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tv   Johns Hopkins University Discussion on NAFTA Negotiations  CSPAN  September 12, 2018 11:46am-1:25pm EDT

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in the u.s., canada john hour and 35 minutes. welcome everyone. looking at the latest under the and we hope to set pinoy well hopefully extremely interested in progress. all these issues will give you
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a brief of how i was walking out going across the street to brookings for lunch. and i ran into mary and another colleague of ours from the peterson institute where i'm also deleted. and chris walked by. the four of us got into a conversation about nafta evidently because the announcement had just been made that the u.s. and mexico had struck a deal. in the middle of that conversation suddenly one of us said we should do an event about this. and here we are. that's how we got here. let me introduce myself. the director of the latin american studies programs and also the emerging market specialization sitting here immediately it to my right.
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the senior fellow at the peterson institute. also a professor at syracuse university. and then to her right a visiting scholar at the cato institute. so let me open up our initial remarks. we had sort of a fairly informal discussion between the three of us and then organize switchover to a second panel looking at the politics of everything that's going on from the mexican perspective and from the canadian perspective. just to give a brief introduction to all of you. as you know the u.s. has recently announced that it struck a deal with mexico and canada had been up to that point sort of out of the discussion. it's now been wrought back into the discussion but nothing has really progressed. and the latest news that we had is that negotiations are
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ongoing which means that negotiations are ongoing. i will have anything more that we can say. on the mexico u.s. steel the interesting thing is that what came out of this in terms of the deal was the document that they actually published that said it is a preliminary agreement in principle but in itself is something that is kind of hard. what is a preliminary agreement in principle. it is certainly not ideal set in stone and it's certainly something it certainly something that will be subject to a lot of back and forth. with an ideal there were three things that sort of stood out the first was the issue of rules of origin which we will get into in the panel and specifically on the auto sector were raised from 62 and
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a half percent in the agreement in principle is that they would be raised to 75% as many of you in the room now they are a staple of trade agreements and what they usually specified how much content in a given product has to be sourced from within the region. sixty-two and a half% of anything produced within north america had to be sourced within north america. the second element of what was announced was out of auto production 40 to 45% has to be produced by workers that are earning at least $16 per hour in wages. this is probably the first time that an alum wage requirement has been built into a trade agreement as all
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of you know minimum wage issues and policy is usually subject to a lot of political is a very politically charged issue to say the least. and having that in the trade agreement with no clear enforceability is certainly another issue that i think we can discuss here in the penal. and then finally, there is a side letter to what was agreed that basically stipulates that imports of automobiles for mexico may be limited there may be an import cap and there is no clarity on what that side letter says but it seems to imply that it would be in place in order for mexico not to be hit by the potential auto tariffs that the u.s. is
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intending to impose on other trading partners. this is just to remind all of you under the section 232. the national security investigation that the trump administration has launched on several different products it is now a report that is due to come out on autos and there is a threat that those imported from other countries here in the u.s. may rise to 20 to 25%. the current wto nation tariffs that trade with the u.s. on auto is two and a half. that would be a very big bump. it would make cars very expenses. i won't talk anymore. let me pass the word first to marry to make some remarks on some of these issues.
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i think that brings that up today. they're still so much that we don't know where this will end up. i wanted to step back and take a bigger view of how this fits in. my particular area of expertise is trade with china and so although i did write a case study for the kennedy school years ago when the united states signed the agreement and that was on capitol hill the day of the vote. many of us will remember that when we signed an agreement with canada which is a much larger economy. most americans have no idea what was happening. at the time when we we signed the agreement with mexico economy was about the size of los angeles. this is a the second one that we have stepping back and
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looking at what's happening with nafta in a wider context i'm reminded first of the agreement that the trump administration has signed with south korea. it's not renegotiation of course. it's like tweaking of course. from the steel and aluminum tariffs by basically forcing south korea to engage in managed trade. i think it's a good way to think about what's happening. and the heavy industries such as auto, steel m aluminum.
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we may see other appliances early on under a different part of the u.s. law. nevertheless more mainline traditional industries. just look at the election map. it goes back into the sort of belief that these are the key to strong and prosperous nations. looking back in a kind of mindset and a worldview that is shared by many people in the end administration and many people in the voting public. we see a move towards managed trade. the unfortunate thing about the nafta agreement is that it's clear that that is going to be coming out the auto industry provisions that monica just spoke about our clearly the most obvious example of that. but the president trump focus on supply management for dairy
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also speaks to this idea. he knows that we have a dairy management in the united states. we look even more broadly. look at what's happening with the european union. they seem to believe that it can have off problems with autos in the auto tariffs hitting european unions would be a gigantic seismic shock to the global trading system. they believe they can have it off. but president trump is already talking like a man who wants managed trade. when the european union has suggested that they would remove all tariffs on autos. that wasn't enough. they wouldn't be ford for example produce deals quite successfully in the region. so we have a general tendency
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towards managed trade. it seems to grow with each passing week. china seems to be the one exception. everybody agrees that it's time to gang up on china. i would question whether this is what we really want. it's been a long time since we really talked about how we can move forward in a cooperative way to create a peaceful and successful trading environment, on maybe it's time that those of us who are in the academic community they really start to think about alternatives to managed trade. i will leave it there. just on the issue that they mentioned. it is a the south korea free trade agreement. it is important to note that apart from the managed trade perspective that the negotiations took there is an additional thing.
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the actual agreement with renegotiation. a headset yet been signed. this is something that could under what is currently happening with nafta that they could very well have it happen with nafta. in these announcement of deals. it really is not actual deals that happen with the negotiation at all. their wide open. it is not the negotiated deals but what was already in place in the first place. with how we broadly think about nafta. when we think about what brought president trump to office. he rallied on the idea of a populist agenda.
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we will have to make it better for everybody. we think about that framework. to make it better for everybody. we see with chorus there are small tweaks not many changes. he doesn't have to go back to congress for vote. we might not get because increasing the quota does not mean that we have haven't like american cars. in addition to that. having the echo were strengths. as straight out history out of the 1980s. we have things that have been proposed. they aren't the ways to actually improve trade agreements. in that sense is a very different agenda. when we look at nafta we look at the things that have been in focus.
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and when we look at what has come out of the negotiations again, we are seen kind of things working on the margins and were seen rules of origins been tainted. it is to limit the imports. there is a specific .. ..
