 Good morning everyone and welcome to the Faculty of Public Affairs Research Award Symposium. As we begin, I would like to take a moment to acknowledge that we are guests here on the unceded territory of the Algonquin and Ishnabe people. My name is André Ploed and I'm Dean of the Faculty of Public Affairs. In 2018, the faculty recognized the outstanding research of Laura McDonald with the FDA Research Excellence Award. And then we sent her to work. We sent her to work to organize the symposium that you are part of today. So it's very nice of us, don't you think? We kind of say you're doing a great job and on top of that we're going to give you more work. So thank you for undertaking us. So the award of course is an invitation to the recipient to host the symposium during FDA Research Month. And that is therefore what brings us together today. Today's symposium is entitled Trading on New Terms, Civil Society and North American Free Trade. It's occurring at an important time in North American relations. National governments have changed in all three countries. The trade agreement, linking all of our three countries has changed and the role of civil society has changed as well. We especially welcome today's speakers who will offer insights into the shifts on the North American landscape from many perspectives. You're also welcome to attend the other events happening during FDA Research Month. Over the next month, we're hosting public lectures, symposia and panel discussions. Most of them actually happen right here. And in particular, we have our graduate conference next Monday and Tuesday with discussions on topics that are quite related to what you're going to talk about today, including the International Economic Order and US tariffs, supply management in Canada. Everybody is invited. Please register through the Faculty of Public Affairs website at carlton.ca backslashfpa. Thank you again for coming and I wish you all a fruitful discussion. Hi everyone. I am indeed the lucky winner of the Research Award for 2018. And so I'm Laura McDonald from Department of Political Science and Institute of Political Economy. I'm going to speak more formally later, but I just wanted to welcome everybody. It is some work putting this together, but I have many helpers. And I feel extraordinarily fortunate to be able to listen to the speakers today who teach me a lot, all of us a lot about these exciting important events that are going on around us. So I just thought it would be interesting and fun to kick off the day with a little video that I found on the internet that was produced by the AFL-CIO, the American Federation of Labor. Help me labor people. Yes, okay. The main labor federation in the United States that they produced during the discussions of the renegotiation of the North American Free Trade Agreement. So to give you kind of a sense of the tone of responses to those negotiations coming from at least one sector of civil society. So there we go. You can write down the street and see these big plants that once employed thousands just sitting there idle. It's devastating to know at one point you could have worked, raised a family, got into the middle class, and now that possibility is no longer there. I know there's talk today of renegotiating after. If trade deals are good for Americans, why aren't Americans allowed to see what's in these trade deals as they're being negotiated? I've been here all my life. I'm a third generation steelworker. My dad was a union guy. Yep, UAW. Our life in Lorraine back then was pretty good. It was very good. Being a kid in Lorraine was great. He was always playing basketball, having 40-yard dash races up and down 20th Street. A lot of people was working. And there were thriving businesses all along 28th Street. In some fashion or another, everybody remotely worked for U.S. Steel and wanted them to do the best or Ford and wanted them to do the best. I think they call us the rust belt now. In the late 90s, some of the larger corporations started to leave our area, one of which was Ford Motor Company. When U.S. Steel closed down, that hurt a lot of people. When jobs disappear in Lorraine or other communities like Lorraine, it just has a devastating impact in the quality of life. Loss of revenue seems to disproportionately impact people of color. You start losing public service personnel like firemen, teachers, policemen. A lot of foreclosures. A lot of empty houses. It's been trying. We've got to make sure that people understand that the economy that we're in today is a bigger problem as a result of what bad trade deals do in communities. The trade deals of the past really have been written from the perspective of corporations. When workers' voices are not present in these deals, that they're not good labor standards or environmental protections, a whole host of people are actually losing out. Our workers in this country got a bad deal, but so did those workers in Mexico or in Canada. How do we get back to good? The labor movement has leaned in on trade deals in the past. TPP was no exception. Labor has to come together in any new renegotiation of the North America free trade agreement and bring with it all of the sectors. My hope within this town is really coming together with jobs coming in, well-paying jobs that you can support your family with. You'll find no harder worker than in the state of Ohio. All we ask for is a level playing. I hope that the younger generation is able to take this situation we're in and mold it into something that we can all be proud of in the years to come. We in the movement have to continue to fight and I think labor is stronger when it stands united and stands together. That's what we did to the TPP and that's what it's going to take to get a good renegotiated trade agreement. Okay, so thanks. I just thought that video quite effectively raises some of the issues we're going to be talking about today. The response of workers in particular to the effects of the restructuring of the North American economy. You might take issue with some aspects of the analysis but I think it raises a sense of very powerful message about what has been the nature of trade deals up till now. The sense that ordinary people were not included in those discussions, civil society were not included and interestingly at the end when you think it's going to be kind of a Trumpist America first, it's all Mexico's fault kind of message. The union representative says it's not just us it's not just the Americans who are suffering Mexicans and Canadians also had problems with these trade deals and that indeed is what I'm going to be talking about later is about transnational linkages amongst civil society groups in the three countries but before that we have the privilege of listening to a series of speakers who are going to introduce the situation in each of the three countries so I'm going to ask Chris Gabriel to come up who's going to be chairing the session and our three speakers and she'll introduce them for us. My name is Chris Gabriel I'm an associate dean in the faculty of public affairs and associate professor of political science here at Carleton. It's my pleasure to chair the first panel of this event understanding the current political context. I'm going to introduce each of the speakers in turn and they are each evident in their own fields and you can read more about them in the bios that you received in the package so without further ado our first speaker will be Chris Sands who is at John Hopkins University followed by Julio Durazo-Herman at the University of Quebec at Montréal and our last speaker will be Meredith Lilly who is here at Carleton University so they'll each speak in turn for roughly 20 minutes I'm firm on the time I've warned them to give us some time for questions and answers and discussion to follow so without further ado I will ask Chris Sands to take it away. Thank you very much Christina it's always an honor to be back at Carleton and when I say back at Carleton I'm an American who spent my junior year abroad or you'd say third year in the political science department here at Carleton and then had the chance to come back when I was working on my dissertation on a Fulbright at the Norman Patterson School so I feel like I'm coming home except the building is completely different so it's like going back to visit your parents but they've downsized and they're living in a condo and it's much nicer really but no memories um anyway so I'm glad to be here thank you very much for having me what I'm going to try to do is talk a little bit about the US picture on civil society and put in context what I think the USMCA provides in terms of opportunity for civil society have a say in how the USMCA using the American acronym sorry about that take shape I'll talk first about process then about what people are doing and and and I'll keep to 20 minutes so not to get in trouble so we've seen for a long time with civil society a process which some of the political science community refers to as hitchhiking they have a cause an issue that they want to put on the political agenda and those of you who've read your John Kingdon about agenda setting and windows of opportunity that pop up it's very much in that vein they look for something that has politicians attention and then try to find a way to attach their issue to that thing which has more momentum to move forward in order to get progress on the issue that matters one of the classic examples that some of you will remember because it's very American is trying to declare HIV AIDS a national security threat because it meant that the Pentagon budget might somehow have something to do with research and advancing that cause we've seen that done for a number of social issues whether it's integration of African Americans into the workforce or women in the workforce and now people of different sexual orientation so the Pentagon's often obviously big target at least in the US it's a very big budget and so if you can find a way to get Congress to attach your cause then you have you get attention you get on to the agenda trade has become very similar and some of you will remember the NAFTA negotiation distinct from the Canada use free trade negotiation because when Bill Clinton became president and was responsible for for seeking the ratification of the agreement largely negotiated by the George H. W. Bush administration in order to build a coalition that included some Democrats he proposed adding side agreements labor and environment side agreements to try to build some support there was also the creation of a development bank the North American Development Bank in Dallas and these were sweeteners designed to get some votes and say yes we really are dealing with these issues significantly about those however they were outside the agreement and what environmental and labor groups discovered as NAFTA was implemented was that none of the dispute settlement mechanisms none of the enforcement mechanisms that were inherent in NAFTA were available to labor and environment because it was outside the agreement so we had these institutions probably familiar with the Commission on Environmental Cooperation because it's based in Montreal that could study that could speak on issues but had no ability to necessarily force policy change and that was an important lesson both for the negotiators and also for civil society that being on the margins was good but it wasn't good enough and so what you saw subsequent to that was whether it's the US Chilean free trade agreement Canada's free trade agreement with Chile or other agreements subsequently negotiated labor and environment having had that NAFTA first step on the margins became part of the main body of the agreement and and so this was this was progress because once you're in the main body you can you can actually leverage trade enforcement mechanisms whether if we're talking about NAFTA chapter 11 chapter 20 chapter 19 to try to get enforcement on the issues that matter to you however in the NAFTA era and subsequently there are other issues that really are important to civil society to have not got the same the same respect one of them is at the role of regulatory harmonization and even though many people in the union movement now in both our countries are public service union members as opposed to you know manufacturing union members who are very concerned about processes that streamline regulation in a way that makes perhaps the country competitive vis-a-vis business but might also mean elimination of regulatory gates not solely a race to the bottom but possibly an elimination of jobs within the public service that formerly were there to maintain systems that were regulatory so there's a concern there there's also as many of you know real movement or real energy in civil society around new issues whether an old issue for example I should mention is is women's advancement in trade but there there are others people's concern over using the trade agenda to advance non-discrimination for people with different sexual orientations or even people of different racial backgrounds now this had not been on the trade agenda but as you know Canada put it on the trade agenda through the vehicle of the progressive trade agenda that was articulated by the Canadian government as part of what they saw not only in in the renegotiated NAFTA agreement but also in turning the TPP into a CP TPP a comprehensive and progressive trans-pacific partnership so all of that set expectations now you might say well we didn't they sign this agreement in Buenos Aires isn't it over not so fast it's not over because of course the Americans can't do anything without a convoluted process and we have a convoluted process a word on why when President Obama in 2014 asked the Congress for trade promotion authority for a new grant of trade promotion authority to negotiate the TPP but also to negotiate a transatlantic trade and investment partnership it was met with sort of disbelief many Democrats remembered that Obama was a critic of the NAFTA and all of a sudden he was asking for trade promotion authority to advance a corporate agenda across the Pacific that was not what they expected and so many Democrats although they loved Obama didn't really want to support this which forced the Obama administration to negotiate with Congress which hated Obama at least on the Republican side but were we're willing to advance trade and so they negotiated what we say in the United States was the most interventionist by Congress trade promotion authority grant since the 1974 trade act that created the fast-track process when I say interventionist I mean that it built in requirements for transparency reports to Congress consultations with Congress all the way through the process and then timetables and new demands for what had to be presented there is a submission package which is necessary for the administration to deliver to Congress in order to initiate the approval process and it has not yet been submitted what's included in the package six things there is a final text to the agreement we signed a draft so there's still been some cleanup work that's being done so they want the final text secondly draft implementing legislation this is very unusual normally Congress writes their own legislation but here they're asking for implementing legislation to be written by the administration indicating which laws need to be changed in order to implement us commitments they