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tv   Key Capitol Hill Hearings  CSPAN  October 12, 2015 2:00pm-4:01pm EDT

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concern about things like -- i'm sorry if have to come back -- chlorinated chick oregon race to the bottom on regulation or lack of transparency, number of fundamental concern that derive, i think can from something that extended far beyond what really whats it the ttip negotiation and has more to do with the base rickol of business in society. >> thank you, marjorie. you touched upon a hot-button issue, isds, as an issue that we at cato and the chamber don't see eye to eye on. axle has commented quite a bit about it. written about it. axle, would you maybe share with the audience your specific on isds, why it's problematic, what you think of the recent proposal for the permanent court? share your thoughts. i think a lot of people here have thoughts so this could be a good debate. >> sure. thanks very much for the
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invitation. it's a great conference. now, investor state dispute settlement. that's the topic if i look it's from a german perspective, which is in the sense of the debate -- in the center of the debate. procedures and mechanisms are part of most international investment agreements and there are more than 3,000 of these agreements. essentially it's about foreign investors -- >> that discussion from this morning. you can see the rest online at c-span2.org. we'll go live again to coverage of the cato institute's conference on international trade and the ttip. a look now at domestic policies and their impact on international trade. this is just getting underway. >> alphabetically. senior fellow of -- began this career as a journalist with "the vancouver sun" and "the fortunately times" and the spent
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time inside u.s. trade or he -- this is back at a time when it was weekly publication, and you had to -- jim colby is best known for his work in congress, although now doing really good work at the german marshall fund. those who are not familiar with the u.s. congressional system, you should be aware that jim spent most of his years there as an appropriator. hi job was to out put money to various agencies. you can gate certain amount of input when you're passing out money but what is interesting is he did not serve in a policy committee that was dealing with international trade. he dug into trade policy -- i don't now of want to call it as a hobby or passion but -- >> sort of as a result of being my mentor when he retired.
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somebody has to get to work on it. >> the developed quite a reputation as an advocate for trade liberalization in the congress. it was extremely active in getting the nafta approved, and in honor of those efforts at the time he was retiring from congress in 2007, received the washington international trade association lifetime achievement award. damian levy is the head of the trade and agricultural section at the eu delegation here in washington. but before he came here, he had an interesting opportunity to serve as -- in the e.u. commission has deputy chief negotiatear for the laing offering the ttip talk. then they sent him to washington to keep an eye on us so the current political landscape in the country must be leaving him entirely vexed.
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before he was with the commission he was an attorney in a law firm both in new york in brussels. he has seen she process from the both sides of the atlantic. >> i'm dan peerson i was ten years at the international trade commissioner. my fellow commissioner sneer. >> she was. >> i spent 16 years at a major multinational company and before that i was on the senate but of particular relevance to this panel, back in the glorious day moves caught when farmed, among other thing is raised broiler chickens. i live in hope that one day, consumers will be able to enjoy wholesome u.s. chickens that have been residenced in a
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chlorine bath. now let's turn to the topic at hand. had the opportunity last week to hear a preparation by bruce stokes in which he inveiled some recent analysis that they had done on public opinion in both europe and the united states regarding trade, that the figures that i pulled out from his presentation involve u.s. and german attitudes to the basic question, will ttip be a good thing or bad thing for the country? we don't have the broader e.u. numbers but he was impressed imd with the german results. in the united states 50% of responsible depths thought that d tip would be good. 21% thought it would be bad. in germany, the goods were only
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41, and the bads were quite a bit higher at 36%. so then the followup question, for all those who answered the question in the negative, not being happy with ttip, what was the reason for that? 50% of american respondents w. concerned that ttip would lead to job losses and lower wages. only 17% of the germans were concerned about that. however, only 12% of u.s. responsibility dens were concerned that ttip would lead to decline in environmental health safety standards-automobile standards. americans now are concern about that. 61% of germans think they're going give their safety away completely if ttip goes into effect. so, it's a really interesting contrast. with that as background, gentlemen, what is your
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assessment of the public opinion surrounding trade at this time? >> start by going down the row and then maybe you want to call on specific people. i think the numbers are interesting because the they represent a reversal of a year or two ago who the germ yaps and all european support for ttip was much higher than it was in the united states. it was thought this would be the difficult part was going to be over here. i think it's still going to be -- we'll talk about that politically difficult here, but clearly there are a number of things that happened in europe that have diminished the support for it. there is the growing nationalism. there's the growing division. the fact that the entire -- all of the european par him has to approve and it all the countries have to approve it. there's the nsa in germany -- the nsa scandal diminished a lot of support and then the groups talking about the environmental
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issues that dan just mentioned. i think are making people nervous about that. here in the ute i it's clearly been loss of jobs but with the economy coming back, that kind of diminishes a little bit. so the support for here in the united states has been a bit stronger. it's never been strong for a lot of trade agreements in general, but i think it's an interesting way in which the two sides have somewhat reverse evidence. thes here in the last couple years since the negotiations were proposed that got underway. >> i think a couple of things. first of all, i think other country where you have very strong opposition astoria, netherlands, belgium, austria and -- i think skepticism is the highest. when we started two years ago,
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it was pushed strongly by germany, austria and other countries which export a lot to the identity and stand to gain a lot. and we had expected there would be more opposition from the south, because typically in trade policy in europe, you have this opposition from north versus the south, in antidumping cases, for example, but here it's been the reverse. it's been the reverse with a german public very skeptical. the deal wasn't explained for a long time to a german public by leaders, either in government or business. you have to remember, we had a switch in government in october 2013, so you had elections and transition to a new government. so there was the -- the attention went elsewhere in germany at the time. of you look at similar polls in
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italy, portugal, spain, greece, you see very strong support actually. so, i think it's very balanced, mixed views, mixed things and that calls for specific reactions. we have didn't much more in terms of transparency to complain ttip but it has to be done together with leaders and people who trust their -- there is no european public opinion. you have 28 if not more public opinion. so it's up to leader in ease public who are trust bid the population so explain why they call for the negotiations and why it's important. >> thanks very much. great to be here. you mentioned i've been watching this for something over two decades now and i think we're actually in a particularly interesting time right now. if you go back to the laid '80s, early '90s the conclusion of nafta, a very
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ambitious trade agenda, and opposition what was still just forming there was a big fight over nafta but the opposition at the time from unions, environmental groups was anyway -- nascent. they were trying to figure out how to run campaigns. then the knocked off the agreement on investment. you have the protests in seattle and you had perhaps coincidentally, perhaps not, the lack of an ambitious trade agenda. so a long period where will what woe saw from the u.s. and the -- were not tear terribly ambitious arrangements. now here we are in a period where you have, i think, an opposition that is better organized, better informed, more effective partly as a result of social media than it's ever been before but you also have a tremendously ambitious trading a.
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the tpp in the u, the ttip in both the ute and europe, more going on as at the plural lateral level. i think we're in an interesting time where you have the proverbial clash of the irresistible force and immoveable object going on here. i think how this plays out is going to be the really interesting. if you look historically i would have to say ambitious agreements like this tend to get through but i don't think they ever occurred at a time where the public opposition was as strong and as organized as it is right now. >> jim, from your experience in congress, you know that at times the congress does feel compelled to do something that its little different than what public opinion would suggest. can you give us your thoughts on how congress might find a way to deal with the antitrade pressures and still come out in favor of an agreement?
