 Welcome. We're delighted you're here. I must confess, when Meredith Broadband said that she wanted to hold this event on a Friday before a long weekend, I thought, you're crazy. Nobody's going to show up for this thing. But it just shows the enormous gravitational pull of the USTRs. This is really quite a bunch. My name's John Hamery. I'm the president at CSS. I'm delighted to welcome you here. I'm currently reading a fabulous book. I never understood America until I read this book. It's written by a guy named McDonough. It's about the early history of America. And you get right down to it. I'm a political scientist. My version of history is all about geopolitics. That's not America's history. America's history is about trade. You're going to get down to that. It really is. It's just amazing. And you start opening up. The shaping of the American Republic was very much driven by the way we were going to connect in this larger world, how we were going to do it. And God knows we've been through a lot of different episodes in our history. We were as protectionists as you could get, you know, at one time in our life. At one time in our life, we passed legislation that said it was free and open territory to steal anybody else's trade secrets. And we'd patent them here. We've had a pretty rich history here of irregularity. And so now it's about time that we'd be humble a little bit and think about where we're going in this world. And frankly, the world would be improved dramatically if we had a much stronger, more active trade policy, you know, in America. So we're going to talk about that today. I want to say thank you to all of you for coming. You have a very important role in this. And that's to make this a lively session. I know the intellectual content of our presenters. I know that you are in for a very rich discussion. But it's going to get a heck of a lot better if you are engaged and active in this. And so I really would ask you to draw on that and to bring the best out of these remarkable individuals. I'm grateful, and I know I speak for all of you, we're grateful as a nation that these women and men were willing to lead in such an important way for our country. And they're still willing to be active in the policy life of America. I just had a short session upstairs when we were chatting about some of this. And it's exciting to have people that are still, you're just committed to making this a better and stronger country and working through the tough issues that we face. So we're very thankful for that. Where's Mike Moore? Michael, how are you? Thank you for coming. Former Director General of the WTO, we're going to send you back so you can take care of Russia. You can do that, Michael. You're going to have your hands full, buddy. That's going to be a big one. Of course, he's here now as New Zealand's Ambassador and just doing a phenomenal job. And we're delighted to have him here. Thank you. Welcome, Michael. Thank you. Okay, I'm wasting the time because I'm taking it from the experts who are here. So let me turn this over to Meredith Broadbent to get this started for real. We're going to have a series of things. By the way, David Kemp is going to be with us. April 26, then we'd invite you to come because he wants to deliver a major address on this point. We'd like to invite you back as you can come for that. Let me turn to Meredith and I'm going to pull this thing out of the way so all of you down there can see. Thanks for coming today. This is an event that we all look forward to. I'm thinking for next year we need to order two tables. So we've got two tiers here like the match game and somebody on the upper level and someone on the lower level. So we're not falling off the end of the table. This is an exceptional group of assembled talent, political leadership and negotiating experience. And they've taken their time to collectively give us their views on the priorities for the U.S. trade agenda. Although I do want to draw out their differing perspectives, my assumption going in today is that there's a huge amount of agreement among these six individuals that have served as United States trade representative under four different presidents going back to 1981. They are here, I believe, because they care about the role that trade plays in strengthening the global position of the United States. I should mention to those of you that are in our electronic audience that the United States trade representative is a cabinet level official, at least so far, with a rank of ambassador who is directly responsible to the President and Congress for trade policy. And I'd be in trouble if I didn't say, please follow this event on Twitter at csis.org, hashtag number six USTRs. The number six comma USTRs is our hashtag. As the United States looks ahead this year, there is more of a blank slate on what the President can construct as a new trade policy than there has been for quite some time. The decks have been cleared, thankfully, and all the pending free trade agreements are done. Negotiations on the Trans-Pacific Partnership are a work in progress with several large trading partners and close allies seeking to join in raising geostrategic considerations in addition to the economic questions of market size and growth potential. The fact that countries have declared the WTO Doha round of multilateral negotiations to be at an impasse makes it certain that the comprehensive worldwide trade liberalizing result that might have been possible is not to be in the near term. Gone, for example, are the global mechanisms that were proposed, like the hugely powerful Swiss tariff cutting formula, which would have wiped away anachronistic tariff peaks in developing countries and advanced developing countries. What we do have, I would argue, is more freedom. More freedom to calibrate and refine US trade policy based on growth opportunities in particular regions and countries. When it comes to pursuing the job-creating benefits of trade, there are many like-minded countries in the world, and we hope to hear about some of the targets of opportunities that are out there today. We are honored to have these six former USTRs lay out some priorities that they see for action on the trade agenda. We hope today's discussion will result in some practical suggestions on how to move the trade agenda forward. In terms of organization of the events, each panelist will give five-minute opening statements to address a few selected topics with the understanding that the trade agenda is so full that we are not able to do justice to all the major issues. With that, I'm encouraging the panelists to comment on each other's presentations as they feel inclined to do so, and then we'll turn to the audience for your questions, so please keep them in mind. With that, I will briefly introduce our panel. Their longer bios are available to you on your chairs in the room. Ambassador Mickey Canner served as USTR and later Secretary of Commerce for President Clinton. Ambassador Canner is a partner in Mayor Brown LLP. He serves as Senior Advisor to Morgan Stanley and is a member of the Board of Directors of CB, Richard Ellis. He led the later stages of negotiations resulting in the North American Free Trade Agreement and its side agreements on labor and environment, helping to work with Congress for passage of the NAFTA implementing legislation. He served as Chief Negotiator to the Uruguay Round Negotiation to create the world's largest and to date the most successful trade pack, and he supported the President in hosting three of the early successful APEC meetings with leaders of the Asia Pacific region. To Ambassador Canner's right is Carla Hills, Chairman and CEO of Hills & Company. Ambassador Hills was the U.S. Trade Representative from 1989 to 1993 in the administration of President George H.W. Bush. During the negotiation of NAFTA and the Uruguay Round, and she was responsible for the Blair House Agreement, which broke the impasse with Europe on agriculture that led to the conclusion of the Uruguay Round. She is currently Chair of the National Committee on U.S.-China Relations of the Inter-American Dialogue, and she is Co-Chair of the Advisory Board here at CSIS as well as one of our trustees. Ambassador Clayton Yider practices international trade and agriculture law at Hogan and Lovells. He served as USTR from 1985 to 1989 in the Reagan administration, where he negotiated the U.S.-Canada Free Trade Agreement and launched the Uruguay Round, which broadened global negotiations to include services, intellectual property and agriculture. In 1989, Ambassador Canner, excuse me, Ambassador Yider was named Secretary of Agriculture. In that post, he steered the 1990 Farm Bill through Congress. He's also served as President and CEO of the Chicago Mercantile Exchange. Ambassador Charlene Barshevsky is Wilmer Hale's senior international partner. She served as USTR from 1997 to 2001 also in the Clinton administration. She was Chief Negotiator of China's WTO agreement as well as global agreements in many sectors, as well as global agreements in many sectors and areas including financial services, telecommunication and high technology products. Ambassador Brock is Counselor and Trustee here at CSIS. Senator Brock served for four terms as a member of Congress from Tennessee and subsequently in the U.S. Senate. He was USTR in the Reagan administration, 1981 to 1985, and also served as President Reagan's Secretary of Labor, 1985 to 1987. He is Chairman of the Brock offices, a firm specializing in international investment in human resources. And finally, Ambassador Susan Schwab is Strategic Advisor in Mayor Brown's Government and Global Trade Practice and a Professor of Public Policy at the University of Maryland. She served as USTR from 2006 to 2009 in the George W. Bush administration, where she negotiated four FTAs and achieved congressional approval of permanent normal trade relations with Vietnam and the bipartisan May 10, 2000 deal, which addressed the sensitive issues of labor and environment. She also negotiated the US bilateral WTO accession agreement with Russia. I think a lot of these ambassadors had been involved in the Russian negotiations at one time or another. In addition, Ambassador Schwab oversaw the initial U.S. government decision to join the Trans-Pacific Partnership negotiations, an initiative which is embraced and energetically pursued by President Obama. With that, we will go to five-minute opening statements starting with Ambassador Cantor. Thanks very much, Meredith. I appreciate it. I don't know where the Michael came from, but we'll tell you that's all. Only person ever called me that was my mother. No one else. That's what it says in your paper. Just a couple things. First of all, I do question the sanity of every one of you being here on Good Friday and pass over weekend when you could be in a beautiful day playing golf or doing something else. So I do question that. Second, let me just say how honored I am to be with my colleagues and friends. It's really interesting. I think we all have been friends with colleagues. We've shared almost virtually the same, if you want to call it, ideology, certainly the same supportive trade with very few differences. And