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i think it's problematic in fact, have negotiation being handled where we are isolating long-term partners and friends and allies that have been with us from the beginning through a lot of difficult things. where we're challenging notions of supply chains and the way things are made today. ottawa is a great example. we have supply chain but we don't just make parts and one place and then putting the whole car to get it sent to other countries. we are making things to togeth. you have across the board from the truck and also ontario, you're getting things going back and forth throughout the day. i used to work on billions of dollars in trade and we are free countries building things together. if you put a tariff it's equivalent of basically putting a ball and built the factory floor. that's what's being proposed in many ways. one way to think about nafta in
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this context is what's the main goal and the aim that the administration has been going forward with this? if this is that template to put on the rest of the world with negotiations that will happen in the future that something to be quite concerned about. in the nafta context what we have to be careful about is with intertwined economies that can be destructive disruptive depee these rules land. once we see the final text of this which i'm excited to see, if it comes out at the end of next month then mr. dayton at it and trying to find exactly is going to get hurt and who is going to benefit. until then we'll have to wait and see. >> but with that in mind one thing in picking up on comments, one thing we can say which is if some of these things especially on p-cats but on other products, some of these things to come into effect and to some of these walls are being built as inu illustrated, within factories and within supply chains, there
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are two things that might happen. when is that companies might try to get around those walls, so by trying to get around those walls they would not fulfill the requirements and the criteria that have been put in place or currently being negotiated, and by going around that these companies would then have to start paying the most favored nation care which on autos happens to be 2.5% but it's a lot of stuff going back and forth across the border. you don't pay 2.5% was. you probably paid many times over and that has implications for how much cars are going to cost in north america in general. so that's one first point. the second point is that supply chains would have to come if iu were to abide by these new rules, they would have to completely reorganize and restructure themselves which is also extremely costly.
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this is going to have price impact. this is going to have an impact on the prices of cars within the north american region, which brings to light one point about nafta that a very start point. when nafta came into effect, the years after nafta came into effect the north american region became extremely competitive in the auto sector. so where it was suffering in the 1980s, the reason for why a lot of these managed trade practices and measures were put in place because as having all this competition from japan, the from japan but then later from other asian countries, with nafta this industry became competitive within north america. ultimately what all of these measures are doing is taking away those competitive gain someone very important sector
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for all three countries involved and sort of regressing back to a time when the region was not competitive. that is something that is harmful to all within this broad context of managed trade. mary, i want to go back to the issue of higher prices for autos that i was talking about before because you had a very interesting piece, which i hope you can talk a little bit about, on what happens, this is not nafta related as such but it could come into play after nafta. as i mentioned before there is an ongoing 232 national security investigation on automobiles and there may come a point when these new tariffs, 20, 25%, whatever, whatever they might be, will be imposed on cars that are imported from outside of the u.s. some mary had a very
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interesting, , has a very interesting paper that she authored alongside to make other colleagues at the peterson institute looking exactly what those impacts might be, at edges would like to say something about that. >> let me talk about why it's related to nafta. as monica mentioned, the mfn tariff on autos is 2.5% in the united states. so if the united states ratchets up the requirements for automakers to access 0% movement of vehicles across the boundaries, it may be that the automakers simply turn around and say we will just forget it and will pay the 2.5%. for example, if you 40% of the vehicle has to be made with labor that only $16 an hour, on less expensive automobiles where competition is very fierce, you
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may say it's not, i cannot sell the vehicle less effort is more of it in mexico as i have been doing and, therefore, it will not need a higher standards. i will simply pay the higher tariff. when you think about this when you begin to realize that it seems the 25% to a coming because otherwise all this attention to raising the cost of producing automobiles in the north american region doesn't make any sense because automakers with would throughot their hands and say we will pay 2.5%. that's the big signal to us that these auto tears are seriously under consideration. what does it mean for the united states? monica mitchell c-uppercase-letter trying to fit what the cost effect would be and, of course, differs by market segment. for a low-end vehicle with input from 1500-2500, for luxury vehicles more in the region of
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$4000. it's quite a big hit picture is of a such thing as a fully american-made vehicle every vehicle would be hit to some extent. we find that the vehicles that have more north american, particularly american content, i should say canadian americans can we can give sort out this production process. it is so intertwined that we don't know how much american versus canadian content. the people who say they can that really don't have very good methodologies. they are adding whole bunch of other stuff. that isn't what we're talking about. i have no idea how customs will be able to figure out how to actually tax imports of autos and auto parts from canada. it's unthinkable up until now. so anyway just looking at american and canadian content, you see that vehicles that are
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not popular that hit smaller niche markets are those that have less american and canadian content are more at risk. if your type of person who likes italian sports cars or japanese luxury vehicles or a kind of quirky little vehicles that get great gas mileage, you're the one who's probably going to be driving a vehicle that has less american and canadian content, and probably face a higher price increase. having said that, every vehicle with ace a price increase because if you were alive in the 1980s you know exactly what happened with the voluntary export restraint from japan. all of a sudden the u.s. auto prices went way of even though they were restraining the japanese. here we'll see vehicles hit with high tariffs as those manufactures try to raise the price. will push demand for vehicles that more american content, such
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as the toyota camry, and that will free the producers up to increase prices on all vehicles. we'll see it price increase in use vehicles for the simple fact people will be pushed out of the market with the broad increases in prices, also like to say that will be no place to hide from this. perhaps less obvious would be the fact we just simply will not see certain vehicles come into our marketplace. this was brought home this week when ford said no, it would not be come after president trump tweeted that he wanted them to make this very low-cost vehicle that they'd scheduled to produce in china and export back to the united states, they said no, they will not be making it in the united states, or exporting it to the united states. obviously with 25% tariff% tariff that will be possible but it's also not going to be profitable to make it in the united states which means that particular segment will not
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appear. so we have less choice, something so silly disappear from the market, other things will be more expensive. looking ahead we know this is an area where we will see tremendous change. electronic vehicles are coming whether president complex or not. not. china is on the path to become the world largest consumer of electronic vehicles. other countries are following. one has to wonder if we will simply be left out of it. this will not be the place to do r&d electronic vehicles. this will not be the place to get the most technologically advanced vehicle. all that is extremely sad for anyone who has been in the market place recently as have mine my son i would say an entry-level vehicle. the industry has been doing very well. it was hit really hard and the great recession, no doubt about it, but jobs in out of second group much more rapidly than job overall. the type of vehicles that are being produced in north america are terrific, very competitive.
