1 00:00:03,120 --> 00:00:18,680 Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. 2 00:00:20,120 --> 00:00:23,680 Speaker 2: Hello and welcome to another episode of The Odd Blogs podcast. 3 00:00:23,760 --> 00:00:26,160 Speaker 3: I'm Jill Wisenthal and I'm Tracy Alloway. 4 00:00:26,480 --> 00:00:29,680 Speaker 2: Tracy, one of the things that we've noted from time 5 00:00:29,760 --> 00:00:32,280 Speaker 2: to time on the show is, you know, when it 6 00:00:32,320 --> 00:00:35,839 Speaker 2: comes to trade with China specifically trade in general, but 7 00:00:35,840 --> 00:00:38,920 Speaker 2: I would say trade with China specifically one of the 8 00:00:39,040 --> 00:00:43,080 Speaker 2: rare areas where there seems to be a bipartisan consensus 9 00:00:43,360 --> 00:00:45,239 Speaker 2: that maybe the way we did it in the nineties, 10 00:00:45,280 --> 00:00:49,040 Speaker 2: two thousand, prior most of the twenty tens was not desirable, 11 00:00:49,240 --> 00:00:51,720 Speaker 2: was costly in certain ways, and that the whole thing 12 00:00:51,760 --> 00:00:52,320 Speaker 2: needs everything. 13 00:00:52,640 --> 00:00:55,200 Speaker 3: It is kind of amazing that that's the thing that 14 00:00:55,240 --> 00:00:58,040 Speaker 3: people have landed on as an area of agreement. I 15 00:00:58,040 --> 00:01:01,040 Speaker 3: think in retrospect it would have been kind of unexpected. 16 00:01:01,080 --> 00:01:05,399 Speaker 3: But you're absolutely right. There seems to be these dual concerns. 17 00:01:05,520 --> 00:01:08,959 Speaker 3: I would say one is national security, so the idea 18 00:01:08,959 --> 00:01:13,320 Speaker 3: that maybe China is a strategic competitor in terms of security, 19 00:01:13,400 --> 00:01:17,080 Speaker 3: and so you should be worried about what they're building, 20 00:01:17,280 --> 00:01:20,399 Speaker 3: what they're doing over there, all of that technology competition 21 00:01:20,480 --> 00:01:23,360 Speaker 3: things like that as well. But then the other component 22 00:01:23,400 --> 00:01:26,759 Speaker 3: of it, I think is you hear terms like unfairness, 23 00:01:26,800 --> 00:01:31,120 Speaker 3: maybe even cheating, People talk about China not playing on 24 00:01:31,200 --> 00:01:34,319 Speaker 3: the same playing field that everyone else is, and so 25 00:01:34,680 --> 00:01:37,959 Speaker 3: it seems to be driven by those twin concerns. And 26 00:01:38,040 --> 00:01:41,600 Speaker 3: I think again, like when the Trump administration ended and 27 00:01:41,720 --> 00:01:45,000 Speaker 3: Biden came into the presidency, I don't think anyone really 28 00:01:45,080 --> 00:01:48,200 Speaker 3: expected the extent to which a lot of those tariffs 29 00:01:48,200 --> 00:01:51,320 Speaker 3: would be carried over, and yet here we are almost 30 00:01:51,320 --> 00:01:55,080 Speaker 3: four years later, and there has been this kind of 31 00:01:55,080 --> 00:01:56,920 Speaker 3: incredible continuity. 32 00:01:56,480 --> 00:01:59,960 Speaker 2: A continuity and arguably even expansion in a certain areas. 33 00:02:00,240 --> 00:02:02,760 Speaker 2: And of course, if we were to get another Trump administration, 34 00:02:03,000 --> 00:02:06,560 Speaker 2: then very likely a further expansion of some of these 35 00:02:06,600 --> 00:02:09,959 Speaker 2: trade restrictions. We seem to take two components. So there's 36 00:02:10,000 --> 00:02:14,239 Speaker 2: obviously tariffs on certain key areas, and then you know, 37 00:02:14,280 --> 00:02:18,280 Speaker 2: there's so much attention on technology and so technology export controls, 38 00:02:18,639 --> 00:02:21,080 Speaker 2: and when you mentioned you know there's sort of unfairness 39 00:02:21,200 --> 00:02:24,320 Speaker 2: or cheating or something like that. You know, there's obviously 40 00:02:24,440 --> 00:02:27,520 Speaker 2: just a lot of anxiety about the fact that in 41 00:02:27,600 --> 00:02:32,960 Speaker 2: many advanced technological areas, China is building a lot of 42 00:02:33,120 --> 00:02:36,720 Speaker 2: very competitive things. And whether it's I'm particularly thinking in 43 00:02:36,800 --> 00:02:41,160 Speaker 2: areas like batteries or evs, where it looks like in 44 00:02:41,200 --> 00:02:44,000 Speaker 2: many cases they're ahead and there's a lot of anxiety. 45 00:02:44,000 --> 00:02:46,200 Speaker 2: These are key areas for the future, and the US 46 00:02:46,320 --> 00:02:47,840 Speaker 2: is behind and the europe is behind. 47 00:02:48,040 --> 00:02:49,239 Speaker 4: Absolutely well. 48 00:02:49,280 --> 00:02:52,760 Speaker 2: I'm very excited because we truly do have the perfect 49 00:02:52,800 --> 00:02:56,120 Speaker 2: guest to talk about this big pivot where it's going, 50 00:02:56,560 --> 00:02:59,040 Speaker 2: some of the theory behind it. What does this new 51 00:02:59,080 --> 00:03:01,880 Speaker 2: approach look like, and what is it supposed to accomplish. 52 00:03:02,120 --> 00:03:05,040 Speaker 2: We're going to be speaking to the US Trade Representative, 53 00:03:05,120 --> 00:03:08,760 Speaker 2: Ambassador Catherine Tie. Thank you so much for coming on 54 00:03:08,800 --> 00:03:09,360 Speaker 2: Odd Lives. 55 00:03:09,800 --> 00:03:11,720 Speaker 5: Thank you so much for having me. I'm delighted to 56 00:03:11,760 --> 00:03:12,520 Speaker 5: be here with both of you. 57 00:03:12,760 --> 00:03:15,800 Speaker 2: Fantastic. Let me just start with a really big picture question. 58 00:03:15,840 --> 00:03:18,840 Speaker 2: You know, for decades there was a certain status quo 59 00:03:19,000 --> 00:03:21,960 Speaker 2: with trading with China. There seems to have been a 60 00:03:22,080 --> 00:03:24,799 Speaker 2: sharp pivot. Is this the new normal? Is this going 61 00:03:24,840 --> 00:03:28,840 Speaker 2: to be with us, this new relationship with US China trade. 62 00:03:29,400 --> 00:03:31,720 Speaker 2: Is this going to be what it's like for years 63 00:03:31,760 --> 00:03:32,040 Speaker 2: to come? 64 00:03:32,800 --> 00:03:36,240 Speaker 5: So I cannot wait to get into some of the 65 00:03:36,280 --> 00:03:39,800 Speaker 5: specifics on this question, but I want to start at 66 00:03:39,840 --> 00:03:44,280 Speaker 5: a slightly higher level and just to orient what I 67 00:03:44,440 --> 00:03:47,600 Speaker 5: do and what trade policy is. So as the US 68 00:03:47,640 --> 00:03:50,280 Speaker 5: Trade Representative, my title is a bit of a mouthful, 69 00:03:50,280 --> 00:03:53,800 Speaker 5: but it's actually one of the most self explanatory positions 70 00:03:53,800 --> 00:03:57,240 Speaker 5: in the President's cabinet. My job is literally to represent 71 00:03:57,320 --> 00:04:00,880 Speaker 5: the interests of the United States. That's the entire United States, 72 00:04:01,200 --> 00:04:04,840 Speaker 5: the entire economy, all of its people, from coast to coast, 73 00:04:05,120 --> 00:04:08,040 Speaker 5: from top to bottom on the coasts and the middle 74 00:04:08,560 --> 00:04:15,000 Speaker 5: and to represent Americans and the American economy in international trade. 75 00:04:15,480 --> 00:04:18,159 Speaker 5: What that means is trade is a very interesting thing. 76 00:04:18,480 --> 00:04:21,520 Speaker 5: We are both a part of the Foreign policy team 77 00:04:21,600 --> 00:04:24,480 Speaker 5: because international trade is something that you do with other countries. 78 00:04:24,680 --> 00:04:28,480 Speaker 5: There's that foreign relations aspect to it. But also we 79 00:04:28,520 --> 00:04:31,080 Speaker 5: are part of the economic policy team. Is what you 80 00:04:31,279 --> 00:04:35,200 Speaker 5: do in trade, it impacts your economy. It can help 81 00:04:35,240 --> 00:04:37,320 Speaker 5: to grow your economy, and it can help to shrink 82 00:04:37,360 --> 00:04:40,680 Speaker 5: your economy if you depending on how you do trade policy. 83 00:04:41,160 --> 00:04:47,159 Speaker 5: So what we were oriented by at the beginning of 84 00:04:47,200 --> 00:04:51,280 Speaker 5: this administration, President Biden Vice President Harris gave me at 85 00:04:51,360 --> 00:04:55,080 Speaker 5: USTR and my team two charges. The first one was 86 00:04:55,560 --> 00:04:59,279 Speaker 5: America's back and so you must do everything you can 87 00:04:59,560 --> 00:05:03,400 Speaker 5: to repat relations with our trading partners, to be as 88 00:05:03,440 --> 00:05:08,599 Speaker 5: constructive as possible to demonstrate that the United States is 89 00:05:08,680 --> 00:05:11,440 Speaker 5: engaged with the rest of the world and that the 90 00:05:11,600 --> 00:05:16,880 Speaker 5: United States is a force for good. The other charge 91 00:05:16,920 --> 00:05:20,159 Speaker 5: that we had was you must also be a part 92 00:05:20,240 --> 00:05:24,159 Speaker 5: of our economic policy team. You must also get in 93 00:05:24,240 --> 00:05:26,720 Speaker 5: line to make sure that you are pulling in the 94 00:05:26,760 --> 00:05:32,320 Speaker 5: same direction as we heal ourselves from the hardships of 95 00:05:32,480 --> 00:05:35,520 Speaker 5: the COVID pandemic. The COVID pandemic was not just a 96 00:05:35,560 --> 00:05:40,880 Speaker 5: global health crisis, it also was a global economic crisis. 97 00:05:41,240 --> 00:05:43,040 Speaker 5: You must be a part of the team to get 98 00:05:43,120 --> 00:05:46,560 Speaker 5: us past COVID and then to help us to build 99 00:05:46,600 --> 00:05:50,640 Speaker 5: the United States economy so that we can be strong today, tomorrow, 100 00:05:50,720 --> 00:05:55,200 Speaker 5: and for the years to come. So our orientation has 101 00:05:55,240 --> 00:05:59,839 Speaker 5: required us to do trade differently to ensure that we 102 00:05:59,880 --> 00:06:02,520 Speaker 5: are still engaged with the rest of the world constructively, 103 00:06:02,560 --> 00:06:07,840 Speaker 5: but also also to really stand up for US economic interests. 104 00:06:07,880 --> 00:06:09,880 Speaker 5: And so where I want to start the conversation with 105 00:06:10,120 --> 00:06:13,600 Speaker 5: your first question and getting into the US China trade relationship, 106 00:06:14,000 --> 00:06:17,480 Speaker 5: is you talked to some about the technology competition that 107 00:06:17,520 --> 00:06:21,560 Speaker 5: we have. You talked about the national security and the 108 00:06:21,720 --> 00:06:25,560 Speaker 5: geopolitical tensions. One piece that I think is going to 109 00:06:25,600 --> 00:06:28,279 Speaker 5: be really important for us to focus on is this 110 00:06:28,520 --> 00:06:33,640 Speaker 5: concept of economic security, and that has at least two 111 00:06:33,640 --> 00:06:36,880 Speaker 5: facets that I want to lay out for you. One 112 00:06:36,920 --> 00:06:41,080 Speaker 5: is the economic security of the entire United States, the 113 00:06:41,080 --> 00:06:45,440 Speaker 5: economic security of the nation. And the other concept is 114 00:06:45,920 --> 00:06:49,560 Speaker 5: the economic security of the people within the United States, 115 00:06:49,560 --> 00:06:53,239 Speaker 5: the economic security of our working people. And it's really 116 00:06:53,279 --> 00:06:55,400 Speaker 5: through that lens that I think that it will be 117 00:06:55,440 --> 00:06:58,240 Speaker 5: important to start taking on some of your questions about 118 00:06:58,240 --> 00:06:59,640 Speaker 5: the US China trade relationship. 