tv Johns Hopkins University Discussion on NAFTA Negotiations CSPAN September 10, 2018 5:00pm-6:46pm EDT
up so that they are trying to abide by these rules and stay away from a federal audit or one of these big raids where they round up workers. gomez joining us. michael from alabama, go ahead. caller: in my opinion, the illegals wouldn't want to work for these low wages on the rms if the liberals would push a living wage on the farmers instead of trying to push for a living wage in mcdonald's and taco bell and all these other places. pay them a decent wage, and, you know, as long as the u.s. chamber of commerce and the business roundtable have their
claws in washington, then these -- you know, they're not going to pay a living wage. host: got you, michael. thanks. alan gomez, to that point, mcdonald's, target, the large chains, do they fall into the e-verify system? guest: i don't know. i haven't looked at these bigger companies. i can tell you that michael brings up a good point. what these employers are paying their workers, to be absolutely clear, there are plenty of employers out there who knowingly and willingly recruit in mexico and central america to try to bring workers in the united states knowing full well they will pay them well below market rate and the conditions that some of these people have been put through is just remarkable. they'll put these workers almost as endent ured servants, working on their farms, pay them low wages.
it not only takes up that drive but drives down the average wage for workers in that field. but i can tell you i met with so many farmers. i know there are a lot around the country who want to do this right. as one of the previous callers said, some of them are doing quite well and they have no problem paying very good wages to their workers. what they want is stability. for them it's important to get a guest worker program that works and that fits their needs so they can have a consistent work flow as opposed to the sort of scattered, you know, piecemeal approach that a lot of them have to take by picking up whatever immigrants come in and praying they happen to be here legally. host: john from council bluffs, iowa, hi. caller: good morning, pedro. host: you're on. caller: mr. gomez, you are starting to politicize in bringing up me and some of the republicans. i notice chuck schumer and none
of the other guys said anything about this. i just don't want want to politicize it. the girl's dead. the kid had a driver's license. out there killing people. somebody's got to verify these -- where they come from or it's just going to keep happening. >> welcome, everyone, to our nafta -- can i even pronounce it? naftapocolypse panel. looking at the latest developments under nafta, we have i hope a very interesting -- well, we have a very distinguished set of panelists and hopefully an extremely interesting discussion as well given that all of these issues as we go along. let me give you a brief antidote how this came about. a couple weeks ago i was walking out, going across the
street to actually nearby to -- across the street from me -- but brookings to lunch and i ran into mary and another colleague of ours from the peterson institute where i am also affiliated and then chris walked by and the four of us got into a conversation of nafta, evidently, because the announcement had just been made that u.s. and mexico had struck a deal and middle of that conversation suddenly one of us said we need to do an event about this and here we are. that's how we got here. now, having said how we got here let me introduce myself. i'm monica, director of the latin american studies program and also the emerging markets specialization, sitting here immediately to my right is mary who is a senior fellow at the peterson institute for international economics. also a professor at syracuse university. is then to her right is
visiting scholar from the cato institute. let me open up our initial remarks. the idea is we have sort of a fairly informal discussion between the three of us and then we're going to switch over to a second panel looking at the politics of everything that's going on from the mexican perspective and from the canadian perspective. so 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 out of the discussions. it's now been brought back into the discussions but nothing has really progressed. and the lacest news we have is that negotiations are ongoing which means that negotiations are ongoing and we really have nothing more we can say. however, on the mexico-u.s.
deal, the interesting thing is that what came out in terms of the deal, the document that ustr actually published said it is a preliminary agreement in principle within itself that's something kind of hard. the language of which is kind f hard to disentangle. what is a preliminary agreement in principle? it's not a deal set in stone. it's something that will be subject to a lot more back and forth. within that deal there were stood hings that sort of out. rules of origin specifically on the auto sktor were raised from 6 it 2.5% -- the agreement in principle is that they be raised from 62.5% to 75%. as many of you in the room
-- rules of origin are they are a staple of trade agreement and what they specify is how much content in a given product has to be sourced from within the region. so the 62.5% rule was basically saying that 62.5% of anything produced within north america had to be sourced within north america. now that's up to 75%. the second element of what was announced was that 40 -- out of auto production, 40% to 45% of what is produced has to be produced by workers that are arning at least $16 an hour in wages. this is probably the first time that a wage -- a minimum wage requirement has been built into a trade agreement. as all of you know, minimum wage issues and minimum wage policy is usually subject to a
is a very tical -- politically charged issue, to say the least. having that in a trade agreement with no clear enforceability is certainly another issue that i think we should discuss here in the panel. d then finally, there is a side letter to what was agreed that basically stipulates that imports of automobiles from mexico may be limited. there may be an import cap. there is no clarity really on what that side letter says, but it seems to imply that that cap would be in place in order for mexico not to be hit by the he potential auto tariffs that -- by the potential auto tariffs that the u.s. is intending to impose on other trading partners. this is, just to remind all of
you, under section 232, the national security investigation that the trump administration has launched on several different products, has already done so for aluminum and steel, as you know. there is a report that's due to come out on autos. there is a threat that tariffs on autos imported from other countries here in the u.s. may rise to 20% to 25%. the current w.t.o., most favored nation tariff for countries that trade with the u.s. on autos is 2.5%. it may make cars very expensive. which is something that mary, my lovely colleague, have worked on. i won't talk any more. let me pass the baton to mary. mary. mary: thanks, monica. i think that brings us up to date because there's still so much we don't know, where this will end up. i want to step back and take a
bigger view how this fits in more to the trump administration's general approach to trade policy. my particular area of expertise is trade with china. so although i did write a case study for the kennedy school years ago, 1994, when the united states signed the nafta agreement and that was on capitol hill -- i was on capitol hill the day of the vote. very exciting although many of us, americans, when we signed an agreement with canada, which is a much larger economy, most americans had no idea it was happening. at the time when we signed the agreement with mexico, however, an economy that at that time was about the size of the economy of los angeles, everybody was up in arms that naftapocolypse. this is the second one, and i think it speaks to the fears of lowering income in the united states. stepping back and looking what's happening with nafta in
a wider context, i'm reminded, first, of the agreement that trump administration has signed , granted steel and alum i was in tariffs for south korea, forcing them to agree in managed trade. managed frayed, i think, is a good way to think about what's happening. particularly in the traditional heavy industries that this administration favors such as autos, steel, lum -- alum new mexico and we may see other appliances early on under a different part of the u.s. law but nevertheless, more main line traditional industries.