I'm really honored to be with all of you, so thank you very much, Eric. It's terrific. I'm going to be very brief. I'm going to lay out very quickly. We have 45 minutes from Irish Apparel on Canadian softwood lumber, though, later in the program. He's making his question out now. I know you all want to stay here for that. You'll miss lunch, but that's okay. Let me just lay this out very quickly. I'm going to talk about, in my view, this is my personal view, where I think a trade policy ought to go in the next administration, whatever that administration happens to be. Obviously, you have Democrats and Republicans sitting up here, so therefore this is not about politics. I think it's about, hopefully, a legitimate, rational, workable trade agenda. First, let me say this trade agenda has to take advantage of what we all want, which is a rules-based trading system that relies on the rule of law that implements disciplines on all of us. I'm not just talking about the United States, all of us in terms of international trade. That's what we need. That's what we've all driven towards. That's what the big and small agreements are about. We just need to do more of it, and it needs to be put in some framework of trade that can work. It seems to me that it leads to mutual dependence on each other. It enhances globalization. It really enhances strategic and political and economic issues. Certainly economic issues, strategic and political issues. You cannot divide these days what you do in trade from what we do strategically and politically together. It is critical in this globalized world, so let me get to it. First of all, I'm going to start with enforcement is a major, has a major role to play. It enhances the credibility of our agreements. It gives confidence to trade, especially for the American people and the Congress. It's important for access to markets. It's what we did, I think, what Carla started so well, and we were able to finish in the Uruguay round in terms of the dispute settlement system. It's worked well. It's a critical component of trade. These kinds of disciplines are really important. We need to continue it. Second, we need the next President of the United States to advocate trade. I'm going to talk about the U.S. in this section right here very quickly. We cannot push a trade agenda unless the President of the United States, whoever the next President will be, whether it's President Obama or whoever the Republican nominee happens to be, if they don't put trade at the top of the agenda. And I can tell you it just won't work. We won't go anywhere the Congress won't follow, the people won't follow. We won't sell trade and it won't enhance our businesses and our jobs, our economy, and frankly our safety and freedom, as well as political and strategic issues. So the President has to advocate. Third, I would say, I'm going to say it, Doha is dead. Why don't we all just admit it to each other? And why don't we start now and say there are certain things that are critical we can get done. For instance, as Charlene can tell you, and maybe in the question and answer section, the ITA agreement, which she did so well, the telecom agreement, the financial services agreement of what, 15 years old, 17 years old? Look what's happened just in information technology since then. We were in the dark ages 17 years ago. We have got to redo these agreements and make them more effective than they are. We have a great opportunity. We ought to look, financial services, the same as telecom. Second, we need to work on, deal with worker rights in the environment multilaterally. Third, we have to protect the little intellectual property and have effective investment protections as well. We need an agriculture negotiation. Remember the Uruguay round, agriculture was supposed to be a separate negotiation, was supposed to be a separate agreement. We agreed to do it. We haven't done it. It's time to turn our, and I'd love to have Clayton when you can talk about that. Turn that and do something about it. We have a chance, folks, in these areas, these sectoral areas to make some great progress if we quit spending so much time worrying about something that doesn't exist, which is the Doha round. And it will make a difference. Frankly, the information technology agreement, the telecom agreement, financial services agreements taken together were as big or bigger than the Uruguay round in terms of impact economically. And so we ought to go back to them, update them, make them more effective. It would be a tremendous boon to trade. The fourth area is the Trans-Pacific Partnership. Not because it's called the Trans-Pacific Partnership, not because Sushwa did a terrific job putting that together. It started as a P4. Where is Mike Moore? Where are you? Hey, Mike. It started with New Zealand and three others in the P4, right? Then it grew, and it grew. Now it's nine countries, including the United States. It needs to be bigger. We're growing in Asia, the fastest growing trade area in the world, fastest growing economies in the world. We are growing a noodle bowl or a bowl of noodles of trade agreements. What are we doing? We got ASEAN plus three. We have Korea, Japan, and China trying to reach an agreement. We have the Trans-Pacific Partnership. We have bilateral agreements. We have got to come together and begin to address the critical issues in trade, which would address 55% of world's trade if you put the U.S., Canada, Mexico involved with Japan and the nine right now. And the ASEANs, by the way, we have split the ASEANs. Why? We have a Trans-Pacific Partnership. Some ASEANs are in. Indonesia's not in. Thailand's not in. Burma's not in. We need to bring these countries in. Now it's not going to be easy. I understand that everyone up here knows how tough that is, but if we don't think big, if we don't begin to reach for large goals, and what I've said are very large goals, then we're not going to make progress. And what we're doing is allowing trade internationally to drift. And that's very dangerous. So what I'm suggesting today in these four areas, not to allow it to drift, to really address some large issues and to try to make them happen over the next four day years. Thank you. Well, this is a real reunion. And the six of us have a terrific time when we get together, which is this morning. And we've had a lot of fun. I agree with a lot of what Mickey's just said. I have a few points of differences, but this morning we'll discuss a variety of trade initiatives, some stalled, some being negotiated, and some simply being dreamed about. And in assessing their relative importance, I always like to think about what a good trade agreement can accomplish. In my view, a great multilateral trade agreement should strive to accomplish five strategic, and I underline strategic goals. One, to open global markets, which will generate growth for rich and poor nations alike. Two, to reduce global poverty, which furthers the United States' development goals. Dr. William Klein has done a wonderful study connected with the Peterson Institute for International Studies showing that a 1% increase in trade by poor countries reduces poverty by 1%. Three, to advance our security aims. You know, impoverished nations don't govern well. They can't seal their borders. They become failed states, and they become breeding grounds for international terrorism, crime, narcotics trafficking, and a lot of bad things. Four, to integrate poor countries, the Bangladeshes, the Indonesians, the Pakistan's, indoor trading system, and that creates future markets for our entrepreneurs, just like the Marshall Plan. So they get a dividend, but it's down the road a bit, and finally to enhance rule of law and transparency. Now, bilateral and plural lateral agreements can accomplish some of this, but because their geographic reach is much more narrow, they can't accomplish as much. But if big enough, they can stimulate the members of the multilateral community to move forward on multilateral liberalization. We saw that with the NAFTA. The Uruguay round had collapsed in Brussels in 1991. We came home and began to negotiate the NAFTA. President George H.W. Bush signed it in December of 1992, and it was put through Congress the following year. Within four or five months, we completed the Uruguay round. People came back they did not want to have the North American market, which was so large, not have the benefits for the global economy. My friend to my left here thinks that Doha's dead. I agree it's on life support, but I also believe there's a way to bring it back. And I'm still on your left. And he's still on my left. No change at all there. And I believe Doha could contribute to the five strategies that I just mentioned, but I don't have time in my five minutes to go through it, but I'll tell you there's a simple package that would harvest some gains, and I would move forward if I had the chance to do so. Now, the Trans-Pacific Partnership is the only trade agreement that this administration is negotiating, and I think it could, could be great. The stated goal, and I quote, is to bring together economies from across the Pacific, developed and developing into a single trading community to serve as a platform for broader regional integration and eventually a free trade area of the Asia Pacific. Now, as Mickey has mentioned, the Trans-Pacific Partnership involves nine nations. We have trade agreements with Singapore, Chile, Australia, and Peru, four of the nine, and Brunei, New Zealand, Malaysia, and Vietnam would be add-ons. The potential for the trade, if kept at the current size, would be quite small. The five largest Asian economies, China, Japan, Indonesia, India, and South Korea are not included, and they account for over 75% of the GDP of Asia and the great majority of Asian people. So, were Canada, Mexico, and Japan who want to be admitted to join, that would add real heft. After these leaders, that is the Canadian Prime Minister, President Obama, and President Calderón met this past weekend, Prime Minister Harper said to the press, well, the administration is split on whether they want Canada in. And Mexico's economic minister, Ferrari, said he wants an answer by the end of the month. In my view, for the TPP to achieve the five strategic goals that I think are important, that will require the addition of additional economies. And while I favor the concept of moving forward the TPP, I want to point out that I do see four risks if we keep it small. One, it would not accomplish the administration's goal of bringing together developed and developing economies in Asia into a single trading community. Two, it would divert trade from Asian's poorest states, Cambodia, Laos, Burma, and make them worse off because of the diversion. Three, it would split the ASEAN-10, which has been so strategically important to the United States. We have established an ASEAN ambassador in Jakarta. We have supported an ASEAN secretariat. We have talked about a free trade agreement with the ASEAN-10. And to split them at this point, I think it would be a loss. Fourth, it could induce a competing trade bloc because China is not in. And these concerns would be diminished if we housed the Trans-Pacific Partnership into the WTO, making it open to any member that wanted to be bound by its terms. Call it open architecture. And that's exactly what we did with the government procurement agreement, which has served us well, and with the information technology agreement. Now, moving from the Pacific to the Atlantic, we have a high-level working group studying the possibility of a U.S.