 Okay, we're back, we're live on Jay Fidel, here we are on Think Tech Global with Russell Hanma. Welcome to the show, Russell. Nice to see you here. Yeah, thank you, Joe, for welcoming me again. I know, like, last time I spoke on the TPP was on the post when Donald Trump was elected as a president. Yeah, well, let's talk about TPP again. Let me see if I can reel back my own tapes, okay? It was happening and then he was elected and then he pulled it apart, took the wings out of it, dismissed it as he did so many other international possibilities and opportunities to the U.S. Things have changed and we need to know about that, Russell. Russell, by the way, is a senior official, American official for APEC. That's Asia Pacific Economic Cooperation, okay? So what has been happening with TPP lately, the Trans-Pacific Partnership, that makes it look like this will be resurrected for the benefit of the United States and others? As you know, Jay, two weeks ago when they had the World Economic Forum in Davos, Switzerland, and I know that Donald Trump, the president, attended the summit there, the last president of the United States, like that was Bill Clinton in 2000. So Donald Trump wanted to go there and show the world that what his economic plan was and why make the United States as being number one in the industry and making America great again. So he wanted to literate that to the leaders there. And when he made a statement, he said that he's interested in rejoining the TPP again. Because as you know, in Japan, matter of fact, about two weeks ago, in January 23rd of this year, they had the 11 members of the TPP without the United States and they were willing to go it alone without us. So we had lost ground. We were off the platform. All of a sudden, 180 in Europe in that World Summit. Yeah, exactly. And that's when the Canada's Prime Minister Justin Trudeau made a statement that he is interested in rejoining in or moving forward with the comprehensive, progressive TPP. Yeah, OK. That's where we have Japan, Australia, Canada now, and New Zealand is kind of pushing forward. So why did Trump have this change of heart? What made him change his mind about this? It's a major change. One way he changes this way, then the next minute he changes that way. What made him change back to TPP? I think he kind of realized what the ramification was. And there was a lot of pressure from the multinational corporation with the companies that's doing import-export. And as you know, most of these multinational corporations rely on international transaction to generate their revenues. And as you know, he changed the corporate tax structure from 35% to 21%. So in other words, he wants all these multinational U.S. corporations to come back to the United States and have their headquarters in the United States. So that way, they can give the better of a corporate tax structure and pay better to their employees and the better of the world. Well, apparently, they are the richest companies in the world. A number of them are American, not all of them, and they have great influence on him. And therefore, you know, they motivated him to make that huge tax reduction. It's cutting the corporate rate in half. That's quite something. The benefits for corporations are a lot better than the benefits for individuals. So apparently, they had a lot of influence over him. And now TPP. And if, as you say, these companies will benefit by a resurrection of the American position in TPP, well, he's serving them yet again. They are an important constituent for him, yeah? Exactly. I think he kind of stradulized that maybe in terms of when he first came in an office in 2017 last year. He made that executive order that saying that he wanted to withdraw from TPP and focus on a bilateral trade agreement with it. And what happened was so much he used that fear factor kind of approach. And so all these international partners that was part of the TPP or outside of what the European Union countries wanted to work with the United States and wanted to invest in the U.S. So it is just to show that good gesture that we're still partners with the United States. We've got so much tremendous amount of investments coming in now. Yeah, after this actual format, yeah? Exactly. So let's see how long that lasts. I mean, there's a kind of two-edged sword there. But looking at TPP, and before he made this reversal in Europe, they, the other members of TPP had sort of indicated they were going to go it alone. They didn't need us anymore. They were going to have their own TPP without the United States. And they were moving in that direction, no? So now we're back in. So my big question, the big payload here for this discussion, Russell, is how do you get back in? What do you do? How does the United States re-insinuate itself into the process of TPP, into the meetings, into the policy? What do we do? Yeah, thank you, Jay, for asking that question. I know a lot of the audience is kind of wondering which direction we have to take. But as you know, when we had that TPP meeting in Tokyo in January 23rd, they decided to bring it in March 8th of next month. There's going to be another TPP meeting with the ministries in Chile. And that's when they're planning on signing and moving forward with the comprehensive progressive TPP. And there's actually about 22 items in there that still they haven't really discussed. So they're going to bring that in the agenda later on. At the same time, they may be asking other countries if they're interested in joining in as well. United States can be on