I want you all to come away from the next ten minutes with a single
next ten minutes with a single
next ten minutes with a single counterintuitive idea and that is that
counterintuitive idea and that is that
counterintuitive idea and that is that trade deals aren’t really about trade
trade deals aren’t really about trade
trade deals aren’t really about trade not in any conventional sense of the
not in any conventional sense of the
not in any conventional sense of the word they’re not about tariffs they’re
word they’re not about tariffs they’re
word they’re not about tariffs they’re not about quotas they’re not about GDP
not about quotas they’re not about GDP
not about quotas they’re not about GDP growth they’re not even really about
growth they’re not even really about
growth they’re not even really about jobs that’s how we tend to talk about it
jobs that’s how we tend to talk about it
jobs that’s how we tend to talk about it job loss and job gain and that’s what’s
job loss and job gain and that’s what’s
job loss and job gain and that’s what’s in the news and that’s what’s at the DNC
in the news and that’s what’s at the DNC
in the news and that’s what’s at the DNC but that’s not what they’re really about
but that’s not what they’re really about
but that’s not what they’re really about not really and we’ll get to that but for
not really and we’ll get to that but for
not really and we’ll get to that but for now I want to start at the very
now I want to start at the very
now I want to start at the very beginning the modern era of free trade
beginning the modern era of free trade
beginning the modern era of free trade as we think of it today started in about
as we think of it today started in about
as we think of it today started in about 1944 when all the great lights of
1944 when all the great lights of
1944 when all the great lights of liberal economics got together in a
liberal economics got together in a
liberal economics got together in a little place called Bretton Woods New
little place called Bretton Woods New
little place called Bretton Woods New Hampshire and at the time the world was
Hampshire and at the time the world was
Hampshire and at the time the world was in a pretty dark place it was you know
in a pretty dark place it was you know
in a pretty dark place it was you know all the people they are remembered World
all the people they are remembered World
all the people they are remembered World War one they lived through the
War one they lived through the
War one they lived through the depression World War two was still
depression World War two was still
depression World War two was still raging across the Atlantic and at the
raging across the Atlantic and at the
raging across the Atlantic and at the top of everyone’s mind at the time was
top of everyone’s mind at the time was
top of everyone’s mind at the time was world peace how do we create an economy
world peace how do we create an economy
world peace how do we create an economy that fosters and necessitates world
that fosters and necessitates world
that fosters and necessitates world peace that was the entire idea and they
peace that was the entire idea and they
peace that was the entire idea and they seized on this idea of economic
seized on this idea of economic
seized on this idea of economic interdependence
interdependence
interdependence the idea was that if nation-states were
the idea was that if nation-states were
the idea was that if nation-states were dependent on each other for their supply
dependent on each other for their supply
dependent on each other for their supply chains then they couldn’t go to war with
chains then they couldn’t go to war with
chains then they couldn’t go to war with each other if Germany needed France for
each other if Germany needed France for
each other if Germany needed France for its coal and France needed Germany for
its coal and France needed Germany for
its coal and France needed Germany for its steel then they couldn’t go to war
its steel then they couldn’t go to war
its steel then they couldn’t go to war with each other so that was the idea
with each other so that was the idea
with each other so that was the idea behind what became about four years
behind what became about four years
behind what became about four years later the GATT the general agreement on
later the GATT the general agreement on
later the GATT the general agreement on tariffs and trade and this little
tariffs and trade and this little
tariffs and trade and this little document created the world as we know it
document created the world as we know it
document created the world as we know it today
today
today it created globalization it created
it created globalization it created
it created globalization it created outsourcing it created multinational
outsourcing it created multinational
outsourcing it created multinational corporations as we think of it it’s hard
corporations as we think of it it’s hard
corporations as we think of it it’s hard to imagine a world in which there
to imagine a world in which there
to imagine a world in which there weren’t you know McDonald’s isn’t global
weren’t you know McDonald’s isn’t global
weren’t you know McDonald’s isn’t global corporations and the and the sort of
corporations and the and the sort of
corporations and the and the sort of structure that we have now but the
structure that we have now but the
structure that we have now but the general agreement on trade on tariffs
