p.

A New Transatlantic Trade Deal: Good for America?

AmbassadorKurtVolker:Thankyouverymuchforcomingthisevening.Mynameis
KurtVolker.I'mtheExecutiveDirectoroftheMcCainInstitute.
Sometimeago,alittleovertwoyearsagonow,westartedourseriesofdebateson
variousforeignpolicyandnationalsecurityissuesthatchallengeboththeUnitedStates
andareimportantglobally.TheMcCainInstitutewassetuptostrengthencommitmentto
characterdrivenleadershipandtoreallyflushingout,throughhonest,opendebate,some
ofthehardissueswehavetotackle.Oneoftheprincipalissuesinthenewsthelast
severalweekshasbeendecisionmakingabouttrade.
Shouldtherebeanewfasttrackauthorityforthepresidenttonegotiatetradeagreements
andthenhaveitfasttrackedthroughparliamentaryprocessintheCongressandSenate,
andwhatwouldbetheimpactofthatontheTranspacificPartnershipaswellasthe
TransatlanticTradeandInvestmentPartnership?That'swhatwe'reheretodebatethis
evening.
IsanewtransatlantictradedealinUSinterests?Todebatethatquestion,wehaveavery
distinguishedsetofdebaters,extraordinarilyknowledgeableonthesubject,andto
introduceourdebaters,areturningmoderatorforus,someonewhohasdonedebateshere
bothattendingandthenmoderatingsomeoftheonesbefore.HeistheWhiteHouse
correspondentforFoxNewsRadio,andwithoutanyfurtherado,letmeturnitoverto
him,JonDecker,whowillmoderatethisevening'sdebate.Thankyou.
[applause]
JonDecker:Thankyou,AmbassadorVolker,foraskingmetomoderatetonight's
debate,andthankyoutoallofyouwhoareheretonightintheaudience.Wehopethat
tonight'sdebateinformsyouasourpanelistsdiscussfreetradeagreementsgenerally,and
specificallyTTIP,theTransatlanticTradeandInvestmentPartnership.
Thetopicoftonight'sdebateisparticularlytimely,asAmbassadorVolkersaid.Forme,
it'salsopersonal.Icoveredthedebateoverfasttracktradepromotionauthority,and
coveredtheintensedebateovertheNorthAmericanFreeTradeAgreementmorethan20
yearsagowhenIwasbasedinMiamiforNBCtelevisionandradio.
NAFTA,though,ofcourseissmallpotatoescomparedtothegoalsofTTIP,theproposed
freetradeagreementbetweentheEuropeanUnionandtheUnitedStates.TheEUandthe
UStogetherrepresent60percentofglobalGDP,33percentofworldtradinggoods,42
percentofworldtradeandservices.
TTIP,whichtheObamaAdministrationconsidersacompanionagreementtothe
TranspacificPartnershipTradeAgreement,aimstoincreaseoveralltradebetweenthe

p.2

respectiveblocsbyasmuchas50percent.
AfreetradeareabetweentheUSandtheEUwouldrepresentpotentiallythelargest
regionalfreetradeagreementinhistory.AsJoeBidenwouldsay,thisisabigdeal.
[laughter]
Jon:Proponents...Ididleaveoutaword.
Proponents,asyouwillhear,arguethatTTIPwillcreatemillionsofnewpaidjobs,
improveintellectualpropertyprotections,andeliminatetheregulatorybarriersthatexist
betweentheUSandtheEU.ButopponentsofTTIPsaythisproposedtradedealwould
leadtolowerstandardsofconsumerandenvironmentalprotectionandsafetyatwork.
TheyalsoquestionwhetheraTTIPwouldreallystimulatemoreinvestmentgiventhe
tariffsimposedbytheUSandtheEUarealreadyrelativelylow.
Wehaveanimpressivepanelofexpertsassembledtonighttodiscusstheseissues,andlet
meintroducethem.
Ourfirstteam,whichwillarguethatTTIPisagooddealfortheUnitedStates,consistsof
formerArizonacongressmanJimKolbe,whoisnowaseniortransatlanticfellowatthe
GermanMarshallFund,andShaunDonnelly,acareerdiplomatwhonowservesasvice
presidentofinvestmentandfinancialservicesattheUnitedStatesCouncilfor
Internationalbusiness,whichisaprotradegrouprepresentingAmerica'stopglobal
companies.
ArguingthatTTIPisabaddealfortheUnitedStateswillbetheteamofTheaLeeand
TedBromund.TheaLeeisaDeputyChiefofStaffinthepresident'sofficeatthe
AFLCIO.Shehasresearchedtheimpactofnumeroustradeagreements,andjoining
TheaisTedBromund,aseniorresearchfellowattheHeritageFoundationrightherein
Washington,DC.
Letmetellyoutheformatforthoseofyouwhohavenotbeenhereatthesedebates
before.Theformatisprettystraightforward.Eachteamwillopenwiththeirargument,
fourminutesaside.Followingthat,eachteamthengetstwominutestorespondtothe
others'openingargument.
Iwillthenmovethingsalongalittlefurtherwithafewquestionsinwhichtheteamswill
gettwominutestorespond,andafterthat,that'swhenyouintheaudiencegetachanceto
askyourquestions.Again,eachsidehasuptotwominutestoreply.
Finally,attheendofthedebate,Iwillgotoeachteamofourpanelists,asktheminone
minutetosumupwhatheorshebelievestheUSshoulddorightnowasamatterofUS
tradepolicywithEurope.
JimKolbeandShaunDonnelly,whydon'tyoustartusoffandgetthingsstarted?

p.3

JimKolbe:Thankyouverymuch,andI'mgoingtoleadoffforus.Thanks,Jon,and
thankstotheMcCainInstituteforsponsoringthisdebateandtheotherpublicpolicy
debatesthatthey'vehad.You'veallgotyourpopcornandyourdrink,butifyoucameto
see"JurassicWorld,"it'snotgoingtobequiteasthrillingasthat,butwe'lltrytomakeit
asgoodaspossible.
WehavelimitedtimesoI'llgetrightintothetopic.Iknowwe'retalkingtonightabout
TTIP,theTransatlanticAgreement,butmakenomistakeaboutit.It'slinkedtothedebate
that'sbeengoingoninCongressandinWashingtontheselastseveralweekstheTPA,
theTradePromotionAuthorityforthepresidentandtheTranspacificPartnership.
YoucannotdoaTTIP.Youcan'tdoaTPPifyoudon'thavetheTradePromotion
Authority.Whileyou'llhearfromsomeoftheopponentsthattheyreallymightnotbeall
thatopposedtoTTIP,theyhavebeenopposedtoTPA,which,inasense,saysthey're
reallyopposedtoanykindoftradeagreementswhatsoever.
Ithinkit'sastrawmantosimplysayyou'rereallyforthisagreementbutyou'reopposed
tothepresident'sauthoritytonegotiatetheagreement.
Letmegetintowhatare,quickly,theadvantagesofTTIP.AlreadyEuropeisourlargest
tradingpartner.HalfoftheglobaleconomicoutputoftheworldisinEuropeandthe
UnitedStates.It's$6.5trillionayearoftradethatgoesbackandforthbetweentheUnited
StatesandEuropeingoodsandserviceseveryyear.
Secondlyitwouldeliminatebarriersthatcouldbringsomehugebenefitstous.Among
thoseistheideathatitwouldboostUSexportsbyabout$300billionannually,addat
least$125billiontotheGDPthisisfromtheEuropeanPublicPolicyCenterand
increasethepurchasingpowerforAmericanfamiliesbyloweringpricesbyabout$900a
year.
Ithinkoneofthegreatestthingsaboutitisitwouldprovideforregulatorycooperation,
cuttingthecostsandmakingitmorecompetitivefortheUnitedStatesandEurope.We
wouldbetheonesinthedriver'sseatintermsofmakingtherulesabouthowwe'regoing
tocompeteandtherulesandthestandards.There'smorethatIcouldsay,butI'mgoingto
turnitovertomypartnerhereatthispoint.
ShaunDonnelly:Great.Thanks,Jim,Jon,andtheMcCainInstitute.Thankyouvery
muchforinvitingushere.Ijustwanttomakethreepoints.First,Ithinkthefundamental
reasonthataTTIPagreement,agoodTTIPagreement,isintheUSnationalinterestis
jobsandgrowth.ThatwastheapproachthattheUSandEUtookastheytookabouta
yearandahalftostudytheideaofdoingaTTIPverycarefully,thetwogovernments.
Theycametotheconclusionthat,yes,thiswasgoingtobegoodforjobsandgrowth
betweentheUSandtheEU.
AsJimsays,it'sverymuchgoingtoreducebarriers.It'snotgoingtoeliminatethem,but
it'sgoingtoreducealotofbarriers,tariffs,butmoreimportantlyintheregulatoryareas,

p.4

trytofindwayswherewecanreducethoseinefficienciesandcoststhatareimposedon
businessandworkers.
Equallyimportant,thisistheopportunityforthetwobigindustrialdemocraciesinthe
worldwhosharesomanyvaluesincludingprivateproperty,intellectualproperty,
workers'rights,protectingtheenvironmentbutalsodemocracy,freespeech,andruleof
lawtotryandcomeupwithatemplateforahighstandardtradeagreementthatwecan
eachusethenaswedoagreementswithothers.Maybesomefeaturescanbetakeninto
theWTO.
Thisisanopportunitytowritethekindofglobaltradeagreementthatwewanttosee.
Frankly,iftheUSandEuropecan'tfindawaytoagreeonthat,we'regoingtoseeother
countriesthathavedifferentvaluestryingtowriterules,andsomeofthosearegoingto
beatthedisadvantageofUSandAmericancompanies.
So,it'sgoodforusintheshortrun.It'sgoodforusaswelooktothefutureandtryingto
writethetemplateforwhatwewanttoseeasaglobaltradingregime.
Jon:TheaandTed,youhavefourminutes,youropeningstatementplease.
TedBromund:Thanksverymuch.I'dliketojoinmyfellowdebatersinthanking
AmbassadorVolker,theMcCainCenter,ourmoderator,forconveningthisimportant
discussionthisevening.
Letmejuststartoffbysayingthatalreadythemoderatorandmyfellowdebatershave
madetheargumentthatTTIPisgoingtogenerateenormouseconomicbenefits.We'reall
quotingfromthesamestudyhere.Theyprefertoquotegrossnumbers.I'llgiveittoyou
inpercentageterms.Ifyourightnowmake$50,000ayear,TTIPistheequivalentofme
offeringyouaraiseto$50,125in15years'timeprovidedthatyoudoeverythingItell
youtodointheinterim.
It's125bucksover$50,000.Bearthatinmindwhenouropponentstalkaboutthe
enormousgeopolitical,economic,geostrategiceffectsofTTIP.Thisissimplynotthatbig
adeal.
Secondly,thisisnotyourgrandfather'sfreetradeagreement.Inthepast,freetrade
agreementswereabouttariffsandquotas.Now,asouropponentshavealreadyargued,
they'refundamentallyaboutrules.Ouropponentsargue,andeveryonetoanextent
concedesthis,thatthereareinefficienciesinrulemakingonbothsidesoftheAtlantic.
Whatouropponentsdon'trecognizeisthataprocessofnegotiating,convergingruleson
bothsidesoftheAtlanticisinevitablygoingtoraisethecostsofthoserules,notlower
them,becausethestandards,thelevelofrulemakingwilltendtoriseovertime.
Finally,tomymind,mostdamagingly,rulesaremadethroughaprocessofnegotiation
thatincludesinputbyindustry.Rulesaregoingtoreflectthedemandsoftoday'sindustry,
nottomorrow'srisingindustry.MygreatestfearaboutTTIPisitwillbeanagentfor

