 Good morning everybody welcome. We're delighted to have you here and there's some friends that are out there getting coffee And they're gonna be flooding in here, and I look forward to having them join us. This is a Really a wonderful opportunity to hear from Senator Hatch And I would send her thank you and I know the demands on your time to be able to come and join a Think tank and share some views and the policy community is very valuable For us and I want to say a personal thank you to you I I had the privilege of working in the Senate, but not not for you And but I have had a chance to watch your stewardship Through these years and want to say thank you for remarkable leadership for America and we we we've greatly valued and needed That leadership more now than ever colleagues today senator hatch is going to speak with us about the TPP and Everybody knows how important that is. I'm a defense guy. I Spent my career in and around the Defense Department strategic in my world means a bomber Okay, but that's not strategic This is strategic. We're talking about something as profoundly strategic and that is how is the the Asian community going to be shaped to deal with Cross-cutting horizontal problems. Is it going to be a structure that's based on rule of law transparency accountability of government do process or is it going to be the Wild West and It can go either way. It's profoundly in our interests That this workout Along the lines of the TPP the vision that informs this There is not enough appreciation of the strategic significance of TPP in either Washington or in this country Senator hatch does understand that and that's why he's championing this and we We have to this stage. It's so important for the country this can't be just simply submerged into the kind of Tactical politics environment because this is important for America's future And I think senator hatch is Prepared to be that champion to help us realize that there's a much larger Reality that we have to appreciate and why it's so crucial for us to move this year So senator all of us are very deeply grateful for you I will tell everybody here the senator has to get out of here because he's got to be up in the hill at 10 o'clock So we're gonna race him out the door and so I better stop talking so you can hear him with your applause Would you please welcome senator orange? Well, I'm delighted to be with all of you here today, and I hope this will be an interesting discussion It should be because some of the most important things we do up there involve what we're going to discuss here today I thank you. Dr. Hamrey for your kind introduction, and it's really an honor for me to be here today Now the Center for strategic and international studies is well known for its thoughtful analytical work in international economics When they asked me to speak here, they said they were looking for someone Who could not only help them fill that role but also captivate an art audience with his charm his wit and his charisma So I'm pleased to fill in while the search continues And it's really a pleasure for me to be here. This is the first time in 38 years that I've been in in this institution and I have always Respected it very very much Joe Jordan's a personal friend and a great man It's a pleasure to be here And when to come and talk with you because I strongly believe in the power of open markets and international trade to grow economies I Believe in trade because it works. It certainly works in my home state of Utah, and it's a Utah's a prime example Despite its location Utah is well integrated into the international marketplace We export goods and services to 195 countries around the world Utah has the highest percentage of foreign language speakers in the country and 60% of our public school students study a form of foreign language and elementary or high school or high school. I Think the reason we have such a facility with languages is because we have Mormon missionaries all over the world now 95,000 of them Growing and learning and of course learning languages. I have two of my grandchildren one in Brazil and the other one in Chile Chile serving on missions and speaking their languages fluently both Portuguese and and In Spanish our integration into the local market market the global marketplace is One reason for Utah's continued prosperity during its most recent economic downturn In fact, Utah led the nation in five-year economic growth from 2007 to 2011 I might add international trade especially with our free trade agreement partners was a big part of our Utah success story Utah's exports to US free trade agreement partners boomed over the past decade growing by over 225 percent from 2002 to 2012 The success of free trade agreements or FTAs as an element of economic growth is not limited of course to Utah Statistics show the trade with our FTA partners provides more opportunities for American workers than trade with our non FTA partner FTA partners According to the I'm so used to working with the FTA that I substituted every once in a while According and with good reason if you look how they muck so many things According to the business roundtable US trade with FTA partners supports 17.7 million American jobs since 2002 US goods exports to countries with whom we have a free trade agreement in effect in 2012 increased by 110 percent and These economic opportunities lead to higher paying jobs for our American workers For example jobs supported by international exports in the manufacturing sector Pay on average 18 percent more and jobs not linked to trade I'm often amazed when I think back on the role that International trade has played in driving economic development across the globe over the past several decades One of the most compelling pictures. I have seen is the recent satellite photo taken of the Korean Peninsula by night On the bottom half you can clearly see the shining lights of South Korea which exemplified the dramatic economic growth that that nation has enjoyed as a result of its long-term embrace of democracy and free trade on The top half lies North Korea cloaked in an almost total darkness as it remains economic economically isolated from the rest of the world And if you think each of those shining lights as representing a family a business or a community It really brings home what trade means to the individual I'm talking about food warmth security and even individual opportunity We can't forget that at the end of the day Economic decisions and trade are driven by individual choice When we expand options through trade We expand individual choice so in essence economic liberalization also fosters individual freedom it increases opportunity choices and Standards of living for people around the world We know that the path to economic growth Lies in open trade and economic freedom When governments remove the constraints of unnecessary regulation and protectionism through trade negotiations Individuals are free to exchange goods and services in the most efficient way possible These efficiencies liberate resources which can then be used in other more productive ways this virtuous cycle Generates growth and that growth can continue to help lift millions out of poverty Just it is all just that is as it has always done in the past Since the end of World War two The United States has played a leading role in promoting open markets democracy and of course the rule of law We were a major proponent of the GATT and the Uruguay round Which resulted in the creation of the rules based world trade organization? We first embraced comprehensive bilateral free trade agreements with the signing of the US Israel Free trade agreement over 25 years ago And we created a new model for trade when we undertook comprehensive negotiations Between developed and developing nations with the advent of the North American free trade agreement Since the negotiation of our first bilateral agreement