tv Politics and Public Policy Today CSPAN October 26, 2015 1:00pm-3:01pm EDT
journal", so they could show what was going on in the hearing room, even before anybody was getting there. i was starting to tweet out things that were happening outside the room as well as inside the room. i was showing what the camera crews were doing, how the committee was setting up, how we made sure that we were as close as possible getting the key moment when she came into the building and then she went into an annex room across the hall with her team, with her aides, with her staff. the reporters were assigned whether they were print, online or tv reporters, assigned desks that they could report from. a lot of people i talked to from the public said it was their first hearing, they wanted to be there as they called it, an historic moment, so it was interesting to see and hear from them. i tweeted out a picture at the end that shows secretary clinton talking to other members of the house, again mainly democrats, and she seemed very pleased, had a big smile on her face and chairman gowdy, who was --
appeared to be sweating at the time, was -- seemed happy to be leaving the room now that the hearing had concluded. i thought the most interesting thing was those conversations that didn't get captured on camera. i did mention one about chairman gowdy and mrs. clinton's aid, huma abedin, but there were other moments, other members of congress talking to each other. we devote gavel-to-gavel coverage to the house and senate, the house on c-span and the senate on c-span2. and when it comes time to those key hearings on capitol hill, we are there we devote resources of cameras putting on television, radio and online and make sure that the viewers can completely understand without any commentary that entire convenient and this is one of those key events, covering this hearing with mrs. hillary clinton before the house select committee on benghazi that i think a lot of people will remember from years on.
"financial times" world trade editor sean donnan delivered opening-day remarks on a day-long discussion on transatlantic trade hosted by the cato institute. after his remarks panel of six trade experts talked about the potential benefits and draw backsed of the transatlantic trade and partnership a negotiation between the u.s. and the eu this is about an hour and a hal well, good morning, everybody. good morning, dan. we're going to get started. i think we owe it to you since we started this conference so early in the morning we should
not delay. welcome to the cato institute, i'm dan ikens, welcome to our long gestating conversation. which is called, will the transatlantic trade partnership live up to its promise. on behalf of my colleagues, i want to thank you for choosing your time on this most festive of holidays here at the cato institute. we have assembled an excellent group of experts, they sort of span the ideological spectrum, the geographical spectrum, the age spectrum, so you will get a lot of different perspectives on a lot of different matters. it's been quite a week for the trade policy with the implementation of ttp. it's been quite a year for trade policy. in 15 years since i've been at cato, i think this has been the most bubbling of years. we'll see where it all leads. the tpp has long been presumed to be here depending on the conclusion of the tpp and succession of the tpp, steps have been taken so we're about to embark on a really robust debate the united states about
the tpp. the debate has been going on in europe. i think the europeans are a bit frustrated that the american negotiators and the american public have been a little bit sidetracked or focused on other issues. but i think people are ready for this. it's -- ready to start talking about this. there are actually 345 people registered to attend this conference. i guess some of them have slept in, but they will be here at some point during the day, i hope. also as evidence of the importance of this issue, c-span is here, and c-span is going to be broadcasting it live today and recording. so if any of you plan to leave early i just want you to know in advance that your boss and your colleagues will know. they will see it. they will find out. please stick with us. so now the tpp is done and the debate that is about to happen, we wanted to sort of lay on the table, what are the issues? there are a lot. this is complex. we want to talk about some of
the traditional trade negotiating issues that have been put on the table as well as the broader complexities, the geopolitics, what does it mean for the multilateralism, for the wto. there's been a lot of debate about that. we'll bring it to the fore here today. some people understand more clearly what the regulatory coherence business is all about. this is said to be the larger games. it doesn't look like a whole lot of progress has been made or there has been a whole lot of accord how to proceed. so we're going to do a deep dive on the regulatory coherence issues by the end of the day. people ask what are the economic models about, are they important? we'll have a session on that towards the end of the day as well. but you have the program, the information is available out in the lobby. also, the participants in this
conference were asked to write essays, and we're publishing approximately 1500-word essays about any ttip-related project. and we have been publishing them on our website. and we will continue to do that through next week. next week is the tenth round of ttip negotiations in miami. so we're going to sort of carry this over to that point. just one other housekeeping remark, if anybody is going to tweet use the hashtag catottip. and people can chime in from all over the world. so i want to introduce the person who will set the stable on the issue. you all know shawn donnen, he is an excellent journalist and he understands the issues keenly.
i use the word "keenly" when talking about an english comment. shawn is the world trade editor at "the financial times." he did this right in the "ft's" wheelhouse so he is a perfect person to set the table for us. in his capacity as world trade editor, shawn leads the "ft's" global coverage of trade and development issues and follows the imf. he is such a sport that he got back last night from peru where the meetings were held, and he is jumping right back into this. so he is very versatile. before assuming his role as world trade correspondent in 2013, he was world news editor at "financial times," deputy editor and world asia news editor. he has had a lot of roles. he is working his way up to the top. everybody who does trade policy knows shawn and likes to talk to
him. and i'm really happy that he is cheer to chat with us. just a couple of other points. besides "the financial times," some of the papers he appears in, "the south china morning post," "l.a. times," "christian science monitor." shawn is a graduate of boston university where he has a degree in international relations. yet he still writes very well. i would like you to help me in welcoming shawn to the podium. thank you. [ applause ] >> thanks. thanks a lot, dan. i -- i will beg your forgiveness. as dan said, i am just off a plane. so if i get my acronyms mixed up and start talking about the imf, or beps, the tax measures that
were passed or approved in lima, or start talking about emerging markets, you will know that you have the wrong set of notes here. the ttip, for those of you who follow me on twitter, you will know it's sort of an unhealthy obsession, as it is for some of you as well. it's something i have been following for the last two years. it clearly is an immense project. i just thought i would -- but i think it's a really interesting time in ttip, because we're in that kind of uncomfortable middle period. i think it's -- we're somewhere just before the halftime whistle goes. and i think it's valid. it's a good time to sort of step back and think about where we are. and that's what you're going to do today, you're really going to be diving down into the issues. i thought i would offer four
not entirely random thoughts about ttip here, and this is how i think about it, and also the conversations that i have with my editors who constantly say when is this thing going to get done and it it going to get done and what should we be writing about this? and i think it's -- i'll start with really part one, which is i think it is important to remember, and i think that this sometimes gets lost in the discussion of the detail that, you know, ttip is still a valid endeavor. it's a big and valid endeavor, worth stepping back and thinking okay, this is a trade relationship that is as important as it gets in the world today, something like that $800 billion worth of trade or more last year. and also, it's about the future of trade agreements.
and really, that issue of regulatory coherence that dan was referencing there, that tangle of regulations that business complains about. and in closing with that, those non-tariff barriers that we have been writing about for a long time. interesting point in business, increasingly, this is not a phenomenon over the last year or two, but this is now our transatlantic nowadays, which was once an american corporation or a european corporation that was reaching across the area is now a transatlantic one.
great examples in fiat and gm and endeavors there. i also think -- if i would endeavor, i guess beyond the bilateral transatlantic relationship, think of it in the context of the wto and global trade liberalization efforts, and the ttp. jack had the theory of the noodle bowl theory of trade, if all of these ftas were in the world and going to complicate the world and create a tangle of noodles, i would like to patent the ravioli theory of trade and that is where we are now in the ravioli, or the dumpling theory of trade. we are seeing a series of agreements that are being written or negotiated and that eventually some day, they will become the great lasagna, that is a global, multilateral deal. again, i'm patenting that. so if you use it, please -- and i think that's a long-term
project. i mean, clearly, when you talk to people in the u.s. administration, part of the reasoning behind the launch of ttip and ttp was about getting something happening in the realm of trade liberalization and moving beyond the paralysis you have now in the doha round. ttip is also a geopolitical agreement, i would argue, and that is because of my background in international relations. and i think the geopolitics are as valid for politics as tpp and ttip. people talk about the concept of china, i think ttip is equally valid in that context, particularly with what is happening in russia and ukraine nowadays.
