Window on Washington: The Future of Trade

Speakers:
Edward Alden

Bernard L. Schwartz Senior Fellow, Council on Foreign Relations

Myron A. Brilliant

Executive Vice President and Head of International, U.S. Chamber of Commerce

Presider:
Robert McMahon

Managing Editor, CFR Editorial, Council on Foreign Relations

Bobby Yip/Reuters
Bobby Yip/Reuters
Description

Experts discuss the future of U.S. trade policy in light of the recent election of Donald Trump to the U.S. presidency.

Audio
Transcript

MCMAHON: Thank you, Operator. And hello, everyone, and thank you for joining this Council on Foreign Relations media call looking at the future of U.S. trade policy. I’m Robert McMahon, managing editor of CFR.org, and I’m going to be talking about the follow-on to the presidential elections, in which President-elect Donald Trump targeted U.S. trade policy as a top area of reform. His plan for the first one hundred days in office listed withdrawing from the Trans-Pacific Partnership agreement, renegotiating NAFTA, and labeling China a currency manipulator as his top three priorities. So with us to help understand trade policy and what could be developing next, we are fortunate to have Edward Alden, CFR senior fellow, and author of the indispensable new book Failure to Adjust: How Americans Got Left Behind in the Global Economy, and Myron Brilliant, who is executive vice president and head of international affairs for the U.S. Chamber of Commerce. The three of us will be talking for about twenty minutes or so, and then opening up the call to you all. And this is a reminder: this call is on the record.

So, Ted, I wanted to start off with you, with the question on what happens next. If these campaign signals are real—and they certainly seem to be; President-elect Trump has been tweeting about trade among other issues since Election Day—what can you tell us about what we should be looking for next on the trade front?

ALDEN: Great. Thanks very much, Bob. And it’s good to be here with you, Myron.

I would say there are things we know with some confidence, and things we don’t know. I mean, I think one of the things we know with a high degree of confidence on the Trump trade policy is that there is going to be a very different ideological approach to trade than we’ve seen in a long time. Really, for the past seventy-five years or so, American presidents have believed that trade and trade negotiations were a positive sum exercise, that liberalizing trade was good for American companies, it was good for American workers and consumers, and it was good for the rest of the world. The Trump administration will have a very different view. He clearly sees trade much more in zero-sum terms, that we win or we lose, and we’ve got to negotiate tough arrangements so that we don’t end up on the losing side. So I just think at the—at the level of approach, this is very different from anything we’ve seen in the United States for many, many years.

Second thing I’ll be looking for—and we really don’t know the answer yet—is exactly what is he going to ask for. He’s said—he’s talked about renegotiating NAFTA, he’s talked about driving a harder bargain with China and perhaps in part by labeling them a currency manipulator, but we don’t really know yet what tangible changes he’s going to seek and what aspects of NAFTA, for example, does he wish to renegotiate. There was a leaked transition document that CNN got their hands on that had an underwhelming list with things like country of origin labeling and a longstanding lumber dispute with Canada. I think in order to meet the expectations of some of the people who put him in office, he’s going to have to have a bigger ask than that. He’s going to have to demand some changes that he hopes will bring more investments back to the United States. So—but we really don’t know yet what sorts of changes he’s going to seek.

And then the third thing I’m going to be watching closely is the extent to which his administration tries to stay within the rules of the system as written under the WTO and NAFTA and other trade agreements. I mean, if he—if he goes after China by launching a series of WTO cases, by using U.S. trade laws, antidumping and countervailing duty laws more aggressively, perhaps by launching a safeguard action under WTO rules the way the Bush administration did for steel—if all of those things are done within the framework of the rules, then I think the changes will be less dramatic. But if he goes to the extent that he suggested in his campaign of unilaterally slapping tariffs on Mexican imports or Chinese imports, regardless of WTO rules, then I think we’re in a very different world. So I would be watching closely for that as well.

MCMAHON: Thanks, Ted.

Myron, turning to you and especially your constituents in the Chamber of Commerce, how are they regarding the results in terms of the election results. in terms of the campaign that President-elect Trump ran on trade? And is there a certain amount of anticipation now? Was this a kind of a wakeup call for business in some ways?

