tv National Governors Association Winter Meeting - Panels on North American... CSPAN February 25, 2019 12:47am-2:13am EST
be an american? what doesn't it mean to be american? being an american, you do your own thing. it is reinventing yourself. people all around the world come here. they all come together. we are doing it now and we will do it in the future. announcer: voices from the road on c-span. the national governors association has been holding their winter meeting in washington dc. among the topics discussed were technology innovations, digital skills and education programs. we began with a form on international trade. good morning and welcome back to the second day of the winter
meeting. we are here and we are studying today's program with an exciting, timely topic. that is trade. agreement, many counterparts our are eager to learn about the next step. how we can potentially deepen trading relationships under the new agreement. i have the great pleasure of moderating the panel with three representatives -- one representative from each of the countries to gain their insight on the new framework. u.s., we'll hear from the federal government. we are pleased to have larry kudlow, assistant to the president. he is here today to share the on ourtives
international and economic agenda. before joining the trump administration, he served as the in the reaganctor administration. and an economic commentator with the national review. he leads the coronation of president trump's domestic and global policy agenda. standsere to discuss and ready to answer questions about current trade negotiations with ,hina, trade policy generally indeed, talking to him in the back, he said if any of you went to push back on anything that he says or raise any other issue, please do so. when you think of his long, distinguished career, the most
impressive part of his past was he was married in whitefish, montana. kudlow.elcome, mr. >> exactly right. hello, everybody. inky very much. it is quite true. but myi do not look at, wife's kith and kin are from montana. i want to take a few moments, if you will. i want to walk through an trump'sof president trade policy. --course, i want to mention i will not talk china at the beginning. any questions that you have on
china, i will be happy to try to answer, as the negotiations continue. let me begin with this thought. ,he president's view on trade free, fair and reciprocal. many of his critics, some including my conservative thatds have already used protectionist word. i am the free trader in the building, we have had long talks about this and i will come up with the phrase free-trade and reciprocal. in the 1950's, right before the -- i collaborated with president trump. ultimately down the road is zero tariffs, zero nontariff barriers and zero
subsidies. that is the long-range goal. it is the goal to which i absolutely subscribe. that would give us maximum freedom, it would reward competitiveness, it would unleash america's export sales. we have a very strong economy. i am very proud of that. we are the most competitive with all the recent ratings of national organizations putting us at the number one spot. open your doors. face down your barriers and give us a chance. that is why i say three zeros. not get there overnight, but it is a goal. we are making progress. regarding the issue of tariffs, i will say this. president trump has taught me
that tariffs are a negotiating tool. they are part of his quiver. in particular, i want to note on china, where we have been the toughest. no president, republican or democrat, in recent decades has stayed on china's case the way that we have. frankly, using tariffs to do so to bring them to the negotiating table. democrats, republicans. it can be used as a negotiating tool. i think it has -- the key point is breaking down barriers. -- i am here as america's economic assistant. give our farmers, ranchers, autoworkers, manufacturers, give
our new economy intellectual property rights protection, digital protection. opportunity to show you how good we are. and please, take down your barriers. that is our point of view. america first is a trump phrase. absolutely. he will also argue that america first does not believe, does not mean that it is america alone. america first can coexist. we are not just america alone. in fact, i will note that right an, we have put together excellent trade deal.
there is a strong deal. we are negotiating heavily with china and with europe. we are negotiating heavily with japan and we have completed a trade agreement with south korea. america first. we are engaged globally. we are engaged locally. one final point on the general policy. to intent has always been create trade deals in america's interest, or the economy, new economy, all the various sectors of our economy, and a bipartisan way. you may not agree. there was some pushback. i look forward to questions. that bilateral trade negotiations, bilateral trade negotiations is better and more
efficient than multilateral. we did not want a lowest common denominator with processes that do not favor the u.s., and we do so because we want to help every sector of the economy that has the notion that we are bipartisan. as we get into it with my see howes, you will much we have tried to have a bipartisan deal. just a quick review. where we calculate it, the u.s. billion in new auto investment to the u.s. $62 billion and we would to 100,000ughly 80 new jobs.
you may disagree with that and i appreciate it. i might also add that on top of that, a bunch of us are negotiating with auto manufacturers in europe who not only expect to accommodate the new ground rules but to do more, to actually bring in more. we are part of that. 75%. content will auto earning $16orkers an hour. those are record numbers by fire. activityect to union and collective-bargaining activity, particularly to our friends in the south and mexico, we made new ground in every area to promote collective bargaining and promote their rights. to hold the mexican government
standards as well as international environmental standards. up dairy farming issues and financial services. most particularly, we have the strongest protections written into this for intellectual property. which is to say, innovation and inventiveness and creativity for all of us. that is the great strength of the american economy. creativity. that is what makes us great. against piracy and counterfeits, biological, pharmaceutical. we have gotten the whole nine yards. we think it will increase productivity. energy has been protected with respect to various decisions.
