Skip to main content

tv   Global Business Dialogue Discussion on U.S.- China Trade Relations  CSPAN  December 26, 2018 10:49am-12:16pm EST

10:49 am
>> trade ministers from australia, new zealand and japan talk about u.s.-china trade relations at an event hosted by the global business dialogue in washington, d.c. they focus on have trade disputes between the two nations are impacting other countries in the asia-pacific region. >> okay. i'm going to count to three or four and then will be underway, about us on close the times we've ever done. so good morning. good day. thank you all for coming.
10:50 am
i'm with the global business dialogue and it's a real pleasure to each of you here today. we'll get to the heart of this bonus program in a minute, but just a two thoughts first. it's january of course that is named after the two face god janus conflict both ways come forward and backwards here really though that's a better description of december than it is of january. i december 31 you are singing old anxiety and you're worried about next year, but when jennifer second comes around its just fully hard charging towards aching the first quarter of 2019 as good as it can possibly be. that will be especially true in trade this year we have a march deadline for the u.s.-china talks, the current ones, and, of course, we have a looming brexit deadline the 29th of march.
10:51 am
it's december the same in whico pause for a moment and look both ways. hanukkah has just passed, known as the season of light, festival of lights, but judging from all the christmas tree lights run arlington, i'm good sell business of lights is interdenominational and switch reflections. so in my short time at the microphone i'd like to reflect a little bit on three things with you. first is the global business dialogue, second is the policy of the third is france. gbd is been a growing concern for 19 years which is not particularly present but it's amazing to me it was said in the plea that trade policy is important that we're talking about. put differently, if economic activity is that played trade policy that conversation is the punishment of which it is shaped. and for us nothing symbolizes
10:52 am
conversation more than a hot drink and given special history in trade, he is thickly apt and so that's why our logo is a teapot with a globe. but you can't do things like this without a lot of help. i can't thank everyone today, but to offer sponsored members represent here and i like to mention them. what is -- another is trade data monitor. nobody does trade data like them. don brash, the founder of the company could be with us but he's represented by a young associate. but, of course, every member helps them every member contributes and we are grateful to all of them, all of you. now about diplomacy. all of our speakers this morning our diplomats. tami in and he may not have the title like elisabeth bowes,
10:53 am
shige watanabe, their diplomats. i think about alan gottlieb who was canada's ambassador to the united states back in the 1980s when the candidate u.s. free trade agreement was being negotiated. before he left he gave a most terrible speech i think you at the press club. in it he was saying that old diplomacy, , the kind where countries make their views known to note at the state department was over. but today domestically in washington had to engage with everyone. that engagement is not easy. it takes a dash of courage and a lot of work there and i'm very grateful to each of this mornings speakers for making the effort here at gbd. now, trade policy has invisible hand component. each representation of a
10:54 am
countries use in which is the global commons of understanding. i don't want to be flip here, but i did see bill lane in the audience, and when bill was with cat back in the '80s, he was a vigorous advocate for the canada/u.s. free trade agreement. once he was giving a talk to farmers in pennsylvania and he referenced the famous plainfield. and he said, the point, he said, is not to level the playing field, it's to fertilize it. but that is bill lane. finally on the subject of friends, gbd relight sound sponsorships and memberships but also relies on friends and friendships. these last few years to informed, our vice president and her husband, dick, a historian, have been incredibly helpful and very good friends of gbd. and for over a decade gbd was within the rich soil of samuels
10:55 am
international where andy durrant, another good friend was and is the managing director. in andy knows asia welcome free will, and it is my good fortune yours that he will be your guide the rest of this morning's program. andy, you are. >> thank you very much. i was going to suggest you give your initial presentation here and then do the rest. >> thank thank you, judge, a god morning to everyone to the last gbd program of the year. i'm just here to moderate, so let me get on with moderation. the first speaker is elisabeth bowes is, has been hit with minister counselor with the australian embassy since july 2016. we were chatting just a few minutes ago and she had thought when she came in that our focus was going to be tpp implementation period it's a
10:56 am
little different but it has certainly been interesting. so with that, elisabeth. >> thank you very much, andy, i thank thank you very much, judge as well for those welcoming words. judge was one of the first people i met in d.c. when i arrived to a half years ago, and we've had a good relationship and friendship ever since. i'm quite delighted to be asked to speaker today and also to see some good friends and colleagues here in the audience. i think i'm unique because esther has unique perspective on trade relations with the two economic giants, the u.s. and china. as so many countries in indo-pacific region, china is by far our largest trading partner. but overall the u.s. is our largest economic partner, and both of our relationships are underpinned by free trade agreements, which is also
10:57 am
something of a rarity. given with both those countries. so at the outset i i thought i would give a quick overview, a comparative overview of our respective trade and investment relationships with each of these giants, starting with the united states. two-way trade in goods and services is carnivale at about $68 billion. also, the u.s. enjoys a trade surplus of the fox will $29 billion according to the bureau of economic analysis. australia's major exports to u.s. are primarily agricultural commodities were at their imports from u.s. are industrialized products. the bilateral investment relationship, however, is quite significant and is valued at over 1 trillion u.s. dollars. china as i've said is australia's largest trading partner and accounts for nearly 30% of australia's exports. in fact, our bilateral two-way
10:58 am