BRILLIANT: Well, first of all, Bob, thank you. And, Ted, I’m looking forward to reading your book, so I just want to plug that for you because it’s a thoughtful book and from all accounts a very important contribution to the debate.

Let me—let me just say a couple of things. I’m hopeful we’re not having a Ray Bradbury “Fahrenheit 541” moment, meaning I’m hopeful that we’re not going to burn all the books about trade and globalization. But it is a wakeup call—and not just for the business community. It’s a wakeup call for governments and institutions that believe in furthering and strengthening our overall economic engagement with the rest of the world.

And by the way, we’ve had plenty of signals before the election that this was a deep and deepening crisis of anxiety in our country, because after all, this is not the first time there’s been serious debate about trade, and it’s—Trump is not the first person who has said things during a campaign season and had to then become the president and have to address it in a different light in control of government as opposed to being a candidate. We had that after all with President-elect Clinton, who during his ’91 season was very much attacking NAFTA and China, and of course we know what happened when he became president after it was passed. And of course, China ultimately became a member of the World Trade Organization. We saw that again with President-elect or candidate Obama, who attacked the free trade agreements that President Bush initiated with Colombia and Panama and South Korea. And of course, we know that two and a half years after he became president, he supported and advocated for their passage through the U.S. Congress.

But I don’t want to suggest that this isn’t a serious issue, because it is. And the wakeup call for the business community is that we’ve got to do a better job selling the importance of trade to American jobs, and recognizing that there are always winners in trade arrangements. And I would tell you, it doesn’t always mean citing big macro numbers like there are 41 million Americans who depend on trade, but it does mean doing a better job of explaining why these trade agreements are important to our economy and how they spur not just jobs but good-paying jobs. And we have—we have a challenge ahead of ourselves, and it’s not just because we have a president-elect who ran on an anti-trade agenda, but because economic populism is on the rise. And while I don’t think you can turn the clock back on globalization or even on trade, we do have an economy or we have an issue here with anxiety about jobs and education and about skills. And it’s not just tied to trade. It’s also tied to technology and productivity and automation, which is a huge issue.

So what I would say is, first, we undermine America’s leadership when we don’t lead from the front. And when we are not driving openings around the world through trade negotiations, then we’re creating a vacuum for American leadership. And so if the United States is not going to put forward the TPP, then those countries who are part of those negotiations are going to continue talking to China about RCEP. And that regional architecture is not nearly the same, but it is—it is important to understand that the United States is not part of that architecture. So it’s about understanding who’s going to set the rules and standards for the twenty-first century. It’s about our values and promoting American values through trade agreements and other kinds of vehicles. And so we have a great deal of concern about the potential direction of a Trump administration. But as Ted said, we don’t know yet who’s going to be in positions of authority. We don’t know yet to what extent the Trump administration will carry forward with his contract with the American voter. I will point out that of the seven elements under his plan to protect American workers, element one, two, and three are problematic. One is the withdrawal of—you know, from NAFTA, which is a process we could talk about on this phone call; two is—of course is withdrawal from the Trans-Pacific Partnership, a step we would urge him not to take at this stage; and three is of course what Ted referenced, which is the secretary of treasury labeling China a currency manipulator.

So we—we’re focused on addressing, one, the attacks that could be made on NAFTA, and trying to help this administration in transition understand areas where they can get some wins without compromising a trade agreement or without compromising the prospect of getting TPP done. NAFTA—or—was completed in 1994. In our view, there are ways to upgrade NAFTA. But renegotiation for us is not the way to go. And in a sense, TPP is really NAFTA 2.0 because it incorporates Mexico and the United States. And what it does is also incorporate not just reductions of tariffs but also addresses the rules and standards and increasing a protection for intellectual property rights and other areas like cracking down on SOEs and issues like that that do matter to the incoming administration. So we’ve got to get clarity on where the president-elect wants to go with his talk on NAFTA, his talk on China. We want to hold our powder dry in terms of TPP. We know it’s not going to be something accomplished in a short order, but we’re not prepared to say it’s dead.