or should I say bail out bilateral for free trade agreement We have now successfully concluded 14 free trade agreements with 20 countries around the world And now the Obama administration is continuing the work of its predecessors in working toward a new model That would link existing free trade agreement countries with non FTA countries to create an integrated marketplace Now this ambitious Undertaking known as the Trans-Pacific Partnership or TPP would bring together 12 light-minded nations Including some of the world's largest economies like Japan Canada and Mexico into a single agreement as a group TPP countries represent the largest goods and services Export market for the United States The potential for future expansion is embedded into the fabric of the negotiation as TPP Parties have made it clear that upon conclusion of the negotiation Other nations are welcome to join if they are willing and able to meet the high standards the agreement envisions Now on the other side of the world The US is negotiating the transatlantic trade and investment partnership or TTIP Which for the first time would further integrate the 28 countries of the European Union and the United States Through a comprehensive free trade agreement Again if successful this agreement would have a significant impact on the award on the world economy as Together the United States and the EU Generate over half of the world's economic output Total goods trade alone between the US and EU Amounts to over one trillion dollars a year Investment flows represent another three hundred three hundred billion dollars a year and Building on the strong trade relationship already in place with the European Union a Comprehensive agreement between the US and the EU would set the standard in the global training trading community For what a high standard trade agreement should look like the administration also continues Efforts to negotiate a trade in services agreement or TISA With 50 of our WTO partners now it's successful This agreement would cover 70% of the global services trade So as you can see There Certainly is no shortage of ambition In our trade agenda But still Key questions remain Will any of these negotiations actually conclude And if they do conclude Will they achieve the high standards That must be met for congress to approve them I have my share of concerns Regarding these These questions So we all know it's easy to start new projects, but hard to actually finish them Too often our initial enthusiasm for the new goal is overridden by Other priorities or our unwillingness to actually do the hard work necessary to be successful That is just as true for trade negotiations as it is in our personal lives U.S. Economic history provides abundant examples of failed trade negotiations Often failure results when one of our trading partners lacks the commitment to make the hard political choices necessary to successfully conclude a trade agreement But our history also shows that our inability to successfully conclude And implement trade negotiations can also be attributed to our own failures The case in point Is the kennedy round of negotiations undertaken under the auspices of the of the gatt In the kennedy round The members of the gatt had reached agreement on non-tariff barriers regarding customs valuation and anti-dumping Both of these agreements required legislative action To implement to you know for us to implement them in the united states However, these non-tariff agreements went beyond the express limitations provided under congress' prior grant of tariff negotiating authority And as a result Congress rejected the agreements Today the obama administration is similarly undertaking comprehensive trade negotiations around the world Without the authority of congress Now that does not mean that congress doesn't support Does not support it doesn't mean that congress does not support the ongoing negotiations Many of us do But it does mean that these complex negotiations are not currently authorized by congress And the congress has not formally anticipated the standards the agreement must meet In order to be approved Of course like the kennedy round The executive branch is free to negotiate any agreement it sees fit But also like the kennedy round Successful conclusion and implementation of such an agreement is on shaky ground In january i joined with ways and mains chairman camp and former sound of finance committee chairman bachas To introduce the bipartisan congressional trade priorities act That legislation explicitly authorizes The executive branch to negotiate tpp and ttip as well As as the trade and services agreement Of course the authorization is not limited to these agreements nor is it limited to the administration So if for some reason any of these negotiations fail The united states has the ability to pursue other opportunities with different trading partners under this or a future administration Importantly The bill updates the congressional objectives for trade agreements which are woefully out of date The world and the economy of 2014 are very different from 2002 Which is the last time congress Actually renewed trade promotion authority or tpa The priorities articulated in our bill reflect extensive outreach with various stakeholders As a result these objectives are updated and modern modernized to reflect the way that business is conducted today For example The bill calls for trade agreements to address state-owned enterprises Requiring these entities Ex sully on market-based considerations The bill also recognizes the importance of trade in services and global value chains Which create benefits across all sectors of our economy In addition it requires that new trade agreements address currency practices The bill also maintains and strengthens objectives Seeking high standards of protection for u.s. Intellectual Property rights holders And advances trade negotiating objectives for the digital age As you know our intellectual property is constantly being stolen all over the world And especially in some areas of the world and we've got to find some way of Restoring restraint in that area and and restoring protection for intellectual property And this nation is a very very robust And good nation with regard to intellectual property interests Our tpa bill goes further than 2002 by calling for an end to government involvement In intellectual property violations Including piracy and cyber theft of trade secrets and the bill calls for elimination of measures that require u.s Companies to locate their intellectual property abroad as a market access or investment condition The bill includes an expanded capacity building objective Directing the administration to work with u.s trading partners To strengthen not only their labor laws as was provided for in 2002 But also their intellectual property rights laws Many have complained The current tpa does it does not include the requirements on labor And the environment which were part of our recent trade agreements Our bill addresses these objectives Through the clear articulation of these objectives The congressional trade priorities act sets forth the standards An agreement must reach to be approved by congress In so doing it empowers the administration to achieve those standards We know that the administration is struggling to realize many of the goals that has articulated for tpp Including high standards in market access intellectual property and the environment Approval of the congressional trade priorities act will help our trade negotiators Achieve these goals by clearly stating what elements must be part of a trade agreement In order for it to obtain congressional approval It also tells our trading partners that if they are willing to meet these higher standards The agreement will be taken up by congress And taken up expeditiously And without amendment giving them the confidence they need to put our best offers