Implications for ongoing trade talks. This portion featured a Panel Moderated by a former canadian ambassador to the u. S. With current and former government officials from mexico and canada. This is about an hour. Good morning. Good afternoon. Bon jour. Welcome. Over to you, joann. Okay. And my name is joann zimolzak. Were pleased to welcome you to the Washington Office for the nafta 2. 0 summit. Given our topic today and who we have here with us, it seems appropriate not only to say welcome, but beinvenidos. Were pleased to have you here and present this Great Program today. Which is streaming live, even as we speak, and will be available afterwards on the dentons website. Change can be unsettling, but it also presents a lot of opportunity, which im sure will be part of the discussions today. And theres so much interest thats already been generated about this program. We have over 100 people who are going to be here today with us in person and many more who are watching it over the web. Dentons is pleased to be presenting this program, and with its presence in the u. S. , canada, and mexico, we have extensive capabilities and experience at the critical intersection of business, public policy, and crossborder relations. Many of our practitioners are here today to share their experience and their perspectives and were so happy to also be joined by key members of industry and government who can also add their valuable perspective. And with that, im going to turn things over to scotty greenwood, who is the colead of our federal practice. Scotty. Thank you. Welcome, everyone. Were really delighted to have you here. This is what its all about for us in public policy, bringing together policy leaders, thought leaders. Our clients. Our prospects. Everybody that is looking to understand what could happen with this really important north American Economy. And so youve got the agenda in front of you. And wed like for you to interact as much as possible. One of my favorite parts of being at this firm is the terrific people that we get to work with, and im going to introduce gary doer, who many people know as canadas former ambassador to the United States. He was also premier of the province of manitoba. Hes a rock star, a hard act to follow. You can just ask ambassador mcnaughton who had to follow him. You can ask the people who work with him in the embassy. I almost had you married to juton, who represents the province of ontario. Our friends from mexico, Everybody Knows gary doer, so with that, gary will ask you to introduce to group. I believe general leslie is in the building. You can go ahead and start and well get him going. Thank you very mump, scotty. Please, i hope you get better soon, scotty. And you can have on our recommendation, either some tequila from mexico or bourbon from the United States or good old crown royal from manitoba, canada. And we would strongly recommend that for medicinal purposes here at this trilateral discussion on trade. It is an honor to be here with all of you. And im going to im not going to rag the puck. I understand general leslie is in the room or on the way. I think hes coming. So im going to introduce my good friend from mexico and our panelists today, grugore yeah canalis, who is a Founding Member of monterey law practice for dentons. Hes an expert in corporate law. Hes an expert on cross border financing. Hes a Legal Adviser general. Good to see you. Hes a Legal Adviser on energy and therefore not only will he be able to answer the tame politically correct questions i will ask him, but he will also be later on able to answer your questions. We have just been joined, and thank you very much, general leslie, andrew leslie, who has been elected as the member of parliament in 2015. He is the parliamentary secretary to the canadian minister of global affairs. He is a former general in canada, a military leader in canada. He has worked in that capacity in various theaters around the world. And of course, working with military in canada. He has served in places like afghanistan, very dangerous places. But also places i know from my experience of being a former ambassador that many of the people in the administration, whether it was the Obama Administration with general jones or the administration now with general kelly, people in the military leadership in our two countries have served together. They are bonded by their skills, their bravery, the command and control, which they bring to their jobs. And also, the work on behalf of our shared Democratic Values here in north america. So were very pleased. I dont know the Prime Minister i know is meeting with the president. We want to reveal completely all of the agenda items he will be raising in the oval office simultaneous to the meeting going on here today. I want to start with our friends in mexico. Just a lot of media speculation, a lot of punditry about the president ial election in mexico in the summer of 2018. How do you see that operating as an environmental condition for these negotiations . Will it affect timing . Will it affect substance . Whats your read of it . I want to know your read monterey, not our read from some other community outside of mexico. Thank you for being here. And yes, this is a very sensitive timing issue that has been expressed as. When this administration was elected, one of the first statements of the Mexican Administration said if were going to negotiation nafta, we wanted to do it quickly and we want to do it in 2017. We dont want it to spill over to 2018 because were getting a president ial election. Mexico runs a sixyear period presidency that is not reelection is not allowed. So its a complete