general agreement on trade on tariffs
general agreement on trade on tariffs and trade is what did it we created this
and trade is what did it we created this
and trade is what did it we created this and it brought on this period of
and it brought on this period of
and it brought on this period of extraordinary disruption in convulsion
extraordinary disruption in convulsion
extraordinary disruption in convulsion and prosperity from about 1948 when the
and prosperity from about 1948 when the
and prosperity from about 1948 when the GATT was first signed to late 70s the
GATT was first signed to late 70s the
GATT was first signed to late 70s the global GDP grew by about 7% per year
global GDP grew by about 7% per year
global GDP grew by about 7% per year just explosive growth and for a while
just explosive growth and for a while
just explosive growth and for a while people thought that wouldn’t end that
people thought that wouldn’t end that
people thought that wouldn’t end that was just it we had cracked the code but
was just it we had cracked the code but
was just it we had cracked the code but then it began to wane in the late 70s
then it began to wane in the late 70s
then it began to wane in the late 70s and early 80s you had the great lights
and early 80s you had the great lights
and early 80s you had the great lights of a new generation of liberal economics
of a new generation of liberal economics
of a new generation of liberal economics get together for a second time a new
get together for a second time a new
get together for a second time a new Bretton Woods only this time it was the
Bretton Woods only this time it was the
Bretton Woods only this time it was the uruguay round and it lasted for eight
uruguay round and it lasted for eight
uruguay round and it lasted for eight years and the scenario there was a
years and the scenario there was a
years and the scenario there was a little different instead of world peace
little different instead of world peace
little different instead of world peace and economic independent interdependence
and economic independent interdependence
and economic independent interdependence they were really motivated by this idea
they were really motivated by this idea
they were really motivated by this idea of global efficiency it’s basically how
of global efficiency it’s basically how
of global efficiency it’s basically how do we continue to boost the global
do we continue to boost the global
do we continue to boost the global economy as it has been boosted over the
economy as it has been boosted over the
economy as it has been boosted over the last thirty years what do we do and the
last thirty years what do we do and the
last thirty years what do we do and the scenario was different so in the 1940s
scenario was different so in the 1940s
scenario was different so in the 1940s there was just really really high
there was just really really high
there was just really really high tariffs and quotas and really high or
tariffs and quotas and really high or
tariffs and quotas and really high or really protectionist policies at all the
really protectionist policies at all the
really protectionist policies at all the borders and so lowering those could have
borders and so lowering those could have
borders and so lowering those could have this profound influence but by the 80s a
this profound influence but by the 80s a
this profound influence but by the 80s a lot of those quotas were pretty low a
lot of those quotas were pretty low a
lot of those quotas were pretty low a lot of those tariffs were already pretty
lot of those tariffs were already pretty
lot of those tariffs were already pretty low so they began to think outside the
low so they began to think outside the
low so they began to think outside the box and they seized on this idea of
box and they seized on this idea of
box and they seized on this idea of non-tariff barriers and now this this
non-tariff barriers and now this this
non-tariff barriers and now this this leads into the modern era of trade I’m
leads into the modern era of trade I’m
leads into the modern era of trade I’m talking about now now non-tariff
talking about now now non-tariff
talking about now now non-tariff barriers are the idea that it doesn’t
barriers are the idea that it doesn’t
barriers are the idea that it doesn’t really matter how low a tariff is around
really matter how low a tariff is around
really matter how low a tariff is around a country’s border if once a product
a country’s border if once a product
a country’s border if once a product gets inside it has to compete on an
gets inside it has to compete on an
gets inside it has to compete on an uneven playing field so once you have
uneven playing field so once you have
uneven playing field so once you have you know Jim Beam for example if it’s it
you know Jim Beam for example if it’s it
you know Jim Beam for example if it’s it doesn’t matter if Japan doesn’t have a
doesn’t matter if Japan doesn’t have a
doesn’t matter if Japan doesn’t have a tariff on liquor if once it’s inside
tariff on liquor if once it’s inside
tariff on liquor if once it’s inside Japan it has to compete on the same
Japan it has to compete on the same
Japan it has to compete on the same shelf next to a Japanese liquor that’s
shelf next to a Japanese liquor that’s
shelf next to a Japanese liquor that’s subsidized by the Japanese government
subsidized by the Japanese government
subsidized by the Japanese government so the idea now was
so the idea now was