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>> what you just said is certainly the case since at least the passage of nafta, the consideration of nafta, where there was strong public opposition but congress has always had a more of a pro-trade agenda or more favorable toward trade agreements. that's changing a bit now. you have seen this in the -- the trade promotion authority in 2002 by one vote. the trade promotion authority for president obama by a handful of votes. so they've been very, very narrow and close votes. so it has become much more difficult to pass these agreements. and what you have, of course, historically is a reversal of roles where republicans, business oppose trade agreement because they wanted protect, and republicans tenned to be against any kind -- wasn't trade
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agreements beautify kind of lower of tariffs or anything that liberalized trade, and democrats were representing working people, were more in favor of these trade liberalization movements. now the situation is reversed where companies and businesses generally support the trade agreements. labor unions have taken a strong stand against these trade agreements, starting with nafta and also before that but starting strangely with nafta and they gotten their voice on this now, and they've learned exactly what to do and how do the grassroots efforts. trade inons represent fewer and fewer workers today, they still have an inordinate amount of influence because the money they contribute and the workers they provide for door-to-door
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campaigning and telephoning and other groundwork that has to be done in political campaigns. democrats pay a lot of attention too what is being said by the trade union. you have this rather contentious argument going on between the two sided how this will play out. we really don't know yet. it was said for a long time that tpp would be the very -- should have been the easy one to negotiate, but a very tough one to pass. and ttip should be easy to negotiate, since we have two very large civil or integrated miss on both sides of the atlantic, but a tougher one to -- but -- and an easy one to pass. more difficult one to -- i'm sorry. more difficult one to negotiate because of the differences on things like patents and intellectual property and the chickens and things like that,
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but it should be the easier one to pass. now i don't think we'll see that. under to the tpp was difficult to negotiate and we still don't see -- see all these details of that yet, and we now see that i think ttip is going to be a very difficult one for us to pass when and if we get it. the one last thing i would say on this is we're definitely not looking at anything that's going to be considered by congress in this administration. this will at the very earlest be 2017 before it's submitted to congress. i think the interesting this is to consider whether tpp will even get to congress before the next administration. >> damian, how does it look in europe? i read this morning that angela merkel has come out very much in favor of ttip. not many weeks ago the european par him blessed a different -- parliament blessed a different investor state dispute settlement. so clearly there's progress at
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the political leadership level to move forward. >> what has been assuring this political leader palestine europe, including the european parliament in june and july and its latest resolution has supported the negotiations. including what chancellor merckful said today, and if you listen to the prime minister or the spanish prime minister, british prime minister, they're install -- all in favor and want us to move ahead, president hollande was in favor of ttip. what we hear from american counterparts is european leaders need to make a better effort at explaining what is going on. i can tell you from the inside, from the european commission with -- we work very hard to make it more transparent, to explain more. we never communicated about a trade agreement in laings -- languages other than english.
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now we explain ttip in 22 languages. more than ten documents explain what ttip and is is not. in many other languages. the tools are there for people to communicate about it. business to communicate about it. it's true that european companies were not used to have to do any advocacy work in favor of trade agreements, so they are awakening, but it's a slow progress, and in an environment where companies are cutting budgets for government affairs, and that kind of thing. so, it's not clear if a project like ttip doesn't have an impact on your bottom line in the next four quarters, are you are you going to put any dime on the table? yes, the -- up to the government to do it. if you look at the concerns in germany and other european countries expressed, you hear concerns about consumer rights. ttip or big american companies are seen as danger to our good
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rules, to our good consumer protection, workers rights, environmental standards, and even democracy. scratching my hair, i think, well, all interesting but we have said all along we will not negotiate down our rules of protection on environmental standards oar labor protection or consumer protection. we said all along we would not negotiate data protection rules in ttip and still it's seen as a trojan horse that will be all these bad things from them u.s. so it's a fair communication measure to be made with -- i'm sure we can do more. the commissioner has been doing much more than previous commissioners in communication, and will keep on doing more but there will be a limit to what we can do as long as the negotiations haven't progressed enough. that's one of the difficulties we are confronted with, as long
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as there is no tpp negotiated, you can sell a concept, you can say we aim too do this and will not do that but give us a bit of time and we need to work on the negotiatings and get them done and then sell them. that probably explains why a number of companies are waiting on the sideline and saying, i want you to agree on something and then i'll know to what extent i can support or criticize. also important to remember that ttip was launched in a period where i think there was much more stronger support for the trade opposition in europe than there is today. the being of two european commission or the former president of the european commission was very forceful in issuing a trade agenda -- because ttip its part of an argentina. it's not a project for the european commission. we negotiated with japan and
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with canada a year ago and we negotiating on and off with india and other countries, central america, colombia, ecuador, ukraine. so we're very ambitious trade policy agenda across the world, and we're probably launching negotiations with australia and new zealand, mexico and chile. so tpp is part of a very big agenda and there was strong support for that agenda itch believe there still is. the public opinion has become much more critical about this project which is called ttip. >> ted, your observations on dealing with complicated public opinion? >> a couple of things. would like to reinforce damian's point about what the commission has been doing on the transparency front. i think there are lots of thing that are swirling in public opinion.
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one argument you hear very often is that all of this is being done in secret; that corporations have outside influence and that ordinary people don't know what is going on and can't affect it. i think in the context of how the u.s. has traditionally handled its trade negotiations strategy, that critique is legitimate. you -- the united states has done negotiations in secreted. all countries heavy. look at the advisory committee structure, it's have live weighted towards the interests of business. so there's a lot of that critique i think that considerable legitimacy and as the trait grandma moves into areas of consumer and environmental regulations, that becomes a lot more questionable. when you're talking about tradeoffs on tariffs that are really sort of profit-loss issues for the companies, maybe makes a little more sense to handle negotiations that way but in the new areas they're much broader public interests affected be the outcome of these agreements. i've been encouraged what i have
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seen the commission doing. it will be interesting to see how that plays out when the negotiations get father their long and you're trading. but the commission has been putting proposals out there in a very public way, quite transparent, about everything it's doing itch think really trying to tackle very head on that criticism about secrecy. i'm hoping the united states will follow that lead in the ttip negotiation. it will be a big change of direction for the united states. one other unrelated comment on the united states, comes out of the pew poll that you mentioned. you drilled down, one of the very interesting things -- gets to dediselk between the public and congress in congress you have a democratic part that is almost you've nighted in opposition to continuing on trade and a republican party that is quite supportive, even the to tea party elements who i think a lot of us thought maybe for nationalist or antigovernment grounds will be suspicious but have been fairly supportive. but you drill down in the poll, democrats actually -- democratic
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voters are muff more favorable to trade than republican voters and i think part of that is the changing demographic of democratic voters. more young voters, more multiethnic, hispanic, immigrants, new immigrants who have become new u.s. citizens the parties hasn't caught up with their electorate, certainly in the way this is likely to handled in congress. >> i think that is an important point. the poll data shows that democrats -- people identified phi. the as democrat support trade to a greater degree than those that identify. thes as republicans. quite a reversal, and we -- at the parties have not caught up with that. house democrats react to this as their younger voters, entrepreneurial voters social media voters, come 0 the for, if they're going to change their position on the trade agreement.
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>> well, let's shift and say a few words about the role of elections themselves in influencing the whole domestic political environment. damian, this morning sean donnelly mentioned three elections upcoming in europe that may have some influence. german general election, the french presidential election, and then the reference dumb -- referendum where to stay in the eu. would you every some thought oses than. >> congressman would talk about policy, hard to take this one. it's clear that elections in large member states have more influence on why we do a role in the projects we pursue and the basis of pursuing to the projects. i tend to think the british will asks to keep on moving and not slow down.