And there are other outstanding trade negotiations where we don’t have clarity. For example, the ongoing negotiations with Europe, called T-TIP, or the regional—or the multilateral negotiations on trade and service agreement, as well as others where we still don’t yet know what this administration might do. So we do have some worrying signs. We’re prepared to have an open mind working with the new administration, we want to see what personnel decisions are made, and we’ll engage as appropriate.

MCMAHON: Thanks, Myron. You covered a lot of ground there, and I want to follow up on a few areas. I want to start, though, with one of the points you made and directed to Ted for a second, which is essentially mentioning that it’s like we didn’t—the United States has not done enough for trade losers as we should have done. There are losers and winners, obviously, and this—sort of the trade adjustment aspect has—it seems to have been neglected. Ted had mentioned in his book that these problems that were identified almost forty years ago in the Nixon administration that are now coming home to roost.

Ted, can you talk a little bit about what hasn’t been done that sort of got the country to this point, where trade has become the boogeyman?

ALDEN: Yeah, and I mean, I think you can see it in the election outcome, the fact that—you know, that it was the Rust Belt states—Pennsylvania, Ohio, Michigan, and I would throw North Carolina into that in terms of manufacturing—these were states that were very exposed to import competition. And I agree with Myron: This is not all an import competition story. It’s a technology/productivity story. There have been lots of reasons for the decline in the number of manufacturing jobs. But it had a big impact in those states.

None of this should have been a surprise. I mean, it goes back before the Nixon administration. In fact, the Trade Adjustment Assistance Program was set up by John F. Kennedy in 1962. But the program has always been inadequate. It’s never covered more than a fraction of the American workforce. In fact, in the first six years after the program was launched by Kennedy, there were twenty-five petitions to the government. Not a single one was accepted by the government because the criteria were so narrow. And, you know, TA has ebbed and flowed in terms of its size, but there has just never been a serious commitment by the government to helping American workers adapt to import competition and to help retrain and find them new places if they end up losing their jobs to imports.

I mean, just a factoid on this. If you look at the thirty-four countries in the OECD, the United States spends less on retraining and other what they call active labor market programs as a percentage of its economy than any other OECD countries except for Chile and Mexico. We spend about .1 percent of GDP. In Denmark, it’s almost 2 percent. The average across Europe is about seven times as much as in the United States. So this has just never been seen as an important role for government in the United States. And the result is, you have—and, you know, I believe there are many more winners than losers from trade, and trade has benefited Americans broadly—but there are pockets of people whose lives were really affected badly by trade competition. The work of the economists David Autor and Gordon Hanson and David Dorn looking at the impact of Chinese import competition in the 2000s was really important here, and I think we just made a mistake as a country by not paying more attention to that problem, which is one that economists have understood for a long time. This all fits perfectly within conventional economic theory, that, you know, broad gains but some real concentrated costs.

BRILLIANT: So let me pick up one three points that were referenced by Ted. I agree with his assessment of TAA. That’s always been the price for getting trade agreements done through Congress, but frankly, it’s an inadequate response to the needs of the people in this country who feel dislocated. The criteria are inappropriate, and we need to be looking more broadly about job counseling, job assistance, job relocation support. Those are areas where the business community’s prepared to work with labor in trying to improve the safety net for workers in our country who feel that they’re falling behind. And we should be doing that not on the basis of trade agreements, but because it’s in our interest to have a competitive workforce in this country. That’s point one.

The number two point I’d make is, from the business community’s standpoint, I was the co-chair of the effort in the 1990s to see China ultimately get permanent normal trade relations. We started to do with something called most favored nation status, which the two of you know. Of course, we argued that that was a bad term because most people thought we were giving the Chinese something more than normal trade relations that we give everyone us around the world except for six rogue countries. So we were successful in renaming it, which was important in terms of convincing Americans that we were just trying to get China to join the World Trade Organization so that their market would be more open to American products and services, and that has happened. We have problems with China, but that has certainly been a relationship that has been, I think, important for both the United States, China, and the world.

