But that is the same thing, the other side of the coin. We measure different things. Why . So the cost savings would be in research and design. There are manufacturing inefficiencies that, but if you make slightly different of course. We have seen a preposterous situation over the years within europe, and this is going back a little bit, but different regulations for backup alarms on machinery. The decibel level, the sound, the frequency, it adds costs. Placement of taillights and lighting on machines vary from country to country. You have to make the same Construction Equipment with slightly different beeping sounds. Every time it is a change and it adds costs. It drives the costs up for nothing. That is something we need to drive out. That alone will help us all. Again, i think the comment about this not being a static world and our competitors are getting better. They have agreements we do not have. Senator kerry was talking earlier about the excellence in u. S. Higher education, how that has always helped us, training more and better engineers, but those days are ending. So our Natural Design advantages are going to be harder to come by going forward. And so we need those things, so we are not starting with a 10 cost disadvantage. In asia. What would it mean for caterpillar . We have a huge business in asia and growing. That is the single largest opportunity over the next decade or so. We intend to lead market. But again, i come back to the point that it is likely that a lot of those countries, a number of those, will do agreements with or without us. If we dont get tpp done. We will look into a market that we ought to be competing with. Ill move to africa because i am passionate about this. We watched the chinese really take over africa. Theyve come in with their own financing, their own engineering, sometimes their own workers to take over minerals, extraction, oil and gas, hydroelectric power across africa. I know, michael, that is on your agenda. But i am so pleased to hear that the crossover between commerce and the state, because that is what we really need. That is what china and others do so well. They combine all of their assets, all of their possibilities to go after business and try to win customers over. I think we can do that, and i really think the commercestate, nation can be very fruitful. We would like to help with that. It is a great opportunity. Ambassador, so trade Promotion Authority is a big issue. What do you see as the prospects in congress to get trade Promotion Authority, to get fasttrack . What would it mean if you do not . Can you negotiate these agreements if that is not a part of the equation . The president made clear that he would like to get trade Promotion Authority, that it is a critical tool for being able to move these agreements, make these agreements really never met them. Just this week, there was a hearing in the Senate Finance committee on ttip where senator baucus and senator hatch talked about the importance of moving forward on trade Promotion Authority, and we are working with the finance committee and the ways and means committee, both democrats and republicans, to try and move this forward as quickly as we can with his broad support as we can possibly have. We think it is a critical tool. Ultimately to getting agreements through congress. And that is why we want to get it done. Assume if you are rooting for some of these deals, you would like to see it the u. S. Government has a strong negotiating position as possible. Governments to not create jobs. But we do set the conditions for that to happen, so we work hard in tennessee. We have the lowest debt per capita. We have the lowest two or three tax rates. Great infrastructure. We have done all the things we think we can do to help this be a great Productive Work environment, but there are certain things that are out of control that dramatically impact jobs in tennessee. When i hear manufacturers tell us, we love being in tennessee and we love the work environment, but if we had this agreement in place, we could produce x more jobs. It is frustrating to me as a governor because it is something that is out of my control, but it is critical for me to lend that voice, whether it is in washington or anywhere else, to raise it. We have worked hard to set up a great working environment in tennessee. We think we have it. There are certain things that are beyond our control. So i understand everyone on this panel is an enthusiast to these agreements, but we want to be clearheaded about some of the competitive costs. In the constructionmining business, what you see as the competitiveness that would come from imports would be less expensive . What are the challenges you will face of some of these deals come to be . Well, that is a great question, and one we are battling on many fronts, and it comes back to the competitiveness of the United States. You get into things like education system, our taxing system, and all of the things that make u. S. Companies competitive visavis our competitors around the world. That is another broad subject. To have a level Playing Field between exim bank and tariffs and the ability to penetrate markets that are open is kind of the foundation of all of this. Past that, it is up to u. S. Companies to be competitive and up to the american government, certainly, to help us all be as competitive as we can to create manufacturing jobs and job growth. I look at it in those three steps of foundational work. The opening of markets is fundamental to starting the process. We export an awful lot from the United States. We work hard every day on internal label agreements. We have spent a lot of time on our education system. But if we do not have those markets to start with, the rest of this is sort of benign. We have got to be there to play. Again, in the auto business, what would you see as the competitive threats come to be from more imports . We love freetrade and we love competition. I can only tell you that made a strong