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Watch: The Future of Global Trade

My name is Matthew Goodman. I work on international economic policy here at CASIS. And I'm delighted to welcome you on behalf of CSS and assignment chair. This is part of a series that we do called the economic statecraft speaker series. And it's generously supported by Alcoa Foundation and we appreciate that support. We do a lot of things under this series, but today we thought it would be quite topical to talk about the subject of trade which has been in the news if you hadn't noticed recently. And so we're going to have a, we've got a dream team up here that I'm going to introduce in a minute to talk about this and Mike from an after after that from 1130. But let me first make a couple of administrative announcements. First of all, in the case of some sort of security event, basically follow me is the bottom line instruction. If they're exits behind here that go down there, stairs down to the alley, or you can go out fraud and there's a little park across the street where we assemble. So that's point 1. Point 2 is we're going to do a break from 1115 to 1130 and there'll be coffee up on the SAM. Non-terrorists. There are restrooms basically behind me here that you can get to around this way. And finally, if you have any phones or other noise makers, if you could set those on stun or otherwise silence them. We'd appreciate that. So with that, let me just say that, you know, I've been watching trade like many people for decades. And there have been some heated debates along that road, but I don't think it's ever been like this. I don't remember a time when it's been this heated and there has been as much controversy around the topic of trade and trade policy. And there are some underlying trends that are worrisome in trade itself. Global trade, the last three or four years has been growing more slowly than global GDP and that's historically an anomaly. It's always grown faster than the global economy. Protectionism in not in massive 1930s ways, but in small ways, has been rising. And the WTO and independent groups have, have sort of catalogued all of that and it's quite worried. Global trade negotiations had been stalled. Doha Round is effectively dead. Multilateral negotiations are focused on some specific areas, but even those are not moving as fast as they could or should. Mega regional agreements like TPP, the Trans-Pacific Partnership, TTIP, the Transatlantic Trade and Investment Partnership. Even the regional comprehensive economic partnership, which is another Asian arrangement, is not moving very far, very fast. And then of course you have all this anti trade and anti globalization rhetoric and positions being taken by presidential candidates on both sides of the aisle. Against trade, which is, again first, as far as I know with so much ansi trade rhetoric from both sides of the aisle. I mean, I will say that the election, I think I learned some things from that debate and the election results about trade. I think we, you know, there's obviously a lot of anxiety about trade and, and economic change in other ways, technology and other changes in the economy. And I think a sense that we folks in this room and in Washington don't understand those anxieties and certainly you're not delivering the solutions to those problems. And whether it's looking at policies like adjustment assistance or retraining and education, more wage and income support of some kind. We're not delivering things that people want. And I think we all need to listen more and, and, and understand what those anxieties are and what the solutions may be to these issues. And the Simon chair is going to be doing more work. We're already starting to do more. Looking at those, those questions which we haven't done as much on in the past. But I also think, and I think most people on this panel and in this ROM agree that trade is kind of also getting a bit of a bummer app. It's being, it's become a poster child for a lot of anxieties that aren't directly related to trade. I mean, trade is provided broad benefits for our economy, for the global economy. If they understood it, I think 600 million Chinese would agree that the trade and globalization have been a good thing for them. And so I think part of the problem here is that we're not doing a good enough job explaining trade. And that's the purpose of today, is to help try to explain things in a specific way. Not just say it's good for the economy or it's, there's broad benefits. But to look specifically what's at stake and what some of the areas of trade policy are important for the US economic and in some cases strategic interests. So we have, as I say, a dream team up here to help do this. I think there are probably all familiar to all of you. I've had the pleasure of working with, with everybody up here. In fact, when I was young, I wanted to grow up to be these folks. So delighted to have go down in order here, Victoria, Victoria S been out who is President and CEO of BSA, the Software Alliance. She's worked for both Democratic and Republican. The White House's including the Obama White House, where we had the pleasure of working together when she was IP intellectual property enforcement coordinator. And so delighted to have Victoria Here. You have more background on her. In the biographical information. Next to her is Peter all Guyer who again, I'm sure is very familiar to people in this room. He's President of Global LLC, a consulting firm, but I think you all know him as former deputy US Trade Representative, former president of the Coalition of services industries. And so it's just the thrilled to have Peter here with us as well. Thank you, Peter. And at the end, another familiar figure, bill ranch, who is Senior International Trade and Government Relations advisor at Kelly dry law firm here in town. But again, I think probably better known to most of you here as long-time president of the National Foreign Trade Council. And before that he was a, he was under Secretary of Commerce for Export Administration. And he is a friend and mentor and has taught me a lot about this subject. So I very much appreciate his willingness to join us here today. So I have talked a lot. I now want to let you talk. And the first thing I'm going to do before we delve into individual areas that you each have a lot of expertise and knowledge about. I want to ask each of you and I maybe we'll start with Peter because you've been doing sort of trade policy at USTR for a long time. So what your diagnosis is? The point we're at in trade and trade policy. You can disagree with aspects of what I said or enhance that and add, add other points. But what do you think is going on? How did we get here? Okay. Well, thanks, Matt. Well, as you as you pointed out, there is a lot of disenchantment are really widespread opposition to trade and to trade agreements. Certainly here in the United States, but we're also seeing it in Europe and in other developed countries primarily. And a big part of it in the United States obviously is the concern about manufacturing and what has happened to our manufacturing sector and the people who have worked in manufacturing. And if you look at the statistics over the last 30 years, manufacturing production in the United States has increased about 85%. But then you look at the employment picture and employment in manufacturing over that same period. And mostly since 2000 has declined 30 percent. And so a lot of people, of course, attribute this to trade. But I think when people look at it and a lot of the research points out that really what the main factor, the overwhelming factor in this is change in technology. And so that's, that's the situation with, with manufacturing. Now. Another big part of it, and this is something that Victoria, we'll talk about is the digital revolution. And the digital revolution is spreading obviously across our entire economy in almost every aspect of our lives. So there is a great need for people to, who are digitally literate in their jobs. And not just those who are in Silicon Valley or someplace like that. But in every single business, more and more of the business depends in one way or another on the digital economy. And the problem here, as I see it, is that we have a huge mismatch between the skill demands of the digital revolution and the skill supply that we still have a mismatch between people who are prepared for, I'll call them brain jobs versus people who previously have had muscle jobs. And I've been there still are a lot of need for various kinds of muscle jobs, but not to the same extent that there has been in the past and certainly in the future, it's going to be a smaller and smaller percentage of the working population. So obviously this, these issues, and particularly the one about manufacturing were important in the, in the campaign because they were important to the general public. And the response, as Matt pointed out from both candidates, was. We need to be more aggressive in defending America's interests and promoting America's interest. Now, in terms of defining what America's interests are going forward. Little sketchy are there in terms of the the prescription being given by from my point of view, the incoming administration. And I think one of the things that perhaps we could talk about is, you know, it's going to be a more aggressive trade policy. And there is aggressive smart and there is aggressive dumb. And so the challenge, I mean, we're going to have to deal with a more aggressive trade policy. And in some instances we should. But we need to make sure that as I said, it's aggressive, smart, not aggressive dumb. Okay. We will come back to that because that is kind of the $64 thousand question is how to get that smart policy, right? And what advice we'd have a new administration. So thank you for raising that. But Victoria, before I ask you specifically about the digital economy and the issues that you're working on. Again, what's your take on, what's going on and why we, how we reach this point, contrary. So I will see, you gave us a great setup and as you were talking, so many thoughts came into my head. I was thinking I'm going to need a window, so i've I've tried to win that to 31 is you made the point that concerned about trade has been around for a long time, but it certainly seems like it has escalated to a certain extent. And I think the reality, I think we said our work, that's reality that trade has been a difficult and controversial issue for many, many, many years. Trade votes are always difficult votes. So it may feel worse now, but it's not like, it's not a totally new situation. So the second thing I would say is, I think trade and what we mean by trade has changed, certainly passed from my industry. I think we'll probably come back to this when we're talking more about the digital economy and the data economy. But either trade policy needs to keep up with where the global economy is going. That sounds kind of obvious, but this USTR has started to try to do that, but I think we need to see more progress there. The nature of trade or what we mean by trade, certainly from my industry has changed a lot. And if trade is going to continue to be one of the drivers of the global economy as I think it should then needs to reflect what the global economy is becoming. And so I think that's, that's a big shift and I think there's actually some room for optimism there and happy to come back and talk about why I think there is. I think there is room for optimism and work in terms of where trade is going. The third thing I would say, and we need to have more conversation about this as well as, you know, you've talked about some of the fears. I think I would agree with you that I think putting all of those fears on trade is probably misplaced, but I think there are real concerns about what is happening in the United States and the impact that's had on jobs. Suddenly tell you from the perspective of my industry, it's something that we care about a great deal. So if you look just at the software industry, we create 10 million jobs in the United States. And additionally, we are an industry that has more jobs than we can fill. We have empty jobs in software because we don't have people with the skills and the training to fill them. So we're in a very different place than many other industries where we have. By 2020, they said it's going to be 1.4 million more computing jobs in the United States. We only have about 400000 students in the pipeline to fill those jobs. We have a real pipeline issue. And so I think focusing on training and education is certainly something our industry is focused on. I think we need to get our governments, we're focused on it. And I think that that needs to be part of the narrative that we're talking about as we go forward. Great, again and a great topic to come back to you. Bill, what about you? What's your take? Well, after this, I'm I'm I'm sort of in the position of what I learned when I was working on on Senate staff were people talking about a set of debate, everything's been said, but not everyone has said it. And so here I am saying, Yeah, Good, You're right. Let me try to add a slightly different tack. I think we've agreed trade is, is a scapegoat. Not a surprise. The gains tend to be long-term and diffuse. The costs tend to be short-term is specific. That's not news. At the same time, it's more than a scapegoat because the gains have been disappointing