I would say that what we can learn from that experience in the 1990s is we used to have broad-based coalitions, whether it was for NAFTA or for China’s succession to the WTO—broad-based meaning companies did a very good job of educating their workforce about the importance of these endeavors. Today companies generally focus on their industry-specific issues, and we’ve seen that perhaps be a sign of some challenge and disconnect with the workforce in our country.

MCMAHON: Can you cite two examples of that, just kind of significant ones?

BRILLIANT: Well, I just feel like, you know, it—not to pick on ourselves too much, but in the context of TPP, maybe the coalition eventually wasn’t as broad and deep and we weren’t doing as good of job of educating our workforce as we need to. And I think this election, and the debate during the election, where you have the two major candidates running for president running on anti-trade platforms, demonstrates we’ve got to go back to work. We’ve got to go back to work educating the workforce that so many American jobs are dependent on trade and that export supports about half of all U.S. merchandise jobs in this country, that one of three acres of American farms is planted for export. We have to do a better job of working with our workforce and better understanding the role that trade plays in our economy. And after all, we represent 5 percent of the world population, so we can’t just sell to ourselves. We’ve got to sell around the world. So I think we’ve got some work.

And the third point I would make is simply that I don’t think most Americans realize that the overwhelming—we have a surplus not only with our twenty trade agreement partners in manufactured goods, but we also sell to them thirteen times more U.S. exports per capita than we do other countries. In other words, trade agreements have generally been in our favor because our market is open and we’re dealing with countries often that don’t have open markets, whether it’s in ag or whether it’s in manufacturing or whether it’s in services. And so we do well when we negotiate trade agreements, and so that’s something that is lost, I think, on the general public, and we have to go back to work hard at explaining those benefits.

MCMAHON: You mentioned earlier, Myron, the importance of U.S. in an economic leadership role, and it’s also important to a lot of other countries as well, actually. And I’m certain—I’m pretty sure a number of countries in the TPP were looking forward to having the U.S., you know, playing—being a heavy player in the region. Now we have this summit that’s taking place the next couple of days in Peru, the APEC Summit. A lot of TPP states are represented there at the leadership level. President Obama will be there in a lame duck capacity. Is it important perhaps for that meeting to send some sort of a signal about a trade—about a commitment to free trade as a way of maybe sort of countering the funk that’s in the air?

BRILLIANT: Well, I’ve been to about—I’ve been to 12 APEC meetings, and there’s a common theme at all these APEC meetings, which is that the United States is an essential component to any global strategy on open markets. And so when the United States is leading from the front, the APEC economies welcome that. And so no question that President Barack Obama will go down to APEC and find his peers, the heads of state of these other economies, questioning where the U.S. policy will go.

But as you stated and Ted’s stated, there’s a lot of uncertainty, and we do not know in fact what campaign promises that President-elect Trump made will in fact be carried forward. And I don’t think we’re going to have the answers any time soon, nor do I think President Barack Obama is going to be able to alieve the concerns of those countries in the Asia-Pacific region.

Now, what I would say is there could be good out of all of it, right? The fact that there’s uncertainty about the direction that Trump will take means that China—and you’ve already seen this signal from Xi Jinping, or from the Mexicans, from President Peña Nieto, that maybe that—that maybe there’s a time to say, you know what, we’re not doing what we need to open up our market, and perhaps we need to listen to what’s happening in the United States and hear Trump out and find ways to improve our environment, because I can certainly tell you a lot of companies are concerned about the direction China’s taken on the regulatory side and in other areas, like intellectual property rights. And so we may find that this tougher message encourages China to come to the table in areas that it has been resisting the last few years, and we might find others as well. We’ll see. And if that is the case, there may be an opening. And as—I don’t want to speak for the president-elect, but I will say that he’s said that he’s open to trade deals. He just says that he wants stronger and better deals. We’ll take him at his word. We’re prepared to work with him to get stronger and better deals, but we don’t want to backslide on the arrangement that exist and we don’t want to backslide in advancing America’s leadership around the world.

MCMAHON: Thank you, Myron.