the sideline as you know, our trade representative, Robert Leisenhalder, he can be sitting in and observe what's going on. And as you know, the TPP members once, they want South Korea to join now that Thailand is interested. Now Indonesia is interested in joining TPP. And this all follows Trump's remarks in Germany? Actually not. They've been negotiating that. I think they've been 11 members. They wanted these additional members. And maybe that was a reaction to Trump's withdrawal. They said, OK, the US doesn't want to be involved. We're going to get other members. We're going to make it bigger and better than any TPP in the past, with or without the United States, right? Yeah, actually, when the United States was involved with the 12 countries of TPP, we had like 40% of global world GMP. And now without the United States withdrawing, they wanted to include South Korea as well, Thailand, Indonesia in order to cover the percentage of the threshold. So these new countries are involved, and now the United States comes back, represents a huge economic base in the world, doesn't it? Yes. Better than more than anybody would have anticipated, yeah? Actually, if you want to look in those kind of terms, but I know that the TPP members want to have United States to rejoin again. That's going to, because in terms of we already did the bilateral agreement with those countries, now they can go with the multilateral and see which direction they can, and the United States can come up with a better policy, make it better. And I think Donald Trump can make a better deal with it. And I know they're trying to negotiate right now. Even with countries like Canada, they're more concerned about the culture, Ascot, but the music and how they, because a lot of them speak French there, the movies as well. And I know like New Zealand is more wondering about the architecture of the dairy products, and they need to finalize that. And now the terms like in manufacturing, good and food items are going to stay as what was negotiated in back in two years ago. But isn't there a point, Russell, where you can have too many countries in a given type of partnership like this, a trade partnership like this? I mean, Trump was talking about bilateral, that's two countries, yeah? And this would have been, it was 12, now it's going to be way more than 12. Is there a point, Russell, where it gets to be self-defeating, where you can't, you know, can you have a trans-Pacific partnership that covers every country in the world, or is that just too much for this kind of device? I think it's kind of in terms of region. I think when we first established the TPP, the Trans-Pacific Partnership, there was four members and gradually grew up to 12 members. Everybody wanted in on it. But most of that was more focused in the Asia-Pacific region, the APEC countries. But if you look in a global concept, we focus with the European Union. There's an agreement that we were working on called T-TEP, which is called Trans-Atlantic Trade and Investment Partnership, which still, we can still proceed with it. But we want to make sure that we do the TPP first. So we're not into the European thing yet. All right, now that was kind of deferred. He backed out of that. Yeah, we're kind of, it's not yet. He didn't go back into that yet. We didn't kill it or anything. There was no executive order or anything on that. It's just kind of being deferred, being limbo right now. But as soon as we can go and pursue, because I know our trade administration signed on the USTR office is working on the NAFTA with Mexico and Canada. What's the status of that? I think they're still going to resolve some of the trade issues. So have we backed out of that? Have we put that on an ice one? I think right now we haven't backed out on it. So I'm sure that they're going to try to work it out. And I know that the TPP is first. No, I think they're going to try to work on the NAFTA first. NAFTA first, then TPP, and then the transatlantic. It depends if we can come up with the better terms and condition in the existing TPP. What does better mean, Russell? I think in terms of protecting our labor, if we do have a TPP agreement, you've got to make sure if these foreign investors want to invest in the US soil to come up with a manufacturing, those trade agreements are in there, and they're going to include American labor using our American Union, our American contractor. And what percentage of a joint venture of ownership they can have? Is it going to be a 50-50 kind of concept? So those kind of things are not addressed in the trade agreement yet. So he's trying to make a better deal for the US. That's his position. He doesn't mind going into TPP, but it's on different terms than TPP originally contemplated. So I mentioned that last time when I talked about the TPP on the show here, so in other words, these foreign investors or these international capital that's invested in the US soil, they can start up some kind of venture here and come up with a managed factoring of goods or financial services here, and they can export their services or that product back to their own country or to some other abroad countries and benefit from that from the trade. So back to the question. What do you need to do to put Humpty back together again here? You have meetings. And we started meetings already. You know, even after a week or two after he made his statements in Europe, we already have meetings going. Is this true? Yeah. I think the main thing is we've got to make sure that those 11 members are going to accept us. Well, are