tv President Trumps Trade Chief BBC News December 21, 2020 4:30am-5:01am GMT
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bbc news, the headlines was not dozens bbc news, the headlines was not d oze ns of bbc news, the headlines was not dozens of countries are imposing travel bands to and from britain where a new fast spreading variant of coronavirus has led to the country's highest daily number of recorded cases. after months of recorded cases. after months of wrangling, cabinet republicans and democrats in the us congress have reached agreement on a 900 william dollar code —— coronavirus relief package —— billion—dollar. it includes stimulus payments for millions of workers who lost their jobs because of the pandemic and will also provide funding for the max vass —— mass vaccination campaign. still caught up on fish. uk and eu negotiators trying to agree the terms of a free trade deal between the two say they are still stuck on the issue of eu accessed uk's fishing waters.
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sources close say the decision on whether it is deal or no deal can be expected before christmas. no—one bbc news, our economics editor faisal islam. —— now on bbc news the i'm faisal islam, the bbc‘s economic editor. and as we look back on the tumultuous tenure of president trump, one man was ever present in his cabinet. he was trusted to do big, new economic deals with the world's biggest nations and that is the us trade representative robert lighthizer. responsible for the trump mantra that trade wars are good and easy to win for the self—styled mrtariff man. in a rare interview, mr lighthizer reflects on negotiations with china, north america, europe, and the uk. and he's adamant that ripping up the world trade rules was necessary to bend globalisation to work better for ordinary americans.
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but where do we all go from now? ambassador lighthizer, thank you so much forjoining the bbc at this important moment. it is a pleasure to do this. we look back on the past three orfour years, this administration, your tenure here, you have sort of ripped up the rules, the consensus in global trade. do you look back on that and feel that that has worked? we are proud of what we have done. the president, if you ask me what we did and what we tried to do was, one, we wanted to reorient the purpose of international trade more towards working people in the united states and less towards outsourcing and corporations. i think that was important.
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the second thing we did, which i think was really significant, was focusing more on china. china is a great challenge for not only the us but for our economic system. yours and mine. so we tried to do both of those things. you have to start for the proposition is do you believe there were problems in international trade when we started. and we certainly do. we had lost millions of manufacturing jobs, we had enormous trade deficits, notjust with individual countries, which we can debate about, but with the whole world. going up every year to the point where it was $800 billion and really something that is not sustainable. so from our point of view, our losing our manufacturing base, our communities were being hurt as a result of lack of manufacturing and a lack of other good jobs and so the president set about to renegotiate nafta, to change the relationship with china, and then to work on the wto.
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and then a lot of other things, we did deals with japan and we did deals with korea, we put tariffs on a variety of chinese products, the steel and aluminium, so there was a change of the paradigm. and even in this last election, you saw no real pushback from vice president biden to the proposition that trade is not working for working people. so the president famously said in one of his tweets "trade wars are good and easy to win." that hasn't really proven the case. the point that the president was making was that the united states has had a lopsided trade relationship with an awful lot of people. and changing that is something that we really have to do. and i think the president has done that. i wouldn't really say that we started a lot of trade wars. i don't think that's accurate. we have really enforced our laws, we've insisted on fairness for american workers, but when you look across the way, where would
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you really say we started a trade war? in the usmca, the old nafta, we renegotiated the agreement and got a very good agreement that's in the interest infinitely better for the united states, a very significant change. but also better i would say for mexico and for canada. so there clearly was no trade war there. we did change our relationship with china. that was a relationship where we had to step back look at, where you had massive technology theft, force technology transfer, failure to keep intellectual property, and really markets were not and are not working. there was a very unfair relationship and it had deteriorated to the point that we had a $400 billion trade deficit with one country. we sold them very little, they sold us an enormous amount. the president really
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had to do something. people get tied up in the word ‘trade war‘. i don't look at it that way. i think we enforced our rights and did what is good for america workers and american businesses. but the deficit, at the end of the day, is bigger than it was with china, and in general terms too. is that not a sign that the strategy didn't work? if you look at pre—covid, five of the previous six quarters, our overall trade deficit was down, not up. if you look at average median family income, 2019, the last year we have data for, that is pre—covid, 6.8% up “6.8% in the united states, the highest in american history. average workers‘ salaries went up the highest in american history. and finally i would say if you look from election day
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in '16 till february, you would see that we createed 500,000 new manufacturing jobs. now, covid changed all of that. and if you look at the trade deficit for this year with china, it is down substantially. so what about the impact more generally on the system of world trade? when the world's biggest superpower uses tariffs as a weapon, it can be no surprise that this trickles down to every other nation, and now you have china using the same tactics against australia. do you not have some regret over the example america has set in terms of the trading system that it built up over decades? if you're suggesting that china has become more protectionist because of something that the united states did, my view is that that's nonsense. china has a very clear plan. they have a state—controlled economy. it's becoming, indeed, in a recent months and years, more controlled.
