Transcripts For CSPAN NAFTA Negotiations 20171211

Our program for prosperity and development and americas program. For those of you online, we welcome you. If youre interested in the rebroadcast of this event, it will be posted on the event page immediately following the program. To any of you who follow this, we are delighted you came and invest your time thank you for doing that. A trade website, for continuing coverage. To get things started, director of the Mexico Program richard miles. Richard. Richard thank you. U. S. To director of the mexico futures initiative. Haveay wonder, we will people talking about a possible nafta doomsday scenario. It should it is the Job Description to see the big picture, the whole relationship. Is we want to look beyond trade and examine look happen in the issues and all with these bilateral relationships for one of the parties of nafta. We will probably hear about defense cup test defense quite rich canada, cooperation with both companies on issues like venezuela and haiti, global and most importantly, canada and mexico are our neighbors. The angle that investors care a lot about, cultural and educational ties, and things like education. To start things off, we will have another ambassador set the stage. She is a person who needs no introduction but i will give one for her anyway. Born in los angeles, attended oxford and started her career as u. S. Attorney in los angeles, and the Civil Rights Division in the department of justice, and during the ford administration, she was the secretary of health and she was u. S. Trade representative to which time she led negotiations for the Free Trade Agreement. Find aould be hard to better person to speak about what the world could look like without nafta nafta. Please join me in welcoming her. [applause] thank you. We have got a great panel so i will be brief. I think in starting to think from ahat we lose pullout of nafta, we ought to remember what does the agreement do for us . Let me briefly say it brought together 490 Million Consumers and created a 19 trillion market. It eliminated tariffs on all industrial goods and most agricultural goods except for a. Ew it opened a broad range of Services Including Financial Service is an provided treatment for Service Providers across lines. Removed significant Investment Barriers and provided protection for north american investors and provided affordable protection for and copyright, which have become more important in the 20 years since. , our commercial relationships throughout north america expanded, making this region the most competitive in the world. And mexico account for one third of our global trade but we are not to talk about trade or what happens if it shrinks. Thatt to also mention canada is our largest exporter destination. Number and vibrancy of these commercial relationships has created great bonds, people to people and government to government paying dividends in areas way beyond trade. Mexicos from canada and constitute the top two sources, a major industry for the United States. In 2000 15, 1. 5 join dollars to our economy. Today, one out of nine jobs are hinged to tourism. It has already occurred in this year. Aboutesult of concerns the breakdown in our regional relationship. Another cause for withdrawal is. He in crease in investment our partners invested 280 billion in the United States and the uncertainty created by the threat of our walking away from the agreement without question, will reduce interest in investment and jobs connected to investment. And not just from northern and southern neighbors. Much more broadly. Uncertainty with respect to the future action also affects job creation. In 1993, our jobs connected to mexico total 700,000. Today, as a result of nafta, it is 5 million. Exiting from nasco would obviously nafta would obvious it shrink the number significantly. You take the auto sector. We would lose jobs if we break up our highly sitting synchronized supply chain that makes our auto chain the most competitive globally. Our companies would see costs increase and that would adversely affect their Global Competitiveness and the result is a decrease in our sales, which would mean fewer jobs. Toe companies are predicted relocate to asia, which would at which would again adversely affect jobs. States that are related to what they produce in agricultural markets. ,he tariffs and the food sector are above 30 . Truly feeles would that pinch. In addition to the harm done in that regional relationship, we would suffer challenges maintaining security. In the past two decades, our three governments have worked together to handle the increased flow of trade trying to separate those items that would create a danger so they could focus on facilitating the items for which there is no concern. Intelligence and collaborate on confronting challenges to International Areas ofvarious , creating aime stronger border requires and action on both sides of the border. Naftaut of nafta would most assuredly erode partnerships in dealing with a broad range of security issues. Finally, i have no doubt an exit in nafta would result in serious leadership erosion for our government. Not only with our two neighbors but throughout the hemisphere and beyond. To turn our back on an important agreement with our neighbors, over concern about bilateral deficits raises questions with respect to our reliability and our leadership. What other government would want to sit down and negotiate on any topic . A concern would loom that we told not the relied upon deliver tomorrow what we promise today. Panel to talkt about it in greater detail, the cost and consequences of exiting from nafta. I will exit the podium and turn it over to our great panel. I think you for being here. I thank you for being here. [applause] good morning, everybody. Im a senior fellow here at csis. What a treat to have three former ambassadors here. Today, Earl Anthony Wayne is a former u. S. Ambassador to mexico from 2011 two 2015. The former mexican ambassador to the United States from 2007 2013. And michael wilson, a former canadian ambassador 2016 2009. We can talk about trade as well. I would like to start with, putting this topic more in the lot on the level of a regular citizen. How do you citizens would be affected by an exit of nafta. How does that impact them . The basic message is that things would cost more. The winter vegetables you get from