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the amount of technology you can buy on a 20, 22,000 article sort of blows my mind. and yet they risk it all that for not really clear what pics i think that a lot at risk. we see nafta is team that up and crating this fortress north america. we have to really ask what is going to be the long-term cost that in terms of competitiveness. >> let me switch gears a bit and ask inu fma, the big sticking points for canada. so we have kerry disputes. we have number disputes. we have all sorts of other disputes and that on top of all that we have dispute settlement mechanism under dispute. so if it's a few words about that that would be great. >> i think that to top sticking point and one has heard of has been chapter 19, the so-called
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mechanism to do with at the dumping and countervailing determinations by domestic agencies. the other one would be the dairy issue. larry is a mess. gary has always been a nest for canada but it's always been a mess and the united states, too. canada has a quota system by which reduces make dairy products and that's heavily controlled. canada can give a little on derry. we saw this with tv. they give up three .25% of the market share in the tpp. that was given for the united states and michael mccaul thought was the u.s. would be in that agreement and they would fill that quarter. the problem is u.s. now, a lot of the quota will remain empty and canada is okay with that at this point. there is a bit of tinkering fso has begun to figure out what this extra market share will be in nafta and that's good to be a difficult thing for candidates as well especially if he becomes like new zealand decide to fulfill the quota of the u.s.
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lesbian. without the u.s. in that there is a problem for candidates the whole issue of class seven milk products. this is a mess and it's difficult to get into what exactly it is but suffice it to say the canadian producers had agreement with the company about pricing milk product below certain price which would price u.s. produces out of the market. this was cratered after nafta came into force. it outside that your schedule for dairy products in canada. they came up with his creative way to tinker with the rules to cut out u.s. producers. that's what's happened. u.s. producers have an oversupply. that's in problem views has to dress so it's messy and complicated at the end of the day they can come to some sort of grew there. i don't think it's got logical they can do this. the agreement with the europeans and which make it more access than the gate in tpp. so there is room to maneuver and that's something we can settle what the final compromise is,
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that's the question. what's that final number they decide? the other big issue is chapter 19. this is a big mythology about chapter 19 and canada. when you look back at the root of negotiations with the u.s. can the free trade agreement, it's pacitti confessing because how excited canada was get this. yes, we finally got them. i feel like there's a feeling we just need to keep it to matter what. it's something we need to get because canada wanted this against the united states and they came to us once and we need to keep it within the scrape. so there's that. canadians might have to take a hit and he will be upset if they do that chapter 19 something they can live without. when you look at the data on what's happened with chapter 199 cases and what's happened with other cases that go to the core of international trade in u.s. which is especially the equivalent of what chapter 19 does, there's that much of a difference anymore. they used to be a concern in the '80s that the trade was biased
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against foreigners, it took too long for them to settle the cases and that they had no expertise in trade matters. it's not clear to me that's a problem anymore and most lawyers we have talked to say that's not an issue and that no difference in people with dakota chapter 1t of international trade. for canadian companies there should be no problem to go through this process. in many ways chapter 19 is like the last holdout. canada is keeping it now and i think a lot of it is negotiating bluster in order to get another concession from the united states. i don't think chapter 19 is the hill they should die on. it shouldn't be with a keypad into the day. if they can find a way to get something else from the united states, that's a good win for canada, a good win for everyone but i don't think these are issues that are so difficult they can't come to a solution. >> thank you, inu. let me move to the audience and
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see if there are questions for our panelists, and we have a mic here in the back picks up please regime and he will, to you. >> thanks. i was very intrigued by your last comment about chapter 19 and you obviously have looked at the record of chapter 19 versus cit. you are probably right in terms of the substance, but given that prime minister trudeau has outlined this publicly as a red line, how does he convince the canadians that cit is just as good? >> i think that's a good question. a medically would be a tough silvered the way i see is when you look at the comment that he may come visit when you something like chapter 19. he gets it when he chapter mcbee. i think that is a we've got to give them something. something that can cover dealing
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with these issues either an agreement on the side where the parties agree to bring back at that the dumping reforms of the deputy l as the u.s. will do with the eu. that's one way forward, or to find another way. i think it's going have to be done quite quietly but i don't think prime minister trudeau was anything with enough facing an election intention of backtracking on this, i think he can get away with it. >> anymore questions? over here. >> i know the state we are scanty details but us curious how this would affect the agricultural sector? >> well, it would not be good, as we've seen manifestations as we've seen manifestations already happening in the u.s. here we've seen throughout, the
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whole process has been very noisy and nafta renegotiations officially started in august of 2017, and at first there were several rounds of negotiations taking place in each country, sort of and alternating basis. been there came a point when everybody realized that this whole negotiation might actually unravel. that was not helped by some tweaking done by the white house. on several different locations. ministate within the u.s. started to look at themselves and realized that actually we are very dependent on nafta. this was particularly true, this was true of a lot of different states but it was very true of agricultural producing ones. they paid attention even more when mexico started to very marginally, but they did that, they started to buy soybeans and
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corn and other grains from argentina and brazil. again, very marginally. the amounts that we're talking about our small but the fact of that was very symbolic in sort of driving members of congress who represent some of these localities as well as farmer associations in the u.s. to start speaking up. so everybody realize suddenly that there was a lot at stake if indeed nafta did unravel, and that sort of push back that came from the agricultural side also came from the manufacturing side, by the way, it's is whati think to a large extent made these negotiations continue. it seems from the kinds of things we've seen published that there were several points in time when the administration was sort of ready to pull the plug on nafta, and it didn't happen because some of these lawmakers and somebody's representatives
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from particular industries and particular sectors, specifically from agriculture sector, were very vocal in getting the point across that they were going to lose out in a very big way. >> i was wondering if this trade agreement goes through, can you speak how it might have discrepancies with other trade agreement that canada and mexico have with the eu are other partners or tpp x separately, what does mexico according to quoted on this mean for all the foreign manufacturers that manufacture autos in mexico for export to the u.s.? >> we had to keep an eye with the overlaps will be in tpp. that's going to be the main thing we're going to compare
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nafta to to see how much they borrowed. when you look at the e-commerce chapter, trade and environment probably going to be copied and pasted in many ways, seeing that difference is going to be important. remember, nafta at 500 to trade and environment so will be interesting to see what the due to the actual chapters. nafta created to make institutions to deal with this. we don't know what's going on with the institution speed it. we've got to find out soon enough what's going to happen there. there's other issues with ip. intellectual property rights, there was an extension of the copyright term from 70 to 75 years in the new nafta from tpp which is at 70, also for biologic drugs. the data exclusivity time is ten years with nafta. that's problematic for canada because canada's domestic law
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requires them only to eight years as exclusivity. this will be issued with that and also for compliance with his other agreement. with the eu and interesting thing that is tucked inside a nafta release with this provision of the said you're not to protect the origins of cheese. this would be difficult for the canada eu agreement or canada agreed to protect this. i have no idea how this is going to work out. like this is kind of a mess when you think about it and how they are going to sort this, it's going to be very complicated. that's going to be something to see, what deprivation looks like, it will be interesting and we will have to keep an eye on unraveling this massive spaghetti bowl. >> thank you. >> could i just say one thing? i do think it's interesting to think about the fact that candida will be in tpp and we will not be. this desire to tighten rules of origin that stems from that.
