tv Key Capitol Hill Hearings CSPAN November 19, 2013 8:59am-9:30am EST
can be translated into real and meaningful commit ms. you have all heard the reasons why it makes sense to invest in the united states and use this as your platform. i have to say i have been visited by companies from all around the world. some of which are represented in this audience in recent weeks who said between our legal system, our innovation, ecosystem, our workforce, the access to cheap and cleaner energy that this is a platform that they want to base themselves at. when you add to that, the network of trade agreements that were currently negotiating, this can be a global platform for exports and i think we'll see more and more investment as a resu result. we're seeing an investment in manufacturing in certain sectors we never thought we'd see additional investment and we're seeing expansion of services and investment in our agricultural sector, which is of world class character. so we're very optimistic about the u.s. being a platform for
global investment and global exports with these treaties and agreements providing the context for that and this summit bringing attention to that and it's nice to be on a panel where everybody supports what it is that we're doing on trade agreements and we're very grateful for all our support going forward. >> the place to start is executives on the panel. as i illuded in the beginning, there's been a series of trade agreements with south korea, columbia and now we're in this world of talking about these sweeping agreements with the e.u. and with countries. how as you're making business decisions does the prospect or possibility of these broader agreements, how is that different for you than the bilateral agreements? >> it's highly important to us. i'll come at it differently with
the free trade agreement for example. we were very worried that colombia and a number of our would do a free trade agreement and we would not be included. because so much of our competition is nonu.s., which is mining equipment going into colombia, we would be looking at tariffs that japan, germany, others would not have to encounter. so i would go to our workers out in central illinois and say, look, we have a 10% premium. we have to find a way to be more efficient or we're going to lose the sale. we can't find ourselves in that position. it's critical to us. most of our big equipment from this country is so sourced u.s. we need to have access to those markets that the tpp example is a great one because i'm convinced that most of those
countries will sign an agreement with or without us at some point down the road and will be potentially looking at that. i really worry about that as an exporter and employer of some 50,000 people and what happens to our workers and opportunities as a result of that. >> you have the perspective of being an importer and an exporter. the next are going all over the world and brings sedans from germany. how does the prospect affect your business? >> it certainly must have an impact. we still pay -- we look at our relationship between the united states and europe, we still pay to europe 10%. we have 5% to pay to the u.s. that sums up year by year to a number of $550 million costs related to that. it's not only about the import
fees that we have to pay. it's also about the different standards. and you wonder why because it's about crash testing and it's about emission standards. and it's the same glow. it's the same human being sitting in the car. yet we have different standards and it's to the tune of a couple hundred million. i have to encompass all these different rules. so not having these addition costs much have a huge impact on our growth. we still have to see what they are going to be in detail, but it will have a huge impact on us. i see today, which is also my responsibility, how well we are doing with canada, how well with mexico as opposed to brazil or argentina. brazil overnight raised by 30%.
so out of business, but you're a very exclusive brand. >> in a development context, how do these agreements matter? >> the pure number you start with is we export 16 times more per capita with companies we have free trade agreements. the tpp with automobiles we could just in tennessee increase our automobile exports almost $1 billion, which is huge in terms of the jobs created. we have a gm plant as well. so we think all that will help. back to eu, there's 10% tariff and then another 7 to 10% in additional costs due to double checking, crash safety and a lot of other things. you start out at a disadvantage,
that's huge. >> for a minute, we just watched canada and the europeans negotiate and finalize a pretty good agreement, which i really hope opens the door on many thi things we could be doing with europe as a result of that. after all, we have nafta with canada. there's not that much of a difference. so it should help us get that done. >> so give us the scoop. how are things coming? what do you see as the prospects for these agreements over the next months or years? >> i'm optimistic. we're much further along. it's been underway three plus years. we're trying to work on the outstanding issues which are still significant, but all of the countries around the table are working hard to try to get this done. with regard to ttip, we're at an earlier stage. we have also been spending a lot of time with our european colleagues coming to a common understanding of where we have
similar approaches, where we have different approaches to issue. there's no great surprise there. we know how to work our way through it. it doesn't mean it won't be difficult, but it's doable. the great opportunity but also the challenge with the european agreement is we're going to try to bring our regulatory and standard systems more closely together. not regulation, not lower health or safety standards, but try to eliminate unnecessary costs, unnecessary frictions to get in way of two well regulated markets. that's something that's going to take some creativity. it's a new area that we're focused on. but i think it's one that holds out a lot of promise. the last thing i would add to doug's point earlier, we don't live in a static world. other countries are not just waiting to see what it is we do. they are out there negotiating access to key markets for our