mexico would probably cost a bit more. We do not know. Daytoday, that would be the place where people note things. Will talk about this a little bit more, we see a reduction in security operation in fighting crime. That is already a serious that both sides are working together now very collaboratively. I think cooperation would be negatively impacted the u. S. Were to exit nafta. Good morning and thank you for having us this morning. This is an important week, intersectional meeting before round six in canada at the beginning of next year kicks off. We will be seeing a lot of on hot button issues , some of these issues in the conversation. One thing i would add to the list of how it impacts daily lives of americans is cost if the u. S. Were to impose some of the issues it would like to on the automotive sector, there will be a very important impact on the principal automobiles manufactured in america. It is a hard question. Public policy on debate discussions but on narrative and storytelling. Transform that data despite that we seem to live in a factory washington these days. One way i think that helps is to underscore there is no bilateral relationship on the earth that touches the daily lives of so Many Americans in their relationships with mexico. With scarceappens resources on the border, and what has been done on collaboration but there is a compelling story to be told that storytellingate that will connect with your average joe to underscore how important this is . One of the sectors that would be severely hurt by the nsc asian bag sector,the which will provide a real pinch in states that elected President Trump. That wouldstates lose significantly if this disappears. I am we will do this in the panel, but at the end of the day, the challenge we have as former officials and think tanks and policymakers is how do we create a narrative which connects to the average citizens in the mexico and the United States as to what the impact of nafta going south, pun intended, for security and wellbeing of north americans . A lot has been said and ill try not to repeat it. These are the three sectors that would be most severely affected and they are with the average joe or jane will feel quite directly. Acutely, there is an uncertainty as to what naftaappen if we have no and there is nothing to replace it with. There will clearly be an indirect effect on jobs. If all of this happens the way i wouldbeen discussing, be concerned about an antiamerican sense in mexico be damaginghat will for the relationship among all of our countries. We just dont need that. I think it is something we have to be concerned about. The final point i will make is 35 state, have as the number one export destination is canada. Thatnk there is a number other states with mexico and the number two in both cases is. Sually mexico or canada it is not just here in washington. It will be felt with the negative impacts of three of us talked about. Collect thank you. I would like to focus on security aspects. This Companies Incorporated and border issues and drugs and illegal immigration, hallowed exiting impact those areas, especiallygration, from Central American companies, countries, and potential terrorist threats . Those are issues that citizens care about. A good place to start is precisely where mike left off in a lotthat it leads of these issues. Yunnan in the do not need to be kissinger to figure out why a country where positive favorable perception of United States has collapsed the most is mexico. Year. T from 66 to 33 in a people may say, how does that impact a written the relationship . When you have that impact in mexico in less than eight months and you see what mexicans are being asked, there is a key question i would like to put next to this collapse which is you ask mexican citizens whether the administration is dealing adequately with the Trump Administration, the overwhelming 62 , say thatr the Mexican Government is not responding adequately to u. S. Administration. Youine what the poll tell about the ability the Mexican Government has to do stuff with the United States . As it goes to the cycle of next year, then it it impacts it has ag in terms of profound impact on security collaboration, something tony and i worked on hand in hand when he was in mexico city and i was in washington dc and there is already a challenge because this is not the forum to discuss whether we agree or not, but as the u. S. Has moved in a de facto legalization, many in mexico are increasingly saying why should mexico be investing blood sweat and tears in eradicating if nine states in the United States have legalized for Recreational Use . There is already a relevant tension and to this, you add u. S. Administration that decides , it will article 225 have a profound impact on how mexico has articulated a number of policies, whether it is regional or bilateral level. It is not that mexico will necessarily become an antiamerican country. It is simply the ability to do stuff that we have been doing for the past decade and a half on issues like security would got the window. I will give you a prescient example, given now that immigration was one of the third and has played such an Important Role in these months and we have a decision over what happened with the dreamers in daca. Was the gang of eight bill being developed on capitol hill, which was later proved in the senate and failed in the house, some of the followed it closely. There was a debate on what was a touchback clause, what you do with 11 million undocumented immigrants who were in the United States to legally be in the United States. There was a discussion on as to how you would make these 11 Million People leave the country and then come back legally to then start whatever process of immigration and legalization was put on the table for them. Mexico at the time told one thing is mexicans or Central Americans were relatively close. If you are from india or china or poland, and you go back and then come in, it is a bit of a challenge. Mexico said, we would be want to take an 11 Million People if you would process them across the porter in mexican consulates, and then that way we could help ensure that those individuals in coulduntry without papers come back in with a legal status so we can get that off the table. That debate today in the current circumstances despite how important it would be to what weve the needle forward, it