so the idea now was you know we need to strip away all that
you know we need to strip away all that
you know we need to strip away all that other stuff and make the world economy
other stuff and make the world economy
other stuff and make the world economy as efficient as possible and that is the
as efficient as possible and that is the
as efficient as possible and that is the philosophy that governed trade beginning
philosophy that governed trade beginning
philosophy that governed trade beginning in the 1990s in 1995 we got rid of the
in the 1990s in 1995 we got rid of the
in the 1990s in 1995 we got rid of the GATT and we replaced it with something
GATT and we replaced it with something
GATT and we replaced it with something you probably have heard of the World
you probably have heard of the World
you probably have heard of the World Trade Organization and around that time
Trade Organization and around that time
Trade Organization and around that time before and after we had these
before and after we had these
before and after we had these extraordinarily enormous ly powerful
extraordinarily enormous ly powerful
extraordinarily enormous ly powerful trade agreements the NAFTA the CAFTA and
trade agreements the NAFTA the CAFTA and
trade agreements the NAFTA the CAFTA and literally thousands of bilateral
literally thousands of bilateral
literally thousands of bilateral investment treaties all of which were
investment treaties all of which were
investment treaties all of which were governed by the same philosophy
governed by the same philosophy
governed by the same philosophy non-tariff barriers how do you create or
non-tariff barriers how do you create or
non-tariff barriers how do you create or you got nation-states to sign on to this
you got nation-states to sign on to this
you got nation-states to sign on to this idea that their domestic industrial
idea that their domestic industrial
idea that their domestic industrial policies their domestic laws their
policies their domestic laws their
policies their domestic laws their domestic regulations needed to align
domestic regulations needed to align
domestic regulations needed to align with this global sense of efficiency
with this global sense of efficiency
with this global sense of efficiency it’s the whole idea and that just take a
it’s the whole idea and that just take a
it’s the whole idea and that just take a moment appreciate that because it’s
moment appreciate that because it’s
moment appreciate that because it’s totally different than anything that the
totally different than anything that the
totally different than anything that the granddaddy’s of trade would would
granddaddy’s of trade would would
granddaddy’s of trade would would consider it would have considered trade
consider it would have considered trade
consider it would have considered trade in the late 19th century you know David
in the late 19th century you know David
in the late 19th century you know David Ricardo and Adam Smith and all these
Ricardo and Adam Smith and all these
Ricardo and Adam Smith and all these people you learn about in the textbooks
people you learn about in the textbooks
people you learn about in the textbooks when they were talking about trade they
when they were talking about trade they
when they were talking about trade they were not talking about someone’s
were not talking about someone’s
were not talking about someone’s domestic policy on environmental law
domestic policy on environmental law
domestic policy on environmental law they were not talking about you know how
they were not talking about you know how
they were not talking about you know how long a pharmaceutical company’s data
long a pharmaceutical company’s data
long a pharmaceutical company’s data exclusivity should should last at last
exclusivity should should last at last
exclusivity should should last at last for 12 years or 7 years or five years
for 12 years or 7 years or five years
for 12 years or 7 years or five years and under what circumstances all of a
and under what circumstances all of a
and under what circumstances all of a sudden that became what we were talking
sudden that became what we were talking
sudden that became what we were talking about when we talked about trade and
about when we talked about trade and
about when we talked about trade and that changed everything so to give you
that changed everything so to give you
that changed everything so to give you two examples one of the biggest
two examples one of the biggest
two examples one of the biggest discussions about trade that we’ve been
discussions about trade that we’ve been
discussions about trade that we’ve been having since the late 90s involves or
having since the late 90s involves or
having since the late 90s involves or fights really involves the Europeans and
fights really involves the Europeans and
fights really involves the Europeans and the Americans and the Americans want to
the Americans and the Americans want to
the Americans and the Americans want to export their genetically modified beef
export their genetically modified beef
export their genetically modified beef to Europe and Europe in the Europeans
to Europe and Europe in the Europeans
to Europe and Europe in the Europeans for a variety of sort of cultural and
for a variety of sort of cultural and
for a variety of sort of cultural and social mores don’t want that don’t want
social mores don’t want that don’t want
social mores don’t want that don’t want GMO beef and so you have this fight
