 Ingo, do you feel international yet? Oh, I feel international. This is Global Connections. That's Russell Hunger. He comes around once in a while, tells us about international meetings and trade agreements, and mostly APEC actually, because he is the master plan author for APEC, the APEC master plan. And it's always an honor to have you here, Russell. Thanks for coming down. Well, thank you, Bill. I mean, Jay, for inviting me again. It's been a while, but I've been kind of focused on the APEC conference in San Diego, Chile. Next week, matter of fact, it's going to start from the 7th of November to the 11th, where all the leaders are going to get together. And I did prepare a strategic business plan, and I did pass that on to the APEC leaders, especially to the ministers and the senior officials there. So they can look at our white paper, our position paper from United States, Hawaii. We're going to strategize and do business with the APEC community. And as you know, this year, Chile is hosting the APEC conference. And we have a good relationship with Chile. We had a sister-state relationship with them, as well as some of the cities. And Hawaii does. Yes, we do. I think that different counties have different sister-state relationships. As I recall, Chile's having some commotion in the street lately. That might affect things. Because if you have free-floating protests, and then you have APEC in the same city in San Diego, the protesters might find APEC. That will not necessarily be positive. So you mentioned that this conference, the one coming up November 11, was, well, about four issues. Let me see if I can remember. It was about the economy. Yeah, I can mention that it's going to be basically the digital economy. And that's going to make sure that the internet is going to be free and secure, and how do the business, in terms of if you're going to have to pay taxes or not, from foreign country to now, if they have a free trade agreement or not. So those things are going to be a mystery on the digital 4.0, they call it. And another one is SME, Small Business Enterprise. As you know, in the United States, we have a small business administration that looks and takes care of the small businesses. So like you go into, like, got a third world country in Asia, a lot of them are small and median. SME. SME. Yeah, so they work with the large enterprise and large corporations. And the third focus might be on the woman in empowerment. And basically what they do is creating, try to enhance women in entrepreneurship. So as you know, worldwide, we want to see more women playing a major role in leadership role. So those things are going to be addressed. All these things are being discussed elsewhere, so. Yeah, and another important is climate change. As you know, there's that inclusive growth in terms of sustainability, as you know, we had a Paris Agreement and it came out with the 17 SD strategic development goals. And based on what they use, the 17 SDGs is based on evaluation for performance measures. The Paris Agreement says by year 2045, it should be fossil free. But by 2050, all the third world countries should be fossil free and not using gasoline consumption. I have a question. Who's in the 21? You know, I remember that there are 21 nations who are part of APEC. The U.S. is one part and I guess Chile is another part. And they rotate around among the nations. You get one every, you get the meeting every 21 years, yeah? And ours was about three years ago, four years ago? Yeah, we actually hosted in 2011 when President Barack Obama was the president at the time being. So I could think he brought it to Hawaii. And that kind of helped me out, you know, and I proposed a master plan after that, APEC organization for integrating all the 21 countries, meeting the Bogar Doctrine, which says that by year 2020, we should have a free trade area in the Asia-Pacific region. So that's... Who is we? The other 21 countries, the APEC. And that's where we started with having, we're involved with the TPP, the Trans-Pacific Partnership. China was pushing for the RCEP, the Regional Comprehensive Economic Partnership. We're out of that now. Yes, but eventually in the future, I know that they're... So this Chile APEC conference can be very important because what happened is Chile took a leadership... But tell me who's in the 21. Basically, I can name all the countries, but we have as well United States, Canada, Peru, Chile, Mexico. And Japan, Korea, Taiwan, we have China, we have Indonesia, we have Australia, New Zealand, and going down to Bernay, and going down to Thailand. We don't have Cambodia, Laos involved yet, or Sri Lanka, but even India's not a member. Maybe in the future, we'd like to have India be part of the APEC country as well. But you know... Right now, no European country. They could be setting aside, but I did propose on my strategic business plan that I pass it on to European Union because what European Union is looking into, coming into Asia. And if you look at the history, by post-1920, all the Europeans are here, British, the Germans, the Norwegians as well, and they colonized a lot of the South Asia countries. So now, because of the post-World War II and on it, and aftermath, they kind of pulled out. Now they're showing the effort that the Europeans want to be going to Asia with the trade and commerce. So we're going to talk about that later in the show, yeah. So I did propose on my strategic plan, maybe we can unify the European Union integration with the APEC organization because that kind of puts all the 21 countries, the European Union and 21 countries, APEC organizations, they can integrate and this could be part of your Asia. It's about the same number of countries, yeah. Exactly, exactly. So I think