tv Key Capitol Hill Hearings CSPAN October 12, 2015 8:00am-10:01am EDT
>> between the u.s. and the europen union. that's live today at 8:30 a.m. eastern here on c-span2. >> c-span, created by america's cable companies 35 years ago and brought to you as a public service by your local cable or satellite provider. >> host: joining us on "the communicators" this week, representative john shimkus, republican of illinois, a member of the energy and commerce committee and also a member of
the communications and technology subcommittee. representative shimkus, thanks for joining us. >> guest: it's great to be with you. thanks for having me. >> host: and also joining us, david mccabe of the hill, thank you for joining us. >> pleasure to be here. >> host: there's an effort in congress about who controls the internet, internet dominance, and you have a piece of legislation that deals specifically with this. could you set up our audience and let them know what the issue is and what your bill addresses? >> guest: well, it's called the dill -- the bill was originally called the dot.com act, and it was about icann's transition of the eye january that functions, who is the keeper of the addresses, how the internet operates. and there is kind of an international struggle, and the u.n. and some people saying, you know, the united states should
not be the keeper of the final vestiges of a contract, and we should have a multi-stakeholder approach. the tech community has gathered support for that, and we got involved when the congress, especially the house, have gone on record saying we support a multi-stakeholder approach. i got involved when i said who are this multi-stakeholder, who is this group? let's define this group. at first i was kind of made fun of, i think. what is this guy on the subcommittee dealing with these big tech issues. but then as we started talking about this transition, these questions about who are, who is the multi-stakeholder group, and who are members and what are they going to decide, and i think the tech community started saying, you know, there are some pretty good questions in here. we already knew we were going to
have a gao report. the the internet and high-tech community said we want these other things reviewed. when the transitions -- keep the contract, the u.s. contract viable, so that we can do an evaluation of the final product, and then hopefully trust but verify position, and then we will move forward comfortable that that last vestiges of u.s. control has -- is in good hands and a multi-stakeholder approach that doesn't bring in other parties that we might be concerned with. >> host: so, representative shimkus, when is this transition supposed to take place, and what's the status of your legislation? >> guest: well, what the ntia has done is decided to extend the contract with icann, and that's a very, very important aspect of this thing. we think our legislation helped move the administration to make sure they extended the contract
so some of these questions could be asked. a lot of positive things have been said in the senate about our bill. there's a hold placed on it right now based upon what we think is kind of a misunderstanding of constitutional and a properties rights debate on the, on the dot.mil naming and the like that has raised some flags over there with the hold. it's our hope that that'll eventually get resolved and they'll move the bill. the big benefit was we slowed down the process, and we had the really the high-tech community be also get involved to look at this process. and with this delay we hi we'll get a better product. >> host: david mccabe, go ahead. >> so are you saying it will still be a success even if the bill doesn't pass because it slowed down the process? >> guest: well, yeah, it's not
really just slowing down the process, it got the high-tech community to ask the question. if you look at our bill, there's four other provisions in the bill that really came from the high-tech community saying we need these things also to be addressed. so as they continue to do that, of course we'd like to see the bill pass. it does give us a last chance to have a say what's going on in the senate now is really delaying our opportunity to have a final say in the final product. so it'd be better if they passed it, the president signed it and then we get a chance to have final oversight of that product. >> do you get a sense is there anything you can offer, what can you offer senator cruz and some of his colleagues who have raised concerns about this bill in the senate that might get them to lift the hold? gloog that's a great question. [laughter] i don't know. i'm not in the process of offering senators whatever you
might offer. i think we have a bill that's passed, they have a bill that they want to move, and sometimes offering is done by the leadership on the senate side to get floor time to do this or that, accept amendments or the like. so that's kind of outside of my bailiwick. >> host: representative shimkus, as far as the transition process, give us a for instance. what would alarm the congress so much that they need to actually step in or alter thes process of transferring this internet dominance, domain? >> guest: i think the multi-stakeholder approach labeled and had totalitarian regimes who we know are enemies of the united states who would then use that ability to either disrupt the ability of their citizens to get free and fair access in the worldwide web or use that position to hurt or harm the united states and our interests. >> host: so if there's multiple
players in this, who ultimately makes the call as far as how things are done as far as dominance issues are concerned? >> guest: well, that's part of the question that i think are being continued to be asked, why we would like to see more resolution. because those are exactly the questions that we need to have answers on. the gao report's going to come out with some analysis, but the multi-stakeholder, high-tech community, they're asking these questions in meetings, you know, not -- well, sometimes in smaller groups monthly, but they're hashing through that right now. >> host: so, representative, a couple of weeks ago on this program we had the opportunity to speak with the head of icann, the ceo, and asked him about this process not only from the perspective of him being the head of the organization, but what he sees going on on capitol hill. i want to play a little bit of the response he gave and get you to respond to that. >> guest: okay.
>> guest: but there was never a question whether this is the right model. so the u.s. government served, i think, as a very, very important backstop during the years of the formation and the strengthening of the multi-stakeholder model. and now that the model is strong and involves many of our key businesses -- cisco, at&t, microsoft, every major u.s. company and every major global company that works very closely with our internet affairs -- is at the table. we have governments as well. we have civil society. we have many of the groups, the technical groups. we have all the players, the multi-stakeholder players at the table. and the u.s. government came to the conclusion that the model is now ready for it to show the world our belief and our
commitment to this model and the best way to do that is to let it go. >> host: representative shimkus, your response. >> guest: well, i think i agree with most of that. again, the concern was, you know, he laid out who he says the multi-stakeholder model is, they are. but in the decision-making process, you know, who's going to have the leverage to have, in essence, the final say? and they have, you know, they're developing policies and processes where you've got a majority of a supermajority of votes and overriding and all that stuff. that's all we want to see, is a process what we don't want if this is not successful, there is a fear of the balkanization of the internet. you have some of these stakeholders who we may question their intent try to break away and create their own little, you
know, world of internet communications which is not what the entire worldwide communications system wants. we do want a good cop on the block to make sure that we're all playing by the same rules; hence, the multi-stakeholder mold. we just want to make sure we know who the policeman is. >> i'm just wondering, you mentioned the origins of this system, and there's new criticism coming from some of the critics of your bill that holds, essentially, because of the way the system was set up originally that the government may not have the authority to transfer control of this system. and be so i'm wondering what your response to that would be, and i'm specifically talking about the letter that came from senator cruz and senator grassley. >> guest: yeah. i don't agree with that analysis because we're not giving up that
root, that root address. that's the basis of their argument, is that a root address will be given up. we'll still maintain the root address. so i don't agree with their analysis of the, in essence, the ownership rights of the government because we're keeping what we have. >> they've asked for a gao report essentially looking at these issues. obviously, they're saying one thing, you're saying something else. do you think the gao to report is a good idea, or would that be a disadvantage to congress' role in this process? >> guest: well, by the time the gao report comes out, this could already be resolved. i mean, a gao report's going to take at least a year to do that, my guess, and then this process based upon the contract -- our goal was to make sure that we kept the contract in place so that we could have a review of the system. when the final -- the importance of the bill is that we have a last opportunity to look at the
final decision on the multi-stakeholder approach. >> host: you're watching "the communicators" with representative john shimkus of the energy and commerce committee and representative of illinois on associated note, when it comes to the internet, the fcc has plans when it comes to net neutrality. mr. shimkus, where are we with the plan going forward, and does congress have a role at this point? >> guest: well, i think that the ship has left the port be -- port on net neutrality. i've never been a big supporter of it. the primary reason is i want more pipes, not less. and i think the assumption is, is that the holders of the pipes would restrict transmission of data. now there's other reports in current news about internet service providers, you know, might be doing that too. i would like to encourage fiber on the toic layouts -- fiber optic layouts than less, and i
think net neutrality tries to force itself on the existing system to make sure that a traffic are, all traffic can flow, but how does it incentivize a buildout of more? >> you said kind of the ship has left the port be, but that hasn't stopped your colleagues in the senate from meeting on a potential compromise bill. i'm wondering what that looks like? >> guest: no, i don't know what they're meeting with and on. so i don't know what it would look like or what they're trying to propose. >> is there anything that would have to be in there to get your support? >> guest: well, again, i want to see -- all i want to be able to see is how do we incentivize the laying of new fiber optic cables? if we -- because when you, when you make a governmental demand on what a private entity can carry, then you're almost assuming, well, then is the
government then eventually going to have to get involved in funding that so you can upkeep that because you're commanding carriage where if you let a free market system incentivize the, you know, the right way to carry large packages, maybe that incentivizes someone to build out. so that's what i would look at, where's the incentive to build out. >> host: representative shimkus, another thing that has to be considered next year is spectrum. as we sit here today, hearings on capitol hill on this topic. could you give us what's happening legislatively on the house side when it comes to this wireless spectrum and how the fcc handles it? >> guest: yeah. it's a very exciting time. of course; we had a very, we would argue a very successful spectrum auction a year and a half ago. technology is just a financial thing, i think that's why i love serving on the committee. really, technology moves so fast that we can't regulate it, but what we know that we need is more spectrum, ability of the space to continue to innovate.