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you can imagine that candida becomes more deeply integrated into the asia-pacific through tpp, and the u.s. would be worried about competition from that integration. particularly to supply chain. so the fact that we're not in tpp is also driving some of this i think behavior that we are seeing. >> can you talk about the politics of this in mexico in specifically is there any chance that these negotiations don't conclude before the new government takes over, and if so, what happened? >> that is precisely the topic of our next panel. we will be dealing with that very soon. any more questions? anymore questions. there's one over here. let me collect a couple or maybe three question because we are right at the end of our time. a couple of questions over here.
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>> can you give sort of a professorial come just sort of a basic analysis of what trump has repeatedly called for, which is international trade tariffs with the u.s. to drop to zero everybody, no exception picky culture over and over again. and his objective among other things is he says to in the debasement of our current budget and ending massive current deficits. what are looking for is just come is trump wrong in his goal of saying what you have zero tariffs? i started thinking, jumping is, probably jumping for joy at his grade. >> while mic circulates, let me take a stab at that.
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the zero tariffs from all sides, that would include the u.s. if the u.s. wants other countries to lower their tariffs to zero, u.s. is going to have to lower its tariffs to zero. and i don't think the calculus has actually been made to substantiate that kind of statement in terms of what it would ultimately imply. so it's one of these sort of broad brush political statements that are thrown out there without the actual data to back it up and actually be able to trace what it exactly means. the debasement of the country because of the current account deficit, this is something that is just not true. the dollar is the international reserve currency. there's a other international reserve currency circulating in the world. you have other currencies that, a little bit close to that but fall very short of being actual
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international reserve currency. the dollar has maintained its status despite the different bouts of turbulence that we are led through in the past few years. the current account deficit has a counterpart. so when you look at the overall payment structure, the balance of payment structure of the country, there's the current account balance and then there's the financial accounts, the balance of payments are composed of both. if you run a high current account deficit with the rest of the world, basically what's happened is that a lot of people, a lot of countries from around the world are actually investing in your assets. so money is flowing into the u.s. that's the other side of the current account deficit, is an investment surplus. so there's a surplus coming in from the other side, which is to say a a current account deficit alone since absently nothing about the state of the currency, the state of the macroeconomy,
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whether things are going to bat. you can't make value judgments on the face of having a current account deficit that it just means you are buying more from the rest of the world and the rest of the world, the counterpart to the is the rest of the world is investing more in the u.s. if you were to bring the current account deficit of used to zero, that would have application for investment in the u.s., not a good one. that's something to think about. let me collect two more questions and then and in befod the panel. >> you mentioned it would be unprecedented for minimum wage policy to be baked into a a tre agreement and i'm wondering whether that would be a good thing. if that were to raise wages for workers it seems like it's a worthy goal, that could it have adverse consequences? >> my question was, you had mentioned at the outset that you of the people in the white house
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and the administration on trade is very different than the ones in the larger academic community. clearly, what they're doing with nafta doesn't make sense to you guys, but how does it make sense to them? what kind of alternate theory are of the operating under that would make sense in their minds? >> thank you. so the question of minimum wages, , we are going to discuss that at greater length in the following panel. let me just say this. there's an enforceability problem. when you stipulate a a minimum wage requirement in a trade agreement, who's going to enforce it? minimum wage policy is a sovereign issue so it's something that is governed by a sovereign government. we can discuss whether this is something that is desirable or not and certainly in the case of mexico as will be told but in the next panel that is an issue
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with wages, with a minimum wage policy even not being strictly adhere to. but be that as it may, trying to do minimum wage policy in a trade agreement does not have any kind of enforceability attached to it and doesn't any kind of political legitimacy either. because as i said this this isa sovereign policy issue. this this is a government policy issue which is very politically charged usually. there is a lot to unravel their and we will do that in the following panel. >> so the other question about the minimum wage is the fact is it is being done bilaterally. when you think about it, mexico has to compete with other countries, and by raising its minimum wage, particularly in certain sectors that may not want to do on its own just to appease the united states, it puts itself at disadvantage in other areas. there is still many poor areas
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of mexico. it has its own development agenda, and for the united states to then tell mexican citizens how they're going to develop because of our relationship just with us, it puts us at a disadvantage. this is not like we're all in a multilateral setting talking how to raise wages for the world, you know, poorest workers. >> i would add one more thing to that because think about what trade agreements are supposed to do, right? to lower trade barriers. right now what were in the update is adding more and more stuff in trade that has nothing to do with trade all. we have to ask ourselves, for all the people have this populist backlash against rate, who want to add more stuff in trade agreements, is this what we want to do? to rethink a trait can solve al these problems? no, it can't. adding in chapters in all these things that are unrelated to it will not solve those problems that are domestic policy issues. this is a great that has to happen at the domestic level in these countries to allow them to adjust their policies as they see fit as they should do is have one.
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i wonder whether it's relevant, the global confidence level, to discuss these issues that are so different in each country. in the case i don't think there should be in the trade agreement at all. >> as for the final question, do any of you want to address the mindset of the administration? >> i will say not milton friedman. milton friedman knew what cause, what the difference between the capital account of the current account and there is this video of ronald reagan which is going around among people, which is funny because many of them are not republican, where he says it's great that we have a trade deficit. it shows how many people have faith in america and want to invest in america. he did understand that the counterpart to the current account deficit with capital account surplus. there is no one voiced in this administration. we have very different voices. in the end i do believe it will be president trump and makes the decision and that is partly why i think that we are very likely
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to get the auto tariffs. >> so with that let me thank our panelists who were very eloquent. [applause] >> and we will switch over to her other panel. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]
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[inaudible conversations] >> so our second panel is more
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on the political economy of nafta and on the specific politics playing out on the ground with respect to the negotiations in mexico and in canada. i i have two very distinguished professors here from sais, professor francisco gonzalez who teaches both in international political economy as well as department, as well as in the latin american studies program. and then to his right, christopher sands who was part of this -- co-conspirator on this come for this event today. actually he put together most of this, but he is the director of canadian studies, for those of you don't know. and of a just kick it off with the question that anybody has in her mind. politics in mexico and nafta. going back to the question that was asked earlier. >> here we go. ten minutes, no more. thanks for having us, monica.