Ted, real quick follow-up. Anything that you think the APEC meeting can or should do that could send any sort of signals to boost the trade discussion?

ALDEN: Well, I mean, I think President Obama will obviously try to reassure the other TPP countries that this is not the end of the story in terms of U.S. engagement. There are certainly possibilities. There are Republicans up on the Hill. Kevin Brady, Ways and Means, has urged Trump to take another look at TPP. Orrin Hatch in Senate Finance has talked about a Plan B of maybe negotiating a bilateral deal with Japan as a way of sort of keeping the initiative live. I think all these things are going to be very difficult.

I actually just wanted to pick up on one point that Myron made, and I was actually delighted to hear him say this: The business community is prepared to work with labor on trying to think about some of these retraining safety net issues. I think this is going to be a real wakeup call for business. You see, you know, Apple floating the idea that it’s going to move some assembly job—that Foxconn’s going to move some assembly jobs to the United States. You’re going to see more things like that. Jeff Immelt of GE was here at the Council a month or so ago talking about his localization strategy. I think business has got to find a new way to show that its activities are in the interests of American workers as well as American consumers. I mean, we’ve heard for a long time, really going back to the 1970s, that, you know, when American companies invest overseas, that’s great for American workers because they’re expanding. There’s a lot of truth to that, but I also think there’s a side of it that companies need to demonstrate their commitment to the United States. Harvard Business School, Michael Porter has talked about the business commons in the U.S., whether that’s investing in apprenticeships or using local suppliers wherever possible—things to try to strengthen the attractiveness of the United States as a business location. So I think those are things that are going to have to be on the agenda going forward, particularly if, as Myron said, that the companies want the U.S. government to have their back in dealing for instance with regulatory difficulties in China or other investment issues in China. So I potentially can see some positive things coming out of this. I’m scared that we are going to see actions out of this administration that do a lot of damage to the trading system, but I also think there are—there are points where we can be optimistic.

BRILLIANT: Ted, I agree with you that business has seen a wakeup call, but I also don’t think corporate targeting is a good way to bring business to the table. So what we want to really do is encourage the labor community to also engage, because I know from my own experience in being involved in trade negotiations for twenty-eight years now that it’s not always been easy to have labor sit down and talk about these issues in a constructive fashion. So we need to encourage it to be a two-way street. But I think there are opportunities, and I think that the—we should try to maximize those opportunities, not just because we want to move trade agreements, but because it would be good for the competitiveness of our country. And we want to encourage investment in our country, whether it’s in infrastructure or in other areas, and we want to be open to conversations both with the incoming administration and with other stakeholders in how best to do that. And that can be done, as you know, through dealing with regulatory challenges, dealing with tax issues. But we want trade to be a component of that, because we don’t see a way to grow our economy to 3.5, 4 percent without having trade to be a central piece of that. But we also know that people making $29 ten years ago don’t want to make $10 now, and so we have to recognize that there are now Americans who are working in jobs with college degrees that don’t require college degrees: 51 percent of Americans are in that boat. We also know that there is a backlash on American business, but we have to promote why business is a force for good. I don’t know if you know this, but, Bob, 80 percent of college graduates don’t want to work for a big company. I think that figure would have been quite different twenty-five years ago. So we’ve got some work cut out for us, but I think we see the possibilities of advancing an agenda that is going to be good for our economy, good for our workers and good for business.

MCMAHON: All right. Well, I think we’re now ready to open the call for questions from those of you on the line. I want to remind all participants that the call is on the record. And, Operator, could you let us know if there’s any questions, please?

OPERATOR: Yes, sir.

(Gives queuing instructions.)

And our first question will come from Ellen Ferguson with CQ Roll Call.

Q: Thank you very much for having the call. I wanted to go back to job retraining, trade adjustment assistance. A lot of Republicans, when they had to vote on it last year, held their noses in voting for trade assistance. Chairman Hatch, I think, actually voted against it. He has a great disdain for it. How do you overcome that? And is that disdain merited? Is there some overall reform that needs to be done on the—on job training and trade adjustment assistance?