is off the table. It would be political suicide anyone in mexico today that is an example of how this pinata added as a to the potential of nafta going down the drain because of unilateral denunciation, how this could impact a lot of what on narcotics on regional security, on challenges we are facing in the caribbean and south america, where we had been working hand in hand. To finish on that one and then maybe, it is important to , theber that in the 1980s United States and mexico were called distant neighbors. They really did not cooperate on much. There were friendships but there was not a cooperation on the governments. What happened of the subsequent 25 years is gradually, let me underscore gradually, we developed more mutual trust and and startedstanding expanding the area where we will able were able to cooperate. We wrote a paper about it in the Foreign Policy area, how long it took. It took through the first decade of the 2000s and then beyond to get us to the point where we were willing to collaborate around the world and other places. In the security area. There just was not mutual trust or understanding in agencies. They would Work Together on cases that it was limited. Border. Ng on the up until a few years ago, people were still shouting at each other and pointing fingers and they moved to a shared paradigm of shared responsibilities. To share the responsibility for solving these problems. Neither of us could do it ourselves. Starting in 2008 and moving forward increasingly every year that it was better collaboration. They did not solve all problems but they found new ways to address the problems that were more effective. A lot of it is endangered by what he was talking about, the Public Attitudes in both countries, but also in mexico the spacedo not have to take the steps forward and your own Law Enforcement people will be less trustworthy because of what they perceive to be clear insults not against criminals who but against mexico in general and the mexican people in general. The big danger here is we will see big steps afterward. The worst part of it to me is up young mexicans who grew in nafta and came to see real values in the United States that they admired are now changing their opinions. The overallent in pole, but it is evident in what we have both heard from our friends who say, you know, my kids are coming to me, and they are very critical of the United States now, and they have a whole different attitude like they are pulling out old views held by me when i was younger and by my parents, of the United States. It is not the kind of relationship that we want to have with a neighbors. I think tony said something very important. Nafta has wrought our three , not justtogether mexico and the United States but also canada, mexico, and the United States. Nafta, that will dissipate, no question. Old we are concerned about a of the strong relationship built over the last 25 years between canada mexico and the United States. A broader point here, what is the message to the rest of old the rest of the world . Cannot geted states along with her two neighbors, mexico and canada, and they have to destroy a create a trade agreement, which has done Tremendous Positive results for all three countries, if they cannot get together with her two neighbors, how will they get together with other countries and other parts of the world . Carla made the point a little earlier on a trade agreement with another country, how can you count on the United States . So there is that. The third point i would make is on order management. I was ambassador, after 9 11, a real challenge we had was order management. If there is a breakdown in attitudes toward managing the border in the positive way, we are going to get affected in canada almost as much as it would affect mexico. That is something we have got to be concerned about as well. Obama andresident Prime Minister harper wash something, i think the on orders is the name of the association. A focus on Border Management and harmonization of regulation. Was done very quietly below the radar stream a lot of good things came out of that over the course of this time. I would worry that the momentum that arose from the 2011 agreement would decline and possibly, he might see things in reverse. Impact betweennd canada and the United States as between the United States and mexico, but certainly, we would not be immune from what is expressed. Thank you. My other question is, you mentioned we have mexican elections in july. How would this process, the anda exit, impact democracy human rights, and all the issues if the u. S. Pulled out . I have seen a lot written about this. Gobbledygooks been. Lets be clear. The new method the mexican election will not be won or lost depending on what happens in nafta. Not even this country determines electoral out comes they some policy with a couple of exceptions. But it will have an impact in the sense of attitudes and opinions, which we talked about, and it will have an impact because there will be the action of who lost now the which will be utilized electoral he. I dont think, regardless of whether nafta is still alive, whether it has already been denouncing aided, i do not think mexicans will go to the polls and cast your vote depending on what happens with nafta. Be impunity impunity, corruption, but those will be the main drivers on which mexicans will decide who they choose as the next president. There is not a direct correlation between what happened with nafta, but it will have an impact in terms of attitude and perceptions and the bandwidth which with which this government, we call this horrendously long transition from joyce december 1, we will have a lameduck president for five months, and president president elect at the same time. It will be a difficult moment to articulate forwardlooking policies in the best of worlds regarding a strategic relationship like what we have in the united dates. If nafta is no longer there, imagine the complications as then new government tries to devise policy toward the u. S. Where i think the derailment does lay an Important Role, it is an issue where most americans , whichsually think about is nafta in mexico had an impact tradee trade jar agenda. We supported 5 million u. S. Jobs direct the in the united dates linked to nafta and yes, we are your second u. S. Your second buyer, all of the numbers are there any point to what