and the losses had been, I think, as a consequence of global market integration, the losses have been sharper and greater than people expected and the gains have been part because of the state of the economy have been less than people had been, have expected? Part of the answer is we need to do better job of talking about the gains which I think we haven't done. But the more important part of the job is to make sure the gain, gains actually accrue. And that the system is structured in such a way that, that people a benefit from, from once. What's happening? Now we can talk a little bit more about that if you want. I think though at the same time, the election creates kind of an institutional dilemma for us that we need to think about above and beyond. Just the argument about trade policy. It seems to me we're kind of at a fork in the road. Is as Yogi would say, Hey, we should just take it, that's the answer. But in this case, we have a number of people that are really talking about a policy that is more isolationists, more protectionist, and in some respects more nativist than a policy of outward-looking expansion and global integration. That's not new for the United States. We really pursued those policies the first 150 years of our history. It wasn't until the depression and the Roosevelt administration and we really turned into an international country, if you will. And on a sustain level. And post-World War II, what we spent a lot of time on investment in as constructing a global architecture of institutions and rules that, among other things, work to our benefit. Which I think is one reason why did, why we did it. But also worked, I think, to the benefit of a larger number of countries by creating some sense of order out of multilateral chaos. I think we may be reaching a point where there are people that are challenging that order. There are already people in other countries challenging that order. China's about probably the best example of a country that has not been a defender of the existing system. And we have been, and I think it's benefited us. We are in a situation now where we face a lot more competition globally, not only for economic gain and market access, but also for global leadership. And the maintenance of and further construction of a system that works to our advantage. I think we have an incoming administration that has a lot of skepticism about that and may take us down an older road and our history. And one of the things that I worry about a lot, which is macro more than the micro question of what do we do about trade policy domestically? One of the things I began to worry about a lot is that we have competitors for global leadership. And you're going to see this next week in Davos when Xi Jinping is going to be there and we're not. And you're going to see somebody else saying claiming the mantle, if you will, of, of global leadership. In the economic sphere. People may or may not buy that. But I think there's, there's a trend here that is important. And it's not only important from some sort of thing that all the foreign policy people of which I am not one do about the US role in the world is important. It's important economically because the system contains rules about how companies do business with each other, how intellectual property is protected, how data is stored, or are they don't have rules in some cases. And they have rules about tariffs and things. As mundane as that. That system has been advantageous for us. And I think we want to maintain that system. And in order to maintain it, I think we have to maintain our role in it. And I'm worried that it's going to be eroding partly because I thought a lot of people here have lost confidence in it, which the election reflects. And I'm not sure that the incoming administration has much enthusiasm for it. This is such an easy panel to moderate. It's like having wind-up toys. I just wind it up and they can't do this off for me. I don't have to do anything. It's fantastic. I'd I'd like to just let you guys continue to talk, but let me try and steer it a little by diving a little deeper. And then we'll come back up and talk about these broader issues against Peter again, to start with you on services. So you spent a lot of time working on that before. Actually ask you about services, trade itself. First of all, what are services? Because I think of services as what our cross-border services in particular, because we all think of haircuts or restaurants. Those are tradable things. Yeah. Yet, yeah, that's actually a good point. So tell us, help us define what, what, what we're talking about here and why they matter to the United States. Well, services are the largest, by far the largest sector of the economy. And yet we often think of services is what happens to us in our daily lives. But a lot of the services that we do have in our daily lives either are traded internationally or they can be traded internationally. So service, obviously they include the whole array of financial services, of, of banking, of insurance and so forth. The whole telecommunications area of services. So you think of AT&T and Verizon. And then the hold digital area of services, whether it's Microsoft or Facebook or Google, or any of the other services that we all take advantage of. Its services, logistic services. You'd think of FedEx and UPS. All sorts of services. And the services are integrally related to manufacturing. And if you look at businesses today up, there's a misconception about manufacturing trade and services trade. And what I mean by that is that when an automobile comes across the border, let's say from Germany, customs looks at it and it says, okay, here's a $40 thousand BMW. That's $40 thousand of manufacturing imports by the United States. But when you look at how BMW is manufacturing and what it needs to manufacture, a huge part of what it's doing. Our services, obviously the financial services, the logistics of moving the cars, engineering and design services, accounting, communications and public relations, advertising services. So several years ago, a few years ago, the WTO did an exercise and said, let's look at whole range of products, so-called manufacturers that are going across borders. And let's break it down. And what part of the manufacturer is really tightening the wrench? Well, you don't use wrenches anymore, but the robots manufacturing the car and all these other ancillary but necessary services that are part of BMWs operations. So they did this and they did this more or less globally looking across a whole bunch of countries. And they said, If we look at the customs figures, now, something like 25 percent of world trade is services. But when we break it down and take out the services part of a washing machine or an automobile or an airplane. We find out that actually services are 48% of world trade. So there's all the services that are kind of hidden under the guise of manufacturers, but are absolutely essential to all these manufacturing businesses and the products that they, they produce. Now, in the case of the United States, is the leader by far in services, internationally traded services. One example of that is that we run a quarter of a $1 trillion trade surplus in services. And frankly, the United States as the most innovative in introducing international trade services. Even the Europeans are concerned that they're not competing well with the United States because we are the innovators. So this is something that one hopes the incoming administration will understand and understand that success in manufacturing also means success and services. And in terms of US competitiveness down the road, they need to be paying attention to what are the rules of the road on services? And are we Who are the leaders and services, the ones who are defining what the rules should be. And this will get a lot also to the part that Victoria has responsibility for the digital economy because services are completely dependent upon the digital economy. And again, it's the US that has been using its leadership in the digital economy to support its leadership and services. So when it comes to actual trade and goods, it's fairly easy to deal with the, at least the border problems by cutting tariffs and integrating and increasing trade that way with services. What are the, it's not as, it seems, not as easy to get services integration across the globe. How, what are the, what are the main problems for services across border And, and what what needs to be done to address them? Well, there are a number of, I'd say the first one is, again, the digital economy and the ability to move your data and to store your data where it makes the most sense. It doesn't make sense to have to hold your data in every jurisdiction in which you're operating. Regulatory issues are huge and services, I mean, It's pretty obvious in the case of financial services, but it's true in all the other services. I mean, you think of something like express delivery and you know, alright, what are the rules under which are expressed delivery companies operate in a place like China? Well, they're very, very restrictive or they don't even know what the rules are. The rules keep changing or there so obscure. So the sorts of things that we more or less take for granted in terms of rulemaking, transparency and regulations, that the regulations apply equally to domestic operator and a foreign operator, which is often not the case. That, that companies, US companies. Are they competing against state owned operators which have different rules applying to them than to our companies or other foreign companies that are operating. So I would say the digital issues and regulatory issues across the board for services. Two of the highest priorities that looking forward and okay. Well, perfectly teed up the next two panelists because I want to turn to, and I will actually come back to you on a definitional question and a sac if we have time, but but Victoria, let me pull you in here and Peter's already sort of, I think, delivered your punchline. But, but first of all, definitionally, what is the digital economy and why does it matter in this context? So Digital Academy is a term that's used a lot. I'm actually chairing a group at Davos next week on the digital economy and society. And I think one of the, one of the things we'll be talking about is exactly how you define the digital economy. But for purposes of this discussion, let's define it as industries that are producing things that are digital, right? So things that are in digital form, software being an example, therefore, of the digital economy. And I think one thing that's important to note about the digital economy and kind of this, we're talking about the economics slowdown is that the digital economy is actually performing quite well. Businesses that are in the digital economy have grown 30% in the last five years. So the Digital Academy is outperforming the rest of the global economy. And that's, and that's not growth that we want to stop. But what I would what I would like to do is actually go kind of one step down below the digital economy to talk about the data autonomy, because that matches up very much with what Peter was saying. So in my industry, we talk a lot about this data revolution moment that we're in right now. And this is a fact that is widely known. But every time I say it out loud, it kind of amazes me yet again, save you. If you if you I'm here today on January 13th, 2017 and you look back to the beginning of recorded time when humanity started recording the knowledge that it acquired. 