want a labor market impact assessment an environmental impact assessment from the agreement they want a us itc report that's the us international trade commission that always assesses things a bit like the congressional budget office for budget issues or the general accounting office for for other economic measures the us itc a fairly nonpartisan body nonetheless part of the commerce department needs to provide an assessment and then finally there needs to be an enforcement plan to ensure the commitments that are not upheld by Canada and Mexico or by particular corporations can be challenged and then and then you can get some sort of satisfaction and that way is understood to apply in labor and environment because labor and environment in this agreement has been brought into the main body but perhaps not to other areas this is set off a negotiation within washington first on the draft text and second on the enforcement provisions which have been the main concentration for civil society on the draft text to give you an example republicans in congress were quite concerned about the language that canada had asked for and put in the agreement that that made it a violation of the agreement to discriminate in employment on basis of gender or sexual orientation this was not popular with christian conservatives and others in congress so they asked that this be changed and so the us tr made a footnote in the text that said this provision does not apply in the united states now you might say what what we signed a deal ah but the us is not changing canada's commitment or mexico's commitment it's only changing what it's agreed to and leaves it to canada mexico to say well that's not the deal we want that back in but they're only changing the rule there now that happened in the text and we'll see where it goes second example the enforcement plan democrats have focused very much on the enforcement plan to make sure there are substantial teeth in the agreement so that if labor provisions aren't met for example we now um have a very complicated automotive rule of origin that not only counts content but counts whether the workers producing say automotive parts are making at least sixteen dollars an hour because if they're not that content value can't be included in formula is a very complicated uh issue and many people in civil society are concerned that there's a huge fudge factor for business which understands this better than most of us in the civilian world and they want to make sure there are teeth so that if there's a company that's violated that that that can be addressed um and you'll see a lot of democrats have been focusing on that so let's say that some of that negotiation is continuing what what happens next well the next thing that will happen is the administration will submit this whole package and there will be draft implementing legislation and I emphasize draft because although congress is asked for the draft it's only a draft and when that legislation hits congress congress cannot amend it after it's introduced but they can revise it before it's introduced because it's legislation they're congress they can do that so this is this is the interesting bit um and many people uh you might have such a weird system in the US I apologize for that but um so a tariff bill a trade bill implementing legislation like this is considered what we would call money bill which means it must be introduced in the house so the fact that the house is now under democratic control means that the senate really isn't the most important piece initially it's what happens in the house so speaker Pelosi and her team have the ability to take this legislation and insert things perhaps they might say we're striking that footnote that USTR put in about women and and and sexual orientation because we don't think that should be there and there's nothing anybody can do about it if congress if the democrats decide they're going to change the legislation once it's introduced it is it's got to be passed in exactly the same form by the senate or rejected by both so that gives democrats a tremendous amount of of leverage on top of which some of you will remember if you go back a bit um the the United States negotiated a free trade agreement with Columbia under the George W. Bush administration that and Canada of course followed along with a free trade agreement they negotiated with Colombians you passed yours first one of the reasons you passed yours first was that Nancy Pelosi didn't like it and some of it she didn't like in the agreement but also she was dealing with uh George W. Bush and she wanted as much leverage to get stuff out of the republican administration as she wanted so there was no clock on her she just said well I can introduce if I feel like it she held it up for four years and the bush people were mad and business was mad but nobody could force it and she was waiting for somebody to give her a good deal maybe an immigration bill maybe more money for environment I mean she's she's got limited power but she knows how to use what she's got and she's in the same position now so if the Trump administration thinks they've got a great victory uh there's waiting for a rubber stamp from congress they're going to find that Speaker Pelosi is going to hold out I suspect no it's a simple majority in both chambers yeah and it doesn't have to be it can't be amended so once it's in it's it's stuck but yeah it's just simple majority in both both chambers so that's the um so those are the levers and so civil society has potentially great influence here so where are we well as usual the business community if you count them in civil society is the best organized they the large companies who see some potential benefit organized small business there are two coalitions a past usmca coalition which has been organized by some of the more um successful lobbying groups and a chamber of commerce group that is supporting usmca now that includes a lot of smaller businesses during the course of the negotiation big businesses have been very wary about saying anything about usmca or new naftan and the reason is they don't want a trump tweet that says at ford uh is hurting american workers because what business is very keen on is when trump puts your uh twitter handle your company's twitter handle in a negative tweet it hurts your stock price and a lot of CEOs get paid on stock options and they don't want the stock price tagged because they're going to hear about it so what they've done instead is use their trade associations uh the american automotive trade policy council the uh you know steel work steel association the manufacturers association national social manufacturers to be the front people on criticizing or intervening on the trade agreement and they've been very very forthright in participating in these corporate coalitions to advance getting the agreement passed and there is very little corporate dissent although they probably like a slightly different agreement they just want to see this put forward in order to end the uncertainty and move on to what for most us businesses is the real fight which is china which has much more broad and bipartisan support than picking on canada and mexico even though apparently you're a national security risk um so that's that's the first issue then there's the second issue immigration not really with canada although it could be an issue with canada immigration with mexico has always been an issue in us mexico relations and there are there is a very significant civil society network that cares about immigration and many of these people are concerned about the deferred action on childhood arrivals what we call the docket kids or the dreamers where they're also concerned about the status of um uh undocumented workers who've come over they also are concerned about future immigration and uh and what they hear from trump is enforcement first the big wall so i have five minutes i'm going to talk really fast um they're also looking for a trade-off and many of them advance the idea that if nancy pelosi can get an immigration concession out of trump perhaps deferred action on childhood arrivals then maybe the usmc is worth passing that's a very big chip and it won't make some republicans happy but that's one of the things in play with regard to labor and environment they're in the best position they've been in in a trade agreement in a long time robert leitizer has cultivated both communities particularly labor you'll notice that not only was trump not mentioned here in the video from afl cio but there was no there was no criticism of trump either a lot of what leitizer has advanced he's he's a nice uh he grew up in ash debuah uh ohio he's concerned about the same agenda and he has tried to cultivate shared brown and many democrats who are who are very pro labor in or because he knew from the beginning he needed their support to get this thing through so so labor and environment are at the moment tentatively okay with the agreement that doesn't just say seiyu and some of the public service unions haven't got doubts but they're kind of watching to see how this plays out they've gotten a lot potentially in this agreement they may see the potential for more but they've been relatively calm what will make the difference in the next few months a couple things will make the difference the one first is timing we are coming very close to the 2020 election and you know we're always in election mode in us it is entirely possible given the timetable that if nancy polosi introduces this into the congress in end of march say that given the amount of time that the senate the house can take we would still be debating this in early 2020 once you get into 2020 and frankly even now many democrats will find the agreement okay but don't want to give trump a win and that's going to start affecting the politics and i think if the u.s doesn't move before early 2020 most people will say you know it's good but i could do better in under a next president whether it's president bernie or president kamala harris or whatever and they'll gamble that it's better to stall on this and see if you can you know reboot i know you don't want to hear that but i'm just saying that i'm sure true though doesn't want to hear that either the next piece that i think is worth watching is the role of canada in mexico the trump administration as you know is entirely shameless on these things and the white house is said to the both the true to government and to the the government in mexico that it expects canada and mexico to be on the hill pushing for passage of this agreement even though neither is extremely thrilled with the agreement we expect you to go and sell it and uh as as mc mulvaney the chief of staff said to a group i was i was listening in the audience was off the record but i'm quoting him anyway um essentially said look they need the agreement the uncertainty is killing them if you want it you got to go out and lobby for it well canada and mexico have taken a common position which is not unless steel and aluminum tariffs are raised on the two three two and not if you impose automotive tariffs on us as well perfectly reasonable position in my view but that is also a level of negotiation if that's satisfied and canada mexico are then expected by washington to co and work on the hill they are both canada mexico more popular with congress than trump is then the question will be what will canadian and mexican civil society say about whether canada and mexico their governments should be lobbying on the hill in favor of an agreement and i think that will be a discussion among civil societies among networks labor unions in canada talking labor unions in the us environmental groups and so on so forth so that i think it was meant to be a sort of tea up for the next two talks so i'll stop there uh but happy to answer questions as things go on great with two minutes to spare oh um we could trade it no no monetize it okay um so thank you very much um it's a pleasure to be here thank you to laura for inviting me uh thank you to the faculty of public affairs for organizing such a such an event i think it's something i'll talk to my own dean about organizing at two cams so i like this model and thank you for being here so i titled my presentation future directions in canada mexico relations i'll be switching a bit perspective so it'll be a different kind of talk from chris but i hope that will generate debate and maybe controversy as well um anyway so what i'm trying to do is trying to look at how uh mexico-canada relations uh looked like at the moment where the us mca agreement is being ratified um my starting point is um something that i called in a previous article uh far away so close this movie by uh i forgot his name now it's a german movie um anyway um the idea is that mexico-canada are very close but are also rather far away and this shows very uh strikingly in the way they relate to each other and it creates a permanent paradox uh in the relationship between these two countries uh we've all heard this this this course about mexico-canada being natural allies and about mexico-canada being uh together in north america and being together to uh preserve nafta and so on and so forth but we need to remember that there's been a number of important crises in mexico-canada relations that show us that there's something else going on that needs to be taken into account before we think that mexico-canada are in fact natural allies and that they will fight together for us mca or whatever so the first crisis is the mexican visa crisis of 2009 where uh canada unilaterally imposed visas on mexico's tourists and not only unilaterally imposed but also imposed them on a very short uh on a very short term basis so uh from essentially one day to the next mexicans needed visas to come to canada and mexico was very hurt because this was in the middle of negotiating the security and prosperity partnership in north america which was supposed precisely to uh deal with this kinds of issues through consultation and so forth so um it was uh in mexico was perceived as a slap in the face and the mexican government reacted accordingly and the spp was dead and buried very quickly afterwards um but it's not only mexico who has been a victim of canadian unilateralism canada has been hurt by the fact that mexico has been negotiating a number of free trade agreements in latin america that are uh essentially uh seen as a hub and spoke system in which mexico is the hub and canada is simply one of the spokes and mexico has free trade agreements with many other latin american countries and mexico has not been very supportive of canadian efforts to extend its own free trade uh system to colombia chile or other countries so mexican canada have also this this tension there um not not entirely uh productive of a natural alliance the way to deal with that on a day-to-day basis has been a very traditional way a mexican way of of doing this which is through compartmentalization this was not created for canada was actually created for the us in which the way to deal with the elephant and the border mexico has compartmentalized all its different relationships so trade is never mixed with culture or with security or with whatever other relationship is there in order to avoid the fact that one a crisis in one of these dimensions might create a crisis in the entire relationship and that's a way to survive living next to the united states