tv Panelists Discuss NAFTA Negotiations CSPAN August 15, 2017 4:35pm-6:37pm EDT
scientist and the chief scientist at goddard. at noon we join nasa tv as they provide live views of the eclipse shadow passing over north america. at 4:00 p.m. eastern, fuhrer reaction to this rare solar eclipse over the continental united states. live all day coverage of the solar eclipse on monday starting at 7:00 a.m. eastern on c-span and c-span.org. listen live on the free c-span radio app. a look at the upcoming renegotiation talks are the north american free trade agreement those at -- known as nasa set to begin tomorrow. expressedde officials their concern whether a final agreement could be reached and discussed the possibility that p could could pull out if it does not benefit the united states. from the wilson center, this is
two hours. >> good morning. will you come down and take a seat here. if you're looking for a place, we are willing to sell these place at an inflated price this one. there are scalpers outside. do not use them. just give the money directly to me. ok. welcome to the wilson center. they can for being here. when we talked about doing an event in august, a little voice inside my head said you are crazy, washington, no one will come. they said maybe the nafta is important enough, maybe our existential russians will questions will-- attract an audience, and then we came up on bright idea of asking you to go's chief negotiator to participate. and this is going to happen. it is extraordinary. ken said, no, i can
do it. it was not intentional. but we got a panel for you nonetheless. let me run through quickly from left to right, as i see it, fred sten, at the peterson institute for international economics. thank you for being here with us. he was great to provide a of the mexican perspectives here. that will be very welcome. senzweig, whoro previously served at the mexican ministry of the economy. mora, thede la founder of lmn consulting, and has held multiple posts within the mexican government. and my colleague, deputy director, chris wilson, who is
known to you for his work on have to wear he was the mexican economic affairs and on border affairs. and i am dunkin would -- duncan wood. very nice to see you. there has been an endorsement of anticipation. i first page of it says it is here. it is a strange moment, but at this time last year here at the wilson center we were holding a series of conversations about, the newder administration, how can we improve nasa? -- nafta? we were talking about modernizing nafta on understanding that a different person would be in the white house, because that was what everybody assumed. thewe were all saying, modernization of nafta is desperately needed, and how can we possibly do that??
opportunity to do it. there was a nice piece published this morning in canada that says this is a great opportunity to secure north america's competitiveness. this comes with an enormous amount of anxiety, anxiety about whether or not this can be a successful negotiation, anxiety about whether the u.s. executive branch will stick with it, anxiety about questions of timing and political change. we also see this is an enormously context negotiation, and many in this room has sent over the past few months, how can we possibly get this done in a six-month period, which seem to be the preferred time period on the part of the negotiators, especially from the mexican and the american side? the canadians have a different perspective. my colleague, i'm grateful to
the candidate institute for providing support for us on these issues. the timing question is one of the things that i think we may run up against the question of do we do it fast, or do we do it right? and that could be a very important choice, and i'm looking forward to discussing that with our panel. we have a very encouraging phenomenon of convergence between the three sides. we go back to january or to november of last year, there was an enormous amount of concerned tot we could get to a point at least we were in the same book, if even not on the same page with regards to international trade negotiation's. we haveeems as if got there, which is encouraging. and all the problems and challenges and obstacles, many of which are known, but there are a number that are unknown, and we do not know how things are really going to turn out if these negotiations become
public, if we get a great deal n into the negotiations, if certain things are tweeted, then we get a reaction from the u.s. president, which might draw a reaction from the mexican president, etc., etc. what we can say is now that it is here, now that we are here, we have come a long way in six months come and i think that is a very encouraging part of the story. i am talking of coming a long way. it is worth remembering how far nasa wass come since the gary cheated. i know this is a story you have heard a million times, but just remind us, before the nafta, was very common in mexico for everyday goods to have price controls on them, for committees to meet on a regular raises to set the prices of basic commodities. economy that was
run by state-run enterprises, not open to direct investment. the plate -- the changes that took place during the 1980's because of the latin american debt crisis are then locked in by the nafta. those are things which we take for granted these days. it is an extremely journey. now, -- extraordinary journey. is to remember their reforms that have taken place in mexico since 2012 are trying to build upon the success of nafta. now we have the opportunity with nafta renegotiations to lock in some of those reforms again through an international treaty, international negotiation. so without any further a duke from me, i would like to ask our panelists to give opening comments, and i will begin with luz and the floor is yours. i know you have got repaired cap panelists -- comments.
-- prepared comments. i want you to start with some of the redline's you see from the mexican and u.s. point of view. then we will come to a conversation afterwards about questions of convergence and timing and complexity. ms. mora: i would like to thank you for inviting me. and thank you for thinking about me. i know was a mexico scholar a few years ago, and i had a fantastic experience in this place, so it is a pleasure to be back with you. really feel privileged to be able to be part of this half the discussion. i think the nafta discussion is always welcome, and is is very timely given what it represents or a countries in terms of trade, in terms of job creation,
integration, also in terms of the place of the regions we represent in the global economy. it is even more timely when we think about the fact that we will see the beginning of a negotiation process that i hope will allow us to move forward towards deeper integration and a whatr understanding of north america means for our freak -- three countries. have an been -- having been part of the mexican-american groups that took part of the negotiations -- thank you for being here with us. we were running around with papers trying to support the , 25 years ago. i really have to say that i would never ever, ever have expected to see a proposition on renegotiatee to
nafta on the proposition to have to address the question of manufacturing jobs lost in the u.s. i would never have expected that side thate the u.s. would have been the source of distrust and questioning of nafta like we have been presented this year. i have to say it still puzzles both see how to address questions, the deficits and the job? through a trade negotiation and through half that. question that it will be a daunting task for canada and for mexico to sit down with the u.s. when it seems that president trump views this opportunity as payback time and also has outlined an agenda that is clearly tainted with protectionist and nationalist perspectives. duncan, as
mentioned, that the has yielded amazing results. nafta has delivered economic results beyond what any one of us expected at that time. optimisticmost expectations. nafta created a $19 treat you -- trillion regional market. every day we tried more than $2.5 billion at a time when -- billion dollars. when nafta was negotiated, mexico exports $10 billion a month. -- exports are more than $1.3 billion every day. in the last few years, trade between the three partners went 1993 to0 billion in more than $1.2 trillion last year. 50% of total stock in mexico and
more than $200 billion, which revisits more than 20% of mexico's gdp. i would like to center my remarks on five quick points. the first one is that in this negotiation process, mexico is not ready to be considered anything else but a u.s. and a trading partner. at the table, mexico and canada are equal partners with equal rights and equal obligations. why after 22 years of nafta, a's -- mexico is the second-largest u.s. export market only after candidate. for every dollar the u.s. sells abroad, 16 cents are bought by mexican consumers. today the united states trades more in goods and services with mexico and canada than to does with japan, south korea, brazil,
russia, india, and china all together. dexico is also the u.s.' secon source of imports, only after china. 40% of totalor imports from north. production of automobiles electronics, machinery, and appliances have greatly benefited from production sharing from the three countries, as nafta has enabled reduced costs. my second point is that mexico should look for more and not for less now. nafta early 1990's, triggered a structural reform in mexico. since its implementation, nafta has been a force for change and a transformation of mexico's economic structures and institutions. nafta was a really transformational experience for
