 All right, let's go ahead and get started. We may have some people continuing to come in. My name is Alan Murray. I'm the Chief Content Officer for Time Inc. I've been coming to Davos on and off for more than 20 years, but I don't think I've ever been here at a time when there was more general optimism about the economic outlook than there is this year. But at the same time, there are a few of these foreboding black swans that are circling the outlook. And certainly one of them is trade. If you look at the front page of the Wall Street Journal today, global trade tensions rise. That's the topic that we're going to take on today with this panel, and we have the perfect group of people to discuss it. And let me introduce the panelists very quickly. At the far end, you have the U.S. Secretary of Commerce, Wilbur Ross. Thank you for being with us. The CEO of Cargill, David MacLennan. We have the Director General of GATT, the Cornerstone Institution of the International Trade System, Roberto Azevedo. The Chairman of ENI, the Italian Energy System, Emma Marchagalia. Perfect. Did I get that right? Perfect. I've been working on it all morning. Thank you. You exercised a lot on that. And the CEO of Standard Charter Bank, Bill Winter. And Secretary Ross, I'm going to start with you, because the administration has been making a fair amount of news in the last few days. We had the tariffs on solar panels and washing machines. Last Friday, there was the report out of USTR saying it was a mistake to bring China into the WTO. There are forebodings about action on intellectual property. And you've probably already picked up in the short time you've been here that a lot of people in Davos are saying, is this the beginning of some sort of new trade war? What's your answer? No, I don't think so. Trade contests, trade disagreements have been going on forever. The ones you referenced, God knows, have been well-publicized, well in advance. So I can't imagine that the washing machine event or the solar panel event came as a big shock to anybody. I think, though, that nobody is trying to ignite a gigantic thing like Schmidt-Wood-Hawley did during the Depression. That's not what this is all about. But what it is about is we feel that there is an accumulated set of, I guess, debris of some incorrect policy decisions that our government and others made earlier in the process and that those need fixing. So for example, I would take a bit of umbridge at the article you referred us to, the foreign policy article, the writer made the analogy that why are we worried about trade deficits because if you go and buy a car, you gave money. So that's a trade deficit. But you got a car, and that's a fair bargain. Well, that goes fine, except what we're complaining about is the used car dealer who turned back the odometer to reveal far fewer miles than the car ran, and then he still charges us. That's not a fair deal. That's not free trade. So I think the analogy limped a little bit in that regard. That was an article in Foreign Policy that said that there's a greater level of risk in the global trade system right now than there has been since World War II. Would you agree with that statement? No, I think there's a growing recognition of risks that have been accumulating right along. And I think the hopeful thing is you can't really solve problems unless you admit that they exist and people get to discuss them. Just one more question before I go to the director general. Is the global trading system in your view broken? Broken is a term one could or could not use. Does it need some changes? We think perhaps it does. It's an old system. The world has changed. Concessions that were appropriate to make, say, to a China or a Germany after World War II don't seem to us to be quite so appropriate as we get here to this year. So we do think that somebody needs to be the manager or the arbiter or the rulemaker for global trade. That I don't think is anybody's question. There's no need for it to be just a total free for all. But does that mean we agree with every aspect of it? No. Just one follow up on that again before we go to the director general. But the current arbiter are these dispute resolution panels set up under the WTO. The US has blocked appointments to those panels, effectively stalling the system. That would suggest you think the system is broken. Well, Ambassador Lighthizer has made, I think, quite clear at the WTO ministerial meetings that he does have concerns with the way that process has worked. Roberto, how would you interpret what you're hearing from Secretary Ross? Do you feel like the system is under attack? I think what I heard from Secretary Ross is consistent with what the US has been saying for quite some time. This is not new. I think the US has reservations about how the, particularly the appellate body findings in the WTO went. They exposed, to some extent, some practices in the US in applying trade remedies. And that's anti-dumping, countervailing, safe guards, et cetera. The US is not happy with those findings. And they never made any ambiguous statement about that. The question is how do we deal with that? And I think the US has now, what is new, is the blockage of the appointment of the members of the appellate body because the appeal instance is a very critical part of the dispute settlement of the WTO. Members in the WTO are concerned about that. I am concerned about that. Everybody's concerned about that. But I think what I have been telling members is we have to talk to each other. You cannot ignore the fact that a member of the WTO, an important member of the WTO, has significant concerns about the system. Can we improve it? And I think people want to have a conversation about reforms and improvement. They have different perspectives. What is a step forward in the view of some is a step backwards in the view of others. But it effectively shuts down the system. No, not necessarily. It's still working. It is going to affect the speed. We still have some time to work. We're working on that. It doesn't stall and stop the system. But it will affect significantly. In what way? That's something that we will find out soon, I suppose. Emma, from your position as a chairman of a company that has operated under a global trading system that's developed over the last 70 years, do you feel like the rules of the road are changing? Well, let's say also, as you know, I'm also the president of Business Europe of the Federation of European Industries. So