change of political environment. So were midoctober, and negotiations are in the state that we already know. So its difficult that the negotiations will complete, be completed by the end of this fiscal year, so right now, the mexican parties are starting to select the candidates. Its like an internal process. But its getting a lot of noise. And of course, nafta being a key element of the mexican economy, it creates some distortions in the public dialogue. Just a legal question following that. If there is a i remember in tpp, there was an agreement from the former president , and then the existing president to get to the table with the United States along with canada and japan to go from 8 to 11 countries. If there is an amendment to nafta or amendments to nafta, does it have to be ratified in your parliament, in your assembly . Does it require approval from the states or is it a president ial administrative decision . Yes, since nafta is a treaty, the mexican constitution, it ranks just below the mexican constitution in terms of hierarchy of laws. So it needs to be agreed by the executive branch, of course, and then has to be ratified by the senate who has exclusive authority to ratify treaties. And we have seen now the negotiations that some of the senators are not just playing a back seat role. They actively are making statements about the cause of the negotiations. So yes, it further complicates the approval from the mexican point of view. Thank you, it doesnt need a twothirds vote, though, with the constitutional amendment. No. Straight up and down. General leslie, welcome. Thank you. Hope all your meetings are going well here in washington. Would you care to tell us how theyre going . I think personally im learning a great deal. Full disclosure, the main reason im here is i just do whatever scotty says. We all do. Were all nodding. Okay. Fine. Yes. The pm is here, obviously, with key advisers on the nafta file. Its been a great morning. And we had really good interactions with the ways and means committee. The house, and a lot of salient points and discussions were initiated. And i see that an awful lot of common ground. Good. Now, secretary or the chair of the committee, kevin brady, who we know, at one point was proposing a border tax which, of course, canada and mexico and other countries have argued would not be in the Trading Interest of the United States. Did that topic come up . Or has so far now, it doesnt appear to be in any of the socalled tax reform packages in the congress and at the white house. Didnt come up this morning. Its been discussed in corridors for some time now. A couple of facts to put on the table. Make sure were speaking from a common framework. So canada is the u. S. s largest trading partner. We buy more stuff from you than china, uk, and japan combined. So the idea of a crossborder tax when you have cars, for example, after 23 years of nafta, the system has reached a state of efficiency and productivity and specialization on both sides, three sides of the border if the border can have three sides. I think you know what im talking about. Where in a car can cross the canadian u. S. Border five, six, seven times. So crossborder taxes wouldnt make it really cost effective. You have to think these things through in terms of their implications. The second and third are the consequences. And of course, that crossborder tax has been out there as an idea for many, many years. And it usually, the larger Economic Impact is further analyzed and tends to just stay where it is now. Thats good news. Very good news. Gregorio, the whole issue of labor and the environment has been discussed in the tpp negotiations before, during, and after, and now is an issue that i was in detroit a week ago on a border meeting, and that came up from folks from the United States. What is the position of the government of mexico on the principles . We wont have the same wording as tpp because the president is opposed to tpp, but the principles contained within the tpp agreement or other principles on improving the enforceability and the efficacy of labor and Environmental Standards within the three countries . Yeah, well, this is also a very sensitive issue for the Mexican Government. It is very important to point out that at this time, there is a countrywide discussion about a constitutional amendment to change and to modernize labor laws. So that process is under way, which is also going to have domestic repercussions. What is also important to point out is that mexico is part of the oet and complies with all these rules and guidelines. And has been compliant with all of those principles. And also in tpp, they agreed to this High Standard of labor. Good. General leslie, you would be a general still here. Its okay. Its a prenominal. It is. It was our experience over the years that, again, the military relationship between canada and the United States, between the pentagon and our military in canada, was very strong, and you developed in your leadership position strong bonds between the individuals that had those various leadership positions. I also know that when we were asking for either hydro president ial permits or Oil President ial approvals, the pentagon was the first of the nine agencies to sign off and say yes to go ahead because of the Energy Security that potentially represented for United States. In these trade discussions, in nafta, we hear a little bit about some of the grievances between our countries. Has there been any discussion at all about the ability in the north American Neighborhood to have Energy Security between our three countries that would include renewables, Energy Security, oil