Be part of the discussions today. And theres so much interest thats already been generated about this program. We have over 100 people with us today in person and many more watching it over the web. Dentons is pleased to be presenting this program, and with its presence in the u. S. , canada, and mexico, we have a extensive experience at the critical intervention. Many practitioners here to share their experience and perspectives and were happy to be joined by key members of industry and governments who can also add their valuable perspective. And with that, im going to turn things over to scotty greenwood, the colead of our federal practice. Thank you. Welcome, everybody. We are really delighted to have you here. This is what its all about for us in public policy. Bringing together policy leaders, thought leaders. Our clients. Our prospects. Everybody that is looking to understand what could happen with this really important north american economy. And so youve got the agenda in front of you. And wed like for you to interact as much as possible. One of my favorite parts of being at this firm is the terrific people that we get to work with, and im going to introduce gary, who many people know as canadas former ambassador to the United States. He was also premier of the province of manitoba. Hes a rock star, a hard act to follow. You can just ask the ambassador who has had to follow him, or others who work with him in the embassy. Minic smith represents the province of ontario, our friends from mexico, Everybody Knows gary, and so with that, gary, well ask you to introduce the group. I believe general leslie is in the building. You can start and well get him going. Thank you. Thank you very much, scotty. Please, i hope you get better soon, scotty. And you can have on our recommendation either some tequila from mexico or bourbon from the United States or good old crown royal from manitoba, canada, and we would strongly recommend that for medicinal purposes here at this discussion on trade. It is an honor to be here with all of you, and im going to im not going to rag the puck. I understand generalle leslie i in the room or on the way. I think hes coming. Im going to introduce my good friend from mexico, and the our panelist today. The gregg Gregoria Gonzalez who is a Founding Member of monterey law practice for dentons. Hes an expert in corporate law. Hes an expert on cross border financing. Hes a Legal Adviser general, good to see you hes a Legal Adviser on energy, and not only will he be able to answer the tame politically correct questions i will ask, but well also later be able to answer your questions. We have just been joined and thank you very much, general leslie, Andrew Leslie who has been elected as the member of parliament in 2015. He is the parliamentary secretary to the canadian minister of global affairs. He is a former general in canada, a military leader in canada. He has worked in that capacity as a in various theaters around the world, and, of course, working with military in canada. He has served in places like afghanistan, very dangerous places, but also places i know from my experience as being a former ambassador that many of the people in the Administration Whether it was the Obama Administration with general jones or the administration now with general kelly, people of in the military leadership in our two countries havenenen served together. They are bonded by their skill, their bravery, the command and control which they bring to their jobs, and also the work on behalf of our shared Democratic Values here in north america. So were very pleased. I dont know the Prime Minister i know is meeting with the president. So we want you to reveal completely all the agenda items hell be raising in the oval office simultaneous to the meeting going on here today. I want to start with our friends in mexico. Just a lot of media speculation. A lot of punditry about the president ial election in mexico in the summer of 2018, how do you see that operating as an environmental condition . Will it affect timing or substance in whats your read of it . I want to know your read for monterey, not our read from some other community outside of mexico. Yes. Well, thank you for being here. And yes, this is a very sensitive timing issue. It has been expressed since the beginning of the negotiation by the Mexican Government. When this administration was elected, one of the first statements of the Mexican Administration said if were going to renegotiation nafta, we want to do it quickly and 2017. We dont want it to spill over to 2018, because were getting a president ial election. Mexico runs a sixyear period presidency. That is not reelection is not allowed, so its a completely changed of political environment. So were mid october in the negotiations, and the status we already know. Its difficult that the negotiations will complete, be completed by the end of this fiscal year. Right now the mexican parties are starting to select the candidate. Its like an internal process. But its getting a lot of noise. And, of course, nafta being a key element of the mexican economy, it creates some distortions in the public dialogue. Just a legal question following that. If there is