-EU free trade agreement. And in spite of the two groups' financial challenges, together we command more than half the world's GDP and hence a bilateral agreement would have real heft. Since both of our governments face tight financial circumstance, we might, might be able to come to an agreement removing or reducing agricultural supports, and that's a question for my friend Clayton Yider to my right. Also, we have both negotiated a very similar trade agreement with South Korea, which could be used as a starting point for the negotiations and expedite the process. A U.S.-EU accord of platinum quality could, like the NAFTA did with the Uruguay Round, stimulate incentives to move forward on the multilateral front. And finally, in the Western Hemisphere, now that the U.S. has trade agreements with every single government that borders the Western Pacific except Ecuador, why not focus on Brazil? Brazil will be here on Monday, and we'll be meeting with President Obama with commodity prices high and Brazil seeking agricultural reform. They might have grounds for a very interesting conversation. And with the private sector still leveraged hugely and our government continuing to spend more than it collects, trade is providing a much needed economic cushion. Now, whatever we do, let me just say that we have to work closely with Congress. Whether we are able to get trade promotion authority, so-called fast-track, we need to meet very regularly with Congress to explain our strategic drive, what we can accomplish, because if we don't have an arrangement with Congress, it's very tough for our trading partners to sit down and put their tough political issues on the table, take the heat at home, and not be assured that this agreement will be voted up or down. So, if we want to double our exports by 2014, reduce global poverty, advance our development goals by deed rather than handing out cash, create future markets for our entrepreneurs, strengthen our security, and enhance rule of law, we need a trade strategy and to move ahead aggressively on opening world markets. Thank you. Well, I'll just say amen to all that. And it's what a pleasure it is to see everybody here this morning and to be on the podium with our longtime friends here, all of whom think pretty much alike as has been indicated before. I'm going to try to cover mostly agriculture this morning because obviously that's of interest to everybody. You don't put much of anything in the way of an agreement through the U.S. Congress if you don't have agricultural support. So whatever the context, that's really critical. So knowing how U.S. agriculture thinks at the moment about trade issues is pretty important. The first thing on everybody's mind without question is TPP. I don't think agriculture is totally given up on the Doha around Carla, but boy, there's just a sliver of potential that remains there. But multilateral market access in agriculture is pretty important. TPP is where everybody's focus is at the moment. Not because there's a lot there now, as Carla indicated, there isn't for agriculture, but because of its potential. And that starts with Japan among the three countries that have indicated an interest in joining. When Japan comes in, that makes everybody's eyes light up in terms of agriculture because there's a lot of protectionism in Japan. It could be eliminated over time, and that opens up some excellent trade opportunities. It's also important for Japan to be in because it could jumpstart that economy for the first time in 20 years. Now, what Japan needs to do to be invited is another matter. We've had a long-standing beef controversy with Japan almost as long as the Doha around negotiations, and that needs to be fixed. Fortunately, it looks like Japan is awakened to that and may fix it soon. We hope that's the case. Another long-standing controversy is Japan Post, which has implications to the U.S. insurance industry, not to agriculture, and Japan in which Japan at the moment seems to be going in the wrong direction. And that certainly could jeopardize Japan's opportunities of participating in this negotiation. There's a little of that in with Canada as well. The Canadians, Carly keeps saying, you know, it would be a wonderful thing if we were invited to join this negotiation, and everything is on the table, but we're dairy and poultry are concerned. We, you know, we've got to kind of find a way to take care of things. That doesn't go over too big either in the U.S. or with countries like Australia and New Zealand that have an interest in their case, in particular in dairy. The U.S. in both dairy and poultry. So the Canadians have to be really serious if this is going to happen. Now, if you have to add Carly just those three, that becomes a very meaningful negotiation for agriculture and for everything else. I'm not sure anything else gets added in the first tranche of negotiations, but boy do I agree with you that the real payoff for TPP comes if a number of other countries come in at a later time. And just indicating the ones where U.S. agriculture would have a tremendous interest in the second tranche would be countries like Taiwan, the Philippines, Thailand, and Indonesia. And there you really have some potential growth in market access in agriculture. A couple of additional quick points on agriculture. One, Russia's entry into the WTO is mighty important. We can have more discussion about that later, but the fact is U.S. agriculture has had pretty good access in Russia from time to time through the years in beef, pork, and poultry. And they'd like to do more in processed food products as well, but that's really been a roller coaster. And WTO disciplines on Russia would certainly be welcomed. That's not going to happen unless we get PNTR taken care of in the U.S. Congress. That's the Jackson-Vanny Commandment, as you well know. And that really has competitive aspects to it because we know that competitors in Brazil and Argentina are going to take full advantage of Russia's accession to the WTO and we may not be there. We can talk a little more about the Farm Bill later. I don't need to spend a whole lot of time on that right now because we don't know what's going to happen in the Farm Bill. It's up this year. It expires in September. And all about all I would say at this point and I can embellish on it and questions and answers in the question and answer session, if you will, is that there is no consensus among U.S. ag organizations? Will there be a safety net? Notwithstanding the fact that farm incomes are at record levels, yes, just because farm organizations will insist on it in the volatile environment that exists in the world today and a lot of people would share that view. So there will be a safety net. There will probably be several safety nets this time. I doubt it's going to be a one-size-fit-all on commodities as it has been in the past. It's probably going to be three or four different safety nets organized in their own respective manners and all of that has trade implications. Will the costs of the farm program go up or down? They'll go down in the short term and the long term. Nobody knows. I can remember the roller coaster of the 70s and 80s when everything was rosy in the 70s and everything collapsed in the 80s and we bankrupted thousands of U.S. farms and we don't want to go through that again. In addition to cost, what will be the trade implications? Will the new programs be more or less trade distorted? I don't know. I can't tell because it's too early. There is some indication that direct payment programs are likely to be eliminated. Those are the least distortive of farm programs, not the most distortive. So in an average sense, trade distortions are probably going to go up rather than down if that occurs. Just a word on the U.S.-European Union. I've long been an advocate of our doing a free trade agreement with the European Union and I'm delighted that finally people are picking up on that and paying some attention to it. The first question is, can agriculture be handled in that context? And the answer is yes. And I say that notwithstanding the fact that I spent half my life criticizing the common agricultural policy in vivid terms. The fact is though over the last 20 years our two agricultural policies and from a commodity standpoint have grown closer and closer together. Agriculture is not the issue that would preclude the European, preclude the Doha round from coming to a satisfactory conclusion. That challenge is in non-agricultural market at excess to a much greater degree it is in agriculture. We could solve agriculture in the context of the Doha round and we can solve agriculture in the context of the US-European Union free trade agreement. Bill. Okay. You're going to hear a lot of repetition in terms of attitudes up here. One, I probably should say it on behalf of most of us, they're going to take USTR out of the cabinet over our dead bodies. Second, I think we've got to keep in mind that the United States is really unique. Not just a little bit, not just big, but we really are unique. We're the only country that has the capacity to truly lead in an affirmative fashion. We can only do that by example. We can't do it by force. We can't do it by pushing. We have to do it by example. We have to admit and understand and recognize that our strength is not in our military but in our economic capability. And if we use that particular strength we can avoid a whole lot of other adverse situations. Lastly, in the larger sense, we desperately need a trade policy. We don't have one. We need something that sets the parameters, one of the goals, one of our basic approaches. Are we focused entirely on a multilateral system that gives us rules by which we can adjudicate disputes? Or do we have something much more fundamental that we're trying to achieve? I'm going to shift you around to the other half of the world. Meredith asked me to talk about the Middle East and North Africa. I'm not sure that I can say anything more than that the stakes in this area are incredibly high. We have problems that are just not going to go away. The aps spring is the phrase that is used to often describe something that is enormously complicated and fast changing. The question is what do we do? How do we do it? And when do we do it? And each of those has an effect on the others. Understanding the political situation there and here adds a whole range of additional factors that you've got to play or work with. So let me just look quickly at two different aspects of our approach. One, we have a part of the world that is terribly poor. In most cases, almost totally dependent upon one exportable resource. In most cases, very inadequate or almost nonexistent in some manufacturing sectors or service sectors. Huge amount of bureaucratic interference. Governments that is at least intrusive, if not