 I'm curious how do you view the revision of those trade deals? Is this the fool's game? Is it a way to put that more protectionism because you say it's taking away free trade? I mean all those negotiations in Japan, Korea, Alina, I mean Mexico, Canada How do you view them totally inefficient? They're supposed to bring norms, you know at a certain level I mean they're supposed to bring some good at some some areas or you don't find them useful at all For the case of Korea US FTA revision, Marcus already told nothing much But one thing we could have gained a lot from that course FTA because original agreement says Within I mean from 2021 25 percent tariff on pickup truck will be gone But through this re-negotiations this 2021 is extended to 2041 Okay, so you know we don't produce and export anything any pick up truck yet to to us But we lost a lot of potential Benefits out of this kind of re-negotiations. So we are moving away from more free trade Marcus and then Carl. So The NAFTA agreement was 25 years old And there was all kinds of things like digital commerce that really didn't even exist when it was negotiated So you could make the argument that it was sort of like an old house that needed some refurbishing and if you had had The kind of government that existed in the United States for the previous three generations What would have come out of that process would have been far from perfect But it would have been a kind of rational attempt to bring the rules more into alignment with the actual way commerce was operating and you could But what happened was that effort a Lot of it was focused on the Trans-Pacific partnership Because it was simply a bigger deal Canada and Mexico were already members. So when we got TPP We would basically be sort of cleaning the now really mixing metaphors, but we would sort of be cleaning the whole house When Trump pulled us out of TPP that caused the trade diversion Problems I alluded to earlier with respect to say pork in the Japanese market but it also meant that we had to now do those things within the context of NAFTA and a Government that wanted to fix up those things probably could have done a better job But this government is fundamentally protectionist So it used that opportunity to do things like alter rules of origin that had the effect of making that agreement Pulling the agreement away from free trade rather than moving it ever closer Carl no, I only wanted to add that I think that the EU in its efforts to Conclude bilateral trade agreements genuinely wants to open markets. I think so and there are new Issues beyond tariffs. I mean all the what is happening in the trades in the services sector This is all liberalizing, but you know that there's a lot of opposition to trade deals in Europe today And in France especially I mean population doesn't understand them And it's it's a hard thing to to explain nowadays why it would be good eventually level playing field It's just it's not working people are not buying it anymore. I think in Europe. It has a different issue than in other places in Europe It's about the fear to lose influence on standards and the fear that there is no democratic legitimacy in in the changes and Of course the secrecy of it too. Yeah, and of course distributional concerns. Yeah, I think what What we have seen over over the last 30 years or so you certainly during the period of Hyper globalization is an increase in inequality Sometimes very clearly measured in the United States sometimes not that obvious like in United like in Germany There were since 2005 numbers are not actually moving anymore But perceived inequality has gone up quite a lot And so if you look at the research that exists of populism there seems to be a link and many believe that the trade openness access a base opening up trade access a base that problem it creates it creates losers and There's a very strong opposition Politically to to allow these these these losses to occur in periods of political fragility I think that is maybe in Europe the most important argument right now that Many would believe that the for example Mercos who agreement is actually a good thing. It actually helped us rain in Bolsonaro in his you know make him Abide by the Paris agreement for example, but the you know Fragility the political fragility within Europe makes it difficult to create users that would then you know support populist parties and wreck wreck havoc In ways that we don't want Sure, I mean your argument like a free trade is not welcomed by friends or you I think this is a traditional Issue I taught the international trade for many many years But when I come to the part of political economy trade policy, you know gains from trade It's spread all over the people whole population whole industry But the loss of the difficulty Out of a market opening is Concentrating on certain sectors that they can unite themselves and make a demonstration They can do lots of other things so politicians looking at this to side who you know politicians will take which part protectionist Polo systems is much better for their election. So now you mentioned about losers, you know I think you know politicians comes in then populist When the wind they lay on election, we were just before going back to you Marcus. I'd like to welcome you Mr. Wadahabi, thank you for being here and we were talking about free trade agreements And I know you have a great experience on the Japanese US trade agreement It would be nice for you to share with us Sure what you think we were talking about convertions of economies It's not exactly your point of view, I think if you might tell us how what you felt about the renegotiation Negotiation between us and Japan May I make intervention now? Well, sorry to be late. I thought that this session will start at 4 p.m. Oh, that's wrong. That was from 4 to 5 30 So I thought it's not a whole presentation because we're just going back and forth You know, just just answer through this question. I will answer to others afterwards. No problem Okay, there's a positive side and negative side of this most recent Japan US trade agreement first of all from Japanese perspective it was quite a Good agreement because we could avoid the imposition of 25% You know duties on Japanese cars to be imported to the United States from Japan So that's one thing and the negative side is that This will reduce the chances opportunities for United States to come back to the TPP So that's that's a negative side. Do you think it's a good thing? Oh bad thing You mean all together that's that's fine, but kind of a negative side is that Since you know the United States has been looking for Japanese agriculture market now United States got some Access you know improved access of US agriculture products to Japanese market. So that will reduce opportunities for United States to come back to TPP original TPP that is TPP 12 So Marcus Nolan who's sitting next to you was disagreeing on the terrace. Maybe he can explain why yeah So I do not believe that this agreement spares Japan from the Section 232 case on automobiles and the potential tariff. I mean Prime Minister Abe wanted that commitment, but he hasn't gotten it What the two sides have said is that there is a phase one of the negotiation? Which has been which has been announced, which is a limited number of tariff cuts or tariff cuts on a limited number of sectors But that but the key point is it actually doesn't do that It doesn't spare the Japanese automobile industry now There's going to be a phase two of the negotiation and perhaps at that point Japan can extract that commitment But it hasn't thus far and the other thing I would just make a minor point You know in the previous discussion we were we were discussing the US Mexico-Canada agreement as though it existed It's been negotiated, but the legislation hasn't been passed in the United States and the issue we face now is that The House of Representatives is controlled by the Democratic Party the speaker Nancy Pelosi If you just went and polled the congressman You smack up or whatever you want to call it could probably pass the House of Representatives But Pelosi wants to keep in kind of in step with whoever the eventual Democratic presidential nominee is going to be If it looks like that's going to be Joe Biden or somebody like Beto O'Rourke who have pretty moderate views on trade Legislation can move forward, but if it looks like it's going to be Bernie Sanders or Elizabeth Warren She's going to hold back on that legislation. So even in the case of this agreement We've negotiated agreement, but the United States hasn't actually passed the implementing legislation Additional collateral damage that might come from the EU US agreement and that is the WTO once again because of It's article 24 that actually says that free trade agreement should cover Substantially all trades. So if you just pick what is easy for you and leave the rest then That might be violating article 24 and no who cares the US administration certainly not but we thought the Japanese would actually care and And in that sense, you know, that's that's a negative on that agreement at least in my in my view It doesn't cover substantially all trade and it doesn't take the tariffs to zero either one Well, actually, you know, I worked as a Economic affairs officer at the WTO secretariat some time ago dealing with article 24 and actually, you know after the you were around negotiations You have more precise term in you know in terms of say for instance Those FDA or customs union agreement should be concluded within the reasonable period of time and that has been defined as 10 years so you see maybe this agreement will come into force But in 10 years time that's considered to be reasonable lengths of time So if both Japan and the United States can agree to reach Higher level of coverage of this agreement that we find with WTO