Good morning. Ll. Welcome to our online viewers as well. And Oregon InternationalEconomic Policy and m. Delighted to welcome you. This is part of a series that we do in this generously supported videby alcoa foundation. We do a lot of things and it would be topical so we have a dream team up here after that but let me first make some announcements in the case of some sort of security event with the stairs down to the alley. And to number 2b will do a break and there will be coffee and restrooms. And finally if you have any fonds or noisemaker put them on silent we would appreciate that. I have been watching trade for decades there have been heated debates. But i dont think because ever been like this. Item remember a time it was this much controversy around the topic of trade and trade policy. There are some underlying trends that our worrisomeowing o with said gdp. Grown fa with the protectionism and then to have the global trade negotiations. With the multilateral negotiations with that specific area even that is not moving as it should. With us transatlantic Investment Partners even the regional comprehensiveic partnership that is another arrangement. And of course, you have this antitrade rhetoric. And on both sides of the aisle as far as i knew with so much antitrade rhetoric from both sides of the aisle. I will say the election about the election obviously there is a lot of anxiety about trade and economic change with the other changes in the economy we dont understand those anxieties looking at adjustment assistance or retraining education or income support of we are not delivering things that people want we need to understand what those issues are and to do more work than those we have not done as much on it and the past. But most people would agree that trade is getting a bum rap and it has become a poster child for a lot of things tidies not directlyad related to trade for the Global Economy if they understood that i think 600 million chinese would agree that globalization has been a good thing for them so i think part of the problem were not doing a good enough job of explaining and that is the help part of the purpose today to explain things. But specifically look at what is the sake with the trade policy with strategic interest. So we have of Us Dream Team and the Software Alliance for the democratic and republican white house. And having the pleasure to Work Together as the coordinator real delightede to have her here in the biographical information. In with the global elsie Consulting Firm with uh trade representative former president of the coalition and at the end another familiar figure cohosh from the law firm here in town but to be better known as president of the National Foreign trade council with undersecretary of commercelingns and then appreciate the willingness to join us here today. So now going into those individual areas i will ask each of view with those trade policy so what did your diagnosis prexy you could disagree with the specs aspects of what i said but how do we get there . Barrett is disenchantment certainly here in the Uniteded States but also europe and other developed countries primarily. Of big part of that in the United States about manufacturing and the Manufacturing Sector and those who work in manufacturing. Tatistic if you look at the statistics manufacturing production but then you look at the big picture and remotely since 2000 and has aho declined from 30 of when people look at the research with the overwhelming factor, that is the situation with manufacturing. Another big part of it is the digital revolution and that is across the entire economy so there is the great need before people who were digitally illiterate in their jobs and not just s Silicon Valley but every wangle business it depends one way or another on the Digital Economy. The problem here is we have a huge mismatch between the skilled demands of the digital revolution and the skills apply between brain jobs or previously were muscle jobs and there was still a need for the muscle jobs but not to the state same extent as in the past or in the future there will be a smaller and smaller percentage of the working population. Rticular so with these issues of manufacturing is importantbecaus in the campaign because they are important to the general public and we need to be more aggressive in promoting americas interest and defining with americas interests are going for word in terms of the prescriptioniewe of the Incoming Administration. One of the things perhaps that we could talk about is it will be a more aggressive trade policy there is aggressive smart and aggressive dom. So the challenge, we have to deal with the more aggressive trade policy. And we should. But we need to major in this march and not done. We will come back to thatbe because it is the 64,000 question but before i ask specifically about the Digital Economy, what is your take what is going on how we reach this point . So many thoughts came to my head. I limit that to three. It seems that it has escalated to a certain extent and we could recognize it has been a controversial issue for many years. It is not a totally new situation. Second, trade and what we mean by trade has changed progress think we will come back to this talking about the Digital Economy thee trade policy needs to keep up where the economy is going. But we need to see more progress and betrayed will continue to be one of theob drivers to see what it is becoming. And i am not be to come back and talk about why there is optimism where trade is going. The third thing i would say why we need to have more conversation is i would agree with you then think there are real concerns about what is happening in the United States and did my a industry we care about just looking at that industry theres 10 million jobs in the United States additionally we have empty jobs and software because he dont have people who have the training so we year and a very different place from other industries. By 2020 1. 