these are, to me, the three big pillars of why this remains a valid endeavor. the second point i think about is the question i get from my editors, which is okay, this is big, can you actually get it done or can they actually get it done? if so, when? and when you're in the daily news business, this sometimes turns into slightly depressing conversations. i think the question -- the answer that i offer my editors nowadays is yes, it will get done. but probably not any time soon. and that may not be the answer that people in business and others who have a shorter horizon of thinking may want to
hear. but i do think that increasingly in my mind, it's hard to see this getting done during the obama administration. and that raises all sorts of interesting questions. i think they are trying to get it done. clearly, they are trying to get it done. there have been agreements on negotiations accelerating. but really, everything has to go incredibly smoothly to get even close. and as one senior official involved told me when we talked after the meeting recently, really what we're laying out in front of us just gets us to the mid-game. and i think that is something that is important, especially in the context -- and i use ttp as a reference point. ttp, for those of us who cover it, it's been a joke that this thing has been in the end game for two years if ttip is just getting to the mid-game.
we've got a long road ahead there. there is a couple of reasons why i think this is -- going to struggle to get done in the obama administration. one is the complexity of the deal. i think a lot of the conversations feel still like they're only just getting started, even though it's been two years. and i think that's interesting. the other point is, i still think for the u.s. administration, ttp is going to take a lot of energy to get through congress in the next -- to close, to scrub, to get the text out, to sell politically, the administration is really going to be focused on that over the next year or so. i don't think it's a zero-sum game. and clearly, the folks at usgr have argued for a long time that they can walk and chew gum at the same time.
but there is a question of attention and political pressure as well. you have seen in ttp, there is sort of a building urgency over the last two years. for most of the last six to nine months, if not year, the ttp negotiators have been meeting weekly essentially. and in intersessional agreements. they have been on the phone closing agreements, especially the u.s. and japan negotiators have been on the road constantly for most of the last year. so -- i don't see that in ttip right now. i may be missing something, but i just don't see that accelerated schedule there. i think the other point is that the political timeline ahead is getting very interesting. i don't think in 2016, ttip is
going to draw quite the opposition or the heated debate that ttp is here in the u.s., for obvious reasons. but i'm not sure that in the context of the anti-trade rhetoric we're hearing on both sides in both parties right now that even the deal with europe is going to be immune to that or some kind of blowback. you know, there is an argument that putin's new syrian endeavor and his other adventurism in ukraine and so on could help to make that geopolitics case in the congress. but then i keep wondering and i was thinking about this on the plane last night, although not for that long, i wonder what donald trump would make of ttip if ttp is a disaster, what would he think of ttip. and then i came up with some fun quotes that -- sort of imagining
him speaking, and then i switched off and moved onto something else. but clearly, there is -- there is a potential risk there. but i think 2017 is the more important year, in terms of the political timeline. this gets into why i don't think it will get done in the obama administration as well, with the european politics or here domestically, which is you have three monumental votes in europe in 2017 and that is the german national election, french presidential election. and i think equally importantly, the u.k. referendum on whether or not to be in the -- to remain in the eu. in each of those elections, i
would expect ttip will be an issue that will be vigorously debated. there were 150,000, 200,000 people in the streets of berlin on saturday protesting against ttip. that tells you that certainly, people feel strongly about this in germany. angela merkel has been treading very carefully on this. her coalition partner, even more so, arguably. but, you know, across europe there are now 3 million signatures on a petition against ttip. and that is starting to become a big number. i also think that sort of vocal opposition is bleeding into a kind of broader skepticism about ttip that i hear from some of my colleagues who are asking me as europeans, as much as economic
journalists, but also hear from others in the quiet center now. and i think that is really, really important. i also think the leaders in each of those elections or votes is politically savvy enough to know that there is a risk for them in this debate. i think the third random thought is that the barriers or stumbling blocks are just not going away. and in fact, they're arguably multiply, we talked about the debate, that is still there. the safe harbor decision we saw recently, from the top court in europe, it's not technically part of ttip but it's emblematic in a broader position.
a combination of jealousy and angst that you see in europe now when is comes to the issue of innovation in technology and companies, which is really interesting and i think will shadow the talks. gmos, the decision earlier by the commission to allow states to opt out of any decision is important to recommendations on the decision. but clearly it tells you a lot about the european commission and how they will handle the politics. the isdf, and i can't believe i have gotten this far without mentioning isdf. the investor state dispute settlement mechanism and all of the heat around that. i think there is a view in brussels that they have come up with a solution of a recent proposal for a wholesale rewriting of the system.
i think you only have to look at the u.s. chamber of commerce's incredibly quick response to that -- negative response to that proposal to see why that may be more difficult than the europeans think in terms of the negotiations. it has two main points as far as i can tell. the creation of an international court with sitting judges to hear investment cases sounds a lot likely exit to me, a multi-lateral institution that will hear the disputes. the europeans want to come up with something entirely fresh. the second is an appellate function for investment cases that would allow governments to go before a panel of sitting judges.
i think both fit in very much with this european idea that the answer to a problem is often to set up a new institution. i don't think that goes down so well, particularly in places like this. and here in washington, more broadly. i think there's a myriad amount of other questions out there that are building these big questions on whether financial services are included or not. these are things that should have been answered sometime ago, i would have thought. that said, i did say yes, i think this is going to happen. and that brings me to sort of my fourth and final point. and that is both sides want it to happen. at the political level, certainly. so what has to change for it to happen? and i think that is something that the negotiators on both
sides have been thinking about a lot and were discussing during that recent meeting. i'm not sure they have got all the answers, but clearly, something has to happen to kind of get some kind of new momentum behind ttip. i think the first thing is really a re-calibration of the endeavor. is this the big, totemic catch-all agreement that a lot of its advocates have sought? should it be that? there were people when i was still based in london who talked about ttip as the beginning of a transatlantic -- basically, a growth of the european union across the atlantic. and it would become a single economy, a single market across the atlantic. i'm not sure that ttip, given the current challenges, will get you there.
that may be a good long-term goal, but it's not where this is heading. i think particularly with what is happening in the eu, and suspicion within the eu itself and its role. so i think that is one point of re-calibration. so do you focus instead on something that focuses on tariffs, services, maybe government procurement lines? do you turn the regulation project into a longer term project? people have talked about ttip, i think there are two lines that really come to mind with ttip. one was the let's get this done on a single tank of gas. that has gone away. the argument now perhaps with an electric car instead of a gas
guzzler. after vw, certainly not a diesel. i think they were making this point a year ago, there was an early harvest deal to have. and the regulation should be viewed as a longer term project. i think there's -- when i talk or listen or ask questions on regulation, it is still striking to me how much the question of regulation on things like food and auto safety and so on is kind of a mars and venus thing. i'm not sure you solve that in a trade agreement immediately. i think the acceleration point, right now, next week, we'll see an exchange of tariff offers, the first one didn't go so well.
they first agreed to set a 97% threshold. so turn this into a negotiation over the remaining 3% of sensitive tariff lines. so if you're going to go in a closing mode in 2016 you need to meet more quickly than they plan to at this point. to tariff offers next week and procurement offers in february that already takes you into the spring, almost. i think the second point is european leaders need to handle the politics better. and they need to be braver, if they want to get this done. and i haven't seen any signs of that, particularly from the european commission, which i think has been a much more political animal than it was before. so i think -- one of my
questions, when she took over, i sort of thought of her as engaging in the rope-a-dope maneuver. and try to wear them out that way. i don't think that has worked. we saw that saturday in berlin. i think, and this may be a provocative point, americans need to be better in the context of this negotiation at proving their europeanness, which again, is not a comfortable admission for some parts of the -- the policy here. i've been away for 17 years and just come back, and i'm struck by how much americans changed in a number of ways. and how the traditional narrative on -- our different
economies and how we regulate has changed. and i think actually, the vw example is a great one. it upends the narrative that somehow europe is greener when it comes to cars than the u.s. i think food culture change, the idea is remarkable, that mcdonald's is deciding not to use any antibiotic-treated meat or any hormone-fed chicken or beef is important. and it's important in the context of ttip because these are exactly the sort of things that european consumers think about when they think about ttip, the famous chlorinated chicken. and chlorine. so i think i'll stop there. i'll let you chew on that idea,
on that chicken, if want. or the freedom fries, if you prefer. just to stop with that point, you really have an interesting day ahead of you. and an interesting point in this negotiation. i think this deal is going to get done. but i really do think some things have to change in the dynamics for it to get done. thank you. [ applause ] i think dan wanted to introduce the next panel. but he's disappeared now. is he coming right back? okay. i guess we could exchange ttip jokes, if there are any good ones.
