I think is an important topic and i appreciate everybody who came out this morning as well. I can tell you i take seriously the advice i get from my staff and one of the messages i get repeatedly from my staff, they like to take me aside and remember just because you cant give a good speech doesnt mean you cant give a short speech. I will keep that in mind as i work my way through my remarks and look forward to the exchange with derek. Lets talk about us mca. When we talk about this, it is worth having a starting point, a question about nafta. Why is it the administration felt it was necessary to renegotiate nafta. That is starting point for us mca. Was it nafta was an unfair, unbalanced agreement, or tariffs that were unacceptable obstacles to trade . Now to all those questions. Nafta is a freetrade agreement. 0 tariffs on 97 of agricultural goods, no quotas, no obstacles, the epitome of a free, fair, reciprocal trade agreement and since nafta was implemented, american exports from mexico are up 500 . Pennsylvania exports have grown 500 . I think you can make a case that since nafta was signed in 1993 a lot has changed in the economy since then so we have a whole digital sector that didnt even exist and so modernizing. Certainly made sense but that is not the reason the administration wanted to renegotiate nafta. The reason in my view the administrator wanted to renegotiate nafta was despite the increase in our exports, imports from mexico have grown even more. I would argue that was the central motivating fact. Thats why we have a lot of bad outcomes because it was the wrong intent in the first place. The actual purpose was to diminish trade with mexico, and im afraid that might happen. I dont think its going to be severe but on the margins its going to cost us an opportunity to Exchange Goods with mexico and therein lies the heart of my objection. Let me walk through some of the specifics or the way i think about the difference between usmca and nafta. You could look at usmca as nafta with two two categories of cha. First category i would consider the constructive modernizing changes, mostly modest i think but theyre not unimportant. Its about digital trade, crossborder, data transfers, ip protection for software, data storage, localization is not mandated. Mostly my understand is that these items mostly now in the usmca will be a codification of existing practices. Thats all right. Thats good. Much of it was taken from tpp. So what was it terribly controversial or difficult to get there, and thats all fine. Theres a very, very modest opening of some agricultural sector, marketing canada, particular americans probably will be able to sell more every products, are back at the envelope estimate thats on the order of half of 1 of our dairy production. So not really large but not a bad thing. Thats category one. What a think of as the constructive changes and modernizing features. Category two is where have my objections. These are changes that are protectionist in nature and are designed to inhibit trade. The first big category is the auto sector. As you may know, the source of the big majority of our trade deficit with mexico is in the auto sector. Unsurprisingly, that is the focus of really completely unprecedented provisions for a trade agreement. Its really the end of free trade in autos between the United States and mexico. Lets be clear about that. What the administration couldve done they couldve had a straightforward limitation like a quota or tariffs. They i guess decided that would be maybe too obvious. Instead they create this complicated but nevertheless, onerous minimum wage requirement that is designed to force wages on mexican factories that are well above the prevailing rates of wages because mexico is of course a developing country with a low cost of living and much lower wages. This is designed to make mexican auto production less productive and raise the cost. The advocates of this agreement and the administration think that is a good thing. I dont think its a good thing. I think imposing this minimum wage thats much ive been prevailing wages will make the north American Automotive industry as a whole less competitive. Its an integrated supply chain to raising the cost of components from one source are going to tend to show up as higher costs in many cars that are produced in the country. It means higher prices for consumers, lets be clear. This is a tax that American Consumers will pay on autos and auto parts that come across our border if the tariffs which are the alternative to the higher minimum wage, one way it will be a higher cost by design. Probably on the margin increases pressure to shift to more automation, or to just sourcing parts and cars in other countries altogether. That means i think over time fewer american jobs in this space, not more, and thats one of the difficult consequences of protectionist policy. Thats the auto sector. A second area i find very troubling is theres an Expiration Date on this. Weve never had an Expiration Date on a trade agreement or an Investment Agreement for the obvious reason that if you put an Expiration Date, you introduce uncertainty about what the world looks like after that date. In order to extend the Expiration Date which is 16 years from the date of enactment or the date that signing, about 16 years out, the three parties have to simultaneously come together and agree to add as they designed six years at a time to the end of this. That might happen but it might not. If somebody is contemplating a crossborder investment they have to ask, what is the trading environment going to look like when we no longer have a trade agreement that governs it, or at least we might not . So again it has to be detrimental to Economic Growth and trade across the border because we are needlessly injecting a new level of uncertainty in these rules. Third category that i i find objectionable is the virtual elimination of the investor state dispute settlement mechanism. This is the mechanism by which really, lets be honest, its american investors who make