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and when we listen to president hollande last year when he was here, he said, it's very important for the europe and the united states to move. let's get it done quickly. and i don't know what chancellor merckful will say but i'm sure she is in favor of a strong agreement. i think overall if you look at it we want a good deal and substance will prevail over speed. >> the elects themselves are not -- >> elects -- elections have an impact on your able to move. when we have elections in the parliament, we see season this during the mid-term elections. a bit more nervouses in on the side where you have elections to move on sensitive issues. that's for sure. how it will play out is too early to say. i agree with sean, being a
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popular topic, a topic of dinner table conversations in families across france, germany, the u.k., yes, it will be a topic in the campaign, but impact that will be have having on the negotiations is too early to tell. we will try to close with the obama administration, we think it's technically possible. difficult, yes. i agree. but feasible but we need to step up the work in all areas for sure, on both sides. it's still do-able. and then you would be done before the election campaign starts in france and then in the other countries. the u.k., i don't in the when they well hold their reference dumb. has not been decided yet. so we'll see. what impact, i say for next year
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it should only incentivize us to move ahead and try to conclude, but substance threes prevail over speed, that's for sure. the european commission will not try to rush to a deal with the obama administration if it doesn't feel the deal is good for europe. i'm sure you will hear the same from the u.s., who will say, yes, we'll try to get it done has to be a good and ambitious deal. >> ted, ready or not we have an election coming up in this country and a little more than a year. both congressional and presidential. at last i check, none of the leading candidates of either party seemed to be much inclined toward trade liberalization. how do you read the implications of the u.s. election for what might happen in ttip? >> the timing is difficult. 'll crib from my lunchtime conversation with congressman colby so i apologize if if steal his thunder. we were talking about this, that
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you do -- the problem from the u.s. perspective is that the majority for trade is so narrow. as jim mentioned. a handful of votes. so particularly when it comes to the tpp vote -- i know this is.ttip but in the sequencing ttip comes after tpp so congress has to deal success film with tpp before we get to the question of whether ttip can pass, and i think that in the u.s. ttip will be a much easier sell in the congress than tpp is. so there just isn't all that much room for error. if i look at these things historically, my read is that the geopolitical importance of an agreement like tpp or ttip is so enormous that even some of those who are skeptical in congress are inclined to support it because saying no is such a blow to an important ally and the tpp to japan and australia
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and ttip to the european nations and canada and mexico. so at the end of the day congress will support this but the timing is really difficult. the obama administration would like to do this in the spring, and if we're still in a situation in the spring where donald trump has done well in the first couple of primaries, obviously secretary clinton has now come out against the tpp. rather awkwardly, i think, given her historic position on this. ... but certainly it is timing.
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>> host: you had beach opportunity to get up close and personal with the electorate several times? what does it look like you? >> guest: trade was never that popular, and arizona's 22 years of trying to educate the -- educate the constituents. that is the benefits of trade or wide as diffuse, we will the benefits for protection is a my narrow and focused. guess who wins with a narrow, focused agenda which is why trade has become such a difficult political issue. the situation looking into this next year's is cloudy for trade as it is for the presidential elections, but i will make one prediction with absolute certainty. the two nominees for president, major parties are bernie sanders and donald
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trump, you could probably take your trade agenda and put it in the bottom drawer with some mothballs and forget about it. that is probably not likely to happen, but i do think it is likely that secretary, if secretary clinton's can -- secretary clinton continues to be a leader in the poll, it looks like she will be the nominee and the democrats will have to feel that they cannot vote on tpp next year. that pushes the whole change in the back. it is unlikely. even before that it is unlikely that they could possibly be done and voted on before the next election. i am beginning to think that it will be very difficult for tpp to be voted on before the next election. cannot be completed before that time. so it will be up to the next administration. we just don't know who that will be a number of -- what
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approach that will take. president clinton would undoubtedly want to reconsider. something to start over the beginning there, but this is not going to be easy on either side of it, the house and senate or politically. >> everyone said he gets kicked over to the next pres. which is enormous uncertainty. if you look at what happened, you realize there is enormous pressure to continue with the agenda entrée release. president obama ran on a fairly anti- trade platform and admittedly it took him a while. he kind of morphed from being the kind that was very skeptical about trade, wanting to renegotiate nafta, bo back and tear the thing up to becoming the president who is presiding over the
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most ambitious set of trade liberalization's into decades now. there is a lot of pressure to stick with the program. >> and observe president obama made a quick pivot in the direction of trade agreements. take down his own team and went into school with the republicans, and it is an interesting situation. >> i believe he did it for good reasons and it took a little while, but i do think there is just a lot of pressure on trade to keep moving forward. >> one of the issues that came up in a panel this morning with federalism in the united states, federal government versus state and local government, how they handle certain issues which is also potential concern in europe, do you have any thoughts? is the united states going to have to knock heads and get various levels of government to coordinate i
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would personally like to see a complete reformulation of the role of state and us trade policy. i mentioned the advisory committee structure. there is a state government advisory committee, but it has been not terribly effective. if you look at the interest of the states, they are very dramatic. most are actively in the investment promotion game, a lot of large cities are increasingly looking at their export opportunities to plug your competitor if you look at the work the brookings is doing about identifying export opportunities, state and local governments are waking up to the importance of international trade policy for their economic interest. getting after procurement markets which should be done, but the way you do that in the us government
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says we are going to do these things you want on the investment front. you have to do some stuff for us including finally getting serious about opening your procurement market or taking care of tax problems where they exist. i would like to see a much, much closer ongoing working relationship between state, local, and federal government. there were only ten provinces, but it's something that we could do. >> i like to see that happen, but it's not going to. states are not going to open up the procurement. it is interesting, as you said, states have foreign trade offices they promote there exports, do all the time.
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you are very narrow certainly on the procurement issues related to be locally focused on this protecting by america is not only by america. it's by california or by oakland. i really wish you could do that. it was a big headache for our european friends to have these kind of 50 different approaches you have 28 of28 of them now that you have to deal with over there. national government in brussels. >> in a number of areas it's
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more unified. more harmonized depending on the services sector and the good sector. but what states have been doing in the procurement, the discrimination they have put in place is an issue that we need to address in the negotiations. that is clearly are ?-question-mark side in the negotiation that we need to address. that followed market access discussions. what we will get is a matter for negotiations, and we will see where those discussions take us. but it's more than that. and it goes both ways. the rules, regulations adopted in the state level or interstate level are a reasonableour reason of
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concern for companies who wish to do trade across the atlantic, and we are trying as much is possible to look into this. it is true that the provinces actually in the room, we are negotiating procurement. so that was easier ten provinces or 11 territories. it's not up to me are us, but that's a concern that we have expressed. as long as you look at regulated professions there are activities, engineers, accountants, lawyers, the state level. if you want to facilitate the movement of lawyers and accountants were arctic, arctic, we need to have the state and member states talk to each other or talk to proxies like we do at the european commission in order to find more solutions for mutual recognition of professional
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qualifications. that is an area we still need to look at very much, and it is clear that we could not accept a deal that would impose obligations on the european situations, member states, even subnational, and nothing of the federal level. that would not be a balance agreements even know if you look at the center of gravity, for example, gun procurement markets obviously there is much more money being procured. we need to keep that in perspective as well. that will be part of the balance and how people in europe would look at this. i am not saying it is easy, but we need to address this. we only have one real good opportunity to improve the southern atlantic relationship. we have been looking at this trying to do low hanging fruit sector specific stuff,
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but these have not had a significant impact on the relationship. we need to take the time to do it. >> i have been surprised the evolution of financial services as they are discussed but not. you know, with europe and the united states being the two largest providers to financial services in the world, some sort of harmonization might make sense. if i understand treasury secretary lou he has not all been incensed about the idea of having discussions. but what is the state of play there? >> a bit. i'm probably not as expert as some others are, but you
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are right that the -- because we are to such gigantic financial markets, the opportunities and liberalization or harmonization are tremendous, benefits would flow from that probably is large is anything you can think of. and then the united states the reluctance, and i think we should be doing it for the reluctance of the united states is the passage of .-dot frank, and it is too new. no one wants to temper or tinker with it. but no one really wants to deal with .-dot frank. and the secretary of treasury, little bit of turf battle, that is our area. trade negotiators don't get into the financial services issues'. that is forthat is for treasury to negotiate. they have been reluctant because of the pushback from l-uppercase-letter, even reluctant to open the door that much on financial services.
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>> i don't have a lot to add. a lot of that has not been implemented yet. >> is it too late to added? >> let me clarify our position.position. it is still on the table from our perspective. we should take out financial services. such tangible part of our relationship. not only is it the money side of any transaction, but it is also as you said, european and american companies that we are also leading regulatory process revolution.
