Is the United States Decoupling from Asia’s Economic Architecture?

a very difference saki-san news the new chairman we've known each other for many years and this is a wonderful new venue where we know each other in a new way working on policy issues together before we have before I start when we have public events we always have a little safety announcement I'm going to be responsible for you or Mike Green or Matt Goodman if we hear an announcement that we have to evacuate the doors are right behind me this door is the one that's closest to the street we will take the stairs down take two left-hand turns a right-hand turn we'll go over to National Geographic and I think I'll get you all tickets you can see the new exhibit on the Queen's of Egypt it's a great show it's a nothing will happen but I want you to be prepared just as we are we're very honored that Stephanie Murphy who is with us today a remarkable member of Congress who's a rising star in the Democratic Party we're very pleased and we do have a limited amount of time because she has a trade hearing that she's going to she's on the trade subcommittee of ways and means and that's the one of the few power committees in the Congress congresswoman Murphy is you know comes with a very interesting background to having been an educator a businesswoman now committing herself to public policy and she is an intellectual leader she is leading the so-called Blue Dogs which is the moderate Democrats in the house that are trying to chart a sensible path forward and trade is at the core of that and no one spends more time thinking about this than congresswoman Murphy would you please with your warm applause welcome this remarkable leader congresswoman Stephanie Murphy thank you [Applause] Thank You John I really appreciate the kind introduction and thank you to CSIS and jet row for inviting me to speak I'm really honored to be here you know given the sizable Japanese presence at this event I think it's appropriate to begin with a little confession in the summer after my junior year in college I actually lived in Japan and worked at Canon where I was responsible for translating the company's technical documents from English to Japanese and I'd studied Japanese for about two years in college and I arrived in Tokyo so incredibly college confident in my skills and that confidence faded rather quickly when after my first translation was returned to me covered in red ink so it didn't get much better after that if you have trouble with a Canon copier you probably can blame me so I really did though despite my my language issues I had a wonderful time in Japan and I learned so much including a very valuable lesson in humility thankfully we can now pivot or maybe it's better to say rebalance to a discussion from my linguistic shortcomings to a discussion of US economic engagement in the Asia Pacific region it's the most economically dynamic region in the world and by virtually any metric like Asia itself this topic is vast and complex with a thousand worthy subtopics to discuss but I'm gonna focus on just three interrelated themes they are the ongoing US efforts to countering an increasingly assertive China through the use of economic statecraft the January 2017 decision by President Trump to withdraw the United States from the trans-pacific partnership and the president's scattershot tariff policy you know before I go into that I think it's if you'll give me some personal privilege to tell you a little bit about myself I think it's important to start there because they say that where you stand on an issue depends on where you sit and my views on u.s. international economic policy in general and towards Asia specifically are informed by my current position in Congress and by the characteristics of the district that I represent I'm a moderate Democrat who represents an area in Central Florida so that Orlando area it's about a third Democrat a third Republican and a third independent and I take real pride in being bipartisan and I believe that that's been a key to my being effective in Congress I'll speak up when I believe President Trump or congressional Republicans are wrong but I don't criticize them reflexively and I don't take any particular joy in it Florida is highly dependent on international trade trade supports nearly 2.4 million jobs in our state which is nearly one in five workers Florida experts over fifty billion dollars a year in goods and over 40 billion dollars a year in services and about thirty thousand Florida companies import products although it's hard to measure with precision imports keep prices down and increase choice for Florida consumers with respect to foreign direct investment foreign owned companies employ about 350,000 workers in Florida for example over 20,000 Floridians work for form work for firms based in Japan so these data points help explain why I'm proud to describe myself as a pro trade Democrat I believe that trade and investment liberalisation policies if crafted in a thoughtful way can enhance the quality of life for the people I represent and my constituents don't tend to be hostile or skeptical towards these policies so long as I as their representative deal with the many Bennett detail the many benefits that these policies bring and honestly discuss the disruptions they may cause in certain sectors and then work hard to minimize those disruptions rather than being indifferent to them and that's my general approach whether we're considering US economic policy towards Asia Latin America or any other region of the world in addition my views on the value of US engagement in Asia are influenced by my personal background in my professional experience prior to Congress there's an emotional dimension to my position and it's not just an intellectual one so there are 541 members of Congress and I'm one of only five born in the asia-pacific in an asia-pacific country I was born in Vietnam about three years after the end of the Vietnam War I'll save you the trouble of doing the math in your head I'm just hit the big four Oh last year but my parents because they had been affiliated with the South Vietnamese government in the US military and were being persecuted by the new communist government decided to escape Vietnam by boat when I was just a baby and we ran out of fuel in the middle of the South China Sea and a US Navy ship responded to our SOS call and they provided us with fuel food and water that allowed us to make it to a Malaysian refugee camp and that moment for me really crystallized what I think makes America great and it is this unique combination of power and leadership and generosity it's the power and leadership that deploys the US Navy thousands of miles from the US borders to ensure freedom of navigation that international commerce can go on and that people are safe on the seas their forward presence deters conflict but it's also that generosity that has men and women who were trained for combat decide to extend grace to desperate strangers and I don't mean to sound sentimental but I'm alive today because of this unique combination of American leadership and American power and American generosity and so I think that as you can imagine in light of my story I tend to be really skeptical of arguments made by American politicians whether they're Republican or Democrat that the United States should step back from its leadership responsibilities on the global stage I'm inclined to believe that such a retreat however tempting might sound at first blush would ultimately make America and our allies less prosperous and make the world less stable and safe my belief in the overriding importance of the American of American leadership of the judicious use of American power and of American led alliances was reinforced as a result of the years I spent working at the Department of Defense after 9/11 during posts at the in the Pentagon and out at the US Pacific Command I helped to shape US military policy and develop partnerships in the Asia Pacific region I got an opportunity to help negotiate the u.s. Singapore strategic framework agreement I participated in mill mill discussions between the US Navy and the Japanese maritime Self Defense Forces I helped plan special operations and counterterrorism across Asia and then authored the guidance that set forth how our military would use its forces in the region but I'll have to say the most rewarding work that I did was my involvement in the US military's response to 2004 tsunami in Indonesia which evolved into a multinational operation featuring countries like Japan and Australia Singapore and Malaysia during my time at DoD I was reminded again and again how effective the u.s. can be when it sets clear objectives forms coalition's of willing nations that share those objectives and leads those coalition's in a strategic and respectful way and it's a lesson that I take with me into Congress with that as a backdrop let me return to the three themes that worry me most about the state of US economic policy in Asia and the connection between them first is what might be called the X Factor the multi-dimensional challenge posed by China under under Xi Jinping to the us-led International order especially in the asia-pacific region there's an emerging consensus that the US and China have entered a period defined by confrontation and competition that will be won or lost in that gray area short of kinetic action at its core this is a contest over divergent values and interests it's a contest between opposed political and systems and between different visions for the future of Asia and the world writ large on the political front it's a contest between authoritarian rule and democratic rule on the economic front it's a contest between state led a state led model and a market-based model and it's a contest in which I believe the United States must prevail to compete effectively with China it's imperative for the United States to strengthen economic engagement in the Asia Pacific through increased trade and investment and not to succumb to protectionist impulses I would note that every US multinational enterprise worth its salt understands that they cannot be a successful global company unless they have a meaningful presence in Asia or strategy to attain one but American firms are working against considerable headwinds emanating out of Washington and that brings me to the second theme I mentioned the trans-pacific partnership in one of his first acts in the Oval Office president Trump would drew the United States from TPP the president could have sought to renegotiate aspects of the agreement he didn't like or he could have sent the agreement to Congress for our review potential modification and approval or disapproval but instead he made a unilateral decision that's going to have multilateral consequences for years to come and many of my congressional colleagues on both sides of the aisle have been less than forthcoming on this subject so let me be clear I think America's withdrawal from TPP was a serious strategic error I assume it was met by cheers in Beijing loud enough to drown out the groans in Tokyo in Hanoi we had the opportunity to unify the region around an American design system of Commerce and to check China's rising influence and we squandered it thanks to Japanese leadership the 11 other TPP nations went ahead with the agreement in our absence lowering tariffs among themselves and basically leaving American companies at a competitive disadvantage how anyone could argue this as a result that is in our national best interest is really beyond me in my view the US has compounded this through the president's impulsive use of tariffs on friends and foes alike which is my third source of concern I suppose we can have a reasonable debate over the wisdom of President Trump's decision to impose 25 percent tariffs on 250 billion dollars worth of Chinese imports and to threaten tariffs on the remaining 300 billion in response to Chinese trade pact practices that I think nearly everyone agrees are abusive but for my part I view tariffs as a foreign policy equivalent of trying to punch them well someone else and punching yourself harder despite the president's constant claims to the contrary it isn't a it is American companies and American consumers that bear the brunt of these taxes on imports and in addition US exporters have been harmed by China shrewd application of counter tariffs raising tariffs only on select products with the United States and lowering tariffs for their other trading partners with no end in sight to this trade war between the world's two biggest economies it's never been more vital for the u.s. to work closely with its allies in Asia and Europe who share our concerns about China's unfair trade practices we should be building a unified coalition along the lines that I used to witness everyday at the Department of Defense to maximize the chance of getting China to make real structural changes but that's not what we're doing and instead of joining forces to take on China we're fighting with our friends over secondary issues and that's because the president has imposed steel and aluminum tariffs on our allies as well as our adversaries based on a flimsy national security justification affected countries have imposed retaliatory tariffs on us just as the Chinese have and in some cases importing firms in these nations have shifted their supply chains in order to source products from other non-tariff countries American exporters are paying the price right now and they may be paying the price well into the future even if these various tariff wars come to an end there's no guarantee that foreign importers will shift their supply chains back to firms in the United States because will become viewed many as unreliable trading partners so to be clear the Chinese are opportunistic in the same way that they took advantage of the American military's preoccupation in the Middle East over the last two decades to vastly advance their own military capabilities they are now taking advantage of our retreat from the global trading regime to advance their own economic position if this is what US leadership looks like we can do better and if this is what US economic engagement innate in the asia-pacific region looks like we can do better and if this is how we intend to prevail in this generational competition against China we can do better and we must do better in summary I'm concerned that the Trump administration's policies on TPP and tariffs are undermining the effectiveness of our broader policy towards China which we must get right given the stakes involved for our national security and our economy and that's one reason I've come to the conclusion that Congress acting on behalf of the American public should play a far more muscular role when it comes to US trade and tariff policy it starts with better and more bipartisan oversight by Congress of the president's trade policies for example I think Congress should hold a hearing on the benefits and costs of rejoining TPP and on additional ways to fortify our trading relationships with countries in the region always in a way that strengthens labor and environment and other standards we should have the vigorous debate that President Trump unilaterally foreclosed but I think we have to go beyond this over the years Congress has chosen to delegate much of its constitutional authority to regulate foreign commerce to the executive branch the current president has used that authority recklessly at best and abused this Authority at worst harming American businesses consumers and alliances in the process I think the time has come for Congress to reclaim its fair share of this Authority so we have a greater say in tariff decisions before they're made especially tariff decisions that are justified on the dubious national security logic I intend to introduce legislation in the coming that would fine-tune the balance of power between Congress and the president and with that I want to thank you again for inviting me I hope you enjoy the rest of today's event you're discussing incredibly important issues and I appreciate being here with you this morning thank you thank you very much congressman that was a I mean a personal story your experience in the Defense Department the strategic and you didn't mention your business experience and of course representing your constituency brings a 360-degree clarity to this problem and then you're speaking about American leadership on trade in Congress City on trade which for this audience I think is really a powerful message the congresswoman has agreed to take a few questions in Japanese just kidding I