a i remember in tpp, there was an agreement from the former president , and then the existing president to get to the table with the United States along with canada and japan to go from eight to 11 countries. Does this if there is an amendment to nafta, or amendments to nafta, does it have to be ratified in our parliament, or in your assembly . Does it require approval from the states, or is it a president ial administrative decision . Yes. Since nafta is a treaty and according to mexican constitution, it ranks just below the mexican constitution in terms of hierarchy of loss, so it needs to be agreed by the executive branch, of course, and then has to be ratified by the senate who has the exclusive authority to ratify treaties. And weve seen now in the negotiations that some of the senators are not just playing a backseat role. Theyre actively making statements about the course of the negotiations. It further complicates it from the mexican point of view. Thank you. It doesnt need a twothirds vote like pan exdid with the constitutional amendment . No. Straight up and down. General leslie, welcome. Hope all your meetings are going well in washington. Would you care to tell us how well theyre going . I think personally im learning a great deal. Full disclosure. The main reason im here is i do whatever scotty says. We all do. Were here obviously with key advisers on the nafta file. Its been a great morning. We had really good interactions with the ways and Means Committee of the house, and a lot of salient points and discussions were initiated. I see an awful lot of common ground. Secretary, the chair of the committee kevin brady, who we know, at one point was proposing a border tax which, of course, canada and mexico and other countries have argued would not be in the trading interests of the United States. Did that topic come up, or has so far now it doesnt appear to be in any of the socalled tax reform packages in the congress and at the white house . Didnt come up this morning. Its been discussed in corridors for some time now. A couple of facts on the table. Make sure were speaking from a common framework. So canada is the u. S. s largest trading partner. We buy more stuff from you than china, the uk and japan combined. So the idea of a cross border tax when you have cars, for example, after 23 years of na a nafta, the system has reached a state of efficiency and productivity and specialization on both sides. All three sides of the border if the border can have three sides. I think you know what im talking about. A car can cross the canadian u. S. Border, five, six, seven times. So cross border taxes wouldnt make them cost effective. You have to think these things through in terms of their implication. The second and third are the consequences. And that cross border tax has been out there as an idea for many years. And it usually, the larger Economic Impact is further analyzed and tends to just stay where it is now. Thats good news. Thats very good news. Gergorio, the whole issue of labor, the environment has been discussed in the tpp negotiations before, during, and after, and now is an issue that i was in detroit a week ago on a border meeting, and that came up from folks from the United States. What is the position of the government of mexico on the principles. We wont have the same wording as tpp because the president is opposed to tpp. But the principles contained within the tpp agreement, or other principles on improving the enforceability and the efficacy of labor and Environmental Standards within the three countries. Well, this is also a very sensitive issue for the Mexican Government. It is very important to point out that at this time there is a country wide discussion about a constitutional amendment to change and to modernize labor laws nature process is on the way. It also has domestic remember repercussions. Whats important to point out is mexico is part of the system and complies with the rules and guidelines and has been in compliance with all those principles, and also in tpp, they agree to this high standards of labor. Good. The general leslie, the you would be a general still here. Its okay. Its a prenominal. It is. It was our experience over the years that, again, the military relationship between canada and the United States, between the pentagon and our military and canada was very strong, and you developed in your leadership position strong bonds between the individuals that had those various leadership positions. I also know that when we were asking for either hydro president ial permits or Oil President ial pipeline approvals, that the pentagon was the first of the nine agencies to sign off and say yes to go ahead because of the Energy Security that potentially represented for United States. In these trade discussions, in nafta, we hear a little bit about some of the grievances between our countries. Has there been any discussion at all about the ability in the north American Neighborhood to have Energy Security between our three countries that would include renewables, Energy Security, oil and gas. In other words, we wouldnt rely necessarily in the future on petro dictators. We could rely on our own neighborhood to have a multipronged