The View on Trade: From Federal to State Levels

Tuesday, January 30, 2018
Mike Blake/Reuters
Scott Peters

U.S. Representative from California (D); Member, House Committee on Energy and Commerce and House Committee on Veterans Affairs

Greg Ip

Chief Economics Commentator, Wall Street Journal

Representative Scott Peters (D-CA) discusses the future of international trade policy, the next steps he would like to pursue for the state of California, and his perspective on the role of states in promoting U.S. trade.

IP: Guess we’ll get started now. Is this on? OK. Thank you very much, everybody, for coming out this morning.

So I just got back from Davos, where I would describe the mood as euphoria about where things are with anxiety about where things are going. You know, as you know, Davos is kind of the watering hole for the global elites. And Donald Trump, the nationalist flag-bearer, sort of like arrived in the den of the globalists. And people were wondering which Donald Trump will show up, the, you know, conciliatory Donald Trump or the confrontational Donald Trump. And he gave a very conciliatory message, talked about reforming the international trade system, talked about shared prosperity. It was a speech that Barack Obama could have given.

But I think beneath the surface there’s a lot of anxiety about what is actually going on with renegotiation of NAFTA still ongoing in Montreal, the new tariffs on solar panels and washing machines, new rhetoric about taking on the European Union. And I think for everybody, and for members of Congress who have a view about where they want the world economy to go, it’s a very anxiety-ridden time.

So I’m very pleased that you’re out—you’ve come out this morning for a conversation with Representative Scott Peters from—Democratic congressman representing San Diego County. Congressman Peters, you’ve been very much sort of a force for moving forward towards integration, a fan of fixing NAFTA not leaving NAFTA. So let me start with a few questions for you on—specifically on NAFTA.

You’ve been following the news out of Montreal, I suppose. How important is NAFTA to California? And what happens if negotiations fall apart in the agreement and the president withdraws?

PETERS: Well, first of all, thanks for having me. I’m looking forward to a good conversation.

And this topic is very important to—is this on? Can you hear me?



The topic is really vital to California. I saw the statistics. Something like the day after we pull out of NAFTA, California loses over 200,000 jobs. Mexico is our largest trading partner. Canada is second. Asian countries come behind that. So it’s really critical to California. It’s particularly critical to those of us on and near the border, where I was—I was telling Greg that in my county, when I asked the Chamber of Commerce after I was elected what’s the most important investment I could bring to you from the federal government for business in San Diego, they said fix the border crossing. San Ysidro Port is the largest land border crossing in the world, and delays were up to an average of two hours, which was costing us billions of dollars of economic impact and tens of thousands of jobs. We worked really hard to get that project moving, and hope to have it completed by 2019. But the U.S.-Mexico relationship is a priority for California, and particularly for those of us in Southern California, in L.A., and San Diego.

IP: What are the specific provisions of NAFTA which have become important to the California business community? And which would hurt most if they were to go away?

PETERS: Well, just the ability to trade—I think the facilitation of open trade is important to us. And then, obviously, I think we’ve not contemplated what tariffs might be imposed if we didn’t have NAFTA, like the idea of taxing the trade deficit away—(chuckles)—was kind of a policy that Mr. Trump throws around. You know, it’s what’s not there, I think, that’s been so critical to us.

And, you know, we have a number of manufacturers and fabricators on the Mexican side, combined with offices and executives on the American side in medical device and in manufacturing. It’s a real symbiotic relationship, and we really consider it one region. So NAFTA’s facilitated that growth over the last 20, 25 years. And, you know, it could—I think reversing it could be really devastating for us.

IP: Could NAFTA be improved? What kind of changes would you like to see to make it better?

PETERS: Well, the cruel irony is that we’re seeking the changes that were negotiated as part of TPP for Mexico. And I’ll tell you, I was a Democrat who was a big booster of that trade agreement. I thought there are any number of reasons to do it, but sort of the three areas in which it made big improvements were protection of intellectual property, the agreement that all of us should abide by basic environmental standards and treaties, but the thing you talk about most among Democrats is what you do for Mexican workers. And TPP had authorized real organizing; had authorized contracts be negotiated by workers, not by the company before the union was formed; and authorized real remedies for violations of workplace standards and, you know, really provided Mexican workers with the kinds of things that Democrats talked about as important. And here we are trying to get the same things that TPP did for Mexico without the leverage of having 11 other markets to offer. So I think that’s exactly what we’re after, and I think unfortunately we missed a—we missed a real opportunity to achieve that with the trade agreement that President Obama had negotiated.

IP: One of the major sticking points in both NAFTA and it was a sticking point in the Trans-Pacific Partnership negotiations is investor-state dispute resolution. In fact, you get it from both sides, you know, people on the left who say this is a gift to corporations and people on the right who say this is an infringement on sovereignty. What’s your view on how important it is to have that in NAFTA and how important it was to TPP?

PETERS: It might not be so important if you’re just dealing with Canada or a state where the courts and the rule of law is fairly well-developed. You know, and I’m just, parenthetically, worried about our own situation today. (Laughs.) But, you know, for these developing countries, I think it’s been important for investors to know that they could get a remedy even though, you know, they’re investing in a country that doesn’t have those developed institutions.