mean ask one or two questions and I think we can then they can take some finance if it's okay you make a very strong case for why it was a mistake for the u.s. to unilaterally withdraw from TPP and and and gave us a very clear signal what you're about what you're going to try to do about it Prime Minister Rob a with the cpt PPT pp11 is in many ways holding a place for us while we get our act together and wondering if there's a a message you can send to our trading partners who want this coalition of like-minded states to make the rules in Asia about how it is that the US will get back to that place I know it's a fight but but what are some of the encouraging things that you can you can tell us about well first I want to recognize Japanese leadership in the region both on an economic perspective as well as from the national security perspective I think it's been really incredible to see the progress and and how Japan is leading in the region so certainly appreciate what they've done especially as it relates to the trade policy I think in the United States trade has almost become a four-letter word and that's why you don't see the kind of leadership that we need to see both in Congress and in the executive branch in order to get us back to a place where we can lead this country to take our seat back within the global trading regime right one that we spent so much time painstakingly building with our allies and so that it starts there it starts at being able to articulate to my constituents to Americans across this country the importance of trade and in order to have the space to do that to talk and maneuver within the trade policy realm we also have to as a government care about the adjustments and the displacement and I think when a government is indifferent to the displacement you start to lose the support of the public and the American people that allows you to have the trust you need to move forward on trade policy and so there's a lot that we can do there and I'm not sure that our adjustment policies over the last few decades have been effective so we need to relook at the types of adjustment policies we have continue to fight for and defend labor environmental enforcement provisions and then find a way to communicate and and grow more voices willing to be vocal about trade since since 2016 the polls that that we've tracked Chicago Council and others actually shown an increase in public support for trade for TPP so in some ways it feels like what's needed is some leadership and really we applaud you for what you're doing our theme this is the 14th year that CSIS and jet 2 are doing this and for 13 years the theme was how do we measure integration within Asia and this year after consulting with our colleagues in jet row we thought we needed to ask a little more difficult question which is this one is the u.s. decoupling from Asia's economic architecture and uuuugh sent a warning that that's in some ways what we're doing with our trade policy there's another aspect to this which which you would know from your national security experience which is walkway 5g technology so there there is a debate about whether there are some areas where for legitimate national securities it's not the you know made-up ones related to steel traps but for legitimate national security reasons we may need to decouple in some areas and I'm wondering if this is on the agenda for you now it on the House Ways and Means Committee in the Congress and what the temperature is on that question well certainly I think that economic policy and national security policy has always been interrelated in the sense that we believe tighter integration between two countries tends to be a buffer to prevent conflict right and there are we're definitely looking at the national security the uses of national security authorities to restrict trade I think there are legitimate as you said there are legitimate concerns that we have to address of China's behavior in the region insofar as and then there are certain industries that we have to protect and ensure that our supply chain is reliable because the end part of products that they are in matter too much to our national security and our military to to leave it lead it leave it to to not have a supply chain that that is workable and so we are looking at this there are a number the bill that I'm going to introduce this week actually takes a second look and tries to balance the the powers between the president's use of 2:32 of IEEPA of the foreign Powers Act all of those things that he's used because there are situations in which the president should be able to use that but I always liken it to when the president sends servicemembers into harm's way at some point he has to come to Congress and ask for permission but he has that authority in the near term for a real national security emergency to to send US forces I same is true if he's gonna put economic or American businesses and American consumers into economic harm's way he should also come back to Congress at some point and allow us to have a say as we represent the American people and so we are looking at that balance recognizing that there are things that we need to address but also that that Chinese behavior that we need to address but doing so in a way that is more aligned using our allies working together with our allies and then checking the use of national security economic Authority that's a really important really important topic and the Constitution is something to say about that too of course I think you have time perhaps maybe for one question in English yes right where's my mic from team there we go could you identify yourself briefly and keep the question a bit short thank you Mike I'm Tom reckford with the foreign policy discussion group I was very impressed with all the points that you you made on trade and and tariffs and TPP I wonder how many people on your own subcommittee and in the Ways and Means Committee in general share your views well I think a fair number of people do share the view of being pro trade in fact the new dem coalition which is a democratic coalition that advertises itself as being a pro trade organization has over a hundred members I'm a part of that as well as the leader of the Blue Dogs so I think there are a lot of people who do see the benefits of trade share some of these positions but as I said in my speech or in my remarks I'm not seeing I have had other colleagues who have not taken a very public or assertive position on this and you know you from political perspective coming out and saying this when it's an issue that they're just glad they don't have to deal with anymore because it's you know there and we're not taking a vote on it is politically convenient but it's not good for from a policy perspective we can do one more so right here in the front table keep your hand up so they can find you if you could my name is hum Tran from the Atlantic Council and thank you very much for your 16th remarks you mentioned a lot about TPP but living TPP si in your view are there any mechanism forum and so on that the US can right now enhance collaboration and to strengthen opposition in Asia other forms to enhance our position in Asia well there are a number of other forms that we help create what I'm concerned about though is that we currently have an administration that hasn't properly staffed the entities that would otherwise engage with those organizations whether it's ASEAN or you know the military mil-to-mil you know if you look over at the State Department they're not that they haven't they don't have the staffing that they need to engage robustly the way that we do over at commerce do we have enough people to be at the table setting setting the terms and I'll share with you one specific example that I'm really concerned about is everybody talks about this technological competition between the US and China and I believe our technology is built for democratizing purposes and that's kind of how we've seen it it's made for a rowdy rowdy political environment in the US but China looks at technology to assert its authoritarian you know tech dystopia and these two models are competing well to date the u.s. model technology has been leading because we were at the table setting the standards and you know determined of defining the terms by which people were going to engage and right now we're I don't see where we're leading in that Europe has put out a private privacy rules we haven't been able to get together to do that I lead a coalition I chair the Future Forum which is 49 of the youngest members of the Democratic caucus and this is an area that we are taking up we're doing privacy roundtables because the United States has to have a vision for what we think if you you know what what does the scaffolding of legislation and regulation both domestically and internationally what does that look like so that we continue to promote a democratizing type of technology and not allow the authoritarian tech dystopia to be the one setting those terms congresswoman Murphy has to get back to our Ways and Means Committee hearing and I can certainly see where my part she's really convinced me that we need her to be there her leadership is just really impressive to witness and we wish you a fair wins and thank you very much for helping us to start this conference thank you so much have a good day [Applause] let me continue I don't think I introduced myself before I'm Mike Greene the senior vice president for Asia and Japan chair here and together with my colleagues Matt Goodman and Nixon Cheney were really proud to be partnering with jetrel for the 14th time looking at East Asian regional integration we have a little bit of a spicy title for this year's conference but it's it's not about publicity it's about a legitimate concern a lot of us have so we'll dive into this today and we have clickers and things to allow the participation from the audience as we go forward we're going to hear next some remarks from the administration mark Napper is the Deputy Assistant Secretary of State for Korea and Japan and he was in Seoul as the chargee d'affaires from 2017 to 2018 a not inconsequential time on the Korean Peninsula and he said earlier assignments as director for India Japan I think I first met mark when he was a cob on mochi a staff assistant to then ambassador Mondale and yeah and he has really made his mark on us turpan relations so mark also has to get back to the department pretty quickly so we're gonna invite him up to the stage to hear his remarks and then we'll turn to sauce sake saw mark thank you for joining us I good morning thank you Mike for that kind introduction I I have a similar what congresswoman Murphy called college confidence anecdote regarding my Japanese skills and that was when when I was a junior in college I decided to compete in the Japanese language contest and I I was invited as a finalist to Washington DC actually to compete and I came in third which sounds great except for the fact that there were only four finalists so anyways endeavor to do better today but really Thank You CSIS Thank You JETRO for inviting me today and for hosting this conference on this important subject is the United States decoupling from Asia's economic architecture and my hope this morning is that my remarks on the US vision for a free and open into Pacific together with an update on our energy and infrastructure initiatives will make the case that the United States is in fact not decoupling and rather is doubling down on our commitment to the region so the u.s. vision to advance the free and open into Pacific is based on this administration's belief that the Indo Pacific is among the United States is most important if not the most important priority a priority that president Trump laid out in his address to the APEC CEO summit in Vietnam in 2017 and adding to that in November of last year vice president pence reaffirmed the u.s. vision for the region that is a constellation of Nations that are sovereign strong and satellites to none and since the president's announcement in 2017 we have mobilized the entire United States government to begin to bring this vision to fruition and so the u.s. indo-pacific vision is built upon principles that are widely shared throughout the region namely ensuring the freedom of the seas in the skies insulating sovereign nations from external coercion promoting market-based economies promoting open investment environments creating fair and reciprocal trade and supporting good governance and respect for end of right now the United States is committed to fulfilling our indo-pacific vision through expanding engagement with all countries of the region in three vital areas economics governance and society today I am here to address the economic pillar of this indo-pacific vision and to provide you with some updates on how we're doing cooperation with partner countries in regional institutions such as AC ASEAN and APEC is at the heart of our strategy support for asean centrality is a cornerstone of our Indo Pacific strategy as secretary Pompeo said at the first Indo Pacific Business Forum quote ASEAN is literally at the center of the Indo Pacific and it plays a central role in the indo-pacific vision that America is presenting APEC is also a foundation of this economic pillar of our Indo Pacific vision through APEC we level the playing field for US businesses by facilitating transparent and efficient cross-border trade procedures we strengthen policies to improve the business environment and create economic opportunity and we are advancing free and fair trade and investment practices apex 21 economies from both sides of the Pacific account for 38% of the global population 48 percent of global trade and 60 percent of global GDP in fact six of the United States top ten export partners are APEC economies that purchase 60 percent of u.s. Goods export supporting six million American jobs APEC promotes an inclusive rules-based regional economic architecture that supports free and open trade and investment and since its inception in 1989 APEC total trade in goods and services has increased more than six point seven times to 20 trillion dollars per year outpacing trade growth in the rest of the world with average tariffs falling from 17 percent to five point six percent as recently as five years ago and as an APEC member and as an APEC leader the United States works to shape the policy environment for free and fair trade in the region and promote high standards that will be part of future trade agreements and we remain committed to expanding and deepening economic ties in APEC because of the benefits to the American people and our partners of the region and this strategy of ours in the indo-pacific is inclusive secretary Pompeo has said there's multiple times our Indo Pacific vision excludes no nation we seek to work with anyone to promote a free and open into Pacific so long as that cooperation adheres to the highest standards that our citizens demand now the end of Pacific is not a concept unique to the United States and it is one that is shared by many nations in the region not least Japan though our respect divisions may differ somewhat are in the Pacific strategy and those of our allies and partners are complementary and are similarly guided by a commitment to uphold a rules-based order in the region by our calculation developing countries in the indo-pacific need 1.7 trillion dollars in infrastructure investment every year and no single government has the resources to support this strong need which is why our strategy is to create the conditions needed to unlock private sector investment to meet this infrastructure need according to the firm Blackrock more than 70 trillion dollars is stockpiled in the world's financial centers looking for investable opportunities we believe that our Indo Pacific economic vision can bridge this gap between infrastructure investment needs and this capital that's currently available we believe that our private sector is one of our biggest strengths and no one invests more in the indo-pacific than US businesses u.s. foreign direct investment in the Pacific doubled from two thousand seven to two thousand seventeen reaching 940 billion dollars in 2016 United States direct investment in the indo-pacific supported five point 1 million jobs in that region and we alone and we are not alone in our focus on the private sector we believe that the greater the embrace of the private sector the greater the economic growth and look at the opposite though state dominated state directed investment results in corruption unevenly distributed economic growth and ultimately