we compromised heavily. there is the 16 year cap on the whole project. i am proud of that. colleague, i think he has written a template for new trade deals across the board. i really do want to know -- i do not want to visit us. one reason president trump once bilateral deals rather than large multilateral deals is that he believes they are better for american interest. deals, the history is not good. the flexibility is low. it is the lowest common denominator. i think this idea of bipartisanship -- i hope it will take hold in this congress as we
try to get it passed as soon as possible. as soon as possible. proudlyint, i will say that we are growing at 3% right now in real terms after inflation for the past year. many of my friends on the other side of the aisle but it could not be done. i am always in the great position, first of all, i am a former democrat. i worked for two presidents, ronald reagan and donald trump, who are former democrats. i believe the best republicans are former democrats. that was a joke with other bit of truth to it. [laughter] we are going at 3%. i believe our policies for lower tax rates for individuals and businesses is working. i believe deregulation is working and i also believe
policies of trade reform are working. i have so many distinguished democratic economists on my tv through theows years, and i can never get angry at them. i am trying to bring them over to my side. at the moment, the numbers look good for us. and if it is not true. , i will have to toe the line later on, i get that, but we will stay with our policies of low taxes, low regulations, trade reform. folks, i will conclude, the unemployment rates are low, the individuals -- african-american, women, and their labor participation rate is rising quickly now. the biggest rocketship within those numbers is the entrance of women. people from the unemployment ranks are now moving back into the employment ranks because wage rates are rising after
inflation. we are very proud of that. i think the country has unlimited potential. my former boss, president reagan , used to say, "the best is yet to come." my current boss has the same exact sentiment. i believe in capitalism, not socialism. every night on my tv show i would begin by saying "free market capitalism is the best path to prosperity." i also believe in global cooperation, so does our administration, and i believe america is open for business. and i will say to you, as assistant president for economic policy and head of the national economic council for both parties, i say to you genuinely, or both parties, tell me what you're thinking. tell me where we can be helpful, what you would like us to change.
i think this is the greatest country on earth and it will remain so. it is my great hope we will work together to realize our greatest potential. thank you. [applause] >> ladies and gentlemen, please welcome our panelists. >> michael? >> thank you. >> thank you for that, i appreciate it. thank you mr. kudlow, for the update. i have the sincere pleasure of introducing our distinguished guests from mexico and canada. from the mexican federal government, the honorable jesus seada, deputy minister of foreign affairs. [applause] played anister seada
crucial role in renegotiating nafta. governor ducey and i had a great opportunity to spend time with him doing the presidents in operation. i also want to welcome of the honorable mark garneau, minister of transport of canada. [applause] it will be pretty amazing to be the minister of transport, not many people can say they were also an astronaut. and also a former military officer. [laughter] thank you both for determining here today, we certainly look forward to your insights on the new agreement. i will turn to the deputy ada.ster se would like to hear your thoughts on the agreement. will go straight to the point. i would like to make my remarks in one opening in three very short fax.
to express my admiration for this fantastic conference, the governors of the united states of america. i want to thank its chairman, governor bollock, for the invitation, and it is an honor to be with you. first act, i would like to stress something that mr. kudlow already alluded to, which is that the world is really moving increasingly to trading in the s.oc it is cheaper to transport, information is free around the inld, policies are more open many places, and the result is we have a hyper integrated europe, but we also have a different trading entity with about 27 countries increasingly integrated, despite anxieties about brexit. bloc, not only
the 27, but also countries around them. then you have china, which has become richer in the last 10 to and bys in particular, becoming reacher, it loses some of its edge, but it is investing massively in neighboring countries like vietnam, bangladesh, thailand, including other economies like japan and north korea. they have become the largest economy in the world. so, what about north america? north america has to keep up and preserve its leadership. the number one economy in the world, the most dynamic, but always in need to reinvent itself. there are serious difficulties, and another they are being addressed with the u.s.m.c.a.,
act 2. what does it u.s.m.c.a. brent? ,ct 1.5, a massive updating developing rules where we did not have rules, for example in digital trade or labor. 2, the maint thing, persistence of donald the newvision, negotiation, the new agreement makes it more demanding to bring ,rade into the production chain the so-called was a haulage and moreles of origin become rigid. it is difficult to bring parts from other countries to bring into your bmw or toyota in the region. instead, an incentive is created for them to invest, bring investment.
investment has every reason to come in a much more noticeable way into north america. instead of being able to bring from germany or career 30th percent of the cost of your car, you can on the bring 25%, not even concentrated in a block like the engine, everything has to be manufactured here, 75%, of which 40% has to be high wage employment like to pay in canada and the united states. so an incentive is created for mexican companies to increase labor standards and labor payments and all that. so it is a pro-investment regime, that is my bottom line. of course, trade, but pro-investment. it is a good investment that will help preserve and develop the efficiency of the region. , car parts across
borders within canada, the u.s. and mexico after eight times, coming and going, crisscrossing the region to achieve great efficiency. we have to protect and develop that so that we have an efficient region. states is a most formidable engine of growth in the region, but canada and mexico bring a lot to it. mexico brings a young population, efficient cost conditions for certain ,ctivities, a growing market same with canada and the united states. then finally, the world is being more and more integrated. things that did not used to be part of the trade rules like labor standards, it was a tough discussion in nafta. the democratic party warned that when negotiations were completed and there was a big effort to
bring in labor standards and environmental standards, it was not possible because negotiations were complete. it stayed as a side issue. now, it is a central part of the new negotiations, the new agreement. labor standards, environmental standards, anticorruption. a whole range of mechanisms to support what you need to support , and will support, which is small and medium enterprises. them.e always to help not subsidize, but have them be efficient. all that is what are call a strong social agenda that will be the benchmark for future trade agreements. increased efficiency through integrated investment, and strong social agenda. there can be nothing better than that for the united states, canada and mexico. thank you. : thank you,lock deputy minister. i very much appreciate you being here. welcome. [applause]
bollock: before diving into questions, we are excited garneau,from minister carne his perspective on the agreement. >> thank you, governor. it is a pleasure to be a winner address this forum. my strong association with the united states, lived for nine years in houston, texas, had the honor of being part of the astronaut program, sleep -- flew on the challenger, i have many relatives who are american citizens. i have two children with american passports. i work for a long time in the u.s. navy and with nato operations, so i have a long association with the united fish in the care very deeply -- with the united states, and i care
very deeply about our relationship. we are here to talk about the u.s.m.c.a., or as we call it in .m.a,, but whatever it is, it is a great deal. [laughter] we came up with what we found to be a great deal, and we signed it last fall, and i believe that the united states feels the same way about it. president trump has said this is an extremely good deal for the united states, the u.s.m.c.a., and to quote mr. kudlow, yes, the resident did say at one point that as far as he was concerned, imposing tariffs on steel and aluminum was part of the negotiating process, but he also said that once we achieved a deal that was good for the united states, and he has said that, that those tariffs would be removed. so in our situation here in
canada, we can begin the ratification process on the u.s.m.c.a. as of the 19th of march, and we want to go ahead and do it, because it is really good for both of our countries. canada and the united states have the largest trade in the world between two countries. 2017s over $680 billion in , and for 35 of the 50 states, canada is the number one export destination of the products made in those 35 states, and in many other cases, the second-most important destination. we want to ratify the u.s.m.c.a. but we have a serious challenge in canada. it is not the fact that we have an election year this year, which we do, and which will cause us to move towards other priorities in the coming months, it is a fact that those tariffs on steel and aluminum are still in place.