We are—we are—the concept in American business of arbitration is very common. That’s what it is. I think I got a call from Senator Warren herself leading up to the TPA vote trying to convince me that this was a bad idea. But I think it’s a very important part of it to give investors that confidence.

I think it’s notable that in the United States, you know, investors have been bypassing it to go to Article III courts because the remedies are so much better in federal courts.

IP: I’m sorry, what are Article III courts?

PETERS: Federal courts, so Article III of the Constitution.

IP: OK. Sure.

PETERS: So I think it’s—I think there’s nothing magic about it. I think it was a convenient whipping boy for politics. But it makes a lot of sense to me.

IP: What can you as a congressman or what can Congress do if the president moves to leave NAFTA, or KORUS, or any of these treaties that you personally support?

PETERS: Well, it’s unclear. You know, we hear—the administration is out there making very, very difficult proposals like, you know, five-year expiration that would never work. He’s got the ability to withdraw, with some notice. There’s a question about whether tariff schedules can be amended without congressional action. But I don’t think we’ve ever been—we’ve ever seen this kind of situation.

If there were—I’m concerned right now, as someone—I would describe myself as a moderate Democrat. I mean, I’m a civil rights Democrat, but I think that business solutions have to be bipartisan. I’m a pro-trade Democrat. But I’m concerned that—and I’m willing to vote against the rest of my party. On the Republican side, we haven’t seen a willingness to buck party leadership, and there’s no sense of institutional independence and integrity that we’re getting from the Republicans. So I don’t know what would happen even among professed Republican pro-trade people if we had the chance to vote against President Trump. I haven’t seen that happen yet in any context.

So I don’t know. A, I don’t know exactly what the legal landscape is. But I’m also concerned about the political probability of Republicans standing up to the president on anything.

IP: What would you as a congressman attempt to do? I mean, notwithstanding that you can’t decide what the Republican response would be, but what would you like to see Congress do? And what would you personally put yourself—you know, apply yourself to achieving?

PETERS: Well, I mean, to me, I think that the—you know, I’d like to see us work the problem. So, I mean, you know, I would go back to, ideally, I think that the TPP approach was great. If it was up to me, we’d join that. We would get working on Europe, put ourselves back to where we were in 2016. I would think that for—to expand the universe of pro-trade Democrats, we should couple that strategy with a recognition that the effects of trade in America are different for every community, and that you have to provide some sort of help for those communities that are displaced or dislocated, whether it’s training or other support.

I think a lot of Democrats were frustrated that that conversation didn’t really happen to the extent that it might have. And I think if it did in a serious way that that would expand the universe of pro-trade Democrats, who now, after the TPP politics have settled down, are hearing from a lot of constituents—and I hear this from a lot of people who voted no on TPA—how important trade agreements are to them and how important not having tariffs are. And particularly among Democrats in farm states, they’re really hearing it loud and clear. So I think there’s an opportunity to work it. But we have to get back to working around issues and not being so partisan. I’m not sure that I see that in the next few months.

IP: Well, speak to the dynamics of the California delegation. I believe it’s 39 Democrats, 14 Republicans. A lot of those Republicans are moderates. Most of them are pro-free trade. Is there the potential there to, you know, reach across the aisle within the California delegation to pursue common interests for California on trade matters?

PETERS: I don’t know. I mean, I would say that one of the dynamics is that we have both Mrs. Pelosi and Mr. McCarthy in our delegation, and they’re not like best friends. (Laughter.) So we are—I am personally trying to set up a briefing by the Chamber and by the manufacturers for the California delegation on the ramifications of changes to NAFTA and potentially pulling out of NAFTA, and we’ll see if the—if the delegations are willing to sit together, believe it or not. But anyway, I think that should happen.

I think that—you know, I’m very frustrated with Republican moderates. I will just tell you, if you will allow me a two-minute vent. I get on the plane every week to come solve these problems. I am willing to vote. I am the fourth-most independent Democrat, they say. I’m willing to vote against my—I vote pretty much for civil rights, but I’m willing to vote against my party on these economic totems because I think that we have to think more broadly about where we are in the world and that, you know, our economy is not the 1970s in Detroit. And what I find is that I meet people who, on the Republican side, are willing to have that same discussion, but they will not buck their leadership.

So we have an—we have an agreement on stabilizing the insurance markets in health care that we did at the Problem Solvers Caucus, but no one will try to—no one will commit to any action forcing to get that to the floor. We have agreements on immigration. None of my colleagues and friends will say, you know, I’ll—I’m going to support these action-forcing mechanisms over the objection of my leadership. So it’s great to have moderates who are Republican, but if they’re not—and this might be the same thing on NAFTA. We might face the same thing. It’s great to have a philosophical agreement, but if you’re not willing to take action it’s not worth a lot. And then everybody—if everybody votes like Mark Meadows, everybody’s Mark Meadows. Stop complaining about Mark Meadows. And that’s kind of the frustration I’m seeing right now.

So I think this is a very interesting week with this memo being released. I think every one of you should be concerned about the national security implications. But for your perspective, what does this do to further divide us in Congress? And to the extent you want anything done through a functional Congress, this is a very, very bad development. And I’d like to see my Republican moderate friends really ask themselves why they’re here on these policy issues, and we need—we need them to step up. And they’re just not so far.