public backlash so based on consultations with our allies and our partners we've identified several areas namely digital economy infrastructure and energy as target sectors for development and today I'll briefly discuss the progress we've made in the areas of infrastructure and energy so one of the economic elements of this indo-pacific economic vision is Asia edge which stands for enhancing development and growth through energy Asia edge is a whole of US government effort to grow sustainable and secure energy markets throughout the indo-pacific region this age edge program of the United States seeks to strengthen the energy security of allies and partners create open efficient rules based and transparent energy markets improve free fair and reciprocal energy trading relationships and expand access to affordable and reliable energy throughout the Indo Pacific region so in practical terms Asia edge provides technical assistance to improve our partner countries regulatory environments and energy related procurement processes Asia edge works with partners to develop national and regional market energy energy market plans Asia edge uses development finance to encourage the deployment of private capital and Asia edge helps countries to develop smart grids and other forms of modern energy infrastructure in addition a edge another element of our Indo Pacific visions economic pillar is as i-10 itin which stands for the infrastructure transaction and assistance network and like Asia edge itan is a whole of government initiative to develop high-quality and financially sustainable infrastructure throughout the indo-pacific region the i-10 initiative establishes a new US government interagency body coordinated by the National Economic Council to optimize us tools for assessing projects directing development finance and deploying technical assistance to strengthen infrastructure planning and procurement in our partner countries Iten has also established a new transaction advisory fund to help partner countries access private legal and procurement support for infrastructure negotiations and development so we've got these new mechanisms in place what have they done well first for Asia edge one recent success was in November 2018 vice-president pence along with the prime ministers of Australia Japan New Zealand and Papua New Guinea signed a joint statement and announced the Papua New Guinea electrification partnership to meet the electricity infrastructure development of the people of Papua New Guinea while avoiding unsustainable debt burdens and since then we've undertaken a significant collaborative scoping mission that has identified specific projects which are already improving Papua New Guinea's access to electricity next door in Indonesia the United States Agency for International Development has partnered with Indonesia State Electric Company in its efforts to modernize their power grids and diversify Indonesia's energy sources in Vietnam the Department of State and the US Agency for International Development are working with the government of Vietnam to implement Viet Nam's power development plan to attract private sector investment in both Vietnam and Philippines as well the Department of State is providing legal assistance in employing international best practices in legal and regulatory regimes for importing LNG an increasingly important export for the United States in ASEAN we're partnering with the ASEAN council on petroleum to exchange information on natural gas infrastructure and markets laying the groundwork for great US exports of LNG to the region now as I said we're not alone in pursuing these efforts and Japan is one of our most important partners and Japan has aligned ten billion dollars in financing to work with Asia edge to stimulate investment in US Japan private sector energy projects in the United Arab Emirates Taiwan Mozambique and Indonesia and we've also aligned Japan's energy capacity-building efforts with Asia edge in activities such as liquefied natural gas value chain and procurement training throughout Southeast Asia now in regards to our i-10 efforts in South Asia the United States has expanded a regional technical assistance program that is developing transparent legal and procedural frameworks to oversee complex infrastructure contracts and the transaction advisory fund I mentioned earlier is launched and will provide transaction specific advisory services to countries to build their capacity to assess potential infrastructure projects including legal services and technical assistance for contract negotiations in the Philippines the United States has increased technical assistance to support that country and its ambitious infrastructure strategy which president duterte has called build build build now to enhance further our government's ability to promote private sector-led development globally and especially in the indo-pacific Congress for which we're very grateful passed last year an act known as the better utilization of investments leading to Development Act it's a mouthful but it's also known as the build act and Congress took the lead on this and president Trump signed it into law last October and it's a very significant piece of legislation very significant new mechanism for the US government really which serves to consolidate modernize and reform the US government's development finance capabilities primarily OPIC the overseas private investment corporation as well as USAID s development credit Authority and these are going to be formed and merged into one organization known as the u.s. International Development Finance Corporation or DFC for short and this expansion of the US toolkit to mobilize private sector investment we believe will fuel even more growth opportunities in the indo-pacific so this new Development Finance Corporation will launch October 1st of this year and will have a 60 billion dollar investment portfolio capacity more than double its current cap they will also have the authority to make equity investments and will enable increased cooperation with our allies and partners to advance our shared goals indeed we signed last year with with Japan and with Australia and MOU in November actually in Tokyo we signed with with J BIC and our Australian counterparts in mo YouTube to do trilateral development finance cooperation throughout the region which is significant advance and I think a significant statement about our commitment to working with our allies and our partners on important infrastructure development needs and the DFC will also have the ability to provide technical assistance and to conduct feasibility studies something has never been able to do before and this will better enable us engagement at the very early stages of projects projects lifestyles life's our eight life cycles so in closing let me just say that our vision for a free and open into Pacific requires a long time horizon for 10 and of course the energy and the infrastructure initiatives which were pursuing our long term and require a commitment that's significant but we believe through through Asia edge through itan through the other mechanisms that we were creating such as the new Development Finance Corporation we are laying the groundwork for years and years of private sector investment u.s. public investment of our time and our energy in the indo-pacific and this investment of our time our energy our resources both from the US government and from the private sector we believe will support US exports and jobs it will strengthen our alliances and our partnerships throughout the region and it will create a constellation of strong independent nations at the center of our u.s. vision for the indo-pacific region once again thank you very much I appreciate this opportunity and I'm sure this is gonna be a great conference thank you thank you Mark um mark has to get back to state we're grabbing people and their busy work day and throwing them into the line to hear their observations congresswoman Murphy gave I thought a very powerful statement on why TPP is strategically important and how she's gonna do her part and there may be some signs of hope to get us back on track but mark I think helpfully reminded us that there's a lot more to us economic engagement policies in the region even as we sort out our larger politics on trade so we always benefit from and enjoy and our CSS jetrel conferences a snapshot of what's happening in regional integration from the leader of JETRO this year we have a new leader of JETRO since April 2019 sonsaku-san has been the chairman and CEO of Japan external trade relations organization JETRO but he's not new to CSIS we interacted with him quite a bit in his previous job from 2015 to 2019 as the senior executive vice president and corporate executive vice chairman of Fujitsu where he led business development public policy thinking about the intersection of policy business development technology economic integration before that he did that work for Tokyo marine and of course his career primarily was in the Ministry of International Trade and Industry then Ministry of Economy Trade and Industry a switch and name by the way that happened right as I was publishing a book on me the book went to print and then they changed the name to Metis I want to thank you for that it was very helpful for my sales so he's had key positions in Metis in the trade Bureau as an adviser to the minister he interestingly sasaki-san served in Beijing as the jetrel representative drink some of the most interesting and politically complicated times in Japan China relations so sana cyclesounds gonna kick off our discussion of the intersection of policy and business development with the presentation and then we'll turn them at government in the first panel sauce exxon thank you thank you very much for the kind introduction good morning ladies and gentlemen i would like to express my sincere gratitude to all all of you joining us today i would also like to give my thanks to dr. Hamlin dr. green as well as their colleagues at CSRs for their continued dedicated work on this forum as the head of JETRO I am pleased to be able to host such a seminar regarding the trade policy which is one of the most politically sensitive an exciting issue at Washington DC of this moment last October this seminar covered the rapid progress of digital commerce within the asia-pacific experts also discussed the need to streamline the environment to facilitate the trend today I'd like to follow up on this topic and in particular emphasize the role startups and innovation have had on growth I'd also touch on the effects protectionism has had on this trend as well as supply chains and finally we will take a look at what can be done and what is being done to allow innovation and business to thrive in the digital era we've seen many developments since the last seminar for example we introduced two startups providing wider sharing services in Assam one was Grubb a company both born in Malaysia which found prosperity in Singapore the other was go check in Indonesia in this area both have rapidly expanded their business categories and service areas there's no room for uber to operate in these two countries last November Grubb decided to invest in the leading Indonesia electric payment service provider Depot group and in Singapore it now offers a ride heating service aimed at pets called glopitt new business models with new technologies also appearing in China one example is Hama fresh store a subsidiary of Alibaba which offers courier services for fresh food the company claims to be able to deliver anywhere within 2 miles in under 30 minutes this is quite a bit more challenging than the 2 hour delivery by Amazon fresh hama also sells products at its physical stores to allow consumers to personally verify freshness technologies such as big data AI and IOT are likely to be a game-changer for business aimed at solving social problems with large populations and developing economies China and ASEAN attractive markets to mount such technologies to give an example the retail e-commerce market in China will be expanding more rapidly than in the US America is still unrivaled when it comes to creating new technologies from scratch however China and Asia increasingly excel at developing business models utilizing new technologies what enables these startups to expand business is the flow of money direct investment to East Asia is strong with rolls into ventures increasing for instance Grubb has received investment from Toyota and Softbank and kojic from Google and Mitsubishi Corporation in the meantime companies operating in the asia-pacific under greater strain due to additional tariffs imposed by the US and China which have affected supply chains the immediate economy of both countries appears steady thanks to stable personal consumption but the aforementioned escalation of friction will further increase uncertainty in the business environment a Jai transmission is assisting companies in doing international business biggest concern is that changes in the trade environment will undermine predictability and legal stability naturally this has led to concerns that business expansion will decline in the region according to research by JETRO in 2018 seventy-five percent of Japanese companies in the US have been directly or indirectly affected by protectionist measures this result is overwhelmingly high compared to other regions including China and Korea where 37% of respondents are affected if the items subject to additional tariffs increase the scope of the impact is likely to expand companies are also connect concerned about tightening regulations on inward directing as and export controls in the US since last fall JETRO has held several seminars in Tokyo under the theme of new regulations within a mere few days we received more applications than we could accommodate I believe this is a clear sign of how heavily these issues weigh on Japanese companies we hope for any regulations made to be enforced with high transparency according to the US Department of Commerce Japanese companies in the u.s. employ more than 900,000 people until recently direct investment from Japan to the US has remained steady with employment increasing however there's no guarantee that the trend will hold in fact there have already been reported cases of a complaint of companies deciding to reduce their business sites in the United States the coupling of supply chains may impede business activities in the US by industry manufacturing including digital product is expected to be most directly affected until today manufacturers have spent years optimizing supply chains within the asia-pacific to stay competitive as the chart shows exports of digital products from China to the US has doubled over the last 10 years as a result of developing supply chains changes to the trade environment brought by protectionism have burdened them with unnecessary trade adjustment costs studies by General and the American Chamber of Commerce in China revealed that many companies are already shifting supply chains from China to Vietnam Taiwan and Mexico following the decision on additional tariffs this may this trend is expected to accelerate among US companies there is also movement to avoid additional tariffs by China to give an example harley-davidson announced that it would transfer production of motorcycles aimed at China from the US to Thailand who bears the cost of the restructuring supply chains is the end in the end is the consumer of products and services according to the team of Professor Weinstein in Colombia University the average annual burden on each household is estimated at more than 800 US dollars this figure includes the effects of the new additional tariffs announced last month at the same time the competitiveness of companies in the US which procure from China will decline Alex has expressed up until now leveraging tariffs as a weapon or tool in bilateral negotiations will in the end neither benefit the US economy nor our US citizens I mentioned startups and innovation field at the beginning how will change in the trade environment impact this field if current condition continues companies and financial institutions will be inclined toward risk aversion as a result growth funds in the market may be impaired this would also adversely affect the innovation environment likely forcing startups to drastically review their growth strategies in the US and Japan and across the asia-pacific the role of innovation and technology in economic growth is predominantly however the conditions necessary for them at risk of falling apart in order to maximize