exporters. we need to be on the field as well. we need to make sure that not only are we on the field and getting access to markets, but that we're doing it it in a way that raises the standards of trading system that introduces new disciplines to deal with emerging systems. there's a real stark choice out there. and we made that choice. the choice is are we going to go for a race to the top where we're trying to raise standards in our tpp partners have bought into that or are we going to get dragged into a race to the bottom. that's what other trading nations might have us do. and our goal is to reach these agreements on high standards so it can level the playing field so our workers here in the u.s. have a chance to compete because they are the most productive workers in the world, but we need that level playing field if we're going to succeed. >> it's an unrelated issue, but do the tensions over spying and
nsa stuff, is that damaging to agreement in the not too distant future? >> it's obviously a serious issue that's out there. our view that these issues ought to be kept on separate tracks and in the right lanes of dialogue between appropriate officials on both sides. i think you have heard from a number of european officials that they see the logic of moving ahead with ttip. it's important to their growth strategy and their strategy to try to maintain competitiveness in the global economy. so we're hopeful we're going to continue to make progress on that. we have teams in brussels as we speak. there are negotiations that had to be cancelled during the shutdown of the government but are now back on track. we expect to continue those discussions in the coming weeks. >> a number of people, includesing yourself, have mentioned rel toir regulatory alignment. can you give us more detail of what that means? what are the challenges of having regulatory regimes and
what kind of savings would you be looking at if those were to be aligned better? >> one is obviously crash testing. so cars have to be crash tested in a different way in europe than they do in the u.s. mexico has the european crash testing. so over the border, there must be different living because there's different crash tests. i have to say if we only can agree that we accept mutually the requirements of the standards of crash testing that would be great success. we can have either the european and crash test by europe and u.s. the same that would be great. but it does add considerable amount of research and development, i.e. cost, to every car we produce we lose competitiveness. the same holds true, by the way,
for emission standards where u.s. is more focused on mileage where europe is more focuses on emissio emissions. but that's the same thing, just the other side of the the coin. it it doesn't change because we just measure different things, but the outcome is the same. so why? the. >> so the cost savings would be in research and design. i assume there's some efficiencies that come about? >> yeah. >> we have seen kind of a preposterous situation over the years in a number of countries. this is going back a bit, but the different regulations for a backup alarm on machinery. the decibel level, the sound, the frequency. impossible things to deal with, but it it adds cost every month. taillights in lighting on machines vary from country to country. >> so you have to make the same construction with slightly different beeping sounds. >> there's a manufacturing change. it adds cost and drives the cost up.
that's something we need to drive out. just that alone will help us all. >> what do you see as the advantages of these issues? >> again, i think the comment about this not being a static world and our competitors are getting better, and they have agreements we don't have. senator kerry was talking about the excellence in u.s. higher education, how that's helped us and we have trained better engineers. those days are ending. so our natural design advantages are going to be harder to come by going forward. we need that so we're not starting with a cost disadvantage. >> what would it mean? >> we have a huge business in asia and growing that's probably the single lrgeest opportunity over the next decade or so. we have to be there. we intend to lead that market
like we do in so many others. i come back to the point that it's likely that a the lot of those countries, a number of those will do agreements with or without us if we don't get tpp done and we will be looking into a market that we ought to be competing with. i'll move it to africa because i'm passionate about this. we watched the chinese really take over africa. they come in with their own financing, their own engineering, sometimes their own workers to take over minerals, extraction, oil and gas, hydroelectric power. i think we can do better in this country. i know that's on your agenda, but i'm so pleased to hear that the crossover between commerce and state because that's what we really need. that's what china and others do so well when they look at a market. they combine all their assets, all of their possibilities to go over business and try to win customers over. i think we can do that. i admire and think the
commerce/state combination can be fruitful. we'd like to help with that as well. it's a great opportunity. >> ambassador, so the promotion authority is a big issue. what do you see as the prospects in congress for you and them to get fast track? what would it mean if you don't? >> well, the president has made clear he would like to get authority that it's a critical tool for moving these agreements real and implement them. just this week, there was a hearing in the senate finance committee on ttip actually where chairman baucus and senator hatch talked about the importance of moving forward on trade promotion authority. we are working with the finance committee and the ways and means committee both democrats and republicans to try to move this forward as quickly as we can