my feeling is this. I think something is changing. Yes. I agree with Roberto that if there are some rules that we think has to be changed because they are not functioning. And I think there are rules that has to be changed because, as we've already said, some of these rules has been created before the digital economy, before industry 4.0, before a lot of things. We think we need to change the rules. But I think we should do it inside. We should do it inside the WTO. I think we have also to remind that these rules has been created in the past by US and Europe. So my point is that I can agree on the fact that we should make it better. Honestly, if I look what happened in Nairobi, I'm not satisfied because in Nairobi nothing happened. And honestly, the WTO is not really improving opening the market. And this is a problem. But I think what we have to do is to change the rules inside and not saying we don't apply the rules. Because if we don't apply the rules and if a big country is so important in the US, they don't want to apply the rules, my fear is that at the end other countries will reply to the US. And maybe they will say, OK, if the US is not applying the rule, I will not apply the rule as well. And then what could happen is like a trade war. And if we have a trade war, I think everybody has to lose. I want to go back to the trade war. But before I do, I'd like to ask both David or DMACC. Should I call you DMACC? Your friends call you DMACC. They do. So is my wife. Well, if she does, I wouldn't take that liberty. But I want to ask you and Bill the same question. I mean, you've built businesses operating under one set of rules. Do you feel like the rules are fundamentally changing? I don't know, Alan, that the rules are fundamentally changing. But Cargill and being in the food, agriculture, and nutrition business, we depend on trade. And so if I'm asked by my board or our employees, what's the number one thing that concerns me? I'll say it structurally or of an exogenous nature. It's where is trade going? So as I listen to the secretary, I agree we want it to be more fair. But I think at its core, organizations like the WTO and agreements like NAFTA have worked. And if you look at the statistics of economic growth and in the growth of agricultural trade between Canada, the US, and Mexico, it has been good for the agricultural community. But anything that is, what are we, 25 years now? I don't have to? Anything that's 25 years old needs a facelift or needs to be improved. And so there's different ways to do it, which is, let's come to the table and talk about how it can be improved, or the extreme being, let's rip it up and start all over again. That concerns me, so. Which message are you hearing from the administration? Well, publicly, I mean, there were things said during the campaign that we're gonna rip up NAFTA. I don't believe that, I don't think that's, I hope that's not where it's going. I think that would be very bad for our economy. How about something like TPP, which was negotiated under US leadership, the administration pulled out, now you have 11 nations forming TPP without the US. Is that good for your business or not? No, it's not good for our business. So we were, it will come as no surprise to anybody in the room or on the panel. We were strong proponents of TPP for a lot of different reasons. So it was not good. We won't know what good might have meant. But multilateral trading agreements, again, if they're fairly negotiated, and ultimately, as everybody knows, there's gonna be positives and negatives with multilaterals, but not good for our business, no. Bill, how about finance? Well, the question that you asked before about the, on the one hand, are the rules changing or do they need to change? I'd take a step back and say the world has changed. The world is changing quickly. We've had tremendous convergence of the level of economic activity and level of wealth between developing countries and developed countries. And the trade rules were set up at a very different time with a very different global structure. So it's entirely feasible and probably appropriate that regional or global trading packs take on a different complexion. So inevitably, we need to have a continuous reassessment of the rules, and that's happening. In some cases, prompted by the United States, in other cases, prompted by others. The emergence of a regional trading pack in Asia, excluding the U.S. and China as an aside, is not insignificant, and that, I think, reflects the tremendous interrelatedness in terms of the economies within the Asian region. Will China eventually find its way into that trade pack? Well, I don't know, of course, but I wouldn't be surprised if they did, given the economic dependence between China and its neighbors. Is that a good thing for the United States? Well, it depends on what the relationship is between the United States and that growing regional trade pack. And I think it's critical that we maintain a global perspective on the long-term economic trends and update the trade rules with that in mind. Yeah, so I want to get back to Secretary Ross in just a second, but before I do, the thing about trade wars, like other wars, is they often don't happen because somebody said, I want to start a trade war. They happen because events get out of control, that you have a spiraling of retaliatory action. To any of the four of you, before I go back to Secretary Ross, think we are in a period where there is some significant risk of sliding into a trade war. I think there's increased risk because of the rhetoric and because of the moods in different countries, including my own home country. And so I agree with Secretary Ross that at the margin with washing machines and solar panels, probably shouldn't have come as a surprise. And we don't have the benefit of hindsight, but is it like, okay, everybody understands that, we expected it, we're going to make it better, or is it the first step in what could then become as you said, Al, and look at how wars have started. At the margin, it seems like it may be an isolated incident. It deteriorates. That's how wars trade or otherwise can begin is one step, and then somebody's, well, I'm going to do this, and the tit for tat or quid pro quo gets worse and worse. Roberto, significant risk of a trade war? Well, first I'd like to correct something that's been said here, which is the implication that the reason that the US pulled out of TPP was solely Donald Trump. That's not