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tv   Panelists Discuss NAFTA Negotiations  CSPAN  August 18, 2017 12:32pm-2:34pm EDT

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>> here is what i had on c-span2. next, a panel discussion on how negotiations to modernize the nafta agreements could impact mexico. then a group of activists discuss strategies for lobbying members of congress. 3:4:05 pm investors protest the us patent and trademark office's patent trial and appeal board. >> every month booktv on c-span2 features an in-depth conversation with a nonfiction author about their writing career. join us on september 3rd when our guest is eric pay taxes. 's latest book is if you can keep it. 's other books is amazing grace, best-selling biography of dietrich von hoffer. arthur and new york columnist maureen dowd will discuss bush world. are men necessary? and the year of voting dangerously. michael lewis will talk about his books including his latest,
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the undoing project. he has also written the big short and the new new things. join us for in-depth the first sunday of the month at noon eastern on booktv on c-span2. negotiations are underway with the united states, texaco and canada to modernize the north american free trade agreement. earlier this week mexican trade officials were among the group of panelists who discussed how the nafta talks will impact mexico. this panel discussion hosted by the wilson center in washington dc is two hours. >> good morning, ladies and gentlemen. if you are looking for a place we are willing to sell these seats at a deflated price, there are scalpers outside, don't use them, just give the money
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directly to me. welcome to the wilson center. thank you for being here. when we talked about doing an event in august a voice inside my head said you are crazy. in washington no one will come. maybe nafta is important enough. maybe our existential questions will attract an audience. then we hit on the bright idea of asking mexico's chief negotiator ken smith to negotiate and he said yes. this is actually going to happen to melissa's extraordinary. then he said last week i can't make it. i apologize for misleading you. it was not intentional. we have got an absolutely fabulous panel. let me run through very quickly from left to right as i see it, fred berkson, senior fellow and director of the peterson
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institute for international economics, thank you for being with us. it is great -- the mexican perspectives here and it will be very welcome. francisco de rosenweig known to most of you. previously served as undersecretary for foreign trade, luz maria de la mora, has been here many times, a fellow here, managing director and founder of llm consulting, including ministry of foreign affairs. my deputy director chris wilson who is known for his work on nafta and border affairs and, i am duncan wood. nice to see you. let me say a couple comments.
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there has been an enormous amount of anticipation. my first page of notes says it is here. a strange moment but at this time last year at the wilson center we were holding a series of conversations about under the new administration, how can we improve nafta? we were talking about improving, modernizing nafta on the understanding that a different person would be in the white house because that is what everybody assumed and we were all saying a modernization of nafta is desperately needed and how could we do that q all of a sudden we have this opportunity to do it and a nice little piece by eric miller, this is a great opportunity to secure north america's competitiveness. the second point is this comes with an enormous amount of
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anxiety. anxiety about whether this is a successful negotiation and whether the the executive branch will stick with it, anxiety about questions of timing and political change and enormously complex negotiations and many of us in this room have said over the past few months how can we get this done in a 6-month period which seems to be the preferred time period on the part of the negotiators at least from the mexican and us side. the canadians have a different perspective and i recognize my colleague, laura dalton who is somewhere around here, i am grateful for the issue that she is providing support on these issues but the timing question is one of those things we may run up against, do we do it faster, do we do it right? that could be an important
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choice and i'm looking forward to discussing that with our panel. we have a very encouraging phenomenon of convergence between the three sides, to january or november of last year, there was enormous concern that we get to a point where at least we are on the same book if not on the same page. and it seems they got there which is tremendously encouraging. and all of the problems and challenges and obstacles, many of which are known but a number are unknown out there. we don't know how things will turn out if these negotiations become public, if we get a great deal of buy-in into the negotiation, if certain things are tweeted and we get a reaction from the us president which might draw reaction from the mexican president etc. etc..
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what we can say is now that we are here we have come a long way in six months and that is an encouraging part of the story. talking of coming a long way, it is worth remembering how far mexico has come since nafta was negotiated. just to remind us before the nafta it was very common in mexico for everyday goods to have price controls to set the prices of basic commodities. it was an economy dominated by state run enterprises. it was not open to foreign direct investments. the change that took place in the 1980s largely because of latin american debt crisis and then locked in by nafta, those are things we take for granted but it is an extraordinary
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journey. another point to remember is economic reforms that have taken place in mexico since 2012 build upon the success of nafta and we have the opportunity with nafta negotiations to lock in some of those reforms through an international treaty, international negotiation. without any further or do i would like to ask our panelists to give opening comments and begin with luz maria de la mora. you have some prepared comments. i would like our panelists to begin by focusing on what they see as the priorities but also mention the red lines they see from the mexico us point of view and then a conversation afterwards on questions of convergence, contention, timing and complexity.
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the floor is yours. >> thank you for the invitation. and thank you for organizing this, thank you for thinking about me. i had a fantastic experience in this place, a great pleasure to be back with you. i really feel very privileged to be part of this nafta discussion. the nafta discussion is always open and timely. in terms of job creation, integration and the place, free% interval. it is even more timely when we think about the beginning of a
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negotiation process, that would move towards integration and a better understanding of what north america means. and what took part in the nafta negotiations, thank you for being here with us. and the negotiators 25 years ago. i really have to say that i would never have expected to see a proposition on the us side to renegotiate nafta based on the proposition of having to address the question of manufacturing jobs lost in the us. i would never have expected in the us, would be the source of
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distrust and questioning of nafta like we were presented with this year. it is still puzzles me to see how both questions, the deficit and jobs questions through trade negotiation and all that. no question that it will be a daunting task to sit down with the us, donald trump views the opportunity is payback time and outlined an agenda that is clearly tainted, a nationalist perspective. as duncan mentions i do believe nafta has yielded amazing results. after 23 years nafta has economic resources beyond what any of us expected. beyond the most optimistic. nasa created a $19 trillion
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market, every day trading $2.5 billion, when nafta was negotiated mexico aspired to export $10 billion every month and exports from mexico to the us amounted to $1.3 billion every day. in the past 23 years trade between the three partners went from $219 million in 1993 to $1.3 trillion last year in terms of us and amounted close to 50%. representing 20% of mexico's gdp. 5 quick points. the first, in these negotiations
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mexico is not ready to be considered anything else but a us and canadian trading partner. at the table mexico and canada are equal partners with equal rights and equal publications. after 23 years of nafta, mexico today is the second largest trading partner. only after canada. for every dollar, $.16 brought by mexican consumers. today the united states trades more in goods and services with mexico and canada van it does with japan, south korea, brazil, russia, india and china altogether. mexico is the second source of imports only after china. we account for 14% of total us
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imports from the world. production of automobiles, electronics, greatly benefited from production sharing. nafta has not been able to reduce costs and become more effective. my second point is mexico should look for more and not less nafta. in the early 1990s, nafta triggered a structural reform in mexico. since its implementation nafta is a force for change and transformation for economic structures and institutions. nafta was a transformational experience for mexico, transformed the face and shape of the mexican economy and opened the door to a young democracy after 70 years of 1-party pool. nafta has been one of mexico's most important engines of
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economic growth given the role international trade and foreign direct investments represent for the country. i can tell you nafta is embedded in mexico's every day life, mexico is not ready to reverse in the last 23 years, nafta created a wide consensus in mexico that that is the way to go. we need more, not less competition and we want to be global players. mexico should look in these negotiations for ways to improve the agreement, there's plenty of room for improvement for implementation, a quick glance at the history, we will know has long as there is a recommendation and leadership there can be deeper integration. i can tell you in mexico there is no one political party, no one political leader that thinks it would be a good policy option to walk out of nafta or mexico
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should respond to trump's aggressions by closing our border or building a fortress. in fact a recent survey shows close to 50% of mexicans have a positive opinion of nafta and the trade relationship with the us and only 16% have a negative one. moreover, from march of this year, 73% of mexicans surveyed oppose getting rid of nafta. this does not mean nafta has not yielded winners and losers. it does mean the country has undergone a deep transformation, new opportunities in that area. a strong decision to dish these negotiations for the establishment of 21st-century, 21st-century rules are not the
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way by reversing those rules, not an option either. mexico today is ideally proficient to move nafta's integration and competitiveness, in 2012. structural reforms touched on these sectors. education, telecommunication, energy, and the financial sector in those reforms placed mexico in a better position to contribute to a stronger and more competitive north america. this set of reforms, allow mexico to negotiate issues like energy, services, e-commerce or telecommunications. my third point is nafta 2.0 could be the largest structural reform we need. why do i say this? in mexico nafta has made it more
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evident that any qualities that characterize mexican development for centuries, for mexico this is an ideal opportunity to democratize trade. nafta 2.0 will lead to a more inclusive economy where more sectors take part in globalization. half of mexican exports are done by six states on the northern border. 60% of total experts represented by two sectors, automotive and electronics. 5 million economic unit in mexico account for half of total expertise. nafta 2.0 inclusive rules lead mexico to create a better business environment. nafta should be the opportunity to introduce redtape for international trade or business in general. nafta has to stop being a
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negative term. restated and revalued. the late robert pastor conceived of a north american idea, north america as a region that could lead the world economy. maybe one of the reasons we are renegotiating the nafta debate, conflicts from the early 1990s is we never took the time or effort to socialize nafta or explain the value of north america and how it benefits each one of us. one of the biggest challenges is how to restore the north american idea as a regional integration scheme where three countries are better off with it rather than without. we need to rethink the nafta, how to be efficient with nafta not as a result of a defensive agenda which for each one of us count as losses. nafta in north america need something from the three countries that show together we
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not only add but multiply gains in a highly globalized and competitive economy. what we learned in two decades, nafta has offered a clear set of routes for a transparent and predictable business environment. nafta locked in the mexican model of economic openness18% o.