those tariffs affect not only canadian workers and industry, they also affect u.s. workers and industry. there is plenty of evidence to support that. at this point, those tariffs are and unnecessary tax which is weighing down on both countries. would be remiss if i did not say that this would present us with real challenges as we begin the process of ratification in canada. i don't know if we are going to get there. we would very much, and i am making a plea to the governor's, i am making a plea that you bring up with the president of thatnited states the fact these tariffs are a serious impediment to us moving forward on what is the best trade deal in the wor world. the u.s.m.c.a. is important for
both our countries, and it will period of long haywar stability and investment, but we need to move away from these tariffs, which were invoked under national security reasons, which is frankly logical. the united states has $2 billion of surplus in steel with canada. thany more steel from you any other country and all other countries combined, when we are talking about what you export in steel. in terms of aluminum, yes, we do sell you more aluminum, but the united states has a need for 5 million metric tons per year for its own requirements, and you million.uce 2 you need to import, and canada's one of the countries that would like to continue exporting is aluminum to you without tariffs. we can producee
aluminum because we have lots of energy in our country. it is a march more -- it is a more challenging situation here. not atm saying is we do this point, now that we have secured a good deal on u.s.m.c.a. cometh neither those tariffs in place. thank you. gov. bullock: and if i make him thank you to the minister. [applause] bullock: ambassador lighthizer and his group, we are working on that, we are hard at work on that to solve the issue. >> i will ask a question, then open it up to all of you to ask a question. first i would say that, some have said that this is much i do about nothing, that it is just .osmetic changes to nafta is that a fair criticism? if it is not, from you all's perspective, what are the most significant differences that
both governors and people of all three of our countries should understand and highlight? mr. seade: there was a massive , of the mechanisms to solve disputes and problems. the dispute settlement system of date,y kind of out so there were a lot of ambiguities that were cleaned, updated, farook was created for certain situations. secondly, the investment part was really important. integrating the region through investment. and perhaps third and most was the social agenda. creating roles for labor and we do not have any, for environment, for many other areas.
are in this together, it is no longer an internal business, we are an integrated economy, so we need those rules. creates and changes the roles in a very important ways. -- thatnk that minister is a really important point. thehe past, including original nafta, i actually served in the reagan administration when he moved toward the u.s. canadian -- i was the beginning of it. -- i was 13 years old at the time, so -- [laughter] -- but our leaders were very close and they both shared the vision. and i will give much credit, subsequently, the clinton administration, who brought in the mexican side, i missed much
muchcism -- amidst criticism and hostility in politics, did a great job. my view. ok. wrong, it wasi am who kindident al gore onkicked ross perot's butt the larry king show. i have been around for so long, but anyway, that is another point. i love your point about investment, in labor, environment, we have a current supervision we have never have before, we have protection for intellectual property rights that we did not have before, digital, financial services, we managed to come to an agreement on agriculture and there he farming, all very hard things to do, and i am just looking at
this side-by-side, yes, it is better. you know what else is better? we got a good deal done and the supply chains and business activity continues. andntially uninterruptedly, this will be the most prosperous trading block the -- block. >> nafta was a good deal when it was brought in 25 years ago, but the world has changed in ominously. i don't want to repeat what my colleagues have said here, but the fact that there are provisions with respect to labor and the environment, the fact that we are taking a more focused approach on intellectual property, these are all good things that needed to happen. so i think this new deal, the
u.s.m.c.a., is one for 2019 and is a necessary exercise. in six years, we will review it. tradeare evergreen arrangements that have to take into account changing circumstances, but i think we are in a good place now. gov. bullock: do any of the governors have questions? governor herbert? gov.into account changing circumstances, but i think we are in a good place herbert: ths an honor to have you all here to help us understand trade and some of the challenges we face with our friends to the north and south. the longer i have been around the national governors association, the more i have come to appreciate that for most of us, our goals are the same. the outcomes you are looking for the same. we sometimes differ on process, a pathway to get there, the role of government, distribution of wealth, all those things. which is why we have different
parties. one thing we all seem to agree on, though, is fair trade, free trade. on thingsn fair trade like beauty is in the eye of the beholder. mr. kudlow, help me understand, where we get in this mess we have so many different trade agreements with so many different countries? should they be different? or should every trade agreement with every country be exactly the same? good point, governor. i don't think every country, every trade deal in every country should be the same. i think each one has a unique characteristics. we are engaged right now in trade talks, i might add, intense trade talks, and we are working with europe, which has similar but different situations. we are working with japan, which has similar but different
situations. and, of course, we are working with china, which has in many respects, the most differences. argued forrump has trade relations rather than multilateral trade deals. and i know not everyone agrees with that point of view, but he makes a couple of points that may help answer your question. one of the points is, these large-scale multilateral deals frankly don't help the united states as much as they should. secondly,states as much as theyn process is actually run against the united states in many cases. we are all working with the wto for reforms, yes, that would be a good thing if we can do it.
