tv Government Officials Discuss U.S.- Mexico- Canada Trade Agreement CSPAN March 5, 2019 12:02am-1:33am EST
and executive nominations, next week senators begin a debate on a resolution that terminates president trump's border emergency declaration, the house passed that measure last week and president trump has said he'll veto the resolution if it reaches his desk. follow the house live on c-span and the senate live on c-span2. up next, diplomats, government officials and industry executives break down the u.s./mexico/canada trade agreement. they talk about how it's changing the relationship between the two countries, hosted by the canadian american business council here in washington, this is just under an hour. all right. everybody refreshed, everybody ready for more great content? so we -- why don't you guys sit in -- let's sit in those three seats. i'll sit on this end for a
change. we've listen another nafta 2.0 pretty deeply. hello. i'll do one of these whistles if i have to, and deafen you all. is everybody with me? are we ready? okay. as i was saying we've looked at nafta 2.0 pretty deeply. now we want to try and put it in a broader global context and we have three great people joining us here today to do that. howard dean is the former government of vermont, now a senior adviser in public policy and regulation practice, also with us is ambassador michaelkergan, former canadian ambassador to the u.s. and also arturo sarokan, an international strategic consultant and adviser and public speaker. so let us talk. here we go. ambassador, if you don't mind,
let me start with you. what are the implications for north america if this new treaty trade pact is not ratified by all three countries? >> it's the disaster, first of all, because of the threat of the white house to unilaterally withdraw from nafta if usmca doesn't go forward. we may be left, there's an expression in mexico which is you're left like the dog without two sandwiches. which means no usmca, no nafta. but beyond the predicament -- >> if he doesn't withdraw, though, we have the existing -- >> if he doesn't withdraw you have the current regulatory frame work, with some challenges because of the uncertainty of if he's going to do it, if that's going to be a sort of de-- he's
going to now accept the worst deal ever and it's going to be the law of the land. but more importantly when you look at what's happening in the world and when you see the concerns in this city over china the greatest question is what does this do to the ability of america to remain strategically competitive in the asian pacific and with china? >> ambassador, do you want to weigh in on this? >> it is going to be a complete mess. some people say, oh, well, if nafta doesn't go, we go back to the -- we said this morning if the trade agreement was conducted last century, it doesn't take into account. we've got a situation if you don't have regulated trade amongst the three countries, it's putting up the drawbridges and putting out the motes. and we'll all be poor as a result. and all those cross border ties, that hidden wiring we talk about, which really makes this three-way arrangement so strong will start to fray badly.
and it will obviously have an impact on personalities and how people, canadians, mexicans and americans regard each other. so i think it's bad politically. it would be a disaster economically. and as arturo said, this particular part -- >> strategically is it problematic because we could work as a unit in negotiations with other parts of the world, we'll be less likely to do that, won't we, if this doesn't pass? >> that's true. i think there's a couple of principles. one is despite steve bannon and -- >> well, is it? >> yes, it is. >> why are you so confident about that? >> because first of all the younger generation are all globalists. the first global generation, not the millennials and second of all we are too small a world with all the interactions. it's a ridiculous debate. second of all to the matter at hand, what happens if we get rid of nafta and that's how the president wants to put pressure on everybody, not going to
happen. here's why. trump won in all the farm states. the farmers are already really upset at what's going on. somebody in trump staff is going to tell him that if you do this you're not winning reelection period because you lose iowa, michigan and so forth. i'm not one who lists states. but this is a political disaster for the republican party. and when it entirely surprised me, although it will be democrats for trade reasons that don't want to do this, it wouldn't surprise me to have -- if the president did somehow lose his mind, which some would argue he may already have done so, if he does do that, it's possible that there will be a two-thirds majority in both houses to override him in that action. so i mean, this is a -- this would be america's brexit. that's how incredibly disruptive it is. people up here previously have talked about cars crossing the
canadian american border five times. every supplier gets parts from mexico and canada. it's not just bad for canada and mexico, it's really bad for the united states. >> i just want to clarify one thing. you think the political realities will keep it from withdrawing from nafta, will that also mean he will lift tariffs in order to get usmca -- >> tariffs are a problem and they're bad for the industries, bad for american -- >> they're holding up ratification of the agreement, it looks like. >> yes. the tariffs are really significant are chinese tariffs on soybeans. that's what could convert the farm belt into a pro-democratic vote, that will be the swing vote for 2020, both in the senate and in the presidency. so those are the significant tariffs. that is a smaller question. than undoing nafta. undoing nafta is brexit and we're going to see how awful brexit's going to be in about three weeks if they do this.
