Clip] we would like to welcome our next discussion. This has been the top priority for the past two administrations and trade policy has been a crucial tool to bolster American Manufacturing might and help it thrive in a competitive marketplace. The National Association of manufacturers is the point of that spirit and we could not be more pleased to host their president and ceo to talk about how trade can support the vital manufacturing sector. He has joined by the man behind the pen who has been telling the story about trade policy for over 20 years, doug palmer of political politico. Thank you. I am doug palmer with politico and i am here to be i am pleased to be here with jason. Of the National Association of manufacturers. You have been president since 2011 . Yes. If i was under deposition i would not sure i would remember what the date was but i think it was 2011. Doug i looked at your bio and i saw that you came to washington in the 1980s and you worked as a press secretary for i think a pair of different congressman. So, i actually dropped out of college. I wanted to be part of, ironically, the reagan revolution. I never got a chance to work in the reagan white house, but it was always my dream. He was really kind of my inspiration and what motivated me. His, if you will, his worldview impressed me. I could not do it there, but i was able to work for members on capitol hill who were able to enact the agenda. Doug governor alan both when he was on the hill and in the governors mansion. Jay later i worked for george allen when he was a congressman at the government center. And he was probably the younger version of reagan, in my mind anyway. Doug cool. I guess i would just ask you to start off by giving us a brief overview of what are the trade priorities for the year and then we could dig into some issues. I have been thinking a lot about the wto ministerial in a couple of weeks. I know you guys are interested in seeing trade legislation move and are sort of frustrated that trade agreements are not being negotiated. I thought we could talk about that. Jay that is a wrap. Doug if you could start off with a brief overview about what you would like to see done in 2024 . Jay the nam was founded in 1895. We were founded under the belief we need to expand our access to markets around the world. Later we got more involved in domestic policy. But our goal was to recognize the importance of the important place that american manufacturers had. On the world economy. And that was the impetus for the birth of the nam, and that has been part of our dna for all of that time, what is that, 129 years of the existence of our organization. But i think we look at trade, and i know our members do. I have a very small and discrete board of directors, 250 members. Doug right. Jay the good news is that regardless of their size whether they are Multinational Companies or the smallest momandpop manufacturer understand the importance of a liberalized system of trade around the world. They know that is good for their success and communities. I was just speaking to investor montezuma, who will be speaking in a little bit. And he was making the point and makes it more eloquently than i could that trade is the recipe for peace, and the recipe for working together harmoniously. I think we look at trade through that lens and as a facilitator to obviously economic growth. But also the export of our values and the american style of democracy. So, some of our objectives, first and foremost we would like to see more trade agreements. We have not seen one negotiated for over 10 years and the rest of the world, quite frankly are eating our lunch when it comes to negotiating these agreements. Very simple issues like you would think they would be simple issues. Like the miscellaneous tariff bill, getting that done. That gets locked up with all of the partisan backandforth and on an issue like that i do not quite understand it. I would probably add on to all of that issues that directly impact our ability for manufacturing in the United States so we can trade. A stable tax policy. The tax reforms that we achieved in 2017 were important to grow wages in the United States. Regulatory certainty is critical for manufacturers to be able to compete United States. Immigration reform will be important because we can invest all we wanted manufacturing in the United States to become a world leader, but if we do not have the people to do the job that we would be open, 620,000, we are not willing to be able to aspire or meet the aspirations that we have for being that Global Leader on trade or continuing to be that. All of those are part of the nam legislative and regulatory basket. Doug thank you for the overview. I would like to dig into the Ministerial Conference a little bit. There is not a lot on that agenda to give manufacturers to get manufacturers excited, i do not believe. I know that you are worried about one thing which is this covid19 this push further trips waiver to cover therapeutics and diagnostics. Why would that be a Bad Development from your point of view . Jay intellectual property is the lifeblood of manufacturing. We worked pretty hard, and it has always been a given from the u. S. Perspective that intellectual per top property protections would be front and center. We saw the trips the original trips waiver with regard to the vaccine and the properties of the vaccine occur, and we were