and uh mexico has also developed a compartmentalization and a depoliticization of its day-to-day relationships with canada so even in the midst of the visa crisis and all those problems mexican canada and mexican and canadian officials uh usually got together under far away from from the spotlight and decided on a very small marginal but on the end rather important and substantial ways to make things work because after all trade is trade and money is money and both wanted going so um that's one one big element and the other big element has already been raised of course it's the united states mexican and canada compete for the attention of the united states and therefore they're not always um thank you not always are ready to collaborate with one another when they see it might be to their advantage to negotiate alone the most striking example of this was christa freeland saying precisely so canada will negotiate alone because it is too canada's advantage to do so and then of course she discovered that mexico could negotiate faster and quicker and therefore had to cut short diplomatic trip to europe in order to come back to washington and negotiate what she had not done previously anyway so um that's part of it so i'm i'm always very wary when i hear this talk about north american trilateralism i wonder what exactly it is because it's it's hard to see uh another example of of this uh vague trilateralism is the fact that canada has built the tradition of jumping into a moving train uh nafta was also negotiated with canada moving into an agreement that was already uh ongoing was being negotiated out of fear of being left out of a more comprehensive trade agreement between mexico and the us it was a way to protect whatever canada had acquired uh i don't don't have the english word in my mind but the the french word is a key as uh the the key the the privilege is already one negotiated through the canada u.s. free trade agreement of 88 so that is one thing and then the other thing is that we should very quickly discard the idea of uh you EU styles or european union style deep in an integration uh nafta was negotiated as an agreement that explicitly excluded the idea of furthering integration and the and the um collapse of the security and the prosperity partnership shows us how difficult it was under the nafta agreement to um actually a deep in integration it is true that labor and environment have been brought into the usm ca agreement but i'm not entirely sure that this will change anything in terms of creating the framework for deep in an integration beyond uh simply trade and investment so going to the usm ca agreement what i would like to show you here is the fact that this is a precarious agreement it even the name nobody agrees on uh it's an agreement without an agreed name i'm showing you the the french version of the canadian name which puts canada first then the us puts of course its own name first and then in mexico it's even worse because the official website talks about an agreement but the mexican government sent a bill proposing the ratification of a treaty so just this is anecdotal but it's it shows you how this is an agreement to disagree in the best of cases um it is also um a nobative agreement and something that nobody thought would be a good thing so it's the first trade agreement to have a fixed uh sunset clause so we all know that it's it's due to and 16 years after its ratification whenever that happens and also it has to be renegotiated every six years so actually uh if us entrepreneurs and others are thinking about usm ca bringing certainty i'm sorry to tell them that they're wrong because actually uncertainty is built into the treaty or agreement and we will be hearing about usm ca and we will be having this repeated crisis about ratification and so on at least every six years and then a big one at the end of the 16 year period and then we don't know what will happen so um this is not what i would call certainty right um there's many things that have changed in in the switch from nafta to usm ca so there's uh the question about automobiles and i think this is probably the most interesting part of the agreement because it builds on what was essentially the most successful part of nafta creating a vertically integrated automobile industry in uh north america and the new features of the usm ca uh actually work into uh strengthening these vertical integration the more regional content you have while the more integrated the industry might become it still needs to be seen whether the sixteen dollar per hour minimum will actually be enforced we haven't seen any movements on that front in mexico but uh apparently there's teeth to that and i guess uh the the lobs of the government is actually waiting for ratification before moving forward rather than uh going ahead on the first time another interesting element of the usm ca is a whole chapter on corruption which is of course meant to be a sweetener a political sweetener in the us and possibly candidates not that interesting in mexico but still it gives attention to the fact that corruption has a higher political priority these days and therefore it's been included in the in the agreement i won't talk much longer about ratification because that has been already discussed but just to remember that mexico has been waiting for the us to go ahead first and there's this balancing act that's been going on between waiting for the us to ratify and of course to lift the the the tariffs but also trying to avoid trump saying well it's either you ratify the deal as it is or there's no deal because we'll uh get out of nafta and then there will be no trade agreement at all so it's it's it's a difficult act and the mexican government the canadian government as well are trying to find the way through this maze because if if they also don't want provoked trump into tweeting nafta is over ass off noon today so that that's it something going on um another thing that's interesting to think about when we talk about these trade agreements is the fact that trade is there and it has grown enormously so what i put in in the on the presentation and the powerpoint is the growth of trade between mexican canada i only found the trade in goods uh so the services are not included but it's gone over over 30 billion dollars from in 2018 and it's also it's also interesting to note that there is an enormous growth in numbers but there is tremendous stability in proportion so um you'll see that uh in terms of trade mexico provides for six to seven so two-thirds of the goods sold to canada and so there's a big imbalance in the in the balance of payments it also works the other way around so when we look at investment we'll see that investment has grown enormously that uh the mexican part of investment flows is not insignificant it's around 12 percent but and it has grown with time and it has remained stable at 12 percent as well so it's interesting to see this paradox of an enormous growth in terms of volume and enormous stability in terms of proportions another thing that i would like to point the attention to and that this will help us think why um why the us the NAFTA-USMCA agreements have been negotiated the way they have has to do with the fact that soft power is also an important element that we need to think about and uh soft power declines itself in in different ways but it excludes at least theoretically both military and economic power so there's other ways of for countries to influence their foreign policies so what i want to show in this final slide is the number of travelers oh it's still in french there okay anyway so canadians going to mexico and mexicans coming to canada unfortunately there's no data for canadians in mexico in 1994 it only starts in 2008 here the the trend has been growing but the the proportion has changed and that has to do of course with the fact that for a number of years mexicans needed a visa to come to canada and so for a while they actually did stop coming to canada once the visa requirement was lifted they uh they came back it is also interesting to note that it's not on the slide but the the amount of money mexicans spend in canada has very little to do with the amount of money canadians spend in mexico so it's a very unbalanced trade situation there and it also shows the the appeal of mexico as a as a tourist destination for canadians and it's also important to note that not only for tourists that go and spend two weeks but the the snowbird phenomenon is an important phenomenon and there is communities that have come to depend on the money brought by the snowbirds especially around the port and the coast of region there snowbirds are are important and they they provide for an important canadian presence in mexico of course we need to talk about students i was one of them once and i i stayed oh thank you and the the number of students has grown i think by 10 so there were about 3000 and 2000 and there's about 30 000 us mexican students in canada today there's no comparable flow on the other direction canadian students don't tend to register in mexican universities maybe only for a semester and then they only need a tourist visa but they're very active in working in collaboration with mexican civil society movements solidarity migrant rights worker rights indigenous rights and so on so there's an important canadian student presence in mexico as well and i have to conclude with with roma the movie which has cost so much up war and canadan has been extremely popular and it's also a symbol of mexican soft power and canada so all these things have to be factored somehow in the mexico-canada relationship finally i'll i'll try to look into the crystal ball and talk about the lobe sabrador and the most important thing we need to talk about is the fact that usmca was negotiated by former president peña nieto but actually it was masterminded by lobe sabrador and his team because peña nieto was a lame duck president that had no political authority left and it was actually a lobe sabrador team that moved in and told peña Nieto which were the elements they were willing to agree upon and there was sort of an agreement to the fact that peña Nieto would have the glory of signing the agreement in Buenos Aires but the agreement actually reflects lobe sabrador's priorities and it will be ratified at some point by the new government it is interesting to look at the return of the sight room how entrepreneurs were invited to negotiate on the mexican side even though this was lobe sabrador and therefore a leftist government and how the sight room worked as usual so entrepreneurs were invited but civil society organizations and most likely most especially unions were not so that's that also tells us something about the position of lobe sabrador vis-a-vis the usmca finally i would like to take a look at the lima group and the venezuela crisis because that was a point of high politics a collaboration between canada and mexico that has gone overboard with the arrival of lobe sabrador and the decision to return to more traditional mexican foreign policy tropes and non-intervention mediation for the resolution of internal conflicts and so on and therefore mexico has for all practical purposes left the lima group and has been working with the uruguay and some european countries and trying to propose an alternative version to the venezuelan crisis so just to conclude because i'm probably out of time by now i would like to talk a little bit about the question of social legitimacy and i think this is the one thing that will most likely change with lobe sabrador so the sight room will be still be there the the the constraints of trade and investment will still be there except that lobe sabrador has a different constituency he needs to please and so there will be some changes in what i expect will be mostly that the discourse and the tropes of mexican foreign policy mexican trade policy but essentially i suspect there will be little change in the way they today uh mexican canada relations work so we will be back to compartmentalization and the politicization thank you so i'd like to say thanks first to laura mcdonald for the opportunity to be here um and she asked me to set the stage at least i think this is what she asked me to do this is what i i'm going to do so um in terms of sort of the politics around the new nafta for canada and the involvement of different stakeholders in the process um i like this picture because everybody's looking in a different direction um which is actually a little bit how i think the dynamics of this this went this is the day that they signed the the agreement um and and my comments i think are going to be complimentary there i'm i'm headed in a little bit of a different direction and i think i'm going to try and show you a little bit of how the sausage is made um uh when it comes to stakeholder engagement uh by governments um and i thought also that the video was a good way to set the stage because one of the messages that i thought was important that was conveyed in that was um when uh the the woman spoke and said labor is stronger when it's united and so i i think you'll hear as i go through my comments um how united and fragmented positions end up playing out in what trade agreements can look like so on the surface you know the politics of the deal as a whole for canada really aren't particularly exciting because everyone in canada for the most part is pro nafta there's widespread recognition that canada is a trading country and that we rely on nafta for our economic well-being um all major political parties including the n dp uh took a position of being in favor of nafta organized labor for the most part has taken a position uh and citizens and so this isn't the same in the united states where there's there i think there is more vocal um uh fragmentation about about the deal as a whole but within the sort of big tend that we're all pro nafta um there are certainly different approaches and interests and emphasis that that different uh groups would would put on different aspects of what makes a good trade deal in for who and i think there's also actually quite a bit of art in the public representation of what a good deal looks like to the country and how political leadership goes about selling that deal to the public as something that is good for it um so i want to start by emphasizing that it is key and a totally normal part of trade negotiations to engage groups that are expected to be impacted by those trade negotiations and what they might look like countries sign trade agreements because they think it's going to be good for their country good for their businesses workers and citizens um but it's also known at the outset that not all aspects of every trade agreement are going to be good for everyone's interests and so it's important for governments to anticipate the needs and the interests of the groups that are expected to be impacted both those who are expected to benefit but also those who could potentially be hurt and negotiators also need to be educated so that they don't unknowingly trade something away that they weren't even really aware was important um and they could potentially hurt domestic interests and so overall negotiators need to understand they you know they have this big picture goal of figuring out what that final package is going to look like and is it worth signing on to yes or no because ultimately that is the decision governments