trade reached a record almost 200 billion australian dollars in our last fiscal year 2017-2018. that's about 140 billion u.s. dollars, and is more than double that the two we trading relationship that we enjoy with the united states. of this amount australia's exports to china accounted for approximately one and 23 billion australian dollars in goods and services, that's about 86 billion u.s. that means australia has a surplus with china of about 50 billion australian dollars, or 35 billion u.s. dollars. our trade with china is predominantly in commodities, primarily resources and agriculture, iron and coal feature heavily but we also have expanding services exports, particularly and education services and tourism. by contrast with the united states, however, to wait
10:59 am
investment is much more -- two-way -- much more limited. although it has grown from a a fairly negligible based in the last ten years, bilateral investment is valued at about $70 billion, as i said with the u.s., it is 1 trillion. now, australia is a trading nation and we are proud of it. australia, along with the u.s., was a founding of of the general agreement on tariffs and trade and its successful organization the deputy oh. our location in the indo-pacific provides a particular focus for economic trade and investment relations. the indo-pacific region is the home of eight of our top ten trading partners and we've negotiated an fta with seven of those trading partners. i'm not only , do posture and use share strong security ties, some would argue the closest of security ties can we also shared the pursuit of open markets in
11:00 am
support of peace and economic growth around the world. we submitted our bilateral trade ties with the united states in 2005 with the entry into force of the australia u.s. free trade agreement. under that agreement all u.s. goods and australia duty-free and quota free. in fact, vice president pence on a visit to australia last year described as a model fta. .. the purest commitment that freeze companies requirement to enter into commercial partnerships if chinese
11:01 am
businesses in certain inspectors. these agreements have been beneficial for all countries, australia, the united states and china. both sets of agreement have spurred bilateral growth and investment. beyond this, these agreements have provided stability and predictability in our trading relationships as well as tools to dialogue and at some forecasts, by 2030 asia will be the home of 3.5 billion people in the middle-class. australia's economy will complement those of a growing asia. demand for minerals and energy will continue and there will be significant opportunities to supply regional economies with services and premium agricultural products. the trade agreement with china is one of the agreements in north and south east asia that will support increased investment. in our region we are looking at
11:02 am
a very important milestone on december 30th, the entry into tpp 11 which will provide sophisticated regional framework of rules for its members to facilitate trade in the region. we are not standing still. we are negotiating the 16 country regional economic partnership together with china, the pacific alliance, we are in negotiation with as well, and we have recently concluded negotiations on bilateral agreements with indonesia and hong kong. further afield, we just launched negotiations with our biggest trading partner, the eu. on the cornerstone for
11:03 am
bilateral and regional economic relationships, they are underpinned by wto rules. in other words the rules embodied in the wto provide the foundation for our trading relationships including with the biggest participants in the system, the us and china. as a trading nation, a well-functioning wto is of fundamental importance to australia's interests. wto rules that limit trade restrictions, provide stability and predictability for international trade and transports economic growth, job creation and improvements in living standards. in this context we view china's succession to the wto as a positive, providing as it does a rules-based framework on which we have built in our bilateral fta for our bilateral trade relations, china's economic transformation, partly due to its succession to the wto has lifted millions out of poverty in this economic transformation has been one factor in australia's 28 years of uninterrupted economic
11:04 am
growth. as much as we are increasingly reliant on fdas to govern trading relationships the wto remains of fundamental importance as a foreign to deal with issues of a multilateral nature, particularly subsidies and domestic support. turning to the current trade policies of today, from australia we recognize long-standing us concerns regarding chinese practices. we are encouraged the us, addressing some of its concerns through the wto and its wto dispute settlement mechanism, but we recognize concerns extends beyond it related practices. for australia as a trading nation, dependent on multilateral trading rules, predictability and stability in trading relations it is important us/china relations do
11:05 am
not become defined in confrontational or adversarial terms. this risks strategic instability and damage to economic growth domestically, globally and particularly in the indo pacific region where australia is located. and risks damage to the multilateral trading system. we welcome the meeting between president xi xinping and trump at the g 20 and the news of continuing discussions between them. australia consistently encouraged and negotiated outcomes between two countries which opens markets, is nondiscriminatory, steps back from tariff escalation and is consistent with wto rules. not only would that be good for the global trading system but it would be good for the us and china.
11:06 am
as the smaller nation, i have highlighted the way australia places on the rules-based global trading system. including the wto. we have systemic interest in all members by wto with and upholding them in their own trading relationships. we want to see all wto members commit to allow foreign participation in as many areas of the economy as possible. but as members recognized, the wto is in need of reform. improvement of wto such as transparency and notification procedures and proper functioning of wto committees would strengthen the framework to us china trade relations which are not subject to preferential trade agreement and would insist on strengthening this institution as a whole. that is why australia's cosponsoring the us
11:07 am
transparency initiative, we have seen positive areas, just a few days ago, china's support notifications for 2011-2016. the same conclusion, we are very clear eyed about challenges that lie ahead and these challenges are significant. it will be a heavylift from both countries, if the us and china to reach an agreement that sees tariffs not just pause but lowered on both sides. and the arrangement for third countries in the global trading system as a whole. we want to see that agreement come to fruition we, australia, not sitting idly on the sidelines, we will continue to look at this agenda. in some areas the grass
11:08 am
continues to grow. [applause] >> that was terrific. please join me in well-paying -- welcoming, who will brief us on what japan has been doing the past few years. >> good morning. as i talk about the inference of us/china disputes and policies on trade. this year and for the future next year.
