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Speaker 1: Our very own David Weston, the host of Wall Street Week,

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Speaker 1: went down to Washington and they had a chance to

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Speaker 1: sit down with the US Trade Representative Catherine Dye a

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Speaker 1: fireside chat at the Aspen Security Forum in Washington, where

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Speaker 1: they covered a wide range of issues. Let's take a listen.

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Speaker 2: We're starting to realize that the implications of a regulatory

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Speaker 2: system that started in the nineties and hasn't evolved very

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Speaker 2: far is creating disconnects with the implications of this technology advancement.

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Speaker 2: So I'll give you one very very specific example that

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Speaker 2: I think may resonate with a lot of people because

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Speaker 2: it's a large part of the conversation in so many ways.

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Speaker 2: The unveiling of chat GPT four in the spring, I

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Speaker 2: think was a wake up moment for all of us that, Wow,

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Speaker 2: there is a lot of innovation that's going on in

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Speaker 2: our economy. That is a great thing, But holy Jesus,

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Speaker 2: what is happening here? And I would just say that

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Speaker 2: even five years ago, I had the opportunity to participate

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Speaker 2: in a conference at Stanford where they did a whole

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Speaker 2: AI pre for US, and at the time the prompts

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Speaker 2: that you were giving AI were coming out with hilariously

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Speaker 2: funny outcomes when you ask AI that was being trained

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Speaker 2: to write a joke, and the joke that came out

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Speaker 2: the back end was almost never funny, or it was

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Speaker 2: funny because it was so unfunny. Right, So at the time,

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Speaker 2: I think just five years ago, twenty nineteen, twenty eighteen,

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Speaker 2: we're thinking, Wow, this could have a lot of potential.

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Speaker 2: There's so much innovation, there's so much stuff that's brewing,

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Speaker 2: but we don't have to be worried about it yet

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Speaker 2: because it's still very rudimentary. Short period of time, All

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Speaker 2: of a sudden for all of you who have experimented

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Speaker 2: with chat GPT four and you've started putting prompts in

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Speaker 2: literally blowing everybody's minds. Right, which is the focus that

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Speaker 2: we have now on AI? What is AI built on?

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Speaker 2: It's built on massive amounts of data. We're come back

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Speaker 2: to the issue of data. How do you develop AI?

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Speaker 2: You have to have access not just to those massive

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Speaker 2: amounts of data, you have to have access to incredibly

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Speaker 2: powerful computing processes. You marry those two up and you're

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Speaker 2: going to push that innovation and push that development. Who

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Speaker 2: has access to that kind of data and that kind

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Speaker 2: of computing power a very small number of extremely powerful

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Speaker 2: and dominant companies that are almost all, if not all American,

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Speaker 2: And that's why our posture on the rules that apply

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Speaker 2: to data flows, data localization, and source code is so important.

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Speaker 2: At the core of each of these proposals in these

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Speaker 2: negotiations is the question that we have to answer around

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Speaker 2: the balance of authority between the private sector and the

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Speaker 2: companies and the government and our regulatory authorities. Who gets

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Speaker 2: to decide or control how freely the data can flow,

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Speaker 2: and when it can be restrict did where it needs

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Speaker 2: to be stored, and when access is required to disclose

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Speaker 2: source code. And I think that those issues are very

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Speaker 2: much consequential, not just for trade and economics, but for

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Speaker 2: our entire society. And the cross cutting nature of these

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Speaker 2: issues means that if we're going to lead using trade

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Speaker 2: rules at a time when there is no consensus but

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Speaker 2: massive amounts of debate and questioning, then I, as USTR,

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Speaker 2: am committing massive malpractice and probably committing policy suicide by

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Speaker 2: getting out ahead of all of the other conversations and

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Speaker 2: decisions that we need to make as a country.

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Speaker 3: On the subject of expanding existing agreements we had, I

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Speaker 3: believe it's your counterpart in Taiwan this week, say we'd

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Speaker 3: like to have a free trade agreement. Let's expand out

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Speaker 3: what we have right now. Obviously that would raise geopolitical issues,

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Speaker 3: foreign policy issues. Are you open to that.