one may say, just look an election map and you'll figure out why those are the industries that are being chosen and that i -- that may be true. it goes to the belief that these are the key to strong and prosperous nations. so i think we're really looking back at a kind of mind set and a world view that is shared by many people in the administration. and many people, i would say, n the voting public. so we see a move toward a manage trade. the nafta agreement, it's clear that's going to be coming out. the auto industry provisions that monica just spoke about are clearly the most obvious example of this, but trump's -- president trump's focus on supply management for dairy also speaks to this idea because he certainly well knows -- and we also have dairy management in the united states
. we look even more broadly, we look what's happening with the european union. the european union seems to believe it can head off problems with autos and auto tariffs hitting european union would be a gigantic, i would say a seismic shock to the global trading system. they believe they can head it off but president trump is already talking like a man who wants managed trade. when the european union has suggested they will remove all tariffs on autos, he said that wasn't good enough because they wouldn't be buying our automobiles. seeming to completely dismiss the fact that ford, for example, builds automobiles quite successfully for the european market in the region. so we have a general tendency towards basically 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 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, trading rules. maybe it's time that those of us who are in the academic communities and other communities start to think about alternatives to managed trade. so i'll leave it there. monica: thank you, mary. just on the issue that mary mentioned, so this is the south korea-u.s. free trade agreement, it is important to note that apart from the managed trade perspective that these renegotiations took, there's an additional thing. the renegotiations took place but the actual renoirks, the actual agreement -- actual negotiation, the actual agreement has not been signed.
this is something that could, under what's currently happening with nafta, that could very well happen with nafta. so in other words, it's very possible that we might have these ongoing negotiations and these announcements of deals were preliminary agreements in principle that really aren't actual deals that have been negotiated at all but are wide open and thus would still re-- what still remains in place are not the prenegotiated deal but indeed what was already in place in the first place. namely, the nafta that was negotiated 24 years ago. please. >> i want to pick up on a theme that mary brought up and how we broadly think about nafta. when we think about what brought president trump to office is that he rallied on this idea of this populist agenda. part of it was saying we want to tackle trade and make it better for everybody. inu: so we think about that framework. we have to look at what he's done and what he's proposed to make this better for everybody.
well, we look at chorus and with chorus that were small tweaks, not many changes. doesn't have to go back to crong tore a vote. the -- congress for a vote. it makes it better by getting a little more autos into another korea. increasing a quota doesn't mean that koreans like american cars. that won't change the preference that people have. in addition to that, having these voluntary export restraints on steel. this is a trade policy out of e 1980's, something that bob lighthizer knows. mary said managed trade. these aren't things to improve trade agreements, not the discussions that academics and scholars have been talking about. this is a very different agenda and that's what he calls his populist agenda. when we look at nafta, we look at the things that have been focused -- autos, steel. when we look at what's come out of the negotiations, again, we're seeing kind of things working on the margins.
we're seeing auto rules of originalins being tightened and in fact, rules of origin across the board have been tightened. nafta already has some of the most stringent rules of origin of any agreement in the world. so to make this even tougher, it's very clear what the goal is here, is to limit the imports of non-north american products into the north american marketplace. in addition to that, there is a specific goal of increasing u.s. production in all of these inputs as well. the textiles is a good example of that with the increasing of tightening the u.s. products in the yarn rule put there. this is the vision we need essentially to become a more nartartic sort of nation. i think that's what's being put forward in terms of the nafta talks. not just revitalization and revisioning of nafta to make it really better but really to scale it back and take a lot of the free trade out of nafta and that is inherently problematic. second, i think it's also
problematic how the negotiations are being handled. where we are isolating some long-term partners and friends and allies that have been with us from the very beginning flew a lot of difficult things and where we're challenging notions of globalized supply chains in the way things are made too. auto is a great example of this. we have an integrated supply chain where we aren't just making parts in one place and putting the whole car and sending it to another country. we are actually making things thing. you have across the board from detroit and actually ontario, you are getting things back and forth throughout the day. we are talking about billions of dollars of trade and we are three countries building these things together and that's pretty impressive. you put a tariff, it's the equivalent of basically putting a wall in the middle of a factory floor and that's what's being proposed in many ways. the one way to think about nafta in this context right now is what's the main goal and the aim that the administration has in going forward with this? if this is a template they are going to put on the rest of the world with the negotiations that are going to happen in the
future, that's something to be quite concerned about. the nafta context, what we really have to be careful about, we have intertwined economies that can be very disruptive depending where these rules land. once we see the final text of this, which i am very excited to see if it comes out at the end of the next month, then we will start digging at it and find out who's going to exactly get hurt and who will benefit. until then we will have to wait and see. monica: yeah. with that in mind, one thing in picking up on inu's comments, one thing we can already say which is if some of these things, especially on autos, but also on other products, if some of these things do come into affect and if some of these walls are being built, as inu very well illustrated within factories and, you know, within supply chains, there are two things that might happen. one is that companies might try to get around those walls. by trying to get around those walls, they would basically not
fulfill the requirements and the criteria that have currently been put in place or currently being negotiated and by going around that you would -- these companies would then have to start paying the most favored nation tariff 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% once. you probably pay it many times over. that of course have implications for how much cars are going to cost in north america in general so that's one first point. he second point is that supply chains would have to, if they were to abide by these new rules, they would have to completely reorganize and restructure themselves which is also extremely costly. this is also going to have a price impact. this is also going to have an impact on the prices of cars within the north american
region. which brings to -- which brings to, like, one point about nafta that is very -- it's a very stark 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 whereas it was suffering in the 1980's, the reason for why a lot of these managed trade practices and measures were put in place because it was having all this competition from japan, chiefly from japan but then later from other asian countries, with nafta, this industry became extremely competitive within north america. so ultimately, what all of these measures are doing is taking away those competitive gains from one very important sector for all three countries involved and sort of regressing back to a time when the region was not competitive.
and that is certainly 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 happened -- this is not nafta-related as such but could come into play under nafta. as i mentioned before, there is currently an ongoing 232 national security investigation on automobiles, and there may be -- there may come a point when these new tariffs, 20%, 25%, whatever they might be, will be imposed on cars that are imported from outside of the u.s. so mary had a very interesting -- has a very interesting paper that she authored alongside two other colleagues at the peterson institute looking exactly at what those impacts
might be and i just would like you to say something about that. mary: well, let me talk about why it's related to nafta. as monica mentioned, the tariff -- the m.f.n. tariff on autos is 2.5% in the united states. if the united states ratchets up the requirements for automakers to zero percent movement of vehicles across the two boundaries, it may be that the automakers simply turn around and say, well, we'll just forget it and pay the 2.5%. for example, if you have 40% of the vehicle has to be made with labor that's earning $16 an ur, on, you know, less expensive automobiles, where competition is very fierce, you may say it's not -- i cannot sell the vehicle unless i produce more of it in mexico as i have been doing and therefore i will not meet the higher standards, i'll simply pay the
higher tariff, when you think about it this way you begin to realize that it seems that the 25% tariffs are coming because otherwise these -- all this attention to raising the cost of producing automobiles in the north american region doesn't make any sense because automakers would simply throw up their hands and say we'll pay the 2.5%. i think that's a big signal to all of us, these auto tariffs are very seriously under consideration. what does it mean for the united states? monica mentioned our policy brief, trying to figure out what the cost effect would be. of course, it varies by market segment. for a low-end vehicle, we would see anywhere from $1,500 to $2,500. for luxury vehicles, more in the region of $4,000. so it's quite a big hit had. there is no such thing as a fully american-made vehicle, so 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 american -- we can't sort out this production process. it's so intertwined that we don't know how much american versus canadian content. people who say they can do that really don't, in my mind, have very good methodology. so they're adding in a whole bunch of other stuff. it isn't what we are 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 just sort of unthinkable up until now. so anyway, just looking at american and canadian content, you see vehicles that are not really popular that hit smaller nearby markets are those which -- niche markets are those which are more at risk.