mexico. it transformed the mexican economy and opened the door to a young democracy, after 70 years of a one-party role. nafta has also been one of mexico's most important engines of economic growth, even the relevance that international trade and foreign investment represent for our country. i can tell you have to is embedded in mexico's everyday life. mexico is not ready to reverse the progress we have made in the last 23 years under the nasa. after created a wide consensus in mexico that an open economy is the way to go, that we need more, not less competition and that we want to be global players. what mexico should look for in this negotiation is waste to improve the agreement. there is plenty of room for improvement, and there is plenty of room for full implementation. just take a quick glance at the history of the european
integration, and we will know that there -- as long as there is a common leadership and vision, it will lead to regional integration. i can tell you in mexico there is no one single party or leader at think that it could be a good policy option to walk out of the nafta or that mexico sure it's fun to transgressions -- mexico should respond to transgressions by building a fortress. a recent survey conducted shows that close to 50% of mexicans have a positive opinion of nafta and that trade relationship with the u.s. and only 60% have a negative one. in a survey, from march of this year, 73% of mexicans surveyed rid of nafta.ing this does not mean that nafta has not yielded winners and losers. in mexico, it does mean that the overall the country has gone
through a deep transformation that has opened new opportunities in a variety of affairs. mexico today is in a very strong position to push this negotiation for the establishment of 21st century reform. not thetury roles are way, and reversing those rules are not an option. the structural reforms touch upon key sectors. education, telecommunications, energy, and the financial sector. those reforms have placed mexico in a better position to conjure it to a stronger and more competitive north america. this set of reforms in addition allow participation accident to negotiate new issue areas such as energy, services,
e-commerce, or telecommunications. my third point is nafta 2.0 could become the latest structural reform in mexico that we need. why do i say this? in mexico, that has made it more evident that huge disparities and inequalities that have characterized mexican development for centuries. for mexico, this is an ideal opportunity to democratize 2.0 willnd a nafta have to lead to a more inclusive economy for more sectors and regions take part in localization. today more than half of exports are done by six states on the northern border. areof total exports represented by those sectors. out of 5 million economic interest in mexico account for half of our total exports. will lead mexico to
create a better business environment. the opportunity to reduce red tape for international trade and also for business in general. my fourth point is that nafta has to stop being a negative term. nafta has to be rethought, restated, and revalued. the north america idea was conceived as a leader of the world economy. maybe one of the reasons we are renegotiating nafta today is that we never really took the time or the effort to socialize nafta or to explain the value of north america and how it benefits each one of us. today probably one of our biggest challenges is how to restore the north american idea as a truly regional integration scheme where the three countries are better off with it than without it.
however, we really need to rethink thexa -- nafta, had repositioned nafta, not as a result of a defensive agenda. nafta and north america urgently need a common vision from the three countries that shows that together we not only add, but multiply gains in a highly competitivend economy. my fifth and last point relates to what we've learned in more than two decades of that stuff. nafta has offered the region a clear set of rules and disciplines that have created a transparent and predictable business environment. nafta locked in a mexican model openness,c liberalization, and competition. i'll also want to underscore that nafta sees this mechanism, ary, thes vision
mechanism for state investors, investor state mechanisms. thiser 20 states mechanism. and chapter 19 on trade have been without a question one of nafta's most important pillars for effective implementation. if region has a lot to lose the u.s. walks out of the nasa. effective,fta became north america accounted for more than 20% of world trade. today, we have lost room to the rest of the world. today, after it represents close to 18% of world trade. the agreement needs to offer the kind of gross that -- growth that is her heart by the 21st century economy, where global sharing is the neighborhood -- name of the game. mexico has a lot to lose from the u.s. leaving agreement.
represent 30% of mexico's gdp. u.s. investment represents 40% of mexico's fdi. jobs, industrial production, services, tourism, and many other activities in the region have a lot to lose if we temper with nafta. the vast majority of businesses realize how important it is for them and have made specific proposals from where to modernize and improve nafta. for many in the u.s., lowest possible denomination or expectation of nafta's renegotiation is whatever a result it will do no harm. if the u.s. decides to walk out of the nafta, which we hope it will not happen, it will certainly affect regional value chains, production, trade, investment, jobs, and economic growth.
however, the agreement will still remain in place for trade between canada and mexico. if the result of this negotiation shows we can overcome this very delegate situation, the three countries will still have to develop a regional strategy to safeguard nafta and north american integration. -- and, former u.s. general david for trieste issued a report that makes the case for north america. they argued that the u.s. needs vis of nafta a from an afterthought to a central u.s. policy. the question, how do we revitalize nafta in order to strengthen the competitive position of the region and integrate those left behind into the benefits of globalization? nafta countries need to develop a new regional strategies and such strategy needs to consider a few key element. the integration of the north
american market is the way to boost the region's competitiveness, job creation, is as opportunities, and innovation. we need to reconcile integration and security. has been1, that there torn between the driving force and the breaking force to build a fortress to guarantee safe and secure borders. infrastructure needs to be modernized and more research is needed to be allocated. door to door operation should be facilitated. bonus.has a democratic we have a young population. our average age is 26. north america increasingly resources.ly is keytitive workforce to maintaining a dynamic region. so we need to think about the
training and development of human resources to meet the needs for qualified personnel in areas that did not exist 20 years here. america'snorth integration will be incomplete until we find a way to sort and in great labor markets. this is something that could take generations given the huge income gap existing between mexico and its two partners to the north. however, there are some steps that can be taken in this regard and are already part of the nafta. robert -- in 2013 suggest to improve the provisions on professional services in nafta to facilitate and expurgate obtaining visas for professionals, offer them riods, and create an expanded mexican-american worker program. thell refer to my remarks,
new rules that will result from a nafta 2.0 may become the new goldenr injured -- standard of international trade. in the early 1990's, the disciplines that we negotiated in the nafta became the state-of-the-art trade rules in areas such as trading agriculture, trade in services, investment, and intellectual property. last where new rules were developed and later set out on the negotiation agenda on the wto. the negotiations that start tomorrow will be closely followed by the rest of the world. offer a very clear idea of the direction that global trade may take in the future. we have a responsibility.
nafta and mexico needs a strong nafta. exit will face presidential onctions next john june 2 -- june 2. we have been able to pass structural results that will yield results in the long-term. however transparency, the role of rule of law, crime are a serious challenge that are acting against mexico's competitiveness. if mexico will continue to a stronger region, we need to find long-term solutions. -- nafta mayco have triggeredexpo's transition -- triggered mexico's transition to democracy. boosting north american integration requires political leadership, and requires a shared vision. returning credibility and legitimacy to the process may prove to be the biggest challenge, we need to be up to
it. thank you. >> also emphasizing the gains that have been secured after two decades of nafta. i would like to send it to francisco. >> thank you. i want to thank that wilson after the -- many months of great uncertainty , finally the negotiations will start tomorrow. becauseeen a bumpy road from the mexican point of view, there was a great uncertainty that the u.s.ce will be sending to congress.