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the agreement needs to offer the kind of growth that is her heart by the 21st century economy, where global sharing is the name of the game. mexico has a lot to lose from the u.s. leaving agreement, mexico's largest export. representing of mexico's gdp. u.s. investment represents 40% of mexico's fdi. jobs, industrial production,
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services, tourism, and many other activities in the region have a lot to lose if we temper with nafta. the vast majority of businesses realize how important it is for them and have made specific proposals from where to modernize and improve nafta. for many in the u.s., the lowest possible denomination or expectation of nafta's renegotiation is whatever a result it will do no harm. if the u.s. decides to walk out of the nafta, which we hope it will not happen, it will certainly affect regional value chains, production, trade, investment, jobs, and economic growth. however, the agreement will still remain in place for trade between canada and mexico. if the result of this negotiation shows we can overcome this very delegate -- delicate situation, the three countries will still have to develop a regional strategy to safeguard nafta and north american integration.
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in 2014, former u.s. -- and general david petraeus issued a report that makes the case for north america. they argued that the u.s. needs to switch vis a vis of nafta from an afterthought to a the question is how to revitalize nafta to strengthen that and integrate, in the benefits of globalization. such strategy needs to consider key elements. integration of north american market is the way to boost the region's competitiveness, job creation, business opportunities and innovation. we need to reconcile security, nafta has been torn between its driving force and the breaking
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post to build a fortress to guarantee safe and secure borders. it needs to be modernized as more resources to be allocated to make integration smoother. a seamless door-to-door operation should be facilitated. mexico as a demographic in the region, we have a young population, average age 20 years old, north america increasingly requires qualified human resources to meet production in the region. a competitive workforce is key to maintaining dynamic region. we need to think about training and development of human resources to meet the needs for qualified personnel. i believe north america's integration will be incomplete after we find a way to integrate
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labor markets. this could take generations, even the huge income gap between mexico and its partners to the north. however, there are some steps that can be taken in this regard and are already part of the nafta. robert pastor in 2015 suggested to improve the proficiency on professional services containini nafta to facilitate and expedite obtaining nafta visas offering them longer periods and create an expanded mexican worker program. i would like to go through with my remarks by referring how in t the absence of tpp the new that will result from nafta 2.0 might be the gold standard of international trade. in the early 1990s the disciplines negotiated and nafta
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became the state-of-the-art trade route in new areas like trading agriculture, trading services, investment and proper intellectual property to name a few. new rules were developed and later set out on the negotiation agenda.. negotiations that start tomorrow will be closely followed by the rest of the world. and disciplines we give ourselves in north america will offer a very clear idea of the direction global trade may take in the future. we have a responsibility to younger nafta. mexico needs nafta and a strong nafta. mexico will have presidential elections on june 2nd. we have been able to finally pass a series of structural reforms that will yield results in the medium to long-term. however corruption and transparency, rule of law,
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crime, a serious challenge acting against mexico's competitiveness. if mexico is to contribute to a stronger region we need sustainable and long-term sust solutions. in 1994, mexico, nafta may haven triggered mexico's transition to democracy. polit more nafta may be the force. the integration requires political leadership, returning credibility and legitimacy may be the biggest challenge but we need to be up to it. >> great way to kick us off with an ambitious vision of what is possible. and the many games that have been secured after two decades
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of nafta. if you could address the question of the priorities and redlines in negotiations. >> good morning, everybody. i would like to thank you. as you know, after months of o uncertainty, it will start tomorrow. it has been a bumpy road. from the mexican point of view there was great uncertainty, sending to congress will consider the tpa 2015 or the administration was thinking about a new tpa. it is the one that is going to be utilized for the nafta redo, there are some areas of
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opportunities where we have come aground. important to remember the way mexico -- to update nafta. it is important to remember nafta over the last year has been may between 10 years. i remember when former president obama was running for president raising the nafta issue, maybe doing our homework back then and we haven't done it yet. we need to negotiate nafta. we have some important issues to share. we have a border that is 3000 feet higher, a great regional
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region but also issues in the best interests of two countries afraid to modernize. we are talking three parties and the discussion that it was going to be on the umbrella of two parties, they would never shape with canada and mexico different issues.wi of course there are concerns we want to share, no common concerns, when we talk about security or border issues or infrastructure regarding the priorities, the us and mexico, willing to conclude the process by early next year, one of the
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main reasons or elements they should consider is the language, the initiative because donald trump decided to withdraw but there is a lot of language we can utilize. even though trade negotiations do not move like technology and e-commerce, the true agreement in my view that has been negotiated was tpp. the first wave of negotiations, in the middle of the second one, sadly, the think about tpp is not more than anywhere in the us
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with mexico trying to push hard to put in place but also the us is losing leadership in trade negotiations but the pacific alliance, australia, singapore and canada as trading partners so if you see for us considering the us is our most important e trading partner, mexico is important to have a strong us economic performance but also to have us economic integration with mexico and canada so having said that, we may see an area of opportunity, mexico almost 99% of the company or enterprises do
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not participate on the international trade so one of the main priorities should be to introduce them and bring them on board which e-commerce in the sense that back then, internet doesn't exist but when i say e-commerce i'm not talking about that. where mexico has $15 in canada, 16, talking about ivr issues. i would say the opportunities to reflect to incorporate energy reforms, many things happened in mexico since the last 25 years and mexico is no longer of a
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country afraid to negotiate with the us, nowadays we believe we have a strong team of negotiators, to be at the tabler you have a great ustr experience but if the two countries are able to localize the efforts in the few issues we may not have that convergence, by the end of the year early next year. redline, in my view, is not an issue that should be considered
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a possibility to negotiate in the case of mexico. we had at least two or three labor reform and improving the legal framework, 2012 there was one on the way, wages should be out of any second the issue related, strange issue because this is the way trade was seen and i remember when i was a senior official at the mexican government trying to explain the chains to an important person.