IP: So let’s talk a bit about the Democratic Party’s own politics on trade. In Davos, on one panel I attended Wilbur Ross pointed out that the opposition to TPP was bipartisan. Hillary Clinton was against it. You know, if you look at a couple of your potential nominees for 2020 like Bernie Sanders, perhaps, or Elizabeth Warren, they’re against it as well. So in what sense has the—isn’t it the case that the Democratic Party itself has drifted left on trade, and that even if you had a Democratic Congress and a Democratic president a lot of these trade agreements would go away and we would be moving in a more protectionist direction?

PETERS: First, I’m so disappointed in Hillary Clinton moving away from this agreement that she negotiated and called the best agreement—you know, best trade agreement we’ve ever had. I mean, I thought that for a person who already had issues about her trustworthiness and her reliability, that that was a terrible political move, and she could have hung in there and fought for it.

I think the press around the agreement was also hyperpolitical and didn’t have a lot to do with what the issues were, and I hope that maybe they’ve learned a lesson from that. We could have better coverage of what this really was.

In the Democratic Party, there was a lot of pressure from the labor community that this was a very bad thing. And it was certainly a big battle for me and others like me to take that on. Parenthetically, and I could explain it, I think it turned out to be one of the best political moves I ever made, and I think there was a great reward in doing the right thing—and mending the relationships with labor to the extent that I could, but certainly locally. And I think, as an example, that we set an example for other people and showed them that we could do it.

As the politics have died down, my colleagues have been hearing, as I said, from people in the business community about how important these agreements are to job creation, about how we need to make competition fairer for our workers in many of the ways that the TPP did. And I think that they’re open to it. I just think that you have to couple it with some sort of support for workers who are displaced by trade. And, you know, I think there’s a—there’s also a begrudging recognition that it wasn’t all trade that’s affected people, but really the nature of work, with technology and with globalization that’s been a big effect. I think Democrats are interested in having that conversation, and I think that the universe of pro-trade Democrats will be bigger.

Frankly, you know, anything that Trump likes—or hates, a lot of them start to like. So the fact that Trump was so vociferous against TPP and says that NAFTA is even worse has really opened up the eyes of a lot of Democrats to the possibility, you know, hey, maybe I do like that if he hates it so much. (Laughter.)

IP: You’re part of a bipartisan group called the Problem Solvers Caucus. Have you discussed what you—what that group of moderates can accomplish on trade and what legislation you might try and push forward to overcome some of these divisions?

PETERS: No, it’s a good question. I think, to be honest, we’ve been dealing with health care, and now immigration has taken up that time. But it would be a—it would be a good conversation to have.

IP: What impact, if any, will trade have on midterm politics, especially in California? I mean, California is a state that I—perhaps you can inform me, but is it a state where trade matters a lot? And in which direction? And how do you see it playing out in the midterms?

PETERS: I think any business would tell you that trade is really important. I’m not sure that it’s politically prominent. I do—when I had—I just got to tell you that in general people are fired up. And you’ve heard this. You saw this in Virginia. I have never seen anything like this. I was in local politics. I practiced, law, then I was in local politics for a long time, and I had the hardest time explaining that my job was important here. Like, you know, what do you do, and is that Sacramento, you know? And after Trump got elected, it went nuts. And so I think that the Trump thing is what’s really going to drive people more than an issue.

And if I could just tell you one story. When I first got elected in 2013, I told my political people—I said, we have to schedule a town hall because that’s what people want. I want to be out in the community. I want to do a town hall, right? So I sent out a notice to everybody in this community called Scripps Ranch. It’s, like, pinkish-red. It’s pretty—you know, pretty moderate. And I said I’ll be on the—I’ll be there, and let everybody know. And we had six staff members, two cops, and four members of the community—and they all wanted to know about Obama’s birth certificate. (Laughter.) So we stopped doing that format. We did “Congress in your company.” We visited employers, and I visited over 300 employers. That’s a great format.

But after Trump got elected, she called me up, MaryAnne, who does my politics. She says, you know, I think there might be a town hall. And I said, are you kidding? What a waste of time. She says, no, no, I think that people might come. So we scheduled a room for 350 people at a mosque, which we just got for space but I didn’t mind the symbolism. And I said, well, how’s it going, two days later. She says, oh, it filled up in two days. We had 350 people. We had 900 people at the next one, 650, 500, 550 people.

The concern about Trump is visceral, and it’s going to drive people to the polls. It’s going to drive Democrats to the polls more than any issue. And I’m a little concerned about what the lesson learned from that might be in terms of issues, you know, whether it’s telecommunications and net neutrality, or trade, or—you know, I think—I think the message should be go make it work. But I—you know, I think it might be—imply free college and stuff like that, so. But I don’t—I don’t think—I think in terms of affecting the polls, I think the Trump election, Russia, health care, those are the things that are going to drive people.