the case. There was no political appetite in the United States and either party for TPP. Hillary Clinton made that clear repeatedly in her campaign. The leadership in the Senate and the House made it clear. So I'd just like to get that on the record, because we may disagree on a lot of things, but we don't need to disagree about historical fact. And we'll come back to that. Significant risk of a trade war? The risk is always present. And as you said, you don't start a trade war often deliberately. It's just actions that take us there. I don't think right now, I remember when we were here last year and every single interview that I gave and every single panel that I participated was, are we getting into a trade war? And at that point in time, so that was a year ago, my point was, let's not talk ourselves into a trade war. Let's wait and see what happens. Let's wait to see because it's one thing rhetoric and the problem with rhetoric is that it doesn't exist in abstract. The rhetoric exists because the pressure, the protectionist pressure is there. Now, so far governments have been able to hold that pressure back. I think the existence of the rules helped significantly, but I also think that there comes a realization that the global economy is so very much interconnected that taking action that stops trade in some way or another will come back to you in a negative fashion. What we have to avoid is unilateral action. Is you believing that you can fix everything and that you're going to disregard everything and do what you want to do because others will react. And once you begin to have that kind of dynamics, it's difficult to reverse it. Did you want to add something? Just to say that from my perspective, I mean, if I look at what the US administration has done up to now, I don't really see a big risk of a trade war. But of course, if NAFTA, if chapter 232, 232 or others will go on, then some risk will improve, let's say. But I agree that we don't have to say that. I think the most important thing is try to stay together because my point is that if we don't stay together, US and you, at the end, China will be the one to put the standard for the world. And if we don't want this, I think we have to stay together and work together as US and EU. Well, I'm glad you brought that up because those of us who were here last year, and Secretary Ross, you weren't here last year, but those of us who were here last year heard Xi Jinping make a strong speech saying, in effect, and I'm paraphrasing, if the US is going to retreat from support of the global trading system, which has carried the economy for the last 70 years, we in China are ready to step forward and take the lead. How do you respond to that? Well, the Chinese have for quite a little while been superb at free trade rhetoric and even more superb at highly protectionist behavior. So I think you have to separate the language from the activities. Every time the US does anything to deal with a problem, we're called protectionists. But I'd like the panelists, who do you think is the least protectionist country in the world if it's not the US? Anyone else have a candidate? Okay, second question. Who do you think- You're saying it's China. Pardon me? You're saying it is the, oh, the US is the least protectionist. We are. We have the least trade barriers, both tariff. You might have seen the editorial I had run a while back. Out of 20 odd major products in international trade, China is higher tariffs than we are in all but two and the EU is higher than we are in all but about four. So before we get into sticks and stones about free trade, we ought to first talk about is there really free trade or is it a unicorn in the garden? In some ways though, that's the role that the US played coming out of World War II. It took the high road, it led the way. If the US isn't willing to play that role anymore, who will? Okay, well let me give you my version of post-World War II history. You may find it as appealing as some of my other remarks, but in any event, it was deliberate US policy to try to help Europe and Asia recover from the ravages of the war. And that was undoubtedly good policy. It was good policy globally and at the time, in fact all the way until the 1970s, we had trade surpluses every single year. So it was an affordable policy decision. I think one of the ways where they went wrong was not time limiting it. And that's what I meant when I said before, concessions that were totally appropriate to a European country like a Germany or to a China or to a Japan, that what was perfectly appropriate in 1945 is singularly inappropriate as we sit here this year. So there was a timing factor and I don't blame the WTO or GATT for that, that was US policy, we screwed up. The President has made that pretty clear that he feels it was an important error historically in our policy decisions about trade. And so now we're left with the cumulative effect of it and that's what we're trying to deal with in a very short time period. But David, same question, if the US is not willing to play the kind of role it played in the post World War II period, who will? Or does someone need to? Or does the system work without it? That was my whole point in the history lesson. There was a need then because the world had been ravaged by World War II, there's no longer a need to subsidize China or Japan or Europe with our money. Do you agree with that perspective? We don't need that kind of belief. I think the point that the Secretary Ross is making is an important one, which is to say, and it's parallel to what I was saying about NAFTA, which is a 23 year old agreement. So in context of 2018, you need to look at it and take into context what is happening today. It's the same with the evolution of GATT and the WTO and the circumstances in the world are radically different today than they were then. So the fact is to look at trade and I don't think it means giving up US leadership on trade in the world. I mean, there can be equally shared roles, but there's other countries or trading blocks, the EU, America or China that can also step up and do their part to do the right thing as it relates to a healthy trading environment. Bill, is there any danger in your view in China saying we'll step in and fill what we perceive as a vacuum? Well, this is a negotiating process, as we can see. And I think that the big question for the US and for China is do they want to be part of fixing the problem on a multilateral basis or on a