social welfare through innovation it is necessary for us to come together to share knowledge in addition to these environmental changes the structure of industry itself has been shifting where we used to see a close digital world we are now seeing cyberspace and reality merge together thanks to digital technologies such as AI and IOT all products and services are driven by data in this regard you could say data is crude oil for the 21st century we need to promote the improvement of the business environment from the prospect perspective that data is the source of innovation what is the role required of the United States and Japanese government under the current enum current environment one answer is forming a framework for facilitating innovation to mount new products and services in society in other words the role of rulemaking based on visual standards or establishing and maintaining open ecosystem in this case it should be done within a range that does not impede the standardization of technology born from private sector innovation the bike sharing business in Singapore is a straightforward example when this service first appeared the Singaporean government did not intervene as a result multiple companies were able to take part allowing the market to split across the country at once however as each company prioritized customer retention abandoned bicycles became a social problem the government then responded by adopting a bicycle parking standard this has greatly alleviated the situation without hindering business rulemaking through government-led de jure standard grows more important in international business on a daily basis this is because products and services are able to more easily cross border as a result of increased innovation through ICT there's not yet commonly agreed-upon definition of digital trade but the OECD defines it as trading goods or services either digital or physical which require the cross-border transfer of data this includes all services offered through online platforms online hotel reservations ride-sharing and music distribution today a company's headquarters production and service sites data centers and distribution centers are likely to be located in different countries the ideal framework under this paradigm is not pirate all but multilateral operator all governments can also help by disseminating digital technology such as big data AI and IOT as quickly as possible and at low cost all of these digital technologies are capable of significantly boosting social welfare however if technology and data are disproportionately accumulated in leading platformers the income gap will widen this could lead to problems in maximizing Social Welfare another role of the government could be with responding to externality such as increased energy consumption or unfavorable effects on society in order to respond to these changes and expectations Prime Minister Abe a advocated the Khan data free flow with trust at the doubles conference in January it emphasizes that establishing trust throughout the digital economy and society and promoting international data flows is necessary in order to make it the reality economic minister ii and the japanese government have been taking have been talking with many governments ahead of the g20 summit next week the g20 ministerial meetings on trade and digital economy was held in early June all g20 countries reached an agreement on the concept of data free flow with trust which says that Trust is the enabler of free data flows regarding the data and digital technologies which will drive the economy and society in the future we need to work together with our countries to secure interoperability despite their various views on this but at the same time with the purpose of realizing an inclusive and sustainable economic sustainable economy and society the establishment of trust and promotion of the free flow of data is necessary these acknowledgments are significantly meaningful on a related note this january voluntary countries within the within the WTO agreed to begin working on an international framework for digital trade and in fact preparatory discussions began this made the following are current themes for deliberation 1 facilitation of e-commerce such as signatures and electronic verification to distribution of electronic data Beyond Borders 3 protection of consumers and for support of developing countries it is expected that Japan will work together with the u.s. to strongly encourage other g20 members to join these activities through the summit in Osaka in the asia-pacific ecommerce rules have already been introduced through the TPP they will also be included in the regional comprehensive economic partnership or our SAP currently in the final stage of negotiations we eagerly welcome the u.s. to join us in promoting the improvement of the region's business environment in the japan-us summit meeting held in last month the leaders of both countries reaffirmed cooperation toward the realization of over free and open Indo Pacific this includes for the energy infrastructure and digital sectors in the meantime the interest of individual countries in the field of digital trade has grown more diverse a wide variety of things have been taken up these include exam exemption of tariffs free flow of data data localization privacy 5g governance AI Big Data regressions on platformers and income ecommerce based on the idea of the data free flow with trust Japan wishes for the rules prescribed in the TPP to be applied in other regions as well these cover areas such as one exempting electronic transmissions from taxation to cross-border transfer of data three banning mandatory data localization and for non-disclosure of source cause while focused on privacy protection and security it also advocates rulemaking with a high level of liberalization in other matters with ongoing discussion through the Japan United States strategic digital economy partnership launched this much we believe that the u.s. shares the same orientation in discussing development in the asia-pacific economic and social infrastructure including including for energy is vital in particular within Asia the economic growth of many regions is impeded due to insufficient infrastructure making the benefits of innovation widely available requires developing the communication infrastructure necessary to use new technologies one problem anticipated in the broad use of big data and 5g technology is a significant increase in power consumption strengthening the regional power generation capacity is therefore a pressing matter in this right infrastructure development is vital to maximize the economic and social potential within the asia-pacific as was discussed at the previous seminar Japan and the US should play a leading role in maintaining and strengthening the global free trade system a cooperation such as through the trilateral meeting of the trade ministers of the US Japan and the EU is critical in addressing WTO reform and unfair trade practices where should the u.s. and Japan focus when working to solve the issues I just mentioned the Asia Pacific accounts for a significant portion of the world's economy the scale and potential streamlining the digital business environment in the region arjan would therefore greatly develop its social economy and strengthen the competitiveness of its industries in order for our countries to enjoy these benefits we must take the lead in establishing a regional framework we have been helping promote the APEC cross-border privacy rules cbpr system through holding workshops and events in the asia-pacific in addition we are also cooperating to provide capacity-building training programs looking at each age a Pacific country we see significant differences in digital trade related environments as well as areas of concern improving the business environment will require the US and Japan to work together through demonstrating leadership's and formulating a roadmap regarding the relationship with Asia Asia in particular a mutual understanding and dissemination of information are critical to improving the business environment JETRO is already prepared to play a contribution contributing role here well them through what framework should we engage in dialogue what issues should take priority as we work together on digital trade and rulemaking in the long run forming rules through that through the WTO will of course be preferable however it is important for us to deepen discussions and mutual understanding through multiple frameworks for the time being father this should be done from a holistic viewpoint taking account the circumstances of individual countries on this topic I have high hopes for the following panel discussions with experts and from each country finally as I mentioned earlier the US and Japan are working together at rulemaking at this year's g20 going forward we will hopefully see the formation of projects in which our countries can cooperate in the field of digital related infrastructure I'm eager to hear insight on this point from each of the panelists today thank you very much [Applause] okay well let me join my green and welcoming you all here i'm matthew goodman I hold the Simon chair and political economy here at CSS and delighted to be part of this great conference again well sasaki-san you laid quite a smorgasbord out there of important topics my Japanese insecurities include never having quite figured out how to say smorgasbord really in Japanese but the apparently use the word Viking from the Viking set which I like because it suggests that there's an opportunity to plunder the the food selection that you put on the table so we're gonna try to do that in this panel and select some some tasty items to talk about there's way too much to to really cover everything but we're gonna do this in three parts this session first we're going to have presentations from the three experts then we're going to the other two-thirds of the conversation is going to involve you because we're going to use these clickers to allow you to vote on different questions which we're going to put up on the screen and the second part and then we'll do questions and answers with you about any of the above topics so this is as Mike said the 14th time we've done this this forum and I've been involved with it actually even before I joined CSAs seven years ago I think I spoke this once upon a time and as Mike said until this year really the focus has always been on you know how do we integrate more deeply why should we integrate more deeply what are the the policy tools and we've typically had you know question about is our SEP winning or is TPP winning and we we will have a question about that later but but this time as Mike said we're we're really in a different environment and I think that and enca sake is not implied it as well that the we're we're in a new environment where you have a very different trade approached from the United States in the region in the asia-pacific region this we have this trade war let's call it between the US and China going on which is leading down paths that we didn't think we're really well again even a year ago and you know we have the u.s. out of DPP we have tariffs and other threats against allies we have the u.s. pulling out GSP benefits from India and so you know there's a very different environment policy wise and I think that is raising questions as sasaki-san said about trade patterns supply chains investment decisions in the region and so I think this conversation is going to be quite different at least this first part of the conversation because I say we will ask about those traditional policy tools and things but but I think that's the fundamental backdrop here and are we the question to me is are we experiencing a permanent change or is this something temporary that's going to correct when some of the policy issues maybe get resolved I mean for example just to be provocative supposing President Trump and President Xi Jinping shake hands on a deal at the end of next week in Osaka at the g20 I think it's unlikely but it's possible it wouldn't be the first time the president Trump has has has agreed to a deal surprisingly the most analysts so you know if that happens does that mean that we're back in the old world and we next year's conference can be back on the sort of traditional track or are we in a very different you know sort of permanent structural change here about patterns of integration and and trade investment flows in the region so that to me is the fundamental question here we have a fantastic panel here as always a great group of experts from the region so I'm going to introduce them now and let them go one by one and we're going to do it I think in this order so the first speaker is Professor - Shin chuan from the who is the professor he's Dean and professor at the Center for WTO studies at University of International Business & Economics his research focuses on Chinese trade policy the WTO government procurement US trade policy us-china trade relations he served on the WTO Secretariat as a visiting researcher and here at SycE Mike's in my alma mater and that keep as well I see the Korea Institute for International Economic Policy got his PhD international trade and Master of Arts in international trade from the University that he now is teaching at next to him is Yasuyuki toto who is professor at wasa T University's Graduate School of Economics from 2010 to 14 he was professor at the University of Tokyo's associate graduate school of frontier Sciences his recent research focuses on the impact of firm networks supply chain shareholding links research collaboration on economic activity using firm level data from various countries in Asia and Africa he received his PhD in economics and Master of Arts in food research interestingly from Stanford University and a Bachelor of Arts from it from the University of Tokyo and next to me is Deborah Elms who is founder and executive director of the Asian Trade Centre in Singapore which works with governments and companies to design better trade policies for the region she's the vice chair of the Asia business trade association sits on the International Technical Advisory Committee of the global trade professionals Alliance and many other she works with many other organizations has a big focus on TPP on ASEAN and other regional initiatives she got her PhD in political science from the University of Washington and MA from the University of Southern California and Deborah is representing the ASEAN or perspective we usually have a scholar from Vietnam or Singapore or one of the ASEAN countries but but we're delighted to have Deborah stand in she's based in Singapore so she can hopefully speak to some of those perspectives so I've talked enough with that professor to Thank You Jethro and CSIS for inviting me here I'm always glad to come back although the atmosphere is not so good as before I've prepared a PBT but I won't follow it rigidly because of time limit I would like to just make some brief points the first point is that China is on the defensive side in this us-china trade war we are really shocked in the surprised and not prepared at all for what the US government has done to us we did not expect that the US government would be so determined and courageous to obviously break the rules and trade connections promoted by the US for decades our early assessment was that a wide range of additional tariffs are impossible because they are clearly against WTO rules and the will significantly hurt the US economic interests but it turned out that the US government does not care about them at all we also shocked by the fact that tariffs are not a means to make things right to push forward China's faster and the deeper opening up in the reform but a purpose itself to partially Qatar the economic interdependence between the two countries we thought section 301 is a kind of deterrent weapon to force partners to make concessions but the outcome is that the US administration really believed that tariffs will benefit the US interests even worse is the trade war is not only about trade but a part of wider strategy of containing China China has been demonized as the main sinner responsible for various domestic problems in the US and the key challenge of us-led International order we totally under underestimated the fundamental changes in the US policymaking circle you know the the director of Institute of American Studies in Cass China Academy of Social Sciences has lost his visa to the US perhaps due to the alleged why the information collection activities but in China actually people even