approach to Energy Security. Currently the United States enjoys a trade surplus with canada. In the energy field, its 37 billion a year. So what we represent to the United States is a safe, secure supply which as essentially unrestricted, unlimited flow. And well established networks that are already fairly sunken into the ground or traveled just above it, and thats energy which the United States has to have. On the west coast, the energy flow is mainly west coast, and of course, central canada. Its mainly from the north to the south. On the east coast stuff comes from the United States up to canada. In the main, though, what we do is we send relative states of crude down to you folk. You process it. You refine it where the greatest markup exists and you either sell it back to us internationally or consume it yourselves. The relationship with the pentagon and National DefenseHead Quarters is in my opinion, the Strongest Military relationship in the world. And its its bonds that have been forged in blood. Of course, going back well over a century. The amount of exchange and cultural affinity that armed forces folk and canada and the u. S. Have as a result of direct experience is quite something to see where we have literally thousands of canadian men and women in uniform in the states training and up north doing the same, especially in the winter. Im not sure how many of them actually enjoy it. But theyre very enthusiastic before they start the training. I would say that relationship is very firm and secure. I dont think theres any discussions on any level about any significant tweaking to it. I know that i was in the room for the last visit when the president and vooims spoke about reducing the barriers of trade across the border, and the whole vision, if you would, of thickening the outer perimeter so you can thin whatever process regulatory systems in place at the border to speed up the flow was talked about at some length by those two gentlemen. In turn in our last budget we indicated a 73 increase to defense spending. Which is pretty sizable. Its pretty sizable. So thats to buy new capabilities and stuff we need. A long winded answer to a short question. My apologies. Thats a very important part of our neighbor, is north america. I think its extremely important. The general mentioned about the issue of the Energy Chapter. The energy area in the nafta agreement was not you wisely protected tequila but didnt offer energy, as i recall, not that any of us as consumers of the fine product object, but the amendment to the constitution in mexico, there are many that believe that it would make sense to put that in the new nafta, an amended nafta. Theres energy in the u. S. canada trade agreement but not as explicitly in the nafta treatment. The constitutional changes there to allow for private investment up to a certain percentage in energy in mexico. Is that something the u. S. And Mexican Government and canadian government is talking about as a potential amendment to the nafta agreement . Yes. We have to keep in mind that when nafta, the reason nafta was goesh negotiated, the entire Energy Sector was a monopoly of the state. At the time there was a push from the United States to include that into the regional nafta for this constitutional impediment. It was not included. However, just recently under the Current Administration, it was a sweeping Energy Reform that included constitutional amendment. Mexico now is totally open in the emergency sector for foreign nrsment. It was not. The position of the Mexican Government is to accept an Energy Sector. I think its not been totally shared by the United States and canada. I think that my view of that is it would be popular. Were dealing with a populous argument. I view the populist argument of having your oil from canada and mexico and gas from the United States and hydropower, et cetera, is to be more reliant in our own area and less required to rely on socalled petrotick day or thes is a populist idea we should be entertaining with more enthusiasm. Its an energy grid, and eventually you can see a vision wherein it will be north American Energy grid. Right now i was in an energy grid drira couple weeks ago. You have smart men and women sitting at consuls. Im not sure, but this power may have originated somewhere in northern kquebec in a water fal thats doing the lights in this room. Its seamless, and theyre figuring out based on draw and brownout periods and all sorts of other things. You try to pretend to know what theyre saying. Theyre good at what they do. Its seamless as to where the energy is coming from and how its managed and manipulating, incorporating different feeds to result in an efficient use and distribution of power, all down the eastern seaboard. Its quite something. Now, were dealing with the people that are against nafta are using populist arguments against it. Do you think we should be as populist on the advantages of nafta starting with energy . I should point out that on energy, the position of mexico has changed dramatically from 23 years ago. And one of the purposes, the main purposes of the Current Administration to push a full Energy Chapter of nafta is to lock up those changes and prevent