bilateral basis, multiple bilateral bases? China has opened themselves up to being part, starting with entry to the WTO, of being part of the multilateral process. They hadn't been up until that point. The US has been a leader of the multilateral process, appears to be withdrawing from that process to some degree. Now, can the US reassert a leadership position? Not the leadership position, because that doesn't work anymore. A leadership position? Yes, the US can. And I think the strong encouragement from those of us that have businesses across the globe is for the US to reassert a leadership position in the multilateral process as a way to fix all of the challenges that the Secretary has pointed out, which are real. And perhaps that's the plan. Some of the rhetoric doesn't suggest that, and the facts will bear out over time. If China or the EU or anybody else is willing to match our tariffs, we'll pull up. You'll go for it. Roberto, a question for you, because this gets back to the declaration that the Trade Representative's Office made on Friday, that it was a mistake to let China into the WTO. It was done on the assumption that China would liberalize over time. And in fact, we haven't seen the degree of liberalization that people had hoped for. How do you respond to that? No, it's their assessment. I can not dispute that assessment. What I would say is this, going back a little bit to the conversation we're having about leadership, the world has in fact changed a lot recently. And I don't think that it will be fair to expect one country, whichever country it is, to lead the world. It's not there anymore, this kind of condition. So it is a collective responsibility. If the US is not taking the fore on everything in the WTO, others will have to do it. And they have been doing that. Just recently, in the WN Buenos Aires, we had 17 countries signing a declaration to talk about and eventually negotiate e-commerce rules. That's the future of commerce. The US is a signatory. They signed the declaration. And they're willing to talk to countries that are like-minded and want to move forward. Whether that is going forward and how it's going forward, I don't know. But to say that there is a complete lack of leadership in the multilateral system, I think it's overstating the situation. Emma, viewing this from the European perspective, is there any concern on your part that you have this sort of jockeying between these two giant powers that's gonna leave the rest of the world in the lurch? To be very honest, I think Europe is sticking to be one of the blocks who stay open because, as you know, we signed a lot of FTA. I mean, in the last months and year, we signed a very important FTA with Canada. We signed a very important FTA with Japan. We are in the process to negotiate a very important FTA with Mercosur. So honestly, I think Europe has a lot of defects. But on the trading policy, I think Europe is sticking to be an open market. So I don't think we are destroyed by the two. I think it's important to stay open. Of course, then you need instruments, you need duties, you need, when there is unfair competition, you have to fight that. But to stay open, I think at the end, in the long term, is good for Europe. Secretary Ross, how do you view these various bilateral and multilateral trading agreements, many of which don't include the U.S.? Is that a good development for the global trading system? Well, I think it's a development that those parties chose to go forward with, that we were not asked if we liked them or if we would support them, nor frankly were we asked to join in them. So it's not an event that we said, oh no, go paddle your own boat. That's not the case. And I think we've made pretty clear that the president and others in the administration that we are open to the idea of continuing negotiation with Europe. When we dropped from TPP, we did not drop from TTIP. And we've said over and over that there was meant to be a message in that. A very clear message. We could just as well have walked away. That one actually would even have been easier to walk because it was maybe 60% of the way to being in agreement. TPP at least was in the view of the signatories a fully blown agreement. So people shouldn't misinterpret that was not an accident that we didn't walk from TTIP tip. David, we've seen a reduction in global investment, some global trade flows as a result of some of this tension. Is there a cost to the global economy of this kind of a bilateral approach to trade agreements? Not necessarily. I don't know that we've seen a reduction in global trade. Or investment. Or investment. Yeah, I mean, I understand that the administration is working through the process, whether it's NAFTA or making, looking at bilaterals. But from our from Cargill's perspective, our global trade has not changed. It's quite robust. And so this discussion is about where are we going from here? But you look at, you can have bilaterals which have certain efficiencies. And if you have a great bilateral agreement, that can be just as robust and fulfilling as it can be with multilateral. And obviously, it's a lot easier to negotiate with one versus 12, right? Yeah, and that's our point. Our aversion to the multilaterals is several fold. If you can make them work right, it's fine. But here are the concerns we have. Let's say your Japan and Mr. Winters is Vietnam. And now we're negotiating the TPP. I go to you in Japan, so we'd like you to reform your agriculture, lower the tariffs on our beef coming in to get rid of some of the other restrictions. And you might say, well, okay, I'll do that. But here's what I want you to do for me, okay? So you took a little nick out of us. Now along comes Winters representing Vietnam. We say, well, here's something we'd like you to do. And he's okay, but here's what I need. There's nick number two. Now each of you now benefits from the nick the other guy took, even though you didn't ask for it. It was something you got gratuitously. So we think that's one structural problem. Second structural problem, they take too damn long to do. And one of our big problems with the processes at WTO and at NAFTA, it takes too long to get things resolved. It has to take longer to do a 12 country agreement than to do a two country. And the problem with that is, and I'm saying this is somebody who's done quite a few deals in life as has the president. Somebody who's been negotiating a deal for eight years, nine years, and there are sticking points