they ticked off at us? I had the impression they were ticked off at us because we backed out. And they were going to go it alone because they were ticked off at us. And now I think we've got to thank the Prime Minister from Japan, Prime Minister Abe Sengzo, for supporting that, giving us an open statement that we have a concession to rejoin again. And I think even Australia, the Prime Minister there in New Zealand, they all want us to join it, even the Peru, Chile. And Chile is saying that they want to pursue this and they want to have the signatory of the new TPP, the comprehensive progressive TPP, to be signed in Chile in March. This suggests that the State Department has been busy. I mean, these things do not happen of their own. They don't happen because somebody woke up one morning and said, gee, I think I'll support TPP and the American re-involvement. It must be that the State Department is talking to these people, Abe, for example, and saying, look, how about supporting us? We want to come back in. We need your support. How about making a public statement that supports our re-involvement? That must have happened. It must be happening now with these other countries. Who's doing that? Is that Tillerson? Who's doing that? I think right now he's got to be under the United States Trade Representative Ambassador. That's Leighton House? Yeah. Robert Leighton has to move forward. I know that he's been sitting in on these trade negotiations already on the sidelines. But the other thing is he has to show a good gesture, come up with a good report to the Trump administration. And from there, Trump's got to realize with Rex Tillerson saying that with the State Department that, hey, maybe it's good to join us, see the comprehensive. Well, I get from what you're saying. And then what happens? Then he's got to issue an executive order saying that we want to rejoin again. Right, because he made an executive order pulling out, yeah. Yeah, to resent that other executive order. But the Congress has got to take it up. But the Senate could have done deal to me at all, Russell. I mean, this is wishful thinking in many ways because the Trump administration has apparently a current strategy of trying to do a better deal, make it better for the U.S., significantly better. And that means in a zero-sum game, that means it's worse for the other guys, because this is just a bunch of bilateral things merged into a multilateral thing. And so he's got to go out there and negotiate. And it sounds to me like from what you're saying is that unless he gets a good deal in Leighton House's current pre-negotiations, he's not going to issue that reversal executive order, am I right? Yeah, I think so, but I think he realized what the trade-offs got to be already. So to me, the Trump, when he, good thing is not only the TPP, he's got to work with the European Union as well, on the other side of the Atlantic Ocean. And a good gesture is when it comes to his G7 summit meeting, which is going to be in Quebec, in Canada, and Charles Vox, Canada. And it's going to be held end of May 31st. This spring. This spring. And that's when the G7 country is going to get there. Abyssinso from the Asia is going to be there, of the Japan side. There's going to be the European Union people, Germany, France, Italy, going to be there. So the top seven countries going to be there, and they're going to negotiate. I'm sure Trump can bring a gesture. So hey, by the way, in Asia, we're interested in rejoining the comprehensive progressive TPP. He's telegraphed that. And vice versa. And the European leader, he can say, if that works out, we may be joining. And we might try to revive the T-tip. And that's going to get the European side excited. Yeah, but when you say it works out, it sounds to me like this is all a large strategy on his part to try to get the best, he's negotiating, yeah? This is a negotiating strategy. The whole thing, he's going to try to get the best deal in three little Indians here. And each one is going to be based on success in the previous one. If any one of them fail, then he's not going to do any of them or something like that. So it's hopeful. It's wishful. And it depends on whether he takes positions that the other guys feel are reasonable. If he doesn't, we're going to get it to stalemate, right? Like in Congress, stalemate. Isn't that true? Yeah, not a stalemate, but I think it's just got to be ongoing negotiating. You never get there. And it's just a matter, it will still be in the sidelines until we finalize it. We become a signatory member again. And the U.S. Congress got to approve that trade agreement under comprehensive, progressive TPP, and give that 90-day notice. And from there, it becomes officially, and from there, the private sector and the multinational can go there and do the trade. And they can get that right agreement itself. So let's go back to the Congress thing, yeah? So before, just talking about TPP, before we had, we were in TPP. We were a leader in TPP under Obama, I guess. And that was good. Then Trump pulled that by executive order, okay? Now you say if we can cut a deal with the other 11-plus members as it exists in TPP, he would issue another executive order. But that has to be affirmed, ratified, confirmed by Congress. But he, actually, he has to show that... It's a treaty. Yes, exactly. As a treaty. Yeah, but he's got to show that agreement, sign the agreement with the leaders and bring that to the Congress. And the Congress got to pass some kind of measure saying that they do accept that. And then