upcoming administrations for undoing the Energy Reform which was very debated in mexico. It meant for certain sectors of the mexican society. Thats why they believe by having an Energy Chapter in nafta will lock up that Energy Reforms. On behalf of my nation, ive been to a variety of places around the world. Everyone has different life lessons they learn from wars or peace keeping. One of the things i better appreciate now that im slightly older and more experienced is its not a good way to improve something by blowing it up or destroying it. Its pretty simple. Especially something thats complicated, has taken years to reach maturation and has resulted in benefits, of course. But when you have those benefits which are the product of very closely integrated supply systems which provide value added, just think through the consequences of the desire to make a bold statement and what that means, and whats your plan b . Whats plan b, by the way . So what were focussed on as a nation is seeing the good in nafta, seeing what has to be what should be changed. What should be modernized. What can make to, quote, Vice President pence, what are the win, win, win scenarios which he said with our Prime Minister standing beside him when they were both in rhode island two and a half months ago. What are the win, win, win circumstances . When you go into negotiations, you should know where you want to go, and im hosting this magnificent city to which ive been often you folk asked when im looking at the americans in the room, you asked to renegotiate nafta. So whats the win, win, win . If not, whats your plan b . Yes. The on behalf of the United States [ laughter ] stay tuned is my only answer. Were missing a u. S. Well have u. S. Representatives. Well have speaker gingrich here today, and secretary of commerce wilbur ross here today. The question has been banked by james moore in the discussion with the secretary of commerce. Im sure he will propose it. The issue of dispute resolution mechanism. I should be very careful here. Now im working parttime for a law firm. And dentons, the finest law firm in the world. And i would say my read of getting rid of some of the dispute resolution mechanisms would be that we would end up resolving disputes in the courts, in the World Trade Organization and other areas of legal jurisdiction. And it seems to me that for a person or an administration promising to drain the swamp, it would actually not it would have the opposite impact, the unintended consequence may be different than the proposal. So far we made these arguments to the United States, and our good friends, the United States, and what is the what is the reaction at the table or in the public discussion on having a predictable, affordable, decisive resolution dispute mechani mechanism . Mexico . Yes, i think its important to have these two separate dispute resolution mechanisms. State to state mechanisms. Nafta already contemplates that, and then the state investor. Dispute resolution also should be basically stay cities. I think there is some inconveniences to have Domestic National tribunals to resolve that kind of disputes. I think its important to have an International Body to resolve the disputes. General . So lets talk about a completely hypothetical case involving bowling and boembar. Bombar jay produces a neat aircraft with new technology. It has all the advantages of new technology, faster, lighter, more cost effective, and another company, a u. S. Company, boeing, for example, says we dont like that. Were going to put counterveiling duties by approaching the u. S. Department of commerce saying whatever they said, and 220 duties are assigned with another 80 for counter dumping. So 300 duties. Wait a second. Boeing didnt submit a bid for the aircraft type. Because they dont have an aircraft which meets the qualification of the customer. Who is american airline. So they didnt submit a bid. And one of the understandings is you have to show material damage. How do you show material damage when you didnt submit a bid . You didnt take part in the competition, and you dont have an aircraft which can compete. And the answer is, well, you cant. So why did they really do it . This completely hypothetical situation . Because boeing is looking down range and seeing what they produce which is three different types of aircraft. One is 100seater plus. One is about 150. Im going to get the numbers wrong, because im a army guy, this is things that fly. The third is a dream liner area of competitive process, and boeing is back order, which is about 4,250, not that in hypotheticals you have to get too accurate. Thats enough work you can go on for a couple of years. So this is, perhaps, have i said hypothetically enough . I think youve mentioned it, yes. Okay. Thanks. Minutes. [applause] i will make a brief introduction. You know who kevin brady is. You know him as the house ways and Means Committee chairman. When i arrived in washington, i thought powerful was part of the title. In the black hills of south dakota, cap remember kevin remembers playing track at central high school. Playing for legendary dave bluth who died early this year. Got 34 state championships, two of which when you were there