11:09 am
first of all, the trade dispute, the largest and second-largest economy in the world. affects japanese economy and japanese people and paul in october, conducted revealed. the number of japanese companies affected by the us/china work. a third up from just 3%. with france, the prospects of
11:10 am
export from china, chinese demand is going to soar. we believe that it is important for the united states and china, to solve these problems. through dialogue. that is important. having said that, has to protect our companies and workers, from known market policies. from third countries. those practices include, theft transfer. to distorting industry of
11:11 am
subsidies. and distortion created by state owned enterprises. that is why we are closing with the united states. in the framework, with talks. under these frameworks we are also promoting discussions of wto reforms and e-commerce. you can see some elements of those discussions in a joint statement issued between the prime minister abe and donald trump. and talks, both issued in
11:12 am
september, at the united nations. in addition to that, just before the meeting between donald trump and xi xinping on december 1st at one is there is --buenos aires xi xinping met with donald trump and pointed out it is important for china to take concrete measures. in regard to the tariffs which is the focus between china and the united states. and the marginal trading system
11:13 am
and believes that any kind of trade created measure has to be consistent with wto so it is necessary to scrutinize each measures. generally speaking, over the wto bond rate. in a sense, the current price to have us$150 billion worth of chinese goods, regrettable because it could hurt economic -- and again, we hope that discussion between the us and
11:14 am
china will lead to the trade solution through dialogue. japan, to communicate with the united states and china going forward. i will briefly touch on japan's trade policy. i grateful and excited to see the tpp will take effect on the 30th of this month. and also japan you epa will start on february 1st, next year if the eu commission makes the decision tomorrow. these agreements on japanese
11:15 am
trade policy, january 18th and with regard to the negotiation with japan united states agreement on goods as well as other key areas including substance, that can produce an achievement. i have to be very accurate on this. technically speaking, those negotiations, 30 days after the detailed objectives to congress. i believe they are working on that. and retired by tpa. meanwhile we welcome the substantial progress made in
11:16 am
our negotiations in 2018. and to concrete ourselves, thank you. [applause] >> thank you very much, watanabe san. i'm pleased that tammy overby can join us, she spent 21 years based in seoul and another eight years after that working as head of the asia division of the us chamber. tammy can help bring perspective of american companies and american private sector that will match up with what we are hearing from our speakers representing their governments. >> thank you all and i want to
11:17 am
thank judge and joann in the global business dialogue for inviting me. conversations like we are having today have never been more important. we have a saying in the trade world that if you are standing still you are falling behind and from my perspective, nowhere is that more evident than in asia. i want to offer a huge congratulations to my friends on the dais from australia, japan and new zealand for their hard work, their leadership, and the success they are about to enjoy 11 days from now on december 30th when the cpt pp or tpp 11 enters into force. and then a few days later, vietnam will join that various steamed group. i don't think many americans realize what this means to us.
11:18 am
american farmers and ranchers and employees are about to be significantly competitively disadvantaged in some pretty important markets. particularly japan. american wheat farmers are about to take significant hits since australian and canadian wheat farmers whose biggest competitors in the japanese markets are about to get preferential access over american wheat farmers. i should note america was a big component of high standards, comprehensive rules that cpp tpp now has, in my view, terribly unfortunate that our companies and farmers and
11:19 am
ranchers are not going to see the benefits. the us wheat and national association of wheat growers said after japan ratified tpp 11 that if nothing changes before the effective tariff schedule is fully implemented, us wheat farmers and us grain trades will essentially be writing a $550 million check every year to their australian and canadian competitors. some of the tariffs in cpt pp go to 0 immediately, 11 days from now. others will be a lemonade or reduced over a number of years. for example japan is going to illuminate all tariffs. it is going to go to 0 on 32% of their agriculture, food related products, immediately. 9% of their items will have
11:20 am
some tariffs but at preferential rates. the remaining 59% of their product tariffs will be eliminated over 20 years. i should note that is for the countries who are in the cpt pp. those terrible limitations and tariff cuts will not come to american farmers, ranchers and employees. but the preferential tariff rates will go to those countries who showed courage and vision. in addition, on february 1st next year the eu, japan economic partnership agreement, is likely to enter into force assuming our friends in brussels tomorrow vote as everyone expects. american farmers, ranchers and employees, let me underscore we are about to be significantly,
11:21 am
competitively disadvantaged in the fastest-growing part of the world. does anybody doubt what i think about this issue? i want to make sure i clear that americans are about to be significantly competitively disadvantaged. other agreements happening in asia, my colleague mentioned the regional comprehensive economic partnership, australia, new zealand, japan, korea, china and india. this is a huge economic collection of countries, they are moving forward. i admire your optimism that it will be concluded next year but as somebody who helped draft language year after year on tpp and how we expect a significant conclusions this year and becoming good friends with my
11:22 am
thesaurus as we found new ways to say we are almost there, not quite but we are getting closer, i wish you the best of luck but it is moving forward whether it concludes next year or not. from my view the important thing is they are moving, they are negotiating, they are trying to open new markets for their farmers, ranchers and employees. other countries in asia, what are they doing right now who are not part of tpp? korea, my old home. the koreans have free trade agreements with almost everyone in the comprehensive partnership for tpp, with all of the 11 except mexico and more importantly japan so korea is seriously looking at joining tpp. there are some political issues between countries in the group