>> would you buy the brexit comparison, by the way? >> well, not quite because it's -- i would say brexit, in some ways, is even more closely integrated than our three countries. we've got three countries as opposed to britain versus the 27. so my sense of it is, and the dependency that britain has on trade are greater than we have amongst our three countries, think about the laws and regulatory, certain issues and so forth. but you raised an important question. and that is, is globalization that we know now finished or are we going to be seeing greater what is being called populist nationalism? and i worry somewhat that there are centrifugal forces internationally and this may be a phenomenon, how important it
is for the three countries here to stick together. there's fragmentation, in asia with the rise of china, in europe with eastern europe. >> i disagree, look at tpp, when we dropped out, the other 11 countries didn't, they were smart, we were dumb. what people don't realize about trade is that trade relations are -- and trade treaties are a proxy for defense treaties. that was the big mistake we made. the other 11 countries went ahead with it, they were smart about doing that. >> the white house says we'll have bilateral agreements. >> good luck in negotiating those. >> they're working on it. >> that's going to be a nightmare. but there's also something else happening here regardless of whether we see sort of a rebranding of globalization by a new generation of americans and maybe in other parts of the world, i do agree with michael that there are some forces in north america, certainly in
europe, that tend to pull at the strings of global economy. i think regionalization paradigms are much, much more relevant now, what mexico has done with the lines and in latin america what we've done as the three north american partners. there's something lost in the debate and discussion over nafta and whether the new rules of origin are good, bad, i think they're bad, but that's another story. i think they're one of those issues that set us back from where we were with nafta. but the greater narrative here is what i think is a danger, which is regardless of what happens, this whole thing of my way or the highway approach to forcing mexico and canada into a renegotiation, yes, it was needed, nafta was 20 years old, there were disciplines that needed to be included in this agreement. but with the tariffs on steel
and aluminum, with national security derivatives, the narrative that is being fed by the weaponization of trade policy by this white house is that canada and mexico are not your allies. that is a very dangerous dynamic. >> is weaponization the right word for what's happened with trade? >> i would say yes under this administration in the white house, definitely certain people in the white house, peter navarro, we mentioned those names this morning, definitely look at trade as a weapon. and to a certain extent the biggest economy has the largest weapon. >> and now the precision weapon at that, the way it's being wielded now. >> blunder bust. >> it's creating a lot of pain in red ax states that have been slapped with countervailing duties by mexico in response to aluminum tariffs, we're replicating what we did, governor you may remember this, back in 2009 when mexico
responded to the u.s. decision not to comply with the axis of mexican trucks to the united states, bedid exactly the same as what is being done now. >> i have a question here from the audience for the two ambassadors. mexico and canada are in cp/tpp and have trade agreements with the eu is that a safety net against nafta withdrawal by trump? >> very much so. interesting enough we've renamed our international trade minister as international trade diversification. there's a lot in that. traditionally we've had 82%, 84%, 79%, we vary of our exports going to the united states, mexico in the same ballpark roughly. we've come to that conclusion in that given the way this white house is operating we've had to operate very quickly in looking around for a new market, not necessarily taking away from, it's trying to get the overall pie larger and we definitely negotiated our european trade
agreement well before mr. trump arrived on the scene. but the point being is that with a situation as it is we've recognized that it's imperative for canada now to really move and find new markets given the uncertainties we're finding in the north america market. again, doesn't mean we're moving away from north america. means we're having a few extra pistols in our belt. >> same true for mexico. >> basically the same dynamic. we've modernized and updated our 2000 agreement, the year 2000 agreement with the european union, we've modernized it, just finished the negotiations. obviously cp/tpp will play a very important role in this, mexico along withchile, the largest free trade networks in the world, we do see these as plan b's or escape pods if things go haywire in the north american market. >> one of the incredibly
dangerous pieces of this is the chinese are invested substantially in the mexican auto industry. trump has made us an unreliable partner in trade and testifies. that's the bad place for what has been the most powerful nation on earth. we may not be for much longer if we continue to force our closest impact long term on the north american auto industry as a competitive player in the global marketplace, such as in europe, due to tighter limits on sourcing and rules of origin? >> absolutely, absolutely. the auto industry is one of the most important in this country. to the extent we're isolated, we're weaker. >> more than europe where it's going to affect north american car production and sales is where these are growing the
fastest, which is in asia. korea, india, china and that's where we need to be competitive and that's where we're shooting ourselves in the foot. >> yes, in spades, it's a problem. >> so one of the hold-ups here in the u.s. is the democrats on the hill so governor dean for you, a question from the audience, will the pelosi democrats vote for usmca? should they? >> they should. look, i am not -- i do not believe that free trade has had a huge number of negative consequences. certainly has in some areas, the head of the canadian union was up here and he's not wrong. iowa, michigan so forth have lost jobs. but free trade has lifted a billion people around the world out of poverty. it has fundamentally changed the way the globe works and it's made us until this administration better neighbors. so the value of free trade is extraordinary and i do believe that automation has had an awful
lot to do with job loss. river -- one of the largest plants in the world is producing what it was in the 50s, the hay day of the automobile industry, today they're producing the same number of cars with one-third of the work force. that has nothing to do with trade agreements. >> china has been mentioned surely they're the elephant in the room when it comes to trade. >> i wanted to do a two finger on the dems. i think strategically the democratic leadership would not want to own the defeat of usmca, the problem will be mechanics and timeline. the closer we get to the presidential election or the run-up to the primaries it's going to be increasingly difficult. echoing your comments, your initial comments, governor, i've talked to some of the -- yes, there are some of the freshman democrats who have just come in who replicate anti-free trade positions of the democratic party in the past.