98% of the data that exists that has been recorded, has been created in the last two years. That is, that that's not even exponential growth, that's growth and information and data on a scale so far beyond anything that humanity has seen before, that it's hard for us to get our minds around it. That's going to have impacts far beyond trade policy, that's going to have an end global economic policy that's going to have societal impacts, that are going to have enormously beneficial consequences for the world at large, but are also going to change a lot of the ways that we think about how we live our lives and the economy. So we were living in this moment and I think it's also worth, remember that's happened. We're still at the beginning of that. So I think it is incredibly important therefore, when we are thinking about something like trade policy to be thinking about how trade policy and economic policy needs to adjust to try to account for that. And in terms of data, one of the things that I think is really interesting, interesting to me as trade negotiator is you have, you have something that is already so important to the global economy. And yet we don't have enforceable trade rules on data by enlarge. And I kinda I was an intellectual property negotiator when I was at USTR. One of the highlights and always will be one of the highlights of my careers as being a negotiator for the United States at USTR. But one of the things that the United States, it was very prescient in the 90s, is realized how big a driver of the global economy, intellectual property that's going to be, the United States went out and negotiated trade rules on intellectual property. And at the time that was considered unusual, there was, there wasn't a consensus that intellectual property should be part of global trade rules. Now I think you can argue about what those rules should be, but I think it's obvious to everyone that there should be international or global rules on intellectual property. Well, data is kind of at that moment now there are not strong enforceable rules and the WTO on data, which makes sense because it wasn't part of the global economy when the WTO was brought into being the way it is today, TPP was the beginning of having an international framework on data. That is, there is a big gap in terms of our international trading system rules right now. And there's a gap that clearly needs to be filled. And I guess going back to what I said in the beginning part of the reason I am optimistic about least one part of the trade agenda going forward is I think that, that gap is too big and too important to the US economy to be overlooked. So I am optimistic that any administration, including the next administration coming in as they're looking to negotiate a trade agenda that will create jobs in the United States, will see that as an area to focus on. And I'm happy to elaborate. Yeah. What I mean by that? Like what but oh, well, let me ask. I do want you to do that, but let me just ask, and the cross border dimension of this, what, what, why is it so important for data to flow internationally? Why does it not flow as smoothly as it should? And how is government? Involved in this and why are they trying to stop data from flowing? That's great. So thank you. And there's the data localization of cross-border data flows, kind of terms of art, but they're like hideously opaque terms. So I'm glad you asked me that. So when I'm talking that data, often people think of personal data and that makes sense because, you know, their own data is often what people are interacting with. But there's an enormous amount. In fact, the majority of day there's commercial data. So at practical example of that is every time you're on a plane, that plane now, this was not true years ago, but it is true today that plane is throwing off a terabyte of data. And with every transatlantic flight terabyte of data, that on one foot, enormous amounts of data that are sometimes well, it sounds like a lot. It is a lot. And that data is measuring things like the wind velocity or the amount of the fuel efficiency. And so Boeing has then using that data to figure out both how to make its planes more safe and to make its planes more efficient. And that kind, that is, and that is happening in agriculture and transportation, in manufacturing and literally every economic sector that we have is now depending upon data to, to do what it does better to either make its manufacturing goods or services more efficient, more responsive to customer demands. That data and the ability for our companies to use that data as effectively as possible. It needs to move back and forth. If you have a plane that is fine from the United States to Europe, you need to be able to send that data back to the United States so that Boeing can use it in a way that's effective if you are looking at agricultural data and measuring weather patterns around the world to try to make sure that we can grow crops in the United States or in any country around the world as well as we can, you need to be able to share that data around the world. That's true in medical research, that it's true in every field. Problem that we are facing is that there are countries that are either considering or put in place policies to say, we don't think that Davis should be able to move across borders. We want to keep that data here inside of our country. And one practical way that, that manifests itself as saying datacenters have to be built here in this country if you want to be able to operate in our country. So instead of having data centers in the United States, creating jobs, the United States trading partners are requiring that datacenters be built in the jobs that go with them be built inside of their countries and those, and there's a variety of reasons why governments might pursue those policies. But that's practical way. Can you give a sense of wonder to those reasons is to do with their citizens own privacy as a commercial. So I think, I think so. I think there's a yes, there's there's I said there's a variety of reasons and there are some legitimate reasons that government would want to keep data. So data that was central to its national security, I think is a reason that we would all agree. A government might want to keep its data very close to itself. But I think there are times when privacy or security concerns are mentioned as reasons, but they may, they may sometimes be the legitimate reason. There are other times they think they're not. I think there are certainly governments around the world that are looking to try to build their domestic industry. And they see this as a way of slowing down the US. I mean, this is an area where the US is a leader and having restrictions here limits or impedes company's ability to expand their consumer base. And that hurts jobs back in the United States. It's hurts our competitiveness. And that is a motivator. Maybe not always the motivator, but it is a motivator. You mentioned that the TPP was trying to get at some of that rulemaking in dealing with some of those barriers, what would it have done? What will it do? I should say, because I still believe TBP is going to happen eventually. I'm just not going to predict when. Uh, so, so what, what it said, how does it address some of those? Tpp was the first trade agreement that had a default rule. This a data should move back and forth across borders. It had a default rule that said you cannot you, a government can not required data center to be built within your borders in order for a company to do business in your country. And there were exceptions to that is there are always exceptions and trade agreements, but that was the default rule so that, that does not exist in any trade agreement. And we need to have the sort of default baselines on an international basis. And I also am confident we will get there, whether it's through TPP or whether it's other mechanisms. I think, as I said, I think it's just too important to the global economy for it not to be a drought. Where else are we talking about these things other than n? Well, TD trading has been the main place. And so if, if TV is not going to move forward, and I don't know that we actually know that. I think I think there's enough unpredictability in the system that I certainly wouldn't want to say that's a 100 percent. But I think if it, if it does turn out that TPP is not the mechanism that certainly we will not stop pushing for those that have international rules in this area. One thing I would mention that I find. Interesting and something we definitely keep an eye on is the European Commission came out with an announcement on data flows two days ago, which said a number of things. One of the things it said in that announcement is that it was going to start negotiating deals with Japan and South Korea on data. And as the Europeans are want to do, is any country B wants to do, they will then export their notion of what dataflows means. And their notion is not as open and as expansive as the United States is. So I think that is any, any former trade negotiator would look at announcement like that and think that it's definitely something the United States should be watching with some degree of caution. And the Europeans are going to be out there talking to Japan and South Korea and other government. We need to be out there talking to them as well. And with our vision of what open data looks like and data flows across borders. Okay, fantastic. Lots more to ask about, but let me get Bill, Bill in here as well because another chapter of TPP was dealing with it deals with state owned enterprises. And that word gets its own acronym, SOEs. But I don't think again, that's all that well-defined. What is this data? Is this data enterprise have to be something that's a 100 percent owned and controlled by government? Or is there a problem that's broader than that? What is the problem? Well, I once when I was on the China Commission on once a month, one of my former colleagues once said that in China there were only two categories of companies. Those that are owned by the government and those that shut up and do what the government tells them. And I think that was a bit of an overstatement, but it also illustrates that there's a range of behavior that probably is assumed by the term I have. Mean standard enterprise technically is an enterprise, it's owned by the government. But in factors, as you've said, there are degrees you can own it. You can control it, which means you own if it's a stock thing, you own the majority of the stock or even a control a minority of the stock are. But beyond that, even if you don't do either of those things, you can heavily influence at one way or the other. Chalmers Johnson, Here's years ago, describe Japan's policy as state developmental capitalism, which was not ownership of companies, but heavy hand of guidance, if you will, by the state suggesting that various companies do certain things and in some cases, suggesting that certain companies that they ought to combine and merge or that you ought to work on this and you ought to work on that in order to prevent messy competition. So there's a range of things and I think at the far end. And it probably, in a way, one of the more pernicious things that happens is it ends up being sort of credit allocation and investment allocation. The state decides who gets the money. And that leads to, you know, I guess I would say there's probably three problems and two to two problems of discrimination and one problem of overcapacity. If the state is deciding who gets the money, and they decide that either by their ownership or by telling banks, lend to them, don't lend to them. Several things are happening. One is you're directing capital in one area so somebody is not getting it. And that means there are other people in the economy that are not going to be able to grow or do the things they want to do because the market's not making the credit decision. The government is at the same time, it is inevitably discriminatory against competitors which tend to be foreign competitors. So if you're being given governmental advantages, whether it's through credit allocation or non-tariff barriers, or licensing restrictions or by national provisions. We've been known to do that. What you're effectively doing is giving a leg up to your guys as opposed to there guys. And I think from the company for the country standpoint, well, let me go before I talk about the good things. The third problem, which we're seeing a lot now is it's almost inevitable if when you get into the SOE game that you end up with overcapacity. And you see this particularly now in steel and aluminum and particularly with China. I mean, the reality is for all the flaws of the market and there are many that governments don't allocate capital as efficiently as the market does. And what governments tend to do is overshoot. They decide that an industry is important. Semiconductors in Japan in the eighties, autos wherever, steel and aluminum, and they channel investment in that area. If it's state control, that's an easy thing to do, even if it's not. You know, people read tea leaves and they think that's, that's a growth area. The government's putting money in. There. Are the governments favoring that sector. I'll follow them. And what you end up with is more capacity than unity, which means more supply than you need. And then what you end up is people with what we're seeing right now in steel and I think aluminum to pupils. And then you dumped the product because you've got all this stuff. And then other countries have to do we match you if they're going to not lose market share? And then you get kind of a worldwide problem which happened over and over and over again. We're in the midst of it in the sectors I described, but it's not confined to them. There are people who will tell you and I think with, with some argument that there are advantages to state-owned enterprises. I think the main argument is various variations of the infant industry argument. Particularly if you're developing, You're not going to get in industrialization off the ground. The argument goes, unless the government takes a hand in the business and provides either protection or investment funds or both to nascent industries who, in the absence of that kind of help, would not be able to compete with established companies, foreign companies in the same sector. I think there's some truth to that, whether it makes sense to be creating 47 countries having steel industries is kind of something else we can debate, but clearly, you know, SOEs have permitted the development of important things over the world, over history. I mean, the most obvious argument is Airbus, which I think is really the creation of government extrinsic viewer. If you're bowing, you wouldn't be very excited about that. They're not. On the other hand, if your airbus, you say, Well, we did the same thing with Boeing. So it's, you know, everybody is guilty. I don't think the balance of guilt as nearly the same, but that's what to be litigated in the WTO. The point is though that a lot of countries, including developed countries, including this one, have from time to time with a good bit of success allocated capital and government favoritism in one form or another to in specific areas that in order to achieve national policy goals. And