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Speaker 1: This is a Bloomberg Business Flash and I'm Cameron Moscow.
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Speaker 1: for thirty five dollars twenty five it's a share in
Speaker 1: cash or a total value of about one point seven
Speaker 1: nine billion dollars. And that's a Bloomberg business flash. Tom
Speaker 1: and Michael Caramelska, thank you very much. Data Marshall. It
Speaker 1: was a career Foreign Service officer loaned to the White House,
Speaker 1: worked on international economic issues in the George H. W.
Speaker 1: Bush and Clinton white House is truly bipartisan look at
Speaker 1: what was going on in the world those days. He's
Speaker 1: now the head of the Transnational Strategy Group and he's
Speaker 1: talking about this campaign for president and Mike he's qualified
Speaker 1: if you talk about trade because he's got a degree
Speaker 1: in physics from Case Western Reserve, which is that's a
Speaker 1: very very cool degree. You've got to be from Ohio
Speaker 1: to understand this this campaign, there's no question about that.
Speaker 1: But Data, I I found it very interesting. Uh you're
Speaker 1: writing that, um, as the candidates try to figure out
Speaker 1: the US economic place in the world in these globalized days,
Speaker 1: that what we're getting is sort of an effort to
Speaker 1: repair the airplane while in flight. Uh, nobody has spent
Speaker 1: a lot of time thinking through exactly what should be done.
Speaker 1: They're responding more to public pressure than to a clear
Speaker 1: strategy for how you run a globalized economy. Well that's right.
Speaker 1: In good morning, gentlemen. Thank you so much for putting
Speaker 1: me on this show. UM. Yeah, it's um. Globalization has
Speaker 1: been around for a very long time. Uh. The effects,
Speaker 1: both positive and negative, have been pretty manifest in the
Speaker 1: United States and around the world. But UM, I think
Speaker 1: it's fair to say that in this particular election, for
Speaker 1: a number of reasons, these issues have become front and center. Uh.
Speaker 1: The concerns regarding wage growth, inequality, jobs growth, manufacturing of
Speaker 1: course China both as an economic competitor and market, and
Speaker 1: also of course political military challenges regarding China. Uh, the
Speaker 1: issues involving high tech industry of the United States. Uh.
Speaker 1: Many many of these kinds of issues are swirling around
Speaker 1: right now, and UH there are there are some common
Speaker 1: sort of axes that one should think about in trying
Speaker 1: to uh understand what is going on. But for better
Speaker 1: or for worse, through to November eight, these issues are
Speaker 1: going to be white hot. You mentioned repairing the airplane
Speaker 1: while in flight, you know. Um, there has been a
Speaker 1: tremendous amount of discussion in sort of academic, business, political circles, UM,
Speaker 1: foreign policy circles in Washington, New York and elsewhere over
Speaker 1: many years about these trends, but they really have not
Speaker 1: been focused on very much in prior elections. Are only
Speaker 1: really at the margins this time. For better or for worse.
Speaker 1: The issues are out there. The question of course is
Speaker 1: um uh, how will they be analyzed? Who the voters
Speaker 1: will elect and of course who that president, what that
Speaker 1: president is going to end up doing about this, because
Speaker 1: certainly some changes need to be made. In my view,
Speaker 1: when I look at t p P, there has to
Speaker 1: be an international response to our presidential election. And frankly
Speaker 1: to what the two candidates are hearing from their supporters,
Speaker 1: I believe both of them are hearing that they're not
Speaker 1: thrilled about t p P from the American prism. What's
Speaker 1: the foreign response to that observation? Well, are the eleven
Speaker 1: TPP partners with the United States? UM, of course are
Speaker 1: very positive on it. Um they very much want to
Speaker 1: see it passed. Of course, the as we recall, the
Speaker 1: agreement has been negotiated, but it needs the legislation that's
Speaker 1: required to put into effect is still pending in Congress
Speaker 1: and there's a lot of questions about whether that will
Speaker 1: be passed anytime soon, including in the lame duck period.