with this broad support as we can possibly have. we think it's a critical tool ultimately to getting agreements through congress and to be implement implemented. that's why we want to try to get it it done. >> i assume if you're rooting for some of these deals, you'd like to see u.s. government have a strong negotiating position? >> right. at the end of the day, one of things we understand in tennessee is governments don't create jobs. we do set the conditions for that to happen. we have worked really hard in tennessee. we have the lowest debt per capita. we have the total tax rates. we have great infrastructure. we have done all the things that we think we can do to help this be a great productive work environment. there are certain things out of our control that dramatically impact jobs this tennessee. when i hear auto manufacturers tell us we love the work environment. if we had had this agreement in
place, we could -- it's out of my control, but it's critical for me to get involved to lend that voice whether it's in washington or anywhere else i can to raise it. like i said, we have worked hard to set up a great working environment in tennessee and we think we have it. there are certain things beyond our control at this point. >> i understand everyone on this panel is an enthusiast, but we do want to be clear about some of the competitive costs. in the construction and mining business, what you see is the competitiveness from others who could be less expensive. what are the competitive challenges you'll face if some of these come to be and that they can fight them off. >> that's a great question. and one we're battling on many other fronts. it comes back to the competitiveness of the united states. you get into things like the education system, our taxing
system and all the things that make u.s. companies competitive vis-a-vis our competitors around the world. that's another broad subject we could probably spend days on as well. the ability to penetrate markets that are open is kind of the foundation of all of this. i think past that, it's up to u.s. companies to be as competitive as we can and up to the american government to help us all be as competitive as we can to create job growth. i look at it in that three steps of foundational work. but the opening of markets is fundamental to starting the process. we can be competitive. we export an awful lot from the united states. we work hard every day on internal labor agreements and we have spent a lot of time on our education system. if we don't have those markets to start with, the rest of this
is benign. >> in the auto business, what do you see is the competitive threats? >> we love free trade and we love competition. that made us strong over last 50 years from a humble company with 4,000 employees in the early 60s to way north of 100,000 today. we are the most successful manufacturer in the world meaning that in europe, there is free trade. we love to take our competition on and see who is the best. so if we're not afraid of anything, then it's competition. >> so your workers can -- >> not scoot by protectionism, that would be what we're looking for unilateral free trade that would certainly grow our business. >> what are the advantages that workers and manufacturers in
tennessee have that make you confident that in a more level playing field they will prevail? >> a couple things. at the end of the day, it's going to be about having the right trained workforce. we're doing everything we can to make certain we have enough engineers and enough welders, i.t. professionals to provide that product. we realize there is a downside. part of your question is there a downside to these agreements. we not only make cars and medical equipment, we also grow a lot of tomatoes. they would tell you since nafta, their tomato sales are down. in the long-term, we're going to win. so we realize you are opening up our markets to that process, but we kind of believe in competition. and we'll take our chances in that world. our job is to set the right structure, make sure we have the right environment for business to grow so they know what they are dealing with and make sure we're training the right
workers. >> do you see any ways that some of the losers in these trade deals, some of the industries that face more competition, is there a way to ease some of that difficulty? >> absolutely. and 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 we would be recognized that we need to take care of anybody who was displaced. that's why we have insisted the trade adjustment assistance be part of the package. the trade adjustment assistance which is a program that helps workers, expires in two months. it's been linked to trade promotion authority. our hope is that as congress takes up trade promotion authority that they will marry it with trade adjustment assistance so we can move this forward. let me just say one more word about that. the trade promotion authority, it's the mechanism by which congress gives us our marching
orders. they tell us what to negotiate, how to work with them during the negotiations and what the conditions will be under which they consider an agreement to approve it or disapprove it. and we work extremely close with congress hand in glove at every step. the trade promotion authority is the way that gets structured. last thing i would say, and this has been part of our trade agenda, it's not enough to negotiate these agreements. we have to make sure we monitor them and enforce them. we have dramatically increased our efforts throughout this administration by bringing more cases were necessary, using our trade laws, bringing in the whole government approach to our enforcement efforts through the trade enforcement center and i think that has helped convey to people that we want to make sure this works for american workers, farmers and ranchers across the board. >> so you have a unique opportunity here. you're here on a panel with the
man who is negotiating these big agreements. there's tradeoffs in these negotiations. what does the u.s. push hardest for? what are you willing to concede on to get a deal done? from the perspective of tennessee or caterpillar, what would you urge the u.s. government to focus on and as they make these tradeoffs between service industries and autos and farmers and all the different interests involved in these negotiations? >> i'll start. i think 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 in the world in my opinion at this with a tremendous background. i have great trust in hyim on this. you whack those off and in the end you make the compromises in the places you have to compromise. you have to be as broad as you can across as many industries as possible to get it done.