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it only makes sense to have that part of the transaction were not looking for lowering .-dot frank. we want a forum where regulators meet with the implementation of those hologram it's. >> very different from other
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areas we have the regulators in the room. not that they want to take over the discussion. what regulators to be in the room and treasury officials. and so the turf battle, you are in charge. the people talking talking the talk on the regulators, not the trade negotiators. that is one of the reasons we can confidently say that. >> i think this emphasizes the difference between what is being tried and historical world of trade negotiations.
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i covered the services negotiation, and they did not get that far, but they were about market access and making sure financial services companies were free to do business. this isthis is different. you are talking about regulatory structures, prudential measures, ensuring the safety and soundness of the banking system, so as a different set of issues in that respect historically from a was done. >> regulatory issues. >> one of the issues, breaking new ground. >> not on substance. simply setting up the structure to discuss later. it is not like cars or medical devices where we are trying to have binding entities on substance.
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>> before we open this up for audience questions, conditionally genetically modified -- modified organisms and chickens and meet that might be treated with hormones, if there is nothing in there for agriculture not sure we can get the votes. >> is it possible to get something on those issues? >> we looked at a number of files that have been there in the drawers on each side, applications that have been pending for years and are
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trying to move on. and forand for example, i can go into the example. i am not sure it is necessary, but we have made fundamental changes. in detail, the used to be the case ones that have been washed with water with 5 percent lactic acid. scientific authority, given the opinion that it is actually safe, we change the rules. so now for the european union you can either do water or water plus lactic
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acid which is, i think, an important step symbolic to show that, yes, europeans, yes, europeans are willing to make changes. we get that agricultural exports importing and politically much more than gdp. so we do get that. and if you look at our culture from a european perspective we have them under first-round rules and find it normal that spanish farmers have to wait 15 years to get that being approved. most european countries are still not approved year. we can do it with issues.
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that would require authorities him best to follow both sides. and so we have our own sbs issues. >> i was interested in your comments about a knew the younger voters moving toward free trade or freer trade, does that indicate that hillary clinton is out of touch with the party? >> not those she will it
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lead in the election. those in the primaries had to be different kind of voters that will support her with the workers, volunteers and that. but i think what you are seeing is a change in the demographic. >> it came very clearly. trade is not a highly salient issue. pretty far down the list. >> with politico. i had to quit questions, kind of framing around is it just harder and harder not to negotiate given something to have been happening? first, the approach that was unveiled by the commission, is the us going to accept that? it seems to be highly -- it seems to be the opposite of
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what the model did in terms of what the us views as a model investor state dispute mechanism, and although they made some changes, we will see what those exactly are to soften the investor mechanism a bit. is that just going to be another redline that cannot be crossed? and then just last week you saw the safe harbor decision i know data rules are not being negotiated, but businesses want dataflow rules in these fields power how are these two issues linked? how we will the decision affect the negotiations? >> thank you. great question. we don't talk about s ds anymore but investment courses.
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first of all, it is not from that country. with the new proposal and use of the european parliament the big policy objective should be clearly reaffirmed in our trade agreement. second, they should be dispute resolution whereby states waive their immunity which is an exception actually and international affairs. usually states have immunity.
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you can't sue a state unless under specific circumstances. by maintaining these two principles that investors have to have protection with the right regulator and the fact that states should be subject to dispute wererise binding the resolutions. we think the principles are back on the table and were able to negotiate on this topic, us will agree are our proposal and it will be a better for negotiations. we have been the situation for a year and a half or we could not negotiate. we had 144,000 our list of questions. they have had an intense discussion on the matter. now we have to negotiate again. ..
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>> does it come as a surprise? yes, in a way. we been working with the national data protection authorities to come up with a coordinated answer and guidance to companies on how to handle the new situation. the safe harbor was not the only grabbed to transfer data. you have contractual provisions that is a way of companies to transfer data that has been used by companies. you matter corporate roles to transfer data within your own groups. you had also the consent of
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consumers. companies ask european consumers, their customers. we your data is transferred as part of a long list of provisions you agree to when you signed an agreement? been a remains valid and it remains illegal. all the ways to transfer data for remains solid so the impact of the safe harbor to see as we look at in that perspective. it's not that all data, all data transfers is not banned and you future. but impact of the negotiations, i think it's too early to tell and also depends on how european and national authorities will handle the situation going forward. we had been discussing -- >> our time is very nearly out. >> thank you. >> shall we take, visit a quick question? okay. we will do one quick question. >> i'm a law professor in paris. i have a question on ttip and
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public opinion. change the narrative around ttip in order to conquer public opinion. actually the narrative has changed over time. in the beginning very much about geopolitics, then small to medium enterprises under the new commissioner. but yet the argument remains pretty much today right at the bottom. public opinion is very much concerned that this kind of the grid may be raced to the bottom. why don't you revert this? why don't you present this as an opportunity for a race to the top? this might actually -- >> okay, thank you for the question. let's end on that. >> i actually think that this is one of the big opportunities that ttip represents. i mean this is less of a concern for me as a result in the polls in the particular regulation. is an ongoing narrative. i think if we see a situation where we've got a ttip that a strong regulations that cover
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the two largest consumer markets in the world, that puts tremendous pressure on the rest of the world to move up to the standards. i actually think this is a real race to the top opportunity. i also agree the question i would like to see it presented that way. >> anything? >> in a way that's what we've been doing. but i think a number of skeptics will not be leave us. they have not believed us when we are saying it's not a race to the bottom, they will not believe us if we tell them it's a race to the top. >> i think that this is a great opportunity for us to be the two great powers, economic powers, that set the rules for the rest of the world. and i don't mean to we dominate it that we can set the standards and the rest of the world hopefully will follow along. if we don't do that you can be sure that whether it's china or somebody else or a plethora of
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different kinds of arrangements will do that. i think it's a great opportunity for us as you say to that effect erased to the top. >> my perspective is that what we're trying to do here is raise the quality of the trade policy debate. i hope we been able to accomplish that to some degree. please join me in thanking my fellow panelists. [applause] >> thanks. [inaudible conversations] [inaudible conversations]
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[inaudible conversations] [inaudible conversations] >> a. >> i think we're ready. my name is bill watson.
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the topic for this panel is going to be the geopolitical and security applications of ttip. and we have an actual group of panelists here who are white us pointed opening remarks and afterwards we'll have a discussion here sitting around in our chairs. but let me go ahead and introduce the speakers. immediately to my left is phil levy, senior fellow at, senior fellow of the global economy at the chicago council in global affairs. fran burwell, special images at the atlantic council, and peter rashish is a senior advisor for trade and transatlantic relations at the transnational strategy group. i'm glad we're doing a panel on geopolitics. i've noticed throughout the day that it almost every single panel someone has mentioned the geopolitical importance of ttip.
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there are people who claim that ttip is all about geopolitics and security. as a trade expert i find that this fight is going. fine. i want to talk of all the trade issues that it's true there's a lot of motivation going on -- i find that dissatisfying. the political circles a look at primarily the larger global picture and where tti ttip fitso the entrance of u.s. and european foreign policy. so before we get into our panel presentations from experts i'd like to spend just a few minutes providing backing up just a little bit and addressing a question that i think doesn't get answered enough it seems really interesting to me. and that is what are we negotiating a ttip now? the economic and political for ttip is not new.
