tv Political and Historical Context of NAFTA Negotiations CSPAN October 12, 2017 7:18am-8:49am EDT
no talk radio to speak of, the big media. c-span. he quickly realizes the potency of special orders every afternoon in a 5 minute speech, being carried over cable to 100,000 homes around the country. dick army, former congressman dick army used to ribbon about it. gingrich would say would you go give a speech to 100,000 people? of course you would. that is what you are doing with c-span. quickly becomes a cult political leader getting 700 letters a week from people across the country to this broad bench junior member from
georgia who is already achieving national power. >> watch afterward sunday night at 9:00 eastern on c-span2's booktv. >> nafta renegotiations continue between the us, canada and mexico. up next a panel looks at the politics of the north american free trade agreement. we will hear from a former us ambassador to canada, gordon giffen and republican house speaker newt gingrich. the international law firm deadens hosted this conference. >> good afternoon, everyone. welcome back from the break. hope you enjoyed some coffee and refreshments. we had a terrific panel this morning. this afternoon's panel earlier this afternoon and the next panel promises to be as informational and jampacked.
i will turn things over to my partner and friend, gordon giffen, former ambassador to canada, the global leader of public policy practice and all around good guy. >> i hope somebody wrote that down. welcome. i am biased but the presence of my friend, ambassador gary durum, this will be the most interesting panel of the day. we even recruited an american to be on it. you were playing a north american. i'm honored to be here as the person facilitating this conversation.
to my left physically but not ideologically is former prime minister of canada the right honorable stephen harper. to his left which may be true, i am not sure, is former speaker of the house newt gingrich. to his left is the former mexican ambassador to the united states, we have a very interesting and experienced group here and i don't think i have to be too provocative to get the conversation started. let's put this in context. people think this is the first time a free-trade discussion has been controversial or difficult, haven't read history. in 1988 in canada, national election was fought fundamentally over whether or not to have free trade with the
united states, then incumbent progressive conservative prime minister brian mulroney was arguing for a liberal party arguing against it and we entered into the canada us free trade agreement which was the precursor to nafta. of course speaker gingrich was speaker of the house when nafta was approved by congress. >> i was the whip. >> i am giving you more prominence that is warranted i guess. i suspect he voted for nafta. the way i would like to initiate our conversation is to ask the panel at large, i will start with prime minister harper andy -- ask each in succession to address whether
they believed nafta at the time of its adoption was the correct policy for north america. secondly do they believe our three economies, on balance, have benefited from the free trade arrangement that nafta structured in north america. and if the answer to each of those is yes, do they believe it is important that we maintain going forward of rules-based free trade arrangement in north america? >> those are pretty easy once was for historical context, in the 1988 election way back when we had the free-trade agreement i was a candidate for the fledgling populist reform party and we were supportive of the free-trade agreement.
we were more nuanced on nafta but on balance supportive in 1993. short answer to all those questions is it was the right policy at the time. i could qualify at by saying i think what happened after that with canada american relations, we saw a broader relationship become trilateral, nafta was the correct trade policy, i think it has -- i think it has been beneficial to all three countries. the data indicates that. i certainly think it is always in the interests, particularly smaller players to have a rules-based system. the one qualification to get us started is we mail think it has
been broadly good for all three countries. it is clear a significant percentage of americans do not think it has been good for them or their country. it was apparent to me when i was prime minister from 2006 on that this is a deeply rooted view in both administrations not they were against nafta but they believed there was widespread opposition in the united states and i if we are going to be smart about this we have to ask how to address that and adjust, trying to convince people they should be happy is not going to be it. >> first of all reagan proposed this in 1979 as part of his initial kickoff running for president. that were very long history negotiated largely by bush who
succeeded reagan and one of the key moments was when jimmy carter went to north carolina to meet with canada to explain why he thought it was really important that clinton not be against nafta. there is a long deep history. i was the republican whip in 1989 and i can tell you it was the right thing at the time, got more republican votes for nafta than clinton and gore got from democrats because we were basically living out and ideological belief in freer trade, implementing something reagan had advocated we all campaigned on for a decade and had less opposition. you cannot analyze what happened to nafta without understanding the degree to which the unions hated it. by the time we came back later when i was speaker and tried to give the president extended negotiating authority he
couldn't get any democrats because the unions made clear this guaranteed a primary fight in every district. there was a core base of institutional hostility that was consistently anti-abca1 combined with the ross perot precursor to trump, ross perot populism which was anti-abca1 and i found myself during the nafta process coaching gore on how to debate ross perot which was something i would not have imagined in a rational world it would not have happened. one of the keys was gore beat ross perot badly in a television debate and as a result took a lot of the steam out of the anti-abca1 forces. at the time, it was the right decision, the right gamble.
more so for the us and canada. i agree with prime minister harper though i routinely get lectured on the importance of free trade and why are you yanks ruining this whole thing but i do think from a canadian perspective the optimal moment was us/canada free trade agreement. it is not as much to canada's advantage in many ways it was to america's advantage and the long-term strategic goal of helping mexico become an industrialized society was an important strategic vision which reagan had which was carried out in the first phase of nafta. let me say i think it is very important, i wrote a book called understanding trump but it was not called predicting trump. i think trump is impossible to
predict but my hunch is in the end we will get to a reformed nafta. we will not get to the end of nafta. it will be a fair amount of intense negotiating including minor crises and name-calling between here and getting to a reform version but i don't think there's an appetite for blowing it all up with the president's occasional tweets. when you watch the people the president brought in the cabinet these are relatively sophisticated people and their inclination is to have tough negotiations aimed at improving the american position in the treaty, not aimed at blowing it up. >> i would fully agree. in general with moving into
optimism here, nafta has been an important success story for the north american economies, measured in terms of trade which is what trade agreements are supposed to do. they are not there to mitigate extreme poverty, the reason for the free-trade agreement is create greater levels of trade. from mexico to canada, the numbers are very compelling. canada, the us's number one trading partner, mexico is the third-largest trading partner, largest buyer of us goods, mexico depending what region you are focused on, let me give you some context. thanks to nafta mexico is buying more us goods but all of latin america -- more us goods for brazil, russia, india and
china or is buying more us goods than china and japan combined or we assume britain is gone from the european union and is a done deal we buy more exports, 5 million us jobs dependent on trade with mexico, 26 dated america have mexico as their number one trading partner, trade $1.4 billion a day of goods across the mexico/us border and north american trade around $1 trillion, one at has become extremely sophisticated over the last decade as joint supply chains and production platforms have changed north america.