MCMAHON: Ted, you want to start with that?

ALDEN: Yeah, if I could—if I could take a—I mean, I do think there are reforms that are necessary, particularly to strengthen the relationship between federal programs and the business community—you know, companies that are actually creating jobs and have specific needs. A lot of the best stuff is happening at the state level. So I do think there are reforms that are needed to the programs.

But more broadly, I think, you know, Trump brings a different element to the Republican Party. I mean, the standard approach of the Republicans in Congress for years has been that government programs are simply wasteful and we want to cut them back wherever possible. This goes back to Ronald Reagan, who tried to ax the TAA program in the early 1980s. Trump seems to have a different view. He’s in favor of a big infrastructure program. He seems more friendly to notions of government spending than Republicans have traditionally been. And given that he was elected with a lot of support from working-class voters, programs that are aimed at helping those individuals—and TAA’s not the only one; you could look at things like wage insurance, which is a program that’s really been underdeveloped, that helps particularly older workers—I think it’s quite possible you could see more support for that in the Republican Party than you have seen in the past because of President Trump. Whether it’ll be enough or not, I don’t have a crystal ball that tells me that. But I think you could see some shifting there.

MCMAHON: Myron, would you like to add anything on TAA?

BRILLIANT: Just briefly, I think that Ted hit the highlights, which is TAA doesn’t work. We all know that. Labor knows that. The business community knows that. The Congress knows that. So we need to—we need to look at something that’s not tied to job loss, because the criteria is just too rigid and it just hasn’t proved to be an effective program for American workers. So we’ve got to look, as Ted suggested, at wage insurance, job counseling, job relocation support. There are lots of things that we can look at. And we’ve got to package it not just because we’re trying to promote trade agreements, but again, because we’re trying to help American workers’ needs in a highly competitive global economy. And so we need to look at that series of programs. And I think there are—certainly an open mind in this area. I think there’s an opportunity to make a difference.

MCMAHON: Thanks for that question. Operator, do we have another question on the line, please?

OPERATOR: Yes, sir. Our next question will come from Lisa Lee with Reuters.

Q: In my prior iteration I was a Senate aide for Senator Moynihan in international trade, the Finance Committee, and he was the biggest proponent for TAA. Who are the champions now for Trade Adjustment Assistance, whether in this iteration or in some other ways that you are thinking of changing it and strengthening it?

ALDEN: I mean, just briefly—I mean, Myron may have more insight than I do. I don’t see any real champions out there now. I mean, in the—on the TPA vote, the Democrats were even willing to vote against it in an effort to prevent President Obama from having the authority to conclude the Trans-Pacific Partnership. I mean, that vote got undone, and the in-trade promotion authority went through. But I don’t think there’s a great deal of enthusiasm for the program on either side of the aisle. I’m with Myron on this, that we really need a much broader rethinking of how we do labor market assistance. TAA is too narrow. We need a program that’s not just tied to job loss associated with trade. I mean, a lot of the coming labor market disruptions are going to be technology. We’ve got 3.5 million truck drivers out there, and driverless technology is coming onstream very, very fast. So we’re going to have a lot of other displaced workers in the future. We’ve got to figure out ways to help those people make the adjustments. So there really needs to be a broader thinking. The Obama administration had some good proposals in its budgets, but those never got off the ground. But I think we need a broader approach.

BRILLIANT: Yeah, I think it—rehashing who’s been a proponent of it in years past I think doesn’t make a lot of sense. I think we have to go forward with something different, and I think everyone would agree with that. And I also would say automation, as Ted is referencing, is coming so quickly, and we don’t have government policies prepared for that, nor do we have a workforce prepared for that. You mentioned—Ted mentioned the fact that we may have driverless cars. I’ll tell you. Retail experience is going to be different ten, fifteen years out. So we’ve got to—we’ve got to think about the industries today that are going to be impacted in five, ten years and start getting out in front of this issue. So, you know, I don’t want to dismiss TAA. It still exists. But we need something very different in terms of an approach to help the American workforce. It’s something we are very committed to because we understand that having an educated workforce is in the interest of the business community as we build out new products and new services and look to innovate around the world.

