Test test test test test test test test test test test test test test. Although the Democratic Party across the country is ip creasingly protrade. The millennials are protrade. Immigrants. Latinos. Im just wondering if you think theres a shift in that if the democrats on the hill will reflect the increasingly the democrats across the country that are increasingly portrayed or if you see some sort of shift like that. Donald trump talked a lot about the people and what theyre demanding. He only talked about some people. The people who have now turned hard against trade are the White Working Class voters who have not benefitted from the economic economy the last 20 plus years. If you look at whats happening across the country, the picture is not so bad. What has change suicide the Republican Party. I was showing some really shocking numbers. All happened during this last campaign. And basically youve got the divide is between elites and rank and file on both parties. The elites of the Democratic Party are against trade, strongly influenced by laborer and other Interest Groups. Rank and file democrats are solid majorities continue to say that on balance they think trade and trade agreements are a good thing for the country, even though they worry about job impacts. Hillarys voters were more protrade than anybody elses. Also happened on the republican side where now you have a the elites of the party, the establishment has been strongly protrade and now the base has turned against that. Im supposed to talk about democrats. Im not sure we can look to Republican Party any time soon to put an effective check on mr. Trumps ideas on trade because those members of the Republican Caucus and house and senator looking over their shoulders at strongly protrump core voters. Theres an opportunity for democrats to make headway because mr. Trump is so strongly antitrade. I already see liberal friends rediscovering arguments in favor of afraid and global integration. I dont want to kbexaggerate th. As long as the Interest Groups that are so dominant in washington call the tune, its going to be hard to scare off votes for trade agreement. Not that its going to be a big issue. I agree with will and defer to him on talking about democratic voters. I think the last point he made is key. Theres been no at least as far as i can see and you may know more in terms of debate in democratic circles than i do certainly, but i cant see theres been any movement of the house democrat. I think thats key in terms of trade. Away from fairly rigid transition. Against new trade agreements. They are still tied very much to labor, environmental groups. Public citizen and nato groups. I dont see much change in that. On the republican side, i come back to the fact, i agree its probably going to be tough because because House Republicans and senators except for graham and mccain are scared to death of tweets. So they dont want to get tweeted. So its hard to know how the republicans, your typical republican memo will act. If you look at the rhetoric of the Republican Leadership and look at beyond trade, you cannot go along with some of the nonsense that trump and his people are putting out. And have traditional Republican Values about promarket, p procompetition. I dont know how that will work. Claude . I mean gary. Im sorry. Gary. Thanks. I just want to while agreeing with everything thats been said, small Historical Perspective on this. If you go back to the years of 19th century and early 20th century, trade was a really big issue in the u. S. We had these periodic tariff bills that would be more protection under wilson. More protection under the three republican president s in the 1920s, harding, hoover, all quite protectionists. And, you know, that was a central debate. Now, then after the second world war, the strength of opinion on trade as a political issue, it dropped way down. I mean, on the polls, up until this election, this president ial election. Theres like a number eight or nine out of eight or nine issues. What trump has done is elevated this back to the position that is trade debate to the position it had been in the 1920s and earlier. Thats really very interesting. Maybe it will return to where it was, but certainly not as long as trump is in office. The other id say ano, maam engli thing about this whole relationship, back in the 1920, le was about 8 . 8 or 9 . Now the figures are about 25 . You might see objectively theres more reason for trade to be important, but the reason trade is important to trump and his team is the deficit. The 500 billion deficit. That is only 2. 5 of gdp. That 2. 5 goes away to combination of policies, kind of what happens to the issue. Anybody else from the audience want to comment now . Someone in the back. There are two. Go ahead. First you and you. Reverse it. Yes, trump got elected. Sorry, will you say your name. American steel institute. Trump got elected in large part because he was able to flip mid we midwestern states that traditionally go for democrats and make them vote for republicans. Pennsylvania, michigan, et cetera. And i think a big piece of that messaging there was you know, saying tpp is the rape of the country. Et cetera, et cetera. Do you think future republicans will follow that . Weve been talking about trump specifically. Do you think other republicans will say hey, maybe the way to win the midwest, states that historically have gone for democratics is to give up on trade, walk away from it and that opens