11:23 am
so i don't know how quickly that will happen but they are watching it very closely. no one wants their country at a competitive disadvantage. who will be the biggest beneficiaries of this new competitive agreements, tpp 11? countries like vietnam and malaysia, countries that have, well-positioned geographically, they have lower wage rates, improving infrastructure and now high standard comprehensive policies, rule of law, companies will be able to have a high level of predictability in those markets and most importantly they are liberalizing, opening their markets and they are doing it for their own competitive reasons. when the us and korea first
11:24 am
negotiated fta, many people asked why -- what does korea want to do with this? korea had to make significant changes, they had to rewrite a lot of their laws, they had to open things up, they had to -- i will still your line, they had to fertilize the playing field and why did they do that? they did it because they live in a tough neighborhood and they knew for their future competitiveness they needed to open up. that liberalization was the best way. so countries like vietnam and malaysia are following the same path. from my perspective, one of the coolest things about tpp is you have fully developed economies like japan, australia, new zealand, and you have still developing economies like vietnam and malaysia and yet they all agreed to the same
11:25 am
high standards. it is true that those still developing economies are going to get some capacity building help, some extra phase out, transition times to help them get to the high standard but it is a race to the top. i have huge respect for those governments who had the vision and the courage to do this. to those governments that on days 3 of the new administration without any serious consideration decided to withdraw america from tpp i think it will go down in history as one of the biggest economic mistakes made in my lifetime. i'm going to stop right there because we want to get to your questions. you guys are great audience and i am here all week. [applause] >> thank you, that was a little understated but i hope we can
11:26 am
dry you out in the questions. our last speaker, from the new zealand embassy, a trade and economic counselor, more importantly i suspect this will be one of his last public appearances as he will be going back to capital next month. he will be greatly missed. so thank you very much. >> thank you, andrew, thank you very much, judge, for inviting me to speak here. it is great to beer, thank you all for being here. i want to acknowledge other members of the panel. my embassy colleagues, very important here to share information the last couple years and one of my oldest
11:27 am
washington colleagues, tammy yoder be who has always been entertaining to talk to, not just today. last time i spoke here was in 2016 which was quite a different time but there are some similarities and the what i want to mention, i was quite a heavily australian oriented program. and gave a really great speech and to start the proceedings, i see at the time, given his political background and seniority in the australian system they gave me a lot of political cover where i could agree with everything he said but couldn't say to the words he used. and agreeing with elizabeth in particular and associate myself with the speech, the organizers associated strongly with australia.
11:28 am
you may see the embassy of australia but i will solve this in fact, that gives me exceptional amounts of cover. and full the people at home. if i say anything that makes you squirm, you can picture me as an australian. the other similarity from 2016. it was interesting to me and thank andrew for mentioning the kind of valedictory nature of the speech, you don't get to do valedictory's until you are an ambassador. looking over the time i spent here, the irony given how different the environment is that we are facing from 2016 when talking about ratifying tpp, for new zealand the objective remains the same. i remember arguing on that day,
11:29 am
in the middle of 2016 we were arguing the rules will be written, that is where our economic future really is. for new zealand it is imperative to be in the room for those discussions and have influence on those rules. and that remains the case. but more importantly, the nature of the rules, there have to be rules. more concerning consideration, we have a discussion about tpp versus asset. the reality is just imperative that the architecture, 5 million people in the region,
11:30 am
much more concerning environment would be one where those agreements exist and we deal with every country bilaterally with accepted standards. people talk about the cp tpp which is coming into force in a couple weeks time. if you go back to early 2017, after the administration had withdrawn from tpp, people ask why bother doing tpp 11? what is the point? the biggest economy -- this is the point. now that we have rules and standards ingrained in the region, that is a huge benefit. massive commercial games in new zealand, and down the line, the greater economic gain comes from barriers, having clear consistent standards in the region. i didn't want to reject the
11:31 am
premise of this event, but new zealand's approach, the reaction is not just to the us and china but a whole bunch of things that are coming down at us in the world and related to the nature of our economy. very small scale. i enjoyed comparing 500 employees in new zealand, we define that as less than 10. we have a couple, 2 or 3 or 4 businesses you could call a major size but the whole economy, so we have a series of things we will talk about that we are doing, not just because the us and china -- because of
11:32 am
the nature of our economy and i mentioned the us and china but we see restrictiveness, trade restrictiveness across the world. increasing disruption, coming as everybody does. we have seen a big growth in trade skepticism and new zealand, 60% of gdp is trade related. we have to take on all those issues and that is what we are trying to do. i don't mean to resist the premise and reject it. clearly when the us and china like others here, china is our number one trading partner, australia is number 2 and the top three economies, as elizabeth said, having china as number one partnering, one additional partner. is going to be impacted. they are primary impacts, manufacturing in both companies and you see them affected by tariffs.