if you're the type of person who likes italian sports cars or japanese luxury vehicles or 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. probably face a higher price increase. having said that, every vehicle will face a price increase because if you are alive in the 1980's, you know exactly what happened with the voluntary export restraints from japan. all of a sudden the u.s. auto prices went way up even though, of course, they were restraining the japanese. here we'll see vehicles that are hit with high tariffs as those manufacturers try to raise the price, it will push demand toward vehicles that have more american content, such as the toyota camry, and that will free the producers up to increase prices on all vehicles. we'll also see the price
increase in used vehicles. people will push demand into used cars. we'll see very broad increases in prices. or as i like to say, there will be no place to hide from this. perhaps less obvious will be the fact we will not see certain vehicles coming into our marketplace. this was brought home this week when ford said, no, it would not be, after president trump tweeted that he wanted them to make this very low-cost vehicle that they had scheduled to produce in china and then 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 that will be impossible. it's also not going to be profitable to make it in the united states. that particular segment will not appear. ok. so we have less choice. some things will simply disappear from the market. other things will be more expensive. looking ahead, we know this is
an area where we're going to see tremendous change. electronic vehicles are coming whether president trump likes it or not. china is definitely on the path to become the world's largest consumer of electronic vehicles. other countries are following. and one has to wonder if we will simply be left out of it. this will not be the place to do r&d in electronic vehicles. this will not be the place to get the most technically advanced vehicles. all this is extremely sad for anyone that's been in the marketplace recently as i have buying my son, i would say, an entry-level vehicle. you know, the industry has been doing very well. it was hit very hard in the great recession, there's no doubt about it. jobs in the auto sector have grown much more rapidly than jobs overall. and the type of vehicles that are being produced in north america are terrific. very competitive. the amount of technology you can buy on a $20,000 to $23,000
vehicle sort of blows my mind. yet we're risking all that for it's not really clear what. so i think there's a lot at risk. we see nafta is kind of teeing that up and creating this for tress north america and we have -- fortress north america and we have to understand what the long-term cost this will be in terms of competitiveness. monica: let me switch gears a bit and ask inu, if i may, the big sticking points for canada. so we have dairy disputes. we have lumber disputes. we have all sorts of other disputes. on top of all that, we have a dispute settlement mechanism under dispute. so if you could say a few words about that, that would be great. inu: sure. yeah, i think the two top sticking points everyone has probably heard of in chapter 19, the so-called mechanism to deal with anti-dumping by domestic agencies. and the other one would be the
dairy issue. dairy is kind of a mess. dairy has always been a mess for canada. it's been sort of a mess in the united states too. we all do different things subsidizing our producers. canada has a quota system by which producers make dairy products. that's heavily controlled. now, canada can give a little on dairy. we saw this with t.p.p. they give about 3.25% of their market share in the t.p.p. that was given with the united states in mind. the whole thought was the u.s. would be in that agreement and they would fill that quota. the problem is with the u.s. out a lot of the quota will probably remain empty and canada is pretty much ok with that at this point. there is a little bit of tinkering that has to be done to figure out what this extra market share will have to be in nafta and that will be a really difficult thing for canada to swallow especially with the t.p.p. nations like new zealand, will fill it. without the u.s. in that there is a problem for canada. the class 7 milk product.
this is a mess and it's really difficult to get into what exactly it is. suffice it to say, the canadian producers had a agree pricing on milk product below a certain priced which priced u.s. producers out of the market. this was a product after nafta came into force. it's outside the tariff schedule for dairy products in canada. they came up with this creative way to tinker with the rules to cut out u.s. producers. that's what happened. he u.s. producers have an oversupply. that's an issue the u.s. has to address. it's really kind of messy and implicated. at the end of the day they can come to some sort of agreement. i don't think it's beyond logical they can do this. and the agreement with the europeans in which they gave more access than they gave in t.p.p. so in is room to maneuver and i think that's certainly something we can settle. what that final compromise is that's the big question. what's the final number they decide to. the other big issue is chapter 19. now, i think this is a big
mythology around chapter 19 and canada. because when you look at the original negotiations of the u.s.-canada free frayed agreement, it was exciting -- free trade agreement, it was exciting how canada got them out. we need to keep it no matter what. it's something we need to get because canada won this against the united states and they caved to us for once and we need to keep it within this agreement. there's that. canadians might have to take a hit and they are going to be very upset if they do. but chapter 19 is something they can live without. and when we look at the data on what's happened with chapter 19 cases and what's happened with other cases that go to the core international trade of the u.s. which is equivalent what chapter 19 does, there's not much of a difference before. there used to be a concern in the 1980's, it took too long for them to settle their cases and they had no expertise on trade matters. it's clear to me that's not a
problem anymore. most lawyers we talked to say they have no difference if they go to chapter 19 panel or court of international trade. for canadian companies, there should be no problem to go through this process. chapter 19 is like the last holdout. canada just keeping it right now. i think a lot of it is negotiating bluster in order to get another concession from the united states. that's a good strategy and that's what they should do, but i don't think chapter 19 is a hill they should die on and not what they should keep at the end of the day. if they can find something else to get from the united states, it's a good win for canada. it's a good win for everyone. i don't think these are issues that are so difficult they can't come to a solution. so we hope that they can come back soon and get it over with because we're dying over here. [laughter] monica: thank you, inu. let me move to the audience and see if there are questions for panelists and we have a mic with mike weener in the back so
please raise your hand and he'll come to you. >> thanks. i was intrigued about your comment about chapter 19 and you obviously looked at the record of chapter 19 versus c.i.t. you're probably right in terms of the substance. but given that prime minister trudeau has outlined this publicly as a red line, how does he -- how does he convince the canadians that c.i.t. is just as good? inu: i think it's a good question. i think politically it will be a tough sell. the way i see it, when you look at the comment he made, he said, we need something like chapter 19. he didn't say we need chapter 19. i take that as saying, ok, we have to give them something, something that can cover dealing with these issues, either an agreement on the side where the parties agree to basically bring back sort of anti-dumping reform to the w.t.o., as the u.s. is going to
do with the e.u. that's one way forward. or to find another way to address some of these things. i think it's going to have to be done quite quietly, but i don't think prime minister trudeau will lose anything with him not facing an election anytime soon of backtracking on this bid. so i think he can get away with it. monica: any more questions? over here? michael, there's one. >> at the stage we are scant on details but i was curious how this would affect the agricultural sector? monica: anyone want to handle that? mary: well, it would not be good, as we have seen manifestations already happening in the u.s. we've seen, you know, throughout this -- the whole process has been very noisy, right? the nafta renegotiations officially started in august of