we have to make the best deal for america and america's, shall we say, different economic sectors are constituencies. my emphasis on bipartisanship comes from the president's own thinking. it may not always appear that way, i understand that, i don't want to swim out of my lane, i am not a political expert, but we are cognizant and sensitive to the fact that certain parts of the country have certain priorities. they may be democrat or republican, red state or blue state, but we want to accommodate everybody. i don't think you can do that on these big multilateral deals. maybe at some future point, if tradee bilateral agreements, that we can get more to a multilateral -- the minister mentioned trading blo
cs, maybe so, but the president believes america has not had a good deal. gov. herbert: let me follow up if i could. if the goal is to have no tariffs and everyone this name, which is what you said in your opening dialogue, i understand that if everybody is treated the same, it is fair. but you just said that we probably don't want to have or we are not going to have, or there are exceptions where we have different trade agreements with other countries for a variety of reasons. those sound counterintuitive if we are trying to go to equal cross-border -- and then say that there are exceptions with other countries. know, it is aou kudlow intellectual thesis. here is where we would like to go for a long period of time, but it is not easy. and again, this is absolutely not a political statement.
we believe president believes that we believe, and the president believes, that prior administrations and congresses under both republican and democratic majorities have not done the job. the goal is, yes, zero tariffs, and subsidies. meanwhile along the way, we want to make things better. that is the point i am saying. i do think that a two can work together. it starts with the three zeros, i may or may not be around to see that in my lifetime, i get that, but i think it is a worthy thought. i am just trying to say that if we can have free, fair and reciprocal, we will all benefit. thepend a lot of time with farmers, with the unions, with our cousins in mexico and canada , we have a lot of different things -- these are hard things to do, as you probably know.
gov. bullock: governor sununu? gov. sununu: what state are you from, sir? >> we do a lot of international trade. everybody wants to see a deal done. i think everybody would agree that it has a lot of good provisions. there isfs stink, but no doubt that there has been value in enjoying everyone to the table and getting something done. the other major point which was alluded to, is that long-term, it is a big domino to fall, to put pressure on asia to get these subsequent deals done, speaking solely from the u.s. perspective. but from a north american perspective as well. do youto ask larry, how see the tariffs come into play through the u.s. ratification process? is that something that will be done in parallel? do you see the administration doing it alone, or congress taking it up as the ratification
process moves of this bring? also, what is the ratification process in mexico? canada did a similar process across the border? seade:-my start with the last question, it is similar. jurisdictionthe responsible. active fromry very the end of negotiations. even before we took office as government in december, but the change in the legislature have been in september, so we have been active with them explaining this many, many times. but i thinkncerns, on balance, there will be support. i am confident that there will be support with respect to the u.s. decision-making process.
i hope there will be support, -- maybe will be much higher but there would be disputes and areas that are painful. but on balance, it is a good deal and i think senators on balance will go for it. when? we are carefully watching the united states. we will try to kind of move in parlance. dir. kudlow: it is a pleasure. tpas, as yous of know, we have to have them voted in the house and senate and we are moving towards bad. it is a little bit under the radar, because chennai is in town, but actually, this is a huge priority for the united states and for our administrations -- because china huge town, but this is a
priority for the united states and for our administration. , who i might add, i interviewed three times on hauser i think meetings.them 101 we have to get them through. same with the senate. an i make a broader point? , u know, we have a long positive alliance with the european union with mexico with canada. my god, canada has stood with us with so many years in so many difficult areas.