counterproductive. Bureaucracy, the tape, too much corruption. The problems are endless and legion. If you look at it, though, the region does have something of an identity. And they have to be treated at least in one fashion in that particular context. So one of the things I would hope that we would begin to think about more directly and immediately is a regional, region-wide approach. There are a number of ways you could do it. Back in 2003, President Bush suggested a mid-east free trade agreement. President Obama has been very clear in establishing the urgency of economic development as a priority of US policy. There is an understanding, I think, both in the Congress and in the administration that if you begin to create a more coherent approach to give some sense of hope to the people of that region, you begin to change the political dynamic that would advance our cause and that of our allies. There are a lot of ways to do it. There is an example in Africa and in the Caribbean Basin of preferential agreements on a multinational basis. That's one way to begin. We could expand the GSP program and make it more effective, more comprehensive. There are too many areas that are not covered, both nationally and in terms of product. Those are the sorts of things that I think can pose a more rational and effective regional approach and create a sense that we do know that we have a stake in the region and that we're willing to stick our neck out. Again, by example, by a lead to begin to address the political and security issues we have there, not just on the basis of political and security, but on the basis of economic strength. Let me go to the specific nations. There are a huge number of countries between Iran and Morocco. There's one that we have dealt with over the last several decades that is and has been for several thousand years the lead and that's Egypt. Egypt is more at risk than at any time in my lifetime. When I first took this job I was negotiating a free trade agreement with Israel and I went to Egypt and offered to have a free trade agreement with that country. They were not ready. They're not ready now. But having said that, I don't think we can ignore the opportunity in that country and that's when we got to put all our eggs in one basket but we got to put a lot of eggs in that basket. We have a really dangerous situation over there not just because of the advent of the Muslim Brotherhood it goes beyond that. If you look at the riots in the streets they were not only a bunch of college kids who were unemployed looking for freedom. Most of the people in the streets were hungry they couldn't afford the price of bread and you've got a country that has relied on subsidized fuel and subsidized wheat bread to keep the country stable. That's an unsustainable model. They're running out of resources, they're running out of their reserves they're going to have to devalue their currency that's going to raise the price of all imported goods they have to import their own fuel we've got a very serious problem I would love to see us begin publicly to work towards a free trade agreement not that it's going to solve the problem. That's a long-term solution but I don't think it makes sense even though we're trade people to think in terms of trade being an answer to a whole lot of other factors we've got to think about how to effectively support them in terms of the quality of their governance we've got to get more involved in giving assurance to U.S. investment 1% of our worldwide investment goes into this entire region 1% I mean that's crazy we've got to raise the level of assurance so that American and European businesses can invest there I guess the statement is that we have a deeply rooted, really serious very complicated problem it will not be solved by trade but if you don't start by using trade as your entry vehicle if you don't use that as the example by which we approach a whole range of other problems you're not going to get there without facing the prospect of a very, very different Egypt or a very, very different Middle East that will be more of a hazard than a help and the last point I'd like to make is that we've got to raise our efforts in all of these areas and reduce our expectations it is really important not to overpromise either there or here if we do that maybe we've got a chance Thank you So how many former USTRs does it take to screw in a light bulb? Six so far I was going to say none we'll persuade you you don't need a light bulb It's better Let me say that I agree with Mickey that without presidential leadership there is no effective trade agenda Second, with Karla on the strategic underpinnings of trade and trade agreements the five underpinnings that she pointed out have really been a consistent rationale for trade really since the end of World War II when both Roosevelt and Truman recognized that without trade a fragile peace would never take hold and without trade USTRs would have no real commercial interest in each other's stability and so what Karla pointed out was I think extremely important and that is to remind us of why we're all here on Good Friday but the importance of trade Third, I think we're probably all aligned on the big initiatives that need to be seriously considered especially sympathetic to Bill Brock's view on the Middle East having for many many years advocated a broad holistic approach on the economic treatment of the larger Muslim world which is 37 nations many of whom are the poorest on the earth I think fourth with respect to particularly sectoral agreements which proved very effective in the 90s Mickey is right the global telecom and the financial services agreements need to be updated the world has changed very much since then even though those agreements were pretty forward leaning the information technology agreement is going to be renegotiated if you will and extended and expanded which is important but I do think on the sectoral side there are a number of other areas that we considered both in the services area as well as in what we would think of as newer areas whether it's environmental goods and services which would make a very nice sectoral agreement or an agreement on fisheries which would be another good sectoral agreement or agreements in areas that are newer to the global economy in which there are far fewer vested interests biotech maybe one on that I think it's very important however that amidst all this talk about the trade agenda we not lose sight of perhaps the single most important thing the United States could do and that pertains to its own domestic policy measures there's no reason we can't fix the problems in this country particularly with respect to our fiscal and macro situation and without that many of our broader trade initiatives will fall flat we won't have the leverage that we need and we won't have the sympathy of the public that we need in doing these kinds of agreements so it's extremely important that the U.S. domestic policy agenda be set in motion and fixed looking at the external challenges that we face there are of course many when you think about global trade one that I want to focus on that Meredith had asked me to focus on really has been on the front page now for some time and that is China and the treatment of U.S. intellectual property and technology in China this is an absolutely pivotal issue for the United States because it speaks to the potential hollowing out of our intellectual capital which is extremely serious let me just say that let me start at least with just two minutes on China's technology policy because to understand where the policy comes from is to appreciate how difficult it is for the U.S. position so China's goal is to become an innovative an innovative economy that's a great goal absolutely a great goal the problem is the implementation of that goal and so you have a number of underlying decrees and documents that have been around for a long time the thing about China is if you read what they put out you actually learn quite a bit it's ironically reasonably transparent so I'll just pick two one was their medium term blueprint for science and technology where China is determined to reverse the ratio of foreign technology and foreign IP from what they calculate as 60-30 to the reverse 30 foreign 60 indigenous in China it laid out a series of projects it laid out China's technical orientation it laid out a series of mega projects all in the technology area laden with sophisticated intellectual property it laid out the notion that it would become the world's largest filer of patents it already almost is that it would be in the top five of countries whose patents are routinely cited in major scientific publications it is a very long way from that and the rapid commercialization of its own labs so it wants technology and IP ready made for applied science it is to say for manipulating into commercializable products second big plan is their plan to 2050 China points out in this plan that it missed the first industrial revolution this great economy a third of the world's wealth until early in the last century it missed entirely the industrial revolution and it is still catching up ever since and the goal of the second plan is to not miss the second industrial revolution in which we're all in but in fact to lead the second industrial revolution again I have no quarrel at all with the aspiration here and a variety of industries are again singled out for special attention from the government and a variety of focus on technology, intellectual property and its importance to China and its indigenization in China and then you have the 12th five year plan put out last March seven strategic industries almost all the same industries over all these years really you just have to read the stuff and indicates the strong technology orientation of the Chinese economy so all of this is great I mean it is laudable it's impressive and all the rest the problem is there's an enormous gap in China between aspiration and the ability to actually execute there's an enormous innovation and IP gap in China lots of reasons for why the world's most inventive economy for 4,000 years became one of the world's least inventive economies but such as it is that is the case it's still a heavy tech absorber not a technology creator so who fills the gap between aspiration and current ability to execute U.S. companies European companies multinational companies who are in China and who because of a series of interventionist policies are increasingly under pressure to transfer technology to transfer intellectual property I don't know of any major company who hasn't felt this pressure and a series of policies that try and force the indigenization of technology patents have to be first filed in China or R&D facilities need to be set up in China as a condition of future market access or special encryption algorithms or unique national standards to which companies have to conform and to show conformance you have to expose all of your IP there's a range of programs here that are involved they all interlink and intermash some intentionally some quite by accident but they work synergistically in a very powerful way so there are lots of responses to this there are pure