but i've spoken to a lot of freshman from especially california, the pacific northwest that have a very different outlook on trade and are much more aggressive in terms of ensuring that free trade is an instrument for economic competitiveness and its national linkage to the united states. it's a bit of a mixed bag. i wouldn't just simply say the dems are going to do what they've always done on trade. >> that's absolutely right. if you look where our big votes are they're all in the east coast and the west coast. that's where trade is critically important. any democrat who wrote against a free trade agreement from washington state are in trouble. boeing, enormousstuff and the same is true for the eastern states. so we have all three nations represented here. what is the sequencing going to be on ratification? who will take the plunge first? >> the united states. >> united states. >> we are all going to wait for at least -- i don't know if we
will wait for the u.s. to push the buttons and vote but i think certainly if i can speak for mexico i think the feeling in mexico city, though there may be different views, is that we need to wait and see how congress tees us up and once there is a road map that this will happen then you start seeing movement in mexico. >> and the tariffs are gone. >> yeah, the 32. >> our mission here was to put this in a goingal context so we have to talk about china. does the white house, does the president get real credit for shaking things up? we have heard about china's intellectual property and trade practices for decades and he called their bluff. does he gets points for that? >> it was not a bluff and the answer is yes he does get
points for that. >> howard just gave the president credit. >> even -- well, that's such a bad quote. i won't say it. >> go ahead. >> no, no. but sure. look, the chinese trade agreement has been valuable because the truth is the stronger economic china is the more stable economic china and the evidence for that is most people have forgotten this about george w. bush's administration but an american spy plane was done and they died and we landed safely on the island, which is an enormous air base and within 10 days the crew and the plane was sent back. that would not have happened 20 years ago and the reason it happened because $800 billion in trade was something the chinese were not ready to give up so our relationship a has been problematic but it needed
to be shaken up and i think trump should get credit for that. >> we received as consumers remarkably good bargains from china with their manufacturing and the walmart of these worlds have the relationship that most countries have with china individually and china comes in and we are under this illusion they played by the wto rules and no we are still a developing country says china and that's when things started to go off the rails and there is no question, the time is now. it's a little bit like great britain and the united states at the beginning of the 20th century, both economic rivals, one coming up and one going down. both are democracies and in this case one is to be
charitable and a potential military rob to the united states. the gain is more serious. as much as the president may get agreement on this particular round the fundamental problems with china will remain and it is going to be a challenge for all of us in this. >> that's why it was stunning that the president from day one would -- because of how the u.s. was convening this instrument to contain but then also engage china. and so that's the first strategic mistake. the second blunder being committed i think by this white house is how a strong resilient competitive north america is the way to engage china going forward and that's where the
strategic equation out of the white house at least in regards to north america and how north america fits into a larger strategic puzzle does not make sense. >> anybody want to guess if we will have an agreement with china by the first? >> no? >> let the washington guys talk about that. >> no. >> i think it is hard. i'm not a chinese expert. >> the economic backlash from his supporters from that i don't think he understands yet. >> and we will talk to the governor of kentucky who has been feeling the tariffs. another indication this world of multi lateral ism is falling apart. >> i don't think it is falling apart. the europeans need to do things smarter than what they have
been doing. they decided their members did not need to disclose there finans and that's just plain stupidity. i don't know. but you cannot run a democracy without transparency. so they have to get their act together. i can understand why the brits voted the way they did with antiimmigration. they would reverse brexit looking down the barrel of the gun. >> in terms of what is happening there is something which is not do dissimilar to what happened here which is expressed in the 2016 presidential election which is the accountability between citizens and public policy off of state orders is broken and if it is broken here it is further broken between the european union. so i think it is much more
related to how do you rethink and renew the public policy posts and engagements providing conveyor belts between public policy and citizens. >> any thoughts on how to do that? >> it will be interesting to see what the impact will be on north america in the sense that the uk will lose the protection it has from the european union, it's own custom's arrangements and so forth which may mean some of our exports may go in a slightly more favored way. secondly, the whole financial issue with the disintegration of london in terms of moving to frankfurt or elsewhere has a big impact on the financial implications in the united states and mexico and canada. the third thing is i think the
brits are somehow thinking we will arrange a quick free trade agreement with the united states or canada. we all know nafta organizing free trade is something that takes a long time. >> there is also an opportunity and add brandon used to say you never let a good crisis go to waste. we have a good trade agreement with the european union and the brits leave we will be looking at a free trade agreement with the uk. maybe there is potential synergy for north america european agreement if brexit does happen. >> i don't think it's going to be frankfurt but it could be dublin and it could be toronto.
>> here here. >> what has to happen to the world trade organization? can't we put trump on the world trade organization? >> unfortunately he is already on it. they have not appointed appellate judge and they are holding back. so the dispute mechanism, canada has taken a lead of 15 countries of which mexico is one to see how with the trade we can find some sort of formula to reform the wto, improve the new mechanism and get the better negotiations. as it often happens the smaller countries that depend on trade are moving together to see what we can do to reform but nothing can happen until the white house decides they want to be more positive towards wto and it's not looking very positive right now. >> the recipe is not throwing
out the baby with the back water. it's not getting rid of dispute mechanisms and it is improving them. if you weaken dispute mechanisms what do countries investing have in terms of local certainty and the freedom they can do if they face hiccups. >> so we see these economic relationships straying or at least strained. what are the implications for national security? >> they're enormous. trade policy is defense policy. and it's a setting of an alliance because of trade helps our relationship with vietnam and other places. the philippines is a great example. we are losing negotiations with
philippines partly because china set up illegal island but partly because we are withdrawing. that's an enormous blunder nobody has explained the president but maybe the people he hired did not get it. i don't think this is the end of global ism i think you see the shifting of alliances. the trouble of the united states will come up on the short end of the shifting. >> economic nationalism sets countries up against each other. we are putting up barriers and you are then establishing confrontation with your neighbors and other trading partners. you mentioned earlier you were at munich and i think we have seen the beginning of that. it was interesting last year the europeans were quiet and
this year they pushed back hard. vice-president pence did not get a warm reception. markel became very passionate about this. not necessarily as a result of the trade issue but it's a symptom of the problems going on. >> i think the national security implications are real and for too many years too many people have taken mexico for granted but there have been two fundamental events, one of them nafta in 1993 and the terrorist attacks of 911 which changed the way mexico reacts on intel and border security in the united states. if you continue to use north america general, nafta but more importantly mexico, the appetite and the band with of any mexican government of any political sign to do what it has done with the united states
particularly with nine/11 goes out the window. >> we have to leave it there. thank you all three for joining us here today. appreciate it. the next discussion should be a fun one. you would remember when we introduced mexico's ambassador, for the first time we have a woman as the u.s. ambassador in canada and she is with us today, kelley craft. she served on the united states of kentucky board of trustees and joining us here, thank you
both. all yours. >> thank you. we are happy that premier ford made it into washington, d.c. after all of the snow we had here. >> when he landed it is beautiful compared to toronto. we have seen nasty cold weather but it is great to be here. >> great to have you. >> i have not seen the premier since valentine's day. it is every man's dream to take their wife to the auto show and that's where i was. so at the same time as the auto show, premier ford was making an important announcement about an automotive plan. can you share that with us? >> absolutely. the largest manufacturers of vehicles in north america and
we produce 2.2 million vehicles out of ontario and we are the only jurisdiction that have five manufacturing companies out of there. they have pretty large facilities producing great vehicles and they needed help. over 15 years. let me back up. 15 years of the government prior to us, we lost over 300,000 manufacturing jobs because outrageous electricity costs, some of the highest costs in north america and highest taxes in north america, regulations and red tape, 380,000 regulations and the largest subnational debt inherited in the world of $340 billion. we had a government for 15 years that were just spending like drunken sailor and i apologize to the drunken sailors, they can spend their
own money. it was $40 million a day they were spending more than what we were taking in. and that's what we inherited and we made a lot of massive changes when we went in their looking at the red tape, the 380,000 regulations and we are getting rid of 25% of those right off hand, working hand in hand with the automotive industry. we told the automotive industry every dollar you invest we will match that. i believe in working with companies hand in hand and making sure we sat down with them. the most important item they want is someone to listen, the government to listen, every single automotive company and the ceos have my phone number.