maybe the policy unit committee of the APEC organization could look at that and hopefully see if that might be a good way of integrating the Europeans and the Asians together. That's not included though in the four issues you mentioned. I guess there's an agenda out and those four issues are on the agenda, but those issues are discussed worldwide these days, there's nothing really fancy about them and there's nothing in those four issues, and I get this right, there's nothing in those four issues. Digital economy, small, medium entrepreneurs, enterprises, sustainability and climate change and women in entrepreneurship. Yeah, there's nothing there about expanding global trade. I think there's a, you know, in trade and facilitation committee, you know, because you got to look at the physical distribution of goods and services that includes marine time with ocean, highways, airports with airlines, you know, moving cargo as well. So they got to look at the trade and facilitation of the physical distribution. So those, in terms of transportation, those intermodal concept is very important, integrating those three transportation modes from ocean, air and highways. So who goes? It isn't necessarily the heads of state. I would be surprised to find that Trump went, for example. Is he planning to go, do you know? I believe Trump can be there, because Chile is one of our number one allies in South America. And we even have a visa waiver program, so they have 90 days, we don't have to have a visa with Chile. Oh, he hasn't put them aside yet. Yeah, most likely. I know that he didn't go to the Papua New Guinea one last year and he let Mike Pence be there and our Secretary of State was there as well. That was last year. But I think this year with the election, you know, coming up next year, I think it might be a good gesture of him to go there and show that, you know, we are special. So he goes, other heads of state will go too, I think. Yeah, believe me, it's a heavy head conference with Asia-Pacific leaders there. So what do you expect will come out of it? I mean, these four areas and possibly, you know, more expanded trade provisions, trade agreements. The U.S. is an inter-trade agreement, so that's definitely, you know, an obstacle, because we don't do trade agreements, so we certainly don't do multilateral trade agreements these days. We pout out of TPP and other things. We don't want to do COP 24 or 25 whenever it's coming up. So what kind of agreements do you think will come out of this? And will the U.S. be an active player in those agreements? I think what's going to happen, we're already strengthening our bilateral trade agreement. That was one of the things I recommended to our president when he came in the office that when I was working on the TPP, asked him to stay on with the TPP. But I guess the administration wanted to strengthen the bilateral trade agreement, country to country, before we get into a multilateral or trilateral agreement with different countries. So in this case, with Chile, we already have a free trade agreement with Chile. We have a free trade agreement with Peru. We have a trade agreement with Mexico. Those are already APEC countries, and we have a free trade agreement with Colombia. So they're part of the Latin America Free Trade Association. And the United States is part of the inter-American reciprocal alliance. These agreements made recently, or these agreements that were made before Trump? These were done way before Trump. I believe it was done when... What about China? A few weeks ago, Trump said that he was going to negotiate or complete a negotiation of a trade agreement with China. Giving us all some sort of hope that there would finally be an end to the tariff war. And indeed, when he did that, he also did not impose certain tariffs that he had threatened to impose. That was good news. But since that time, A, there had been little frictions, maybe bigger frictions, on various levels between China and the U.S., some our friction and threats, and some their friction and threats. And there has been no news whatsoever about the status of these magical negotiations that are supposedly taking place with China, which he said were leading to a wraparound and amazing agreement with China. But we haven't heard any more about it. Do you know about it? Tell us what the status of those discussions are and what we can expect in the way of some wraparound agreement that will defang all this tariff controversy? Oh, yeah, definitely, J. I think what happened was latest that China, in terms of based on their freight and retaliation territory, agreed on the $50 billion of buying agriculture goods from pork, soil beings. So try to help out the farmers in return of giving government subsistence. So in terms of trade agreements, they're trying to finalize that. But to me, what they need to do the most is that intellectual property rights. I think that's where all the worldwide countries are looking at U.S.