their best offers on the table Our bill also expands and enhances congress' role In ongoing international trade Negotiations through strengthened consultation mechanisms Including provisions that require USTR to meet and consult with any interested member of congress at any time And it allows any member of congress to be designated as a congressional advisor And to attend negotiating rounds Should the administration fail to consult with congress or abide by the procedures outlined in the bill Congress retains the ability to cut off the fast-track privileges provided under our legislation Nor bill ensures that congress retains clear authority over the scope of the Implementing bill as well as enhances congressional oversight over ongoing trade negotiations It is carefully crafted And balanced package that will enable congress to move to its at least in my opinion more effectively Utilize its constitutional authority to open global markets for us goods and services and grow our economy No complex economically significant trade agreement Has ever been negotiated by any administration And approved by congress Without trade promotion authority So how do we make trade work for america? Through a real and meaningful congressional executive partnership Embodied through the renewal of tpa Now sadly This administration's enthusiasm for tpa seems tepid at best Despite publicly calling for approval of trade promotion authority in the state of the union Which the president did and i was sitting there very happy with President obama's efforts to achieve its successful consideration have been anemic Part of this is because of who supports democrats And part of which and part of home are The members of the free trade unions For some reason some of the freedom some of the Or excuse me the members of the trade unions For some reason some of our trade union leaders And maybe i can speak to this better than most republicans because I actually worked for 10 years in the budding construction trade unions as a skilled As a as a skilled person And appreciated the opportunity that i had I was a metal ather And it was a very skilled trade that gradually worked itself price itself right out of the marketplace But why our union brethren cannot figure out why Free trade agreements are important in creating jobs i'll never understand Because these free trade agreements are critical to them in the future That may mean they have to unionize some of the companies that are Doing this work But what's that? How is that new to them? The fact is it gives them more opportunity and more jobs and more opportunity to unionize Now i'm not suggesting the company should unionize, but i am suggesting that It's crazy for the trade union movement in this country to not recognize the value of free trade agreements Now think of silicon valley They're just begging us to get free trade agreements that literally will protect intellectual property interests And uh Right now all of you young people Understand how important the internet really is And we do up on capitol hill as well or should i say many of us do Many of you can remember the enormous political effort president clinton Put into successful implementation of the North american free trade agreement And i'm sure many of you will recall president bush's political commitment to renewing trade promotion authority in 2002 War rooms were established And each and every cabinet secretary was expected to make these initiatives a public priority With good reason In contrast tpa was not even mentioned as a priority in president obama's recent most recent budget And his trade representative seems to be relegated to parroting the same bland lines In nominal support of tpa over and over again Now by the way, i think ambassador frohman Has the potential of being a great A great trade leader But he's got to be unshackled a little bit in order to be able to do some of the things that have to be done He's got the ability i have a high respect for him and i cleared the way that he could be approved Or helped clear the way at least But actually i cleared the way I have a great deal of admiration for him, but i don't understand After the president made this such an important part of his His his his speech to the congress I can't understand why he isn't Really going ahead and doing this It will benefit our country greatly But it'll benefit the whole world greatly too It'll create more freedoms around this world History shows we need more than vague slogans For tpa to succeed We need the president's active engagement and support We need total political commitment From this administration to advancing tpa this year just like we had In the clinton and bush administrations Without it without that total political commitment We simply will not succeed and what nation Is going to enter into a free trade agreement with us If there isn't tpa They're not stupid they understand that without tpa there's no chance for For the agreement to ever really be Be successful So this is really important. It's not too late. I have to say I believe the bipartisan bill we introduced to a new tpa Would gain strong support in the senate finance committee if it were taken up today I also believe the bill would gain strong bipartisan support in the senate as a whole If we were allowed to come to a fair vote Unfortunately democratic leadership in the senate is actively discouraging consideration of tpa I was very interested in senator reed's Frivolous comment the day after the president said he wanted tpa and we're not going to do it Well, I thought that was very interesting And it shows some of the conflicts that do arise I suspect that was to satisfy Part of the supporters of the democratic party I also suspect that's one of the stupidest things they could do But then again, I'm used to that And as persuasive as I am I'm not nearly as effective as president obama can be In convincing democrats that renewing trade negotiating Authority Must be a priority For our great nation and really for the world It's not just An american situation that but we're the leaders And it would help the whole world if we do this There's still time And i'm hoping that our president president obama will rise to the challenge Trade is one area where lofty ideals Must join hand in hand with hard work to succeed As you know, a beehive and the motto Quote industry unquote appear On the state flag of utah representing our state's commitment to hard work and progress I think this is a fitting banner for those who support Free trade as well Support for free trade is not for the political politically timid or passive It represents a commitment to stand tall And work hard for economic progress and individual opportunity In closing, let me just say this I will work with anyone Republican or democrat To advance our nation's trade agenda And i know that there are many in congress who share that very same commitment We can do this We've got to have presidential leadership But we can do this I'd like to unleash from them With the power to really do the job that ought to be done For our great country But even more importantly maybe in some ways for the world large If we are serious about growing our economy And putting americans back to work This is the path that we must follow It's been a privilege to be with you I want to thank you all again for inviting me And i've certainly enjoyed making these remarks with you And i haven't nearly gotten as energetic as i really can be on this area So thanks so much Thank you senator hatch Appreciate your being here and appreciate your challenging remarks My name's scott miller I run the international business program here at csis And i'm delighted you all joined us today And i hope you'll stay for a brief panel discussion of senator hatch's remarks I had to recruit a panel of true experts in trade policy Fans because none of us saw the senator's remarks in advance So we're