GMO beef and so you have this fight
GMO beef and so you have this fight because the Europeans say that they are
because the Europeans say that they are
because the Europeans say that they are allowed for local rule and national
allowed for local rule and national
allowed for local rule and national sovereignty and
sovereignty and
sovereignty and democratic nations reflecting the
democratic nations reflecting the
democratic nations reflecting the Preferences of their constituencies they
Preferences of their constituencies they
Preferences of their constituencies they should be allowed to have those rules in
should be allowed to have those rules in
should be allowed to have those rules in the US it’s backed by the WTO says nope
the US it’s backed by the WTO says nope
the US it’s backed by the WTO says nope that’s your domestic policies are not
that’s your domestic policies are not
that’s your domestic policies are not aligning with the sense of global
aligning with the sense of global
aligning with the sense of global efficiency and that is actually a much
efficiency and that is actually a much
efficiency and that is actually a much more interesting discussion to be having
more interesting discussion to be having
more interesting discussion to be having then is trade good or is trade bad
then is trade good or is trade bad
then is trade good or is trade bad suddenly we’re discussing national
suddenly we’re discussing national
suddenly we’re discussing national sovereignty we’re discussing local rule
sovereignty we’re discussing local rule
sovereignty we’re discussing local rule we’re discussing what do we mean by
we’re discussing what do we mean by
we’re discussing what do we mean by environmental regulations and are we
environmental regulations and are we
environmental regulations and are we okay with with them being trumped under
okay with with them being trumped under
okay with with them being trumped under what circumstances so here’s a second
what circumstances so here’s a second
what circumstances so here’s a second example and this happened this year in
example and this happened this year in
example and this happened this year in the u.s. in the US it used to be or it
the u.s. in the US it used to be or it
the u.s. in the US it used to be or it is that if you wanted to put your tuna
is that if you wanted to put your tuna
is that if you wanted to put your tuna on the shelf and say dolphin free tuna
on the shelf and say dolphin free tuna
on the shelf and say dolphin free tuna on it it actually you had to use methods
on it it actually you had to use methods
on it it actually you had to use methods that actually excluded dolphins and the
that actually excluded dolphins and the
that actually excluded dolphins and the Mexican government got wind of that and
Mexican government got wind of that and
Mexican government got wind of that and said you know that doesn’t that’s not
said you know that doesn’t that’s not
said you know that doesn’t that’s not fair that discriminates against Mexican
fair that discriminates against Mexican
fair that discriminates against Mexican fishermen because Mexican fishermen fish
fishermen because Mexican fishermen fish
fishermen because Mexican fishermen fish in waters that are dolphin heavy and
in waters that are dolphin heavy and
in waters that are dolphin heavy and they use methods that don’t exclude
they use methods that don’t exclude
they use methods that don’t exclude dolphins so by having this law where
dolphins so by having this law where
dolphins so by having this law where we’re actually discriminating against
we’re actually discriminating against
we’re actually discriminating against Mexican fishermen and the WTO agreed so
Mexican fishermen and the WTO agreed so
Mexican fishermen and the WTO agreed so we have you know these efficiency
we have you know these efficiency
we have you know these efficiency problems you know what do we how do we
problems you know what do we how do we
problems you know what do we how do we how do we think about global efficiency
how do we think about global efficiency
how do we think about global efficiency how do we promote the free movement of
how do we promote the free movement of
how do we promote the free movement of as much Goods and as much services
as much Goods and as much services
as much Goods and as much services across as many borders as possible while
across as many borders as possible while
across as many borders as possible while at the same time preserving the laws and
at the same time preserving the laws and
at the same time preserving the laws and regulations that prize things that
regulations that prize things that
regulations that prize things that aren’t about global efficiency that are
aren’t about global efficiency that are
aren’t about global efficiency that are maybe about you know racial equality or
maybe about you know racial equality or
maybe about you know racial equality or about protecting the environment or laws
about protecting the environment or laws
about protecting the environment or laws the prize public health issues things
the prize public health issues things
the prize public health issues things like that that gets us up to where we
like that that gets us up to where we
like that that gets us up to where we are today you may have noticed that the
are today you may have noticed that the
are today you may have noticed that the conversation that we’re having about