-China trade agreement because of our IT matter, paying for our intellectual property rights for copyrights, infringement of painter fees. So all those things got to come in. And I think it's about China to realize that. But I think they're having our time internally with the internal policy between their private sector and state-owned enterprise. How are they going to adjust intellectual property rights? Well, their economy is suffering. And they may be resistant about that because I think they rightly see that intellectual property is a big part of the future for them. And indeed, they're focusing a lot of capital and attention on technology right now. So what about the APEC as a kind of crucible for that discussion? Do you think that China and the U.S. will be meeting about their bilateral deal in Santiago in the APEC coming soon in a week or two? Yeah, I think so. What happens usually when the leaders get together, they meet on the sidelines. And they already have a meeting they schedule with their counterparts with state officials there and see if we can meet on the side. And that's when they discuss their matter. So I think it's a smart thing to do when they go there. It's an opportunity, yeah. Exactly. What about other countries? I mean, is Trump trying to do bilateral trade agreements with other countries that will be there as part of the APEC 21? And do you think the other agreements, bilateral agreements, may come out of it? Yeah, I think a lot of them. I think that if they focus it, it's going to be hosted in Latin America. I know this APEC plays a role for having a voice of concern. And it treats all small countries, large, medium countries the same. So they get an equal vote, equal consideration and a voice of concern. So I think in this time when, you know, not only in Chile, but I know they want to help their neighboring countries, and I know that there's a big turmoil in Venezuela this past early year with the government overthrow and, you know, their past leader, Montego, and basically, so there's a big concern about bringing some of these exodus of Venezuelan that people went to Chile, kind of went to Peru with the other neighboring countries. So they're all concerned about those kind of issues. Yeah, sure. Well, at the same time, remember, this president is under impeachment. This president was roundly criticized for what he did in Syria with the Kurds and all that recently. This president has been making lots of gaffes and statements that alienate millions and millions of people, not only in the U.S., but around the world. And I recall that at one of the meetings in Europe, he got up and made a really stupid speech, and they all laughed at him. Literally, in the room, laughed at him. And I wonder how people receive him among the APEC 21 and how they will receive him in Santiago and how the South American countries who were involved, for example, feel about him these days. Do you have any idea about that? I think they probably have mixed feelings. I'm sure what's happening with Mexico, with the war issue, with the borderline telling the Mexican leaders to control their own little immigration on the south of their border. So those kind of issues, they might have still an impact. But this is more like in terms of reassurance what the APEC did in the past conferences and make sure there is an effort that we're seeing progress being done. Well, it seems to me. It's a check and balance kind of gathering for the leaders as well. If you're talking about bilateral agreements, if that's the order of the day, and we should discuss whether it really is the order of the day. But if you're talking about bilateral agreements as what is happening these days at APEC and otherwise, it seems to me that there are 21 countries there. And of course, the US is a big player or has been a big player. I'm sure it's as big a player as it used to be. It's possible, if not probable, that the bilateral agreements that will be made at APEC in November 11th and so forth in Santiago will be bilateral agreements between other countries, not necessarily involving the US. If that's the order of the day, bilateral agreements, they can have their own bilateral agreements without us. What do you think? Can we expect that? Yeah, definitely. That's what this whole APEC process is about. We're not the only two players. We've got other countries to work with. And we just got to show courtesy of professionalism and see if we can have a dialogue and see if we can keep our protocol with them intact. That's what we have our representatives there already and we're working on it with the past specialist that's been working on the APEC issue with the APEC Business Advisory Council that we sent three of our top business leaders to be part of the APEC Business Advisory Council. One more question before the break. We'll take a break in a little while. Russell, there's been a lot of talk about the State Department, even going back to Rex Tillerson, to the effect that the State Department has been, quote, hollowed out, end quote, that important officials have not been reappointed but they've left, that the State Department is not really in the inner circle of policy, foreign policy with Trump, that he ignores them. And I think that's why a lot of them have left and are disaffected with this government. So what we have right now is, at the very least, a hollowed out State Department, a State Department where the halls are empty, so to speak, and where the president of the State Department are not talking to each other, not confiding in each other, not listening to each other. So how does that affect APEC? How does that affect our behavior at APEC and any other international meeting these days? I think, like I mentioned earlier, we have our people that's been in APEC representing us, our officials, senior officials as well, with their staffing, and they're usually staffs staying on board with all the transition of the APEC conferences. And with the Business Advisory Council that we have, and they've been working here around, they've been meeting occasionally monthly basis or quarterly basis, but we have our business agenda already intact. It's just a matter of who the leader's gonna be, but they can still mingle, but when it comes to the end of the day, the working group's gonna be the ones that's gonna be working on the policy. Yeah, and I remember the APEC conference here in 2012, was it, that most of the people who were here were not government at all. They were business. And I suppose what I hear you