>> all right. shawn, that was an excellent overview of the issues that we're going to get into an exchange here. please take your seat if you're on this panel. come on up. so this session is supposed to go from 9 to about 10 past 10:00. it's going to be a conversation. the original point -- the original idea was to have a bunch of chairs up here, like a sunday morning talk show and talk, but i think there were some complications with the number of lavolier mics. so it will be more like an academic set-up. so the purpose here is to talk about the issues. there are lots as shawn just gave you a taste. there is a lot of complexity. but i would like for us to be
able to do here is to debate some of the issues, to at least address some of the issues. there are lots of them. i want you to leave this session with the sense that there are some complicated issues that might be difficult to resolve. maybe it would make sense to take them off the table. maybe it would make sense to compromise in some other way. i would like you to have an understanding of some of the major offensive and defensive interests of the american side, the european side. and get a sense of where things stand going into strategic round of next week. a couple weeks ago, a paper came out by the atlanta council and bertelsmann because it identified 28 or so issues on the table. they produced the results of a survey where they asked trade experts on both sides of the atlantic which issues are the most complicated to resolve and which are the most important and they plotted it.
their xy axes. the most difficult to achieve and most important to a successful outcome were up in the top right quadrant. but anyway, they talked about these various issues. i would like to get into some of them here. obviously trade agreements, gmos, sanitary measures. sito and fito regulatory issues. coherence. we got a whole panel devoted to that later. labor and environmental standards. intellectual property protection. financial services. energy expert relations. there are a lot of issues. let me also note that there's a slight programming change you may have noticed. yana dryer was supposed to be with us. she is coming later. had some logistical issues getting across the atlantic. so phil levy, who's also on another panel, volunteered to help us out.
so, thank you, phil. so, the way i want to proceed is i want to ask a question. i have 12 questions here, but i'm going to ask a question, gonna direct it to one of the panelists. he or she can start with an answer. and then others can chime in. when we sort of exhausted or it's time to move on, i'll ask the next question. first question i have is for frederick, frederick erickson. all of their bios are in your packets. really quickly, frederick erickson. phil levy from the chicago council of global affairs. celeste from the afl-cio. susan aaronson from george washington university.
let me start with a question for frederick. what do you consider the most important issues to a successful outcome for the ttip and what do you consider to be the most difficult to solve? >> well, i think it is actually the same issue and shawn drew attention to it already in his talk. it considers it is that united states becomes the 29th member of the european union. that's the main benefit that's going to come out from this. if you want to show you're increasing european, you should take longer holidays. pick up this european social model, desperately liked at the cato institute. and please don't take away our agreed cause are far more environmental than ours are. that's the sort of ambition we're going to have for what we're going to go at ttip. no. let me just say a couple of words on that issue, dan, from the viewpoint of thinking perhaps through the economics and the political economy of it all. i'm not sort of desperately happy with this obsession that a lot of people have about
estimating the potential gains and losses of different trade agreements especially by using plain vanilla models that we know aren't really capturing some of the key benefits that come from trade. i'm sort of complicit to that myself, since i have authored these studies with some regularity. i think ttip itself has to be put in this broader context and that context is largely that we are seeing an end to 25 years of globalization as we knew it, an end to the idea that constant expansion of the principles of economic liberalism is going to power western economies, that are going to deregulate economies at home and that that sort of deregulation is going to have very strong effects on what happens externally between countries. i have a book that's coming out
in a while. i've been sketching a different scenario than we are seeing right now and that is we move past 20 years of globalization, given that globalization was so heavy, powered by big and global corporations, and their trade linkages across the world. and we move from that into a period which i think is going to be more characterized by global corporatism in the sense that we're seeing a revival for pretty old ideas about linkages between business and governments. we're seeing a revival for discriminator and sometimes protective use of regulation. that can manifest itself in everything from sort of towards
skepticism towards different mergers and acquisition deals. ge bidding for french company -- i can't remember the name of it right now. sort of how the politics around these deals came to be very sensitive and very controversial. we're seeing in today's "financial times," to plug shawn's newspaper an interview with the ceo of barclays bank who is making the case for the build-up of a global european champion in investment banking because he feels that american investment banks are getting too competitive. that's the sort of all-time government interference in the economy that we're seeing and it's going to sort of encourage governments and companies to become closer, sometimes leading to very creating crony-type relations. that's the context that i see for ttip, which sort of translates itself into a new
type of scenario for global trade where trade is going to grow far more slowly in the future than it did in the past 25 years. we're going to see this in the trade statistics. we're going to see this in reorientation of the structures of trade, partly because asia emerging markets have developed to that point in the economy where they begin to integrate much more regionally than they do globally. so you see strong amalgamation effects coming in the asian region which is taking away a lot of the benefits that the american and european economy could thrive on for the past 20 years. >> i just wanted to pick up on the point you made earlier about the united states becoming the 29th european state. does anybody else on the panel sort of share that view that the ttip is the completion of columbus' conquest of north america? or are there other perspectives on these issues? what are the big issues? what are the stumbling blocks?
>> good morning. if i may add to frederick's excellent remarks, i see it a little bit differently. i see it as not only -- well, i see it as really not being about trade but rather about governance. not only competition of governance models among u.s. and eu countries, but also between a western model and a chinese model, or a western model and perhaps an asian model. and i make that distinction because i think they're not the same. but it seems to me that when we're talking about new issues, such as regulatory coherence, and new sectors, such as information flows, that's really much more than trade. and it's -- to me, it is about governance when the united states moves from focusing on specific human rights, such as labor rights, to a broader conception of including human rights.
we've learned something from the european model. so it seems to me, ttip could set -- you know, if you buy some of the things that policymakers have said about it in terms of setting -- creating 21st century trade agreements and setting gold standards and building blocks, i think those metaphors are useful and also a little bit scary. but i think we need to be honest about what this really is. >> any other thoughts? >> just to jump in there, i don't buy many of these metaphors myself. i think what we are looking at is actually pretty standard type of free-trade agreement negotiations between -- that at the end of it, the result of it is going to be a pretty standard type of free-trade agreement that we have seen in the past years, topped up with infusions if here and there that hopefully
can at least rub some new ground in terms of dealing with more thorny type regulatory issues. but sort of the idea that has been at least initially sold to the public about sort of a 21st century agreement, about creating a single market across the atlantic, i simply don't think this is going to happen. that just leads me to my sort of conclusion of what i was going to say which is that i think this is an agreement that, at least in europe, is going to be won or lost on its capacity to generate more growth, more jobs. that's the politics of it. if you're going to end up with an agreement that has only small benefits to that quest, then i think you're going to see all the other thorny problems and perhaps controversial issues are going to magnify. they are going to sort of become far bigger. it is sort of chlorinated chicken or what have you.
if you want to go for sort of the big net benefits, you need to sort of run with the stream of what you've seen from a lot of estimates that come on potential growth. you need to grow into those sectors that can deliver huge scale benefits by taking away tariffs and taking away perhaps some new type of trade restrictions that are there. you need to think about services, data, and how you can sort of use the trade agreement itself to throw some friction into global trade policy in the sense that you really want an agreement here, which can, at least for the future, divert trade in the sense that you push countries like china, india, brazil and other large economies in the world to become far more favorable to more of a western type of model of these issues. so if you find that sort of combination, it is going to be a fairly good agreement, but i don't think we're going to have higher hopes for going beyond that. >> you just alluded a little to the geopolitics which shawn spoke of. phil, what do you make of the
geopolitical arguments for the agreement? how important is it, relative to the economics which frederick just articulated about? is it about security or is it about writing the rules of trade before china and india and brazil do and is that important? >> well, i think it is both, both the economics and the geopolitics. i think it -- i'm going to take the bait a little bit on the 29th, because i think that links into this with the geopolitics. i think one of the things that we've seen, we saw this in tpp and ttip, that if you want to have sort of success in tackling the difficult agreement you can either make progress on very thorny issues or you can expand. tpp was supposed to conclude in november of 2011 when the u.s. was hosting aipac. it didn't. so how do you show success? bring in mexico, bring in canada, bring in japan.