p.5

promotingstaticrulemakingthatwillbenefitcompaniestodayandnotnewandrising
firmstomorrow.Inmymind,corporatismisnotfreetrade.
TheaLee:Thankyou,Ted.Goodevening.ThankstotheMcCainInstitute,myfellow
debaters,andtoallofyouforcomingouttonight.TedandIareonthesamesideofthis
issue,butwedon'thaveexactlythesameviewonit,asyoumightimagine,fromthe
HeritageFoundationandtheAFLCIO.ButIdoagreewithsomeofTed'sbasicpoints,
whichisthatthisisnotyourgrandfather'sfreetradeagreement,thatthebenefitshave
beenoversold,andthatthekeyissueforusisgoingtobewhattheimpactofregulation.
But,onthatarea,Imightcomeatitfromadifferentside.
IwanttomakeclearthatneitherInortheAFLCIOareopposedtoTTIPtoday.That
makessense,becauseTTIPdoesnotexisttoday.TTIPisagleaminthenegotiator'seyes.
We'refollowingthenegotiationsclosely.We'vebeenconsultingwithourEuropean
counterparts.
But,infact,it'sinterestingthattheformerAFLCIOpresident,LaneKirkland,mayhave
beenoneofthefirstpeopletosuggestatradeagreementbetweentheEuropeanUnion
andtheUnitedStatesina1993"WashingtonPost"oped.Hisconceptwastheopposite
ofTed's.Itwasupwardharmonizationofsocialstandards.HelookedatEuropeanUnion
asahighwage,highstandard,goodlaborrightsplace,acountrythatwewouldlike,ora
partnerthatwewouldliketogetcloserto,ifwecouldharmonizeourstandardsupwards.
ButwhatwouldbetheimpactofTTIPasit'scurrentlyconceivedbytheparticipating
governments,onworkers,onwages,onjobs,onenvironmentalprotections,onconsumer
safety,onbothsidesoftheAtlantic?Ithinkit'sclearthatTTIPdoesbringavery
differentsetofissuesthansomeoftheothertradeagreementstheUnitedStateshas
negotiated,awealthy,highstandardpartner.
Butthereisalotofreasonforconcern.Thathastodowiththedirectionofthe
negotiationsofwhatweknowsofar.Themainmovementhasbeendiscussedwithafast
trackdebate.TheTPPdebatehassomedeepandfundamentaldisagreementswithour
owngovernmentaboutwhatagoodtradeagreementlookslikeandwhatitwouldtaketo
creategoodjobsintheUnitedStatesthroughafreetradeagreement.
Youcouldaskthequestion,"WhydoweevenneedatradeagreementwiththeEuropean
Union?"IthinkthisactuallygoestoTed'soriginalpoint,whichisthatwehavelow
tariffs,relativelyspeaking,onbothsidesrightnow,andtheinvestmentflowspretty
freely.So,whatdowegainfromafreetradeagreement?Or,isthisoneofthoseareas
wherewehaveananswerinsearchofaquestion?
Therearetroublespotsinregulatorydifferences,agricultureintheEU,tariffpeaksin
bothcountries.There'sactuallyamapofwhythisisadifficultagreementtonegotiate,
anditshouldbedifficult,becausethesearenoteasyquestions.ThisisanareawhereI
agreewithTedthat,whenyoutalkaboutregulatoryharmonization,thisisnotsomething
thatiseasilyresolvedbyabunchoftradenegotiatorssittinginaroom.

p.6

Thatthereshouldbe,Tedtalkedaboutindustry,thereshouldbeconsumer,
environmental,andlaborrepresentativesalsopartofthatdiscussion.Wehavetwovery
strongwilleddemocraciesthatgothroughaprocesstofigureouthowtosetregulations.
Wedon'talwaysagreewitheachother.Thedifferencesarereal.
Acoupleofotherissuesquickly.TheIndustrialStateDisputeSettlement,whichhasbeen
socontroversialinthecontextofTPP.IntheEuropeanUnion,thisisactuallyareally
importantissue.Arewegoingtogivecorporationstherighttosuegovernmentsover
regulationsthatcostthemprofit?WhenyoutalkaboutaddingtheEuropeanUnionto
this,addingthisprovisioninadealwiththeEuropeanUnion,thataddsactually
thousandsofcompaniesthatnowwouldhavetherightandtheabilitytosuetheUS
governmentoverregulations.
ThisisconcerningbothhereintheUnitedStates,andweknowit'salsoconcerningfor
theEuropeanUnion.
Anotherissueisfinancialregulation,theDoddFrankBill,whichsetshigherstandards
forfinancialtransparencyandsomeotherissuesintheUnitedStatesandintheEuropean
Union.TheEuropeanUniondoesn'tlikeit.ThereisaconcernthatTTIPwould
underminethat.
Therearesomerealconcerns.Thespecificsthatgetnegotiatedwiththisagreementwill
haveahugeimpactonworkingpeopleonbothsidesoftheAtlantic,andwe'rekeepinga
closeeyeonit.Thankyou.Ilookforwardtotherestofthedebate.
Jon:Thankyou,Thea.LetmegiveourfirstquestiontoourproTTIPteamofJimand
Shaun.We'retalkingabouttheTTIPtradeagreement.Ofcourse,noneofushaveactually
seenwhat'sintheTTIPtradeagreement.Doesthistroubleyouasmuchasittroubles
manyopponentsofTTIP?
Jim:Goahead.
Shaun:Well,Imean,obviously,Ihaven'tseenit.I'mnotaclearnegotiator.Theamay
be,but,look,it'sanegotiation.I'dliketoknowexactlywhat'sinthere.Igotothe
briefingsthatUSTRgives.Ireadwhat'sputuponthewebsite.Ihavedialoguewith
peoplethatareinvolvedonbothsides,butit'sanegotiation.
IfIgotoworkforyouatFoxRadio,we'regoingtonegotiatemysalary.I'mnotgoingto
dothatatFedExFieldwithalltheoffersandbackgroundsuponthescoreboardor
something.Fundamentally,ifwe'regoingtohaveachanceofsucceeding,youhaveto
runitasanegotiation.IwasanegotiatoratUSTRforawhile.Youhavetobeableto
say,"Imightbeabletodothis,ifyoudidthat.That'snotgoingtotakeplace."
Ithinksomeofthecritiques,I'mnotsayingwehaveaproblemwiththewaythe
negotiationisbeingrun.Therealagendaisbeingabletogetaccesstothedocumentsso
thattheycanfanoppositiontothem.

p.7

Bothsideshaveworkedhardtogivemoretransparency.Thisisthemosttransparent
negotiationIthinkanybody'sdoneanywhere.
Buttohaveachanceofsucceeding,itdoeshavetoremaininnegotiation.Peoplebothat
theexpertleveland,ultimately,attheministeriallevelaregoingtohavetobeableto
negotiate.
Jon:Jim,anythingyouwanttoadd?
Jim:Yeah,I'lladdveryquicklytothis.Ithinkthissecrecyargumentisreallypretty
muchabogusargument,abogusissue.Imean,whenwasthelasttimeamanagement
unioncontractgotnegotiatedoutonthesidewalkwitheverybodywatching?Ofcourse
not,it'sdonebehindcloseddoors,andthenit'srevealed.Thenyoucanwork,the
management,stockholders,alltheunionmembersgetachancetodecideandtovoteon
it.
Youcan'tdoanegotiationinfrontoftheentireworld.Youhavetobeabletohavethe
giveandtake.But,intheend,ofcourse,theagreementhastocomeoutintheopenandit
hastobethoroughlydebatedandthoroughlyvetted.Thereisanotherreason,ofcourse,
wehaven'tseenalotofTTIPevents.It'snotthatfaralong.
UnlikeTPP,theTranspacificone,therearen'tasmanyofthedetails.Wedon'tknowas
muchashowfartheygotalong.ButevenwithTPP,theyhaven'treachedagreementon
thefinalkeyissues.Untilyoudothat,nobodywantstoputtheircardsonthetableuntil
theyknowthey'regoingtohaveadeal.Theyshakehandsaroundthetable,thentheygo
out,andtheyannounceit.YougettotakeittoCongressandhaveavoteonit.
Jon:TedandThea,youhavesometimetorespondtothat.
Thea:Ithinkthat'stotallywrong.Idisagreewithbothofyou,ShaunandJim.Ithink
thatthesecrecyhasbeendysfunctionalfortheUSgovernment.It'sbackfired,becauseit
iscausingalotofuncertainty.
NobodyistalkingaboutputtingCSPANintheroomwiththenegotiators.Whatwe're
talkingaboutwhenwesaytransparencyisthatthegovernmentswouldmaketheirinitial
negotiatingpositionpublic.
Now,there'snotalotthat'ssecret.WhattheUSdoesistheyputonthetablethelanguage
fromthelastthreetradeagreements.Ninetyfivepercentofwhat'sonthetableis
somethingpeoplehaveseenbefore.There'snosecrecythere.
We'renotaskingthenegotiatorstorevealtheirbottomline.That'sthepartthatisdifficult
andissensitive.Whetherontheruleoforiginyou'regoingtogoto50percentor55
percentor62.5percent,onlythenegotiatorsknowintheirheadwherethey'regoingto
go.Thatwouldbedysfunctionalifyoumadethemrevealtheirbottomline.
Butmakingthemputtheirinitialnegotiatingpositiononthetableissimplygood

p.8

governance.TheEuropeanUnionhasactuallytakenastepinthatdirection,soifoneof
ourtradingpartnerscanputtheirinitialnegotiatingpositiononthetable,there'sno
reasonwhytheUnitedStatescan'taswell.
Jon:Ted,doyouwanttoaddtothat?
Ted:IwouldjustsaythatmyskepticismaboutTTIPdoesn'tfundamentallyrevolve
aroundprocessissues,asimportantastheyare,likethestatusofTPAorthequestionof
secrecy.MyconcernsaboutTTIPrevolvefundamentallyaroundissuesofprincipleand
whatIviewastheadvancementofgenuineeconomicfreedom.
IpersonallythinkthatdiplomacyintheUnitedStates,asthefederalistpapersmakeclear,
isfrequentlytobeconductedwithsecrecyanddispatch.Noonecanaccusethetrade
negotiationsasbeingconductedwithdispatch,butI'mnotsurethatamodestelementof
secrecyisallthatdamaging.
Jon:LetmestickwithTedandTheaforthisnextquestion.Itwouldseemtomakesense
thatiftheEuropeanMedicinesAgency,theEMA,justinspectedapharmaceutical
manufacturerinBerlin,forinstance,forcompliancewithgoodmanufacturingpractices,
thattheUSFDAcouldrelyonthefindingsoftheEuropeaninspectorinsteadof
duplicatingtheeffortbyconductingitsowninspection.Butthat'snotthecase.
Whydon'tyousupporttheideaofeliminatingthisregulatoryburdenofduplication?
Thea:Youwanttostartwiththat?
Ted:Sure.Thereareareas,suchasmedicinesandcars,thesearethetwomost
commonlybroughtup,wherethereisverysubstantialregulatoryduplicationwhereboth
countrieshavehighstandardsforautomotivesafety,fortheapprovalofmedicines,where
thereare,undeniably,costinducedbyregulatoryduplication.
Butweshouldbecarefulwhenwediscussthespecificadvantagesofreducingregulatory
burdensinthesegeneralareas.Yougoonand,therefore,sayweshouldhaveaprocess
fortransnationalruleharmonizationacrosstheentireeconomyoftheUnitedStatesand
theEuropeanUnion.
It'sonething,Ithink,togocarefully,sectorbysector,andalookatafewoutstanding
exampleswheretherereallyisburdensomeduplication.It'sanotherthingtosetupa
process.Remember,regulationisaprocess.WhatweestablishwithTTIPwillgovernall
theruleswemakeinallareasoftheeconomygoingforwardpermanently.
Thatisamuchbiggerprincipleandweshouldbecarefulnottoconcedethelarger
principleforthesakeofthesesmall,advantageousbenefitstobederivedinafewspecific
areas,suchaspharmaceuticalsorcars.
Jon:Thea.