saying is that in Chile, in San Diego, the real work is done by the people from the business community, maybe the multinationals, the American corporations wanna do work overseas, get into contracts with overseas entities. Those are the ones who are gonna be going in force. Those are the ones who are gonna be trying to make deals more than our government, more than our State Department, more than our president, am I right about that? Yeah, exactly. They already have state there. They've been invested so much in overseas with factories and financial services, like for example, in Chile, the United States has roughly about $40 billion of assets of our real estate as well, businesses, stocks and bond and all that invested in Chile already. And roughly we actually export roughly about $11 billion of, or $14 billion of goods to Chile early. And we import $11 billion of goods. It could be agricultural goods, flour, produce that we consume here. You look at, you go to Costco, a lot of them, all the fruits and flowers are from Chile and blueberries or fruits and plums and all those stuff. So they're agricultural, and what I'm trying to do is they're pretty advanced in agricultural technology with the STEM field. So I wanna see if the Hawaii can learn from them as well, work in some kind of technology transfer because we wanna diversify our agriculture here as well. So in terms of domestic demand. So Hawaii should go down there and participate in the... Actually, we should have a concern involved. So that's why I prepared these strategic business. So who's going? Actually from our side, from the business point, the APEC National Center, which I work closely or I communicate with correspondents and they're part of the U.S. Chamber of Commerce. So they're the blue chip corporations that we have. How about the Hawaii Chamber of Commerce? They're kind of secondary in certain ways, but I know there's, you know, we kind of piggyback with the U.S. Chamber of Commerce. So with, and I've been trying to dialogue with the APEC National Center so we can show them what we have to offer from Hawaii's businesses. Okay, and that would be bilateral, that is U.S. business and Hawaii business with Chile and Chile business. Okay, we take a short break. That's Russell Hamno. He follows closely APEC, not only in the day when it happened here, but every day, every year since and this year in Santiago, Chile, November 11th. So we'll be coming back shortly. I'll be talking about some of the other implications about the sort of the dynamic, the kaleidoscopic dynamic of international trade relations with Russell Hamno. We'll be right back. Thanks to our ThinkTech underwriters and grand tours, the Atherton Family Foundation, Carol Mon Lee and the Friends of ThinkTech, the Center for Microbial Oceanography, Research and Education, Collateral Analytics, the Cook Foundation, Dwayne Karisu, the Hawaii Council of Associations of Apartment Owners, Hawaii Energy, the Hawaii Energy Policy Forum, Hawaiian Electric Company, Integrated Security Technologies, Galen Ho of BAE Systems, Kamehameha Schools, MW Group Limited, the Schindler Family Foundation, the Sydney Stern Memorial Trust, Volo Foundation, Yuriko J. Sugimura, thanks so much to you all. Trade agreements, mostly bilateral these days, but also multilateral and how they will all be affected by the APEC meeting coming in two weeks in Santiago, Chile. But one of the things that we were talking about, Russell, I think it's very important, is to take a look at One Belt, One Road, because that's essentially a trade agreement and a development agreement by China, or initiative by China, to go as far west as Spain. They want to go all the way to Spain. They're already in Africa. They're all, you know, they're everywhere. And it's more than one road. It's a southern route and a northern route and a sea route. And it's not just one continent. It's the whole world. They are trying to expand their trade connections all over the world with One Belt, One Road. And they're making some headway, although they have problems with what they call the debt traps, where countries get to hate them because they sell these expensive harbors in an infrastructure and then the country can't pay the bill. And then the Chinese take over and everybody hates them for it. That's happened in a number of places. I don't know how they're dealing with that. But the problem is, where's Europe? Europe has, for that matter, where's APEC? What is APEC doing about One Belt, One Road? Is it being left out or included? What's Europe, which is not included, as you said, in APEC? What is Europe doing about One Belt, One Road? Are there competitive One Belt, One Road-type initiatives or is it just the Chinese? Well, I can tell you, Jay, good thing you asked me that question. And that was one of my closing remarks on my strategic business plan that I prepared at Unifying in the European Union and APEC organizations together that way they can work under your Asia, infrastructure development, moving goods and services. And if you look at the history, Silk Road, I know that China was taking initiative since the Hans dynasty, going from two century to 18th century. Silk Road played a major role going from Beijing, Shanghai, and all the way to Spain, going through Afghanistan, Pakistan, the route through Turkey, to Syria, Iran. And if you go to the south, they go through Egypt, through Africa. Eventually they go south. We had a lot of trade and what happened was the Europeans were trading a lot of fur, beef, fur animals, and gold. In return, China was given the silk and tea. The 15th century. Yeah, right. So they played a big role. But the 15th century, that's when 14 and 15 was a dangerous road for silk road because Mongolia, the Mongolians