>> that's a fact. >> i think everybody has my cell number. >> i don't. >> i will give it to you later. >> we are sitting down listening. when it comes down to not only automotive but companies around the world, there is one thing -- well, there is many things they want, but one thing they want is certainty. i will give you another example. we looked at a sector where we are going to regions around ontario and encouraging them to work with us to put sites together. tennessee did this with the automotive sector and attracted over 5 billion in investments and i believe what works for other regions they can work for ontario. so we are making sure we accelerate any permits that automotive companies need. some of these companies come in and they need 1,000 acres.
that's a large piece of land and a lot of municipalities fight against it. some regions don't want a big large plant in their backyard so we are sourcing out regions that want manufacturing jobs. >> now that i work for the state department i learned a few things about red tape. can you further that college of trade and how it helps the workforce? >> college of trades is for construction trades for the most part and it was another layer of bureaucracy, another layer of bureaucracy -- i will give you an example. steam fitter is a small company with three, four employees and their son came to work. not get involved in the actual
manufacturing or installation i should say of pipes or steam fitting and the call to trades would show up and say let me see your union card. they didn't have it, here is a thousand dollar fine just for his son showing up to carry tools from point a to point b. it was just a bad, bad situation there. and everyone was complaining about it. it did absolutely nothing for the trades and the ratio was five to one from journey men to someone starting so they were stifalling the growth of people that wanted to get into the trades. the unions controlled it so we got rid of it. >> you were reviewing all of the regulations, pages and
pages. >> staggering. you put this in perspective, 380,000 regulations. how do you business with that? the people that go the regulations the best is the industry. we are sitting down with industries and asking them to support us and help us. there is so much duplication and we have looked at regulation and probably half of it is duplicated with the federal government too, the exact same regulation. why have two? we put a regulation swat team together, from the economic development department and we have a team that focuses on regulation. we have an internal competition who can get rid of the most regulations. >> that opens up the job market and with our employment rate, both countries being so low we have a shortage of skilled workers and when president
trump's america first agenda that's the people he campaigned on behalf of and what can we do together to promote more steel workers? >> that's a big problem. you want to create more jobs and we are doing that. job numbers came out for ontario and we created 41,000 jobs because of a new government in place and people are feeling confident and they are seeing taxes going down. we have something called cap and trade, carbon tax. i don't know if you are dealing with a carbon tax down here. >> we operate on that. >> carbon tax is the worse tax you can put on the backs of the people and on the backs of businesses. it is a tax and they put the word carbon in front of it. that's what i say. it's the biggest waste of money and makes us uncompetitive
against jurisdictions that do not have this fictitious carbon tax. well, we have hit 22% and we still have 11 years left and the prime minister wants to bring this nasty carbon tax in. it's just going to make us uncompetitive. every single item you buy in the store and everywhere goods being driven, gas is going up, every product you buy in the store is made of carbon, from one source or another. it's a tax grab by the government. that's all it does. it does absolutely nothing for the environment. so stay away from the carbon tax. it's a bad, bad tax. >> today we heard a lot about the aluminum tariff and i'm interested to hear your spin on
this. i heard about this this morning from the usda so tell me what your opinion is. >> well, it hurts both countries. canada and united states are unique. there is no two countries in the world that are connected like canada and the united states. i know that personally. i have a facility in chicago and a printing business, i spent 20 years in chicago and another facility in new jersey. we are just connected at the hip and there is a saying in canada that has been around forever, the united states uses canada to catch a cold. it's hurting both countries. let's talk about the automotive industry when we ship a part. some parts go back and forth across the border eight times and every time they go across they get dinged 25% with steel,
aluminum is 10%. and it's hurting both countries equally. matter of fact, to be frank, it is hurting the united states more than canada. for every job they think they are creating in the united states they are losing 16 jobs. we have the same lifestyles, everything is connected. it's not like the united states competing against mexico. that's a different lifestyle but we are identical. >> you want to talk about your meetings you have planned? >> we are going to meet with the ambassador and again encourage him and keep in mind
we are a large province and we are doing 489 billion for the united states, 19 states, they're largest trading partner is ontario and eight other states we are the second largest trading partner so a trade is absolutely massive. we just want to tell everyone south of the border that ontario has a new government, ontario is open for business and open for jobs and we are getting pro job legislation in. we cover a bill called bill 148 and it was a terrible job killing bill and it went right down to minimum wage that the increase in minimum wage by 25% overnight. so more people lost their jobs over this bill 148. it was a mandatory holiday, everybody got eight days paid automatically and i have no regrets getting paid for
holidays but it made us uncompetitive and a lot of companies give you that anyway but we have to be can you competitive in ontario. we are the size of almost twice of texas and we have 14 million people. so we are a large player in north america. >> i know that you know when i first met you we talked about being open for business and we have a few people here in the business world i'm sure with their checkbooks saying i have two choices, kentucky or ontario so what initiatives are you taking to promote business in ontario and how can we promote business working together? >> let's talk about the text sector. our silicon valley is called waterloo. there are so many tech
companies, blackberry started there and there are super bright young people and some of the stuff they were coming up with you would not think of it. we want to make sure -- by the way, tech is tied into automotive now. no matter if it's google or any tech companies working with the automotive industry we are encouraging people that we have the whole package in ontario. we have more natural resources, the majority of areas right across north america and we have some of the brightest and smartest people in the world right in ontario. it's the most diverse multi cultural city in the entire world so no matter where you come from you land in ontario and you have people from your country their somewhere. it's just a great area.