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i wasn't able to explain inappropriate ways, the new pr narrative and receive a response, okay, at the end the deficit as long as we don't talk about that, something we can see the us proposal but able to consider any trade in a new way. the other issue is most of the objectives that were released, they bring the canadian and mexican framework to the audience. in ip are issues like prevention for 12 years, what i said, the
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meaning is proficient, $50 in the case of mexico, $800 and wants to add or increase the constants in the us in order to revert the deficits. that something that is important for the canadian as you realize but many provisions, for dispute settlement, also considered the concern parties raised in the last few years, negotiating the mechanism, the best approach back then, there are some new
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provision this added to. >> if i can give a reaction to those perspectives from two mexican panelists. >> i'm not sure was a reaction to them. and the us point of view, obviously a us point of view, not the administration's point of view. i have a few nasty things to say about the administration's point of view. we started each of us by harkening back to history a little bit and want to do that in the sense of recognizing my us colleague who was the chief us negotiator of nafta, the honorable carla hill who was ad ustr at the time if only we were so lucky now. we are graced by her appearance.
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i want to suggest three basic points about the upcoming negotiation, the benefits of nafta, how much has been gained and positive opportunities that exist. what lies ahead of the group, ae opportunity to strengthen northi american competitiveness, improve our ability to compete in a tough world of competition. i will not repeat or dwell on d any of that, i endorse all that has been said, we published a great deal on it at peterson institute, laid out in-depth analyses of many topics that are being negotiated and hope that will be positive. three areas that need to be
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focused on very intensely. failure is an option. we don't like to say that i think about it but it is true. the president proudly told us four months ago he would decided to withdraw. he got talked out of it by a combination of leaders of other countries and many americans who like the idea of withdrawing but heee was close to it. he set on agreeing to renegotiate if i don't get what i want and so failure is an option. that is it is critically important for the other countries in the negotiation and focusing on mexico to get foremost in everybody's mind how costly that would be to the united states. why do i say failure is an
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option you basically because the united states under the current administration goes into the negotiation with two false premises on which they base their approach. the first said memorably by candidate trump in the election, nafta was the greatest disaster ever negotiated. that is patently false, incorrect, based on no analysis including by them, that has ever been presented by anybody at any time. it is a false premise and we have to be clear that the world knows that. as francisco said, the explicit negotiating objective at the top of the ustr submission of a month ago is to use negotiation to reduce the us trade deficit. it is strange nor can it be
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intellectually the focus of a trade agreement, trade imbalance and macro problems, have to respond in a macro way, trade policies, explicitly trade agreements are not a feasible way to reduce trade names alan's. in particular addressing bilateral trade imbalances is totally impossible, if we did succeed, in the case of nafta. this intellectually absurd proposition is, in addition, practically absurd because mexico is a bigger deficit country than the united states. mexico's global current-account deficit is around or beyond 3% of gdp, bigger than that in the united states. mexico is not a surplus country like you could argue with china or germany or japan or korea.
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it is a deficit country itself so the united states is asking a deficit country to further of increase its deficit, which is even bigger. it doesn't pass the smell test. in practical terms even if you don't believe the conceptual underpinning.g. the us goes into the negotiation, essentially absurd chemistry and to put it mildly that makes it tough negotiation. echoing with the president's mindset, the best we can ascertain, if he is not satisfied the absurd premises are somehow satisfied, they will pool out and that is why i say failure is an option. that is why it is so critical for everybody around the world, certainly everybody in the
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united states, negotiating part especially mexico to keep reminding people gently, politely, diplomatically, y, forcefully and clearly, if the us were to withdraw, the cost to the united states is huge. the tariff increases of abolition of nafta, mexico and the united states, mexico has it not bound its tariffs, mexico goes up 5 times as much, and noo an toward to keep that reminder in the minds of us negotiators, as the negotiation proceeds. all sorts of nasty things could
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be done if nafta failed. the fact that the us would be a big loser itself from the failure has got to be a big deterrent to the failure if tha. point is kept clearly in mind. secondly, what could be a possible way to reconcile these premises, the us goes in and like-minded people like our two earlier speakers had in mind, is there some way to satisfy at least in some sense us objectives without doing violence to sensible principles and economics, trade policy, relations between countries and north american competitiveness as a whole? any trade negotiation has to be based on the principle of reciprocity, politically essential but essential in
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economic terms as well.ll mar reciprocity does have two there is what we call level reciprocity and what we call marginal reciprocity. marginal reciprocity tends to b, the normal ammo of trade negotiations. that means we each reduce our barriers by similar percentages. we cut tariffs 20% or whatever it may be and that is marginal reciprocity. trump people have explicitly pursue which is level reciprocity which means you want to wind up with the same level of trade barriers. one party starts with higher barriers, that party is expected to cut more to get down to an equivalent level at the end of the day and marginal reciprocity has been the typical mo but one
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could argue for level reciprocity and could go home and say we got a reciprocal deal on that basis. the case of the nafta negotiation there is a practical possibility, terrorists are basically 0 so there is no wiggle room there but the world bank trade restriction index shows mexican nontariff measures are about three times as great as the united states was roughle 15% to 5% when you equate their tariff equivalents and their price affects. it is conceivable that following good trade economic principles and pursuing its own national interest with -- based on getting cheaper imports and more competitive inputs mexico could conceivably reduce nontariff
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barriers more than the us reduced its or in some areas where the us doesn't have any that the moment and this could move toward level reciprocity which with any sense at all, the trump administration could claim as a great victory, say we got a good deal and back off some of its more extreme views. that might be a way out of the negotiators can find the specific barriers acceptable to reduction. our two mexican speakers have noted since nafta was originated, mexico conducted a number of reforms in key areas, the telecom sector, most are susceptible to nontariff measures applying at the border, which were not a political cost, and mexican politician but woulu
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help serve the objectives of disparities between two nd there countries, and positive affect,g us exports and there are some ways -- within not so convergent goals in order to achieve successful outcome. the third point is to remind everybody in the nafta t is t negotiation, very importantly w affected by what is happening in other trade negotiations pursued by the nafta partners and in the rest of the world as well.
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luz maria de la mora reminded us the rest of the world is watching the nafta negotiations to see possible models and guidelines for the future but thetc converse is also true, naa negotiators have to be watching what is going on in the rest of the world. for example the us is about to launch a negotiation with korea. it is not called renegotiation but some of the things the us is seeking what announcer to a renegotiation or significant changes in the course agreement. case in point is the currency chapter. the united states will have high on its priority list in the korean negotiation a currency chapter because if you read the last several semiannual reports on foreign exchange and currencs manipulation and all that you will find that korea is the number one country in the crosshairs of the u.s. treasury, true in the past administration and important to this administration in respect to the risk of currency manipulation. it is not labeled a manipulator,
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that issue will be very high on the us agenda in the correia talks. therefore in the nafta talks the administration is going to ones a currency chapter or provision, not because it views canada or mexico is a currency manipulator but as precedent and could be applied in korea and revised tpp down the road with other past and future manipulators because currency issue is important economically and is a huge political issue in congress and the political office has to be satisfied if this gets through congress eventually into fruition and that is one example and there will be other issue areas where what goes on elsewhere like in the ongoing china talks and so much in the
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headlines will affect what goes on in nafta both in terms of specific sand in terms of the overall policy approach but not only what the us is doing elsewhere's accounts but what canada and mexico are doing elsewhere that counts and in a big way. i tip my hat to mexico. perhaps the world leader in negotiating trade liberalizing agreements in movies. in terms of having more than anybody else mexico has certainly been the leader in terms of opening markets, diversifying its trade, building its network and trade contacts around the world and continuing
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to negotiate with korea, and if nafta talks were to fail not only with the us, barriers against it, sharply increased degrees of preference against the united states, with the other agreement so the us would take a double loss and the fact that mexico is wise enough, would add to that. my final piece of unsolicited advice to my friend in mexico is keep it up. keep doing all those other deals. japanese have this wonderful term, foreign pressure on the country to do the right thing it ought to do anyway. that is mexico's fta, the united
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states, keep up the pressure, particularly mexico and canada should work with japan to keep the ppp alive, that is more on the united states. you would have mexico, korea, free trade, this would adversely affect the united states. i invented a concept called competitive liberalization. countries liberalize preferentially to each other they generate huge incentives to emulate or join the party or otherwise protect themselves against having new preferences the disadvantage them so it implies here, people thought of it as the us around the world, works the other way as well so with tpp 11, the pacific
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alliance, those bilaterals beino negotiated, keep that going because that inevitably has a very important effect on thinking in the united states, certainly in the business community, even the labor b community about what happened if we don't maintain and in fact strengthen the trade agreements we have to. the best outcome obviously is a traditional trade type negotiations that will strengthen the mexican economy as luz maria de la mora described wonderfully in the original nafta. of the united states and trump administration want to strengthen the us trade balance toward mexico there is one obvious way to do it, strengthen the mexican economy. if it grows faster, if it has a stronger peso the us will be more price competitive.
