tv Key Capitol Hill Hearings CSPAN August 19, 2016 12:00pm-2:01pm EDT
all of the ills in the american economy makes a good sound bite. there's no doubt they're still economic anxiety in this country, something sanders and trump have seized on. when you actually look at the numbers and when you review the various academic studies out there, what you find is that trade would isn't the cost of the vast majority of job losses in the manufacturing sector of the united states. .. closed factory or someone losing their job because of import competition.
what they don't really see, for example, the lower prices we all enjoy at walmart and target and the rest because of free trade. they don't see the fact that american manufacturing output, in terms of total value in the american manufacturing sector is setting record highs. that is because we don't make t-shirts anymore. we make airplanes and satellites, things that you're not going to see on shelves of walmart. there is this great disconnect between perception and reality. folks like sanders and trump more than willing to exploit that misperception and people's economic anxieties say everything can be solved, all of their problems by cut buildings off trade with china. unfortunately, for voters out there that is simply not the case. >> scott lincicome is contributor to national renew. he is ad duke university right now because he is senior visiting lecturer there.
he is an international trade attorney with the experience in trade litigation at the united states commerce department, before the u.s. international trade commission, court of international trade, european commission and world trade organization. dispute settlement body advised corporate and sovereign clients on u.s. bilateral and trade agreements and u.s. trade policy as well as wto matters. so your questions, and your comments, and what you think about trade coming up here. so, continue dialing in. we'll get to those in just a minute. but first i want to bounce off of you a column today in the "wall street journal." why trade critics are getting traction. he writes this. recently labor economist and david author and david dorn and gordon hansen found in national bureau of economic research, import of from china up to 20% of u.s. job losses since the end of the 20th century.
in the process china's advance toppled much perceived empirical wisdom about the impact of trade on labor markets. part of country dependent on industries, most exposed to importation from china have been hit the hardest. >> guest: i cover this study in my piece for "national review." it is getting a lot of traction. it is important to note there in the quote that you read, so 20% of the manufacturing job losses caused by trade. the other 80%, so the vast majority have nothing to do with chinese imports. now look, no one is scoffing at that 20%. those are millions of jobs potentially. it is not that. the problem though, this is something noted by otto dorn and so forth in that study, the problem is not trade. the problem is the american labor market's ability to adjust to shocks, whether they be technological progress, changing
consumer tastes or trade. things that are all beneficial overall but do cause disruption in the paper those authors and other interviews note that what we really need to focus on is the collapse in labor dynamism. as i argue in my piece for "national review," there are actually a lot of government policies, very misfied guided government policies caused or contributed to lack of labor dynamism. workers that lost jobs to be able to find new jobs. in the '90s it was quite positive. it collapsed in 2000, has remained in negative territory ever since. so, what we really should focus on -- what we should really focus on it? chinese imports. it is instead what is wrong with our labor market that workers can't find new jobs? that workers can't resume that
kind of natural job churn that the american economy used to be so good at? >> host: let's get to calls. paul is up first. a democrat in north carolina. go ahead. >> caller: i've watched trade. i'm a writer and journalist. i wrote extensively on trade since the '80s and i agree with some of the comments made in regard -- i've watched a lot of automation and that sort of thing and temporary agencies do away with permanent jobs and so forth. that is a factor. however, the trade agreements have worked perfectly the way they wanted to. they moved industry into the south and they couldn't manufacture cheap enough or break the wages down low enough there. so then things moved offshore. and i'm a promoter of fair trade. we don't have fair trade. and it is all pursuit of cheap labor. >> host: paul, there are lots of
calls lined up, i want scott lincicome to respond to what you're saying there. >> guest: i'm thrilled to hear we're talking about automation in terms of manufacturing job losses. the other thing i would reiterate, is the idea that we don't make stuff anymore is simply a myth. american manufacturing output is setting records. not only that, you know, caller mentioned the american south, there are gleaming new manufacturing facilities across the american south. here in north carolina, down in south carolina, throughout georgia and alabama. a lot of these places are booming and so the idea that there is this great offshoring of american labor just simply is belied by not only the data but our own eyes. we can see it first-hand. >> host: sandra, you're next, columbus, georgia, independent, what do you think? >> caller: i think the trade deals that we have made over the
last, what, 15 years have not been good for the united states. you've got china with their money manipulation, their cheap labor, things going to mexico, and not all of these people are losing their jobs because these different businesses are being automated. regulations and the demands made by our government are making it so difficult for businesses, particularly small businesses to stay in business. and something needs to change. >> host: okay. scott, your response? >> guest: i think it's a great point. the reality is, there are a lot of government policies, whether be tax policies or regulatory policies, that are making it very difficult for american businesses to remain globally competitive. but this again is not a trade problem. this is a domestic policy problem. we have one of the highest
corporate tax rates in the world. we have onerous regulations that strangle us, as caller mentioned, small businesses. again, trade deals, get a lot of flak but, again reality those trade deals have nothing to do with our sky-high corporate tax rate. at same time if you look at the numbers, that are there is not a strong connection between the passage of, for example the u.s.-korea fta and the loss of american manufacturing jobs or a decline in the american economy. >> host: scott lincicome respond to donald trump yesterday, in janesville, wisconsin, which is community that lost jobs in>> manufacturing and he says due to trade. >> wisconsin has lost 15,000 jobs since nafta. kasich is running also, we forget about him. he voted for nafta. both of them want tpp. tpp, trans-pacific partnership,
both of them want trans-pacific. that will make nafta look like a baby. and wisconsin will be hit so hard. >> host: scott lincicome a couple points i want you to take on? did nafta hurt wisconsin and janesville? will tpp do even more? >> guest: right, obviously i will not be able to speak to janesville, wisconsin's employment numbers. we've been losing manufacturing jobs as share of total employment since the 1940s. we've been losing manufacturing jobs in sheer numerical terms since 1979. long before nafta was ever in force. we lost about the same number of manufacturing jobs in the years leading up to nafta as we did in the years after nafta. so the idea that nafta is some great job destroyer for the american manufacturing sector is
again simply false. stars tpp goes, it makes a great political target. president obama is pushing it right now. it is embodiment of everything that is wrong with trade policy so people can claim. look the fact is, tpp, has some good things and some bad things but just nafta to blame all of wisconsin's manufacturing problems to nafta or future tpp is simply false. trump would be far better served looking at some problems in our corporate tax sector, our regulatory sector and our labor market, instead of just blaming china and mexico for what's obviously a much bigger and more complex problem. >> host: scott lincicome, what if we didn't go forward with the trans-pacific partnership? you write in the truth about trade, your piece for "national review," morally and economically advantageous for
the united states to embrace protectionism, it's almost certainly impossible for it to do so. u.s. manufacturers evolved over decades to become integral links in breathtakingly complex global value chain. >> guest: correct. i think the numbers i cite there right after that are really fascinating. you know about 40% of everything we export has chinese or mexican or canadian content in it. and about 30% of everything that china and mexico and canada export has american content in it. when you look at so-called, american car, there is quite likely that it is going to have various parts from all over the world. if you look at iphone says made in china, actually, it was only assembled in china. it contains parts from japan and taiwan and united states and relies on american engineering and marketing ingenuity.
to tear this all apart, remove american manufacturers and american economy from this very complex globe value chain, would not just hurt america, it would hurt the global economy. you would be trying to kill the virus of global trade and in doing so you would certainly kill the host, being the united states economy. >> you're watching c-span's issue spotlight program on trade deals. up next, lori wallach, director of global trade watch at the group, public citizen. she discusses the role of the world trade organization which is tasked with enforcing trade rules between nations. miss wallach is coauthor of the book, whose trade organization? this portion of an event from 2004 is about 40 minutes. >> from the end of world war ii, a lot of folks heard about the bretton woods summit. there in was created three global institutions, the
international monetary fund, the world bank and the gatt, general agreement on tariffs and trade. they had three particular roles. the imf was not like the current imf. it was to keep the currency exchange and goal standard going and give very short term license to float trade. when you send out something before the money comes back to finance the float, they would give very short, with no conditions, loans to countries. the world bank everyone knows for these mammoth bad for the environment projects was actually set up to reconstruct europe and japan after the bombings of world war ii. it was supposed to go away. the gatt, agreement on tariffs and trades it was supposed to set up multilateral rules, most basics ones, most-favored nation, sometimes called mfn. that means any status you give to one trade partner, you have to give to everyone in the same agreement. that teams fair.
national treatment on non-discrimination. that means you can't treat a product differently for regulation, taxes according to where it is actually produced. so if you have the three pesticides prepare rule on domestic farmers, then imports have to have same treatment. you can't make them zero pesticide rule and keep out imports according to some other regulatory mechanism. then there were tariffs cut and quotas cut. it only covered trade and goods. when you see image of the ships, that was the gatt. that is what we had at the trade system with rounds of negotiations for 50 years. wherein, well about 40 years, wherein we come to the reagan and thatcher era. so, hate to bring up that guy in the context of his recent funeral where he was roasted and toasted as the great leader but frankly the guy behind the
brainstorm of this so-called neoliberal agenda, which is a whole set of policies embodied in the current wto which replaced the gatt, the current imf, the current world bank, which is whole formula that basically translated conservative vision of reagan, of thatcher and implemented it. now here is what is very interesting about it. it is a set of policies that in domestic legislatures, in numerous countries had been rejected. i mean there is the stuff we know b this trade liberalization, but there is also investment liberalization. what that means is not allowing government to regulate who owns land, to be able to regulate things like zoning. like all the big box fights about the kmart stores and wal-marts. the way that is regulated is basically, a, retail service investor can not occupy more than x square feet. so regulation of an investment. but those kind of regulations under this neoliberal mind-set
that would undermined the efficiency of the markets, they would be gotten rid of and rules who could own what. would a service like water system be public or private? would that be a municipal non-for profit or a for-profit? some things you want to not have in the private sector for profit, schools, water, or should everything be for sale? in setting up rules to decide that. plus financial liberalization, which has to do with stock markets and currency, making your currency freely tradeable, compared for instance, having rules how much currency you can take in or take out. a lot of developing countries had rules on currency to avoid things like the asian financial crisis which folks should note after implementation of wto rules on financial sector liberalization, a lot of countries with no infrastructure, regulatory systems, were suddenly told to liberalize, found themselves having their currencies rated.