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people up and talk about the u.s. europe free trade agreement for decades. the case for doing so is pretty strong. the economic case, the value of the u.s.-european relationship is not something you. it's not something that's very controversial at least among political elites and policymakers. but as we've learned throughout the day, coming to agreement on what he free trade agreement would look like is a very difficult task. so with one that's not necessarily as controversial as it is difficult to achieve. and so i think that throughout the years it has been an understanding that this might be a good idea, but it's needed some more urgent motivation. and what is it about today that gives us the urgent motivation i
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think there are three things i would like to point out. and the first one is when the obama administration came into office and announced its foreign policy, they announced but we all know is a pivot to asia which in hindsight seems like a very provocative thing to do. because you can imagine the imagery of the rhetoric is to move over this way. and when you do that you turn around. and so the obama administration was essentially showing its back to europe. at i think that's out it was perceived across the atlantic i don't think it was meant to be perceived that way but it was. and so what can europe do to reach a hand out and to kind of pull the united states to back? and i think the idea of a free trade agreement was an obvious
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choice for that. the second thing that is unusual now, maybe not in the grand scheme of history, but over the last couple of decades is that we are seeing a resurgence and openly belligerent -- belligerent russia where the people were hoping that we would not. and this is certainly a major security issue for europe. many americans kind of see, i think they see things that happened with russia sort of the chess game or a spy novel that's not the case under european comment where things are much more real and have economic as well as security implications. and, finally, i think that there is a realization that europe and the united states have a common purpose in opposition to their growing influence economically
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and politically of emerging markets, like brazil, india, china. and that the introduction of a competing model for economic governance, one that is more state focused, is a very clear contrast with what we might call western values, anti-western approach to global governance. and in this sort of period that we are in we might call, we may call it the post multilateral era in terms of trade policy where we have this stagnation of multilateral negotiations with the wto. people are trying, governments are tried to come up with new ways to pursue a liberal agenda and a free trade agenda. and we see the u.s. and the eu doing it separately.
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the united states is pursuing bilateral mega regional agreements. european union has a similar policy. and the ideology behind those policies is really the same. there may be a few differences here and there, but compared to the worldview of china and india, the u.s. and european union are on the same page but they're not at the same table. it makes a lot of sense i think that policymakers would be looking for at this moment a new comment institution to push and promote western values and economic artist and i don't mean to say that the ttip is going to be some of sort of replaced the wto or something like that.
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but it is a forum for pursuing an agenda that is a common one. and that is a western one, and where the u.s. and the eu can be at the same table working together and at least start building some kind of institutional structure that can, if, if we're all living in a post multilateral trade environment, can provide a kind of institutional background for doing that. so i think that what we talked about the strategic and geopolitical implications of ttip i think it's important to remember that ttip is in a way approach of the current geopolitical environment. and maybe we are not all in
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control of geopolitics as much as being controlled by it. but let me pass the baton over to people who know what they're talking about. and we will start with phil le levy. >> all right, good afternoon, everyone. so i'm not here to argue that ttip is exclusively about geopolitics. it's not. i agree, think economics are very important and very interesting as well. that's why come from. but i think it is fair declivity significant geopolitical component. and we wonder about the geopolitical potential of trade agreements. we don't have to look terribly far to find them. after all, if you look at what was the spark that sort of set
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off the ukraine crisis, it was a stamp the ukraine was taken are potentially going to take about a trade for lunch with the european union, one that did not come about which features a protest. because trade agreements came from this would have direct economic effects but they could also signal alliance is a good signal where the our partnerships in weather our friendships. i think it's by no means a stretch to say there significant component and that's what i'm going to try to address very briefly so we can have time to be conversation. i will make three arguments as to what i feel a lease is geopolitical component, of the ttip. the first days i think you can perhaps be it is all of it as the renewal of the house between the u.s. and the eu of the u.s. and europe. of course there's nothing need to have an alliance and an alliance that goes will be on economic matters. if i the north atlantic treaty organization, nato since 1949.
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and you've had that kind of a security partnership that has existed. the problem is some of this has gotten a little bit stale as bill described, the institute asia would be seen as a pivot away from europe. unintended byproduct. this goes in both directions, however. if you look at the european commitment to nato, it is the repeated complaint of the united states that a very few countries in europe meet their notional nato obligation for spending 2% of gdp. i believe in 2014 it was estonia, greece and the uk them that those commitments with a number of them wondered whether this can be keep up. i hear there have been financial problems increase. on the one hand, there's this. each of them o where you could call things into question a little bit and how much does each really care about the other.
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so a successful ttip can serve as a renewal of vows. it is not the same as a sort of concrete security assurance, but maybe you can think of it as a necessary but not sufficient condition that if you couldn't pull something like this off, if you can't chordate even at this level it calls the other into doubt. the second point i would make is there's a direct security benefit from having stronger economies, the things that people sometimes stress. i think europe that was going faster would be more confident and better able to meet its challenges. it's something that the u.s. greatly desires. the difficulty in drawing out his argument is often is at the forefront when people make these cases is, this may sound obvious but the size of of the benefits probably proportional to the liberalization that actually takes place. there sometimes seems to be a bit of a sense if you just do a ttip and growth will spring
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forth. some of this may be fostered by the amazing ability to estimate precisely the growth of the of an agreement that hasn't been reached and we don't know what it looks like. you might get the impression it just doesn't matter coming together growth anyways from a signing ceremony. i'm not sure that's true. actually there is tremendous potential to foster growth, but it will mean that people need to tackle some of these difficult issues since we heard on the previous panel there's serious political obstacles that one has to overcome. in fact, as i said earlier one of the distinction characteristics is its almost all difficult political challenges just because of prior experience of liberalization between the countries. the exception on this, not the exception difficulty but where you can imagine a very direct big economic benefit might be into energy sector. because of some the restrictions that just has put on, things like grading liquid natural gas and coal exports, there is a
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privilege given to fta partners in this. so that we can see something directly and when one is looking at the altar of suppliers that europe has for natural gas, such as russia, that plays directly into security concerns. that is one of the most direct instances. the third point that i will make service president should those question, why now, which is i think there was a sense that europe was being pulled apart of it by centrifugal forces that the difficulty in the euro zone, questions about sort of britain's status within the union. i think it's worth noting as we look at the history that they were sort of an asymmetric harder when it came to pursuing all the scope that europe had been more enthusiastic, the u.s. dragged its feet. you at a high level working group and eventually then you
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finally have vice president biden grumbling, one tank of gas, maybe we could do something like this. i think that was part of the motivation, the idea that here is a project which could look like the best of europe, that it was of the european countries that squabbling this sort of working together, working with the u.s. we don't know what the commercial terriers would look like if you were to have the eu breakup, if britain were to decide to go on its own. but the more confusing it looks to have to be within the european union, the stronger the union i think is the thought and, therefore, there's a time as to that and impetus and that, of course, is very direct effects with you being every significant partner for the u.s. so to closing notes with that said.
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so the flipside of all these salutary effects of a successful agreement i think is there are downsides to a failure. that is, if this doesn't work then maybe a commitment gets called into question that wouldn't if it were neve never , not after sure it's better to to love and lost in this particular case. and the last point i would make, actually follow want to the last panel, where it was optimism that at the end of the day a certain responsibility would sweep through congress because this is geopolitical thing. whatever your calls about sort of parochial interest groups, at the individual to geopolitics and would make the right to vote. i would note that's one reason why it's so damaging to have foreign secretary clinton, ashby. one of the ways that happens is you can go back and look at the votes, you get all past secretaries of state kind of lineup and signed a letter and say, trust us, what are the
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economics of this, it's a geopolitical imperative. to have the most recent secretary of state come out and say no, it's not, we are talking ttip -- ttp but not ttip it is a bit too. it doesn't called into question. who else would want to look to sort of judge the geopolitical imperative. i will stop there and look forward to our discussion. [applause] >> thanks very much for inviting me here to speak. it's very interesting to be here at cato. we've heard a lot about ttip today, and most of the discussion focused on whether ttip will be finalized in the economics of such a deal. if you arrived today taking ttip is going to be relatively simple i'm sure you've been disabused
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of that notion picked our questions about coherence on the u.s. side and the eu side about regulatory frameworks. answered issues about how ttip will relate to other multilateral trade arrangements. there are tons of reasons for ttip to fail. but my view is that ttip cannot fail. it would be a strategic disaster for the u.s. and europe if they fail to reach this agreement. and because this is recognized by leadership on both sides of the atlantic we will reach a conclusion on the agreement. we do face a very serious uphill battle in europe about certain views on the arrangement. but as i talk about in this i think those are, in fact, part of the strategic battles that are being waged in europe right now. when ttip was launched it was seen primarily in terms of jobs and growth in fact some of us have been advocating for kind of
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but it would be called not ttip at the jobs and growth pact. but at that time the european economy was really struggling, and although the us economy was getting better we were heading into, we were looking at recent elections and the obama administration certainly wanted more, more growth over here. but from the very beginning it was clear that ttip was going to be strategical accord. the first reason is just simply its size. we've heard a lot about the trans-pacific partnership is strategic because it brings in 36% of the global gdp. well, ttip is 46% of global gdp. i think we need to realize that this should to be concluded much bigger than tpp. secondly, as we were a lot about today there is the potential within ttip to create a global
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standards and regulatory frameworks that companies will use throughout their supply chains. this means that because of the size of our markets, these will essentially become standard and regulatory practices that companies use around the globe. we will become global regulators which is undeniably a strategic position. third, i think the strategic nature of ttip becomes even more apparent when looking ahead a few years. we've already had the imf label china as overtaking the u.s. as the biggest economy in the world when you look at purchasing power parity. and clearly our 46% of global gdp that we have now is not going to last. so this is kind of a window right now of when we can get an agreement that will help solidify the types of rules and rule of law in global commerce that has served us so well over the years.