all winging this So please be gentle with us But i'm delighted to see you here today And i'm particularly pleased to welcome To the two old friends of the trade policy community To the rostrum here with me for a discussion on the senator's remarks And on the path forward on trade policy Ambassador iris shapiro Is a long time he's currently the principal of iris shapiro's global strategies But a long time trade lawyer But more importantly he has the bad both of these gentlemen share a background Both worked at the united states trade representative's office in a policy position Both were worked in the senate as senate committee staffers I was during the clinton administration was general counsel with a rank ambassador to usdr mickey canter Prior to usdr he spent 12 years working in the united states senate as a staffer And i would note that ira is a published author You can find on amazon.com iris shapiro is the last great senate It's a wonderful narrative of the senate during the late 1970s early 80s And i would i noted with interest that if you're a fan of house of cards In season two episode two There's a copy of this book on frank underwood's desk So it's a kind of diaries a genius piece of product placement. He he noted he didn't have anything to do with it In any case Also here is uh, mr. Tim keeler tim is a partner at mayor brown law firm and uh was has a similar but Time shifted background to ira In that he was chief of staff to usdr susan schwab during the bush administration and prior to that was a member He was a worked at the department of treasury Also in the bush administration, but was an international trade staff at the senate finance committee So both gentlemen bring this unique perspective of having worked in the policy shop at usdr And in the policy shop at the united states senate And we're going to talk today about bridging that gap and creating the partnership That's required to fulfill the goals that senator hatch laid out So let me turn to uh in turn to ira and tim for opening comments ira Thank you scott Thank you for the product placement And i can't say anything critical about senator hatch because he told me how much he liked my book He said it was a little liberal But basically accurate and fair toward him And i said but that's because that section was based on your own memoir senator Um, I appreciate the opportunity to be here, uh today It seems to me that We're at what James baker once described as a defining moment With respect to the us position in international trade Uh, we have The president and ambassador from and have staked out the most ambitious trade agenda in 20 years Uh without yet the evidence that congress supports it. So that's kind of remarkable In my view We have been involved in this country in what I call a 20 year war over trade If you go back to 1993 Congress support approved the nafta After bill clinton went all in for an agreement that much of his party hated And the house democrats most of the house democrats opposed A month after that the uruguay round was Was negotiated although not approved by congress until the next year in the lame duck session The clinton administration you'll recall then made one Highly publicized trade initiative after another The free trade area the americas the free trade area the asias pacific A new multilateral round The assumption seemed to be I think that america With a nafta fight done america's commitment to negotiating future Further trade liberalization was inevitable In fact, what I think of as the 20 year war over trade was just beginning As you know bill clinton never got trade negotiating authority again despite asking for it repeatedly and despite the fact that the economy was booming The next multilateral round, which was supposed to launch in seattle crashed amid chaos in the streets and chaos in the convention hall violence in the streets 2007 when president bush was able to negotiate three free trade agreements congress didn't even act on them for years despite The representation and despite the notion that that's what trade negotiating authority was about You were supposed to guarantee a vote on this When president obama became president Understandably focused on other priorities And correctly reading the congressional mood We had a virtual time out on trade negotiations With the exception of the trans pacific partnership sort of a modest agreement that began in odd ways Which kind of moved along rather slowly but still involved only nations that we mainly had free trade agreements with are ready Ironically in 2011 if you look at it At a time when partisan rancor was absolutely at the highest level in washington We got through the Free free trade agreements all of a sudden congress took them up and passed them by comfortable margins And tpp started growing with the addition of Canada and mexico and with the addition of japan it became an extremely major Trade agreement. I would argue the most important trade agreement in the last 20 years President obama changed course Because of the changes that were occurring in the global economy and the fear that the united states risked Being left out and left behind The asia pacific nations were engaged in economic integration and the united states was on the outside looking in China was asserting its economic power and offering state capitalism as an alternative model to rules based open trade Other nations from the eu to mexico to canada to australia Were negotiating free trade agreements with their preferred partners It seems to me that every nation If you look around every nation has its own domestic politics that are difficult about trade But only the united states appears to be regularly paralyzed by our politics Mike frohman who's An extraordinarily able trade representative confronts the challenge of completing tpp in the face of strong opposition in the democratic party And the near certainty that he will not get everything that our pro trade business community wants from him We have a very strong anti trade movement in this country The afl cio and other unions make a forceful economic argument Claiming the trade agreements accelerate the movement of jobs from the united states worsen inequality and suppress wages for those jobs that remain Public citizen and other NGOs criticize trade agreements from another angle They argue that they undermine the ability of the u.s. To maintain its own health safety and environmental standards I don't think these arguments particularly the economic arguments should be dismissed lightly There's no longer any real doubt that globalization and the rapid development and diffusion of technology epitomized by the internet Have contributed to growing inequality in america and everywhere else Clyde Prestowitz wrote presciently back in 2005 about three billion new capitalists But I don't think anyone fully anticipated the impact of china's rise in the global economy But it seems to me that if you take those hard realities, it still leaves us with the question of how to respond Do we really believe that the united states would be better off Watching standing by while other nations negotiate preferential trade agreements to the disadvantage of our companies our farmers and our workers If trade agreements are so bad for advanced economies, why isn't the concern more widely shared in the eu or in canada japan or australia If china presents a unique challenge With its state capitalism Shouldn't we be working with other nations to reach agreements that establish trade rules that benefit us and provide incentives for china to change And by the way, if trade agreements are so harmful to the united states as some would tell us Why are the governors across the country Democrats and republicans always in favor of trade agreements. They are the ones who have the responsibility for job creation public citizen and the other ngos Believes that our government should decide