now you know we are successful, because we are getting bigger. as shawn noted, one of the major elections is what will the british decide their role in europe is to be? one way of strengthening is expand, get involved in something bigger. not perhaps so far as bringing the united states in as a member, but it looks that way a little bit. it is an expansion project, a tightening of ties. the problem we see, this brings its own complexities. now we have a few new difficult negotiating issues and that's what we have in ttip as well. you ask about the geopolitics of this. geopolitically, it is important to have a strong europe. we will talk about this more this afternoon. for a whole range of issues and challenges, you want to have a strengthening and the thought is
this is the kind of thing that can bolster. as frederick said, having some growth, having more jobs would cure many of europe's ills. it would make everyone feel better about not just whatever agreement you reach, but then the union itself, so it can then serve as a sort of bolster in that way. but i think that was a lot of what was behind it because there was no shortage of venues for the u.s. and europe to address economic matters. that's part of what the challenge of ttip is. they've been addressing these things all along. you had eight rounds of gatt negotiations. transatlantic economic cooperation council where they were doing bilaterals. so if you wanted to tackle chlorinated chicken, there were opportunities. doing it in this way with a big agreement i think is largely to sort of reinforce not only is sort of europe intact, but then this bond between the u.s. and europe, which obviously shaken through a number of events over the last decade or two, that they sort of advertised that that's stronger, which is
great -- so long as it works. >> good points. celeste? >> i think we're missing the point a little bit here in that there is not that much room to grow through a traditional trade agreement. you know, through all the rounds of gatt, the fact that the u.s. and eu have pretty low barriers facing each other, whether it is tariffs or regulatory barriers. if the idea of the ttip is grow out of austerity and grow out of the great recession because we're going to get rid of the barrier against chlorinated chicken or hormone beef, that just isn't borne out in the data. data shows in the very best-case scenario, the growth that you're going to achieve is a little more than a rounding error. that doesn't appear to us to be enough of an advantage of the ttip to really live with a lot of these other things that
working people are pretty concerned about. and with the ttip agreement, it is not really, oh, we're going to move to london because that is a great offshoring platform to get back to the united states, but it is a lot of questions about isds, who is going to have the final say over regulations, how we're going to structure our economy. if this is a new form of global corporatism, i think working people are very concerned that there's going to be even more corporate power in the new form of globalism because it was really not advantageous to working people under its current guise. >> doesn't it depend on what the rules are and where we liberalize, what the terms are? i've spoken -- i've questioned global governance agreements as
opposed to trade agreements. is there a good agreement? can great savings for business be spawned and passed on in the form of new investment to create jobs and lower prices and things like that? >> absolutely. and i think there are too many questions there. one is the transparency with which it is negotiated. if working people and other members of civil society are locked out of the room, but everyone knows the big corporate lobbyists are maybe not in the room but have the best access to the negotiators and the most influence over the rules that are written, those rules are not going to be written in a way that favors workers. secondly, businesses achieving more efficiencies is terrific in a vacuum but it cannot be argued based on current economic models, that that's automatically going to be shared with workers. what we see and not just in the united states but in the uk, in germany, in mexico, in south korea is that workers are getting a smaller and smaller share of national income. particularly as productivity goes up, workers' incomes are
not rising. if workers can prosper as the companies prosper, you will see continuing skepticism and doubt about the ttip as you saw in germany on saturday. >> a follow-up. you envisioned workers locked out of the room. i know from time to time the obama administration speaks with organized labor. do you feel that there's not useful communication that the current model doesn't work to give workers a say? >> it's not really about communication so much as about influence and balance of power. certainly there are labors of -- amongst the 600 or so advisers. about 30 of them represent labor. just numerically you don't have a fair representation in regards tots number of workers in america versus the number of
businesses in america. but more important than the numerical representation is the impact, the influence and the effect. certainly the obama administration has a very open-door policy. we present issues. we have meetings. they take our phone calls. but in terms of our proposals translating into what's put down on the negotiating table and at least trying for the things we're asking for, we don't see it. >> let me just sort of contest that idea a little bit. globalization trade deals deliver benefits for the economy when they expose economies to more competition. that's the main driver of gains from global trade and trade agreements. problem we've had for the past 25 years is that we haven't seen any sort of trade agreement
that's been able to push that competition much which is why in the 1990 in america and europe when productivity growth was actually accelerated going, more investment went into the economy where you had sort of a big boost in trade volumes. at that point you saw take-home pay for workers. doesn't matter where they worked and how they worked. salaries were going up. ever since then we've been on a declining trend for productivity as a consequence pay hasn't increased that much. but the functional income distribution between labor and capital has been flat for 30, 40 years. it is not that labor itself is taking a hit and that capital is sort of feasting on the caucuses of labor. what we are seeing is growing income inequality because skills
are rewarded more than other types of skills in the modern economy which means that blue-collar workers have not seen pay go up so as much as in the past. but in order to shift into a different type of economy that can expose economies of different type of globalization, that expose more economies to more competition and to transmit new technology and innovation at a faster pace, then we need to begin to return to trade agreements again and to design trade agreements that have the capacity to achieve that. >> celeste, do you want to offer -- >> sure. the data we're looking at does say labor income is down in comparison to the past so we perhaps are looking at different data. you talked about the standard economic models for trade agreements. not accounting for everything. part of what they're not
accounting for is the movement of capital. so it is not just that u.s. producers are being outcompeted by an import sector. it is that whole factories are shutting down and moving and companies are deciding we're going to produce overseas where it is cheaper and export back to the united states. that's quite different than the traditional model that we're both making wine and whoever's better at it should be the one that exports it. not only that, but we've already seen a concentration of capital since this era of trade agreements. more mergers, more acquisitions, less competition. so if we're talking about becoming more efficient and having more competition, we've got to look at the effect of trade agreements on that concentration and what that does not only to consumers but to workers who are trying to sell their labor in the marketplace. >> susan wants to the chime in. then i'd like to ask marjorie about business' perspective. >> it seems like we're talking about three different things that are clearly related. one issue is what's happened to
the share of labor in terms of globalization and -- are trade agreements the proper place to address that problem given labor's declining influence. so that's one. i don't know where we all stand on that. it would be interesting to see. the second thing is does labor have influence. i would actually argue, labor has tons of -- it's seen -- it's certainly heard, if you look at the labor rights provisions since they've evolved over time, certainly congress has to some extent tried to meet them as have various administrations. the question is why is that not working to help labor. then the third issue is process, right? how do we negotiate a trade agreement. who's in the room. is the process considered transparent and accountable, which seems to me an issue we should talk about at another time. but clearly is i think a very important issue because it is an issue about trusting governance.
and if governance agreements, as i call them, are becoming ever more influential and ever larger with more countries and more sectors, how we do it is important as what we include in there. i'll shut up now. >> marjorie, i'd like to ask you how focused is the chamber and business on the ttip and what types of problems can it resolve for u.s. business here as exporters and u.s. multi-nationals in europe? >> thanks, dan, very much. thanks to cato for organizing this. i did rib down a little bit about the fact that we're having this very interesting conference on a federal holiday but clearly enough people are interested in the topic that the room is nearly full. kudos to you for bucking the trend and going ahead and having us all here first thing in the morning.
let me start by asking how many people in the room start from the premise that ttip is or can be a good thing? show of hands. cool. how many of you start from the premise that under no possible circumstances could it be a good thing? all right. golly, where to begin. chamber has been a long time -- first off, let's back up and realize that the chamber, yes, it represents a lot of big businesses but we also -- 95% of our members actually are small and medium sized enterprises. so the notion for starters that the chamber is only about representing big business is a bit disconnected from the reality of our membership.
business is painted as -- i don't want to say the devil, but business is painted negatively in the application of ttip. why are we negotiating trade agreements? we're talking about trying to liberalize the free flow to have trade in goods and services and investment flows and agriculture, wherever we can. by definition, business has a stake and a fundamental role in why these negotiations are happening. workers have a fundamental role in them as well because they are employed by business. so this notion somehow that there is a dichotomy between what business wants and what is in the interest of workers and consumers, it strikes me as it
is an unfortunate dichotomy. i think, frankly, what you see happening in europe right now in terms of the massive demonstrations, it wasn't just in berlin this weekend but in amsterdam as well. i was in the hague last week and dutch officials are growing increasingly concerned about the trends in their country as well. i think that the debate that you see -- i'll come back to your question in just a second. the debate that you see going on in europe is much larger than what may or may not be included in this particular negotiation. it is a much more fundamental conversation about the role of business in society. and frankly, it is a much more intensive dialogue that's happening in europe right now. i think that in some respects at some point we'll get around to having that conversation. i think now that tpp's negotiations have concluded, we will start to see more of that conversation. the chamber has been an advocate for these negotiations even before the negotiations were negotiations.