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i would point out that it's not the first time that trade agreement or trade relationships have been seen as affiliate a strategic purpose. this goes back at least a century if not more, not always successfully have analysts argue that economic ties are those countries with strong economic ties are less likely to go to war but i would just point out norman angell, the great illusion, arguing, came out in 1913 for the european economy was were integrated that were between those countries was futile. and tom friedman once argued that no two countries with mcdonald's franchises have gone to war. just a few months later, nato bombed serbia that was the end of that, but nevertheless, but despite this kind of mixed record of success the u.s. has used fda's to indicate political support for particular governments at particular times. the u.s. colombia fta and
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u.s.-morocco fta can hardly be justified a as upgrading relatis from beijing has been major trading partners but it did serve to vindicate support for governments in those countries at key times. i suggested kerry said recently, speaking about the need for trade promotion authority, the right kind of trade agreements are actually critical because they create habits of cooperation that help us not only economically but in everything else we do. so i think ttip is one of those agreements that would have been a strategic agreement even if the world were not changing as we negotiated this agreement. we have seen since ttip started, since the negotiated start and service since the 2011 containing, or 20 talking to any of the high level working group of real change in europe's environment in particular. not only are we seeing
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instability in the south but the real question in terms of ttip is russia's aggression that simply against ukraine at the idea that it may move closer to the eu committee very rightly pointed out that one of the crucial points was ukraine's decision to accept a deep and comprehensive free trade agreement. but also russia's aggression against the eu itself. i think for many years russia under estimated the eu. it thought it was just you're the kind of trade association between countries. but as the center european countries went into the eu and their trade became diverted to the west, as their incomes to invest their legal systems change, russia learned that this was very different from what it had expected. i do think for all of those who think that the eu is a failed organization, i would just point
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to the considerable reshaping of central europe that we've seen since those countries have gone into the union. therefore, ttip as the current major project between the u.s. and the eu is a prime symbol to those who are opposed to it, of both the europe's competence and influence and the strength of the transatlantic partnership, thus ttip success i would argue it is strategically essential. the failure of those negotiations would be one of the best indications possible of vladimir putin and others that the u.s. and european partnership is just words and has written back. the credibility would be close to zero. so that's the negative side. but there's also a positive side, strategic opportunity side rather than a challenge site to ttip. so i think if we get ttip concluded, the doors open on
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some options for us. first, it presents opportunities to tie not be you european countries more closely to the atlantic community. in the balkans that you already has trade agreements with albania, montenegro, macedonia, serbia come and bosnia-herzegovina. and its job regarded that windows countries are ready that would eventually become members of the eu. it is time for the u.s. and the eu wants to have a ttip to think about involving those countries in conversations about how they join, at least elements of ttip, as they move closer to integration with the eu. as these countries work on the chapters of the eu secession, perhaps it is when they close the free movement of goods and trade chapter, that they're able
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to pick up certain elements of ttip. speeding up to ttip and announcing that in a joint useu declaration i think would provide a good incentive for some of these countries who need incentives quite frankly to move forward with their negotiations. and would indicate our willingness to support countries when some of them are under pressure to stay close to old allies. ttip also provides an excellent opportunity to show solidarity with ukraine, moldova and georgia put all three of these countries have a d.c. fta with the eu, becoming one will go into effect i believe january 1, 2016. whether they proceed towards the river ship for not giving him some kind of relationship with ttip is something that could very much help keep them heading in the right direction as members of the transatlantic community.
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we could even wait until all other dcfta is have moved forward and are mature how o are we could actually announce something earlier and i think give them some reassurance that the time with a very much needed it. another country that is kind of sitting midway right now is turkey. they have a customs union with the eu and i think that they have certainly been very concerned about what ttip will mean for them. we have kind of been putting them off and sang wait until it's concluded and then we will see. i think perhaps the more than -- the more forthcoming attitude that might be useful. to our questions from the about turkey's future direction and i'm one of those who believe that turkey is very unlikely to become a member of the european union anytime in the near future. so we need to find a different way station for turkey, if you will come and we should ask assess whether we can use ttip for the.
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energy is another area adella just very briefly simply sign the agreement should relax some of the restrictions on the export of oil and gas to europe from the united states. it's not good at any of our exports will actually go to europe as opposed to going on the market, the world market, essence of these commodities are more and more fungible, freeing up other things that might be accessible to the europeans. i think though that it's often, it's worth asking what other elements of energy may be included in a ttip if the europeans that advocate for energy chapter. i owe a thanks to jim f. which has a new report out that looks at some of us, but some the things that they're asked for in terms of limits o or codificatin of state assisted energy
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countries and things like that, when you think about it you realize that it is a way of reinforcing themselves as they face a struggle against gazprom and other energy countries that don't always play by the same rules. i think that's another area that we should look at. finally, a successful conclusion of ttip will open the door as was discussed earlier to bring together a whole bunch of different bilateral fta is that the u.s. and europe have around the world. so we now have free trade agreements separately, each come with chile, colombia, costa rica, mexico, nicaragua, panama, a river in south korea. we also have agreements with canada and morocco. the eu is very close, has concluded that is trying to get ratified the canadian want to get working on the moroccan one. there are a few others particularly once we've tpp actually done and approved. we should be thinking about what
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this means. we would have to deal with issues such as inconsistencies between rules of origin and elements of that kind but this could be a very serious -- tpp and ttip together could provide a very safe spaces for renewed platform of global trade negotiations. if not actually in the wto, by creating a much bigger network of trade negotiations, of bilateral trade agreements. thank you. [applause] >> and thanks, bill. i also want to congratulate the cato institute wrote on this very lively and engaging event. glad to be here. i share the assumption of this session which is that there's a new relationship between geopolitics and trade it in come
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and also i think i should a kind of -- in a general way trade negotiations are a kind of soft power that help communicate countries global priorities or the parties between two sets of countries. that i think in the case of the useu, ttip is certainly very strong declaration of common person -- purpose between the u.s. and eu which offer each other those important political and economic partner. not only would be the first treaty-based relationship that the u.s. would have with the eu. and then from the geopolitical side, geopolitics i think if done right hopes quit more stable international environment that allows countries to put the resources that flow from trade pacts to better use. but i also don't think we should get too carried away about the relationship between trade and geopolitics to adequate first of all has to be very clear about
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the two worlds because insufficient enter relationship, if you start from different points and they do generally inhabit different world. i think we should also understand that these two worlds are converging. and then i think finally understood what the limits are, to what you can do for geopolitics. i think that a starting point from the trade policy side come is pretty clear what trade policy and she which is deliver higher living standards and is done this importantly over the last seven years through the wto through in and of violent weather our rules and sort of common except did was put on the other and geopolitics focuses on something very different which is again done bascom focus on maintaining and creating international order but it does this in and about whether or not any rules. for my second point i think now
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what we're seeing is these cards are things we shuffled. what we are seeing in the last decade or so we see we have threats to international order, less stability, more uncertainty that don't stem from sort traditional geopolitics. i think we're plus international order stemming from a breakup global economic rules. how do we see that? i think we talked about this. we see that countries like china and russia which are challenging transatlantic values and interests to present us that economic model and we've also seen a large economies and we seem estimate in the doha round that we discussed which i think is a large part going to diverge and diversity of economic models. and then we've seen the establishment of regional financial institutions. so it seems to me in this kind of environment establishing new