the door to getting to 270. Who would like to pick that up . Nobody wants to get hit by tweets. Its a president ial one. But i just want to make this point. What really moves members or motivates members behavior is less tweets primary challenges. Particularization of american politics is such the most likely way anybody is going to lose their seat is not in a partisan battle. Its being primary in their own party. Right now 87 of republicans who have districts held strongly approve donald trump. Im really worried the only way the likely way out of this box or dilemma is that were going to have bad policies. Were going to go back and explode relationship with mexico possibly of negotiation with nafda. Could be in a trade war with china very soon. Could have much bigger impact on our economy. We may have to relearn what we thought we knew about protectionism and amerimercanti before we can change the political dynamic thats happening in the country. I guess i would comment perhaps on the earlier question. I think if reason labor has been actively opposed to trade agreements and trade policy is the concerns they had have simply not been addressed. I think in the way they have historically operated, they have typically looked to the interest of the companies for whom that negotiate, which makes perfect sense. Oftentimes the seoul staoul sta party with interest what happens in america is not the company or the workers or the state, but the local community. I know and tpp reason there was such strong opposition was in fact on an issue that dealt with rules of origin in the auto sector where the Auto Companies had a view that was understandable from their global foot fingerpri footprint and the unions had a view of trying to keep jobs in america. Their view was ignored and view of the company was adopted. As long as you have a situation where the workers feel that their views are not incorporated in trade policy, then i think the democrats will continue to have problems getting their members to come out and support an organization. I would only point out this administration, the Obama Administration was highly prolabor. Certainly took into account and advancing the labor enforcement provision of the tpp, which could come close to i think pushing republicans away from it, but this is about as prolabor an administration as youre likely to get in any policy. It wasnt they were ignored. Expressed by ed. Accomplished recently a book. I regret i cant think of the title. The thesis is that this crisis has been building for decades. In fact, he sites a movement, a bill that would have been draconian in all of its aspects. It was in the 60s. Introduced in the 60s. Maybe early 70s. It was very serious attack on the aura that we know. Trade liberalization movement and on legislation. So eds point is that weve ignored. Ignored this building. This popular decent at our own peril. Now it is on us. It has descended upon us. You look for why that was. Is it the fault of the Business Community for not being more aggressive about funding. Helping fund. Helping fund trade adjustment assistance. Has it been the, which is in fact underfunded or underlooked or overlooked, rather. It is quite a serious charge, i think. I dont know. Im wondering if i can ask my colleagues whether they have an opinion on that point of view of eds. I have to leap in on this one. Yes, its been neglected politically. It was not neglected in the economic protrade community. Never had has been. We wrote a lot about it in our institutes. Im sure aei did. Virtually all institutes would have written on the issue of the dislocated American Worker. Heres the core issue, a very small percentage will give higher than what he gave. A very small percent of worker are dislocated because of trade. A very large percentage dislocation of 4 million workers a year. A very large percentage because of automation. 85 or 90 . Now the problem with trade adjustment assistance and such programs as we have, which are the least generous and the most stingy of any advanced country, is that theyve been nearly targeted in their own special stinginess on workers who are impacted by trade and can come up with competition. Which is 70,000 workers a current year at times. So all these millions of workers who get really very little out of the government system, naturally feel neglected and then someone like trump comes along and sanders said the same thing. Blame it all on trade. Create this hatred. He came to the issue. Its just too expensive, he said at the time, i think he was wrong, but just too expensive to have a program that covers all the dislocated workers on anything like this scale than any other advanced country does. That would be canada, starting with canada. Uk, france, netherlands, et cetera, et cetera. I think that was a mistake, but we have a buoyant economy so you could go with it. There it is. Youve got to talk about multiple multiple billions of dollars to deal with all these disloe dislocated people. Until you do that, youre going to have this golden opportunity for populist politicians. We shall see if congress rises to the problem of the moment. Jose, did you want to comment. Yes, just very briefly. I looked as well as as gary on the what was actually the u. S. Manufacturing and the thing is the well, if its not china, it must be automation. The truth is its not automation either. If you look at the productivity. I speak like an economist because i am one. If you look at the productivity