119 00:07:00,440 --> 00:07:03,039 Speaker 3: Okay, well, let me ask one more broad based question, 120 00:07:03,160 --> 00:07:05,760 Speaker 3: then maybe we can get more into China. But when 121 00:07:05,800 --> 00:07:11,080 Speaker 3: you say representing US interests in terms of economic security, 122 00:07:12,080 --> 00:07:14,880 Speaker 3: has that always been the case for USTR or does 123 00:07:14,920 --> 00:07:18,400 Speaker 3: this represent some sort of policy shift? Because putting my 124 00:07:19,120 --> 00:07:24,520 Speaker 3: international relations back on, I took IR at university. I 125 00:07:24,520 --> 00:07:27,440 Speaker 3: think back to trade in like the nineteen nineties and 126 00:07:27,480 --> 00:07:30,800 Speaker 3: two thousands, so much of it was just about exports 127 00:07:30,840 --> 00:07:34,160 Speaker 3: and growing GDP. This seems to be something a little 128 00:07:34,200 --> 00:07:35,080 Speaker 3: bit different. 129 00:07:35,600 --> 00:07:39,320 Speaker 5: One hundred percent. The approach that we are bringing we 130 00:07:39,400 --> 00:07:44,280 Speaker 5: have called a worker centered trade policy, and the point 131 00:07:44,320 --> 00:07:48,160 Speaker 5: of the worker center trade policy is to constantly remind 132 00:07:48,240 --> 00:07:51,000 Speaker 5: ourselves that at the end of the day, when it 133 00:07:51,040 --> 00:07:56,120 Speaker 5: comes to your economic policy, the beneficiary of your policies 134 00:07:56,960 --> 00:08:01,680 Speaker 5: is the people in your economy. I think that quite 135 00:08:01,760 --> 00:08:04,000 Speaker 5: often when we get into economic policy and it can 136 00:08:04,000 --> 00:08:08,160 Speaker 5: get quite complicated, it can get theoretical. We often gravitate 137 00:08:08,200 --> 00:08:10,640 Speaker 5: to talking about the economy as a set of numbers 138 00:08:10,640 --> 00:08:14,840 Speaker 5: and data and statistics and trends. What gets lost in 139 00:08:14,920 --> 00:08:18,360 Speaker 5: all that conversation is that the whole point of economic 140 00:08:18,400 --> 00:08:28,560 Speaker 5: policy is to ensure vibrancy, economic opportunity, livelihoods, futures, hope, 141 00:08:29,000 --> 00:08:33,800 Speaker 5: and vitality for your nation. It is about how the 142 00:08:33,960 --> 00:08:37,760 Speaker 5: people experience their lives, what kinds of jobs they have, 143 00:08:38,160 --> 00:08:41,160 Speaker 5: what kinds of education and training that they have to 144 00:08:41,200 --> 00:08:44,480 Speaker 5: pursue these jobs, what kind of industries we're growing here. 145 00:08:44,880 --> 00:08:49,120 Speaker 5: So the worker center trade policy is to remind ourselves that, Tracy, 146 00:08:49,200 --> 00:08:53,240 Speaker 5: exactly as you've noted, the way we've pursued trade policy 147 00:08:53,280 --> 00:08:57,520 Speaker 5: for decades in a bipartisan way has been about growing GDP, 148 00:08:57,720 --> 00:09:03,800 Speaker 5: growing the overall pie, facilitating volumes of trade. And what's 149 00:09:03,840 --> 00:09:06,160 Speaker 5: cut and lost in all of that conversation is what 150 00:09:06,280 --> 00:09:09,640 Speaker 5: has been the impact on our economy. Are we actually 151 00:09:09,679 --> 00:09:13,200 Speaker 5: as we grow the pie, are we actually seeing that 152 00:09:13,480 --> 00:09:16,839 Speaker 5: more of our people have access to that pie. And 153 00:09:17,000 --> 00:09:19,040 Speaker 5: what I will say is, when we look back at 154 00:09:19,080 --> 00:09:22,439 Speaker 5: our trade policies over the past twenty and thirty years, 155 00:09:22,920 --> 00:09:26,520 Speaker 5: we see the overall numbers grow here in the United 156 00:09:26,559 --> 00:09:30,640 Speaker 5: States and around the world, but you also see significant 157 00:09:30,679 --> 00:09:35,240 Speaker 5: de industrialization in some critical industries where we have really 158 00:09:35,320 --> 00:09:39,600 Speaker 5: just hollowed out. We've lost a lot of capacity, especially 159 00:09:40,000 --> 00:09:44,160 Speaker 5: in hard and heavy manufacturing, light manufacturing as well. 160 00:09:44,559 --> 00:09:45,480 Speaker 4: And then the other. 161 00:09:45,320 --> 00:09:48,040 Speaker 5: Piece of it is we are also seeing here in 162 00:09:48,080 --> 00:09:51,360 Speaker 5: the United States and around the world a growing wealth gap, 163 00:09:51,880 --> 00:09:56,920 Speaker 5: significantly growing levels of inequality within our economies and between 164 00:09:56,960 --> 00:10:03,400 Speaker 5: our economies, and that is giving us pause and reason 165 00:10:04,040 --> 00:10:07,680 Speaker 5: to reassess how we do trade. We still need to 166 00:10:07,720 --> 00:10:10,600 Speaker 5: be the great trading nation that we are. We know 167 00:10:10,840 --> 00:10:16,240 Speaker 5: that the global economy is interconnected. The question is how 168 00:10:16,280 --> 00:10:20,000 Speaker 5: can we be doing trade better so that we are 169 00:10:20,040 --> 00:10:23,360 Speaker 5: actually not just growing the overall numbers, but we are 170 00:10:23,520 --> 00:10:28,280 Speaker 5: growing opportunity for a middle class. The middle class in 171 00:10:28,320 --> 00:10:32,240 Speaker 5: America is this incredible concept because almost everybody thinks that 172 00:10:32,280 --> 00:10:35,480 Speaker 5: they're in the middle class or is aspiring to be 173 00:10:35,520 --> 00:10:39,360 Speaker 5: in the middle class. It's that really important, vibrant part 174 00:10:39,440 --> 00:10:42,559 Speaker 5: of the economy that ensures that you are growing and 175 00:10:42,760 --> 00:10:47,599 Speaker 5: ensures that you are providing opportunities for all of the 176 00:10:47,640 --> 00:10:51,320 Speaker 5: people in your economy to contribute. So yes, absolutely, the 177 00:10:51,360 --> 00:10:53,800 Speaker 5: way that we are pursuing trade policies, the way that 178 00:10:53,840 --> 00:10:56,640 Speaker 5: we are thinking about and talking about it, is different 179 00:10:56,679 --> 00:11:00,880 Speaker 5: today because we have seen the limits of where that 180 00:11:01,160 --> 00:11:09,480 Speaker 5: pursuit of trade liberalization, the pursuit of overall macro views 181 00:11:09,559 --> 00:11:13,640 Speaker 5: on trade and economic growth have really fallen short in 182 00:11:13,679 --> 00:11:15,160 Speaker 5: the last several decades. 183 00:11:15,840 --> 00:11:18,839 Speaker 2: Since you mentioned the last several decades, and this is 184 00:11:18,960 --> 00:11:22,240 Speaker 2: very helpful obviously sort of the big picture philosophy behind 185 00:11:22,360 --> 00:11:24,600 Speaker 2: the trade pivot. But maybe I'll try again with my 186 00:11:24,679 --> 00:11:28,880 Speaker 2: first question. Could this be a new several decades of 187 00:11:28,920 --> 00:11:31,840 Speaker 2: the things going in shifts? Could you imagine that the 188 00:11:31,960 --> 00:11:35,200 Speaker 2: sort of new restrictions on trade with China is also 189 00:11:35,760 --> 00:11:37,480 Speaker 2: something that will last for several decades. 190 00:11:37,679 --> 00:11:40,600 Speaker 5: So here, let's take a couple steps back and look 191 00:11:40,640 --> 00:11:44,560 Speaker 5: at the context for what's developed over the last many years. 192 00:11:44,600 --> 00:11:48,079 Speaker 5: And I think that there are multiple factors. One is 193 00:11:48,120 --> 00:11:51,080 Speaker 5: that since World War Two, the Bretton Wood system has 194 00:11:51,080 --> 00:11:54,760 Speaker 5: grown up, and there has been this important concept that 195 00:11:55,040 --> 00:11:59,960 Speaker 5: liberalizing trade, taking away barriers between countries, promoting more trade 196 00:12:00,080 --> 00:12:02,880 Speaker 5: the more we trade with each other, the more peace 197 00:12:02,920 --> 00:12:04,960 Speaker 5: and the more prosperity there will be in the world. 198 00:12:05,720 --> 00:12:08,120 Speaker 5: I think that those are worthy goals. The issue is 199 00:12:08,160 --> 00:12:10,439 Speaker 5: that you look at the goals that you are pursuing, 200 00:12:10,440 --> 00:12:12,480 Speaker 5: the ways that you've been pursuing them, and then you 201 00:12:12,559 --> 00:12:15,080 Speaker 5: have to look around you for the data and the 202 00:12:15,080 --> 00:12:18,199 Speaker 5: indicators around what the results of these policies have been. 203 00:12:18,679 --> 00:12:21,280 Speaker 5: And so let's take since I think that this is 204 00:12:21,280 --> 00:12:24,880 Speaker 5: the eightieth year of the eightieth anniversary of the Breton 205 00:12:24,920 --> 00:12:28,040 Speaker 5: Woods Agreement. You look at the last eighty years and 206 00:12:28,120 --> 00:12:31,720 Speaker 5: there has been a lot of prosperity, marked by also 207 00:12:31,880 --> 00:12:35,400 Speaker 5: periods of peace in large parts of the world. But 208 00:12:35,559 --> 00:12:39,320 Speaker 5: you look at the more recent years and what you 209 00:12:39,520 --> 00:12:43,920 Speaker 5: see is that today our economy and the global economy 210 00:12:44,000 --> 00:12:49,680 Speaker 5: feels more fragile, geopolitical tensions feel higher than they have 211 00:12:49,880 --> 00:12:53,760 Speaker 5: been in a very long time. And it's important then 212 00:12:53,840 --> 00:12:58,040 Speaker 5: to look at what's been going on. This concept of 213 00:12:58,080 --> 00:13:02,280 Speaker 5: free trade and the goal that we were pursuing through 214 00:13:02,320 --> 00:13:06,560 Speaker 5: free trade. It's a very very beautiful concept. The issue 215 00:13:06,720 --> 00:13:11,880 Speaker 5: is that it is entirely theoretical. There is in fact 216 00:13:11,920 --> 00:13:16,040 Speaker 5: no free trade in the world, and maybe one of 217 00:13:16,080 --> 00:13:20,920 Speaker 5: the most important pictures I can paint for you is 218 00:13:21,000 --> 00:13:24,520 Speaker 5: to look at what has happened in the global economy, 219 00:13:24,800 --> 00:13:29,640 Speaker 5: global markets in the last twenty five years since China 220 00:13:29,720 --> 00:13:34,520 Speaker 5: has joined the World Trade Organization, the Chinese economy has 221 00:13:34,720 --> 00:13:40,680 Speaker 5: grown significantly. It has been miraculous to see. That said, 222 00:13:41,400 --> 00:13:47,319 Speaker 5: the Chinese economy is fundamentally structured differently from the economies 223 00:13:47,480 --> 00:13:50,680 Speaker 5: of the countries that started the system that eventually became 224 00:13:50,720 --> 00:13:54,080 