including himself mr. Wu are blaming these American research institutions and researchers for their misinformation and misunderstanding about u.s. sections therefore China's responses and the reactions have been largely hasty and not well conceived especially at the beginning in the year of 2017 early 2018 we thought that the old ways of dialogue and purchase offers would work to stabilize the relationship but now we have realized that no matter what we do the US government would not be satisfied anyway in response to this aggressive and hostile actions of the US government we had to defend our national interest and dignity with tit-for-tat reactions one thing I should emphasize is that within China there was a consensus that tougher US pressure is necessary and beneficial for cliff for accelerating China's opening up and reform especially among Chinese academics there was a widely disappointing disappointment about is a slow implementation of reform agenda made in the third plenum of the 18th Party Congress the end along the Myatt benevolent hegemon of the united states was he expected to play a positive role to promote such a process however an even larger this point for us disappointment for us is that the u.s. government is seems not only unsatisfied with China's policy in the system but also hostile to China as a nation now though many people are still not as supportive of retaliatory policies the mainstream question in China is that what choice do we have we have to fight back the second point is with this background of deterioration of us-china relations the relations with other regions especially sea fish as a Pacific have gained more attention of the Chinese government one result of the trade war is ASEAN has replaced two the u.s. is the second largest trading partner of China in the first five months of this year actually I think the u.s. is a part of Asia Pacific community now of course the term is has become indo-pacific Indo in the Pacific Rim okay anyway I I'm not sure about the difference between the two terms the whole region has been closely integrated in the last decades I'm sorry I should move on yes sorry I forgot it I think yeah you can have a look at the chart the US and China are two centers in the asia-pacific value chains making their respective contributions but it is no doubt that china now has a greater role as a production hub in the region regional economic independence while the u.s. is largely a final consumer no country is willing to take a side between China and the US and China does not want it to be isolated of course so we need to further engage in regional integration through various bilateral and regional initiatives such as China Japan Korea FTA and RCEP Ossipee certainly the lowest hanging fruit in from of China though it is not so high quality and comprehensive it should still be celebrated as a victory in the tide of the globalization the Chinese government seems very determined to promote as a conclusion before the end of this year another option getting more attention is to join the CP TPP it is not I think it is not on the table of the government yet whose first priority is to finish off it as soon as possible but among Chinese academics in the reformists in the government CB GBP is considered as the best choice to promote a domestic reform and it's breakthrough us encirclement then the third point is the more important thing for China is to make ourselves better it is almost impossible I think of China to influence domestic politics within the US I think even yes business the community has difficulty with this a few Chinese people actually in China believe that we have reached a kind of an ideal point of so-called China model China's system has some advantages such as mobilizing and accumulating resources quickly and efficiently but we are not so good at stimulating individual initiative and the motivation by offering citizens more autonomy and protection we still believe that economic reform market-oriented economic reform and opening-up could play a positive role in terms of a social and political progress until now a significant shortcoming of China's FTA strategy is unwilling to make more institutional changes rather than market access commitments this requires a deeper integration rules and more powerful negotiating partners it is I think a good time for now for Asian partners to request a tougher institutional commitments since China is in urgent need of friends on the China side actions speak louder than words history tells us that difficult to reforms always happen in difficult times now the Chinese government has started to take serious actions and opening up more services industries reforming subsidies and the reducing tariffs further the final point I would like to make is that I think now is the right time to seriously consider or reconsider the framework of g2 both China and the US should be regulated by a set of rules bilaterally negotiated and globally accepted this does not mean that the two countries will be dominated world affairs but without a certain and well-managed us-china trade yes China relationship the whole world will suffer and actually the world is suffering right now and the devotee is also expecting a stable and predictable us-china relationship maybe when we look back it it was premature and maybe too early in 2008 in 2009 to advocate such an idea but now I think China has had the will and ambition to take more responsibility as a world leader and also realized that the urgency to establish the to establish a balanced power structure between China and the US I'm gonna stop here thank you okay thank you very much professor - and really for your frank comments and and I think important to give that perspective from China and want to talk about that and I think your idea of effectively some kind of G - a deal - to then be the basis for an international understanding is powerful so we'll talk about that thank you very much professor - professor toda thank you very much first of all I'd like to thank our CEO so yes and jestro for inviting me to this very our great conference is my great honor I'm international economist or development economist focusing on social and economic networks the role of our social and economic networks in the CIM economic growth and resilience and today in this presentation I'd like to mention three concerns ready to age a Pacific economic integration first is a propagation of economic shocks through international supply chains second insufficient knowledge integration and finally excessive protectionism so everyone knows that the asia-pacific region has been well integrated through international supply chains or production networks but this is associated with a disadvantage because negative economic shocks can propagate through supply chains these figures are taken from one of my studies examining how production reduction due to 2011 Japan earthquake proper propagated to regions that were not directly hit by the earthquake so it is clear that an economic shock can I did oh I'm sorry this one so the speeds are showing a propagation of negative shocks I think I should look at this historic and that means an economic shock can indirectly affect our firms in the entire economy through supply chains this actually implies that regressions of what ways production for example may lead to large indirect effects on the whole Asia Pacific region and but this propagation can be mitigated this I conducted another study focusing on the propagation of negative shocks by Hurricane Sandy's in in the USA in 2012 and this figure simply shows that US firms linked with a firm damaged by the hurricane reduce sales after the hurricane very much like almost 20 percent however this negative effect did not reach no US firms or US firms with foreign partners that were linked with the damage firm by the hurricane so the implication is that if you have foreign partners oh if you are more generally if you are diversifying partners then you can promote you can mitigate the economic shocks so this can lead to economic resilience so in other words too much reliance on the unlimited number of partners may incur risks so let's let's talk about the knowledge because a creation of knowledge or innovation is the ultimate source of economic growth as emphasized by a professor Paul Romer who got a Nobel Prize last year I would like to know this because I professor Roma was my co advisor at Stanford so he is my hero and so this figure simply shows that most of the new ideas are generating in about Asia Pacific region however the Asia Pacific region is not well integrated in terms of production of knowledge so this figure is taken from one of my studies shows that are shows research corroboration networks among firms so for example red dots indicate Japanese firms a blue which US firms and purple Chinese firms you can easily see that from this figure the US firms Chinese firms in European firms integrated conducting research corporation a lot however Japanese firms in South Korean firms are quite segregated with few collaboration this is quite bad because international research corporation has been found to be very effective to promote innovation and economic growth so this figure shows that our the effect of international collaboration on the innovation quality measured by the number baton citations is a 30% for the US and are more than 100 percent for China and this effect is a lot larger than the effect of a domestic car collaboration so it is clear that China actually benefits a lot from links with the US but at the same time the u.s. also benefits from foreign corroborate errs okay so I would suggest that knowledge networks should be promoted much more in the Asia Pacific region and knowledge networks are not restricted to research corporation it should include for Sampo technology transfer through supply chains and overseas studies by students however I would like to emphasize that rules should be clearly set to promote economic growth to promote knowledge network that means for example we should strengthen intellectual property rights in particular finally protectionism so everyone knows that a protectionist sentiment has been rising in developed countries this figure shows that about 1/3 of US citizens think that international trade creates jobs in the case of Japan only 20 percent that means 80 percent of Japanese very much spec skeptical about the benefits of globalization but the the session tomorrow I believe that a lot more than 20 percent of Japanese benefit from benefiting from globalization so in the early 20s 2010 many Japanese were against TPP including farmers and also you know workers or citizens in general for example medical doctors and nurses who are strongly against TPP fearing that universal insurance health insurance in Japan would be destroyed by us insurers insurance companies so this means that economic loss from globalization alone cannot explain the rise of protectionism so this imply that we need a behavioral economics approach not - sorry skipper right now so why because we started from here so 100,000 years ago we as a form small groups to fight against the other groups and other species so this imply that we may be intrinsically closed and hostile to outsiders so to alleviate this problem we need to take behavioral economics approach right professor Hickman another Loretto emphasizes so he actually found that education particularly to children can improve non-cognitive skills and also another study by some Japanese scholars using a survey to ten thousand Japanese found that when Japanese were engaged in group what are the group activities in the childhood such as team sports community activities and group walks then they were more likely to have a higher level of non-cognitive skills measured by for example Pro compassion trusting others and then they are more likely to support TPP so this employ that social interactions can actually change the intrinsically close nature of human beings so probably excessive protectionism may stem from intrinsically closed nature of human beings and thus claiming only economic benefits may may not lead to consensus in terms of economic integration so social interactions should be promoted to alleviate protectionism so I would like to emphasize the role of overseas experiences of politicians bureaucrats business persons and students in this regard I sure I would like to thank our si si si si s for accommodating many Japanese politicians bureaucrats and business persons now also I'd like to thank JETRO for promoting internationalization of Japanese firms final remark so in the 1930s as in many countries raised tariff rates and this Lee led to block economies and finally to war - but in this period the US did not restart freights too much okay so I hope at this time again the US will protect free trade and you know promote prevent decoupling and this time actually I hope Japan unlike last time we also play an important role in preventing decoupling thank you very much thank you thank you thank you professor toto well I was going to say that I think you're you win the prize for the most artistic chart that I think we've ever had Anna CSAs presentation that research collaboration thing looks like a Jackson Pollock painting or something it's fantastic but then the caveman one might have might have trumped that so so fantastic vote on it all right we'll have a clicker question about that later but seriously really thought-provoking and taking us in a rather different direction than I think any speaker has before in this conference and so really interesting and I have a question to you about this the research piece of this so with that Debra thank you very much I am delighted to be here this morning I'm talking about ASEAN I've been in ASEAN now for 15 years and have been working with ASEAN companies and Asian companies more broadly and so I was asked to discuss how the us-china issue in particular or US policy is affecting Southeast Asia and Asia more broadly so I'm gonna go I have a bunch of slides and I'm gonna do something I really hate which is put slides up and then flip through them without actually spending time on them which I personally dislike and I apologize for doing that but time constraints being what they are here they are so you can probably get the slides I assume you're gonna put them up or something so good they're up you can look at them at your leisure so let me go through them kind of quickly so just for those of you who don't remember where ASEAN is there are 10 countries in ASEAN in Southeast Asia there they are the ten of them it's complicated this this trade war is complicated for ASEAN and it's one of those good news bad news stories many folks in ASEAN and especially many political leaders in ASEAN will tell you that they will win out of the trade war and so you know while no one really wants a trade war frankly the ASEAN countries are secretly very gleeful that this is happening because they think that they will benefit and for some countries and some sectors the answer is they may but for others the damage is high I mean really nobody wins much out of a trade war and so part of the challenge in ASEAN it's already a diverse region and the implications of this trade conflict in this diverse region is mixed so we have some winners some losers some sectors doing well some that are not and it's very very complicated and one of the reasons why I see on I would argue is not doing as well as it could be doing is because ASEAN itself has never successfully gotten past its own soaring rhetoric to deliver on-the-ground results nor have its individual members done what they could if they had if we had the actual rhetoric coming closer to reality and ASEAN were in fact an integrated region of 600 million people with a free flow of goods services investments skilled labor and freer movement of capital which is the headline thing for the ASEAN Economic Community then ASEAN would be very well poised to do well out of this economic mess that we have are finding ourselves in but since they haven't the the story is a little less bright than you might think so ASEAN has always been at the forefront of integration they've been at this for a very long period of time the asean themselves have now moved to the asean economic blueprint 2025 they've also got six now six what they call asean plus one agreements the sixth one maybe you weren't paying attention we almost missed it actually asean hong kong just came online with five of the members of ASEAN last week so we have these ongoing initiatives in ASEAN and with the neighbors to continue to integrate