a resounding trade success nafta has been from the bilateral relationship. In terms of mexico, nafta had a profound footprint in terms of rule of law and protect ability, investment, and how the country became much less than it was before nafta was negotiated. The way mexico linked its destiny to the United States in terms of economic and trade disparities. It created a level Playing Field for u. S. And this businesses and investment and anchored many of the changes that we have seen in mexico. Some policies articulated by administration hark back to how mexico would manage its economy before nafta was approved. In many ways, there is a larger institutional footprint nafta has has developed in mexico which might be lost and where certainty regarding all regarding investments and footprints, i can mention a big area where this is critically important. Energy. When we negotiated nafta and 9091, the u. S. And mexico vetoed issue our respective countries put on the table. Mobility continues to haunt the relationship as it fits into the him wanted the u. S. To the energy on the table and they said no can do, not only because we were not ready to but because mexicos internal that youlaws were such could not have private or domestic or Foreign Investment in the energy field. What has happened is energy form inmexico and the impact terms of efficiency and security if nafta is lost, you lose, if you are a u. S. Oil major, you lose a lot of legal certainties in the mexican marketplace if nafta disappears. Trade, but in the case of mexico, there are symmetries in the rule of law and accountability with our partners, this had an important effect which could be lost if nafta were to disappear. Just to add to that, if the u. S. Pulls out of nafta before the election, it will change the tenor of the debate. Estimates are that mexico could lose anywhere between 900000 and nafta were jobs if half ended. It is something candidates will have to take a position on. They will have to change the agenda and if joss rise up in the agenda and people are filled come debt fearful, is right that they corruption themes will be right up in front and violence and crime in the country, but you at next to it a different debate about what you do about an economy of mexico . How quickly do you develop new sources . What impact will this be to have on mexican citizens, and you will not have anybody championing cooperation with the United States, even those candidates who personally might they just will not have the space to do that and those who may personally not believe it anyway will be a bit more aggressive and nationalistic and their response because you are protecting your electorate. I will not talk directly about the election because others have commented on before. If thingsl say is about,hat both of talked that will raise uncertainty about investment in mexico by canadians pier 1 thing in the t few years that was slow i would hate to see it slow down because we are just getting a and a numberentum of potential investments are related to the Energy Reform that has taken place. If there is a slowdown reversal, that type of investment will stop. Potential for of the three countries working together is in the energy area. To a can ever get regionwide Economic Energy policy, it would put the north strongn region in a very position. We would be selfsufficient and oil and natural gas, electric power, nuclear power, and really be the model for the rest of the world. That is something i would be very concerned about. Be able to achieve that if we had some setback elector early in mexico. To theinty related mexican political scene will not be good for a wide range of reasons we are detached on in the earlier comments. To a list like to add just said to you. A lot of this conversation has just been gravitating around the u. S. Mexico access and the canada access, even though we just mentioned impact this could have. There is it larger picture at play, which is what an implosion of nafta does to the north american footprint worldwide and ability ofs to the free north American Partners to compete strategically and economically in 21st century visavis china. If there is so much agitation means and china entails for u. S. National security, Foreign Policy, economic policy, im convinced this point century can be the north American Century if we get this negotiation right and modernize and read the 21st century standards. This is what allows north america, paired with what has happened in the Energy Sector in terms of the Energy Revolution in canada and the united dates, and what has happened because of mexicos decision if you add to this template, you have the potential for the 20 century to be in terms of our ability to compete with a particular to china. There is a much larger piece and also something which is very dear to my heart, which i worked with with canadian and u. S. Friends, and that is how do we deepen security collaboration between the countries that are on the regional and global level. How do we engage on the issues that matter to us where we have hemisphere, in the whether it is Disaster Relief to respond in america or the caribbean, we have started to discuss the positioning of equipment and troops, and to be able to respond quickly to emergencies in the caribbean and Central American regions. Mexico has finally moved after decades of peacekeeping operations and keeping us at arms length, we started a slow process of engaging canadian friends for less historical reasons that all of you will understand, antibodies working with canadian friends than with our u. S. Friends, and this allowed us during my tenure to finally bring navy and army liaisons colorado springs, and there is the whole debate of if one day new mexico should, and i think it should, become a member of but i think this discussion that has been slowly moving forward in ways that would have been unthinkable 20 years ago, it is something north america could think would be to the detriment of the Strategic Interests in the region going forward. Arturo mentioned china. Competition ofe the third Major Economic region in the world today. If the United States is thinking the mainally, challenge economically, in trade, finance, and other is not newues, mexico, china, or canada. Mainll be china, where the challenge will come. The major sector the United States is targeting in this renegotiation of nafta, the