there's a lot of talk about deficits and china but this has nothing to do with north american trade but china plugging into the global economy as a result of increase in wto. one of the reasons north america has been competitive was because of joint supply production chains. it was the right political decision at the time. the global economy was very different in 1993 senate is today. there was no such thing as e-commerce. one of the challenges we have faced since then is the perils of mummifying agreements. success with mexican, canadian and us governments fell into the trap of not speaking out, trying to tweak and modernize the treaty as it went, the gold standard of free trade agreements on the face of europe fraying at the edges and the global economy changed and
china's role in e-commerce with this important effort this. when you think of it nafta was a free trade agreement. we were both ambassadors at the same time when lobbying us government to get into the tpp. it is the 3.0 free-trade agreement. as the gap achieved in 1993, what had been happening in the global economy since then. on a trade front, on a geostrategic front, what we started to see was development of true, north american but b
this rules-based trading system, the countries have benefited. issues we should have thought of or addressed as originally designed and negotiated in 1993, some of the profound, divisive political debates we see in the north american heartland today. as part of the negotiation. mexico said no can do. the mexican constitution prohibited that in the energy sector and mexico wanted labor mobility and the us government said no can do. no surprise one of the toxicant devices issues mexico and the united states have been dealing
with is labor mobility written large. in a nutshell what we built in 1993 was not only responding to the changes happening as a result of the end of the cold war, unification of europe, how north america needed to come together to compete and be successful in the last stages of the 20th century. >> thanks to all three of you for those insights. when i think about it, in terms of world leaders over the last 10, 12, 15 years, you stand out as certainly a g-8 leader who advanced free-trade agreements on behalf of their country more than anyone else on the world
stage. numerous canada bilateral agreements, when i about you concluded negotiations with the eu you were prime minister during tpp negotiations, two significant -- you as bilateral, i is multilateral. i think of it as multilateral. you definitely got more experience as a chief executive officer on advancing these rules-based agreements to advance economic goals. from your perspective, do you have any thoughts about how to be a catalyst if canada was undertaking to be a catalyst
for a successful outcome of the nafta negotiations, by successful i don't mean canada wins everything but where there is an agreement we have the human euphemistic win win win because three parties have to see something in it. >> to give some background when i took office in 2006, the free-trade agreement we concluded negotiations, free-trade agreements and other commercial agreements. i need to say the most important thing is way were well accepted by the public. anti-free trade era. first of all a couple things. let's be clear. i'm not sure people are clear on this. i still see articles, harper protected this or that.
i wasn't negotiating free-trade agreements. not necessarily the same as a textbook definition of free trade and that is something to keep in mind and that wasn't just rhetoric. the reason they were widely accepted is ministers who understood the details in their areas, did comprehensive political consultations with every sector, we understood where the pain points would be and did our best to avoid them and understood what reactions would be and who the winners would be. when we announced a trade agreement there would be a raft
from every single interest group expressing support, opposition or something in between. we did not have a single surprise, we knew the agreement from our points of the you, the overall judgment. we were -- in three different settings. i will not comment too much on these multilateral, the small player. after that scenario, the reason
we got the deal done, a small player we made it our business to understand the win for the other side, we cannot get anywhere unless we figure that out and that is a lesson that could be played here. >> during the presidential campaign, president, then candidate trump said nafta was the worst agreement ever entered into by man. he indicated there was a high probability in his view the united states would have to withdraw. in light of those indications you think that is negotiating
posturing? is that current thinking? or do you believe it is a strategy to deal with negotiating partners and congress? >> first of all, i think the irani an agreement may have passed nafta is the worst deal ever done. you can work your way into it depending what his focus is. second, this is part of what makes the american perspective different. don't know if it is worth getting into in-depth but you have to see our trade politics as part of a general identity crisis in the country and this
is part of the split between right and left is so deep right now. from the standpoint of the coalition that elected trump and enabled trump to beat 16 other republicans for the nomination nafta was in fact a symbolic issue blues not whether it helped or did not help economically it became part of a general symbolism of an american crisis partly about the identity, the nfl's problem, do you stand for the national anthem, all these things were wrapped together, trump figured out, if you see his rally technique, part of it is the largest focus group system in the world, he tried lots of lines and keeps the ones that work. it was clear very early on in the summer of 2015 attacking nafta worked. trump is a guy who likes to win and he is not fussy about the details because in the end if
he wins he won. you can complain all you want but you are not winning, he is winning. that is the logic train that leads to a lot of what he does. so part of that is involved in that. part of it is a very profound shift. i don't know if anyone has written on the intellectual level, we have two key premises to our economic policy out of world war ii. one was so big is that to negotiate for advantages, we just drown people. it is partly because everybody else had been bombed, the most effective anti-competition technique available. we were just an enormous country. we could afford the margins to lose and not pay attention. the second was we had had a
very specific area, particularly important for the elite class, and we get a lot lower price. it is terrific to have agreements with china because walmart is so much cheaper. that formula worked. one morning, if i don't have a job i can't pay for this shirt. china is what changed everything. mexico suffered the brunt of the anger but the real change, what you have seen grow in a sophisticated level, if you look at the people trump associated these are not trivial people, they are not isolationists and not people who aren't aware of the world market, most made a lot of
money in the world market. i had with wilbur ross it was totally ironic going after paul manafor for an account in cyprus, it was wilbur owned. they knew nothing about it because it was 17 layers down. they were sophisticated people, but they collectively agreed we had gotten very sloppy and tolerated agreements. best example being scale of chinese theft of intellectual property with no american response so you can go down a series of these things and what you have is an attitude every morning this group is much more muscular. they love bilaterals as big as china is as a market we are still bigger and chinese gdp is divided by 300 billion people