we did it a lot a long time ago. So we tend to forget about that. And then when other people now do the same thing with L, You can't do that. You know, that's sort of the way the game is played, I guess so. I don't do in contrast to what Victoria was talking about when I'm talking, but he's old. Soes had been around forever, probably match the Roman Empire. You're talking about things that are new. You're talking about things that are fairly new. This is old news. They're not going to go away. They're not, they're never going to go away. It's just too tempting. All but it's been, it hasn't been subjected international disciplines and so now it was new about TPP was it was trained in the, for the first time established international rules on not when, how much you codon and a state-owned enterprise, but what state-owned are needed to operate according to market principles. I think that's the underlying idea of what was going on and TPP recognition that you're not going to get rid of them. And nobody's going to agree to do that. But if you can make them operate, operate according to market principles, price according to market principles, and deal with the market as if they were a private company, then you've at least level the playing field. Okay. I'm conscious of time and I really, now there are a lot of smart people in the audience as well who have interesting thoughts and questions. So I want to give you time. And I think I'll just do that. I have another question for each of you, but I'll try to circle back and ask that afterwards if I have have time while you're thinking about a question, and there are microphones which will come and please identify yourself and do ask a question. I just want to say about TPP, that all three speakers have highlighted aspects of what are in TPP and what's at stake. And I think whether you call it TPP or you put it in some other format. I mean, these things are clearly critical to US national interests. And so one way or another, we're going to have to find our way back to rulemaking in these areas. And so, you know, I think we, the logic brings us back to something like TPP eventually in fact, I'd even say I'm going to stick my neck out because the optimistic position on TBT has always been the correct position. That is everything that was supposed to happen has happened, not necessarily in the time that it was predicted to happen, but the agreement was reached and signed by the 12 members. And so I think there's every reason to believe we're going to eventually come back and implemented, except for the reasons that might get in the way. So with that, questions, please, if you have questions again, there's a gentleman right there. And I'm pleased to identify yourself. Yeah, thank you. I'm Dan of polarity, formerly of the National Foreign Trade Council. And I'm wondering, given the tenor of our recent election, debates surrounding trade, what do you foresee as being the US Trade Agenda, say in the next in the near term, the next couple of years. Are you addressing that anyone in particular know? Anyone anybody want to start? Yeah. Well, okay. Let Belgo versus time. I think in the short run it's going to be primarily defensive. The president elect has focused on domestic issues like creating jobs, bringing companies back, bringing manufacturing back on the unfair practices of other people. Which means, I think sort of offenses essentially playing defense, it means more enforcement. I mean, the current administration has been doing more enforcement anyway, so I'm not sure how much of an uptick you can you can make, but we could get into the weeds on that. I think you'll see more enforcement. I think that because I think the President is also a fan of the grand gesture, I wouldn't be surprised to see an announcement that I mean, he's already said we're going to go after Chinese unfair trade practices. We're going to renegotiate nafta. So I'm assuming that will do both, which means there'll be a negotiation. Mexico and Canada have said, Okay, we'll talk. So I think that will happen. Whether it amongst anything, I will see my view as tended to be that he's setting up a situate two situations. Those two where inevitably he won't get everything he wants and then it's going to have to make a decision. Do we fold, if you will, or agree to a compromise that will be the greatest compromise ever agreed to, or do we retaliate and raised be seen in that case? What I don't see a lot of interest in this, what I was alluding to in the beginning, and I don't see a lot of interest in working with international organizations are working within the WTO to move out, move out the borders of market access. He's not talking about better IP rules. He's not talking about doing things about SOEs. He's not talking about changing the framework. What I'm worried about in the WTO is we'll lose a case. I mean, we always lose a few and we win more that we lose, but lose one. And then there will be this wave of anger here. Well, they, they cheated us. We're going to leave. Now I don't think it'll happen. Cooler heads will prevail. But it's fundamentally a defensive process. Prosper pasture that occurred in June. Yeah. Well, I would agree with that, but I would add to at 1 where I disagree, I think are potentially the three. I think. One it gets interesting about the data shape policy issues is that they are not the subject of controversy. There is. They are bi-partisan. Their shoes and living. There has been a pretty solid consensus on a bi-partisan basis that the data issues are good for us jobs and they're good for US competitiveness. So I think as the President elect, as looking for a trade agenda that will create US jobs. I think it'll be very natural for him to navigate to the data issues and for that to be a focus for the next administration. And I think so. I think that is a place where we could have an affirmative trade agenda. We don't have international rules now, we need them. They're not issues that are controversial. There's a lot of bipartisan consensus around them and they create help create jobs here. So I think that could be and I anticipate that that will be an aspect of the next Administration's trade agenda. Not one word said about that. One word. One word said about that from incoming people that I know of. Well, the administrator who's not in place yet. I hope we write per week, week to go, we'll test it then. Peter, just actually as you answer the question, your take on this. What's the role of bilateral agreements? Because that does seem to be something that this administration, I mean, they, they they have talked about that as as as a priority or is that a good thing in itself? And how does that, does that support or undermine the multilateral system? Okay, Well, first of all, I think in terms of the broader picture, I think there are certain things we can say almost certainly. And then there are other things that depend on a few factors. In terms of what we can say certainly is the administration has said is going to be more aggressive. And so for sure, the administration will be more aggressive in things like anti-dumping and countervailing duty for example. A question is, are they going to be aggressive, smart, or aggressive dumb? And I think a lot of that will depend on whether the business community steps up and speaks about its real interests. For example, the automobile industry. It would be a disaster for the automobile industry if the rules were that were going to close down the auto trade, or we're going to put tariffs on auto trade between the United States, among United States, Mexico and Canada. The auto industry is so thoroughly integrated that it would, it would destroy the North American auto industry. So one hopes and that it's true for many other industries the degree of integration and globally with supply chains which by the, by the United States has been a leader in setting up global supply chains. So it would be reversing. And I think it's impossible to reverse. I mean, it's, it really is the classic King canoe ordering the waves to, to recede and even the president elect can't do that. So what would be the, the thing to do? Well, I think for sure. There will have to be more aggressive use of antidumping, countervailing duty. Think with China. I mean, he's gotta be tough with China. One thing that China wants very much is to be classified as a market economy. And there's no way that's going to happen in the near term. But the new administration should set out the criteria. If you're going to be treated as a market economy, these are the things that you need to have in place to be treated as a market economy. And it runs the gamut from the disciplines on state-owned enterprises to how you treat digital economy, how you treat your investors and so forth. In terms of other negotiations, just picking up mat on your point about the TPP. The TPP. And if you're going to look at new trade agreements and new trade policy and how you're going to change nafta, for example. It's ironic that the incoming administration has talk so poorly about or negatively about TPP or an awful lot of things in TPP that you would want to take and let's say apply to nafta. So for example, people worried about labor and environment. Well, the TPP has gone much further than any other agreement in terms of the labor standards that would be required of countries like Vietnam, for example, or the environmental standards. Similarly introducing the, the digital disciplines there. Now, as for TPP itself, I think it's going to be necessary to go back to the TPP other members and say, look guys, if I'm going to sell this at home, we're going to have to fix some of the things that were not right in TPP. So for example, as Victoria said, the default position on data and localization was, you couldn't require localization. However, in financial services, you could. And that makes no sense. So that should be rolled back. I think that some of the rules on the state-owned enterprises are quite weak. So for example, it, TPP focuses mostly on the behavior of state-owned enterprises in the export market. But doesn't really go to the core of how they are treating people in their own market. And so, or how they compete in their own market. So things like that could be put forward to the or the auto rules of origin in TPP are much lack, sir. Then the case in the nafta. So one thing would be for the new administration to go back to the TPP partners who desperately want the agreement and say, All right, we need to make some changes and some fixes. In terms of bilaterals. I think that bilateral agreements that are of the quality that we have pursued in recent years are good, solid agreements that are provide perhaps a basis for international agreements. I think we should offer to do a bilateral agreement with the UK. I mean, we've been doing the T-TIP agreement with the EU and there are lots of problems with that, that the European Commission has points of view that really are in conflict with ours. And we might do better with, with the UK. So those are some of the things that I think that we should be looking at. But one other thing in particular is we need to be looking at Home of how we are dealing with the dislocated workers. And we have this trade adjustment assistance program or a whole plethora of programs. Question is, how well are they working? And I think that we should take a very rigorous look at those sorts of programs. Consider other things that we can do to support and help people make the transformation. Whether they are 50-year-old, auto workers for their youngsters coming along and have just come out of high school. And, you know, what kinds of skills do they need so that they can compete in the 21st century rather than sit back and be unemployed with their 20th century skills. And again, we are going to be doing more programming on, on those subjects. I'm going to take another question from the audience, but I don't want to put you on the spot Ambassador Hills, but seeing you there and hearing all this talk about nafta, I just said to you negotiated nafta. I'd be interested in sort of your thoughts about any of this, but in particular about the prospect of doing something different in North America, I'm trying to do something whether tearing up and starting over adding things or subtracting, but whatever you'd like to address, I'm not going to call you right this second. I'm going to ask the gentleman next to you first, and then maybe he can hand the microphone to you next, right up here in the front, please. Alex. My name is Dixon, one of the judges the affair of Uganda Embassy in Washington DC. Between 436 of August 2014. There was an historic summit, the US Africa Summit in Washington DC, and a lot was discuss, including Lewis, trade relations with Africa. What progress has been made, if any since then, in respect to the US trade relations with Africa? I would think, and if you could answer this question. Secondly, inline with the rapid growth in technology specific like to address modern Victoria on this. Under these detailed advancement in the service sector of the global trade, where do you find the place for Africa in the current trend of global trade? And finally, what should Africa do differently, if any, for it to be able to compete favorably in the global arena. Thank you very much. Okay. All right, good. Three-part question about trade with Africa, maybe Peter, did you did you ever saw a go at some point in your career? Did you