we had a hearing on that today. and it, there was discussions about 3g moving into 4g and 4g moving to 5 and then a debate about sharing technology and how do you do that and white spaces which, you know, in essence, are free and wi-fi applications, you know? it just, you know, for a as muching boy from southern illinois, it makes your head spin. i'm fortunate to be on the committee. the sky's the limit on the applications of what can occur and make our lives better even through health care apps and telecommunication and the like. so i'm very excited about it. >> when it comes to those who can purchase that spectrum, who has first shot at it? >> guest: well, the fcc has to do a bidding process and, you know, we did have some issues in the last auction which, you know, questioned -- there is some subsidies for, a lot of
small, rural, poor areas that we want to make sure providers in those areas don't get blocked out by the large, major corporate entities. but in reality you're going to have the major telecommunication providers and major companies bidding and hopefully hen through that allocation system more people are going to have clearer and better access. but, you know, government's also looking for big bidders so they can fill the coffers of a government that's always asking for revenue. >> so how comfortable are you with the reforms that the fcc has put in place around the designated entity program, providing loans to small businesses, how comfortable are you with those? >> guest: well, in hooking at it carefully -- in looking at it carefully, i'm cautiously optimistic that we're making the
changes that are needed to make sure that those who receive are those who are entitled to that. you know, again, there's a lot of smart people in that field, but there's also a lot of smart people in the region -- in the language of law who, unfortunately, will use their trent of knowledge and the legal system to try to get entry boo areas where it wasn't either the legislative intent or the intent of the regulators to allow that. so the proof will be in the pudding on the next auction. >> is there anything else you'll be looking at during that incentive auction to gauge success beyond just the financial haul? >> guest: well, i hope that you'd have -- we still want to make sure there's competitive carriers out there so that not one person has control and so that when you're accessing, you have choices and that the services rendered -- you know, i think in rural america we know we're not the top area to get
the first modern technology, but, you know, if people in major metropolitan areas are having 5g, we better at least have 3g. >> host: representative, what does it mean that the sprint corporation a couple of weeks ago announced they're going to sit out this auction? what does it say about the process, if anything? >> guest: well, we want more, we'd rather have more than less, and i would say that if you have more people sitting out, then that could be a concern. but, you know, you have to understand also the financial position of a company and where they sit in the competitive field, how they're cabotized -- capitalized. there's a lot of reasons you would decide not to bid and maybe at the time with mergers and the like they feel that they have what they need to move based upon their own particular business model. >> shifting to a slightly different spectrum-related
topic, there's a lot that's been made be including this morning at your hearing about how to free up spectrum control by the federal government. and i'm curious, you've heard some ideas today, presumably you've heard ideas b what approaches seem most appealing to you as your committee and the equivalent committee in the senate look to incentivize the federal government to free up some of its spectrum? >> guest: yeah. and sometimes i'm a little biased because of my military background. the last thing you want to do is harm national security for financial gain of companies. but what, but the government, the federal government has large swaths of spectrum, and maybe only small need at a certain time in certain areas. one, the government has to be fully compensated for the movement from one area of the spectrum to another area. and that's a pretty big price tag because your talking about retrofitting or purchasing new
equipment and requires that move. requiring that move. there's also part of the debate in the hearing today was on maybe some of these aren't, you know, areas where we have somewhere where our intel community or our national defense community. but these areas can be shared which is also a very interesting proposal which should receive more attention than it's had in the past. >> and so you're saying boost the relocation fund, improve sharing. are you in favor of the idea of a government can incentive auction? >> guest: i may not be opposed to that. but, again, with the caveat is maybe on certain slices, maybe not all of them because some of them have maybe more important applications based upon the space they're in. >> and in terms of the timing on any sort of spectrum reform bill aimed at federal spectrum, chairman walden said today he'd
like to see some legislation, chairman thune is working on some legislation. but the timing has been kind of up in the rare. when do you think any action on needs to get done by? >> guest: well, i wish we would have had it done in the last congress. the fact we're talking about legislation and really we have federal agencies now understanding and being more open to talk to us, i think we've made great trades in the briefing. -- great strides in the briefing. i've sat in meetings where they've said, no, don't touch it. [laughter] and that's not the case anymore. so as far as chairman walden's time frame for that, i don't know. i don't try to get in his way. but i do think we're now in a better place to have these discussions. >> host: and what kind of financial haul would you like to see some out of this spectrum auction? >> guest: well, as you know, not all spectrum is equal. so there are particular slices that are more advantageous for people to have.
predicting a return on that, a return on that at auction, i wouldn't have any idea what that would be. but you do want to have the financial resources on relow case at cost. -- relocation at cost. >> you mean for the broadcasters. >> guest: right. >> do you think the current amount available is sufficient? >> guest: i think with technology it's amazing how you can continue to use, have more application and more limited spaces. so i have no idea, you know, of what future holds and what can be used in the big slice of the spectrum available. >> host: representative shimkus, we just celebrated an anniversary of 9/11. a question to you about emergency communications and what's available for first responders and the like to communicate with each other during times of emergency. where are we as far as their ability? has it improved since 9/11?
>> guest: well, i'm pretty disappointed, i'm pretty disappointed. i think in this whole process of providing them the financial resources through the auction and a slice and then setting up the commission, we should be a lot further. be i've always debated and was in this fight saying you don't ask telecommunicators to put out fires, and we shouldn't ask firemen to be telecommunicators. i'm a big believer in the private sector, and we thought there was a way to more quickly and rapidly ramp up a communications system in that model versus the model which is more of a government-controlled model. and i think the frustration that we have now is we're reaping what we sowed which is a
government trying to develop a communications system, and we should be a lot further. >> what can you and your colleagues in congress do at this point to make sure that firstnet gets done? >> guest: well, now we have to keep kicking 'em in the rear end. i'm concerned that they continue to move methodically, bureaucratly. i -- bureaucratically. i think they're going to come back and say we need more money. i would like to go back to the drawing board. that's probably not possible be, but they need to find a way to reach out to the private sector, maybe bring them in and bid on a more rapid ability to get to where they need to be which is having our first-line responders being able to commune a candidate with each other. you know, the -- communicate with each other. the stories of september 11th are tragic. great articles have just been
written. and i'm afraid we're not a lot closer which is kind of the story of when government gets involved in trying to do things that we really don't have a lot of experience in. >> at what point do you go back to the drawing board? you said it's hard, but at what point in terms of money spent or time taken on this project do you go back and say let's start over? >> guest: well, definitely when the first line responders are saying we're not getting very close. i mean, they're the ones who pushed us in this direction, and it depends on if they feel that they have so much ownership now that they're not willing to say, you know, we need to go back to the drawing board, they would be the best ones to help get this, get this finished sooner rather than later. if not, then we'll have -- there'll be a time frame when we'll be so frustrated that maybe we'll look at it as an energy and commerce committee and really the telecommunications subcommittee. >> do you have a sense of what in particular that time frame would be? >> guest: no, i don't. >> okay.