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that is the way to achieve the objective, not monkeying around with rules of orange and and various minutia, to go to the big stuff, which is proven success in the past and could be again. >> thank you. last but not least i will turn to chris, also to give your own perspective on where these talks are going. >> i will try to keep it simple here and what i want to do is take a simpler view of mexican a strategy heading into the e negotiation and thinking of the us perspective which some words we heard to describe are strange, flawed, i would say conflicting. if you look at us objectives you have objectives that are trade liberalizing, trade expanding and on the other hand a series
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of objectives that are potentially trade restricting, protectionist perhaps. how do these interests run into the conflicted us perspective? for me the starting point is a simple one. mexico sends 80% of its exports to the united states, mexico depends on market access to the united states in a very significant way. there is an asymmetry, trade is balanced but in terms of the proportion of the economy depends on trade with the united states or mexico, there's a great asymmetry, mexico depends more. that means when mexico started to hear during the campaigns and after the election on behalf of candidates selected that its market access was at risk mexico started to think very seriously
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about how it would manage the prospect after negotiation, threats to withdraw from nafta etc. and in the sense that the trump administration from the campaign on has been consistent in the language they put forward, they don't seek to renegotiate and then they withdraw. to think seriously about how it would manage the prospect and the threats to withdraw from nafta. in a sense, the trump administration has been pretty consistent in the language they put forward. they will seek to renegotiate. early on it was a little different, but early on, we had that language. the basic response and we are starting to hear it from mexico in terms of strategy is that mexico had a concern that just possibly have the leverage that it needs to get to an acceptable outcome, to maintain market access to the united states. it straight talk but things like we need to have a comprehensive dialogue with the united statest to have a discussion about the future of the entire relationship. in recent weeks referred explicitly from the secretary what they mean by that which is to say mexico feels it offers the united states quite a bit in terms of security cooperation, ensuring there's never a terrorist attack on the united states that involves acrossrs u.s.-mexico border and has done
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an awful lot in terms of dealing with the moving at central americans to mexico to the united states. in 2015 mexico deported more central americans, migrants than the united states did. it's about 50-50 right now in terms of the effort that is being done. mexico's interest in the issue are complex. there are multiple, sometimesasx conflicting but you better believe there's a strong reason mexico is doing that is because it's in use interest and the united states has asked for repeatedly mexico's assistance with that issue. mexico says will put everything on the table so that we can get to an outcome that's acceptable. what this represents as a d compartmentalization of the u.s.-mexico relationship. we had for decades and u.s.-mexico relationship seen it was an important relationship, a complex relationship acrossme broad numbers, the number just agencies of embassy in mexico is
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probably not surpassed by the number just agencies because we have so many diverse interests in mexico. we compartmentalize those issues previously in order to ensure that a conflict on one front, security cooperation, drug trafficking when get in the wayt of important economic relationship. vice versa. on down the line. mexico is saying right now thiss issue is so important to us, such a top-tier national interest for us that will do away with that. we are willing to if necessary is probably a better way, willing if necessary do away with that process that is insured relationship as a whole would move forward this might smoke comes across numerous areas which are natural and always going to occur in a complex relationship. that's where mexico is at in terms of how to deal with this at a very basic level. that shows us, this comes up to mexico stating clearly market t access is a fundamental redline
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advance in the negotiations. what ever come back to me different things across different areas but theeif you n fundamental redline from mexico is market access. if you can deal with the deaths of expanding trade rather than limiting antics restricting trade in dealing with the deficit might be sunday can tackle in negotiation. there are others we could see potential conflict based on this principle of a redline being market access. the rules of origin would be another one. this gets more complex because i think it's fairly clear, not 100%, and the envious negotiating objective that it would be talked to strengthen regional content requirements. we are early on talk of putting u.s. content requirement. that would be trade restrictive. increasing regional content requirements at 62.5 62.5% in a, upping the level in auto industry could be understood to be trade restricting because of the current supply chains that exist that really do rely on
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certain percentage of inputs come from outside the region through our region production chain. another thing would be limiting the nafta safeguard exclusion. right now within nafta there are limitations on how safeguards can be used which would be terrible impose limits imposed on trade to prevent sort of a flood of import from impacting negatively a u.s. industry. that could be another area, mexico taken the position that the united states is proposing is trade limiting is blocking market access. limited in chapter 19, the dispute settlement mechanism, the ability to challenge rulings on antidumping, countervailing duties to great a panel to review them. getting rid of that, and these last two, elimination of safeguard exclusion or chapter 19 is less a direct limitation on market access than giving the united states, this would be the fear it would be giving the united states space more
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flexibility to express its protectionist impulses. in that sense be limiting market access. if mexico feels that market access is being threatened during the negotiations, they're heading down the road of things being more restricted rather than were free, it's going to have to seek to use its leverage both within the negotiations, the fact that mexico can, if we did fall back on rules, not have nafta, has greater flexibility to raise tariffs, that's leverage within the negotiation come within the economic sphere, within the traits fear. mexico may feel the need to go out beyond that and include the rest of u.s.-mexico relationship in the environment around the negotiation. that could work. they could work out just fine given everything that mexico is doing and the leverage they have, but it's a risky gambit. it's risky because the reason that we compartmentalize was to
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prevent the whole u.s.-mexico relationship being tank by a single issue, by linking issues you could potentially enter into a spiral of escalation where multiple issues are put on the table and we could all end up losing quite a bit, not just in economic sphere, not just in terms of getting all the other benefits of the united states gets out of its relationship with mexico and we ought to be very clear about that and the seriousness of that risk as i deduce these negotiations. mexico so far has responded to some tough rhetoric coming out of the united states very mildly, i would say very diplomatically, very carefully. the intention has been to maintain dialogue, to maintain the possibility of entering a discussion based on a win-win sort of philosophy. i guess the point i want to make is very simple. as mexico enters into election season, really i would say at
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the end of this year, the beginning of next year is when that really ramps up. the willingness of the ruling party, including the president himself in mexico to accept that, to take the diplomatic line, the careful line in responding to u.s. rhetoric would be declining quite a bit. the political need that a domestic political need to respond in tough terms and nationalistic terms will increase quite a bit. that's the place where we need to watch during the process of negotiation for a turning point where we may enter a more dangerous time. i think we just have to be realistic here. the likelihood of reaching an agreement by the end of the year of having all of this be settle is just very small. it's small because it's a complex negotiation. each side just as we've heard from our two mexican colleagues today the entering into from the canadian side and the mexican side seeking improvement to the agreement.