work on that? Not really much you know, about it to talk about that and other aspects of our African trade policy. Yeah, Well, a Goa has had, and you want to spell that out for ago is the African Growth Opportunity Act, right? And basically it was a set of tariff preferences for African countries that was meant to be more generous in terms of coverage and so forth. Then our broad preference program, the Generalized System of Preferences. And it has had a degree of success. But part of the problem is the limited product coverage. Not because of the law so much as because of what the capabilities of most of the African countries has been, have been. So if you look at what the trade flows are in a Goa, it's heavily petroleum products and textiles and apparel. Now the problem, a problem is that the textile and apparel business is incredibly competitive globally. And so what will happen is that other countries, countries that even don't have preferences, for example, Vietnam, have been more competitive than many of the African countries. And so the African countries have with losing market share in our apparel market. And there haven't been other industries for them to move into. And so a big question is, what is the capability of various African countries to diversify and to be less dependent upon textiles and apparel. I think that in some cases here to the digital revolution can be very helpful because a big constraint in Africa, of course, has been various of the physical infrastructures, whether it's transportation infrastructure or the telecommunications infrastructure or the financial infrastructure. And so we, we do see instances within Africa of them not having to build a whole telecommunications network, but using the mobile capabilities. We see that in banking and so forth. And it does offer opportunities for small entrepreneurs to tap into the global system through telecommunications, through the logistics that are available. But I think some parts of Africa, they're way ahead of us and mobile banking and other services. The challenges to put together the necessary infrastructure, institutional and physical. And a big part of that is the policies that they adopt. And whether they're adopting policies that facilitate these things are whether they are policies that because of state-owned enterprises or whatever stand in the way of that. Victoria do want to just briefly? Yes. So I want to thank you for that question because I think there is a view that emerging tech with cloud computing or data analytics is something that's helpful to big companies or in developed countries, and that's just not true at all. In fact, you could argue that the efficiencies and cost savings of Cloud computing are even more important to small companies and startups that are trying to get themselves off the ground. And as Pete already said, we've seen really amazing things happening. In African nations where small entrepreneurs are using the Internet infrastructure in the digital economy to get out to a marketplace that they would not have been able to before. And even to leap-frog some building if somebody expensive traditional infrastructure. So in terms of you asked what African countries can do, I would say support an open Internet, support digital trade policies, and also focus on training education for Jati are young people so that they are as well-suited and this best able to adapt to that as quickly as possible. Okay, great. That's reals as okay. I'm sorry to put you on the spot, but I really am interested to hear your reactions to this and not just snapped it. Whatever you think. Every great experts on your question, maybe the mike is not actually working. Just one sec. There we go. Try that one. Thanks. Your specific question to me was with respect to the North American Free Trade Agreement, which Peter address beautifully. It would be a disaster if we were to pull out, the president has that authority in the agreement to give six months notice and pull out. But it is not only the auto industry that would be devastated. It would be many of our industries, our competitiveness. Every dollar that we import from Mexico, $0.40 is US content. And when we think about how we manufacture goods, we need to get parts from the best places we can get them and do what we do best. The nafta has made us highly productive. I suspect that the business community will speak up, but we should encourage them to do so. I think there's a lack of knowledge of how hard they hit would be. Were we to withdraw. And there is a path out. President-elect has said he prefers bilateral negotiations. He could sit down with Mexico and updated, not tear it out. But it's we didn't have digital issues when we negotiated in the early nineties, that we did not have some of the Modern questions that we addressed today that all three of you have alluded to. But it was a template for US trade. We, it was the first agreement that had an intellectual Property chapter. We eliminated tariffs among across the board. We opened up the agricultural market between the United States and Mexico. No other agreement has done that. Indeed, not multilaterally either. Services were brought in so that we could provide services across border, but we could do more. And so the, the path out in my view is to first Have think tanks like CASIS point out the detriment of walking away. Have the business community like the chamber, the roundtable, the services, and the FTC and digital point up what the disaster would be. And then also maybe help formulate a path out, which I think is very much there. And that's what we need to do. We cannot, with 5% of the world's population, turn our backs on the rest of the world. We need to have our borders open. And it's not only with Mexico that we need to have that view is with the world at large. And I would say that it is not just with respect to our economic benefits, which are enormous, but it, our trade agreements have advanced our development interests. If you think back to the Marshall Plan, and we help rebuild the European community. The fact today, when we help and open markets for African nations, for Vietnam, they become ours, are apart, our partners and our customers for tomorrow. You call it an act of, of enlightened self-interest. And it also has a tremendous security benefit. If we watch countries around the world slip into deep poverty. And it's because they are, economies are stagnant. That's where we find international crime, terrorism, Ebola, and all kinds of things. So I compliment your panel. Came to learn and listen, not to talk. But thank you so much what you're adding to the intellectual knowledge that we need to move forward in the 21st century. Let me say that back to you. Thank you. I'm sorry for ambushing you, but I'm also not, Sir. I'm glad that it validated my decision to do that because you're such an expert, but also a class act. So we really appreciate that that input. Okay. Let me just quickly, I know we're running out of time and I'm getting the ax, but I'm still going to take two questions because I didn't give People much time right here. And then there was somebody over there, maybe this gentleman here, take them together and then we'll answer them quickly and then we'll take a break. Hi. Yes. Thank you. My name's Isabella and with Inside US Trade and just kind of going off of what you were saying with the prospect of president elect Trump pursuing to sort of separate bilateral deals sitting down and separate table with Mexico and in another table with Canada, I'm kind of interested in hearing what the experts are thinking that the prospects will be with that and how that would affect him kind of being able to declare victory on renegotiating nafta in that sense. Okay. And this job? Yeah. Eric coolish, American ship or magazines Adam Smith project. I'm just curious what you think the prospects are for a global trade war or more protectionism around the world. When, you know other countries see the lead. That's what this more aggressive potential policy that might be coming up from the US administration. Worries about a broader trade level, right? Good at spark other countries to follow suit or take things further. Okay, you wanna take on either of those. Well, I think well, first of all, in terms of the question over here, my sense is that the president-elect is a negotiator and part of negotiation in many negotiations is you start up here with your demands. And what you're really willing to settle for is somewhere in here. And hopefully that will be the pattern. And so that the more extreme rhetoric is simply to put the other side off balance. But that again, as I say, if the business community and others are putting on pressure for a more reasonable approach that maybe we get to something that is less catastrophic than, than, perhaps the rhetoric would, would suggest in terms of, uh, you know, at all, our trade war. I think that also depends on where, what actually the administration does. And if it is more aggressive within the rules. That's one thing. If it imposes 45 percent tariffs on a country that is a member of the WTO, like China, then they certainly will find a way to retaliate and that can lead to counter retaliation and counter counter retaliation so forth. I don't think that we will have that happen. But it it could happen if people are irresponsible about being aggressive. So just to give Victorian bill of final chance to, whether to answer those questions or to give in a way that Peter has given advice, do smart things, not dumb things to the new administration, any advice to them and how to take these issues forward? Well, I think I would say that the new administration is not in place yet, and so I think there's still a fair amount of unpredictability. But president elected them very consistent in saying that his focus is US jobs. And I think a global trade war is not helpful in terms of creating US jobs here. So from his focus on that, I would I would infer that there will not be a global trade war because I do not think that would be helpful to creating jobs here in the United States. And he has been very clear that that is his focus. I think I've, I've talked a lot about the data economy, the data trade agenda. So clearly, I think that's a place where the administration should focus among others. In part because it will help create US jobs here and it's good for US competitiveness. But I would also say just looking beyond the United States for a moment. Having restrictions on data is also not helpful for other countries around the world and for the companies in those countries because it means they don't have the best access to the best data services in the world. And that's slowing back. So that's slowing down their economic growth. And then I would, The last thing I would say is, in my world, we talk, we are cloud computing and predictive data analytics and all the amazing things that are happening with that right now are very evident. But I would also say it's clear that we're just at the beginning of the words. There are so many exciting things happening, but this is all happening in the last few years. And I think we were at the beginning of the data revolution. One caution I have is to the extent there are shadows put over the future of cloud computing or the future of predictive data analytics because of things like restrictive data policies. And we shouldn't forget, this is still relatively new industry. It's doing incredible things, but it's relatively new and putting a shadow of its own top of it kind of at its inception, I think we'll have really negative impacts, not just for the companies that are using it today, but for where the industry could go in, for what it can mean to the global economy Long-term. Fantastic. Okay, Bill, I think just to agree with the others on the trade war issue, I won't say more about that. The only final comment I make, my advice, among other things, would be either lose this fascination with bilaterals. I mean, I think the, the argument that, that you get taken to the cleaners and regionals or plural laterals are simply wrong. I think everybody has negotiated that will tell you that it's wrong. And that there are situations whereby letters are appropriate because UK is probably one of them. But the idea that the regionals or bad, I think is misplaced because I think it's demonstrably wrong, but also because going forward, negotiations are increasingly going to be our rules are going to be about the things that you guys have been talking about. Less about tariffs. It's a lot more efficient. And you avoid the spaghetti bowl problem at the end. If you can negotiate a set of rules with a larger number of people. Now, you can make sort of the least common denominator case that well, it might not be good reals if we did it with one country, but if, if, if you negotiate rules one country, then what do you got? You got to have rules for one country and nobody else. And then you've gotta do that. You've got to replicate that multiple times. All be different. Which creates the, the, the, the uniformity problem. And it's just enormously inefficient. I particularly don't see it in after you've got an existing trilateral agreement. Why do you want to blow that up to and reinvented as bilaterals? It seems to me that at some point he will articulate when he wants to accomplish with renegotiation of nafta, the people who other people other than him and talked about what that he has. He has not really said much