p.9

Thea:Iagreethateachoftheseissuesneedstobelookedatonasectorbysectorbasis
andagencybyagencybasis.Idon'thaveablanketopiniononthisonewayortheother.
ButIdothinkit'simportantthat,withrespecttoregulationandsafetyandsoon,thereis
acomfortlevelforconsumersonbothsidesoftheAtlantic.Itdoesn'tnecessarilymean
youneedtodoitdifferently.
Theotherpoint,though,isthatyoudon'tactuallyneedafreetradeagreementtomake
somecommonsensechangesandharmonizationsintheregulatoryframework.Thatcan
bedoneoutsideofatradeagreement,there'snoneedtodoit.ToTed'spoint,thatthat
mightleaveyoutheflexibilitytochangeitifit'snotworkingoutafewyearsdownthe
road.
Jon:JimandShaun,whataboutthatpoint,thatyoudon'tneedatradeagreementto
avoidthisproblemofregulatoryduplication?
Jim:Jon,Ithinkyouposedthequestioncorrectlyinthefirstplace.Ithinkitis
important,IthinkitisoneofthemostimportantpartsabouttheTTIPagreement.Ithink
itgoestothefactthatthebenefitsaremuchgreaterthanwhatTedwassayingasaresult
ofthat.BecausethebenefitstotheconsumersonbothsidesoftheAtlanticintermsof
lowerprices,thattheywillbechargedfordifferentgoodsandservices,isimportant.
Theaisright,youcandoitoutsideoftradeagreements,butwegenerallydon'tdoit.You
needthatkindofforcinghandofatradeagreementinordertomakethishappen.But
whenyoulookatit,itreallymakessensewhenyou'retalkingaboutTTIP.Maybeother
agreements,TPP,maybeothercountriesthatwe'retalkingabout,notsomuch,because
thedifferenceissogreat.
ButnotthecasewithEuropewhereyouhavestandardsthatareveryhighandequallyas
highastheUnitedStates.Why,forexample,usewhatwe'vealreadytalkedabout,doyou
havetohavecrashstandardsthere'sanautomobilethatgetscrashstandardsandtested
inEuropehavetocomeovertotheUnitedStatesandgothroughtheexactsamekindsof
testshere,whichaddsseveralhundreddollarstothecostofthecarforeachconsumer.
Whycan'twejustsay,"Yeah,yourprocessisjustasgoodasoursandwewillaccept
that?"Ithinkthisisoneoftheareaswhereyoucanhavetremendousbenefitsonboth
sidesoftheAtlantic.
Shaun:Justtotakeyourpoint,Jon,we'vebeentrying,betweentheUSandEU,tomake
progressinthisintheabsenceofatradeagreement.Idon'tthinktheresultsaretoo
overwhelming.Westillhavealltheproblemsthathavebeencited.Ithinkthetrade
agreementcanbeafocalpointtodrivesomeofthisprogress.
We'vetalkedaboutautomobiles.We'vetalkedaboutpharmaceuticals.Therearefiveor
sixothersectorsthatarebeingfocusedonthisnegotiation.It'salsoimportantinthis
regulatorydiscussionthattheytalkaboutthestructuralareas,thecostbenefitanalysis,
notice,andcommentperiod,moretransparency.TherearealotofproblemsAmerican

p.10

companieshavewiththewaytheEuropeansregulate.It'snotaveryopenprocessand
certainlynotasmuchastheUShashad.
Ithinkthisarea,nobodyshouldthinkanyoftheseareasareeasy,whetherwe'retalking
aboutpharmaceuticalsorautomobilesorsomethinglikethat.
Butwehaven'tmadealotofprogressonregulatoryharmonization,coherence,whatever
youchoosetocallit,intheabsenceofatradeagreement.Ithinkthisisthebest
opportunitywe'regoingtohave.
Jon:LetmestickwiththeproTTIPteamforournextquestion.Weheartrade
agreementaftertradeagreementfromproponentsoftradeagreementsthatthey'llbring
morejobstotheUS,betterjobstotheUS,higherpayingjobstotheUS.Whatdoyousay
toopponentswhoareconcernedaboutthelossofUSjobsassociatedwiththeTTIP
agreement?
Jim:I'llstarthere.Therearelossofjobs,there'snoquestionaboutit.There'salossof
jobsthatcomeabout,butnotsomuchastheresultofatradeagreement.Itcomesabout
asaresultofthewholeprocessofglobalizationandchangesintheworldeconomy.
Wecansitback,putourheadinthesand,denyhavingeverhavinganagreementwith
anycountryonanyleveloftrade,andyou'restillgoingtohavethechangesthatare
takingplaceintheworldtoday.
Thisismoreofaprocessofglobalizationandit'sdramaticand,inmanycases,it'svery
heartbreaking,becauseitdoesmeanchangesinpeople'slives.Itmeanswholeindustries
arebeingwipedout.Justthinkofwhat'shappeningastheresultof3Dprintingtoday.
Themanufacturingworldisgoingtobecompletelydifferentadecadefromnowthanitis
todayastheresultofthat.
Globalizationischangingthesethings.Thetradeagreementsare,Iagree,oftenway
behindandbythetimethey'redonethey'reprettymuchoutofdate.Butthey'rebetter
thannothavinganykindofanagreement.
Shaun:AsJimsays,weliveinaverydynamiceconomywherejobsarecreatedandjobs
disappeareveryday.Wemaynotlikethat,butthat'sthereality.Tradeagreementsarea
relativelysmallpartofthatoverallphenomenon.Butthebestthingthatwecandois
positionourselves,theUS,wherewecancompeteforthoseforeignmarkets,manyof
whicharerelativelyclosedtous.
When95percentoftheconsumersintheworldliveoutsideoftheUS,when80percent
ofthepurchasingpoweroftheworldisoutsideoftheUS,tobeabletocreategoodjobs
andkeepgoodjobshere,we'regoingtobealotbetterifwecangetinthereandgetthose
barrieraway,includinginEurope,sowecangetinthereandletourcompaniesandour
workershaveachancetocompeteforthosemarkets.

p.11

Therearealotofhorrorstoriesyou'llhearfrompeopletalkingaboutNAFTAcost,I
don'tknow,makeupanumber,amillionjob,whateveritis,andalotofthat,Ithink,is
morecoincidencethancausalityintermsofwhyjobsdisappear.Alotmorejobs,
unfortunately,disappearduetoadvancesinproductivity,inefficiency,andsoonlike
that.
That'sthechallengeforus.Atradecanbepartofsolvingthatequationandgivingus
moreopportunitiestodealwiththechallengesthataregoingtobetherewithorwithout
trade.
Jon:TheaandTed,doyoubuyintothatargumentthatit'snottradeagreementsthatlead
tothelossofjobsintheUS,butratherglobalization?
Thea:Tradeagreementsaren'ttheonlyfactorthatleadstolossofjobs,buttheycertainly
areanexacerbatingfactor.Ithinkit'sonethingforShauntosaythisisacoincidence,not
causality.Butthetruthis,andthisiscertainlytrueformymembers,the12.5million
workingmenandwomenwhobelongtotheAFLCIO,thattheyhavehadalotof
experienceyearafteryear,decadeafterdecade,withtradeagreements.They'vealmostall
beenbad.
Thepointisthisthat,ofcourse,weunderstand,weliveinaglobaleconomy.Weneedto
bepartofaglobaleconomy.Weneedrulesthataregoingtobegoodforworkingpeople
andnotjustgoodformultinationalcorporations.Butthetruthisthatournegotiatorshave
notfiguredouthowtonegotiateatradeagreementthatproducesgoodjobstotheUnited
Statesandthathelpsworkersatthelowerendoftheincomespectrum.
Youallhaveseenthefiguresoneconomicinequality.Thiscountryisataveryscary
pointintermsofthegrowthofinequalitythatallthegainsofeconomicgrowthforthe
lasttwodecades,prettymuch,hasgonetothetop10percentofAmericans.That'sleft90
percentofpeopleworkingharderforless.
Tradeandglobalization,andIwouldthrowitin,butthepointisthattherulesoftrade
agreementsandtherulesthatwe'venegotiated,thatourgovernment'snegotiatedthe
WorldTradeOrganization,havenotgotthebalanceright.Sothey'vebeenpartlyabout
multinationalcorporationsbeingprotectedwhentheymovejobsoffshore.That'swhatthe
investmentchapter,theelectoralpropertyrightschapter,thefinancialserviceschapterare
about.LessaboutwhatTedtalkedabout,justreducingtariffs.That'saverysmallpartof
thesetradeagreements.
Ifwehaven'tgottenthebalanceright,everybodyagrees,evenfreetradeeconomistswill
tellyouthattradeagreementsproducesomeeconomicgains.Tedtoldyouthosegains,
evenbytheproFTAstudies,areverysmall,almostlessthanthestatisticaldiscrepancy.
Yet,theyhaveadistributionalimpactwhichisthattheyredistributeincomefrom
workingpeopletothepeopleattheverytopoftheincomechain,thatswampsthesmall
economygains.That'sbeenourexperienceoverthelastcoupleofdecades.Wehaven't

p.12

seenanythinginthecurrentnegotiationswithTTIPorTPPthatleadsustobelievethat
thesetradeagreementsaregoingtohavedifferentoutcomes.
Ted:IwouldjustaddtothatthatI'maconvincedsupporterofthebenefitsoffreetrade
andeconomicfreedom.I'malsoconvincedthatthereisnothingthatwecurrentlyimport
fromChinaoranyothercountrythatwecannotmakeintheUnitedStates.Wewould,
thereby,bevastlypoorifwemadeeverythingintheUnitedStatesandwewouldhave,
perhaps,morejobs,butwewouldcertainlyhaveagreatmanylowerpayingjobsaswell.
Iwouldpointout,however,thatjustbecauseI'masupporterofeconomicfreedomand
freetradedoesnotmeanthatIthinkthatgivinglargecompanies,andlargeunionsfor
thatmatter,avoiceintransatlanticruleharmonizationmeansthatthisisagoodthingfor
economicgrowth,economicfreedom,orfreetrade.
Jon:Letmestickwiththissameteamforournextquestion.Whiletraditionaltrade
barriersbetweentheUSandtheEUarealreadylow,withaveragetariffsunderthree
percent,theyarestillsignificant,particularlytosmallandmediumsizedenterprisesthat
wanttobecomeexporters.Areyouagainsteliminatingthesetariffs?
Thea:Ted,doyouwanttostart?
Ted:I'mabsolutelynotagainsteliminatingthesetariffs.IfTTIPwerelimitedsimply,
andI'llsaymoreaboutthislaterinthedebate,ifTTIPwerelimitedlargelytoazero
tariffs,zeroquotaagreement,Iwouldprobablybesittingontheothersideoftheaisle
rightnow.Imakenodefensewhatsoeveroftariffsorquotas.
Unfortunately,thatisnottheTTIPwearediscussing.That'sapleasantidea.Isupportit
100percent.Butthat'ssimplynotwhat'sunderdiscussionrightnow.
Jon:Thea.
Thea:Ithinkreducingtariffs,asTedsays,istheleastcontroversialpartofatrade
agreementandthey'retheleastconsequentialintermsoftheimpactonjobs.Itreallyis
thebalance.Oneofthethings,youseetheprojectionsabouthowmanymillionsofjobs
aregoingtobecreatedbyeachtradeagreement.
Justrememberback,windback20yearstotheNAFTAdebate,howmanyjobswere
goingtobecreatedbecauseweweregoingtoexportmorestufftoMexico.Because
Mexico'stariffswerehigherthanUStariffsandpeopleusedtousethephraseitwasa
nobrainer.Obviously,ifyoutakedownMexico's,onaverage,10percenttariffandthe
US's2.5percenttariff,obviouslytheUnitedStateswasgoingtowin.
Thatreallywasn'thowitturnedout,weendedupwithalotofUScompaniesmoving
jobstoMexicoandthetradesurpluswithMexicothattheUShadpriortoNAFTAturned
veryrapidlyintoalargetradedeficit.