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rules of global economy is a key strategic objective for the u.s. and eu and on the part with aggression of the bretton woods institution of world war ii. so trade and ttip have read this traditional job to do creating prosperity but also creating international order to even look at ttip and we don't know what anybody's look at the kinds of things that are communicated that it will focus on state-owned enterprises can intellectual property, innovation, labor, internet freedom from the kinds of things where if the eu and the u.s. come up with new growth at about we will be able to push a little international order out into the economy. and i think that we can see them we can see examples of this works. and i think we can see that, we can see examples of that what developed countries do together doesn't have to be a dead end that can lead, kind of can spread. i think that's mexico's experience with u.s. in nafta. mexico and u.s. are highly
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intertwined as economies, particularly 30 phenomena of supply chains. it to him and industries it's very hard to imagine the u.s. -- i think it's not by chance that mexico has become a very strong ally for the united states, for the eu for that matter in supporting an open rules global economy. and again i think mexico, nafta points to another way that ttip can be helpful in this regard, and that is to the countries that decide if and when it decides to expand which countries it will be. my consolation will be a little different. there's an overlap. it's a quite distinct i but i think that again starting point which other countries that can help with u.s. and eu prosperity but also push for the right kind of rules for global economy, greg moore economic order. definitely i think looking from the perspective, that means canada and mexico, important
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both members of ttp so that would help to create a bridge between the u.s. to strategic economic initiatives. and then for the eu i agreed turkey is very important as well as iceland, liechtenstein, norway. turkey is strategically important because even though it's not a member of the bric countries is a large emerging economy, it's not a party of any of the three big mega regionals and wished that ttip is not just a rich man's club but it really is open to others. and then i think you look further afield, i actually think that economies in latin america which should be put towards the top of the list. i think chile, colombia and peru all market economies outward looking along with mexico, part of the pacific alliance. chile and peru are part of tpp so i think it would make a very
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natural allies. if you extended the telescope further come and also i will admit using more political imagination, i think that brazil's membership would be another asset for ttip. after the u.s. and eu, brazil is the largest of adequate economy put it maintains very strong trade investment with both the eu and u.s., also in some high more sophisticated manufacturing sectors. brazil as a member of the bricks and if it could be a new domestic consensus in brasilia about the role of trade and bring prosperity in brazil i think that brazil's novitiate at ttip would be a strong signal that this is a dynamic being created where transatlantic economic rules are being broadened to other important actors in the global economy. now, let me close with this
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third point about where sort of recognizinrecognizing the limite marriage of trade policies and geopolitics. ttip should focus on these two jobs that is what is a tradition of prosperity and then there's the more newer job of creating updated international economic growth in more international economic order to buy do think we need to go, he carefully but what, if any, role the on deck ttip should be enlisted to do. and i think particularly we should be careful about communicating that ttip has held a transatlantic hard power projection. and that is sort of competency is in japan traditional foreign policy challenges. and to sort of our a phrase that's not where ttip's comparative advantage lies. we have a lot of effective tools to confront national classic security issues. nato is first among the but also
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bilateral defense arrangements, political and economic sanctions can diplomacy, foreign aid. at the u.s. and eu have very few tools i think of them trade policy to advance this agenda, this strategic agenda for the international economy that we need to be careful about overburdening ttip. but not only that, if national security concerns become too central to ttip, it is the issues that are covered other countries that are given priority for mentorship i think there's a chance result of the suboptimal economically. that means you have few resources available to confront their foreign policy challenge that i think the better part is to focus on these, this new kind of geopolitics of creating better international economic rules and did other things for other institutions and vehicles. thank you. [applause]
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>> we are going to spend a quick minute getting mike up. s&s all get situated. -- as soon as we all get situated. [inaudible conversations] a okay. before i ask some questions to the panelists and open it up to the audience i'd like to ask if any of you all have any responses you want to make that i do know that was a whole lot
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of very first degree or anything. but if you are something from the of the panel that if you like your to respond to, speeded since we close on whether the link to our power, i agree with your point. when i was arguing about nato, simply that there was this comment interest in this work, it was by no means an advocacy that we should be explicitly work security matters into the tt. i think your point was horrible taken. it's often me at the same people and, therefore, to extend their able to cooperate and work together there is some positive spillover and assist but not an explicit linkage spirit then let me ask -- >> then let me ask you, what do you think is the most important trade issue, negotiation issue within a ttip within the creation of a ttip in terms of
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strategic importance for europe speak with i think if you want to look at issue by issue rather than sort of take it from a bigger picture point of view, and it's been mentioned. i think energy is a win-win innocents. if we do have a very liberal energy reaching across the atlantic it's very likely to create more prosperity but there's a question it will also be a big boost to european security. >> i would add that i think the very basic market access, although it's not that important to the u.s. and eu itself, but if you're talking about extending ttip at all or including others who have a d.c. tfa with the eu i think it's the simple think is the thing that makes sense to the public's and i think it is the one that many countries, for example, who already have ftas with the u.s. and the eu may not be able to purchase a right away in some of the regulatory agreements
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that are made and they wouldn't, for example, contest and things like that. their own agencies wouldn't be able to provide certification as a level that we want, perhaps. but market access is something that is a very useful tool given that it's a very basic part of the ttip and the one we don't think about that much. >> i would sign on in terms of direct with energy. fran made a good point which is we would not expect to see large energy flows directly from the u.s. to europe, but even having that capability. one of the things, when you talk about things like liquid natural gas, this is not something you set up overnight. you don't hit a crisis at okay by next month will have the terminal that takes quite a while. so having the possibility to do something in an ideal that itself forestalls the christ the it presents -- prevent some of
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those are flexing their muscle. so in that sense i would take energy. >> let me also ask one thing that was not talked about in the presentations, is how is the strengthening of the u.s.-european allies through ttip going to impact either one of those economies relationship with china? we always talk about china in relation to tpp. it's not a party but there's so much about china in the rationale for the tpp. where does that come into play for ttip? >> i think it strengthens both the u.s. and eu in their dealings with china. because it says look, here's a major part of the rest of the world economy that had set up certain disciplines that are to be abided by. we sometimes talk about the u.s.
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and the eu, i'm in the u.s. and china has the g2 but it is actually the eu and china that are much bigger trading partners. we need of a certain amount of humility about this but i think together the u.s. and eu if they have an agreement, this is something that will make, will help companies and others, investors in china and those trading with china more on the rule of law side and expectations in terms of the wto as well. >> i would just add come and i agree with what fran said, i think we also need to be careful about how we communicate ttip to the degree it's not against anybody. it's for the u.s. and eu. it's for creating certain types of economic rules which is that argued would create more order even if there's a challenge from individual economies. while i agree it would strengthen kind of the ability of the u.s. and eu to assert
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each others, their interests i think it's also should be clear that it's not against anyone everything going back to when we talked about tpp come while it's a long time from the i don't see why we should exclude china. i don't think a tpp should be seen as against anyone but rather in favor of certain rules in certain interest. >> so i agree with that. one way to see all this is to sort of look back at 2008. unitas big push at the wto to try to conclude the doha talks to get to work and there was a schism, a schism between this country that wanted to pursue high standards agreement and those who wanted to go with a more traditional approach to trade which was largely border barriers -- barriers. u.s.-china ending on a less ambitious i figured u.s., europe and some of the asia-pacific partners on higher standards.