the china thing is tougher. we may -- i'm happy to take questions on china if i can help you on that. the china thing is tougher. so i know sometimes our team is isolationists or anti-globe lists or something . at the u.n. meetings last fall, e.u., thetogether the united states and japan, a tri lateral statement, which was screedally a very strong against what was called nonmarket economies meaning china. and i might add our friends in canada and mexico were well aware of this and approved of it. i helped sell it for the litehauser. bob
the reason i raise that is i want our chinese friends to know full well that what we used to call the western allies stand united to create a new, global trading system governed by the rule of law. which has really broken down in the last i don't know how many years. and does that's late the chinese? well, let me put it differently. does that get their attention? i believe it did. i believe it did. little things like that and we promoted it. and i -- that's the kind of thing -- there's international politics going on here and the great game is still alive. they wanted to deal with the e.u. and the e.u. said no. they rather come to america. they wanted to deal with japan. japan said no, they're staying
with america. on the eve of the huge conference in singapore, i believe, this is february so some time late last fall, on the eve of the big conference where president xi was to give a big speech, the french and german ambassadors wrote a scathing editorial -- i think it was in the f.t., but i'm not sure essentially drawing on the idea that we cannot tolerate nonmarket economies because of their harm to our economies. and they got that message. now, right now, president trump and president xi have an improved relationship and they'll probably get together at some time the end of march, probably down in mar-a-lago to put the finishing touches on a deal, we hope. i'm not here to divulge. but i'm just saying that's the
idea. but we're putting pressure on them. and my second point is besides the legislative process, passing usmca would be so helpful as a show of unity here in north america and as a show to china that we are unified into this new world of trading. it would just give us a leg up. it would give us momentum. i'm really making a pitch here to you, folks, on both sides of the aisle to help us in congress with umca passage. and we will do anything. you can call me any day or night. litehauser true for and for mnuchin and for the president. that's how highly we value this umca deal. it sends a signal to china that they have to play by the rules. >> thank you. >> very good. kudlow, as we wrap up, i
would like mr. garneau or the secondtory to provide any closing comments. >> thank you. i won't belabor the point they brought up in the beginning. if the tariffs on steel and aluminum are removed, canada will move expeditiously towards the ratification of the usmca. we believe very, very strongly in it. we will also drop the $16 billion in counter tariffs that we felt obliged to impose and which we know are affecting many american companies. so i don't think we can be any clearer than that. we want to see usmca ratified in canada. >> yeah, and -- >> i got the message loud and clear. [laughter] >> if i may say, there's no more vibrant democracy than your country. you have an amazing reachness of
debate and views and all that -- richness of debate and views and all that. and of course, it's not only expected but good that it should be a difficult debate on omething as important as the usmca. but the division of labor among politicians, i get the impression the governors have a different role from legislators. you are close to the ground, close to the economy and employment. so i'm not going to say that everybody supports the usmca not at all. i it would be presumption but unbalanced. it's a group of top politicians that understand the benefits of this. there's more debate on -- in the hands of those that have to approve it. echoing y would call at my good friend mr. kudlow just said would call for you to
help us hold the process, to guide the people in the white house, to hope the mexicans so we can extend so we can help with this or that participation whatever the canadians how to pass the message to whole political parties in the united states for this to go through. you have a direct line to the real thinking through your connection with the economies in your states. make it happen. thank you. >> the partnerships between the three nations have been long, and our histories are woven together. and we need to look forward to continuing partnerships long into the future. thank all three panelists for being here today. [applause] >> governor's find that they want to increase the amount of jobs in their states. they want innovative technology. they want direct investment from
companies throughout the world, and the way to make that happen is they have to engage globally. the national governor's association recently launched n.g.a. global. and the purpose is to provide technical assistance and help governors make sure that they're developing the relationships and getting companies throughout the world to consider their state for further economic development, for further investment, and for further job creation. it's really important for states particularly in nevada to trade globally because it's now a global economy. one of the frustration for companies is they don't want to have to do things 50 times. by having n.g.a. global it is a clearinghouse. it is a great partner in terms of directing foreign countries to specific states to fill specific needs. our engagement has placed nuth the global math and foreign direct investment while forging stronger, educational and political relationships around
the world. >> this is an opportunity in one place to get access to more people to create more jobs in the state. we've been very fortunate that we've had the president of ghana, prime minister in places like us a trail y and canada. and what governors find, they learn from those countries. but they also develop relationships. it allows them to encourage those companies and those countries to consider investing in their state. >> over the years, we've had a very solid history from our trade relationships that have companies that have built up on bode both sides of the boreds families that have connected on both sides of the border. the only way we can maintain and enhance and prosper together is to have these sort of relationships with the -- with the elected officials. >> it's critical for states to engage in issues globally around trade and investment. mexico is arizona's number one trading partner. and our neighboring state to the
south is sonora and we are blessed and lucky in arizona that we have a leader like governor claudia pavlova. she's the first female governor in the history of the state of sonora. [speaking in spanish] >> arizona and sonora find common ground and share goals on things that we can work on together like economic development, like public safety. so i think when we look for the common ground lead tore leader on things we can do to improve the prosperity of our state to make sure that it's more peaceful and safer, this is going to benefit to the state of arizona bring jobs to our state and bring in jobs to her state
as well. >> the national governor's association offers enormous amount of services to governors, their cabinet secretaries and their staff to insure that they're learning and they're sharing information across states. >> we're not democrats or republicans. we are the c.e.o.'s of states that have got to build coalitions to solve problems. >> and it's building those relationships, finding the best ways to move our states forward individually often it's done by working collectively. >> i can look at things that have been successful in my administration. they came from other governors. >> as a governor you're one of ooh it's a very exclusive club. you're dealing with issues an problems that most other people don't understand. to have the ability to is it down in a room with your colleagues that may be sharing similar experiences and having to open and frank discussions and the beautiful thing is you really can't tell who the republicans and the democrats are. if i didn't have a scorecard with the new governors, i
wouldn't have any idea. >> nga was a fantastic resource. there's no monopolies so i reached frequently with n.g.a. >> they really have a best practices. there are vendors and people that can help once you know who to contact, where to go to get the information. >> there are just so many ways to tap into that expertise and to the knowledge and to the progress that n.g.a. helps to drive. >> good morning, everyone. time to wake up. i'm the arizona governor doug dusey and chairman of n.g.a. economic development and commerce committee. and it's my honor to be here this morning joined by north carolina governor roy cooper to share this session on
entrepreneurship. i think we all know in this new era and new economy this is a time when companies with start and scale anywhere in the country and anywhere in the world. so to maximize these opportunities, we governors must work with private industry to create an environment where we can innovate and flourish. the conversation that we're going to have up here today and it is going to be a conversation open for questions will provide us a chance to share the successes that we've had while cultivating a culture of entrepreneurship inside our states. and i'm very excited to hear hour organizations like revolutions are helping our state's disrupt and innovate every sector of our economy and are thrilled that steve case is joining us this morning. let me talk to you a bit on some of the things that we're doing in arizona to have an open for business attitude and have a competitive environment that's very dynamic with other states.