concerned about that, obviously. We want to facilitate the growth of manufacturing and other areas of the world, and there are other ways to achieve what i thought the wto was trying to achieve. That was a step too far, this is a giant leap too far. If therapeutics and diagnostics are included in the waiver, the expanded waiver. I do not know how you message to manufacturers and i am sure government says ok to that first and foremost or if the wto does. But we are not exactly sure where we will see the governments come down on that. If they give the green light, how do they turn around and say we want you to invest in developing more innovations in this country if we are just going to turn around and give them away. A similar issue which is not directly related to trade, but merchant rights is another issue that the administration is talking about implementing, the ability of the government to march in and take intellectual property or a patent away from the company if the government has been involved in helping to develop that particular patent. And so, i think we are getting a mixed message. I would tell you today, and i say this all the time. I think this president probably has a bigger heart for manufacturing than any others i have worked with. Ken mentioned that trade has been a priority for trends for President Trump and biden, or the agenda has been front and center. I would say that the manufacturing agenda was front and center. I would say that it has been present for all of the president s i have seen in action since reagan, but in different ways. And i think we have reached a point where we had this amazing opportunity to see manufacturing truly just explode in terms of growth in the country because of the focus on trade by reagan, bush 41, clinton and obama. Because of the focus by the last administration as well as regulatory certainty, and the investment in ships and infrastructure and the policy provisions that President Biden pushed. All of that led us to this pivotal point. And the ability of manufacturing to succeed in this country. But if we start chipping away but by saying at the very least you cannot protect a patent and you cannot protect your intellectual property, i do not think that is the right signal to be sending for any factoring and investment. Doug on the other hand it is my understanding that no other country use that vaccine waiver and the people on the others of the issue argue that what the wto approved in june 22 was not all of that significant. And since no country actually used it, is it an exaggeration to get concerned about the therapeutics and diagnostics piece of that . Maybe that would be equally as ineffective . Jay whether it is effective or not you send a message that you really do not respect the intellectual Property Rights of manufacturers. So, if you apply that theory to other products, whether they are biologics, pharmaceuticals, or anything. Doug and if you would talk about setting a precedent for green technology. Jay there are tractors. You could apply the same theory to any product. So i think it is in manufacturers best interest to protect that pretty basic value. Doug there is another issue that i big that i believe is important today. The 26yearold moratorium on collecting ecommerce. On collecting duties on ecommerce transmissions. That seems to be mainly like Digital Goods like dvds and or the digital versions of movies, movies on dvds or music on cds. Also people today know that electronic transmissions is a really vague term that could cover any sort of business transaction that crosses borders. Jay that is a worry. Doug right. So i mean, how concerned are you . Jay why is it a problem . Look, i think it comes down to your basic philosophy of whether you wants to facilitate more trade, which i think most economists would say that that is good for economic activity. You are going to continue to grow economies around the world. Or whether you want to impede trade. Tariffs also known as taxes economic activity. It is pretty basic. Sometimes governments wants to do that for various reasons. I am not sure why we would want to impede the ability of companies to grow and to innovate, unless we are trying to send a signal that we should only be innovating here. And we should only be creating here. And i do not think in a Global Economy, and whether politically that is that resonates or not, a Global Economy is fact. I want to see our products treated fairly, and i want to make sure that our products have the opportunity to be exported and purchased whether that is digital or electronic, or in the traditional manufactured good. I want the opportunity to sell those products to 95 of the customers who live outside of the United States. Doug well, i am a reporter, i will be covering the wto ministry, and i am hoping there is a little bit of drama in that meeting. Jay we will create it for you. Doug what if, for example catherine is forced to choose between trying to get a continuation of the ecommerce moratorium or giving in on the trips and the expansion of the trips waiver . What is she is what if she has presented with that as a choice to get the consensus to do one thing or another. Is there one issue she should go with . Which of those is more important to you . Jay i will state it another way, there is no instance where the United States should be forced into a compromise, period. We just have to simply lead