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brilliant and very timely event. why did mexico and u.s. go it alone? the simple answer to that is a mutual fear, a mutual fear of the short-term future. in the united states is going to be midterm elections november 6. sixth pick in mexico the event already what's considered revolutionary elections. elections that have brought not only the first left-wing president to the executive branch since the 1930s but also simple plurality majorities in both chambers of the federal congress. they will be controlled by domestic this has never happened before. so in the run-up to the change of government in mexico, and it was a question about what it happen before the current government steps down after, that happens on december 1.
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december 1, this left wing coalition and very strong block supported very significantly by a comfortable majority of the mexican electorate will take power. that's number one. that's on the mexican side. on the american side one of the many issues is, and someone in the previous panel mentioned it, one of the key topics that propelled mr. trump to the presidency was nafta. worse trade deal ever, ever in the history of humankind. mr. trump has to get something, a piece of paper, a shake of hands with the mexican president to go and be able to show the core base and the floating electorate that he has delivered. delivered. there is no more nafta. even if it's a change in name.
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the symbolism of that is important for the political electoral calendar and for what's coming november 6. at the end of the day what we have is an outgoing government, the mexican government, which is a neoliberal, for washington, pro-free trade, perl imf, pro-world bank, their leading. they had been in power since the 1980s in one guys or another, two different parties, center and center-right. they colonized the economic policy establishment and man-made what are known as neoliberal, you know, policy basket as something written in stone for the first time in more than a quarter of a century. that is being called. that is not written in stone
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anymore, and it could be changes. radical revolutionary, no. highly, highly unlikely. changes on the margins, certain changes to substance, highly likely. so the outgoing government is really, really desperate to strike a deal with the u.s. because for this generation of u.s., european trained technocrats who support neoclassic economics and who made it really the bread and butter of economic policymaking in mexico for more than a quarter of a century, the potential attending with nothing, the potential with president trump's bluff of becoming a reality and losing a market for 80% of mexico's exports is catastrophic. so they gave in, and we can get into the contents, agriculture,
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autos, in a different iteration. they gave been in order to simply be able to lock in 80, 85% of what's on the table and has been on the table the last 24, 25 years. on the side of the u.s. there was as mentioned a positive incentive for the current administration of having something at least symbolically tangible, we are delivering. nafta does not exist anymore. now it's going to be called the u.s.-mexico trade deal, or the u.s.-canada-mexico treat you. it's not nafta even if 95% of things remain the same. that's a positive and negative one of course is exactly the incoming left government in mexico. this was a surprise not only to mexicans but also to americans, to pollsters all over the world.
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the magnitude of the victory by the left had not been really in the forecast and, therefore, the united states suddenly finds itself with the possibility of having on the other side of the table a comma not neoliberal, in fact, anti-neoliberal, nationalist, not anti-american but pro-mexicanist government that once to have as its number one priority social justice issues. and regarding nafta, as are going nose, there have been winners and losers. we talked a lot, we have talked a lot about many of the winners. the auto industry no doubt has helped mexico and propel its economy facing difficulty. mexico in the late 1980s was a
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centralized economy, not as bad as venezuela -- petrolized. it's very difficult to imagine or try to go back to those times. times. today more than 25% of our gdp is manufacturing. the horsepower behind that is the auto industry. so there have been a lot of benefits therefore mexican workers, mexican suppliers, for people who rent land. but there have been very significant losers, and the agricultural side, , something that is happy to talk about is one of them. there's a significant constituency in mexico that is backing the incoming left wing government and would be happy to
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see them negotiate in a sterner fashion than the outgoing government has been doing it. so at the end of the day we end up with this critical juncture where these two governments have very significant, impending political changes which might jeopardize everything that's been done and not only the last 30 months of negotiations but, in fact, the 24, 25 years of agreement. >> thank you, francisco. so we've had since the negotiations started in august of last year, we had at first all of the very strong rhetoric against mexico. and, you know, mexico trade with us unfairly, treats us unfairly. everything is unfair when it
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comes to mexico. and then all of a sudden this shifted into canada and it became about canada. so candidates are in fear. canada traits with this very unfairly. we're going to sideline canada regard to speak only to mexico. then we will force canada back to the table once we have struck a deal with mexico. how is this going down in canada? >> well, not very well. i think a lot of canadians are a little surprised they never thought they would be the villain. they are so nice, and i think it works and sometimes to think that donald trump may be convincing americans who know canadians pretty well that's it on this evil force to the north that threatens us, like in southern ontario and dagger poked at the heart of america. this is not the way canadians are used to being seen or even see themselves. so that's the first part of it. the second part of it is yet to give the canadians a lot of
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credit. they are very mature people in terms of the relationship with the united states. when stephen harper, the previous premise was in office he started with george w. bush. they're both conservative and don't like each other. then harper had to adjust to obama. stephen harper knew that he had to be pragmatic and deal with the united states. andy did more or less well but he at least tried. when justin trudeau was elected he added romance with barack obama. they got along really, really well that was brief because then we had donald trump. justin trudeau insisted that there will be no cheap shots. everyone will try to do the best to have positive constructive not personal relation with the president and with the administration. they maintained that dignified, friendly approach all the way through the start of the negotiations and then as the
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negotiations proceeded, up until the summer as we approached the one-year mark, which . was difficult for justin trudeau to point to anything that all the nation's had achieved. canada was been being hit hardh steel and aluminum tariffs. they still have software tester they just escaped the dumping case more because -- it was a lack of -- the president, the first president to wait so long to visit canada. usually the u.s. president goes to canada for early. the president went up to canada in june for the g7 meeting which is kind of unusual, the delay. that turned out to be a turning point where the trudeau government was trying to show canadians that there were not completely selling out to the americans. they were being for an friendly but they're trying not to be poodles whatever the metaphor for being a u.s. apache is. and in that moment, as he
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started saying we had some differences and some deals would not acceptable to us and went to stand up for ourselves, the president left the summit and accused justin trudeau of being a line backstab or an traitor and so forth. not only that, his minions came out, you can call the minions, i don't but presidential advisers are able to come out and also take cheap shots at justin trudeau. we were talking in the previous panel about electoral politics and canadian electrical -- electrooptics matter here. justin trudeau was elected in 2015. the canadians adopted recently a fixed election dates system so although their parliamentary system you could call an election and in time, they had an election expected, all things being equal, on october 21, 2019. the problem that is that the prime minister, knowing he has an election next year, is look at how and after renegotiation
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is likely to affect him. his opposition, conservatives have largely supported the government in the negotiations of nafta and they have taken too many shots, but we are starting to see the electoral impact and is happening at the provincial level. first we saw the election of doug ford to ontario. doug ford for those who remember rob ford, his brother, was mayor of toronto. he is the sort of clean and sober brother, you know, he's not on cocaine thank goodness but he is a populist and he has used that platform now that he is premiere of canada's largest province to criticize the government carbon tax approach and other things. there's a fear among some liberals that his next move is to say the auto industry is in big trouble because of nafta and of justin trudeau, time to get rid of him.