toward the end. Guy has to be pretty courageous to say, nope, that's it, I'm gonna walk. Because otherwise the choices go back to your significant other that night and say, you know what, here, I just blew eight years out of my life and I got nothing to show for it. That's a huge psychological problem with these things that are so drawn out. To say nothing of the fact that often there are changes of administration in between, in different countries, changes in their behavior, both in terms of trade and not. So that's the second reason that we have. Just to, we talked about the blocking of judges for the WTO dispute resolution system. What is it gonna take for the administration to remove that block? Oh, I think we should negotiate that in the conference room, not in the press room. Well, you could give us a little flavor of it here. Yeah, that's the flavor. In the conference room, not in the press room. All right, Bill, Bill, let's talk a little bit about how technology plays into this. Because a number of people have talked about how technology has meant that the large corporate global supply chains that were built up in the old era of globalization aren't really necessary anymore, that you can put more local content in your operations in each country. Jeff Immelt gave an interesting speech on this about a year ago, and that it changes the nature of the corporation, but it's completely doable because technology changes the game. How do you feel about that? Well, I think it would be very hard to generalize that, or to reach that conclusion on a generalized basis. Supply chains are extremely granular at this point, and technology won't overcome the inefficiencies that are built up in different countries or the efficiencies that were never there in terms of global supply chains. I think technology helps smooth things out. I think it also provides a much higher level of resilience. So part of the underlying philosophy of supply chain management today is to have backups. So you'll have multiple sources for anything that's important for your business, and technology makes it easier to manage the multiple sources. But the idea that somehow technology allows a mass migration, a natural mass migration back into the home base, I think is misguided. Now that said, is automation, and maybe by technology you mean automation, is automation gonna change the nature of supply chain management? Yes, because the automation can be done from a desktop anywhere in the world, and that's going to happen independent of trade agreements. And factories can be retooled much faster than they could have been 10 years ago or 20 years ago. That's a resilience. Secretary Ross. We think technology, particularly the advanced manufacturing, 3D printing, things of all those kinds, robotics, are gonna change a lot the industrial factory landscape. And indeed, I think in coming years, LDCs are gonna have to rethink their historical practice of building their country by starting with light manufacturing for export, then going to heavy manufacturing for export. I think those are relatively observable concepts. But we are not relying just on that. The big portion of why we did the tax reform in the way that we did it, is one to give American companies no longer a self-inflicted reason why they should move offshore. Because a lot of them moved offshore as much for tax as for any other reason. Second, to go beyond that and make it more attractive to be here. The immediate expensing of CapEx is a very powerful thing, both for domestic capital investment and for foreign direct investment. And you're seeing it. You're seeing it start to come through. And then the third thing is the overall stimulation of our economy. Who would have thought, say, at Davos a year ago, that if the president got his tax plan through it, and this actual tax plan was not wildly different from what we discussed during the campaign, who would have guessed that over 2 million American workers would have gotten $1,000 or more bonus from their employer right now and the employer was saying the sole reason for it was this tax bill. Who in the world would ever have thought that? So if you don't think that's a powerful factor, we do. And we think it changes the location of desirability because with internet, geography has a different meaning from what it used to have anyway. But with these other manufacturing techniques, cheap labor, it's hard to compete with a robot. They don't go on strike. They don't do a lot of things. They don't get sick very often. There are other fringe benefits to it. And localization of manufacturing also lets you get into customization on a large scale because the tooling, which is a huge, huge cost, particularly in industries like automotive, comes a lot cheaper now than it, and with these emerging technologies, then it did. So relocating a plant is by no means the problem that it was some time ago. And a lot of these historic investments are probably carried on the books with very small fractions of their original cost anyway. So the idea they might have to walk away, probably not. And further, there may be a reason to keep some production in that locale. But what we object to is when a country forces someone in order to get a contract to locate a plant locally and then forces them into a 50-50 or less joint venture and the joint venture partner forces technology transfers. You're talking about a Chinese practice now. Well, China, and there are some others moving in that direction, but they are the past masters. Yeah, I want to go to Em in a minute, but are we going to see action on the intellectual property front out of the administration in the next week or two? Well, it's very hard to comment on an unwritten report. Clearly, we felt there was a need to do the work. I know the USTR has been very, very hard at work on it. We only play a supporting role, we had commerce as a supporting role in it, but he's working very hard on it. There will come a report. Is there a deadline on that? Yes, but it's not for some little while. Emma, let me ask you, are you seeing a change in the way European companies are operating their global supply chains? Yeah, but let me say, well, first of all, let me say that I think that the tax reform in the US is very good and I hope that this will become a benchmark also for the European countries because I think this idea of lowering the tax and attracting investment is the right way instead of subsidy and whatever. But this idea of the new way