make it's it's a it's a whole package and it's either it's good for the country and they're going to implement it or it's bad now negotiations are also highly technical um NAFTA has thousands of tariff line item numbers negotiators can't be expected to be experts on every single one of them and so they frequently speak to business about you know very specific technical issues um in terms of what what works for you and what doesn't uh in a trade agreement now the previous conservative government and the current liberal government have both engaged uh stakeholders as part of their trade policy process they've done so differently the conservative government I think was known to be fairly business friendly and it prioritized the interests of the business community as well as farmers and agricultural uh interests as well as small business I think the liberal government has seen to be more union friendly and has done more to um reflect the interests of organized labor as well as indigenous groups in the new NAFTA but I want to be clear that both governments engaged all of these stakeholders but their emphasis and prioritization of what they heard and then what they did with the information they received is different it's one thing to consult it's another thing to actually do something with that um and so what we're sort of the big kind of pieces of NAFTA from a stakeholder perspective um I recently gave a talk in the states on the kuzma explaining to them because they have no idea that our government decided to call us mca anything else and so I talked about the three C's of kuzma cars cows and conflict resolution and um but I'm mostly going to stick to cars and cows today because this is where most of the political attention was paid at least from a stakeholder perspective so on cars Canada ultimately agreed to a 75 percent north american content rule meaning that 75 percent of car needs to be sourced and made in north america using 70 percent north american steel and aluminum and then at least 40 to 45 percent of the car needs to be made using high wage labor which is defined in the agreement as at least 16 dollars us per hour that was by the way a canadian proposal um and on the surface I think if you turned on your television you would think that uh the canadian auto sector was actually quite happy with the outcome of NAFTA Flavio Volpe who I know and like very much was frequently on our television screens talking about how the government was doing a great job working on NAFTA but my point earlier about the art of of selling a trade deal is that I think within the auto sector it very much depends on who you asked and that's because in the canadian auto industry it's um located entirely in the province of Ontario something to bear in mind and there are four major stakeholder groups so there are the big three auto manufacturers for GM and Chrysler there are foreign manufacturers who have plants in canada these are Honda and Toyota there's also a couple of truck manufacturers there are auto parts producers so the big ones for canada are linamar magna and martin rea um and there are many many many smaller auto parts producers in canada companies there's also organized labor which in NAFTA negotiations was largely represented by Jerry Diaz who also was on our television screens a lot and these four sets of stakeholders don't actually all want the same thing out of a trade deal and so if you were paying attention in the NAFTA negotiations you would know that we only ever heard from two groups and those were Jerry Diaz and Flavio Volpe Jerry Diaz representing you know he's pushing the the high wage provisions in in on autos and Flavio Volpe from the Automotive Parts Manufacturers Association and it's my view that these were the ones who were out talking about the deal because these are the interests that were reflected in the final NAFTA for organized labor the new NAFTA ensures canada's high wages and good working conditions represent less of a competitive disadvantage than those of mexico and for auto parts the new NAFTA ensures that more North American parts need to be in every North American car and since all of the big parts producers also have presence in the United States they're much less threatened by a strong rule of origin NAFTA rule of origin than they are by parts coming in from outside of North America and so who we never heard from was the big three for GM and Chrysler this is for I think a couple of reasons one is because their American headquarters essentially call the shots on what their positions are going to be towards trade deals but also because really they just wanted the status quo they wanted the 62.5% rule of origin and this is what would have been cheapest for them similarly the foreign auto manufacturers so Toyota and Honda in a way they don't really have a horse in this race their Canadian operations are entirely to produce cars for the North American market they're not sending cars back and forth across the canada-us border the way that the big three manufacturing operations have developed and and they have much more of a sort of build where we sell model and so ultimately they also would have preferred the 62.5% rule of origin but it's my suspicion that just sort of keeping quiet consulting quietly with government but not taking a big public position is what they decided was the best position for them and so governments when they are faced with winners and losers in a trade agreement one of the things that they can do is encourage the winners to be out there publicly talking about how great a trade deal is and this is what you know Chris mentioned the US and Mexico are down on the hill trying to convince Americans about why we need the deal and it's because or why we think it's a good deal and it's because they know we need the deal and so if those who are in favor of a deal are sort of out promoting it very loudly then they can drown the voices of those who think that a deal isn't such a good thing or if those who don't think a deal is such a good thing just don't speak out at all then for the average Canadian you look at your television screens it seems that Otto is happy that guy Flavio is always on television and he seems pretty happy so so I guess it's a good deal for the auto industry and again I do know Flavio and I like him very much but I'm just explaining that you know we didn't hear from the big three and and they have been very silent and I think this is largely because they don't like the agreement and you'll note that GM is leaving Canada so or the one plant is leaving anyway and so they are voting with their feet even though they haven't been very loud about the agreement so what about dairy cows in the final negotiation Canada offered 3.6 percent market access to the US and we also agreed to dismantle regulatory barriers associated with something called class 7 dairy I'm happy to explain more about that later but I won't for now and we also agreed to limit exports on powdered milk and formula I can also explain more about that if people are interested but we've heard that the Canadian dairy sector was not very happy about the deal and certainly I think across the board they were not and so we heard a united position from dairy farmers that they did not want Canada to allow any access to the Canadian dairy market in NAFTA and they held the same position on the Canada Europe trade agreement as well as the transfer partnership and in all of these agreements in the end Canada gave somewhere between about 3 and 3.5 percent access now to many people 3.5 percent might not seem like a very big deal dairy farmers might sound like they're belly aching because isn't sort of 96 percent still intact if we only gave up 3.5 percent but that's not actually how it works in the supply management system and when you start to add up all of this incremental access that has been offered in a very short amount of time actually the viability of the supply management system is something that that begins to come into play and so via CETA TPP and now NAFTA we've offered more than 10 percent access to foreign competition imports to our dairy market and all of this impacts just one part of the supply management system so if you think about supply management as a stool a three-legged stool it impacts just one leg of that stool and eventually adjustments are required to those other two legs and if it isn't all done just right what happens to the stool right so what do governments do to help well they can keep farmers whole by compensating them for their losses and this is what trade policy was has always sort of set out to do if you if you talk to sort of classic trade economists they would say there's winners and losers in trade the winners win more than the losers lose and therefore the winner should compensate the losers but when it comes time to actually compensate them it seems that suddenly pockets start to close and it it isn't always a smooth process but to that end I think it's important to remember that the average farmer in Canada is about 56 years old that's farmers writ large not dairy farmers I couldn't get my hands on the stats easily um and there are more farmers that are over the age of 70 than under the age of 35 today and so I think it's quite understandable that dairy farmers whose retirement is entirely locked up in the quota for their cows want to ensure that their quota value isn't going to deteriorate as more foreign milk comes in just as they're thinking about retirement and so one thing the government can do is compensate them for their losses and that provides some benefits the only other point I would make about this is that you know Quebec was the loudest in its opposition to the new NAFTA and I think this was largely because the deal was concluded first in the final days of a provincial election campaign so all candidates were opposed to NAFTA but also because Quebec didn't really gain very much for these losses in dairy it Quebec's interests were hurt in a couple of other areas as well and they didn't have the sort of win on autos that Ontario got and so you heard much more loudly from Quebec than from Ontario that the province wasn't very happy about it and in fact Premier Ford has been down in the States a number of times trying to help promote the agreement so I do just want to highlight am I at five minutes yet okay I do just want to highlight a couple of other things that are in the agreement from a stakeholder perspective so the first thing I think that's sort of most important is that Canada has maintained access to the US market and so this is actually the biggest thing for Canadian business is just still having access the other thing that that was discussed a lot by the government is that chapter 19 was retained so this is about dispute settlement and this is largely I think a symbolic the reason that I think it became so important was because it was the same thing that was really important in the original trade deal Canada US and then the same thing that was important in NAFTA so it's kind of taken on mythical standards in in or mythical proportions in Canada in a way that it perhaps otherwise would not have Canada also eliminated chapter 11 and the US as well around investor state dispute which really I do think serves the interests of Canadian civil society environment and labour groups have been calling for this and certainly big companies have not been calling for this the agreement also as has been discussed contains labour and environment chapters these were largely borrowed from the transit partnership so from a Canadian perspective these were not particularly controversial because they were essentially the same commitments were negotiated by a previous government conservative government and then were put in the TPP and then eventually they made their way into NAFTA so from a Canadian perspective these are not controversial and moving forward to Chris's point the House Democrats may very well seek even stronger provisions in labour and environment and the truth is from a policy perspective Canada could quite easily sign on to those I think it's more a political issue around kind of the ratification timetable as to whether or not we would entertain that and then there's also some sort of small provisions to protect Canadian obligations to Indigenous peoples as well as special programs to boost businesses owned by Indigenous populations which is new to NAFTA and a positive thing but things that were not achieved in NAFTA were the two big requests of business the two top requests of Canadian business were to improve government procurement and to end by America provisions and modernize the list of professionals that qualify for NAFTA temporary entry visas in fact Canada withdrew altogether from chapter 13 which is the government procurement chapter and so we continue to have government procurement with Mexico via TPP but we will have no government procurement chapter in place with the United States once USMCA is ratified so that was business communities number one ask and then their other big ask was around temporary entry provisions which I that is my area of research and so I've read the chapter I've done a line-by-line comparison and there's a handful of words that are different other big sort of concessions that were made by Canada include around de minimis which is duty-free shipping we went from $20 Canadian to $150 Canadian retail sector of Canada not very happy about that we also increased IP protections on biologics and copyright protections both of which will come with additional costs and there may be further changes actually around the biologics issue and again Canada I think could play ball with the Democrats if necessary and so I think the picture though that emerges and I'm I'm wrapping up now is that I think you see that in so far as there was a shift between the way the current Liberal government has engaged in stakeholder stakeholder engagement and and the Canadians is that you do see there's a slightly greater influence of civil society in these negotiations you know the list on the left largely reflects the interest of specific civil society groups although I know we'll be hearing from some of those groups later today it's my suspicion that you'll hear it's more talk than action but I will leave it to the speakers to comment but then on the right the Canadian business community I think can accept the new NAFTA but they don't particularly like it I think that they feel that the Canadian government's priorities were misaligned with those of the Trump administration and that the government deployed too much political capital in areas that they were never going to achieve including a gender chapter and so from their perspective I think that it probably failed to make gains in areas that the business community would have liked to prioritize including government procurement and so one of the things that I would like to close with though is just a reminder that I think we have to remember that it was the Americans who were driving this bus the whole time and so in areas where the Canadian government wanted to get things done and they were aligned with the Americans we were able to do so so on things like autos the elimination of chapter 11 labor and environment chapters we're very much taking the lead from the U.S. on these issues and the chapters are only as as ambitious as the U.S. wanted to be and then in areas where the U.S. didn't want to move at all