use of this and it is because american investors and it could be a Multinational Corporation headquartered in the United States, it could be a group of investors making a purchase in another country. It is sometimes the case that an american investor in a foreign country doesnt get a fair adjudication and a local court. That happens sometimes. Every country in the world has some level of protectionist tendencies and in some places at some moments local indigenous competitors will be able to influence the local adjudication process, the local courts, local regulators to put the foreigner come in this case the american investor, at a competitive disadvantage. We know this is always a risk and so we have created this investor state dispute settlement mechanism where we, and our trading partners, can have confidence that would be a fair adjudication. We almost always win. In fact, i think the record is we have one every case we have brought to an investor state dispute settlement mechanism. We have 50 bilateral investment and trade agreements and freetrade agreements that have this mechanism. In march of last year, 22 republican senators sent a letter to the administration saying it is important that you not watered down the investor state dispute settlement mechanism. What happens . Got it. In mexico they cut it back so there would only be five sectors that have access to the investor state dispute some mechanism, and that was under pressure from members of congress, frankly and intended its gone completely, con. There is no investor state dispute settlement mechanism in canada. So this probably makes mexicans quite happy. They do not have to deal with this. And i think it reflects an underlying view in the administration at least by some in the administration thats very misguided, for the classic protections you that its a good idea to discourage direct Foreign Direct Investment by american investors and introducing new risk whether by a sunset provision or whether its elimination of a dispute adjudication mechanism, thats a good thing because, and this is mistaken view of the world, if overseas investment are less attractive, that money will then be invested in the United States instead. I think that completely misses the reality of the vast majority of american Foreign Direct Investment. Most of which is made to serve local markets and undermining that doesnt make us richer. Doesnt create more opportunities. The companies i know in pennsylvania that has subsidiaries in other countries also have jobs in pennsylvania serving and relating to those subsidiaries overseas, managerial, financial services, planning, administration, all kinds of services. I completely reject the notion that we sum up to discourage american investors from investing overseas. Let me get to that two things that changed late in the game because the provisions i went to work early features of this agreement but two things that change late in the game in my view made this agreement even worse. The first is the new set of labor provisions, and the way this began was with the u. S. Negotiators a green to signing that we are going to force mexico to adopt new labor laws. We did that in mexico has passed these laws, and they have to do with facilitating that unionization of their factories generally. But we didnt stop there. On previous trade agreements we have historically taken the view at least implicitly that a countries labor law is their business, now weve made it our business. The usmca we create this adjudicating body paid for by americans, 45 million a year a year expense for american taxpayers to enforce mexican labor laws in mexico. Like, why is that our responsibility not only that, but if a look at the details of this, the way it is designed, it is designed such that an accusation of a violation of the mexican labor laws in mexico is presumptively deemed to have an adverse impact on trade, and creates a process whereby, you guessed it, new tariffs, new obstacles to trade including embargoes from the presumed to be offending factories can be imposed. The head of the aflcio said, and i quote, for the first time the would be truly enforceable labor standards including a process that allows for inspections to factors of the soul is not living up to their obligations. There are onsite inspections, will have five americans living in mexico. This has not come over very well with the mexicans by the way and the job will be to do this enforcement. Heres the thing, this agreement is reciprocal. Its fully reciprocal. Our trade agreement our trade representative says dont worry, weve make sure that the mexicans cant send folks to inspect american factories. Lets see how that works out when that gets litigated because this is supposed to be a reciprocal agreement, and it allows americans to inspect mexican factories. I think its worth asking the question, what is it that organized labor felt so strongly about this provision . Why is it the ultimately protectionist members of congress felt so strongly about this provision . It could be that they just have this passionate concerned about the wellbeing of mexican workers i suppose. But it could be it serves their own economic interest as well. Specifically of course theres the obvious way it serves the interest i forcing the unionization of these plants. You will make them less productive and less efficient and less able to compete. I think theres more going on the net. Theres a huge opportunity for mischief given that there are a lot of American Company that has subsidiaries in mexico, and now theres a mechanism to accuse them of violating mexican labor laws and a process by which they can then be punished for having done so with these tariffs and embargoes and such. I think that leads to some bad developments. Last thing i want to make it in terms of the policy provisions of the usmca is the by the way, this category, this whole labor title, this whole approach is something that bob lighthizer, the u. S. Trade rep, is very proud of your cases this makes the agreement better. I think that