>> host: representative shimkus, when chairman upton steps down as the chair of the energy and commerce committee, are you interested in that position, and are you actively campaigning for it? >> guest: very much interested, actively campaigning, no, i haven't talked to anybody or shown probro sures -- bro sures, portfolios. [laughter] we've got enough issues right now in the republican conference. we want to help him move his agenda. there'll be plenty of time to do that. i can guarantee you right now in this environment is not the time to be moving many that direction. you all who follow us, you know who the key players are, you know who works. we'll just keep trying to do our job. >> host: aside from the politics then, assuming you were chair, what would you be passionate about as far as the focus of the committee over the next few years under your leadership? >> guest: well, it's very -- i mean, that's a great, exciting opportunity to try to bring
competitive market forces to solving our nation's problems. whether it's in the emergency field be, how do we continue to have base load power and reliability while meeting these environmental standards that keep hurting baseload generation in the health care field. everyone should have some health care coverage. the problem with what we have right now is it's expensive, and we're paying more for less coverage so, again, how do you free that up. and the telecommunications world, what's fun there is, you know, it just moves so fast that we can't regulate it. hence, all the new gadgets and equipment. and really i would like to see the fcc work with us to try to kind of deal with the communications act. you know, the bureau system there no longer meets the modern technological age. and, you know, if they joined us in trying to rewrite the telecommunications act, that would be a blast. >> host: last question, mr. mccabe. >> why are you the man for this
job? why should you be chair? what do you bring to the table? >> guest: i've been serving on four of the subcommittees. i think people who on observe me know i work hard. i'm somewhat conversant on the issues. i can be tough when i need to be tough, i can be bipartisan when we need to move bills in a bipartisan manner. and the institution, as tough as it looks like it's tough to work in, it can -- we can get things done. most recently we passed the modernization act with one no vote, a bill that hadn't been touched since 1976, and that's the type of leadership i'd bring to the energy and commerce committee. >> host: representative john shimkus, republican from illinois and serves on energy and commerce committee. representative shimkus, thanks for your time. >> guest: thank you very much, i enjoyed it. >> host: and also david mccabe of the hill, technology reporter for that publication. thank you. >> thank you. >> c-span, created by america's
cable companies 35 years ago and brought to you as a publicking service by your local cable -- public service by your local cable or satellite provider. ♪ ♪ >> tonight on c-span's new series, "landmark cases," in 1830 dred scott was enslaved to u.s. army surgeon dr. john emerson. emerson was assigned to duties in several free states during which dred scott married harriet robinson. when the doctor died, mr. scott tried to buy his family's freedom from his widow, but she refused, and he sued. follow the case of scott v. sanford in c-span's new series, "landmark cases." with our special guest, george washington university law school professor martin bracey, we'll explore this historic supreme court ruling by reviewing the
life and times of the people who were plaintiffs, lawyers and justices in these cases. landmark cases, live tonight at 9 eastern. and be sure to join the conversation as we'll be taking your calls, e-mails, tweets and comments during the process on c-span, c-span3 and c-span radio. and be for background on each case while you watch, order your companion book available for $8.95 plus shipping at c-span.org/landmarkcases. >> and we are live this morning at the cato institute for a discussion on the transatlantic trade and investment partnership or ttip negotiations. after more than two years and ten rounds of negotiations, an agreement is nowhere near. analysts will discuss the prospects for full tilling the promise -- fulfilling the promise of a deal between the united states and european union. they'll also look at what is exactly under negotiation and what the tragedy -- what the
>> good morning, dan. >> we're going to get started. i think we owe it to you since we started this conference so early in the morning, we should not delay. welcome to the cato institute, i'm dan ikenson, and welcome to our long-gestating conference which we have called will the transatlantic trade investment partnership live up to its promise. and, well,ing on behalf of my colleagues and the 35 other participants, really want to thank you for choosing to spend your time on this most festive of federal holidays here at the cato institute. i don't think you're going to be disappointed. we've really assembled an excellent group of experts. they sort of span the ideological spectrum, the geographic spectrum, the age spectrum. so you're going to get a lot of different perspectives on a lot of different matters. you know, it's been quite a week more trade policy with the announcement last week of the completion of the tpp.
it's been quite a year for trade policy really. in the 15 years that i've been at cato, i think this has been the most bubbling of years. we'll see where it all a leads. but, you know, the ttip has long been presumed here to be dependent upon conclusion of the tpp or success of the tpp, and that was predicated on passage of trade promotion authority, so those steps have been taken. so i think we're about to embark on a really robust debate in the united states about the t, ip. the debate has been going on in europe. i think the europeans that the american negotiators and public have been a little sidetracked or focused on other issues. but i think people are ready for this. it's -- ready to start talking about this. there are actually 345 people registered to attend this conference. i guess some of them have slept in, but they will be here at some point during the day, i hope.
[laughter] also as evidence of the importance of this issue, c-span is here, and c-span's going on broadcasting this live today and recording it. so if any of you plan to leave early, i just want you to know in advance that your boss and your colleagues will know. they'll see it. they'll find out. so please stick with us. so now that tpp is done and this debate is about to happen, we wanted to sort of lay the table, what are the issues? there's a lot and this is complex. we want to talk about some of the traditional trade-negotiating issues on the table as well as the broader complexities of the geopolitics. what does this mean for multilateralism, for the wto? there's been a lot of debate about that. we're going to bring some of that to the fore here today. some people want to understand more clearly what this regulatory coherence business is all about. this is said to be the source of the largest gains from a
successful ttip, but doesn't look like a whole lot of progress has been made or there's been a whole lot of accord on how to proceed. so we're going to do a deep dive on the regulatory coherence issues at the end of the day. people ask what are these economic models all about, and are they important? we're going to have an event, a session on that toward the end of the day as well. but you have the program, the information is available out in the lobby. also participants in this conference were asked to write essays, and we've been publishing approximately 1500-word essays about any ttip-related topic, and we've been parishing them on -- publishing them on our web site, and we will continue to do that through next week. next week is the tenth round of ttip negotiations in miami. so we're going to sort of carry this over into that point. just one other housekeeping
remark, if anybody is inclined to tweet about anything going on here, use the hashtag cato ttip, and people will be able to chime in from all over the world. so i want to introduce the person who's going to sort of set the table on the issue. you all, i'm sure, know sean done. he is an excellent journalist. he understands economics keenly, and i like to use that word "keenly" when i'm talking about an english publication. he writes cogently and in a fair and balanced manner. so sean is the world trade editor at the financial times which really is the ultimate transatlantic newspaper. ttip is right in the ft's wheelhouse, so he's the perfect person to set the table for us. in his capacity as world trade editor, sean leads the ft's global coverage of trade and development issues, he follows the imf. in fact, he's such a sport that
he got back last night from peru where the imf meetings were being held, and he's jumping right into this. so he's very versatile. before assuming his current role as world trade correspondent in 2013, sean was world news editor at financial times, before that deputy news editor and before that asia world news editor, and he's put in a lot of roles. he's working his way up to to the top. he's -- can everybody who does trade policy knows sean and likes to talk to him, and i'm really happy that he's here to chat with us. just a couple of ore other points, besides the financial times some of the work sean does appears in other newspapers worldwide including south china morning post, the l.a. times, christian science monitor. sean is a graduate of boston university where he had the degree in international relations, yet he still writes very well. [laughter] and i'd hike you to help me --
like you to help me in welcoming to the podium. thank you. >> thanks a lot, dan. i will beg your forgiveness. as dan said, i am just off a plane, so if i get my acronyms mixed up and start talking about the imf or beps, the tax measures that were passed or amoved in lima or start talking about emerging markets, you'll know that i've got the wrong set of notes here. the ttip is, for those of you who follow me on twitter, you'll know it's sort of an unhealthy obsession as it is for some of you as well. it's something i've been following for the last two years. it clearly is an immense project. and i just thought i'd -- i by
think it's a really interesting time in ttip because we're in that kind of uncomfortable middle period. i think it's -- we're somewhere in the, just before the halftime whistle goes, and i think it's valid, a good time to sort of step back and thin where we are, and that's what you're going to be doing today. you're really going to be diving down into the issues. i thought i'd offer four not entirely random thoughts about ttip here, and this is how i think about it and also the conversations that i have with my editors who constantly say so when's this thing going to get done, and is it going to get done, and should, you know, what should we be writing about this? and i think it's -- so i'll start with really point one which is i think it's important to remember -- and i think this sometimes gets lost in the
discussion of the detail that, you know, ttip is still a valid endeavor. it's a big and valid endeavor worth stepping back and thinking, okay, you know, this is a trade relationship that is as important as it gets in the world today, something like $800 billion worth of trade or more last year. and also it's about the future of trade agreements and really that issue of regulatory coherence that dan was referencing there, that tangle of regulations that business complains about and closing those nontariff barriers that we've been writing about for a long time. but it's also sort of an interesting point in that in business i think increasingly -- and this is not a we mom 9/11 of
the last year or two -- but businesses are transatlantic nowadays. the multi-national corporation which once was an american or a european corporation that was reaching out across can the world is now increasingly a transatlantic one. great examples in fiat and chrysler, gm and the auto industry there. i also think the valid endeavor goes beyond the bilateral of the transatlantic relationship and really it's that it's thinking of it in the context of the wto and global trade liberalization efforts. and the tpp. the noodle bowl theory of trade that all these ftas in the world were going to complicate the world and create a tangle of fields, i'd like to patent the ravioli theory of trade, and