becomes an official agreement. Well, so what happened before? Obama made it by executive order. Did Congress approve the original entry of the United States into TPP? Actually, at that time, the Congress was still negotiating with the both. Never did. And then it was kind of sitting limbo. Then the new administration came and they kind of made the exit. But there are no positive... So it never got confirmed by Congress before. It never got ratified by Congress before. Because there was a two-bill, one was to protect American labor and see if they can give some additional funding to educate the people that was affected. How about NAFTA? Did NAFTA get ratified by Congress? In the... Yeah, NAFTA got ratified by Congress. So you can't make it go away by executive order. You cannot. You've got to have that Congress. What about the European, the transatlantic? Is that ratified? That hasn't been ratified yet. Okay, so that's still in limbo, yeah? That's the same time we're negotiating with the TPP. We live in a global world. I don't think that Trump understands the nature of a global world, but let's just take it as a basic premise that we live in a global world. And global cooperation is the way to a better planet for everyone. Let's assume that. What's the importance of these trade agreements? Do you favor them? Do you favor all three of them? On what terms do you favor them, Russell? How important are they to the world and to us? I think in terms of just the leadership, showing that we're Americans in general, our global leaders, that we're open for all import, export, and we're willing to work out if we have a problem. And I think that we showed that in the past administration, all the years that, in terms of days that we've been going overseas, starting up businesses. To me, I have no problem showing that American leadership globally. Does it benefit us? For example, you were in favor of it before, too, weren't you? You're in favor of trade partnerships in general. That's the nature of Russell Hanlaw, right? That's your worldview. Am I right? Yeah, I believe in the trade agreements, but I think it's... Were they two weeks before? You agree with Trump now? I think in terms of there's some adjustments that we could make, that's what I wanted to make Hawaii the headquarters for TPP, because we can do things with due diligence, using our American law here and come up with a better due diligence. And I think their international... Do you think there's any chance that'll happen? I think Trump even made a statement that state of Hawaii is an ideal place where... Did he really say that? Yeah, where government officials can come here and meet. For TPP? In terms of any agreement. In general. In general, any agreements. He's saying that Hawaii's an ideal place, special for Asia Pacific, special for Asian countries to come here, to meet as a gathering place and discussion. That's where we are, yeah. Exactly. We're the heart of Asia already. We're the gateway of Asia. So let's talk about the economics for a minute. Suppose TPP is renewed, okay? And on terms that are mutually agreeable, I mean, I have my questions about whether that can ever happen with this president. But let's assume it happens. What is the benefit economically to the United States? What is the benefit to the global community if that happens? Well, I think in terms of if it does happen, we can use Hawaii as... Even if it's 11 members... Economic, economic benefit. Even those 11 members signed on March 8th, and they proceed that we're still on the sidelines, we can still rejoin in with other members. And maybe we can have the meetings in Hawaii, just like we had it like two years ago. We had one in Big Island. We had one in Maui. What about the economic benefit? Economic benefit. What is the economic benefit? How does that work? It's a global free trade. We can make Hawaii the trade of the Asia-Pacific region and meeting the Bogar Doctrine by year 2020. What's the Bogar Doctrine? That was done in 1994 when in Indonesia, Bogar, the APEC countries, the APEC leaders got together and decided by year 2020 they should have a free trade area in the Asia-Pacific region that all APEC members should have a free trade agreement. So there's the connection between APEC and free trade. APEC is free trade. Exactly. That's why we've been pushing the TPP and they included that in my master plan for APEC and trying to meet the Bogar Doctrine and China was trying to pursue their own with the RCEP back then now but they're still got to work out with the ASEAN countries. Okay, let me flip the question though for a minute. Let's assume that he takes a position that's too hard and those guys, they don't feel the same way about the United States as they used to under Obama. They say, nope, we're not doing it. We're not going to get into a green with you. Take a walk. It sounds to me like NAFTA is in trouble at that point by virtue of Trump's strategy and the transatlantic partnership is in trouble at that point by virtue again of the Trump strategy. What happens economically if it all fails? What happens to us in Hawaii and the U.S.? What happens to the world in terms of the global economy if it all fails? I just got to stay with the bilateral trade agreement. We just have to pay tariffs on non-tariff and tariff items and some of these goods that we might have to pay like 10% or 15% more than what you pay at the retail. So we pay more. Exactly. Yeah, it's harder too. I guess a question I would ask you though, it seems to me that when you double back like this, like he's done, you