IP: So there are important geographical differences in this country about how people perceive whether they’ve been winners or losers from trade. And I think California, home to so many successful high-tech, you know, high intellectual property type companies—Qualcomm and others are based on San Diego, for example—they see themselves as unambiguously winners from free trade. But Trump, in some sense, was elected by the people who see themselves as the losers of free trade and globalization writ large, and he has delivered on a few things. You know, there have been quite a few announcements by companies transferring production from Mexico to the United States, a lot of that production going into the states that were the backbone of Trump’s victory, whether it’s Wisconsin or Michigan. I think you were telling me that Toyota is moving production from California to one of the other Southern states. So perhaps the pro-trade messages resonates among your constituents and businesses, but what do you say to all those constituents and businesses in these other so-called left behind states who really like what they’re hearing from Trump and believe that they are going to come out winners from this more adversarial approach with our trading partners?

PETERS: Well, I mean, you know, all I got is evidence and, you know, what the business community says. And, you know, I just don’t think the world’s getting any smaller. I mean, we are—I mean, we are not able—we are not able to draw a line around our country when, you know, most of the world’s consumers and most of the world’s growth is outside the borders. So I think you have to tell them that.

I think the thing is that, to be honest with people, is to say we want to provide you and your kids the tools to compete in this economy. People don’t want to be victims. They don’t see themselves as victims. They want—they want the chance to compete. I believe that. And, you know, I think that’s what—that’s what we should be offering.

To the extent that the Republican Party—the Trump Republican Party becomes a party of negativity and fear—fear about the future—I just think that we have to be honest with people that, you know, that’s just not going to get you where you need to be, and we have to have a better answer. You know, I think we got our own problems on the Democratic side, but I certainly think there’s an opening there to have an honest conversation with Detroit and Cleveland and St. Louis about, you know, where this country needs to go.

IP: So, obviously, something like a trade treaty is a federal responsibility. But are there things that the state of California can do to ameliorate its position if the overall direction of federal trade policy is going in a direction it’s not happy with?

PETERS: So we can’t do anything about tariffs, obviously. But the federal—I mean, the state government and the localities in California, including San Diego, have been very aggressive about taking advantage of NAFTA and doing what you would do in business, building relationships and trying to make deals. So that will continue.

Jerry Brown has been in Mexico a lot. Gavin Newsom has. I think Gavin is probably the leader and the—sort of the favorite to win the governor’s race, but everyone appreciates the importance of a direct relationship with Mexico. So that will continue.

San Diego Chamber of Commerce makes annual trips down to Mexico City and often is in Tijuana, and that will continue.

Clearly, there are some things that are beyond our control, like the loss of the state and local tax deduction. I think that’s going to have some effects on California versus the rest of the country. But certainly if tariffs are imposed on trade with Mexico, I mean, we’ll be certainly negatively affected by that. And if we withdraw from NAFTA, as I said, that will be a huge job killer for California.

IP: Some U.S. trading partners—Canada comes to mind—have tried to circumvent the administration by reaching out directly to governors, mayors, individual congressmen, and businesses in an effort to try and maintain a relationship there. Is that a useful exercise, in your view, or is it mostly cosmetic?

PETERS: You know, I think it’s pretty useful. I mean, they—I can’t do a deal with Canada, but they visited my office and they told me that San Diego County is—exports $250 million a year to Canada. I didn’t know that, so that’s pretty helpful. And, you know, we do a pretty good job of trying to maintain that relationship locally. So, to the extent it’s helpful, I can talk about that in raising the consciousness in San Diego.

IP: What role does the business community have here? In the last year or two we’ve seen—in the last—during the Trump administration we’ve seen the business community often drawn against its will into some of the most contentious debates in this country, whether it’s on gay and transgender rights or the response to the Charlottesville demonstrations. On trade, can business play a higher-profile role than it has in the past? And what should that role be?

PETERS: I think the business community is very important. And I’ll just tell you, I don’t want to be mean to the Chamber of Commerce because I’m one of the Democrats that they endorsed, so—and I know this is all on the record—but all these business groups have to get away from parties and be more issue-focused.

So, you know, what I think the problem is, say, with the Chamber—I think they’re doing a better job, but if the perception is that they only support Republicans than Democrats don’t try. They figure there’s no—there’s no chance for me to get this. And the Republicans take you for granted, so they can take really bad votes. They can vote against—you know, there’s one of my Republican colleagues who has a huge manufacturing plant in his city; he voted against TPA.

IP: Which congressman is that?

PETERS: I’ll probably not say his name, but it’s not uncommon. And he was—you know, it didn’t affect his standing with the Chamber. They grumbled about it, but they didn’t do anything about it.

So the business community’s got to actually think about, like, who’s really better for business in this Congress, apart from their party affiliation. And that would give rise to Republicans and Democrats who would be useful, I think.

So I think that—and also counter the fear that a lot of Republicans, frankly, have of the Trump voters. You know, when Eric Cantor got defeated, I think that’s one of the toughest things that happened to Congress because that scared the dickens out of everybody. (Chuckles.) I can’t take a moderate position on immigration—which was then, by the way, the Chamber’s number-one issue. Look what happened to Eric Cantor.

So the business community plays a really important role in informing Congress members locally about what’s important to them, what is—does affect job creation, and then telling the public, you know, this guy matches the agenda of your guy’s not matching the agenda. You should talk to him. And I think you’re uniquely situated for that.

IP: I think we’ll move to some questions now. And put your card up, I guess, is what we do here. And I’ll call on you. So, yes, and state your name and affiliation.