and lead not only there, but in the wto for issues like dispute settlement, the resolution on that. We have to step up to the plate. We are not sending necessarily the best message to the rest of the world when we go into these conferences if we are not willing to consider more freetrade agreements around the world, we are not leading in terms of expanding trade around the world. And we have not been doing that for a long time, over a decade. So i kind of reject the premise of your question because i simply do not expect the United States is going to be forced to make to compromise. Doug we will see what happens. Jay nor should it be. Doug maybe i planted an idea. On the subject of u. S. Leadership, i mean that has kind of been on my mind heading into this ministerial. It sounds like you are saying and i do not want to put words in your mouth, it is not leaning on trade to the extent it has in the past. I listens to a speech that an ambassador gave at the center for strategic and international studies. She talked about how the u. S. As a champion of the rulesbased International Trade system. And i just wondered, could the u. S. Really claim to be a champion of the rulesbased International Trade system . Given that it has taken apart the dispute settlements. It has been effectively killed the appellate body. It imposed those tariffs in the name of National Security, which whether you disagree or agree with. Jay the 232s. Doug the wto ruled against it and said they would not abide. The china 3 01 refs were also rude 301 tariffs were ruled against. And the administration argues that they were worked out bilaterally and then we pass the Inflation Reduction Act which contains all of these discriminatory decisions that violate most favored nation treatment under the wto rules, so i do not know. Are we still a champion of the rulesbased International Trade system . Jay i think we should be. And i think look. I am unabashedly free market proponents. And i think those rules should be based on market economies and not command economies. And i think that is truly the conflict that we have. Whether we want to acknowledge it or not. We look at a country like china, which is treated as a developing economy at the wto which makes no sense whatsoever. And we have a choice to make. And, sometimes do we do it right all the time . Of course not. Do we aspire to do it right all the time . I hope so. That is the goal of any elected leader in any administration. I give a lot of credit to this president for his foreignpolicy outreach with regard to Foreign Policy. That can translate into good relationships on the trade front as well. But, i go back to and i am not sure how many folks agree with this. But, i truly believe that free market economies and democracies, generally, need to stand up for the rulesbased system. Because if we do not, it is a very different way of life. And i am concerned about where that leads. Because it is not going to stop in terms of economic policy. It will devolve into forms of government and systems that freedom loving people do not accept. Doug right. Right. A few more questions, but i do plan to leave some time at the end for audience questions. So if you have them, thinking about those. Turning to congress. You mentioned the miscellaneous tariff bill, which i believe it has been expired for a number of years. Jay three years i think. Doug you talked about the partisan bickering and that being the hold up. What do you see as the prospects . Are you optimistic that anything will get done in the Election Year . Or is another year going to come and go and hopefully get it done in 2025 . Jay it depends on the day whether i am optimistic or not. I woke up this morning and got optimistic when the Senate Passed the foreign aid bill. When it goes to the house, ask me then how optimistic. But look, i think you can get things done in congress. The most important thing for manufacturers and for anybody here representing a manufacturing company, it is to tell our story and explain why does this really matter . You want to stop the threats to our National Security when it comes to the production of Semi Conductor chips . You have to have all of the input materials to go into that. Some of those things we simply do not make here. The next question is why dont you make it here . My response is are you going to let me to permit a mine . What do you think the world will look like in 2039 if we do not get this done now . We need mtb not just to meet our economic goals and not just to feed the supply chains of manufacturers, but also to meet our National Security objectives. Some that wed came together on a bipartisan basis and ships designs. And that was a high point for the government when we did that. Now we have to make sure that all of those ancillary issues that go into making chips in the United States gets resolved. One of those is permitting reform and tax policy and regulatory policy are important. And that ultimately and hopefully trade policy. You can see the same thing when you talk about Climate Change and decarbonization. If our goal is less Carbon Emissions and not just here in the United States, why would we restrict lng exports . Especially to europe, which are the way let us throw in the Foreign Policy objectives because we want europe to be less reliant on russian gas, which, is dirtier and than u. S. Natural gas and reliance on coal, it makes no sense. Let