and we are happy to prefer bilaterals overlarge administrations because the net advantage is so huge. every country in the world wants to avoid bilaterals as much as we can. it is not just a trump personality. in terms of specific questions there are at least three things going down. one, trump wants to continually send a signal that says canada and mexico can't get to a deal with us. i'm prepared to walk out. not i'm going to walk out, i am prepared to walk out. it doesn't frighten me to walk out. i am a fairly impatient guy and i thought we would get this done and i don't have a wall or a new trade agreement, the combination of not having either one makes me unhappy. 3, i was bored this morning. i decided to start an argument. you have to see those things
and how they weave together to understand how the trump presidency operates. not trying to defend him or attack him but just suggesting you have to look at the american tradition that andrew jackson and theodore roosevelt, to have personalities as volatile and aggressive as trump. if you read how they recovered in their time not written by historians later but in their time, they were very much like trump, mercurial, aggressive, willing to fight, those characteristics are how he approaches everything. nafta is just one of 20 things he is approaching in parallel, look at iran, north korea, nato, angela merkel. he is a very enthusiastic guy. >> i thought that would slow
you down. >> i told the speaker last night, i was in my hotel room and didn't know what the channels were on the television because i wouldn't ordinarily voluntarily choose fox news but it happened to appear on my television and there was newt gingrich who i watched for 15 minutes. if you haven't watched the gingrich hannity routine, it is worth the price of admission. i took notes and learned a lot. to the speaker's point, he mentioned the wall. it is sort of like beyoncé, it only needs one name. we only have to say the wall between, we just say the wall and we had some rhetoric in the last 18 months or so, the
characteristics of migration between the united states and mexico. a lot of political rhetoric. from a mexican perspective, does that in any way limit the flexibility of the government of mexico to negotiate, meaning do they have to demonstrate they are strong and can stand up to the american rhetoric, number one? and number 2, is there a reason to be concerned about the dynamic of the negotiation as it might affect the presidential elections in mexico next year? >> one of the beauties, gary feels the same, no longer -- i am a recovering diplomat.
you can say stuff we couldn't when we were in office. there is no issue out there so much as the wall issue. it has irritated profoundly, you don't have to be a rocket scientist to figure out why. in a you research poll that came out in july, there was an update in september, looking at positive perceptions of the us around the world, country where positive perceptions of the us has fallen most is mexico and it has nosedived, negatives are in the 90%, personal negatives regarding the current president of the united states completely collapsed too. this is not a minor issue. one of the things that happened in parallel to nafta in these 20 plus years, very different
engagement with the united states, it started to create a sense of societal -- between mexicans and americans. one of mexico's nobel laureates wrote in an essay many years ago one of the historic reasons mexico and the united states have never been able to get along with mexicans didn't know how to speak up and americans didn't know how to listen. one thing that changed with nafta is the united states started listening to its partners in the thousands mexicans because of the nature of the game came to capitol hill in 1993 to lobby for those votes, we were able to squeak by at the end to get nafta over the finish line, mexico had to understand how to play the game in washington dc. that started to change the way mexicans and americans understood the relationship. add that mexico has the largest community living abroad in the
united states and the largest us diaspora community lives in mexico. there has been a profound seismic shift in the past few years where i think the 2016 campaign in particular has been extremely poisonous regardless of rapists, the wall and nafta, the worst deal ever, it has wound back public narratives why these countries are uniquely important to each other's security and well-being. with presidential electoral process in july 2018 with these numbers i shared with you, favorable perceptions of the united states and mexican president who has his own challenges regarding popularity, the margins of maneuverability for mexican government when we reach crunch time of having to strike a deal
given the timing of when that may happen, despite the best wishes of three governments we won't be wrapping up nafta by december 2017 this will be in full-blown presidential campaign mode in mexico and this could have an impact on what the mexican government is able or willing to accept or not in negotiations. i always believed you should never let a good crisis go to waste and the crisis donald trump detonated in the us-mexico bilateral relationship and the crises we are facing as rounds 4 of negotiations kicked off in arlington, virginia, we have an opportunity to modernize and upgrade nafta, to improve it and bring in the disciplines donald trump jettisons on day one when he kicked tpp out and pulling up nafta by the bull
straps and turning it into a free-trade agreement where we have better rules of engagement, where we have disciplines we didn't have in 1993, those do profoundly impact labor in the us because despite what the president said manufacturing jobs have been dropping the past 20 years in the united states and the service sector has been improving and if you look at services the us has a huge there plus with mexico. how you bring in things like e-commerce and digital trade into nafta of the 21st century is an important opportunity. how do we bring labor and environmentalists use the word -- you remember this variable, side agreements, because some in the us government, some in the mexican government didn't want them, we have the opportunity of bringing some of
these issues into the treaty itself. how do we continue to build on these successful supply and production chains, the automotive industry in north america, so competitive? how do we prevent a frankly sinatra doctrine of my way or the highway approach to negotiations in nafta the deal that could be important to the economic future of these countries? a lot of this will play out not only in terms of rounds of negotiation where we are reaching the fourth round which will be complex because the 800 pound gorilla in the room, very complex if the us does insist on issues like a sunset clause and specific content for automotive, that is a red line in canada and mexico. all of this will have in the same way this debate has had,
political roots, what happened in this country over the past 18 or 20 months, could have profound political barriers, what happens in mexico as we had to oppose on july 1, 2018, and in the us when members of congress start campaigning for reelection in the midterms of 2018. >> prime minister harper. from a canadian perspective, a successful negotiation meaning one where there is an agreement at the end which suggests all three parties sign it and say this is constructive, if success results in the american
government declaring as compared to the worst agreement ever they have negotiated the most pro-american trade agreement and the history of the planet. so the canadian government, if there is a success, they took canada and mexico to the cleaners. a failure would be no agreement and we revert to the status quo which for some period of time, people are going to do that off and figure out what that means for the time being. success is an argument in canada that will be heard with the americans winning. failure is nobody winning. the canadian public perspective, how do those two options play out? >> that is a tough situation.