p.13

So,youhavetolookatbothsidesofitandIthinkit'stoosimplistic,eveneconomists
don'treallyunderstand.Ifyoujusttakethetariffstozero,wherearethewinnersandthe
losersgoingtobe?It'shardtojudgethat.
Jim:Well,we'reinagreementononethingapparentlyupthereandthatistheideathat
reducingthetariffstozerowouldbeagoodthingandthatmightbenefiteverybody.ButI
justcannotresistrespondingtoThea'scommentsabouttheNAFTAagreementand
Mexicohere.
IhappentoliveontheborderwithMexicoandIhappentoseethesetrainsgoingupand
downeveryday.Aboutfivetrainsadaygoingacrosstheborder,downtoHermosillo
wherethere'sahugeautoplant.
Mexico,IthinkI'mcorrect,isnowthefourthlargestproducerofautomobilesinthe
world.Howdoyouthinkthathappened?Whydidthathappen?Becauseweshiftallthe
jobsdownthere?Becausethey'reclosetotheUSmarketsandsotheycanassemblethem
there,buttheygettheirparts...Notgettingtheirparts,now,fromChinaorfromKoreaor
Japanorotherplaces,butgettingthemfromtheUnitedStates.
Thosetrainsgodown,filledwithparts,transmissions,tires,airbagsystems,electronic
systems,whateveritmightbe,andcomebackasassembledautomobiles.Sothereisa
hugebenefitandyes,ourtradewithMexicohasincreasedby400percent.Yeah,that'sa
deficitnow,butwe'veincreased400percentsincewesignedNAFTA,theamountof
goodsthatweselltoMexico.Soit'sanargumentthatjustdoesn'twash,inmyopinion.
Shaun:No,Icertainlywouldagreewiththat.Idon'tknowifTheawouldhavea
problemifwecouldgorewindhistoryandeliminateNAFTA,you'dratherbeimporting
allthosegoodsfromChinaorJapanorsomewhereelse.AsJimsays,Mexicois
integratedintheUSglobalsupplychain...
[crosstalk]
Shaun:Yeah,well,butIthinkyouranalysisofMexicohasmoretodowithRossPerot's
suckingsoundthanwithwhattheeconomicsoftoday'sglobaleconomyreallytellus.
Thea:That'ssilly.
Shaun:Well...
Thea:No,buttheotherargumentthatwasmadeforNAFTAwasthatthiswasgoingto
helpuscompetewithAsiaandEuropeanditdidn'treallyworkoutthatway.Weruna
halfatrilliondollartradedeficitnow,withtheworld,andabigchunkofthatiswith
Mexico.It'snotlikethishelpeduscompetebetterwithChina,becauseitdidn't.
Shaun:ItwouldbebetteroffwithoutNAFTA,you'rethinking?
Thea:Probably,yeah.Ohyeah.

p.14

Shaun:That'sinteresting.
Jon:LetmestickwiththeproTTIPteam.Wecanreturntothisconversationaswell.
TTIPprimarilyconcernsrewritingtherulesoftheroad.Whatlocationdoyouprefer,or
wouldyouprefer,IPtoreside?IntheUnitedStates?InEurope?Orinthirdcountries?
Jim:ForIP?Forintellectualproperty?
Jon:That'sright.
Jim:Youwanttotakeonthatone?
Shaun:Well,I'mnotsureIunderstand.
[crosstalk]
Shaun:I'mnotsureIquiteunderstandthewaythequestionisphrased.
[crosstalk]
Shaun:Butclearly,intellectualpropertyhasgottobeacoreelementofastrongtrade
agreement.TherealityisthatneithertheUSnorEuropearegoingtosucceedcompeting
toproducelowcost,basiccommodities.
Ourcomparativeadvantage,andalsoEurope's,arebasedonhighquality,branded
productsandservicesthathaveintellectualcomponent.So,thatnetworkofpatentsand
copyrightsandtrademarksandtradesecretlegislationisabsolutelycritical.SoIthinkit
hastoresideintheUS,inEurope.
ThisisthekindofareawhereIthinkiftheUSandEuropecancometogetherinaTTIP
negotiationandcomeupwithreallyhighstandard,cuttingedgeIPprotectionsthat
benefitcompaniesandworkersinEuropeandtheUnitedStates.Thisisthekindofthing
thatweshouldbedoing.
BecauseiftheUSandEuropecontinuetohavedifferingIPregimes,itjustcreatesan
opportunityforcountrieswhoarenotinterestedinprotectingintellectualpropertyto
continuetostealourintellectualproperty.
I'mnotsureIunderstandthequestionofwhereitshouldreside.Itshouldresideveryhigh
ontheagendaandbeeffectivelyenforced,bothinEuropeandtheUS.
Jim:Intellectualpropertyprotectionisreallyimportant,it'sessential.Ifyouwantto
haveinnovation,ifyouwanttohavecreativity,ifyouwanttohavenewadvances,you've
gottobeabletoprotectthosewhoaredoingtheinvestmentoftime,capital,human
thinking,brainpower.You'vegottobeabletoprotectthat.Soit'sabsolutelyessential.
Theargument,Ithink,onTTIPisalesscriticalonethanitiswithothercountries.Europe

p.15

hasprettygoodintellectualpropertyprotections.Wedohavesomedifferences,there'sno
questionaboutthat.Butit'snotthesameaswehavetheproblemswithChinaandwith
othercountrieslikethat.Frankly,withtheWTO,wehaven'tbeenverysuccessfulin
gettingcountrieslikeChinatoprotectintellectualproperty.
It'simportant,there'snoquestionaboutit,it'simportant,butIthinkit'soneofthethings
thatprobablyisfurtherdownthetotempoleintermsoftheareaswheretheremightbea
differencebetweentheUnitedStatesandEurope.
Jon:Doyouseeitthesameway?Isitfurtherdownonthetotempole?
Ted:Icertainlyagreethatprotectionofintellectualpropertyisanimportant,perhapsnot
themostimportant,butanimportantfeatureofanagreementwithEurope.Ithinkwhere
mydifferenceswithmyfellowdebaterswouldariseisthequestionofChina.I'mvery
unclearhowtheargumentworksthatbecausewehaveonestandardforIPandthe
Europeanshavearoughlysimilar,butalittlebitdifferent[indecipherable0:39:21]forIP,
that,therefore,ifwehadthesamestandardsomehowtheChinesewouldstopstealingour
stuff.
That,tome,isafantasticargument.WTOhasnotworkedtostopChinesethievery.The
reasonwhyChinastealsisbecauseitisprofitabletodosoandharmonizedintellectual
propertystandardsintheUSandEuropewillnotstoptheChinesefromcontinuingto
stealourstuff.
TheargumentaboutChinaisbroughtupagainandagaininTTIPdebatesandI'veyetto
hearacoherentexplanationofhowiftheWorldTradeOrganizationhasfailedwecan
createwhatwould,ineffect,beanewWTOforIPbetweentheUSandEuropeand
somehowmagicallythisisgoingtoproduceresultswhentheWTOwhichcontains
essentiallyeveryoneintheworldhasfailed.
Thea:Imightsurprisepeoplebytellingyouthat,infact,theAFLCIOdoessupport
strongintellectualpropertyrightsprovisionsintradeagreements.Werepresentalotof
peoplewhomakealivingfromtheirintellectualproperty,actorsandwritersand
musiciansandsoon.So,that'sanimportantpieceforus.
ButIthinkhowit'sdoneisalsoimportantandIthinktherearestillsomeareasthatare
goingtobeproblematicwithrespecttotheEuropeanUnion.Oneofthoseareasis
pharmaceuticalproductsandthespeedwithwhichgenericproductsgettomarket.
Now,genericproducts,priceequalsmarginalcost.Whengoodscanbemadeavailable
cheaper,morequickly,particularlylifesavingdrugsthisis,Ithink,moreimportant,
muchmoreofabigissuewithrespecttotheTPPthenthat'ssomethingthatweneedto
figureouthowwecanbalancethecostsofhealthcarewhicharerisingveryrapidly,
largelybecauseofmedicaldevicesandpharmaceuticalproductsthatareveryhighpriced
intheUnitedStatescomparedtootherplaces.

p.16

Howthatcanbebalancedandhowthehealthcaresystems,competinghealthcaresystems
thatdonegotiatebetterwithpharmaceuticalprovidersthantheUSgovernmentdoes,how
that'sgoingtowork.Ithinkthosearesomerealissues.
TheotherissuethatIthinkwillbeatroublespotisculture.It'snotjustaquestionof
makingmoneyandallowingproductsintoyourmarket,butcertainlyinalotofthe
EuropeancountriesthereisarealdesiretoprotectEuropeancultureorfilmmakersor
others.Thatmightcomeintoconflictwiththenegotiator'sagendaandTTIP.
Jon:Shaun,didyouwantto...?
[crosstalk]
Shaun:IjustwantedtotrytoansweroneofTed'spoints.IfyougointotheWIPO,the
WorldIntellectualPropertyOrganization,thedominantissueoverthelasttwoorthree
monthshasbeentheUSandEuropefightingaboutgeographicalindicationsandcan
EuropeanstwisttherulesaroundandkeeptheUSfromgetting...
MypointissimplythatwhenweendupfightingaboutIP,we'relessabletowork
togetheronacommoninterest,becausetherehasn'tbeenalotofprogressintheWIPO
aboutenforcingthingswithChina.Whenallwe'redoingissortofthrowingthingsat
eachotheroverthisparticularissueaboutgeographicalindications.
Idothinkifwecouldworktogetherandsetahighstandard,therecanbesome
better...It'snotsimplistic,butIdothinkthere'sanargumentthere.
Jon:LetmecomebacktotheteamofTedandThea,ifIcould,withaquestionthat
picksuponapointthatyouwerementioningalittlebitearlier,Ted.Therearemanywho
saythatweshouldbeabletofindacertainlevelofuniformity,oratleastmutual
recognitionoftheUSandEuropeanautosafetyregulations.
Overthepast15years,only7outofthehundredsofsafetyregulationshavebeen
harmonizedbetweentheUSandtheEU.Myquestiontoyourteamis,"Areyousatisfied
withthestatusquo?"
Ted:No,I'mnotsatisfiedwiththestatusquo.I'vealreadyindicatedacoupleofareas
whereIwouldliketoseeachangeandI'llindicateafewmoreasthediscussion
continues.
Butletmesortofreversethequestionalittlebit.Iagreethatprogresstowards
harmonizationhasbeenslowinthecurrentframeworkandthereareseveralframeworks
thathavebeentried.Butreversethequestion,TTIPisanallsinging,alldancing,24hour
adaybarservicekindoftradeagreement.It'sgoingtocovereverything.
WhyarewetryingtodoeverythinginthecontextofTTIPwhenwe'vebarelybeenable
todoonething,thatis,automotivesafetystandards,outsidethecontextofTTIP.Ireally
wonderthatforthesakeofsomebenefitstobederivedfromTTIP,peoplearewillingto