Speaker 1: But as we can see from the President's recent trip
Speaker 1: to Asia, where he of course visited a number of
Speaker 1: countries that are partners for the Transpacific Partnership negotiation UM,
Speaker 1: they there is a strong degree of support. I'm sure
Speaker 1: the President, who took along his U. S. Trade representative
Speaker 1: as well, was trying to be as UM optimistic and
Speaker 1: as positive and serving. The President sees this negotiation and
Speaker 1: one that is still underway across the Atlantic, as key
Speaker 1: elements of his UM legacy, perhaps some of the top
Speaker 1: elements of his economic part of his legacy. So he's
Speaker 1: going to push it, but it's going to it has
Speaker 1: received and I believe will continue to see significant resistance politically,
Speaker 1: uh and by both parties, which is another interesting realignment
Speaker 1: that we're seeing, certainly by by all three candidates that
Speaker 1: are personally running. Well, go ahead place Well, I was
Speaker 1: gonna ask the the issue seems to be you can
Speaker 1: make an economic case for for the macro economy for
Speaker 1: t PP, but it's very hard to make a case
Speaker 1: to the working man who feels his job is in
Speaker 1: danger because of trade. How would you adjust trade deals
Speaker 1: to account for that, to to put a floor under
Speaker 1: the problems for the worker. Well, that's a very good question,
Speaker 1: and that really is the question is how do we
Speaker 1: move forward with trade deals in the future, Because certainly,
Speaker 1: I mean everyone makes the point that of humanity lives
Speaker 1: outside of the borders of this country, about se economy,
Speaker 1: the world's economies outside, so clearly trade needs to continue
Speaker 1: even without any additional trade agreements. Obviously would there's a
Speaker 1: tremendous amount of international trade, but the way it has
Speaker 1: worked out is that it has in my view, created
Speaker 1: some real tensions and inequalities. And as you point out,
Speaker 1: the issue I think is what you do about those
Speaker 1: who have not been benefited by globalization before? That is
Speaker 1: really the question. And here I think that the data
Speaker 1: is pretty clear on it, both um academic data is
Speaker 1: a very widely reported um insided source and politically so
Speaker 1: certainly there needs to be uh a lot more tension
Speaker 1: paid to manufacturing. Let's come back on, Dana. Let's come
Speaker 1: back and continue this discussion. Dana Marshall, where the SEA
Speaker 1: worked with Bush SR and Clinton on trade dynamics and
Speaker 1: as an important voice to consider on America and Trade
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Speaker 1: Good morning. I'm Kerra in Moscow, Allow with Tom Keene
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Speaker 1: the open sn P five hundred up about a tenth
Speaker 1: of upper center one point to twenty one hundred Dow
Speaker 1: Jones Industrial average up a tenth of upper center eighteen
Speaker 1: points to seventeen thousand, eight hundred ninety two. And then
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Speaker 1: points to forty nine thirty nine ten. Your treasury down
Speaker 1: ten thirty seconds the old point eight eight percent yield
Speaker 1: on the two year point on three percent. Now am
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Speaker 1: cents to fifties seven of barrel, Comac school down two
Speaker 1: tens per cent or two dollars fifty cents to twelve ounce.
Speaker 1: The euro a dollar eleven sixty one, the en one
Speaker 1: eleven point to zero. Tom and Mike Karen, thanks so much,
Speaker 1: Dana Marshall with us working with George H. W. Bush
Speaker 1: and President Clinton is well, Mike, why don't you pick
Speaker 1: it up on T P P and on what we
Speaker 1: were talking about earlier? We were talking about I mean,
Speaker 1: obviously you can't under the rules Congress can't amend the bill,
Speaker 1: so it will stand or fall on its own, uh,
Speaker 1: this trade deal. But you were telling us how before
Speaker 1: we had to go to break, how you would fix
Speaker 1: future trade deals. Right. Well, the yeah, I think that
Speaker 1: if you look at why it is that these trade
Speaker 1: deals have elicited the kind of resistance that we've seen,
Speaker 1: even in three sort of frankly inconsequential deals like very
Speaker 1: small ones would negotiated a few decades ago with small
Speaker 1: countries in the Persian Gulf, maybe for political reasons. A
Speaker 1: lot of it has to do with the effect on workers,
Speaker 1: and then in the manufacturing sector. And let's face if
Speaker 1: you look at the manufacturing numbers right now, either output
Speaker 1: or employment, it's flat. In fact, it looks like even
Speaker 1: trending down a bit in with some charts that I've seen.