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Speaker 2: So the negotiation we're having with Taiwan right now, and

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Speaker 2: I'll just highlight here, every trade negotiation we're doing right

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Speaker 2: now has an element of innovation that's baked into it.

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Speaker 2: And this is because we're trying to be responsive to

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Speaker 2: the data and the feedback that we are receiving from

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Speaker 2: the world economy. There are so many changes that are

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Speaker 2: going on simultaneously that I'm not met Even our smartest economists,

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Speaker 2: even my colleague Janet Yellen, who is a legend in macroeconomics,

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Speaker 2: no one can explain exactly what's happening or predict exactly

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Speaker 2: what's going to happen next. And so from a trade

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Speaker 2: policy perspective, what we have been very disciplined in trying

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Speaker 2: to do is to say, let us bring a trade

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Speaker 2: program to each one of our partners that's tailored to

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Speaker 2: that partner, that's tailored to their interest in our interest

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Speaker 2: in the partnership, that's also tailored to the challenges and

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Speaker 2: the dynamics that we are navigating together in the global

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Speaker 2: economy with Taiwan. What that's meant is that we have

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Speaker 2: been negotiating agreements, and the first agreement that we have

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Speaker 2: with Taiwan is one that covers I think five issue areas.

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Speaker 2: It's trade facilitation at small media enterprises, good regulatory practices,

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Speaker 2: and I'll have to look at my notes for the

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Speaker 2: other two. But we've got a core group of five disciplines.

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Speaker 2: We signed that agreement Congress in a fit of enthusiasm,

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Speaker 2: even though they weren't legally required to took a vote

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Speaker 2: on it, to show their support for what we are

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Speaker 2: doing here. And on the basis of that support, we

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Speaker 2: are negotiating another set of disciplines right as we speak.

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Speaker 2: We've been making excellent progress and we will continue to

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Speaker 2: look at building out those agreements to have an arrangement

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Speaker 2: with the Taiwan economy that is fit for the times.

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Speaker 2: And the times are very challenging, and so this is

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Speaker 2: one of our accomplishments that we are particularly proud of

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Speaker 2: and committed to.

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Speaker 3: So you don't rule out of free trade agreement, but

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Speaker 3: it's not now.

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Speaker 2: Look, so let me back up to What do you

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Speaker 2: mean by a free trade agreement?

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Speaker 3: Right?

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Speaker 2: Do you mean the traditional kind of US approach to

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Speaker 2: a very very comprehensive, maximally liberalizing, aggressively liberalizing agreement. We're

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Speaker 2: not doing that with anybody right now. It's actually insensitive

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Speaker 2: to the dynamics in the global economy and the US

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Speaker 2: economy right now. To push on with that program, which

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Speaker 2: may have been fit for the eighties and the nineties,

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Speaker 2: maybe was starting to show its age in the two

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Speaker 2: thousands and twenty tens. It's twenty twenty three. We need

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Speaker 2: new policies. There is innovation going on all around us.

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Speaker 2: When we were negotiating those agreements, I don't know, AI

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Speaker 2: wasn't even a thing that we talked about, right, So,

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Speaker 2: in all these different ways, but certainly we hadn't experienced

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Speaker 2: the pandemic, supply chain discombobulations and disconnect the fragilities. The

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Speaker 2: geopolitical tensions were We've always had them, but they were

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Speaker 2: different and at a different scale with different partners. So

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Speaker 2: in all ways, as much as we embrace innovation instinctively

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Speaker 2: as Americans and certainly in our economy, we need to

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Speaker 2: be embracing innovation in our trade policy and that's what

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Speaker 2: we're doing. And that's why when you say FTA, sure,

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Speaker 2: if by FTA you mean are we innovating trade agreements

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Speaker 2: and are we doing trade aggressively but in new ways.

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Speaker 3: Yes.

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Speaker 2: When you say FTA, if you mean the old style

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Speaker 2: trade agreements that we used to do, then know