us be consistent. You want to decarbonize and you want to lower Carbon Emissions then let us use what we have in this country and what we are manufacturing and producing in terms of lng. And get it to europe as quickly as possible. Doug speaking as optimistic one day and pessimistic the other. After the republicans won control of the house in the prior election there is some optimism on the other republican agenda that they will advance trade legislation that does not seem to have mattered. Jay it started in the administration in the white house level. I personally would like to see trade Promotion Authority being continuous instead of renewed every two years. I just do not understand that. I know it provides good jobs for a lot of people, but i just it makes no sense to me. Put that into effect, give the president , whoever he or she is, the ability to negotiate free trade agreements and lets do more. It is hard for Congress Without the leadership from the white house to really move anything on the trade front. Doug right. Jay there are some radioactive issues in their minds anyway. Doug what do you think if biden is reelection reelected do you think there is more chance of what we know for a traditional freetrade agreements in a second biden term . Jay not sure of that, i have not gotten any warm fuzzies from the Current Administration but also not the Previous Administration either. Whoever they select we will have challenges on the front. And i do think that it is our job, again, to explain why trade is good for communities all across these this country. We tell a really bad story. We have never perfected how do we explain the benefits that small communities like where i was from, chillicothe, ohio in southern ohio. It has benefited from being able to export products made right there. The jobs that are provided, the highest paying jobs of any sector of the economy chillicothe and write up the road in circleville. If you talk to folks back home, i went to for those of you who are familiar with ohio know that circleville is home of the circleville pumpkin show and it is the greatest free show on earth. I was there last year and i was just talking to folks. It is a huge festival. I was talking to folks i went to high school with and others and we would talk about trade and they are just antitrade. It has to be america only. And we are kowtowing to the rest of the world. And when i started talking about the plant right down the road and all of the jobs that it created there when it opened up in 2017, i think, so much of their product is being exported and they cannot make that connection. And i think that is because we have allowed the partisans, frankly, to control the narrative and it is time for the Business Community to control the narrative. Doug tying two things together, the miscellaneous tariff bill waves waives tariffs on what is needed. President Trumps Campaign is talking about putting a 10 tariff. Jay 60 for china. Doug i mean what would that do to manufacturing in the United States . Jay well, it would i think the first question you would have to ask is not what would happen to manufacturing manufacturing in the United States from that specific action, but what would happen to the liberalized system of trade around the world when retaliatory tariffs are implemented . I mean, this is not just a shot you get to take without being without getting return fire, it is going to happen. I think we know the answer to that. We saw what happened before the great depression. We keep testing those boundaries. At some point the system collapses. So i think that is probably what would end up happening. By the way it is not just trump. Both parties dally with tariffs. I think not that i agree with them and not saying i am not passing judgment. I am just saying that there have been a lot of very specific targeted tariffs over the course of the last few years, but if they are broadly applied, i think you are asking for trouble. Doug we talked a little bit about freetrade agreements and your frustration that the administration is not offering more. There is i Mean Congress in 2019 and 2020 i remember did pass the renegotiated nafta agreement. The u. S. Canadamexico agreement. We are coming up on the fourth anniversary of that. How do you think that is working out . Jay we have a few issues. Mexico and canada have a few issues, but that is the nature of agreements. And it is also why i am actually fairly encouraged. We had the three amigos summit with a major focus in that not just about the border and National Security but about the freetrade agreement. The ministers met in cancun in july and i had the opportunity to lead the business delegation. And i think that i think what i see from all sides is that they want this to work. They are going to figure out all of these issues. That are out there, whether they are issues with Energy Supply or agricultural products. These are issues that can be resolved. And i go back to one of my previous statements, or paraphrasing it. Disagreement is incredibly important to our National Security and place in the world. We need to expand the relationship, whether it is trade or other relationships here in north america. And we need to embrace the relationships and our allies around the world and europe, australia, new zealand, japan, and other areas. We are facing a choice between freemarket economies and mockers sees and command