>> speaking of technology and data, you have four daughters, i have two daughters who they absolutely would have never kind of gotten with nasa because technology was not available and that's one of the things i am proud about the ustr team is to remodernize nasa. the trade agreement has a lot of questions and i know that we will have ratified by all three countries and it's a work in progress. what are you doing to help ratification of usmca? >> on a state level your hands are tied to a certain degree. i would love to sit down and hammer out a deal, i'm confident i can hammer out a deal in a day. i'm telling you, i am. we can sit down and get it
done, but working with the federal government. i will work with anyone. i don't care if there are a nonliberal, conservative, whatever they are, if they can bring business to ontario i will stand shoulder to shoulder with the federal government. and i think we show that to them but let's cut through the nonsense. >> i think your meeting with my governor and that's the way to promote this relationship and the ratification. i think that is essential to our legislators and i think that's something that i must say your prime minister has been brilliant at reaching out across the border and discussing trade issue with each individual state because it's an individual need and kudos to you because you have reached out, that's one of the very first ways we met. he is into horse racing for all
your horse racing fans. >> i must say we were at the queen's place, the big horse race and we were there were friends of ours in kentucky and california that had a horse that was a favorite and i see this guy who has a white polo shirt and it was 116 days in toronto. believe it or not. i thought that was one brave person to come in and we clicked. >> my team said you can't go in there with golf shirts and jeans so when i saw the ambassador i said i will apologize that way and i said
that's a jeans and t-shirt guy. i am in toronto often and he draws a crowd and we were at the indy race in toronto, the same weekend of the queen's race and i thought one or two of the race car drivers, you have two of the best race car drivers in all of the industry and i was thinking there was one guy i really liked and i'm going to say hello to him. it was this guy in the center with all of the young adults and you were so open for discussion and he was already late to meet with us so i was waiting on you to come into this area we were going to be leaving and here he was holding court with i don't know maybe 50 to 60 young adults which was
really cool. i appreciate the common folk out there and i give all the credit to my brother rob. >> can you talk about your brother rob? >> absolutely. >> i see one of my favorite reporters over there. how are you, katie? you must miss me. we used to work together at city hall and as katie saw it was interesting, he attracted -- i'm sure everybody knows. he was a rock star when he walked up to the public. the average person in government housing when all the government housing votes and he was there for the common folk and he returned every single phone call so people, new
canadians, the ethnic community wondered why they voted for rob and they come to canada not knowing anyone and you could call rob up at home and he would return the call and show up at all door and help them out and they did not have to be the political insiders and make donations to get a return phone call. you didn't have to be part of the establishment or the insiders. that's the way we were raised to return phone calls and everybody has their cell phone. i will give you my number so if you want to text me with great ideas or you are up in toronto, take this number down, it's right in my pocket. >> he will respond. >> i get a couple hundred texts. the best way to get a how old is text. it is 416-805-2156.
sometimes we say we get caught in the bubble. you get caught in the bubble sometimes and you never lose track of the people that brought you there, brought you to the dance, that voted for you, and all of a sudden you get in the office and there is 15 layers before they can get a hold of you and our case, our family comes to knock on my door and i will show up. i don't care how small of an issue it is and every single day we try to help people. to some folks they think it's a small issue and to other people it is massive. everyday i get calls and texts i need help and we do our best to help these folks. >> we live in the greatest
neighborhood in the world and i am such a beneficiary of that because i arrived in ottowa and you hear we live in a thin border, i'm the recipient and i can say first hand, canada, ottowa, toronto, i have had nothing but that experience and we want to work together and work together on a business relationship and you are absolutely the person that to me -- well, you draw people in. >> i appreciate that and i think it is been fissure to both countries and we both want a mutual relationship, closest allies in the world and the largest unprotected border in the world and i count my blessings everyday that we have neighbors to the south of us.