Speaker 5: the WTO in that post World War two period. The 225 00:13:54,160 --> 00:13:57,320 Speaker 5: General Agreement on Tariffs and Trade was a group of 226 00:13:57,520 --> 00:14:00,920 Speaker 5: very like minded countries that emerged from World War Two 227 00:14:01,200 --> 00:14:04,880 Speaker 5: and to pursue a set of principles. When we brought 228 00:14:04,960 --> 00:14:09,640 Speaker 5: China into the WTO, what we were hoping, and this 229 00:14:09,720 --> 00:14:12,240 Speaker 5: is based on looking at a lot of literature at 230 00:14:12,280 --> 00:14:14,600 Speaker 5: from that time, talking to the people who cast those 231 00:14:14,679 --> 00:14:17,600 Speaker 5: votes in the US Congress for China's accession to the 232 00:14:17,679 --> 00:14:19,960 Speaker 5: w two. What we were hoping was that there would 233 00:14:20,040 --> 00:14:24,320 Speaker 5: be a significant wave of economic reforms in China that 234 00:14:24,360 --> 00:14:28,400 Speaker 5: would make the Chinese economy more market based, more open, 235 00:14:28,880 --> 00:14:34,480 Speaker 5: more capitalistic, and that democratic reforms would follow in terms 236 00:14:34,480 --> 00:14:38,600 Speaker 5: of China's political system. So the first thing, the first indicator, 237 00:14:38,640 --> 00:14:40,480 Speaker 5: is then to look at what have the results been. 238 00:14:40,520 --> 00:14:45,360 Speaker 5: If you're looking at the PRC economy and the PRC 239 00:14:45,520 --> 00:14:49,880 Speaker 5: political system today in twenty twenty four, from colleagues and 240 00:14:49,920 --> 00:14:53,960 Speaker 5: friends who have visited China, the China that we see 241 00:14:54,000 --> 00:14:57,520 Speaker 5: is significantly different from the China that was negotiating in 242 00:14:57,520 --> 00:15:00,840 Speaker 5: seccession to the WTO at that time nineteen eighties and 243 00:15:00,880 --> 00:15:04,480 Speaker 5: the nineteen nineties, there was a lot of talk about reform. 244 00:15:04,960 --> 00:15:07,840 Speaker 5: Those reforms have really petered out. What we see today 245 00:15:08,000 --> 00:15:11,400 Speaker 5: is maybe the most repressive version that we've seen of 246 00:15:11,520 --> 00:15:16,360 Speaker 5: China in the past decades in terms of the political environment. 247 00:15:16,600 --> 00:15:19,000 Speaker 5: But then if you look at the economic environment, I 248 00:15:19,040 --> 00:15:23,160 Speaker 5: would say you go back to twenty eleven. In twenty twelve, 249 00:15:23,680 --> 00:15:28,440 Speaker 5: the American Chamber of Commerce AmCham in China for the 250 00:15:28,560 --> 00:15:32,920 Speaker 5: first time. In those years twenty eleven, twenty twelve, twenty thirteen, 251 00:15:33,360 --> 00:15:35,840 Speaker 5: they put out I think it's called a white paper. 252 00:15:36,040 --> 00:15:40,080 Speaker 5: They put out basically a book every year describing the 253 00:15:40,760 --> 00:15:46,400 Speaker 5: economic environment that American companies experience in China. And around 254 00:15:46,440 --> 00:15:49,320 Speaker 5: those years is when AmCham, which had been one of 255 00:15:49,400 --> 00:15:54,800 Speaker 5: the biggest cheerleaders of US China trade bringing China into 256 00:15:54,960 --> 00:16:00,440 Speaker 5: the global economy, started to identify a downturn in the 257 00:16:00,560 --> 00:16:04,320 Speaker 5: economic environment and in the sense of opportunity and fairness 258 00:16:04,360 --> 00:16:10,440 Speaker 5: that big American companies were experiencing in the Chinese economy 259 00:16:10,520 --> 00:16:15,480 Speaker 5: if you followed what was happening in Chinese politics at 260 00:16:15,520 --> 00:16:21,200 Speaker 5: the time. That coincides with the transition of leadership to 261 00:16:22,200 --> 00:16:26,200 Speaker 5: the current president, President Chi Jinping, who is now in 262 00:16:26,280 --> 00:16:31,160 Speaker 5: the midst of his third unprecedented term as president of China. 263 00:16:31,880 --> 00:16:35,840 Speaker 5: So I think that the scales started falling from the 264 00:16:35,880 --> 00:16:40,920 Speaker 5: eyes of the American business community. Certainly that the Chinese 265 00:16:40,960 --> 00:16:45,360 Speaker 5: economy is structured to pursue goals that are different from 266 00:16:45,760 --> 00:16:49,320 Speaker 5: the principles of free trade and open markets and market 267 00:16:49,360 --> 00:16:54,800 Speaker 5: based economics, and that I think is a significant contributor 268 00:16:54,960 --> 00:17:00,080 Speaker 5: to this bipartisan and very very broad consensus that we 269 00:17:00,120 --> 00:17:03,640 Speaker 5: have in the United States now that the trading system 270 00:17:04,000 --> 00:17:08,280 Speaker 5: globally is not working the way that we had wanted 271 00:17:08,320 --> 00:17:10,600 Speaker 5: it to, that we dreamt that it would starting in 272 00:17:10,640 --> 00:17:13,080 Speaker 5: the nineteen forties and on and through the nineteen nineties, 273 00:17:13,080 --> 00:17:16,520 Speaker 5: in the two thousands, and what you hear now also 274 00:17:16,720 --> 00:17:21,600 Speaker 5: from our administration Secretary Yellen at Treasury Layel Brainerd, head 275 00:17:21,640 --> 00:17:27,000 Speaker 5: of the NEC, the National Economic Council, Secretary Blincoln State Department, 276 00:17:27,520 --> 00:17:32,240 Speaker 5: certainly from me, is a concern about what we're calling 277 00:17:32,560 --> 00:17:37,959 Speaker 5: Chinese over capacity and excess production that in these years 278 00:17:38,119 --> 00:17:42,440 Speaker 5: post the height of the pandemic, as everyone is building 279 00:17:42,480 --> 00:17:46,520 Speaker 5: towards their economic recovery and the strength of their economy 280 00:17:46,760 --> 00:17:51,840 Speaker 5: going forward, we see China doubling down on an export 281 00:17:51,960 --> 00:17:55,919 Speaker 5: led growth, export led recovery. And what you're seeing from 282 00:17:55,960 --> 00:17:58,080 Speaker 5: the United States, and it's not just us, and it'll 283 00:17:58,119 --> 00:18:00,520 Speaker 5: be interesting to get into that conversation too, is what 284 00:18:00,560 --> 00:18:03,040 Speaker 5: you're seeing from the United States and other countries is 285 00:18:03,400 --> 00:18:08,000 Speaker 5: a pushback that having experienced China Shock, the China Shock 286 00:18:08,080 --> 00:18:12,439 Speaker 5: from the two thousands and twenty tens where Chinese industrial 287 00:18:12,560 --> 00:18:16,160 Speaker 5: non market policies really allowed them to export a lot 288 00:18:16,160 --> 00:18:19,240 Speaker 5: of the externalities from their policies to the rest of 289 00:18:19,280 --> 00:18:22,359 Speaker 5: the world, that we are standing up and others are 290 00:18:22,400 --> 00:18:26,920 Speaker 5: standing up to say we will not tolerate, we cannot 291 00:18:27,000 --> 00:18:30,320 Speaker 5: tolerate a China shock two point zero. And I think 292 00:18:30,359 --> 00:18:33,879 Speaker 5: that those are elements of the larger context that you 293 00:18:33,920 --> 00:18:36,959 Speaker 5: are seeing today involving our trade policy and beyond. 294 00:18:53,520 --> 00:18:57,520 Speaker 3: Since you mentioned both Bretton Wood's and China's ascension to 295 00:18:57,600 --> 00:19:00,639 Speaker 3: the wto I really want to ask about something that 296 00:19:00,680 --> 00:19:04,720 Speaker 3: you've been talking about quite a lot recently, the ITO, 297 00:19:05,040 --> 00:19:08,040 Speaker 3: the International Trade Organization, which is something that I remember 298 00:19:08,160 --> 00:19:11,680 Speaker 3: from international relations. I think it was proposed by FDR, 299 00:19:11,840 --> 00:19:13,960 Speaker 3: like back in the Bretton Woods era, but never really 300 00:19:13,960 --> 00:19:17,480 Speaker 3: got off the ground. How literally should we take that 301 00:19:17,600 --> 00:19:20,720 Speaker 3: discussion from you? Is the idea here that the ITO 302 00:19:20,840 --> 00:19:24,520 Speaker 3: provides perhaps some guiding principles for trade policy, or are 303 00:19:24,560 --> 00:19:28,639 Speaker 3: you actually interested in creating something that would potentially compete 304 00:19:28,640 --> 00:19:29,440 Speaker 3: with the WTO. 305 00:19:30,600 --> 00:19:34,240 Speaker 5: So what we've been doing is looking back at our 306 00:19:34,320 --> 00:19:39,119 Speaker 5: history for indicators lessons. We're all products of our history. 307 00:19:39,400 --> 00:19:42,720 Speaker 5: It's actually a really important exercise to know that history. 308 00:19:43,320 --> 00:19:45,840 Speaker 5: And there's been a lot of talk about FDR and 309 00:19:45,880 --> 00:19:49,080 Speaker 5: a lot of focus. The reason I think it's obvious 310 00:19:49,160 --> 00:19:51,040 Speaker 5: once you think about it, is a lot of the 311 00:19:51,080 --> 00:19:52,840 Speaker 5: challenges that we are seeing today. And this gets us 312 00:19:52,880 --> 00:19:56,200 Speaker 5: beyond even trade and economics, but certainly trade and economics 313 00:19:56,240 --> 00:19:58,199 Speaker 5: are a central part of this. A lot of the 314 00:19:58,240 --> 00:20:03,480 Speaker 5: challenges that we are seeing developed today are reminiscent of 315 00:20:04,040 --> 00:20:07,640 Speaker 5: the challenges that we as the United States saw in 316 00:20:07,720 --> 00:20:15,640 Speaker 5: the nineteen thirties and the nineteen forties. A trend towards authoritarianism, fascism, 317 00:20:16,080 --> 00:20:23,479 Speaker 5: corporate concentration, significant imbalances in our economy, imbalances and power 318 00:20:24,160 --> 00:20:27,800 Speaker 5: coming through then World War Two, the need to come 319 00:20:27,880 --> 00:20:33,400 Speaker 5: up with the vision for a more coherent and cohesive 320 00:20:34,560 --> 00:20:39,560 Speaker 5: world order, including a world economic order that would be 321 00:20:39,560 --> 00:20:43,720 Speaker 5: better and that would allow us to take lessons from 322 00:20:44,119 --> 00:20:48,040 Speaker 5: very painful experiences and apply them forward. And so that 323 00:20:48,080 --> 00:20:51,440 Speaker 5: has led us to go look at the Breton Woods 324 00:20:51,480 --> 00:20:56,320 Speaker 5: agreements coming out of World War Two that desire to 325 00:20:56,440 --> 00:21:00,600 Speaker 5: build institutions like the World Bank, like the IMF, and 326 00:21:00,640 --> 00:21:03,159 Speaker 5: then to revisit our own history and trade and to 327 00:21:03,200 --> 00:21:07,959 Speaker 5: see that the original vision for the trade institution, the 328 00:21:08,000 --> 00:21:12,480 Speaker 5: trade pillar of Bretton Woods was this International Trade Organization. 