the level of environmental health and safety protection that we provide to our people That's not some uniquely american viewpoint Trade agreements are compromises because none of the nations that we deal with want to sacrifice too much of their sovereignty If you look at the european union and their positions on gmo's or data privacy or chemical regulation or animal rights You're not going to see any rush to trade agreements The balance is between lowering trade barriers and maintaining Control over your domestic legislation to the extent you can And by the way, does anybody really believe that trade agreements are the reason that the united states can't adopt or maintain Environmental or health or safety positions or consumer positions The last time i looked the issue was differences among ourselves Differences between the administration and congress. These aren't the product of trade agreements From my standpoint I got involved in trade for the first time 30 years ago working for democratic senators at a time when Japan's rise seemed inexorable Free trade for me was kind of an acquired taste But over time I believe that carefully negotiated trade agreements were important tools to opening foreign markets Leveling the playing field attracting foreign investment and giving our cutting-edge industries and service providers and farmers their advantage around the world I need to say i'm the chairman of a thing called the national association of japan america societies From my standpoint The two nations that have the most Skin in the game and tpp Are the united states and japan It's interesting that our interests have converged Three years ago. We were quite far apart and neither country was focused on tpp very strongly Right now tpp is essential to the us For integrating us in the asia pacific and maintaining and creating high standards It's essential to japan. They regard it as almost existential and importance as they've slipped behind korea and other countries I think it's incumbent on the us and japan to work out their differences And the last thing i'd say because my opening remarks have probably gone too long I don't think the administration's view of tpa support for tpa is tepid I think it's politically realistic To recognize that it's going to be very difficult indeed impossible to get tpa until Clarity is achieved on tpp I think the tpp drives tpa at this point. I also believe that The other nations and i've been in japan recently the other nations understand That tpa will come if tpp can be negotiated successfully So I don't I understand senator hatch's position. I don't share the concern I think that anyone who's a capital hill veteran Democratic or republican would suggest that we're not going to be able to get tpa before november And I don't think it stops us from concluding the agreement I think the fundamental challenge for the united states is figuring out how we actually feel about international trade I'm told there will be a pew research study survey that comes out this week Which indicates much more support for global engagement Global economic engagement then you might gauge by listening to capital hill So I think that we have to pursue this and Bring it to a successful conclusion thanks tim Thank you. Thanks. Thanks for having me. I very much appreciate it. I'll give some some brief thoughts because I do want to get to some q&a somewhat reaction to senator and and iris comments, but also since we're at tsis some strategic thoughts about particular tpp Or as a former member of the bush administration some some strategy behind tpp And it's great to see I see a lot of friends in the audience that I haven't Some of them I haven't seen in some years. So it's it's it's very very nice to be here on the on the strategic side you know the tpp is As much driven in my view by important foreign policy Considerations as it is uh economic and trade policy and and that's a good thing. That's not a bad thing I mean much of essentially the development of the gat was a reflection of the impetus in during the cold war um, and it's It's candidly a lot about china And the president himself said this in the foreign policy debate with governor romney Where the two men if you go back and look at that it was Fairly extraordinary how in depth they talked about very complicated issues I never thought in my life. I would hear a president or presidential candidate talk about An anti-dumping action in another country, but president obama actually did in the u.s. Case against china at the wto And and he particularly mentioned uh, tpp as um a negotiation to essentially keep the us footprint in the age pacific Growing and and not being shoved aside by by china And and that's essentially a complimentary aspect to what has has become a more robust relationship with with korea a long time ally china's neighbors Have I think seen it in the same light and have In addition to to russian to the u.s. Uh, given the the tensions in the south china sea and elsewhere Have rushed to to view that the tpp in this in this fashion. In fact, I think There's been a quicker interest of governments to join than anybody expected when this was uh, either Softly launched by the bush administration, but also really taken up and made robust by the the obama administration It's not to say that that this is representative of a new cold war With china and it's not to say that it's um an encirclement of china. It is a hedge. I think in case the the assumptions of what has been the bipartisan u.s. China policy for a long time uh, don't work out as planned and It's it's a hedge in the sense of giving us a a window of Particularly with vietnam what if you have a really more robust trade rules-based relationship with a with a government that is run by the communist party but has Elements of capitalism inherent What can you do to Become closer to improve it and to bring a higher degree of freedom to To the people involved And and and for all those reasons it's it's very strategic and an incredibly important and worthwhile endeavor It's also a hedge regarding the In combination with the t-tip negotiations of the e.u The hedge vis-a-vis the bricks. I mean if you combine the u.s. Existing fta's with tpb member countries with t-tip You pretty much cover the entire world except for the bricks and antarctica so That is Hopefully going to be put pressure on the multilateral systems to the wto so that we avoid What became essentially a painful bang your head against the wall exercise in doha where Countries were talking past each other about what they're What their mutual responsibilities were we're going to be to to succeed I was right the it is a very ambitious trade agenda right now Um The trade facilitation agreement was just concluded and that was I think clearly a success the information technology agreement Will hopefully be concluded soon if if china Essentially decides that uh That they want to conclude it The trans-specific partnership t-tip a trade and services plural lateral You know this this has the makings for a very very robust A trade agenda so let me briefly talk about the issue of tpa and and tpp the You know what came first the chicken or the egg problem that's been bedeviling the the trade community for a while um I would note that It probably was a very big missed opportunity to not be able to when um Take what center hatch agreed to is senator balkas and and congressman camp And really plow ahead. I mean that it's it's by its nature when you have a transition of power that's going to slow things down and that's That's what happened has happened with the senate finance committee. Uh, I think center hatch deserves a lot of credit He didn't support the may tent deal that the bush administration negotiated with democrats and republicans in in the congress at the time in 2007 When there was an agreement reached on how to more fully incorporate labor environmental and and