of industry 4.0 and whatever, I think this could also help to have a kind of relocalization. But in my opinion, I don't think that this will really make all the company local because the value chain are so, as you said, I mean, if you look at the European companies, a lot of them have value chain all over the world because that is kind of people in some points, a market in other. So my opinion is that this, yes, okay, the digital could work to have a recalibration, but I wouldn't say that this will be the dead of the open trade because I think open market remains a very strong and important thing to have. So I'm gonna open it up in just a minute. So if you have questions, please get them ready. But before I do that, I wanna ask the election in the US was interpreted as a response to the legitimate grievances of a pretty large group of people who feel like they haven't gotten much out of the globalization process out of the last two, three decades. You've seen the same thing in the UK vote on Brexit. You see populist movements throughout Europe responding to the same sort of thing. What's the right way to respond to those legitimate grievances, Roberto? I think there is a lot of emotion in this conversation and not necessarily a lot of information. For example, loss of jobs has played a very important part in this conversation, but trade and open markets have been blamed for that and foreign competition has been blamed for that. Of course, cheap imports have a role to play in this situation, but eight out of 10 jobs that are lost in the market, they're lost to new technologies, they're lost to innovation, has nothing to do with trade. But if you're speaking to the non-college educated worker in the United States who on average hasn't seen any increase in income in the last two decades or three decades, can you really say to them that trade doesn't have something significant to do with that? You're not going to convince everybody. I mean... No, I'm asking about the merits. No, even the fact that the economy, in general, benefits from open markets and from imports that lower the cost of production, of consumption, that is no consolation for the guy who lost his job. He lost his job. He doesn't care if everybody else is doing better. He has a problem. So I don't think governments can respond to this by looking at the aggregate. I think you do have to look also at the situation of those who are being left behind. And that is a tough proposition. That is a tough proposition. David, as a longtime advocate of free trade, how do you talk to those people who feel like they've really gotten the short end of the stick? Complete empathy. But I think, to Roberto's point, there are many factors at play. It's not just because of trade, but the point that has been made is trade agreements need to be fair and you can't have one country. I mean, your point about the least restricted market in the world, there isn't anybody less than us. But I think that's what the political climate is saying. That things, economic growth has not been evenly or fairly distributed. Trade is one of the components. It might be automation, technology, tax policy, all of the things that are being addressed and talked about. Sure. Questions from the audience, please. Yes, sir, and please identify yourself before you ask your question. So Ricardo Melendez Ortiz from ICTSD in Geneva, working on trade and sustainable development. Just without asking to negotiate this here, as you said before, on the question of the disciplines for procedures for anti-dumping and safeguards, that the US has been unhappy for 20 years now. And the issue of overcapacity in certain sectors, still aluminum, some others. What do you see as an immediate solution? Is it renegotiating, for instance, the understanding on those disciplines or what would make a difference at this stage? Well, I think those decisions were deliberate decisions. They were made knowing that they were continuing to build excess capacity. The people doing that are not so unsavisticated that they didn't know that they had hundreds of millions of tons of excess steel capacity. They made a conscious decision to subsidize the excess capacity in order to export not just steel, but what would have been an unemployment problem for them to an unemployment problem for other countries, particularly US. China, which is, as you know, the number two industrial company in the world to us. However, they produced in one month this year more steel than we do in a year. Think about the proportionality. They're producing 12 times as much steel as we are, as a smaller economy. The amount of steel that they're exporting is over 100 million tons a year. That's more than the whole capacity of the United States. So let's not kid it ourselves. These weren't inadvertent errors. These were deliberate policy ideas to deal with some local issues. And that's what makes them hard to deal with because the underlying issues that they were trying to solve with that haven't really gone away. And now the next area of challenge is gonna be high tech. I assume most people are aware of the 2025 plan, which has a very clearly stated target of becoming the world leader with enormous market share in most all of the new technologies that you could name and spell. That is a direct threat. And it's a direct threat that's being implemented by the technology transfers, by disrespect for intellectual property rights, by commercial espionage, by all kinds of very bad things. So it isn't just the overcapacity in the historic industries. It's what's going forward. Is there anybody on the panel who would take issue with what the secretary just said about China technology and intellectual property rights? It's not a disputed issue, is it? I think China would dispute it. But any of us? No, I think this, to be fair, I think there will be complaints. These are not new. I think China is going to respond to those complaints saying that that's within the rules. I think the major point that has been made is that we need to revisit all this. The issue of overcapacity is a reality. I mean, nobody doubts that. There's no question about that. I don't think China even disputes that. The question is, can we, in good faith, sit down and find a solution for this? You cannot sit at the table expecting to get everything you want, but you cannot also pretend that you're sitting at the table and not really negotiate. There has to be a serious conversation about this if we want to find a