commercial responses what do you do about patent registration and so on and so forth there are China government relations responses how do you work with the Chinese government there's a pyramid of protection you build around your own IP if you're located in China and there's the U.S. government and the U.S. government has 68 ongoing dialogues with China I would suggest we are way over-dialogued even though God knows as you can see I like to talk and the U.S. of course has used the WTO and other mechanisms and all of that is fine but it is missing a fundamental mechanism for helping to navigate this area and that is a bilateral investment treaty with China it started talking there's been a very long hiatus purely on the U.S. side for various reasons but using a bilateral investment treaty could allow U.S. European other companies the protection of intellectual property they can't quite get in the WTO because all of these measures we're talking about all of them diminish the value of your investment in China they diminish the value of your joint venture they diminish the value of your FDI and that means it's a treaty violation if you had such a treaty and that means not Chinese courts but international arbitration it's a whole different playing field a whole different playing field so I would add to the list of policy prescriptions for the next administration getting on the dime and negotiating an extremely broad including an IP and technology focused bilateral investment treaty with China no I was making a wise-ass remark it should not be picked up by a microphone okay we're at the point where everything's been said but not everyone has said it I'm going to I am delighted and honored to be here with my colleagues the formers and echo the point that we do need to question all of us for being here on this beautiful day but thanks to CSIS for hosting this event I think we do need to give this audience credit and I give my colleagues credit part of the reason we're here is we do actually care about the stuff we do genuinely care about these issues that's kind of fun and we're kind of wonky my assignment was to cover what my colleagues hadn't covered which is not a whole lot and the WTO's post-DOHA trade agenda I am to your right Carla and you're sort of sandwiched by folks who do agree that DOHA is dead and we don't need to get into that theological debate I think we would all agree that we need to get beyond DOHA and that's sort of my core premise here and whatever we want to call it let's just declare victory and move on and so that's what I'm going to talk about I think the key in terms of what's going on in Geneva today sadly is that we have a number of in particular a couple of the larger emerging economies that are looking at what is or what was on the table in the DOHA round and realize that whatever the next even though this one's not going anywhere and believe me it's not going anywhere the next iteration they realize is not going to be as sweet and that it's whatever the next iteration is going to be particularly in Nama I mean on industrial goods that there will be a differentiation between developing countries and developing countries and that the larger developing countries aren't going to be treated the same way as the smaller poorer developing countries and that there will be more of a continuum and so I think they're probably kind of hanging on to what was on the table even if it means nothing actually ultimately happens but it is in everyone's interest I think to move on for many of the reasons that I think Carla so ably articulated I mean who is hurt the most by the fact that there is this proliferation of bilateral regional deals and the answer is the smaller players that are out there the poorer players that are out there if you look at the 300 bilateral free trade agreements that are out there they tend to be among the larger the larger countries so you know my focus today is going to be really on why all roads whether we're talking about bilateral regional deals whether we're talking about sectorals whether we're talking about plural laterals and I'm going to touch on all of those why all roads should be leading ultimately to a reinvigoration of the multilateral system making sure that we are ultimately reinforcing the multilateral system over time in the near term recognizing that we're kind of stalled out in Geneva but that while we engage while we have a proactive agenda on the bilateral front sectoral front plural lateral front that those should be those activities should not preclude taking actions that will strengthen the WTO and the multilateral at the multilateral system and I do agree that at the end of the day the folks in Geneva really should be focused right now on moving on beyond Doha and that should be what Pascal Lamy is focused on that should be the number one, two, three, five and ten things on Pascal Lamy's agenda it should be the number one, two, three, five things on the agenda of the G20 leadership as far as I'm concerned and when the G6, 7, 8, 11 whatever configuration of WTO ambassadors get together in Geneva that's what they ought to be talking about how do we move on for the sake for the health of the system a number of you have heard me say before the biggest threat to the WTO today is the Doha round so while we're waiting for the next multilateral round to show up what kind of bilateral regional agreements should we be talking about we've talked about some of those today we've talked about the TPP I would just stress some of the points that have been made here and that is how do we make sure that these can be evolving systems call it plug and play but design such that they can be concentric circles that they can grow such that we can open them up for countries that are willing to take on the responsibilities to take on the new issues that are built into them because after all and some of you I think we're here at CSIS for the discussion that we had earlier this year on the Trans-Pacific Partnership one of the single most significant things I think about the TPP negotiation is that the next gen the next generation of trade negotiators they are regardless of what they're going to negotiate and who they're going to negotiate with the precedents are being set in the TPP negotiations whether it is about state-owned enterprises and state-supported enterprises whether it is labor and environment these are things that ultimately are going to get reverse integrated into the multilateral system at some stage or will be proliferated through other bilateral regional sexual deals so watch this space so if you can build out concentric circles what are these precedents going to look like and how will for example rules of origin be designed so these are not closed systems so that ultimately you can build a concentric circles you can reverse integrate and these can become WTO plus structures and ultimately WTO supportive structures rather than exclusionary structures that work against the multilateral system so that these can contribute positively to the WTO system second, sexual deals we talked about the information technology agreement that is exhibit A and you know Charlene deserves a huge amount of credit 1996 today and I would commend any of you who haven't read it ITIF a couple weeks ago put out a study on the ITA 97% of all trade in these products is covered now this is an MFN agreement that definitely needs updating the US doesn't need any authority we have residual, US government has residual authority to expand the coverage the agreement was negotiated before GPS's were invented there are new semiconductor technologies that could be put into this new expanded coverage it is the absolute perfect example where the countries that aren't signatories Brazil for example have so obviously shot themselves in the foot when you look at the data the free rider is on the slowest car in the highway and so that the benefits that have accrued to both the producers and the consumers have accrued not just to the producers and consumers of ICT equipment of the producers of ICT equipment but to the consumers meaning the upstream consumers the users of that equipment who make any number of other things in any number of other sectors and it is really a compelling example of how liberal trade this amazing multiplier effect works so sectoral agreements whether it is in this sector or we've talked about I know in this room we've talked about medical equipment Ed Gresser and others I've talked about medical equipment you can talk about pharmaceuticals you can talk about a variety of goods and services plural laterals services being front and center services is a great example where we should be doing this unilaterally we shouldn't be waiting around for other countries to agree but as it happens there's a group in Geneva called the really good friends of services liberalization there are 16 of them I don't know what really good friends means I mean this is a group that showers together sure but this is the really good friends of services liberalization TMI TMI, sorry it is a new world but this is a no brainer I mean whether it is financial services express delivery transportation services e-commerce again these are things we should be doing unilaterally but if you can't get your own legislature your own executive branch to do it unilaterally then leverage somebody else's and let's do it you know let's all hold hands and do it together because it will make our like the ITA our own domestic economies grow we've talked about a variety of these kinds of these kinds of things but you get where I'm going with it trade facilitation customs facilitation again those are like tariffs why let things sit at the border transparency we're all trying to get rid of corruption what better way to do it than to build transparency single windows at your border I think members have been doing this we should be doing this together Karla mentioned open architecture again great examples of that let me close with just echoing one thing Russia PNTR Clayton mentioned Russia PNTR I would just mention the following because we've talked about leadership and priorities and a comprehensive trade policy Russia is going to be a member of the WTO this summer June July whether Congress moves Russia PNTR or not whether we jettison the Jackson Bannock provisions or not and therefore it's not about Russia joining the WTO it's about whether the United States is going to benefit from Russia being a member of the WTO PNTR is not leveraged it's not anybody's leverage so the sooner we go about doing it the better because it's in our interest to do it it has nothing to do with Russia so that requires leadership the words come up several times at this table it requires the administration the White House the Department of State particularly the foreign policy establishment because the debate and discussion is largely about foreign policy human rights debate and discussion because there are in fact legitimate foreign policy human rights issues associated with Russia not having to do with the trade the WTO PNTR but the sooner the better that the administration step up it's a bipartisan issue that Congress on a bipartisan basis should move this I