rights And in trade agreements among a number of things He did if I recall correctly, he didn't vote for the peru fta at the time either which which was the first fta to include that so That was a sort of under reported pretty big movement that that happened and Obviously, I think there was a presumption that Traded adjustment assistance if it were to happen all these things were happening this congress that would happen and I don't think if people assume that Things can just get held over to the next congress that it'll just pick up in the exact same place Maybe it will but I don't know that and and I think it's um Not necessarily an assumption that should be taken for granted. I mean negotiations can both go in both directions I will also say um On this question of tpp and tpa and can one drive the other um I don't I try not to be a conventional wisdom stale thinker about things right so I don't I say never I don't I don't use the word never that being said it has never happened before in this fashion and Uh, there's a reason that tpa comes first you get the guidance you get the structure from congress and then When things when the negotiations are still in play And then when it comes back it's subject to the rules and congress gets to decide whether it met the standard that they asked for um Now I if you had asked me three years ago Could congress ever pass three major free trade agreements in one day You know on both houses of congress. I would have said never you're crazy. That could never happen. Well that happened with with Columbia and Panama and Korea So I I take pains just to never say never but The it is undoubtedly a new theory to say that tpp and once its contours are clear and known will be enough to drive tba For purposes of getting tpp done. I wouldn't even I don't it's still not clear me. What would be the point of of Passing tbp and then passing tpa if you're going to do it You might as well just pass tpp directly and have tp a b for the Whatever whatever hasn't been done And You know my my not that the administration wants my advice but my advice to them is you know You really shouldn't wait till the day after the election november to start thinking what's the president's legacy going to be on these things um That's not to say that ambassador from and others aren't thinking about it, but I have seen the end of an administration and there is a lot of pressure to try to cement What the president's legacy will be in a whole number of areas and Even to to do that in the last Two years and three months After the the midterms you still need to lay the groundwork before then and so I certainly hope that even if tba is not going to get enacted and sign the law before november that enough that additional progress can be made Perhaps for final completion in this congress or at least to To get momentum moving again and to continue to get what has to be a bipartisan process Moving again, it's um It it shouldn't be assumed that uh, you can always just pick up Where things left off because there's always going to be challenges. It's always going to be difficult from From both the left and the right so with those those thoughts. Let me let me turn it back to you scott You see now you want to thank you tim Let me pose one question to iran tim and then we'll open it to the to the audience My one question is really based on there was good news and bad news and senator hatch's comments The good news was right up front and I hope you didn't miss it because he's he talked about how engaged with the world How how utah was globally integrated into into markets? Uh, and I I thought when he said that I said, you know senator Senator reed smoot wouldn't have thought that And and it's an important note about how our economy has changed that an inland state With a large internal economy like utah is deeply engaged with the world economy In fact thinking about ira's comment We probably doubled the share of gdp associated with trade in the us economy since the start of the 20 years war I think we've gone from about imports and exports being about 15 percent of gdp to today imports and exports are over 30 percent of gdp So the good news is there's a lot more in there's a lot more commerce being done globally in the united states There's a bit much bigger share of our Economic output is connected to the rest of the world. That's helpful to the trade agenda The bad news was was in part what senator hatch talked about some of the key issues Which made me realize these aren't your father's trade agreements. He mentioned state or net enterprises intellectual property Currency things that are first not the core expertise of the ways and means of finance committee and not at least right in their wheelhouse But second involved many more equities outside of the committees of jurisdiction That complicates the legislative process So the bad news is we have a very complicated path forward for the consideration of either trade to motion authority or trade agreements And we have a congressional environment right at the moment which i'd characterize as weight and hurry up They tend to do things not at all and then all of a sudden So i'd like iran and uh and uh tim to both react to the senator's good news and bad news well The reason i focused a little bit on the history but also Highlighted the strength of the anti-trade movement Is i think the anti-trade movement has been quite strong and effective In creating doubt in the country and on the hill About the benefits of trade They can be beaten a mobilized With pro-trade advocates on the hill with a strong business community with the governors across the country There's a formula for winning these kind of battles But they really have to be waged, you know for as long as i can remember the business community has said We've got to make the case better on the benefits of trade Well, there's a lot of bright people trying to make that case and it's not as easy as it is to make The simplistic argument more simplistic arguments against it So that's the political dynamic we deal with The other thing is this is a very complex trade agreement And you know when when the united states says we're going to have this high standard trade agreement And that's what everyone's agreed to And then you end up sort of finding divisions about Everything from state-owned enterprises to intellectual property To a lot of talk about old issues Sugar dairy Etc. It's a very complex situation But the one thing I would add in Certainly tim's right that this isn't the conventional model When I say tpp drives has to drive tpa In my ideal world the tpa bill would have been ready on the first day at least of 2013 Could have been taken up early in 2013 not start talking about it a year later At the same time I think congress is being widely consulted And I also think that Congress has had an opportunity each time one of the new countries has come in they've been offered the opportunity to Think about what that would mean. They haven't stopped the process And so I think it has somewhat more legitimacy than than people would would ordinarily think A lot of agree with everything I ever said right there and The only other thought that comes to mind is that You know, there's there's I didn't mean to be too pessimistic about what can happen in the last two years of presidency And in particular the one thing I think I were left out from the His uh, his excellent recitation of what happened these past 20 years Was uh following the Clinton administration's failed effort to get Then fast-track now tba um, you know the president Including from from iris good work president. I think you testified for the senate finance committee on permanent normal trade relations when I was up there with china um President clinton got uh, you know, the negotiated china's accession of the wto and and uh, the congress passed permanent normal trade relations during an election