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naturally correctly but that includes negotiating complex tasks and hopefully actually being innovative with the agreement. that will take time to do. to the extent you can bring things and from tpp, the fast on certain topics but ar our complx topics that are out there that we need to be tackled. i think i've presented a somewhat grandma picture of the risk that might gather in terms of a clash between some of the objectives and interest but i do want to close up saying despite all that i actually rather optimistic that we can reach a moderate update to the agreement that is acceptable to each side. i just want to quickly say why despite everything i dissent i believe that. it's because u.s.-mexican and canadian interest on trader fundamentally quite well aligned. at, not just talk about the politics but at a real level, real economic level of interest are quite well aligned and that will and distilled into the
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politics of the situation. we have a massive trading relationship with more than $1 trillion if trade each year across north america. that means by definition there are thousands of companies that depend on trade with the nafta partners. it means that are over 10 million jobs in the united states that depend on trade with canada and mexico. it means you have built in this huge stakeholder group that depends on nafta that has over the years come to depend deeper and deeper and more and more on nafta that are there pushing within the domestic political process through all sorts of different vehicles towards trying to keep the united states on track toward a successful renegotiation. more than just a big relationship, it's also a deep relationship that is developed within north america especially since nafta was put in place that is bound to get our competitiveness and made it much more, rather than compete against one another, it's a much more correctly to understand the north american relationship is
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that we compete together as a block on a global stage against other productive regions that have unified production processes, production sharing across the regions. the united states we have a huge level within north america i should say, a huge level supply chain integration. we constructed will use regional manufacturing platform in which goods move back and forth across borders during the course of production. what that means is half of u.s.-mexico trade today is an input moving apart to make sure that will feed industry on the other side of the border. we each send over $100 billion worth of input to factories and produce on the other side of the border. that means factories of producers and employees that work at those plans depend on the input and the supply chain set up and develop. a huge disruption if that was broken up. it means if the united states were to impose import taxes, border taxes of any sort on mexico, on canada, they indirectly are doing that to our
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exporters. because if, $100 billion of input to mexico each year. 8080% of mexico's exports are coming to the united states. you better believe all those inputs are coming back into the united states. if we tax them, it doesn't matter which direction, you put a tax on them you're breaking up the system, imposing a break on that system. it just means this is a negotiation to an existing trade agreement. this is not getting rid of the tpp trust potential future economic opportunity for someone. this is potentially if we're talking of putting up protectionprotectionist measureg into the paycheck, cutting into the business model of companies that are already out there throughout the united states. it's difficult to dial it back without having significant reactions within the domestic political process. that's why despite some of the risk and clashes i see coming i think we will have to and likely will find a way through to a reasonable outcome.
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>> thank you very much. excellent presentation. i'd like to pick up on two points that chris brought up at the end. one is on the timing of these negotiations. i tried to provoke people to talk about the beginning. nobody took me up on this i will persist and hopefully you can come with some ideas about how important that timing is. chris mention this point about integrated production in north america and is a lovely quote the other day from one mexican we talked about the fact that the are in north america we might think that if this was eggs being cooked, that there are yolks and there are wise. unfortunately scrambled eggs. they have all been mixed together and you can't separate the minimal. this is way thinking about it. try to unsurveyed scrambled eggs and use of difficult that's going to be. that's one of the things fred, if we were to make sort of a
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pitch to the administration to try to impress upon them how difficult it would be to disengage from this integrated production platform. i'd like to ask the audience for questions. there's a lot of you who have been waiting patiently. we have a good period of time, i do freight has to take a call i think probably around -- that's been pushed off? fantastic. we had plenty of time. who would like to lead us off? there's a question back there. there's a question down here. >> thank you very much. on jack person, former worker for the ec in montréal. with the side agreements or labor in for an vibrant to have been orphaned in the last, over the last 25 years. yet i see the united states desires or integrate them into a new nafta. i'd like to ask the panelist what they think this will happen, if this will happen at all and in what form? thank you very much. >> thank you. we will take a question down here and then there is one over
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there. >> laura dotson, candidate institute. i know you don't stick a map of a mexican negotiators but everybody at the table has been negotiating in the past. what i'm thinking about drawing on fred's point about what else is happening in the world is the linkage between the nafta and the tpp. we know the three countries have negotiated, in part of an agreement that the u.s. wanted very much, canada and mexico wanted it very much as well. you were going into the nafta negotiations. u.s. negotiators have flag they want a lot of stuff out of that tpp. are you going to give them those tpp concessions rate at the outset? are you going to hold some of those things and reserve? the japanese have said we want to do tpp 11 in november. how much of big enchilada tpp 12 did you as mexico or canada take care tpp 11 table? >> thank you.
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the third question to in this first round. >> thank you. dana marshall with the transnational strategy group. thank you very much with us very interesting discussion. i want to see if i could draw the panel out on an issue they discussed a bit but i think would be interesting key to this. this. and that is the impact of north american integration. by making the three countries more competitive with respect, for example, for the challenge from china. the political economics of that, they seem to change all the time to pinyon many, many factors. that is an issue, in fact, candidate trump himself discussed as i recall when he was in mexico during the campaign, struck me, wondering why he said that. i wonder if that maybe something in his mind or in the mind of some of the advisors. i just wonder if we could maybe analyze that a bit further? >> thank you very much. before we turn to our panelists,
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ambassador hills has been recognized. two former u.s. ambassadors to mexico are flanking her here. if we can just use you as an advance guard of these negotiations, i think you'll get a lot done. who would like to lead off with responses? >> okay. the political timing is evidently not the best. we are at the end of an administration that is already done a lot in terms of what it can deliver and i think it delivers a lot in terms of political movements that it had to do in terms of opening the economy key sectors, energy. i think it's one of the most important reforms that we have today mexico and it's a great opportunity if we want to see it in a positive way, the nafta. why is it the worst political time? it's the end of the administration and right now we thinking about elections. we're thinking about the end of the administration that has very
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little political capital to back whatever it comes. obviously it may come we don't know what the negotiation may yield. we know that the negotiation starts tomorrow and we know when negotiation starts but it's very difficult to predict when and negotiation will end. to get this process is done as quick as possible and i know that the mexican government is working very hard to get this done in the shortest rate of time. because we need certainty. we need to get a positive result
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even though as fred said failure is an option. but we don't want to give that alternative away. it's true that we're going to start a process of elections, president elections at the end of this year. probably the elections are due in june of next year, june 2 next year with presidential election. we have no idea who is going to be the next president. we have no idea who's going to be winning the election. it's really a tossup. it's hard to say what is going to happen but clearly it may end up being that the actual negotiation takes place, and it's not finished and it takes in the middle of, takes place in the middle of an election, which is not only for president, it's also for congress. we have a big if. there's a big uncertainty in
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terms of what may happen. the most recent negotiation between mexico and the u.s. took several months to work, to be worked out. we don't know. it's something that we will need to pay attention but as i mentioned in my remarks, i do have to underscore that in mexico there is no politician. there's no political party that questions mexico's membership into nafta. it may be that they want to come up with new issues or new areas or that they do not completely agree with the way the negotiation has been directed, but i don't think that mexico's new president, whoever that is, will question the fact that we need to be there in the process. in terms of the side agreements, i think that's true, has evolved a lot in the last 25 years.
