 We're back. We're live. I'm Jay Fidel here on Think Tech. We're talking about Asia in review here at the 2 o'clock block. And we're talking with Russell Hanma, one of our old friends and regular contributors, talking about relationships in the Pacific and around the world. Trade agreements, that's your specialty, isn't it, Russell? Thank you, Jay, for inviting me again to your show. And I believe the trade agreements is very important and crucial for state of Hawaii, since we're in the middle of the Pacific here. And as you know, 98% of goods that we consume are either brought in by ship or ocean carriers. Yeah. So, you know, when we talked last, we talked about trans-Pacific partnership and all the good things around that. Now trans-Pacific partners seems to be, what shall I say, on the back burner, shelved for now by the United States, by President Trump. So, how does this affect your thinking now that we really don't have a TPP? Well, I think, Jay, you know, as you know, that when Donald Trump, the president, actually did executive order to withdraw from the membership of TPP, the Trans-Pacific Partnership, which the 12 members, including our United States trade was a micro forum at back then. Two years ago, signed a signatory membership in Auckland, New Zealand, where the 12 members decide they have to ratify it in their parliament or in their Congress or their national diet. So, what happened in this case, with changing of the guards when President-elect Donald Trump come in and office became the president, his first mission was try to withdraw the TPP membership because he thinks that we're going to lose a lot of jobs because all the manufacturing plants going to be at overseas. Yeah. But when we look at the situation, it's the other way around. And we're seeing more investors coming from overseas that are members of the TPP as well. So, actually, TPP works better for us than not TPP. And it's not going to save jobs to withdraw from TPP. In fact, if we have TPP, it'll provide jobs. Am I right? Yeah. And that's the main concept because it is a high standard kind of trade agreement which gives small countries to compete with bigger countries in the companies as well, from large enterprise to median small enterprise companies. So, the way it was set up, Russell, who was going to be involved in TPP? Who were the nations that were going to be party to that agreement? Actually, there was 12 countries. Let me memorize a few of them. Just recite some of them. Yeah. Japan as well. We had the people like Vietnam as well, Peru, Mexico, Canada as well, United States. So, last year, I remember when we hosted the APEC conference in Peru. And then the officials over there knew that Donald Trump was going to be the next president. And they were going to withdraw from the TPP. The rumors. So, what happened during the closing ceremony, all the members decided that the hosting country, President Porosky of the Peru president said, made a statement, we should include all 21 countries to be a member of the TPP. That makes it more fair, so you don't have to... The whole APEC crowd, everybody. Exactly. So, you don't have to really compete with China's proposing with Oceana, the RCEP, Regional Economic Conference. I have a great idea. A partnership there. Yeah. It's really funny that, you know, he made the promise before, or made the campaign, you know, promise before that he wanted to withdraw from TPP. Now, he's doing that. And, I mean, doing it by executive order. And, you know, there's been a lot of discussion about the reviewability of executive order. For example, the immigration executive order that he issued two weeks ago, you know, has been stopped by the Ninth Circuit. And the government, the Attorney General of the United States, in that case, argued that his executive order was not renewable, a reviewable. And the result is the court found that it was reviewable by the federal courts. And they could stop his executive order, if that's what they decided to do, as a matter of the checks and balances under the Constitution. So, it's a really interesting question. In large part, the executive order was a matter of diplomatic relations. It's, you know, it's the visa connection and the immigration connection with all these, you know, countries, Arab countries, if you will. So, now we have an order, okay, that withdraws from the Trans-Pacific Partnership. And that involves our relations with other countries and goods and services coming into our country. And just as you could make the argument, as the Attorney General of Washington did, that the immigration order would affect the economy because it would stop the human resources of these immigration immigrants, people, whatnot, with the visas. And that was damaging the state of Washington. Likewise, couldn't, this is so interesting, couldn't the Attorney General of Washington say, wait a minute, withdrawing from TPP likewise affects the economy of the state of Washington? You know, you're taking away, Mr. President, you're taking valuable opportunities, advantages, and revenue from the state of Washington. You don't have the authority. You're a violation of our rights by doing this. We're going to take you to the Federal District Court. We're going to ask Federal District Court to put a TRO on this and consider whether you are within your authority, whether the federal courts can change what you did in the executive order. Isn't that an interesting possibility? There is a parallel, don't you think? I think in terms of immigration, you know, in terms of not just the seven countries are, you