they used to have a emergency brake. there will be no exchange until the currency rate bows back to normal. gone. you saw taiwan, korea lose decades of development with entirely currency rated and value of it cut in half. imagine you know what something costs and you go to the back you have half literally what the money you have but the price is same. that is what under in asian countries because of liberalization. smorgasbord taking assets of from the public sector into the private sector. selling things like hospitals, trains, schools. but also, privatizing what are sometimes called essential services that aren't always solely in the public sector such as deregulating things like energy. now, privatization and deregulation, are deregulation what for instance caused the california electricity shutoff.
when the u.s. trade negotiators everyone ought to deregulate the energy systems, the wise negotiators look at california, hello? we only have brownouts one every three months in our country developing city. your whole place was shut down for three months? why would we want to do that. that is part of the package, part of the push. there are new protections, new property protections. intellectual property rules, gain he teeing patents, copyrights and also trademarks. which is to say for many developing countries they don't allow patenting of certain things like medicine or seeds. a lot of countries don't allow packaging of life forms or human cells for moral or ethical reasons but under this package of policies, this is one of the policies one is supposed to adopt. plus harmonization. whatever is left of regulatory standards that haven't been
deregulated you are to make to one universal global standard. there is one standard what is considered safe for pesticide contamination. you can imagine you have a global standard you least common denominator, lower common denominator. you hear all the stuff, what does it have to do with my country. the way it works with wto and nafta, when a country signs on they must conform all of their domestic laws to the rules on all these diverse things, that have nothing to do with trade. like what does how your local school or hospital works have to do with trade? it's a local service regulation issue. or, what doesn't lex wall property patenting of medicines in africa that shoots up the the price of aids treatments do with trade? no one is moving drugs across the border. the question what does the patent law have to be within the country and within its domestic operations? or for that matter, what exactly
should be the role of one size fits all rules on a whole set of value judgments? the biggest transformation into global corporate rule through agreements like the world trade organization was the shift from the objective, for instance, the gatt, treat everyone the same, to the subjective. the how much pollution are you allowed to stop? how much poisons must be accepted in your food? or priorities you set. will you make access to medicines for everyone in your poor country a priority? or you make patenting a priority? making those value decisions is what transformationally instruments like the world trade organization and nafta got into and this is the big shift. this is the difference between international trade, i.e. trade, inter, between countries and globalization, as in one big
homogenous glob of globalization. so there is international, versus globalization glob. and the idea is to have everything around the world as far as policy, regulatory matters, set within these rules and in fact the operating clause in the world trade organization is, all countries shall insure conformity of all of their laws, regulations, and administrative procedures. so the best way this is ever described, this is actually in the who trade organization book was by a rancher i met in wyoming trying to describe why the u.s. was in a big fight over what european meat was like and why it was sort of ruining him and he figured they would have the right to eat what they wanted as long as we did same thing with their farmers, why are we in big spat. i tried to explain what is going on. i get this exactly. what we're talking about a high voltage, electric fence right
around the pasture, and you can't get out of that pasture. now the cows can do anything they want in the pasture. they wan eat. they can roll, they can muck around, you just can't bump into the fence. what you're telling me basically is the wto is set up as a high strollage fence around national governments, state governments, and our local governments, turn down the juice, ladies and gentlemen, you have two inches to right, two inches to the left, if you are not inside the fence you will get zapped but good. ways of free roving democracy you decide your policies, you're finished in the pen. that actually is a pretty good description. because as having all rules which every country has to change their laws to meet there is very strong enforcement. to give you one example of the u.s. of these kind of changes, people are going, oh, maybe it is not that big of a deal. here is just one, note 700 different pages of non-trade
stuff. the u.s. used to have patent duration, a term of seven teen years. that meant when someone discovered a new medicine, they had 17 years of monopoly. once they were through with the patent they were only ones who could sell it. everyone heard of motrin, newspaper prince, all the different ibuprofen drugs. that was under patent for 17 years. in those days each one of those tablets cost as much as a thing of 40 is now. $8 a when i was kid. under patent they had control who could sell it and set the price. aids drugs are super expensive, one owner of that idea has the monopoly on sale of distribution. 17 years was the term. the u.s. pharmaceutical industry spent years and years trying to get that extended to 20 years. and you know they just couldn't do it because between all the consumer groups and everyone granny and grandpa, that was a nonstarter. what do you mean you will raise
my prices for three more years? well in comes the world trade organization. this is one of many stories we tell in the book to make this clear. in the world trade organization's agreement on trade related intellectual property, let me share a footnote revealed in the book, whenever you see the term trade related indicator that chapter has nothing to do with trade and actually been caboosed into the wto. someone shouldn't look, jeez, the copying place put a wrong chapter in here. they put words, trade related before it. trade related intellectual property agreement, agreement of protection, right? this is supposed to be a free-trade agreement, this is monopoly protection thing. it is patents, extends the term of patenting to 20 years. everyone that signs must conform domestic legislation. couple weeks after the wto vote happens in conference, get call from senator or congressman who
you spent month trying to get to understand, it is not trade, hello. not trade. trade is small part. everything else is base whethert this think what you congressman. did i miss legislation i got u.s. patent term is extended 20 years. we worked with you to beat that. how could this be? companies make so much money anyway. how did they get from seven seen to 20 years, that is impossible? silent, slow motion, coup d'etat? world trade organization has made you do that you thought you were in charge. you thought for something like that to happen you would see it jumping up and down in front of you. but in fact through the backdoor, something that had been won by consumers for decades got sacked. and that is just one of literally hundreds of examples. which gets back to the book. so i have all these stories in my head because i've been paying attention to it for 15 years.
i will admit, it is true, i'm a recovering trade attorney but i'm recovering from that condition because now that i work with activist group we do uplifting fun things as compared to reading extremely large tomes by our telephone in a large basements of the as recovering trade attorney i've been able to go through all of these stories and learn them. a lot of people said to me, lori, you got to write this down. whenever you talk to someone, get in a conversation we get it but no one has stories written down. in our book we've written down all the stories. let me give you another cut on the issue of enforcing these rules. which is the wto sets up, nafta sets up it is own internal tribunal. all the existing agreements, environmental treaties, human rights treaty, labor rights treaties those are all conventions. the countries agree internationally on the terms but every country has to enforce their own border.