automotive sector. The deficit or the surplus of mexico in auto parts is about deficit, or surplus, however you want to look at it. That is a major focus and something has to be done to address that. But lets be careful about addressing that. Todayhas car production of 28 million vehicles. North america, the three countries, slightly over 20 million. They have the capacity to move into this market. I just came back couple of weeks over there. China is coming into the north american market, within five , and they have the capacity to do that and they are developing the technology. If you go back to japan 20 or 30 years ago, the quality is not there now. A lot of japanese and korean cars. I happen to pick up a copy of the post and what caught my eye was this. I was a little more closely it is not a corvette, it is a chinese car. It is the fastest electric car in the world today. China has 43 of the vehicles. Which you willis come into the market. Here we are and we are trying to the north American Automotive production. This, as you heard from others togetheroday, is drawn by the supply chain north american supply chain, where the best of the United States, canada, and mexico is brought together to make this a very competitive region. How weld be looking at can strengthen north american region against the challenges from both europe and china, rather than in that major competitive auto production area. So we have got to get away from the wind when the smallscale get we will get trying to at the negotiating table, get our minds on the strategic level where it is extraordinarily important that we Work Together as three Company Countries to address the competition, which andound to come from asia china, because they are the dominant country over there, obviously. We have have a strategic overview guiding these to aiations, as opposed transactional approach at the negotiating table. You, ambassador. It is a great segment segue for my last question. How do you visualize a modern nafta . What is the best alternative . Lets be positive. What are the elements that we to be a bigngthen north american block . What we need to do is focus on the future issues that will make countries more competitive or not. Rather than looking backward to the economies of the past, and how do we make sure the rules that we write in the new nafta are flexible and open enough to take care of these kinds of changes. Now, were right trying to keep up on data and. Ervice we have leave that space for what is coming. We know that economists will be hit by a wave of new technology. We will have to have workers, where for dont lose the job, they will have part of the job redefined. How do we Work Together to have that space opened for Workforce Development in all three countries . How do we have the space for new services and how do we encourage what will in fact compete with nota in the future, and just china with germany and japan, because they also have these regional models that help them produce things competitively, so it really is very strategic vision, not narrow and specific vision. There is a place for fixing things in the trade agreements that have not worked. Opportunity is creating a trade agreement that will take us 20 years into the future and serve all three of these economies well. If i can just add, that is sort of the same thing on the security front also. Of people for a lot at the height of the collaboration was extending beyond northnd america because of the cooperation between the three countries. Thinking yourst national borders. Youre thinking how collaboratively can we expand the security look to other areas, and not just border areas, but who is coming in . How do we Work Together to keep terrorists and radicals and others out and that was really the potential of where we were going. It was transforming borders between the u. S. And canada and the u. S. And mexico, in their very nature, to make them a creative place where you are providing security but facilitating that traffic entering it in the context of Network Information sharing that really lets you know who is coming and going. That vision is also endangered to the isolated idea of the countries, not really taking advantage of the potential that is there. I think coming up with an upgraded to. 0 and 3. 0 Free Trade Agreement is to jettison the my way or the highway approach of negotiations and a zero sum mechanics with which this administration was approach approach to most of the negotiation itself. You have to get rid of sunset closes. Absurd, it runs counter to why you have a Free Trade Agreement and the first place. You are not going to sign a Free Trade Agreement if every five years, you are a company and you will invest, you will not do it if every five years, you have to renegotiate the agreement. Harm to theo no and production platforms we created in north america which have allowed us to and which have ensured that not more jobs are lost and it also means that through what we were trying to do with ttp, one canada and mexico decided to join ttp, ttp at the end of the day, the reason why they joined was this was the best way to up grade nafta without having to renegotiate it. By 21st century standards on , tonythat did not exist ,as mentioned it, ecommerce biotech issues, by modernizing ttp and having canada and mexico and the United States it renewedve automatically negotiated in the same sentence. The fact that many of the disciplines that negotiators are looking at today come from the i think that is an indication of what a modernized an upgraded freetrade agreement between the countries that improves our ability to compete looks like. This is very important on the issue tony has mentioned and ise, and the paradigm membranes. Membranes allow the good stuff we have the ability to do this not in terms of what our agencies have been doing together since 9 11 despite what you have seen on the campaign trails, and the collaboration between the United States, mexico, and canada in terms of passenger verification, to make sure that nobody denied a visa Northrup America north america can remain a confident place. These are places of the puzzle, that if brought together could really upgrade and modernize our trilateral relationship. All i would end up by saying is that oscar wilde used to say when the gods wished to punish us, they would listen to our prayers. An americanized version, be careful