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i think that one benchmark to see where these negotiations may take place, if we look into tpp which i will deal because san francisco negotiated tpp for mexico. i think there are new ways and new disciplines to deal with these issues. i think they are valid. they are a valid concern for our economies and they are a valid, there are valid disciplines that happen, we thought, in the most recent negotiations. however, i do think that we need to find ways of establishing at least the common denominator. i wonder how the u.s. is going to negotiate the environmental part if the u.s., trump administration decided recently to leave the prior declaration which has to deal with emissions, carbon emissions and that really affects production and all the pics i don't know
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how that is going to take place in the agreement but i think at the end of the day we need to find ways to have disciplines that will actually help the competitiveness of the region. in terms of nafta and tpp, i just want to say that i don't think that what we negotiate in tpp will be concessions that would just be taken from one agreement to another. this is the negotiation even though we have already drafted them, worked on them, we have tried figuring our language. tpp had its own bowels of the time. tpp 12 is what resulted. we may be at a better situation because we know exactly what we're talking about. we have been able to figure out what many of these disciplines mean, and what we want to achieve with them, but i don't necessarily think that the concessions that mexico made at
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the table in tpp will necessarily be identical or will be just transferred from tpp to nafta. i really think that they will need to be part of the whole package. and in terms of competitiveness, while i think that nafta 2.0 gives us an amazing opportunity to increase the region competitiveness through the energy markets, i really think that the liberalization of the energy sector in mexico and the energy that can do brings to the table, that the u.s. brings and that the mexican economy opens a result of the reform could be the most important used for the region. when nafta can do is walk in those reforms. i think that if we really think there's some factors that could boost competitiveness in the region, it may be having the
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integration of the north american energy markets. thank you. >> francisco? >> thanks. i want to apologize for not waiting -- mentioning in my initial remarks. hello. i am sorry. i apologize again. i think that regarding the first question, it's important to keep in my it's the first time that u.s., and agreement that is in place. mexico is doing the same with europe, so i think that even though that is clear that u.s. will follow in -- my guess is why shouldn't we, why are we talking about market access? if we are willing to negotiate the 21 century agreement we should be taught but other
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chapters rather than talking about what has worked over the years. so regarding, if we're going to be able to deliver by early 2018, i guess that it depends on the strategy that each country will follow because if you start from scratch and you put on the table chapters that somehow the wording or language that is in place over the last 23 years i think would be quite hard to be able to deliver by then. if you consider some of the language the u.s. used to impose tpp and some other trade initiative that usually the u.s. follows in the following negotiations, it seems maybe we will be able to move or to speed up the process. in the case of mexico, of course we will follow our own president, tpp, pacific of light
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and while the supporting member the pacific alliance is the sole initiative in mexico right after nafta that they have full liberalization over the years. not even tpp, no. that's something that is important for mexico to bear in mind. if we are able to get some languages from president in canada, prime minister said a few days ago, or yesterday, i think we will be able to speed up the process and maybe to try others, the efforts to the aries woman may have a different point of view. but it depends on this strategy. as far as i heard, there's an informal information that it seems the u.s. will table the tax for different chapters. i don't know if this is official
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position or if it's confirmed, but at least more if that's the case we will have a better understanding if nafta renegotiation will have a future or not. it's a possible or possibility that it's an option. if it's an option it would be for the u.s. because for mexico, nafta has worked over the years and we don't feel uncomfortable about it. it will depend on the outcome. talking about said agreements and labor, environment provisions, i will say in the case of mexico we will feel comfortable, a lease with tpp negotiations to put on the agreement, both disciplines. i think address change and he evolved completely since those
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said agreements were negotiated. but it's to true even though wee able to deliver by january, we don't have any certainty that the coming administration in mexico, or in the u.s., could consider to renegotiate the agreement that they may reach. because it's important to remember that in the u.s., i don't know if it's common practice but in mexico and its happen to korea and to panama and colombia to renegotiate what an agreement was reached. also in mexico of course we will have elections on july 2, 2018. so it's an option even though, not even though party has challenge, the benefits of nafta, we also need to consider that will have a new administration in a year plus.
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and just to conclude, regarding the tpp concessions, i think as maria expressed very clear, of course concessions that were made back in tpp negotiations should not be the starting point. that was the outcome of a very tough and long negotiation in the case of mexico. although five years in the case of the u.s., a little bit longer. so it's a good reference but considered a something the mexican government is willing to put on the table they want. i think that the main difference between tpp and nafta 2.0 is market access. we have duty-free and second, though rule of origin is completely different reality in the pacific ring in north
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america. so one question that a have for fred, if it's possible, how is it possible to manage and agreement that may not follow or comply tpp 2018 even though it iis a convenient one for north america? because i understand that if it follows somehow previous and president that the yuan has negotiate over the years, ideally that it would be reasonable to think that the tpp and nafta 2.0 to pursue higher-level of ambition. i'm a bit confused because it would be in place on july 2018 and less it submitted a request by mr. trump, and there's no motion against in congress.
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so if tpa 15 is reasonably to continue, the u.s., what will happen if by any reason there's some issues that abhisit even though that might be of interest or agreement among parties may not comply directly with the bipartisan agreement. >> there you go. >> on that last point, which is a very good one, the administration for all its combinations in various directions has i think been very careful to avoid at least appearing to violate the objectives that were laid out in tpa 2015. it's a a matter of judgment and some of us here may differ on those judgments as to what they're proposing actually
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carries out those objectives. but at least so far they have tried to avoid any implication that they are violating congressional mandates. they obviously gone beyond them in some cases. congress did not say go out and try to reduce the u.s. trade deficit through your trade agreements. congress did not, repeat, did not say that. and so is the agreement were to blow up over that mistake -- mistaken premise, then i think they would have trouble with congress. but remember, whatever they negotiate in the talks now coming up, they have to take to congress. so at the end of the day as always in the u.s. system, the president proposes, congress disposes. so with a trade agreement, more even than other areas, the negotiators have to always,
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always be looking over their shoulder what will congress approved, et cetera, et cetera. fasting is a was the one i mentioned four months ago president trump said ongoing to withdraw from nafta and you got all this pushback. a lot of that pushback came from the congress. senator cornyn from texas, the number two ranking republican says quote, nafta is us, unquote. as somebody said in the panel, it is an integral part of the economic life of texas. not to mention other parts of the country. and so if you did jeopardize the agreement you would be doing so with the congress. then when you get into the specific discussions for ratification, if a deal is successfully negotiated, they will have to demonstrate case point by point where they went along with it dictate of congress. i mentioned the current issue. that's the sometimes controversial one which is in
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large -- large part because congress had in tpa 15 you shall not permit trade partners to undermine the level playing field by currency manipulation. that's why even in the tpp though it came in late in the day they negotiated a side agreement and is a lot of controversy whether that went far enough, et cetera, et cetera. i think they will conform to the congressional dictates, although again if it blew up there would be hell to pay. the only other comment i wanted to make was on dane is third question which was very good about having a somewhat different objective of using the negotiation to strengthen north american competitiveness towards china. i fully agree with your implication. that should be the objective of the exercise. there would be many ways, specified by the panel, to do that, by further integrating the economy's come strengthen the
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supply chains, et cetera. that companies wouldn't do it unless it strengthen their competitiveness, that would ipso facto improve the competitive position of the north american economy. but that would require a totally different mindset from the u.s. administration. the mindset of u.s. administration is that canada and mexico are adversaries. that is a zero-sum game, defined by trade deficits. that if i write a trade deficit with you that means the trade is unfair. that is the way they have a defined the issue. i'm talking about the very top level, the president, but some around them as well. if you define the issue as a negotiation with adversaries, you are in an opposite mindset from what you suggested, dana, and i would endorse, ought to be the mindset of an updated nafta
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for 25 years, namely, improving the joint competitiveness of the region. it's a fundamental mindset question, not some technical maneuvering around the margins. it's pretty basic, and let's you and i keep working on them to change that. >> yes. no reset anything about the environment. i'm not an expert in that exact topic but but i would say think there's a willingness on the part to engage in the conversation and to look at brinbringing the environment a t of the agreement into the actual body of the text. that's something we should look forward to the conversation if we should look that tpp for president, other agreements for president. exactly how you could do that and what it would look like, how you would subject pieces of that to dispute resolution. this resolution so will be a part of the renegotiation and so those two things got to look at together because they will both be negotiated side-by-side.