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you can see the current, the subsequent moves as with the launch of tpp and ultimately ttip as a way to work around, do not have the agenda stopped because there were certain countries that were at that point unwilling. one interesting difference that tpp at least from its founding was fairly explicit that it was open to new members. so i think the question is what about china, what does china medic with you that ambassador -- when you shine it is right to meet those dangers they would be welcomed to try to join. it might be nice to ttip make a similar statement, this talk about setting standards but is also open once the standards are established. we have had quite the same in a statement. in terms of where does this temperature chart china, it's drinking this move towards high
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standards. the ttip is nothing quite as fortunate as a tpp in saying coming being explicit that would anyone else is willing to meet they welcome to join. >> do you think that might be a weakness in the ttip? peter alluded to does. if you have high standards in the agreement, there is the economic benefit, you want to bring these countries up to your high standard. but if your goal is for geopolitical and strategic reasons to incorporate more countries into your club, when you set high standards you make it more difficult. i know this is an important part of eu integration, how to get these countries to be able to join the club and there's a lot of reform that has to go on. it's a long process. is that something that we should be particularly word about with ttip? does it mean that a less
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ambitious agreement might be a better agreements because if you look at the tpp, i think as someone mentioned earlier today, it's a pretty high standard agreement. it may not be as high standard with what ttip ends up with but it's a pretty diverse group of countries that have signed up to it. there may be some ways, probably some way to some of those countries adapt to those higher standards of rules through, overtime or other things but i think just declaring that they want to be part of that world, that in and of itself even has vowed to. >> i think there's definite a trade off. i think you're right. i think the way china has often approach these things marks the other team where you can have things come to to love it judgment friendship agreements but it's of the agree that part which you emphasized far more than this sort of commercial substance. yes, i think there are ways to have those sort of friendship agreements but this is a
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conscious decision that is important to that of these roles. there is a cost and that way. using this debate most explicit with the role of china in the tpp. makes no sense of the country that is so significant on the outside. it is if your goal is the standards. >> i think makes a lot of sense for ttip to preserve a binary high standard of ambition. -- a very high standard one of the challenges for ttip is going to be both the parties are used to negotiating with much weaker opponents. now we have the t two albums negotiating with each other, so to speak. it would be very great difficult to introduce another party into this negotiation. i think the question is when she had the agreement, are there things you can do, as peter said, to help others reach some of the discipline? they may not reach them all that
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once. you may have to make decisions about whether they reached sufficient to buy in to part of the greater i think would keep a lot of trade lawyers very busy for a long time. i think there's question we should ask ourselves once we have a better idea of the shape of the agreement. >> why do we open it up to questions from the audience? [inaudible] >> it seems people want to get a strengthens the western alliance that we should necessarily look at what happens in the field of trade. i accept the distinction between hard and soft, and i agree the purpose of a trade agreement should be trade and anything else should be subordinated to it very carefully. that problem with nato is something the europeans will not pay for it. under the present situation underestimate unlikely to want to do. they've had plenty of chances but that's where i would put my eggs. as far as the question of standards ago, i agree with
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everything has been said but i would just underscore the fact that, you know, tpp has been arrived at, the agreement is being conclude ended doesn't only involve harmonization but raising standards for providing them in the case of vietnam what they don't really exist. it involves what you want, what you may say a missionary, different kind of responsibili responsibility. i guess that's about all i have to say but i do think it is really important that agreements about trade don't get encumbered unnecessary with joe political considerations. i think they can stand in the way. as you know i'm not very optimistic about the chances of ttip at all, but with finding europe wide consent and a union that involves members who are not members of nato. some of them strategically vulnerable. you know the nation's on talking about i think it raises more
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questions than are really necessary for ttip and they should maybe be shelved and we discussed after the negotiations are concluded when and if that happened. >> i don't think any of us would take a distinctive linkage that says here's the nato chapter of ttip. as you note quite correctly there's been this long-standing push of, please make your contributions to nato as you're supposed to which has been especially effective over the decade. subquestion what else can one do. economic strengthening and press renewal of belief in the project, the partnership could potentially be helpful but it would not be an explicit linkage. >> i think since the make a suggestion about linking ukraine, moldova and georgia to ttip, i think we've always struggle in situations such as we face in europe's east right now with trying to find the
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right kind of tool, levers how to encourage good behavior or changes in behavior. and the sanctions have been in my mind a real success in terms of transatlantic integration and coherence but they have not necessarily, it's not good that they changed whose behavior. on to the circumstances i think there's a real question -- putin's behavior. example george is trying to get map as the warsaw summit and i think it will be a real question about the security applications out that and whether that inputs georgia on the road as listed in the bucharest summit, nato summit, to become a member and what that means for article v for country that is rather geographically vulnerable. and what can we do to strengthen in that country and to show our allegiance for the country without necessarily going the
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whole way of article v. and i think that we need to be more creative about those types of arrangements. and some of those, ukraine intel recently was not thinking about nato membership, and melville has not do we need to figure out some ways that we can strengthen the ties in the courage of those countries without necessarily going to hard power grid. i'm not quite sure if it means that i'm advocating that we use ttip and hard power way, but i think, try to say that it's actually an alternative because it is so difficult to use hard power in these loaded situatio situations. >> second row right here. >> thank you. one question -- tried to lick hard and soft power given the state of military -- most of the country of the union.
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why not go back to the i do -- [inaudible] not going anywhere very fast of opening of defense procurement on both sides. the transatlantic firms. that would mean countries would get probably more value for their money. they would be less interoperability issues. and a lot of big firms would be pretty -- [inaudible] so what does the panel think about this idea? >> i would be done is interesting idea. i would be want to be careful before doing that in ttip it out also want to think about whether nato could be the framework for that kind of negotiation or whether ttip is the best vehicle for that.
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but that certainly is a creative way cutting down barriers. it also would support a strategic interest of the countries involved. >> the eu actually has directive that takes a step in that direction. i think it is being implemented never i think this is what it starts to become effective and really only applies to defense procurement that does not involve r&d. so many companies as you know they get a lot of state subsidies for the r&d work and then they need to have their contracts afterwards. but this would be for like buying boots, things like that. it's unclear, it's to open it up across europe so to make it part of a single book at. it does not see anything about third countries. i for different interpretations about what people exactly to a fortress europe or whether it keeps it open. but there's no reason not to
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think that they would in this limited way open it up to u.s. firms, or other firms spent i think it's a very interesting idea. is not obvious how it works out. you are right and you see some countries that saw the federal opportunity and you see some companies that saw that as a real threat. >> chris from manufactures allies for productivity and innovation. many previous analysts have spoken about the different degrees of fervor with which the european support ttip anti-american support ttip. but suppose there's a dramatic turnaround and there's a groundswell of opposition to ttip in a united states come and say it's countered in the state of texas.
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-- gets concentrated. unlike what we see in europe or advocacy particular capital, let's say we talked about berlin, it's unlikely that the americans in texas would go to austin to it's far more likely that they would head to brussels because they would correctly think i'm psycho not in brussels, to washington, d.c. because they will correctly think that's where the power is. that we spoke about 200,000 people going to berlin and other capitals, gives me thought that there is a certain inclusion in terms of that opposition. because clearly the center of power and aggression this deal is in brussels, not an individual capitals. subquestion to the panel is from for all of us in this room and many others go corporate interest, special interest, nongovernment organizations and the u.s. government was at the federal level or at the state level, if we all collectively
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were to contribute to the turning around of that fervor in europe to clinch this deal, should we all go to berlin, vienna and paris to do that or should we had to brussels? .. >>

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