know, Muslim-oriented speaking countries, but with their religion and their beliefs. It has that ripple effect in certain ways because, you know, our founding fathers in the Constitution, you know, we made this great country with immigration laws as well and making, given the chance for opportunity to people to come here as a freedom and see if they can make it in the United States. And, you know, not only the first generation, then they got their second generation children, third generation. Like, we have, you know, I myself as a Japanese-American third generation, but I was, you know, fortunate enough to be born and raised in Japan because my father was with the military, so he was stationed after the World War II in Japan and met my mother there. So I'm kind of cross-trained between Japanese and American in certain ways. But, you know, it's just that you show your responsibility as well, your loyalty of what country you're serving in. You know, the people that have the exposure, these immigrants that come here, they want to do good. They want to do good for United States and they want to bridge the gap between their country they're from. And when you get to the second third generation, they're already, you know, full-pledge the Americans anyway, so. But do you see a kind of a comparison, a connection between, you know, the executive order relating to, you know, doing immigration trade, if you will, human resources trade with people by, you know, affecting the economy of the state of Washington and other states and being in TPP, affecting the economy of the state of Washington and other states. I mean, to me, it seems to be a kind of a seductive comparison to think that maybe the federal court has the right to review that order as well because it doesn't work well for the U.S. or the state of Washington. Right. I know that if you look at the demographic of the state of Washington, there's a lot of agents there. I know there's a lot of immigrants coming from China as well, from Hong Kong. I think the majority of across the borderline to Vancouver, 60% of our people from Hong Kong, Chinese. So it's a lot of immigration standards over there. Our former first Chinese American governor, Gary Locke, who became the ambassador to China. He's from Washington area. So, you know, we have a lot of agents living in the Northwest as well, in Hawaii as well. So, you know, we're all people and we just want to do good for our president of the United States with the Asian country. Yeah, you've been trying to get the TPP on board for a long time. You've been essentially working for that. As I recall, you're the promoter of the agent who has helped APEC and TPP for that matter. So you're as familiar as anybody in the state of Hawaii with these matters, with these trade agreements and relations, at least in a Pacific Rim, trade arrangements, Pacific Rim. So when, you know, when we lose TPP, which seems like we've done, what do you do? How do you feel about that? Is the rug pulled out from under you? All your work over all these years now? Yeah, I guess I got, you know, we've been working on it for 78 years to get our, you know, the TPP established. And I myself got on board when we hosted the APEC conference in 2011. And when I did draft the APEC master plan for the APEC leaders and the ministers and the working committee, I did include a measure that we want to include all 21 countries to be the TPP member, because that meets the requirement of the Bogar doctrine, which was established in 1994 in Bogar, Indonesia, when Indonesia hosted it back then. That's when all the leaders of the APEC got together and decided that by year 2020, all APEC countries throughout Asia should have a free trade area in the Asia Pacific region. So that's what TPP is considered as a free trade area measure, meaning the Bogar doctrine's requirement of having a free trade area. No tariff barriers. Exactly. And that's where now China is trying to push for the R-set with the ASEAN country plus six countries. Sure. Which is competitive with our arrangements. Right. So they might be the first one to meet the Bogar doctrine. So pulling TPP means to give the advantage to China, doesn't it? In certain aspects, I would say, but I think in terms of a multi-lateral when you get so many countries, it's still a bilateral, to me, the bilateral trade agreement will supersede it country to country. And I think that's what Donald Trump is looking at, that maybe he thought that having all these countries in commingling working together might harm the U.S. industry. Take jobs away. Take jobs away. But when you look at it from the micro aspect, not from a macro, you can look at what the countries are, because you're breaking down into different commodities, different industries, and the different industry does create different kind of business opportunity and creating job aspects as well. So he was not particularly civil with Prime Minister Abe. And then he made some statements, as I recall at the very beginning, sort of his nastiness. But then he decided, and maybe he was better advised, that he ought to meet with him. He ought to talk about trade. You ought to get together with him, find common ground, and have our traditional relationship with them continue. And so now this meeting took place in Florida just a couple of days ago. I believe they met in February 10th in Washington for one day. And the following day, the Prime Minister Abe and the Mrs. Akime, the first lady from Japan, they rode the Air Force One with the President. And went to Florida with Marco Lago and resorted and was