increases youre seeing in the United States as well as many oversea countries in the last ten years of autoization. Its clearly compared to pc revolution. Nothing compared if you look at the manufacturing revolution that took place when real heavy machinery replaced workers. So if you start to plot trade and especially china versus manufacturing jobs, actually the effect is the reverse than you expect. Its the other way around the chinese demand american goods. They need it in order to grow their economy. If you look at google shares versus unemployment in the United States, youll see the reverse relation as well. The main job kill in manufacturing is services. Most jobs were never lost. Just upgraded to services jobs. You can think about it. Look at the previous generation. You were maybe working on the factory floor, but suddenly you were actually an assistant Service Manager or client director. Thats actually how most manufacturing jobs were lost in the United States and europe. They were never really, really lost. I think thats a very important point to remember and that goes also the first question we were hearing about the narrative around trade. So with the record low unemployment that we see in most of western europe as well as United States, in the historical context, its relatively low. Why is this an issue now . I think its a narrative problem. I think we yeah, will was pointing out. Its a question about communication. Its a question about tweets. One thing i would say which is quite unique with a debate that we have now here in the United States. This debate around trade and inequ inequality happens globally. Theres one thing unique about the debate in the United States. It assumes the income inequality is constant. In the rest of the world we are talking about a Dynamic World visavis how are we going to get ahead. Some people say we never will. Its only the United States where it can say we dont want to have income increases like tpp because we cant distribute them fairly. Its like saying, okay; we cant not have any kind of income increase because it will not be distributed fairly to the manufacturing or also the well, the contract, middle class and working class. Its kind of like a lost cause. That i think was a surprising element if you see comparatively from well, from the other countrys point of view is the inauguration speech of donald trump was for us marksist. If you replace the American Worker. You have a template for socialist and extreme left speech. In china as well as in europe. Its only in those corners you will find that narrative. Thats the main difference, i think. One reason nafta has been in eye that supported trump. However many jobs have been lost to mexico, you would be hard pressed to find a manufacturing job that hasnt been threatened to be moved to mexico for purposes of keeping wages down. All right. Or to mexico or china or to other countries. I used to be in business before i became a lawyer. I can tell you it happened all the time. And the Tipping Point that happened in this election was basically youve had 40 years of basically flat income for working men and women in the country. And there are a lot of pictures that say this is trade. Whether or not economist can agree that its that trade cost the jobs. It certainly cost the wages. The ability to move jobs or the ability to threaten to move jobs cost wages to a lot of people. That is a factor that isnt done. Agree with gary we have done a very poor job as a country in terms of having a social safety net and Education System to help people move on if they lose their jobs for whatever reason. So sounds like were ill go back to you just to be fire, in the back there. Hi, nick berger. Im from Washington State. Were very trade department. Also have you anemic viewunique views. We benefit from import export bank quite a bit. Not just from boeing, but also from suppliers further down on the supply chain. So im curious and i hear a lot of resignation and some doom and gloom in what youre saying right now. So for the benefit of the great estate. Youre very perceptive. For the benefit of the great estate and t greatest state i union, what can we do to advocate some of these policies we dont know yet. Particularly xm bank. How do we make sure that doesnt suffer like t tip and all the other things that we liked. Well, i get lost in the bank issue. I understand its important to you, but its pretty marginal in terms of things that have been discussed here. How did if we had the best trading and worker adjustment programs in the world, would we still have been able to withstand the lure of cheap labor from mexico. I began work at the u. S. Chamber of commerce decades ago. In the 60s and we were beginning to deal with problems. And the chambers position was well, look, its trade. The operation of the free market. They are paying people a dollar an hour or whatever it is. We cant stand in the way of that. Thats the way business is conducted. Makes sense because we can make Cheaper Products to supply the market et cetera. Were all familiar with that. Is that part of the end all problem. Was that the wrong policy . Should we have allowed those manufacturing facilities to be accompli established in that way. Was that a way to maintain american jobs. Or does it come down to secretary shultss bad decision or inappropriate decision or the position of the business leadership, which i understand has not wanted to like shults, not wanted to appropriate the money