2017. monica: and at first there were several rounds of negotiations taking place in each country, sort of on an alternating basis. then there came a point when everybody sort of realized, well, this whole negotiation might actually unravel. of course that was not helped by some tweeting done by the white house. on several different occasions. and then many states within the u.s. started to look at themselves and realized that, well, actually we are very dependent on nafta. this was particularly true -- this was true of a lot of different states but very true of agriculture-producing ones, and they paid attention even more when mexico started to very marginally, but they did that, they started to buy soybeans and corn and other grains from argentina and brazil. again, very marginally. the amounts that we're talking
about here are small. but the effect of that was very symbolic and 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 realized suddenly that there was a lot at stake. if indeed nafta did unravel. and that sort of pushback that came from the agricultural side also came from the manufacturing side, by the way, is what i think to a large extent made these negotiations continue. it seems, from the kinds of things that 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 some of these representatives from particular industries and particular sectors, specifically from agriculture sector, were very vocal in getting their point
across 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 that othered trade agreements that can dand mexico has with e.u. or other partners, t.p.p.? what does mexico agreeing to quotas on autos mean for all the foreign manufacturers that, you know, manufacture autos in mexico for export to the u.s.? inu: we have to keep an eye where the overlaps will be. in t.p.p., that's going to be the main thing we're going to compare nafta to to see how much they borrowed.
when we look at the ecommerce chapter, trade and environment, probably going to be copied and pasted in many ways. seeing that difference is going to be important. remember, nafta had 500 to trade and environment. nafta also created two institutions to deal with this. we don't know what's going on with these institutions either. so we got to find out soon enough what's going to happen there. there's other issues, true, with i.p. intellectual property rights, there was an extension of the copyright term from 70 to 75 years in the new nafta. from t.p.p. which is at 70. also for biologic drugs. the data incluesivity is 10-year period within nafta. there is discrepancy in the five-year t.p.p. that's problematic for canada because canada's domestic law requires them to have only eight years of exclusivity. this will be an issue for that and also for compliance with this other agreement. with the e.u., an interesting
thing that kind of tucked inside the nafta release was a provision that said you are not allowed to protect the originalins of cheesening. so like -- europeans are up in arms about this. because this is going to be really difficult for the canada-e.u. agreement where canada agreed to protect this. i have no idea how this is going to work out. this is kind of a mess when you think about it. how they sort this is going to be complicated. that's going to be something to see what that provision looks like, it's going to be very interesting, and i think we're going to have to keep an eye on unraveling this massive spaghetti bowl. mary: could i say one thing here? monica: yes. mary: it's interesting to think that canada will be in t.p.p. and we will not be. and this desire to tighten roles of origin that stems from that. you can imagine that canada becomes more deeply integrated into the asia pacific, through
t.p.p., and the u.s. would be worried about competition from that integration, particularly through supply chains. so the fact we're not in t.p.p. is also driving some of this, i think, behavior we're seeing. >> can you talk about the politics of this in mexico and specifically is there any chance that these negotiations don't conclude before the new government takes over and if o, what happens? monica: that's precisely the topic of our next panel. we will be dealing with that very soon. any more questions? let me collect a couple or maybe three questions because we're right at the end of our time. there are a couple of -- over here. >> sure.
can you give a -- sort of a professorial -- 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 for everybody, no exception? he calls for that over and over again. and his objective, among other end be is he says, to the basis of our currency will be the current deficits. what i'm looking for, is trump wrong in his goal of saying we ought to have zero tariffs? because i'm start of thinking, jumping is -- is probably jumping for joy at his grave. mic a: well, while the circulates. the zero tariffs from all sides, that would include the u.s. if the u.s. wants other
countries to lower their tariff to zero, the u.s. is going to have to lower its tariffs to zero. and i don't think the calculus has 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 to actually be able to trace what it effectively means. the debasement of the currency because of a current account deficit, this is something that is just not true. the dollar is the international reserve currency, period. there's no other international reserve currency circulating in the world. you have other currencies that come a little bit close to that but fall very short of being actual international reserve currencies. and the dollar has maintained its status despite the
different bouts of turbulence we lived through in the past few years. the current account deficit has a counterpart. so when you're looking at the overall payment structure, balance of payment structure of a country, there's the current account balance and then there's the financial accounts, you know, the balance of payments are composed of both. if you're running a high current account deficit with the rest of the world, basically what's happening 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 a current account deficit is an investment surplus. so there's a surplus coming in from the other side. which is to say a current account deficit alone says absolutely nothing about the state of the currency, the state of the macroeconomy, whether things are good or bad. you can't make value judgments
on the face of having a current account deficit. it just means you're buying more from the rest of the world and the rest of the world, the counterpart to that, the rest of the world is investing more in the u.s. if you were to bring the current account deficit of the u.s. to zero, that would have an implication for investment in the u.s. not a good one. so that's something to think about. let me collect two more questions and -- before we end the panel. >> so you mentioned it would be unprecedented for minimum wage policy to be baked into a trade agreement and i'm wondering whether that would be a good thing if it were to raise worksers for mexican workers, would it be a worthy goal but would it have adverse consequences? >> my question was, you had mentioned at the outset that view of the people in the white house 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 the -- to you guys. but how does it make sense to them? what kind of alternate theory are they operating under that would make sense in their minds? mary: -- monica: son the question of minimum wages we will have that in the other panel. there is an enforceability problem. when you stipulate a minimum wage requirement in a trade agreement, who's going to enforce it? because ultimately minimum wage is a sovereign issue so that's something that's 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 we will be talking about in the next panel, there is an issue with wages, the minimum wage policy even not being strictly adhered to. be that as it may, doing this