look at convention on international trade and endanger species. everybody agrees what is on endangered species list but gets enforced country by country. there is no treaty tribunal. so the u.s. passes endangered species act to implement the treaty. at wto and nafta there are tribunals. in fact they are the only self-enforcing international agreements. so when you hear a critic of one of these agreements say, it is only currently really enforceable world government, it is actually not hyperbole. the u.n. has all kind of great policies but they can't be enforced. so what happens at the wto is, these tribunals which in both nafta and wto, set up by three trade attorneys who come off after list. to get on the list you have to worked at the gatt or wto or represented your country there. so many some one like me who is trade attorney knows all the jurisprudence until my eyeballs
roll, i'm not qualified to be on tribunal. you have to have a stake in the organization. you don't get fair judgment when people judges, worked for the institution that is being challenged. they meet in secret. totally in secret. no press, no public. the tribunals set up in geneva, wto headquarters. there is professional legal staff does a lot of work which means they have a lot of power. these three panelists help of secretariat of the wto legal staff are basically in power to judge if your domestic law fits within the constraints set by the wto. and if it doesn't, and they rule it doesn't, there is no outside appeal. there is internal appeal. it is not body that seems to overturn these cases very often. in fact the wto rules are so lopsided we found when we analyzed for the book all the cases come to the wto, the plaintiff, the person that takes the case, challenging a domestic
law has won 95% of cases. so basically, you bring a case, almost impossible to save your domestic law by proving it is inside the rules. and the kinds of laws that have gotten sacked include the u.s. clean air act regulations on gasoline cleanliness. u.s. endangered species rules on turtle excluded devices in shrimp nets. u.s. protection act. the korean food long shelf life regulations. there have been a series of rulings against india, basically forced that country to start patenting seeds, life forms, et cetera. even though india is the world's largest democracy, had a constitution that explicitly for bad the patenting of seeds, life forms, et cetera. and pharmaceuticals. there has been a series of rulings against different countries, food security policies, ie for the developing
countries who had it with the rich countries dumping their subsidized food on them, they put up policies to keep the dumped goods out but under the wto rules the dumping is allowed. it is not disciplined and stopping goods at border, that can be challenged as a violation of wto and on and on and on go the cases. now these tribunals have the power when they order the country to change their law or face trade sanctions and so it is basically, amazed to call it a kangaroo court, but allies from australia said that was extremely insulting to marsupials. it is the worse than a kangaroo court with trade sanctions. if you don't change domestic law you face perpetual sanctions. let my give you up with case. only one country faced sanctions another disgusting cases show how extreme the rules are. we go in great detail through the whole case in the trade organization book, european
consumer groups, found out what pharmaceutical and farm groups to get a ban on artificial growth hormones in beef. it was a big domestic fight and they won with referendums. so the whole european union passes a law that says, we will not allow the use in europe of artificial growth hormones for raising beef. and or the sale of beef grown with artificial hormones in europe which is to say, we don't let you use it here to make the food and you can't import it either. it is not discriminatory, right? under the old gatt rule, treat everyone same. you're treating imports and domestic food the same. so what is the trade issue? well, when the wto tribunals ruled in fact that rule violated the wto food standards rules because those rules forbid you from using so-called precautionary principle where you put a ban on something an make the industry prove it is safe. which by the way is about how half of u.s. products are
regulated like pharmaceuticals. the burden is on the farm suit can company to show they're safe and efficacious, not on consumer groups and government to show it is dangerous. the din just has to show it won't hurt you. that is normal. on this ruling the burden was on the government to show the beef hormones was conclusively scientifically harmful. fact they had seen evidence, hormones cause cancer when people directly consume them, there are not long-term studies when you consume the beef that consumed hormones when you are a human. you know hormones are human carcinogens should be enough. there are various other pieces of scientific evidence. not conclusive, not enough to worry. wto says no, no acting on precaution. you can not take the measure and principle of precaution is not in all the environmental treaties you can't take the measure to avoid harm. tough prove it dangerous. europe has been paying $150 million of trade sanctions
last five years to keep out our home moan-tainted beef. they have to pay a ransom not to eat food they don't want to eat which they passed by referendum applied to their own domestic farmers. sound crazy but it gets worse. now with the wto's track record so uneven what we found researching this book is now a mere threat of a challenge is often enough to make a country drop a policy. one of the most gruesome cases has to do with guatemala. guatemala adopted what is often called nestle's code. you guys are too young to remember this, there was huge global boycott of nestle's in late '60s and early '70s, because they were promoting breast milk substitute baby formulas aggressively, advertising to illiterate women in developed countries insinuating their baby was be healthier drinking formula. if you're not in a place with
safe water and mix dirty water with formula, the baby dies of infant diarrhea. so in fact the u.n. and world health organization got together, with the civil society campaign which was run out of the churches, the world council of churches, was really mover of this whole thing. it was fight against epidemic of needless child deaths. that is how they described it, world council of churches, hardly a radical group. they fought and fought, and got a u.n. treaty. had a couple of basic rules. no deceptive labeling. a plain package. healthy baby, someone who couldn't read, farm la, fat baby, my baby skinny, that give me formula. couldn't have promotion in hospitals. couldn't have someone who just delivered here, you should give your baby this, five days later breast milk is dried up and they're hooked. couldn't have advertising by health officials, just basic consumer rules. country after country adopt this is treaty.
guatemala adopts it. they become the poster-child for unicef because their infant mortality rate goes way down. it is really working for them. at this point wto is about to be approved, we're fighting with consumer groups around the country and the world, i get a call from the guatemalan health minister, i thought it was joke. i thought a friend who hadn't return ad call and had someone saying guatemalan health minuter is calling. it was really the guatemalan health minuter is. i hear you're trade attorney and you work in consumer group, you will not bill me $300 an hour to give me advice. i have outrageous letter from the state department, adopting the unicef baby milk code is violation of world trade organization and we have to get rid of treaty saving babies and they will take to us the wto are they making this up? look at estimates give us a small verbal opinion whether they're just trying to spook us and we should ignore them or we have to respond to this?
yes, sir. send it away. so i get the general packet. sure enough, state department letter, this theory is this. gerber baby foods, based in the u.s., has a trademark on their trademark fat babyface. plain packaging rule you can't have depiction of a fat baby. what they're asking gerber about conform with the law with a plain package. gerber, blah, blah, ingredients, get rid of the fat the baby. but in the wto trade inlex wall property rules there is guarranty of trademark protectionion. our trademark protection rights trump the u.n. treaty. as a matter of law, whatever treaty is later this time, convention on interpretation of treaties, whatever treaty is later in time does trump. they write the letter, intimidating. looking through different parts of the wto would apply. well, there is health exception in the intellectual property rules.
probably get you in another part of it. i think you should fight it. we can help you get lawyers. you will still have to pay some recalls. this is outrageous, if nothing else make moral case we'll embarass them into not pursuing it. three month later i hear back. cost them about a million dollars to defend a case to the wto. i heard back from the minister, said, you know, the way you laid it out, even 60% chance, for us a million dollars, entire immunization budget. so can we spend a million dollars gambling we can stop a wto challenge that kills babies, or, or do we give up million dollars which stops immunization that kills babies that is sure thing. breaks our heart, but we changed the law. want to let you know, u.s. products don't have to comply anymore. they don't. we tracked data. what happened with infant mortality, et cetera. all these documents which we made publicly available are among some of the many that have
been leaked to us that tell stories in this book. so much of this stuff is secret. you want know. there is guatemala's effective law, all the kids, most developing citizens of a poor country gotten squashed to wto and never even went to the tribunal. part of this book, what is so interesting, people tell us cases because we're trying to track the real life effect. bottom line of public citizen you estimate the pros and cons, if it is not working, not inevitable, you got to change it. one thing that seems clear about this model of globalization is, as it stands, not really survivable. so question becomes, do we figure out a calm and reasonable change to some different rules? because we do need global trade rules. we don't need rules one size fits all on everything but we need rules on trade. to get the trade rules right and dump some of the other baggage that has been put on?
or do you wait for everyone to ignoring it, for poorest countries to get into total state of misery because of actual outcomes of these agreements? this gets to the final point before q&a, which is the economic track record. two of the chapters of the book are based on the economic track record. the reason i didn't focus on economics but focused on the domestic policies first because most people are more familiar with the economic fights. but a lot of people don't realize this one size fits all imposition business with secret tribunal sacking our laws. fyi, in the u.s. we weakened marine mammal protection act. dolphin safe label doesn't mean anything. it is back to chasing dolphins in boats with circle lar nets. no one observed dolphin dying. nets are size of football field. only one observer in a boat doesn't mean anything. clean air regulations on gasoline cleanliness meant to
rewrite, something environmental protection agency thrown out unenforceable and useless that would increase carbon emissions by 5%. endangered species act on turtles were weakened, slim are allowed in the country doesn't meet endangered species act standard. put this in fact with u.s. in some of the cases. what happened economically. in the u.s. perhaps the most telling statistic is the following, which is one that certainly affect you guys futures some everyone gets to hear from parents, maybe grandparents from how after world war ii, until the early '70s, there was this great boom. for first time people were able to buy houses. people who didn't have cars got cars. the u.s. real median wage, the middle, where the bulk of people are, and real wage, adjusted for inflation, not just the fact that the dollar has gotten bummed up, but the real age from world war ii until 1972, which was the top of one of the growth cycles, where you measure these
trends, it increased 85%. so median real wages in the u.s. increased 85% in that chunk of time. if you now go from zest two until the current time, trade is now two times the share of gross national product of the u.s. but our real median wages are flat. which means to say basically the same as it was in 1972. in fact if you look at certain sectors of the country, actually we haven't caught up to 1972. the real median wages are lower than they were in 1972. yet trade is now two times our gross domestic product. ie, trade is a much bigger share of our economy but our real wages are very flat. a bunch much economists have said is there connection to that? we better go figure it out. economists that support nafta and wto because they don't read agreements and free trade theory that works, then you have a bunch of economists who are saying very odd.
what could be causing this income inequalitygrow so much? which by the way the biggest factor in the median wage being low is the top is growing way up but the bottom is declining, middle staying where it is. there is inequality of distribution of income. for folks saw last year, "new york times," new era of the robber-barons, there has not been growth in income inequality since the turn of century until now. it is stark and shocking. it is happening, by the way within many countries and between countries. between the rich countries and poor countries the gap is growing. within many countries within the country the gap is growing. what is the cause? interestingly the institute the institute for international economics, one of those think tanks very pro-nafta and wto, their analyst, a guy named william klein, all of this is written out carefully with the footnotes, in whose trade organization, he estimated that 30% of the increased income
inequality was being caused by trade liberalization. by the way, theory of free trade, adam smith theory, it has as predict shun of the theory that you increase income inequality. these guys who are the classical theories of fry trade theory and recognize it is true and want to measure what is that effect because the way free trade economics works the gain is on import side. general benefit of consumers lower prices created by competition. if you gain in free trade because the price goes down but also in the theory might see wages in certain sectors wages going down. but the theory holds overall gains in the economy by lowering the wage, lowering prices will compensate for the fact only some people's wages will go down and in fact you will expand the pie. you will be more efficient. you have more money to put into new industries, everything grows, new people get new jobs and help people on losing piece of it but the net is always
positive because everyone gets consumer benefit and only a few people get the hit in wages and their job. well, an interesting study was done about it center for economic and policy research. it's a website i highly recommend, cpert.org. they took the pro-nafta and wto estimates about inequality caused by trade and plugged the real data about real wages. what they found interestingly was, at this point the way the free trade economics is working domestic, basically readjusting quality and types of jobs you look, don't just look at net number. my god, there is net less one million jobs, you look with what kind of jobs and what those pay, that shows you where inequality is. they did study applied conservative estimates of inequality, at this point the savings on consumer end, lower prices is now outweighed for the
median by the loss in income, which is to say using actual they're, you can show that a huge chunk of the median wage earners of our country are actually losing under our current trade liberalization under the theory using the conservative guy's modeling. that is really interesting piece of research. i'm not economist. one of the good things about the book is, we didn't send that chapter to anyone's mom, i had to understand the chapter because i had to right it. we boil down all the theory and go through the whole free trade theory and apply real numbers. the thing very interesting, you can find data that says the following. the u.s. has lost almost 3 million manufacturing jobs in the era of nafta and wto. put that in perspective that is one in six of the entire sector in ten years. so if you think about for instance, the industrialization period, turn of the century, where you went from agrarian society to an industrial society, 50 years in the midst of that, huge strife, creation
of the labor movement, federal legislation and you have the shift. we have now one in six manufacturing jobs gone in 10 years without any particular safety net reorganization set up. as everyone knows the newest trend now offshoring not just manufacturing jobs but service sector jobs, high-tech jobs, computer jobs, engineering jobs, even medical, diagnostics. this is all being done by the way without paying attention to the existing u.s. regulations on things like, our banking and health information is protected under domestic privacy laws. but when it gets off shored, in part because of these services rules of the trade agreements, none of those rules apply overseas. so in fact, particular bank was sending information for processing and they got held basically ransom, if you don't pay me more money, i will post this on the worldwide web. i'm working in pakistan. your privacy laws don't apply.