economies and autocracy. I want to strengthen the former and not allow the latter to start to bloom. Doug ok. I would like to pause and see if there are any questions in the audience. I see this gentleman way in the back. So, why dont we start with him. Wait for a microphone to come your way. Yeah, the gentleman right there. Rob rob tobias formerly with the u. S. Treasury and now with the National Association of importers as in alcohol. I build off of your admiration. Jay by the way, one of your most manufactured one of my favorite manufacturing problem products. Rob in good times and all times and bad times always needed. And people trade up or down depending. Building off of your admiration of Ronald Reagan a little background. I was a steady i was a student at uc berkeley when it was government reagan and i was in my third year in washington when it was president reagan. Having experienced that, i would not say would you agree or what are your thoughts on the proponent that reaganomics, basically has set the economic stage for the last 40 years in this country, and that really forms the roots of the anger against freetrade that you saw in ohio. My minister is from North Carolina and says that anybody who ever votes in favor of freetrade will never get a north carolinian vote because of a closing of the textile mills. And i believe many of President Trumps supporters are demonstrating that anger. So, the question is do you think the foundation of that anger dates from the longterm impact of reaganomics . And whether President Bidens executive order can correct that . Thank you. Jay well, how long do you have . So i suppose there are some roots that go back to the reagan years. And, you mentioned the term reaganomics which is intriguing because i have not heard that for a while. I really think that we are the only way we are going to deal with the frustrations in these communities. By the way the congressman i worked for in the 1980s, one of them was Alec Mcmillan and the other was jim martin, and they were all over the textile bill. I cannot even recall what the actual title was. We were scrambling to try and save textile mills all over the south. I think of some of my manufacturers like milligan in South Carolina, who have navigated through all of that and they are quite successful. By the way, they are exporters of the product. There are Success Stories and then there are stories that are frustrating that folks grab onto and they refused to see the bright Silver Linings that do occur when you expand opportunities for trade around the world. I am going to go back right to what i think is our obligation as Business Leaders is to tell that story better. Often times you know, a lot of my companies and i do not blame them, they are trying to deal with daytoday work and operate their company is effectively, efficiently, and profitably. And they do not want to have to tell the story which is why they have organizations like the National Association of manufacturers to help tell that story. But we have to invest and tell the public the stories of what trade liberalization has done. Have there been issues . Sure. I do not think that we would have seen companies leaving or i would say investing in other parts of the world if we had other policies supporting a liberalized trade agenda. I will go back to the very first thing that we talked about. We need tax policy that incentivizes investment here and regulatory certainty that gives Business Leaders the ability to plan for the future. We need to invest in workforce incentives. All of those and infrastructure which we have done and continue to do. You cannot just open up the trading system and not expect capital to flow outside of the borders if you do not have the right policies internally. That is where we failed. And that is what we developed over the course of the last 30 years, which was i think an understanding that we had to have those policies in place. I feel much better about where we are in terms of public policy, although we certainly have some challenges. Today more than 10 to tony or 30 10 to 20 or 30 years ago. Thank you. You touched on an important point where there is a lot of rhetoric in support of American Manufacturing. But actually actions that do not support it or undermine the ability to promote manufacturing in the u. S. And i think about some of those things, when you look at tools that are available, one u. S. Foreign trade program is one of the oldest trade programs designed to promote the location of manufacturing in the u. S. And creating american jobs, and promoting Global Commerce and u. S. Exports. And many manufacturers in the u. S. Use of Foreign Trade zone program particularly in Industries Like automotive or pharmaceuticals which have inverted tariffs which the program is designed to help them address in their global competition. And, you mentioned South Carolina. Bmw, which is located i want to say in South Carolina is the largest exporter of u. S. Manufactured automobiles. They operate in the Foreign Trade zone as do the suppliers in michelin, being successful. It has really turned South Carolina into a manufacturing and exporting powerhouse. But when you look, a lot of policymakers really do not know much about the Foreign Trade zone program. And to the extent that they do it has a bad rap. And there is a great deal of reluctance to do anything to support or enhance the program in ways