so while we have chaos emanating from here we have integration happening in Asia and I think that's important the other thing which I'll talk about in a little bit more detail of course is the r7 ago she ations but don't forget as well that the Europeans are extremely active in Asia and especially in Southeast Asia where we have EU Japan already in force EU Singapore any minute now it will finally be locked in it's taken forever but it's really close now EU Vietnam is finished and we're waiting for the final ratification they are restarting negotiate they're in the middle of negotiations with Indonesia I personally think that's a job security job but whatever the Malaysians in the Philippines may be restarting relatively soon so the European Union continues to move ahead with integration in Europe within ASEAN let me talk briefly then about our SEP and where we're at with our SEP our SEP is treated very skeptically in this town which is a with some good reason but I think you are too dismissive in Washington of our set we're in the 29th round of our SEP so I realize that that's part of the reason for such skepticism and as someone who has hiked around with our SEP now this will be the 18th tighten that I've been to ourself I am joining your skepticism and I'm exhausted and I hope we finish um but ourselves complicated you know we have 16 countries now in our SEP all 10 members of ASEAN China Japan Korea India Australia New Zealand that is a complicated thing to try to slot together and get to conclusion I mean TPP was bad but TPP at least everybody was voluntarily at the table so when you're voluntarily there you you want an outcome even if it's difficult to finally get done and ourself every one was drafted you are in our set because you are a member of ASEAN or because you have an existing ASEAN plus one agreement so not everyone is equally enthusiastic at sitting down in the first place so you can imagine how complicated this is to get the agreement locked in and in particular what's been hard is getting what they call the ASEAN dialogue partners China Japan Korea India Australia and New Zealand to commit to opening because this will be the first time that many of those dialogue partners particularly India China have an agreement together and that is proving to be really difficult to get across the line so it's it's an interesting agreement and it's one that we should pay more attention to because it will link together Asia in a way that we have not seen before so we will have one agreement that covers 16 countries in Asia and even if it's relatively modest at the outset it will upgrade over time so even if the tariff cuts are relatively modest to start in some places they will be improved over time now fingers crossed that they don't wreck this agreement with bad rules of origin which is a big problem which to fix that but nonetheless tariff cuts coming ability to move goods especially all around 16 countries in Asia this is something that people should be paying attention to it also includes more than that so it's it's a comprehensive agreement its goods its services its investment its intellectual property rights its e-commerce it's got a legal chapter which I don't know that they will use but it will have one you know so there's a lot of things in this agreement and getting it done is going to be complicated but we expect to have it done this year and the reason we expect to have it done I know I know you're all saying I've heard this before no this year is pretty serious because if we don't get it done this year then it's difficult to see how it keeps going so what they may do is default to an asean-plus-three if they don't get it done this year and kick out India Australia and New Zealand kick them out for different reasons the Indians because they're difficult at the bottom end and Australia New Zealand because they're difficult and being too ambitious and so if you kick them all out you could get the agreement done and be done by this week you know potentially you know end of this month and so that may happen or alternatively just get the whole thing finished we know what the issues are they've been the same issues from the beginning and so I think that's important the second thing that I want to mention briefly is ICP TPP which has been mentioned earlier but just be aware again it's in force and I'm gonna skip over a lot of this but it's enforced now for two of the ASEAN countries four of them are in two of them are in force Singapore and Vietnam we're already seeing benefits for especially Vietnam so if you start looking at the Vietnamese numbers especially things like Vietnam Canada which did not exist before you can see the uptick in Vietnam Canada numbers that you did not have so that is also very interesting and important to pay attention to I'm gonna skip over the CP TPP because you know what this is did it just to show you that the Vietnamese numbers this is a slightly confusing chart but basically to show you that Viet Nam's exports month by month compared 20 17 18 19 January February March because we've only been in force now since January the numbers are exploding and then to compare that to u.s. imports from Vietnam also changing as a result of the trade war but you see that the numbers in Canada they're small but the proportion is very very high in other words the Canadian exports out of Vietnam really exploding partly because the Vietnamese and the Canadians have done an amazing job of taking advantage of this and then finally let me just mention that of course the us-china trade war has really significant impacts for ASEAN not as much though as people expect not as at least not yet and the reason for that is because supply chains are much stickier than people seem to expect I think if you haven't worked in companies maybe you missed this point it is not so easy to just pack up and move a factory I might move my factory but getting all of the ancillary services that I need to make my factory be successful is harder than you think and most even the most advanced global MNCs are reluctant to move factories when they're not certain how long this is going to last when they're not certain whether this matters to them even a 25% tariff cut a tariff increase which is big is just another disruption in your supply chain you know they deal with these kinds of things all the time so if we look at the numbers early on you know ASEAN was going to be in trouble all the pink boxes are Asian inputs into China that then go to the US so you can see that Asia is tightly tied into these supply chains and especially Southeast Asia so any disruption in that trade is really problematic for ASEAN and deeply problematic for countries like Singapore where Singapore's semiconductor exports in particular are a huge part of Singapore's export bucket altogether and you can see of course we're shifting supply chains but let me just finish with my last chart here to hear this if you just look at the supply chain indexes especially coming out of China actually the numbers are not as bad as people expect so many people say uh supply you know to trade disruptive total disaster things are a mess if you look at the shipping rates and shipping freight indexes and so forth and part of what we do at the Asian trade centers help people shift supply chains and if you look at the actual supply chain indices and shipping container numbers they're not as bad as you would expect and especially the red lines are this year and the other lines are from 2015 forward you can see that while we have disruption it's not nearly as bad as other times because supply chains are used to dealing with disruption there's a hurricane here a volcano there a flood somewhere else a currency fluctuation somewhere I mean this is not an abnormal thing even though of course we're not used to having tariffs go from zero to 25% and certainly not in the United States so the point is just that supply chains are moving but not as fast as people think and not in the ways that people might expect the longer this goes on though the more they will shift they may shift to ASEAN they may shift out of ASEAN and in particular that my last point to this audience would be be a bit careful because they may shift to Asia full stop for into Asia for an Asian market rather than shifting into Asia for a u.s. final market people may say screw it this is too complicated I'm not in the mood if I'm gonna shift my supply chain I'm going to shift it for the long run and in the long run where are my final markets likely to be in Asia four billion consumers in Asia many of them a growing middle class the middle class in China is bigger now than the entire US itself so you know for a company if I'm going to go through the aggravation of shifting up by supply chain I should think about the future and maybe the future is not the way that it has been in the past maybe the future is something entirely different so let me just leave it at that Thanks okay fantastic that was another great presentation Thane thank you and great food for thought let me ask one question each I think we have enough time for me to ask a quick question of each panelist and then we're gonna do the clickers and then you'll have a chance to join in as well but just starting the you Debra so if you're Vietnam and you've seen I think in the first four months of this year Chinese investment in Vietnam has increased nearly six-fold as a result of some of these forces you've got trade creation and trade diversion effects you know some short-term benefit but not clear where this is gonna go long-term what do you do I mean if your Vietnam what how do you position yourself in this changing environment what is their strategy and you know or other ASEAN countries as well but Vietnam seems to be right at the heart of this well Vietnam is doing I think the best that's why they've got so much inbound investment and the reason why they've done I think relatively well is that they have tried to get their domestic house in order even before this current trade war so they've said look we need to become rather than the bottom of ASEAN in the sea MLV basket we need to jump to the top of ASEAN and so in order for us to do that we will do things like sign on to CP TPP which is super complicated but we'll do it anyways and we'll make our very best efforts to comply with those rules we'll sign on to a European Union agreement which reinforces the domestic pressures on us to get the job done domestically and that will help us be an attractive destination for inbound investment and so that was already in tow before we ended up with this chaos out of here and I think that's partly why they are doing so well out of this additional trade complication on us-china because they have the systems in place that attract inbound investment because of CP TPP because of EU coming up bu vietnam because they are jumping to the top of the asean tables in many respects again it's you know they wear it towards the bottom before they're moving quite quite sharply and i think if you are not doing that if you're not putting your own domestic house in order if you're doing backwards policies like making it more difficult for foreign investors making it more difficult to export making it more expensive if it takes you three years to get a permit to build a factory who's going to relocate to your country if you're making it more expensive for you to ship things out who's going to relocate to your factory you know so you need to think about if you have really backwards like india keeps thinking they're gonna do well out of this and i really if you have really backwards policies on e-commerce and digital trade why would i go there looking to the future i would not so surprise surprise nobody's going why because the policies are backwards difficult and can change in an instant this is not the kind of stable environment where an investor thinking forward wants to put down new roots for the future okay thanks lots more to ask about and well maybe get the the audience to help with this but professor Toto so you going back to your Jackson Pollock painting which is spectacular really the this research collaboration issue has exploded as a topic here in Washington in the last you know a few months I mean it's been around for years but it's become a very hot topic with a lot of conversation including one here a couple weeks ago that we had in this room about including with the Provost from MIT and some national security experts talking about this question of maintaining an open environment in our universities and our laboratories for research on the one hand and the benefits that that provides to us but also you know the real national security risk that the risks that arise from that from a lot of you know sources but but including researchers who are taking knowledge back and sometimes it's it's going and feeding into less positive letting non-commercial and more national security worrisome areas so getting that balance right very difficult is this a conversations happening in Japan and are you having a discussion in your university or in other universities about about these issues and how are you trying to strike the balance and then related to this what are the implications for for trade and investment patterns in the region big questions but if you could give us a quick answer to that quick concern first of all in Japan a Sharia is been debating for some universities too so now I think I mean Japanese universities if I want to invite for example Chinese scholars we I have to you know write many papers to get approval this actually hinders research corporation I think and I think again innovation is very important and research corroboration is a very important channel of knowledge diffusion which promotes innovation so and uh you know learning from your research partner is completely legal basically but again I want to emphasize that we need rules explicit rules - you know for national security or whatever so research corporation should be under explicit contrast and then the contrast should be you know should be specified so that's a I think I'm very important for this you know to promote innovation thank you okay well again it's a huge topic and one we may invite you back to talk to us about more because it's really of interest to to us here at CSS deeply so professor to your presentation was understandably somewhat dark and and often when we get to the topic of us-china trade issues we have the same conversation here with you know different perspectives but ultimately it's a pretty dark conversation can you give us any light is there anything in in either regional or global trading the regional or global trading system where there is actually an opportunity for the US and China to cooperate collaborate to get something positive done beyond the bite of the purely bilateral issues that we're struggling over is there's something on the international or regional agenda where the US and China have a clear you know aligned interest where they could work together well I'm sorry for my method and understandably yeah actually I have been always optimistic but now yes you've changed yeah it's it's so really difficult I mean actually even multilateral discussions based on bilateral negotiations like right now actually members that at least in the WTO members are proposing to implement a some reforms china has delivered its proposal on the booty reform and actually some of some points in the proposal are responding to us requests so-called structural reforms so in this sense we are cooperating but as a whole for the WTO the now the key problem is the the functioning of the dispute settlement mechanism members including China at least pay a lot of attention to that we believe this is the basis for the impossibility of WTO rules if big members don't follow rules then why we make rules so this is I think a big dilemma in the WTO reform now we are waiting for the proposal of the United States the US has complained about dispute settlement a lot but has not submitted any constructive ideas about how to improve this system then I think China and other members are suspicious of the value of making new rules even in the ongoing negotiation I like on Commerce we also have this concern so I mean we have I think we have a lot of expectations from the United States to play or how to say to get back it's all confidence in self and it's a belief in international systems to follow the rules made by or led by itself so anyway I think a largely steer depends on the United States yes we're looking forward well thank you for the boost of our self confidence I