sheds a light on how he thinks about this. The last provision going to mention is one that he acknowledges makes the agreement worse, and that is he had negotiated ten years of intellectual Property Protection for biologics, and at the insistence of Speaker Pelosi that goes to zero. In my view this is a very, very exciting new category of medicines, biologics. Really some stunning, breathtaking therapies that are for illnesses that are very, very serious. And our u. S. Law is 12 years of protection to create the incented, the billy to recoup a massive investment in developing these new biologics in mexico and canada. That goes to zero. Two of the things i want to touch a really good one is the International Trade commission did report in which they did an economic evaluation. Some of my colleagues and supporters site the social be good for the economy. Its nonsense. So the data point thats that s often cite this one instead of 6000 new jobs created by usmca. First of all, if you believe that that number is true, its a trivial number. We have been cranking out 200,000 roughly new jobs a month in this country. Usmca according to this data point will produce 176,000 new jobs over the next 72 months. So its extremely small in scale. Scale. If even believe it to be true, and i dont, the report, their argument that the trade restriction policies will diminish Economic Growth and cost those jobs but it will be offset by the added certainty of having codified the practices of digital trade that i i referreo at the beginning. All right, maybe thats how that works out, but they acknowledge that they dont even attempt to quantify the adverse impact of the sunset clause because they dont know how to do it. We know thats got to be negative. It cant possibly be positive in my view. We just dont know exactly the magnitude, and theres been no analysis done whatsoever on the provisions, the whole labor sector was written after the ipc report was done, and the concession on biologics was likewise also additional tightening and more restrictive rule of fortune about steel and aluminum is in this as well, and the itc acknowledged in the report the more strict you make the country specific rules of origin the more the damage growth. We dont have a quantification of this but directionally we know its going to diminish growth and jobs. So bottom line i think its very unlikely that this produces any net new jobs and i think most likely probably, very small but probably a net negative Economic Growth relative where we are today. Last point on substance here. We have cbo score that came out this week, humanas unit that is relatively new. Cbo comes to the conclusion that the labor rules, i should say than minimum wage rules on auto production in mexico cannot be complied with, and so they wont be complied with and so the alternative under usmca is that autos and auto parts that dont comply will be hit with a tariff. The cbo analysis that will go into effect and, of course, thats a tax on a consumers and its about 3 billion. On top of everything else, usmca is a 3 billion tax increase increase, 3 billion is not an enormous number but it is what it is. Let me wrap up how we think about this. The way i look at this is we talk a Free Trade Agreement and added some constructive features, taken largely from tpp, but then we slept on an Expiration Date. We imposed costly new restrictions on the trading partner. We limited the dispute mechanism celibate for u. S. Investors. We dropped the intellectual Property Protection for the most Innovative New medicines and give a big gift to organized labor in the form of a process designed to allow protectionist to impose further restrictions down the road. We will get little or no extra Economic Growth out of it. Maybe a modest tip. It shouldnt be terribly surprising that Speaker Pelosi, a lifetime protectionist and other protections in congress were spiking the football that the aflcio has endorsed this deal, its been two decades since theyve endorsed the tracheal. Is my final thought. This will almost certainly passed probably by a big margin in both houses. I just want to stress that this should not be a template for further teacher agreement. They should not be the way we approach trade in the future. We should not be looking to restrict trade. We should be looking to expand trade. Thank you very much. [applause] this would be a great time for the 20 some people who are standing up to sit that if they want to. Otherwise you get a little tired and i would love for you to have questions. I also noticed i am to the left of the senator toomey as im sitting, which is definitely not true. But we could, thank you for your remarks, and i couldnt agree with him. He could spend the next 20 minutes agree with you. I agree with you on most trade, the general approach to treatment i agree on the intent of key people in initiation with regard to usmca. I agree with your intervening in mexican and labor market speedy i have a feeling theres a butt coming still. Lets talk about what we might disagree on at least disagree partly on. Ill start with a key element of this for you, and im not sure it is for me. The president originally wanted a much shorter review period. He wanted a review. And his second term so he could have the option of bailey out of usmca while he was still present if the one reelection. I dont find 16 years to be a problem. Trade agreements change in 16 years. We should be evaluating almost every trade agreement after a while to see as you mentioned correctly with digital trade, the situation is change, the technology, new trade patterns, new issues that come up. I find the review period at 16 used to be an excellent enforcement. Dont start cheating because we will be looking at this 16 years later in this case 16 years later a lot better cut of enforcement some of the other information which i also object to. Let me come back to you about the review mechanism and say, 16 years isnt six years witches ws what restarted it is a reasonable amount of time. It creates some uncertainty at the end o