we've had a moratorium on rules and regulation that have been renewed every year i've been in office. we've paved the way for self-driving technology in arizona and helped the wemo lift. and both national and international companies to the state. entrepreneur can crowd fund in arizona for equity. we've been the first state in arizona to pave the way for 5g. we're also the first state to create a regulatory sand box program to develop and task thintech products and services. so these are things that we're excited about and things that we want to hear more about what's going on in other states and ideas that we can apply in our states. and with that, i want to hand it over to my partner on the commerce authority and economic
development committee and that's the governor from north carolina. tell us what's going on in north carolina. >> thank you, governor ducey. i want to know where carolina where people are better educated, where they're healthier, where they have more money in their pockets, and they have opportunities to live more abundant and purposeful lives. the third grade class i told that a few weeks ago really loved the more money in your pockets part of my mission statement. but we want a prosperous north carolina and a prosperous country. we know that innovation and entrepreneurship is a way to get companies started and they grow and they create jobs for a lot of people. for example in north carolina, we have the company pendo which started with todd ohlsson who is in raleigh. he worked with cisco, google, red hat, started growing this company. now they're expanding.
they could have gone anywhere in the country with their expansion. they were being courted. but they were -- decided to stay in raleigh, north carolina because of our amazing talent cluster there. we have some of the greatest universities in the world in the triangle area in charlotte where global banking capital. what we're doing in north carolina is trying to kick start innovation and entrepreneurship. north bout 1.6 million carolinaians who have their jobs in small business. that's about 44% of our private workforce. so we know that we have to work hard to give people opportunities to innovate. now, there are some obstacles that people are facing. one thing with young people is that we have about $41 billion in student debt in north
carolina. there are a lot of young people who have to get jobs with companies to help pay off these loans and it's much harder for them to be in a position where they are able to innovate and they're able to start their own companies. so i've appointed a north carolina entrepreneurial council to try to help us deal with these issues. issues of student debt. issues in making sure that entrepreneurship and innovation is available for people of color for women. we are -- we are the state that has the largest percentage of women in our tech workforce and we're proud of that. and we're encouraging a lot of efforts that are out there right now. the american underground has been named by cnbc as the start-up hub of the south. and we're working, of course, to collaborate and bring innovators
together trying to attract that capital. we've also worked hard in the area of life sciences. we have the north carolina life bio technology centers that provides loans and grants to worthy start-ups to help them get going and they provided funding to over 3,000 projects in north carolina. but we still have a lot of challenges. there's a lot of rural areas with lack of broadband. we want to make sure that not just tech start-ups and not just life sciences start-ups but all kinds of businesses can start-up and innovate whether it's a barber shop or a farmer that wants to grow their business. look forward to hearing from steve today and for -- look forward to your questions because we know there's a lot going on across the country to try to make sure that we stimulate our innovation and
entrepreneurship company -- economy. >> thank you governor speaker. steve case is the chairman and c.e.o. of revolution. this is a d.c.-based investment firm that partners with entrepreneurs to create businesss that are built to last. it's worth noting that in 2014, steeverpb revolution launched the rise of the rest, a platform to shine a spotlight on entrepreneurs starting their scaling businesses outside of silicon valley, new york and boston. prior to reeve lution, -- revolution i think we know that steve co-founded america online which changed the world and changed the way that it became business and became the world's largest online internet. i know it certainly changed the way we did business at cold stone creamy. steve is the chair of the foundation which he established with his wife gene. together, the cases have invested in hundreds of
organizations, initiatives and partnerships with a focus on leveraging the internet, an entrepreneurial approach to strengthen the sector. i want to welcome steve case to the national governor's association. thank you for being here. and i want to turn it over to you to hear from you. >> first of all, thank you to n.g.a. for focusing on start-ups and trying to level the playing field. it's worth remembering that 250 years ago it was a start-up. .t was just an idea entrepreneurs kind of led the way in thing a curel revolution and in the industrial revolution and most recently led the way in the technology revolution. they went to the strongest economy and therefore sit global influence. the question to me are we going to continue to maintain that
leadership position? i think we can. i think we should. but we only can, i think if we level the playing field. and so everybody -- everywhere really does have a shot at the american dream. i was surprised eight or nine years ago. the national advisory council innovation it's part of the ommerce department that he led start-up america and i worked with president obama and helped pass the jobs act. did not realize until then essentially they're grown by small businesses. big business accounts for a lot of jobs but does not account for a lot of growth. we need to focus on start-ups if we're going to get the job creation engine going and not every start-up wants to or needs to raise venture capital but
there is a correlation with the ones that want to create the most jobs. here's the data that led us to focus on this. last year in this country, 75% of venture capital went to three states, california, new york and massachusetts. got 75% of our capital. california alone got 50%. the other 47 states fought over 25%. last year 90% went to men. even though we're great and we're all proud of it, the reality is it does matter where you live. doesn't matter what you look like or who you know. that's why we're trying to get capital from the coast back through entrepreneurs. in fact, 125 companies in 35