we began in i think 2010, 2011 with our friends at some of the -- some of the think tanks in europe to look at the potential benefits deriving from a comprehensive agreement, initially just looking at benefits of tariff reduction. from there the conversation grew to one about what could be the benefits extending beyond tariff reductions. the notion being, quite frankly, that in the absence of -- or the relative posity of monitoring fiscal options to promote jobs and growth, that trade liberalization should in fact be part of the solution. so we have been advocating for this for a long time because we do see the opportunity for greater growth in trade and in
investment flows. practical reality is, as many of you know, because we're talking about in many instances multi-national corporations, much of the trade that goes on between the u.s. and europe is intracompany trade. something like 40% of the trade that goes on across the atlantic is intracompany trade which means the companies are paying duties twice for goods flowing back and forth. i'm sorry, but that just creates unnecessary costs in the economy. i do think when it comes to regulatory cooperation, people talk about coherence. i'm talking about cooperation and coherence. our members do see something opportunities there. you have to stop and ask yourself why if european and
american air safety agencies can deem airworthy an airbus in europe and allow that to be flown here in the u.s., and have a boeing aircraft deemed airworthy by the faa and therefore flown without being retested in europe, why is it, if we can do that, we have to have -- why is it that -- i don't know if it is mattel -- i think it is mattel -- forgive me if i'm wrong -- why do they have to make two different versions of a baby rattle? because the standard in europe and the u.s. is different on the level of decibels that the rattle can make next to the baby's ear. >> can i interrupt? this issue is a big issue. it is identified as the source of the greatest gains and the european left likes to talk about it as a race to the bottom to u.s. standards. and the u.s. right likes to talk about global governance and exceeding to these ridiculously economic squashing standards.
clearly there is a middle ground. you identified rattles. it just seems to me all along that business should do a better job of getting out in front and coming up with example after example after example of products where two sets of standards or regulatory schemes need to be complied with that achieve the same safety or environmental or labor protection goal, whatever it is. are you guys compiling a list? >> well, in fact we are. it's interesting that you ask that question. look, there is no doubt about it, especially in europe, business hasn't done enough to articulate the benefits of these negotiations. in the u.s., i would say we're doing a better job but we're doing it in an environment where nobody's really listening yet. let's face it. the level -- the attention span of the american public is fairly limited. and to the extent people are thinking about trade right now, if they're thinking about it at all, they're thinking about tpp. and i think that the conversations that we're going to be having about trade over
the next number of months, as it relates -- as we saw over the summer with tpa, being in effect a referendum on tpp and that we will now have going forward with tpp is a different set of circumstances because the relationship between the u.s. and the asian countries with whom tpp has been negotiated is fundamentally different than the relationship between the u.s. and europe. should the business community be doing a better job here? you bet. do we need to get more information out there? you bet. i'm not spending enough of my day -- and in fact this is my day job -- trying to make the case for why improvements in regulatory cooperation, whether it is sectoral or whether it is in terms of a broad framework for dialogue is important. i need to do a better job explaining why you do need an effective state investor dispute settlement mechanism where there
is an "i" in the middle of these situations and where investments plays such a significant role in the bilateral relationship. yes, there is more business should be doing, but i also think it is more difficult in some respects to make the argument, if you will, sort of straightforward business argument for why this agreement is needed when you're faced with what i would describe as more fundamentally emotional arguments. it is easier to raise people's concerns about things like -- i'm sorry, i have to come back to it -- chlorinated chicken or race to the bottom on regulation or lack of transparency. a number of very fundamental concerns that derive i think from something that extends far beyond really what is the ttip negotiation, has much more to do with the basic role of business
in society. >> thanks, marjorie. you touched upon one of the hot-button issues, shawn mentioned isds. that's an issue that we at cato and the chamber don't really see eye to eye on. axel has written quite a bit on it. would you share with everybody why it is problematic, share your thoughts. i think a lot of people here have thoughts about that so this could be a good debate. >> sure. yeah. thanks very much for the invitation. it's a great conference. now investor state dispute settlement. that's the topic if i look at it from a german perspective, which is in the center of the debate. investor state dispute settlement procedures or mechanisms are part of most of international investment agreements. there are more than 3,000 of these agreements.
essentially it is about foreign investors have is the right to bring claims against foreign states. right? and that's very unusual thing in terms of international law because if you think about the wto, the world trade organization, only states have the right to sue other states. that's a very unusual thing in international law. of course, there are many issues, many criticisms you can have when it comes to isds. only big and foreign companies can bring those claims. not something small and medium size enterprises can use. there is a question of the impartiality of the arbitrators. there are arguments that arbitrators have been counselors before, so there is this whole question of impartiality.
the big issues also that the decision of these arbitrary tribunals are based on very wide concepts and wide vague provisions like fair and equitable treatment. our colleague has wrote about that. and just to mention last point, our calculations show that strong treaties, strong investment treaties, those that include isds provisions do not have an additional positive effect on fdi. there is a big question market in terms of effectiveness and impact. now with regard to the proposal by the commission, i think it is an intriguing proposal. no doubt about that. shawn talked about it. there is a point when a panel of judges, there is an appeals mechanism which is missing so far.
it has increase cd transparency and so on and so on. although i think it is an intriguing concept, intriguing proposal, i think it is missing the fundamental question -- why do you need an additional layer, if you want, of international law in a free trade agreement negotiated by two countries with rather mature domestic legal systems. my proposal was just leave it out. right? it is perfectly possible to imagine a free trade agreement, investment agreement between two industrial countries without isds. you can focus on enforcement of protection standards in domestic legal settings. that would be my idea. and but of course another question we should think about is -- in case there will be no isds in ttip. when this be taken up in other investment treaty negotiations with the likes of vietnam,
china, japan and other developing countries? so that is one of the big questions. and also that's one of the big questions when it comes to the reform of the international investment regime. so what kind of impact will this proposal by the european commission have beyond ttip. >> anybody have -- ya. >> i think you can have two perspectives, a constitutional perspective and more a pragmatic political economy view where you try to figure out exactly what was the question to which the answer was on isds. from a constitutional point of view, i think it is perfectly obvious. it's a system which doesn't conform to basic constitutional principles and there is actually a very easy way to solve this which is for europe which we have been arguing for which is basically to allow complainants, whether they are foreigners or
nationals, to reference international agreements when they go to court. period. sadly, there are a lot of people arguing against that, both on sort of the part of european governments who simply don't want to have international agreements to become part of sort of the legal and regulatory fabric in that way. they want to have the opportunities to sort of avoid having laws to have consequences for them. or international agreements to have consequences. a lot of the people have been arguing against isds don't like these either, because what they really would like to get away from is the fact that international agreements should have consequences, even little consequences. so that's the sort of -- i think it is pretty easy to solve that problem if we would really like to sort of make the system more
did shall to conform to basic constitutional principles. now let's go to the much more difficult issue which is about the political economy and to understand why did these sort of agreements emerge, why didn't they conform to basic constitutional principles to start with, and what's the role that they have played in the broader landscape of various types of international agreements, trade investment and many other issues that have been negotiated in the past 30, 40 years. well, the simple answer is that isds is a sort of safety valve for a host of different type of agreements where it has allowed governments to basically ignore or at least avoid settling the difficulties of previous agreements which is to detail the consequences for regulations and laws in those countries that have contracted party to them. so absent that sort of safety
wall, we are have to become far more detailed and prescriptive what the consequences for loss and regulations that international agreement should have. we need to in negotiate much more on the books in the country not on broad sort of textural principles that you have in the international agreement and that's a different type of international negotiation we are looking at. if we take away the safety walls then we have to become far more prescriptive, lock in governments in greater detail than exist. >> i'm a bit more favorably disposed towards isds. maybe i anticipate not grasping the constitutional front. if you think about trading goods, for example or other sort of regulatory things, if you say i wonder whether the u.s. approach to foreign sales corporations is conforming with commitments that were made in
the past. we don't say we'll just take that up in u.s. courts or see what the u.s. administration says. there is a broader body that arbitrates this. i think the case is pretty clear that there is an investment component to trade that is a very important thing. this is not tangential. marjorie just gave statistics how linked these are. then i guess the question of how does one address this. now i think on investment matters, the real challenge of the ttip context is that isds looks slightly out of place because it is largely a measure, say what happens if you have concerns about the other country's legal system. having some sort of redress is good for investors but you could say, your legal system looks pretty good, so does the u.s. legal system.