329 00:21:12,560 --> 00:21:14,879 Speaker 5: I'm so glad you brought it up. And then looking 330 00:21:14,960 --> 00:21:19,639 Speaker 5: at what the components of that were to building a better, brighter, 331 00:21:19,760 --> 00:21:23,880 Speaker 5: more resilient world from those years in the nineteen forties, 332 00:21:24,640 --> 00:21:29,200 Speaker 5: and what we see is an application of FDR's vision 333 00:21:29,720 --> 00:21:34,399 Speaker 5: domestically through the New Deal era and translating that into 334 00:21:34,600 --> 00:21:39,360 Speaker 5: the international context and seeing that in the original architecture 335 00:21:39,440 --> 00:21:43,600 Speaker 5: of the International Trade Organization. Sure, there was a tariff 336 00:21:43,600 --> 00:21:47,359 Speaker 5: liberalization program, and remember this was among very very like 337 00:21:47,480 --> 00:21:51,760 Speaker 5: minded countries coming out of very traumatic World War II 338 00:21:51,920 --> 00:21:57,160 Speaker 5: experience coming together around common principles. But it wasn't limited 339 00:21:57,200 --> 00:22:01,200 Speaker 5: to just tariff liberalization. That there were important additional elements 340 00:22:01,240 --> 00:22:03,760 Speaker 5: to the ITO Charter that is really important for us 341 00:22:03,880 --> 00:22:06,240 Speaker 5: to look back on and to think about, because it 342 00:22:06,240 --> 00:22:10,640 Speaker 5: turns out there are actually major points of preoccupation for 343 00:22:10,720 --> 00:22:14,200 Speaker 5: us today in our economic policy. So one aspect of 344 00:22:14,240 --> 00:22:22,000 Speaker 5: the ITO disciplines includes meaningful standards on labor and workers. 345 00:22:22,600 --> 00:22:25,760 Speaker 5: And if you think about the ITO Charter coming out 346 00:22:25,880 --> 00:22:30,040 Speaker 5: of the New Deal perspective, and you look around the 347 00:22:30,040 --> 00:22:32,880 Speaker 5: world and at the time also it was a period 348 00:22:32,920 --> 00:22:37,760 Speaker 5: where a lot of countries were achieving their independence from 349 00:22:38,000 --> 00:22:44,720 Speaker 5: previous colonial masters, that focus on labor and worker protections 350 00:22:45,280 --> 00:22:49,080 Speaker 5: becomes very very interesting, especially in light of the challenges 351 00:22:49,080 --> 00:22:52,200 Speaker 5: that and the conversations that we're having today around the 352 00:22:52,200 --> 00:22:56,480 Speaker 5: need for workers to have more leverage and power in 353 00:22:56,600 --> 00:23:00,280 Speaker 5: terms of that balance with the big companies. The other 354 00:23:00,359 --> 00:23:04,639 Speaker 5: piece of it is anti monopoly rules, anti monopoly disciplines, 355 00:23:04,680 --> 00:23:07,800 Speaker 5: and again that is a huge part of the conversation 356 00:23:07,920 --> 00:23:12,399 Speaker 5: today and looking at corporate concentration and looking at companies 357 00:23:12,520 --> 00:23:16,960 Speaker 5: that are acting as monopolies and distorting opportunity and markets, 358 00:23:17,240 --> 00:23:23,160 Speaker 5: but also countries that are behaving as monopolies and understanding 359 00:23:23,240 --> 00:23:26,719 Speaker 5: that back in the nineteen forties, what we were looking 360 00:23:26,760 --> 00:23:31,080 Speaker 5: at around the world was a program to defend against 361 00:23:31,160 --> 00:23:36,240 Speaker 5: the challenges of both fascism on the right and communism 362 00:23:36,240 --> 00:23:40,600 Speaker 5: on the left, and applying that to today's challenges. I 363 00:23:40,640 --> 00:23:44,280 Speaker 5: don't think it's about constructing an alternative model to the 364 00:23:44,359 --> 00:23:48,159 Speaker 5: wto again where the products of our history, but taking 365 00:23:48,280 --> 00:23:53,680 Speaker 5: lessons from the way we had approached a period of thoughtfulness, 366 00:23:53,840 --> 00:23:58,159 Speaker 5: a period of institution building, a period of pushing forward 367 00:23:58,200 --> 00:24:02,000 Speaker 5: in terms of reform, and really thinking about how we 368 00:24:02,200 --> 00:24:07,280 Speaker 5: can take inspiration from those experiences to apply them to 369 00:24:07,280 --> 00:24:08,080 Speaker 5: where we are today. 370 00:24:08,440 --> 00:24:12,240 Speaker 2: Since you talked about worker safety as one element of 371 00:24:12,440 --> 00:24:15,280 Speaker 2: thinking about trade and worker centric trade, is it okay 372 00:24:15,400 --> 00:24:18,320 Speaker 2: for a country to have as part of its growth 373 00:24:18,359 --> 00:24:21,920 Speaker 2: strategy the fact that conditions may be less safe there 374 00:24:22,000 --> 00:24:23,159 Speaker 2: than they are for us workers. 375 00:24:24,040 --> 00:24:26,359 Speaker 5: This is a great question. I think it's not just 376 00:24:26,400 --> 00:24:30,159 Speaker 5: about worker safety, but also workers' rights, the ability to 377 00:24:30,520 --> 00:24:34,879 Speaker 5: organize to collectively bargain to advocate for better working conditions, 378 00:24:34,880 --> 00:24:39,720 Speaker 5: including safety conditions, but also advocate for better wages, better benefits, 379 00:24:39,920 --> 00:24:43,440 Speaker 5: that whole suite of rights that are internationally recognized, really 380 00:24:43,480 --> 00:24:46,359 Speaker 5: really great question. So when we talk about a worker 381 00:24:46,400 --> 00:24:50,520 Speaker 5: center trade policy, what we're doing is looking at again 382 00:24:51,000 --> 00:24:53,120 Speaker 5: the trade policies that we've pursued in the last several 383 00:24:53,200 --> 00:24:56,000 Speaker 5: decades and then seeing the version of globalization that we 384 00:24:56,040 --> 00:24:59,720 Speaker 5: have around us today is one that has really incentivized 385 00:25:00,480 --> 00:25:05,639 Speaker 5: the minimization of costs and input costs, So it rewards 386 00:25:05,680 --> 00:25:09,120 Speaker 5: the exploitation of people and workers. The more you exploit workers, 387 00:25:09,119 --> 00:25:12,480 Speaker 5: the less you have to pay them. It also rewards 388 00:25:12,840 --> 00:25:15,399 Speaker 5: the exploitation of the planet. The less you have to 389 00:25:15,440 --> 00:25:21,240 Speaker 5: worry about environmental regulation carbon protecting the environment, the cheaper 390 00:25:21,280 --> 00:25:26,240 Speaker 5: it is to produce. So we often call that structure 391 00:25:26,320 --> 00:25:31,480 Speaker 5: of incentives the race to the bottom, where you're rewarded 392 00:25:31,600 --> 00:25:36,320 Speaker 5: for undermining standards, you're rewarded for having low standards and 393 00:25:36,520 --> 00:25:39,240 Speaker 5: undercutting each other on standards, and at the end of 394 00:25:39,240 --> 00:25:42,560 Speaker 5: the day, what you discover is a less sustainable world 395 00:25:43,000 --> 00:25:46,000 Speaker 5: in terms of our climate future that's a very very 396 00:25:46,000 --> 00:25:49,080 Speaker 5: good example, but also a less sustainable world in terms 397 00:25:49,160 --> 00:25:53,199 Speaker 5: of the experience of our people in our economy. So 398 00:25:53,720 --> 00:25:55,560 Speaker 5: this allows me to get into a little bit of 399 00:25:55,640 --> 00:25:59,040 Speaker 5: a frame here which is that we've justified that race 400 00:25:59,119 --> 00:26:02,640 Speaker 5: to the bottom on the basis of, well, you know, 401 00:26:02,840 --> 00:26:05,640 Speaker 5: if producers can cut their costs, then they can bring 402 00:26:05,720 --> 00:26:10,679 Speaker 5: prices down, and so consumers who are people will have 403 00:26:10,760 --> 00:26:15,640 Speaker 5: the benefit of low, low prices, low prices when they 404 00:26:15,640 --> 00:26:19,160 Speaker 5: go to the market for essentials and also non essentials. Right, 405 00:26:19,680 --> 00:26:22,800 Speaker 5: the important part about a worker center trade policy, as 406 00:26:22,840 --> 00:26:26,680 Speaker 5: we call it, is to remind everybody that in all 407 00:26:26,720 --> 00:26:31,040 Speaker 5: of that logic, what's gotten lost is virtually every consumer 408 00:26:31,480 --> 00:26:34,760 Speaker 5: that consumes in the marketplace and spends in the marketplace 409 00:26:35,320 --> 00:26:39,280 Speaker 5: is also a producer. Is a wage earner, is someone 410 00:26:39,280 --> 00:26:42,240 Speaker 5: who has a livelihood and has to make the money 411 00:26:42,920 --> 00:26:45,040 Speaker 5: that goes in their pocket so they can spend it 412 00:26:45,080 --> 00:26:49,200 Speaker 5: in the marketplace. So the human being in the economy 413 00:26:49,359 --> 00:26:53,480 Speaker 5: is multifaceted and at the very least is both a 414 00:26:53,560 --> 00:26:58,800 Speaker 5: consumer and a producer. And if your policies are just 415 00:26:58,800 --> 00:27:01,879 Speaker 5: justified on the basis of low cost, low prices for 416 00:27:01,920 --> 00:27:04,480 Speaker 5: the consumer, and you are ignoring the fact that in 417 00:27:04,560 --> 00:27:09,000 Speaker 5: a very interconnected and globalized world, suppressing the rights of 418 00:27:09,040 --> 00:27:12,959 Speaker 5: workers and exploiting them in one country in one economy 419 00:27:13,320 --> 00:27:18,000 Speaker 5: is going to have downward competitive pressures on those workers. 420 00:27:18,080 --> 00:27:22,520 Speaker 5: In another economy and downward pressures on their ability to 421 00:27:22,560 --> 00:27:27,720 Speaker 5: earn better wages. Then overall you've ignored an important part 422 00:27:27,720 --> 00:27:31,760 Speaker 5: of the calculus over whether or not you're actually creating utility, 423 00:27:31,800 --> 00:27:35,320 Speaker 5: if you will, in the economy for your people. And 424 00:27:35,440 --> 00:27:38,320 Speaker 5: that's a large part of what we've seen. So absolutely, 425 00:27:38,600 --> 00:27:41,240 Speaker 5: what we are fundamentally trying to do through a worker 426 00:27:41,320 --> 00:27:46,119 Speaker 5: center trade policy is to take a more holistic, comprehensive 427 00:27:46,240 --> 00:27:50,160 Speaker 5: view of the primary beneficiary in terms of our economic policies, 428 00:27:50,200 --> 00:27:53,040 Speaker 5: which is the human being, to take into the fact 429 00:27:53,040 --> 00:27:57,439 Speaker 5: that they are both a consumer and a producer, and 430 00:27:57,560 --> 00:28:01,200 Speaker 5: to try to flip the script on trade and trades' 431 00:28:01,280 --> 00:28:05,280 Speaker 5: contribution to globalization. The globalization that we're experiencing right now 432 00:28:05,359 --> 00:28:08,560 Speaker 5: is just one version of versions of globalization that we've 433 00:28:08,560 --> 00:28:10,840 Speaker 5: had before. In fact, if you go back far enough 434 00:28:10,840 --> 00:28:14,200 Speaker 5: and you look at, say the founding of the colonies 435 00:28:14,240 --> 00:28:16,919 Speaker 5: that became the United States, you know that it was 436 00:28:16,920 --> 00:28:22,760 Speaker 5: all about supply chains and trade. Yeah, so the version you. 437 00:28:22,760 --> 00:28:24,280 Speaker 2: Wouldn't let us process our own wrong. 