would argue and I have in fact argued in writing that it is in our interest the U.S. interest for foreign policy reasons it's in Russia's interest foreign policy reasons reform reasons it is in the economic and commercial interest of both countries and I leave it at that and I think we've got plenty to talk about with this group so thank you all for inviting Ilson for being here today Meredith good thanks first of all we're moving so that's okay who wants to respond to what someone else said want you to respond to each other no one wants to respond there's no burning comment all right who do I got? Chris and she'll come with a microphone there thank you Chris Parlon Parlon and associates all of you have mentioned adverted to at least the need for presidential leadership it's not on yet Chris okay I've never been accused of not being able to be heard so this is a first all of you have referred to or adverted to the need for presidential leadership put yourself in a position where you are able to advise President Obama and the Republican candidate both of your political affiliations what is the most important sound bite that you give that will be meaningful credible to listeners of both Fox and MSNBC what needs to be said and said well you want one I'll give you one and everybody can build with you that's a good one 95% of the consumers of the world live outside of our borders we're 5% of the world we're now 20% of the world's economy we're going to be a less percentage of the world economy over the next 10-20 years if we're going to grow economically grow jobs, grow our income be able to finance what we want to do in this country we're going to have to take advantage of a globalized world we're going to be able to do that economically through trade and so that would be Chris my sound bite what he said I would only add to that just the simple word jobs people don't seem to realize that global trade creates jobs everywhere for the importer, the exporter the producer, the manufacturer the transporter millions millions of jobs that are related to trade and the more trade the more jobs and we need to get off of this thing of this pitch that exports good imports bad and all the jobs are with exports and there are no jobs with imports and if you want a bumper sticker trade makes us prosper and then go to the hill and personally and sell that idea call people into the White House and explain to them 5% of the world's population actually is a little less 20% of the world's output where are we going to put it and what the opportunities are in terms of our security our national interest in reducing poverty and so trade really makes the US what our national interest is all about I'd like to add something too which is if you look at polling data and you look at longitudinal data you discover that when presidents are out there talking positively about trade let's use that when candidates are saying negative things about trade particularly presidential candidates you see more negative attitudes among the population about trade and so when presidents come out of presidential campaigns having talked down trade having trash talked trade surprise surprise their negative public attitudes about trade then they have to deal with it when they become leaders of the free world to the extent that they are saying positive things about trade there is in fact a positive impact they get a positive dividend in terms of public opinion so leadership counts on the rhetorical side particularly during campaign cycles so that is worth noting candidates pay for their negative rhetoric about trade of the presidents you all worked for who was the best in articulating you George H. W. Bush Reagan not even close talking about can I actually respond to that you know Bill Clinton was always very frustrated in the sense that he never fully felt he found his public voice on trade he was an unbelievably phenomenal president on the trade side what we did in eight years is really breathtaking but the problem was when you didn't get TPA that was the challenge then we did all the sectoral agreements so it didn't hurt at all but here is what I would say his challenge his challenge was that the visuals on trade the closed factory gate moved to Mexico one picture tells an unbelievably powerful story the benefits of trade are much more diffuse in an economy it's 50 more jobs here another factory there so on and so forth or to general rise in living standards very hard to put that in as powerful a context rhetorically and he used to talk about this quite a bit because he was a huge believer in open trade but always found that it's very difficult to bring the issues at a public level in as powerful a manner as the one picture closed let me quantify that very quickly to give you a fact I hate to deal with a fact and it's Chris Parlor and I remember in July of 1993 NAFTA supported about 33% of the American public and about 50 something percent were opposed the rest had no opinion by the time we got to November when NAFTA passed the congress over half the American public supported NAFTA and only about 30 something percent were opposed so you can move the needle as has been suggested and that's not just I hesitate to say anything because everybody thinks oh you're just flacking for Bill Clinton again well yeah I am but the fact the fact is it's just an example other presidents have done it as well he's not the only one and presidents have to do it more that was my point I tried to start with but somebody has to say I just would love to hear a president what are we afraid of for guy's sakes we're the strongest most productive people in the rest of the world what are we afraid of the opportunities there let's go get some jobs give me a president kind of says that I think I think Susan I think you'll see a new president Mac Dessler University of Maryland and Peterson Institute a so called experts who raise questions typically ask questions we think we know the answer to I'm going to ask you a question I haven't the foggiest notion what the answer is to and see what people have thought about a number of people who are energy experts have recently been arguing that there is underway a fundamental revolution in terms of the U.S. position in energy markets driven by the low cost of natural gas which has implications for manufacturing competitiveness as well as our trade balance like a lot of things that affect trade policy this comes not in the trade policy sphere obviously not especially because of anything we've done but does this change or impact any way you can think of what we should be doing what our priorities should be doing in trade negotiations assuming that at least part of this so called good news about the relative U.S. position and advantage in energy markets becomes true I'll take a quick shot of that and others can add I don't claim to be an energy expert at all Mac but I think we've got to be careful about over promising in that area this is another area where unrealistic expectations can get us in a great deal of difficulty I think it's great that we're working on all these alternative sources of energy and of course agriculture is heavily involved in that through ethanol and maybe the next generation beyond ethanol and so on but the fact is we're going to be dependent upon heavily dependent upon fossil fuels for a long time to come so we need to figure out a way to generate greater production of fossil fuels from areas other than countries that don't think they don't like us very much Sir, there with the blue tie in the front Is it on? Okay Thank you. My name is Matt Shul, I'm from Inside U.S. Trade I had two kind of questions that I was hoping could draw on all of your experience as negotiators and also working with Congress the first question kind of about negotiation is about the TPP you have these kind of competing priorities do we finish the TPP this year as soon as we can with the folks we have in it or do we bring in the new players Japan, Mexico and Canada and many of you seem to believe that is important bringing those new folks in in order to broaden the economic value of the deal but how do you as a negotiator deal with those two competing priorities you know say hey let's slow down these negotiations and bring in the new important players or do you try to finish it this year the second question is about dealing with Congress many of you talked about Russia PNTR do you think that's doable this year in an election year you know you've all had experience working with Congress and you know how politics can come into play especially in an election so thank you first one TPP membership of the broadening it and then he asked about Russia PNTR let me say that if you had open architecture and had your agreement tied to the WTO the way Charlene did with the government procurement agreement or the intellectual property or the ITA agreement then it would be an open door for all those able to meet the commitment you don't have to slow down you just have to keep your door open and let me just add that even if you assume the existing nine with no additions your question also assumed that there one could finish it this year that's not going to happen even with the existing nine so the issue is whether it'll slow things down inordinately by adding other countries it's going to slow it down some in my judgment it's worth it absolutely let me just say you've got to learn to walk and chew gum at the same time and you can do that this is not this is not rocket science folks to be able to move this forward to do what we did in the ITA in your right Carla and then at the same time bring in Japan, Canada, Mexico the Oceans I think that's difficult politically if we don't I think you must have said that we've got to do that and also we've got some countries in Asia who are poorer and so on this is going to hurt them it's going to divert trade and I think we ought to move on both at the same time I think we can do it I think it's something we need to do and I think it then leads to what I think we've all referred to finally involving China that is a critical element folks and we've got to do it and so we've got to take these stair steps toward this and this is the way to start and we shouldn't wait you can do this and it doesn't matter we can do this now, election year doesn't matter when you're doing these trade agreement negotiating so we ought to start now and I hope we do I don't know whether I'm agreeing or disagreeing with my colleagues I think you have to negotiating a bilateral and negotiating with eight other countries is very different and negotiating with eight versus twelve is orders of magnitude different and when the others include Japan or Canada with supply management in dairy for example just to pull a hypothetical example or Japan with as Clayton mentioned Japan post and some sensitivities in agriculture I agree absolutely as I mentioned that TPP when we launched it and when we envisioned it originally TPP was a path to take it from P5 which was the P4 plus US through to FTAB the free trade area of the Asia Pacific or WTO plus meaning take it outside the region if the EU or Brazil or China anyway anybody else was willing to take on very very high bar commitments