-- trying to do minimum wage policy in a trade agreement does not have any kind of enforceability attached to it and doesn't have any kind of political legitimacy either. because, as i said, this is a sovereign policy issue, this is a government policy issue which is very politically charged, usually. so there's a lot to unravel there and we'll do that in the following panel. mary: so the other question about the minimum wage is the fact it's being done bilaterally. when you think about it, mexico still has to compete with other countries. and by raising its minimum wage, particularly in certain sectors that it may not want to do on its own just to appease the united states, it puts itself at disadvantage in other areas. there are still many poor areas 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 are all in a multilateral setting talking about how to raise wages for the world, you know, poorest workers. inu: i would add one more thing to that actually. think about what trade agreements are supposed to do, right? to lower trade barriers. right now what we're ending up doing is adding more stuff in trade that has nothing to do with trade at all. we have to ask ourselves, for all the people who had this populist backlash against trade, who wants to add more stuff in trade agreements, is this what we really want to do? do we think that trade can solve all these problems? no, it can't. and adding in chapters and all these other things that are unrelated to it is not going to solve those problems that are domestic policy issues. and so this really is a debate that has to happen at the domestic level in a lot of these countries to adjust their policies as they see fit, as they should do as they want. so i wonder whether it's even relevant, the global governance level, to discuss these issues that are so different in each country. so in that case, i don't think it should be in the trade
agreement at all. monica: thank you, inu. as for the final question, do any of you want to addresses the mind set of the administration? mary: i will say not milton friedman. he knew what the difference between the capital account and current account and there is a video of ronald reagan going around among people, which is sort of funny, because many of them are not republicans, where he says it's great we have a trade deficit. it shows how many people have faith in america and want to invest in america. so he did understand that the -- the counterpart to the current account deficit was the capital account surplus. i -- you know, there is no one voice in this administration. we have very different voices. in the end, i do believe it will be president trump who makes the decision, and that is partly why i think we are very likely to get the auto tariffs. monica: so with that let me thank our panelists who are
respect to the negotiations in mexico and in canada. and i have two very distinguished professors here from sais. professor francisco gonzalez who teaches both in international political economy as well as department -- department as well as in the latin american studies program. then to his right, christopher ands, who is my -- who was part of this event today. actually, he put together most of this. he's the director of canadian studies. for those of you that don't know. let me just kick it off with the -- with the question that everybody has in their mind, politics in mexico and nafta. going back to the question that was asked earlier. francisco: here we go, 10 minutes, no more. thanks for having us, monica. brilliant and very timely event. why did mexico and the u.s. go at it alone?
the simple answer to that is a mutual fear, a mutual fear of the short-term future. in the united states, there's going to be mid term elections november 6. in mexico there have been already what's considered revolutionary elections. elections that have brought not only the left wing president to the executive branch since 1930's but also simple plurality majorities in both chambers of the federal congress. they will be controlled by the left. this has never happened before. in the runup to the change of government in mexico -- and there was a question about will it happen before the current government steps down or after, that happens on december 1. 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, of course, 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. the worst trade deal ever, ever in the history of humankind. mr. trump has to get something, piece of paper, shake of hands with the mexican president to go and be able to show the core base and the floating electorate that he's promise -- his promise is delivered. even if it's a change in name. the symbolism of that is important for the political electoral calendar and for what's coming in november 6.
so at the end of the day, what we have is an outgoing government, the mexican government, which is a neo-liberal, pro-washington, pro-free trade, pro-i.m.f., pro-world bank, they're leaving. they have been in power since he 1980's, two different parties. they colonized the economic policy establishment and they made what are known as neo-liberal, you know, policy basket as something written in stone. for the first time in more than a quarter of a century, that is eing called, that is not written in stone anymore. and there could be changes. radical revolutionary, no. highly, highly unlikely.
changes on the margins, certain changes of substance, highly likely. so the outgoing government is really, really desperate to strike a deal with the u.s. because for this generation of .s., european trained tech nocrats, who made it the bread and butter of economic policymaking in mexico for more than a quarter of a century, the potential of ending with nothing, the potential of president trump's bluff 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 content -- agriculture, autos, in a different iteration, they gave 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, the positive incentive for the current administration having something at least symbolical letangible. 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 trade deal. it's not nafta. even if 95% of things remain the same. that's the positive. the negative one, of course, is exactly the incoming left-wing government in mexico. this was a surprise, not only to mexicans, but also to americans, to pollsters all over the world. the magnitude or 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 fact, iberal, in anti-neo-liberal nationalist -- not anti-american, but mexicannist, pro-mexicannist, nd nationalics, populist government that -- nationalist, populist government that wants social justice issues. regarding nafta, of course, as everyone knows, there have been winners and losers. we talked a lot, we talked about many of the winners. the auto industry no doubt has helped mexico propeled its economy very significantly. mexico in the late 1980's was a petrolized economy. not so much as venezuela.
98% of the exports were oil. but 80%, 85% were. it's -- it's very difficult to imagine or try to go back to those times. today, more than 25% of our g.d.p. is manufacturing. the horsepower behind that is the auto so there have been a lot of benefits there for mexican buters, mexican suppliers, there have been very significant losers. side, something that i'm happy to talk about is that. there is a significant constituency in mexico that is backing the-- incoming left-leaning government and would be happy to see them terner fashion s
than the outgoing government has been doing it. at the end of the day we have this critical juncture where have verygovernments significant, impending changes which may jeopardize everything that has been done in not only the last 30 months of negotiations of the past 25 years of agreement. monica: thank you, francisco. so we have had -- since the negotiations started in august of last year, we had at first although of the very strong rhetoric against mexico. you know, mexico trades with us unfairly, treats us unfairly, everything is unfair when it comes to mexico, and then this shifted to canada and it became about canada.
canada is very unfair. canada trades with us unfairly. we will sideline canada and only speak to mexico. we will bring canada back to the table once we have struck a deal with mexico. how is this going down in canada? christopher: 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 worries them sometimes that donald trump may be convincing americans that canadians are this evil force to the north like ineatens us, southern ontario a dagger poked at the heart of america. this is not a way that canadians are used to being seen. that is the first part of it area the second part of it is you have to give the canadians a lot of credit. they are very mature people in terms of their relationship with the united states.