and gas. In other words, we wouldnt rely necessarily in the future on petro dictators. We could rely on our own neighborhood to have a multipronged approach to Energy Security . Once again, former soldiers, like members have mentioned, canada is u. S. s largest trading partner. Currently, the United States enjoys a trade surplus with canada. And in the energy field, its 37 billion per year. So what we represent to the United States is a safe, secure supply, which as essentially unrestricted, unlimited flow. In well established networks that are already firmly sunk into the ground or travel just above it. And thats energy which quite frankly the United States has to have. Funnily enough, on the west coast, the energy flow is mainly west coast and of course central canada, mainly from the north to the south, but on the east coast, stuff comes from the United States up to canada. In the main, though, what we do is send relative states of crude down to you folk. You refine it where the greatest markup exists in the food chain, and you sell it back to us or internationally or consume it yourselves. The relationship with the pentagon and National Defense headquarters is in my opinion the strongest bilateral military relationship in the world. And its bonds that have been forged in blood, of course, going back well over a century. And the amount of exchange and cultural affinity that armed forces folk in canada and the u. S. Have as result of direct experience is quite something to see. Where we have at any one time literally thousands of canadian men and women in uniform in the states training, and you folks and your formations up north to do the same. Especially in the winter. Not sure how many of them actually enjoy it. But theyre very enthusiastic before they start the training. So i would say that that relationship is very firm and secure. I dont think theres any discussions on any level about any significant tweaking to it. I know that i was in the room for the last visit when the president and Prime Minister spoke about reducing the barriers to trade across the border. And the whole vision, if you would, of thickening the outer perimeter so that you can thin whatever administrative or process regulatory system is in place at the border to speed up that flow was talked about at some length by those two gentlemen. In turn, in our last budget, we indicated a 73 increase to defense spending. Which is pretty sizable. Thats pretty sizable. So thats to buy new capabilities and stuff that we need. A longwinded answer to a short question. My apologies. No, no, very important part of our neighborhood, north america, its extremely important. The general mentioned about the issue, the Energy Chapter. The energy area in the nafta agreement was not you wisely protected tequila but didnt offer energy, as i recall. Not that any of us as consumers of that fine product objecti. But the amendment to the constitution in mexico, there are many that believe it makes sense to now put that in the new nafta, an amended nafta, because theres energy in the canada u. S. Trade agreement, but not explicitly in the nafta trade agreement, is the constitutional changes that are there to allow for private investment up to a certain percentage in energy in mexico. Is that something that the Mexican Government and the u. S. Government are talking about . The canadian government is talking about as a potential amendment to the nafta agreement . Yes. We have to keep in mind that when nafta, the original nafta was negotiated, the entire Energy Sector, not only oil and gas, but electricity and inentire Energy Sector was a monopoly of the state. Yes. At the time, there was a push from the United States to include that into the original nafta. For this constitutional impediment, it was not included. However, just recently, under the Current Administration, it was a sweeping Energy Reform that included a constitutional amendment. Mexico now is totally open in the Energy Sector for foreign investment, which it was not. And the position of the Mexican Government has been to include in a separate chapter, in a full chapter, Energy Sector, which i think has not been totally shared by the United States and canada. I think that my view of that is it would be very popular. Were dealing with a populist argument for or against nafta. And i view that the populist argument of having your oil from canada and mexico and energy and gas from the United States and hydro power, et cetera, to be more reliant in our own area and less required to rely on socalled petro dictators i think is a populist idea that maybe we should be proposing with more enthusiasm, he says, diplomatically. Yeah. So its an energy grid. And eventually, you can see a vision wherein it will be a north American Energy grid. Right now, i was in an energy grid Distribution Center a couple weeks ago. Its my job to figure out how that impacts canada u. S. Relations. Io have smart young men and women sitting at these consoles. Im not sure, but this power may have originated somewhere in northern quebec in a waterfall. Thats doing all of the lights in the room right now. But it is absolutely seamless, and they are figuring out based on draw and brownout periods and all sorts of other things which they lost me. Usually you go in and smile and nod and pretend to actually understand what theyre saying. Theyre very good at what they do. It is seamless as to where the energy is coming from and how its managed and quite frankly manipulated, incorporating all of these different feeds to result in an efficient use and distribution of power. All down the eastern seaboard. So its quite something. Now, were dealing