>> we had a company called sam the wrecker man back in the day and i think i was 12 years old and i listened to music, all different types and my parents said what album? remember albums? i am aging myself. albums and i said no i want a little casette of the star- spangled banner and i would play that with my walkman on. and my parents said from when you were 12 i knew you were going to the united states and so one day i got up and on new year's eve flew into chicago and called my dad the next day and he said happy new year and i said i am in chicago and he
said what are you doing and i said i am opening a division here and since then i spent 20 years down there and loving the people. don't make no mistake, i'm a patriotic canadian but i love the united states, closest allies, best people in the world. >> absolutely. >> i was going to ask if you had any parting words but how can we promote our countries better than to have you here in dc promoting canada? >> i appreciate that and likewise for the united states. having you up in canada. >> thank you. >> we are fortunate. >> so you wanted to tell us about your family and your wife karla and your four daughters. you have you the sweetest family, surrounded by women. >> i have a beautiful wife and four girls. i'm a girl maker, i guess.
i have four girls in less than five years and they are now older. the oldest is 27, ages 27 to 24. there is one thing about girls, they always take care of their dads. they spoiled me rotten. anything they can do, they try to help and worry about me. so it just makes you feel like a million dollars and i'm just very grateful. i have a great family. >> we are grateful that you joined us today and you are part of our family. once hear you are always here. >> thank you for being here today. >> thank you.
therefore we have one more dialogue. keep on going? okay. what you may also know being from kentucky is that we are home at two very important exports, bluegrass, bourbon, basketball and doug ford can think kentucky for our contributions to the toronto raptors i must say. it is bluegrass, bourbon, basketball and bevan. he is the leader whose characteristics i can only define as leadership. i am really proud for what my governor has done for the state of kentucky in cutting the red tape and leading us to the 21st century. even more so i am really excited for what is to come for you. it is my pleasure to introduce my governor matt bevan and friend matt bevan.
>> i may be the only one of these that were mentioned that [ inaudible ] at this point in time that we will get to that i'm sure. >> thank you for joining us and a reminder for those of you out there watching the live stream or here in the room there is still time for you to ask questions. remember to text it for -- gov. matt bevan well we have this conversation. we just heard the perspective on trade from the premier of ontario now let's get the perspective from the u.s. first i want to talk about kentucky's relationship with canada. canada is a huge trading partner for kentucky isn't it? >> it is, 25% of what we export goes to canada. we trade with many countries as you many states but without a question canada is our largest
trading partner that has been the case and is likely to be the case into the foreseeable future. we actually are running a trade deficit with you instead of hearing it the other way around we export about $7.7 billion worth of things that are made goods and services from kentucky to canada and we import currently about 6 billion so it is a good strong relationship, 37 canadian owned companies that employ more than 8000 people directly and as many as 100,000 others whose lives are touched by that based on direct investment from canada as a foreign direct investor canada is our second largest investor. yes very strong, significantly financially important connections. >> since we are talking about a trilateral agreement largely today let's talk more about the
trade relationship with mexico. >> with x an and canada excuse me mexico in kentucky it is smaller. there are about 11 mexican companies employing about 3900 people and the exchange of goods and services is smaller. that said it is still an important part primarily, i am guessing questions will take us to the nature of the integrated supply chain there are north american made cars or mexican made cars, they are made in north america and goods move up and down the integrated supply chain across our borders. these are north american and this is a north american issue which is why this is as important as it is. >> kentucky is a center for the auto industry right? >> kentucky is the largest per capita producer of automobiles in the u.s. and i think the
third-largest in volume. all of the chevy corvettes are made in the world are made in kentucky. the largest toyota plant in the world is in kentucky, every ford super duty truck is made in kentucky. all of the lincoln navigators, the fort escapes etc. it is a powerhouse of automobile production which again is why this issue is as critical as it is to us. >> 95,000 jobs i think? >> i don't know the exact number but it has been a growing importance. if you look at just toyota it is the largest plant as i said and 900 jobs or something associated with just that one plans. the ford plant it is the most prolific truck production facility in the world and we are blessed to have it in kentucky. these have been expanding both those facilities they have spent billions in recent years in expanding there cooperation.
no sign of abatement on those. >> there has been a lot of conversation here today about the tariffs on steel and aluminum and we heard earlier from some folks in the industry saying they were really hurting them, have you been feeling the effects in kentucky? >> there is. when you think about the ruling which was done under the premise of national security issues and protecting certain abilities to produce certain materials and i was speaking just a moment ago with one of your ministers and/or ambassador for those of you who happen to be canadian and the conversation we had is this and it is probably known to those in this room, when it was first put in place it really wasn't the problem, canada has never been the problem and nobody in america really believes the issues lie with canada but
there were broad brushes intentionally being used, canada was being painted with that same broad brush and it was largely intended for two major trading partners of the united states and this is essentially what has come of it. you asked about the impact yes we are a big metals producer and we have benefited as a state to some degree, 40% of all of the aluminum plate used in the automobile industry in the u.s. 40% of all of it produced is made in kentucky. >> have the tariffs helped you in that regard? >> back to the point the same could be said for stainless steel, 40% of the stainless steel is made in kentucky. those would seem to think while my goodness kentucky must be loving this and doing great what then comes of those base materials? they are fabricated and turned into something of value and with each value add there is pain that comes because for
every job that is protected and saved on the one hand there are 10 , 12 , 15 or hundred that are negatively affected. the end result of this is that the consumer pays for everything and at the end of the day the consumer who has the option of consuming or not ends up paying more. if the average cost of one of these automobiles goes up 1000 1500 or $2000 per vehicle, there is a cost to that. nobody will win if there is not resolution. this state of still being in limbo and ratification before ratification, the chicken and egg, if we don't get resolution, we kentucky, we america, and i would say speaking for canada if i may, all of us will lose if we don't get this resolved. >> you have a good line of communication to the white house, i am sure you have made