what you wish for. I think the administration has to be careful what it is wishing for on the nafta front because the profound economic trade and National Security effects you it can have on the trilateral relationship as a whole. What should a modern trade agreement look like . I think the basics of approaching a trade agreement among free countries who are friends, allies, neighbors is to look at the broad region and then identify what can be done in the critical sectors. We talked about energy, digital, isomotive, transportation another, and then decide how we can best design a trade agreement that looks at the strengths of the three countries how do weey areas and put together a trade agreement that allows them, those various sectors, to work more closely together to develop a strong national, a strong north american region. And that i think is the big challenge. I think there is another point here. The whole focus of the administration has been on the trade deficit. Economics 101 will tell us that is notficit is not based on a specific trade agreement here or with whatever other country. It is based on the structure of the u. S. Economy. The u. S. Economy has a high federal government deficit, High Consumer spending. That produces a low savings rate and an automatic current account deficit, the trade deficit being a significant part of that current account deficit. So we have got to realize that hammering away at what country or another country on a trade agreement such as nafta is not going to solve the u. S. Trade deficit. It is a red herring. It is something that the united forhas had 440, 45 40, 45 years, so it will not be resolved by making a change to nafta. Structurally, there has to be a change from and that will be extraordinarily difficult. The thing i worry about the most on this is if we revert to the lets have a trade negotiation where i will hammer you, you will hammer me, and we each try to get a win at the table, the implications or the messaging that this extends to the World Trade Organization and any future discussions around that table is very negative. We have got to be looking at trade in a positive way, and if the three countries, if our three countries cannot work moreher to find that modern way forward, it sends a very negative message to members of the wto. Thank you very much. Q aave about 20 minutes for from the audience. Questions. E two please identify yourself. The lady here in the lady over there. The microphone. Thank you. About then is possibility that the u. S. Pulls out of nafta. Has aidedn government stated that it might reduce Security Cooperation if this happens. How credible is that morning . Is the extent Administration Just bluffing but not willing to reduce security corroboration cooperation . Good morning. About the true issues for nafta. You mentioned the first sunset clause. You have not touched on issues to issues. I would be interested in your views. Open your views on how you would deal with a brexit in e. U. , so next year they will have to do with the e. U. Trade government. It appears Single Market is up. Can you take lessons from that . Thank you very much. Two parts, two questions. What happens if the u. S. Pulls out . It is a very interesting question. My understanding is this policy of the government of canada, i think it is the Mexican Government, that i cannot speak to that, is nafta will continue. There is provision for nafta to continue without a member country. We would be continuing to work with mexico, and if that is the case, mexico would have advantages coming into canada, and likewise, canadians coming into mexico, which then neighbor in the middle would not have, and that is going to create some tension i would have thought within this country. Particularly in the agricultural sector. Aat is something that point that needs to be made. Settlement in p. M. 8 15 15 p. M. , i personally told jim baker that we had real problems with what the United States was proposing. And we finally got an agreement because he realized that we were not going to have a deal if we did not have a dispute settlement mechanism. And he overruled. Point over, but he took a strategic view that it was important for the united dates to have an agreement with cam it United States to have agreement with canada, and he overrode his negotiating team, which had taken the same position that is currently being taken by the united dates in this. United states in this. That is one less that people at the strategic level have an ultimate possibility to get a deal if they see that deal is appropriate for their country. And i think that we can easily come up with that combination. We have got professional negotiators. What are the Lessons Learned . Done has been work analyzing what is happening with the dispute settlement mechanism, and in some cases, wins and intates some cases canada wins, but they are small amounts in terms of the overall trade relationship between the two countries, very small amounts. This insitate to say the United States, but the United States is a somewhat more litigious country than canada is. And i can tell by some nodding of the heads that there is a little bit of agreement on that. So there are more challenges from the United States, and people will say that shows that the system is working in canadas favor. I would say it is working exactly like the system should work, so that we take the litigious, politically motivated actions and reduce those to an arbitration where we outsidee independence both of our countries, some independent result or some independent participation. With at then comes up reasonable solution, and i would say that people who look at these from an objective we use verbal way objective, reasonable way, without putting numbers on it, that the decisions that have been taken have been good. I will not say anything more than that except it was extraordinarily important for us because, as you know, some of the politically motivated actions that have been taken, some actions currently between boeing and that was outside the normal trade dispute procedures, we have to have some protection against a that. Is a lotd states bigger than mexico and canada, and if we are going to not be disadvantaged because of that size and the litigious nature, then we have to have that balancing item which is a dispute settlement mechanism. I will address the two respective issues on nafta