i agree with that. just going off of what nuet said about if trump is unpredictable to newt gingrich he's unpredictable to me. i really am not sure because he is unpredictable means his behavior has no consequences. i don't know how you go from categorizing nafta the way he has done and the coming out a year from now with modernized agreement with a couple digital chapters and say it is now a great deal. i don't know how you get from here to there. the other thing i put in everybody's head, when i took office, the republican administration said to us in categorical terms, in our
judgment nafta could not be passed in the u.s. congress today on either side of the isle. that is in 2006. in 2008 barack obama campaigned against nafta. didn't actually do anything, we actually beyond the border regulatory cooperation council we had integrated initiatives. he said he would renegotiate and support it. that is the important thing. my concern is the following. we have got to figure out a way that this thing isn't going to keep being a problem. trump may fail as a president. i don't think what he has done will go away anytime soon. we have a serious problem with widespread perception on the part of the american public that these relationships are not of great interest and we
have to do a better job, combination of a better job convincing the man is in their interest and addressing their real concerns. i shouldn't say what i would or would not be doing but i look at the situation and say to myself what would success be in americanize on this agreement. in the case of canada, the current account deficit with the united states. i don't know by the standards of deficits and surpluses, i don't see an issue to fix. we can talk about dairy and poultry, they are so small in terms of the number of american producers, it is trivial. that is the question we ask ourselves as canadians, what are we supposed to do that
would make this american success. what is the american problem with this? i don't really know. i have one piece of insight, the automobile sector is part of it. i remember sitting around on my 50th birthday signings biggest or concluding putting through treasury the biggest subsidy package ever by canadian government, $50 billion to help gm and chrysler with the united states, these companies have done a terrible job running the business and suddenly in deep trouble. bush and the obama administration felt -- as a consequence we felt in canada we had no choice but to sustain a bail out and put a lot of money on the table and no sooner had covenants expired than they were figuring out how to move the plantss to mexico. i am not your average a family line worker and i was pretty
irritated. i wasn't thinking of something like that, canada and america having jointly bailed out this industry would have some interest in finding a joint solution to rectify this kind of problem. i'm not suggesting i know what that is but there is at least a serious issue where we are on the same side of the table and i figure out how to make it work. .. >> republicans in the house of representatives but in particular they carried nafta over the line. i think i could also argue took a democratic president to drag enough democrats to the party to be able to pass it so it would've been hard for a republican president to pass it.
today it seems to me that there's a large segment of the republican party who has become anti-trade agreements. and that calls into question whether even if the administration was able to conclude an agreement in these dynamics, whether or not it's that on arrival as far as the congress is concerned in canada, they have much more efficient system of government, if prime minister of the day has a majority, it's not too difficult to get through the house of commons. they have a process, or their it's a process, and so they can get it through. but even if there's a successfully negotiated agreement, can it get through
this congress? >> i think it would be very hard, and i think it will depend upon what the agreement is. it will depend on how it's portrayed in public and it depends on what the interest groups do. if you have enough different people think this is an improvement at all of them work on it together you can probably do it. but the decay in the belief that large trade agreements are good for america has been very, very clear since 1993. it was already clear by 1987-98, i think it was late 97 when we tried to give the president, we the republicans were trying to give president clinton extended trade negotiation able to pick he was begging us not to bring it up because they couldn't deliver any votes. and even that on our side there was a growing number, there was a block of people who we thought it was a bad deal. we could have delivered our
share but you're right we couldn't have carried a majority just on the republican side. and i think all that's gotten much worse since then. on the republican side bannon and the forces that he represent are going to be bitterly opposed to any agreement. there's no agreement trump could make that you wouldn't have the bannon forces out there trying to defeat on our side. i suspect on the left there's almost no agreement that wouldn't end up with sanders and warren and booker and harris deeply opposed. of course if it's a trump agreement it would be close to get unanimous. i think phase two of our system gets to be really hard. i would say i think if they did get to an agreement, whatever it was, that they concluded was acceptable, that it would be described by trump as an
extraordinarily whim, exactly what we need as as a country, o is break through, it will be huge in its impact and he would be very enthusiastically aggressive in trying to get it to. i think been a gets the question of either enough interests that can help find -- we convinced all the major business elements to quit sending ceos to washington, and instead send a local factory managers to local meetings. and that turned the tide. if you have enough different groups that come to the conclusion that this is the future, if, for example, north dakota wheat farmers decide that this is the essence of the world, at some point i can't may decide running for reelection. she's actually always been in favor -- heidi heitkamp -- i don't know what the term will be that it will probably be something like they modernized dramatically improved 21st
century nafta. somewhere in that list is going to be enough to rethink people can cling to that they can say i was against that, but this is really good. then we will say, i think will be a brawl. >> so, ambassador, you referred to the gorilla in the room. when you think about it, rules of origin, dispute resolution mechanism, agricultural subsidies, government procurement, sunset clause, investor state, you get down into the weeds and there are a lot of individual components of the discussion that could be somewhere between a speed bump and a barrier. in your mind do you first, in this case, the mexican government, have to conclude that there is an imperative to