p.17

maketheargumentthatitneedstodoeverything,needstocoverallareas.
Whydon'twesettleforsomethingthatcanbenegotiatednowthatwouldsecuresome
genuinebenefits,notverylarge,butsome,withouttryingtonegotiateanagreementthat
coversabsolutelyeverythingwhenwe'vebeenabletonegotiatefranklymuchof
anything.
Jon:Thea?
Thea:Well,I'mnoexpertonautosafety,butIdidsitthroughareallyinterestinganda
verydetailedandtechnicaldiscussionwithsomeautoindustryexpertsandconsumer
safetyexperts.Theyactuallyconvincedmethatitisn'tquiteassimpleasjustsaying,
"Hey,youhaveyourcrashstandardsandtheymustbeprettygood.Wehaveourcrash
standardsandwethinkthey'reprobablyalsoprettygood.Let'sjustaccepteachother's."
Ithinktheseareissues.Therearereasons,maybesomeofthemareirrational,butIthink
someofthemmayberationalforsomeofthedifferencesinchoicesthathavebeenmade
onthetwosidesoftheAtlantic.I'mnotwillingtoputthisprocessinthehandsoftrade
negotiatorswhoalsoarenotexpertsinautosafety.
Jon:Jim,yeah.
Jim:Well,Iwouldjustsay,simplyinresponsetowhatTedwassaying,thatyoustart
offwithabroadandaboldagenda.Yougoasfarasyoucanwhenyoustartoff.It'snot
goingtoendupwithgettingeverything.
Notradeagreementwe'veeverdone,whetherit'sbeenthroughtheWTOorit'sa
bilateral,regionalone,haseverendedupwithallthethingsthatwestartedouttalking
about.So,somethingsfalloffthetableandalotofthingswillfalloffthetablewith
TTIP.
Butthere'snoreasonfortwoworldgianteconomiesthataremoreintegratedthanany
othertwothatarenegotiatingatradeagreementintheworldnottostartwithabroad
agreementandtrytogetasfaraswepossiblycan.
Jon:Shaun,doyouwanttoweighinonthatautosafetyquestion?
Shaun:Wellno,justtoansweryouroriginalquestion,no.Icertainlyamnotsatisfied
withthestatusquo.Idon'tthinkAmericanbusinessissatisfiedwiththestatusquo.Itisn't
justaboutautomobiles.Automobilesis,inmanyways,aproxyforabroaderdiscussion
andweseethisinmanykindsofsectors.
Yes,thisisreally,reallyhard,buteachtimewesetupconflictingorparalleltests,andso
on,thecrashdummies,theseatbelts,we'rejustaddingcost,whichmakesitharderforus
tocompetewithJapaneseorothersinsomethinglikethis.Ithinkthepointherehasgotto
becanwe,whereverit'spossibleandit'snotgoingtobepossibleateverysectororevery

p.18

product,butwherewecanidentifyoverlapsorinefficienciesandwecanreducethem,
maybenoteliminatethem,butwherewecanreducethemandmakeAmericanand
Europeancompetitorsmorecompetitive,notjustinourownmarkets,butintheglobal
markets,that'stoouradvantage,ourcompany's,ourworker's,ourcitizen's,ourtax
revenues,andsoon.Weoughttobepushingveryhardtodoit.
Jimisright,we'renotgoingtomakeitineverysector,butthat'swhywedoboththe
sectors.Thosearebeingdoneaspartofthisregulatorydiscussion.Butalsointheother
parallelstructuraldiscussionabouthowyouregulate,howdoyouassesscostbenefit,
howdoyougetinputintothisthing.
Becauseweneedtogetregulatoryprocessesthatalsoworkbettersothatwehavefewer
oftheseproblemsgoingforwardasnewproductsemerge.
Jon:LetmestickwiththeproTTIPteamforthenextquestion.Members,I'mlistening
toyouofbothteams.Youbothseemtoagreethatactualunnecessarytradebarriers
shouldbeaddressed.Whatinyourview,whatinyourteam'sview,qualifiesas
unnecessary?Fueleconomystandards?Whataboutstandardsthatkeepthetoysour
childrenandgrandchildrenplaywithandthefoodweeatsafe?What,inyourview,
qualifiesasunnecessary?
Jim:IwouldjustsayIdon'tthinkwe'retalkingabouteliminatingthesestandards,we're
talkingaboutharmonizingthem.Whetheryou'retalkingchildren'stoys,forexample.
Whycan'twehaveacommonstandardastowhatmakesitsafe,what'ssmallenough,
largeenoughnottoswallow,what'snotgoingtobepoisonous,soforth,what'snotgoing
tohavesharpedgesonitandsoforth.Whycan'tweharmonizethose?We'renot
necessarilytalkingabouteliminatingthosestandards.I'msuretherearesome.I'llcome
upwithsome,I'msure,thatweprobablycouldeliminate,butthat'snotwhatIthinkthe
realissueishere.
Shaun:No,thisisnotaboutderegulationorloweringstandardsatall.Thisisabout
tryingtoseewherewecanalignthem,reduceinefficiencies,eliminatediscriminations,
andsoonlikethat.
Theseregulations,bytheway,oughttobeincludingintheagriculturalarea,theyought
tobesciencebasednotpoliticalbasedjusttomakethepointaboutGMOsorother
kindsofthingsthatarefranklygoingtobeamongthetougherissuesthere.
Butclearly,weneedregulation,weneedtoysafetyregulations,weneedpharmaceuticals
andfoods.Thisisnotanantiregulationandderegulation,loweringregulationkindof
agenda.Thisisaboutlet'sdoitsmarter,let'sdoitbetter,let'sdoitinamoreharmonized,
moreefficientkindofway.TedandThea?
Ted:Anyonehereintheaudiencewillingtogooutandmarchinthestreetsforacallfor
doingregulationalittlebitbetter?Goteveryone'sbloodpumpinghere?

p.19

Forsomereasonthisdoesn'treallymoveme.Isuspectthisiswheremydebatingpartner
andIwillpartcompanyinareallydrasticsortofway.Butletmetrytoputitonaplane
thatatleastsomepeoplewillagreewith.Rulesarecosts.Thatdoesn'tmeanthatwe
shouldhavenoruleswhatsoever.
Butrulesareliketariffsandlikequotasintheextentthattheyimposecostson
manufacturersandultimately,therefore,onconsumers.Now,wecouldhaveagood
discussionaboutwherewethinkrulesareunnecessaryandburdensomeandIsuspectI
wouldbeinfavorofamuchwidermeasureofderegulationthananyoneuphereinfront
ofyoutoday.
But,ouropponentshaveconcededthatthisisnotaderegulatoryorloweringregulations
agenda.Itisaboutaverytechnicalapproach,atbest,toreducingduplicativerules
betweentheUSandtheEuropeanUnion.That'sTTIP.That'sthewholedeal.
Whensomeonesaystoyouthatthisisgoingtoresultinsubstantialreductionofthecost
burdenofregulationoverallintheUSorEuropeaneconomy,there'ssimplynobasisfor
thatclaim,becausetherulesarestillgoingtobethere.Theymaybeharmonized,but
they'restillgoingtoexist.
Thea:Well,Ithinkthisissuchaninterestingarea,becauseTedandIdohave,insome
ways,theoppositeview.That,forme,ifthere'sgoingtoberegulatoryharmonizationin
TTIP,itmustbeharmonizationupwardandnotdownward.
ButI'vebeenonpanelswithotherbusinessrepresentativesandthey'vetalkedaboutthe
kindsofEuropeanUnionregulationsonchemicalwaste,ontheenvironment,on
consumersafety,thattheyfindannoyingandburdensomeandexpensive.
Thedynamic,whatIamconcernedaboutisI'vebeenassured,amilliontimes,byour
negotiators,it'sallgoingtobeharmonizationupwardsandthat'swhyTedissoupset.But
Idon'tbelievethem,somaybeTedwillbehappyandI'llbeunhappyattheendofthe
day.
Itdependsonwhattheroleofincorporationshaveinthistradeagreement,onbothsides
oftheAtlantic,inEuropeandintheUnitedStates.Forexample,Europehasdifferent
standardsandhigherstandardsonsomethingslikebovinegrowthhormoneand
geneticallymodifiedorganisms.
IcanassureyouthatnoneofthebusinesspeopleontheUSsideoftheAtlanticthinkthat
theendofTTIPisgoingtobethatwe'regoingtoagreetoimposethosehigherstandards.
Now,Shaunhadsaid,"Ofcourse,ithastobesciencebased."Thatallsoundsgood,I'm
allforscience.I'masciencebelievermyself,notagreatscientist.
Butinpractice,whathassciencebasedmeantintermsoftradenegotiations?Whatithas
meantisthatonecountryhasastandardthattheythinkisprotectingthemagainstsome
kindofrisk,thattheirconsumersortheirscientistshavefeltisarisk,orhavedetermined

p.20

isarisk.
Oneexampleforexampleistheprecautionaryprinciplewithrespecttocancer,possible
carcinogenicadditivestofoodorothersthings.Now,youmightjustsayjustbevery
careful,whywouldyouwanttosellproductsthatmightbecarcinogens?Soyoushould
haveaprecautionaryprincipleifthere'sevenachancetheremightbeacancercausing
agent,thenyoushouldregulateagainstthat.
Butthatcouldbeexpensive,asTedmightsay.Othercountriesmightsay,"Oh,you're
justbeinganervousNelly.There'sasmallchancethatitmightcausecancer,butwhothe
heckcares?"Now,arewewillingtoletatradeagreementadjudicatethisverydifficult
questionforus?No,Isubmitthatthat'sthereasonwehavedemocraticallyelected
governmentsandnottradenegotiators.
Jim:IfIcouldjustquickly...
Jon:Absolutely.
Jim:...quicklyrespond.TowhatTedsaid,andbythewayIdon'tknow,Imightgive
youarunformoneyonthederegulation,there,butIcertainlywouldliketosee
deregulation.Iwasmakingthepointsimplythatwhatisthereality.Idon'tthinktheTTIP
isaboutderegulation,it'saboutharmonization.ThepointIwantedtomakewasisyou
saidcorrectlyrulesarecosts.Differentrulesaregoingtobemorecostly.So,theextent
thatyoucanharmonize,andnoIdon'texpecteverybodyheretogomarchinginthestreet
rightafterwardforharmonizationofrules.Buttotheextentthatwedoharmonizesome
ofthoserules,wedoreducethecosts,anditdoesbenefitconsumers,andworkers.
Jon:LetmecomebacktoTedandThea,becausewe'retalkingaboutTTIPbutIalso
wanttogetyourviewaboutwhatyouthinkshouldbethemodelfortradeagreements.
HastherebeenanytradeagreementtheUShassignedandimplementedthatinyourview
hasworkedandbenefitedUSbusinesses,andAmericanworkers.
Thea:Doyouwanttostart?
Ted:Sure.IsuspectthisisanotherareawheremydebatingpartnerandImaycometo
somedisagreement.I'mtheconvincedsupporterofUStradediplomacysince1945,
whichIthinkhasbeenanunparalleleddisplayofwisdom,economicprogress,andgrand
strategiclogic.
IthinkthatoneofthebestsinglethingstheUnitedStatesdidintheaftermathofWorld
WarIIwastopushforthecreationofGATTwhichlastedforapproximately50years,
whichresultedinthedramaticloweringoftariffsandquotas,firstbetweentheUSand
Europeandthenlargelyaroundtheworld.Ithinkthiswasanenormouscontributorto
prosperityandpeace.IthinkitwasavitalpartofAmericanColdWarstrategy,and
Americaneconomicstrategy.