Q: Good morning. I’m Michael Andrews. I’m with King & Spalding. I served in the Congress and represented a district in Houston, Port of Houston, during the first—during the passage of NAFTA.

PETERS: Hey, I’m glad here’s a future, by the way. (Laughter.)

Q: It was interesting because the labor unions were fierce opponents of NAFTA. Even the seafarers’ unions that had much to gain from the Port of Houston having NAFTA passed. I’m curious, in this round, where are these big organization like—traditional Democratic groups like labor unions? And where’s the Democratic leadership in the House? Have they taken a position? Are they opposed to it or do they agree with the president? Where are they?

PETERS: So I’ll tell you, labor’s interesting. It’s pretty consistently in—the Washington, D.C. labor people won’t talk to us if you voted for TPA. There’s 28 of us, and they said we don’t want to have anything to do with you. But we’ve all mended fences with our locals because there’s things we can help them with. So, you know, where the voters are, it hasn’t—you know, you have to spend some time. Now, you shouldn’t have surprised them. You know, you were in this business. You let them know ahead of time. You give—have them give input, you don’t surprise them. And, you know, they know where you are, that helps you. But the internationals are pretty punitive. And I think the sad thing is that they’re in such a position to be part of the discussion about retraining that they should be in the game. But that’s just where they are. And I can’t tell them what to do.

Party leadership, I—you know, I just don’t think has been—I think Democratic Party leadership right now is probably not a well-constructed phrase. I think there’s a lot of—you know, frankly, we’ve got—we really got hammered in 2016 elections. We won six seats and people were patting themselves on the back. There’s a—I was actually in The New York Times Magazine because I said, you know, this—we should not consider this a victory. And that was supposedly some sort of radical statement. (Laughs.) And I think we’ve got a lot of work to do to talk about, you know, what we offer to the American people beyond being against Trump. We have some months to do that. We haven’t done that yet. On trade, and on some other issues too.

IP: Just to follow up on that, does the Democratic Caucus have a unified position on what to do if the president withdraws from NAFTA?

PETERS: I don’t think we discussed that yet. Actually, that’s one of the things I hope that comes out of this briefing. If we can get the California Democrats to agree on this, that’ll have a big effect on the rest of the—of the—you know, the entire caucus.

IP: Interesting. Jake.

Q: Thank you for that. Jake Schlesinger with The Wall Street Journal.

I just actually wanted to follow up on Congressman Andrews’ question. And I know you’ve touched on this in a lot of what you’ve said, but just to hit more straight on, which is whether it’s possible that we’re seeing a transition or a turning point in the politics of trade that—you know, to summarize it briefly, I guess I’d say that since NAFTA The opponents of trade have been the most vocal and the most persuasive, at least a political level, even if not intellectually so. But the supporters of trade have been largely silent and haven’t really made their case, except to the decisionmakers. Whether you think that President Trump’s aggressive stance on trade, NAFTA and others, may be somehow flipping that equation. And if so, you know, what do you see as a winning pro-trade message going forward?

PETERS: Well, first of all, I think that our arguments have been, you know, academic, and we haven’t really explained to people on the ground how this affects you—I mean, in terms of people who are pro-trade. So I just think, you know, having people understand, you know, the thing you’re making is going to be exported to these other countries, and your job depends on that. And some companies have done a better job of that than others. And then, you know, having a real discussion about how we need to raise the conditions for other workers around the world, so that our people are competing more fairly. And then acknowledging that, you know, even though we get a huge benefit from trade, that benefit is not distributed evenly, and that we have to make sure that everyone and their kids has a chance to compete in the economy. And I think if we had an integrated message like that—and I think that last part is significant for Democrats—that that’s the way to win.

IP: But just to follow up, do you think that Trump’s opposition to trade has actually had a powerful effect in terms of flipping a lot of people into the pro-trade camp, and that that will be an electoral factor?

PETERS: Again, I don’t think that’s going to drive people to the polls. I think—but I do think that now that Trump has been so vociferously against TPP and NAFTA that, you know, Democrats are really saying—and, you know, it’s also part of—it’s part a larger withdrawal from American leadership. So if you look at the Paris Agreement, you look at what he said about NATO, it’s part of a larger disengagement from American leadership that the world has depended on too. And that concerns a lot of people. And I always talk about it in that context too. I said, you know, we’ve withdrawn from Paris. We’re not leading the world in trade. And we’ve put our security—you know, reliability about security in jeopardy by, you know, doing what we’ve done around North Korea and around NATO. And so if you put it as part of that, I think people see, you know, maybe we should be leading the world in trade again.

IP: Just to consider the administration’s point of view, like in Davos last week they had a fairly firmly consistent message that, in fact, America first is not America alone. They are not withdrawing from U.S. leadership. They want free trade, as long as it’s a certain reciprocal. You saw the president say that. You saw Wilbur Ross, the commerce secretary, say that. You’ve seen them say we’re still—they’re still interested in pursuing TTIP with Europe. You even heard the president open the door to reentering TPP under certain conditions. So I’m just wondering, perhaps the administration’s point of view has been unfairly caricatured as being anti-trade. And perhaps there is a compromise position that will resonate.