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the one thing i would say is that we put this on the candidate incisor there will be a challenge in terms of bringing climate into the environmental agreement. i think the way it was, by some of the come i think the foreign minister but by the top canadian officials that would be difficult to imagine an appointment of chapter this day and age that doesn't reference climate. that's actually in tpa, the rejection of that notion. this is some place where we will see some potential conflict. it's just one example of many how these things become very quickly much more complicated than you think it might be at the outset. that's when space of it. in general we picked up on it but there's a very strong tension between speed and the negotiation and the timing issue and the tpp importation of language issue. it's the only way to move very quickly is to really use tpp as
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a strong template. if you look at the objectives from the u.s. and mexico for that matter, you will see most of the topics really referenced there are topics that were dealt with in the transpacific partnership negotiation. there's a lot to work with if you willing to do it but you have to look at who's under the pressure in terms of timing and i was in mexico is probably on top of that list. the united states second on that list. we have midterm elections next year. canada probably third. they will be games that are played in terms of negotiations and willingness to stretch them out to be essentially those who want to finish quicker if they really want to do that will have to be willing to give up a bit more faster in order to get there. i'm not sure anyone is willing to do that. that's where i think, that's why think the most likely outcome is that timing falls apart very quickly, that is quickly realize that all the negotiators, that
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is not going to be included in the issue or early next year. in which case there's no advantage to quickly a seating to tpp concessions as you already made. and instead your strategy should be to start from your tpp starting point if the negotiations which would mean you or renegotiate each of the topics along the way. that's much more a likely outcome. all of this leads to back to this question of interacting with the u.s. congress because it's very likely, even after no appreciation takes place their statutory time frames that need to be waiting periods before congress and the united states we take action on a trade agreement. it is very unlikely the united states congress would vote on an updated nafta until after the midterm election next year. we need to think pretty seriously about whether or not the u.s. congress will pass whatever is negotiated. nafta is an incredibly controversial topic. as we go through a midterm election process that would
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become an incredibly partisan process again as well. i don't know the answer. we done with the agreement will look like. it's hard to predict but but ik we to think seriously the possibility that just like some of these other big issues that u.s. congress has tried to tackle like healthcare in recent months, that this is something that could be a lot of work put into and it could just go kaput when it hits the u.s. congress. i think we should take it seriously. >> chris has been a real downer today i have to say. [laughing] but you know, it's the weather i'm sure. >> that used to be clear, just to be clear, if it goes kaput as you say, the current nafta stays in place. >> withdraw. >> right. but your premise is that he succeeds in negotiation, since it to congress ratification, congress will not do it. you may be right on that, but in that case i believe the current nafta stays in place until and
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unless something happens to change it. so everybody is clear, kaput does not mean the end of nafta. >> i'on seeing a number of hands up. i know you've had your head up for a while so we can begin over there. thank you. >> pbs online is out. can we dig a little deeper into mexican the politics? at the moment the candidate leading in the polls also is a populist nationalist. he happens to be from the left rather than from the right. he opposes and says he's going to undo all the recent reforms that you all have talked about that were made possible you said by nafta. and to be blunt, he's a bit of an opportunist. if he sees an opportunity to use nafta for his benefit, isn't that likely? and then also even if he wins is he going to have a congress
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that's going to be with him? your congress has to approve the still the same as the american congress. >> thank you. past the microphone to guy right behind you. thanks. >> i want to pick up on this last exchange between fred and chris, and ask come to think about 2019 and other negotiations that are underway. nobody mentioned brexit. the uk will lose free trade with mexico and canada when they leave the community here both those countries have free trade which extends to uk at the moment and is getting improved but both cases. what does uk do? the uk has expressed willingness to negotiate bilateral with the united states and with canada and mexico. why would they do that? doesn't it make more sense to think of the on the nafta and get the uk into a north atlantic fair and free trade area if you want to call it that? start thinking about that now
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because it these delays take place, which i agree are certainly possible, maybe unlikely, we'll end up at the end of 2018 with the current nafta in place one hopes and an opportunity to galvanize the whole thing by bring in the uk with a very generous transition. >> got and i are both old enough to remember when nafta meant north atlantic free trade agreement. that was a proposal back in the '70s and '80s. >> the term got co-opted by the hemisphere. >> i'm from the wilson center. you all thought about making nafta or modernizing for the 21st century and also watching other agreements, trade agreements. my question is about gender and international trade and incorporating into trade agreements. the canadian government just came out today or yesterday saying she wanted to incorporate gender into free-trade agreements like they did with
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candid and chili with a renegotiate a couple months ago and ashwin scrape agenda provision in nafta. i guess my question is what your opinion on integrating gender into nafta free trade agreement and whether or not you think it's on the radar of mexico and the u.s.? >> just frequently it is also in a mexican statement of objectives. they come it's a nursing question. do you want to ask a question as well? >> basically the question is on labor and the role it's going to play in the success of this, particularly if you're counting votes at of the process. vote number one being the present and never cubing the congress. they don't always mesh. the unions at least in the united states may play a much bigger role. how do you see negotiating through that particular think this you have an eye on passing it at the end of the line? >> thank you very much.
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>> read, would you like to kick off this round? >> well, on jim's last question, i think the reason that you need to have a pretty forceful labor provision in the renegotiated nafta is exactly what you said, make the whole agreement possible in the congress at the end of the day. i don't know how much those provisions will accomplish the goals of the labor movement or american workers, but their strong insistence i think from both sides of the aisle in the congress to put that in. i don't think this administration is particularly devoted to that topic themselves but if they're going to get it to the congress have tabet in the. i think you're right to flag about anything the negotiating parties probably understand that as well. >> francisco? >> thank you. regarding the first question, i
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guess the political agenda some influence, the process. i'm not certain that it really mexico is in a hurry. i think that the mexican administration has a strong interest to conclude the nafta 2.0 during the current administration but doesn't seem to be like a must. if the conditions or the request from the other two parties are not ones that can be met in terms of the mexican administration, maybe they want push hard enough to try to get the deal. because as you may remember, there were many other issues mexico is willing to push for and you'll see also what about their responses on canada and in particular the u.s.
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regarding brexit, it's a great idea, something that a year ago or even early 2016 when i used to be -- [inaudible] this was an idea that was mentioned by the secretary. the problem we have is that first, england cannot negotiate until brexit happens. we're talking about two years. having said that, there's already informal talks in the case of mexico and england, and understand that is the same with some other trading partners. and it will be a great approach to have nafta plus england. but maybe not america somehow too heavy in order to move us as
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block to negotiate something. mexico wanted to join the ttip if we were the sole one that had it in place with europe since 2001. so it's a good idea and i think, and an ambition that we should look for over the years. but maybe it's going to take longer than we would like to. regarding gender free-trade agreements, i think it's something that we should and must include. and it's one of the issues that as i said should include 21 century trade initiatives. regarding labor operations, it's important to remember mexico is no longer the country that has labor framework 25 years ago.