year The last year of a presidency um So, uh, so hoax brings eternal And to tim's point that was a situation where in election year the senate Took up and passed without amendment to house bill It can't happen it the bill passed. It was very painful for us for the record. It was very very painful And it it took and it it is it is it was in my mind a demonstration of the importance of personal leadership both from the clinton administration and from uh from The two key senators bill were off the chairman of the committee and uh tap one hand the ranking member Uh, their personal leadership made that happen. I mean it was not easy and uh, and not without its complication With that, let me open the floor to questions for a few minutes. Uh, there are I'd like you to remind you of three things three rules here for questions first wait for the microphone We are live webcasting this so the audience on the who's watching online Will want to hear your comments. So wait for the microphone to get there second Introduce yourself and your organization And third do I call it the alex trebek rule make sure your question is actually in the form of a question Not a statement. So Yes, tell me Thank you Wait for the microphone. I'm breaking all the rules to start with Um, uh, philma aske. Yeah, I've been in the trade field. I'm a senior advisor at csis and I've been in the trade field and I'll break the last rule first and then I don't really have a question, but I would just like to comment um I do think that it strikes me that the similarities are greater than the differences and how trade policy has worked over The years first of all your last point is that if you try to calculate when the best political time to do a trade agreement is You will never get there There's a trade agreements have been passed in election years. It's leadership. That's the key Uh, also ira I would tend to disagree with you a bit about you know, which goes first because you have examples of both I mean the canada fta was negotiated almost entirely before trade authority was passed And then subsequently trade authority was passed for future trade agreements that hadn't even begun But if the calculation is that you will change the opposition and support for these agreements based on How you structure Passing tpa, I I think that's incorrect also in the end whether you have tpa Or have the agreement concluded you will have the same opposition The the labor unions will not support a trade agreement Clinton went all in and succeeded in getting NAFTA passed But he campaigned against this NAFTA and spent What a year and a half two years trying to Trying to get a better environment for passing the bill among the opponents And that eventually had to just go for it So I think you just have to continue to go for it leadership in the house leadership in the senate leadership particularly in the executive And and trying to push both forward and eventually See what needs to be done. You know, maybe t uh the negotiation needs to proceed a little bit further before the authority You can be comfortable with the authority and lastly scott. I'll disagree with you I think the complication is not more now than it was in past agreements different We you know going back to when services was first put in agreement the complication seemed enormous and And the authority went way beyond ways it means and finance But you'll accomplish it because you build a coalition of those who Who are are going to be benefited as senator has Uh, so aptly outlined fair points. All thank you I or tim you want to respond at all? Yes, bob oops Well I'm bob vasteen. I'm at the georgetown center for business and public policy I have a quick question. I apologize. It's a little bit a little bit to the side of the The topic top the tpa tpp topic, but it's certainly within the ambit of the Of the title of the the program I'd like the panel's views on appropriate economic sanctions actions Vis-a-vis russia and you're on the ukrain issue. What is appropriate? Um at this particular time. What is possible? Have you given any thought to that? Well, uh, let me as a rollo in my role of moderators say we're we're we're watching Patiently and that I would make the one overall point that that economic sanctions When they are effective are coordinated with a broader policy And uh, I would so I'd ask a prior question What is our policy toward russia and and within the within the the the whole context of of us russia policy Where what is the role of economic sanctions so sanctions cross sanctions is tend to be Tend to have a boomerang effect. They hurt the u.s. Economy and they also tend to not Affect the target of the sanctions particularly well unless they're Fundamental part of a broader strategy Any question? Yes, sir Thank you, uh, don morten with the alliance for american manufacturing. Um, thanks for your comments today. This is a question for uh, mr. keeler, uh, you mentioned that tpp is Strategically focused towards china and i'm curious, uh for your views as to whether we can achieve those strategic objectives without addressing some key non-tariff issues related to china within the agreement such as currency manipulation and the soe issues um Well first on the soe issues, um, I think the answer is yes, uh That without trying the agreement it's still Incredibly useful to get as much done as can be can be done because essentially It serves as the experiment and the message to china of If you ever want to do a big deal with the u.s. Whether it's Whatever setting plural lateral Or were in in janeva This is what the u.s. Is going to care about Um currency is much more difficult issue Uh, it's it's one thing to Um It's one thing to say we want to do address currency manipulation in a trade agreement It's another thing to get somebody to agree to another country to agree to it It's also so without china in the picture very difficult to design Rules that would govern currency manipulation That would not also apply to the united states or run the risk of it I mean they will apply to the united states so run the risk of us breaking those rules right because amongst tpp members Um Actions that you know, it would be very hard to design neutral rules That where they could be others could be found to manipulate their currency that wouldn't also apply to actions that the u.s. Has taken Uh in the past few years with respect to monetary policy and its effect on the dollar And the u.s. Has found this out sort of the hard way at g20 meetings when they've expected to be able to to basically isolate china and Particularly brazil steps in and says i'm sorry, but if you're flooding the market with dollars from quantitative easing And that has impacts on us Your pump and money we don't we don't see that big of a difference between China is essentially hooked to yours Now china is different in that you might be able to design rules Because they have such unique factors In their foreign exchange system that you might be able to design rules where you you could effectively do that But you know if you look at what japan does you look at what the u.s. Does it's a very Difficult issue to design it in a way that doesn't raise serious defensive concerns for the u.s. And i don't think anybody would want to Create a structure where suddenly we could we could have somebody pointing the You know rules against us on on what has been Um the monetary policy actions of the federal reserve whether i agree with it or not I just don't want to see us Set ourselves up that way. So I hope that I hope that gives you my views. Thank you. Yes, sir Thank you Hi, i'm ed barber from good works international a consultancy founded by nd young And before that 43 years in the state and treasury departments where i had the pleasure of working with a lot of your colleagues and predecessors at us tr My question is about the senator's comments on unions I should say at the outset that