get this done? and i don't mean i'll do a bad deal just to do a deal, but i worry that we are letting the trees take over the forest here, that we really do have to see the forest, in the forest is a north american trading block. and that if we somehow rejuvenated and get confidence in it again, that with respect to the rest of the world, we can do an awful lot of good for our respective populations. i worry we spent all our time talking about the trees, and there's not a recognition of the importance of the bigger concept. is that a conversation that occurs in mexico or is it hard to have their? >> i think certainly mexico understands the big picture and this is why i think al's a boat bluntly mexico has been behaving
like the adult in the relationship between mexico and the united states over these past months. a symmetry of power also has to do with it. we are not as big an economy as the united states and, therefore, we've got more to lose if this were to unravel. i think mexico clearly has stated that big picture of a competitive interconnected strong resilient north american economy is what the free countries need to be seeking to achieve as a result of these negotiations. but it also is clear because of work are now, and i i will say very bluntly at least from where a lot of us in mexico stand, , i think negotiations right now on a nice edge. we will see what happens in the next round but mexico for the first time since the started has turned to articulate that it won't walk away and it should walk away from negotiating table. it should stick to what it is been doing which is patiently focusing on getting this done. but i think it is now clear in
mexico that both the private sector and the government believe a bad deal is worse than no deal at all. that's also changing the political damage and conversation in mexico, and the added problem to your trees and forest dynamic year is about at the end of the day we basically no that regardless of ivr and e-commerce and state-owned enterprises and chapter 19, at the end of a this administration going to measure the success of nafta to things and two things alone. on the trade deficit, which in the case of mexico is a red herring because the trade deficit represents a prison of the total trade deficit in the world. second benchmark is the issue of how do you bring manufacturing jobs back to u.s., and that's why the issue of rules of origin and the particular view of the
motor sectors one of the big food fights developing as we head into negotiations. that's a problem because i think, and this is one of the reasons why i think ustr lighthouse it today announced with close another chapter in the negotiations. i dynamic that would be important for special with u.s. president has very short fuse in terms of patients and if he's going to be impatient with the government to government negotiations, wait until this hits capitol hill at the dynamics of tpa kick in and congress starts debating what the three governments have negotiated. the problem here is how do we create an early harvest of success stories and other chapters of negotiation that send a message to his daytona and public pension and members of congress that stuff is getting done and we are concluding important chapters of
negotiation so that then we can focus all our attention into cutting through those knots that we know will be the deal breakers at the end of the day. so this dynamic between looking at the forest but then scratching at the tree is going to be very complex, particularly if we can't speed up more early harvest success stories of okay, we completed 17 of the 30 chapters that we agree to negotiate as part of nafta. and the faster we can create those dynamics and saying all these issues have now been agreed to come they're done,, we brought them up, we dennis sessler can we we think it's good and now we can focus on that two or three heart that we need to crack. i that would be a good dynamic t again my concern is you have administration which is obsessed with these two which basically at the end of the day will measure whether it is happy with the outcome or not based on those two issues. >> so i'm going to ask one more question and feel free to go be
on my question if you got any of the points you want to make and then i'm going to see if there any questions from the audience before we wrap up. last week in the discussion president clinton said that one of the things that he thinks he could've done better on the united states government i guess could've done better with respect to nafta is put on the front end of the process trade adjustment assistance. in other words, what programs would be put in place to directly assist those segments or sectors of our society that would be adversely affected by the agreement. everybody i think understands quote-unquote there are winners and losers in a trade agreement, and we all have our different theories of what happened in the u.s. national election last
year, but at least one of the things that seemed to have affected it was a belief by a substantial segment of the american population that they were being left behind. and so in order to try and set the stage for a successful conclusion of negotiations and perhaps approval by our congress, but also acceptance by canadians, mexicans, canadian government and the mexican government, should we be doing collectively more thought about what is addressing those who may be inadvertently or knowingly adversely affected by the agreement and explicitly talking about it and what we're going to do about that? because we just leave the opponent out there for those who felt ignored, ignored again, it
seems like a pointless exercise. so that's my question. and feel free to add any of the thoughts you would like the on the question and then each of you i i want a declarative prediction on whether or not there will be a finally negotiated agreement. >> prime minister. you are first. >> boy, a lot of questions in there. on the first, i think i said earlier, look, we paid a lot of attention when we did trade agreements to the what the impact would be. you use the phrase and i know you probably did mean literally what you said. those who perceived, who have proceed, they have been left behind in the united states. i look at the date of these people are not perceived that
the left behind. they have actually been left behind. there are large segments of americans by region, by income, by sector that have been badly hurt by economic development over the past 20, 25 years. it may not be because of nafta art may not be because of trade but we should at least recognize that this is not a perception on their part. it is actually a reality that they and wider communities are dealing with. we've got to address those things. to the extent trade is relevant in them, we've got to address it there. look, to your question on will be or will we not succeed, i'm not sure about this. i am new -- nude is the one who is more insight and he appears more confident than i am. as i say i don't think that's going to be adequate for