that is that we are now in this ravioli, and if i'm in be asia, i call it the dumpling theory of trade. we are seeing a series of mega-regional agreements that are being written or negotiated and that eventually someday they will become the great lasagna that is the global, multilateral deal. again, i'm patenting that, is if you use it, please -- [laughter] and i think that's a long-term project. be -- i mean, it's clearly when you talk to people in the u.s. administration part of the reasoning behind the launch of tpp and also ttip was about getting something happening in the realm of trade liberalization and moving beyond the kind of paralysis that you have in the doha round now. so i think that's an important
context. ttip is also a geopolitical agreement, i would argue, and that's partly because of my background in international relations that dan pointed to. but -- and i think the geopolitics are as valid for ttip as they are for ttp. people talk about ttp in the context of china, i think ttip is equally valid in that context particularly with what's happening in russia now a days and ukraine. so i would, you know, these are, to me, the three big pillars of why this roadway -- this remains a valid endeavor. the second point that i think about is that great question i get from my editors which is, okay, this is big. can you actually get it done, or can they actually get it done? and if so, when? and when you're in the daily news business, this sometimes turns into a slightly depressing
conversation. i think the question, you know, the answer that i offer my editors nowadays is, yes, it'll get done but probably not anytime soon, and that may not be the answer that some people in business and others who have a shorter horizon of thinking may want to hear. but i do think that increasingly, in my mind, it's hard to see this getting done during the obama administration, and that raises all sorts of interesting questions. i think they're going to try to get it done. clearly, they are trying to get it done. mike froman and cecilia -- [inaudible] recently agreed to accelerate the negotiations. but really everything has to go incredibly smoothly to get even close, and as one senior
official involved told me when we talked after the froman meeting recently, really what we're laying out in front of us just gets us to the mid game. and i think that is something that is important especially in the context -- and i use tpp as a reference point. tpp, for those of us who cover it, it's been a joke that this thing has been in the end game for two years. be ttip is only just -- if ttif is only just getting to the mid game, you know, we've got a long road ahead there. there's a couple of reasons why i think this is going to struggle to get done in the obama administration. one is the complexity of the deal. i think a lot of the conversations feel like they're only still getting started even though there's been two years. and -- though it's been two
years. and i think that's interesting. the other point is i still think for the u.s. administration tpp is going to take a lot of energy to get through congress in the next -- to close, to scrub, to get the text out, to sell politically. the administration is really going to be focused on that over the next year or so. i don't think it's a zero sum game, and clearly the folks at ustr have argued for a long time that they can walk and chew gum at the same time, but there's a question of attention and political pressure as well. i think but -- one of the things you've seen in tpp is sort of a building urgency over the last two years. for most of the last 6-9 months if not year, the tpp negotiators have been meeting weekly, essentially, in intercessional agreements. they've been on the phone, closing a few, you know, especially the u.s. and japan
negotiators have been on road constantly for most of the last year. so, and i don't see that in ttip right now. i may be missing something, but i just don't see that accelerated schedule there. i think the other point is that the political timeline ahead is getting very interesting. i don't think in 2016ttip is going to draw quite the opposition or the heated debate that tpp is here in the u.s. for obvious reasons. but i'm not sure that in the context of the antitrade rhetoric we're hearing on both sides in both parties right now that even a deal with europe is going to be immune to that or some kind of blowback.
you know, there's an argument that putin's new syrian endeavor and his other adventurism in ukraine and so on could help make that geopolitics case in the congress, but then there's also i keep wondering and i was thinking about this on the plane last night although not for that long, i wonder what donald trump would make of ttip. if tpp is a disaster, what would he think of ttip? and i could, i came up with some fun quotes that i was sort of imagining him speaking, and then i switched off and moved on to something else. [laughter] but clearly, there's potential grist there. i think 2017 is the more important year in terms of the political timeline, and this get into why i don't think it'll get done in the obama administration
as well, and it has more to do with european politics rather than here domestically. and that is you have three monumental votes in europe in 2017, and that is the german election, national election, french presidential election, and i think equally importantly the u.k. referendum on whether or not to be in, remain in the e.u. in each of those elections, i would expect ttip will be an issue that will be vigorously debated. there were 150,000, 200,000 people in the streets of berlin on saturday protesting against ttip. that tells you that certainly there are people who feel strongly about this in germany. angela merkel has been treading very carefully on this. her coalition partner even more
so arguably. but, you know, across europe there are now three million signatures on a petition against ttip, and that's starting to become a big number. i also think that sort of vocal opposition is bleeding into a kind of broader skepticism about ttip that i hear from some of my colleagues who are asking me as europeans as much as economic journalists but also hear from others in the quiet center now. and i think that is really, really important. i also think the leaders in each of those elections or votes is politically savvy enough to know that wills a risk -- that there is a risk for them in this debate. i think the third random thought
is that the barriers or stumbling blocks are just not going away. and, in fact, they're arguably multiplying in different ways. we've long talked about the snowden effect on data and the discussion will that kind of how it adds to suspicion across the atlantic, particularly in germany. i think, you know, that is still there. i also think the safe harbor decision that we saw recently from the top court in europe, it's not technically part of ttip, but it's emblematic of a broader suspicion there. i think that's -- broader suspicion be, but also a sort of combination of jealousy and angst that you see in europe now when it comes to the issue of innovation and technology companies which i think is really interesting and i think will shadow the talks.
bgmos -- gmo tos, the decision by the european commission earlier this year to allow member states to opt out of any decision is important to recommendation are. it's not a firm decision, but clearly it tells you a lot about the european commission and how they're going to handle the politics. the isds, and i don't believe i've gotten this far without mentioning isds. the investor state dispute settlement mechanism and all of the heat around that. i think there is a view in brussels that they've come up with a solution with a recent proposal for a wholesale rewriting of the system. i think you only have to look at the u.s. chamber of commerce's incredibly rapid response to that, negative response to that proposal to see why that may be more difficult than the europeans think in terms of the negotiations. it has two main points as far as be i can tell; the creation of
an international court with sitting judges to hear investment cases. it sounds a lot like -- [inaudible] to me, a multilateral institution that will hear these investment disputes. clearly, among opponents it's a poison brand. so the europeans want to come up with something entirely fresh. and the second thing is that it is an appellate function for investment cases that would allow governments to go before a panel of sitting judges. i think both fit in very much with the european idea that the answer to a problem is often to set up a new institution. i don't think that goes down so well, well, particularly in places like this. and here in washington more broadly. i think, you know, there's myriad other questions out there that are building on these big
questions on whether financial services will be included or not. these are things that should have been answered some time ago, i would have thought. that said, i did say, yes, i think this is going to happen, and that brings me to sort of my fourth and final point. and that is both sides want it to happen at the political level certainly. so what has to change for it to happen? and i think that is something that the negotiators on both sides have been thinking about a lot and were discussing during that recent meeting. i'm not sure they've got all the answers, but clearly something has to happen to get some cupid of new momentum -- some kind of new momentum behind ttip. i think the first thing is really a recalibration of the endeavor. is this the big, catch-all
agreement that a lot of its advocates have sought? should it be that? there were people when i was still based in london who would talk about ttip as the beginning of a transatlantic, basically a growth of the european union across the atlantic and it would become a single economy, a single market across the atlantic. i'm not sure that ttip, given the current challenges, will get you there. that may be a good long-term goal, but it's not where this is heading. i think particularly with what is happening in the e.u. and the suspicion within the e.u. of the e.u. itself and its role, so i think that's one point of recalibration. so do you focus instead on something that focuses on tariffs, services, maybe some
government procurement lines? do you turn the regulation project into a longer-term project? people have talked about ttip, i think there's two hines that immediately come -- two lines that immediately come to mind with ttip, one was let's get this done on a single tank of gas. that has gone away, although the argument now is perhaps we're with an electric car instead of a gas guzzler. and after vw, certainly not a diesel. [laughter] the, but, you know, i think there's people, and matteo remember si was making this point a year or more ago, there's a kind of early harvest deal to be had and that regulation, begin its complexity, should be viewed as a longer-term project. i think there's, you know, when i talk on or listen or ask questions on regulation, it is
still striking to me how much the question of regulation on things like food and auto safety and so on is a kind of a mars and venus thing. and i'm not sure you solve that in a trade agreement kind of immediately. the second point is to really accelerate negotiations. i think right now we will see next week an exchange of new tariff offers. this is only the second exchange of tariff offers, and i think that's telling. it's been two years. the first one didn't go so well. they've both agreed to set a 97% threshold, and so turn this into a negotiation over the remaining 3% of sensitive tariff lines. but if you're going to go into closing mode in 2016, you need to be meeting more quickly than they are planning to at point. so tariff offer's next week, and then a procurement offer's in february. that already takes you into the
spring almost. i think the second point is european leaders need to handle the politics better, and they need to be braver if they want to get this done. and i haven't seen any signs of that, particularly from the european commission which i think has been a much more political animal under jean claude junker than it was under mr. barroso. i think one of my questions is when cecilia malmstrom took over, i started thinking of her as engaging in the kind of rope-a-dope maneuver of i'm going to listen, listen, listen to all the opponents and then try and wear them out that way. i don't think that's worked. clearly, we saw that on saturday in berlin. i think -- and this may be a provocative point -- americans
need to be better in the context of this negotiation at proving their european-ness. which, again, is not a comfortable admission for some parts of the polity here. but i've been away for 17 years, and i've just come back, and i am struck by how america has changed in a number of ways. and how the traditional narrative on our different economies and how we regulate has changed. ..