having cleared that, i will say that there are some areas of opportunities where we believe we have common ground. it is important to remember that consideredt mexico to update nafta was the tpp. it is important to her member that nafta has been maybe 10 years. i remember went former president obama was running for president raising the nafta issue. maybe we didn't do our hard work back then and haven't done it we are now sitting at
the table to renegotiate nafta. we have some important issues to share. we have a border that is over 3000 kilometers. whereo have some issues it is in the best interest of the two countries to try to modernize. months, there was a discussion of it was going to be under an umbrella that would consider three parties. whether we would negotiate with canada. when we talk about security, border issues, or infrastructure. priorities, i
would say that is both administrations in the u.s. and mexico is willing to complete this process by early next year, or elements that should try to consider is the tpp initiative. president trump decided to withdraw. there is a lot of language that we can utilize. that trade negotiations do not move as --hnology and e-commerce,
i thought that we were in the middle of the second one was tpp . tpp is noteems like moving anywhere, at least with the u.s. but mexico is trying to push hard to communicate. lending u.s. is sadly -- sadly losing leadership in thee negotiations because pacific alliance is working with new zealand, australia, singapore, and canada. considering that the u.s. is our most important trading partner, for mexico it is important to have a strong u.s. economy performance, but also to have a u.s. that has economic integration with mexico and canada.
having said that, i will say that where the administration for mexico may see an is smes.ty they do not participate as a part of international trade. one of the main priorities .hould be to introduce them or bring them on board the second -- introduce them or bring on board. the second is e-commerce. nafta did not consider any provisions for that back then, the internet did not exist. we are talking about ip are issues. the other opportunities to
all theand incorporate energy reforms, labor, education . many things have happened in mexico since the last 25 years. mexico is no longer that country that was afraid to negotiate with the u.s. strongeve we have a trading team of negotiators. i think we have a great and solid minister. i do believe that is the three countries are able to focal eyes the efforts in the few issues where we might not have that convergence, we will be able to deliver by the end of the year, early next year.
wages is not an issue that should be considered even as a possibility to negotiate. in the case of mexico, we have at least two or three labor reforms. our labor workd over the last few years. the latest one was in 2012, and there is one on the way. i think should be out of any kind of discussions. there should be a redline. , the issue related to trade deficit, i would say this is a kind of strange issue the waythis is like
that trade was seen 34 years ago. remember when i used to be a senior official at the mexican government that i was trying to to a very important person. i wasn't able to explain it in saidppropriate way, so i it is the new narrative, ok? deficit,d, i think the as long as we don't talk about trade management, is something we can see what is the u.s. proposal, but we are not able to consider any trade management in any way. , most of theses difficult objectives that were
are somehow with the message that they want to bring mexican to thed u.s. they want to increase from $50 in mexico to $800. they also want to increase the original constant in the u.s. in order to revert the deficit. finally, the chapter 19, i think that is something that is very important for the canadians as most of you realize, but i think that there are many provisions that tpp could also be considered in order to robust this.
when nafta was negotiated, this was the best approach that was possible to negotiate back then. maybe there are some new provisions or elements that can be added to nafta to point out -- nafta 2.0. thank you. i'm not sure it is a reaction to them. you asked me to present a u.s. point of view. it is obviously a u.s. point of view. it certainly is not the administration's point of view, and he will see i have a few nasty things to say about the administration's interview best administration's point of view -- administration's point of view. my u.s.o recognize
colleague who was the chief u.s. negotiator of nafta, the honorable carl hill, who is our ustr at the time. if only we were so lucky now. carl is here that we are great -- carla is here, and we are graced by her appearance. i want to suggest three basic points about the upcoming negotiations. i start by sharing the view about the benefits of nafta, how much has been gained, and the positive opportunities that exist. aheadtrue that there lies a real opportunity to strengthen ,orth america competitiveness improve the performance of all of our economies, improve our ability to compete in a very tough world of competition, so i'm not going to repeat or dwell on any of that. i endorse all that has been said. some of you know we have published a great deal on it.
laid outon institute many of the topics being introduced. what i want to do is suggest three areas that need to be focused on very intensely as these negotiations proceed. the first is failure is an option. we don't like to say that. we don't like to think about it, but it is true. the president proudly told us just four months ago he had decided to withdraw. he got talked out of it by a combination of the leaders of other countries and many americans who dislike the idea of withdrawing, but he has been very close to it. agreed toon negotiate, i have the right to pull out if i don't get what i want. so failure is an option. that means it is critically important for the other
--ntries in the negotiation and here we focus obviously on mexico -- to keep foremost in thatbody's mind how costly would be to the united states. why do i say failure is an option? basically because the united states under the current administration goes into the negotiation with two very false premises on which they based their approach. by first, said memorably trump in the election, is that nafta was the greatest disaster ever negotiated. course, is patently false, and correct, based on no including by them -- that has ever been presented by anybody at any time. it is a false premise. we have to be clear that the world knows that. thendly, as francisco said,
explicit negotiating objective right at the top of the ustr submission of a month ago is to use a negotiation to reduce the u.s. trade deficit. as francisco said, that is rather strange. behas never been, nor can it , intellectually the focus of a trade agreement. trade imbalances are macro problems. you have to respond in macro ways. trade policy, explicitly trade agreements, are not a feasible way to reduce trade imbalances, in particular addressing isateral trade imbalances totally impossible, because if you did succeed somehow in reducing it, the imbalance would just shift elsewhere. in the case of nafta, this intellectually absurd proposition is in addition becauselly absurd
mexico is a bigger deficit country that the united states. mexico's global current account deficit is around or a little beyond 3% of its gdp, bigger than that of the united states. mexico is not a surplus country like you could argue with china or germany or japan or korea. it is a deficit country itself. so the united states is asking a deficit country to further increase its deficit to reduce our deficit, which is even bigger. in short, it just doesn't pass the smell test in practical terms, even if you don't believe the conceptual underpinning. the point is the u.s. goes into ,he negotiation with two false essentially absurd, premises. that, to put it mildly, makes for a tough negotiation. but it does mean -- again echoing the president's mindset as best we can ascertain it -- that if he is not satisfied that
his absurd premises are somehow satisfied and met to his satisfaction, he will pull out. that is why i say failure is an option. why it is so critical for everybody around the world -- certainly everybody in the united states -- but particularly the negotiation partners, especially mexico, to just keep reminding people gently, politely, diplomatically, but forcefully and clearly, that if the u.s. were to withdraw, the cost to the united states would be huge. we know that the terrace increases -- the tariff increases from the abolition of nafta would be twice as high. but since mexico has not bound wto, mexicoin the
could actually go up five times as much as the united states. i don't think it would be untoward for mexico to keep that reminder in the minds of the u.s. negotiators and officials as the negotiation proceeds. of course, there are all sorts of other nasty things that could be done if not the fails -- is nafta fails. the fact that the u.s. would be a big loser itself from the failure has got to be a big deterrent to the failure is that point is kept clearly in mind. secondly, what could be a possible way to reconcile these premises come over the u.s. goes in. , athere some way to satisfy least in some sense, the u.s. objective without doing violence to sensible principles in
economics, trade policies, relations between the countries, and north america competitiveness as a whole? negotiation, -- any trade negotiation has to be based on the principle of reciprocity. it is essential in political and economic terms. reciprocity does have two meanings. there is level reciprocity and what we call marginal reciprocity. beginal reciprocity tends to the normal mo of trade negotiations. that means we each reduce our barriers by similar percentages, by whatevertariffs it may be, and that is marginal reciprocity. however, there is a concept with the -- concept which the tr ump people have said they want to pursue, which is level reciprocity.