you will be liable under your laws. so it is worth paying me a bunch of money so i don't post your entire database on worldwide webb get you sued. you will get sued for three million. how about paying x-amount. besides blackmail, you, your friends, health status, financial status, social security numbers could be stolen should be out and running about. once again you have a whole set of issues where governments have been handcuffed how you want to set up common sense regulations. although that one i'm happy to say congress is fighting back. now the economic scene in the u.s. has been interesting in the sense we've seen total shift away from manufacturing, but, in the developing world the news has been really gruesome. that is where i'm going to stop. which is the most important economic fact perhaps to learn, if you're not going to read the whole book, pick up the fact sheets because we have a set of fact sheets. each color is a different chapter, and it summarizes the key findings.
if you ever wonder were the developing world, india, malaysia, bolivia, millions of people on the street protesting against the wto, the imf, like when developing world, social movements saw that we finally had a protest about the wto in seattle in 1999, which public citizen had a role in helping organize, email saying, congratulations, but it is about time. i mean when they started passing these things, we told you twice, this is your structural adjustment. you guys are about to get what we've gotten but we have 30 years of experience. nice you finally gotten with the program to have a darn protest, because we've been fighting this 20 years. why developing world why people are out in the streets is the following. the price now for goods particularly food, agricultural goods, sent from the rich countries into the poor countries basically sat below cost of production. it is called dumping. you have food, basically wto
agriculture rules allowed rich countries to keep subsidies. basically froze everyone in place. export subsidies, what the grain trading and meat companies get, not farmers, then there is domestic subsidies and domestic support which farmers get. both got frozen in place. a little bit of decline but largely frozen in place. what that means though, if you were a poor country didn't have any money for those programs, you got frozen at zero. even though the rich countries are frozen at high subsidies and as a result can sell food into your market, below the cost, not only of what it costs their farmers to produce it but what it costs your farmers, i.e., they can bankrupt your farmers by having subsidies, you are not allowed as developing country to have countering subsidy or quantitative restriction, a quote to keep it out. those are the wto rules. the chapter on agriculture is one of the once probably as far as deciphering wto rules one of the most useful because those
rules are so arcane. it explains exactly how it is that right now more people in the developing world are facing malnutrition, 10 years, nine 1/2 years after wto, than before. how it has come to pass after 10 years we were promised that the wto would increase global wealth and increase the wealth of the poorest countries. how more people are living on one dollar a day. now, and that is the world bank's model for extreme poverty. you hear people come back and say, no, no, but, actually the thing that is good is percentage of people living on one dollar a day has decline a little bit. let me share with you one of the many economic tricks revealed in the book. which is, that number includes china. but ladies and gentlemen, china was not a member of the wto until the last six months of the measurement period. china was outside of the wto. china effectively gave the royal
development raspberry to almost every element of the wto they export ad lot but subsidized them a lot. banned imports with lots of trade restrictions. currency is still not tradeable. you can't raid the chinese yuan. not in thailand where you can crash currency and korea and buy up entire manufacturing sector and own it. you can't crash the currency, you can't do anything to the currency unless the government says. investment strictly regulated. chinese government has many, many downsize and problems regarding human rights. what they do with investments as development thing really clever. basically foreign investor come on in. here is the deal. you make money, it benefits our development. here are conditions invest here, do this. set up the road. we get some part of the electricity goes over here but set up electrical plant. those conditionals on investment precisely forbidden in the wto.
all the stuff klein did and incredibly fast growth rates and lifted millions of people out of poverty are exactly things you can't do to be in the wto which they just joined and there are huge fights whether or not they will change all these domestic policies. but if you take china out of the that number, take total of china and growth of china out, in fact there is huge percentage gain of one dollar day. all rest of the developing world which had to signed up and had to stay with those rules have seen their growth decline. so for instance, if you look at latin america, you see during the period that is considered preglobalization, from basically 1950 to the mid '70s, you see growth rates, per capita growth rates, growth is not the best measurement the one the world bank uses, gives some sense how the economy is doing, you see a growth rate there of 72%. not bad. then you see all the countries structurally adjusted. they all sign up to the formula.
imf does it more than wto because a lot of latin america countries weren't originally in the wto but got in. followed a whole set of formulas. 7% per capita income growth from '70s to 2001 which is most current data. africa, first period, positive growth rate, 32%. second period, all structurally adjusted following the rules, growth rate of negative 23%. basically africa has lost wealth following this model. in fact what the data shows no country has developed under the current rules that are being imposed by wt o&i mf on developing countries. why basic movement against globalization in developed countries because they're living with most horrific results past 30 years. >> 2016 presidential candidate and senator bernie sanders has been a long-time opponent of modern trade deals.
shortly before the official start of his presidential campaign, he took to the senate floor to speak out against the trans-pacific partnership. a reminder you can find the senator's entire speech by going to c-span.org and searching the video library. >> mr. president, i was very disappointed that president obama chose the headquarters of nike to taught the so-called benefits of the tpp nike epitomizes why disasterous, unfettered free trade policies during the past four decades have failed american workers. nike does not employ a single manufacturing worker who makes shoes in the united states of america. not one worker. 100% of the shoes sold by nike are made overseas in low-wage countries. when nike was founded, this is transtoremation of the economy,
not just nike, when nike was founded in 1964, 4% of the u.s. footwear was imported. in other words we manufactured the vast majority of the shoes and sneakers that we wore. today nearly all of the shoes that are bought in the united states are manufactured overseas. today, over 330,000 workers manufacture nike's products in vietnam, where the minimum wage is 56 cents an hour. i hear president obama and other proponents of tpp talking about a level playing field. we have to compete on a level playing field. does anybody think competing against people desperate, people, who make 56 cents an hour is a level playing field is fair to american workers? of course we want poor people all over the world to see an increase in their standard of living. we have to play an important role in that.
but you don't have to destroy the american middle class to help low income workers around the world. now, mr. president, the obama administration says, trust us, forget what they said about nafta. forget what they said about korea, forget what they said about china, this one is different. really, really. cross our fingers hope to die. this one is really, really different. and yes, it may be true that every corporation in america, corporations that have shut down factories in this country moved to china, they're supporting this agreement. yeah, it is true that wall street, whose greed and recklessness almost destroyed the american economy, they're supporting this agreement. yes, it is true that the pharmaceutical industry charges us the highest prices in the world for prescription drugs, they're supporting this agreement. not to worry. we should trust these guys. they really are thinking of the american middle class and
working families. trust us, when they tell us a trade agreement will be good for working people, yes, we should really trust them. meanwhile, every trade union in america, the vast majority of environmental groups in this country, they are saying, be careful about tpp, vote no on fast track. >> in 2011, former senate majority leader tom daschle and former white house chief of staff andrew card produce ad report on trade policy for the council on foreign relations. they discussed their recommendations with david wessel of "the wall street journal." topics include improving enforcement of trade rules and making investments to help people lose their jobs. this is about 40 minutes. >> let me start with one big question, if i may, mr. card and mr. daschle. the report quite eloquently says this: the growth of global trade and investment brought significant benefits to the united states and the rest of
the world. freer trade and investment, facilitated by rules the u.s.-led in negotiating and implementing, have alleviated poverty, raised average standards of living and discouraged conflict. seems to me there are an awful lot of americans are not convinced global trade and investment has brought significant benefits to them. they think it is actually hurting them. so i'm curious, what do you say to them to convince them this is in their interest, not only interest of big u.s. multinationals? >> you want to start, senator? >> david i would start, we have do ask, what would happen had we not done these things. the world is going through a most transformational moment. it is changing dramatically. we're becoming far more integrated and far more interrelated. we recognize real developing markets for the products we produce and services we provide are in the developing continents, of africa, latin america and asia.
so as we recognize this transformational moment, we also have to recognize that there are things, we have to do to engage with the world in order to insure our economy stays strong. we also in the report note that there are a lot of things we could do better. we could do a lot better with enforcement than we do today. could do better to work with workers to cope with transformational circumstances that than we do today. . .