are taking power. They were kind of ruling that whole area. So it wasn't safe to travel the safe road back then with Genghis Khan in power. But what happened with the trade routes, there's north, south, and south, we, west. There's three routes that China was pushing for that back then. But now with year 2013 came with the modern Silk Road concept where Xi Jinping became the president and he decided we have to readjust the Silk Road concept with modernized China for their benefit. So they started the infrastructure investment bank with the BRICS, with Brazil, Africa, Russia, China, and India was part of it. And they established that infrastructure and development bank in order to get everybody involved and built the infrastructure due to your Asia concept. And that was very clever. But now what happened, like you said, Jay, earlier, because all these loans that China was giving with economic prosperity they had, and some of them became bad loans and what happened was these countries couldn't pay back other loans. So the China got control of the infrastructure. There's a provision in their cloth. And the loan saying that if you cannot pay back your loan based on your monetary and fiscal policy, we're gonna have control of your ports, airports, highways. Well, that's pretty serious. Yeah, so they cut the blood money. The foreign country owns your ports. Exactly, that's happening in Africa, happening in Sri Lanka, and Malaysia's kind of looking at that too. So what happened with the APEC organizations, very concerned about with ASEAN development. So what happened was Japan. And this happened like two or three weeks ago. The European Union was very interested in coming into Asia again because of the 1920s. They're here already with the British, the Germans, and they're colonizing a lot of the Dutch here, colonizing Southeast Asia. So after the World War II and the post-war, they pulled up and now they're showing interest and they want to come in and be part of APEC and they made an agreement with Japan with Prime Minister Abe Shinzo about three weeks ago. What's the nature of the agreement? The nature is that they want to compete with China on the one-built, one-road initiative, infrastructure development. So in other words, Japan and European Union is going to be a partner. And Asia's got their infrastructure development with the BRICS partner, but they are going to be fighting for infrastructure project. But to me, in terms of competition, I bring the cost down, but you don't want to reinvent the wheel. So maybe in terms of infrastructure for China, border control, they can do the internally and meeting the airports, highways, and railroads to integrate in terms of intermodal and make it more efficient. And other countries can do the same and come up with their own project scope or their infrastructure and kind of share that with their partners. And that way, you get a better feasible project. Maybe a little competition. Maybe you get a kinder, gentler approach from the European countries and businesses than this kind of predatory lending that China has been doing. So how far have they gotten with this new idea? This very new and interesting idea. How far have they got? Actually, it just came out, so I'm sure they're looking at the mappings, see which route is the best, which feasible routes, and in terms of ports, airports, and railroads, and highways. And they want to make sure that they're going to find the most efficient way cost saving to get the partners to be in that project. It's going to be a very interesting wrestle and you and I will have to take a look at it going forward. Is if the European and APEC groups try to do a one belt, one road in the same areas as China is trying to do a one belt, one road. And those areas include, for example, ports that are controlled or owned by the Chinese. What happens to the Europeans when they try to get into that port? It could be we have some really aggressive competition going on there. I think that's where it tears with the trades because you're going to get warfers charged, the cost of the fees of breaking ball, is there going to be customs or regulations on? Is it, was there a free trade agreement with them? Exactly, it was going to get very complicated. Right, so that's why I made that dialogue maybe the European Union and the APEC organization can unify together and come up with a free trade agreement. That's like putting all the eggs in one basket and that kind of resolves a lot of headaches of border control. Russell, you are definitely a make peace kind of guy, make trade kind of guy. Wish you well in your efforts in that regard and I think we should get back together again and see how these things play out sometime after APEC and after the European initiative is rolled out. Yeah, I think for closing, I think Hawaii can play a major role as we are the hub of Asia Pacific and we are the gateway of Asia. So I like to see more American companies involve construction industry as well through the infrastructure, engineering firms, developers. We can do a partnership kind of joint venture with them. Yeah, hold that thought, hold that thought. And other thing is we are the gateway to Asia. Never forget that, we have to play on that. And other thing is, other thing is that hopefully there's a lot of negotiating. We're competing for the G7 Summit meeting next year in Hawaii and as you know, the G7 has a lot of European leaders from Germany, France, Italy and we have a European Union Council President on board as well. So I think that might play a major role for Hawaii hosting the G7 Summit here in July of 2020. Maybe they can do it at the Trump Hotel in Waikiki. I'm only kidding. Russell Hanno, thank you for coming. Yeah, thank you Jay. Aloha.