to be a oneyear visa. You have to apply for your next year six months into your first visa. This is what we call a category. The Obama Administration extended the term of the tmds for three years, and also did something surprising. They extended the benefits. If you have a tmd visa, your domestic partner or spouse has a andt to look for work, youre workingage children have a right to look for work. That also makes a big difference. Generous visat categories because it was intended for professionals, people going back and forth. I will give you a counter argument. If i were running nafta, which is why im not running for office, i would like to see us having a debate about Labor Mobility. A Service Economy requires changing individuals across the border to do business, whether it is to fix the machine or talk partners about Collaborative Innovation come anything. Yet we have unlike europe, other places, we do not have a particularly good Labor Mobility system in north america, and we could he talking about that now. I will give you hope. If we have achieved nothing else, the idea that there can be a nafta 2. 0 opens up th the possibility there could be a nafta 3. 0. It was an agreement that was meant to be last for the ages, that was not written in a way to can be evolved or updated. It was something we did as best we could on the margins. We always said, especially academics, great ideas are out there, but we cannot reopen nafta does if we did the whole thing will blow up. If we get to 2. 0, theres potential we can come back to the table and have a constructive discussion about how we meet the Labor Mobility of the economy that is emerging. I would love to see that. Good afternoon, gentlemen. My name is chris as well. Im a student here. I think you answered this question, so i will sort out there do put a finer point on it. You exclaim how nafta institutionalized many regulations that benefited states, and by states im in countries, personal businesses and their interests, positive circumvention of Political Considerations come if you will, within their respective states. If nafta were to dissolve and trade resorted to wto terms or other instances is there a danger states would not remain adherent to the previous regulations so long as they did not pilot violent other terms of trade, or another way to put it, how would industry respond . Do you believe industry is powerful enough to sellregulate to maintain changes after these government and inspired trade terms . Interesting question. I think what is interesting is and i will unpack a little bit the way the u. S. Does trade agreements, you think about nafta, it is not a treaty. It is an agreement negotiated by the executive with the legislature translating into statutes. Those statute Grant Authority to agencies to go about rulemaking with for example, customs does a rule that says if your product needs this rule of origin, then you are eligible not have a turf on your spirit that is the mechanics how this unpack. Regular nation as an area regulation as an area of government is fascinated in complicated. Any of the regulations we have on the books in the United States, canada, and mexico, our written away they are written because an industry really wanted to do what we are talking about with the Auto Industry favor, write rules that the way they do business and give them a leg up on competition. That is the way in which we get often complicated, counterproductive and economically inefficient set of regulations in our society that, to become hard to change. And love people to see the benefits of harmonizing their approach. So it made sense for them to get rid of barriers that got in the way of their businesses doing well. We had liberalization. This is important i have to say in canada. One of the things that is funny about canada i love the canadian stash is that they do not have the same internal Market Structure that the u. S. Does with the Commerce Clause that limits interprovincial trade barriers. Many provinces have rules that make it difficult for workers in newfoundland to work in alberta or vice versa. It has been a story for canada going back to confederation 1867. How can they knit together in National Economy . Them anve incentive. We will do it to line up the way do americans do it, and if that have its biggest lineup with quebec, we have not conceded anything, but were still doing something that is more economically efficient. It has been as result of that for some improvement. I do not think industry would self regulate in the sense. Nobody wants to pollute like mad. Were not worried like that, but at the same time businesses feel that regulation is their job. They will behave themselves, but they are worried about that other business that might cheat and give them a disadvantage. If you think about the rhetoric that donald trump has used with regard to trade him one of the things that animates his vision of what other countries do is they cheat. They do not follow the rules. Theres concern about that with china. He uses that language. In terms of international regulation, if nafta were to fall apart, in terms of domestic regulations have there would be a concert with enforcement of those relations making sure without nafta protections we do not have cheating. My hope is it does not come to that. One thing to add, you would have an explications game, if nafta were to go way, if mexico did nothing, investors doing their risk analysis were to assume it is possible in a way it was not before, so that he might curtail or totally forgo a new investment, if it is infrastructure investment, the gloves are off now and who knows what is going to happen. The mexicans would not have to do a thing, the expectations about what they could do might change, and i could be very dangerous. At a practical level, yes, certainly eliminate nafta would increase frictions. Just terrorists alone would go up. There are a lot of frictions that exist. Not a good idea. It is the law. The further you are from the object you are moving, the more expensive it is. Currency rates fluctuate all the time and become barriers. I think there is a worse off soon option of terminating a nafta which would be a zombie nafta, one that is neither dead nor alive, because we are not committed to the existing nafta 1. 0, and we are not all the way to nafta 2. 