11:33 am
more importantly you see the prospect of medium to long-term economic damage across the world, disruption, and i think there is an aspect, it makes me nervous when you see people in both countries celebrating the other economic hardship. you have to be capable of what you wish for but you could argue what we are seeing in markets reflects one country winning or losing, you will see damage across the world and as elizabeth said, a lot of us, china is a major trading partner. each of us -- these things rebound through a globalized world. the final thing with respect to the us china trade dispute that is concerning.
11:34 am
trying to figure out how you would relate us and china to the wto and is a chicken and egg argument with us/china dispute whether the wto is in trouble because of us/china. another point, concerns with where things are going to the us and china and there are other concerns how the organization evolved or not. the rules we are operating under for the last -- not all of them but for the most part in 1995, agreed in 1995, this is a big driver for things like tpp that attempt to deal with a new economy and happily a lot of those rules are shared by us mca which is good.
11:35 am
we do see a big problem in new zealand with growing subsidies. they've always been a problem the only way to deal with those is in geneva. we generally think at some point we need to come back and start to negotiate, i'm not calling for that now. a lot of things need to be done before that can happen. not just the we need new substance and new rules but the dispute settlement body, the sheer holding the thing together, needs a negotiation because contrary to what people say the wto isn't going to march into any capital and make you change your rules. you will meet change your rules because the benefits of being in the wto outweigh the costs. and so we need to be
11:36 am
negotiating, making clear the benefits to people, to countries, making progress. if i have gone on too long let me finish with the responses to all the things we are seeing in the world. we are fully engaged in geneva, working hard on all the things you have been talking about. listening to the list elizabeth game had the same negotiations for new zealand, negotiating with the eu, negotiating with certain lines and for new zealand if we can finish those things we have 53% of merchandise exports covered by trade agreement, we go to 77% if we can finish those negotiations. we are involved in international public goods organizations, building these
11:37 am
international communities of good practice, and engaging on flexible and open negotiating practices, there are good things you can do even if not doing multilateral negotiation and thinking about those negotiations, and e-commerce and digital trade negotiation and we would like to see fossil fuel subsidies brought into the wto for environmental reasons. we have an aggressive strategy to deal with nontariff barriers. slowly getting the system behind that and launched in the last week a strategy dealing with technical barriers and on the agriculture side a really strong history of dealing with symmetry barriers and dealing with those and finally, i will end on this. although we come from different
11:38 am
perspectives, we have faced some of the same issues and in new zealand, tpp, and parliament for a country like new zealand it is surprising to people. the social and political license to be involved in trade agreements, they need to make sure the benefits of trade were felt across the economy. the holistic process of consultation and the kind of community involvement in trade negotiations going forward, that is something that needs to happen one way or the other, alienated by trade agreements and that is the challenge for all of us. thank you. [applause] >> thank you very much.
11:39 am
let me take moderators prerogative and ask the first question. the questions while the panelists. if we go back to january 2017, it seems less then two years ago there was a feeling here at least that the tpp was in ashes but was not going to be resurrected and we weren't really sure where the driving force for liberalization was going to come from. that was the theme for the first year and as we reached into a series of actions the us has taken notably the dispute with china i think it is a mistake to look at the resurrection of the tpp is something just being done in response to the bilateral
11:40 am
dispute between the us and china but more that it is something other governments have decided they will pick up the mantle. i would love to hear your thoughts on that. >> to be frank, i see this response to us china trade tensions for the reasons tammy articulated but we all mentioned. asia is the fastest, most dynamic region in the world, i mentioned by 2030 will be home to 3.5 billion middle-class consumers. it is our region. we felt it was still pointed out, the wto has gone so far, rules needed to be updated for the 21st century, the tpp was a vehicle for that, we saw inherent value in proceeding with that. that was the principal driver.
11:41 am
it helps us having the regional framework, and economic integration in the fastest most dynamic region in the world. >> tpp, no doubt, this issue, the decision right now, the issue now came up between the us and china, not only the issue between the us and china. we are very much involved in the discussion to solve those issues. thank you very much. >> on the cp tpp we should point out even though the
11:42 am
united states government withdrew, american companies that operate in those jurisdictions will still benefit, which is good news for them. it is bad news for american farmers, which tend to be export-based from here, it is bad news for small and medium sized exporters who will not benefit from these high standard comprehensive rules, and the most dynamic fastest-growing part of the world. >> i don't have a lot to add to that which we covered a lot in that space but for us it is a question of having that architecture and being formerly lengthened to all these economies, half of them we didn't, mexico, canada and japan. one thing i didn't say in a space that is driving the way
11:43 am
we look at this, there's a tendency to think when you are negotiating an agreement, the job is done when you get ratification or entry into borders but in asia you get a lot of benefits and structures set up by the regular meetings of the committee's and do those things and the relationships that come and the trust particularly dealing with different cultural and political systems, from new zealand's perspective, it is a no-brainer that you want to get into these structures and have the chance to sit down with people and bring people to each other's countries and see how things work and it is amazing how much progress you make. >> with that, let me turn it over to the audience. yes? please wait for the mic and identify yourself. sorry, right there. it is not aerobics.