that means if one party starts with higher barriers, then that party is expected to cut more to get down to an equivalent level at the end of the day. marginal reciprocity has been the typical mo, but one could argue for level reciprocity. i think a country could respectably go home and say, we got a reciprocal deal on that basis. in the case of the nafta renegotiation, there is a practical possibility. terrorists are basically zero ariffs te -- t are basically zero. it is conceivable that following
good trade and economic apples and pursuing its own national interest -- which of course is based on getting cheaper imports and more competitive inputs for your industry -- mexico could conceivably reduce some of its arifferrace -- non-t barriers, that would move us towards level reciprocity, which the trump administration could claim as a great victory and say we got a good deal, and therefore back off some of its more extreme views. that, i think, might be a way out is the negotiators can find the specific barriers that would be susceptible to reduction. our two mexican speakers have noted that since nafta was originated, mexico has conducted a number of reforms in key areas
, and some of those i think probably are susceptible to reduction of non-tariff measures at the border which would not be at political cost to the mexican government or future mexican politicians, but would help serve the objectives of reducing disparities between the two countries, and by the by , could be argued might have a positive effect in reducing the u.s. trade deficit. it certainly would expand u.s. trade exports, and therefore would be a good thing. maybe there are some ways, wiggle room within otherwise possibly not so convergent goals, and origin achieve -- in order to achieve a successful outcome. the other point is to send we everybody that what happens in the nafta negotiations will be very importantly affected by what is happening in other trade
negotiations pursued both by the nafta partners and the rest of the world, as well. us that theminded rest of the world is watching the nafta negotiation to see possible models and guidelines to the future, but the converse is also true. the nafta negotiators have to be watching what is going on in the rest of the world. for example, the u.s. is about to launch in negotiation with korea. it is not called a renegotiation, but de facto, some of the things the u.s. is seeking would amount to a renegotiation. case in point is the currency chapter. highnited states will have on his priority list in the korean renegotiation a currency chapter because, if you read the last several treasury semiannual
reports on foreign exchange and currency regulation and all that, you will find that korea is the number one country in the crosshairs of the u.s. treasury in the past administration and this administration in respect to the risk of currency administration. they have not been labeled a admin -- a manipulator, but that issue will be very high on the u.s. agenda in the korea talks. talksore, and the nafta the administration is going to want a currency chapter or provision. views canada or mexico as a currency manipulator, but rather as a precedent that they could be in aed in korea add revised tpp at some point down the road with other past and potentially future manipulators, because the currency issue is very important economically and is a huge local issue in the
begress that has to satisfied if any of these things are going to make it to the congress eventually and into fruition. that is just one example. there will be other issue areas where what goes on elsewhere, like in the ongoing china talks, will affect what goes on in nafta both in terms of its specifics and in terms of its overall policy approach. however, it is not only the u.s. is doing elsewhere that counts. it is what canada and mexico are doing elsewhere that counts, and in a big way. i want to tip my hat to mexico as perhaps now the world leader in negotiating trade liberalizing agreements with other countries. i think mexico a couple of years ago tasked chilly -- tasked chile in terms of having more ft
a's than anyone else. mexico is the leader and opening of its markets, diversifying its trade, building its network of business and trade contacts around the world, and is continuing to negotiate now with several other countries. why is that important for nafta? it goes back to my first point. if the nafta talks were to fail, not only with the u.s. face an increase in mexico's barriers against it, but would face sharply increased degrees of preference for other countries in the mexican market against the united states because of all of mexico's other agreements. the u.s. would take a double loss. the fact that mexico has been wise enough to do all these other deals and more deals, would add to that result. my final unsolicited advice to
my friends in mexico is keep it up. keep doing all those other deals. the japanese have this wonderful term, foreign pressure on a country to do the right things that it up to do anyway. fta, that is mexico's vis-a-vis the united states. mexico and canada should work with japan and others to keep the tpp alive. do a tpp 11. that's more of the united states. now you have mexico korea free trade. all these things that would adversely affect the united states. there a concept called competitive liberalization, which says that as countries liberalized towards each other, they generate huge incentives for other countries to emulate or join the
party or otherwise protect themselves against having new preferences disadvantage them. that applies here. people generally thought of it as the u.s. putting pressure on areas around the world, but it goes the other way as well. with the tpp, with the pacific alliance, with those bilateral being negotiated, keep all that going because that inevitably has a very important effect on thinking in the united states, hopefully in the white house, certainly in the business communities and labor community, about what happens if we don't maintain and strengthen the trade agreements we have. a few thoughts. the best outcome, obviously, is a traditional trade type negotiation that will strengthen , whichican economy happened from the original nafta.
if the united states and trump really want to strengthen the u.s. trade allen's toward mexico, there is only one obvious way to do it. strengthen the mexican economy. if it grows faster, able import more. it has a stronger peso, the u.s. will be more priced competitively. the's the way to achieve objectives, not monkeying around with wolves of origins and various minutia. it's to go to the big stuff, which is a proven success in the past and hopefully could be together. >> thank you, fred. last but not least, want to turn anyhris, impart to fill in gaps but give your perspective on where you see these talks going. everyone for the great presentations. i will try to keep it simple and i want to take a simpler view of mexican strategy heading into negotiations.