states. and we're going to keep at it. we believe this is a way to make sure there is opportunity for everybody and deal -- all these governors have many challenges. i respect that. but i'm bothered by the fact that a pew study came out that said that 75% of americans are anxious about the future. fearful about the future, this disruption that my friend in licon valley tend to celebrate. we know that technology is disruptive. 90% of us worked on farms. that the fact that a.i. are going to disrupt jobs is not a surprise. the question is can we off-set that by creating jobs in -- all across the country not just on the coast which is why this is so important and why i'm glad he n.g.a. is making a real focus. >> thanks so much, steve. steve and i share something in
common. at th started our careers procter & gamble. they are looking for best practices that you can apply legally and ethically and with attribution. we certainly did that at cold stone creamery. we looked for the best franchise models, the best unit economic models. i'm curious as you travel the country, what model doss you see in other states that governors should be aware of? and what best practices do you see among entrepreneurs so that they can access capital outside of the markets in boston and new york and silicon valley. >> there are some things beginning to happen and different states as laboratories have interesting things as we traveled around. we now visited 38 cities. we've done the bus tours a cup only times a year. 10,000 miles. we've been all over the country like nashville, new orleans,
phoenix, raleigh, durham and buffalo, and chat knew ga. they are interesting things happening. there is a sense of possibility there. and i think the key thing to watch is governors is you're looking for particular metrics is tracking the flow of capital. are you getting a greater share going forward? and also fracking what's happening with talent because what's happened really all across the country i'm sure all of the states is an enormous brain drain. some people that were grown up in your community went to your great universities then left, usually to the coast because they thought the opportunity was better there than it was if they stay home. how can we slow that brain drain and treat creath a boomerang. i think the three things to focus on, i talked about it in the book. one is driving for collaboration. it's amazing to me as i've traveled around that even though there are interesting things happening in different cities often even in the cities including some relatively small
cities not awareness of what's happening and the partnerships that are natural with the mayor and the start-up companies and the mayor would have the idea of driving more density, driving more collaboration is critically important. celebration is also important which led to the creation of start-up america. this is something where the vernor can use their bully bull pit to build better services to make our lives better and sometime rebuilding and reimaging the communities. president obama hosted the first white house demo day where we demos. nd this country care about innovation. i encourage you to do more of that. the final one is the capital. what are things you can do?
i know they've done angel tax credits or back some of the regional venture funds or getting more capital backing those regional venture funs. there is more capital available to entrepreneurs and different parts of the country. >> thank you. >> governor cooper? >> yeah, you mentioned earlier about the abysmal statistics of people of color and women being able to get into the start-up economy. i think companies have found that diversity of the workforce makes you more profitable. and in north carolina we're working to encourage diversity. ve set up a historically underutilized business effort to provide more contracts to minority businesses. we see in our start-up world an organization that is called lack force at the american underground. i'm trying to get to young women early at adge age to get them
interested in stem courses. what can we do to give more opportunities to minorities and women in this innovation economy? >> it's a huge opportunity. there are some communities that are really focusing on inclusive entrepreneurship that can bring more people into the innovation economy. but the reason is a challenge. venture capitalists say that the best way to be successful in the future is to -- be good at pattern recognition, seeing what's successful already and do more of it, which kind of makes sense. the problem with that is in the past the things you've been doing are only backing certain kinds of entrepreneur who is look a certain kind of way that happens to be in certain kind of places you're missing human potential and innovation potential and entrepreneurial
potential. the second wave has been services, google facebook, running on top of the internet. and the third wave is integrating. things like health care, trance por -- transportation, food, things like that. we need everybody in the playing field all across the country if we're going to win. some of the ex-peer tease in each of these sectors as you know are in the states in the middle of the country not just on the coast that are getting a lot of venture capital. some of the people that we bring are going to be people that are the usual suspects that venture capital have backed them. every city we visited we've done a pitch competition usually about 100 companies apply to pitch. we pick the top eight or so. we invest in, you know, the winner of the pitch competition. half of the last 10 pitch competition are won by women. they're more intentional about it and you make sure that you
have -- you're considering actively trying to source ideas start-ups from a wide variety of places reaching out to different communities and give them the opportunity to be on stage and tell a story there are some companies being launched all acrots the country. but it requires that intentionality and some of the efforts of american undergrounds and many citys that are trying to make inclusive entrepreneurship kind of a big focus and it's focused more on inclusive, focused more on purpose oriented companies which s a big trend focused on creating an interconnected community. that's going to be the secret -- e to drive enter entrepreneurship all across the country. >> the governor of north dakota, doug pergham.
steve, i want to start out with some attitude and thank you for everything that you've been doing not today but for the last decades to try to draw attention to this issue as somebody who has espn my life trying to attract capital and talent back to the midwest when it was all flowing to the coast. i really appreciate everything that you're doing. but you talked about collaboration and celebration. you've been to all these cities but maybe share for the governors what do you think has been the best collaboration models and the best models and how governors can support communities that are working together to support attraction of talent and attraction of capital back to the communities that have not been part of the 75% of d.c. dollars. >> probably 25 years ago, 30 years ago when l was a little company. the internet was still -- we started in 1985. what's that 30, 40 years ago?