Speaker 1: So that has to be the big focus. So what
Speaker 1: do you do about either perhaps trying to amend TPP
Speaker 1: to try to make it something that either candidate would
Speaker 1: accept or for a future deal. I think you need
Speaker 1: to look at the impacts on manufacturing, and there are
Speaker 1: a number of areas. I think maybe two or three
Speaker 1: baskets I would highlight. Certainly one of them is UH
Speaker 1: in terms of currency misalignment or manipulations, is something that
Speaker 1: there's been a lot of discussion about, a lot of analysis,
Speaker 1: and it's a very very big factor UH that needs
Speaker 1: to be looked at. There's a school of thought, and
Speaker 1: I think I would subscribe to it that that the
Speaker 1: currency manipulation issue was not sufficiently dealt with UH in
Speaker 1: the TPP negotiations. There's a lot of reasons for that.
Speaker 1: You get into it UH rules of origin, which is
Speaker 1: a kind of a very esoteric sounding thing, but it's
Speaker 1: very important in trade agreement. It basically means what what
Speaker 1: amount of components of a trading partner is the minimum
Speaker 1: that you need in a product in order to for
Speaker 1: it to benefit from a trade agreement. There's was a
Speaker 1: lot of controversy about rules of origin, which we're seen
Speaker 1: as potentially threatening US manufacturing by being too low that
Speaker 1: it would permit effectively let's say Chinese products China of
Speaker 1: course not being a TPP member a country to flow
Speaker 1: say into Japan and being incorporated into a Japanese car
Speaker 1: that is sent UH with a gradually declining duty into
Speaker 1: the United States. That was the problem UH. The treatment
Speaker 1: of state enterprises, which which are important in a number
Speaker 1: of the t t member countries, are also in areas
Speaker 1: that needs to be looked at more data. The minutia
Speaker 1: of this is important. With your experience with President Bush
Speaker 1: Senior and with President Clinton. What's different about our caution
Speaker 1: and how suspect we are about this agreement versus the
Speaker 1: previous eight agreements you are directly involved with. Well, again,
Speaker 1: an interesting question if you look back, for example, and
Speaker 1: when NAFTA was being negotiated and when it finally passed
Speaker 1: in the mid nineties, at that time, the United States
Speaker 1: actually had a small trade surplus with Mexico. That surplus
Speaker 1: is now loaded into a huge something like llion dollar deficit.
Speaker 1: I think that that is an important factor. And I
Speaker 1: think also history has shown where we've seen mounching trade
Speaker 1: deficits which are serious need to be looked at, which
Speaker 1: do impact uh US economy. I think that these are
Speaker 1: it's the history that we've seen with these negotiations that
Speaker 1: has um I think changed. Um. You know, I'm a,
Speaker 1: as you mentioned, former State Department person, so I'm very
Speaker 1: used to using trying to use economic tools to achieve
Speaker 1: US foreign policy ends. That's very legitimate. It needs to continue.
Speaker 1: I think the challenge for the next administration will be
Speaker 1: which of those economic tools can be used and which
Speaker 1: that would be effective and advanced foreign policy. In first,
Speaker 1: just just one example on copyright, will the value of
Speaker 1: our creative content be improved with TPP. Well, that is
Speaker 1: what that is one of the main reasons um for
Speaker 1: the administration pursuing it. If you look at the other
Speaker 1: side of the ledger, on the intellectual property right side, UH,
Speaker 1: copyright protection, digital trade, avoiding, localization, these are seen as
Speaker 1: breakthrough areas for the TPP document, but it's very difficult
Speaker 1: to quantify. Just a week or two ago, the International
Speaker 1: Trade Commission is required by law to do an economic
Speaker 1: evaluation of trade agreements. The i t C put out
Speaker 1: it's analysis of TPT and it showed, frankly, a very
Speaker 1: poor performance in manufacturing. You know, why would you want
Speaker 1: to negotiating ass in agreement that was not going to
Speaker 1: be positive in manufacturing. On the other side of the ledger, though,
Speaker 1: it did say that it that many of the individuals
Speaker 1: and companies have talked to UH extolled virtues of this
Speaker 1: on the i P side, but without quantification. Well then, uh, well,
Speaker 1: let's ask this when you look at you you talked
Speaker 1: about the trade deficit with Mexico. What should be our
Speaker 1: foreign policy, foreign economic policy, what should we want from
Speaker 1: other countries? Well, that's that's also a very complicated question.