>> so i think i will stop there. i'll let you chew on that idea, on the chicken, if you want, or the freedom fries if you prefer. and just up with that point do you really have an interesting day ahead of you. at an interesting point in this negotiation. i think this deal is going to get done wha but i really do thk some things have to change in the dynamics for it to get done. thank you. [applause]
>> i think dan wanted to introduce the next panel. but he's disappeared know. is he coming right back? okay. [inaudible conversations] >> exchange ttip jokes. [laughter] >> i will take a seat and leave it to dan. >> all right. shawn, that was an excellent overview of the issues we are going to get into in an exchange year. please, take your seat if you were on this panel. come on out. so this session is supposed to go from nine to about 10 past 10
or it's going to be a conversation. the original idea was to a bunch of chairs up here and like a sunday morning talk show and thought, but i think there were some complications with the number of your mic. it's more academic set up but the purpose here is to talk about the issues. there are lots, as shawn just gave you a taste. there is a lot of complexity. what i'd like us to be able to do here is to debate some of the issues, to a list address some of the issues. there's lots of them. i want you to leave this session with the sense that there are some public issues that may be difficult to resolve. maybe he would make sense to take them off the table. maybe would make sense to compromise in some of the way. i would like you to have an estate of some of the major offensive and defensive interest of the u.s. aside, the european
side, and get a sense of where things stand going into the ttip around of next week. the couple years ago a paper came out by the atlantic council and bertelsmann which i've always liked because it identified about 20 or so issues that are on the table. they have produced the results of the survey was asked trade experts on both sides of the atlantic whether to which issues are very complicated but the most obligated to resolve coach of the most important. they plotted it, the next axes and so the most difficult to achieve than most important successful outcome were up in the top right quadrant. but anyway we talked about all these various issues. i would like to get into some of them. obviously, trade agreements deal with tariff, agricultural, gmos, measures which are
ported from it, talk about coherence a little bit. we have a whole panel devoted to that later. labor and environmental standards, intellectual property, protection, financial service, energy export. there's a lot of issues. let me also note that thi therea slight programming changes may have noticed. i kind of try was supposed to be with us. she's coming later purchase some logistical issues getting across the atlantic -- iana dreyer -- fred help to volunteer to help us out. so the way i want to proceed is what you ask a question that i have 12 questions but i'm going to ask the question, going to direct you to one of the panelists. he or she can start with an answer and others can chime in and when we have sort of exhausted or when it's time to move on a ask the next question. the first question i have is for
fredrik, fredrik erixon. and by the way, all of their bios are in your packets by really quickly, fredrik erixon from ecipe, from brussels and celeste drake, afl-cio, marjorie chorlins, chamber of commerce, axel berger from the german developments at it and susan aaronson. let me start, fredrik them with questions you get what you consider the most important issues to a successful outcome for the ttip come and what do you consider to be the most difficult to solve? >> i think it's actually the same issue, and chandra detention to in his talk. of course, the united states becomes the 29th member of the european union. if you want to show your increasing european is you should take longer holidays and a bit less social model which is desperately lightyear at the
cato institute. and please don't take away the illusion of these green cards, far more environmental than yours are. that's sort of ambition we're going to have for what we're going to get ttip. now, let me just a couple of words on the issue, dan, from the viewpoint of thinking fresh the economics and the political economy of it all. i'm not sure desperately happy with him this obsession a lot of people have about estimate the potential gains and losses of trade agreement special by using the models we know are not really capturing some of the key benefits that come from trade. i'm sort of complicit to that myself since i have authored these studies with some regularity.
i think ttip itself has to be put in this broader context, and that context is larger that we're seeing in and to 25 years of globalization, and ended to the idea that constant expansion of the principles of economic liberalism is going to pass the western economy, adequate to deregulate economies at that sort of the regulation is going to have very strong effect on what happens externally between countries. i have a book that is coming out in a while, been sketching sort of a different scenario, which is we have moved from past 20 years of corporate globalism given the fact that globalization was so heavy powered by big and global corporations, and their trade linkages across the world, so we're moving from that into a period which i think is going to
be more characterized by global corporatism in the sense we are seeing a revival for pretty all ideas about linkages between business and governments. we are seeing a revival for discriminatory, sometimes productive use of regulation. that can manifest itself in everything from sort of skepticism towards different mergers and acquisition, deals, for instance, ge bidding for french company -- can't remember the name of it right now, and this sort of, how the politics around these deals came to be very sensitive and very controversial. we are seeing in today's financial times to plug shawn smith paper an interview with
the ceo of barclays bank was making the case for the buildup of a global, european champion in investment banking. because american investment banks are getting too competitive. that's the sort of government interference in the economy we are seeing and it is going to sort of have companies as governments become much closer. that's the context that i see strategic, which sort of translates itself into a new type of scenario for global trade where trade is going to go far more slowly in the future than it did in the past 25 years. we are seeing this in the trade statistics. we'll see read orientation of the structures and trade. partly because ac on emerging markets have developed to the point out economy where they begin to integrate much more regionally than they do globally -- asia.