4 million positions but we dont have h a pipeline to fill those positions. Ple in t focusing on training and education. And that is the part of the narrative. And to be in the positionbut and here i am. We agree trade. But have the time the gains were disappointing and the losses were a consequence of the immigration to be sharper because of the state of the economy. Part of the answer is to do a better job. The but tim major it is of clue. That people benefit. Talk more we can talk about that if you want but at the same time just beyond the argument of trade policy as a fourth can the road a fourth again the road but we have a number of people talking about policies that is more isolationist and protectionist than a policyntegi about word expansion. 150 years o but we pursue those policies that be turned into an International Country on a sustained level. And what we have spent a loton of time is constructing the global architecture that work to our benefit. But also to the benefit of a larger number of countries. I think were reaching a point people are challenging that order china is probably the best example of the country that has not been a defender of the system. And we have spent and it has benefited did us. We analysis situation we face a lot more competition globally not only for economic gain but also leadership globally. Stem tha the maintenance of i think we have the Incoming Administration that has a lot of skepticism about that and they take this down andn older road in our history. More than what do we do about trade policy but we have competitors for a global leadership. So next week we will not be in davos. G somebody else is claimingtl the mantle of leadership in the economic sphere. There there is a trend that is important not from what all of the Foreign Policy people do buy it is important economically because the system contains rules house of property is protected and they have rules about tariffs that system is advantageous for us. Maintain in behalf to maintaincause a because people here haveen lost confidence. I am not sure that Incoming Administration is aware ofis that. Is this the chanteys the panel to moderate they just wind it up for me it not have to do anything. [laughter] come ba but i will dive littlesu deeper but with services before i would ask about services and trade itself what are services . I think of a hair caught share cut or a waitress or it is trade. Services are by far the largest sector of the economy. You often think of what happens to us in our daily life but a lot of what we do have are traded internationally or can be. Obviously they include the whole the raf Financial Services of banking and insuring and so forth. And the whole telecommunications area. And the whole digital area. Microsoft or facebook or any other services it is Logistic Services think of fedex or ups. And delaware are integrated and related to manufacturing. Looking at businesses today. About manufacturing trade and services but what i mean by that is when the automobile comes across from germany customs looks to say here is a 40,000 bmw that is 40,000 a manufacturing imports. But when you look at how bmw manufacturers, a huge part of that our services. Financialservices, logistics of moving moving, engineering, design, ad communications, publicrelat ions, advertising. So a few years ago the wto did exercise to look at manufacturers and lex break it down to tighten the of wrench with all live the other ancillary and Necessary Services to the bmw operation. So it is globally and said if we look at the customs figures 25 of world trade in services. But when we break it down to take out the part of the washing machine or the automobile we find out actually services are 40 of world trade. Theyre all the services that our hidden under the guise of manufacturing factually is he central to these businesses and the products they produce. In the case of the United States the leader by far of services internationally traded. One example of that is we run onequarter of a trillion dollar trade surplus. Frankly United States is the most innovative to introduce international trade. Even the europeans are concerned because we are the innovators. This is something that you hope the Incoming Administration will understand that success in manufacturing also mean success and services in the with the u. S. Competitiveness down the road we need to Pay Attention the rules of the road. And those who define what the rules should be. For the Digital Economy t because theyre completely dependent upon the Digital Economy using the of leadership to support its leadership and services. When it comes to trade it is fairly easy to deal with the problems by cutting tariffs by increasing trade. Is sent as easy to get services integration. Whether the main problems and what needs to be done to address complex. Again the Digital Economy to move your data and store your data it does not make sense to holding it and any jurisdiction with regulatory issues saw huge. Is pretty obvious in the case of Financial Services but if you think of express delivery what are the rules under which those companiesth operate in a place like china . They are very restrictive with the rules keep changing so those sorts of things that we take for granted in terms of transparency or rulemaking but they apply to a domestic operator that u. S. Companies are competing with different rules. I would say the it digital issues are across the board with two of the highest priority is