some of the words we have heard to describe it are strange, flawed, maybe conflicting. if you look at the u.s. of actives, you have on the one hand, a series of objectives that are trade liberalizing, trade expanding and on the other hand, you have a series of objectives that are protectionist, perhaps. how does the mexican strategy and how to the mexican interest run into that conflicted perspective right now? the starting point for me is a simple one. mexico spends -- sends 80% of its exports to the united states and depends on market access to the united states in a very specific way. that as pretty balanced a proportion of the economy that depends on trade and a bilateral trading relationship, mexico depends more. that means when mexico started
to hear during the campaign, when we had candidates selected, that it's working access was at risk, mexico started to think seriously about how it would manage the prospect and the threats to withdraw from nafta. in a sense, the trump administration has been pretty consistent in the language they put forward. .hey will seek to renegotiate early on it was a little different, but early on, we had that language. the basic response and we are starting to hear it from mexico in terms of strategy is that mexico had a concern that just in economic negotiation and trade negotiation, mexico may not have the leverage it needs outcome, an acceptable so it started to talk about things like a need to have a comprehensive dialogue and a
discussion about the future of the entire relationship. we've heard explicitly what they mean by that which is to say mexico feels it offers the united states quite a bit in terms of security cooperation, ensuring there's never a terrorist attack crossing the mexican border and has done an awful lot in terms of dealing with central americans moving into the united dates. 2015, mexico deported more central american migrants than the united states did, about 50-50 in terms of the effort being done. issues in that area are complex, but you better believe there is a strong reason mexico is doing that because it's the u.s. has asked for mexico's assistance with that issue. mexico says we will put everything on the table so we
can get to an outcome that is acceptable. this represents a d compartmentalization. we have heard for decades, seeing that it was an important and complex relationship across a broad number of u.s. agencies, it's probably not surpassed by agencies represented anywhere because there are so many diverse agencies in mexico. tocompartmentalized those make sure a conflict on one front around security operations and drug trafficking so it would not get in the way of important relationships further down the line. mexico is saying this is such a top tier national interest that we are going to do away with it. we are willing to come if necessary, do away with that process that has insured the relationship as a whole would move forward despite small
conflicts which are natural and always going to occur in a complex relationship. at ins where mexico is terms of how to deal with this at a very basic level. this comes through mexico stating clearly that market access is a fundamental redline. mean different things across different areas but the fundamental redline is market access. doing can deal with it by that, it might be something you can tackle. you might see conflict based on this principle of a redline being market access. rules of origin would be another. thatnk it's fairly clear they would be talking about strengthening regional content requirement. we heard early on talk of putting u.s. content requirement
and that would clearly be trade restrictive and crossing a redline. thing level in the auto industry could be understood to be trade restricting because of the current supply chains that exist that rely on a certain percentage coming through the regional production chain. another thing would be eliminating the nafta safeguard exclusion. right now, within nafta, there are limitations on how the safeguards could be used to prevent a sort of flood of imports from impacting negatively a u.s. industry. mexico taking the position that what the united states is opposing is locking market access. eliminating chapter 19, the ability to challenge the mystic rulings on anti-dumping, to
create a panel to review them and these last two, the elimination of the safeguard exclusion is less a direct limitation on market access than -- this would be the fear, that it would be giving the united states more flexibility to express its protectionist and policies. in that sense, limiting market access. if mexico feels market access is being threatened, they are heading down the road of things being more restrictive rather than more free, it's going to seek to use its leverage both within the negotiations, the fact that mexico can if we did call back on wto rules -- nafta has greater flex ability to raise tariffs and its leverage within the economic sphere, within the trade seer. mexico may feel the need to go beyond that and include the rest
of the u.s.-mexico relationship in the environment around the negotiations. that could work out just fine given everything they have there, but it is a risky gambit because the reason we compartmentalized was to prevent the u.s. mexico relationship being tanked by single issue. you could enter into a spiral of escalation were multiple issues are put on the table and we could all end up losing quite a bit, not just in the economic sphere but in terms of benefits the united states gets out of its relationship with mexico and we have to be clear as we enter into these negotiations. mexico so far has responded to some tough rhetoric coming out of the united dates very mildly, very diplomatically, very carefully.
has been ton maintain dialogue, to maintain the possibility of a discussion based on a win/win loss of the, but the point i want to make is very simple. enters into election season, i would say at the end of this year or beginning of next year is when that serves to really ramp up, the willingness of the ruling party, including the president himself to accept diplomaticke the line in responding to this rhetoric will be declining quite it. need, the domestic political need to respond in tough terms in nationalistic terms will increase quite a bit, so that is a place we need to watch during the process of negotiations for a turning point where we could enter a more dangerous time and i think we just have to be more realistic.
the likelihood of reaching an agreement i the end of the year and having all this being settled is very small because it's a complex negotiation. each side, just as we heard from our mexican colleagues today, seeking improvements to the agreement, naturally and correctly, that includes negotiating complex tasks and hopefully being innovative with the agreement. that will take time to do to the extent you can take tpp and move from complex topics that are out there that will need to be tackled. i think i have resented a somewhat room picture of the risks that might be out there in terms of a clash between objectives and interest, but i want to close out saying that despite all of that, i'm rather reach aic we can moderate update to the agreement that's acceptable to each side
and i want to quickly say why despite everything i just said i believe that. it's because u.s., mexican and canadian interests are fundamentally quite well aligned. real economicl, a level, our interests are quite well aligned and that does filter into the politics of the situation. we have a massive trading relationship and that means by arenition that there thousands of companies that depend on trade with our nafta partners and there are 10 million jobs in the united states that depend on trade with canada and mexico. told in this huge stakeholder group that depends on nafta that has over the years come to depend deeper and deeper on nafta that are there pushing in the process through all sorts of different vehicles to war to keep the united states on track toward a successful
renegotiation. it's also a deep relationship that has developed, especially since nafta was put in place that has bound together our competitiveness and made it rather than compete against one another, a much more correct way to understand it is that we compete together as a block on , productiontage sharing across the region. within a huge level north america, huge level of supply chain integration and a regional manufacturing plot form in which goods move back and forth during the course of reduction. that means half of u.s. mexico trade is an input that will feed industry on the other side of the border. we each send over $100 billion to factories and producers on the other side of the border. that means the producers at
those plans depend on the supply chains and there would be a huge disruption if that was broken up. if the united states were to impose import taxes were border taxes of any sort on mexico or canada, they are indirectly doing that to our exporters. tosend $100 billion exports mexico each year. you better believe those imports are coming back to the united states. if we tax them, it doesn't matter which direction we are moving. you are imposing a break on that this isnd it just means a negotiation to an existing trade agreement. it's not getting rid of the tpp which was potential future economic activity. this is potentially fair talking about protectionist measures, cutting into the paycheck,
cutting into the business model of companies that are already out there. it is difficult to dial that back without having significant reactions and without the risk and clashes i see coming, we will have to find a way to a reasonable outcome. thank you very much. for excellent presentations here. i would like to pick up on two points. one is on the timing of these negotiations. i tried to provoke you at the beginning, so i'm going to persist and hopefully you will come with some ideas about how important that timing is. chris mentioned the point about integrated production and there was a lovely quote the other day where he talked about the fact that in north america, we might think if this was eggs being
cooked that there are yolks and there are whites. togetherll been mixed and you can't separate them anymore. i think this is a nice way of thinking about it -- try to run separate scrambled eggs and you will he how difficult it's going to be. a pitch toto make the administration to impress upon them how difficult it would be to disengage from this integrated production platform. i would like to ask our audience for questions. youow there are a lot of have been waiting patiently. i know fred has to take a call -- that has been pushed off, fantastic. who would like to lead us off? there's a question there. >> thank you very much. i'm a former worker for the cec in montreal. the agreements for labor and the
environment seem to have been orphaned in the last 25 years, yet the united states desires how to integrate them into a new nafta. i would like to ask the panelists how they think this will happen and in what form. thank you very much. >> there's one here and one over there. canadaa dodson from the to. i know you don't speak on behalf of the mexican negotiators, but everyone at the table has the negotiating in the past. is whatm thinking about else is happening in the world is the linkage between nafta and the tpp. negotiatedes have part of an agreement that the u.s. wanted and canada wanted as well. are going into the negotiations and u.s. negotiators have wanted a lot of stuff out of the tpp.