able to golf at the following day at Trump's International Golf Course. What do we know about their discussions over trade in that meeting in Washington, Florida? Actually, there was already a gender or pretty much, you know, the working committee and the groups through the State Department as where the counterpart of the Foreign Ministry's office that done some logistics before. And there was a press release saying that Japan is willing to invest roughly $450 billion to create 700,000 jobs in the United States and to build the infrastructure project. So they're proposing like the bullet train project for the high-speed rail in California. There's one in Texas, from Houston to Dallas. And they're working on the MagLift technology on the high-speed from the East Coast, all the way from Washington to New York, Philadelphia, you know, Boston. This is big money. Exactly so. This came after the inauguration, am I right? Right. This is not after those initial friction points. Yeah, because I guess I mean, you know, maybe because of Donald Trump was pushing everybody, like, you know, in terms of creating this fear factor where fear motivates people. Well, he achieved something, he achieved something, didn't he? So, I think... Out of Pompeo, yeah? Exactly. So, I think what Japan was trying to offer something in saying that, you know, we've been a good partners, we've been a good ally for the 60, 70 years after the World War II. And we invested so much in the United States since the rays of 1980s and 1980s when Prime Minister Abe was, Kanakasone was the Prime Minister of Japan and Ronald Reagan was the President. That's when we had so much investment from Japan. Yeah. They're buying out all the golf course, resort business. Oh, billion, sir. Exactly. So, maybe he feels like, you know, they want to revisit that avenue again. Well, that should be welcome, I think. Let's take a short break, Russell. When we come back, I want to flesh out exactly how these talks are going to proceed. And how they could affect not only the United States, but Hawaii Day. We'll be right back. Hi, I'm Stacy Hayashi and you can catch me on Mondays at 11 on Think Tech Hawaii. Stacy to the rescue. See you then. Aloha, I'm Bill Sharp, your host for Asian and Review, a weekly show right here on Think Tech Hawaii that's devoted to substantive analytical discussion about contemporary events in Asia. By Asia, we mean anything from Hawaii, Western Pakistan, and from the Russian Far East South to Australia and New Zealand. Thank you for watching Think Tech. I'm Grace Chang, the new host for Global Connections. You can find me here live every Thursday at 1 p.m., where we'll be talking to people around the islands or visiting the islands who are connected in various aspects of global affairs. So please tune in and Aloha and thanks for watching. We are so happy to be with Russell Hanma. He is the agent or representative of the APEC group and also until recently, I suppose, the TPP, which was recently had the plug pulled out by the president. So we spoke before the break, Russell, about how these bilateral negotiations would supplant negotiations around TPP. Now the U.S. has pulled out of it. And what I want to know is how do you think those bilateral discussions are going to proceed? What's going to happen now? What's the likelihood of having that success, of having that $450 billion of Japanese investment hit our shores? That's a big wish list for us in Hawaii, but I think what's happening right now is after the meeting they had with President Donald Trump and Shinzo Abe, the prime minister from Japan, they said that they gave the responsibility to Vice President Pence. And Japan has a secretary cabinet member, Suga, which I guess those two are going to be kind of working out the U.S.-Japan bilateral trade agreement. That's at a high level now. Exactly. And to me, I would like to see the framework, how they're going to approach, because I know the main focus is that they want to give a low interest loan to start this infrastructure type of project. So it's infrastructure. The idea is that $450 billion would, at least in some substantial part, go to American infrastructure, which is consistent with Trump's campaign promises to rebuild American infrastructure. Exactly. That's where our construction and development come. They'll give a lot of the so-called blue collar workers with the construction unions jobs. That's like in the Midwest, what Donald Trump's, most of his voters, got in terms of just the overall industry, American industry, they want to bring back manufacturing as well, some of the... Invest in manufacturing. Exactly. And that, of course, theoretically creates jobs here. Or even assembly work or heavy-duty kind of projects that can be hard, you know, the blue collar workers to get more... So I guess none of that money would go to build a wall against Mexico? No, I don't think so. I think what Japan's pretty smart in a way to allocate their funds, I guess they want to make sure that the Japanese contractors want to get the business. So what they're going to... To me, what I'm going to see is what's going to happen. You're going to see a joint venture kind of partnership because you're going to have to give jobs to the American contractors with the construction industry here if they're going to come with the infrastructure project. So you're going to see a lot of joint venture kind of approach. And that's where we got to start, folks. I'm telling that I talked to Chamber of Commerce people here. I was here at the state legislature and some of these civic leaders. And