what happens when you talk about vietnam or when you talk about peru and peruvians will criticize their own legal system. this is not casting aspersions from afar. in the united states the president plays a very big role in u.s. trade policy that we have seen and will continue to see the difficulty of moving trade agreements through congress. part of how this is accomplished is you keep agreements relatively consistent. people will talk about slight changes of the margin but not sort of redoing agreements so you re-open discussions all at once. i think there's two reasons then for why you'd want to include something like this. one is the sequential reason which is that you have a precedent. fine, maybe we don't think it would be used very frequently. i think the question you raised earlier, is this a fundamentally bad thing or is it all in how it operates.
other thing is, as shawn mentioned in his opening remarks, if we are ultimately aiming towards sort of a grand harmonization of all this where we get away from the ravioli and noodles and have our big lasagna -- due credit -- then it is going to be far easier if the pieces fit together from the start as opposed to a bunch of disparate rules that need reconciliation. >> what about the hyper national treatment aspect of this? we're giving foreign investors two paths to resolve their issues whereas u.s. investors at home have one. and visa versa. is that not precedent setting? is it not problematic in some ways. >> i think it will depend entirely on how this operates. it is like having an appellate mechanism. you could give somebody two cuts at the question. if one is sort of an automatic overturning, then that's problematic. if instead this really looks for problematic instances and says
only in those rare circumstances where something went very wrong, this is much less troubling. >> so i think when we're looking at first principles on this we've never actually had any empirical data that foreign investors are systematically discriminated against before the u.s., for example, has got be into an isds agreement with any country. that's where you start, not just people think peruvian courts are bad. if they're bad, they're bad for everyone who lives there, not just the foreign investors. ask so you are trying to solve a problem that we've never demonstrated exists in the fairs place. and i think first we need to show that that problem exists, and then say, is isds, given what it is, the best solution for it, or even the investment court system and now the commission has now proposed. because we haven't talked about that there are plenty of other options. state to state dispute settlement as you settle all other trade disputes, whether
it's in trade agreements or at the wto. there's political risk insurance. and it is not -- there is a disparity about how domestic investors are treated versus international investors. but it is also the rest of society. we have to look at how isds privileges one form of rights and those are property rights. versus all other rights. so to take an extreme example, this is from a paper by gus van harten, the canadian professor. if the owners of a foreign investment are tortured by a host government. right? quite extreme. those investors can use all the domestic systems at their disposal. plus, isds. if the workers of that foreign investment are tortured by their own government, they can't use isds. they have to go to the domestic system. so at what point have we decided
that in terms of global governance there's one right that's quite privileged and all other rights have to use whatever's available to them regardless of what system it is. >> seems like everybody wants to say something about it. this is a hot topic. we're running short on time but i'll go to you. but maybe we can put it in the context of in the tpp there was the tobacco carve-out. talk about precedent setting. tobacco's carved out. what does that say about the precedents being set for other industries getting similar discriminatory treatment? anybody. >> i'm so glad there's at least one other person up here who actually thinks isds is not it the most demonic elements of these negotiations. look, let's be very clear on the
fact that what we're talking about here is again what i would describe as a relatively emotionally driven debate about what is a pretty fundamentally basic construct of international law and precedent that's been in existence for 50 years. it isn't the case that a company can sue a government if their employees are tortured. there are very strict and narrow definitions on when isds -- when an investor can in fact pursue the route of isds. it is a very limited number of circumstances in which contractual obligations have been violated or there's a perception of violation. it's interesting to me that in this whole conversation so far, the one thing that we haven't heard, which in fact is what's
driving most of the conversation in europe, is this notion that somehow it's corporations that are going to be writing regulations. and that they're going to take away government's right to regulate. and here again, the practical reality is that if you talk about the tobacco case, i'm not going to speak to the specifics of the case in australia because we don't yet know the outcome, but the practical reality is that somehow the notion that this mechanism will allow a company to force a change in a government's regulation is simply a misrepresentation of the facts. >> susan. >> well, i think we need to, again, rephrase where we're at here. the first question is do investors deserve protection and then the second question is how should that system -- what should that system look like. it seems to me that in countries
where the rule of law is good, do you really need a separate legal system? and what does that do for the rule of law? for example, united states obviously, we do have systems. right? we have mediatory systems as well as the legal system and the law says that at times you have to go through the arbitration system as opposed to the legal system. for example -- okay, i won't get into the detail of that. but what we've seen i think is real abuse by corporations of that system, and that i think is what is fueling discontent, as well as the notion that do investors deserve this separate legal system. so let's look at that and why there was the tobacco carve-out. if you look at, for example, that canada eli lilly case where a government's policy space to make decisions related to intellectual property protection has been challenged by a company, a company believes its patents deserves that protection and it has used multiple venues
to try to get that straightened out. it seems to me we need to ask, does this need to be in this particular trade agreement. to your point, phil, about precedent. the precedent issue here is really interesting, because the united states does include things it never included before in its trade agreement, so it evolves over time, but it also takes things out when they're not relevant. and i would say, while a trade agreement with pakistan, you probably would want to have investor state dispute settlement. do you really need it, just for the reason to have the precedent in the next trade agreement for eu/u.s. and i think given concerns about the way that system has been used over time, we should really be asking that question.
>> dan, i'm sorry. i just got to say -- >> real quick. >> okay. really quickly, let's back up and realize the whole conversation and the whole sort of kerfuffle has to do with one negotiation and that's the u.s. you have to ask yourself why. now there is some question let's go back and look at it, is what's been written on paper able to be interpreted in a way that's comporting with the sort of basic principles that are reflected in the commissioner's new proposals. i think you have to step back and recognize part of what's driving this is not a rational conversation about the up sides and down sides of trade. why not have it? how can you pick and choose which agreements you're going to put it in?
>> you have any concluding remarks on this topic? >> yeah. again on precedents. that's also it relates to the bigger debate we have about ttip because that's increasingly the argument, our policymakers are trying to sell ttip. right? we need this in order to set the global standard. with regard to isds and ttip, a lot of attention is on china. right? we need isds because we are negotiating these two treaties, the u.s. and the eu with china. but we are forgetting that china's doing this since the late 1990s. they include isds in their treaties. they are interested in having these things in their treaties. china just recently concluded a treaty with australia with isds. you may know australia is one of those companies that excluded isds from a treaty with the u.s.
so i think this precedence argument is a weak argument but this then relates to the whole debate about ttip. we are having trouble selling ttip on the basis of how much exports will it generate, how much income will it generate. so we are tempted to use these more geopolitical arguments. china bashing arguments, in a way, to sell ttip. >> well, this issue is very prominent. i don't think we'll resolve it here. if you want resolution, go to our website at cato and read what simon and i said. obviously we won't get to all the issues i hoped we would, but i find these negotiations -- i find the european negotiators to be on my side because they're trying to open up my market. they want to get to the federal level. they want jones act reform.