I have no connection with organized labor. So i'm not arguing a brief But uh, and it is indisputable that at a macro level Trade is overwhelmingly beneficial all the numbers he cited were impressive and true From the union point of view though, it's hard to make the translation from macro to micro They see jobs going overseas as a result of nafta. They see an increasingly hostile environment to labor Uh in the united states. They see uh a declining share of Incomes going to the lower level The the lower level earners as opposed to higher level So my question is how if at all do you bridge that gap? Or is this even an issue that this is an issue that's been with us for decades Is it even a subject that can be addressed in a trade policy context? Sure. Thank you Okay I'm trying to answer that but I wanted just to say that I think thelma ascii's point was a good one and reminding us that there have been things accomplished in various election years And there are different models that have worked in the past. I think the canada fta was a very interesting example When I talked about The opponents to trade and trying to to forge some kind of consensus What I was thinking is I really would not like to see a recurrence of the 2002 Fast track or negotiating authority which passed by such a narrow margin that the bitterness just continued I'm looking for something a little more like 1988 the omnibus trade and competitiveness act or 1974, etc A somewhat broader consensus that this president and future presidents might be able to rely on With respect to the union issue I've been a democrat all my life and i'm pro union The fact of the matter is that there's been a substantial reduction of manufacturing jobs over time Which has to do with a whole lot of things that are not trade agreements It has to do with Globalization generally, but it also has to do with technology And in my mind one reason I focus so hard on china is this fact We peaked at 19 million manufacturing jobs in 1979 We had 16 million manufacturing jobs in 2001 We lost 3 million manufacturing jobs in the next two years and never really recovered them And to my mind that suggests that china poses a different kind of issue than anything we've dealt with before But the other thing I would say is that at a time when We have the a dramatically changed energy picture Different costs for manufacturing lower costs than we've had it potentially in a long time I think the chances of maintaining a manufacturing base in the united states are stronger than they've been And I think that that is in the interest of the unions and the other thing that has to be said is We're split in this country Over the unions. We're split regionally The only thing as old as me is to taft heartly act 1947 born the same year I was and so we've been split about unions for a long time Thank you. Now, that's actually a very helpful perspective I mean and I think that the key point I take from iris first of all two points one is I think the obama administration deserves credit for the outreach they did with organized labor Particularly in the u.s. Korea for trade agreement, which wound up being supported by the united auto workers as I recall So the this administration does affect the values But second the nature of the nature of work the nature of manufacturing is changing fundamentally mostly due to technology And the the opportunity for a renaissance particularly driven by unconventional energy is is palpable. So I I hope that our agreements International agreements can't help leverage that because I actually think the climate is much better I I grew up in Ohio in the 1960s and 70s So I remember when manufacturing fell apart and it wasn't all because of trade agreements But but there is a renaissance there. I was recently in stubenville, Ohio Which is a boom town now thanks to the utica shale formation So so things do change and being able to come to grips with technology is an important thing Scott let me let me just add on a quickly to what something iris said and I agree that the balance between 2002 and where things went for a few years after that was Two partisan and and that was how it became palpably bad for the for For the u.s. And for the u.s. Trade national interest And we did try to correct that with the 2007 agreement the may 10th 2007 agreement and it and it has It took time But that that aspect of it has been successful the four fta's that passed after that passed with supportive leadership of both parties um, obviously, you know that you had the What became a temporary difficulty over columbia, but It it you know if you look at the the number of votes for the even the three fta's at the end of the day They were really overwhelming and and bipartisan So You know, I will say organized labor had called for exactly what we basically capitulated on in 2007 for years and to its credit a lc f l c i o went neutral at least on peru and But other unions still vociferously opposed and afl eventually ended up opposing other things You know the question's a good one and I don't know the answer You know blissfully it's not my job to get the answer right now anymore I did I did my part. Thanks One final question. Yes, sir My name is Ren Xiangwei from the global policy group The united states is trying to encourage more foreign direct investment at home And my question is how could bilateral or multilateral talks with countries like like china Help address some of the difficulties that chinese enterprises are facing while trying to invest in america. Thank you Let me let me take a shot. I don't know that it can really address it at all because the biggest irritant that china usually raises is sypheus, which is a national security examination And I can assure you no trade agreement is going to be Going anywhere near those issues You know chinese investors are Well-served to not try to hide from sypheus. I think a lot of the public blobs you've seen on sypheus has been when when when companies try to to hide from it instead of Being the first one to make the phone call I want I wanted to add on one more point to the earlier issue of of the shale gas revolution Which I don't I think the actually I think there'll be bigger effects on trade policy than people anticipate I mean nobody anticipated what these phenomenal numbers of production in the us are On on oil on on gas it's it's almost mind-boggling and they in the projections go up every single month You know I I have to think that I'm not one who frets about the trade deficit for purposes of of the trade deficit My view is it can be a symptom of good things or or indicator of bad things It doesn't it depends on what the context is But I have to think it's actually going to have a big dent In our trade deficit and how how could it not I have seen a study that suggests it otherwise I'm not an economist. It made no sense to me, but the numbers are just so overwhelming. How can it not? So whether you're talking about is inputs into downstream manufacturer goods Whether you're talking about just displacing current imports whether you're talking about exporting Which they could eventually happen both on gas and oil That could actually change our our trade politics Quite a bit it's it's it's it's these numbers could really change what has been sort of assumed numbers in this debate So great. Thank you. Just one follow-up on the on the china question I would note that one very important negotiation senator hatch did not mention Is the negotiation of a bilateral investment tree between the united states and china? It's a it's a it's a big big task, but it's very important to both economies both have Capital export issues both have capital import issues And that those treaties have proven over the last 50 years to be a great way to to bridge the gaps From a substantive standpoint. So with that, I want to thank all of you for coming. Please join me in thanking our panelists