necessary for a really comprehensive serious trade adjustment assistant worker program. Ill go on a half a second longer. When i talked to the representatives here in washington, senior representatives ge and ibm and others and they ask about this issue, their response all of them is to say, what they do, what ibm does, what ge does to retrain. We spend more money on that than, you know, and then theyll si cite the figure. And they do. They spend huge amount of money training workers for new jobs, existing jobs they need. I can certainly understand that. Thats not a response to the national issue. We really havent and i dont hear anything in the trump policies that says to the labor department, okay, we want to gas up your programs. We on this panel a woman very able assistant secretary. Deputy secretary for trade adjustment assistance from labor department. Theyre very serious folks. They aided, had 49,000 cases last year, but as gary says, thats a drop in the bucket. They arent as serious people so thats not going to do it. Im wondering how whether theres a i dont know what the question is here. Do we have to face the implosion. Will suggested its not the same kind of implosion maybe, but do we have to face the catastrophe that this is all going to go down to the disadvantage, huge disadvantage of the American Worker and consumer and just have to learn the bitter lesson like we learned it in the 30s. Is it down to that . I dont know if anybody has any response to that. Im going turn to gary. You wondered off so much. You lost it. Whats the we we were talking about. What is the proposition. I think the point of the implosion was we get in a trade war, if i understand it. Thats one thing. R you were then talking about the more general question, the effects of trade on income equality. Separate those. Okay. Thats where i went. The first one i could pick up after you, go ahead. We kind of wardndered in all kis of directions. I like the wandering. Thank you. Let me say a word for the xm bank. Ive been associated with that for years. Its absolutely ridiculous we phased it out. I agree with bob its marginal. Its an important margin and every other advanced country has a much larger bank than we have and now our bank is basically out of business. Its as simple as that. If youre proexport, as this administration is. You should tell Jeff Sessions because hes in your administration to get with the bank. He opposed it in the senate. So maybe we could do something about that. Its marginal. I agree. The big thing is the Exchange Rate. Weve had an overvalued Exchange Rate. The u. S. Dollar for 20 years or more. That is the biggest single reason within our control to why we have this continuing deficit which is now ant 500 billion. Which led to all this political upheaval. And, you know, who controls the Exchange Rate. This didnt get mentioned in the campaign. Two body which control it. The federal reserve. And actually the Exchange Rate is in the bill. Nobody notices it its there. Have everything to say about the Exchange Rate and not said a wit about it. Under the Obama Administration, under the george w. Bush. Let it go. High Exchange Rate for a lot of reasons. We get these persistent trade deficits which is quite unfortunate. Just to put a final number and code on what bob said, the actually expenditure on trade adjustment assistance, this tiny little program, is less than half a billion dollars. I mean, this is ridiculous. On the xm. Very brief on the xm. Is probably the countless measure that most people in the system can tolerate. One of those permitted things. Theres one complication. One is that actually Washington State actually went after the european xm. The European Investment bank over boeing. Let me show you a glass house. And number two is that europe and United States together went after shore and city b. We never raised the case with wco, but it is one of the major irritants of International Trading system of export credits. So im not advocating. Im not a big fan of political in europe. I think everyone in this panel will vouch for that. Im not very european. Overall, i think thats a doubleedged sword. We would have to think about what kind of political implication that would have. Thats all. Okay. I think will is the next one then claude. I said earlier i think we need to change the language that we talk about these policies and trade adjustment is something we all threw in the trash can for a while. Doesnt move the dial at all. Both terry and gary both right that we have both parties have unconscious bli ignored the impact since 2000 and White Working Class people of economic structural economic transformation. I dont think theyve been dissenting against trade policy. Theyve been fuelling the results of trade policies since 2000. Done nothing, but bring them downward mobility, stagnant wages and the sense of being culturally engulfed or displaced. They dont theyve totally withdrawn confidence in government policies, but also on trade adjustment. Dont believe in any of that. We know where they are. People came out and voted. Rural areas. Small town areas. Where the economy was doing worse trump did best. Hillary clinton swept the big cities where the new economy is doing pretty well. So you know, we know the geography of distress here. We need large scale policy intervention to Steer Development dollars. We are even thinking about Community Stabilization funds that actually help preserve existing Production Capacity to at