solution because these things can escalate very easily. When you say you cannot pretend to sit at the table and not really negotiate it, is that directed at Secretary Ross? That's not directed at anybody. I've been doing this for a long time. That applies to everybody. Bill, you wanted to say something? Yeah, I think there's really two questions I think that the Secretary has raised. One is the industries where excess capacity has been created deliberately or less deliberately, but a proper global trade agreement has provisions for anti-competitive behavior in dumping, and we can argue whether they're effectively implemented. But that's a very good reason, to my mind, to have a multilateral trade agreement. The second question is anti-competitive behavior in terms of companies coming in. Now, those of us that have big businesses in China or elsewhere went involuntarily. We knew the rules, believe me, we understood what the constraints were and what the risks were, and we went involuntarily. Now, obviously, if the rules changed once we had it, and that's not exactly fair, but for the most part, I think we went in, we knew what we were doing, we take what we get. The US, the Chinese authorities will continue to evolve. If they make it a very unattractive place for companies like Standard Charter Bank or others to invest, we won't invest. They know that. They're sophisticated players. They'll adapt their rules if they want international businesses to participate. So I don't think it's a black and white issue of saying that somehow we were duped into going into China on some of the false pretenses. Would you have expected at the time that China was brought into the WTO that it would be a more open economy by now? Well, it is a more open economy by now. More open than it is. Yeah, I think we would hope that the, we would have hoped that all economies would continue to open up in the post-WTO environment, but of course, but, and it's not just China that's gone slower than we might have liked. Okay, other questions? Greg, I'm sorry, identify yourself before you. You wanna take a mic? Question from Secretary Ross. Many of the US's trade partners believe these safeguard measures are illegal under the WTO. MESU may win the right to retaliate. If they do, does that mean this was not the right way to go and how does the US respond in that circumstance? Well, the fact that they may get a favorable decision doesn't mean that it's a correct decision, but in any event, there's been no decision yet, so I think it's a little bit too early to assume that the safeguards will be knocked out. It's hard to deal with the hypothetical. A question here, then here. Hi, I'm Sam from Tencent. Maybe the global trade system has a problem, but do you think that the tariff is the best way to solve the problems? Your administration, do you have any other options on your mind? And just hours ago, Jack Ma from Alibaba said that no matter what, trade is going to happen. So, do you have a response to that? I'm sorry, I couldn't hear how. So, there are a couple things, but one is about tariffs and other ways. Is tariffs the best way to deal with the problems in the trading system? Well, in terms of steel, there was put together the global steel form some 18 months ago. It has made zero difference to the capacity situation. It has not even been able to get up-to-date and accurate information from all the participants about their own capacity. So, anybody who thinks that just a few words of conversation is gonna change this is just simply wrong. Eventually facts overcome fiction and fiction is the notion that, oh, if we would just talk a little more, it would get solved. US has been trying that for a very, very, very long time. And in fact, in steel, I have a chart in my office which goes from about the early 2000s through the present and it has a big bar graph which shows the increased capacity in steel in China and then it has little, like, voice boxes. The voice boxes are every time that China said there's too much capacity and we're gonna do something about it. And the only thing that didn't change was the upward slope of the capacity. It's what I said before, the Chinese and many other countries are superb at talking free trade and acting protectionist. And our country has done a terrible job convincing people that we really are the least protectionist and unfortunately we have trade deficits to show for it. Can I say? Yes, go ahead Emma, I'm sorry. Just on steel because my own business is steel. Just to say, I agree on the fact that when there is unfair, I mean, we have very clear use when you have anti-damping, you could put, I mean, anti-damping duties on that and on steel, as the Secretary knows, there are now anti-damping duties also in Europe and in the United States and now, I mean, the market price of steel is much better than before. So not just to say that there are moments in which also to answer to the question, the anti-damping duties are needed and you have to do it. Of course then when you talk about safeguard, security, for security reasons, maybe we can talk about that but there are moments in which anti-damping duties are fine. Yeah, but the problem with the conventional trade actions, we have more than 400 trade actions against almost 40 different countries in different segments. So we're pretty familiar with the remedies and the problem is it's whack-a-mole. What happens is, and it's what happened with the washing machines, for example, you put a tariff on a machine coming out of this country and all of a sudden it's coming out of another country and then another country and then another country. It's the same game, it's the same subsidization, it's the same dumping, all they're doing is skirting loopholes in the existing WTO. WTO never thought there would be instances of trans-shipping and a big scale like there are. They never thought that people would deliberately go around these rules. You talk about people playing by the rules when some company has moved through five or six different countries just to escape four or five different trade actions against them, that's hardly playing by the rules. Right here in the front, you had a question. Heather Long from The Washington Post. Secretary, I'm wondering, so you're now doing these tariffs on specific sectors, on certain goods. Is there any expectation that we should be prepared that the tariffs would go more broad to be on an entire country as opposed to just goods? And I'm also wondering if