lose credibility. In fact, the press is full of this kind of concern that he's double backed. He's changed his position. He doesn't really understand the nature of international trade. He's made statements that are really not too diplomatic and insulted people. He should not have insulted. So, Querie, right now today, have we lost our leadership on trade platforms like this one? Have we lost our diplomatic primacy the way we used to have it? And if we have, what do we do to regain it, Russell? You know, I don't want to pinpoint, you know, saying it was our Trump's fault that we lost our competitive vision, our American leadership. But we still do have our American leadership out there and we have our, you know, business leaders are there. We have our ambassadors from State Department that's qualified, a career diplomat. So, you know, our American presidents are still there and overseas and we're showing our leadership. And you know, that to me, it's just a political thing that Trump is our president and he's our presidency and we just got to play it out that right now. Yeah, yeah. Well, it's interesting because it's certainly it's political. Everything around him is political, but it's also diplomatic. It's also, what do I say, international feelings. It's feelings. I have relationships with people, you know. It's all about, you know, relationship, guan chi kind of relationship. Anyway, so I want to go to one other thing and that is what is your advice to Trump? He's right over there, right? Camerawon, can you tell him what you think he ought to do to get over the hump on this and to get back in good order with the global economic trade community? Go for it. Yeah, I think in terms of before the May 31st G7 summit, he can work out something with the TPP members saying that he's interested. Maybe ask Abe Sins of Japan's prime minister to kind of soften up the TPP members because I know Japan is taking that leadership and they had that meeting in January 23rd to move it to Chile in March 8th for signatory members to sign the Comprehensive Progress of TPP. On the other hand, maybe if that works out, he can bring it up to the European leaders doing the G7 summit meeting saying that if that goes good, we would like to pursue on the European Union's TTIP. So that kind of shows a good gesture that he realized what the consequences were, what the ramification was that he's willing to look into the multinational trade agreement instead of bilateral. Yeah, yeah. Would you advise him to go easy on these guys, not to be too pushy with them so that actually they can make a deal? I mean, making a deal even if it's not a great deal is still better than not making a deal at all, right? Yeah, I think he learned his lesson when he went to the NATO summit back in Europe like a year ago. Yeah. Now he went to the APEX summit, the East Asia summit, so he knows how to deal with the international leaders. So I think he's playing that protocol and being a good diplomat in certain ways. Yeah, okay. Now in Republican Congress, of course, they're going to back him up and ratify what he comes up with, assuming he comes up with something. So I'm not going to ask you what the Republicans should do. We already know what the Republicans would do in Congress. But I will ask you to address the people who are a little confused. They're not sure which way the wind is blowing on this. They're not sure how it affects them. They're not sure what he's going to do from day to day. So what kind of comfort would you give them? They're right out there. Camera one. Yeah. Yeah, I think in terms of Hawaii, because we're think tech Hawaii, and in terms of home rules for the homeboys, we want to proceed with our national policy and make sure that Hawaii still maintains their 20% or federal funding here and see if we can benefit from the international trade. And because we're in the middle of the Pacific and especially have our Asian partners here. And our tourism looks good. And hopefully these international partners can come and invest in Hawaii, as well as the mainland investment with the mainland partners. That Hawaii should sustain certain economic development opportunity here. So are you suggesting people get behind this effort to renew the TPP? Yeah, definitely. I think our policy members at the state legislature understands this. I brought this up to them. The East West Center scholars in the academia field understands this. Yeah, yeah. Okay, one other thing, Russell, you are the senior American official representing APEC, Asia Pacific Economic Partnership. Well, APEC, yeah. Anyway, so you're the senior person in that regard. And you have been following trade from Hawaii's point of view but also from APEC's point of view for a long time. You've been present at a lot of these APEC conferences around. You've talked to the people. You know the story. What is your role in bringing TPP again together? Yeah, basically I tell everybody that my role is based. I just want to educate the leaders. I want to educate the people to understand what the TPP and the trade is all about. And hopefully they can make a better decision among the leaders. And that's where I come from. I'm just a steward that's trying to relay the message and hopefully the leaders can understand and come up with a better decision with the policy side. Yeah, good for you, Russell. That means you have to come back and talk to us some more. Keep us current on what's going on and what we'll go on this spring all around TPP. Thank you so much, Russell. Thank you, Jay. Appreciate it. Yeah.