438 00:28:24,640 --> 00:28:29,320 Speaker 5: It wouldn't. We were part of a labor came from 439 00:28:29,440 --> 00:28:33,280 Speaker 5: Africa to the United States. Talk about exploitation those labor 440 00:28:33,320 --> 00:28:35,360 Speaker 5: that you did not have to pay free labor. That's 441 00:28:35,359 --> 00:28:38,200 Speaker 5: a tremendous unfair advantage, and you could talk about it 442 00:28:38,200 --> 00:28:41,360 Speaker 5: as a subsidy. Right you pick up the sugar in 443 00:28:41,480 --> 00:28:44,400 Speaker 5: the Caribbean. You have the labor force here in the 444 00:28:44,520 --> 00:28:49,680 Speaker 5: United States producing tobacco, cotton, raw materials that then went 445 00:28:49,800 --> 00:28:54,680 Speaker 5: back to England and the European countries for value addition, 446 00:28:54,880 --> 00:28:58,080 Speaker 5: and then you had those high value products then sold 447 00:28:58,120 --> 00:29:02,280 Speaker 5: back to the folks in these in these input economies. So, 448 00:29:02,720 --> 00:29:04,440 Speaker 5: just to get back to the point, the version of 449 00:29:04,440 --> 00:29:07,200 Speaker 5: globalization that we have today is advanced from what we 450 00:29:07,240 --> 00:29:12,040 Speaker 5: had before. We are in an inflection point right now 451 00:29:12,720 --> 00:29:16,600 Speaker 5: where I think that we really are evolving into the 452 00:29:16,640 --> 00:29:20,040 Speaker 5: next version of globalization. And the point of a worker 453 00:29:20,120 --> 00:29:24,320 Speaker 5: center trade policy is to make sure that our goal 454 00:29:24,400 --> 00:29:28,000 Speaker 5: is not just trade volumes. Our goal is not just 455 00:29:28,480 --> 00:29:31,080 Speaker 5: the concept of free trade. Our goal is much more 456 00:29:31,120 --> 00:29:38,080 Speaker 5: pragmatic to achieve, including through our trade policies, more sustainability, resilience, 457 00:29:38,360 --> 00:29:41,760 Speaker 5: and more inclusiveness in our economic outcomes. That's for both 458 00:29:41,920 --> 00:29:45,320 Speaker 5: us and for our trading partners, so that we can 459 00:29:45,400 --> 00:29:48,360 Speaker 5: evolve into a version of globalization that can start to 460 00:29:48,400 --> 00:29:51,000 Speaker 5: realize what we call the race to the top, a 461 00:29:51,120 --> 00:29:55,680 Speaker 5: version of globalization where incentives are over time to raise standards, 462 00:29:55,720 --> 00:30:00,160 Speaker 5: where you're rewarded for not exploiting, but your reward or 463 00:30:00,400 --> 00:30:05,960 Speaker 5: for thinking three steps ahead to the sustainability of your 464 00:30:06,280 --> 00:30:12,080 Speaker 5: business models, your economic models. And that's fundamentally the opportunity 465 00:30:12,120 --> 00:30:13,000 Speaker 5: that we have today. 466 00:30:13,800 --> 00:30:16,720 Speaker 3: How do you judge the potential for tip for tat 467 00:30:16,760 --> 00:30:20,840 Speaker 3: retaliation when it comes to trade protections? So, if Joe 468 00:30:20,880 --> 00:30:25,160 Speaker 3: and I are running the odd lots Republic and we're 469 00:30:25,200 --> 00:30:28,120 Speaker 3: wildly populist and we want to appease I don't know 470 00:30:28,200 --> 00:30:32,640 Speaker 3: our base of semiconductor workers, we could just erect, you know, 471 00:30:32,800 --> 00:30:37,240 Speaker 3: massive tariffs or ban imports of semiconductors from somewhere else. 472 00:30:37,320 --> 00:30:39,880 Speaker 3: But I imagine one of the things that would stop us 473 00:30:39,920 --> 00:30:43,280 Speaker 3: from doing it is we would worry about retaliation. And 474 00:30:43,400 --> 00:30:46,880 Speaker 3: just to take a recent example, I mean, Canada decided 475 00:30:46,920 --> 00:30:50,400 Speaker 3: to tax evs coming from China, and China has now 476 00:30:50,480 --> 00:30:55,280 Speaker 3: launched an anti dumping investigation into Canadian exports. How do 477 00:30:55,320 --> 00:30:57,840 Speaker 3: you think about that particular risk. 478 00:30:58,480 --> 00:31:00,560 Speaker 5: Okay, I've got a three point for you here, and 479 00:31:00,560 --> 00:31:02,040 Speaker 5: I'm going to try to keep them all in my head. 480 00:31:02,160 --> 00:31:05,080 Speaker 5: One is your use of the word to protect is very, 481 00:31:05,160 --> 00:31:07,080 Speaker 5: very interesting, and so I want to come back to 482 00:31:07,120 --> 00:31:09,480 Speaker 5: that as a separate matter, and I hope that we 483 00:31:09,520 --> 00:31:10,280 Speaker 5: have time to do that. 484 00:31:10,720 --> 00:31:11,080 Speaker 4: Okay. 485 00:31:11,240 --> 00:31:14,280 Speaker 5: The second piece is this, when you take trade actions, 486 00:31:14,440 --> 00:31:18,520 Speaker 5: it is actually really important to explain what you're doing 487 00:31:18,560 --> 00:31:21,360 Speaker 5: and why you're doing it, and what your objectives are. 488 00:31:22,040 --> 00:31:25,000 Speaker 5: And it is really important for you to be able 489 00:31:25,120 --> 00:31:29,840 Speaker 5: to be understood by your trading partners. And those are 490 00:31:30,040 --> 00:31:33,720 Speaker 5: trading partners who might be foreign policy allies and strategic partners, 491 00:31:33,960 --> 00:31:38,480 Speaker 5: and also trading partners with whom you have more tense relations. 492 00:31:39,120 --> 00:31:41,960 Speaker 5: And so that's been a critical part of what we've 493 00:31:42,000 --> 00:31:46,320 Speaker 5: been doing the Biden Harris administration, which is to build 494 00:31:46,800 --> 00:31:52,280 Speaker 5: and rebuild our relationships and to ensure that our approach 495 00:31:52,680 --> 00:31:57,800 Speaker 5: and our actions are well understood by our partners. So 496 00:31:58,280 --> 00:32:01,240 Speaker 5: that gets to retaliation. If people don't understand what you're doing, right, 497 00:32:01,320 --> 00:32:02,880 Speaker 5: tit for tat you get a lot of that, and 498 00:32:02,960 --> 00:32:05,720 Speaker 5: we've seen some of that in our past. The third 499 00:32:05,760 --> 00:32:10,920 Speaker 5: piece on tit for tat retaliation is this one, which 500 00:32:11,000 --> 00:32:16,200 Speaker 5: is in your example of Canada taking steps on increasing 501 00:32:16,280 --> 00:32:19,840 Speaker 5: terroiffs on certain Chinese imports in some critical industries including 502 00:32:19,880 --> 00:32:23,600 Speaker 5: evs and China's response. Part of what we have seen 503 00:32:24,400 --> 00:32:30,480 Speaker 5: in the last twelve years is an increasing willingness by 504 00:32:30,560 --> 00:32:37,200 Speaker 5: the PRC to weaponize the dominance that they have achieved 505 00:32:37,360 --> 00:32:40,479 Speaker 5: in the global marketplace. And there's two elements to this. 506 00:32:40,840 --> 00:32:43,560 Speaker 5: There are dominance in terms of being a producer and 507 00:32:43,640 --> 00:32:47,600 Speaker 5: a supplier, so you know, a monopolistic kind of dominance. 508 00:32:48,120 --> 00:32:50,960 Speaker 5: And then also there are dominance in terms of being 509 00:32:51,040 --> 00:32:54,719 Speaker 5: a consumer in the global marketplace. And I think that 510 00:32:54,840 --> 00:32:57,520 Speaker 5: the term that we use in economics, there is a 511 00:32:57,600 --> 00:32:59,760 Speaker 5: monopsony monopsonistic dominance. 512 00:32:59,760 --> 00:33:02,960 Speaker 3: We need the monopsony clackson. Sorry, we always joke about 513 00:33:03,000 --> 00:33:05,800 Speaker 3: having a sound effect whenever anyone says monopsy, and I. 514 00:33:05,800 --> 00:33:07,840 Speaker 5: Didn't know about that. It's so curious what the sound 515 00:33:07,840 --> 00:33:08,680 Speaker 5: effect is going to be. 516 00:33:09,160 --> 00:33:10,520 Speaker 2: We don't actually have one. 517 00:33:11,360 --> 00:33:17,240 Speaker 5: Okay, So we have developed a vocabulary to call this 518 00:33:18,280 --> 00:33:23,720 Speaker 5: phenomenon an exercise of economic coercion. It's a if you 519 00:33:23,720 --> 00:33:28,160 Speaker 5: want to break it down, it's basically bullying at the 520 00:33:28,280 --> 00:33:33,000 Speaker 5: highest level in terms of a country taking its economic 521 00:33:33,080 --> 00:33:37,800 Speaker 5: tools and bullying another one for exercising rights that are 522 00:33:37,960 --> 00:33:44,720 Speaker 5: within its sovereign power to exercise. And the particular danger 523 00:33:44,800 --> 00:33:47,400 Speaker 5: here and this brings us back to the work that 524 00:33:47,400 --> 00:33:50,280 Speaker 5: we're doing on supply chains to diversify them and make 525 00:33:50,280 --> 00:33:55,560 Speaker 5: them more resilient. Is the need for us to have 526 00:33:56,080 --> 00:34:00,760 Speaker 5: more supply chains and more options so that we can 527 00:34:01,360 --> 00:34:07,040 Speaker 5: insulate ourselves, our partners can insulate themselves from this kind 528 00:34:07,160 --> 00:34:15,040 Speaker 5: of economic bullying, economic coercion, and weaponization of marketplace dominance. 529 00:34:15,440 --> 00:34:17,640 Speaker 5: So that's the third point I wanted to make around 530 00:34:17,760 --> 00:34:20,640 Speaker 5: the example you provided with respect to Canada, which is 531 00:34:21,080 --> 00:34:26,759 Speaker 5: we've seen Canada take measures that actually align their economic 532 00:34:26,800 --> 00:34:31,000 Speaker 5: defenses with ours. It's actually really important when you look 533 00:34:31,040 --> 00:34:34,319 Speaker 5: at the North American economy, the US economy, and the 534 00:34:34,440 --> 00:34:38,160 Speaker 5: level of integrations with both Canada and Mexico, and the 535 00:34:38,239 --> 00:34:41,840 Speaker 5: need for US actually to think about not just taking 536 00:34:42,000 --> 00:34:46,040 Speaker 5: individual defensive measures, which these tariffs I would characterize them 537 00:34:46,080 --> 00:34:49,799 Speaker 5: as defensive measures, but to coordinate our defensive measures in 538 00:34:50,000 --> 00:34:54,600 Speaker 5: order to I'm not going to call it protectionism, right, 539 00:34:54,880 --> 00:34:59,600 Speaker 5: but in order to protect our North American economy from 540 00:35:00,080 --> 00:35:06,120 Speaker 5: the distorative effects of this unbridled, non market based Chinese 541 00:35:06,239 --> 00:35:11,360 Speaker 5: excess production impacts on our competitiveness and frankly, our ability 542 00:35:11,400 --> 00:35:14,279 Speaker 5: to continue to produce, to be able to thrive, to 543 00:35:14,360 --> 00:35:17,600 Speaker 5: have our producers in terms of EVS, in terms of 544 00:35:17,600 --> 00:35:20,680 Speaker 5: steel and aluminum, to be able to grow, but to 545 00:35:20,800 --> 00:35:23,880 Speaker 5: survive in the first place. We have seen time and 546 00:35:23,920 --> 00:35:28,440 Speaker 5: time again industries that China has identified as strategic for 547 00:35:29,040 --> 00:35:33,160 Speaker 5: not just domination within their own market, but domination in 548 00:35:33,200 --> 00:35:38,080 Speaker 5: the global markets wipe out industries in very very open 549 00:35:38,239 --> 00:35:41,160 Speaker 5: market based economies like ours. And so that is in 550 00:35:41,239 --> 00:35:45,160 Speaker 5: large part why you see the steel owned aluminum industries 551 00:35:45,320 --> 00:35:48,600 Speaker 5: in the United States. You see us taking new kinds 552 00:35:48,600 --> 00:35:51,080 Speaker 5: of measures to ensure that we can continue to produce 553 00:35:51,160 --> 00:35:54,080 Speaker 5: steel and aluminum, which is critical to our economic security 554 00:35:54,120 --> 00:35:58,680 Speaker 5: and our national security, but also with respect to solar panels, 555 00:35:59,120 --> 00:36:03,239 Speaker 5: and now also so in terms of EVS. The ability 556 00:36:03,280 --> 00:36:07,680 Speaker 5: for us to coordinate those defenses also helps to insulate 557 00:36:07,800 --> 00:36:12,960 Speaker 5: us from those coercive effects of China's economic dominance. Trade 558 00:36:13,000 --> 00:36:17,160 Speaker 5: defensism is that a word, trade defense absolutely. In fact, 559 00:36:17,400 --> 00:36:19,960 Speaker 5: we have a whole system of trade measures that we 560 00:36:20,000 --> 00:36:23,400 Speaker 5: call trade remedies. The Europeans call them trade defense instruments. 