Speaker 1: I mean, if you look if you look at the
Speaker 1: subject as from a business perspective, Let's see, you're running
Speaker 1: a transnational business. What you're trying to do, of course
Speaker 1: is to put production UH and trade and consumption into
Speaker 1: UH the places in the world, which is going to
Speaker 1: maximize your return on investment and shareholder value. But that
Speaker 1: is not necessarily the same goal as UM A government has. UH.
Speaker 1: National economic goals are not necessarily the same as the
Speaker 1: goals of transnational enterprises. It seems to me that that
Speaker 1: the next president to whoever he or she might be,
Speaker 1: is going to be elected with by an electorate that's
Speaker 1: very concerned about these things and it's looking for change.
Speaker 1: Of course, like any election, electorate's not expert. They're looking
Speaker 1: for the experts the administration change it. I think certainly
Speaker 1: there needs to be some changes in manufacturing policy and
Speaker 1: on trade. And I would also say, just at the
Speaker 1: last point that it's not only the international side. There's
Speaker 1: also domestic steps that can be taken, for example, an
Speaker 1: infrastructure bank. Right, We're gonna have to leave it there.
Speaker 1: Dana Marshall, thank you so much. Transnational Strategy Group, what
Speaker 1: that was a joy to get the same discussion on
Speaker 1: TPP where Mike I find there's oftentimes um a lot
Speaker 1: of heat and certitude unless analysis. Uh Mike, look at
Speaker 1: that headline. Yeah, that's a big number. Billion dollars, Saudi
Speaker 1: Arabia said to Wade bond sale, this is course off cutter.
Speaker 1: I believe it was nine billion off the top of
Speaker 1: my head. Don't have it and from me fifteen billion
Speaker 1: dollars as UM fifty oil in the chronic nature of
Speaker 1: oil here Brent crude down fourteen since I note gold
Speaker 1: down four dollars as well twelve Saudi Arabia to Wade
Speaker 1: bond sale of fifteen billion. Time not to check in
Speaker 1: with Michael Barr and get the latest world of national headlines. Mike, Tom,
Speaker 1: thank you very much. Just two years ago, the Braunsils
Speaker 1: River in southeast Texas had run dry in places because
Speaker 1: of drought. Today, communities along the Bronzils are dealing with
Speaker 1: flooding that has killed at least six people. The National
Speaker 1: Weather Service says the river will likely crest at record
Speaker 1: levels by mid day today. In Fort Bend County, the
Speaker 1: suspected Taliban gunmen shot and killed at least sixteen people today.
Speaker 1: In Afghanistan, it is the deadliest single attack the group
Speaker 1: has made since naming a new leader last week. A
Speaker 1: spokesman for the northern province of Kundus says insurgents dressed
Speaker 1: in military uniform stopped convoy of buses. Initially, about two
Speaker 1: hundred hostages were taken, more than a hundred fifty freed,
Speaker 1: and more than thirty are still being held by the Taliban.
Speaker 1: About forty thousand striking Verizon employees say they are returning
Speaker 1: to work tomorrow after reaching a tentative contract agreement. The
Speaker 1: company and unions say the deal reached Friday includes about
Speaker 1: new call center jobs and nearly eleven percent in raises
Speaker 1: over four years. Global News twenty four hours a day,
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Speaker 1: Michael bar thanks so much for look at ecuties bonds.
Speaker 1: Currencies come out is a yen weaker one eleven twenty three,
Speaker 1: some persistent weakness in the end. We see the same
Speaker 1: thing with red membies six point five eight you won
Speaker 1: per dollar. I also know Brazilian real three point five
Speaker 1: nine weaker over the last few days. Michael McKee and
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