are you going to give them those concessions at the outset? are you going to hold some of those things in reserve? do japanese say we want to tpp 11 in november. how much of the big inch a lot of do you take to that table? the third question to end this first round. dana marshall was transnational strategy group. thank you for this interesting discussion. i wanted to see if i could draw the panel out on an issue that i think would be interesting and that is the impact of north american integration on making the three countries more competitive with respect to the challenge from china. we are aware of the political economics of that and it's change all the time depending on many factors but that's an issue candidate trump himself discussed when he was in mexico
during the campaign. i'm wondering why he said that or if that something on his mind or in the mind of some of his advisers and i'm wondering if we could analyze that a little further? >> before we turn to our panelists, ambassador hills has already been recognized. ambassador's to mexico are flanking her here. if we could use you as our advance guard, we would get a lot done. who would like to lead off with responses? the political timing is evidently not the best. we are in an administration that has done a lot in terms of what it can deliver and it delivers a lot in terms of political movements it has to do in terms of opening the economy in key sectors. adding energy is one of the most
important factors and it's a great opportunity if we want to see it in a popular way. why is it the worst political time? right now, we are thinking about the end of the administration that has very little political capital to act whatever comes and obviously, we don't know what the negotiation may yield. we know the negotiation starts tomorrow and we know when the negotiation starts but it's difficult to predict when a negotiation will end. in the 1990's, we started in 120 and ended up in august of 1992 and i remember the handshake. after that, it became a process of approval. ,egotiating takes a long time
even though we are not starting from scratch. but the risk for mexico is even thish we want to get process done as quick as possible and i know the mexican government is working very hard to get this done, we need certainty. we need to get a positive result even know as fred said, failure is an option. it is true that we are going to atrt a process of elections the end of this year and probably elections are due in june of next year. who is going to be the next president. we have no idea who's going to be winning so is tough to say what is going to happen but beingy it may end up
actual negotiation takes place and it's not finished and it takes place in the middle of an election which is not only for president, it's for congress. so we have a big if there. there's uncertainty in terms of what may happen. it is recent negotiation between mexico and the u.s. took several months to be worked out. so we don't know. it's something we will need to pay attention but as i said in my remarks, i have two underscore that in mexico, there's no lyrical party that questions mexico's membership into nafta. it may be that they want to come up with new issues or new areas or they do not completely agree with the way the negotiation has
been directed but i don't think mexico's new president, whoever that is, will question the fact we have to be in the process. in terms of the side agreements come i think it's true. labor and involved -- labor should have been involved in last 25 years and i think that's one benchmark to see where these negotiations may take place. tpp because into francisco negotiated the tpp into mexico but there are new ways to deal with these issues and i think they are valid. they are a valid concern for our economies and they are valid in theines that happened most recent negotiations, however, i do think we need to find ways of establishing at least a common denominator.
i wonder how the u.s. is going to negotiate the environmental part if the trump administration decided to leave the paris declaration which has to do with carbon emissions and that really affects production, so i don't takehow that's going to place in the agreement but at the end of the day, we need to find ways to have disciplines that will help the competitiveness of the region. and tpp, i nafta just want to say i don't think what we negotiated will be concessions that will just be to another.ne even though we have already drafted them and worked on them, we have tried figuring out which, tpp had its own balance at the time.
be at a better situation right now because we know exactly what we are talking about. we have been able to figure out what many of these disciplines mean and what do we want to achieve with them? concessionsk the mexico made at the table will necessarily be identical or will be transferred from tpp to nafta. i think they will need to be part of the whole package and in terms of competitiveness, i 2.0 gives a new opportunity to increase competitiveness through the energy markets. i think the liberalization of the energy sector in mexico and the energy trends canada brings to the table and the u.s. brings to the table and the mexican economy has as a result of the
reform could be the most important boost for the region. if nafta can lock in those reforms, i think if we really think there's some factors that could boost competitiveness in the region, it could be having the integration of the entergy markets. >> thanks. for noto apologize reading you in my initial remarks. i'm sorry. i apologize again. think regarding the first question, it's important to keep thatnd it's the first time an agreement is in place. mexico is doing the same with europe and even though it is follow in,u.s. will
why shouldn't -- why are we talking about market access? if we are willing to negotiate the 21st century agreement, we should be talking about other agreements rather than what has worked over the years. regarding if we are going to be able to deliver by early 2018, i guess it depends on the strategy each country will follow because if you start from scratch and put on the table chapters that somehow the wording or language in place over the last 23 years, think it's going to be quite hard to deliver by then. if you consider some of the the u.s. used to impose
in, usually the u.s. follows the following negotiations, it seems we would be able to move or speed up the process. we willase of mexico, follow our own president. is important to remember is the pacific alliance is the sole initiative right after nafta -- it's important for mexico to bear in mind. if we are able to get some president inm the canada as the minister said a few days ago, i think we will be able to speed up the process and the areas where we may have a
, but itt point of view depends on the strategy. far as i've heard, there's an informal information that the will table the tax for different chap. i don't know if this is confirmed, but if that is the case, we will have a better understanding about if nafta will have a future or not. that hillyerility is an option and it is an option for the u.s. because for mexico, nafta has worked and we don't feel uncomfortable about it. so of course, it will depend on the outcome. talking about said agreements provisions, i will say in
will putof mexico, we on the agreement vote -- both disciplines. i think it has changed and evolved since the screen is were negotiated, but it is true even though we are able to deliver by don't have any certainty the coming administration in mexico or in consider told theyotiate the agreement may reach because it's important to remember in the u.s., i don't know if it is common practice mexico, to korea and panama, it's important to negotiate what agreement was reached. in mexico, we will have elections on july 2, 2018.
party hashe left challenged the benefits of nafta. we need to consider we will have in a yearnistration plus. just to conclude, regarding the maria expressed it very clear -- the concessions be there made should not starting point. that was the outcome of a tough and long process of negotiation in the case of mexico over five years. in the u.s., a little longer, so it's a good reference to consider something the -- the mexican government is willing to
put on the table day one. tppmain difference between and nafta 2.0 is market access. we have duty-free and the rule of origin is completely different. one question i have is how is it possible to manage an agreement complyy not follow or even though it's a convenient one for north america? if it follows the previous president the u.s. has negotiated, i believe it would be reasonable to think tpp and to pursue a higher level
of ambition. it will be in place until july 2018 unless it is submitted a request and there's no motion if it is the original base to continue, what will happen if by any reason there are issues that even though it might be of interest or agreement, parties may not by participating >> on thatement? last point, which is a very good one, the administration, with all its dominations and various
directions has been very careful to avoid at least appearing to violate the objectives laid out in tpa 2015. now it is a matter of judgment and some of us made it for on those judgments as to what they are proposing actually carries farthose objectives, but so , they have tried to avoid any implication they are violating congressional mandates. they have obviously gone beyond them and congress did not they go try to reduce the trade deficit through your trade agreements. congress did not say that. the agreement were to blow up over that mistaken premise, then i think they would have trouble. , whatever they negotiate in the talks coming
up, they have to take to the congress. at the end of the day, the president proposes and the congress disposes. the trade agreement, even more than other areas, the negotiators have to always be looking over their shoulders, what will congress approved, etc.. a fascinating episode was the one i mentioned four months ago where president trump said i'm going to withdraw from nafta and got all of this pushback. a lot of the pushback came from congress. senator cornyn from texas says nafta is us, and as someone said on the panel, it's an integral part of economic life of texas, not to mention other parts of the country. if you did jeopardize the agreement, you would be doing so at your peril with congress.