p.21

However,Idon'tthinkthatTTIPisacontinuationofthattradition.Ithinkitmovesus
away,naturally,intheconsiderationoftariffsandquotasintotheareaasweallagreeof
harmonizedrulemaking.Idon'tthink,therefore,it'sacontributiontoeconomicfreedom,
tofreetrade.
I'dalsoaddthatGATTwasdistinguishedbecauseithadageopoliticalvisionbehindit,a
visionwhichinthecaseofTTIPisatbestextremelyweak,andinmyview,absentall
together.
Jon:Thea?
Thea:Well,actually,onethingIagreewithTedonisthat,inprinciple,inanideal
world,Ithinkmultilateraltraderulesmakemoresensethanabunchofdopey,
overlapping,regional,andbilateralagreements.Ithinkthat'samessyspaghettibowlas
someeconomistshavesaid.ButI'mnotcrazyabouttheWTOortheGATTintermsof
theactualoutcomes.
Buttheoneissuewherewehaven'ttalkedabouttonightislaborandenvironmental
standards.ThisissomethingthatAFLCIOandalotofourallieshavebeenpressingfor
sinceNAFTAprogressivelytoincorporatestronger,binding,moreenforceablelaborand
environmentalstandards.Withrespecttolabor,we'velookedattheInternationalLabor
Organization,whichisuniqueintheinternationalworld,becauseitisatripartitebody
thathasrepresentation,notjustforgovernments,butfrombusinessandfromlaborfrom
170differentcountries.
Thestandards,thecorelaborrightsthattheILOhaveidentified,thefivecorelabor
rights,theyhavebeenincorporated.Thisiswhatwe'vebeenfightingforformanyyears
intoUStradeagreementssinceNAFTAwasprogressivelyupanddownstronger
protections.
TheJordanAgreementwasthefirstagreementthattheAFLCIOsupported,becauseit
didhave,forthefirsttime,enforceablelaborandenvironmentalstandards.Wealsowere
supportiveoftheMay10thDealthatwouldstrengthenlaborandenvironmental
standards.Butthetruthiswe'vebeendisappointedintheimplementationofallthese
agreements.That,infact,governmentaftergovernmenthasletusdown,becausewe've
seenverylackluster,Iwouldsaymediocre,enforcementoflaborprovisionsandtrade
agreementsacrossbothDemocraticandRepublicanadministrations.
We'relookingtoreallystrengthenandbuildonthatfoundationsowecangetitright.We
haven'tgottenitright,yet.
Jon:JimandShaun.
Jim:Goahead.
Shaun:No,yougoahead.

p.22

Jim:It'sfunnytolistentosomeofthis,becauseIthinktherearelargeareasherewhere
wemightagree.IcertainlythinkthatthepostWorldWarIItradearrangementshave
beenvery,verysuccessfulinGATT.LeadingintotheWTOhasbeenverysuccessful.
Buttheworldoftradehaschangeddramatically.
Itwasabouttariffsbackthen.Thatwasreallywhatitwasessentiallytherealissue.We
hadveryhugetariffs,hightariffseverywherearoundtheworld.Itwasreducingthose
wasthemostimportantthing.Today,intheworldthatwelivein,tradeisnotsomuch
abouttariffs.It'saboutotherthings.It'saboutotherbarriers.
Tariffswerethebarriersthen.Westillhavebarriers,butthereareotherbarriers.The
GMOsareagoodexampleofthat,whenEuropeimposesGMOstandardsthatexclude
ourproducts,ouragricultureproducts,damageouragricultureindustry.Wecangetinto
anargumentaboutwhytheydothisandwhetherit'svalidornot.Idon'tthinkitis.
Ithink,asShaunhassaidearlier,it'sgottobebasedonscientificevidence.Idothinkthat
thisagreementcanbeveryimportantintermsofreducingsomeofthoseotherbarriers.
Theydon'thavetobetariffbarriers.Theycanbeotherbarriers.
Shaun:Wedon'tnecessarilygettopickthebarriers.Wedidtariffs,andcertainly
betweentheUSandEuropemostofthemaregone.Thereareafewleftinverysensitive
sectors,principallyinagriculture,andweoughttobetryingtogoafterthem.Ithinkthere
wasaconsensusherethatweoughttoeliminateallofthose.We'dallfourliketoseethat
happen.
ButIthinkwehavetodealwiththebarriersweconfront.IfyoulookattheUSand
Europe,thebarriersthatareoutthere,youcandecide,"Well,thesearen'tthegoodold
tariffbarrierswelike.Weshouldstop."
Ithinkthisiswhat,certainly,mycompaniesaresaying.Thesearethethingsthatare
affectingourabilitytodomorebusiness,tosellmoregoodsandservicesintothe
Europeanmarket.Ithinkwehavetodealwiththeagendathatweconfront.Ifyoulookat
theTPP,thetranspacificnegotiation,muchheaviertarifftherebecauseofthepartners
we'renegotiatingwith.Weoughttobepushingtogetallthosetariffseliminatedanddo,
inmyopinion,theregulatoryissuesaswell.
WhenyoulookbetweentheUSandEurope,whatI'mhearingis,"Cleanupthetariffs,
but,God,therealproblemswe'refacingareontheregulatoryside."
Theamayliketheprecautionaryprinciple.Iliketheideaofprecaution,butourEuropean
friendshavetotallyabusedthisideainareaswheretheydon'thavescienceandtheyjust
say,"Wedon'tknow.Theremightbeaproblem,so,therefore,we'regoingtobanit."
Ithappenstoalwaysbeinsectorswherethey'renotcompetitiveandweare.It'salittlebit
questionablehowmuchofaprinciplethatisandhowmuchthat'sprecautionarypolitics.
[laughter]

p.23

Jon:Ouraudienceisnotjustheretowatchtonight'sdebate.They'realsohereto
participateintonight'sdebate.Nowisanopportunityforyoutoasksomequestionsofthe
peopleuphereonourpanel.
Ithinkthatwehavepeopleoneachsideofthisauditoriumwithmicrophones.Ifyouhave
somequestions,ifyouhaveaquestion,pleaseraiseyourhandandthey'llcometoyou.
Acoupleonthatside.
[pause]
MaleAudienceMember:Thankyou.MyquestionwasforMr.Bromund.Ihavetwo.
First,yousaidthatafterWorldWarII,itwasgood,withtheGATT,tolowertariffsand
toeradicatequotasbutnowadayswiththeTTIPeliminatingnontariffbarriersisnot
importantordoesn'tmakeanysenseorsomething.Ididn'tunderstandwhyitwasgoodto
eliminatequotasandtariffsbutnottoeliminatenontariffbarriers.
Mysecondquestionwasregardingyourfirstremarks.YousaidthatTTIPwasnotagood
dealbecauseitwassettingrulesforindustriesthatweseetodayeverydaybutTTIPis
notsettingrulesforindustriesofthefuture.Iwaswonderinghowyouwouldwantthe
negotiatorstosetrulesfortheindustriesofthefuturesince,ofcourse,wedon'tknow
theywilllooklike.Thankyou.
Ted:Ifeelreluctanttohogthepanel'sresponsetothis,butasthequestionswereasked
ofme,I'lltrytoanswerthem.
Thedifficultywitheliminatingnontariffbarriersisthatthewaythattheywillbe
eliminatedinpracticeisthattheUSandtheEuropeanUnionwillagreeonasetofrules,
thesamerulesforparticularsectors,andaprocessfordesigningrulesinthefuture.So,
youwillhaveaconvergenceofrules.
Therulesarestillthere.Allyou'vedoneis,incertainsectors,you'vemadeitalittleeasier
forcompaniestocomplywiththem,buttheoveralleconomicburdenoftherulesremains
almostentirelyuntouched.That'swiththebestcase.
Thesecondpartoftheanswerreallyrelatestoyoursecondquestion.Idon'tknowwhat
themarketisgoingtoproduceinthefuture.That'swhyit'scalledthefreemarket.That's
whyIlikeit,becauseeveryoneoutthereissmarterthananyoneoutthere.WhatIdon't
wantistogivelargecompaniesand,forthatmatter,largelaborunionstheabilitytowrite
rulesnowthataregoinginevitablytohampertheemergenceofthesmartideasandthe
bigcompaniesinthefuture.
Becauseunionsandcompaniestoday,andthere'snothingwrongwiththemadvocating
theirpointsofview,theywillinevitablytrytohaveruleswrittentodaythatbenefitthem.
That'sperfectlyfair,andperfectlyreasonableforthemtotrytodothat.
But,becausewedon'tknowwhatthemarketisgoingtoproducegoingforward,those

p.24

rulesaregoingtogovernwhatthemarketwillproduceinthefutureanditwillreducethe
opportunitiesforgrowth,foremploymentandfornewideasgoingforward.
So,Idon'tliketheserulemakingprocessespreciselybecauseIbelieveinthefreemarket,
andIdon'twanttogiverulemakerstheabilitytocrampitwhenwedon'tknowand
cannotknowwhatit'sgoingtoproduce.
Jon:JimandShaun,youhavetwominutesifyou'dliketotakeacrackatrespondingto
thatquestion.
Shaun:Well,I'lljustmakeonepointandleavemostofthetimeforJim.Ithinktheseare
fundamentallynegotiationsbetweengovernments,andultimatelythegovernmentshad
listentobusiness,largeandsmall,listentolaborandotherpeople.
Butit'sultimatelythejobofgovernmenttobeabletolookaheadandseewhatmightbe
overthehorizon,andwriteinagreementthatisn'tjustprotectingtheexistingcompanies
ortheexistinginterestgroupsandsoon.Ithinkwe'veseen,whetherit'sAppleand
MicrosoftemergingintheITsector,whichdidn'texistwhenGATTormanyofourFTAs
arebeingnegotiated.Or,UPSandFedExinthedeliveryservicesarea.
Ithinkyoudo.Itisaresponsibilityofgovernmentastheylookatthese,toseehowcan
youleavespaceforwhatmightbecoming.Maybetheyhavesomeinkling,maybethey
don'tknow,butIthinkit'safairpointtomakesurethatyoudon'tjustwriteittoprotect
theexistinginterest.
It'sanationalinteresttocreateopportunities,andthereoughttobespaceinthere.Ithink
generally,thefactwe'veseenintheITindustry,we'veseenmanypartsoftheservice
industriesthatdidn'texisthaveshownthattradeagreementsdon'tseemtobean
impedimenttonewsectors,newcompanies,newwaysofmergingandprospering.
Jim:Yeah,that'sbecausewe'veneverhadatradeagreementlikeTTIPthatfocuseson
transnationalruleharmonizationbefore.
Thea:Actually,we'vemademistakes.Ourtradenegotiatorshavemademistakesinthis
areawhere,forexample,inservices,thequestioniswhetheryouhaveanexceptionfor
theindustries,thesectorsthatyoudon'twanttobecoveredbythecommitments,or
whetheryounametheonesthatshouldbein.
Ifyounametheonesthatshouldbein,you'remoreprotected.Butsomethingslike
electroniccommerce,andhowthat'staxed,orhowtariffsgo,oranythingslikeevenwith
respecttogambling,whetherthat'scoveredbyourWTOobligationsandservices.
Wedon'tabidebyWTOruleswithrespecttogambling.WehavemonopoliesforIndian
tribes,andforstates,andweuselotteriestoraisemoneyforstateeducationfunds.We
don'tallowforeigninvestorstocomeinandbepartofthatmarket,andyetour
negotiatorsmadeamistakeinwritingthatlistofwhatshouldbepartofotherrecreational