the perfect answer. if you're looking for perfection you should probably go to academic institutions. they were to perfection. this is an effort to describe what we think is needed and it is a practical recognition of the challenge on free trade between the old debate of what would perfect look like and the new debate is what about me? so this is a balance between the theoretical valley of free trade and the practicality of we need to do more for the american worker. to demonstrate that the ground rules are there. the united states is going to be your partner in making sure people play by the rules. this is an effort to recognize political climate as well as the economic climate and the reality that the world has changed and we don't have, we don't have
permission to be the exclusive carriers of economic growth for the world, and we don't have permission to the isolationists. we are going to participate in the globe economy and we think this is a roadmap for more realistic participation. where pro-american interests are not going to conflict with the theoretical expectation of an open market. >> as you know the report argues there are lots of ways in which trade and foreign investment in the united states and u.s. investment abroad are ultimately good for the united states but my debt is editable of the democrats in congress you might have trouble getting a majority for that proposition. what do you say to them? what is this will in america's interest not just in corporate america's interest? >> if you look at where we are softest today with regard to the con is the expectation we're
going to grow jobs. one of the major takeaways of this report and our study over the last year is we really need a much more aggressive, proactive, pro-american policy. it's encouraging foreign investment into the united states as we see already in many other parts of the world. something we haven't done a good job of encouraging. it also means encouraging american investors and american manufacturers to also invest in america and building the kind of partnerships to do that is really what will grow jobs in the long term. we are going to your a lot of debate over the next several months about how we go jobs. we think there's a significant trade component having to do with investment related directly to job growth in this country that we need to focus on if we are going to get this job done right. >> you mentioned the report picks up on the fact not all
workers benefit from trade and it suggests government policies could be used to share the benefits of trade more broadly. the report calls for this thing called wage insurance which is a way of compensating workers who may lose the highways job because they are one of the losers from trade. yet in the exceptions to report at the back, in the commentary, both lott and obama's object to that. what do you say to republicans like bill thomas and trent lott or the republicans on the hill who are an easy but extending the trade adjustment assistance program? is that really important? are they right speak with i think you're right in the global context of spending. i think with regard to united states, but they are saying put it in the same priority for consideration that everything else will be in windows deficit reduction commission needs to saturday's the money.
i think their benefits for free trade and the benefits can be shared with people who will be dislocated it's not bad. i'm not just for spending, spending, spending. i'm doing in the context of the overall federal this plan that has to come in spending. i don't disagree with their angst. i do disagree with the reservation because i think we put together a plan that was practical from a political point of you as well. i think there is some recognition that the are going to be adjustments that would be needed to address people who are on the cusp of angst because they are in a free trade jeopardize position in a job. so that's what i favor. i did talk with both senator lott and former chairman of ways and means bill thomas. i completely understand their aunt, but when it is discussed in the context of overall spending i think we can find a way to show if benefits are
going to be real from free trade, some of those benefits should -- spent putting the two words emphasize, i'm so critical, that is political practicality. political practicality in today's world dictates we understand the importance of trade adjustment assistance if we are in favor of a robust trade policy. they go hand in glove. you can't have one without the other. >> i should say matt and ted are not required remain silent. we agreed they were mostly speak up in the q&a. didn't want you to think they were assigned just to nod every time. [laughter] >> kidney every once in a while. >> tempered a decade ago when the report on trade, one thing that could different is the role of china. what does the report have to tell us about what we have to fear from china, will we have to gain from china, and most importantly, what role should
our government play in making sure that china plays by the trade rules that we played by the? >> first of all the road of china's growth is evident to us all. so are some of the problems in china. i support the decision effort to have to be more responsible about how their currency is traded around the world, what level it has in the dating that value back to china. i also am concerned the intellectual property. i also think it's a reality of self initiation by the u.s. government has not been very present would've been violations. we counted on corporations and businesses to come forward with their concerns and their increasingly reluctant to raise the level of concern to the federal government. i think the federal government should be more active or proactive in calling attention to violations of trade and where the rules are not being
respected. this report also calls for our government to be self initiated when it comes to some of the violations. >> why would so the company that feels china is this finish it by breaking will not be willing to stand up for itself speak with retaliation. i think they are concerned about retaliation and the fact, by the chinese government. but to your question, i think it's a very appropriate and important question, if i to categorize the report it would be in more ways. there are four major takeaways, all of them apply to china. first is what have a much more proactive trade policy. we ought to be focused on those countries that really could produce some real results in china, india, brazil, three good examples. clearly as we target we can do the most good with trade, china is a major factor. the second is investment policy. without the investment policy that recognizes the importance of bilateral relationships and encouraging more investment.
china is one of those major players but we could make a big difference. the third is enforcement. we've got to do a better job with enforcement. what better country to demonstrate we can do better job with enforcement and china? finally the trade judgment, we need to recognize we've got to help our workers. that especially relates to china because we are being hurt in some ways by the bilateral relationship we've got today. all for takeaways apply any very significant and consequential way to china. >> in the report you talk about, one of the recommendations, a national investment initiative to coordinate investment policy to create more highway -- what is it we're not doing to encourage investment here? >> it means all of our investments in the united states should have an eye towards competitiveness. how are we going to remain competitive with the rest of the world as it has become
increasingly competitive to us? we need to have more investment in our infrastructure. we need to have more investment in education. this is a recognition that the united states alone is not going to be the engine that drives all economic activity around the world. we've got to be more competitive and we're asking for an investment in our infrastructure and education so that we will be very competitive with a world that is increasingly competitive against us. >> can add one thing? we saw in the report the national investment initiative would be complementary to the administration's national export initiative, that a lot of what this report is about is attracting investment in the united states that's related to export market. the unite united states just as evidence in a systematic way. most countries have national level investment promotion efforts where they are looking overseas to bring companies
together to retain investment here. we don't do that at the national level in a serious way. we mostly due to the state level. we talk about tax policy, the way in which our corporate tax system is an outlier, discourages investment in the united states. we talk a lot about china and developing countries. the goal is to something government the national export nctc trade and investment are intricately linked as we could exports we need to be promoted foreign investment and more broadly -- >> drawing more foreign company to invest in the united states. making them feel welcome. >> and when u.s. multinationals expand abroad, to try to have policies to allow the expansion abroad to connect with jobs built in america as well. thinking about all global engage companies in america trying to allow them whatever the mode of interacting with use and the global economy, to have the
ability to have dynamic growth marketmarket like china's embas? >> guest: back into jobs here. >> you talk in the report about approval with the german chancellor and the french president as being better salesman for the export industry and american presidents have been. want to ask you about that. in europe the governments are much closer to businesses and the relationship to business and government is different here. most of the time the ryder cup is in american is stay out of my business and i will stay out of yours. do you imagine, should the president of the united states, whether it's a republican/democrat, be spending more time beating on the chinese to buy boeing jets or beating other germans to buy microsoft software? >> i don't know i would see beating on them. i do think creating a greater cr
into close anymore successful partnership as we look at international competitiveness is something we should be. i think it's a good thing. i also think we've got to do a better job of linking jobs with this whole effort. that's what i think we failed to do is we haven't really made the case about how jobs can be affected and how we can build the jobs the agenda around doing a better job of selling ourselves to the world. that poorly is what this is all about, recognizing there's a huge amount of rhetoric that has to be considered as we make our case, it has been a desperate effectively in past years. >> scott, remember president of the united states, they don't not push for u.s. exports. its kind done with a bit of awkwardness like we ought not to be tumorigenic about this because we are the united states. is that a problem or is that a good thing? i'm not sure. >> i don't think it's a problem.
presidents have been unabashedly championing i'm going to say u.s. corporations the computer against foreign corporations. it's when they're competing against other u.s. corporations that they don't get engaged to a just want the playing field to be as level as possible and they want the rule of trade to be respected on all sides. i think that's what we're asking federal government to do, is to be proactive in making sure the rules that are there on the rules that are enforced. we are not going to count on our corporations all of the time to be the ones to say hey, they are breaking the rules. we have our own ability to see whether not the rules are broken and wished step up, blow the whistle and call attention to it. but yes, we want april america trade policy and that's what this is saying. i don't think it's inconsistent with the fact the united states is the best example of free market system and we want to spread free market systems around the world but we are going to do it, recognizing that
are free market system is great because it does have the rule of law. it is enforcement and we will make sure that is spread across every border in the world. >> away an american taxes corporation is of course quite controversial at the moment. we are the only country in the world that tries to tax everybody's office no matter what you are in the world while others generally try to tax only the profits earned in the country. there's a great consensus in congress and depression without of tax reform as long you don't try to define what it is they're talking about. you talk about taxes but i wonder if either you could talk about how do we think about corporate tax reform in the context of a trade and investment deal? >> i think there is a recognition that tax policy has a huge influence on our success in international trade and competitiveness. we've got to look at it from that perspective.