financial services reform. these are things that are important to u.s. consumers and businesses. so what are your thoughts? what are your thoughts, phil, about some movement in those areas? the u.s. going to create reforms on jones act, government procurement, financials services totally off the table. what should we expect and would europe walk away from a deal that doesn't include reforms there? >> i'll let our european panelists speak to whether or not they're going to walk away. i think you've hit on the core challenge of the ttip which is as i noted, it is different from most other trade agreements that you take up in that there's been so much liberalization that's taken place in the past. that's wonderful. you have a healthy trading relationship. we talked about why you'd want
to have this bonding if you pulled it off, but the problem is the areas that you just cited are the traditional highly intractable trade issues. yes, it would be nice to change the jones act. >> many of them on here are pretty intractable. >> i don't advise anyone to hold their breath until the jones act is changed. gmos. that's the problem. it is a whole bunch of these things that have survived sort of time after time where people look for deliverables for some bilateral and you just couldn't move on these. i think that's what we saw with the agenda setting on this right from the start when you said audio visual with france. then in the u.s., what do you do on financial regulation? as you started -- it was a great idea to have us work on some things but the remaining issues are really tough and it makes for a difficult negotiating dynamic because often shawn was talking about whether one was in the mid game or late game. there is often this sequence where first let's tackle all these easy issues. we'll build confidence, work
together, you can note all the progress we've made. when it comes down to it, we'll hit the hard ones. the problem is with the ttip, you hit the hard ones right off the bat. there was no beginning game. but get right to the difficult issues. yes, it would be great to tackle these things. there are entrenched political interests that are behind them and it is why we haven't tackled these things. then you're going to have a question which is either you sort of summon the political wherewithal to overcome those which would be really remarkable if they do, or you -- well, you summon the wherewithal to overcome them, you come up with something that's sort of much more modest than you first intend and declare victory, or you walk away. it goes with the difficult choices for the ttip. >> anybody else? >> i think the reason why some of these have stuck around all the time as you've said, they're
really politically intractable. but in some sense, there's a reason for that and maybe it is not necessarily a bad thing. i mean the other option is to have absolutely no regulation, right? at the extreme. so that there is no conflict over what that regulation is. and anything goes. if that's not what we're trying to set up, sort of super regulatory council that can sort of whack a mole and bat down anything that's not the least trade restrictive model, that's where you're getting political pushback and that's the idea that citizens want some say in what their economy looks like. in some senses some citizens want greater government intervention in the economy, cato would say less government intervention in the economy. but these are really, really important questions. and it really gets to again i think marjorie's question when she said raise your hand if you already think ttip is a good thing and you're for it. i sort of went half-way up. we're in the sort of could be camp. i think this again gets back to
the question of power that we often don't want to talk about in trade negotiations. if you're already for it, and you don't have any idea how it is going to come out, that means you're pretty confident it is going to come out in a way that benefits your interests. i think for working people, we're theoretically for it because we haven't yet seen one that really comes out that takes the proposals that we put in and they get put in to place. so it is a really critical, critical question about how confident you are that your ju hráh @r(t&háhp &hc% going to determine the outcomes. >> marjorie? >> yeah. so you asked the question about some of the more intractable issues. i can tell you that, like cato, the chamber actually sides with the europeans on a number of these issues. we do think that financial services should be included in the regulatory portion of the conversation. we do think that there is government procurement
liberalization to be had, although i don't think it is purely a european offensive interest. i think it is actually a u.s. offensive interest as well. we do support the notion of lifting the ban on crude oil exports which is obviously one of the drivers for including an energy and raw materials chapter from the european perspective. so i think we are, like you, interested to see liberalization occur not just in europe but there are things to have to happen here as well.
no one is anymore interested in reducing protections for workers or consumers in the environment than they are in europe. we have the same level of concerns. so not saying that we want to use this key element of regulatory cooperation of a way of eliminate or have a race to the bottom on regulation. >> citizens want to have a say, but on many of these issues, one thing we do is public opinion survey. you get strikingly strong numbers even when you ask specifically about ttp or ttip. so i think when we look at some
of these obstacles, this may not be representing the citizens do you want a say, but more interest group politics. >> yeah, and just to follow on on that last point, i think that's perfectly true. i think the point is when you actually look at the political economy of trade and liberalization, you won't find many examples in world history where external liberalization as pushed through deregulation. what you will find is that external negotiations in the w.h.o., they have managed to lock in existing patterns of openness to trade domestically. every now and then perhaps pushed countries a little bit to open up more. but trade agreements, they are broadly defined by the bigger
sort of trend of political economy inside each country. for the past years we're simply not on a big deregulatory trade. we're on a trend where regulations at some point are increasing but i think more important if the trade negotiations are becoming ever more complex, ambiguous by design, that regulators have been afraid of doing regulations simple transparent and readily understandable for each and every one simply because they don't want to face up to the cops questio consequences of the full effects when applied. there is a good story in the "economist" the other week whth were making the point of how the slew you of financial regulations that have emerged in the post-crisis era has created a lot of uncertainty in the entire financial sector and they were quoting one financial regulate it tore who w
regulator who was explaining that we call all the banks in, we line them up and shoot one at them so that the others get the message. >> ouch. >> this and hecato endorsed policy. >> three points. perhaps it's worrisome, but i don't think in the future labor will ever be happy with trade agreements. because i don't think they're meant to really address the problems of workers, which is both unfortunate and i think what we've done over time is try to come up with some fixes. so in the work that celeste and i participated in, we came up with new ideas but they're all at the margins. and not in the end going to chankt the situation.
yet i think the situation must be changed. we need to find ways to empower workers. second point, what i love about ttip and ttp, while the public seems more supportive of trade, but it's also revealed that our -- i don't want to use protectionist, but skeptical. because of all this interest group pressure. yet i'm really hopeful as i see trade agreements evolve over time because i do think that we need to find common ground on spillovers that affect people's privacy and quality of work and the environment t, et cetera. so as the process becomes i think more transparent, i see more people engaged in the debate and i think that that is a good thing. i hope that more people will learn about the economics of the
global economy, economics of inequality, i think having these debates helps to get people thinking about it. that doesn't mean that the pundit class of which i'm probably one isn't involved in could youi skewing the debate in some ways. but i think we have opportunities to make it more the accountable and that's a good thing. the more you have that feedback loop between government and the governed, that's a good thing. and what the united states does affects europeans and vice versa just as what china does affects south korea. end of it. >> and susan wrote a thoughtful essay on our forum about how to address labor concerns. so i encourage you to read those. we're just about out of time and i don't want to be accused of having dominated the questioning. so i'm going to ask if anybody has a question in the audience,
feel free he to raise your handd ask it. this woman here in the middle. please identify yourself and address your question and make it a question, please. >> my name is nia. i was wondering in terms of free mark market, you are saying we have big business and you say you represent also small business. but does u.s. have big cooperati corporation and have small people and didn't really represent all people. so i just wonder how could the chambers of commerce represent all the people in the situation of the world economy. and i just wonder if we can say regulation in global trade, but we cannot even have a good
regulation, a good law in united states that can implement a good law to protect all the people, so how do we handle the global situation in this global trade agreement. >> thank you. i think she was addressing you, march marjorie. >> the u.s. chamber of commerce isn't represent everyone. it works on behalf of business. it happens that among our members we have businesses of all sizes and across all sectors. we have u.s. based, u.s. headquartered company, we have european headquartered companies among our member. we have other nonu.s. head quartered companies along our member. so i'm not sure i understood the point you were making.
s question of how to better promote regulatory practices if we don't ourselves have entirely effective or adequately representative approaches to regulation in this country i think is frankly the subject for a much, much longer conversation. i think it's a fair yir questio but i don't know that we have the opportunity to answer it here. >> i don't think we do. i must say, we are out of time. i got through about half of the questions that i wanted to ask, so i have to do a better job of timing things in the future. but we'll go to a coffee break and i think we will reconvene here at 10:30. please help me in thanking the panel. [ applause. >> [ check all these people out on twitter and read what they have been writing and that might answer some of the questions that you you didn't ask.
cq reporting that leaders are wrapping up a budget deal and is likely to be filed by later tonight. while few details are available, the budget agreement expected to lift discretionary spending caps for defense and nondefense in fiscal 2016 and 2017 offsetting at least a part of the increase through selling off a portion of the strategic petroleum reserve. part of the increase in defense would come through higher funding for the overseas con p
contingency operations fund. a debt limit would be attach to the budget deal giving republicans the opportunity to sell the package as raising the debt limit in exchange for constraints on spending. democrats will insist on a so-called clean bill. that again from cq. and the house returns at 6:30 to take up a measure to reauthorize the export/import bank which will gets the bill to the floor without having to go through committee or house leadership. it if the measure is successful in the house, it still needs approval of the senate. tuesday highway funding legislationt if the measure is in the house, it still needs approval of the senate. tuesday highway funding legislation if the measure is sn the house, it still needs approval of the senate. tuesday highway funding legislationif the measure is su the house, it still needs approval of the senate. tuesday highway funding legislation and wednesday house votes for the next house speaker with a vote you by the full house on thursday. senate a vote on judicial nomination at 5:30. tomorrow work on a cyber security information sharing bill. watch it live on c-span. all persons having business before the honorable supreme
court of the united states are admonished to draw near and give their attention. >> we have not seen a court overturned a law passed by congress on an economic issue like health care at least since loughner. >> the case in loughner, whether a state legislature can take away your life and liberty without due process and the court rules no. i think it's a wonderful decision. >> this week on landmark cases, we look at loughner v. new york. in 1895 an act restricted bakery employees to 10 hours a day or 60 a week. joseph loughner violated that law and was fined $50 and took his case all the way to the supreme court. find out why it's a controversial decision as we can
floor the case with with our guest, randy barnett, professor and author, and paul kens, political science professor at texas state university. landmark cases, live tonight at 9:00 eastern on c-span, c-span3 and c-span radio. subcommittee on space will come to order, please. without objection, the chair is authorized to declare recesses
at any time. welcome to today's hearing entitled deep space exploration, examining the impact of the president's budget. i recognize myself for five minutes for an opening statement. last week was an amazing time for the space community. a major hollywood film about the exploration of mars debuted within days of nasa announcing a significant scientific discovery, liquid water on mars. the coincidence of these two events garnered the public's attention and rightly so. rarely does popular culture and science align in such a fashion. the attention also prompted obvious questions from the public such as, how will discovering water on mars impact future exploration? are we really going to mars? and how and when are we going to get there?