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because he is premiere he does have to solve the problem. he just has to raise the alarm. it's almost too good for the media to passive. québec has an election on october 1, the day when i am in a sea effects of whatever was agreed between mexico and u.s. we have an election next spring for the federal election in alberta. alberta has a socialist government which is now behind in the polls to a conservative alternative party run by a former cabinet minister stephen harper is quite charismatic. the political calculus for justin trudeau is bad in that he needs to be firm and fair and you need to come up anything else with a deal because canadians know how important nafta thing to do. they don't understand how their old friends the americans can treat them this way. if i can say, the worst thing of
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all is that canadians to like us to to in the united states. in case you're wondering, francisco is mexican but i'm not canadian. i'm just from detroit. [laughing] but what canadians, they really do like us and they know as well. in some cases, say in u.s.-china relations ordinary chinese people see nothing but trump and to wonder if the americans of all gone crazy. but if you have canadians friends you see this, the canadians know the americans are still nice. they know the americans are still their friends. they think trump is an aberration, and so they've managed this so far without it becoming a real disaster for the trade, for the economy. there was a brief attempt to boycott american products that didn't go very well. they mostly are ready to forgive us for trump and do a deal if a reasonable one can be arrived at. that's the awkward position of the government is where we find ourselves now. >> thank you. let me explore or dive deeper
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into another question with both of you. francisco talked at length about this tectonic shift in mexican politics that has just occurred, and how there is now, it would be very soon in place a government that is very unlike the previous, the current government, which is into the previous government, in the way that they think about policies in the way they position themselves. you used the word nationalist. it makes one wonder, given that the trump administration's position is a nationalist position in selling respects, and then you have an incoming administration in mexico that also has nationalist leanings, then you have canada which currently does not have nationalist leanings but some
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provinces might or might start moving in that direction. i wonder if both of you could comment on this? if it takes a while for the final nafta deal, if there is one, to finally come to fruition, how do these shifts in the makeup of the two governments within nationalistic bent of the u.s. administration, how does that come together and give us something that makes sense in terms of the free trade agreement? >> very, very good question, very substantial. on the mexican side, prima fascia, it might appear as if having a strong nationalist, nativist in power in the u.s., which has not been the case for a long time, and also having one
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in mexico, which used to be the case up until the 1980s, would be the worst of all worlds of those people who believe in free trade, for those people who want to build bridges rather than walls. newton once we scratch the surface of this proposition, the reality is that the incoming government in mexico is quite pragmatic. it's the government that understands that the livelihood of a majority of mexicans, that the rate of growth of the economy for the country, which has been very mediocre, not even 2% per annum the last 20 years, at least in real terms, by key issues regarding the promise to deliver social justice, to
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deliver results that close one of the widest gaps in income and wealth distribution anywhere in the world, the country is sadly in the company come in the box, with 20% most unequal countries anywhere in the world, in the company of some sub-saharan african come south asian countries and many latin american countries like chile, like brazil, colombia. if this government is going to be successful, it does not believe in the venezuela formula of starting to nationalize, return to statism. not even to the middle way, house, if you want to call it that way, that brazil or
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argentina adopted. that was not wholesale 21st century socialist revolution like like hugo chavez in venezuela but is a significant move towards status, nationalist policy. in mexico what you have is on the one and a level of rhetoric which is strongly resident with the majority, because a majority have not seen the benefits of free trade and of this, in theory, mutually beneficial association with the united states and canada. and on the other you have a country which is very well acquainted with recurring financial crises since the 1970s. crises each took place first and foremost due to the types of nationalist interventionist policies such as capital controls, licensing agreements,
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free imports and exports. many distortions to the economy land in mexico in dreadful financial circumstances in 1976, in 1982, 1988-89, and just when nafta was being signed in 1994-95. we have not seen that since then, and the left is aware about this. so we do not have in power and ideological led left. we have one that is pragmatic, that is focused on delivering results. and that being said, the main issue then depends on the relationship between these two nationalists. can they get along? is president elect andres manuel
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lopez obrador going to get on president trump's hair? likelihood is very likely, because almost anyone gets in president trump's pairs. anyone and everyone, humans, animals, vegetables, minerals. [laughing] so that i think we have discovered that. president trump might very easily take up a fight with the new x can present as his picked up fights with the prime minister of canada, with the president of france, with the president of china, almost with the the president of russia but for some reason not. and thinking about the mexican side, people have talked a lot about lopez obrador as an ideologue, as a quintessential populist. he is but he's incredibly pragmatic. this is the third time he ran for the presidency. the first time the presidential
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race probably was stolen. we still about 2006. 2012 was a different different story and is lost by five points. but in the run-up to the 2018, really, this is someone who ended up, when people started dissecting the electoral results, trying to make sense of how the poorest and most highly educated mexicans could have voted for this man. so people with postgraduate education and people without having completed junior high school voted three or four, to one for lopez obrador. urban and rural. the following he has is genuine. his way of approaching things is pragmatic. he will smile. he will talk very, very slowly, and it will be difficult to get
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in his hairs. this is someone who is learned the virtues of buddhist appeasement. because the fiery brand that he used to x-files -- expose into the presidency. the previous two times particularly the first one he lost a lot of appeal when during the post-electoral conflict he said institutions, institutions go to hell. a lot of the middle class, the educated as will as for populist support he had garnered ended up distancing themselves from him after those pronouncements, after 2006. so this is someone who ended up
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having, maybe by his minions, his staff, the people that surround him, forced him to mellow down. is he on medications? he probably must be because his personality is dramatically different from the pre- and post-2015 individual. as long as he takes his medicine, , therefore, it is had to see him becoming a child and then trying to start poking president trump in the eye. ..