president trump to have an agreement that he cannot in some concrete way say is going to improve the lives of some of these masses of people who voted for him. so i think it's getting a lot more than some kind of technical revamp. i think that's going to be tough to get to. look, i told business the following. is it conceivable or is it just not conceivable that the administration would cancel nafta? i believe it is conceivable. i believe donald trump would be willing to take the economic and political risks of that under some circumstances. partly as you say because he can then hunt the whole issue to the congress anyway. secondly, as i said i don't think a technical agreement is good enough. can we just kind of talk at the clock and hope the president loses interest? which is a strategy that some have. i can think that's not the case either because even for a guy who's priorities changes as
quick as mr. trump, this is pretty high up in pretty high up for the people who voted for him. look, if i were a business on this i would be trying to understand what the consequences would be for my business in the event of cancellation. what mitigation measures i could take, what my supply chain effects would be, and what additional work i would have to do if congress and others to try to protect my interest as we move forward. i would not want to simply bet that this is all going to work out. i think, as i say what's driving this are some very powerful political currents that frankly nobody included mr. trump is actually really figured out how to address. they going to keep coming at us. >> first lesson is don't ask an economist a question about the economy without expecting that
he will parse what you had to say. i meant proceed that nafta was responsible for being -- >> i know what you meant. you're a democrat and i had to take a shot at you. [laughing] >> just to be clear, and to do this pretty regularly, the right honorable stephen harper and i graduated from the same high school, so whatever my disabilities are, we got it at the same place. [laughing] he masquerades as a western canadian. he went to high school in toronto. mr. speaker, i don't know if al of this you recall the question. answer whatever comes to your mind. [laughing] >> i was just going to say i'm actually in toronto tomorrow doing the munk debate and being with you to sort of reassures me it will be a total mass. [laughing] i debated last your defending trump and we started out at, i think it was 84-16 for hillary
over trump. and after an hour and a half of brilliant debating it went the 8020 come hillary over trump. i'm a host it was a magnificent achievement to have moved four points. with this conversation i'm really looking forward to tomorrow night opportunity. to try to explain trump again. i want to contextualize this in a couple of ways. first of all, if the diplomats, if the negotiators can find a a way to get to a possible agreement that the trump administration would agree was victory, that was also accepted by mexico and canada, then you could probably get it done relatively quickly which i suspect means next spring. i doubt very much we can get it done this year. however, if, in fact, the things that have to happen are larger
than that, then i think there are three factors you need to take into account that may actually, the first of which, i think it may be better to take much longer to finish the negotiation. because i think, and i will tell you why, there are two circumstances that may contextually change. i got the support think about how do you sell this to the congress and add you think about this. some things gordon said which i thought were very, very helpful in framing what's really at stake. and you said similar things, that if you think of this as a world economy in which there's a substantial advantage to having our three countries collectively developing supply chains and other capabilities, as opposed to measuring it within the three countries. you get a totally different conversation.
i want to put it to way to think about it. and this is part of why my instinct is trump will now withdrawal. the number one measure of the trump administration, rather than avoiding a major strategic disaster with iran or north korea or terrorists, the number one goal has to be job creation. there is no other long-term justification for trump. if he does not get substantial job creation, he cannot run for reelection. and if they don't get substantial job creation, the republican party is just going to get killed at the polls next you. they really do have a deep internal commitment to getting the job creation. they are interested in getting a better nafta agreement is tied to their interpretation by job creation were as blowing up nafta guarantees chaos and guarantees you actually lose jobs at potential in some parts
of the country create recessions. so there's a really practical, larger, political/economic concern, and the more you can tie an effective north american, kind of think of the link is because you guys now have a thinking about this differently, if you think of this as a northern i don't know to what would drive the mexican and canadian governments crazy, ultimately the second they want to make it is, ultimately our competitor is china. this is an american view, not necessary and mexican or a canadian. we want to figure out how do you maximize our capacities and economy to get back to growing faster than china, to be guaranteeing we are bigger than china and, frankly, to bringing back there is national security capabilities that we have very sloppily over the last 20 20 is allow the chinese to get either by very clever manufacturing or by just pure theft. i think you see this
administration become dramatically more aggressive about china. if you are in washington, d.c. and you're thinking through a grand strategy as it relates to china all of a sudden having canadian and mexican allies economically, creating a better supply chain, a larger market, greater economic opportunity, somebody comes dramatically more desirable that if you're simply looking at china, i'm looking at mexico and canada with an american context. i think both at a job creation level and in terms of our geopolitical capacity to deal over the next 40 to 50 years with china you may see a shift in how the administration gradually comes to see this whole conversation. that ain't going to occur between now and christmas. but it probably is going to occur over the next year because i can just take the things either internally, the briefings on getting, they are startled by
how many different thinks the chinese are doing that are clearly in effect waging war on us in ways that are totally shocking. and, therefore, they are starting the process of sink all right, if this is the reality, then what's the long-term american strategy? it is an irrational american strategy to decide to break with its northern and southern neighbors if it's in a situation where it thinks it major competitor is to use. that will begin to infiltrate and change the conversation in the white house over the next six months to you. so in my mind you actually have a greater advantage with a somewhat slower process unless you can find an easy agreement. my hunch is from this conversation it ain't going to be an easy agreement.