first and then go to the specific question. Mexico andt said, canada have one thing in common. To an offer next from, but it is better to be on top of the elephant than underneath the elephant. [laughter] previousne of my predecessors uses a is there is too much bush and hills excuse me. I did not mention mechanisms and the Government Procurement, but it is no doubt that the canada round in january will hinge on ous issues,i Government Procurement and dispute regularization resolution mechanism, items that could break or make the negotiation. Round in mexico city, around five, responded started responding and pushing back on some of these issues, particularly Government Procurement was a big one in the last round where the Mexican Government put the first counterproposal on the table regarding Government Procurement. I would remind people that they should be careful what they are wishing for, because mexico could go down for the titfortat route. The way we play Government Procurement and the way the Mexican Government does perfume it, i know who the big loser would be if we went down the titfortat routes. On the issue of what happens if there is a u. S. Renunciation, both the mexican and canadian governments have signaled the moment President Trump presses the Nuclear Button and invokes mexico and canada will walk away from the negotiating table, because unfortunately there is some voices in washington that the tactic,a negotiating that by invoking 2205, this would force mexico and canada to accept some of the issues the u. S. Has put on the table. I think both the Mexican Government, which is taken the position that i know better than the canadian position, has clearly said that is the scenario where mexico and the u. S. Welcome weight because there has been pressure in mexican opinion as to some of these unpalatable my way or the highway positions by the u. S. Were tabled, it were many in mexico visit mexico should leave the negotiating table. Were not going to do that. Were not want to hand the u. S. Ex used to torpedo the agreement by having mexico walk away from the negotiating table because we do not like something being table. Where i think there has been u. S. Tois if the enunciate, then canada and mexico will walkway. As michael said, this does not mean that nafta is over for mexico or canada. We can maintain nafta. I think the position of mexico from the outset was to ensure this was always a trilateral negotiation despite some go it alone forces in canada whos adjusted canada should strike its own deal with the u. S. Cause of fear of mexicanization. I think the mexican and canadian positions now have converged that we will continue to always ensure that there is a trilateral discussion approach, and obviously that the would still be a force for both canada and mexico despite a u. S. Than in ca she. Denunciation. Whether the Mexican Government is blood were not, i do not know. You should ask them. I think it is in earnest. I think there would be significant political pressures in mexico not to respond to a unilateral denunciation of nafta, but at the same time, lets be real. There are direct consequences of toning down, dialing down daytoday collaboration with u. S. Law enforcement and intelligence agencies, that in the fight of organized crime, mexico has depended on intel, support from the United States, particularly in terms of it signals of intelligence to confront organized crime. I think there has been a shift that has occurred in mexico, and people in washington would be making a mistake if they do not consider this, which is for decades, for the many, many im a career diplomat and im a u. S. Hand, which means i have done all my diplomatic career with regards to u. S. Mexico negotiations. Since nafta, the key paradigm with which mexico and United States engage with each other is we were not contaminate that relationship because of specific disputes in different issues of bilateral agenda, the logic being this was such a complex relationship that if we tomahtos, the whole relationship with stalled. For 20 years, the paradigm of the u. S. Singapore relationship was not contamination and thematicatic silos. Pressure,ding and this government articulated a policy of linkage as a result of the pressures on nafta, that is, than mexico would be approaching the negotiation related to nafta as a whole bilateral relationship, and that we would be putting issues of security collaboration, Immigration Enforcement on our southern border, and others on the table to leverage and level the Playing Field with the United States. Whether the Mexican Government does that, i do not know, but what i can tell you is there will be very important public and political pressure on the Mexican Government now that it has stated that is its negotiating position to decide not to do it once nafta collapses. First, to take off where arturo left him there is a practical question about Security Cooperation between the two countries. Early this year, the u. S. Government under the Trump Administration and the Mexican Government, designed a new strategy for combating Drug Trafficking and organized crime, and it is going after every point along the chain of drugs from production to the sale, production, crossing the border, sale, money coming back. If you are going to successfully implement that kind of cooperation, you need to have more information exchanges, more trust, and more confidence between the workers on both sides in both governments. All those agencies have to be comfortable with each other. I do not believe that will be possible if we are in a situation where the two countries are distancing themselves from each other on a project that involves millions of workers in mexico and is going to have such high cost. And additionally, where mexico is being maligned, as it has been maligned, and it will be on two levels. One level is the one that arturo laid out, the political level, and the other will be the point of view of the actors who have to implement this why am i going to endanger myself going after this powerful, wealthy killing machine of a Drug Trafficking group for people who are calling us murderers and criminals and rapists and other things . And it is just going to dampen hope of getting to that higher level. Continued be cooperation. Theres no doubt about that because it is in the interests of both countries. But to get to a new level of