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and security dependency and the fact that it's relatively isolated in the world, northern america with one native but mostly it's greenland. but mostly the united states. and the united states which has always had a more global, far-reaching ambition. so the way the two have learned to get along is by agreements that set up institutions out of the politics of the management of therelationship, starting in the 20th century we signed a treaty that created the joint commission that looks at management of the great lakes , water quality and invasive species and presidents don't
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need to worry about that at all. it's all coming along below the surface. we have an error defense agreement set up in the cold war to protect our shared airspace because we feared the bombers would come over the northern part of north america and when it is needed, it is not necessary to go back to the president of the united states as on 9/11 when a canadian deputy commander was in charge of norad and we needed to do something because we didn't know what the nature of the attack was.the canadians ordered american and canadian fighter to secure the airspace and we didn't have to go to back to this clinical sphere. nafta is the most central institution in the us canada relationship and what is unnerving to canadians is the shaking up of something foundational that they thought was subtle. if you go back to the age of the autopilot, more canadians were interventionist in the economy. they had a feeling as the smaller partner that they were going to have to intervene a bit, held their companies out.
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over time we convinced them to give those protections up in the spirit of free trade and now i know it drives americans inside pray see, and freeland gives a better speech on the virtues of free trade on how it helped global growth than anyone in the trump administration and they are telling us our story back to us because this is something we have been trying to convince them so that dynamic is real. second thing we have done that's causing problems , you're also good-looking and fabulous but imagine you have a good friend growing up with not so good looks and you get all the dates but he's not as good-looking as you and maybe they're not as rich as you. we all have inequities in our friendships and we want to stay friends, you don't mention them.
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you just don't bring it up. it's not that it's not true, it's just bad form to rob the other guy's face in it so the funny thing about canada's relationships is we operate as if we are equal. we do joint things as partners. this is what mexico would dream of but canada is used to it so it comes as a shock that donald trump, about how he thinks about things, donald trump believes in bilateral negotiations, the us has the upper hand and it's going to play hardball and get a good deal because as you said, canada needs to deal with the united states more than the us needs to deal with canada. it's not usually to say that and even for to press the point and even though that leads me to marry go, i don't think the canadians will become -- they have a little bit of nationalism but not really. i think the weakness of the way that we are negotiating is we think we can do a deal, sign it like this agreement in principle which isn't worked out yet and everything will be fixed and after the ribbon has been cut and we
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declared a whole new era, what you'll see from the canadians is what a weaker partner does which is quietly to protect their own under the new rules. the president focuses on dairy because it's one of the few products for which there is a relatively high canadian tariff. we had under the clinton administration, bush and obama a regulatory cooperation dialogue that was really aimed at getting rid of those barriers. it requires close interworking between the government. it's not necessarily going to happen after an agreement signed that leaves canadians notsure they can trust us the same way that they did, not all of us but some of us and so that's where were going . this gradual unraveling of some of the opening of easy access to canada and i don't mean to make that sound like the canadians are as evil as from thinks they are, but there a smaller partner and
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their government has to look out for canadians and their competitive in a lot of ways but they are going to look for ways they can help their own and that will be to the detriment of canadians in the long run but certainly for americans. >> thank you. let me ask before i turned to the audience going back to the question on minimum wage, both of you. you spoke a lot about the social justice platform. how does this minimum wage requirement that's now built into the preliminary agreement in principle, how does that square off with the social justice platform and how does canada respond, given that the issue of low wages in mexico has always been a big sticking point or canada? >> quickly, it is an incredible paradox. no one would ever believe
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that the nationalist us president would potentially be thechampion of mexican workers .and you might end up being bad. this applies to the auto industry and it is the most dynamic sector of mexican manufacturing. if 40 percent of cars built in mexico were to be required to be built by people who earn at least $60 per hour, that would pressure all wages, skilled, semiskilled and unskilled. the problem for workers in mexico is they have since the 1980s i mentioned , the fall recurring financial crisis. they lost a lot of their bargaining capacity. the most important objective
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for mexicans and it up just clinging my nails to a formal sector job. if you managed to have that, you're already part of the privileged and more than 50 percent of economically active populations does not have that so wages in mexico are regulated by a national commission of minimum wages which is a typical institutional setting where the state gets employers and workers to agree on negotiations about wages. as mentioned, given the recipe that the mexican government to follow between the 80s and now, liberal recipes whereby the mantra was to remain competitive,
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competitiveness lies in cheap labor, cheap wages. and that has been time and again the argument made for carrying out what is known as wage repression. productivity gains in manufacturing areas such as the auto industry since the early 2010 era, aerospace which has grownsignificantly, mexico and canadian producers , asidefrom those , most other segments have not seen major improvements in their everyday wages. so the great paradox here, and if it does happen, then it will be a case study that has to be written about that whatever and however many tactics and strategies workers, leaders in mexico try since the 1980s to make wage gains for their
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affiliates, and they failed, it's now a make or break of this trilateral, potentially bilateral agreement and the us blessing of that agreement and saying if you don't do this, we just walk away . that ends up in fact carrying out a revolution in wages in mexico which is incredible. >> it's very interesting when you watch canada us relations because in a funny way, i say this not being a mexico expert, the orders seem to me to be a matchup of justin trudeau and donald trump . you have this nationalistic man who runs against establishment who challenges mexico city and champions the people that nafta left behind and a man of the left who is a progressive who like justin trudeau is concerned about
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ordinary people and it's an interesting paradox to use your word and i think in general, as left the canadians uncertain how to deal with the new government. i think what justin trudeau can take credit for his repairing mexico canadian relations. under stephen harper they had become quite contentious over some migration that was unanticipated and coming from mexico into canada that led to a visa requirement on mexicans to come into canada that was not well-received. there were high-profile criminal cases in which canadians were in mexico and do something happened to them and they became pathetic cases where canadians would have a lot of concern about the corruption or the rule of law in mexico and trudeau has reached out to the nieto establishment and has a
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relatively good relations but i'm not sure he knows what to do yet with obrador. if we are lucky, one of the things we will get out of this is much better canada mexico relationships. it's always been the weakest end of the nafta triangle because we were in the middle of the two countries are starting to see that they have common interests. and that might be improved in the future. >> a positive note, that's always good. let's turn to the audience. i have only a few minutes remaining. so, michael. >> thank you. i'm interested in your thoughts on whether you think the us is a reliable negotiator in talks and christian freeland answered that by saying he was negotiating with ambassador like kaiser and yet the us has to deliver both congress and the president on any deal. >> let's take a couple.