least slow down the erosion of the Production Capacity that these communities have. As they make adjustments. So we need to two a lot further than trade adjustment to thinking about large scale interventions that really do rise to the level of a social contract thats going to endure that people with lower levels of education can still get middle income jobs and not have this perennial fear of not getting into or falling out of the middle class. Claude wanted to comment. I actually like to shift and look at some of the other questions we havent gotten to. Let me start off with the other guys can shift here. Sort of looking, what is the administration, what is this administration going to be doing in the next few months in terms of trade. You asked the question about a year if from now. One of the things i must say did surprise me, i knew they were going to change things in trade. I sort of thought that in trade and as opposed to some other areas, they might move more slowly. They are really right out of the box ready to go with a lot of things. We can all have our opinions about where exactly theyre going to go. I think its probably not surprising because in a sense, a lot of the things trump is dealing with as president he doesnt know a lot about. He has no background. Dealing with iran, iraq, in trade he has a record of 20 years. If you substitute china for jap japan, which he was talking about in the 1980s. Hes been saying the same thing since the 1980s. Hes ready to go. Looks as if a lot of you probably already know. They have already notified formally canada and mexico. Mexico and canada are already preparing for negotiations. Theyve gone out of the tpp and theyre thinking about the well, before i get to tpp. Weve heard this week within the white house, they are looking at all of the free trade agreements that the United States has. So if they have at least fathered out the idea they need to upgrade in their view of any of the trade agreements that are already on the table. So this is already working. I should say that, you know, if we forget most of the trump people are not in place yet. The secretary of commerce and the white house, they can move forward and use the commerce and ustr staff really to do this. Youve got that. Another couple another couple of points about the tpp. The question here about whether you could replace the tpp. You cannot replace the tpp with bilaterals. You can certainly go back and build up and heres a guy who talked about the deal. He inherited a deal. A good deal. Theyve scrapped it. So now they have to go back and slog through if they want to do this or rebuild it. Individual bilaterals. From an economist point of view, i should point out the Bilateral Agreements while theyre sometimes necessary if you cant get behind that are really a second or third best. Because what youre doing is dividing up markets. We had dweeb in 1990s about the spaghetti bowl. Everybody is doing bilaterals. Great for the two countries. Not great for the countries outside. And also for the system because youre getting all sorts of rules. This is a retro grade step. I had hoped and wrote about this a month ago that the tpp countries outside the nonu. S. Tpp countries would see the benefits of just going on and putting together tpp without the United States. They couldnt do it under the terms of the tpp. The reason i arranged this, if youre japan or malaysia or australia or whatever. Whichever country, youve already taken the political heat for whatever you gave up. Whatever sensitive issue you had of the tpp and potential benefits are there too. Again, a country like vietnam took a lot of flak for things it did internally. It made sense to do it. Talked about why dont we do this. The key is going to be japan. The pressure on japan is going to go in the other direction. Administration has already signaled that it wants to begin talking with japan about a bilateral agreement. So let me just kick that off as to what i think where theyre going to be. They will move forward and i havent mentioned and they talk always about they want something positive. The things dropped in their lap not very important economically, marginally important is the united kingdom. Even there as you may have said and, certainly, would say, its going to be two years at least before the uk is ready to really sign anything. I suppose its not going to stop them from talking to the United States. So let me leave it there and kick it over to others about what is actually going to happen. Okay. What is going to happen. Jose . To follow up on japan, i would say i agree with you fully on every point. And to be a little bit of devils advocate i could say this. If your primary interest of tpp was not corner china, not to build asia pacific alliance. Not to build a natural origin, but actually to disguise a u. S. Japan fda behind the back door and obviously there were some voices. I mean there are conspiracy theories and alternative theories and alternative facts. Regardless of what you think. If you think there is merit in trying to open up japan in whatever means possible, thats inevitable the United States doesnt need canada and mexico australia by its side to open up japan. It can do it bilaterally. You might run into the risk of diluting the interest because canada and aus trail gentleman australia is going to be very different than the United States. When europe tried to negotiate with japan, zero overlap in terms of interest. So tpp doesnt help us. And