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and they do what's in china's interest. so the suggestion that our defending our rights changed that is, to my mind, totally unsupported by the fact. i have no regrets about any of it. i think if anything, we proved that the old way, the old way of trade policy being largely dictated by large corporations, multilateral corporations, and that working people in developed countries just falling by the wayside, that that was a foolish bad policy, and there's nothing in the data that i have seen that suggest the contrary, and it certainly is totally unsupported in suggesting that china has somehow become more protectionist as a result of our actions. so on your deal, the phase one deal to buy more
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american goods, they won't reach their target. i guess you would say the pandemic had an impact there. but was that deal... that deal hasn't really hit its targets. this all started as part of a plan that was put in place august of 2017. the plan went on for a period of time and we ended up with tariffs, we had a negotiation that came close to conclusion in may of 2019, but for a variety of reasons, the chinese system cannot sustain the constant commitments they talked about. the negotiations continued and we had some increase in tariffs and then last january we signed the deal. so what does the deal do? number one, it has substantial systemic changes. commitments. force technology transfer‘s prohibited. there is protection for intellectual property rights. there are commitments on financial services. there are commitments on currency and commitments
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on agriculture sps or trade barriers, you would say. massive substantial commitments. have the chinese done that? both system of things? i would say for the most part yes. i would give them a very good grade for that. i would say also that this is an agreement that is in writing and is specifically enforcea ble. it's very, very significant things. does it deal with everything? no. does it deal with industrial subsidies? no. anybody who thought you were going to change the state run direction of their economy based on an agreement with us really didn't know the history of china or trade. so that is piece number one. piece number two is you have the substantial purchase commitments in a whole variety of areas. agriculture, industrial, energy, a whole variety. and they are substantial, and they are 200 billion over a two—year period of time, and the notion that it was not only the get the trade deficit down but also to have,
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to start relationships that will lead to future trading going forward. and i would say, as you point out, that covid—19 had a substantial effect, more in some areas than others. if you look at agriculture, i would say we had the best agricultural sales to china in our history. in some other manufacturing, they're clearly behind but there's time to catch up. energy, we've seen massive energy purchases. but they're a little bit behind in that area too. we have had a once in 100 year disruption of all — not only economies, societies —
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so i would give them a pretty good grade on that. and the third piece of this phase one deal is that we kept in place the tariffs. so it offset the advantage of all the unfair above the state subsidies but also the unfair technology transfer. so to me, it's a historic agreement. we'll see about a phase two as things develop. it was a major step on both sides and i think it's starting to create new rules that will be fair not only to the united states and china but other countries. a lot of the things in there are beneficial to world trade. this and been frustrated by the world trade 0rginization ——let‘s move onto wto issue, clearly, and you have followed this and been frustrated by the world trade 0rginization for many decades, predating your service in the administration. your policies quite willingly broken the world trade 0rganisation system in particular ways, appellate body that judges disputes and you're also blocking the appointment of the director general. isn't this dangerous for trade?
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first of all, you have to start with the proposition was the system working? when we got there? and i would say, any fair person would say it was not working. it was a real, real failure. we had not had any negotiations for 25 years of any consequence. the wto had to literally fail to function as a negotiating body. and that really is the principal purpose of the wto. so why did this happen? 0ne, we expanded the membership — it's a consensus agreement organisation, so you had people that created a problem. you had china joining in 2000 which really changed the nature of it. but something else happened i would suggest to you. and that is in 1995 when we started the wto in transition from the gat, you started this appellate body
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and you got binding dispute settlements and then you got this sort of super body of bureaucrats who really started off, their purpose really was to kind of correct a panel decision that wasn't quite right and just look at the law. it evolved into a body creating like a common law of trade. so you had these seven people on the appellate body and then the bureaucracy under them creating a jurisprudence, taking away a benefit that members had seen, that have been negotiated for and putting restraint on things that had been conceded. so what you had really was an organisation that migrated from a negotiating organisation into a litigation organisation. now we have a situation where we're trying to create a new organisation. we have to massively reform the appellate body, we clearly need new leadership as you suggested.