>> this is probably, i don't want to do on your previous question but this is probably the most important question of the whole panel because it entails -- >> it still my questions. [laughing] >> it entails a lot of challenging paradoxes and tensions and some of them been addressed by both the prime minister and by the speaker. one of those is do we tweak or do we truly rebuild? i don't think we can get anything approved on capitol hill if we just we tweak. there it will not be an incentio vote for our marshall to vote or get the private sector to mobilize and support something which is just fine tuning. second, i don't think president trump will accept anything that is fine-tuning. so we go ambitious. we go for that big 3.0, 4.0 free trade agreement which really changes and enhances our competitiveness and job creation
and the industrial and services resilience of our economies. but the problem is to achieve that you've got to get rid of that original calendar year that we have to do this quickly because of midterms and use of the presidential election in mexico. so there's another attention of their between a short timeline and then much longer as the speaker set timeline which allows a geostrategic argument to build. and then there are those other pieces of the equation that have nothing to do with nafta but have such a profound bearing on the north american construct on everything from security to canada and mexico after 9/11 have developed a growing common domain awareness we share information and evelyn who is like into mexico or canada with our american friends to ensure that someone was on a wanted list on a watchlist does not shop for a visa or does not come
into our country's to then try and undermine the national security of our neighbor. gary and i went when we were on the road i would always joke that mexico and canada both live next to an elephant but there was much better to get top of the element underneath the elephant. some of the dynamics at play of this have to do with how we been working together to enhance security in north america since 9/11. but all of this is going to take more than eight, six, seven months to build. and to get a new administration and new cabinet players to fully comprehend and fully understand what we've been building with republican and democratic administrations in the past. so, and then there's another issue at play which the prime minister knows very well which is some of us in mexico think on several occasions our canadian friends are being close to throwing mexico under the bus in
pursuit of strength and resilience of the canadian u.s. bilateral agenda. how do we mexicans injure our canadian friends stay focused on a trilateral approach in our engagement with the united states? a lot of these pieces which are incredibly important for weapons of happening with nafta are going to have to be playing out over a calendar which is much longer and much more complex than what we just set out to do six, eight months ago if i said we have no other option but to negotiate nafta because president trump's it if we don't do it he will press the nuclear button and bounce the treaty. it is a strategic important decision at play regardless of what happens in the next negotiating rounds between our three negotiating teams from here to at least december. >> so you didn't answer the question. >> i am increasingly concerned that we won't get to the finish line. >> okay.
so we have an unlikely, and increasingly concern, and a probably will get there. is that a fair -- >> i didn't say that. i said that if we get there we have gotten there and if we don't get there, it may be better to have not gotten there. i think the current track record would indicate we have at least as good a chance of getting this negotiated as a do passing the repeal of obamacare. >> what did he say? >> somehow obamacare got in there. had to get in at some point. >> no, no. look, i think the question technically, the helping was a technical vote. they couldn't figure out how to do it. and i think there's some danger you could end up negotiating with a just can't figure out how to do it. and i think that's a real danger.
>> honestly, i think they could go either way. look, i want to agree with what newt said earlier. that's a really important -- i'm trying obviously i can't represent canada but i'm trying to look at the facts as an economist. i don't know, really know what they cases that the candid the use relationship has been detrimental to the united states. i just don't understand it. i looked at the u.s.-mexico relationship and i think you can point out a few things but i think it's pretty hard to make that case, too. however, i look at the chinese american relationship and i think you could make a pretty compelling case that it has been really problematic for the united states. by the way problematic for canada, and i don't know mexico as well but mexico has frankly a huge currency account deficit with the world. i suspect shine is driving is
that this is a common probably could be addressing but in the campaign, president trump equated china and mexico and some of that has turned into mexico and candid and that's where we are today. >> what i'm going to do, if there are some question in the audience, if you identify yourself and ask a question. no questions from the press, please. just from members of the audience. and i reserve the right as the moderator to amend or reject the question. [laughing] >> and i wish i had seen the gary-arturo traveling roadshow
certainly there is a nafta agreement. it was rightly reported earlier this week that in the event of a new deal brexit, the british government that, in fact, have a plan b which was, in fact, approach, nafta as an option. would the panel please comment on that? excuse me, on the basis of course this is not purely posturing on negotiations. >> we did have a tea party over, dealings with great britain a few years ago but we can consider that. >> i don't think would be necessary approaching nafta. i think it would be very real interest in u.s. british free-trade zone. but i don't know whether that within expand -- nafta is complicated. negotiating that, i do think the administration would have an emotional interest at least in exploring a u.s. british
free-trade zone. >> assuming the british can get through this, and it's quite a mess from what i see on this side of the ocean. i don't know if they have a plan for nafta. i know they have a desire at least the current conservative government, assuming it is not an issue corbin running together, would it interest in signing trade deals with canada and the united states and i think one could be done reasonably expeditiously. on. >> mexico has or had an issue conversation with the uk because we have a free-trade agreement strategic association agreement with the european union which was negotiate in 2000 which is by the way now as a speak being modernized by mexico and the european union. as a result of that one of the first conversations that we had after the vote on brexit was between the uk and mexico to start a bilateral free trade
agreement deal because of the exit of the uk from the european union deal that we are now negotiating to upgrade. i think everything else being equal, this is something that mexico would look at favorably but i think we want to deal with this piece of the question first before bring in a very complex issue like uk succession until upgrader north american free trade agreement. >> so today we're talking about the nafta issues and there's many in this world who are watching the nafta issues that are concerned about their own trade agreement with the three countries. so how much should these other countries the focusing and relying on the issues debate and nafta 2.0? and how much do you think that candidate and united states and mexico are considering other
existing the agreements when you're discussing this among yourselves? >> to happen up south korea in mind? >> i'm an american. [laughing] >> let me take a stab at that. one side effect of nafta is mexico along with chile of the two countries on the face of the earth that have developed the largest and deepest network of free-trade agreements, and we are now as i said in the process of modernizing those the like nafta were negotiated with the global economy looked very different from what it is today. mexico is actively looking that free trade network that it has to develop its own plan b for a rainy day if nafta does go down as how we leverage those free-trade agreements we have impact, mexico is been actively whether we substitute transit import in the mexico american beef and of american grains from brazil, argentina and our canadian partners -- ag. this is something i don't think
if we were to reach a point where nafta implodes, i think mexico has clearly stated it will continue to aggressively pursue free-trade as a fundamental vehicle for its development and of its geopolitical footprint. we are already doing it at a subregion level in latin america with the pacific allies allianh chile, colombia and peru. i think if we were to reach that scenario, which we would sort of the bad day for north america, i don't think that will hamper mexico's willingness to continue looking at free-trade as as a y instrument for its growth in development. >> let me approximate different angle and just say i think every country that has an opportunity to study how the nafta negotiations go will learn things about the trump administration that will be useful in their relationship. in that sense i think virtually
every country has an interest in how does this play out, what does it really mean? and there's probably a pretty useful course on the negotiations that could eventually be offered that upon the 70 or 80 countries interested in what other lessons to be learned when they negotiate with this administration. >> look, i would say that, and i'm not privy to this now but i can only imagine that the uncertainty around nafta both in terms of canadian investment from abroad and potential canadian trade negotiations or actual trade negotiations with other countries, this uncertainty around nafta can be do anything but hurting candidate in that regard pick the one country that under the circumstances will want to have trade negotiation with candidate is china. >> okay. we'll take one last question.