561 00:36:23,600 --> 00:36:28,000 Speaker 5: There they're the anti dumping duties, the countervailing duties. They're 562 00:36:28,040 --> 00:36:30,880 Speaker 5: to level the playing field. What we've discovered though, is 563 00:36:30,920 --> 00:36:33,920 Speaker 5: that set of tools they're really industry specific. They are 564 00:36:34,040 --> 00:36:39,560 Speaker 5: country specific. They are people have compared them to scalpels 565 00:36:40,080 --> 00:36:43,760 Speaker 5: or you know, kind of specialized tools for defending against 566 00:36:43,840 --> 00:36:47,560 Speaker 5: unfair trade practices with respect to China's footprint in the 567 00:36:47,600 --> 00:36:51,520 Speaker 5: global economy, and the result of these decades of very 568 00:36:51,640 --> 00:36:55,920 Speaker 5: very powerful industrial targeting policies, and what we mean by 569 00:36:55,920 --> 00:37:02,040 Speaker 5: that is industrial policies targeting market dominance, international market dominance, 570 00:37:02,400 --> 00:37:05,839 Speaker 5: we are needing to develop an entirely new set of 571 00:37:05,880 --> 00:37:09,000 Speaker 5: tools to defend, to defend on our part, to have 572 00:37:09,120 --> 00:37:12,839 Speaker 5: coordinated defenses. And then let me just say one more 573 00:37:12,880 --> 00:37:16,279 Speaker 5: word about what we're doing here. We need to be 574 00:37:16,320 --> 00:37:19,320 Speaker 5: playing a new game on defense. That's where the tariffs 575 00:37:19,320 --> 00:37:23,200 Speaker 5: come in. But we also know that you can't just 576 00:37:23,320 --> 00:37:26,520 Speaker 5: rely on defense. You need to have an offensive game too. 577 00:37:27,360 --> 00:37:30,719 Speaker 5: And from our perspective, then what are your tools for 578 00:37:31,280 --> 00:37:37,840 Speaker 5: mounting an economic, industrial, and competitive offense. Those are the 579 00:37:37,960 --> 00:37:40,920 Speaker 5: investments that we are making, the investments that we are 580 00:37:40,920 --> 00:37:43,719 Speaker 5: making in our people, the investments that we are making 581 00:37:43,760 --> 00:37:46,600 Speaker 5: in our infrastructure, the investments that you see as starting 582 00:37:46,640 --> 00:37:50,279 Speaker 5: to make in critical industries like semiconductors, but also the 583 00:37:50,360 --> 00:37:55,040 Speaker 5: clean energy industries. And you have to take these suite 584 00:37:55,080 --> 00:37:59,760 Speaker 5: of tools together in order to be able to continue 585 00:37:59,760 --> 00:38:05,600 Speaker 5: to compete against a very very strong competitor whose economy 586 00:38:06,200 --> 00:38:10,600 Speaker 5: and whose theory of their place in the world economy 587 00:38:11,040 --> 00:38:13,880 Speaker 5: is quite different from yours. I'll just share with you 588 00:38:14,200 --> 00:38:17,200 Speaker 5: an analogy that a former colleague of mine has made 589 00:38:17,640 --> 00:38:20,520 Speaker 5: publicly also I'll given credit for it. It's Tim Stratford, 590 00:38:20,600 --> 00:38:24,239 Speaker 5: who had in earlier administrations been the assistant US Trade 591 00:38:24,239 --> 00:38:29,040 Speaker 5: Representative for our China Affairs Office, and he's worked in 592 00:38:29,320 --> 00:38:33,319 Speaker 5: and near and around China economic issues for I think 593 00:38:33,360 --> 00:38:37,120 Speaker 5: most of his career, and his analogy is this when 594 00:38:37,520 --> 00:38:41,319 Speaker 5: you're looking at the US China trade relationship, but that 595 00:38:41,360 --> 00:38:44,399 Speaker 5: could include other economies that are built on the same 596 00:38:44,400 --> 00:38:48,920 Speaker 5: foundations as ours, which are open market based economies. What 597 00:38:49,120 --> 00:38:52,840 Speaker 5: you see is two teams that are on a playing field, 598 00:38:53,360 --> 00:38:56,880 Speaker 5: but they're fundamentally playing two different games. And in his analogy, 599 00:38:57,200 --> 00:39:00,279 Speaker 5: it's like one team is out there playing American style 600 00:39:00,320 --> 00:39:03,360 Speaker 5: football and the other team is out there prepared to 601 00:39:03,360 --> 00:39:05,759 Speaker 5: play what the Europeans and the rest of the world 602 00:39:05,760 --> 00:39:09,280 Speaker 5: called football, but what we call soccer. In his analogy, 603 00:39:09,320 --> 00:39:11,000 Speaker 5: if you play it out a little bit more, I 604 00:39:11,040 --> 00:39:14,319 Speaker 5: think it's a very interesting analogy. His analogy is that 605 00:39:14,520 --> 00:39:18,960 Speaker 5: it's actually the PRC's economy is on the field. As 606 00:39:18,960 --> 00:39:22,960 Speaker 5: the American football players, they've got the padding, they have 607 00:39:23,080 --> 00:39:26,080 Speaker 5: more players, they are out there kind of doing this 608 00:39:26,200 --> 00:39:30,640 Speaker 5: kind of brutalistic kind of competition, and it's our market 609 00:39:30,680 --> 00:39:33,280 Speaker 5: based economies that are out there playing the more European 610 00:39:33,320 --> 00:39:36,480 Speaker 5: style football and the playing soccer where it's more agile. 611 00:39:36,520 --> 00:39:40,520 Speaker 5: You have fewer players, and you're fundamentally playing two different games. 612 00:39:40,960 --> 00:39:43,040 Speaker 5: And the issue is that we've gotten to the point 613 00:39:43,080 --> 00:39:47,160 Speaker 5: in our relationship and in accepting the reality of the 614 00:39:47,200 --> 00:39:52,040 Speaker 5: trajectory of our economies and understanding the fundamental policy goals 615 00:39:52,040 --> 00:39:55,759 Speaker 5: of each economy where we're starting to realize we can't 616 00:39:55,880 --> 00:40:01,000 Speaker 5: keep playing soccer on an American NFL football. We have 617 00:40:01,080 --> 00:40:06,200 Speaker 5: to fundamentally change the way that we approach competing, and 618 00:40:06,280 --> 00:40:10,120 Speaker 5: we're gonna need new defensive strategies and we're gonna need 619 00:40:10,239 --> 00:40:11,600 Speaker 5: new offensive strategies. 620 00:40:11,640 --> 00:40:23,879 Speaker 6: Levels. 621 00:40:28,440 --> 00:40:30,680 Speaker 2: So, I guess I just have one last question about 622 00:40:30,680 --> 00:40:34,680 Speaker 2: this sort of the new version of globalization that we're pursuing, 623 00:40:34,760 --> 00:40:38,480 Speaker 2: as you've characterized it, What are the limiting principles, Because 624 00:40:38,480 --> 00:40:41,880 Speaker 2: there's always more steps you could take to sort of 625 00:40:42,239 --> 00:40:46,120 Speaker 2: boost the position of American workers and you know I've 626 00:40:46,160 --> 00:40:49,160 Speaker 2: said before jokingly but also kind of mean, like I 627 00:40:49,200 --> 00:40:51,080 Speaker 2: think if there's one country in the world that could 628 00:40:51,160 --> 00:40:54,759 Speaker 2: like truly do autarchy, it's probably the United States, given 629 00:40:54,800 --> 00:40:58,920 Speaker 2: our incredible resources here. I know that's not what's being pursued, 630 00:40:59,400 --> 00:41:02,960 Speaker 2: but you know, obviously there's a range of different approaches 631 00:41:03,000 --> 00:41:06,840 Speaker 2: to worker safety, there's a range of different approaches to 632 00:41:07,080 --> 00:41:10,640 Speaker 2: the degree to which government supports private industry, and every 633 00:41:10,680 --> 00:41:13,880 Speaker 2: country does it to some extent, some further, some less. 634 00:41:14,360 --> 00:41:17,719 Speaker 2: What are the limiting principles of the new version of globalization? 635 00:41:18,120 --> 00:41:19,920 Speaker 2: How do you know what's too far? What are the 636 00:41:19,920 --> 00:41:20,879 Speaker 2: constraints great? 637 00:41:21,400 --> 00:41:24,080 Speaker 5: So what I would say is, let's have this conversation 638 00:41:24,120 --> 00:41:27,200 Speaker 5: about limiting principles when we have made more progress in 639 00:41:27,280 --> 00:41:32,520 Speaker 5: terms of reversing the trend of the downward spiral and 640 00:41:32,640 --> 00:41:36,720 Speaker 5: the race to the bottom. We are so significantly on 641 00:41:36,719 --> 00:41:39,600 Speaker 5: one side of the balance. So let me give you 642 00:41:39,640 --> 00:41:42,160 Speaker 5: a little bit more texture here. And this gets us 643 00:41:42,160 --> 00:41:46,320 Speaker 5: into the US Mexico trade relationship and a lot of 644 00:41:46,320 --> 00:41:49,440 Speaker 5: the scars that we bear from the original negotiation and 645 00:41:49,520 --> 00:41:52,840 Speaker 5: passage of NAFTA to then the reason why there is 646 00:41:52,880 --> 00:41:55,239 Speaker 5: a renegotiation of NAFTA and the birth of the US 647 00:41:55,280 --> 00:42:00,520 Speaker 5: Mexico Canada Agreement. The concern early on in the nineteen eighties, 648 00:42:00,600 --> 00:42:03,719 Speaker 5: when NAFTA was being negotiated in the first place, was 649 00:42:04,200 --> 00:42:06,360 Speaker 5: we already had a trade agreement with Canada. There was 650 00:42:06,400 --> 00:42:10,000 Speaker 5: a US Canada bilateral and ween Canada are very very close. Canada, 651 00:42:10,040 --> 00:42:12,440 Speaker 5: I think today is one tenth the size in population 652 00:42:12,520 --> 00:42:14,480 Speaker 5: of our economy. I think that that was a nineteen 653 00:42:14,520 --> 00:42:17,120 Speaker 5: eighty five agreement. The big push then over the course 654 00:42:17,160 --> 00:42:19,839 Speaker 5: of that next ten years was well, you know, think 655 00:42:19,880 --> 00:42:25,040 Speaker 5: about North America. Let's combine this US Canada trade relationship 656 00:42:25,200 --> 00:42:29,239 Speaker 5: and bring Mexico into it. And the concern there was 657 00:42:29,360 --> 00:42:32,600 Speaker 5: Mexico was then and continues to be just at a 658 00:42:32,640 --> 00:42:36,759 Speaker 5: different level of development than the US and Canada. It 659 00:42:36,880 --> 00:42:40,480 Speaker 5: is a lower cost country, lower labor cost country. It 660 00:42:40,600 --> 00:42:43,359 Speaker 5: is a country where rule of law is also at 661 00:42:43,440 --> 00:42:47,319 Speaker 5: a different level of development. And the concern was that 662 00:42:47,760 --> 00:42:50,920 Speaker 5: if you took away all the barriers between all three economies, 663 00:42:51,600 --> 00:42:53,720 Speaker 5: what was going to happen. And there's a very famous 664 00:42:53,760 --> 00:42:55,919 Speaker 5: quote by Ross pro that I'm not going to repeat here, 665 00:42:56,400 --> 00:42:58,319 Speaker 5: but I'm going to talk about it in more kind 666 00:42:58,360 --> 00:43:03,760 Speaker 5: of objective terms. The concern and was that your words, 667 00:43:03,760 --> 00:43:08,960 Speaker 5: not mine, but you know that it's that logic then 668 00:43:09,480 --> 00:43:12,640 Speaker 5: that as you take away the barriers and in that 669 00:43:12,880 --> 00:43:18,600 Speaker 5: push for efficiency and you know, bottom line, the incentives 670 00:43:18,640 --> 00:43:23,480 Speaker 5: would allow everything in terms of production to flow into Mexico. 