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our view has been, the us view, has been that we need somebody with real experience in trade. not somebody from the world bank or a development person. we need a real trade expert. so these kinds of things have a way of working their way out. but the more important point is that the wto is massively in need of reform and i think there is a consensus developing at the wto that we need this kind of reform. let's bring it back to the relationship between the uk and the us. there were people in your administration even suggesting a deal could have been done this year. it looks difficult. how do you assess the state of play of a trade deal between the uk and the us, in the past you have said, you were waiting to see how the uk exits the european union. and you seemed sceptical that we would make a clean break. where are we on that deal? we have an enormous and very
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positive trade relationship with the united kingdom. the united states does. we have $270 billion worth of two—way trade. it is fairly balanced. we have an enormous amount of investment back and forth, number two, the uk has a very good team, headed up by secretary of state liz truss, we have been working very well together and making a lot of headway. so i feel good about where we are. i think it is extremely likely that we have an fta, a free trade agreement, with the uk before long. i feel comfortable about that. they are serious issues that we have to worry about, we have agricultural issues, we have standard issues. there are a lot of things that are tough compromises that have to be made. so those are the things that tend to come towards the end of a negotiation.
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but on the positive side, we are both very, very... we're both leaders in the world on digital trade, financial services, and i think we can do an awful lot to write the rules together, the best rules together that the world can see. when will this happen? 0bviously our election has an impact. deals tend to be made at the end. there is a short period of time they will have to try and wrap this up but i think it is something that can happen. it will require compromise on both sides. now, your last kind of inference, the brexit situation was always something that was on her mind. if you think about it, the nature of our relationship is going to be affected by the nature of the relationship between the eu and the united kingdom. they are a much bigger trade partner to you then we are, although we are very big. so that has an impact.
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what new access we get is less significant if somebody else gets the access, but that will be sorted out here probably in the next two to three weeks. and then i think there is no reason why the united states and the uk cannot get to a deal fairly expeditiously after that. 0n the important issue of the digital services taxes, clearly, you are along the way of a process with france, the uk has also levied that tax, what will be forthcoming from the us as these taxes settle down and continued to be levied on your big tech companies? we view these digital services taxes as unfair. taxes that are largely aimed at united states‘ technology companies. my own view is, i‘m not the lead negotiator, this is the treasury department, my own view is we have to come
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to some kind of global agreement on this issue of how do we tax these large corporations. clearly, i personally agree with the notion that companies that sell into another market should pay some of the cost of running the market that they are selling into. from our point of view, from ustr‘s point of view, if countries put in place taxes or other measures that we think target us companies, are unfair to us companies, we will take action to offset that. we have the laws to do it and we would expect any other country to do the same thing. we are in the process of doing that. we have our studies being done. we are laying the legal predicate for it and we will see how that works out. right now, hopefully negotiations will start again to try to resolve the issue and make it unnecessary to take further steps. would you expect a president biden trade agenda to be radically different from the one that you have pursued ? vice president biden has taken positions very different
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in the past on trade than the ones we have taken. i don‘t know that those are still his views. in the campaign, he was careful not to say he would reverse our steps, so what i think what we have done and what president trump‘s policies are, policy for working people, and my sincere hope, and one that recognises the challenge from the chinese system, my hope is that whenever we leave, that will continue to be the us policy. and i might say that on both of those points, there‘s pretty much of a bipartisan consensus we‘re moving in the right direction. i think the democrats as well as the republicans realise that we needed to shift the paradigm on trade. more in the direction of working people in the united states. and that we needed to recognise
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that china is a real problem for our system. and that we had a very unbalanced relationship and we cannot go back to where it was. now, there will be certain corporations and the like who will want to immediately go back to the way it was. my hope is that the sensible people in both parties prevent that from happening. let me leave you with one last reflective question about this. which is you have claimed that it was the world trade system that caused the issue with working americans losing theirjobs. but america‘s gdp benefited more than anybody. and ijust wonder, did you shift the blame for, i don‘t know, political lack of enthusiasm for redistributing the fruits of growth to working americans and you put that all on trade? isn‘t the issue domestically within america that you may be want to redistribute wealth more rather than blame trade which makes everybody