like temporary entry and there's long historical reasons that I anticipated there would be no change we made we made absolutely no progress and that was expected so I'm going to leave it there I just want to highlight that this is a new report a trilateral report that I wrote the Canadian chapter but there's also Mexican and U.S. chapters not chapters it's very short five five page reports about the new NAFTA and it's available either from it's pinned at the top of my twitter page or from cg which was the organization that funded it okay so we have a nice chunk of time for questions and discussions so I will open the floor can I ask you to introduce yourselves before you ask your question and go to the mics thank you Laura I'm Jean Lodlain I teach at the Patterson school my question is to three presenters the three of you have emphasized that the new agreement the way in which it was negotiated and everything that needs to be done still introduces a large degree of uncertainty to what what what are the impacts the long-term impacts the structural impacts of that uncertainty especially the one that's built in the agreement relative in particular to the renegotiation okay but but not just that I mean overall so one of the things and I thought Julian brought this up very well is not only an uncertainty whether this gets ratified but even if it's ratified the fact that we have these windows for revision renegotiation talking about the agreement again I'm as guilty as anybody in Washington but those of you who remember for a long time if you said well we should update NAFTA we should make some changes the American response pretty much uniformly was you can't reopen NAFTA if you do the whole thing will come apart it wasn't that popular here so even though the establishment is blamed for you know being rah-rah about NAFTA they knew there was vulnerability and put a different way from the moment this the NAFTA was completed in every president election presidential election after that from 1992 which was the George H. W. Bush Clinton election onward we had at least one candidate opposed to NAFTA running for president it was Ross Perot it was Ralph Nader and then by the time we get past the Ralph Nader era we had a significant Democratic opponent whether it was Hillary Clinton and Obama and then by the time you get to 2016 which was sort of a bit of a little earthquake you had all of the major party candidates in the U.S. and some of the minor ones all opposed to NAFTA so we've seen this sort of unhappiness building in the U.S. in a way which I think is quite right Julian and Meredith pointed out that that the NAFTA consensus was much stronger in Canada and in Mexico and people were more accepting of it but it had really never gotten that kind of traction in the U.S. the six-year revision is very clever because a six-year revision means post-trump even if he gets re-elected it also means means post-amlo so who knows what we'll have in Mexico so that adds uncertainty I mean it does say we can go back but it means there's a guaranteed who knows what we're going to be dealing with in six years on top of the question of whether we're going to get it and then on top of the question of whether it'll all be eliminated I think the uncertainty works against a business that's trying to assess how their supply chain needs to be structured we've seen businesses be very cautious in terms of making decisions very reluctant to take on additional risk as they as they look at this and there's something else that I just flag is I think will be a source of ongoing challenge for for the governments and that is just as NAFTA got a lot of negative attention because people said oh this is causing jobs to move overseas but in effect automation was a big part of that as well but didn't have the political sort of targeting that that trade agreements had done we're also facing the same thing here in that one of the great challenges for supply chains is the emergence of 3d or additive manufacturing one of the reasons supply chains went to Vietnam or Malaysia or or other parts of the world was lower labor cost and getting the price of that widget you need down to a couple pennies and transportation cost had lowered significantly enough that you know you could buy that widget in a far-flung country bring it back and it would be okay NAFTA 2.0 or USMCA won't be as bad for Canadian and Mexican workers as it will be for Vietnamese and other far-flung workers because technology will lead to a contraction of supply chains and manufacturing platforms like Platform North America which although they're going to be reorganized here will still be inside the fence as opposed to outside the fence and I think that changes the politics of this as well because there will be a kind of coming home of jobs and investment that will that will occur because business wants to do it that because technology enables it that this agreement will ratify but it'll also mean that it will look to many people like this is helping us out and I think that that changes the dynamic and my sort of last point is what the uncertainty has been doing and I pay attention to Canada the uncertainty throughout has has led to less foreign direct investment in Canada in the last year Bank of Canada statistics pretty clear we've seen less interest internationally companies are saying well if we're going to invest we might invest in the US that's the only safe place that we know we'll still have US market access and that's the biggest market lesser effect on Mexico but a bigger effect on Canada and then the second thing which is even worse is less inward investment by Canadian businesses just in terms of their own because they don't know whether they're going to have secure market access whether they can afford to make that big plug so that's hurt Canadian growth and I think that means the debate is quite interesting the US has three percent unemployment reasonably or no it has four percent unemployment and three percent growth it's a good time workers aren't that unhappy wages are going up but Canada Mexico don't have that dynamic and so I think ironically the uncertainty is working more against Canada Mexico and more against Canada than Mexico than in the US where where we seem to be riding the Trump uncertainty engine very happily just to write it quickly I agree with Chris that the six-year time frame was was engineered precisely that way to to ride the political cycles in both Mexico Canada and the US I would like to underline a few elements of the Mexican side I'm not so sure that in Mexico the pro NAFTA consensus is that strong because the unions were never openly for it and many of the social organizations that have been involved with electing local sovereign president at one point or another where members of the red mexicana de acción contra libre comercio so the mexican network against free trade and so their position towards free trade is ambiguous at best and I think what will happen is that local sovereign has raised expectations enormously about what the the leftist government will do and will have to do with the fact that real possibilities are not that strong so there will be a lot of political play and probably political I do not expect a crisis but at least a lot of frustration on on supporters of the operator vis-à-vis his trade policy so that will possibly add to the uncertainty machine and I do think that we're in for relatively rough time no matter what the labor statistics themselves are because politically it's it's unstable thanks for asking the question Joe I think so there's there's two bits of the uncertainty there's sort of the immediate uncertainty around ratification which Canada is in a weak spot because it's very well known in the United States that we need the agreement and so that puts us in a vulnerable position with respect to the lifting of the steel and aluminum tariffs and what that form is going to take and and we also have the uncertainty of our own political calendar so we have an election in October and so the ratification timeline for Canada is very much something that's up in the air at the moment should NAFTA the new NAFTA not be ratified before the election and should there be a change in governments it suddenly puts a new government in a position of having to take a position on NAFTA and and so you know it so we have all that kind of small uncertainty around ratification but I think there's also some really big structural parts of U.S. trade policy as well as the new NAFTA that that embed uncertainty and where it's my view that President Trump has weaponized uncertainty quite deliberately and so for instance the elimination of the ISDS chapter which I expect that is the state dispute settlement chapter that I think will probably be discussed later today there's lots of good public policy reasons for its elimination the flip side of that though is that from a business perspective it makes Canada a less attractive place to invest because big investors aren't sure about the certainty of their investment and so that's uncertainty and then you've got the 10 plus six year timeline which creates all of these future permanent opportunities to inject uncertainty in the deal and then you have sort of U.S. trade policy writ large we're not really sure what he thinks about China we're not really sure what he's going to do on tariffs and so Canadian suppliers are busily trying to figure out what what parts of my supply chain do I need to retool and revisit to ensure that I have guaranteed access to the United States which is our most important market and so there's all these little bits of uncertainty and and one of the things Chris raised is that if you have to make a decision as a business about whether or not you're thinking about expanding your business is doing well shall we expand more in Canada or will we set up a satellite in the United States so that we're there and then we're not exporting because we're in the States maybe that's the better bet and so it doesn't position well for growth within Canada so I think there's many many many little parts of uncertainty that have just become the permanent environment for Canada and the number one thing that business wants is certainty and they want to know what's our corporate tax rate going to be what are the rules around setting up this pipeline this is what this is a big big thing that business wants and right now Canada isn't able to offer a whole lot of certainty so my name is Cristiana I'm a recent political science graduate from the University of Alberta and I do work here in public service in Ottawa now and my question is I know we're currently we're talking about the current political context but I'm constantly tying it back to civil society in my head and I I you know we're kind of making that distinction between there's like the business sector the government and then just civil society at large and I'm wondering if you could provide a little bit of insight for for me and us I guess on whether you think that the three countries are approaching the engagement of civil society differently and sort of in what ways they're doing that and why do you why you think that is and mostly I'm thinking a lot about just kind of like the rise of you know social media technology and all that and how especially for young people I think nowadays we're so used to just you know if you don't know something you have all the information in your pocket basically but what does that mean in the context of Canada US and Mexico and are they dealing with it differently so maybe I'll start with Canada so certainly I I think governments in Canada engage all parts of you know business civil society sorry what was the third group that you had you yeah regions in you know engage all these groups and all governments do that but I do think that different governments put different emphasis on those things and and I think that the current government is putting more emphasis on engaging with civil society than the previous government did but to the point I made earlier I think it's important to look at what did the consultation look like and what are the final outcome where are they in the final outcomes of the deal I think Mexico with the change of government will probably have a different emphasis than it used to have and similarly in the US the shift to a democratic controlled house means that labor groups and others will probably get more more attention so thank you for your question I think it's a very important question in terms of trying to look at what Mexican policy might look like you must remember that the operator was selected on leftist platform but he has a history of that and so civil society in and in López Obrador's coalition is is that the place of civil society is a bit ambiguous because traditional organizations such as unions are not part of Anlos coalition they used to be affiliated with the PRI and most of the large unions remain close to PRI and somewhere another so they they're part of the opposition rather than in the government and then you must remember that the López Obrador political history as an opposition leader was mostly with the PRD and that was the party that articulated a lot of these social organizations but the PRD split and gave rise to the Morena the party with which López Obrador was was selected but that brought with it a split within civil society organizations as well so it's it's unclear and then López Obrador on top of everything has a very vertical style so he's he has been accused of being extremely authoritarian of not consulting enough and we haven't seen a lot of of it in action but what we've seen so the first part is the the negotiation of the USMCA we've seen that the the side room that was established with NAFTA is still working as usual so there has been no real enlargement of new groups in the side room and then what we see and this is a different issue that we haven't talked about here but the the the negotiation about the National Guard and the creation of a national police that will be able to do with with public security issues was extensively debated in Congress and it was only modified in in in response to civil society criticisms not because the government's bill responded to them but actually because the opposition on on the both the right and the left took up these these elements and forced them into into the law so what I see is is that there is a discourse of inclusion that is not necessarily there in the actual policies at the government so the great thing about talking about the US and Canada is you probably already know everything because you see it all the time the problem in a way for civil society in the US is agenda overload because civil society isn't just the unions it's the religious groups it's the activists for a whole range of issues and they're all have high expectations of the Democrats they all are raising a ton of money because Donald Trump is good for them raising money and it's getting people wanting to be active I it's a bit of a side story but you know these days you teach millennials because that they're the ones who are in school now and one of the funny things about the 2016 election in the US was that it was the first election in which millennials could have been the majority of the electorate they were certainly available to be that Canada that doesn't happen until the 2019 election I think and they didn't vote much in proportion with their numbers and