about what that is. Eventually there'll be an agenda and we can look at it and respond. But it seems to me the way to deal with that agenda is within the existing framework. And the other two countries have said they're willing to have that discussion, so we should do it that way. Okay, this is a huge and complex topic and we've really, in a sense, only scratch the surface. But I personally learned a lot today which I didn't not, doesn't surprise me because these are, these are the eyes and the best. And I really, we need to continue this in all its dimensions. And as I said, follow up on, on some of the the, the aspects of the story that are causing the, the anxiety, the fears and the, the complaints about trade and try to take those head on and we'll be doing more of that. But for now, please join me in thanking this fantastic panel for their camera. Yeah. Yes. Okay. Hello. Hi. Hello. I just want to say thank you. I Serbian government myself. I know the challenges, the demands, especially on family. You've been at this now for actually nine years to get started before it started before administration started. I remember having conversations with you back after, I think it was like three days after the president was elected. And so you've, you've really been at this for a long time. You've done such a splendid job. So on behalf of everybody here, I'd like to thank you for your wonderful service. Thank you. I think we should all give him a round of applause. How, you know, obviously, you're not coming here to collect accolades, although we'd be glad to do that or I, but I really do think we should explore. You. Look, you've, you've been on a mighty race here these last years to try to get the very large, complicated trade agreement in place during the remaining days of an administration. Though you got a day here, you got actually you got all next week. But why don't you help us just reflect on on TPP and Where are we? I mean, in one sense it was the great casualty of an election because it was disparaged. But I'm hearing little echoes suggesting there's still maybe a possibility. Well, first of all, John, thanks very much for having me and I just want to thank CASIS yourself, Goodman, Scott Miller, the work you all done to put information about trade out there in the public. The trade vistas product, among other things, has really been terrific. So thank you for, for all that. You know, I think you're right. I think the President convened all of the TPP leaders in November after the election in Peru on the margins of apec meeting. And what was it you see about that meeting is the other countries are very much, remain very much committed to moving forward with TPP. And we're having active discussions about doing it with or without the United States. Obviously, they'd like the US to be part of it over time. But they've also invested a lot of effort themselves in TPP being a lever for domestic reform. And some of the countries like Japan and agriculture or Vietnam on a range of issues, Malaysia on a range of issues. And they want to this platform to continuing forward. We've also seen somebody mentioned the other day that countries are beginning to take bits and pieces of TPP and put them in other agreements. Now that it's out there and we've established a new standard. And some of these areas, some of the new areas like and I know you've had some discussion this morning about state-owned enterprises, about labor environment, about the digital economy. That those chapters are now out there to be available for use by other countries. So I actually feel quite, quite optimistic that the work that went into TPP, one way or another, one form or another will find its way into effect. One center the other day I mentioned that we should renegotiate nafta by adding labor, the environment, and the digital economy. We got a model here. I've, I've gotta, I gotta got an agreement to sell them. But the fact is those are out there. And I think that work will make its way into effect one way or the other. You, you spoke often about. This is important for American economy and business, but also for America in leading a world and international norms and Asia, what would you take just a minute to reflect what's at risk here? Well, like I think this is a key part of our engagement in the region. And our partners and allies very much want us to be, we are a Pacific power. We always have been. We, they wanted us to be embedded in their lives not to contain China by any means. But the more that China grows in its importance and dominance in the region, the more they want the US to be there, to diversify their partnerships, to diversify their markets. And what's at stake if TPP doesn't move forward in some form or another, is that not only we lose the economic benefits which are substantial to the US economy, but we have T8, we've shut ourselves in the foot on leadership in the region and global leadership. Prime Minister Lee, former Prime Minister Ky of New Zealand, prime minister ABE, have all talked about how if TPP doesn't move forward, it is a, it is great damage because of great damage to. The credibility of US leadership in the region. It creates a void that China is all too willing to fill. And that even our closest military allies and partners will feel the need to line up behind them. And that, to be frank, I'm a bit perplexed because it's hard to be tough on China as we heard a lot about during this campaign. And withdraw from TPP at the same time. Withdrawing from TPP would be a huge gift to China in terms of damaging the US role in the region. And I can't understand why any president or administration would want to hand the keys of the castle over to China to say it's better that China's set the rules for this region rather than the United States. I think that would have very damaging consequences. One of the things I admired about your your personal style and your model was that you were quite open and dealing with with across the aisle, Republicans and Democrats. I'm sure I know that you're sustaining some of that narrative now where what are what are you now hearing about the possibility of, you know, picking this up at the right time, I realize nothing's going to happen right now. It's emotions are raw and that sort of thing. I spent in the months leading up to the election through, through most of 2016, at the suggestion of the Republican leadership in the house. I went around and met individually with almost a 100 house republicans in the months leading up there. And I think the good news is on the substance of TPP. We've won. Virtually nobody questioned the value of TPP to the United States economically and strategically. They were concerned about the politics, particularly in the context of the campaign. They wondered how their leaders were going to bring it forward and when. But there is a, a deep reservoir of support for TPP in Congress. She should it come to a vote. And I'm convinced that had the leadership brought it up for a vote and mobilized its whip operation, we could have generated that necessary votes to, to get a time. So hopefully over time, as the new administration works through trade policy and other issues that are important to Congress. There will be a way to come back to this at some point in the future and figure out how to take it forward and in one form. And when former president elect often when he would talk of this, would try to say, Look, my predecessors were a bunch of dummies. I could negotiate a better treaty. I heard that you're discounting is his comment about you. What are their areas where we could do a little bit to improve TPP so that he could, he could take credit for a victory here. That there is no doubt there is no such thing as a perfect trade agreement. And, and I said to every stakeholder group, nobody is going to get a 100 percent of what they want in a 100 percent of the chapters. I mentioned that to a member of Congress ones when we're talking about TPP. And he laughed at me and he said, if we get 60% of what we wanted a bill, that's a huge victory. Well, I think, and we look across this agreement, across the broad range of stakeholders. I think we did much better than that. And even if it's not a 100 percent, it came close, there may be ways to improve it in and then any new administration will want to take a hard look at it and see what they think of it once they dig into the detail, I do hope they take the time to dig into the details and learn about what's, what's actually in it and who's actually in it. To help inform whatever policy they pursue going for. This was the reason it took five years of really hard negotiation. And actually it started near the end of the Bush administration. So by some measure, it took seven years, eight years to get done. Is because it was a, it was very much a multidimensional chess game with 11 contrary 1212 countries in total, some of whom we already had FTA's with, which meant we didn't have anything to offer them in terms of new market access. But we wanted them to raise their standards anyway. And so how we use the fact that it wasn't a bilateral agreement, we were in many respects playing with house money. We're helping countries get access to countries like Japan. They were riding on our coattails to get access to Japan as a way of encouraging them to adopt stronger labor and environmental standards, better intellectual property rights disciplines on state-owned enterprises, digital economy rules, because we don't have anything to offer them ourselves. And so, and I hear conversations about bilateral and multilateral. There's somebody has a place for bilateral agreements. But a lot of what we got out of TPP was precisely because it was abroad program and we were able to, to, to have countries right on our hotels and get things that they otherwise couldn't get on their own. And there were countries like Malaysia where the Bush administration had tried to do an FTA with Malaysia? Yeah. 2005, 2006 period, it failed. And it failed in part because it was hard for Malaysia to give concessions to the United States, the, the, the Greeks, united States coming in and, and demanding things with them. It's part of a larger agreement when they have fellow Otzi on members in the room. And they're also getting access not just to the United States but to other countries, other big countries, Japan, Mexico, others. It changes the politics of these countries. So it's a much more complicated negotiation and I think some have really gotten their heads around. And I hope that when the new team comes in, they dig in and really understand what's possible in terms of adding to it or changing it and, and what's actually there. You've had some exposure to a transition team or a landing team. Can you give us any insights into how people are thinking about it with the maximum is true? Well, we have had a landing team at USTR. And in fact, Bob light highs or who's the president's nominee for USTR has been helping to lead that landing team. So they have been in a couple of times that we've been providing information to them to make sure this is a smooth transition as possible. We're fully committed to to to making it fully and smooth transition in terms of their policy direction, I don't have any great insights and I think we'll just have to wait and see and give them the time and space they need to go through the policy process. What do you think about these simplification of border fee adjustments? Share with us, Yeah. There are a lot of different ideas out there about the border tax adjustment, the destination based cashflow tax system. So it's a little unclear with beard be different ramifications for, for different ideas. Though there certainly is an issue out there that some countries have vats and some countries have sales taxes and, and that's an issue that's been long disgusted. And the trading system. What is a challenge is if it's a system that gets adopted that inherently discriminates against imports and promotes exports. Only. That could raise international trade implications, as well as of course, have an impact on consumers in the United States and on manufacturers and others who rely on inputs as part of their, as part of their production process. We still import a lot of world. We import a lot of oil, a lot of manufactured product that become important to our manufactured products and then get that, then get exported. And a Sanchez manufacturing the relation between services and manufacturing, it's so integral now, You heard one sector, you hurt the other sector as well. So I think, I think one of the challenges for any incoming administration is as, as they move from campaigning to governing, it's important to think through. Second, third order effects, mum policies. A lot of things feel really good on day one. And then you think about, well, what happens if other countries retaliate? What other happens if other countries imitate? And some of those, some of the same policy look a little bit less good. If you think about it, we all want to drive more manufacturing to the United States. That's been a high priority of our administration and I'm sure it has a previous administrations as well. Our approach had been make the US an attractive place to invest, including by having these trade agreements, they make the US a good place to export, a platform to export to other countries. If you start saying, in order to have access to our market, you have to move your manufacturing here. That