PETERS: The air at Davos must have been great. (Laughter.) I just don’t, like—I mean, I just think—I just think there’s no reason to suspect that he is other than who he is. And, you know, he’s shown time and time again that he is about, you know, fulfilling his campaign promises. There’s that phrase, you know, govern in—or, campaign in poetry and govern in prose. You know, he’s never got off his ugly poetry. And I just think, you know, he’ll give a speech—he’ll give a speech tonight, and he gave a speech last year. But, you know, I just think he ends up—he ends up being Trump. So, you know, I think I’m skeptical.

IP: John.

Q: John Dabbar, ConocoPhillips.

You mentioned the Problem Solver’s Caucus. Could you tell us a little bit more about that caucus, or how an issue like trade, or specific issues in trade, might get to the—on the radar screen for the caucus? Thanks.

PETERS: Thanks. So there’s a group—it’s some form that has existed since I’ve been in Congress in 2013—of Republicans and Democrats who get together. We—it was sort of spawned by the no labels movement, which you might have heard. Now we have an actual caucus in Congress. It’s equal Democrats and Republicans. So we have a Noah’s Arc rule. You got to bring someone from the other party to get in. And it’s a pretty good—I mean, if nothing else, it’s a forum for us to discuss what’s happening, you know, in Congress. We did a pretty good job of coming up with the Alexander-Murray health care fix before they came up with it in the Senate. And the idea was, we’re going to vote together. So if you get a vote on a proposal, which we did in health care, we just did in immigration, 75 percent of the total number. Also, 51—50 percent, plus one, of each of Democrats and Republicans. Then you’re supposed to be committed to that policy and vote as a bloc.

And so it’s—we’ve had some success coming up with good ideas. I think, John, the thing that I’m concerned about is that we need to get the Republicans to be willing to take some action-forcing moves. That has not come yet. And so the idea is how would we get a vote on this great health care plan that we came up if they’re not willing to sign a discharge petition or not willing to vote against the rule that prevents amendments? And we haven’t gotten that yet. So I think that’s a real test for the viability of the group as a policymaking thing. But I do think it’s constructive, if nothing else, to have a forum where you talk about this stuff with each other. And, you know, it’s—it is—there’s so many ways with the disintegration of the news media that people are hearing different things and have different realities. So having that forum is, I think really good.

IP: And just to—you may have answered this already—but are you going to try and get that group to move towards a position on some of these trade questions?

PETERS: I think probably we would. I would suspect just about everybody in that group is inclined to support trade. So I’m going to—I think I’ll raise it with them. The frenzy has been around immigration, to be honest with you. It’s taken up a lot of the oxygen. And I think—you know, I hope that in the next month we get past that. Then we have a little time to deal with NAFTA.

IP: And what might—I realize it’s early days—but what might that action take? Would it be creating model legislation, for example, that might replace whatever action the president takes on NAFTA?

PETERS: I think first we want to take the temperature of everybody. You know, do you support trade? How do you feel about that politically? Are you willing to take in on? If we can come up with some sort of agreement on where we want to go, then we figure out how to implement it. And it might be legislation. Again, there’s some—I was talking to Nelson about this a few months ago—there’s some confusion about exactly what power Congress does have, because I don’t think we’ve come across this very often. And, you know, we might want to clarify that as a group.

IP: Nelson.

Q: Thank you, Congressman. Thanks for coming this morning and helping to educate us on some of the politics around these issues.

Ted Alden of the Council and I, under the auspices of the Council, have been going around and meeting with members of Congress who met with you, and others, who recently met with the Ways and Means—we’ll meet with the Ways and Means staff. We met with Senate Finance and Senate Foreign Relations and others. And one of the points that we have been making, I think ties to one of the questions Greg asked you about how does one appeal—what will the new politics of trade look like? And one of the points we’ve made—Ted Alden has been helping to publicize some findings by Bruce Stokes of Pew which are very instructive on how individual voters view trade.

And interestingly enough, you know, older, white men—who are instinctively Republican—who might be instinctively Republican—are also becoming increasingly anti-trade, led by President Trump. Younger, urban, of color Millennials, who tend to be Democratic, also tend, individually, to be pro-globalization, pro-trade. They own Kias. They own iPhones. They studied abroad. And he—Bruce Stokes has shown a really fascinating divergence in the actual voters—forget the elites. Business community and the unions are still sort of locked into their positions and their political affiliations on trade. But individual voters are moving significantly. Trump has led Republicans to a much more anti-trade position.

I wonder if there isn’t an avenue for you, if you and your caucus members focus on younger, urban voters, who are with you naturally on a lot of the issues, and educate them on trade and the benefits of trade and the downsides of turning your back on the world. That might be an interesting wedge to the broader Democratic community. I just wondered what you think about that.

PETERS: Yeah. I think, again, withdrawing from the world and seeing ourselves as insular is something that is a theme that this supports and does move those people. And they’re coming to us in way that, you know, I think that hasn’t happened before. So, you know, you saw—you saw—and I would also say, just to add on something I said before, this is not necessarily going to be a top-down movement. So, you know, I said that Democrats in Washington are confused about what to say or, you know, what the policy should be. It may not matter as much because if you look at what happened in Virginia, it’s really—these are things that are happening district by district.