I've been doing a lot of correspondence with the email, with Washington as well. And even with our Japanese delegate, with the foreign ministry's office, with Kate Island, business leaders in Japan, with economic policy holders, makers. So make sure that, but in our case, strategically, if we want to position ourselves Hawaii, how are we going to benefit, we've got to create this fund here. So I kind of suggested that, you know, in terms of a statement. For example, the rail project. You know, there's the dialysis of a big disarray of the issue on the rail project. You heard it here on ThinkTech, yeah. Yeah, the half percent excise tax increase. I know there's a bill in the legislature. As a matter of fact, I just testified this morning on House Bill 1442 regarding to increasing the excise tax for indefinitely. What was your testimony? Basically, I told them that if they're going to do this, make sure we need to build on the infrastructure, not only for the alignment. And I told them about what the meeting they had with Abe Sienzo and Donald Trump that there's going to be roughly $450 billion for infrastructure projects. So I told the policymakers that even though I told the mayor well today and the council chair, Ron Minore, that you should look into this and see if we can try to tap into somebody's fund and establish this transit development infrastructure. The problem I see and I raised it to you before is that we're not Donald Trump's favorite state. We voted against him. We're strongly democratic, good for us. We generally, I mean, although some people voted for him here, most people don't like him and didn't vote for him and wouldn't vote for him and criticize him. And our delegation, all four of them in Washington, criticizes him. So he is going to control the way this agreement is finalized with Japan. He's going to control who gets the $450 billion, isn't he? And if he doesn't like somebody, then he would say, sorry, I know you need money, but I'm not going to give you any money because I'm the president. I'm not going to give you anything. Isn't that going to happen? I don't think he's going to play the heart to get kind of approached because the money's actually coming from the Japanese through there. Do they decide who gets it? Actually, it's going to be more like a low interest rate loan. So I think it's going to be like in terms of funding mechanisms, it's going to be like, you've got to go through Bank of Japan. And from there, they've got the financial institutions. It might be Mitsui Bank or could be Mitsui. So they could make it anywhere? Yeah, down the line. And then if they have a subsidiary company in the US with the banking industry, but they're still going to work out the framework on that, how they're going to do it. And is it going to be a straight down, low interest loan? Are they going to prioritize it and give preferences to joint venture kind of projects? Or if the American? They would decide that, or would the government decide that in negotiating the agreement? I think they've got to decide on the terms and condition of how they're going to allocate those funds. Which have not been negotiated in the final act. I think we've got to get the working group people together. No, the thing about it is, I mean, I get this. I can see that $450 billion, billion, did I say billion? Billion dollars is really attractive to us. We want that. We want investment that will help us build our infrastructure. Any president would agree on that. That's really good. However, and low interest loans, we like that too. We always like that. Question is, what's in it for Japan? They're giving up the money. They're taking the risk. They're getting low interest on these work. Why are they doing this? What's the quid pro quo for them? I think if you look at the history of Japanese business in the United States, and it goes back from the 1950, 1960s when Japan was going through robustity. The economy was growing. They were the export countries. And they invested so much into the United States, sitting up factories already from electronics firm to automobile industry, and from real estate, from entertainment, from TV, to anime. Huge investments. They're so diversified here that they know the United States market is in the, because of the spending power that we have. We have like $18 trillion of gross domestic money. Why don't they just do it anyway? They've been doing it. Well, they did do it more, I think, in the 80s, early 90s than they are now. But why don't they just do it? Why do they have to have an agreement to do it? Just make those investments. What's holding them back? The existing laws, they just said they want to use this framework because they're so, I guess they took a survey prior to when Donald Trump was trying to target Japan with China with currency magnification or the trade imbalances they have. But so what Abe Sienzo did was he kind of literated and kind of reminded Donald Trump and his administration that, hey, Japan's been a good friend, a good ally, a partner, and they've been a good investor and a good corporate citizen in the United States. So he kind of reminded Donald. So I think after the math of when they spent time together in the golf course, that they felt more comfortable when there was good chemistry and a good bond. I also, I come away, and you can disagree with me, but come away with the feeling that he intimidated them. They came around and said they would, the olive had popped out of the jar and they would make a $450 billion of loans to the U.S., low interest, below market by definition. And