has a certain appeal. But those are also the kinds of barriers that we have been fighting against in other countries. So imagine if, if China tomorrow said Boeing, you want to sell more planes in China, that is the fastest growing market for airplanes. You've now got to move all of your production to China. We would be we would be up in arms about that. And so I think we need to think through what happens if other countries, given the fact that 95% of the world's consumers, 80 percent of the world's purchasing power. The fastest growing markets, the fastest growing demand for a lot of our manufactured products is outside the United States. We have to think through again, the second and third-order implications of this T-TIP kind of disappeared in public consciousness through this last year. Do you have any thoughts about what might come here in the next year, so on. Well, I had a video conference with sodium also this morning. We're still by the way, we're running through the tape on this, this morning we announced an agreement with the EU on what's called the covered agreement covers insurance and and reassurance issues and we're still working through some issues with them. Yesterday we announced a major new enforcement action against China, aluminum overcapacity. And we're going to continue working til noon on the 20th. But I think in terms of T-TIP. What became clear last year is that for a whole variety of reasons, the EU wasn't prepared to reach an ambitious agreement right now. And we spent a good part of the summer figuring out what a final package could look like. We started talking about it with European Union and it became clear they weren't ready to talk about the elimination of agricultural tariffs or the digital economy are some of the services issues. Having said that, I think we didn't make a lot of progress including on on regulatory and standards issues. And we're in the process of trying to make sure we take up a good snapshot of where we are in the negotiations. Not just where the text is, but where the bid-ask in the negotiations were, what were possible compromises that were on the table. So that if the next administration, when, when they mix administration wants to pick it up, there'll be able to pick it up with momentum. Do you see any prospect until the Brexit issue gets kinda work through on how they're going to manage the relationship between the UK economy and the u. Well, I think in terms of T-TIP, we probably have to wait for the French and German elections pass before there'll be a clear political signal about what direction that he wants to go in. The EU also has to work through this issue of our trade agreements going to be approved by the European Commission, Council and Parliament, or also by 38 regional parlements. And we saw in the context of see how if every regional parliament, including I believe five regional parlements in Belgium alone, can hold up a trade agreement. It's going to be very difficult to negotiate something with the EU. Think in terms of the UK, you know, there's a lot of interests. I know I've read the incoming administration and a bilateral agreement with the UK. And I think when the President said there at the back of the queue, that was just a recognition that T-TIP is our priority. And as a practical matter, it's going to take time for the UK to sort out its relationship with the EU before you can really have a negotiation of a bailout agreement. Right now there are a lot of ideas floating around within the UK, let alone between the UK and the EU about what their relationship is going to be. But for example, if they're going to have a customs union with European Union, that means the EU controls their tariffs. So you can't really negotiate an FTA with a partner who doesn't have sovereignty over their tariffs? Will they have sovereignty over certain regulation? What part of part of that play in an FTA? So it's, it's all that is to say that of course we're going to want to have deep relations with the United Kingdom. We have a special relationship, but we have to see what their relationship is going to be defined by with you before we could really have any intelligent conversations about a bilateral agreement. I have one last question then we'll turn to all of you. But let me ask you, your trade negotiations are usually working through the things that were important 10 and 20 and 30 years ago and are still stuck in our regulatory environment. And the world is changing, economies are dynamic. What I know you're working through that now, but what do you see happening in the global economy that now we should be thinking about looking forward here for assuming we have future rounds of thinking here. Well, look, I think one of the issues that we were I think quite innovative around in TPP was the digital economy. And I know you've heard a little bit from, from Victoria about this this morning, but that is that is a new issue. It is a cutting edge issue and it's only going to grow in importance. Has data and data flows grow exponentially? Yeah, this isn't just an issue for Internet companies or for technology companies. Every manufacturing company and most services companies are increasingly dependent on the flows of data and the free flow of data across borders. And so establishing rules that allow that free flow data is critically important, as well as the other rules around, around the digital economy. I think we're having an interesting conversation out the WTO, now that we've gotten out of a can have our Doha culdesac about what new issues might be put on the agenda. And issues like e-commerce and the digital economy are hardened, or certainly among those. So I think that's going to be critically important. I think the other thing important that we need to be focused on more of a domestic issue than an international one, is the whole area of how to prepare the American public for a rapidly changing economy. I think a lot of what we saw in the last election where people's quite real and legitimate economic anxieties about the rapidity of change. Plus wage stagnation you at widening income inequality and you see a lot of the anger being rooted in, in quite fundamental economic. Technological developments. People talk about trade displacing jobs. We can have that debate and I think most economists would agree that upwards of 80 percent or even higher of any job displacement is actually due to technology, not to, to globalization. But that those of you who've been talking to the technology community know, we're really just seeing the tip of the iceberg on that. And when you start thinking about artificial intelligence and 3D printing and a number of other new cutting edge developments. How that's going to affect manufacturing hand, the services sector in the United States. We need to really rethink not just TAA trade adjustment assistance, but education, lifelong learning skills, building mobility. And there are a lot of other countries and some states within the United States who have experimented and do this better than we do at the federal level. We should look around. We don't reinvent the wheel, but we should try and understand what the best practices are around the world and figure out which ones make sense in our system. Otherwise, what we see around the populist uprising against globalization will pale in comparison to what we see around same sort of feeling when jobs are displaced by artificial intelligence and other new technological developments. That's a theme that comes out more often than every meeting I have notes, amazing. Okay, colleagues, let me open up there. We're going to be some questions from all of you, you know, a **** of a lot more about trade than I do. So let me open that up to the floor. We're back here. Sorry. We have a microphone, right? Right. Yeah, right here. There you go. Thank you. Please say who you are. Type questions. And if they're lectures, I'm going to shut you down. No lecture here, guys, extrovert from Knowledge Ecology International. My question for you, Ambassador Froman, is, Do you regret attempting to block compulsory licenses on cancer medicines in India? Well, first of all, we've never tried to block compulsory licenses on cancer medicines in India. There are provisions for compulsory licenses. Under the WTO agreement. We fully support those provisions in terms of how compulsory licenses should be used. We've restated that over and over again. We do encourage governments to work with companies to figure out how best to get access to innovative medicines. And that's been our stated policy query right back in the middle, about halfway, but I guess stand up and then we'll get the microphone over to you. Hi Bob Davis, who's Wall Street Journal. I wanted to ask you about the slowdown in trade which is picked up steam since around 2007. How significant do you think that is? How much of that is protection? And also on your comments about the sort of build in America, Trump's ideas on border tax and so on. Are you concerned that that will feed, feed into this sort of protectionist sentiment and a slowdown in trade. While I am concerned about the slowdown in trade, as you know, trade, global trade used to grow at almost twice the rate of global economic growth. And that was helping to drawing and leads to further global economic growth changed in recent years. I think some of it changed for reasons of changing supply chains that China, rather than importing a lot of inputs now produces those inputs themselves. And so you see some changes within the Asian supply chains. But some of it is certainly increasing protectionism of new sorts, including localization barriers and, and other non-tariff barriers. And so that is of concern. And if we want to see the global economy, including the US economy, be on a higher trajectory of growth. Certainly opening markets and getting rid of some of these barriers is going to be critical to that. We are so efficient here in the United States as a producer and agriculture or any number of other products that we need these foreign markets. If we're going to have the kind of well-paying jobs maintained and created in the United States. So I think it's very important that we take action when we see protectionism that we highlighted, that we take WTO action if necessary as we did just yesterday, again against China are 16th case against China. Over the course of this administration, we've brought 25 cases to the WTO in total, more than any other country. And that we continue to hold countries feet to the fire to get rid of these protectionist steps. I think on your other question, I just raise I raise it as a question that if you take, if you take issues like raising tariffs on imports, you'll see countries potentially retaliate against us if we're doing something that's clearly illegal, you'll see countries potentially imitate us. And we'll find ourselves at the other end of the stick where our export industries and the jobs, the 11.5 million jobs so they support are put at risk because other countries are raising their tariffs. And then of course, raising tariffs as a tax, a tax on the part of our economy, part of our society who were at least able to afford it. The Council of Economic Advisers put out a study yesterday looking at the regressive, the regressive nature of tariffs. And how it's the lowest quintile of income, low income Americans who paid disproportionately the tariffs. And so you're hurting the people who you most want to help in society. And for all those reasons, I think we just have to think, take a step and think through all the secondary and tertiary impacts taught here in the second row. Once you stand up so that she can see you stand up, please. Zhu Lu from Chinese embassy. Thank you. Thank you. Mushroom it. First. I personally let Donald Trump's mine in the United States is a big loser of international trade. And how do you thing up on that? And what do you think? I do? I think Donald Trump's mind, the arguments about that it sounds they lose your data. And what do you think could be the reasonable explanation to the frustration and eager and anger that voters have right now. In a second. And just demoed shown now his strategy to persuade and urge big companies withdrawal their investment overseas in a state and expand factors here and do things that will last long because that's something different from the market economy rules. And how long, how far you think he can go. The third, you have a very good negotiation and then BIT negotiated with China. It's bilateral. It's about investment. Do thing. President Donald Trump could take that onto his agenda, thinking, I have to write these down. I know this will be surprising, but I am not a spokesman for the Trump incoming administration. So and I don't have any great insights other than what you and I read in the newspaper. So I won't try and speculate. You'll look, I think let me go to your first question. There. There is a lot of anger around the country. And I mentioned, I think it's, it's while it may well be driven more by technology than trade. I think there is a great sense among a lot of Americans that not all countries are playing by the same set of rules. And that we're being taken advantage of. And I see, I think you see that expressed and you know, like the, it's a very interesting study that David O tour and his colleagues have done of looking about where Chinese imports into the United States have had the biggest impact. And where the anger and