your feeling known, what can you tell us? are the tariffs going to be lifted before ratification? >> i am not going to speak for the white house but i will say i have had conversations both with the president as well as with the secretary and i will just say a couple of things broadly while not speaking to think that they maybe perhaps no in some measure. the president is serious about this and he truly does believe not just in the metals industry but a number of fronts that the u.s. as a result of policies put in place through recent decades has not gotten at least in its current state the same degree of equity as it relates to trade agreements that it has given, whether others would agree with that or not the president believes that to be true as to i and a lot of other people. this level of modernization whether it was for nafta or any other trade agreements needed
to happen. i think all of us agree after 25-30 years or whatever the case might be modernizing things is good. on the one hand he is serious, he thinks there needs to be modernization and change at the same time. he understands as does the secretary who has been given a tremendous amount of ability to exercise the presidents desires with a fair amount of latitude, they understand what is at stake and they want to see movement and was secretary ross said is i wish people would just have some patience. he says it frustrates him as a business person but the pace of politics, especially intercountry politics is glacial. it is glacial. we are making resolution. there were some a year ago that would not have believed that the usmca would come to
fruition. there were some that believe it or were not sure it would happen. it has. this too shall pass. the president wants resolution but he is also they are conducting this on a much broader scale than just our three countries. >> we have a question for the audience on this subject asking if you could explain the rationale for holding up u.s. -- usmca given how it is sitting with your state and considering the real problem with these industries is chinese overcapacity. >> i wasn't going to name any particular countries but this is really what it is all about. and to a degree india. this doesn't make china and
india bad actors, they are acting in their own best interest and they should frankly. so should we and so should canada. everyone of us has a responsibility to our respective citizenry to act in the best folks of interest of those folks. the question, it is hard for me to figure out what to say about that other than to say why has why is it still out there? because again i am not making excuses but there is a limited amount of bandwidth and there are multiple fronts upon which this same conversation is taking place. out of respect for his team they literally have 24 hours in a day and a limited about ability to fight these fires all at once. some are larger and others have simmered but it is not forgotten. i do know it is extremely topical. there is not one governor in america that wants to see where we currently are stay in place,
everyone wants a resolution. our president wants a resolution. the secretary wants a resolution. >> another question relating to autos from the audience and it has to do with the new agreement yet to be ratified. it is the new rule of origin i believe is up to 75% that so many cars have to be manufactured to qualify for zero tariffs, how will that play into kentucky? >> again this number has always moved where it needed to. when it was first being discussed the president and some of his team were talking about numbers very different than that 50% or 100% depending on who was talking and magically where did we end up? 75%. this is the nature of these things, is it impactful? potentially, the most american- made car in america happens to be a toyota that is made in
kentucky, it is the toyota camry made in the united states, 75% within north america is not an issue at all. this will be fine and to the extent that any particular model needs to squeeze the balloon a little to make that work it will be fine. it is to all of our interest because we are all linked in the automobile production, we are, we could not unwind it to the benefit of any automaker or any country at this point. i don't think that will be a big issue. >> the aluminum and steel tariffs have provoked a reaction in canada -- >> they very specifically hit your states bourbon playing cards. >> people don't talk about yogurt and catch up. >> they care about the bourbon. >> actually that industry employs a fair number of people.
>> it does and it affects billions of dollars worth of products not only in canada and mexico but around the world, of course it does. i say this not dismissively but people in canada still purchased it more bourbon in 2018 than they did in 2017 and the canadian government made a lot of extra money off of it. let me come back to your question, it is a money grab on a lot of people but it is what countries do. it is again why my point is that nobody is well served if it stays here, nobody is and nobody expects it to stay here for the long term. hasn't had a detrimental effect? no. every time i say that i get an ear full from everyone of these people for whom it has had an effect. it does hurt no question. it was designed to and it does. but is it putting people out of business? it is not.
what it potentially over the long term if left in place? conceivably. in the immediate term it is a way of two big players muscling each other up and in the end these things will roll away and we will all go back to playing hockey of horseracing. >> it was to gain advantage in the negotiations? the negotiations are done right? >> and yet you still have tariffs on our bourbon. what is up with that? >> each of us is gaining something back that we had taken depending on who says who started what the point is no one is winning in the long term nor are the end consumers.
what this really means is that for every one of our citizens who purchases anything whether it is toilet paper or catchup or yogurt or bourbon or playing cards, every one of the consumers is paying a little more for these things so at the end of the day if we want the best products at the cheapest possible price these things will follow it. >> china was also targeted, you do soybean production in kentucky, how much are you being hurt by the tariffs? >> if you look at what this federal government has done with the willingness to backstop any losses, making funding available to be drawn on that was the commitment from the government. they said listen this won't have a negative impact on our farmers, truth be told there is only two major sources the two largest sources for soybean
look at the history of trade negotiations not only between our nations but between the u.s. and any country over the past 100 years starting in the late 1800s. look at how it has gone to nothing to everything to nothing to everything to somewhere in between. this is the way it works and there are always winners and losers but the more we meet in the middle and the less we have any kind of tariffs on anything the better everyone is. this is where we literally and figuratively are joined at the hip. >> you know that is not the white house strategy? >> i beg to differ. i think that is presumptuous to know the say you know the white house strategy. >> just on tariffs, the president said he is a proponent of using tariffs. >> to get people to sit down and talk yes it is working
really well. >> unless it is holding up this agreement which i want to get back to and talk about the farmers. is this a when for farmers if this gets ratified? >> of course. ratification is the implementation of a much better product than was nafta. it is good for both of us. the clarity all of these things are good for both of us which is why it will get done and it will get ratified and this too shall pass. the short term pain will be gone and we will both be better for it. >> the dairy sector in canada has opened up the business agreement, is there benefit in that for kentucky? >> we have a decent dairy