that is essentially to buy a better relationship with this administration. Am I right? Yeah, you can certainly ask, but yeah, that was a good protocol kind of gesture they made. And it's just that I like to see what kind of formula they're gonna apply. And I know that, for example, Japan has already 1.2 trillion dollars of the United States government bonds that they've been purchasing. So they're the one number one. It's already starting. Yeah, so you know, that's been happening like 34 years of allocation of buying the U.S. government. I know China is right there on billion dollars as well too, so. Okay, so the points that I get out of this is number one, TPP is off the table for now because he pulled a plug on it. And although it's possible that somebody could dispute that in court, maybe in the same kind of issue as we had in the immigration executive order, that's not likely to happen. Then we have the possibility that one day, maybe not in this administration, one day the TPP partners will be the APEC partners, all 21 of them, and that would be great. And you'd like to work for that. I know you'd like to see that happen and you'll be there. But that's not gonna happen right away, even if it does ultimately happen. And so what we're left with, at least in the Pacific, right, is this bilateral agreement that's contemplated, negotiated at a high level, involving an assurance or a representation of 450 billion dollars that would largely go for what joint venture and infrastructure, low interest loans in the United States, all good. And you also mentioned that you were down there, testifying, trying to alert the representatives, the legislators and city council members and the mayor, about the possibilities of getting in on this. But you know, Hawaii does not have a great reputation for doing business and entering into lucrative, productive joint ventures. How can we actually get a fair share of this? A share representing a very close connection with Japan on a social level, on a tourist level, and historically. How can we, what do we do, aside from testifying and writing articles for the paper, what do we do to actually get the Japanese to invest the money here in Hawaii Day? Well, I think you gotta get the voice of concern with the Japanese community here, with even with the Chamber of Commerce as well, the Halloween Japanese Chamber of Commerce, the Hawaii Japanese Chamber, even the American Chamber of Commerce of Hawaii here as well, then you gotta get these business leaders to be aware with it that they have a possibility of getting another funding source. A big one. A low interest rate and possibly do a joint venture partnership or come up with a business plan. Maybe the banking industry's gonna have to play that role as an intermediator to allocate these funds. And I'm sure a lot of these Japanese banks are willing to do that with the Bank of Japan and see how foreign ministers are. What's a fair share? What's a fair share? In other words, if you had the ear of the Prime Minister or the ear of Vice President Pence and the people involved in negotiation, what would you think a fair share of that $450 billion would be for Hawaii? What would you argue for, Russell? You know, I guess representing the United States as being a U.S. official here, you gotta be kind of fair from looking for the big picture from the nationalism concept, being a federalist as well. There's other 50 states, we got other 49 states, I'm sure they all wanna have their fair share, Alaska as well, California, five billion, 10 billion, 15 billion, 20 billion, what? To me, that's a good question. The more we get at the mirror we are, but 10 billion, 20 billion would be fine. But I guess it's how much, I guess the governor's gotta play that role because I know I was talking to the Japanese officials here and he mentioned that Okinawa is thinking of having this healthcare system because as you know, the military base is gonna be relocated to Nerima area and that base is gonna be open so with the Japanese Okinawan community, what's to do is build a healthcare system there and like through the Asia Pacific region and they're looking for Hawaii for our advice and see if we can. So I kind of suggest maybe having a UH Cancer Center doing a medical healthcare system even with Queen's Hospital here. What a great idea that is. Yeah, exactly. Well, there's all these possibilities, I wanna follow them with you. I mean, I remember that Okinawa has some of the highest life expectancy in the world, diet or whatever it is and not only can we help them but we can get data from them and help our health system here in Hawaii by learning what they do in Okinawa. Yeah, another thing is that even with our space program with Pisces, the Pacific internet space exploration system, we can, you know, already Japanese exploration like NASA and JAX is already working on this Mars mission, the nuclear moon based camp development with the robotics and 3D mining and we even have contests and through the universities and colleges that to come with the robotic mining applications so they can pump more money into that and the International Space Center, they need to establish a brand new one by year 2026 because of atmospheric pressure. The current International Space Center is gonna be up to lead. From your lips to God's ears, this should all take place. I know you're working hard for it, I wanna stay in touch with you, find out how it's going, find out what we can expect from these negotiations and from the investment from Japan. Thank you so much for coming down. Thank you, Jay.