you see ethics come into asian region which is taking away a lot of the benefits that the american economy and the european economy could thrive on for the past 20 years. >> i just want to pick up on the points you made earlier about the trinity, the 20 night european state. does anybody else on the panel sort of share the view that ttip is the completion of columbus' conquest of north america? [laughter] are there other perspectives on these issues? what are the big issues? what are the stumbling blocks? >> good morning. if i may add to fredrik's excellent remarks, i feel a little differently. i see it as not only come welcome i see it as not only being about trade but rather about governance. not only competition of governance models among u.s. and eu countries, but also between a western model and a chinese
model, or a western model and perhaps an asian model. and i make that distinction because i think they are not the same. but it seems to me that we were talking about new issues, such as regulatory coherence, and you sectors, such as information flows, actually much more than trade. to me it is about governance. when the united states moves from focusing on specific human rights such as labor rights to a broader conception of including human rights, we've learned something from the european model. so it seems to me, ttip could set, you know, if you buy some of the things that policymakers have said about it in terms of creating 21st century trade agreements and setting golden standards and building blocks, i think those metaphors are useful and also a little bit scary to
think we need to be honest about what this really is. >> any other thoughts? >> just to jump in, i don't buy many of these metaphors may so. i think what we're looking at is pretty standard type of free trade agreement negotiations between, the end of the, the result of it is going to be free standard type of free trade agreements that we have seen in the past years. topped off with infusion here and there that hopefully can at least have a new crowd control together with more regular issues. but sort of the idea that has been at least initially sought to the public about a 21st century graded about creating a single market across the atlantic, i think we don't think this is going to happen. that just leads me to my sort of conclusion, what i was going to say, which is that i think this
is an agreement that at least in europe is going to be sort of won or lost on its capacity to generate more growth, more jobs. that's the politics of the. if you're going to end up in agreement that has only small benefits to that quest, then i think you're going to see all the other phony problems that perhaps controversial issues are going to magnify, be far more bigger. sort of chlorinated chicken or what have you. so if anyone to go for sort of the big benefit you need sort of run with a strength of which you've seen from a lot of the estimates that, potential growth. you need to go into th into so s that can deliver huge scale benefits by taking my tariffs and taking away perhaps someday type of trade restrictions that are there. you need to think about services, data, and how you can sort of use of the trade agreement itself to throw some
friction into global trade policy in the sense that you would want an agreement year which can at least for the future the burden trade in the sense that you push countries like china, india, brazil and other large economies in the world to become far more favorable to more of a western type model of this issues. so if you find a sort of combination is going to be a fairly good credit but i don't think we're going to have a high hopes for going to on that spirit you just alluded to the geopolitics which shawn spoke up. what do you make of the geopolitical arguments for the agreement? how important is a relative to the economics which fredrik was just articulating? is it about security or is it about writing the rules of trade before china and india brazil to come at is that important? >> i think it's both the economics and geopolitics, and i think i'm going to take the bait of it on the 29th because i
think that links into this with the geopolitics. one of the things that we've seen and we saw this in tpp and we're seeing this in ttip that if you want to have success in tackling the difficult trade agreement you can either make progress on very thorny issues or you can expand. tpp did that for quite a while there it was supposed to conclude in november 2011 when the u.s. was hosting a tactic again. how to show success of? bring in mexico, canada, japan. boudinot were successful because we're getting bigger. if you look at europe but, of course, having their own debates with the north versus the south in some of the euro zone issues as noted. one of the major elections is what will the british decided to vote in europe is to be? one way of strengthening its expand to get involved in something bigger, not perhaps a fourth after bring the united states in as a member but it looks that way a little bit. it's an expansion process,,
tightening up ties to the problems we see in all of these is that brings its own complexities. tpp, yes, it's nice japan isn't about revenue to difficult negotiate issues and that's we have in ttip as well. when you ask about the geopolitics of this, there is, geopolitically its import have a strong europe. for a whole range of issues and challenges you want to have the strengthening come and the font is this is the kind of thing that could've bolstered as fredrik said, adding some growth, having more jobs would cure me of europe's eels. i would ever feel better about not just what agreement he reached the en end of the union itself so it can then serve as a bolstering that way. but i think it was a lot of what was behind because there is no shortage of venues for europe and the u.s. to address on economic matters and that's part of what the challeng challenge p
yesterday been addressing these things all a long. you eight rounds, transatlantic, council what they were doing bilaterals. so if you wanted to tackle chlorinated chicken, there were opportunities. doing it in this way with a big agreement i think is largely to sort of reinforced not only is europe in fact -- contact with this bond between europe -- shakshaken through a number of events over the last decade or two, that you sort of advertising that stronger. which is great so long as it works. >> good point. >> i think we are missing the point a little bit in that there's not that much room to grow through a traditional trade agreement. through all the rounds of wto, the fact of the u.s. and eu have pretty low barriers facing each other whether it's tariffs, whether it's regulatory
barriers. entity id of the ttip is simply were going to achieve astronomical growth and got out of us to go to the great recession because we are going to get rid of a barrier against chlorinated chicken or hormone beef, that this is a really born out by the data. the gay bishop even in the very best case scenario the growth that you're going to achieve is a little more than a rounding error. so that doesn't appear to us to be enough of an advantage of the ttip to really live with a lot of these other things that working people are pretty concerned about. and with the ttip agree but it's not really we are going to mr. lund because that's a great offshore platform to get back to the united states, but it is a lot of these questions about isc have come about as good as the final say over regulations, over how we're going to have economy and if this is a new form of global corporatism, i think
working people are very concerned that is going to be even more corporate power in the new form of globalism because it was really not advantageous to working people under its current guise. >> doesn't it depend on what the rules are and how we come where we live our lives the terms are? i've spoken, i questioned global governance as opposed to trade as susan mentioned it as well, but is there a good agreement? can regulatory harmonization spawned great saving services that can be passed on in the form of new investment to create jobs and lower prices and things like that? >> absolutely. i think there are two main questions. one is the transparency with which it is negotiated. is working people and other members of civil society are locked out of the room but everyone knows that big
corporate lobbyists are maybe not in the room but have the best access to the negotiators and the most influence over the rules that are written, those rules will not be written in a way that favors workers. secondly, businesses achieving more efficiencies is terrific in a vacuum but it cannot be argued based on current economic models that that's automatically going to be shared with workers. what we see and not just in the united states but in the uk, and germany and mexico and south korea come is that workers are getting a smaller and smaller share of national income. and particularly as productivity goes up and workers incomes are not rising. and so this is problematic and if the rules to address that kind of concern that workers can prosper as the companies prosper, then you're going to see continued skepticism and doubt about the ttip as you saw in germany on saturday. >> i just want to ask a question to fall. this vivid idea of workers locked out of the room.
userland mechanisms like labor advisory councils. i do from time to time to bomb initiation speaks with organized labor. do you feel there's not useful communication, that the current model doesn't work to give workers a say? >> it's about a documentation so much as about influence and vows about. certainly there our labors amongst the 600 or so advisers. about 30 of them represent labor. such as numerically you don't have a fair representation in regards to the number of workers in america versus the number of business in america. but more important than the numerical representation is the impact, the affluence and the effect come and survey the obama administration has an open door policy. we present issues. we have meetings. they take our phone calls. but in terms of our proposal is translating into what's put out on the negotiating table, and at least try for the things we're
asking for, we don't see it. >> fredric? >> let me just sort of contest that i get a little bit. globalization trade deals deliver benefits for economy when exposed economies to more competition. that's the main driver of the gains from global trade and for trade agreements. the problem with that for the past 25 years is that we haven't seen a trade agreement that's been able to push back competition much, which is why in the 1990s in america and in europe went productivity growth was actually accelerating again, we had more investment go into the economy would have sort of a big boost in trade volumes. at that point you saw take-home pay for workers, doesn't matter
whether worked and how to work, scholars are going up ever since then we have been under declining trend for productivity and as a consequence pay has not increased that much. but the functional income distribution between labor and capital is basically stagnant or it's been flat, for 30, 40 years. it's not that labor itself is taking a hit and that capital is sort of facing on the carcasses of labor. what we see as you of growing income inequality because skills are reported more than other types of skills and the modern economy which means that blue-collar workers have not seen a gone up so much in the past. but in order to shift into a different type of economy that can't exposed economies of different type of globalization that can have more competition and transmit new technology and innovation at a faster pace,
then we need to begin to return to trade agreements again and to sign trade agreements that have the capacity to achieve that. >> do want to offer any -- >> sugar a data we are looking at it from the federal reserve bank and it does say that labor shares of income is down in comparison to the past. so we perhaps are maybe look at different data, but i also think, you talked about the standard economic model for trade agreements not account for everything. part of what they're not accounting for it is the movement of capital. so it's not just the u.s. produces auditing outcompeted by an import certificates of the whole factories are shutting down and moving and companies are decidedly going to produce overseas where it's cheaper and export back to the united states. that's quite different than the traditional model that we are both making line, who is better at it should be want exporting
the. we've also seen a concentration of capital since this era of trade agreement, more mergers, more acquisitions, less competition. if we're talking about becoming more efficient and have more competition we've got to look at the effect of trade agreements on that concentration. what that does not only to consumers but to workers who are trying to sell the labor in the marketplace speak i think susan wants to chime in that i want to ask marjorie about this is perspectives. >> so seems like we're talking about three different things that are related. when the issue is what happened to the chair of labor in terms of globalization, and our trade agreements the proper place to address that problem, given labors declining influence. so that's thing one. and i don't know where we all stand on that. i will be dashed the it will be interesting to see. the second thing does labor have influenced? i would actually argue labor has tons of, it's income it's
certainly heard if you look at the labor rights provision as the default over time, certainly congress has to some extent try to make them as as various administration. so the question is why is that not working to lay pay -- to help labor? and in the third issue is process. how do we negotiate a trade agreement, who is in the room come is a process considered transparent and accountable which seems to be an issue we should talk about that another time, but clearly is i think a very important issue because it's an issue about trusting governance. active governance agreements as i call them are becoming ever more influential and ever larger with more countries and more sectors, how we do it is important is what we include in there. i will shut up now. spent marjorie go out like to ask you about business and how focused is the chamber and business on the ttip quacks and
what types of problems and issues can ttip resolve for u.s. business and u.s. bases here as exporters and u.s. multinationals in europe? >> thanks, dan, very much, and thanks to cater for organizing this. i did rip down all all of it at the gravity this very interesting conference on a federal holiday, but clearly enough people are interested in the topic that the room is nearly full. so kudos to you for bucking the trend and going out and having us all. first thing in the morning. let me start by asking how many people in the room start from the premise that ttip is or can be a good thing? show of hands. cool. and how many of you start from the premise that under no possible circumstances could it be a good thing? all right, there's one on his guide in the back there.