there were certainly voices in Republican Party who were not necessarily opposing tpp, but saying we should do bilateral with japan first before moving to tpp. That is i think very important. I have two further questions. One is one is in terms of trade agenda. If you drum up so much as the Trump Administration seems to do. If you follow the template of what happened in the 80s with japan. We landed in to a grand bargain. It wasnt a free trade agreement, but there was a number of exchange of bilateral letters that eventually also led to the pers et cetera. The question are we heading towards a grand barring against china. You can call it probably the only person that would have the credibility to do a trade deal with china would be trump. I dont think any other president would get away with it. The second question, the problem is were running against the clock. If were not doing it or trying to look into the europe problem again, europe probably will strike an alliance with china. Not today, not within three years, but its an inevitable question because europe and the United States have run out of Major Trading partners that could impact their gdps, its just a simple factor. Offensively i think japan is an interesting upside. The question i guess is how much of the innovations from tpp get incorporated in a bilateral there. If you take a look at the report on compliance, theres Something Like 35 or 40 major areas of problems with china. What that says is we lost the ability to do the bilateral deal because supposedly off the table. If were going be compliant with the wto. Which obviously is a major problem. I think that if one is going to have a positive relationship with china that actually addresses what the underlying concern is, all the barriers that continue to make it a 31 or 41 trade relationship between us and them. That really requires you to kind of step away from the traditional model and see what else can you do. Whether that be a managed trade situation, which obviously is not desirable, but maybe the one that would create the less the least friction in terms of the relationship. Coming back to japan. Senator is very keen on u. S. Japan bilateral. Very powerful voice in the country and congress. However, there are couple of difficulties i would emphasize. One in a bilateral, u. S. Would want more than was negotiated in the transpacific partnership. What does more mean . It means substantially more reduction of barriers on agricultural. Which is very politically difficult in japan and substantively greater opening of the services, which Services Sector in japan as well known having worked that vineyard for many years is quite restricted. So thats what the u. S. Would want, but what would the u. S. Give. How could the u. S. Under trump give greater access in the auto market than what it already gave it in tpp or greater access in any manufactured area. Its just a complete contradiction of the standard negotiation where you, you know, both give and get and mercantilist terms approximately on even amounts. That would not be the terms of the kind of negotiation which President Trump seems to be aiming for in bilaterals. So i dont see that kind of a marriage made in heaven. What i can see, what i can see is some kind of very, you know, Economic Partnership agreements which has very little economic substance, but basically a cover for the military alliance which is quite important for japan and that might be the outcome. A brief word on china. The suggestion that kind of a nixon to china, trump to china. That is provacative. That does open the mind for sure but terry again has come to the reality, which is that china in the last couple of years has become very much more restrictive than it was before. Not that its completely open before. It has become more restrijtive and that seems to fit with the internal chinesele dynamic. So maybe going on to one of your other questions, bob. Go ahead. The notion that china would take leadership, well. Infrastructure spending they might take leadership in parts of asia, but leadership the way the u. S. Played it in the post war period which was to open our market very generously. To other countries. That doesnt seem to be in the chinese spirit at the moment. So im pretty skeptical of substantive trade leadership though given the rhetoric and so forth. They could kind of get trade leadership. In the last ten minutes here, this is risky. Lets talk briefly if we can about the border tax. From a standpoint of maybe nafda and mexico and the wall. What do you think going to happen . Can the border im going to address this to gary. He spent a lot of time on it. Do we need border adjustment tax. Ill try to be brief, but this could be a couple of hours. Couple of days. Most important thing about tax reform. This is the first time in 30 years the congress has had the political stars with the white house to do business tax reforms. I surely hope the opportunity is not lost. The two most important things on tax reform in the business field are to get the corporate rate down so were on par and hopefully more competitive than all our trading partners in the world. And, secondly, to adopt a territorial system which has not become the norm in the world. We are again, the outliers. The business unfriendly outliers. Those are the two most important issues. The u. S. Has all sorts of wonderful features and advantages, taxes are not one of them. One of the negative features. Thats the aversion. Straight