when stephen harper the previous prime minister was in office he started with george w. bush. they were both conservative and they liked each other. then the stephen harper had to adjust to obama. he had to behat pragmatic and deal with the united states, and he did more or wes well, but he at least tried. was elected,rudeau with barackmance obama and they got along very well, but that was brief because then we had donald trump. justin trudeau said everybody will try to do their best to construct relations with the president and his administration. and they maintained that dignified, friendly approach all the way through the start of the negotiations and then as the negotiations proceeded, up until this summer would we approach the one-year mark, at which
point it was very difficult for justin trudeau 2.2 -- to point to anything the niceness had achieved for canada. canada had been hit hard with the steel tariff. lack --e really was a he is the first president to wait so long to visit canada. usually the u.s. president goes to canada fairly early. in president went to canada june for the g-7 meeting. -- quitekind unusual an usual, the delay. that turned out to be a turning point. wastrudeau government trying to show canadians they were not completely selling out to the americans. being firm and friendly, but they were not trying to be a u.s. patsy, and in that moment, well, we have some differences and some deals
would not be acceptable to us and we have to stand up for ourselves, the president left the summit and accused justin trudeau of being a lying backstab or, traitor and all then his minions came out -- i don't know if you call the minions, but presidential advisers who came out and took cheap shots at justin trudeau. we were talking about electoral politics on the previous panel. canadian elect for politics matter, too. justin trudeau was elected in 2015. canadians adopt it recently a fixed election system. all things being able, october 20 1, 2019. the problem now is the prime minister, knowing he has an election next year, is looking how a nafta negotiation may affect him. his opposition, conservatives and the others have largely
supported the government in the negotiations of nafta, have not taken too many shots, but we are already starting to see the electoral impact at the provincial levels. first we saw the election of doug ford to ontario. those who remember, rob ford, his brother was mayor of toronto, he is the clean and sober brother. he is not on cocaine, think goodness. but he is a populist politician. and he has used that platform now that he is premier of canada's largest government to criticize the government. there is fear among some of the liberals his next move is to say the auto industry is in big trouble because of nafta and trudeau. because he is the premier, he does not have to solve the problem, just raise the alarm.
that is almost too good for the media to pass up. québec has an election may one. that election right now favors an insurgent populist party, the coalition for the future of québec, not the incumbent party that is liberal like justin trudeau. we have an election next spring before 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 who is quite charismatic. for justinal capital trudeau is bad in that he needs to be firm and fair, but more than anything else he needs to come out with this because canadians know how nafta has been important to them and they don't understand how their old friends the americans can treat in this way. the worst thing of it all is canadians like us in the united states. in case you are wondering,
francisco is mexican. i'm not canadian, i'm just from detroit. what canadians do like us and no was well. in some cases, say u.s.-chinese relations, ordinary chinese see nothing but trump and wonder if americans have gone crazy. but the canadians know the americans are still their friends. they think that trump is an aberration. i have managed this so far without it becoming a real disaster for the trade, the economy, the brief attempt to boycott american products that did not go well. they are mostly ready to forgive us for trump and do a deal if a reasonable one can be arrived at. so that is the awkward position of the government and where we find ourselves now. monica: thank you. , dive deeper into another question with both of you.
francisco talk that life about this shifted mexican politics that just occurred and how there is now -- there will be very soon in place a government that is very unlike the current government. in the way that they think about policies, the way they position themselves. nationalist.ord it makes one wonder, given that the trump administration position is a nationalist position in so many respects, and that you have it incoming administration in mexico that also has nationalist leanings, then you have canada which currently does not have nationalist leanings but some 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 with a nationalistic administration, how does that come together and give a something that makes sense in terms of a free trade agreement? very good very, question, very substantial. on the mexican side, prima ifcia, it might appear as 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 in mexico, which used to be the case until the 1980's, would be
the worst of all worlds for those people who believe in free trade, for those people who want to build bridges rather than walls. once we scratch the surface of this proposition, the reality is the incoming government in mexico is quite pragmatic. it is a government that understands that the livelihood of a majority of mexicans, that the rate of growth of the , which for the country has been very mediocre --not even 2% per annum in the last 20 years, at least in real terms. but the key issues regarding promised, delivered social theice, to deliver results, that is one of the largest gaps
in income and wealth distribution around the world. the country is sadly in the with 20% most box unequal countries in the world. ,ub-saharan african countries and many latin american countries like chile, like colombia. if this government is going to be successful, it does not believe in the venezuela formula ,f starting to nationalize return to statism. , ifeven to the middle way you want to call it that way, that brazil or argentina adopted. that was not wholesale 21st
century socialist revolution like chavez in venezuela, but it was a significant movement towards statist, nationalist policies. in mexico you have a level of rhetoric that is strongly resonant with a majority because a majority have not seen the and ofs of free trade this, in theory, mutually beneficial association with the united states and canada. and on the other side you have a country that is very well acquainted with the recurring financial crises since the 1970's, crises that took place first and foremost due to the types of nationalists, interventionists policy such as capital controls, licensing agreements, free imports and exports. economy,ortions in the
leaving mexico in dreadful financial circumstances. in 1982, 1988-1989, 1994, 19 95, we have not seen that since then. and the left is aware of this. anwe do not have in power ideologically-led we have one that is pragmatic, focused on delivering results. that said, the main issue that depends on the relationship between these two nationalists. can they get along? elect going to get hairs?ident trump's
the likelihood is he will because all must everyone gets in the president's hairs, humans, vegetables, everyone. i think we have to discount that. president trump might pick fights with the new incoming president as he has with the prime minister of france, the prime minister of china, almost the president of russia, but for some reason not. and thinking about the mexican side, people have talked a lot about as an ideologue, as a quintessential populist tea is, but he is incredibly pragmatic. this is the third time he has run for the presidency. the first time the presidential race was probably stolen. we still do not know about 2006.