So if Trump—if Trump gives a label to the party of the Republicans of being anti-trade, anti-international, you know, kind of anti-future, is the way I would characterize it in a political sense, I think that that provides an opening for Democratic candidates around the country to run into that space and win elections. And I think that’s what you saw in Virginia. They didn’t win because they were transgender. They won because they cared about the road. And I think that’s—you know, I think the burden of this Trump theology is going to be difficult for a lot of Republicans, particularly in the suburbs, like where I am.

IP: Just to pick up on what Nelson was saying, though, isn’t in some sense what he’s saying that—or, what Bruce Stokes is finding—is that trade is becoming a bit like abortion of climate change. It’s part of your tribal identification as opposed to an issue that you arrived at through some consideration of the merits of the question?

PETERS: I’d have said that in the Bush administration, but now, you know, who’s for what? You know, I think it’s—I got to tell you that you got Republicans criticizing the FBI and the CIA. I don’t know where the tribe went. You know, I just—I don’t—I really don’t understand that. And so, I mean, Trump has had such a powerful pull on the principles of the Republican Party. I’m from—you know, I went to Lutheran church in the suburbs in the Midwest. And we had—you know, we had Democrats who cared about the poor. We had Republicans who, you know, cared about the poor, but they were just a little bit cheaper in terms of government than we were. Everyone was sort of on the same field between the 30-year lines. I don’t know where your tribe went, you know, if you’re a Republican. Like, you’re not for the FBI? You know, I’m just—I don’t know what that those labels mean as much.

I think on trade, it’s not—it’s not like choice right now. It’s not that unambiguous. It’s still forming. But, you know, that whole notion that we know what the Republican label is, I don’t think so. I want to see what happens in 2018 and 2020. I think it’s up for grabs.

IP: Yes, Katherine, is that? OK.

Q: Hi. Kate Fernandez from the Cohen Group.

Could you speak a little bit about the ongoing discussion and debate on fuel emission standards, particularly what that means for California and for businesses?

PETERS: The car standards?

Q: Mmm hmm.

PETERS: You know, its—so I came to work on climate and energy, try to be constructive. And it’s difficult, because, you know, it has seemed like we had reached a point of agreement that would—in a way that’s happened before in the government help our car companies compete with the rest of the world. And we’re pulling back from that. I haven’t heard a decision, but I guess I know where it’s going. They’re going to pull back from the action of last year. I spoke against it. We don’t have a lot of juice. You know, I think Mr. Pruitt through his—you know, he’s one of the smarter ones in the administration. And he’s—you know, I think there’s a real divide between where he’s going and where I think we need to be. And if I were an energy company, by the way—the problem with all these things that are so partisan is that they don’t stick.

And this is what happened with this tax bill. You think—that tax bill’s a target now. If they had done it in a bipartisan way, it would have staying power. Now it’s going to be like Obamacare was for the Republicans. And the same thing with all this stuff in energy. I mean, we ought to be able to figure out how to take advantage of natural gas in a way that’s environmentally responsible. We’re not having that conversation. We’re going to have another fight. And the problem with him taking this approach of, you know, being so outspokenly kind of anti-climate change is that, you know, nothing’s going to stick, and it’s going to be more turmoil which is, in itself, tough on business. But, you know, it doesn’t settle anything down. I think it’s tough on Congress too.

IP: Patricia.

Q: Thank you. Patricia Wu, C&M International.

My question is about China. I think very much—everything you said on trade very much resonates with me personally. But I’m curious, do you feel that China presents a unique set of challenges? Your messages on trade, do you change them when China enters into the discussion? You know, I think there has been some sense of resonance with what this administration’s doing with China. It’s obviously still taking shape. But I’m curious, you know, how do you—and also other members, both on the Democrat side and the Republican side—how are they viewing this administration’s emerging position on trade vis-à-vis China?

PETERS: China comes up in two ways prominently in Congress. One is on trade. I mean, the notion that we—so now, you know, Australia’s doing deals with China. We were in the position, may still be in the position, to set the rules on trade. And we’re going to let China do it. And to me, that’s just breathtakingly irresponsible. But that’s how—that’s often how we discuss the importance of the TPP approach. The other is in defense, where they’re closing the gap, I guess pretty significantly. There’s a concern that, you know, they’re catching up in terms of our technology. And, you know, they’re pretty smart and long term about bettering their position in a way that, you know, we haven’t been able to be consistent about.

I guess the other thing is they’re investing around the world in everything. So they’re establishing trade relationships in places like Africa, that we’re not really thinking about in a constructive way. So, yeah, it’s different. It’s different because they got a commitment to technology and they’ve just got such mass that I think they’re—you know, I think we’re not paying sufficient attention to them as a competitor.

IP: Yes.

Q: Damon Porter with Global Automakers.

The conversation today regarding NAFTA seems to assume one of two things, that either the president will withdraw from the NAFTA agreement or that Congress will be presented with some new negotiated package in the near future. The expectation was that NAFTA would—the NAFTA negotiations would have been concluded in December. Then there was an expectation that it would be concluded before the Mexican presidential election. With the presidential election in Mexico coming up, and midterm elections, it could very well be that we have an unresolved NAFTA stalemate sometime in 2019. How does that change either the negotiating dynamics or the political dynamics, should the Democrats take control of the House and the Republicans keep their majority or increase their majority in the Senate. Does this make it more problematic that a deal gets done and if the deal is negotiated that Congress can actually approve something?