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richer in aggregate? i would say first of all, we don‘t put all the blame on trade. for sure, we don‘t. we passed a tax bill and we got rid of regulation. we did a whole variety of things. the number one thing the united states had to do in the economic policy space was get our own house in order. and no one has cut regulations more than president trump. no one has had bigger tax cuts for middle—class people but also ones that will lead to more efficient businesses. so for sure it is unfair to say that all of those job losses and all that was because of trade. 0n the other hand, it is undeniable that when you run huge trade deficits and when you see what happened from the time china joined the wto or nafta came into effect, it is impossible to say that a good part of that
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5 million for example manufacturing job losses were not also as a result of rules that were improperly written. let‘s take a step back. trade is important. we all understand that. none of us are against trade. the real question is what is the objective. the objective cannot just be efficiency. the objective has to also be working men and women. that is what president trump is trying to do. now some people would say, it is a little bit inferred, that what you do is you just go with the most efficient global situation, consumers are better off and then you redistribute money to workers. the problem with that notion is that it ignores the intrinsic importance to individual people of working. and i really think this is a fundamental shift from the way people used to think about these things. we are at notjust consumers. we are working people. and we want, and i say this often, we want children to be proud of the fact
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that their parents have realjobs, are doing really productive things, and i think there is an intrinsic value to people. you have better communities, better states and better countries if you do that. and that is a specific objective. it is not something that you will see an economist give any credit for. now they are just starting to realise that this is something we have to think about. but we want strong communities in the united states, and if that means that t—shirts cost another nickel, then t—shirts will cost another nickel. that is more or less the fundamental change that we‘ve had. we think people are better, happier working notjust as consumers and certainly not as recipients of welfare, but i don‘t blame trade for all of this. it is a systemic thing and president trump has tried to address it as a systemic thing. he has tried to do all the pieces that are necessary to make america more
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competitive. we have a situation where 50 to 60% of our workforce does not have a college education. we need those people to live in happy families, happy communities and have productive work and that is what we have tried to do. now granted you can go too extreme on one side too extreme on the other side. we are trying to walk the line. but trade is part of that equation. ambassador lighthizer, thank you very much for your time. we really appreciate you downloading what has been an extraordinary three or four years. thank you very much. thank you for your time. hello. for most of us, the chances of a white christmas look pretty slim, but it‘s probably not going to be a particularly wet christmas either. drier, colder weather on the way by the end of this week.
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there is some more rain to get out of the way first, and on the earlier satellite picture, you can see this big hook of cloud. this is really going to provide wet weather across southern areas, particularly through the first half of this week. this first frontal system bringing rain, particularly across england and wales, up into northern ireland as well. something a little bit clearer but still with some showers further north. chilly air across northern areas with a wedge of really mild air working in towards the south. a very, very mild start to wednesday in southern areas, but a cloudy, wet start with outbreaks of rain pushing northwards across england, wales. some heavy rain moving through northern ireland, getting into southern scotland for a time as well. something a little bit drier following on behind, but probably still quite cloudy. some further rain into southern counties of england. northern scotland will see some sunny spells, yes, but some showers, too, and some of these will be turning wintry at times over high ground through the afternoon. a rather chilly day in northern areas, a very mild one in the south with highs perhaps 15 degrees.
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as we go through monday night, you can see further pulses of rain pushing across southern areas up into wales, the midlands. further north, clear spells, still a few showers into northwest scotland. pretty mild down towards the south, a much colder night for the north — there could even be a touch of frost here and there. then into tuesday, cloudy, damp weather will continue across southern counties of england, maybe into south wales at times. further north, we‘ll see more in the way of sunshine, but again, a scattering of showers, especially across the northwest of scotland, some of these showers wintry over the hills and the mountains. temperatures, again, six or 7 degrees in the north, 12, maybe 13 down towards the south. now, an area of low pressure is set to bring more rain on wednesday, especially across southern areas, but as we head towards the end of the week, this area of high pressure is going to start to build its way in. so, through christmas eve and into christmas day, high pressure will take charge, but with that, some colder air working its way southwards. so, yes, temperatures dropping away by thursday and friday, christmas eve and christmas day, but by this stage, it should be mostly dry with just a few showers.
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