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let's take three, actually, there's one more year. >> mine is in a similar vein which means i agree that mister freeland was quite eloquent and impressive but there's a strategic question given that the us is the dominant player, and she misplayed her hand by walking away from the table for so long and does give credence to the criticism and coming from premier ford. >> one more year. >> i have a couple questions actually and i should preface this by saying i negotiated two chapters in the new but my question on the minimum wage commitment and they're not being enforceability mechanisms is it does become a binding agreement, what is it that the settlement, is it subjected to that some settlements, that will be a mechanism. the second question about eric's, there's a lot of
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trade agreements now out there and carrots are low and this is one chapter of a trade agreement. and are you looking at non-carrot barriers and the impact of removing those? i know it's hard to quantify the impact but in general, is academia looking at that impact of that? my thirdquestion is as has been noted, nafta is over 20 years old . you think it's worth worth updating an existing agreement or should we be pursuing a different strategy such as multilateral agreements like the trade agreement, is a better strategy or is it worth looking at the old ones and updating those. what would be on your wish list? >> do you want to take the first? >> we divided it up very reasonably . so the first thing is are we
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all reliable negotiating partner? this is an unusual negotiation. normally prime ministers are the good cops , expressing confidence that something good will come out and negotiators in the back room are the tough guys and they work towards a tough deal but that hard bargaining is at least predictable and expected. this had been unusual for two reasons, one because the president has played backup along with his trade negotiators so there is necessarily an american copout there and the second thing that's unusual is that this is the first time we've had a negotiation this intense with social media so i often think about one of our problems in us politics now being the web the moment we are in which is that everyone has a lot of information and just as we, when wendy came out people would go to their doctor and say i know i think what i have, i've read all my symptoms and i think it's this and the doctor would say i'm the doctor, let me explain it to you. that relationship between establishments shall us and the people is one that is being changed in trade
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policy. people have their own opinions about what a good agreement is so the negotiator displaying back, and they're saying what always provisions being makes it hard to negotiate period even irrespective of how we behave, then there's the congressional component which i agree your right to focus on. the trade promotion authority bill which is what we're operating under was granted for president obama. it is the most interventionist by congress since the trade act of 1974 in terms of oversight, demanding reports and detail and the trump administration for all the criticism that they are unpredictable as been good about meeting all its requirements and the congress, even though it gave itself a lot of role in the talks has not played a big role. they've been waiting to see what comes out of it so i think congress is the x factor and depending on how this agreement doubles or what we're looking at, we've seen members of congress
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talking about adding canada back in after the fact. or asking for new negotiations, something we haven't seen for quite a long time so i feel the us is not very predictable or certainly reliable negotiating partner because of all of that change and maybe this is the new normal but we will have to see. with regard to christie freeland, i'm hesitant to criticize the way she conducts those negotiations in part because i think she's been figuring things out as she goes and she's very articulate as a spokesperson for the government's policy and as a journalist, she knows how to talk to students about trade. and she's been trying to find a way to keep the canadian public on her side while she's negotiating with the us . that said, she's also taken on the backup role to let the prime minister tried to stay back and above the fray and i think some of the criticism at been aimed at her is about the role she's been assigned and for those of you who care about politics, there are some that suggest he's
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gunning for the prime minister's job down the road and that does happen sometimes in parliamentary systems but the fact that she's been willing to be so out front and criticize the suggestion that she's putting her job first and that we are in you much about the ambition. >>. >> very quickly, on non-carrot and countervailing duties, very little on the service has been revealed. my sense is that as my colleague chris mentioned before hand, what ever it is and so being hammered out , whatever agreement that hammered out, the likelihood is that it's going to be more geared towards us interests as much as the us is the strongest party, both countries mexico and canada have been much more under us been the other way around. one once something is hammered out, you can bet that canadians and mexicans
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are going to try to not restore but try to create as good conditions as they can manage with the new rules that might be less beneficial than the previous ones where by focusing on these types of elements which usually have led disability in the radar screen of newswires, newspapers whathave you , so i think that extra ammunition that the weaker ones are keeping to potentially use. on the minimum wage, you're absolutely right. there's monica also mentioned at the beginning of this section, this is the first and so therefore, there's no precedent to understand how these things work. in the absence of an
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enforcing mechanism, what the people have been talking about is parallel agreements that would create commissions where canadians and americans and mexicans would sit to monitor wage situations in mexico. problems with that, the issue of sovereignty, the issuethat the mexican government even if they commit to it , a priori, after-the-fact, they might very well turn to the public and say what's this, this is some unacceptable intervention. where else in the world is this happening? nowhere else, we should not all agree to this . so you're absolutely right in saying that organized labor both in the us and in canada do not trust mexican government and mexican government's implementation of policies of their laws so for that matter, mexican
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labor and mexicans in general do not trust what the government implements so that in the air and lastly on the pluralization, multilateralism, mexico has said and there's very little that this outgoing administration hassaid . they have not even detailed about this preliminary agreement that they agreed to with the united states, but one thing they've said is that the same basic provisions regarding terrace, you mentioned about many other trade agreements having relatively low tariffs, there was no way mexico was going to give in to having different conditions from those that they signed up to in ppp, which has not been implemented or the free trade agreement that mexico infect as with the european union
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sign in 1999, 2000 agreement that functions and which creates a level playing field which is consummate by and large with wto rules so that at least what they're saying. >> you both. let me make one observation and then i'm afraid we've run out of time for questions. on the updating of agreements, rather than going at it regionally, what's left just get back of it and remind ourselves that we the renegotiation for the updating, would have happened naturally had ppp come into effect? it both canada and mexico were in tpb and nafta would have been automatically updated had ppp come into effect. since tpb did not come into effect, we are in the situation where we are renegotiating that and in principle when you have
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agreements that are 24 years old, the economy changes so evidently, updating is needed so there's nothing wrong with updating, there's nothing wrong with that. it doesn't make much to scratch it all up and start from scratch. because you already have an agreement in place makes all the sense in the world updated. i'm sorry that we have run out of questions. this has been an extremely interesting panel, i at least thought so and i learned a lot. i hope you all did very much for coming. you to our distinguished panelists for their time and their answers and for that. and a great audience, with great questions and with that, i'm calling the germans . >>.
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>> washington post reporter bob woodward is our washington journal guest monday at 7 am eastern talking about his book fear: trump in the white house and on tuesday at 8:30 a.m. eastern, independent counsel can start joins us to discuss his book contempt, a memoir of theclinton investigation. watch next week on washington journal . and now us treasurer jovita carranza speaking on financial literacy and retirement savings. >> good afternoon and welcome to the subcommittee on primary help and retirement security. the hearing where having


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