Officials are getting ready to discuss the upcoming negotiations. Were live at the Wilson Center in washington. The program is expected to start at any moment. Youre crazy and no one is going to come and maybe this is sort of important enough. Maybe our existential questions will bring an audience and we had the idea bringing the mexicos negotiator ken smith to come, and it was a cheeky question, and he said yes, this is extraordinary and ken said last week, i dont think i can do it. So i apologize for misleading you. It was not intentional, but we have got an absolutely fabulous panel for you nonetheless. And let me just run through very quickly from left to right, as i see it, fred burkeson, a senior fellow at the Peterson Institute for international economics. Thank you for being with us. Its great you agreed to provide a repost to some of the mexican perspectives near. Very welcome. And secondly francis, known to most of you here, currently a partner at white and case and previously served as und undersecretary of trade. And an old friend of the Wilson Center is here. Lmm consulting and held multiple posts with the government and of course, my colleague, my deputy director, chris wilson, who is known to you for his work on nafta. On u. S. Mexico economic fairs and Border Affairs and im duncan wood. Very nice to see you. Let me say a couple of comments before we get into the sort of the substance here. Theres obviously been an enormous amount of anticipation. My first page of notes says, its here, and its a strange moment, but at this time last year here at Wilson Center we were holding a series of conversations undered Current Administration how can we improve nafta. We were talking about improving modernizing nafta on the understanding that somebody different would be in the white house, thats what we assumed. A modernization of nafta is desperately needed. And all of a sudden, hey, pres presto, we have an opportunity to do it. There was a nice piece in the global mail up in canada, this is a great opportunity to secure north americas competitiveness. The second point is, of course, this comes with it an enormous amount of anxiety, anxiety about whether or not this can be a successful negotiation, anxiety about whether the u. S. Executive branch will stick with it, anxiety about questions of timing and political change. We also see theres enormously complex negotiation and many of us here in this room have said the past few months, how can we possibly get this done, in a six month period which seems to be the preferred time period on the part of the negotiators, at least from the mexican and u. S. Side, the canadians have a different perspective, of course, and let me recognize my colleague laura around here, she may have stepped out for a second. Im grateful for the Canada Institute providing support for us on these issues. The timing question is one thing we may run up against the question do we do it fast or right. And that could be a very important choice and im looking forward to discussing that with our panel. We have a very encouraging phenomenon of convergence between the three sides. And we go back to january or to november of last year, there was an enormous amount of concern, could we ever get to a point where at least we were on the same in the same book, if not on the same page. And with regards to International Trade negotiations, and it seems as though weve got there which i think is tremendously encouraging. And then theres all of the problems and challenges and obstacles, many of which are known, but there are a number that are unknown out there and we dont know how things are really going to turn out if these negotiations become public, if we get a great deal of buyin into the negotiations, if certain things are tweeted. If then we get a reaction from the u. S. President , which might have a reaction from the mexican president , et cetera, et cetera. What we can say is now that its here, now that were here, weve come a long way in six months and i think thats a very encouraging part of the story. And talking of coming a long way, its worth remembering how far mexico has come since nafta was negotiated and i know its a story youve heard a million times, but just to remind us, before the nafta, it was very comm common in mexico to have everyday goods have a price control on them. For a committee to set the prices of basic commodities. It was an economy dominated by staterun enterprises. It was an economy that would not open to foreign direct investment. The changes that took place during the 1980s because largely because of latin american debt crisis and locked in by nafta. Those are things that we kind of take for granted these days. But its an extraordinary journey. Now, another point is to remember, of course, that the Economic Reforms that have taken place in mexico since 2012 have really tried to build upon the success of nafta. Now we have the opportunity to lock in some of those reforms again through an international treaty, international negotiation. So, without any further ado from me i would like to ask our panelists to give opening comments and im going to begin with lusma. I know youve got prepared comments. Id like our panelists to begin by focusing sort of what they see are the priorities, but also to mention what are the red lines they see from the u. S. And from the mexican point of view then well come to a conversation afterwards on questions of convergence, of convention, timing and complexity. The floor is yours. Thank you. Well, thank you, duncan, and thank you for the invitation to be here with you. I would like to thank the woodrow Wilson Center, and thank you for thinking about me, and i had a fantastic experience in this place, so its always a great pleasure to be able to be back with you. And, well, today, i really feel very privileged to be able to be part of this nafta discussion. I think that the nafta discussion is always welcome. And its very timely given what grew between our two