p.25

services,thinkingthegamblingwasnotincluded,wheninfactwelostinaWTOdispute
settlementpanel.
Jon:Let'sgetanotherquestionfromouraudience.Thisgentlemanrighthere?
FemaleAudienceMember:Excuseme,sir,canyoutakethis?
Yon:Hi,mynameisYonSeaten,andI'mavisitingfellowfromCenterforTransatlantic
Relations,andI'malsofromFinland.MyquestionregardswelfarestatesandTTIP.Isit
possibleinthefuturetohaveastatelikeFinlandorotherScandinavianstateswhereyou
haveservicesfundedbygovernments,orhowisTTIPgoingtoaffecttheseservices?
Thankyou.
Jon:Whydon'tyoustartusoffwiththatanswer,Shaun?
Shaun:Well,certainly,mytakeisabsolutely.ThisTTIPisnotabouthomogenizing
EuropeandtheUnitedStatesinthewayweorganizeoursocieties,thewaywetaxand
supportthings.There'salotoffearmongeringoutthere,thatsomehowtheTTIPisthe
dreadedinvestorstatedisputesettlementthatThealikestoworryabout.
Thatsomehow,thisisgoingtoallowAmericancompaniestocomeinandtrytoprivatize
Europeanuniversities,orhealthcaresystemsorsomethinglikethat.Thisisnotwhatthis
isabout,publicservicesoranythinglikethat.
So,Icertainlydon'tanticipatethatTTIPwouldcausetheUStoreorganizehowitdecides
toorganizeit'sfundamentalstructureofitseconomy,andIdon'tthinkitwouldbeabout
intermsofEurope,howFinlandwantstodoit,orFrance,oranythingelse.Howyoudo
itwithintheEuropeanUnion,that'sanissuewe'llstayoutof.
Jim:Letmejustadd,andthenturnitovertootherpartsofourteam,theotherteam
here.TedandImightagreeatthispointthatwemightliketoseesomeelementsofthat
welfarestatedismantled,butIdon'tthinkthat'swhatTTIPisabout,andIdon'tthinkit's
goingtodothat,eliminateorforcecountriesinEuropeorintheUnitedStatestochange
partoftheirsocialsystem,welfaresystem,theirpensionsystem,SocialSecuritysystem,
whateveritmightbe.
Idon'tthinkitreallyisaboutthat,evenifwemightsometimeswantthattohappen.
Ted:Yeah,Idon'tsharetheseconcerns.Wecanobviouslyhaveadiscussionaboutthe
desirabilityofveryhighlevelsofwelfarespending,butthat'sentirelyseparatefromthe
questionofwhatTTIPwilldo.Iagreewithmyfellowdebatersthatwhetheronelikesthe
systemornot,thisisnotwhatTTIPisabout.
Iwouldjustaddonemoreslightlyprovocativethought.Thebiggestsinglethreattothe
futureofEuropeanandAmericanwelfaresystemsistheunaffordabilityofbenefitswe
promisedinthefuture,andrelativelylowlevelsofeconomicgrowth.

p.26

TotheextentthatTTIPincreasesregulatoryburdens,thoughtheywouldbeharmonized,
buttotheextentthatTTIPencourageshigherlevelsofharmonizedregulationoverall,it
willmarginallyreducefuturegrowthandmakefuturewelfarecommitmentssomewhat
moreunaffordable.Butthat'snotaneffectofTTIPasaregulatoryagreement,that'san
effectofperhapslowereconomicgrowthgoingforward.
Jon:Wehaveonemoreminuteleftforthisanswer.
Thea:OK.Ithinkit'snotreasonabletobeconcernedaboutwhattheimpactofTTIP
mightbe,becauseIThinkoneofthethingsis,thelinebetweenpublicandprivate
servicesinatradeagreementisalittlebithardtojudge.
There'slanguagethatsaysthataserviceisoperatingcompetitionwiththeprivatesector,
whatiseligibleforcompetitionintheservicesector,whatareweopening,andwhatare
wenotopening.AsIsaid,governmentstakeexceptions.Theysay,"OK,thepostservice
isprotected,"andthisandthat.Buthealthcareandeducationaretwoareaswherethere'sa
lotofcompetitionbetweenthepublicsectorandtheprivatesector,andit'snotoutofthe
questionthatsomeofthislanguagemightbeusedtoundermine,ortoattack,orto
challengethepublicprovisionofservicesinthefuture.
So,Ithinkthatissomethingtobeconcernedaboutinadditiontotheproblemofthe
investorstatedisputesettlementandhowcorporationschallengegovernmentsover
protectingmarketsfromthem.Theydon'twanttobeshutoutofthosemarkets.
Jon:Otherquestions?Thiswomanrighthereinthejacket.
AnnatheaCook:Hello,mynameisAnnatheaCook.I'mfromtheMiddleburyInstitute
ofInternationalStudiesatCalifornia.I'dliketothankyouguysforhostingthiseventso
wecanattendforfree,manyofusbeinggradstudents.
MyquestionwasaboutTTIPandhowitmakesusmoreorlesscompetitiveinthe
internationalglobalmarket.There'sacertainamountofargumentonthisissuethatitcan
raiseusandmakeusmorecompetitivewhenwehaveregulationthat'scohesive.
Itmeansthattherestoftheworldwillhavetoraisetheirstandardsinordertoaccess
thesehugemarkets.Itraisesthestandard,anditmakesusleadersininternationaltrade.
Theotherargumentisthattherestoftheworldisgoingtomoveonwithoutusandthat
regionalagreementsshalljustignorethesehigherstandardsandtheywillcontinueto
makehighprofit.
Iwantedtohearmoreabouthowthistradeagreementisgoingtomakeusmoreorless
competitiveintheinternationalworldandwhatyouthinktherepercussionswouldbe
aroundtheworld.
Jon:Jim,whydon'tyoustartusoffwiththat?

p.27

Jim:I'mjustleadingrightintoyourquestionthere.Ithinkitdoesjustexactlywhatyou
said.Ithinkithastodowiththefactthattheharmonizationofstandardsdomakeitmore
competitive.You'vetakentwoofthelargesteconomiesintheworld,andifyou'resetting
someofthestandardsfordifferentthings,therestoftheworldisgoingtohavetofollow
suit.
Ifwedon'tdoit,ifwe'renotabletodoit,thedayiscomingsomewhere,notinthefar
distantfuture,thatChinawillbetheworld'slargesteconomy.They'regoingtostart
settingsomeoftheserules,andthey'renotgoingtoberulesthatwe'regoingtolike
particularly.Ithinkthatit'stoouradvantagetotakethetwolargesteconomiesinthe
worldandstarttosetsomeoftheserulesnow.
Shaun:ThefundamentalpurposeofTTIPisaboutmakingEuropeanandAmerican
companiesmorecompetitive,moreefficient,findingthoseinefficiencies,thosebarriers,
thoserulesthatraisecostwithoutanotherpositivebenefitorsomething,andgoingafter
it.
WhenyouhavetheUSandEuropetogetherrepresentingabout40percentofglobal
GDP,companiesoutthereinIndiaandChinaandBrazilthatwanttosellintoour
markets,they'regoingtohavetofocusonthosekindsofstandards.
Thenwecan,overtimeandthroughagreementsbutalsojustdefactobusinesspractices,
wehaveagreaterchanceofsettingthosekindsofstandardsinbusiness.It'snotgoingto
workineverysector.It'snotgoingtobeperfect.
IfthechoiceistokindofstaywiththestatusquooftheUSandEuropehavingdiffering
regimesortrytoharmonizeandmakesupplychainsacrosstheAtlanticeasierandmore
efficient,Icertainlythinkthat'sthewaytogo.
Jon:TheoandTed?
Ted:Letmejustofferacoupleofquickthoughtsonthat.First,asIsaidinmyvery
openingremarks,theimpactofTTIPisgoingtobe,atbest,averymarginalpositive.
Everyseriousstudyofthis,mostlydonebypeoplewhoaresupportiveofTTIP,findsthat
thetotalgainfortheUnitedStatesandfortheEuropeanUnionisaroundaboutaquarter
ofonepercent,maybealittlemore,maybeuptoathird,ofGDPafter15years.
Thatgivesyouanenormousfigure,butattheendoftheday,it'slessthanonehalfofone
percentofGDP.ThisisnotgoingtotransformtheUS'ortheEuropeanUnion'sGDP,its
internationalcompetitiveness,oranythinglikethat.Atbestit'samarginalpositive.
Thenthere'stheChinaargument.OnereasonIfindTTIPsomewhatunattractiveisthis
argumentthatweneedtosetstandardsnowbeforetheChinesecomealongandgetsobig
thattheysetallthestandards.Iseeanumberofdifficultieswiththat,butletmejustpose
onequestion.

p.28

IfChinaisgoingtorisetothislevelofeminence,aretheygoingtokeeponacceptingour
standardsafterthey'resobig,omnipotent,andallpowerful?Youdon'tjustsetstandards
andthenaftersomeotherpowerrises,they'regoingtomagicallykeepthosestandards.
Onceyoustartconcedingthatargument,you'veconcededthatChinaisgoingtosetthe
futureofstandardsregardlessofTTIPornotbecauseit'sthedominantplayerthat
ultimatelysetsthestandards.Ithinkourbetterbetistogoforbettergrowthwhich,tomy
mind,doesnotmeanhighcontinuedlevelsofdomesticregulation.
Jon:Thea,doyouwanttogetinonthat?
Thea:No,that'sOK.
[laughter]
Jon:Canwetakeanotherquestion?Thisgentlemanrightintheback.
[pause]
DamianLevie:DamianLevie,IworkfortheEuropeanUnionDelegationonTrade.
Thea,ifregulatorsweretodiscussconvergenceandnottradenegotiators,wouldyou
agreewithregulatorsinmanyareastryingtoreduceexistingdifferences?That'swhat
happens.
It'snottradenegotiatorsdoingthat.It'sregulators.I'vebeensittingineachroundinthese
sessions,andwhenyouhavecars,youhaveNITSApeoplehereandthenyouhavetheir
counterpartsinEurope.Tradenegotiatorsaresittingnexttothemandtakingnotes,but
theydon'truntheshow.
It'stheregulators.EPAdoesthesamething.FDAdoesthesamethingwith
pharmaceuticals,pesticides.Lookattheninesectorswhereweareworking.Regulators
arealwaysrunningtheshow.
Thea:Ithinktheregulatorsneedtomakesurethey'regoingbacktotheconsumers,the
environmental,thelabor,andtheindustrygroupsaswell.That'swherethesecrecy
becomesaproblemagain.Ithinkifyou'regoingtohavethatprocesswhereyou'regoing
tomakedecisions,permanentdecisionswithrespecttofutureregulation,thenitcan'tbe
doneinaclosedroom.
Itneedstobedonewiththelightofdaybecausethosearedecisionsthatnormallyare
subjecttorecallwhereyoucanelectadifferentgovernmentthat'sgoneinthewrong
direction.
Itakeyourpoint,Damian,thattheregulatorshavebeenpartofthisprocess.ThenIalso
thinkthatyouneedtomakesurethatyouhavesomesunshineintheretomakesurethat
you'rereallyaccountabletocivilsociety.