these are all questions that the general public may not have the answers to, but thankfully, nasa does. because of bipartisan direction and investments made by congress, we are well on our way to mars. we're building the most powerful rocket built to launch large payloads with decreased risk to overall misses. we're building the orion capsule so our astronauts can travel into deep space. we're upgrading ground systems. nasa has tested the engines and five segment boosters. they have launched an uncrewed version of orion. the kennedy space center is undergoing upgrades. there's more that needs to be done if the united states plans on launching a mission to mars.
we need to build a habitat module, advanced in space propulsion. we don't have to develop all of this at once. we can develop them incrementally over time. there are potential opportunities for international and commercial partnerships. the first step on the journey to mars, however, begins with the development of sls, orion and the related ground systems. unfortunately, congress' support has not been matched by the administration. in 2010, the president signed the nasa authorization act of 2010 into law, directing nasa to develop the sls and orion systems. this piece of legislation was the product of a democratically controlled house and senate that passed with 185 democrats and 119 republicans. demonstrating overwhelming
bipartisanship. these programs are critical for the journey to mars. and yet since 2010, the administration has attempted to cut their funding each and every year. year. this year alone, the president's budget request contains a cut of $343.5 million for sls and a cut of $104 million for orion. all told, the president's budget has requested nearly half a billion dollars in cuts to these programs this fiscal year. this committee's nasa authorization act for 2016 and 2017 fully rejects these proposed cuts. and both the house and senate appropriations committees have approved bills to do the same. even though congress consistently rejects the administration's proposed cuts year after year, the proposed cuts still have a negative affect on the programs. the annual budget uncertainty
that the administration perpetuates impairs nasa's ability to manage the program efficiently on behalf of the taxpayer. at the same time that the administration has been strangling these programs, the nasa work force has been trying to keep the programs moving by setting up alternative cost and schedule commitments called management agreements. the agreements are separate from the official commitments in the kdpc. while it is promising that nasa is trying to make the best out of a poor situation, having multiple plans could potentially lead to confusion and inefficiencies. fortunately, sls and orion have been successful in spite of the external challenges placed on the programs. this is largely thanks to the supremely professional work force at nasa and the contractors. to all the hard working men and women who are advancing the
development of these programs, please know that your hard work is very much appreciated. your work on these programs will inspire the next generation of explorers, maintain u.s. leadership globally and chart new courses for humanity. thank you for all that you do. you are the best that this nation has to offer. my hope is that folks across the administration will reverse course and begin to support the sls and orion programs and the work force that makes them possible with the funding necessary to continue their success. sls and orion are crucial for deep space exploration. the first steps to mars. we have two missile men before us today who are directly involved in the management of the human exploration program while they were at nasa. i look forward to hearing about how we can all ensure the success of our nation's human exploration program. i now recognize the ranking
member, the gentlewoman from maryland, for an opening statement. >> good morning and thank you, mr. chairman. i want to welcome back our two witnesses today. i say back because both of you have appeared before a subcommittee previously as former leader of nasa's human exploration programs. i appreciate your past public service as well as your willingness to testify here today. mr. chairman, last december millions of people in america and around the world tasted the feature when nasa conducted the exploration flight test eft1 in which the orion vehicle traveled farther into space than any vehicle since the apollo era. that future is an exciting one that includes sending humans to the surface of mars. mars is the goal that we established in our bipartisan house passed, overwhelmingly passed act of 2015. we sent it over to the senate.
it is the consensus goal for human space exploration of a distinguished national academies panel that recently examined u.s. human space exploration. so it's quite fitting, mr. chairman, that we follow up on our subcommittee's review of the space launch system and orion crew vehicle programs held last december, just after the ft-1 flight test, and see where the programs stand now. by any measure, the progress on sls and orion is visible and tangible. nasa and its contractors deserve credit for the many accomplishments achieved to date. tests of the solid rocket booster engines and the rs-25 main engine are reviving and modernizing the propulsion activities that brought us through the successful shuttle era. elements of the crew vehicle that return astronauts to space are being fabricated even as i peek. just a few weeks ago, the orion program was approved to
transition from formulation into development. a major milestone known as key decision point c, or kdpc. this hearing should provide an opportunity to discuss the outcomes of the orion kdcp review and clarify any questions, including the perception by some of a two-year "slip" to the first crude flight test known as exploration mission 2, or em-2. however, i would note that the members of the panel were actually not involved in the recent owe ryan kdcp review. only nasa can address questions regarding the kdbc -- i can't even say that. kdpc milestone discuss the breadth of the accomplishments achieved to today and challenges going forward. only nasa can do that. that's why, mr. chairman, i'm quite puzzled that nasa was not initially invited to testify and why i extended an invitation to
the soesh associate administrator of nasa's human exploration and operations missions director to serve as a witness. unfortunately, the association -- associated administrators international travel schedule precluded his ability to appear this morning. so i hope, mr. chairman, that we will give nasa the opportunity in another hearing to provide the details on the sls and orion programs that this subcommittee needs to hear. the fact is that ensuring that sls and orion make maximum progress in this environment of budgetary uncertainty is a job for both the administration and for congress. just as a side note, i would say the budget caps known as the sequester give rise to the inability for us to get a multi-year bipartisan authorization and appropriation to the president's desk as the evidence of our support for sls and orion and for the journey to mars.
we have to lift those budget caps to accomplish the goals that we have set out for the agency and for its contractors. ensuring that sls and orion make maximum progress in this environment of budget uncertainty is a job for this administration and for congress. as the national academy's report reminds us, achieving the goals for sending humans to deep space requires a joint commitment on the part of congress and on the part of the administration. mars is truly a worthy -- a goal that's worthy of this great nation. i look forward to working with you, mr. chairman, to enable nasa's continued progress toward that goal. and before i yield, i want to welcome an intern for a month in my office who is at the madera school. we share interns with them every year. two of them here today are very interested in space. so we welcome them. thank you, mr. chairman. i yield back the balance of my time.
>> thank you. i now recognize the chairman of the full committee, the gentlemen from texas, mr. smith. >> thank you, mr. chairman. at a fundamental level, space exploration, the mission of nasa, is about inspiration. this inspiration fuels our desire to push the boundaries of what is possible and to reach beyond our own planet. the american people are fascinated with space exploration. last week the discovery that water sometimes flows on mars' surface made headlines across the world. the latest space film sparked questions about when nasa will send astronauts to mars. today's hearing seeks to answer those questions and examine the effect of the president's budget on our exploration programs. in fiscal year 2016 budget proposal, the obama administration proposed a cut of over $440 million from the programs that will take us to mars. the space launch system and
orion crew vehicle. this isn't new. the president has tried to cut sls and owe ryan every year since he took office. but there should be no misunderstanding, there is bipartisan support within this committee restored the proposed cuts in our authorization bill. the house and senate appropriations committees restored these funds and supported sls and orion at the levels necessary to keep their development on track. yet the administration continues to try to strangle these programs. nasa recently announced that the first crewed mission for sls and orion was delayed by two years because the administration would not allow nasa to budget for the programs. the administration regularly cuts sls and orion, and congress continues to restore its cuts. the budget instability caused by the administration makes it hard for nasa to plan and execute these critical programs.
the fact that nasa can still maintain these earlier dates in the face of administration opposition is a testament to the ingenuity, resolve and repressionlism of the nasa workforce. the obama administration cannot continue to claim that it prioritizes mars exploration if it refuses to prioritize and support the programs that will get us there. the sls and orion programs represent what is most impressive about the american spirit, our desire to explore. the technologies that are developed for these programs exemplify our greatest breakthroughs and demonstrate american ingenuity. the apollo program demonstrated we could reach the moon. orion and sls will rekindle the american spirit of discovery and advanced humanity farther in space than ever before. congress will continue to ensure that these national priorities receive the funding t