this is anecdotal my my impression having talked to some of them is that they they're very conscious that their vote would help define them and some millennials anyway somewhat consumer oriented so they have an iPhone that's part of their identity so how they vote they they see that as sort of building a personal identity or brand and whatnot it it's it's all very strange because I'm old and this is the problem with getting old because I feel sorry or sympathy for Andres Manuel Lopez Obrador because I think when men get to a certain age the people around them always think they're authoritarian or becoming more authoritarian they're really just becoming curmudgeonly but anyway a curmudgeon is an authoritarian without power so you know that's that's where we all are so anyway but the dilemma the dilemma yes and professors too yes we have a little power so so I think the problem for for American millennials was that they didn't want to embrace Hillary Clinton they were convinced by the polls that Donald Trump was gonna lose so they thought it was a cost-free you know kind of abstention 2018 you saw them vote because the voter totals went up and a lot more of them voted and about two-thirds voted Democrat about a third voted Republican so you know it's not a block but it is interesting and I think that's they're driving a lot of this because they're they're active in politics but through causes not parties and they're trying to to see where we go and Donald Trump in addition to catalyzing activism is very good at dividing the opposition and he he's courted the unions on his trade policy he's courted African-Americans he's courted various identity politics groups with Richard Grinnell who's his ambassador in Germany he's leading a global campaign against discrimination against people on the basis of sexual orientation which arguably has more momentum than the progressive approaches of the Canadians because it's the U.S. so you have these dynamics and and now a word of sympathy for Nancy Pelosi? Nancy Pelosi is very good at her job don't expect our congressional leaders to be attractive they're not they're just disciplinarians who keep their caucus together and she has been elected back to being speaker but with a whole bunch of 20-somethings who are impatient and idealistic and want things now and she's old school and we vote this way because that's what gets us elected and she's trying to discipline this caucus and she's going to try I think with USMCA not necessarily as the focal point but as one of the many levers that she's got to figure out how big this battle is going to be and how much can I get for my constituents to get them to say okay fine USMCA is is all right and at the same time the activists are going to be saying well we can withhold consent if we don't get this and they're gauging how much can we get out of this and I don't know the answer it's going to be very much a bargaining and in the shadow of all of this again not only the 2020 election but I would argue for the US China there's much more bipartisan support and every time I come to Canada if I visit other places I I feel like it's a different world because the US the anti-China it's almost like the Cold War the the the real it's it's the tech people as well as the manufacturers as well as a lot of civil society that's concerned about human rights and other things and that's so strong that I worry that that that what we're going to find is along the SMCA ratification road Trump will say if we don't have this the Chinese are going to eat our lunch and so it'll be a national security patriotic thing to do to support it and it'll try to use that to push this through which will really minimize the influence of civil society if they don't get in early so that's why I emphasize the bizarre or the bargaining that's going on now because I think that in some ways that's that's the last chance to get something in and for some groups trade just isn't I don't even think most progressives in the US really have a strong view of trade unlike the liberals of before trade is a thing but for a lot of millennials the world's a smaller place globalizations a reality for better and for worse they accept some of that they just want to kind of bound it and they may say well this moves in the right direction so complicated I didn't really give you an answer but I'm afraid I'm a curmudgeon but from a business perspective and as an investor almost every conference call in every business you want to know their contingency plans so I think we just have to accept that the world is uncertain part of its technology part of its politics it's so you want people to be agile and although we have a trade agreement if people can make rules or just change things or based on lobbyists and so on the existing system doesn't seem to be providing certainty anyway so I think and and people seem to be focused on goods and not services which are becoming less and less relevant so maybe the panelists could comment on that perspective so so I I agree and I think one of the interesting things so one of the things that's interesting to me about politics for a while is I remember in the 90s we talked a lot about the the withering of the state that we were moving into a global world with transnational corporations and activist networks were going to be more influential in shaping reality for us and the state was was getting weaker 9-11 the US response to 9-11 was an assertion the state still matters and that you're with us or against us and if your state has terrorists who are attacking the US then your state is going to be held liable by the Americans and their allies so it reasserted the state and what's interesting now is that the debate about trade has come back to the state the governments are going to make agreements that parameterize activities that are otherwise quite fluid and and can can be able we've all focused on the state and we think of governments now as being maybe powerful shapers of globalization in a way that in the clinton days we would we would have said well that's just you know that that's that's vanity it's a fig leaf it's not going to last so that's that's the sort of first observation I would make this this recentrality of the state the second thing I would say is that I think we exaggerate how much the state controls these things and how much you can change the rules and then business is agile and adapts around the rules and still finds a way to make make profits you certainly see that in the european union where they have a much more assertive sort of state structure and yet companies are very clever they're figuring out what to do with brexit everybody says all they'll all leave britain but now some of them are structuring themselves so business is is is quite good and I think that civil society is quite good and the state is not as strong as it looks so that's my second observation my third observation then is what brings us back to the state at least in the in the u.s context and I think Canada has an echo of this is the idea that the state fights for us the people so in a world of globalization we need a tribe this is our tribe the nation and that's what we're going to rally around that's why in some ways globalization's only had one sort of philosophy that's been successful at pushing it back and that's nationalism it's the one thing that's at every cycle pulled people away from this you know international soup primordial soup of economics so in that sense I think donald trump is underestimated as a very successful politician because he's convinced many people who don't like him personally that he is fighting for them and that's changed the way that people viewed this agreement even though they think no they don't want to give him a win he's a crazy ego all that but but he did seem to put america first it seemed to have tangible meaning and even people like the people in the video that I know when I go home to to michigan they genuinely believe that trump cares he's a billionaire son of rich people like why he doesn't even but he they think he cares and you get the same feeling when he's in uh minority communities when he talks it it works is true though that successful is on low and then it becomes sort so that then it becomes the political game I think we are going to fight over what happens when the consequences of trump's trade policy come home to roost inevitably you start a trade war with china it's going to start having effects in your economy and I have good friend who's married to a speechwriter for Nancy Pelosi and so I've told the story before she's a really nice lady but we never talk politics when he's around only when he leaves the room and then we talk and her big concern going into the 2018 election was that democrats have really got a a spokesperson problem there's no great leader of the party because they're they're not in power in the white house and trump's very good at it and their fear was that the economy would slow down unemployment would start creeping up the uncertainty it would start having economic impact and trump would blame the democrats and say you elect them to the house and see what happens all of a sudden the economy's downturned democrats are like the plague for the economy you can't trust these people similarly in canada the economy slows down people say well you could have done a better deal with trump you you held out you created this confusion you didn't agree to his terms and now we're not getting the growth or we're having negative effects so this becomes a blame game and I think trump's well positioned in that and I'm one of the people without any great love or joy about it who thinks he's probably going to get reelected at this rate and that's going to change people's expectations of certainty going forward one last comment to quote the great Osama bin Laden I know I'll probably not get I'll get refused entry back to the US for even saying this but you know he once said that in one of his propaganda videos that that people would see that his movement was the strong horse and the americans are the weak horse that understands something a lot about technology people or about political thinking and trump is the strong horse he's winning he's getting what he wants and so I think there are some people who don't really care about politics but who will say trumps my guy he's fighting and I'm gonna back that and companies that will say well I don't know if canada can protect me anymore against the chinese in huawei or against the americans so I'm just gonna move more my operation in the US so I can make a claim to have the americans defend me because I can't I can't rely on canada to protect me and those uncertainties I think will be real problems but anyway that's very gloomy sorry let me go okay just very quickly I would say that one thing that we've not talked a lot and maybe we should have is talking about investment in the context of both NAFTA and USMCA because that's a way as Meredith said of going around uncertainty and if I could show you the the figures for investment a Canadian investment in Mexico you will see that they're actually higher than trade and goods and that shows us that Canadians are finding a way to get that certainty by being on the ground and then they're no longer investors but actually local producers and that's that's a very important point I think even though chapter 11 is no longer there yeah I I certainly take your point and and would agree that you know uncertainties here get used to it right and and if I think we could be at a conference talking about kind of digital futures and all kinds of talk about uncertainty would be happening so there's I think there's a the world is headed for a lot more uncertainty in the in the coming decades and trade policy is just one piece of it I would also say that I think that the conversation around trade negotiations consistently focuses on goods trade when 70 percent of our economy is focused on services and yet we spend a lot of time worrying about stuff moving back and forth across borders to that end you know we didn't even talk about the digital provisions today but they the digital chapter of USMCA will will tether Canada even further to American governance frameworks around kind of internet governance which are at odds with governance frameworks in the EU and so you know with services there's parts of USMCA that are not uncontroversial that affects sort of the services end of things but I do think that that there are parts of the uncertainty around NAFTA that don't certainly don't help the situation I think the ability of business travelers to come and go not being certain when you arrive in an airport to enter the US whether or not they're going to let you in and you start to get hassled more than you used to get hassled these are all things that we know from our research on the long-term consequences of 9-11 have an impact on willingness to travel to the US for instance and again if you just move to the US then you don't have to worry about being allowed in you can you could just be there right and and stay there and and so I think that we do have to be very aware of uncertainty and I do would agree that it that the role of the state and the privileges and obligations that you have from a nation-state perspective actually really change a lot in a very uncertain environment your ability to move all these kinds of the rules of of engagement as they become increasingly sort of hooked to what your nationality is and what country you live in then for countries like Canada that are very very reliant on a gigantic big partner south of us it keeps us in a pretty negative spot I think and I would just say one thing is that I disagree that Donald Trump seems like he cares all right fair enough but I want to I want to raise something it's funny because I think we we it's useful to think like the Americans for a minute and Donald Trump's critique of the negotiation of trade agreements by his predecessors republicans and democrats is that the US opened but didn't get reciprocal opening or didn't get enough reciprocal opening and countries gave up a little with US opening and there aren't that many things left I mean you point to dairy there aren't that many things Canada still restricts US access to and that's one of them and it becomes outsized in Trump's rhetoric but really it's it's not huge deal most Americans sleep well at night not worrying about it so but but his his attitude on his attitude on economic of economic nationalism has been one very similar to Richard Nixon and I always like to bring up Richard Nixon I don't know why because I remember him but you know if you remember the Nixon import surcharge in 1971 and the global political economy at the time the US had under Bretton Woods bankrolled western countries and Japan regrowing after World War Two and how do we do it? Lend lease at first open trade and the dollar as a reserve currency the Germans the French the the Brits less took to a lesser extent the Canadians certainly Japanese kept their currencies low so their products were cheap so initially they exported the US to rebuild but then they exported so much that they were crowding out US manufacturing and it was hurting the auto companies and so on and that's why you might remember 1968 Nixon threatens to leave the auto pack because he thinks you've taken unfair advantage because the US is supporting the international security system and we're fighting