11:44 am
>> brad with us trade, the us has taken a very vocal stand fast wto is not built to handle china's economic system. given that premise, how can this us china dispute be handled? is it bilaterally or through a vehicle like tpp or some new initiative we have yet to hear about? how can the countries play a role in trying to resolve this? is that participation not welcomed by the trump administration? >> was that for any particular panelist or whoever wants to bite? anybody want --
11:45 am
>> i'm happy to jump in. the economies today, the wto rules have not changed significantly but the world has. we need to see updates for the wto rule regarding not just china but all systems. it was originally envisioned as a race to the top. he thought it would be designed to contain them. when japan joined negotiations and countries continued outreach to the chinese that we want to brief you on this or be aware of it and once you to join. we want you to race to the top. you begin to change their view. there was an aipac meeting a
11:46 am
few years ago when the minister said he could envision china joining tpp in a few years which was remarkable. fast forward to where we are now. the trump administration is right to focus on challenges of the chinese economy and the trilateral between the us, japan and eu on nonmarket economies is a good start. i would love to see that initiative expanded to other countries who share the same concerns. elizabeth mentioned them. japan is already in. i know our qb friends share the same concerns about subsidy and state owned enterprises, excess capacity, the list goes on.
11:47 am
i would love to move into developing a coalition to deal with nonmarket economy issues. i will stop there. >> if i could just add it is true that some of the issues that have been raised might fall outside wto rules, it still embodies some fundamental principles that should govern our trading relationships, the principle of nondiscrimination. there is a framework there and we base our ftas on that. it might not be in fta the china and the us agree after ten years to negotiate but certainly there is a framework of principles upon which both countries can forge a new accommodation.
11:48 am
to tammy's point, we are looking forward to the outcome of the trilateral process to see if it can translate into a broader coalition and we ourselves launched with japan and singapore and initiative on e-commerce. there are new initiatives that cover these new areas that are not already covered in the wto. >> next question in the middle here. >> merrily international trade today. i will address this to elizabeth. you just alluded to the fact that it took ten years to negotiate fta with china. it seems to me the current administration does not have that kind of patience. what is your view if there is a victory declared sometime in the next 6 months, but core
11:49 am
issues are not really addressed, tech transfer and so on. do you feel it was wasted pain in terms of the tariff if that is the outcome? >> i alluded to this in my last response. australia issues comprehensive free-trade agreements and with china we have got the best fta outcomes china negotiated, there's a reason for that ten years, what the us is aiming at is not a comprehensive -- it is not clear what the outcome is but i think any outcome that steps back from tariff escalation which is harmful not only to us and china economies with the global economy is important. it is not wasted, 6-month
11:50 am
timeframe and 3-month is not ambitious. it doesn't mean at the end of the time, we had some inbuilt liberalization agendas and we have those in other ftas. any positive progress towards an arrangement is something we would welcome very much. >> yes? >> mary berger with washington trade daily and this is for anyone who wants to answer. all the speakers mentioned the need for wto reform. i'm wondering how optimistic you are about wto members reaching a consensus on wto reform and how quickly you think that can happen. thank you. >> everybody is looking at me. you are leaving.
11:51 am
to be honest i think it is an impossible question to answer. new zealand, you have to be an optimist to be in this game and you have to be particularly optimistic if you are in new zealand given you don't bring any hard power to the equation and we are optimistic that good ideas can work and be accepted and that is what we are trying to do, provide good ideas and square the circle where it needs to be. it is impossible to evaluate possible time frames, too important, people are heavily engaged, the discussion is happening in geneva. i couldn't give you a timeframe. sorry.
11:52 am
>> we will put that in the to do list for 2019. >> great panel. bill lane with trade for america. there are generally two -- was on trade confidence. one is if you have a trade war there are no winners and that was articulated by most of the speakers but there's a counter view which is there really are trade winners who are not involved in the trade war. since the official start of hostilities with china between the us and china at the beginning of july, us numbers, exports to china have trended downward because of soybeans but us imports from china have gone up dramatically primarily
11:53 am
because of people trying to get ahead of the tariffs and we used to call that a pre-by but that is going on. i don't know if that has leveled off. my question to you is since hostilities started, trade hostilities started in july, have you seen your exports to china and the us go up, go down? are you bench sitting in the short term? i noticed some countries are initiating trade diversification program so they are not dependent on one or 2 markets, that is true in canada right now. any thoughts on the by standards, and hurt in the long run. any insights on what is going on on the ground, the one measure folks focus on is bilateral trade deficit.