countries in terms of trade, job creation and integration, but also in terms of the place that we as a region represent in the global economy. Its more its even more timely when we think about the fact that we will see the beginning of the process that i hope will allow us to move forward toward deeper integration and a better understanding what north america means for our countries. Having been part of the Government Group that took part in the negotiations. Thank you, miss hills, for being with us, i was part of the little ones running around with papers trying to support negotiators, in these negotiations 25 years ago. I really have to say that i would never ever, ever, ever have expected to see a proposition on the u. S. Side to renegotiate nafta based on the preposition of having it address a u. S. Deficit and having to address the question of manufacturing jobs lost in the u. S. Its still i never would have expected to be the u. S. , the u. S. Side that would have been the source of distrust and questioning nafta like we have been presented with this year. I have to say that it still puzzles me to see how both questions, the deficit and jobs question, through a trade negotiation and through the nafta. No question that it will be a daunting task for canada and for mexico to sit down with the u. S. , when it seems that President Trump views this opportunity as payback time, and also has outlined an agenda that is clearly tainted with protectionist and nationalist perspectives. However, as duncan mentioned at the beginning, i do believe that nafta has yielded amazing results. After more than 23 years in place, nafta has delivered economic results beyond what any one of us expected at that time. Beyond the most opportunistic expectations. Nafta created a 19 trillion regional market, with consumers, every day we trade more than 2. 5 billion. At the time when nafta was negotiated, we at mexico aspired to export 10 billion every month. Let me tell you the exports lment to more than 1. 3 million every day. In the past 23 years trade between the three partners went from roughly 290 billion in 19 the 3, to more than 1. 2 trillion last year and also in terms of the u. S. And canadian fdi, amount to more than 200 billion. Represents close to 20 of mexicos gdp. So, id like to center my remarks on five quick points. The first one is that in these negotiations, process, mexico is not ready to be considered anything else, but a u. S. And a canadian trading partner. At the table, mexico and canada are equal partners with equal rights and equal obligations. Why . Because after 23 years, mexico is the u. S. Second largest trading partner and mexico is the second large est largest pa behind canada. We, today the United States trades more in goods and services with mexico and canada than it does with japan, south korea, brazil, russia, india and china altogether. Mexicos also the u. S. Second source of imports only after china. We account for 14 of total u. S. Imports from the world. In addition, production of automobiles, electronics, machinery and appliances have greatly benefitted from protection sharing across the three countries and nafta has been able to reduce costs and become more effective. My second point is that mexico should look for more and not for less nafta. In the early 1990s, nafta created a structural reform in mexico. Since its implementtation, nafta has been a source for change in economic institutions. Nafta was a really transformational experience for mexico. Transformed the shape of the mexican economy and opened the door to a young democracy after 70 years of a oneparty rule. Nafta has also been one of mexicos most important engines of Economic Growth, given the relevance at International Trade and Foreign Investments represent for our country. I can tell you that nafta is embedded in mexicos every day life. And the last 23 years under the nafta, nafta created a wide concensus in mexico that an open economy is the way to go, that we need more, not less competition, and that we want to be global players. What mexico should look for in this negotiation is ways to improve the agreement. Theres plenty of room for improvement and plenty of room for full implementation. Just take a quick glance at the history of the integration and we will know as long as theres a common vision and shared leadership there can be deeper regional integration. I can tell you that in mexico there is no one Political Party and no one political leader that thinks that hes it could be a good policy option to walk out of nafta or that mexico should respond to trumps aggressions by closing or border or building a fortress. In fact, a recent study showed that close to 50 of mexicans have a positive upon of nafta and the trade relationship with the u. S. And only 16 have a negative one. Moreover, in a survey, from march of this year, 73 of mexicans surveyed opposed to getting rid of nafta. This does mott mean, obviously, that nafta have not yielded winners and losers. In mexico, it means that overall, the country has undergone a deep transformation in areas. Mexico today is in a very strong position to push in these negotiations for the establishment of 21 century roles. 20th century roles are not enough, are not the way and reversing those roles is not an option, either. Mexico is in a position for the reforms that the president passed in to 12 for mexico. The Structural Reforms on sectors of education, telecommunication, energy and Financial Sector and those reforms have placed mexico in an about thor position to contribute to a stronger and more competitive north america. These set of reforms in addition allow mexico to negotiate new issue areas such as energy, services, ecommerce or telecommunications. My third point is that nafta 2. 0 could be the latest structural reform in mexico that we need. Why do i say this . In mexico, nafta made it more evident the huge disparities that have characterized Mexican Development for centuries. For mexico, this is an ideal opportunity to democratize trade. A nafta 2. 