payment for terrible Corporate Tax system. So those are the two important features you now, the board tax adjustment is what was is what the leaders in the house came up with to square the circle as a link to these other two things. You know, maybe it is the maybe it is the lynch pen. Make it isnt. Theres a Big Coalition against it. What i would urge the house advocates of this to do is come out fairly quick ly with a readable pamphlet that deals with a couple of issues. One is the consistency. There are arguments for it to consistency, but they have to be explained in plain language. Realistic chance of retaliation by china, by europe or other countries if we take this into effect. Do we slide into a trade war that we didnt really want . Or is the retaliation possibly very low and the retaliation there are two main forms that it could take probably very large number of forms, but one is counter vetting duties against u. S. Exports and the other would be a mirror image of nondeduction of u. S. Exports to business in destination countries, which was predicated on the u. S. Nondeducting imports from that country in its business tax system. In other words, a mirror image possibility. I think those are two realistic things. Have to be thought about Going Forward. Press your button. Two big tax proposals on the table. Theres trumps and ryans. Theyre not the same. Trump thinks ryon border tax adjustment or thought it was very complicated. What he wants to do is get rates down dramatically, but, you know, who knows. Im not republican. Maybe theyll find a way to reconcile differences and do something about it. To back i want to back up to the previous discussion i think its relevant here. Trump is doing exactly what he said he was going to do. Okay. His top trade targets were mexico and china. So hes going go after them first. Now, the question is wharks is he thinking. He says that nafta is if worst trade agreement ever written in human history. Tpp is the worst won. Iran agreement was the worst agreement. Cant all be the worst. He never said why. What is it that really bugs him about it. Just said its the worst. Exports to mexico. So that suggests that could be drawn to a border adjustment tax or some vat disguised by some other name as a kind of as a trade measure that is to even the Playing Field with mexico, but you know, clearly hes looking at he or ross are looking at the tax as a way in which countries like mexico get a competitive advantage over the United States. I will say this. If you look at well, i think nafta will be locked down. Ill look and you cover it very well. I look at additional three entities. Japan, china, europe. What will they do . For japan, its not a big issue, per se necessarily. The reason being its not an export made country. Its hard to believe their trade dependency is actually on par with the United States. Look at export for gdp. Japan is not an export led country. Its an import led country therefore, a designation principle may not be a major issue. It looks. And for china, they have capital controls. And they have an eight plus percentage growth. Theyll still have investment in china. American companies is going to continue to invest in china, and keep the profits in china as long as United States can not deliver 8 growth. So simple. So it comes down to europe. What will europe do . Well, wto dispute is not given for a number of reasons. We dont like to talk about taxation as a trade issue. And also i should add that we have our own problems with base erosion. Corporate this is the reason why we go after the internet platforms in Silicon Valley because we face the base erosion ourselves. So i would say i will be ill be tempted to follow, actually, gary and say, well, well probably do a number of cbds. It will be the biggest cbd we have but we have to put up something in order to try to keep the line along the well, the wto system and the open system we have had. And there is also certain element if they want to shoot themselve in the foot, let them go ahead. And so but the key problem with europe is that we cant go to this nation principle. Germany has half their gdp coming from export. What are you going to do . Cut off 80 of the Corporate Tax base . No, you cant do that. It is the same thing with france. 27 of the gdp comes from exports. No, it just cant be done. It is is like saying, europe, you cant continue taxing corporation and thats exactly what you dont want us to do either. So in that sense, china having the capital controls and we cant put them up, there has to be some kind of a reaction. Terry, in a few minutes. A minute. Thank you. There is 178 countries as of 2013 that had indirect value added tax systems around the world. Europes go from i think 15 to 27 . And the United States and saudi arabia, the only two major countries that dont. The u. S. Has tried since the 1960s to change the discrimination that our income based system has faced without success. And so i applaud the house for coming up with a concept, whether or not it is wto consistent, i think, is to be found. And i would find it to be quite remarkable, but not unexpected that our friends in europe would bring cbd cases. When, in fact, the combination of tariffs and vats in europe today are comparable to what they were at the end of world war ii. Tariffs have gone down, rats have gone up, u. S. Exports face the same barriers to entry that they did back after the world war ii. Is this on . I dont want to get involved in the tax part. Just to make this political point, clearly the House Republicans, speaker ryan and if you listen to brady again and again, have put this forward in part not suggesting they dont want genuine tax return, but a part of this is an attempt to deflect trump from the kind of unilateral actions that hes threatening. 