cooperation, to be more effective, is going to be very, very difficult, i believe. And just to take up a bit on the little on the rules of origin it is very interesting. The proposal put forward by the United States has succeeded in uniting u. S. Industry, mexico, and canada, all their opposition to this, and the statement we do not understand where came from and how it is going to improve jobs. In fact, a study by the auto parts industry said it is going to cost up to 20,000, 25,000 u. S. Jobs. Area, even in this key there clearly is a lot of need for Getting Better analysis, working to the facts, working together to find a solution to this complex problem, and there may be indeed a solution where you can tinkle with the rules ofr origin, but you have to understand the economics of it and Industries Getting together. Right now you have u. S. Industry saying this is a dangerous proposal. Now we have to somehow in a number of these areas get beyond where we are right now to a really serious negotiation that indeed is talking about win, win lose, lose. Win, let me piggyback. I do not think what we are the United States and mexico going to the the unitedp where states invaded mexico in the 19th century. Is do we go back to what this relationship looks like in the 1970s or 1980s, or do we continue to slowly build upon this huge paradigmatic shift that is driven first by nafta and then the National Security issues of 9 11, and that is what is at stake here. Because both 1 tony and arturo have talked about it. I want to make one very important point here. The u. S. Canada National Security relationship has been extraordinarily strong. Am on the right track when i say that will not be undermined by the loss of nafta. Thes more important, overriding importance is to maintain that. But what i worry about him and i touched on this earlier in my comments, i worry about more the it anamerican, call opportunity lost. We have seen terrific work happening the last 15, 20 years the unitedico and states, and that has benefited us in canada as well. We worry about the opportunity lost if some of the things that arturo and tony have talked about to happen with the loss of mexico. Forbandura we have time two quick questions. The gentleman over there in the gentleman over here. Hi, there. Thank you for being here. You touched on the tpp 11 briefly. I wanted to know, so obviously mexico and canada are parties to that agreement, the United States is not. What are the indications for the north american tbp 11, and how will that affect the canadian strategy as there being part of that deal . I want to address this question to a turbo two arturo. We have heard talks about copper mice, for example, the sunset clause. We have heard about compromise mediation. 19 with can we expect something similar regarding the rules of origin dispute . Let me just comment on the tpp 11. Canada would be very anxious to continue on the discussions on , as we have done with cta, with our agreement with europe. We would be looking to expand the external relationships that would be very11 much a part of that. Think oath mexico one of the reasons i think why mexico and canada have been so emphatic in continuing to move forward with tbp minus 1, as we saw in the recent apec summit, is we do not only profoundly greed in the agenda, despite some of the issues that caused heartburn in the tpp negotiations, a sicko and canada truly believe the tpp would yeliver a 20 for centur paradigm which we think is important for the competitiveness and economic wellbeing of both countries. It also fits nicely into what mexico has been doing with the Pacific Alliance with its mbian, and peruvian partners. It is part of this trading arc in the americas. It is our version of the Free Trade Coalition of the willing. Now the discussion about the probability of President Trump pressing the Nuclear Button probably even as soon as the sixth round in canada, this becomes a plan b. It is one of the reasons why mexico has been looking at argentinian and brazilian market for grains and meet, why it has deepened the discussions with canada or the sectors, why we are about to conclude the monetization and upgrade of our 18yearold Free Trade Agreement with european union, and where the tpp plays an Important Role, which is precisely if we have to have planned b, this is a very important piece. That is how i think you should and tbpg about mexico minus one in the coming weeks and months. Are there compromises . Possible . Yes, of course there are at least the willingness you have seen on the mexican side as it relates to this review instead of a sunset clause, mexico is trying to prove it is the adult in the bilateral relationship with the United States, that it is behaving as of the. There is room for compromise. There should be room for compromise on the roles of arjun, but it would be contingent on the u. S. Jettisoning its doctrine of my way or the highway and a zerosum approach, either i get everything in a maximalist approach, the idea 50 of the u. S. Content within the heightened north american continent, which is not going to go anywhere. That is where you will not see compromise. There are areas, and you have seen it in ecommerce where the parties are moving forward, where there could be an Early Harvest of Success Stories in this intersessional session, where they can wrap up those chapters where they are those to achieving closure. I hope would send an Important Message to know that the u. S. And canada, despite voices in the u. S. , are not playing to wind the clock and. It is in nobodys interest to clock down and kick the can down the road. But concessions and copper mice as will be possible if the type compromise will be possible if the type of approach is jettisoned. Ms. Bandura ok. Time has run out. Thank you so much for coming and for our panelists and for ambassador please give them a round of applause. Thank you. [applause] [captions Copyright National cable satellite corp. 2017] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] the hill reports the u. S. Trade doesnt rose another 8. 6 in october, importing a record for imports in a single month. Up 1. 6 from the month prior and up 7 from the year prior. U. S. Absent with mexico is at its highest from 2007. You can read more at hill. Com. Conferees from the house and senate meet to reconcile tax bills. Live coverage on cspan3. You can also watch online at