into when they get specific discussions for ratification if the deal is successfully negotiated, they will have to demonstrate their case point by point where they went along with the dictates of the congress. i mentioned the currency issue. that sometimes controversial because the congress said in tpa 15, you show not -- you shall not permit trade partners undermine the field by allowing trade manipulation. in theough it came late day, they negotiated a side agreement and there was a lot of controversy whether it went far enough. i think they will conform to congressional dictates, though if it blew up, there would be hell to pay. the only other account i want to make is on the third question, which was very good, about having a somewhat different
objective of using the negotiation to strengthen north american competitiveness toward china. i agree with the implication that it should be the objective of the exercise and there would be many ways specified by the channel to do that by further integrating the economy, strengthening the supply chain, etc. companies wouldn't do it unless it strengthen their competitiveness and that would improve the position of the north american economy. but that would require a totally different mindset from the u.s. administration. the mindset of the u.s. administration is canada and mexico are adversaries, that is a zero-sum game defined by trade deficits. but if i run a trade deficit with you, that means the trade is on their. that is the way they have defined the issue. i'm talking about at the very
top levels. the president at some around him as well. issue as ane the negotiation with adversaries, you are in an opposite mindset from what you suggested and what i would endorse ought to be the mindset of an update to nafta, namely improving the joint competitiveness of the region. it's a fundamental mindset question, not maneuvering around the margins. it's very basic and let's you and i keep working on them to change it. nobody said anything about the environment. i'm not an expert in that exact topic, i think there's a willingness to engage in the conversation and look at the environmental part of the agreement so i think that's something we should look forward to. we should look to tpp for
precedents for exactly how you can do that and what it would look like and subject pieces of that to dispute resolution. dispute resolution will be part of the negotiation and those things you have to look at together because they will be negotiated side-by-side for top we have heard this explicitly from the canadian side that there will be a challenge in terms of bringing climate into the environmental agreement. theway it was stated why foreign minister is that it to imagine ancult environmental chapter this day and age that does not reference climate and that's actually in tpa, there's a rejection of that notion. this is a place we could see potential conflict. it's one example of many of how these things become much more complicated than you think they might be at the outset. buteneral, we hit upon it
there's some very strong tension between speed in the negotiations and the timing importation ofpp language issue. it is the only way to move very quickly, to use tpp as a strong template. if you look at the objectives from the u.s. and mexico, most are topics that weren't dealt with in the trans pacific hardship negotiation. fewe's a lot to work with are willing to do it, but you have to look at who is under the pressure. .exico is probably on the top the united states second. we have midterm elections next year and canada is probably third. there will be games that are played in terms of the negotiation and willingness to to those whoout
want to finish quicker if they really want to do that, they will have to give up a bit more faster and i'm not sure anyone is really willing to do that. think the most likely outcome is the timing falls apart very quickly and that's quickly realized by all the negotiators that it not going to be concluded by late-ish year or early next year. there's noe, advantage to conceding to concessions you already made and your strategy should be to start the starting point in the negotiation, which means your renegotiating this topics along the way. that's a much more likely outcome. all of this leads to interacting it is.s. congress because very likely even after negotiation takes place that there is a statutory time where there would be action on the
trade agreement. it's very unlikely congress would vote on an updated nafta until after the elections. we do think pretty seriously about whether the u.s. congress would pass whatever is negotiated. nafta is an incredibly controversial topic and as we go through a mid term election process, it will become incredibly partisan. answer.know the we don't know what the agreement will look like, but we have to take seriously the possibility that just like some of these other big issues congress has tried to tackle in recent months like health care that this is something that there could be a lot of work put into and it could go kaput when it hits congress. i think we should take it seriously. >> chris has been a real downer today. it's the weather, i'm sure. >> just to be clear, if it goes to put, the current nafta stays
in place. >> unless donald trump decides to withdraw. is he succeeds in negotiations, since it to congress for ratification, congress won't do it. you may be right, but in that case, the current nafta stays in place until and unless something happens to change it. , it so everyone is clear doesn't mean the end of nafta. hands go up. of we can begin over there. >> pbs online news hour. can we dig a little deeper into mexican politics? at the moment, the candidate leading in the polls is a populist nationalist. he happens to be from the left rather than from the right. he's goingand says to undo the recent reforms you
have talked about that were made possible by nafta and to be blunt, he's a bit of an opportunist. an opportunity to use nafta for his benefit, isn't ,hat likely and even if he wins is he going to have a congress yourgoing to be with him? congress has to approve this deal the same as the american congress. >> berkeley research group. i want to pick up on the last exchange between fred and chris. and asked to think about 2019 and other negotiations underway. nobody mentioned brexit. trade withlose free mexico and canada when they leave. -- what does the u.k. do?
u.k. has expressed a willingness to negotiate bilateral with the united states, why would they do that? doesn't it make more sense to think beyond nafta and get the u.k. into a north atlantic fair and free trade if you want to call it that? take place,ays which i agree are certainly possible and maybe even likely, we will end up at the end of 2018 with the current nafta in place and an opportunity to galvanize all things by bringing the u.k. in with a generous transition time. >> we are old enough to remember when nafta meant north atlantic free trade agreement. that was the proposal in the 70's and 80's. the term got co-opted by the hemisphere. >> him from the wilson center. you talked a lot about making nafta for the 21st century and
watching other trade agreements are on the world. my question is about gender international trade and incorporating it into agreements. the canadian government came out and said they want to incorporate gender into free trade agreements like they did when they renegotiated a couple of months ago and how they want to create a gender provision and nafta. what's your opinion on integrating gender into nafta or free trade agreements and whether you think it's on the radar of mexico and the u.s.? they also mention there should be a gender dimension there. do you want to ask a question? labor andstion is on the role it's going to play if you are counting votes at the end of the process.
the number one being president and vote number two being congress and they do not always mesh. the unions in the united states may play a much bigger role. do you see negotiating through that if you have an eye on passing it at the end of the line? >> would you like to kick off this round? question, i think the reason you need to have a forceful labor provision in the renegotiated nafta is exactly what you said -- to make the whole agreement possible in congress at the end of the day. i don't know how much those provisions will accomplish for the goals of the labor movement or american workers, but there's strong insistence that i think it's from both sides of the aisle to put that in. i don't think this
administration is particularly devoted to that topic themselves, but if they are going to get it through congress, you have to put in there and i think you are right to flag that and the negotiating partners probably understand that as well. >> thank you. regarding the first question, i guess there is a political agenda and how will it influence process? i'm not certain if mexico is in a hurry. the administration has a strong interest to conclude nafta 2.0 during the current administration but it doesn't seem to be a must. the conditions require are not ones that can be met in terms of the mexican
they won'tion, maybe push hard enough to get a deal? you may remember it's a also what about the responses from canada and in particular, the u.s.? regarding brexit, it's a great idea. it's something that one year ago 2016, this was an idea that was mentioned and the problem we have is first, untild cannot negotiate brexit happens, so we are talking about two years. having said that come there are informal talks between mexico and england and i understand
that the same with some other partners. approach to great have nafta plus england. america is somehow block to as a negotiate something. join if we were the sole one that had anything good ideaso it is a and an ambition we should look maybeer the years but it's going to take longer than we would like. the gender free trade agreements, it is something we should and must include and it includehing that should
21st century trade agreements. it is important that there's the labor framework 25 years ago, so my guess is the outcome we got was a positive one. we don't know what other provisions you guys may want to submit to canada and mexico, so we will take a look. at the end, it's about reaching balance and it's about the mexican and canadian parliament. we arecase of mexico, able to reach an agreement during the current administration. i think there's a space to try to approve it and if not, we will see what they may say.