0, because the risk there is it deters decisionmaking. If you eliminated nafta, companies would still be able to make decisions. You would know what your commercial environment is. You might not like it, but you know it. In the world of zombie nafta, you do not know. I have friends at toyota who isl me the tacoma pickup successful, they are selling every truck they can make. It is a great product. Im happy for them. They have two production facilities, one a mexico, one in the United States. A zombie nafta would make the problem hard to solve. Another example, one of the things that a lot of environmental groups were concerned about took place after nafta. There were some mexican plants that got into the business of automotive paint. Automotive paint you can imagine is very metallic, a lot of toxins. They use a magnetic process to get it on the car. If you do that in the u. S. , or canada, there is a sophisticated set of regulations that you have close the facilities so nothing gets into the air. Mexico had not been a place where automotive paint was done. It had not been a big part of mexicos contribution to the north american Auto Industry. Some suppliers moved in and started moving in this direction. Governmentican reached out to canada and u. S. And said we are starting to see this activity. We do not want to be the bad actor, but we have never seen this before. What is the standard . The conversations between regulator straightforward, that this is what you need to ensure, the minimums, this is what we found in our experience, and mexico went ahead and brought those standards in, and we do not have a cheating experience. Going to your question, if we did not have nafta, if we ended up with bad will between america, canada, and mexico, you do not have the opportunity to learn from each other and make sure that you have set good standards that protect everyone. And i think one of the things we never acknowledge about nafta is it has encouraged us to talk the each other at a governmental level, and nobody writes about that, that is one of benefits we would lose if we lost last nafta if we lost nafta. I am with the council of state governments. About the talking congress and then we went off into this big administration talking about nafta. Does the administration you mentioned the u. S. Has the but doe of one, right, americans know what they want . It sounds like we want a better nafta, and the things keep changing, and the canadians and mexico, what the hell, where are we today . So that is part one, and the other one is to yank this conversation back to the title, congress, and maybe that would be a good way to end it. When it comes back to congress, where are we . Great questions, and i think that is one of the mysteries of the current nafta negotiations, is no one i talked to i talked to a lot of people both in the government and on all sides of this in the United States nobody has a clear idea of what the endgame is. Nafta is complex. It is as if we are going up to a very complex advanced military helicopter, and you have technicians working on helicopter, a politician arrives and shouts, they can fly faster, ok, and they are like, do you know what we are doing here . In some ways our politics are disconnected from the actual operation of the the agreement. Commercially, nafta operates as a set of rules that has this incredibly rich texture of a commercial ecosystem that is a lot like what goes on in an advanced helicopter, and it is too context to understand. We had that disconnect that seems to persist. I think that we got into this because the president promised to do it. He was not the first candidate to ever promise to renegotiate nafta. I remember the ohio primary in 2008 where both candidate Hillary Clinton and senator barack obama both promised to renegotiate nafta. The promise has been around, but actually do it, absent a coalition that understood where there is a general agreement about what needed to be fixed and what the potential solution might be, that has never happened. Ok, because of that we had this mess that we are in now. Where does that end . Probably in failure. One of the easiest things to happen is for congress to ignore an implement the bill to fail. It is the story of the tpp. The reason the Trump Administration could kill the Transpacific Partnership is because the Obama Administration was unable to get a to congress. That is a fact. There are a lot of reasons for that, and there are always reasons, but is actually quite hard to get that coalition built, p have do be introduced and you have to be able to state clearly what it does and make a political case for. We are nowhere near that now. I am mystified, and i fear is a zombie outcome. No, i think we have a couple models. Right,te, you are sometimes you bring something very conducts from the public. My guess is most of the American Public will sit back, watch nervously, and pass judgment once they see the final result. We had to bank examples and 2017 that went to Bank Different ways. One was the congress attempt to follow up on another of the president s promises to get rid of the Affordable Care act, repeal and a replace obamacare. This is a commentary, but affects a lot of peoples daily lives, either directly or through their family. The politicians went back and forth and came back with the various solutions. None of them proved passable, and ultimately the copley the public keeps score on the attempt, because it looks reckless, looked like it was going to hurt people, they were not talking about placing it was something that the public would say you came up with a good substitute. If we go down the road of a repeal and replace nafta and the replace it is not good, it may not get to congress, but it may keep score on those who perceive idea how can you talk about pulling the rug out from under us and not give us something that works . The other possibility is it works like the tax reform bill. Tax reform is also enormously complicated. As the president proposed it, it was not what happened. The congress had to make changes. They got a coalition to get a three. Passed, opponents were critical. Opponents were dubious about it, and it seems that a lot of people have come around and said, it is not perfect, but we can live with it, and maybe some people are more enthusiastic, but life goes on and we go forward. Does the complex nafta 2. 0 look like a reckless Obamacare Repeal and replace, or does it look like a complicated what piecetely survivable ok of legislation like tax reform . My guess is foremost congressman, they would prefer the latter because they want to be winners and they want to look like they did something good and they are all thinking about reelection, so they are going to want to make it a big like that. Whether this administration of this process could produce that, i do not know, but i am hopeful. When canada and donald trump wanted to give an example of why nafta was such a terrible deal, time and time again he stood in front of factories that either had been shuttered or war about toshudder or lost jobs mexico, and it could be that congress in passing the tax reform which is partly responsible for some of those jobs coming back, whether that is real or sustainable, i do not know. It may actually address the one thing that trump came back to again and again, which is jobs, jobs, jobs. If the tax reform has that effect of pulling some of those manufacturing jobs back to the United States, it could be that is good enough for trump. Thank you. And that is all the time we have. Thank you so much for coming today, and if you have any more questions, feel free to come in afterwards, but thanks so much for coming. [applause] [captions Copyright National cable satellite corp. 2018] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] prime time coverage tonight includes a discussion with several africanamerican women journalists, including april ryan, on their experiences covering the Trump Administration. From George Washington university, 8 00 p. M. Eastern on cspan. Discussioncspan2, a on u. S. Immigration policy and the human toll of border crossings from the university of michigan f