wrote about that a couple weeks ago and I agree with you I think a lot of this is a problem of our lack of self confidence and we need to restore that so that might be a start okay this is where veterans of the of this forum will know that we now bring you into the into the conversation here in front of you you should have one of these very expensive I'm going to stress very expensive items of hardware and I say that because if you take it out of here someone is going to come running after you and that we will find you so do not take this away these are clickers which have five buttons on them actually six buttons the first one is that's most important is to turn on the orange button at the top to turn the power on we will then be given a series of questions on the screen which are multiple-choice questions and you can push that's last year's result we should not quite yet put that up okay great if we can get full screen so we need a question first and they've we're gonna have a question you can push any one of these buttons you can push 15 times and won't make any difference you'll only get one vote but vote off and vote early you'll get one vote we will get results here in real time of the audience view on these issues and then we will talk about it up here and then later we'll have you able to ask questions as well so does that make sense everybody understand so turn on your orange button so you got a little green light at the top and then we will put up the first question you guy think is doing this if we could put up the first the first question there we go which of the following initiatives related to economic integration in the asia-pacific region has the greatest momentum now CB TVP our SEP a CC or Bri Felton Road we'll give everybody a minute please do but by the way these are anonymous nobody's gonna know who voted for what so please do vote we always find that some people are shy but it's okay as usual we always get somebody who votes for e when there is no answer e so that's fine there we go we deliberately don't put up in most of the questions we don't put up other or you know none of the above because that's too easy we want to force you to try to say what you think is the best answer okay so it looks like we have at least a plurality here if not I guess it is a majority in favor of CP TPP that's interesting start with you Debra why is the audience is the audience right is this the the initiative with the most momentum right now so I think it depends on I've voted yes CP TPP we've been working on this forever so yes I think it depends on where you sit though obviously if you're in or potentially in a country that will or is in the CP TPP it matters a lot to you if you're in a country that will never join it then obviously it matters less to you so I think it's one of those where you stand depends on where you sit because if I were in a country that will never be in CP TPP or at least not in some foreseeable future then maybe I would vote for Bri because I would say well maybe that matters more to me but in Asia in terms of momentum for integration especially for the things that I assume people in this room care about CP TPP is is probably more interesting because it it's more about integration and so I think that's why people are voting for that one okay does that surprise you that results professor - no doesn't surprise you okay Felton road gets scores pretty well we're gonna have some questions about Belton Road so we can pause so if you don't have comments we can move right on right along to the second question which okay is this the second one in ten years which of the following initiatives will define Asian economic integration same four initiatives again your your favorite choice don't press e please [Laughter] give you another second here okay all right again some people are not voting because I count they're way more than you know eighty-five people in this room which is roughly what the numbers are up there so please don't be shy okay so I'm gonna ask professor toto why is CP TPP scoring so well did you know without the United States in it is Japan as it did in getting CP TP TP done going to be able to push others into the agreement push it out further or you know what do you think explains this this we were just skepticism about the other ones maybe so first of all I'm very happy to see this result and I'm very happy to hear that China is already interested in joining CP TPP and so in this question ishow yeah you know asking about the Asian economic integration not Asian Pacific integration so I'm not sure whether u.s. is included or not but hopefully in the end the US will also join our CP TPP so we have a complete our SEP like oh if top like economic integration in Asia so you know I'm not sure I'm sure you are looking from from Japan I was more you know pessimistic about the CP TPP but here it seems that you know people are more supportive to TPP which is a very good news to be good again might be skepticism about the other ones but we and we are gonna ask about Bri in a minute but professor - can I just ask you ten years from now will China be NC be TPP I hope so prediction prediction prediction yeah possible I think yeah but it seriously it's possible but it's got pretty high standards I mean on things like state-owned enterprise and some things that China would find difficult to meet today yeah but now like the principle of competitive neutrality is accepted by the Chinese government mm-hmm so I mean Chinese people always adaptive and the pragmatic so if they are really important in a beneficial fuss we can adjust our principles I've always found this a bizarre argument if Vietnam can do CP TPP than China can certainly do CPT I mean look if it's a political will discussion and if the Chinese government decides they're gonna do it they're gonna do it and it's not that complicated I mean even the CEO at the SOE provisions with all due respect to my colleagues who negotiated it who are in the room this seat the SOE provisions have a giant loophole at the outset and I would argue that as a result I just define everything as a public good and I move ahead and so I mean I think this is fixable it's what I would argue so I think China could absolutely come into CP TPP without necessarily wrecking the agreement as it is and add a boost to it now well it'd be complicated yes would it be complicated for the u.s. of course which is why the Chinese are thinking about it now you know okay I challenge the next panel to to ask what the implications of that would be if China were in CB TVP ten years from now and we're not the United States is not what would that mean okay let's move on I actually just pause for a second do we have last year's results I realized just realize that I think we had last year's results yeah this is last year so it's similar result we'd ask the same question similar although although our SEP did a little better last year than this year which is interesting because it's supposed to be the final year this year right interesting well we'll see every year we've been saying ourselves gonna be finished this year right so okay this is it all right we'll hold you to that next year okay next question please - Bri one yeah Bri is and then you can read these I'll give you to read it it takes a second [Music] it's best no you can't do multiple answers I know it's difficult but you have to pick what you think is the closest to the the truth I'm gonna give you an extra few seconds because it's a lot to digest there again I know there are more people in this room than have voted so please do try to vote it helps us get a little bit more scientific response here okay but there seems to be a fairly clear pattern here though it's not a majority a plurality feel that it is creating a new sign eccentric economic architecture versus the other end of the spectrum I guess is probably see that it's that it's a waste of money for China at least so professor - not to put you on the spot but do you think that this is a reasonable judgment by the audience well I think a Bri is beyond Asia so at least to my I mean even in China B is still a difficulty issue I mean it's difficult to understand so III don't think I mean I'm not sure I fully understand this initiative but to my understanding I think BR I's is more about infrastructure so this of course is from China's own experience we believe that infrastructure is critical for economic development and China has this capability and may be excessive capability infrastructure building so the Chinese government wants to you could say player so called the responsible stakeholder role in the world to help other developing countries to develop their infrastructure of course China has its own benefits its own intentions like to especially to export more of our construction materials and the equipment's but I think it's also beneficial for the countries in the scene under this initiative but I don't think that the purpose is actually to create so casino centric economic architecture it's not like a system or architecture I would say Chinese people a little right now we are not so good at constructing architectural systems we are good at constructor infrastructure these visible things not the invisible rules that so and also security as I said VI right now at least is already beyond Asia so I don't see the connection actually clear connection with so-called Asia security dynamics it's it's mainly a development aid mechanism this is my understanding under the professor Toto is is I mean infrastructure if these infrastructure is built widely built across the region historically that has had a pretty significant impact on trading patterns on actually bad things as well like you know the bubonic plague famously you know was carried by rats across the Silk Road so it be carries you know good and bad things but what would you if if there is a kind of significant new infrastructure map in in the asia-pacific region what what do you think that's going to do to trade and knowledge which you focused on in the region not sure if I understand the question correctly but I I'd like to mention that so professor to mention that Bri is kind of development aid and one of my studies found that Japanese a - Sheree on infrastructure actually promoted foreign direct investment from Japan not from other countries so obviously infrastructure aid can be a channel of foreign direct investment and trade and also it could influence political system in the recipient countries I'm doing a lot of researching at the Opia and I saw a lot of ice for structure has been built in AD Opia by a Chinese aide so then you can see that politically also Europeans are pretty much looking at China and trying to follow the Chinese system so so despite of a statement I'm I think infrastructure aid can pave the road towards like a political architecture and also trade of course interesting well another topic that we are very interested in here and shameless advertising the department if you haven't been to the the microsite that we run reconnecting Asia CSAs org please go there and you'll see a map of this region and and 14,000 I think and Counting infrastructure projects in a database behind that so we're doing a lot of work in this area to be continued so next actually last year's results do we have that if we just flip them around okay so so definitely there was more sort of sense last year even that this was going to lead to sino centric patterns of economic activity and be potentially impactful on the security dynamics interesting okay let's move on to the next question back to trade what is the most likely impact of Trump administration trade policy in Asia so make sure your your thing is still on because sometimes it goes off if you haven't been using it for a while make sure the orange buttons pressed so we're in balance trade more protectionism again vote early vote often okay well there's a pretty clear trend unless we have a sudden surge for four either' No come on guys be be be bold all right so start with you Deborah do you think that's right as the u.s. out of luck here well I think that that is true but I actually think that the more alarming part is actually B which is that the more the United States shows that its okayed and flout the rules the more Asia thinks it's okay to flout the rules so we sitting in Asia are spending most of our time when we're not dealing with this trade war thing dealing with non-stop problems and challenges in Asia that we would not have had to deal with before which is countries that are putting up tariff barriers to one another countries that are putting up poor digital policies to one another countries that are engaged in a lot of behavior that they probably would not have done in the past if they thought that the rules still mattered and if the sheriff was still in town but with the sheriff gone and the rules in doubt we are spending an enormous amount of time dealing with countries in Asia in particular that have decided that protectionism is okay or that changing the rules domestically is okay because what difference does it make you give one example well about Vietnam and digital rules actually Vietnam is I mean they have some you know problem I mean there will be companies who say wait a second Vietnam cybersecurity is a big problem but actually I would argue that in the digital space Indonesia is a particular challenge so we are literally on Tuesday doing another workshop in Indonesia on they're doing many things in Indonesia but one thing that they're about to do is break the WTO customs moratorium on digital products and so we're doing another workshop to help small businesses in it who are Indonesian understand why this matters to them because then they can go argue to their own government why this is deeply problematic to them because they're going to have to pay duties they're going to do paperwork they're going to have to pay taxes on imports of digital products like software music books etc and this is deeply alarming if you're a small business who has to rely on external products and is much more alarming when the other parties do the same thing to use so now you want to export your music your software your whatever your apps and everyone else has put up the same barriers to you so we are spending an enormous amount of time on these kinds of things so customs moratorium backwards digital policies data localization issues ecommerce challenges I thing is the most of our time is actually in digital and in the core supply chain changes but the digital part is deeply problematic because they are non-stop and then new tariff policies that keep coming to effect new standards that come out of nowhere that you know are WTO illegal but again who cares right because we talked up u.s. doesn't care we're gonna lose the appellate body so you know it's a free-for-all and I would say in the long run protectionism in the region is the bit I think the bigger threat okay lots more to talk about that but do we have last year's it's the last question that was the same as last year I think and then we have three new ones but let's see last year so similar similar results but the protectionism one was a little higher than interesting okay next question please we just got three more we're gonna try and whip through those and then bring you into the question and answer by the end of this summer yes in China negotiations will have oh there's one brave soul who's voting for a comprehensive agreement you want to show yourself no that's all right no that's okay two people there we go is that you professor too and me okay anybody else keep voting keep voting if you haven't all right but we've got a pretty clear trend again here so we're predicting an impasse okay we're at an impasse so that's maybe too easy a question that's the status quo I guess nobody thinks there's a possibility that that Trump and she could decide to get this over with and shake hands and do a deal that's nobody's going to raise their hand to support that idea but how about at least a Buenos Aires type of solution where they agree to three-month negotiation to get this done in three months that that seems more possible right professor to that they could agree to that yeah probably but it would be more difficult than before I think because now the Chinese government has stated it's we read lines and I mean before this actually the government the Chinese government has had a had more space to make a deal make more concessions but right now the red lines have been set so it would be a more difficult for for China to make more concessions but then it depends on whether the US