looking forward. Now we have the next two panel but victoria and i will pull you anything he has delivered your punchline but what is the Digital Economy and why does that matter in this context greg. That is a term used to live and i see one of the things we talk about is how to apply that but for purposes of this discussion we will see industries producing things that our digital. Say it or that is in digital form Like Software and one thing that is important with the economic slowdown in has grown 30 in the last five years. And that is not growth we want to stop what i bike to do was go one step down to the data i e economy to say in my industry we talk about those moments we are in right now. Lu this is a facet that is widely known but every time i say it out loud in uses any. If you stand here today january 13 and aback to the beginning of recorded time when man started recording the knowledge acquired 98 of the data the bassist was created in the last two years that is on a scale sosc far beyond anything humanity has seen before it is hard to get our mind around death far beyond trade policy and global Economic Policy to have societal impacts that is enormous beneficial consequences for the worldth that large but it is how we live our lives and the economy. Thinking but this bill was at the beginning of that. It is incredibly important to think about trade policy and Economic Policy. But with the data and was it is interesting it is already important to the Global Economy but yet we dont have trade rules i was an intellectual property negotiator and while one of the highlights of my career to be the negotiator for the United States but in the 90s to realize how they drive that Global Economy so they went out to negotiate trade rules and at the time that was considered unusual but now with the two cardio that it is obvious to everyone there should be International Global rules but there at that moment now. It is of leader to limit the ability but that is a motivator. So what was that have done clacks how does that address that quick spirit that was the first trade agreement as a default rule to move back and forth across of border you cannot view those with did your borders and theyre always exceptions but that we need to have that base line on the international basis. I am confident we will get there either tpp or other mechanisms this to importuned for the Global Economy not to be addressed. Tpp is the main place. I dont know if we are moving forward but i wouldnt want to say that is 100 percent but this will not stop pushing to have rules in this area. One thing i would find interesting here is the announcement on the data flow. And as the europeans want to do and the notion that is not as open. And to be watching with some degree of process. We need to be out there talking to them as well. Another chapter of tpp is bad that word gets its own acronym but did idol think that is that well provide. Does the state enterprise have to be 100 owned or is it a broader than that . When i was saw the tide commission therell the two categories owned by the government and those sessions up to do with the government says. This is an overstatement but there is a range of behavior but the state to enterprise technically is owned by the government that there are degrees. You can nonet, control it for the controlling minority of the stock but you can heavily influence to describe japans policy which was not ownership but heavy handed guidance. And in some cases that you want to work on this sora that to prevent of competition. So it is a range of things in a way that is more pernicious that makes it credit allocation. So the state decides who gets the of money that there are three problems. One part discrimination but if the state decides who gets the money but you are directing capital in one area. That means there are other people in the economy that cannot grow or do what they want to do because they did not make the decision but the government is. Latest discriminatory intends to foreign competitors. If you are being given those governmental advantages or licensing restrictions, we have been known to your guys as opposed to theirs. I think from the baton now we see a lot it is almost inevitable that you end up with overcapacity and and the reality is that the calf mitt does not allocate capital but they tend to overshoot the with the steel and aluminum and days challenge investments in that area. But people read tea leaves and they figure and i will follow the. Bunch what you end up with is mark capacity and then and then be at their countrys to match you if they dont want to lose the market share. But the really the creation of government to be very excited about that that they are not then then you say we did the same thing with the boeing. But i dont think the balancing is nearly the same bin also being litigated in wto. Lot of countries including this one if you are allocating capital in one form or another to specific areas in order to achieve deadend we cannot do that. But i am talking about how is all the upper you are talking about things that our new or fairly new it is not going to go away. But to have an idea of what is going on. But then you have release level of playing field. I am conscious of time and for you to give me thoughts and questions. I have never russian. While you are thinking about a cushioned by it havent asked the aspects of what are in tpp and a what is at stake. I think if you put in another format these things are clearly critical to National Interest one way or another we will have to find her way back to rulemaking in these areas. I thinking we need Something Like 80 ppv in chile because the optimistic position but not necessarily in the time never rest. Is th