11:54 am
>> thanks, i anticipated your question by asking the development of agriculture that question. to be frank it is a bit soon, we are not soybean producers. i don't think we see much evidence of us filling a market niche. our exports to china have increased year-over-year but that is also largely attributable to the fda and the progressive tariff cuts. i know tammy pointed out the tariff differentials and the us not being a part and crunching numbers on differential on some of that with exports to china and the us and so for example,
11:55 am
the tariff cuts, imposed on us goods on key products, we have a 90% tariff advantage, the tariff advantage, we have 0 tariffs now. that is not necessarily translate into actual exports. but you can see already the differential. but we don't look at this as time for a short-term opportunity. we prefer adherence to the global rules. and the increasing trade tensions and the damage that is caused by the tariff for tally asian. >> an example in japan, buying soybeans from the united states.
11:56 am
because it was china us dispute. the price of soybeans in the united states. the japanese buyer in the short term. they say that is good but the stability of the prizes are much more important so in a sense, welcoming the tendency. another thing, all the factories, noticing the chain, buying car parts from china and that is tracing the price raised by that so that is a negative effect they are
11:57 am
receiving right now. >> on the relocation we are seeing companies, no one is leaving china but a lot of people are reallocating the supply chain, the us destination products, they are looking at philippines, vietnam, malaysia, indonesia, even bangladesh, to consider relocating the us-based manufacturing. >> you have given me an opportunity to use a line that is on the bubble. the investor who said we could use it, blame it on her. the line was if you are in bed it doesn't matter whether they are making love or war. if nothing else that is a call for stability, right?
11:58 am
nobody move too much. i trying to squeeze this into something coherent. like others, for us, any short-term gain is outweighed by impact on the system and global stability that might be coming. the nature of new zealand's trade with china, this is part of the consideration how markets will grow but probably not that big a part of it. as an example i worked for the meat industry before i came here. in 2009, or 10, we were doing nothing when we are up to 40% of our land goes to china and 10%, to 20% of our base. the huge growth in that market is the same story for australia.
11:59 am
you might -- if there's going to be impact, it will be more likely to be on economic growth with impact down the line on people in the supply byproducts from new zealand and and the effect of the economy, the trade disputes at the moment. >> i have questions of ambassador of new zealand. australia and new zealand, the
12:00 pm
security grounds. the one who does that for a reason. i'm wondering how you rebound and talk about the security concerns. .. when their significant changes to networks that are run by the private sector they need to consult with the digital and security agencies. that has been done by a vendor neutral in the country neutral basis. the security concerns that have been identified that are not
12:01 pm
visible to me and i'm sorry to say, the process was followed, not a political process and it is ended up where as we'll see where it goes from here. >> i'm going to take the prerogative of associate myself with the embassy of new zealand. [laughing] similarly, it's not a matter we can really discuss but certainly will submit great consideration. >> dick cunningham with steptoe and johnson. the source of all of my trade was and is of course the american baseball player yogi berra who famously said it's always dangerous to make predictions, especially about the future. the corollary is it's always dangerous to make predictions a special about donald trump. i think there are three things
12:02 pm
that are safe to predict. one is this administration has at its great cause international trade and economics, the subduing of chinese broad spectrum of chinese practices of both technology and in subsidies, that they feel are essentially in the you s interests -- the u.s. interest. the second thing is that is worthwhile and useful to understand is a have concluded the wto won't do it for the i submit this isn't just because of discouragement with that we kill procedures, it is because you see the membership of the wto including even people like japan, europe that are not in discussion with them about -- as being essentially willing to go to bat with them at the wto to address these issues. the third thing you need to keep in mind i think is that
12:03 pm
everything, everything this immunization does in trade should be taken at face value. it should be taken as how do they see this as leverage, and what do they see it as leverage for? let me tell you where i'm going with that and ask you to react to it. the great task it seems to me of the world trading community is, should be to try to get the united states to resume its faith in the wto as the basis for rules-based trading system that will solve the problems that it sees as the serious problems. the obvious thing it seemed to me to be done, to be considered, and it's a risky consideration for a lot of countries is for the major trading countries, the eu, canada, australia, japan to join with the u.s. in a
12:04 pm
comprehensive wto case against chinese practices. that should be done it seems to me only with the corollary that you have to let the wto system survive. they are in a process of dismantling it now by dismantling by the end of this coming year the wto dispute settlement mechanism. they would have to agree to allow the wto dispute system to revive. the problem with that is, of course, that makes this a binary world for us with the u.s. and its allies against china, the effect of that on china, it's difficult to see the effect with -- i pose it with a probably need to to do with unless you just want the u.s. to say we're going to continue deal with this unilaterally, although probably it will work and what will work will do something more severe. and i suggest to you to consider radical things like that. if you don't we have a lot of
12:05 pm
trouble. i would ask if giving views on whether that is even possible for the major powers to consider to respond to that. >> major countries. >> for those issues raised between the u.s. and china, as i said, it's not just the issue between the come on the united states and china, , so we are vy much involved. and if japanese interest is going to be separate by those
12:06 pm