a war in Vietnam largely alone and and we ask for the allies to ease up and let their currencies appreciate and then let them do and so he decides to act unilaterally and that sparks the crisis that leads to the 74 trade act because Congress realizes they've given too much power to the president there's nothing they can do to stop him Trump is in the same mode and whereas you can have an economic discussion in a place like Canada for the US is always mixed up with security and the US thinks like we've been fighting this war on terrorism we've been doing all these things we're increasingly alone other countries are trying to take advantage of us in different ways I'm going to reset the balance and that means this is not fundamentally a negotiation about expanding liberalization it's about conditioning the access you thought you already had and saying well you know now you're gonna have to do more in order to retain the same level access you had and what's interesting is in this debate I certainly heard it here today there was this hope that maybe renegotiating after would get us something new and then this disappointment that actually it seems kind of like a retreat from what we used to have but that was always what Trump was about saying you're gonna have to pay more and probably you're gonna get less and we can do it because we're the US arrogant yes but that's where we are I'm Sharon Jeannotte I'm a senior fellow at the Center on Governance at the University of Ottawa and the one word I haven't heard today yet is culture as maybe some of the people in the room know Canada has maintained the so-called cultural exemption which means that culture cannot be treated as same way you know as normal trade however several people have mentioned the fact that trade and services is really a bigger factor here than you know shipping pianos across the border or books or whatever right now Canada is revisiting its telecommunications and broadcasting acts to take into account what people have referred to as the digital revolution and what I'm really interested in hearing from all three of you would be what the relative attitudes of business and civil society are to a potential opening up of the digital environment to more cultural exchange just as a side note I will mention for those of you who are not cultural policy nerds like I am is that Canada's traditional position has always been that we want to maintain the ability to tell Canadians stories to Canadians and that you know the domination of the US cultural industries has always been viewed as a threat so I'd like to hear your perspective and whether that is still the case and if so who perceives it as a threat the business community or the civil society community or both I do know a little bit about this in the cultural carve out when one thing I would say is that the championing of the cultural carve out at the end of the negotiations it's my my feeling that this was probably more theater than substance and that as far as I have heard the elimination of the cultural exemption was not really anything any other NAFTA party was worried about and so again if you think about Quebec because the cultural carve out is very important to Quebec and Quebec lost a bunch of things in this negotiation they lost on generic pharma they lost on dairy and so if a government needs to put something in the window to say hey we fought for you and won if you fight for a straw man that was never going to be knocked down then perhaps the cultural exemption for Canada was never was never really something that was in doubt now there are some legitimate questions around digital flows of cultural products because in TPP this is something that had been conceded in the original TPP and then in the CP TPP where some provisions were suspended that specific provision around the transmission of cultural products across borders was again removed by the Liberal government and so it would appear that there potentially is some implications for for the digital environment now the government has been asked very specifically does NAFTA protect digital products under the cultural carve out and the government has very specifically said yes it does but I think we need to wait until it's tested just to say a little something I did mention the film broma in my talk and I will come back to that but before I would like to mention the history of the cultural exemptions debate is is interesting and it's one of these other points where Mexico has left Canada alone because Canada has this preoccupation that it needs to be able to tell Canadian his stories to Canadians that was never has never been and probably not going to be a Mexican preoccupation because of language culture and so on so Mexico was never very involved in cultural exemptions and went along with it because it did something to protect its cultural industries but it was essentially not an issue so let the Canadians get it if they get it and how far they get it fine so coming back to Roma it's interesting because Roma was financed by Netflix and Netflix is a bad guy in Canadian culture debate today and it has to do with the fact that it's not telling Canadian stories to Canadians or to the rest of the world whereas it is doing that for Mexico so Roma is an example of how Netflix allows Mexico to tell Mexican stories not only to Mexicans but essentially to the rest of the world so that is a completely different position I can't speak much more about that because I am not a specialist in cultural policies but culture is one of these points where Canada and Mexico will very will find it very hard to agree so you know from the US our culture is it's like we don't have an accent we have a culture we don't have a culture so just going back a little bit I think what we saw in the 80s and 90s the last time there was a big Canada US stress over culture was a an important alliance between traditional culture and what I would call the entertainment industrial complex the big companies the Disney's and others who objected to Canada restricting market access in Canada wasn't an objection to Canadians telling Canadian stories it was we don't want to be shut out of this market and they pushed hard on US trade negotiators to gain for sure market access the compromise that was inherent to the Canada's free trade agreement and I know we talk about the cultural exemption we really exempted it from the negotiations but the piece that we came to in that in that time period was that subsidy is fine that's okay but market access restrictions are not and that largely held and what happened after that was that you know the the big companies who really drove this on the American agenda the disney's and 21st century foxes and all that were satisfied you know the CNN was available here we're on cable there just wasn't a real desire for change and and culture if you think of it in terms of artists or whatever they just didn't really care so we were in the piece we had a peace agreement you did what you did we were all fine what's happened now it's interesting is that there is again an alliance of culture on the one hand but now with big companies who aren't just disney now they're tech companies the famous fang of amazon and and netflix and facebook and google and and others and in that space these new tech companies are pushing on the trade agenda for no data localization for ways in which to not have barriers in access to information even amazon chafing a little bit that they've been forced into this alliance with canada post and they would rather do their own deliveries and find ways around it and they have to go through these complicated warehousing and software things to make sure that you get the canadian edition of the latest novel by you know who know tom clancy or whoever so in this environment you know they've they've they've been making compromises and maybe netflix will pick up a roma deal of aroma type films in canada but they're also you know not very happy with being with it's not just that they're not restricted in the us but they don't they want actually even more and at the same time what's happening in the us is a kind of anti-tech push from the cultural people so again we're not an alliance and it comes from two sources one is a kind of anti corporate culture like people who love local and they're saying you know this is crazy these guys are wiping out our retailers they're wiping out our small town communities our stores so we want anti-trust action against google's and all of that and it's about privacy and it's about personality and it's been made worse by the fact that many of these companies are so-called de-platforming people who have certain political views now they tend to be people on the right and so the right and a different segment of culture not necessarily artists who exhibit it the museum of modern art but maybe now religious groups family values groups anti-abortion groups are saying we're we're being threatened by these tech companies and we want cultural protection and defense from the government so i think we're in a very interesting period where there was this one magical moment when there was an alignment and the us got what it wants and now the us alignment is fragmenting there's much more pressure against against those groups so if canada wished to push back it would find the us not defending its tech companies but perhaps piling on so it's a really interesting moment if you want to fight that fight but you may not it's all right it's not up to me sorry Ben Novak i'm a member of the public um earlier our invitee from the us you use the phrase coming home some industries or labor is coming home um how does that correlate with increased costs uh because they lay left let's say right one point to go to the low wage countries now coming home to a 15 dollar an hour economy does that affect costs of articles produced oh sure go ahead well it's completely unrelated the interim between approval of the new nafta and the existing nafta the existing nafta is in force is that right thank you so that that's good um so companies are coming back but they're not necessarily coming back to what they use they're not coming back to the same old norm they're coming back to a world in which they have continued to substitute capital for labor we have we have plenty of capital so machines are taking over more and more jobs they'll come home and they'll locate in places that give them the political's protection that they want and they're happy to do that because they can now afford to operate in the us because a machine doesn't have retirement costs doesn't have benefits costs and so forth that's been tolerable because of the service economy that everyone has been talking about as people find ways that humans work better than robots um and things like outsourcing call centers have have not been public relations successes for many companies so you're seeing some of that coming back um in the best case well educated um north american workers are able to move up a value chain and we commoditize basic labor unskilled labor because it's just commodity we just hire a machine to do it it's machines are fungible there's a kind of sense that it's it's really low value now and so that's why we pay less for it and so our our young people go into jobs that pay better because they require more human skills maybe more customer service maybe more ingenuity i have a friend who's a surgeon and he um increasingly describes his job as um you know kind of babysitting the machines because surgery no longer requires a steady hand it requires that you know how to maneuver the equipment to send the little gizmo or the laser beam inside somebody's body and it's non-invasive and it's highly expensive but but that's the process so maybe in the best world we all move up the value chain we all become more intellectual workers that will require in the u.s a huge change in our education system which is pretty spotty um canada's a bit better but you know there's so there are definitely things we'll have to do they're coming home for sure and they're coming home because taxes and other things but i agree with you they're not coming home the way they used to be it's not a return to the way it was unfortunately i might just add to that um i i totally agree with chris and i think that this is where the trade technology combination is really shifting what the future looks like to the point around uncertainty and i i give a little lecture where i talk about to my students about the 3d printed shoe and how you all of the you know raw materials are there in a i don't know if they're in tubes or something in the sky i should probably get a tour sometimes so i can speak more authoritatively about it but 3d printed shoe all the materials come the thing is printed in a printer and voila there you have your printed shoe it hasn't gone overseas um it wasn't made overseas all the various parts that are required all the components once they're in the location then then it's all just assembled there and it's assembled by a machine and in so far as you need people um they're doing high skilled work of fixing the machine when it breaks and that kind of thing and and or they're doing the design end of things and and so needing fewer employees with higher skills is going to be a big shift i do think it actually places countries like canada at a comparative advantage but in a way you may actually start to see less trade in the future you know if if we don't need to send things on slow boats from china then then you can and and if we are in this more uncertain world with various countries fighting with one another and u.s presidents acting in a certain manner and other countries being very authoritarian then certainty is coming home and being there and making the thing there and there is no question that that will be more expensive my name is derrick mcgrath i'm a retired person i found a very interesting looking at ohio and uh i guess i'd like a comment of how we're going to bring the jobs back and i'll just give a little anecdote uh two years ago i took the trans mangolian railroad from china to st petersburg and going through cyberia virtually every town had quite obviously excellent transportation facilities because the railroad was right there there were beautiful new factories which were all shuttered probably 15 20 25 towns across cyberia you know i looked at that and say are the people going to come back to ohio and reopen those factories and what will the usmca will it do anything for that or is it just mr trump being a bullshit or as he is thank you it's my view that the jobs aren't coming back to ohio um economic analysis would say that overall nafta has created more jobs than it has lost but those impacts have not been even across the country and so the jobs that have been created have largely been on the coasts um and it's on the coasts where people were pretty happy with the original nafta um and in high skilled areas and that those who were most um disadvantaged because trade does create winners and losers those who are most disadvantaged were those with high school educations and located in the interior parts of of the us um and and so i i'm confident that there will be new jobs in ohio but will it be a man you a low skilled manufacturing job not necessarily um will it be something else i hope so i mean there's no reason the people of ohio um can't work on those things but i think the nature of the jobs will be