671 00:43:23,960 --> 00:43:24,160 Speaker 4: Right. 672 00:43:24,640 --> 00:43:27,759 Speaker 5: And you know, the goal has never been in our 673 00:43:27,800 --> 00:43:30,600 Speaker 5: trade agreement negotiations to ensure that we have wage parody 674 00:43:30,640 --> 00:43:33,000 Speaker 5: with Mexico. That's not the goal, because they're at a 675 00:43:33,360 --> 00:43:37,239 Speaker 5: different stage of development. The goal has been how do 676 00:43:37,280 --> 00:43:40,840 Speaker 5: we help Mexico build its middle class. That's what we 677 00:43:40,960 --> 00:43:42,800 Speaker 5: used to talk about, which is, well, you know, the 678 00:43:42,880 --> 00:43:46,040 Speaker 5: NAFTA will allow growth in the Mexican middle class, a 679 00:43:46,200 --> 00:43:48,520 Speaker 5: growth in the number of consumers in Mexico who will 680 00:43:48,520 --> 00:43:52,320 Speaker 5: then buy more things from the United States. Right, Okay, 681 00:43:52,640 --> 00:43:55,920 Speaker 5: The issue is that when you look at industrial relations 682 00:43:55,960 --> 00:43:59,640 Speaker 5: in Mexico, what you see is Mexico is a democracy. 683 00:44:00,120 --> 00:44:03,759 Speaker 5: Mexico has labor unions, but the tradition has been that 684 00:44:04,040 --> 00:44:07,560 Speaker 5: and they have some truly independent unions, but by and large, 685 00:44:07,600 --> 00:44:11,799 Speaker 5: for most of this period of NAFTA. Actually it's true 686 00:44:11,800 --> 00:44:17,520 Speaker 5: even today, most Mexican worker organizations and unions are what 687 00:44:17,560 --> 00:44:23,080 Speaker 5: we call corporatist. They are extensions of the employers that 688 00:44:23,400 --> 00:44:26,839 Speaker 5: they don't actually represent the interests of the workers. That 689 00:44:26,920 --> 00:44:31,280 Speaker 5: they will often negotiate collective bargaining agreements before a single 690 00:44:31,280 --> 00:44:35,319 Speaker 5: worker is hired at a facility, and the workers come 691 00:44:35,360 --> 00:44:38,799 Speaker 5: in not knowing what's in the agreement, and obviously they 692 00:44:38,840 --> 00:44:41,160 Speaker 5: haven't voted on it, they haven't voted on the union, 693 00:44:41,520 --> 00:44:45,320 Speaker 5: and those agreements are not working to empower those workers, 694 00:44:45,440 --> 00:44:47,879 Speaker 5: or they're not looking after the worker safety, or they're 695 00:44:47,920 --> 00:44:51,040 Speaker 5: working conditions and their wages and their rights. Right. So, 696 00:44:51,480 --> 00:44:56,120 Speaker 5: over the twenty years twenty five years of the NAFTA, 697 00:44:57,239 --> 00:45:01,600 Speaker 5: you saw so much production leave the United States go 698 00:45:01,680 --> 00:45:05,920 Speaker 5: to Mexico on the backs of an entirely exploitative model 699 00:45:05,960 --> 00:45:09,120 Speaker 5: with respect to Mexican workers. And the way that American 700 00:45:09,200 --> 00:45:13,560 Speaker 5: workers experience this in all the industries that went south 701 00:45:14,160 --> 00:45:16,920 Speaker 5: was the loss of jobs, the hollowing out of communities, 702 00:45:17,160 --> 00:45:19,759 Speaker 5: and for the jobs that we retained in some of 703 00:45:19,760 --> 00:45:24,800 Speaker 5: our industries, a constant pressure from management to say, well, 704 00:45:24,880 --> 00:45:28,000 Speaker 5: you know, the collective bargaining agreement is up for renegotiation. 705 00:45:28,480 --> 00:45:30,759 Speaker 5: Here are our terms. These are the best terms we're 706 00:45:30,800 --> 00:45:34,000 Speaker 5: able to offer you. And frankly, if these don't work 707 00:45:34,040 --> 00:45:36,120 Speaker 5: for you, we're just going to close up shop, and 708 00:45:36,120 --> 00:45:38,880 Speaker 5: we're going to move this south to a place where 709 00:45:39,120 --> 00:45:42,000 Speaker 5: your compatriots on the Mexican side of the border have 710 00:45:42,160 --> 00:45:46,399 Speaker 5: no rights to negotiate agreements that actually reflect their interests. Right, 711 00:45:46,640 --> 00:45:50,560 Speaker 5: So that fundamental mismatch has been across that we have 712 00:45:50,719 --> 00:45:55,040 Speaker 5: born as part of NAFTA. You get to the renegotiation 713 00:45:55,200 --> 00:45:57,000 Speaker 5: of the NAFTA and some people will say, well, you 714 00:45:57,000 --> 00:45:59,160 Speaker 5: know it was time, was over twenty years, and you 715 00:45:59,200 --> 00:46:01,800 Speaker 5: know we needed a modelies an update, and that's true. 716 00:46:02,239 --> 00:46:05,200 Speaker 5: But the real opportunity in the renegotiation of the NAFTA 717 00:46:05,239 --> 00:46:08,320 Speaker 5: was to address some of these original sins of the NAFTA, 718 00:46:08,840 --> 00:46:13,359 Speaker 5: to address the fact that we didn't adequately provide for 719 00:46:13,560 --> 00:46:17,279 Speaker 5: mechanisms to counterbalance the race to the bottom. And so 720 00:46:17,360 --> 00:46:20,120 Speaker 5: what you have in the USMCA, which is this very 721 00:46:20,239 --> 00:46:26,560 Speaker 5: very interesting product of the Trump administration and Congressional Democrats, 722 00:46:27,120 --> 00:46:31,080 Speaker 5: was among our existing trade agreements, the USMCA is the 723 00:46:31,120 --> 00:46:36,080 Speaker 5: one that has the highest standards for labor and worker protections. 724 00:46:36,640 --> 00:46:43,919 Speaker 5: It has, in particular a labor and worker specific enforcement 725 00:46:44,080 --> 00:46:49,279 Speaker 5: mechanism that was the key to the renewal of the 726 00:46:49,360 --> 00:46:51,839 Speaker 5: NAFTA in the form of the USMCA, that won at 727 00:46:51,880 --> 00:46:54,719 Speaker 5: eighty nine percent support in the House and Senate, and 728 00:46:54,880 --> 00:46:58,399 Speaker 5: even one at the endorsement of key labor union side, 729 00:46:58,719 --> 00:47:04,399 Speaker 5: like the AFLCIO and like the steel workers. And this mechanism, then, 730 00:47:04,600 --> 00:47:08,160 Speaker 5: which is so key and novel in the USMCA to 731 00:47:08,360 --> 00:47:15,080 Speaker 5: worker centrism is a facility specific labor enforcement mechanism that 732 00:47:15,360 --> 00:47:19,560 Speaker 5: allows for anybody to petition the US government. The Canadians 733 00:47:19,560 --> 00:47:22,560 Speaker 5: have their version with Mexico or the Canadian government to 734 00:47:22,760 --> 00:47:26,799 Speaker 5: take up with Mexico concerns that there are specific facilities 735 00:47:26,800 --> 00:47:30,600 Speaker 5: in Mexico that are not affording the right to freedom 736 00:47:30,640 --> 00:47:33,680 Speaker 5: of association or collective bargaining to its workers as required 737 00:47:34,000 --> 00:47:36,959 Speaker 5: not just by the treaty, but as required by Mexican law. 738 00:47:37,400 --> 00:47:41,480 Speaker 5: We have invoked this mechanism, which is very very novel, 739 00:47:41,880 --> 00:47:47,400 Speaker 5: almost thirty times now. We have settled and resolved about 740 00:47:47,440 --> 00:47:50,520 Speaker 5: twenty four or twenty five of the cases. In every 741 00:47:50,560 --> 00:47:53,200 Speaker 5: single one of the cases that we have resolved to date, 742 00:47:53,840 --> 00:47:59,640 Speaker 5: we have allowed for workers at specific facilities to have 743 00:48:00,320 --> 00:48:05,200 Speaker 5: a free and fair election of an independent union of 744 00:48:05,239 --> 00:48:10,480 Speaker 5: their choosing to be able to negotiate new collective bargaining 745 00:48:10,480 --> 00:48:13,960 Speaker 5: agreements that reflect their interest to increase their wages to 746 00:48:14,080 --> 00:48:18,600 Speaker 5: get back pay. We have directly benefited over about thirty 747 00:48:18,719 --> 00:48:22,520 Speaker 5: thousand Mexican workers five to ten I think is the 748 00:48:22,600 --> 00:48:26,759 Speaker 5: number of million dollars in improved benefits and wages. And 749 00:48:27,160 --> 00:48:29,920 Speaker 5: people will say this feels like a drop in the 750 00:48:29,960 --> 00:48:33,400 Speaker 5: bucket in terms of addressing that race to the bottom. 751 00:48:33,880 --> 00:48:37,200 Speaker 5: But what I need for you to know is this 752 00:48:37,280 --> 00:48:42,400 Speaker 5: is the beginning of the flip to a race to 753 00:48:42,440 --> 00:48:45,160 Speaker 5: the top. If you think about what we have made 754 00:48:45,320 --> 00:48:48,720 Speaker 5: possible through this mechanism in the USMCA, for the first 755 00:48:48,760 --> 00:48:52,160 Speaker 5: time in our history, maybe for the first time in history, 756 00:48:52,800 --> 00:48:56,440 Speaker 5: there is a mechanism that is uniquely available in a 757 00:48:56,480 --> 00:49:01,440 Speaker 5: trade agreement that is empowering workers in Mexico and therefore 758 00:49:01,480 --> 00:49:05,720 Speaker 5: also empowering workers in America. We have demonstrated that trade 759 00:49:06,160 --> 00:49:11,240 Speaker 5: is not inherently inimicable to the interests of working people, 760 00:49:11,280 --> 00:49:13,280 Speaker 5: but that trade can be a part of the solution. 