issues, we're going to use the wto process, settlement process properly. and that as you said, we're discussing those issues between the bilateral, i'm in the discussion with the united states in japan. so those issues, and including the wto reforms, so it's not simply that kind of, only to use the wto just for settlement issues. that's what i think we can think we can say that now. >> just to add to that, i think the trump administration's of you on multilateral, view --
12:07 pm
approach is evolving. they came in saying we will do everything bilateral. we are the largest economy in the world. we are going to america first, squeeze everybody. i think the example i would offer is the trilateral with japan and the eu on nonmarket economies. from my personal perspective i wish they had come in and focused on china first and built that coalition, rather than basically after all of our friends and allies first and then getting to china. i think it's important to note that there is bipartisan support in this town for the attention on the challenges with china. and with all the asian governments i speak with, they are in agreement that this is an issue, this this is a challengt we need to work on together. so i'm hoping that there is an opportunity, but no id on the
12:08 pm
timeframe. >> -- no idea. >> if i could just add, maybe it's a question that the panelists don't want to answer, but there's also a clear expression from time to time from this administration that whatever market opening can be achieved with china should really benefit american companies and american interests, which again you kind of look, that takes a back into a bilateral box but one what wf there some progress could actually come at your expense. >> i think, i think wto members are willing to address these issues, and may be this has been a bit of a time coming. it still said we haven't had some new rules for quite some time in some areas are in some areas had in 2013 with produce some good outcomes, but if we
12:09 pm
can, we don't like the unilateral approach, and we think it's harmful for both sides. i think bill made the point trackballs don't have the winners for the participants and we've seen the harm to both economies. i think eventually that unilateral approach will be demonstrated to not be successful as tami has said, then the u.s. will be forced to and it already is, turn to its allies for a broader and a longer-lasting solution. i also don't think it will necessary produce a longer-lasting solution. you would want that framework of rules to underpin a solution to provide that predictability and stability. that takes time. >> well, we've got a few minutes left.
12:10 pm
any questions before we break? yes, paul. >> next time, two microphones. we promise. >> my name is paul, i would use agency for international development but needless to say this is a personal capacity. there's lots of optimism about further progress of the wto, and at least for somebody who sat in on a lot of committee meetings in geneva, one of the dynamics and needs to be addressed is best which the relationship between the united states and japan and china and the other major players in geneva but really with the developing countries and the role that they play. clearly there's an increasing amount of attention that this administration is now giving to the relationship that it has with developing countries as compared to the one that chinese have been developing in that part of the world.
12:11 pm
i'm just wondering if any of the panelists would care to comment on how they see the dynamics of that point out and what role they see themselves as playing in terms of bringing along developing countries in a lot of these dialogues. whether you talk about e-commerce or fisheries subsidies or whatever the issue may be, those helping countries are going to pay much more portable and would've been the case in the past and so they can't be set to the side. >> well, perhaps taking e-commerce as an example, which we played with japan and singapore, we are certainly very pleased that 17 member sent on to e-commerce initiative at buenos aires, and we hope that can segue into proper negotiations on an outcome. i think the point is that the trading system and globalization is not just about big giants gt
12:12 pm
all participants in the system having access. and a recognition of the fact that economic growth and trade liberalization has supported economic development across the globe, and most particularly, going back to our theme, in the most dynamic of regions in asia. so it's important that all countries be brought along without -- that makes it difficult but that's what it's important to address the issues that do indeed touch all countries. separately from the wto we've also certainly urged the u.s. to maintain and, in fact, increased its economic engagement in the region, indo-pacific region, which does include a lot of developed and developing countries, and a few initiatives have been announced by this administration which we really welcome and think usaid might
12:13 pm
be, and opec figures such as the wto. it's a proper economic engagement in the region to support economic development. >> i would to say with respect to that develop, developing division, one of the achievements i think of tpp, as tami said this mix of developing and developed countries, and basically the outcome of cpt pp is that everyone has effectively the same obligations. but you account for that developing status with different lead in times and transitions with technical assistance and i just put that forward as potential model down the line. i think it's difficult for countries as i see a lot of us have faced the issue of having moving to some extent domestic support for trade.
12:14 pm
and it's a difficult thing for those of us with that problem in the developed world to justify why other countries, some of whom are vastly wealthier than us, don't have the same obligation. and so i just kind of leave that out there as an issue that will need to be solved. i wonder whether cptpp approach gives us a way to do that. >> okay. not that optimistic note, i wish you all, on behalf of all of us i'm sure, happy holidays. judge, i'd like to thank you for pulling together yet another fantastic panel, and we really appreciate all the work and contributions that you make to the discussions here in washington. thank you. [applause] [inaudible conversations]
12:15 pm
[inaudible conversations] >> today is day five of a government shutdown. funding round up friday at midnight. negotiations continue on a public and passed both chambers of commerce and get the approval of the president. watch live coverage of the house on c-span, and the senate here on c-span2. >> the 116th 116th congress men january 3. some of the new members have been sharing holiday photos with their families.


info Stream Only

Uploaded by TV Archive on