>> come join the panel. [laughter] >> golly, we are to begin? look, the chamber has been a long time, first off, you know, let's back up and realize that the chamber, yes, it represents a lot of big businesses but we also, 95% of our members are small and medium-sized enterprises. southern ocean for star-studded shimmers only about representing big business is a bit, a bit disconnected from the reality of our membership. business is painted as, i don't want to say the devil, but business is painted negatively in this conversation about tt. the practical rally is open to talk about negotiating trade agreements, why are we negotiating trade agreements? was taught by trying to liberalize the free flow of goods of trade in goods and
services and investment flows and agriculture, where ever we can. and by definition this is has a state and a fundamental role in why these negotiations are happening. workers have a fundamental role in them as well because they are employed by business. so this notion some out that there is a dichotomy between what business wants and what is in the interest of workers and consumers, it strikes me as it's an unfortunate dichotomy. i think, frankly, what you see happening in europe right now in terms of the massive demonstrations, it wasn't just in berlin this weekend but in amsterdam as well. i was in the hague last week that i can tell you that dutch officials are going to increase the concerned about the trends in the country as well. i think the debate that you see, i will come back to question in
just a second, the debate you see going on in europe is much larger than what may or may not include in this particular negotiation. it's a much more fundamental conversation about the role of business and society. and, frankly, it's a much more intensive dialogue that's happened in europe right now. i think that in some respects at some point will get around to having that conversation i think that the dpp is, the negotiations have concluded. we will start to see more of that conversation. mode, pitching has been an advocate for these negotiations even before the negotiations were negotiations. we began and i think 2010-20 love with our friends at some of them, some of the think tanks in europe to look at the potential benefits deriving from a conference agreement. initially look at just the benefits of tariff reduction,
and from there the conversation grew to one about what could be the benefits of extending beyond tariff reductions. the notion being quite frankly that in the absence of are the relative monetary fiscal options available to promote jobs and growth that trade liberalization might in fact, should, in fact, be part of the solution. so we've been advocating for this for a long time because we do see the opportunity for greater growth in trade and investment flows. .co grail is, as many of you know, because we are talking about in many instances multilateral, sorry multinational corporations much of the day that goes on between the u.s. and europe is in trust company trade, something like 40% of the critical zone across the atlantic is intracompany
trade which means countries are paying duty twice as long back and forth. i'm sorry but that just creates unnecessary costs in the economy. i do think when it comes to regulatory cooperation people talk about coherence, not talk about cooperation and careers. our members to see significant opportunities. got to stop and ask yourself why, is european and american air safety agencies can deem airworthy and airbus in europe and allow that to be flown here in the u.s. and have a boeing aircraft deemed airworthy by the faa and, therefore, flow without being retested in europe, why is it if we can do that, we have to have, what is it, i don't know if it's mattel, forgive me if i'm wrong about that, why does that make two different versions of a baby rattle?
because the standard in europe and the u.s. is different on the level of decibels that the rattle can make next to the babies year spent marjorie? anna interrupted? this issue is a big issue and it's identified as the source of the greatest games. the european left like like to k about it as a race to the bottom to u.s. standards, and the u.s. right like to talk about global conference and exceeding to these ridiculously economy squashing standards but clearly there's a middle ground. you identified rattles. it seems business should do a better job getting out in front on where to schemes to to be complied with. that achieve the exact same safety or in our mental or labor, whatever it is. are you guys compiling a list of
speakers will come in fact we are. it's interesting you asked that question. there is no doubt about it. especially in europe business has not enough to articulate the benefits of these negotiations. in the u.s. i would say we are doing a better job but we are doing it in an apartment where nobody is really listening get. let's face it, the level, the attention span of the american public is fairly limited and to the extent people think about trade right now, if you think about it at all they are thinking but tpp. i think the conversations that we're going to be having about trade over the next number of months as we saw over the summer with tba been in effect a referenda on tpp and that we'll now have old fart with tpp is a to a set of circumstances. because the relationship between the u.s. and the asian countries is fundamentally different than
the relationship between the u.s. and europe. should the business community be doing a better job here? you bet. and we need to get more information out there? you betcha. i'm not spent enough of my day, that this is my day job, trying to make the case for why improvements in regulatory cooperation whether its central or whether it's in terms of a broad framework for dialogue is important. i'm to do a better job of explaining why you delete an effective investor state dispute settlement mechanism in an agreement weather is an i in the name of these negotiations. the i.s. for investment and where investment is such a significant effect an overwhelming role in the bilateral relationship. yes, i do think there is more that this is should be doing to i think it's also more difficult in some respects to make the argument, if you will, sort of straightforward, business
argument for why this agreement is needed when you are faced with what i would describe as more fundamentally emotional arguments. it's easier to raise peoples concerns about things like come on start have to come back to chlorinated chicken a race to the bottom on regulation or lack of transparency, a number of very fundamental concerns that arrived, i think, from something that extends far beyond what is a ttip negotiation, has much more to do with the basic role of business in the society. >> you touched upon one of hot button issues, which i mentioned, isds. that's an issue we at cato and chamber don't really see eye to eye on. axel has covered quite a bit about it, written a lot about it. axle, which may be sure with the audience your perspective on
isdf, white palmetto, what you think of cecilia's proposal for the current quarter, show your foster a lot of people here have thoughts about that so this could be a good debate. >> thanks for a much foresaw for the invitation. it's a great conference. investors take supplements, that's the topic if i'm going to look at it from a german perspective, which is in the center of the debate. procedures americans are part of most of international investment agreements and are more than 3000 of these agreements. essentially it is about foreign investors have the right to bring claims against foreign states, right? that's very unusual. think in terms of international law. because if you think about the wto, only states have the right to sue other states. that's a very unusual thing in international law. of course, our main issues, many
criticisms you can have. only big ten foreign companies can bring those claims, so it's not really an instrument that small and medium-size enterprises can use but it's not an instrument that national investors can use. there's a question of the impartiality of the arbitrators. there are arguments that arbitrators have been counselors before and so there's this whole question of impartiality. there's a big issue also that the decision of these tribunals are based on very way to provisions. our colleague has written about that. just mentioned last point, our calculations show strong treaties, strong investment treaties, does that include isdf
present have a additional positive effect so there's a big question mark in terms of effectiveness and impact. now with regard to the proposal by the commission, i think it's an intriguing proposal, no doubt about that. shawn donnan talked about it. there's appointment of ashton and appeals mechanism which is missing so far it is increased transparency and so on and so on. so although i think it's an intriguing concept, intriguing proposal i think it's missing the question, why do you need an additional layer come if you want them of international law and a free trade agreement which is negotiated by two countries? to my proposal was just leave it out, right? it's perfectly possible to
imagine a free trade agreement investment agreement between to and industrial countries without isds. you can focus on liberalizing market for foreign invested big you can also think about enforcement of protection standards, and domestic legal settings. that would be my idea. but, of course, another question we should think about is, in case there will be no isds in ttip, what happens to will the european commission take this proposal up and other investment treaty negotiations? with the likes of vietnam, china, japan and other developing countries? so that's one of the question that also that's what of the questions when it comes to the reformers, international investment regime. look at the back of this proposal by the european commission have gone to ttip? >> does anybody have -- yes.