different um yeah sure sure um and and then separately there are sort of these big globalization effects around technology that also have have sort of separate impacts but um uh it's my view that many of the things that were negotiated around rule of origin and all of that are not necessarily going to um make the us automotive sector more competitive uh than it was before so i'll i'll jump in on that i um it you don't mind okay um so donald trump has many things but i think he he is a man of his era and he he's really thinking about bringing back jobs the way they used to be um he doesn't have a great sense of how technology is changing the world i think his agreement is is regressive in sense of its vision of the economy us trade policy and it's a bit political economy i guess but um us trade policies really reflected the systems of production that we've had and when we were part of the british empire before the revolution we had a mercantile economy in which the us produced a lot of raw materials and some substitutes for british imports and after the revolution we adopted a policy for internal economic development that is we call it the american system but it was a high tariff wall to discourage imports the money raised from those tariffs was used to open up the west build infrastructure and create a larger internal market and that allowed us to have economic growth that is in a way import substitution industrialization the us made a turning in the beginning of the 20th century where all of a sudden we realized that mass production lowered unit cost it was the scale economy and that breakthrough meant that we needed export markets because the more and more markets we could sell in the more units we could produce the cheaper the unit was that would allow us to maintain better wages and that was sort of henry ford's idea and the us became the avatar of opening markets and going against colonial markets or imperial systems that had imperial trade preferences as canada used to participate in and so that was our big challenge that's what we wanted now we've come to this different place where we we feel like well yes we can produce things on mass cheaply and under um sort of bill clinton with the seattle round but more importantly under georgia b bush with the um with the doha round the us tried to shift trade policy to offer closed markets and developing countries a way to participate export led growth it's what we used i could go on but i won't it's what we use to help rebuild europe the idea that you can export to us get richer and therefore and we want you to open up your market to us and many developing countries felt that doha was a failure because it didn't really open up the us market enough it didn't open up europe's market enough and so on and they're the discontents of the system and because the beto relies on consensus they've resisted other changes so we're in this sort of jam and trump's like okay let's build up the wall we have one great thing in the united states which is a relatively robust consumer market and if we can privilege our own guys against all these imports we can get this economic growth it's short term but we can create it so so it's a negative it's a backward looking hope and i think it's going to raise expectations that we can go back to the good old days which i agree with meredith we cannot so then where do we go well i think we have two challenges the first is i think one area in which both canada the us could make advances um is improvement in public sector productivity that is extremely unpopular public sector unions but having getting no change in your quality of governance maybe even an improvement by automating more of it give you an example there there's a software that the transportation security administration not everybody's favorite people at the airport are using where ai assesses all the shapes in your bag and it it has a database including all the sub-assemblies of guns bombs etc so they look for matches and they can do it in a nanosecond as your bag goes through it's not they just know how to look for what might be a disassembled weapon that you might be trying to bring into the us that's going to limit a lot of tsa jobs not the highest paid not the most popular people think about taxes where ai does a deep dive in the data that's available on you not only your income but your spending and tries to decide what your tax rate should be and it's it's all done much more efficiently than the irs audits take seconds um not american terms i know public sector productivity if you look at where growth has been not only in labor movement but in jobs it's been in government and social services and other provision and i think those are going to be under tremendous pressure going forward now why i think that will be a particularly bad is i think at least in the u.s. because we're such we love capitalism it's great um is the u.s. is advancing a liberal and i mean that in the british sense agenda while at the same time not doing much to support the losers this was the mistake of nafta and canada's free trade but at least on the american side it's this mistake we're making now what do i mean one of the big causes in the u.s. is marijuana legalization most people will be fine with that but there are a lot of people who have an addictive personality or who are in a position where they don't have a lot of social support maybe their family is a bit messed up or whatnot when those people um abuse marijuana or it takes them off uh you know a track and they flunk out of high school or they don't there's nothing for them now we as a society know that when gambling addicts people we have to the casinos have to pay for a program to make sure that you can help people with addiction alcohol same way even cigarettes but with marijuana it's like hey it's it's it's just going to be free for everybody but the people on the bottom of the ladder they're they're the ones who are going to fall off the ladder and what i see in the u.s. and i don't think it's there in canada but it worries me a lot in the u.s. is this attitude where the answer to all these problems is that we just throw people away you know they go to jail we're never going to let them back to the economy because you're a felon you're never going to get back in the economy nobody's going to hire you um you you played video games all day your grades aren't great that's fine you know just maybe manual labor molons i don't know we don't have any use for you it's a kind of middle-class sort of you have to do all these things to go ahead and if you don't well we don't care about you and i find that soullessness is really going to be a problem now i don't want to scare you but i think donald trump understands that and that's why even though the conservatives aren't very happy he's gotten together with kanye west and kim karnashian to talk about how do we get african-americans who are disproportionately in jail back into the workforce so it's weird with so many of these things like you think well i think the right is here and the left is here and so i'm but but i think a lot of our social policy debates are getting scrambled and trump maybe the agent of it i don't think he's the answer but but we should be paying attention to this as this goes forward because we're really at risk of advancing freedom for the best off and the people ahead and leaving a lot of people behind and that socially is going to lead to revolution or worse and uh we can't be saying what about that says me um just quickly because it's it's more anecdotal and it just supports what what has been said already but if you look at what's going on in mexico and which is the the place where the jobs were being sucked to to use rose perot's words well what you see is that the industrialization there is also big and that maquilas which used to be the big assembling plants on the border are uh delocalizing themselves to either central america or to uh southeast asia rarely to china but still so what you see is that these same plans that you saw in the video in ohio that the ones you saw in in syberia are also there in mexico sitting idle waiting for a miracle that most likely won't happen and when you see what kind of of industrial plants are booming in mexico then you see that they're extremely highly skilled places so we're talking about the bombardier aerospace plant in queretaro which is attracting a lot of people but of course it's not attracting those who were assembling uh you know cell phones and the border it's attracting engineers that are coming out from the university so it's the same story told again from a mexican perspective well you realize you are both just standing between us and lunch this is just a fast question and it is for my name is Sergio a PG student here in the department of political science more for for julian you mentioned julian that that the new the new agreement in a way was endorsed by the new president of mexico even though it was signed by the previous one i'm just wondering i think we all know since the original 1994 agreement that mexican peasants and small-scale farmers were left besides that you can see in terms of migration how it went up over a hundred percent in the next three years after the agreement and with disney new nafta now i think it's pretty much the same story being repeated again taking into account that these were people most of most of these people were voters for for amelo do you think this is like a backstabbing of them how can this in a way turn to the new government this is going to create a break let's say between amelo and this part of his political forward okay very much related thank you sir um also julian you were talking about the tendency towards compartmentalizing uh mexican foreign policy so up till now amelo made the decision right or wrong that he didn't want to fight about uh nafta with uh donald trump that he had other domestic priorities probably a wise decision um but we have the whole issue of migration that again i guess amelo's trying to compartmentalize to fight the us on migration issues while going along with trade issues more or less um so it's kind of a follow-up on sarah kiosk question is that a viable proposition given that trump is just not backing down on the wall and mexico is paying the cost because all those people who are coming through mexico are now stuck in mexico they can't get to the united states so mexico is paying for the accommodation of those people and and has to deal with the follow-up the political follow-up thanks yes uh there's there's two actual separate issues here because uh the people stuck at the border now tend not to be mexican so they don't vote for amelo so that's a completely different political dynamic and it's one that has started to turn a bit ugly because you've started to see in tijuana for example uh emerging discourses anti-immigrants that are similar to those you hear in europe or in the u.s or in in canada so these people are here they're eating up our public services which were not very good to start with and we should just kick them out of here so it it is ugly but it's not the same question as the previous one because they don't vote for amelo so they it's actually the people in tijuana with this anti-immigrant discourse that are that might get the attention of the government uh as for the people in the countryside that voted for amelo i think amelo has not forgotten them in the sense that he has backstabbed them he's just counting on other policies to deliver his his promises and that would mostly be an increase in public service provision and in order to try to get out of the fiscal reform conundrum which has been going on in mexico for generations now i think you you have to link that with the closing all the fiscal loophole so that the fight against gas stealing and the fight against corruption in the electrical system and all those ways to raise more state money without increasing the tax rate and my belief is is that amelo is doing that in order to be able to fund new public services i'll just add one thing that i should have said about um the question around jobs coming back so so this steel and aluminum tariff piece um uh i think it's the wall street journal and others have shown the same analysis that that for every um uh steel job that trump is saving by doing this he's cost the country 16 other jobs and and so this comes down to the sorting piece if you if you want you could save the the old jobs from the 70s and 80s in that that era that is sort of going anyway you could save them it will take a lot of resources and it will cost you elsewhere in the economy i will i will add up on chapter 11 the chapter that allowed investors to sue governments and the NAFTA agreement uh at an international arbitration panel rather than local courts it's been largely presented as as a loss but actually from the mexican perspective it's mostly perceived as a gain in in that uh mexico was the victim so to speak of most of these arbitration panels and it lost most of these things so mexico was actually not unhappy to have canada on its side to get rid of this particular form of conflict resolution it still is enforced between mexico and the united states but in a very limited form so essentially it's another way for for the mexican government to say we have protected mexican sovereignty in a context where protecting sovereignty was actually not quite possible to do so it's it's mostly window dressing but it's a way to tell the electorate that the government has defended mexican sovereignty and national interests i'll just end with a with a comment that maybe is the meta comment of all of this i think what we're really debating and usmca negotiations were an episode in a larger to societal debate about who pays and when we were negotiating the canada's free trade agreement business said you know we want fewer tariffs because that's a tax on our business and we we don't want to pay those prices and then they also wanted low taxes and they also wanted less regulatory burden and they they lobbied they convinced politicians to help them get those things they pressed didn't get everything they wanted but they pressed and what democracy is introducing is society saying we gave you all those things what did you give back because you're giving us less and less and less we can't maintain social services because you guys don't pay your taxes and you're moving jobs overseas so we don't even have the job benefit that you created so we're going to maybe take away some of your freedom or we'll raise your taxes or we'll find some other but we we have a society to maintain that's and voters are saying that they want that and politicians being very let's say something they're very adaptable talk about agile politicians can abandon a principal in a minute as they try to figure out how to get power and they're trying to find ways to kind of respond to this debate about who pays and who who pays voluntarily and who doesn't pay and I think that's a debate that neither the U.S. nor Canada nor anyone else has settled but it's going to be the really interesting debate about the 21st century USMCA will be seen as sort of an early discussion on those terms but only the beginning I would like to thank each of our panelists and Chris for a very stimulating conversation that opened the event and I'm sure that some of these discussions will continue over lunch and over the other panels but so please join me