over the last 50 years, from a Humble Company with 4000 employees, to way north of 100,000. We are the most successful premium manufacturer in the world. In europe, which is still our biggest market, there is free trade and we are used a competition. We love to see you is the best. Is the best. We are not afraid of anything that is competition. Not skewed by protectionism. We are looking for unilateral, free trade that would grow our business. Same question. What are the advantages that workers and manufacturers and tennessee have that make you confident in a more level Playing Field they will prevail . A couple things. At the end of the day, it will be about having the right trained workforce, and we are doing everything we can to make sure we have enough engineers and enough welders and i. T. Professionals to provide the product. Is there a downside . And there are. We not only make cars and medical equipment, we also grow tomatoes. Our tomato farmers will tell you since nafta their sales are down. In the longterm, they say we are going to win. We realize you are opening up our markets to that process. We kind of believe in competition. We will take our chances in that world. Our job is to set the right structure, make sure we have the right environment, very predictable. And make sure we are training the right workers. We think we are doing that. Ambassador, some of the losers of the trade deals, some of the industries that face more competitions, is there a way to help those workers . Absolutely. When president obama came into office he wanted to make sure we were negotiating trade agreements that were, the benefits would be broadly shared and where we recognize that we need to take care of anybody who is displaced. That is why we have insisted that the trade adjustment assistance be part of the practice. It expires in two months. It is always been linked to trade Promotion Authority. Our hope is Congress Takes up trade Promotion Authority, that they will marry it with trade adjustment assistance so we can move this forward. Let me say one more word about that trade Promotion Authority there is a lot of misinformation. It is the mechanism by which Congress Gives us our marching orders. They tell us what to negotiate, how to work with them during negotiations, and what the conditions will be under which they will consider an agreement to approve or disapprove it. We work closely with congress throughout every trade negotiation, hand in glove. Trade Promotion Authority is the way that gets structured. This has been part of our overall trade agenda. We have to make sure we monitor the agreements and enforce them. We have increased our enforcement efforts throughout this administration by bringing more cases at the wto, using our trade laws, bringing in the whole government approach to our enforcement efforts to the interagency trade enforcement center. And that has helped convey to people that we want to make sure this works for American Workers and farmers and ranchers across the board. So you have a unique opportunity. You are here on a panel with the men who are negotiating these big the man who is negotiating these agreements. From the perspective of tennessee or caterpillar or bmw, what would you urge the u. S. Government to focus on, as they make these tradeoffs with all of the different interests involved in these negotiations . Ill start. In all of these, it is a series of compromises. My encouragement would be, and i will tell you that ambassador froman is one of the best at this. I have great trust in him. He start with the big chunks of things and whack those off, and you make the compromises in the places you have to, but you have to be as broad as you can across as Many Industries as possible to get it done. I know that is exactly how michael does it. It is hard to say, because unless you are in the room negotiating a deal, what you can compromise on. To me, as much as we can get broadly in these agreements, the better off we are all going to be. I am not going to stand i have a long list of things i would like to have done, but im not going to do that to you, ambassador. He knows what it is. I do not know i have a lot to add to that. In any negotiation you start with how much is at stake and i think there is a lot at stake here. My encouragement would be, do not let the 10 of the things that are the most difficult but still our only 10 of the things stop it from happening. I could not agree more. We should not strive for the best of all agreements. We should settle for a good agreement. If that agreement would include that we cannot do away with different standards, that we would accept the standards that we have in the u. S. And europe and likewise. So it would just make things easier. It is important to remember here, too, that there is a lot of change that has to come to the u. S. In some of these deals. I would go to agriculture as one that has frankly been a stumbling block for many, many years to get some of these done. As a result, the has to be managed as well. It is a very difficult set of negotiations when youre going after the backbone that has made our country what it is. Im afraid that is the same in europe. It is, and japan as well, for that matter. Ambassador froman, tell us the pathway from here. What does this next period of time look like as you and your staff at ustr try to come to a deal . As this discussion demonstrates, the challenge before us is that, even within the u. S. , we oftentimes have stakeholders with diametrically opposed interests. Our job is to figure out what the best approach is and support the greatest numbers of jobs, the most growth, the most benefit for the u. S. Economy. To come up with that requires a balancing, even among domestic interests, and then to go to 11 other trading partners in the case of ttp and ttip and figure out a landing zone where it is a winwin for everybody. Nobody gets 100 of what they want in 100 of the chapters, but we have to be able to look at the