only 3% of people were online and they were online, an hour o week. so most people didn't know or hear about the internet. but the governor focus ond planes and building a software company. we were you know, colleagues and trying to get people to a pay attention to what we were doing. i should say because i know we have limited time. we did public last year a playbook on lessons learned. people search "rise and rest: entrepreneurial playbook." what are some of the key things to focus on? on this specific question of driving more collaboration, it is really using your convening power to bring people together partly to shine a spotlight but mostly to bring people cross sector together. all is surprising to me that some of the large companies in your -- in your cities and your states the fortune 500 companies for example need to partner with
the start-up to stay agile and understand what's happening. the start-ups in this third wave is not about the software anymore. it's how you get integrated into health plans, how you get embraced by doctors and nurses and hospitals with much more of a system effort. the food system is similar. it's a systems effort. you need to build these connections by understanding what's happening under the periphery around the fringes. small companies need some of that credibility that the big companies can provide. the university are obviously a great place where, you know, people are learning things and ideas are being germinated and the level of expertise there and the ideas being generate are fabulous. but most are not good at getting those out of the lab and into the marketplace. we encourage more of that
entrepreneurship connection are important. different people are doing it in different places. we're delighted to see some of the examples that have percolated. if we focus on the future of -- as you know, every 25 years half of the fortune 500 turns out. half. so if you're not focusing on the start-ups today, they're almost like planting the seat corn. some of your big companies are going to fall by the wayside and you're not going to replace it by new companies which the area of celebration and capital around start-ups and trying to create that level playing field. but there are more specifics in our rise to rest playbook. >> we've got time for two more questions. we're going to go to governor guerrero and followed by governor hutchinson. >> thank you very much. i get so excited when i heard all your comments because there
is an idea that i wanted to do in guam in terms of innovative entrepreneurship and that's aqua culture, growing fish. and so one of the things that i wanted to do is partner up with our guam community college so that we start teaching our senior students, junior, high school students about aqua culture. and then when they graduate, government could help them by giving them a pond and learning how to grow it. and then learning the marketing, the business and so forth and that.oing out and being you're common about collaborating with the universities. our guam university has done the research for aqua culture. they have a difficulty bringing it out into the community. so i want to hook them up with our guam economic development
authority. so i guess i wanted to say how do we get these venture capitalists to come to guam to help us with the equity and maybe a how-to, bring it out themthe community and make successful entrepreneurs. >> first of all, i grew up in hawaii. one of the things that not surprisingly is a key part of the playbook is that for every state -- every governor to focus things -one, two, three that play to their strength. whether it be farming in nebraska or aqua culture in guam or health care. you know, ohio or minnesota or other kind of places. they'll figure out what are the sectors. don't try to replicate silicon valley. don't try to compete with the social media companies. figure out what are the things that are unique in your region
and focus more time and attention and driving those things. the second piece on capital is just trying to tell the story of what's happening in your -- in your city, state, region and try to get more of those venture capitalists who do have the money on the coast willing to get on planes to visit. poethat is helping cue rate -- potential opportunities. there's a growth state. make it a little easier for that money on the coast to find the right entrepreneurs and the right opportunities and other places around the country. >> thank you, governor hutchinson. >> what a terrific panel. thank you for leading this. thank you, steve for your investment in time and innovation. in arkansas we are doing as other states are in terms of education. e greatly enhance our computer
programs, man dated it in every school. we wanted to attract the talent or keep the talent in arkansas rather than losing then to the -- them to the coast. we have put $2 million every two years into accelerator programs bri k top talent and medical services, innovation in technology to arkansas having them mentored there. trying to attract those kind of companies to arkansas as well. but i wanted to ask you about your first recommendation on collaboration. because one of the things we're trying to do is to have innovation and technology council to bring those together. we just had a summit for that. how can we do this better? what's the key to making that collaboration successful to make sure the innovation community knows who else is there and can feed on the energy of each?
any advice? >> i had the opportunity a few months ago to participate in a heartland summit in bentonville. focusing on driving some of this innovation in particularly some of these cities and some areas that have been left behind. that's an example how you're bringing people together. crosssectors there are some people the nonprofit sector and driving that, you know, kind of discussion and shining a spotlight on the issue both as a problem to solve and as an opportunity to seize. it really does require that convening. it requires that personal engagement this leadership that obviously governors can provide. i know you have limited time in the day and have a zillion things to focus on. one of the things is to position your state as start-up state and position the state where capital should flow and talent should stay or return or come from, you know, the first place an figure
out ways to do that in a consistent way and make it clear that it's not just like a one-off photo op. it's a core part of your strategy in one of your top priorities. and i also encourage all the days even though i have great respect for amazon, jeff bay zose has been a friend for 25 years. he's an investor in our fund. but i also would encourage governors and others as well to cuss fo cuss less time on luring head quarters from existing companies and more on birthing new companies. if half of the money that had been put on a table by 235 communities and half of the energy that went into making a bid to get amazon's second head quarters went into the start-up sector and into the communities. they may very well create the next amazon. so there's a focus. i understand some of the politics. so if you're going to have to take a shot at it.
and the photo option -- it's more immediate than the seed corn planting. but in this third way, i really do believe there was an opportunity for the big iconic company tens of thousands of employeees to be everywhere. the partnership is important. but the expertise they're not just on the coast. the policy regulatory issues are super important. much more important than they have the last 20 years. can you win? can you win the battle of capital and figuring out ways to focus on a celebration, focus on the collaboration are the best ways to do that? >> thank you very much governor. what great closing comments by steve case as well. i want everyone in the audience that as you're considering fostering entrepreneurship, i
paper inhave the white entrepreneurship. i want to give a very special thanks to glove nor cooper for co-chairing this committee. i want to thank you very much, steve for coming out early this sunday morning and sharing your knowledge. >> it's an honor to be here. thank you very much. > thank you. [applause] ladies and gentlemen, we will ow take a 10-minute break. >> good morning. i'm doug bergham governor of north carolina -- north dakota. thank you, the first lady was clapping for me. we've