then he lost by five points. but in the run-up to 2018, we saw someone who wound up dissecting the electoral results, trying to make sense of how the poorest, most highly educated mexicans vote for this man. so people with postgraduate education and people without having completed junior high school voted three or four to one for him. urban and rural. the following he has is genuine. his way of approaching things is pragmatic. , he will talk very, very slowly, and it will be difficult to get in his hairs. this is someone who has learned
the virtues of buddhist appeasement, because the fiery brand he used to us bowels did not catapult him to the presidency. the previous two times, particularly the first one, he lost a lot of appeal when during the poster laurel -- post-electoral conflicts he said institutions go to hell. a lot of the middle class, the educated, as well as the poor populist support he had gotten ended up distancing themselves from him after those pronouncements, after 2006. so this is someone who has wound by his minions, by his
staff, the people who surround him forced him to simmer down. ac on medication? --is he on medication? he probably must be because his personality is dramatically different from thepre and post 2015 individual. as long as he takes his medicine, therefore, it is hard child obrador becoming a and then trying to start poking president trump's eye. christopher: it is a very interesting segue and you may not think there are connections, but there are a few in the canadian case, one of which is institutions. those of you who do not follow canada's relations, canada is a small country intensely focused on the u.s. because of its high degree of trade with the u.s. and security defendants --
security dependency and its relative isolation from the world o. , which hasstates always had a more global, far-reaching ambition in the world, the way they have learned to get along is by agreements that set of institutions that take the politics out of the management of the relationship. at the end of the 20 century, there was a boundary waters treaty that created an institution that looks at water quality, acid rain, invasive species, and presidents don't need to worry about that at all. it is humming along below the surface. we have an air defense agreement, norad, set up in the early cold war to protect our shared airspace because we feared soviet bombers would come over and we did at the institution. 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. the canadian simply ordered american and canadian fighters to secure the airspace. it did not have to go back to the political leaders. that was not getting around politics. the politics were settled. now it is the most central relation. what is unnerving the canadians is shaking up something they thought was foundational and settled. ,f you go back to the auto pac they were feeling as the smaller partner of north america they would have to intervene to help their companies. over time we convince them to give up those protections in the spirit of free trade. now, though what drives the there arede crazy,
speeches about free trade helping global growth, better than anyone some the trump administration, really telling our story back to us because this was something we were trying to convince them. that dynamic is real. the second thing we have done that is causing problems -- you were also good-looking and fabulous, but imagine you have a good friend growing up who is not so good looking. you get all the dates and they are just not as good looking. or maybe they are not as rich as you are. if you want to stay friends, you don't mention these differences. you just don't bring them up. not that it is not true, but it is bad form to rub the other guy's face in it. the funny thing with canada is we operate as if we are equals. we do joint things as if we are partners. canada is used to it, and it is a bit of a shock donald trump --
i think donald trump believes the u.s. has the upper hand in will get a good deal canada needs a deal with the united states more than the united states needs a deal with canada. which is true, but dumb to say that. and that leads me to where do we go? willieve canadians overcome nationalists. i think the weakness of the way we are negotiating is we think we can do a deal, sign it like this agreement in principle that has not actually worked out yet, and everything is fixed. after the ribbon is cut and we have declared a whole new era, we you will see from the canadians is what a weaker partner usually does, which is worked very quietly to protect their own under the rules.
the president focuses on dairy because it is one of the few products. what we really have is misaligned regulations. the clinton administration, bush administration, obama administration we had a regulatory dialogue aimed at getting rid of those barriers. requires trust, close inter-workings between the governments. it will not necessarily happen in an agreement signed in ill well that leaves some wondering if they can trust us. that is where we are going, a gradual unraveling of the easy access to canada. i don't mean to make that sound as if the canadians are as evil as trump thinks they are, but they are a smaller partner and their government has to look out for canadians. they are very competitive in a lot of ways but they will look ir ways to help their own,
think both to the detriment of canadians in the short run and four americans. monica: th anank you. let me ask, going back to the question on minimum age, ask both of you to weigh in on that. francisco, you spoke a lot about the social justice platform of andres manuel lopez obrador. how will this minimum wage requirement that is agreed in work one, how does that the social justice platform, and how does canada respond to it given the issue of low wages in mexico has always been a big sticking point for canada? francisco: very quickly, this is an incredible paradox. but he would have believed that a nativist, nationalist u.s. president would potentially be the champion of mexican workers,
and he might end up being that. not only the workers, this applies to the auto industry. as was mentioned, this is the most dynamic sector of mexican manufacturing. in mexico were to be required to be built by perle who earn at least $16 hour, that would put pressure on all wages. killed, semiskilled, and unskilled. since the 1980's, before the current financial crises, they lost a lot of their bargaining capacity. objective fortant mexicans ended up cleaning by sector.ils to a formal
if you manage to have that, you are already part of the privileged. more than 50% of the economically active population 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 leaders to agree on negotiations about the wage. recipeioned, given the that the mexican government has followed between the 1980's and now, it is a recipe whereby the mantra was to remain effectiveness 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. gains in areas like the auto industry, since the early 2010's aerospace has grown significantly in mexico. aside from those, most other segments have not seen major improvements in their everyday wages. so the great paradox here -- and if it does happen, it will be a case study that has to be whateverbout -- that and however many tactics and strategies workers and leaders have tried since the 1980's to make wage gains for their affiliates and failed, it is now the make or break of this
trilateral, potentially bilateral agreement and the u.s. saying in the agreement if you don't do this, we will just walk away that ends up in fact carrying out a revolution in wages in mexico. it is incredible. christopher: it is very interesting when you watch canada-u.s. relations. in a funny way, and i say this not being a mexico expert, lopez obrador appears to be a mashup of justin trudeau and donald trump. a nationalistic man who runs against the establishment who challenges mexico city and champions the people that nafta left behind. and a man on the left to is a progressive who like justin trudeau is concerned about order , people, and social justice. it is an interesting paradox, to use your word, francisco.
hasi think in general it left the canadians a little uncertain how to deal with the new government. i think what justin trudeau can take justifiable credit for is really repairing mexico-canadian relations, understanding they can be quite contentious over some migration that was unanticipated coming from mexico led to a visaat requirement on mexicans to come into canada that was not well received. there were a few high-profile criminal cases in which canadians were in mexico and something happen to them and they became sympathetic cases where canadians would have concern about the corruption or the rule of law in mexico. trudeau has really reached out to the establishment and has relatively good relations with them. i'm not sure he knows how -- knows what to do yet with lopez obrador. if we are lucky what we will get as much better canada-mexico
relations. it has always been the weakest part of the nafta triangle, but i think the countries have started to see they have common interestss and that -- common interests that might improve things in the future. monica: a positive note, that is always good. we have only a few minutes remaining. let's turn to the audience. >> i'm interested in your thoughts on whether you think the u.s. is a reliable negotiator in these talks and krista said she was negotiating with an ambassador and yet the u.s. has to deliver both congress and the president on ny deal. >> are we taking a couple? >> let's take a couple. let's take three, actually. >> that works because mine is in a similar vein, which is i agree
elegantister freeland's and impressive but i guess there's a larger strategic question, which is given the united states is the dominant player, did she misplay her hand by staying away from the table for so long? > and one more here. >> i have a couple of questions and i should say i negotiated two chapters in the new facilitya. mechanism.rceability if that does become a bindable agreement, wouldn't that affect things? second question about tariffs. there are a lot of trailed agreements out there right now and tariffs are pretty low.