that's how michael does it. it's hard to say because unless you're in the room negotiating a deal, to me, it's a broad answer. as much as we can get broadly in these agreements, the better off we're going to be. i'm not going to stand because i have a long list of things i'd like to have done, but i'm not going to do that to the ambassador. he knows what it is. >> i don't know that i have a lot to add to that. in any negotiation you start with, how much is at stake? there's a lot at stake here. my encouragement would be don't let the 10% of those things that are most difficult but still are only 10% of the things stop it it from happening. >> i couldn't agree more. we should not strive for the best of all agreements. we should settle for a good agreement. . and that good agreement would include that we can do away with different standards that we would accept the standards that we have in the u.s. and europe
and like wise. so we just make things easier for us. >> it's important for us to remember that there's a lot of change that has to come to the u.s. in a lot of these deals. i would go to agriculture as one that has frankly been a stumbling block for many years to get some of these done. as a result, that has to be managed as well. it's a very difficult set of circumstances when you're going after the backbone of what's made our country what it is. >> tell us the pathway from here. what is the next time look look as you and your staff try and come to a deal? >> as this discussion demonstrates, the challenge before us is that even within the u.s., we often times have stake holders with opposed
interests. and our job is to figure out what the best approach is that's going to support the greatest number of jobs, the most growth, the most benefit for u.s. economy. it requires a balancing even among domestic interests and to go to 11 other trading parters and figure out a landing zone where it's a win-win for everybody. nobody gets 100% of what they want and 100% of chapters, but we have to be able at the end of the day look at the package as a whole and we try to take a comprehensive approach, look at the package as a whole and make sure it's serving our interests and our values and it's supporting what we need to support in terms of job creation, growth and strengthening the middle class. those are our watch words. everything we do is tied back to the three objectives. we will be working on tpp and as ttip gets up and running into those areas to try to achieve
that objective. >> and hope there are no more government shutdowns. >> yes, indeed. >> a couple of you mentioned agriculture, which is not really recommended up here today. governor, you have the tomato industry. i will use you. what do you say 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 don't know the number, but i have seen somewhere the number of tennessee's produced now versus prenafta and there has been a hit. a couple things. number one, at the end of the day, i think food today is more and more about quality. number two it's about access to markets and the whole farm to table deal has become huge. lest keep concentrating on the markets that you know you can do well on with quality.
i'm pretty confident your tomatoes can be better than those brought in. let's sell that. >> nafta has been mentioned a couple times in the contest of autos. you can export to mexico quite easily brazil. there's 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? >> obviously, nafta i would call it's a model case how we should move on. i would also like to just to stay in the american context just see how it works with north korea. we have a free trade as well. we have done great. even though they have a strong auto motive industry themselves. i think it really is about embracing free trade to work on it.
>> any lessons from caterpillar? >> i think virtually all the empirical data and evidence will show nafta has been a tremendous winner for all three countries, and especially this one. for our company it's been huge. we have been able to take advantage of a tremendous oil and gas business in canada. a lot of development in mexico. and a tremendous benefit to the u.s. so without nafta, i don't know where we would be, frankly, without our trade partners to canada. i think the mexicans and canadians would tell you the same thing. >> again, go back to specifically our exports to mexico were up eight times. and so are there winners and losers in the process, yes, but the state is way ahead. >> let me just add one metric
here. that's basically only true because free trade agreements that we have around the globe in last 20 years. it really shows how free trade fosters growth. >> just to close up, i would ask each of you to think through and give a couple comments on what you expect the world trade to look like in next year or two and what you would hope to see. what are the great opportunities, the great risks and the most likely outcomes. the things that you would expect to see out of the european and pacific agreements. >> we have high hopes to see the deal on
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