0 will lead to a sector where regions take part in globalization. Today more than half of mexican exports are done by six states on the northern border. 60 of total exports are represented by two sectors, automotive and electronics, and only 45 part of 5 million. And nafta 2. 0 will lead mexico to create a Better Business environment. Nafta should be the opportunity to reduce risk taking for International Trade and also for business in general. My fourth point is that nafta has to stop being a negative term. Nafta has to be rethought, restated, and revalued. The late Robert Pastor had an idea of north america as a region that can lead the world economy. Maybe one of the reasons were renegotiating nafta today in a contrasting context from the 1990s, is that we never really took the time to explain the value of north america and how it benefits each one of us. Today, probably one of our Biggest Challenges is how to restore the north american idea as a truly integration scheme, countries are better off with it rather than without it. However, we need to rethink how to reposition nafta not as a result of an agenda where each counts its losses. They urgently need a common vision from three countries that shows that together we not only add, but multiply gains from a highly competitive time. Nafta has offered the region a clear set of rules and disciplines that created transparent and predictable business environment. Nafta locks in a mexican model of economic openness, economic liberalization and competition. I also want to underscore that naf nafta visionary and that was at that time in chapter 11 this mechanism was stating that investors said mechanism, that chapter 20 state to state mechanism. And chapter 19 on trade, have been without a question one of naftas most important pillars for effective implementation. The region has a lot to lose if the u. S. Walks out of nafta. When the nafta became effective north america accounted for more than 20 of world trade. Today we have lost to the rest of the world. Today nafta represents close to 18 of world trade. The agreement needs to offer the kind of growth that are required by a 21st century where Global Production sharing is a name of the game. Mexico has a lot to lose. Mexico is the largest export market. 80 , 300 billion last year and 30 of mexicos gdp. U. S. Investment represents 40 of mexicos fdi. Jobs, industrial production, services, energy, and many other activities in the region have a lot to lose if we tamper with nafta. A vast majority of business groups in the u. S. Realize how important nafta is for them and have made specific proposals for nafta. For many in the u. S. , the l lowest denomination or expectation of naftas renegotiation, whatever it results, it will do no harm. If the u. S. Decides to walk out of the nafta, which we hope it will not happen, it will certainly affect regional value change, jobs, Economic Growth. Hour, the agreement will remain in place for trade between canada and mexico. If as a result of this negotiation we show we can overcome this delicate situation, the countries will have to look at nafta bob zuellig and general petraeus argued that they must witch visavis nafta to a central u. S. Policy. The question is how do we revitalize nafta and integrate those left behind into the benefits of globalization. Nafta countries need to develop a new regional strategy and such strategy needs to consider a few key elements. The integration of the north American Market is the way to boost the regions competitiveness, job creation, Business Opportunities and innovation. We need to reconcile. Nafta has been torn between the driving force and breaking point that u. S. Needs to build a fortress to secure borders. Borders, more needs to be for a seamless doortodoor operation should be facilitated. We have a young population. Our average age is 26 years old. North america, increasingly requires qualified Human Resources to meet production of the region. And they have look to maintain a dynamic region so we need to think about training and development of Human Resources to meet the needs for qualified personnel. I believe the integration will be incomplete until we sort labor markets. This is something at that could take generation, given the huge income gap between mexico and two partners to the north. However, there are some steps that can be taken in this regard and theyre alreadyar the late robert pasture suggested to improve the provisions on professional facilitate and expedite obtaining nafta visas for professionals and offer them for a longer period and create an expanded american and mexican program. Id like to close my remarks, in the absence of tpp, the new rules that will be solved from a nafta to 2. O may become the new standard of International Trade. In the early 1990s. The disciplines that we negotiated in nafta became the state of the art trade rules in new areas such as trading agriculture, trading services, investment and intellectual property to game a few. Nafta was at the lab where new rules were developed the negotiations that will start tomorrow will be closely followed by the rest of the world. The rules and disciplines at that we give ourselves in north america will offer a very clear idea of the direction that global trade may take in the future. We have a responsibility beyond the nafta. Mexico needs nafta and mexico needs a strong nafta. Mks will face president ial elections next year on june 2nd. We have been able to finally pass a series of Structural Reforms that will yield results in the medium to longterm. However, corruption and transparency, the rule of law, crime and a weak judiciary are a serious challenge that are working against mexicos competitiveness. If mexico is competing to a stronger region, we need sustainable and longterm solutions. And nafta may have been there in 2000. And today, it addresses rule of law questions in mexico. Boosting north american integration