MCMAHON: So this leads me to a question about sort of the executive branch role in in-trade policy. And some of this is exactly what you were just bringing up as well, which is not only conducting trade but also generating policies that are looking around the curve towards, you know, ways the U.S. needs to be innovative. But maybe, Ted, first, could you talk to a little bit about what are the sort of the scope and limitations of presidential authority in trade policy?

ALDEN: Well, I mean, that’s a big question. So I mean, there are a lot of things that presidents can do on their own, particularly on the enforcement side. And we’ll see the extent to which President Trump wants to exercise those powers. I mean, sort of in light of the conversation we’ve been having here, I do think one of the problems with the way the United States has done trade policy is its very siloed. You know, the U.S. Trade Representative’s Office is essentially responsible for negotiating trade agreements. That’s what it’s done for years and years, does it very well. It’s been the center of U.S. trade policies. But I certainly argue in my book that we need to think of trade as one part of a broader competitiveness strategy that includes trade policy, includes investment policy. It includes trying to have a currency that’s actually at a competitive level, so it makes sense to invest in the United States. And then all these other elements: education, apprenticeships, retraining. The government has never been organized well to do that. I doubt the Trump administration will embark on a government reorganization. That may not be the way to go. But I don’t think we’ve ever as a country thought about trade policy as a strategic tool to enhance our competitiveness as well as we should be doing.

BRILLIANT: So that—very specifically, the administration does have a lot of authority here, but it also has limitations. And Ted was referencing some of the authority it has. It can pursue anti-dumping countervailing duty cases. It can pursue 337 IP actions. It could take the step of withdrawing from NAFTA by invoking a provision that allows them to a have a six-month review. There are lots of things that President-elect Trump can do when he gets in office as president of the United States and the administration.

There are also limitations. While USTR is the frontline in negotiating trade agreements, hopefully, Ted, you would agree that it does want to confer with Commerce and—which has more staff, and with Treasury on the financial service side. But it does have the authority to negotiate trade agreements. It cannot do that without consultations with the Congress, and ultimately with the U.S. Congress supporting those trade negotiations. That’s also true for tax treaties, and that’s another area where I think it’s important for the next administration to look at. So when it comes to tax or trade or FTAs, free trade agreements, or bilateral investment treaties, the administration has the authority to negotiate, but it is with consultation with the Congress, ultimately with the approval of at least one, if not both branches of government.

MCMAHON: And I think just to follow on something both of you have referenced, but Ted most recently, there’s also this aspect of how to best respond to technology—to changes in technology. Ted mentioned the driverless vehicles, especially as it pertains to truck drivers. The Obama administration has been starting to issue some guidelines for driverless technology in the last couple of months, but we can imagine this thing sort of getting away from the government if they don’t continue—if they don’t sort of set in place some sort of structure for this to happen. So is this an example where there should be more sort of sync-up among government agencies on setting a policy for technological change that’s coming that is going to affect a lot of jobs? Either one of you.

ALDEN: I don’t know. That one’s a little outside my wheelhouse. I haven’t paid enough attention to some of the regulatory structures.

BRILLIANT: I think the answer—I think the answer is yes, but the question is how. And I don’t think there’s a question that the U.S. government should play a role, but it should not be intrusive on innovation. It needs to be supportive. The fact is that there are a lot of plants in this country that are—have moved to robotic technologies. It’s not just the future of driverless cars or trucks. It’s also the fact that we’re increasingly moving to robotic efforts in plants all over this country, and so where you might have had fifty employees, you might need only twenty-five, and maybe they’re engineers. So we are changing our workforce in this country, and we have to prepare our workforce for those changes.

MCMAHON: Well, I think that is an appropriate note for us to end on now. This is—this has been a Council on Foreign Relations media call on the record, and I’d like to thank CFR Senior Fellow Ted Alden and Myron Brilliant of the U.S. Chamber of Commerce for guiding us through what we should be anticipating as the Trump administration prepares to put together its trade policy.

Thanks, Operator. And this concludes this CFR on-the-record media call.

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