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so my guess is that the outcome that we got in ttip negotiation was positive one. we don't know what other provisions the u.s. may want to submit to canada and mexico. so we will take a look. but at the end it's about reaching balances. it's not all about the u.s. congress. also it's about the mexican and the canadian parliament. and in the case of mexico if we are able to reach an agreement, i think their space to prove it. and if not we will see what the new administration and new president of mexico may say about it. >> well, i will take the other question. he clearly is a front window because he has been campaigning for the last 18 years, and he's the only official candidate that
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we have today. the other political parties did not have official candidates yet. i think that something we need to consider. it's really a tossup, we have no idea who may be the next president and what may be the result of the next election. i would not discard right now -- i will not discard anybody. it's going to be a very highly competitive election next year. now, any president that comes in office in december of 2018 will have an extreme extreme extreme it difficult to reverse reforms. why? because of the constitutional reform. constitutional form requires two-thirds approval. of congress, the senate. and then it requires the approval of each one of the local 32 local congresses in mexico. so i'm not saying that it's impossible, but it's not an easy
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task to reverse reform. so i say that, i would say that in the near future those reforms are there to stay, even though they have cats and even though they are not -- public education would say. we need to give time for those reforms to yield results. it's not something, those reforms will take between two and three generations to really yield the results that we need to see. so i'm not even that pessimistic in terms of whoever ends up being elected president, that will be tempering -- tampering with nafta. we had our let's say globalization crisis in the 1980s when we decided to shift the model from important institution for export promotion we became gaap members. and then we negotiated nafta.
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i think the 1980s was really the defining moment for mexico. and since then we may have tampered and little bit with some of our tariffs. i mean, we have to knows that we also played with some protectionist measures on very specific sectors and doing things that we shouldn't be doing. but nobody says anything so and unless somebody comes and start a case, then we come back to our good behavior. but in general our policy is a trade legalization policy, and open policy. we know that we depend on international trade, international capital flows, international business. so we're not going to be playing with that and nobody in its political platform will do that, even if they said something that would question mexico's role in trade. that will not, i don't see any policy that will reverse that.
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brexit i agree. the uk could join the nafta. that's something that has been discussed earlier but we would have to have a shared vision. we would have to be a north american region to be up to negotiate with a third-party. in terms of gender, i think the gender provision which as duncan said is also part of mexico's objectives for the nafta. it adds up to the least of issues that have to do with have to build an inclusive trade agenda. a trade agenda that really responds to the vast majority of people. we know that in trade as in any public policy there are losers and winners. so we need to find ways to offer that kind of support or adjustment to those that may not be taking advantage of globalization. and we also need to find ways to bring opportunities, to open opportunities to those have not
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been able to take part in globalization. i think it's more of raising the bar and finding disciplines and find the programs and finding the right policy interventions. that may help to include more firms, have a better playing field for men and women in international trade for rural communities or for those who have lost their jobs as a result of technology. i think it's part of the vision of an inclusive trade agenda, which i think is legitimate, but having an inclusive trade agenda does not mean, or should not be interpreted or does not translate into a protectionist agenda. both are compatible. it's just a matter of putting them at the table and finding ways of really creating these
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solidarity is among north america countries and communities. in the past i have the opportunity of working with the ambassador in mexico unissued between mexico and the u.s. on gender. the secretaries signed and m.o.u. on how to improve conditions for women-owned businesses, and women in north america. i think there are already cases in which we have tried to bring in. we think that it's the best way to really create that trade to promote that economic growth that we all need and to bring diversity to the table. i think that this is also something that was touched on tpp if there are several examples recently that a taken place, and how do we create these new disciplines? how do we create the direct intervention? how do we have a more cohesive
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society in north america? i think this may be a good way of addressing those issues and bring legitimacy and credibility to nafta and a north american integration. and with respect to labor, i think that, labor may be a very difficult issue at the table. if you want to take labor as was posted a few weeks and months ago by some of the trump administration officials in the sense that apparently mexico is like the bad guy in the arena because we have lower labor costs. wages in mexico are lower than in the u.s. that's a fact. the fact that exist doesn't mean we have an unfair trade advantage. obviously that's not the idea that we in mexico have to work
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very hard to close that gap but that requires many other things in addition to labor opportunities in the labor market. that requires education, requires innovation, requires improvement in productivity in order to be able to raise wages. so my concern with respect to labor is that the u.s. comes up with a proposal that really tries to intervene in minimum wages and labor markets, which cannot be solved through a trade negotiation. and that may end up creating a very, very difficult way of finding a solution to the nafta negotiation. i know the labor is a very important question but we have to be very careful of not offering solutions that may actually end up getting us nowhere. >> would i add one point? the notion of adding the united
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kingdom to nafta is a terrible idea. [laughing] the reason is, brexit is a terrible idea. it's terrible for the uk. it's terrible for you and it's bad for the united states. i'm in a minority, admittedly but i think it will be reversed because i think when the britts realized with the getting themselves into, they will reverse course. i think it would be a huge error to feed the brexit mentality by holding out this hope of a free-trade agreement with the united states, a free-trade agreement with nafta. all these goodies after the some wonderful conceptually until you start trying to do it. we thought of the congressional difficulties of nafta itself,, and renegotiating, adding these positions. now you add another, the fifth biggest economy in the world with all source of problems that don't appear on the surface of the special relationship and all. it would be hell to pay.
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add the uk, not -- one of the pacific alliance? if you're going to open up nafta and that other countries, fine, but there are a lot of other countries that might even be ahead of uk in the queue. let's talk about them. then what are you in? any chance of using it, using nafta to further integrate north america i think would go further, become even more impossible. but he would become an imaginable task in terms of negotiation. let's keep that one on the shelf until and unless the evil day comes. >> let's not reward bad behavior. >> exactly. >> just a couple of things to add. in terms of, the one extra point i want to add on top of it is the tone in the u.s.-mexico relationship matters quite a bit. that is to say that we can have a highly adversarial tone it
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there's an environment of conflict that's going on. you better believe that come he will use that turkeys proven from what happened in terms of his polling numbers right at the u.s. election shows that he is the candidate best position to take advantage of an environment of conflict between the two countries, wrap himself in if i can take up a nationalist manner. if the environment is such that is appetizing, he will be the one to do that. if he wins the election and that's in five and which we are heading into a presidency, and i think some of these, we should be concerned about the future of the u.s.-mexico relationship because we might have two people on each side that are willing to take advantage of the opportunities in terms of domestic politics at the expense of the relationship between the two countries. so tone matters quite a bit and where we're at because if on the other hand, if we have a cooperative relationship, a
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functioning nafta renegotiation even if it still underway but something that is moving towards a reasonable doubt,, the incentives are much lower to engage in that type of positioning, that type of rhetoric. .. there was an initiative, a push and interest in having canada and mexico join. canada was already in the process and mexico stated its interest in making it a regional
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approach and it was just too tough to conceive of taking that on from the us perspective in particular at that moment. i think we are in a much more complex moment, so the willingness to find an appetite to take on the additional level of complexity when i think honestly what we are trying to do right now is do no harm and keep the boat a fellow. that is the primary objective of most interest right now and so adding complexity is just hard. >> i would like to recognize to questions that we don't have time to answer. they asked about the pieces if nasa fails and i assume they would be ended, wouldn't they? anyway kelly anderson road and asked her provides to bolster for innovation. what is mexico's approach--
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something we will have to come back with. initiative we hope to deal with at a later event and we thank our fabulous panelists. thank you for being here today. really appreciate it. [applause]. [inaudible conversations] [inaudible conversations] [inaudible conversations] >> steve bannon is out at the white house. the "new york times" writing the embattled chief strategist who helped trump when the 2016 election and clashed for others
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with other advisors is leaving his post. a spokesman announced quote white house chief of staff and steve bannon have mutually agreed today would be steve's last day. the white house press secretary said in a statement we are quote people for his service and wish him the best with the "new york times" writing earlier today the president told senior eight he had decided to remove mr. bannon according to two administrations officials, those close to mr. bannon insist the parting ways with his idea. more about this tomorrow morning on washington journal live at 7:00 a.m. eastern on c-span. during the network's nation conference in atlanta last week a group of activists discussed the strategies for lobbying members of congress including building alliances and coalitions and using social media. joining them were us representatives and congreio


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