we created a whole array of incentives to do different things. but the bottom line is we still have a very high tax rates as it relates to other parts of the world and business. recognizing that in creating a greater equilibrium, a fairer and more competitive tax claim is something i think both democrats and republicans, this administration and congress in spite of all the polarization you see about taxes seem to agree. >> i feel very strongly that you can not have a trade debate without talking about taxes. this report acknowledges that reality and we are from a number of business leaders in fact from every business would we spoke to that attacks policies have a great impact on some of the trees policies and the theory of trade. we would like to call the attention of congress as they take a look at tax policy, to pay attention to what's happening in the global competitiveness. how does it impact our ability to compete overseas and to keep
jobs at home or attract new jobs and more investment here? we put some controversial suggestion in here with regard to the tax debate that congress will have to have. it's not in the context of a trade bill. it's in the context of a tax bill that will have to be written but we don't want a tax bill written without paying attention to the ramifications on international trade. >> utah also in the bill about the process of giving trade legislation through congress. once upon a time to make it better we put up a process to the present we proposed and congress could in it and what happened in 30 days. 30 days seems a stretch to 300 days and 3000 days. trade agreements, some of which are with countries about the size of providence, rhode island. how would you propose to make the trade legislation process different? >> first of all i guess, as andy
said, if we tried to write a perfect document you would probably write a perfectly with which to deal with trade legislation in the congress. that isn't going to happen. spume nobody thinks congress is perfect. don't worry about it last night. >> that's the problem. [laughter] >> i think we have come with the realization that tpa, trade promotion authority, legislative avenues are not something that is very realistic today. we have to look to ways in which to address these agreements outside that context, making the case on a bilateral basis with countries as important as brazil and india and china that on that basis alone we are to be able to find consensus on some of the most important priorities aspects relating to trade with those country. we are not going to create a framework where all these things to be done. i think of for the program started, there's no one size fits all approach to trade
policy as we go forward and we have to recognize that today. >> trade promotion authority would be great in a perfect world. the rabbit is congress is not likely to approve trade promotion authority. even if they did they would probably be strings on it that might mean it was really trade promotion authority. this is an acknowledgment of the reality of the political climate today. i thought for trade promotion authority when a work in government. i advocate it when it's working in the private sector and yes, i lobbied congress to pass the trade promotion authority and i thought it was a great tool for president to have. it's just not likely to be given now and one thing about this report is to suggest there should be a strategic considerations with regard to trade. so we are suggesting, take a look at the unique challenges of china, brazil or india. deal with them and it used to be
that you would take your cookie cutter out and poked into the world and bingo, it would show columbia, perfect example. we don't have a cookie cutter anymore. we have to deal market to market, reality to reality, and that is also in the context of the political response that congress gets. >> we've had examples where we've been able to do this and i think we have to go back and find what works in the past outside of tpa and use those principles and experiences begin. >> i would love congress to give tpa to the president of the united states but i think it's inappropriate response to article to his responsibility i don't think congress is going to do it about. >> just add one thing to be clear of the debate. there was broad agreement in the best of all possible worlds trade promotion authority for the present makes sense but it's a good thing. what we wanted to avoid was a big ideological battle over come in three does the u.s. want to go forward with more trade agreements?
that makes both sides harden into position. what this thing is go go out and present to the congress specific deals the administration can bring home. they will probably need tv and the context of the trans-pacific partnership that is being negotiated and you can go to members of congress and explain. >> it allows for a fast-track procedure through congress so the bills cannot be admitted essentially. so you don't get into the game of congress amending trade deals. we have ended up there anyway with trade with an paramount. >> we would like congress to pass speak negotiate. i think it's easy to give tangible come if you tangible agree with you present to members of congress and say here's what you grant of trade the bush authority for this agreement is going to mean, and try to build up confidence that way. >> let me turn to what you think ceos of the companies up to do and say.
in the '90s multinationals created about two jobs overseas for every job they treated here. in the 2000 they didn't. the increased their employment overseas by about 2.4 million decreased their workforces in the u.s. by 2.9 million. what is the response the other ceos of the 100 largest multinational companies in terms of talking to the government, talking to the people about trade and what should they bring to the table? >> i think they should bring to the table we have to be competitive in the world. helpless be competitive in the world and yes, our government should say what are you going to do for us? i think they have some suggestions. sometimes the rules of the game do not allow them to ac add as h value to the united states as they would like to but the competitive challenges require them to make sacrifices at home
for the shareholders return on investments. i think it is a challenge. we heard, jim owens is the best example. it is out there working very, very, very and has been working very hard not only to provide jobs in america but to meet the challenges that consumers have around the globe. he's done it well. but he said we were tying his hands. sometimes it was our tax code, sometime it was a lack of infrastructure in the united states that about him to be competitive but he found a way to do. we listened to the practical challenges that he had to face as he is competing around the world, and is very, very sincere desire to add value at home. >> i think ceos have the same responsibility that public office holders have. which is to do with this report calls for calm and that is what detention and the focus with the american people really want to
hear what you think it should be and that's on jobs. what are ceos doing to do a better job than we've done in recent years on create jobs here at home? what our policymakers doing? how can we work together? what are incentives? what kind of infrastructure do we need to ensure that it is profitable and rewarding for businesses to create those jobs right here at home? that's what we've got to do is emphasize what it's going to take to build those jobs your. the perception is already because building or creating those jobs abroad. we've got to bring them home but we've got to make sure people believe that it's a real priority and the highest element of our agenda when it comes to trade. >> i would just echo what they said hard with the seals can do most important is inform and educate. they are the ones who are seeing at the way, every quarter how fast the changes on the global economy, how opportunities are
growing. but how challenging the business dynamic is radical in this market the public in a way that connects with jobs and opportunities in the united states. international text is a great example. back to the '80s and '90s, the united states corporate tax code was presumed to that of a lot of other countries but the changes in dozens and dozens of countries in recent years to simplify the tax code has made the u.s. more and more of an ally. they are seeing things in a panic and guide the focus of policymakers on this effort to grow more jobs linked to the global economy. >> let me ask you one economic professor questioned there was a striking quote written by the former treasury secretary and former republican white house staffer, which was ironically or interestingly directed by a little-known eurocrat named tim geithner at the time.
-- bureaucrat. this was just 10 years ago. it was a cfr wrote a gains from trade are broadly shared throughout the last decade as the u.s. has become significantly more open, u.s. employment and wages have increased. that's not a statement you could make in 2011. what changed? >> so we don't fully know that the academic in me says were still working on try to understand that but it's clear amazing amount of technology innovation and the different dimensions with which economies of the world have become more coal and more into effect have something to with the fact job growth has been alonso and the america and wage growth has been basically nonexistent for the large majority of american workers. that's a deep reality of the global economic system. doesn't depend on which partiess control which part of her government. that's a deep set of forces that are at play and again with new is saying this is an economic reality that we can build off
hopefully with more innovative set of policies to try to allow more job growth and more income growth linked to the opportunities abroad because it's just not coming as automatic as it did in the past. >> also a recognition of reality come in a government owned entities around the world, increasingly challenging our corporate structure to be competitive. so how do we do with that? our rules really were not met me with an expectation that government owned entities would be the major competitors in some markets so that's where we are seeing the should be more proactive as his government should be more proactive in looking to see whether or not the rules are being followed. and that the playing field isn't level as possible when you're competing to meet the demands of consumers around the world and provide jobs back at home. >> that's i think the american people expect the american government to be a lot more aggressive when it comes to
enforcement and we've been in the last 10 years. if there is one word i think concerns in the most is that, enforcement. why don't you be more aggressive and be more successful in taking on the lack of competitive fairness as you look at some these markets because of state-owned enterprises. >> the final portion of this issues spotlight program future use trade representative michael froman, the former treasury department official and citigroup executive joined the obama administration in 2009 and became trade representative in 2013. his remarks about tpp and global trade at the gate institute are about 10 minutes. a reminder you can see this entire event and all of the events featured on this issue spotlight program by going to our website c-span.org and searching the video library. [applause]
>> thanks very much, dan. i feel a little bit like one of these, coming from the administration here, there are a number of things we don't fully agree on but i think he is an area where we might well agree on, the importance of moving this forward. so i welcome this opportunity and thank dan for the invitation and opportunity with you. i'm delighted to see one of my predecessors year in the front row. one of the great things about this job is how bipartisan it is. i've gotten great advice and support from all of my predecessors and i'm very grateful for the ambassador for being here i want to thank the trade team at cato, and, simon, bill, dan, for bringing their deep expertise on these issues,
to the debate. we welcomed this report that is being issued today and look forward to reading it and be independent analysis at cato does on this issue. tpp will be the largest trade policy advance in more than 20 years on a wide range of important policy goals with the results very well, the results of very well meshed with principals, to conservatives, liberals and libertarians alike. if you're interested in reducing taxes, promoting market-based rather than subsidy-based competition, internet freedom and entrepreneurialism, there's a lot to like in this agreement. for example, tpp will eliminate more than 18,000 taxes or tariffs on our exports. it will increase the standard of living of especially low and middle income americans who spent a higher proportion of their disposable income on consumer goods. it will help maintain the competitiveness of u.s. manufacturers who rely on important inputs and components.