runner clearly the front because he has been campaigning for the last 18 years and he's the only official candidate we have today. the other parties do not have official candidates yet, so that is something we need to consider. it is really a tossup. we have no idea who may be the next president and what may be the result of the next election. anybody.ot discard it's going to be a highly competitive election. that comes in office in december of 2018 will have an extremely, extremely difficult reform because any
constitutional reform and that requires two thirds approval of congress of senate, then it ofuires approval of each one one.cal congress of each i'm not saying it is impossible but it is not an easy task to reform. i would say in the near future, those reforms are there to stay quitehough they are popular, but we need to give time for those reforms to yield results. reforms will take between two and three generations to yield the results we need to see. that pessimistic in terms of whoever is elected
president will be tampering with nafta. ourn mexico had globalization crisis in the 1980's when we decided to shift became and wewe negotiated nafta. i think the 1980's was the defining moment for mexico and have tempered may a little bit with some of our tariffs and we have played with some protectionist measures and doing things we should not doing but nobody says anything so unless somebody comes and starts a case and we come back to our good behavior, but in general, is a trade liberalization policy and an open policy. we know we depend on
international trade, so we are not going to be playing with that. no one in the political platform will be playing with that even if they said something that would question mexico's role in trade. i don't see any policy that would reverse that. brexit in the u.k. could join nafta. that is something that could be discussed, but we would have to have a shared vision. theerms of gender, i think gender provision is part of the objectives for nafta. least issues of how to build an inclusive trade agenda that responds to the vast majority of people. we know in trade that there are
losers and winners. ways to offerfind that kind of support or may notnt to those who be taking advantage of globalization and we need to find ways to open opportunities to those who may not have been able to take part in globalization. i think it is more raising the bar and finding discipline and direct policy intervention that firmslp to include more and having a better playing field for men and women in international trade for rural communities or those who have lost their jobs as a result of technology. part of a vision of an inclusive trade agenda which i think is legitimate but having an inclusive trade agenda
bes not mean or should not interpreted or does not translate into a protectionist agenda. both are compatible, it's just a matter of putting them at the table and finding ways of amongng this solidarity north american countries and communities. thehe past, i had opportunity to work with an ambassador in mexico to work on issues of gender. secretary hillary clinton signed an mo you on how to improve conditions for women own businesses and women in north areica, so i think there already cases where we have tried to bring in because we think it is the best way to promote that economic growth we
need and to bring diversity to the table. this is something that was touched on in tpp and there were several examples recently that have taken waste and how do we create these new disciplines and direct interventions? how do we have a more cohesive society in north america? this may be a good way of addressing those issues and bringing credibility to nafta and north america integration. labor, labor may be a difficult issue at the table. we want to take later as was posted a few weeks and months ago by some of the trump administration officials, is like themexico
bad guy in the arena because we have lower labor costs. wages and mexico are lower than the u.s. and that's a fact. the fact that exists doesn't mean we have an unfair trade advantage. ideal.ly, that's not the we in mexico have to work hard to close that gap, but that requires many other things in the dish and to labor opportunities. it requires education, innovation, improvements in productivity to raise wages. my concern with respect to labor is the u.s. comes up with a to intervene tries and labor wages markets which cannot be solved through a trade negotiation.
that may end up creating a very difficult way of finding a solution to the nafta negotiation. i know labor is an important question but we have to be careful of not offering solutions that may end up doing is nowhere. i think the notion of adding the united kingdom to nafta is a terrible idea. brexit is a terrible idea. it's terrible for the u.k., it's terrible for europe, it's bad for the united hates. i'm in the minority, but i think it's going to be reversed because when the brits really realize what they are getting themselves into, they are going to reverse course and i think it would be a huge error to feed the brexit mentality by holding out this hope of a free trade deal with the united states, a free trade deal with nafta, all of these goodies that sound wonderful conceptually until you
start trying to do it. to think of the difficulties of nafta itself and renegotiating and now you add the fifth egg is the economy in the world with all sorts of problems that don't appear on the surface of a special relationship at all come a there will be hell to pay. if you're going to end that, why not the pacific alliance? other're going to add countries, fine but there are other countries that might the ahead of the u.k. in the queue, so let's talk about them and then what are you and mark any chance of using that the to further integrate north america would become even more impossible. it would become an unmanageable task in terms of negotiations. let's keep that one on the shelf until or unless the evil day comes.
next let's not reward bad behavior. i just have a couple of things to add. the 1.i want to add on top of it is the tone in the u.s. mexico relationship matters quite a bit. we can have a high amy lee adversarial tone if there is an environment of conflict that is going on. you better believe that if he should become president, he will use that. what happened in terms of his polling numbers right after the election shows he's the candidate best positioned to take advantage of an environment of conflict, wrap himself in the flag and take up the nationalist banner. -- is environment is the such that it is appetizing, he can do that and if he wins the election in a the environment, then we should be concerned about the future of the
u.s.-mexico relationship because we have to be on each side willing to take advantage of the opportunities at the death -- at the expense of the relationship between the two countries, so the 10 own matters quite a bit. it's on the other end of we have a cooperative relationship functioning even if it is still underway, but something moving toward a reasonable outcome, the -- it's more to engage with that type of rhetoric whoever becomes the next president will be responsible for the mexican economy over the next six years. you need to have to if you don't want to have a big problem in terms of the mexican economy. it's a big risk for any candidate but there may be situations where there's an environment that promotes that anyway. a couple of years ago, having
europe,ersation with there was a push, there was some interest in having canada and mexico join. canada was in the process of negotiations and mexico stated its interest in making it a comprehensive regional approach. tough to conceive of taking that on from the u.s. perspective. i think we are at a much more complex moment and the willingness to find the appetite to take on that additional level of appetite when what we are trying to do is do no harm, trying to keep the boat afloat, there are people trying to do more than that, but that's the primary objective of most interest right now. it is just hard. i would like to recognize to questions that came in from twitter.
he says what would happen to visas if nafta fails. would they be ended? kelly anderson wrote nafta forides opportunities innovation. what is mexico's approach? that's an issue we hope to deal with at a later event. let me thank our fabulous analysts for being here today. really appreciate it. [applause] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org]
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