p.29

Jon:ShaunDonnelly?
Shaun:IjustwanttopickuponDamian'spoint.Ithinkthefactiswe'vebeentrying
regulatortoregulatorforthepast30yearstomakeprogressinthisarea,andIdon't
thinkwehavealottoshowforit.
Ithinkthiseffortthatwehavenowwiththeregulatorsbutalsowiththe,callitwhatyou
will,thepressureofthetradenegotiation,cangiveusthebestchancetomakepractical
progressinthisarea.IfwegiveuponTTIPandjustcountontheregulatorstodoit,
they'regoingtofallbackintotheiroldtraditionalwaysofdoingit,andwe'regoingto
havemissedanopportunity.
Jon:Doeitherofyouwantto...
Ted:No,it'sallright.
Jon:OK,let'sgoingtosomebodyelseoutintheaudiencewithaquestion.This
gentlemanrighthereinthecenterinthebrownjacket.
[pause]
Jon:Ithinkamicrophoneiscomingyourway.Rightbehindyousir,rightbehindyou.
Raj:I'mRajBoyaaDCresident.Maybeit'satwopartquestion.Youareexperts.I'm
notsurewhetherfolksworkinginruralpartsofthiscountrycanunderstandthe
complexityandthebreadthoftheissuesthatyou'retalkingabout.
Lookingbackhistoricallyspeaking,notdoingtheunintendedconsequencesatthattime
butnowprobablyyouknow,howdoyouthinkitisgoingtoimpacttheworkersinthis
country?Asyouknow,inequalityhasbeenincreasing.Richaregettingricher.Poorare
notgettingricher.
Howwouldthisimpactthosefolks?PeopleworkingatWalMart,forexample,theymay
beabletobuyitemsatWalMart,butsomeofthemareactuallyonfoodstamps.I'm
curioustoknowyourthoughtsonthat.
MysecondquestioniswhenyoutalkaboutEuropeanUnion,therearesomanycountries.
GermanyversusGreece,thereisahugedifference.Couldyoupleasetakeanexample
andexplaintome,alayman,intermsofhowitwouldworkwhenthereissomekindof
tradebetween,let'ssay,UnitedStatesandGermanyversusUSandGreece?Thankyou.
Thea:Thankyouverymuchforthequestion,Raj.HowwillTTIPimpactworkers?That,
Ithink,isreallywhereitdependsonwhatcomesoutofthenegotiations.That'swhy
we'vebeenfollowingthemsocloselyandgoingbackandforth.
Oneissuereallyisthelaborchapter.WhatkindoflaborchapterwilltheUnitedStates
andtheEuropeanUnionconclude?Ithinkneithercountryhasputanylanguageonthe

p.30

tableyet.Ithinkinthisarea,it'sonewherethereisapotential.
WecertainlylookattheEuropeanUnion.Weseethattheyhave,ingeneral,higherlabor
standardsandbetterlaborlawsthantheUnitedStatesdoes.It'snottoohardtodothat.
WewanttomakesurethatwearereallybuildingonthestrengthsoftheEuropeanUnion
andbringingusup.
Theotherpointthatyoumake,whichisthediversitywithintheEuropeanUnion,Ithink
isalsoimportant.Ithinkpeoplehavesortofaquick,shallowimageoftheEuropean
UnionasbeingFranceorGermany,butyouhavealotofsmaller,poorercountriesas
well.That'simportanttokeepinmindintermsofthelaborchapterandwhattheimpact
isonjobs.
IthinkthepointthatyoumakeaboutworkersatWalMartthatgettingaccesstolower
pricesdoesn'thelpyouifyoudon'thaveagoodjob.That'swhywereallywanttomake
surethatourgovernment,theUSgovernment,canfocusinonwhatdoesitmeantokeep
goodjobsintheUnitedStates,howdoweinvestintheinfrastructureandtheskillsthat
weneedthatourgovernmenthasn'tbeenveryinterestedindoinginconjunctionwiththe
tradeagreementsthatarebeingnegotiated?Also,whatdoesitmeanintermsofthe
governmentprocurementchapter?Howmuchaccesstoforeigngovernmentsdowegive
toprocurement?Doweuseprocurementdollars,taxdollars,tocreategoodjobsfor
Americanworkers?Howdoweprotectlaborstandardsandreallymaybetakethelabor
commitmentstoanewlevel?That'ssomethingwereallyhaven'tbeenabletodobeforeto
reallyprotectworkers'rights.
Jon:JimandShaun,wouldyouliketorespondtothatquestion?
Jim:OtherthannotethatIdon'tnecessarilyshareThea'sassessmentonwhohasbetter
laborlawsorsomething.Ithinkonyoursecondquestionaboutthediversitywithinthe
EuropeanUnionGreeceandGermany,justtopicktwothatIthinkyoumentioned
therealityisthatwhileitmayimpacteachofthosemarketslikethedifferencebetween
WyomingandNewYorkCityintheUSsideiscertainlysignificant,theEU28member
stateshave,inthetradearea,ceded,ineffect,theirsovereigntytotheEuropean
Commission.
Intermsoftraderulesthatarenegotiated,whattheEuropeanCommissionnegotiates
appliesequallyineachcountry.ThegovernmentofGreeceorGermanydoesn'tanymore
havethelegalauthoritytogooutandnegotiateorsettheirowntariffsoranythinglike
that.
Becausethey'redifferenteconomieslikeyoucouldfindindifferentpartsoftheUS,the
impactmightbedifferentandsoonlikethat,butIthinkthelegal,thetradeimplications
isgoingtobethesameamongeachofthe28memberstatesoftheEU.
Jon:Ted,I'mnotgoingtobeabletogettoyou.Sorry.OurQ&Aportionofthedebateis
nowconcluded.Inowwanttogotowhatwetalkedaboutattheverybeginning.Iwantto

p.31

gotoeachofourpanelistsandasktheminoneminutetosumupwhatheorshebelieves
theUSshoulddorightnowasamatterofUStradepolicywithEurope.TheproTTIP
teamwentfirstinthebeginningpartofthedebate,andnowourantiTTIPteamwillgo
firstintheconcludingpartofthedebate.Thea?
Thea:Thankyouverymuch,Jon,andthankstoallofyou.It'sbeenaninterestingand
livelydiscussion.
So,whatshouldtheUSdointermsofthesenegotiations?Well,oneeasythingIwould
putonthetableistodroptheinvestorstatedisputesettlement.Thisissomethingwhichis
unnecessaryintheUSEuropeancontext.
TheEuropeanUnionhasalegalsystemthatisperfectlyprotectiveofcorporations.
There'realotofUScorporationsthatgobackandforth,andEuropeancorporationsthat
cometotheUnitedStates.Neitherofthemisdisadvantagedtoday.Wedon'tneedtoopen
upthesystem.Thatwouldtakeoutanenormoussourceofcontroversyanddisagreement
withinthenegotiations.
TheotherthingIwouldliketoseeistoreallyopenupthenegotiationstomuchmore
transparency.IthinkitwillbenefitthenegotiatorsonbothsidesoftheAtlantic.Because
we'redealingwithdifficultregulatorysubjects,thattheonlywaytoensurethisisgoing
intherightdirectionistomakesurethatlabor,andenvironment,andconsumerand
industrygroupsarepartofthediscussioninanopenway,fromtheverybeginning.
Then,putalotofemphasisonthelaborandenvironmentchapters.Ithinkthat'swhere
there'sarealpotentialtonegotiatesomethingthatwastrulyinnovative,andcouldhelp
workersonbothsides.
Ted:Thanks.IwouldliketothanktheMcCaincenter,andthemoderator,andmyfellow
debatersforanexcellentevening.
Letmejustputittoyousimply.ThewarforfreetradeintheNorthAtlanticareais
essentiallyover,andthefreetradershavewon,andthat'sagoodthing.Thereareafew
thingsthatwecoulddointhecontextofTTIPthatwouldbeofmarginallyadditional
benefit.Eliminateanyremainingtariffs,eliminateanyremainingborders,andthenwe
couldlookatafewsectors,relativelyhighvalue,carsanddrugshavebeenmentioned
here.InsteadoftryingtocovereverythinginanenormousTTIPagreement,focusona
veryfewareasthatpromisehighgains,andwithallduerespect,myfellowpanelists,
simplyagreetomutuallyrecognizeeachother'sstandardsandmoveon.
It'sashort,easytonegotiatetradeagreementthatgeneratesalotofthegains,foralot
lessofthefuss.Then,inthefuture,welookatotherareas.Wemightlookatagreeingto
accepteachother'sstandards.
WemettheenemyoffreetradeandeconomicfreedomintheNorthAtlantic,andthat
enemyisus.Ourregulatoryburden,everyyearintheUnitedStatesis$3trillionata

p.32

minimum.ComparedtothegainstobederivedyouarefromanambitiousTTIP,thatis
absolutelynothingcomparedtooverallregulatorycosts,whichwillnotbetouchedby
TTIP.
YouwanttofightforeconomicfreedomandfreetradeintheUnitedStates?Lookatthe
burdensweimposeonourselves,notattheburdenstheEuropeansimposeonus,orvice
versa.
Jon:Jim?
Jim:Well,I'llalsothanktheMcCainInstitute,andJon,ourmoderator,asinagreatjob
here,andmyfellowpanelists.Thishasbeen,Ithink,aninterestingandenlightening
eveningifIcantakethisyousecondtosaythat,becausemyanswercanbegivenin
muchlessthanoneminute.
WhatcantheUnitedStatesdonowforTTIP,orfortrade?Wecangetthecongressto
approvetradepromotionauthoritysothatthePresidentcanproceedwithgettingthe
negotiationgoingforward.Withoutthat,wewillneverhaveaTTIP.SoCongress,geton
thestickandpasstheTPAsothatwecankeepmovingforward.
Jon:Shaun?
Shaun:Thanks,andIalsowanttothanktheMcCainInstitute,andyou,Jon,andmy
colleagueshere.It'sbeenaninterestingevening.
MyanswerisverysimilartoJim.Gettradepromotionauthority,andthengooutand
negotiateagood,strong,ambitious,goldstandardTTIPagreementwithourEuropean
friends.
Weneedtohaveastronginvestmentchapter,includingarbitrationproceduresorinvestor
statedisputesettlement.InvestmentisatthecoreoftheUSEuropeaneconomic
relationship.We'reeachtryingtonegotiateinvestmentagreementswithChina,andifwe
giveuponaninvestmentagreementbetweenthetwoofus,we'renevergoingtogetit
withChina.We'vegottogetthatdone.
Wefaceafundamentalchoice.Everybodydoes,butlet'stalkfromtheUSside.Youcan
eitherrecognizethatglobalizationishereandtrytodealwithit,andmanageit,anda
strongTTIPcanbepartofit,orwecantrytodenyit,andturnbacktheclock,andlivein
thegoodolddayswhenitwasalotsimpler,whenyoucouldmakeeverythinginAmerica
andyoudidn'thavetoworryaboutsupplychains.
We'vegottoacceptreality.Nostalgiaisnotastrategyforcompetitivenessandjobsinthe
21stcentury.TTIPisastrategyfordoingthat,andthat'swhatweoughttodo.
Jon:Iwanttothankourgreatpaneliststonight.ShaunDonnelly,JimKolbe,Ted
BromundandTheaLee,youdidagreatjobtonight.

p.33

Thankyoutoouraudience,aswell.Greatquestions,andthankyoutotheMcCain
Institute.LetmeturnelectturnovertoAmbassadorVolker,andthanksalot.
[applause]
AmbassadorVolker:Thankyouallverymuch,andlet'sgetsomeapplauseforJon
Decker,please.
[applause]
AmbassadorVolker:Really,thisisanesotericissue,ahardonetopull,andIthinkhe
didagreatjobofpullingouttheissuesthatpeopleneedtoconsider.Idon'tknowabout
you,butIcertainlyfeelthatthisisoneofthebestdiscussionsaboutwhat'sgoingonin
tradeandTTIPthatI'veheard,cuttingthroughalloftheheadlines,andalloftherhetoric
toreallyunderstandwhatit'sallabout.
Thankyouall,again,toourdebaters,andthankallofyouforcoming,andwe'llseeyou
againinthefall,atournextMcCainInstitutedebate.Thankyou.
[applause]

TranscriptionbyCastingWords