and ultimately reverse integrate into the WTO that was fine however the first requirement is the precedent setting and the precedent setting has to be the high bar I'm not sure you can achieve that high bar if Japan is sitting there in the first negotiating exercise and so the way and I'm not sure and I say that as an open question but when we're this as far along as they are and I'm not sure how far that is because I'm not privy to the negotiations getting done that high bar and then having the plug and play having the opportunity for others to come in recognizing that if you negotiate if you think of the TPP nine as TPP 1.0 and perhaps TPP 12 as TPP 1.5 as opposed to TPP 2.0 that's probably what we're talking about here when you have a really big player coming in there are some things that are going to change perhaps fundamentally your SOE SEE provisions might change if you're talking about China coming in at some point maybe not I mean ideally you will write SOE SEE provisions that are the ones that you would like to see China signing up to am I making sense here but I don't negotiating TPP with the original nine as opposed to negotiating it with the 12 is a very very different proposition so I'm not sure you're not adding three five or seven years on to the exercise that you wouldn't want to add on can I I'm not disagreeing with the additional complexity but in terms of approach we have an opportunity in Japan that doesn't come very often you've got a government at least a significant portion of which would like to do this I was going to say do the Japanese want to do this depends on who you're talking to but there are a lot of people in the leadership roles that would give a lot to be able to do this and it would help them deal with some domestic issues at one of the same time they have to deal with you may not have to bring them in I think you have to say we want them in I think there's a difference I think we'd have to say we have not said enough about how we would feel we've been dancing on this thing I would love to have the Japanese in TPP I'm just saying that we under the right circumstances if we've got a tough agreement with an open architecture picking up on Carla's point we have to say that this is it we got it with a 9 and we we want, we welcome we encourage other countries I'd be real clear I'd say Japan because I think that country has got to we really need that country and we're not playing anything any right cards at the moment and I'm discouraged about it one point so if you're going to negotiate a trade agreement with a country, you really have to understand what their intentions are or you're taking on a huge amount of work for absolutely no payback and so I agree with Mickey that ASEAN is split the way the TPP is set up but the fact is Indonesia has a desire to be in TPP and on that basis I would say then move ahead with those that will move ahead, don't wait similarly Japan so I had a very interesting discussion with a number of high level Japanese who assured me that they were very interested in TPP and I said well I'm delighted to hear it in the newspaper what are you going to do to really show your interest well we are going to re-emphasize how interested we are and I said well no no no no what are you going to show that you would be capable of doing of doing by the end of the year doing by the end of the year silence so until Japan sorts out its own internal situation of course we don't know if we'll have the same Prime Minister then the US should move forward with those that can having said that there's no question this agreement needs to be bigger to be of economic consequence and therefore of strategic consequence in Asia and there's no question I agree absolutely with Bill we have to indicate to those countries that are not part of this negotiation number one we want them in but then go a step further and number two work with each one of them as we're proceeding on this negotiation to find out informally where they have heartburn and to begin thinking now how that's going to get resolved so as Mickey says walk to gum same time same time and at such point as in Indonesia or Japan can actually make the leap they're ready to make it and you're ready to agree that it's a significant leap and I suspect that Barbara Wysel and Wendy Cutler thought through a few of these issues already can you move on we'll get back to recipe NTR I think Greg Slater sorry I just Greg Slater was going to thank you I want to go back to Ambassador Bersheft's comments on China and it certainly takes the prize for indigenous innovation policies but India has done a lot in the last year in the same space in Brazil starting to do the same thing to compete with China my question is what is the solution for these increasingly complex localization requirements some of them are traditional local content measures some of them are more complex India has a few provisions that are helpful in e-commerce and encryption but by the time it's negotiated it will be out of date even though USTR is trying to make a living agreement what are some other ideas in this space because we are one of the industries that is targeted as a strategic sector for import substitution and I don't think this trend is going to go away anytime soon thank you this is a $64,000 question and by that I mean I don't have any particular simple answer and there is no silver bullet India Brazil Korea China a number of other countries are following this example of indigenous innovation of localization of forced local content of focusing on the one element they don't have enough of and that is intellectual property and so this is an extremely serious problem the US could suggest to those countries where this is a problem that we had better sit down and come to some understanding on the rules of the road here beyond the WTO or it will affect affirmatively the investment environment in those countries as well as the investment environment here for their investment the difficulty here frankly are the very companies that complain so if you are China and you received $70,000,000,000 billion of inward investment last year what would you change nothing and that is one of the difficulties these countries have to feel the sting of investment flowing elsewhere and in that regard I've often thought that ASEAN is missing a very big bet here and that is where ASEAN to declare itself an IP protected zone I think you would see an extraordinary amount of investment go into ASEAN instead of into other countries so bottom line is I think the US as a policy matter and I would put this high on the agenda is going to have to think through some form of agreement or understanding among the other major players in this space but this issue is only going to get worse only going to get worse I agree with what Charlene has said but let me remind us that we have been contemplating a new bilateral investment treaty for two and a half years China has asked repeatedly to join with us in a bilateral investment treaty such a treaty would go a long way to prevent discrimination against inward investment and how the domestics are treated we need one yesterday and we still have not decided as a policy matter bilateral investment treaty is going to cover secondly, it is true China has 70 billion dollars worth of investment but it also has the largest number of new patent holders the best way to get a country to move forward on intellectual property is when the pressure comes from home and we're already beginning to see that at the last meeting of the JCCT there was a commitment by China that there would be an audit central, provincial, and local of intellectual property protection and since that time Wang Shichan has been made the standing committees direct person to get complaints to this isn't a perfect answer but at least China is putting it on the agenda so bilateral investment treaty pressure from home and continuing talking about this is what we need to do Jennifer I had a question a couple of you commented on the importance of a rules based system and Mickey specifically on the issue of enforcement I wondered if you could comment on what I see as a trend where you now have a significant number of regional and bilateral agreements 400 some of which have their own dispute settlement mechanism and yet when you look in practice what has happened is very few of the dispute settlement mechanisms within these regional trade agreements have been very well utilized or proven to be very effective in other words even many disputes between the United States and Mexico United States and Canada which could very easily have gone to a NAFTA panel have instead gone to the WTO have gone to the WTO what happens though when we now have a TPP agreement or others where there is not WTO law on that issue so in theory the dispute cannot really go to the WTO it has to go within these regional trade agreement dispute settlement mechanisms how do you see this tension getting resolved with if you will trade enforcement being viewed as strong at the WTO and I would argue weak among the regional trade agreements I would I would say that having negotiated the last four FTAs and gone through the Canadian lumber deal and so on it is one of the frustrations with the bilateral regional deals it's one of the things that makes me optimistic that ultimately we're going to cycle back to the multilateral system because there is no comparison what is done is you're starting to write into bilateral deals arbitration panels I mean arbitration but that is a very blunt instrument and for those of us in the trade policy arena the WTO process where you have sort of the panel of peers and you've got the opportunity to try to work out something that makes sense because as you know the day you win the case or the day you retaliate you've really lost it's a much better process and it's a much better outcome and you can really it is a much better means of enforcement so I hope at the end of the day the reason we'll cycle back to a multilateral framework but for now the bilateral approach is much less enforceable outcome than mechanism the other element here though is there are 400 agreements and so on most are glorified tariff agreements very few deal with agriculture very few deal with services the rules are quite loose they're often discretionary in any event and in my own view because the US is very far behind in this race the most important sexual agreement would be zeroing out tariffs you would completely disarm almost all of the 400 plural lateral and FTAs as a discriminatory mechanism because they're glorified tariff agreements if you take away tariffs globally what's the point of the agreement you're back to the WTO on dispute settlement and as economic studies you know this is greater the growth because tariffs are taxes that's all it is on your own inputs which is ironic and so the US ought to be looking for as many zero tariff options as it can possibly find on a broad sectoral basis I would agree with that statement because we really have smooth holly tariffs on some of the poorest countries of the world Bangladesh for example pays 16% tax on a very small quantity of exports it makes to the United States Great Britain less