we have one over here. mr. speaker, if there's anyone out there that once to get any counseling on how the negotiations have gone, i'm today with a global law firm that will be pleased to help them understand. >> setting you up for that. >> congratulations to the four of you. very insightful. statistically speaking, at least we heard last week from an economist, they say that u.s. is over full employment. so i don't know where does that mean you need to create jobs, on the one hand? so that's going to be a very difficult thing for president trump to accomplish. the other is precisely, you talk a lot about the china, really that's what the problem is. why is the reason he needed went
after tpp when that was supposed to be the vehicle president obama -- what you think was to come will never forget those words, this is because we want to be the ones to call the shots in the region, in the area. and just a corollary of that, that would mean eventually, and faith said that china has gotten all that benefit for becoming member of the wto. so easy going to be ready to withdraw also from wto and just create a trade war? >> working backwards maybe. is unlikely he withdraw from wto? no. is it conceivable? should pick you to start with the idea virtually anything is conceivable. this is a very different personality and we don't have any boundaries to understand him with. and he has certain very deeply held beliefs. and the idea that is going to be
trapped by a bureaucratic legalistic system that is very slow, very inefficient and routinely exploited by the chinese and, therefore, he retold he is helpless because the lawyers and diplomats tell him he is helpless, this is guy, he understood thoroughly the concept of alexander the great cutting the gordian knot rather than trying to untie it. he sort of thinks, unless you're even knows the analogy but he does know -- [laughing] regulates that analogy every day and is quite cheerful about cutting gordian knots. second, remember this is an administration which includes a lot of us right-wingers which he said to them here is it's great agreement that barack obama and john kerry negotiated, we all go got it, kill that. we don't need to know the details. just kill that. that was in the sense a side casualty of the nature of the campaign and i don't think they even thought about it. it was just an automatic, you
walk in the sunni with these guys been doing, i guarantee you it's not good for the united states. [inaudible] >> i'm just saying that was a bias. inject approach from the standpoint. your first -- look, look, look, i don't want to be too harsh but i'm going to be. any idiot who looks at the american society skips past the study that there are 10 million males who have dropped out of the workforce come skips past the effect of the opioid crisis, skips past all of appalachia and explains to you that we are at full employment is a person who is overpaid, suge knight of tenure and you shouldn't read their garbage. i mean, the fact is only academics who are tenured could afford to be that far from reality. this is an economy which could grow dramatically faster. reagan got up to 7.5% gdp per year. we can grow dramatically faster but it requires profound change.
when maine shifted and put a work requirement on having a snap card for able-bodied adults without children, 13,000 of the 14,000 14,000 people on snap quit and went to work. so he has a society which is encouraging dependency, has encouraged people to bar so much money understood loan program that their trap because when to get out the oh so much they can't make decisions, has tolerated males just leaving the workforce in huge numbers,, has an educational system that is dysfunctional and as a totally inadequate adult retraining program. that's the scale of what trump wants to change. if you change it you can easily get radically higher growth. if you don't change it we we're trapped into continuing decay. we've been at 1.9% for a decade. 1.9% growth. the average 9% growth. the average since 1946 is 3.3. to suggest to us that we should relax and except performing at a sub optimal level for the next
20 years because were not smart enough to solve these problems i think it's just infuriating and a deeply dislike of the academics who sit on the plush johnson city on the campus writing about the rest of america so they actually knew something. >> does anyone else have the concluding a comment? [laughing] >> i will point out that that was a response just given by a former college professor. [laughing] but not tenured, yes. [laughing] >> bitterness. >> listen, i want to thank all three of you. you have added both insight, important experience, judgment and some levity to our examination of a very serious
subject, and i hope also you will continue to be involved in the dialogue as we try and advance our north american combined economic interest. ambassador, do you have -- >> may i commiserate with the fact that mexico was not able to return the favor of getting you into the world cup by beating -- [laughing] and we couldn't reciprocate what you did for us, allowing us to go to the brazil world cup the last time you beat someone who we needed you to be. so i'm really sorry. >> but i've no bitterness about that failure. >> if we can't beat trinidad and tobago, we don't deserve to go. prime minister, do you have anything? thank you very much. [applause] >> we are live to hear from house speaker paul ryan on the republican tax proposal. president trump address the
issue at harrisburg, pennsylvania, yesterday saying in part our country and our economy cannot take off like they should a list we transform america's outdated complex and extremely burdensome tax code. it's a middle-class dill and that's what we're thinking of. that's what i want. he added according to u.s. news he came up with a new promise at a lower tax rate along with a one-time tax earnings companies have sheltered overseas. speaker ryan expected to expand on what the president said here at the heritage foundation this morning. this should get underway in just a couple of moments life here on c-span2. [inaudible conversations]
[inaudible conversations] >> again we're waiting remark some paul ryan on the republicans tax proposal. he is her life at the heritage foundation. this should kick off in a moment. want to let you know the summit of the programming coming up on the c-span networks. energy secretary rick perry will be before a house committee updating members about his department's budget and the pricing of electric power. that will be live at canadian eastern. another cabinet member will be on capitol hill, ben carson will be before the house financial services committee to talk about the future of housing in america. live coverage starts at 9:30 a.m. eastern on-s