an american company selling cosmetics or cars to vietnam will find new opportunities as tariffs of 20-70% finished. the proprietor of an asian grocery store across the river in arlington to save herself and her customers might ask you as tariffs dropped on straw mushrooms and baby corporate tpp will be the first agreement since the uruguay round in 1994 to cut a subsidy for putting fishery subsidies to contribute to overfishing. that's a historic achievement both for the removal of a practice and as a conservation measure. .. win they compete against pour private firms they do so on a
fair and level playing field. tpp will support small businesses through straight measures. the efforts to harmonize custom procedures and make processes more transparent. these are just a few of tpps highlights and there have been a number of studying done on the benefits of tpp from the petersen institute, to the international trade commission and the farm bureau. they found the tpp will support more well-paying, expert relate jobs, and spur economic growth here at home. both the petersen institute and the itc which conducted studies both find the majority of the benefits of tp will go 'oworkers through higher wages. now, there's great deal of anxiety among the american people evidenced in the current election dynamic, not to mention across much of the developed world, and dan referred to that in his introduction. there's concern that other countries don't follow the same rules we do, but instead act
unfairly, that the benefits of growth have been broadly share, the system is rigged in favor of the few. it is important that we not ignore these concerns. they are real and legitimate. the question is, what to do about them? most economists well tell you that technology has more to do with the changing nature of the work force but glialization but they won't contribute. the problem is we don't get to vote on technology, whether robots will deployed nor do be we get to vote on globalization, globalization is mate possible by the fact of con tearerrine a's -- containerrization of shipping and the broadband internet. globalization is a force. you can't just wish it a. or put me genie back in the bottle. trade agreements become a magnet of concern, a crepe goat for a
broader set of factors but it's important not to conflate trade agreements with globalization, globalization has impacted the workplace. trade agreements can be part of the solution and allow to us shape globalization tour -- to our advantage, and rewrite the rules in a way that reflect our interests and our values. just yesterday the international trade commission released a study on the effects of u.s. trade agreements since 1984 when we negotiated our first fta with israel. found that in aggregate our bilateral and regional agreements have added american jobs and increased wages, giving consumers lower prices and greater product variety with the largest purchasing power gains to low and middle income americans and increased returns on innovation. we start from the fact fat -- that the u.s. has an open economy in large part because of
decisions made decades ago and supported by 12 presidents, six democrats, six republicans. our average applied tariff is less than 1.5%. 50% of all u.s. imports are duty free and we don't use regulations as a disguise barrier to trade, but when we look abroad we see markets shielded by higher tariffs and opaque and slanted regulatory system but the transpacific partnership we can level the playing field by removing barriers the markets raise standards the markets which increase our expert-related jobs which pay up to 18% more on average than nonexpert related jobs. right now we compete with low-wage countries all over the world. tpp will open some of the largest and fastest growing markets to made in america manufacturing goods, agricultural products and services and by raising standards in other countries tpp well help level the the playing field for america. but there's something broader at
issue in whether and when tpp moves forward and that's the rules based system itself. that system helped japan and europe rebuild after at the secd world war, allowed developing countries such as south korea and brazil become emerging markets and helicopter lift hundreds oust poverty and here at home successive rounds roundf trade liberalization is stem today added $13,000 of purchasing power per american household but we should not take that system for granted. that system is under attack as more cancellist alternatives are being promoted abroad and calls for isolationism and protectionism here at home. from our perspective it's vitally important that we maintain and strengthen the rules based system where every country has certain rights and all countries are expected to play by the same rules, and if they don't, where there's a fair and equity able resolution and
big countries can't just push little ones around. that system is demaintaining a stable and prosperous asia-pacific region and also keytone suring the global economy works for all americans. it's critically important that we not just sit on the sidelines, of pro-actively shaping the global economy in way that reflects those interests. if the united states were to turn inward the results would be economically devastating. hoyt has proven beyond a doubt that protectionism doesn't work. raising tariffs on our trading partners would lead those countries to respond in kind and block our exports. that is a trade war and we know that no one wins in a trade war. turning to protectionism wouldn't increase employment here. it would reduce it. it wouldn't boost economic going to. it would retard it at best, and drive the economy into recession at worst. and we know this from experience. in 1930, congress passed and president hoof -- hoover signed the act which walled off the
united states from imports. hoover's view was that this was essential for an era in which he believed americans could not compete against low-wage countries in europe. the thinking was racing tariffs would leave to resurgeries of agricultural and manufacturing employment in the united states but the opposite happened. we had many fewer jobs and may have had a sizable trade surplus but also had the great depression and not only did high tariffs worsen the depression but led to the rise oft nationalism in europe and asia. as president reagan once said protectionism will not open markets to u.s. products but will close them and would map debt the united states violate many of the basic rules of international trade and expose our most productive farms and industries to retaliation by other nations. the economic stakes in isolationism are clear and so are the strategic stakes.
rejecting tpp would undermine u.s. leadership, not only in the asia park region but around the world. our allies couldn't help to question whether we had the will to make good on our commitments. as singapore's prime minister put it,over not prepared to deal when it comes to cars and services and agriculture, can we depend on you when it comes to security and military arrangements? in fact, now more than ever it's important we move ahead with the approval of tpp. earlier this week i was reading a piece on the opinion pages of "the wall street journal" and the author was describing his sentiment after participating in a discussion of the impact of brexit on europe. and he said, the fate of the entire post war order hangs in the balance, and with the prospects for democracy worldwide. without vigorous american leadership, the prospects are not bright. between the migrant crisis and interchallenges there's a serious risk europe will be preoccupied for some time.
we cannot afford a self-inflicted wound to american leadership at the same time. the good news is that as i meet with members of congress, they're increasingly appreciating the benefits of the agreement and the costs of delay and those costs of delay are high. we're already seeing our market share in priority products erode by other countries who already have free trade agreements in place. a one-year delay in putting tpp into effect would pose a $94 million cost on the u.s. economy. that equates to $700 tax on every american household. moreover if we don't get it done soon the other asia-pacific countries aren't going to wait for us. they'll move on. as new zealand's prime minister put it, these economies aren't going to stand still, beijing will step in and fill the void. so the choice isn't between tpp and the status quo. it's between tpp and what is likely to evolve in the absence of tpp.
as other countries move forward with their own preferential market access our businesses stan to see their market share in these key countries shrink rather than expand. and instead of seeing our rules put in place we'll face adverse implications for the free flow of data and the integrity of the center internet, for displaining subsidieses and accommodating against counterfeit medicines and consumer goods. today our country has choice. we can play leadership role in and writing the rules of the road for global economy or leave the job to others whose values and interests do not align with ourself. our failure to move forward weaken us economically and undermine american leadership. >> joining us now to look at how trade is being discussed by congress and on the campaign trail is megan, trade report for politico pro. much of the discussion now is about the transpacific partnership, a deal signed by
participating countries back in february. in broad terms what is the tpp as it's known, and what is its status? >> the tpp is the largest regional trade deal in history. a massive agreement that covers 12 nations from the u.s. across the asia-pacific region. touted a involving 40% of the world trade, key port of president obama's pivot to asia, and as of now, he has signed the deal but it's awaiting too get ratified by congress and facing a lot of obstacles before that is done. >> how is the tpp different from previous trait deals, and a naf. >> it is bigger and covers a whole new region of the world. the asia-pacific. the obama administration is aiming to set the rules of trade before china or another nation does, and china, as our largest trading partner, is not involved in this agreement and so the administration is aiming to make it a way to -- for us to stand out for the u.s. to stand out.
it's different because it also includes services and aims to boost trade and investment while raising labor standards, while raising environmental starses, which those two thingers are really touted as the benefits of the agreement. >> you mentioned the president signed the deal but of course, we're waiting for congress to act and the president would like to see congress ratify this treaty before he leaves office. how likely or unlikely is that to happen? >> at this point it's hard to say. it's becoming like it's looking increasingly unlikely that will happen mainly due to fact that's deadline is approaching. the election is coming in november, and inauguration day is january. and it still looks like the administration doesn't have the right number of votes on its side. its supporters sale the administration still saying they have plenty of time to get that done. they're still supporterrers but groups against it, labor group, say there's no way that's can happen. so it's sort of a tossup at this
point and will be interesting to see how lawmakers do cast votes. >> let's talk about the major party presidential nominees for a moment and what they're saying about tpp. you have hillary clinton who initially was a supporter and has supported past trade deals. you also have then donald trump, who has some products made in china, yet he is against this deal and other trade deals. how do you explain the opposition of both hillary clinton and donald trump? >> it's interesting to hear this issue tossed around the campaign trail and to see both major party candidates so strongly against it. and i think hillary, to start, was really pulled to the left by bernie sanders and in her primary campaign and did support this as secretary of state and part of the obama administration, and now says she doesn't see the high enough a labor standards she wanted to see and thinks tisdale hurt american working families, and
she is against it, and it's hard to say if bernie sanders had not been in the race if some we have had the same position because in many other areas she is running on obama's ticket and on obama's name and legacy. donald trump on the other hand, he -- as you say, has men products made in china. he in his businesses does outsource, he does use foreign labor. men practices he imclaims on the campaign trail and trying to present him as advocating for the american worker and the everyday man and by saying that he doesn't like this deal because it sends jobs overseas, he is trial to appeal to that electorate. >> so in congress, though, you have republicans and democrats both for and against. on both sides of the aisle. how do you account for that? >> historically trade is an interesting issue and that it's very bipartisan and a lot of that is because these lawmakers vote for their geographic districts rather than for the politics, and you have different areas of the country feel differently, and if those areas
elect a republican, that republican might be for trade, and if it is a pro trade area it will elect a democrat, that democrat might be for trade. you're looking at rust belt industrial states like pennsylvania and ohio, that are history history cliff wary of trade deals and then maybe some port cities or states like your washington and oregon, that are really dependent on exports and on trade. and so it's not so much the partisan politics of the states but more the geographic importance of those states. >> megan casella, trade reporter for politico pro. thank you for being here. >> thank you, bob. i appreciate it. >> three years after a supreme court ruling overturned part of the voting rights act courts chaos the country have struck down a number of state laws saying they discriminate against specific groups of voters. saturday night chance looks at voting rights and the impact on the 2016 election. well'll feature part of the 2013
supreme court oral argument in shelby verse holder. members of congress look at whether to restore the voting rights act, plus, discussion on whether the voting rights act is necessary. here's what the presidential candidates have to say. >> awful this voter i.d., nowdays a lot of places aren't going to have voter i.d. what does that mean? just keep walking in and voting? >> what is happening is a sweeping effort to disempower and disenfranchise people of color passion -- color, poor people, and young people from oned end off our country to the one-half. >> which our issues spotlight on voting rights saturday night at 8:00 p.m. eastern on c-span, and c-span.org. >> a more leadership changes for the trump campaign. the hill reports today paul manafort has resigned as donald trump's campaign chair. the campaign announces this
morning. this morning paul manafort and i accepted his resignation from the campaign. mr. trump said in a statement. very appreciative for his great work in helping to get us where we are toward and guiding us drew the delegate and convention process. paul is a true professional and i wish him the greatest success. that from donald trump this morning, you can read more in "the hill."com. here's some ads released by the trump and clinton campaigns and then we'll show you the ads. >> good morning, eric. >> good morning. how are you.u. >> i'm great. thank you for joining us, we're going to take a look at the ad in just a moment.ke tell always little built about donald trump and his decision ta now launch campaign ads for thee first time. >> i think that you -- this is something they kept on saying, we'll run ads in the general so this isn't really surprising but it is kind of interesting that
given the kind of missteps he has had in his recent campaign and the fact he has tried to do this kind of rehab. it is interesting that it's coming on the heels of that. so that in and of itself is really kind of interesting to me. >> okay.y.kind let's take a look at the ad and remind our viewers what will be airing today. >> hillary clinton's america, at
the system stays rigged against americans. syrian refugees flood in. illegal immigrants convicted of committing crimes get to stay. collecting social security benefits, skipping the line. our border open, it's more of the same, but worse. donald trump's america is secure, terrorist and dangerouse criminals kept out. the border is secure, our families safe. change that makes america safe again. donald trump for president. >> i'm donald trump and i p approve this message. >> eric, where will these ads run starting today?