than 1% and I can go through all the poor countries that are large Muslim countries Indonesia pays 6 times more Pakistan we're trying to make friends there pays 10 times more this makes no sense at all but in answer to your specific question under the WTO rules under article 24 if you have substantially all trade being covered you can put the agreement in the WTO services agreement similarly article 4 and if you have the agreement within the WTO then you have a dispute settlement mechanism that everyone understands and doesn't have this complexity of rules Jeff Jeff shot with the Peterson Institute let me go back a little further than your time in office to the Tokyo round and in the Tokyo round one of the things that the United States wanted the most to get out of that agreement was a change in U.S. counter veil and anti dumping law counter veil law add an injury test to our own law so that it would be more efficient and benefit the U.S. economy up until the last few minutes there hasn't been a whole lot said about what the U.S. should want to change out of U.S. practices in any of these trade initiatives to strengthen our own economy though as has been said increasing imports is an important reason why we participate in these agreements so what are a few of the highlights that you would recommend to be at the top of the priority list that we should seek to change in an agreement where we get adequate compensation from our trading partners that's a really good question as a matter of fact and since I'm the only one here I think who was alive at the Tokyo round maybe I can start off because I can remember those very discussions that you're talking about and we added an injury provision to our law at that time as you recall at the great insistence of the European economic community as it was called then and we got essentially zero in return so it was probably the worst deal that was made in the entire Tokyo round but to specifically start in response to your question it seems to me that anti-dumping laws would be a great place to start if we were going to make changes in our own system we have set in my view a terrible example for the rest of the world in the way we run anti-dumping the rest of the world is now copying us so we're getting a kick in the rear for what we've been doing to the rest of the world for a good many years the fact is anti-dumping laws basically everywhere now are rigged in such a way that one can find anti-dumping in 90 plus percent of the cases and that's not the way they should function what we ought to do is shape up anti-dumping laws everywhere and as Bill Brock was saying earlier the U.S. needs to set an example in some of these areas and exercise some leadership that's one example where we've fallen down Jim Berger Jim Berger from Washington Trade Daily I just want to thank everyone here for the great presentations makes me feel 10 years younger actually but one thing that wasn't addressed and there's a lot of momentum about trade going right down the line actually right through the decades if I might say but it seems to have dropped off at Ambassador Swab's end what happened the day you left office and why did it happen no no I mean after you left office but why why do we have this policy now and this administration essentially no trade policy which I think you all have implied someone once told me who is a neighbor on K Street here it's been around that the president just doesn't get it well all right I'll take a shot I think for most presidents and Mickey you may have a different view of this for most presidents the first couple of years of the first term were typically spent on domestic policy for Bill Clinton it was a little bit different because sitting there was the NAFTA sitting there was the end of the Uruguay around negotiations and so there was a kind of momentum and an imperative to make administration decisions do we go forward with the NAFTA and the Labor environment do we go forward with the Uruguay round that's atypical and so I think for this administration with the president coming in to the situation he did which is to say massive deficits so on and so forth and then of course the war etc. I think that wars I think that his attention was probably occupied elsewhere frankly and one could argue appropriately so it seems to me under those circumstances it would have been wise for the administration to better empower its cabinet which I think was something of a surprise to many of us who watched but I do think now with this embrace of TPP especially and with the passage of the Korea FTA in particular I think the administration is beginning to see that actually this can be an area of important advance for the president especially in light of his export goal of doubling exports in five years so my hope would be if it's President Obama in the next four years or a new president my hope would be that the momentum that just has begun now just very recently and with the continuation of TPP that a little more momentum is now put behind these efforts but I do think you're right to say that I think all of us agree in one form or another that there's been a bit of a slowness off the block in terms of trade I didn't imply anything you said it outright are you writing for some? the rest of us will imply you can't understand the first year or two because you've come out of a campaign you've made commitments to your constituencies in the present case to labor more precisely and you do have other priorities you've got to deal with but at some point you do have to make a decision about what your policy is we have yet to see that decision it's not TPP we don't have a trade policy period and either the president or his opponent has to say you know we have an economic problem in this country it's not just the fiscal deficit we've got a trade problem the opportunity is out there for us to grab we're not seizing it because we're not taking the initiative but we're the only people who can other countries are not going to take it for us we're the only people who can and somehow this country has got to start talking about trade as an issue of political consequence we don't do that we treat it as an issue of the national industry or the ethanol industry you know that kind of thing and it does bother me that we seem to sort of sit back and let the negatives take control of the debate and that I think is really dangerous for all of us and you know one other element here is that you know too many people including people often at the highest levels of government administration either administration really don't see trade as a big deal they see domestic policy as a big big deal and they kind of ignore trade as being not very important in the United States the fact is it's incredibly important and it's way more important than it was 20 or 30 or 40 years ago and somehow you know people have to get that through their thick nuggets and you should continue writing and you should make it very clear the strategic issues are not only on the economic bilateral benefit of a trade transaction but also how it affects foreign policy, development policy security policy and our economic growth and prosperity okay we've got time for one more question we're heading there you go a career at USAID I worked for Secretary Eagleburger for a year to study the future of the foreign aid program it quickly developed into a study of all US programs for the developing world I think I counted up 26 at the time among the conclusions were that trade was infinitely more important to the reduction of poverty than bilateral official development assistance but another point was is not very well coordinated with one another there are all kinds of fiefdoms around this town there's an element of trade in USTR the GSP in the developing world there's AID, XM, agriculture and so on my question is how do we get trade to have a bigger voice in the broader councils of government because it does affect global poverty and security and everything else and is there a way that we can better coordinate without having to just reorganize the government thanks I was going to say that I think it was very well coordinated with Clinton Administration which is why he created a National Economic Council which was why there was complete coordination on the economic side as well as on the security and diplomatic side through the NEC and the NSC and the joint meetings that were held all the time let me follow up I was going to say that she says it a lot better than I can the NEC under Bob Rubin and President Clinton when we sat at the table it wasn't your deputy it had to be President Clinton insisted not only Bob Rubin was there Lloyd Benson was there Bob Reich was there Warren Christopher was there I was there it was forced it forced the discussion about issues and decisions were made in a way that was coordinated now you're right about it needs to be done better there's no doubt about that we tend to think about these things as we all have at silos that we have our own problems and our own agendas and our own priorities and we don't often enough share them and share across the government it ought to be done better but just moving the boxes isn't going to make it go better frankly that's the only comment I'll make on that the fact is that we have an imperative now is Bill Brock just said take advantage of a world that's changing and changing for the better not for the worse, for the better and we need to provide leadership and trade is a critical not just an element a critical element of this but we do know how to do this Mickey Charling both said it I'll tell you from my experience we had a very tightly controlled process Clayton experienced the same thing we had every cabinet person involved from state treasury, commerce, USTR in my case we chaired it I think but we know how to do it we have done it we've proven that it works certainly with Clayton all I can say is why not now we used to have a weekly deputies meeting on the most contentious issues of trade bring in agriculture, commerce state and when you articulate the issue the parties tend to roll toward a consensus in the middle and it's very good to do it regularly and at the deputies level because then you prepare your cabinet officer for the issues and that you got to the middle suddenly you need a president who as Clinton would meet with Lloyd Benson George H.W. Bush regularly had lunch with Danny Rostinkowski who chaired Ways and Means so he knew what was on the mind and if we gave him a note of something we wanted him to raise that is the president to raise he raised it but it was important to him trade was important and I think we have to elevate it because trade writ large is absolutely vital to US prosperity and peace does anyone at this table think you get you accomplish these objectives of better coordination higher priority for trade by folding USTR into the commerce department ooh we don't want that anyone at this table supported no George thank you good job I just wanted to conclude here the CSIS TPP initiative will have Chairman Dave Camp April 26 to talk about the trade agenda so I would like you guys to put that on your schedule appreciate your attendance today and have a good holiday