the support for present like Trump was. It's a very interesting study and David was not anti trade him. He's actually a supporter of, a supporter of TPP. But he's pointing out the concern that if Americans are feeling like other countries and to be frank, China is number one on the list, are not upholding their obligations, not living by the same set of rules, taking advantage of access to our markets. It makes them very angry and it has political implications. And I think that's why it's so important and why from President Obama on down the strategic and economic dialogue, the Joint Commission on commerce and trade, the G20. All of our interaction with China and Chinese leaders has been to encourage them to take greater responsibility for the global trading system, to be a responsible participant in that system, to uphold the rules and to make sure that there continues to be support for openness. Otherwise, I think you will see that you are seeing a counter reaction. Yes, right back here. Thank you. Thank you. Tory, from the Heritage Foundation. So investors from the previous panel spoke at great length about the need for the business community to speak up about the potential renegotiation of nafta given IV. So they're extensive interests. And what happens if that was supply chains, especially in the auto industry. What would your thoughts beyond the capacity for stakeholders like automakers to speak up in us in a circumstance given the current attacks on many of their business decisions here in the United States. Well, but I think the, I think we need a new model of thinking about stakeholder engagement gone on these issues. I think that the days are gone when a few trade associations and yes, even a few think tanks could get mobilized around APOE, put out reports, hire a few lobbyists, and get trade agreements through Congress. I think those days are gone. I think we need an all out long-term public engagement effort that helps people understand what's at stake. You know, how much they already rely on trade in ways that they may not even imagined, whether it's through their job and the fact that their job is dependent on exports. Or whether it's as consumers and how much of what they take for granted, the iPhone that they have, that would cost more than $2 thousand if we disrupted trade. Or only wealthy people would have iPhones, not the single mother who uses the iPhone to face time with their kids after school during a break at work. I mean, we have to make this real to people that there is a lot at stake and a lot of safe for them personally. I think that's one of the the lessons of the last couple years has been that we haven't done enough of that. I hope the business committee will speak up because they have certainly they have an understanding of what the dynamic is, how to maintain competitiveness here globally. And what role trade plays in that. They clearly have priorities right now that are more around taxes and regulations. But I hope they will also speak up around, around trade. And I hope that we can engage with the kind of education I have heard I have mine and engagement for is much more like we did on the importance of recycling or the health effects of smoking. These are wide, broad and not about particular agreements and not about a particular votes. They're not tied to a particular congressional schedule. It's letting people know really what's at stake in their lives by withdrawing from the international economy, by losing US leadership at how it affects them and real day-to-day way. And I think the business community, as well as others, have a big role to play in that circle right over here. Microphone, coming right, Go. Hi Eric, coolish, American ship or magazines, Adam Smith project. To that point. What about the whole e-commerce and digital economy? Is that a, is that a mechanism or a lever that might get people to think more positively about trade because people have a one-to-one direct connection with that shipment. They see it, they track it versus, you know, the amorphous shipments that flow into Walmart, sight unseen. You see that is maybe a way to drum up support or interest in the populace. Absolutely. I think that could be a big part of that. During the our work on TPP, we met with sellers on eBay and sellers on Etsy, as well as the UPS's and FedEx, DHL of the world. And for those individual sellers as take out CFC's, I think 88% women, many working out of their homes making something and selling it halfway across the world. And other small businesses in the very smallest sense of the word. And they are benefitting When they sell that product from their home in Bethesda to a customer in Australia. They're using telecom services, software services, electronic payment services, express delivery services. That we take that all for granted. That you can go online, click a button, send something halfway across the world and that will actually get there. But those are, those are all areas where there is risk to openness. Where countries are saying, Well, we want to localize electronic payments. We don't want to allow express delivery to be done by international shippers. And I think for, for, for those individuals, we need to make sure that they are articulating why and help them see the link between what they're doing, the kinds of rules that were negotiating and TPB and other trade agreements. Brick down here in the front. Then I'll come to you next and then you'll get the last one on our own allowed to get out of here. Thank you. Rubber gaskets, middleware, Institute of International Studies. And a lot of lament has been expressed about losing American leadership and particularly Chinese leadership taking over. Given the vast momentum of 70 years of building an international order. Can you clarify a little bit of what the fear is about Chinese leadership? Is it vague? It seems a little vague to you, but could you clarify a little bit what the concerns are in which you think it might be different, what the world might look like differently if train it did take a more dramatic leadership role. Well, I'd say two things about that. One is Chinese have that China has a regional strategy for the Asia-Pacific. Look at the Silk Road initiative, the One Belt, One Road, our SAP, the Trade Agreement that they're negotiating succeeding countries. Even South China Sea is obviously part of a regional strategy. And they're executing on that strategy. And that positions them in a very powerful way to in the region to be able to call the shots. The US isn't looking to displace China. But we think it's important that the US also be engaged in the region and that our allies and partners in the region can diversify their relationships, diversify their markets, not become overly dependent on one country. And that the interactions in the region be based on the open rules-based approach that we've defended for 70 years, not about one country throwing its weight around. I think you don't have to. It's not a theoretical issue. If you look at ourselves as an example. Trade agreement versus TPP. China. I don't think it's, I don't think I'm saying anything controversial to say, China has a different approach to state-owned enterprises, Then we do than the disciplines and TPP, China has a different approach to intellectual property rights, protection, to the free flow of data. To a free and open Internet, to labor and environmental protections. In TPP, we've got protections of oceans and illegal logging, illegal fishing, and the subsidization of overfishing, wildlife protection. We've got protection of the marine environment. Those are things that are in TPP that aren't in RSA. Labor. We have look at the, the, the labor consistency plan that Vietnam negotiated to allow independent labor unions that can organize, strike, collect their own finances, elect their own leaders, affiliate with who they want to. And that those obligations are binding and enforceable. That if they don't do those things, they don't get access to our market. There's nothing like that in our set. So if you care about labor, you care about environment, you care about human trafficking. You care about IPR, you care about state-owned companies competing on a fair level Plato flavor, a fair level playing field with private firms. All these issues, there is a choice. And I think it's very much in the interests of American workers and farmers and ranchers and businesses. That the rules defining the Asia Pacific, which in many respects will be the rules that define the global trading system. That they reflect our interests and our values. This lady right here in the second row. Yeah, please stand up so that she can bring the microphone to changing from humanity, daily news media from tailoring instead of China. And he wanted to answer the question that my timeline, I'm just wondering if you talk to me like, hey, sorry about that. Us. Taiwan journeyed at relationships since time when our ninth largest trade partner. If not, what are your suggestions to improve the UN's time when trade relationship? We've not discussed Taiwan specifically. Like I think over the course of our administration, consistent with the policies that have been laid out for several decades. We've had our trade and investment agreement, consultations, talks about resolving some of our outstanding trade issues. We still have a lot of issues with Taiwan around pork, beef, and, and other agricultural products that were having difficulty getting into Taiwan and will certainly encourage them to continue that work, to try and eliminate those barriers and, and deepen our relationship consistent with the approaches that we in previous administrations have taken. Last question is going to be right here in the second row, so it will bring a mike over here to your left or your right, I should say. Thank you, called them if when the growth dialogue, I wanted to follow up on a Western, John asked you about looking forward. You pointed out that studies show that most of the job losses don't come from trade, fluctuate. It's very beneficial, will come from the technology in that we're just at the beginning of that. Just like you said, we have to educate people about the benefits of trade. What you think can be done to prepare citizens in general to understand the new economy we're living in the nomadic transformations which are coming in the role of government policy in trying to deal with that. You said there was some countries that were doing some interesting things, even some states. How can that be leveraged? Because we need that, because right now the focus is on trade, but it's, to some extent, it's Miss misdirected. And the real issue is how do we get the ciliates and the economy B, being able to adjust? That's absolutely, I think that's absolutely right. Like we don't as above and said, You don't get to vote on technology. There isn't a referendum on the next generation of software or whether robots are going to be introduced into the working place. You don't really get to vote on globalization. It's just a force. It's a product of containerization of shipping and the spread of broadband and a lot of other factors. So trade agreements become the scapegoat. Frankly, if they become the vessel into which people poor, they're real and legitimate economic anxieties. But because that's the one thing you get to vote on, it becomes the scapegoat. Think the good news is that the Pew Foundation and others have shown there actually is more support out there for trade than the recent politics would suggest. The majority of Americans understand the importance of international engagement of trade. They see it more as an opportunity than a threat, and particularly young people. The largest cohort of supporters of trade are young people who not surprisingly have been online since birth and have contacts all over the world. Think of themselves, they're more likely to have a passport, think they're going to travel, work, or live abroad, feel plugged in international vis-a-vis technology. And they are, they tend to be the most portray. So that gives me optimism for the future. But we really do need, as you said, to crack this not on only transition assistance by preparing people in the first place to succeed in a rapidly changing economy. Workplaces going to change in dramatic ways in the next 5, 10, 20 years. And that means rethinking a lot of what we do in terms of education, apprenticeships, vocational training and community colleges, and a lot of ideas out there. Singapore has a lot of ideas about how to train people who were in declining industries and moving them into rising industries. Korea, Scandinavia, and across the US, there are a number of interesting experiments, but it takes a conscious effort. People like Mark Warner, Senator Mark Warner's doing a lot of thinking about the future of work. There are others out there as well. And I think that's something we're going to need to do regardless of trade. I think it really goes to maintaining the social compact in the United States that allows her to be coherence instability in our politics. I promised the master that would let him get out of your little almost over the edge. But I do want to say how grateful we are. There's been a marvelous discussion. You've given us not only the insights of the philosophy that guy to do, but you've also given us a nice insight into what it means to be a US Trade Representative. You've done a splendid JOB. Ambassadors, would you all please say thank