you could give us a little bit of insight of how the administration will define success from the various changes that you're advocating for. Is it just to see trade deficits go down by the end of the Trump administration or is there something broader that you're looking for? Well, that's a whole bunch of very complex questions. I'll try to answer the ones that I can remember. See, the purpose is to try to create a level playing field. We're perfectly happy to compete in a level playing field, but take steel for an example. If China were a market economy, the steel overcapacity wouldn't exist because the normal commercial banks like Standard Chartered would not continue to lend them money to let them continue expanding when they were already losing money. So it isn't just the overcapacity, it's the interaction between the overcapacity and the very structure of the economy that makes the problem. In the US, even though we haven't been adding capacity, if we've been losing steel capacity, we've been losing aluminum capacity because when you're a free market economy, you don't have the luxury of having subsidies for money-losing businesses, it just doesn't work. So it's the combination of the excess capacity and the rest of the economy and the central planning that creates this issue. And then that's compounded by the kind of whack-a-mole strategy. If you look at where steel is now coming from, I don't want to name individual companies, countries, you'll see them in the report. There are countries that don't even have steel-making capacity that are shipping a lot of steel into the US right now. Think about the implications of that. It's just another way to get the subsidized steel in. Other questions? Yes, right here in the back. Hugh Jenkins from BTG. Secretary Ross, is the issue preserving US jobs or is the issue having fair access to the Chinese market? All of the above. But the key is we think it should be a fair system. And if our companies in a fair fight can't compete and win, that's okay. I mean, that's capitalism. What's not fair is for them to compete against companies that don't have to try to make a profit and indeed don't make a profit, but keep expanding for reasons that have nothing to do with the commercial need for that incremental product. So that one level in terms of our imports, that's a problem. In terms of our market access, I think everybody is well aware how limited market access is. And not just to China, there are plenty of countries where we have market access problems. Part of that is structural. Because of unilateral concessions made earlier by the US on autos, which is one of our major sources of deficit, we only have a 2.5% most favored nation tariff. And our bound rate, which under WTO rules is the most you could charge, even if you applied most favored nation, is also about 2.5%. So we can do nothing with that. Europe has a 10% tariff. China, which is only in the future gonna be exporting a lot of cars to us, they have a 25% tariff. Japan and Korea and some of those countries also have formidable non-tariff trade barriers in cars. So it's not really an accident that autos are one of the big problems that we have. If everybody charged the same tariff or no tariff, we'd be happy to take our chances. But it's very hard to go against a guy who's got a 10% barrier on you and a 2.5% barrier on him coming in. Oh, I'm sorry. So we only have a couple of minutes left and I wanna ask each of you. I mean, it's clear from the discussion we've had here for the last hour that the global trading system that has existed since the end of World War II is in a period of transition. The U.S. is clearly not going to play the same role it has played in the past. They're clearly going to have to be some kind of changes and so what I'd like each of you to do is to very quickly summarize what is your recommendation for global leaders and businesses to navigate this transition period that we're in right now and Bill, I'll start with you. First, I'm not as lacking in hope as you suggested around the ability for the U.S. to take an ongoing leadership role in establishing a functional global trading system. But in the eventuality that it doesn't or that other countries fail to come to terms with the U.S. or other countries position, then it's incumbent on every business manager to make sure that we've got multiple sources of access to the products that we're creating or the services that we're delivering and that sort of built-in resiliency and redundancy will be expensive for business and it will undo some of the benefits that we've all enjoyed that result from global trade. Perhaps worthwhile in the context of dealing with this affected populations that have been adversely affected by globalization but I think inevitably the corporate response is that business likes certainty. The most common use we have in the world, the best we can do business. So my recommendation is not to go too much unilaterally. I think we need to mainly Europe and U.S. to sit down. If there are things that are not functioning, let's stay together, work together and solve the problems. But the idea to go too much unilaterally because in the past maybe U.S. lose too much and Europe again or whatever, I don't think it's a good thing for the next future. Roberto. I think the system will be in transition forever. As the world changes, the system will have to change to follow up. What I suggest businesses do is don't let governments go by themselves. Engage with them, talk to them, give your perspective. Without that, we have a less informed conversation and we may take wrong steps. My advice would be stay optimistic. I think the administration is fighting for fairness and it is a change, things change, they should change, they need to change, that's the new world. Secretary Ross, you get the final word. Well, thank you. We don't intend to abrogate leadership but leadership is different from being a sucker and being a patsy. We would like to be the leader in making the world trade system more fair and more equitable to all of the participants. It's not a lack of leadership, it's not a lack of willingness to lead. The fact that we have some issues with the present system is different from the idea of whether we're prepared to take leadership. Now, you may not like the direction of it but our president is not as much a follower as he is a leader. Good, thank you all. I feel like we've made some progress in the last hour. I hope everyone feels the same way.