>> so, it looks like -- right now, it looks like it's going to be running in florida, ohio, north carolina, and pennsylvania. these are states that trump is obviously down in ohio and actually down in north carolina and down in all he's states so these are states he really needs to win and it's interesting because of the fact that democratic super pacs said their priorities said they're going to be pulling out of ohio, as from north carolina and ohio, and pennsylvania so these are states that the clinton campaign is starting to see they can reallocate resources there so trump is trying to make strides in states he could lose. >> but one point in pointing out where some of these ads won't be running as pointed out in a tweet by reid general steen for all of trump's talk of appeals to pennsylvania blue collar white no dtv advertisements in scranton, downor the ear riff markets. aren't these important markets
that donald trump needs to appeal to if he wants to win state like pennsylvania? >> itself is interesting. i just saw that tweet right now, and it is interesting that those are places for all this talk about him being able to appealkt to working class voters, he is not appeal to these blue collar areas. so it is interesting he is not going for them. he's trying to go for the other sectors. when he is trying to appeal to pennsylvania. >> it's the third week of august. determiner secretary of state hillary clinton has been up with ads in a lot of markets. is it too late in the game for donald trump to jump in now or are voters still not tuned in before labor day? >> well, you know, the think pat people forget is that for a while, i believe, john mccain was actually lead are sarah palin after the conventions and wasn't until the financial
crisis that obama really kind of sealed his victory. and the same way the debates were the thing that changed the bush dukakis race in 1988. so it's not too late, but all these things need to come with c coordinated effort. so, the question is, will this be part of a larger effort or is it just isolated. >> okay. and my last question is, compare this -- donald trump starting out with on the issue of immigration, compare this to some of the messaging we have seen from hillary clinton in her ads. >> well, because hillaryis clinton, the latest ad she did was her -- i believe it was her talking about donald trump's taxes but hillary clinton is focusing on donald trump himself, saying he is not readyy to be president. doesn't understand national security, hiding something in his tax returns. trump is really, really, really
focusing on illegal immigrationg here, he is focusing on securing the border and ending refugees. he talks about voter fraud. which is -- he talks about it as if it is going to be played in north carolina, maize just saw their voter i.d. law blocked so he is trying to appeal to whitea voters in north carolina who are afraid of voter fraud which most voter fraud happens with mail-in ballots. >> thank you for joining us today, eric garcia. >> thank you very much. >> in hillary clinton's america, the system stays rigged against americans.
syrian refugees flood in. illegal immigrants convict of committing crimes get to stay. collecting social security benefits, skipping the line. our border open, it's more of the same but worse. donald trump's america is secure. terrorists and dangerous criminals kept out. the border secure.
our families safe. change that makes america safe again. donald trump for president. >> i'm donald trump and i approve this message. >> i'm hillary clinton and i approve
this message. >> if i decide to run for office i'll produce my tax returns absolutely. >> what is your tax rate? >> it's none of your business. >> any evidence he pays very low taxes indeed and possibly pretty much nothing. >> perhaps one more reason why we're not seeing his tax returns because he is deeply involved in dealing with russian oligarchs. >> either he is not near as wealthy as he says he is 0 are there's a bomb shell in donald trump's taxes. >> tonight on q & a, joanne jenkins, the ceo of aarp and talks bit -- about her book. and tonight at 8 eastern, it's booktv in primetime with "after words," starting off with
may fong, the story of china's most radical expert, one child. and then the intimidation game how the left is silencing free speech. and then after that, mary frances berry, and at 2:00 15 is the book, consequence, a memoir. booktv in primetime on c-span2 2 week nights. naval air force's commander vice administer mike schumacher on the future of naval if a aviation and talk about transitioning to the f-35, the as spray -- as osprey or the unmanned aerial vehicles of uav.
>> welcome everyone. it's with great pleasure that i'm introducing this event on the future of naval aviation. before we begin today i'm going to give our usual safety reminder on our precautions. we feel very safe and security in our building but should a fire alarm or something go off there's doors behind you and to my left and right there are exits for the back of the building. so, you just make sure that you're paying attention to csis official who will stand up in that case to lead you through the room. the maritime security dialogue is a product of csis and the u.s. naval institute coming together to highlight the pick challenges facing the needy -- navy, marine corps, coast coast guard, from the naval concept development and program design. we're very fortunate to have a series sponsored by lockheed martin and huntington industries
and will be focusing on the fortunate of naval aviation and our discussioned to if with vice admiral mike schumacher who is commander of naval air forces and commander of air forces u.s. pacific fleet in the past and this event will be moderated by vice admiral pete daily, the ceo of the u.s. naval institute. my job is to get off the stage so they can get on the stage to begin the discussion so please join in the in a round of applause for our speakers. [applause] >> thank you for the invitation to come back and do this. to csis and the naval institute. lockheed and huntington ingle. a good turnout. last time we did this a year ago. general davis niksch counterpart on the marine corps and i were up here with admiral prier and look forward to coming back and having an opportunity to talk
about a couple of things today. i've been an air boss to a year and a half now. and it's been an honor and privilege to surf in that capacity, most important live as well know anything wearing uniforms the people we get to work with, the folks doing the heavy lifting, you look at cno, or our navy design, talk about core attributes, the integrity piece initiative piece, and roll in the toughness. they continue to bur over asymmetric advantage are people. we'll talk future of naval aviation. so, what i'd like to do today, talk for maybe 20 minutes, if that. hopefully get through quick -- talk about the really where we are today across the force, across the fleet, from a demand perspective, then focus on the future platforms as we move forward. i covered a couple of those last time here with general davis, focused on three.
the f-35, the mv22 osprey, which we're working a couple of different things right now on those two platforms, and then the mt25. unmanned carrier launch air vehicle. then what i'll do is talk about the challenges and if we get to that -- that's really the readiness challenges, working across the force, my expenses then get to questions so we can get what is on your mind. you look across the force today, in naval aviation we remain the very high demand, navy in general. and i think that's because of the values, the relevance and clearly the -- what we bring to our combatant fleets robbed the world, successfully delivering combat effects in the middle east for the last 15 years. a few months ago we had four care jerry strikes at sea. hari s. truman, and eisenhower. western pacific, john c stennis
and the ronald reagan and air whining five. we're operating just outside of the first island chain. the first time in a long time we have had two carriers operating together and one dedicated deployment to the west pacific, not going through the pacific to the middle east. so four carrier strikers operating. and then we that three more in workups at that same time. today we've got truman at home. stennis is home. eisenhower stands watch in the to north arabian gulf in support of inherent resolve and doing very well. reagan is getting ready to get underway for her fall patrol, and then vincent and bush is the next to do and they'll be out the car in a couple of months and then followed by nimitz. george washington is off the eastern coast, doing our third developmental tests, integration with f-35. and that's going very well. in addition to those carrier strikers, if look at the expeditionary forces, 26 of those are underway or deployed
as well, and that's p-3, p-8, the helicopter detachments, vaq, single squadron in the seventh fleet. so they provide that visible forward deploy presence and deterrent value that rea sure our partners and give our leaders option to respond quickly if needed. look to the future of naval aviation. i think it's very bright. there's some challenges near term. get to those at the end. i think in the environment we're in, our resource sponsor, have done a great job in transitioning each of our platforms. so in every community, except for two hm, our airborne counter measures and our issue 60s that reply and provide or nuclear command and control and communications missions. those are the only two we're looking to sustain in near term.