30 tariffs. It will not work. The Trump Administration is Going Forward now with actions, and the second place is that it is going to take a while. Congress is not going to get its act together for months. Havent even heard from the senate yet and hatch has said given reservations. One part of the Republican Leadership theory that they could deflect the Trump Administration from what it from the disastrous and its private view effect of these unilateral action is not going to work. Were going to see this one way or the other. I dont know what that doesnt mean im predicting what theyre going to do, but youre not going to deflect them from what theyre going to do unilaterally by the tax debate, on the taxing that would help there. Thank you. Gary, it is up to you. I thought you were going to call the time at 1 30. Youre the time youre keeping the time right now. You got it. Well, no, i mean, the points made by others are totally relevant. There is a sense of unfairness that terry has flagged for really decades. I was in the Treasury Department when the leading cases came up, the steel case. And the zenith case and so forth. And, you know, we tried to do something to amend our taxes, tax system, we had the disc, the Foreign Sales Corporation in europe, shot it down both times and i think payback is coming with this talk about the border tax adjustment. Now, when i was in the treasury, thats a long time ago, people used to say, well, the Exchange Rate will take care of the problem. It will adjust. Well, we had 40 years now, and the Exchange Rate hasnt adjusted. You dont hear many people say the answer is going to be the Exchange Rate to our, you know, our trade deficits and so forth. So were going to come back to this bta type of concept and i just hope that in the battle over the bta because the business commune sy ity is lini for and against in a strong way, tremendous pitches in the papers both pro and against, but i hope in this battle we dont lose sight of the two important things, one, get our rates down, and, two, go to a territorial system. Thanks. Thank you very much. Gosh, what a wonderful panel. Thank you so much. I wish the way were clearer, each one of us has got some ideas about that, but so complex and so fascinating and in its complexity. Thank you, and please join me in thanking this really terrific panel. [ applause ] today, the gao releases its biennial high risk list of government operations, most vulnerable to fraud, waste and mismanagement. The Senate Homeland security and Governmental Affairs Committee Hears from the comptroller general. The census burrow director and inspectors general for the va and Homeland Security departments. See it live at 2 45 p. M. Eastern here on cspan3. The president s nominee for labor secretary andy puzder go before the Senate Labor Committee on thursday. His confirmation hearing will be live here on cspan3 starting at 10 00 a. M. Eastern. This weekend, on American History tv, on cspan3, saturday evening at 6 00 eastern, two days after president lincolns assassination, and a week after robert e. Lees surrender in april of 1865, generals William Sherman and Joseph Johnston met to discuss the union armys future. Naval historian craig simons and history Professor John marzalek look back on the historic meeting. Once they were inside, sherman took out of had his pocket the telegram he had been handed just as he was leaving for the meeting, and showed it to joe johnston. So far he had shown it to no one else. It stated that two days before Abraham Lincoln had been assassinated in washington, d. C. Johnston looked up at sherman with horror and declared it was the greatest possible calamity for the south. At 6 50, lynn downey discusses her biography of the inventor of blue jeans, levi strauss. Here say lovely copper rivet. And the patent was awarded after three tries with the Patent Office on may 20th, 1873, for an improvement in fastening pocket openings which is boring language for basically the invention of the blue jean. Sunday, at noon on oral histories, we begin a series of five interviews with prominent africanamerican women from the explorations in black leadership oral history collection. The late gwen ifill discusses her life including had her experience with racism in the newsroom. Getting in the door because i survived this insult or behaved in a certain way was one thing. When i got in, i had to prove to them i could write, that i could meet a deadline, that i could be a good colleague in the newsroom and newsroom environment where once again i was one of very few people of color. So once so just getting in the door isnt enough. It is what i always say about affirmative action, nice the door opens, but what do you do when you walk through it . For our complete American History tv schedule, go to cspan. Org. Center of your screen is actor Ashton Kutcher and leadership today. Actor Ashton Kutcher on capitol hill to testify at a hearing this morning on efforts to combat Human Trafficking and modern slavery. Hes the cofounder of an antitrafficking organization, just entering the hearing room, live coverage on cspan3
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