conversation that we’re having about
conversation that we’re having about trade on the national stage right now is
trade on the national stage right now is
trade on the national stage right now is very confused we’ve got both of our
very confused we’ve got both of our
very confused we’ve got both of our presidential candidates you appear to be
presidential candidates you appear to be
presidential candidates you appear to be in favor of free trade but are against
in favor of free trade but are against
in favor of free trade but are against the trans-pacific partner
the trans-pacific partner
the trans-pacific partner that’s that massive trade deal that
that’s that massive trade deal that
that’s that massive trade deal that would connect the United States and 11
would connect the United States and 11
would connect the United States and 11 other Pacific Rim countries and then you
other Pacific Rim countries and then you
other Pacific Rim countries and then you have other organizations like the AARP
have other organizations like the AARP
have other organizations like the AARP and the Sierra Club and Doctors Without
and the Sierra Club and Doctors Without
and the Sierra Club and Doctors Without Borders that are opposed to elements of
Borders that are opposed to elements of
Borders that are opposed to elements of it and people are telling us you know oh
it and people are telling us you know oh
it and people are telling us you know oh you’re either for treat free trade or
you’re either for treat free trade or
you’re either for treat free trade or you’re against it or you’re for
you’re against it or you’re for
you’re against it or you’re for globalization or you’re against it you
globalization or you’re against it you
globalization or you’re against it you know what kind of world do you want to
know what kind of world do you want to
know what kind of world do you want to live in well we’re not talking about
live in well we’re not talking about
live in well we’re not talking about trade we’re talking about rules we’re
trade we’re talking about rules we’re
trade we’re talking about rules we’re talking about global rules global
talking about global rules global
talking about global rules global standards and what kind of world we want
standards and what kind of world we want
standards and what kind of world we want that to be and as soon as you sort of
that to be and as soon as you sort of
that to be and as soon as you sort of change your mind and you and you realize
change your mind and you and you realize
change your mind and you and you realize that that’s what we’re talking about it
that that’s what we’re talking about it
that that’s what we’re talking about it all starts to make a lot more sense so I
all starts to make a lot more sense so I
all starts to make a lot more sense so I want to leave you guys with that idea we
want to leave you guys with that idea we
want to leave you guys with that idea we created the world that we live in now
created the world that we live in now
created the world that we live in now our forefathers got together at Bretton
our forefathers got together at Bretton
our forefathers got together at Bretton Woods and they created this global
Woods and they created this global
Woods and they created this global economy that we have now and they and we
economy that we have now and they and we
economy that we have now and they and we remade it in the late 80s and the 90s
remade it in the late 80s and the 90s
remade it in the late 80s and the 90s with the World Trade Organization the
with the World Trade Organization the
with the World Trade Organization the rules that we that we pass and we
rules that we that we pass and we
rules that we that we pass and we embrace are the rules of the game that
embrace are the rules of the game that
embrace are the rules of the game that we live in so let’s think about that
we live in so let’s think about that
we live in so let’s think about that let’s think about trade in that context
let’s think about trade in that context
let’s think about trade in that context let’s think about what rules we want to
let’s think about what rules we want to
let’s think about what rules we want to embrace what we want them to serve you
embrace what we want them to serve you
embrace what we want them to serve you know do we want global efficiency to be
know do we want global efficiency to be
know do we want global efficiency to be the paradigm that we that we think of or
the paradigm that we that we think of or
the paradigm that we that we think of or do we want it to be something else maybe
do we want it to be something else maybe
do we want it to be something else maybe like global prosperity global prosperity
like global prosperity global prosperity
like global prosperity global prosperity for for normal people for farmers and
for for normal people for farmers and
for for normal people for farmers and ranchers and you know everyday Americans
ranchers and you know everyday Americans
ranchers and you know everyday Americans it’s because the rules that we pass are
it’s because the rules that we pass are
it’s because the rules that we pass are the rules of the game and when we talk
the rules of the game and when we talk
the rules of the game and when we talk about trade we’re talking about rules
about trade we’re talking about rules
about trade we’re talking about rules thank you so much
thank you so much
thank you so much [Applause]
”
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