are you looking at non-tariff barriers and the impact of removing those? i know that's hard to quantify but in general is academia looking at that and the impact of that? and the third part of that, it's over 20 years old. do you think it's worth updating existing agreements or should we pursuing plural lateral or multi lateral agreements? is that a better strategy or sit worst worst looking at the old ones and updating those as well? what would be on your wish list. >> we just divided it up, very reasonably. the first thing is, are we a reliable negotiating partner? this is a very unusual negotiation. normally presidents and prime ministers are the good cops and negotiators in the back room are the tough guys and they work
towards a tough deal that -- that hard bargaining is at least predictable and expected. this has been unusual for two reasons. one, because the u.s. president has played bad cop along with his trade negotiator and the second thing that's unusual is this is the first time we've had a negotiation this intense with social media. i often think about one of our problems in u.s. politics now being the web m.d. moment we're in which is everyone has a lot of information when web m.d. came out, people would do go to their doctor and say i've read all the symptoms, i think it's this. the doctor would say let me explain it to you. that rhythm between the base hit. and the people is being changed in trailed policy. the negotiator is playing bad cop and the vigorous debate
about what all these provisions mean i think makes it very hard to negotiate, period. -- period. the trade promotion authority bill of 2005. , which is what we're operating under, was drafted for president obama. it is the most interventionist by congress since the trade act of 1974 in terms of oversight, demanding reports and adam. and the trump administration, for all the criticism that they're unpredictable has been pretty good about meeting all of its requirements and the congress, even though it gave itself a lot of role in the talks hasn't played a very big role. they've been waiting to see what comes out of it so i think congress is the x-factor. and we've seen members of congress talking about adding canada back in after the fact if they get left behind or asking for new negotiations, something we haven't seen for quite a long time so i feel the u.s. is not a
very predictable or reliable negotiating partner because of all of that churn. are regards to christie freeland, i'm hesitant to criticize the way she's conducted the negotiations in part because i think she's been figuring things out as she goes. she's a very arctic lat spokesperson about trade and she's been trying to find a way to keep the canadian public onside while she's negotiated with the u.s. that said, she's also taken on the bad cop role to let the prime minister try to stay back of the fray. for those of you who care about canadian politics, there are some people who suggest that she's practically the deputy prime minister, that she's gunning for the prime minister's job down the road but i think
the fact she's willing to be out front, she's putting her job first and not worried too much about the apple biggs, at least at this point. >> just very quickly, on non-tar rich and conservation duties. very little on the surface has been revealed. my sense is that, as my colleague chris mentioned beforehand, whatever it is that ends up being hammered out, whatever agreement, the likelihood is that it's going to be more geared towards u.s. terests -- u.s. is the strongest country. both countries, mexico and canada, depenald much more on the u.s. than the other way around. once something is hammered out, you can bet that canadiens and notcans are going to try to restore but try to create as
conditions as they can manage with the new rules that might be a bit less beneficial than the previous ones, whereby focusing on those types of elements, which usually have less visibility on the radar screen of news wires, numerous, what have you. so i think that's extra ammunition that the weaker ones are keeping to potentially use. on the minimum wage, you're absolutely right. as monica also mentioned at the beginning of this session, this is a first. and so therefore there's no precedent to understand how these things work. in the absence of an enforcing mechanism. ist have is be talking about
parallel agreements that would create commissions where canadian, american, and mexicans would sit to monitor wage situations in mexico. the problem with that, the issue of soverpblgty, the mexican government, even if they commit to it after the fact, they might and they to the public what's this? this is unacceptable intervention. where else in the world is this happening? we should not agree to this so you're absolutely right in saying that organized labor, both in the u.s. and in canada do not trust mexican government and mexican government em political -- imp policemen station of policy of their laws. they do not trust what their government implements and lastly, on the plurization,
ultilateralization rather than tary lateral. mexico has said, and there's very little this outgoing administration has said. they have not given details about this preliminary agreement that they've agreed to with the united states but one thing he said -- they said is that the same basic provisions regarding tariffs -- because you mentioned about many other trailed agreements having relatively low tariffs -- that there was no way that mexico was going to give in to having different conditions from those that they signed up to in t.t.p., which has not been implemented or the free trade agreement that mexico, in fact, has with the european union, signed in the -- 1999. 2,000 agreement that functions,
and which creates a level playing field, which is consonant, by and large with w.t.o. rules. that's at least what they're saying. >> thank you both. let me make just one observation and i'm afraid we've run out of time for questions. on the updating of agreements rather than going at it regionally. let's step back a bit and remind ourselves that the nafta renegotiation or the updating of nafta would have happened naturally had t.t.p. come into effect. both canada and mexico were in t.t.p. and nafta would have been automatically updated had t.t.p. come into effect. since it did not come into effect, we are in this situation where we were renegotiating youa and in principle, when have agreements that are 20
years old, updates are needed. it doesn't make much sense to scratch it all off and start from scratch because you already have an agreement in place so it makes all the sense to update it. i'm sorry we've run out of questions. this was an extremely interesting panel. i at least thought so. i learned a lot. i hope you all did too. thank you very much for coming. thank you to our distinguished panelists for their time -- >> and a great all of a sudden. >> and a great audience with great questions. and with that, i'm calling the adjournment of this panel. [applause] [captions copyright national cable satellite corp. 2018]
>> tonight on "the communicators," a round table discussion on social media regulation and censorship with ch freedom president berin socha and aaron fed. >> it's not a question of policy or what the government's role should be. we can have an ethical debate about that just like we can have ethical debates about how we behave towards each other. perfectly valid conversation. i don't think that's going to happen. twitter and facebook have been very reluctant, especially twitter, to take down users. when they have it's been extreme examples like alex jones and the fact the president has been continued to be allowed to use the platform illustrates how many twitter has been on the
side of allowing people to use their platform in spite of what their terms of service strictly say, to abuse other users. we're not heading towards a world in which people are regularly taken down. >> what are the ground rules, how do people know how to behave and what are their rights of appeal if it turns out they feel they've been banned by mistake or they have a particularly important, even if controversial point of view that ought to be heard? >> tonight at 8:00 eastern on c-span 2. tomorrow marks the 17th anniversary of the september 11 terrorists attacks. on c-span, president trump will mark the anniversary in shanksville, pennsylvania. live at 8:30 a.m. eastern. on c-span 2, we'll be live from new york city for the annual reading of the names of those killed.
and on c-span 3, a memorial service at the pentagon live at 9:00 a.m. eastern and we'll reair off of the 9/11 memorial services tomorrow night on the c-span networks. >> c-span, washington journal, live every day with news and po ill issues that impact you. tuesday morning with just over 50 days until election day 2018. steven shepherd will preview key races. and then brian jenkins discusses the state of homeland security 17 years after 9/11. be sure to watch washington journal live at 7:00 eastern tuesday morning. join the discussion. >> at the white house briefing, press secretary sarah sanders answered questions from reporters today on a range of issues, including the anonymous ed stormy piece printed in the
"new york times" and north korean leader kim jong-un's letter to president trump. his is about 45 minutes. sarah: good afternoon. >> good afternoon. >> the september jocks report continues america's economic winning streak under president trump, evidenced by strong job creation, rising wages, rapid business growth, soaring consumer confidence and increased manufacturing activity. to go into greater detail i'd like to welcome kevin hassett, chairman of the counsel of academic -- council of economic advisors to the podium. and i apologize in advance for kevin's really bad