761 00:49:13,760 --> 00:49:15,480 Speaker 5: And so what I wanted to do with your question 762 00:49:15,560 --> 00:49:17,800 Speaker 5: is really to flip it and to say we are 763 00:49:17,840 --> 00:49:20,480 Speaker 5: just getting started. We are very very far from the 764 00:49:20,520 --> 00:49:23,200 Speaker 5: conversation around what are the limits and have we gotten 765 00:49:23,239 --> 00:49:27,600 Speaker 5: to access The balance is so far weighted in favor 766 00:49:27,680 --> 00:49:30,600 Speaker 5: of the race to the bottom, that we are still 767 00:49:30,600 --> 00:49:33,760 Speaker 5: in the process of innovating how we can do trade 768 00:49:34,080 --> 00:49:38,000 Speaker 5: to benefit more segments of our economy and society. And 769 00:49:38,080 --> 00:49:41,279 Speaker 5: it's actually a very very exciting time for us to 770 00:49:41,360 --> 00:49:45,480 Speaker 5: be doing trade and is requiring a lot of the 771 00:49:45,560 --> 00:49:49,440 Speaker 5: spirit of innovation and advancement and to keep our eye 772 00:49:49,520 --> 00:49:52,600 Speaker 5: on the ball that the race to the top is possible. 773 00:49:53,520 --> 00:49:58,040 Speaker 3: Speaking of just getting started, we began this conversation talking 774 00:49:58,040 --> 00:50:01,120 Speaker 3: about bipartisan consensus when it comes to China trade and 775 00:50:01,160 --> 00:50:04,000 Speaker 3: to some extent, the continuity between the Trump administration and 776 00:50:04,040 --> 00:50:08,640 Speaker 3: the Biden administration on this particular policy aspect. I have 777 00:50:08,719 --> 00:50:11,960 Speaker 3: to ask, do you anticipate at all that maybe Kamala 778 00:50:12,000 --> 00:50:16,480 Speaker 3: Harris's trade policy would differ in any way to Biden's? 779 00:50:16,520 --> 00:50:20,120 Speaker 3: And then, secondly, you've been in this role since I 780 00:50:20,160 --> 00:50:23,120 Speaker 3: think twenty twenty one, do you have any interest in 781 00:50:23,200 --> 00:50:26,239 Speaker 3: perhaps continuing it under a Harris administration? 782 00:50:27,400 --> 00:50:30,239 Speaker 5: So you've asked that question very artfully, and this is 783 00:50:30,239 --> 00:50:32,760 Speaker 5: how I'm going to answer your question. In your framing 784 00:50:32,800 --> 00:50:35,880 Speaker 5: of the question, you're still focused where we started on 785 00:50:35,960 --> 00:50:39,880 Speaker 5: the continuity of say, the terror factions with respect to China, 786 00:50:40,400 --> 00:50:42,200 Speaker 5: and what I've tried to do is to paint for 787 00:50:42,239 --> 00:50:44,879 Speaker 5: you the picture of the reality of the US China 788 00:50:44,920 --> 00:50:48,320 Speaker 5: trade relationship, China's role in the global economy, China's own 789 00:50:49,000 --> 00:50:53,279 Speaker 5: pivots away from reform economically and politically, to put all 790 00:50:53,320 --> 00:50:55,880 Speaker 5: of that in context. But what I really really want 791 00:50:55,960 --> 00:50:58,680 Speaker 5: you and your listeners to take away is that a 792 00:50:58,800 --> 00:51:03,360 Speaker 5: very important aspect of the Biden Harris Administration's approach to 793 00:51:03,480 --> 00:51:07,760 Speaker 5: trade and economic policy is that you have to combine 794 00:51:08,280 --> 00:51:13,640 Speaker 5: defensive tools with offensive tools. You have to combine trade 795 00:51:13,680 --> 00:51:17,960 Speaker 5: measures with all of the other policies that make up 796 00:51:18,200 --> 00:51:22,320 Speaker 5: your economic toolkit. Those are policies of the US Treasury. 797 00:51:22,640 --> 00:51:28,000 Speaker 5: Those are policies of advancing competition and opportunity, and all 798 00:51:28,080 --> 00:51:31,719 Speaker 5: of this is trained on the America of today and 799 00:51:31,800 --> 00:51:35,440 Speaker 5: how we get from today to the America of tomorrow 800 00:51:35,480 --> 00:51:40,040 Speaker 5: and to prepare ourselves to be the strongest economy for 801 00:51:41,040 --> 00:51:43,360 Speaker 5: American workers and American consumers. 802 00:51:43,680 --> 00:51:47,319 Speaker 3: You have very artfully deflected that question, I got to say, 803 00:51:47,400 --> 00:51:49,920 Speaker 3: but that was a fantastic conversation. 804 00:51:50,320 --> 00:51:53,040 Speaker 2: Yeah, investador Ty, thank you so much for coming on outline. 805 00:51:53,080 --> 00:52:07,200 Speaker 4: Thank you so much, Tracy. 806 00:52:07,360 --> 00:52:09,480 Speaker 2: I really enjoyed that conversation. I feel like there were 807 00:52:09,480 --> 00:52:11,600 Speaker 2: a number of just sort of like I guess, big 808 00:52:11,680 --> 00:52:15,040 Speaker 2: ideas to pull out of that that sort of inform 809 00:52:15,480 --> 00:52:18,520 Speaker 2: the new globalization. In fact, that I'd probably start with 810 00:52:18,560 --> 00:52:22,920 Speaker 2: it that that it's like this idea that globalization can 811 00:52:22,960 --> 00:52:26,120 Speaker 2: take many forms. We sort of got used to one 812 00:52:26,480 --> 00:52:29,680 Speaker 2: perhaps maybe starting in the early eighties, or maybe you 813 00:52:29,760 --> 00:52:34,319 Speaker 2: could market to when China entered the WTO or never else. 814 00:52:34,560 --> 00:52:37,080 Speaker 2: But this idea like there doesn't only have to be 815 00:52:37,280 --> 00:52:41,840 Speaker 2: one regime. And as Ambassador Tie noted, there is truly 816 00:52:41,920 --> 00:52:45,359 Speaker 2: no such thing as free trade anywhere, which I thought 817 00:52:45,400 --> 00:52:49,239 Speaker 2: was an interesting line. So at any given moment, what 818 00:52:49,600 --> 00:52:51,440 Speaker 2: free trade or what we call trade or what we 819 00:52:51,480 --> 00:52:53,320 Speaker 2: call globalization can change. 820 00:52:53,480 --> 00:52:56,520 Speaker 3: I think that's my takeaway as well. I also thought 821 00:52:56,840 --> 00:53:01,320 Speaker 3: the throwback to the sort of nineteen four, nineteen fifties 822 00:53:01,520 --> 00:53:06,759 Speaker 3: Breton Woods era of trade was really interesting because, as 823 00:53:06,760 --> 00:53:09,799 Speaker 3: you mentioned, we are very used to thinking about globalization 824 00:53:09,960 --> 00:53:15,120 Speaker 3: in sort of nineteen nineties early two thousand terms. Yeah, trade, liberalization, 825 00:53:15,520 --> 00:53:18,440 Speaker 3: bring down the barriers and all of that, but there 826 00:53:18,560 --> 00:53:24,360 Speaker 3: happened instances throughout history where trade meant something slightly different, 827 00:53:24,480 --> 00:53:28,760 Speaker 3: and the sort of nineteen fifties analogy of I guess 828 00:53:29,520 --> 00:53:33,400 Speaker 3: using that word again, trade defensism or perhaps more like 829 00:53:34,600 --> 00:53:39,080 Speaker 3: activist maybe trade management is an interesting one totally. 830 00:53:39,120 --> 00:53:42,520 Speaker 2: And she made that point about how it's important, like, Okay, 831 00:53:42,520 --> 00:53:46,799 Speaker 2: if we're going to erect these trade barriers, particularly on 832 00:53:46,920 --> 00:53:50,200 Speaker 2: things like you know, the high tech areas, then it 833 00:53:50,320 --> 00:53:53,680 Speaker 2: only makes sense to do it in conjunction with sort 834 00:53:53,719 --> 00:53:57,560 Speaker 2: of offensive strategies and the domestic investments, which we're of 835 00:53:57,600 --> 00:54:00,480 Speaker 2: course seeing with things like the Chips Act or on 836 00:54:00,520 --> 00:54:04,640 Speaker 2: the energy front in the Inflation Reduction Act, and so 837 00:54:04,719 --> 00:54:07,400 Speaker 2: that it has to be sort of this coherence. I 838 00:54:07,400 --> 00:54:10,160 Speaker 2: do think it's interesting. You know, she talked about the 839 00:54:10,320 --> 00:54:14,520 Speaker 2: China shock, right, and China shock one point. Oh, but 840 00:54:14,640 --> 00:54:17,279 Speaker 2: you know that was in we know about sort of 841 00:54:17,320 --> 00:54:21,319 Speaker 2: various textile areas or other low end manufacturing that just 842 00:54:21,360 --> 00:54:25,400 Speaker 2: got completely decimated the moment that companies were able to 843 00:54:25,840 --> 00:54:28,720 Speaker 2: move overseas and build the exact same thing with cheaper 844 00:54:28,800 --> 00:54:33,920 Speaker 2: labor costs, lower environmental standards, lower labor rights, and so forth. 845 00:54:34,400 --> 00:54:37,760 Speaker 2: It's interesting, though, and so we've seen the playbook before 846 00:54:37,960 --> 00:54:39,960 Speaker 2: and we don't want to repeat it, and I get that. 847 00:54:40,360 --> 00:54:43,080 Speaker 2: It's interesting though to think about it in the context 848 00:54:43,120 --> 00:54:46,680 Speaker 2: of some more of these high end areas it really 849 00:54:46,760 --> 00:54:48,759 Speaker 2: is about like, no, we are catching up. 850 00:54:49,200 --> 00:54:49,480 Speaker 4: Yes. 851 00:54:49,600 --> 00:54:52,760 Speaker 3: And also I have to say she was very skilled 852 00:54:52,920 --> 00:54:56,400 Speaker 3: at deflecting that last question. So I guess we'll have 853 00:54:56,520 --> 00:55:01,840 Speaker 3: to see what happened. We're going, Yeah, the we'll find out. 854 00:55:01,960 --> 00:55:03,719 Speaker 3: But in the meantime, shall we leave it there? 855 00:55:03,800 --> 00:55:04,560 Speaker 2: Let's leave it there. 856 00:55:04,719 --> 00:55:07,400 Speaker 3: This has been another episode of the ad Thoughts podcast. 857 00:55:07,480 --> 00:55:10,840 Speaker 3: I'm Tracy Alloway. You can follow me at Tracy Alloway. 858 00:55:10,520 --> 00:55:13,400 Speaker 2: And I'm Jill Wisenthal. You can follow me at the Stalwart. 859 00:55:13,640 --> 00:55:17,840 Speaker 2: Follow our guest Ambassador Catherine Tie. She's at Ambassador Tie. 860 00:55:18,040 --> 00:55:21,480 Speaker 2: Follow our producers Carmen Rodriguez at Carman Ermann dash, O 861 00:55:21,520 --> 00:55:24,879 Speaker 2: Bennett at dashbod and Cal Brooks at cal Brooks. Thank 862 00:55:24,920 --> 00:55:28,040 Speaker 2: you to our producer Moses Adam. For more Oddlogs content, 863 00:55:28,080 --> 00:55:31,360 Speaker 2: go to Bloomberg dot com slash odd lots, where have transcripts, 864 00:55:31,440 --> 00:55:34,160 Speaker 2: a blog and a newsletter and you can chat about 865 00:55:34,200 --> 00:55:38,440 Speaker 2: all of these topics, including a trade and China and 866 00:55:38,520 --> 00:55:42,360 Speaker 2: domestic investment twenty four to seven in our discord with 867 00:55:42,520 --> 00:55:46,440 Speaker 2: fellow listeners Discord dot gg slash odlines. 868 00:55:46,360 --> 00:55:49,120 Speaker 3: And if you enjoy All thoughts, if you like it 869 00:55:49,160 --> 00:55:53,320 Speaker 3: when we talk about trade with China and other policy issues. 870 00:55:53,360 --> 00:55:56,120 Speaker 3: Then please leave us a positive review on your favorite 871 00:55:56,120 --> 00:56:00,000 Speaker 3: podcast platform. And remember, if you are a Bloomberg subscriber, 872 00:56:00,239 --> 00:56:03,520 Speaker 3: you can listen to all of our episodes absolutely ad free. 873 00:56:03,840 --> 00:56:06,120 Speaker 3: All you need to do is find the Bloomberg channel 874 00:56:06,200 --> 00:56:10,200 Speaker 3: on Apple Podcasts and follow the instructions there. Thanks for listening.