that will promote its goals. I was wondering what your thoughts were on that . Jay i could not tell you. Kevin monahan who runs the International Trade division is much better at helping answer that. So, i cannot get into it. I will say that i do know that bmw does take advantage of that program. And i know that when she was governor, nikki haley spoke to our board. She use that as one of the incentives or reasons to invest in South Carolina as she very deftly twisted the arms of a lot of members to come to her state. From what i understand, which is very little. It has been successful in those types of investments. But im going to let ken be the guy who answers that afterwards. Hello, International Trade today. I will build on dougs question and a theme you keep repeating about the storing of manufacturing. Jay i cannot see you, where are you . Doug right here. And purple. Jay also mardi gras. Doug Katherine TaiKatherine Tai spoke earlier and one of the questions she received was why have you kept all the section 301 tariffs. And they cited a report from the account from an economist that said they did not add jobs in the heartland, they did not add manufacturing jobs, but they did help from in the Republican Party trump and the Republican Party and her answer i will quote it to you. You are right that we have kept a lot of the tariffs because we straight we see strategic values of the tariffs in the structure of building up the american clot the middle class and rebuilding American Manufacturing. If this administration believes that tariffs are helping manufacturing in the next administration believes that more tariffs will help manufacturing, what do you think could change this narrative that you need to commence the unions to change their tune . If the 10 tariffs were to come into force and they also hit canada and mexico, do you need to convince congress to change the law and overrule it . What will change the trend . Or do you think we will see more tariffs over the next six years or no reduction in tariffs because there is this belief that it is saving manufacturing . Jay well, i can tell you that he workers at Stanley Black decker would tell you very quickly that the 301s are not working because they have lost colleagues to layoffs because the 301s created a system where they where a drill coming in from china that was fully assembled is less expensive than a drill example here assembled here because of the opponent Component Parts being tariffed coming in. And the fully finished drill coming in from china was not being tariffed. It is a system set up in a way that is not equitable for Many American manufacturers. I think too that because of issues like that, ustr needs to get the review process completed. In terms of the exclusions because we are harming manufacturers in america who are unable to produce some of the parts that are involved in the supply chain. For a finished good. And we are i am not sure why anybody would think it is good to increase the cost of a product and make a manufacturer in america less competitive, that is what has happened with many of the 301s, especially when the exclusion process is arbitrary in many cases. And not very opaque. Some have gotten there exclusions, some have not. Folks do not understand how this is working. So, first and foremost, before we Start Talking about how good and before any elected official or appointed official starts talking about how good tariffs are, they need to look at the results of how these tariffs have been applied to some manufacturers in america and how that has cost jobs for american and you facture workers. Doug i think we are getting near the end of our time. On the 301 tariffs, it seems like you were only talking about exclusions and not expecting them to like do away with the 301 tariffs. Jay it does not look at it look like it at this point but i would certainly advocate that that is not the best solution for trying to deal with trade and balance. This is what we said to the last administration. We said to not impose the tariffs. Instead negotiate a rulesbased, enforceable freetrade agreement. And there was an attempt to do that. Actually i actually attended the signing ceremony as our friends came over from china with masks and we are all sitting there without a week before the world shut down. And, unfortunately we have not seen any progress from that. This is another example of where we need to have some leadership on the world stage to negotiate freetrade agreements. China is clearly one of those. If we are adding countries, let us talk about the u. K. , kenya and japan and ukraine for crying out loud. Let us get these done and marry them with our Foreign Policy and support freemarket economies and democracies. That is the way we do that. And then we negotiate with command economies, like china, so that we can hold their feet to the fire when it comes to trade practices that quite frankly and simply are not fair. Doug thank you for those concluding thoughts. Let me give it to ken. Ken thank you jay and doug, i really appreciate this conversation about trade and americas place in the world and we are grateful to all of your great work on behalf of leading american companies. Everybody who is here, thank you, jay. [applause] we are taking a short break while we get the stage be set the ambassadors. Do not go anywhere, we will be back in a few minutes. Thank you very much. [chatter]