package as a whole and make sure that is serving our interests and our values and that it is supporting what we need to support in the United States in terms of job creation, growth, and strength and the middle class. Those are our watch words. Everything we do is tied back to those three objectives. So we will be working over the course of the next couple of months on tpp. As ttip get up and running, we will try to achieve that objective. And hope there are no more government shutdowns to stop you. A couple of you have mentioned agriculture, which is not really represented up here. Though governor, you have the tomato industry in tennessee. I will use you as a proxy. What do you say to a farmer, to somebody who is being asked to make real concessions on what kinds of subsidies they receive for agricultural work . That is the difficult piece. I do not know the number, but i have seen the number that tennessee produces versus pre nafta. There ha hen. Couple of things. Number one, food is more about quality and number two, it is about access to markets. The farm to table deal has become a huge opportunity for local growers. Lets keep concentrating on the markets you know you can do well on with quality. We will specify tomato farmers. I am confident your tomatoes can be better than those brought in, lets all that. You can export to mexico quite easily, brazil there is suddenly a high tariff. What are the lessons of nafta over these last 20 years, and what implications do they have for how these agreements come to be . Nafta is a model case how we should move on. I would like to stay in the american context, to see how it works with south korea, where we have free trade as well. We are doing great with south korea, even though they have a strong Automotive Industry themselves. So, i think it really is about embracing freetrade wholeheartedly and work on it. Any lessons for caterpillar . I think virtually all of the imperial data and evidence would show that nafta has been a winner for all three countries, and especially this one. For our company, it has been huge. We have taken advantage of a Tremendous Oil and gas business in canada, a lot of development in mexico. And tremendous benefit to the u. S. Without nafta i do not know where we would be in mexico and canada. Mexicans and canadians i know would tell you the same thing. What is your experience with nafta 20 years later . If you go back to specifically, our exports to mexico were up 8 times. And to canada, up three times. Are their winners and losers in the process . Yes, but net the state is way ahead. Let me just add one metric, and that is basically only true because freetrade agreements we have around the globe in the last 20 years, our production, the last seven years i would say, where this is a model site, has gone up in the u. S. By 40 . But exports have gone up by 70 . It shows how free trade fosters growth. To close up, i would ask each of you to think through and give a couple of comments on a, what you expect world trade to look like in the next year and what you hope to see. What are the great opportunities, the great risks, and the most likely outcomes, things you expect to see out of both the european and pacific agreements . I have very high hopes that we will see a deal on tpp fairly soon and ttip behind that. With the job creation, and asia, europe, and the u. S. , i would expect to start to see the benefits of that a year to two years later, as we are starting to see with south korea and colombia today, as you mentioned, ludwig. It is not take very long to open the spigot on exports and imports once those tariffs come down. Standards are synchronized and so on. I would be pretty optimistic that it would help job growth and gdp growth in all three zones, but particularly this one. 95 , of our consumers are outside this country. We need to learn to deal with that. Governor . Directly, i do not have the number on the pacific, but with the ttip agreement, we think our exports will go up 35 , which is about 2 billion. You have to look at the context of the broader market. There are things working to our Vantage Energy costs in the u. S. Are going down. That is not true and a lot of other countries around the world. We can take advantage of that. The logistics cost of transferring goods are getting to be a bigger piece of something relative to the labor piece of that. So we can take advantage of that as well. I just think the market is turning to our advantage right now. It would be a shame if we did not create those additional jobs because of not having these agreements done. Ludwig . We should always keep in mind maybe tpp or ttip, freetrade supports growth, it supports new jobs, Foreign Investment, innovation. So in the end, the consumer benefits from all of that. It creates jobs. In a world of free trade, there will be production moving to those countries where there is freetrade, and free trade will always foster exports. Ambassador, if we are here a year from now, what are we going to hear . I share the governors optimism about where the u. S. Will be in this Global Trading system. When we look around the world, including in subsaharan africa, across asia, and parts of latin america, there is a Real Movement towards recognizing the opening markets, provided you do it in the right way, that opening markets can really drive job creation, growth, innovation. We look at what the Pacific Alliance is doing in latin america, what our partners are doing in subsaharan africa, the leading reformers and african countries. There is a desire to make sure trade is playing a major role in their development and investment. And the u. S. Stands to benefit hugely from this shift in the Global Economy, provided we can do the things we need to do here. Our because risk is getting our fiscal house in order, getting Immigration Reform done, and getting these things on trade through our congress, starting with trade Promotion Authority, which every president has had since 1974. But tpp