both of you. arm wrestle. >> i think there are two sort of come you cannot to perspective on this, a constitutional perspective and a more pro-my political economic do we try to figure out exactly what was the question to which the answer was isds. from a constitutional point of view, i think it's perfectly obvious, it's a system which doesn't -- and this action is a this action is a very these which is office which is for europe which we been on before is basically to allow complainants whether they are foreigners or nationals to reference international agreements when they go to court, period. sadly a lot of people are arguing against that, both on sort of a part as part of european government which to what of international agreements to become part of sort of the
legal and regular fabric in that way. and what does the opportunities to avoid having laws come tough consequences for them or international agreements tough consequences. a lot of the people that an argument against isds don't like this either because what they really would like to get away from is the fact that international good should have consequences. so that's, i think it's pretty easy to solve a problem if we really would like to sort of make this system more to conform to basic constitutional principles. let's go to the much more difficult issue which is about political economy and to understand why did the sort of agreements emerge, why didn't they conform to basic constitutional principles, start with him and what's the role that they have played in the broader landscape varies
international agreements, trade investment and many other issues that have been negotiated in the past 30, 40 years. the simple answer is that isds is a sort of safety for a host of different types of agreements where it has allowed governments to basically ignore or at least avoid sadly the difficulties of previous agreements which is to detail the consequences for regulations and laws in those countries that have contracted party to them. so absent that sort of safety role, perhaps to become a far more detailed and prescriptive but the consequences for laws and the galatians that international agreement should have. we need to negotiate much more on the basis of the actual laws in the galatians on the books in the country, not on broad sort of principles that you have international agreement. that's a different type of
international negotiation country we are looking at. and if we take away the safety walls and we have to become far more prescriptive. reptile locking governments in sort of great details this agreement that exists. >> phil? >> on a bit more favorably disposed towards isds. first on the constitutional point, maybe i'm not grasping. we do this all the time were if you think about trading goods, for example, brothers, if you say i wonder whether the u.s. approach to foreign sales corporations is conformant with commitments that were made in the past the we don't say we'll take that up and the u.s. court or through with the u.s. administration says. there's a body that does these things. i think the case is pretty clear it is an investment component to trade at the very important things, not tangential.
how link these are, not a model shipping containers to unknown parties across the sea. so then gets a question of how does one address this. i think on investment matters the real challenge of the ttip context is that isds looks slightly out of place because it's largely a measures that would happen if you have concerns about the of the country's legal system. having some sort of redress is good for investors but you could say the european legal site looks pretty good and so does the u.s. legal system. what happened when talking about vietnam or peru and peruvians criticized the own legal system. and thenthe, i think particularly for the united states, president plays a very big role in u.s. trade policy. that we have seen and will
continue see the difficult moving treat -- trade agreements through congress. part of this is a college to keep agreements consisted of people talk about slight change at the margin but not read the agreements so you be open discussions all at once. i think there's two reasons than for why you would want to include them. what is a sequential reason which is shoving president. fine, mayb made we don't thing l be used very frankly. i think this is a question you raised earlier is, is as i thought about that thing or is it how it operates? the other thing is that shawn mentioned in his opening remarks, if we are aiming towards sort of a gram harmonization where we get away from the ravioli and the noodles and we have our big lasagna, new credit, then it's going to be far easier if the pieces fit together from the start as a post together bunch of disparate rules that need reconciliation. >> but what about the hyper
national treatment aspect of this? we are giving for investors to past resolve their issues were as u.s. investors at home have one. is it not problematic in some of? of? of? >> i think this will depend and comment on how this operates. it's like having an appellate mechanism, for example. you could say to cuts to the question we get your first, it depends about opera to a one is an automatic overturning and that's problematic. if this is something that looks are problematic instances and says only and those were circumstances where something went very wrong that it's much less troubling. >> celeste? >> i think we were looking at first principles on this, we've never actually had any empirical data that foreign investors are systematically discriminate against before the united states, for example, has gotten
into an isds agreement with any country but it seems like that's the place we start, not just people think peruvian courts are better if they are bad, they are bad for everyone who lives there. not just for investors. so you're trying to solve the problem that we've never demonstrated exist in the first place. and i think first we need to show that the problem exists and then say, is isds given what it is the best solution, or even investment court system and that the commission has now proposed. we haven't talked about there are plenty of other options. state to state dispute settlement as you settle all other trade disputes and whether it's in trade agreement or at the wto. this political risk insurance. and there is a desperat disputew domestic investors are twitterverse as international investors but it's also the rest of society. we have to look it up isds privileges one form of rights and those are probably -- property rights versus all other
rights. and to take an extreme example, this is from a paper by a professor, canadian professor, if the owners of a foreign investment are tortured by a host government, quite extreme, those investors can use all the domestic systems at their disposal, plus isds. if the workers of that foreign investment are tortured by their own government, they can't use isds. they have to go to the domestic system. so at what point have we decided that in terms of global governance there's one right that's quite privileged, and all other rights have to use what whatever is available to them, regardless of what an inefficient system is? >> everybody wants to say something about this. it's a hot topic but we're running short on time. i will go to you, but maybe we
can put it in the context of come into tpp that was the tobacco cartel. talk about precedent-setting. what does that say about isds and what does it say about the precedents that are being set for other industries getting similar discriminatory treatment? anybody. >> i'm so glad there's a least one other person up here who actually think isds does not a demonic, most demonic element of these negotiations. looked, -- look, let's be very clear on the fact that what we're talking about here is, again, what i would describe as a relatively emotionally driven debate about what is a pretty fundamentally basic construct of international law and precedent
that's been in existence for 50 years but it isn't the case that a company can sue a government if their employees are tortured. that are very strict and narrow definitions i went isds, when an investor can, in fact, pursue the root of isds. it's a very limited number of circumstances in which contractual obligations have been violated, or there's a perception of violation. it's interesting to me that in this whole conversation so far the one thing that we haven't heard which, in fact, is what's driving most of the conversation in europe is this notion that some of its corporations that are going to be writing regulations and that they're going to take what governments right to regulate. and here again the practical reality is that if you talk about the tobacco case, i mean, i'm not going to speak to the specifics of the case in
australia because we don't yet know the outcome, but the practical reality is that some of the notion that this mechanism will allow the company to force a change in a government regulation is simply a misrepresentation of the facts. >> susan? >> well, i think we need -- i can rephrase what we are out here. the question is, the first question is to investors deserve protection? and in the second question is, how should the system, what should the system look like? it seems to me that in countries where the rule of law is good do you really need a separate legal system, and what does that do for the rule of law? we do have two systems. we have media tori systems as well as both legal system, you know, and the law says that the township to go to the arbitration system as opposed to the legal system, for example.
i won't get into the details about. but what we've see seen i think israel abused by corporations of that system, and that i think is what is fueling this content as well as the notion that do investors deserve as separate legal system. so let's look at that and why do with the tobacco carveout. if you look at, for example, canada, eli lilly case where, you
we need that because were negotiating easy to treaties, the u.s. and eu with china. that we are forgetting that china is doing this since the late 1990s. they include isds in their treaties with the increasing interest in having these isds things in their treaties come and china just recently concluded a tree with australia with isds. and you may know that australia is one of those countries that exclude isds from a treaty with the u.s. so i think it's a weak argument, this precedent argument. but this again relates to the whole debate we have about ttip that were having trouble selling ttip on the basis of how much it will generate, how much income will generate. so we are tempted to use these more geopolitical arguments, china arguments in a way to sell
ttip. >> this issue is very prominent i don't think we will result if you do if you want resolution go to our website at cato and you will be convinced. i want to bring us out of the we can talk with some of the other issues. we are not going to get everything i hoped we would, but to me these agreements, i find these negotiations can i find the european decoration is to be at my side because they're trying to open up my market. they want to get out our government. they want jones act reform, financial services reform. these are things that are important to u.s. consumers and businesses. and so what are your thoughts? what are your thoughts, phil, about some movement in those areas? is the u.s. going to agree to some reforms on jones act, on government procurement,
financial services told off the table? what should we expect and will europe walk away from a deal that doesn't include reforms there? >> i will let our european panels talk about whether they will walk away. what you get on a sort of a court challenge of the ttip which is that as i sort of noted, it's different from most other trade agreements that you take up and that there's been so much the position that's taken place in the past. you have a very healthy trading relationship. i think we talked about some of the geopolitical reasons for why you would then want to have this bonding if one can pull it off but the problem is, you know, the areas that you just cited are the traditional highly intractable trade issues. yes, it would be nice to change the jones act spent many operate on retractable spent i don't advise anyone to hold their breath until the jones act is a changed. so that's the problem. a whole bunch of these things that have survived, sort of time
after time were people look for deliverables for some bilateral and you just couldn't move on these. i think that's what we saw with agenda setting right from the start when you said audiovisual with friends. the u.s. what do you do on financial regulation? as you come it was a great idea but the remaining issues are really tough. ..