industry but it is not as big as it is for some of our northern states and again it is not just dairy it's broccoli and blueberries and other things in the northeast really for states like maine it was very problematic. there are a lot of things that are needed on both sides. again both sides will be better when this is ratified and tariffs are removed. >> what are you as a governor trying to do to get it ratified? >> this is decided by 535 people in the united states, i don't know the exact number in canada but there is a proportional number and they have to bring this forward. it is topical in the senate more than it currently has been in the house. my understanding is just met with speaker pelosi talking about this exact issue which is what is needed. that level of conversation bringing this to the forefront putting it on the floor it will
pass, there is no real resistance whatsoever. nobody has an appetite to go back to this, nobody. it will get ratified to the point where it is put on the floor and voted on. >> there was conversation this morning that the governors role is important to this process. >> 100% of governors this i can say and i don't think i am speaking out of turn, 100% of governors want to see this thing done. again nobody win if this state of where exactly are we stays in place, no one win's because it is not even a pure some game, both sides lose. it is not like we are winning and you are losing and vice versa and the same for mexico. for all of us in north america we need one another, we are better together and we would be
to the extent we want to be mindful of our role on a global scale, we would be mindful to think of ourselves in some measure as an entity to the same extent europe does as a trading entity in the eu. this is coming. >> as you know there are some democrats who aren't crazy about the labor provisions worrying about enforceability, you don't think that is a significant obstacle? >> you really don't want my comments on that. >> sure we do. that is what makes this a fun conversation. >> in the long run no i don't think it will be. that is the beauty is that it is a similar form of government and how blessed are we to live in a government where we can have such diametrically different views on any number of things including labor issues and still ultimately come to a resolution and i don't think it will be an
obstacle. >> mitch mcconnell -- >> a well-known fellow in our neck of the woods. >> he opted not to take this up in the lame duck session. >> again it is bandwidth, how much time is there to address this? from the canadian perspective and i say this as an absolute complement there is no one like the canadians that know how to use the charm offensive, oh my gracious. every premier and every minister and the prime minister himself everyone is just loving on us governors and all of the people and the ambassador god bless her. >> no one would love to see resolution on this, i am guessing more than you would and it will come. >> [ indiscernible - low volume ] >> you don't want to over charm americans i am just saying it is a fine line.
it is going to get done expediently? nothing ever gets done in government. >> i spoke with governor dean and some ambassadors about the domestic situation politically and 2020 is out there. >> you are going to see this president for a long time. if you are not happy and you are hoping for reprieve i wouldn't bet on it and i am being completely serious. he will be reelected barring something really unforeseen happening. >> you are a politician and to understand the landscape. if this didn't get done before the 2020 election would that be problematic? >> it will effect your elections a lot more than it will effect hours. >> forgive me, it will effect
the canadian side more in terms of elections if this is not ratified. which is why the chicken and egg ratification before exemption removal the 232 ruling and things, tariff removal, it matters and it matters more i hate to say in canada than it does in the u.s. which is not to say it doesn't matter but not even a chance that the u.s. election will turn on this issue, not a chance. >> another political question, you are in kentucky and you are talking to your constituents, do they get this issue and do they get what is happening in washington? >> no. >> where is the disconnect? >> this is people everywhere in a free world where you are blessed with the luxury of being able to care about the things we do.
people care more about how their college basketball team is doing as we approach march madness and know far more about that than they do about this issue. we can afford to care about that. we have it so good that even if we don't know anything about or care anything about critical issues that affect our lives we still get everything we want when we want it and at the price generally that we want it. it is just human nature it is just reality, people just don't care because they don't need to care. we are so richly blessed in north america and in the western hemisphere in large measure that we can afford to be empathetic and that is a dangerous situation to be in. >> how do we change it? >> it is people like us having conversation and dialogue with various degrees of responsibility to carry this mantle. people like our ambassador and others who are responsible for moving this dialogue forward and for people like your prime minister and our president and all of our respective secretaries and ministers
continuing to hammer this out. light hiser on our side and on your side continue to sit at the table and move these things forward. that's how we will get it done. >> we have another audience question i want to get to. i would imagine ratifying usmca will be critical for them to feed all of the u.s. goods around the world? >> amazon is currently building their primary shipping hub in kentucky and it will be the second largest building in the world when they are done with it, 9 million square feet under roof and it will be done in the months ahead. all of this to say we are a logistical hub and this certainly does matter. of course they want to see it done. we have said this a number of times and i will keep saying it. >> you have been very optimistic about the prospects for ratification which is to a what if for me.
what if, what would the impact be for you as a governor? >> every state and every province will loose something, they don't need to give up if in fact we get a resolve but if it was literally just about the u.s. and canada and mexico we could sit down and have this buttoned up in a matter of days at this point but it is part fairly or otherwise of a much bigger mosaic. this is a chess game that has a lot of moving parts across the hemispheres of this globe. there is a little bit of this usmca and its ratification that has been caught up in the dialogue happening with other entities that we are having conversations with and it is going to continue to be. there will be short-term pain that could have been forgone had we only been able to focus on this, we don't have that luxury. it is why i am not second-
guessing at all and in fact i applaud the approach that has been taken to bring people to the table. here is the thing in this is important to understand. people talk about our president as if he invented the tariff, come on. the reality is all he has ever done is start to apply to many other countries maybe this exact a microcosmic example being somewhat of an exception but around the world we are only now saying to people who are charging us 25% to be able to import our cars and they are just as emerged and successful and produce as many cars as we do and sell as many to us as we do to them, in fact a lot more and they are charging us 25% to put them in and we are charging to an half %. maybe there should be equilibrium. people say how about we are 25 , okay maybe about nothing, they are very powerful. it is a very powerful tool to
get people to sit down and have a serious conversation. the same thing is happening in as it relates to nafta. it needs to be ratified and it will be and this too shall pass. >> governor we have to leave it there. thank you very much. >> thank you. >> that concludes our on stage discussion here but i want to seeing the praises of scotty here who pulled this all together could we have a round of applause? thank you so much for your leadership pulling this together today. thank you it has been a pleasure. >> thank you all, on behalf of the board of directors many of whom are here i want to thank you and i want to thank our moderators and i want to say thank you to gene who really worked hard today.