PETERS: Well, given the alternatives I think stalemate might be good. We’re also affecting the Mexican election in way that’s not constructive too. We had 25 years of great relationships with Mexico. And, you know, we have a candidate out there who’s, you know, a good reaction to Trump, pretty anti-America. So I don’t know what that would do to the—

IP: But he claims he’s for NAFTA.

PETERS: Good. That’s good. So, again, I—you know, like, I—you hear them say they want to improve NAFTA. And then you hear them negotiate in a way that seems very, you know, designed to undercut it. So I think—I think a stalemate’s pretty likely, unless he pulls the plug.

And then what will Congress do? I don’t know what Congress is going to look like 2019. I really don’t. I’m both optimistic and wary. But I do think that Republicans now have a chance to create a little distance from Trump. And if I’m just seeing what I’m seeing in the suburbs, I would start to take those actions and try to create a little space. Maybe be more constructive on trade.

IP: Katheryn.

Q: I can’t get the mic on.

PETERS: I can hear you.

Q: Katheryn Harris, the Joint Staff. Very much appreciate your comments on China and their military advantage. I completely agree.

My question is a little bit different, on technology. You had mentioned the role of technology and automation displacing U.S. workers. And, you know, there’s a broad conversation going on about artificial intelligence and autonomy and robotics taking over the world, which hints at larger issues like stem education and the knowledge-based economy. What role do you think those policies have, and how they could improve our position on trade?

PETERS: Which polices? What do you mean?

Q: Tech policy, STEM education, and knowledge-based economy—you know, some of these other broader dynamics—and what’s their relationship to trade, and how can they improve our position?

PETERS: So I just—apart from trade—we—I think we should be laser-focused on the United States being the location for talent in the world. And there are two parts to that. One is educating our young people to be engineers and technicians and robotists. Is that the noun? I don’t know. And clearly, you know, it’s kind of difficult when something like the common core creates such an uproar. It seems to me that we should be encouraging computer science to be—coding to be something that every kid is familiar with. I dissected a frog in 10th grade. It was an interesting day, but haven’t used it a lot since. But if you could make sure every kid who dissects a frog also learns how to code, that would be great. And that should be part of our approach. So educating our own kids is really important. And there’s all sorts of, you know, levels, and community college and affordability. Those are all discussion we should be having.

The other is immigration. You know, we educate people at some of the best universities in the world here. One of them is UCSD in my own district. And then we tell them we don’t have a permission slip for them to stay. So we send them away to start their company or cure their disease in some other country. And that is insane. And, you know, the Chamber of Commerce recognized that and supported the 2013 immigration bill that would have—you know, would have taken care of a lot of the things that we’re dealing with today on the tech side down to the farmers. Sixty-nine votes, or 68 votes on the Senate. We couldn’t get a vote on the House floor.

One of the things I think we’ll be discussing, by the way, are whether we can have some rule changes in the House so that a smaller group of members can force things to the floor. I think if you saw Derek Kilmer’s article in Newsweek, he’s previewing some of the things we’ll be talking about in terms of how to force action. But, you know, we have to have stuff to export. And that’s going to depend on us competing. And I think part of that’s education. Part of it’s immigration. We should—we should be focused on having as much of the talent in the world on our shores as we can.

IP: We have time for one more. Pamela.

Q: Pamela Bates—sorry—from Securitas Global Risk Solutions.

My question was about what role trade data is playing in the debate on the Hill, and the quality of the data that you’re seeing, particularly in relation to more complex transactions, maybe supply chain management or trade in services where the data may be a little more difficult to analyze or come by.

PETERS: I love that question, because I didn’t even think about—I would ever even think about data playing a role in congressional decision making. (Laughter.) But I think that one of the big challenges for trade is making sure that every member of Congress understands how important trade is in his or her district. So it doesn’t take a lot of data to—I mean, I think you’re overestimating the quality of the analytics that has to be present to make that case. We should just concentrate on making sure people—you understand, Joe, that this means 10,000 jobs. You know, that’s—I think that’s the kind of message. You know, Beto O’Rourke has been really trying to do that throughout the whole Congress in a way that explains to people not just in Texas and California how important it is, but around the country. And that’s a really important role for you all too. And I don’t think it’s as complicated as your question implies. But I’d love to have a longer conversation about it as an academic matter.

IP: Thanks very much, Congressman. I’m going to finish off, take the prerogative of the moderator, and ask you a few quick yes-or-no, lightning round, questions to finish this off. Ten years—I want your prediction here. Ten years from now, will the United States be in TPP? Will it be in NAFTA? Will it be in the World Trade Organization? That’s three questions.


IP: To all three?

PETERS: Yes, yes.

IP: Thank you.

Thanks very much for spending this time with us.

PETERS: Thanks very much for having me. I appreciate it.

IP: All right. (Applause.)


Top Stories on CFR


NATO (North Atlantic Treaty Organization)

The war in Ukraine marks a new era of instability in Europe. Countering Russia’s efforts will require a stronger, more coordinated NATO.


After the rise of Chinese power during the 2010s and failed U.S. policies in the Indo-Pacific, the United States should renew the Pivot to Asia and place the region at the center of its grand strategy.*