government would like to accept these red lines but I think if you just tell the audience quickly what the three red lines are the first one is cancel or to cancel all additional tariffs second is the import commitment should be reasonable and then the third one is the agreement should be equal fair something like that there are some flexibilities in these three red lines but still there is a less space for the Chinese government but one thing is it seem that the US administration really loved tariffs so it's a then it would be very difficult for at least at the first redline it's very difficult for the US government to accept it but that were advertised I think the clearest ransom for China so then I also choose C but yeah that one or the two okay I'm not one of them all right I'm sure there'll be questions and discussion about that including in the next panel so let's move on to the last two questions so there's a is Japan a question basically same question end-of-the-summer US Japan Deal No Deal keep voting again the trend lines are pretty clear here unless we have a surge of the right answer which is D but but but but C interestingly professor toda there seems to be thought that there will be a deal as soon as this fall do you think so I'm not very sure I sure I wish I could choose a but again is so you know many Japanese are opposed to TPP you know just few just a few years ago and you know many Japanese frankly you know very much afraid of us you know multinationals or whatever so I'm sure that if the negotiation is going on then more and more Japanese worried about the u.s. and also the they will be against the trade agreement the I mean the reason I'm not sure about how how a trade agreement in goods alone gets done is that that implies that what that means is that the Japan is going to give the u.s. the same agriculture or access that it gives other TPP that where TPP members that's that's what the u.s. really needs and then the the u.s. is going to reciprocate in some way by giving Japan you know the kind of treatment it gave to autos in in Auto Parts in TPP but the latter requires Congress to approve that change and I just think once you do congressional review of this it's going to take a heck of a lot longer than people think but that's that's my view so again lots more to talk about there maybe there'll be questions last question and this is for you Debra I think which is who's next for for a bilat who should be next for a bilat that's that's just the first person voting don't worry we can still who should be next yeah you there's an e this time but this that but only if you really think there's another country you have another country in mind it's not a cop-out to say no idea the word should maybe opens up some you know discussion but never do you want to take a quick stab at that and then we'll let people weigh in yes but this is going to make me very unpopular my answer would be why would anyone sign an agreement with this administration especially especially after Mexico like why would you do that what is it worth the piece of paper that you've just signed you know when you can have it upturned or thrown out in an instant in a tweet in the middle of the night and everything you've just worked for is no good I don't understand why anyone wouldn't line up to I mean I've always thought this was a you know puzzling to begin with but particularly I mean if you weren't paying attention and you somehow missed that Mexico over the wheel for this migration business should have said like holy cow why on earth would I do such a thing and so if I were any one of these countries I would say Wow okay I'm gonna go through very painful domestic political reforms that are going to be demanded of me by the United States which I will agree to do for I don't know what reason but whatever I will do it and then at the last minute for what so I mean who should do it I you know from the US perspective everybody the US should be doing and you know agreements with everybody because they're losing credibility but you know then who would be the counterparty to that I don't know okay we're obviously gonna need bigger clickers next year so we can get get a y on here all right thank you all that was great we're not quite done because I'd like to invite the audience to come in there are microphones that will be brought to you if you raise your hand and then please do be concise and we might take a cluster because we don't have a huge amount of time so the gentlemen there to see any other hands think about it if you have a question I'll take them in a cluster if we have others thank you well thank you for the presentation I mean coming from Ecuador so we don't have a trade agreement with any of the countries that once mentioned here but I was just to take advantage of your experience so in terms of inclusive development for these countries for example we have none that you have mention a lot of times so what are the models is whether I know that it's not a universal answer that you can give to us but just to have an idea for example there's some are CIP or or the CTP P which which is better in order for having the internal normative changes in order to to develop countries thank you if it's for the countries that are signing on yeah they're in Ecuador want a bilateral FTA with the United States no but I think we are the only country that is struggling to have these negotiations I think your advice in this case all right okay that's anybody else that we can cluster it if not does somebody want to take that on what which of these approaches is is best for the country's internal development so it's a great question you know the reason why we do trade is not because we're so interested in trade itself necessarily or trade agreements because we like trade agreements what really because they lead we think it's that there's no silver bullet for development but trade and trade agreements get you closer than anything else so that's why we're enthusiastic about trade and we like trade agreements because they help anchor in commitments that are important so you can do lots of things unilaterally you don't actually need a trade agreement to do the right thing you can just do the right thing but for reasons that I find a bit puzzling many countries have forgotten that unilateral action is allowable and you can just do the right thing because it makes sense so many countries are holding out now for a trade agreement as the mechanism for them to do sensible smart things okay so in that environment what kind of trade agreements make the most sense it it's the more painful ones tend to be to higher quality higher ambition agreements but they also tend to pay off more and so that is why we particularly need Vietnam to be successful out of CP TPP because if you can show that CP TPP high quality high ambition deep commitment 600 pages of rules roughly thousands of pages of schedules actually delivers results in Vietnam that is super important because then one says ah well then that's worthwhile I should sign on to that kind of agreement if Vietnam doesn't do well out of CP TPP which I don't think is going to happen thankfully but if it doesn't do well then people will say why would I sign on to these super complicated agreements I should sign on to this sort of much more flexible lots of you know policy space kinds of agreements that give me the ability to do whatever I feel like doing whenever I feel like doing them and the downside of that of having extra flexibilities extra policy space especially for developing countries is the point of an agreement is to to signal especially to companies that this is the environment in which you will be operating you're reducing risk and uncertainty you want to create I would argue the an environment that is more stable for companies so that they say okay I know what the rules are they are unlikely to shift in the short run and so therefore it makes sense for me to invest to plan for the long run to do the kind of expensive development that matters rather than short projects or whatever that could go could could leave whatever so those require I think higher quality higher ambition commitments and if you need to anchor them in a trade agreement to get the domestic political will to to agree sometimes it's better to blame it on someone else I didn't really want to do this to you guys but unfortunately my other partner they made me do it self what can I do I have to impose these painful reforms domestically to satisfy these guys but yet the end result is you get a much better economic environment for your firms and for foreign firms who want to come in and invest and build jobs and so forth so that's what I would suggest higher quality higher ambition doesn't have to be in a trade agreement you can do it on your own because it just makes sense to do it but if that's politically difficult than signing an agreement with someone and at least then the good news is assuming you can get the agreement done you can then blame them for whatever the challenges are we would have loved to have protected you forever but sadly those people over there are making us do this and the net result should be hopefully enough economic growth with some redistribution policies domestically to solve the problems there is or was Professor to in China a debate like this about the usefulness of these agreements including specifically TPP it was certainly in 2013 about you know the the benefits of joining TPP to help drive the domestic reforms that China needed to do anyway is that still alive that that sense or is there now you know a sense that that's not that useful to China as I said it's a we still think it's necessary to have some foreign pressures to push forward China's domestic reform because actually sings I think since the year of 2008 domestic reforms have been to some extent a slowdown in some aspects some difficulty aspects including a so uniform so even really I think when when the United States decided to join the TPP TPP in China there already was a discussion about joining TPP or at least promoting our domestic reform faster so I do think that that is necessary especially for politically sensitive and difficult issues there are other questions or people just really want to get to break okay you had a question before can I ask eatos on there and then the lady behind and then we'll stop thank you very much for an impressive presentation comments from all of you and I have a question for Deborah's on you mentioned that supply chain has not been really affected in the short term and I reserve department commerce has expanded the entity lists and there was a presidential decree on 5g and there's also across Pharma and now Chinese government is also trying to do make their their entity list so my question my question is how do you how do you think those regulatory change in the comp this will affect as in governments and industries and from his perspective you know in order not to push away as some companies to shine inside what what's your sedition again let's take the the woman behind you me if yeah there we go hi my name is Piper Campbell I worked on us-asean policy through the end of last year so I have to ASEAN related questions one form is Ohm's and one for mister - I'll do mister - first it's simpler my question for you is is it more in the Chinese government's interest to work with ASEAN as the ASEAN architecture or to actually splinter ASEAN and work bilaterally with the countries of ASEAN and then I'm kind of showing my hand a bit so professor Elms my question was a little bit led by one of the slides which pointed to the possibility of there being greater Aussie on arc Asian integrate economic integration with a u.s. left out and I wondered whether you're seeing within ASEAN the as a result of the us-china trade tensions sort of more focus on ASEAN integration or in fact if some of the tensions and some of the differences among the ASEAN countries are are growing in this space so for example the very different approach that of Vietnam or different benefits that would accrue to a Vietnam versus a Cambodia whether those sorts of things are coming to the fore more thank you I think we will do to both depending on specific issues is it's also the case in China Europe relations we have a very close relationship with the EU but also we're developing bilateral relationships with individual you state states then as I said it just depends on specific issues that's some great questions so I said that tariffs themselves no one wants tariffs so we have hundreds of companies right now at USTR complaining about the next list of tariffs for good reason so no one likes them and they would prefer not to have them but those are manageable the entities list is a different thing entirely because that is not the normal thing you're used to dealing with and the sort of complete rupture of being able to do business is something else entirely that is not normal and companies I think are not sure even how to handle this this is a totally different environment well how do we adjust can we adjust how do we need to it you know that that's a very different animal and some of the regulatory changes can be more complicated actually than the tariffs I mean at least with a tariff you know what it is you it might change at this point in an instant but at least you know what that is and you know how to deal with that the regulatory changes can be more complicated because you don't always know that they're coming you don't know how they'll apply the compliance costs for regulatory changes can be higher than a tariff change so the regulatory changes are the kinds of things that really could keep companies up at night and entities list especially among them is is this changing in ASEAN definitely I mean one of the things that should be noted is that for ASEAN all of the Aussie affect all of Asia China is now the number 1 or number 2 import and export market for every country in Asia so if you're going and then I would say this is a final nice point if you're gonna make Asia two sides in a trade war you know this is getting awfully complicated and the more that you ask countries to make decisions and choose sides the harder it is for them to choose and you may not be so happy with the way in which they end up choosing because the end result is you know you you know if these are countries that are in the neighborhood and do you want to be happier with the country that's in the neighborhood of the country that may not be in the neighborhood this is not something that governments are excited about I would say I mean no matter where they fall on the spectrum this is really unpleasant and trying to get a win-win outcome which Asia always loves is almost in possible at a time like this so if you can't get a win-win outcome this is you know how do you navigate this really shifting environment is not easy and so for ASEAN in particular are they finding more fragmentation at the moment I think no the longer this drags on the more fragmentation they may have but at the moment at least it looks like at the ASEAN level not as much fragmentation as you might think a little bit more integration because the chaos is causing them to say well maybe we should focus on getting a few deliverables that make sense our SEP in particular that's the key deliverable I think for ASEAN / our SEP this year and then after that as this drags on it gets more complicated you may see different split so you already see some new challenges in ASEAN itself the TPP countries non TPP countries the ones who are benefitting from the ones who are the ones who are more tightly connected to Bri and China the ones who aren't I mean there's a lot of new challenges that ASEAN has not addressed its not faced and how they resolve this is really an interesting question so for people who have watched ASEAN for a long time I mean it's not always been the most fascinating place to study but actually suddenly it's become much more interesting than it used to be because it's now being buffeted in ways that it wasn't before and the rhetoric that we're gonna survive this buffeting is now like up against the really are you going to survive it and how in-your-face sort of challenge that it didn't have to deal with before so it's kind of interesting and I suggest that some of you who weren't paying attention ASEAN might actually start to pay attention to it because it's gotten far more interesting okay well I heard I heard challenges and chaos and unpleasant and various various bad things but I also heard opportunities and integration and interesting and good good words like that so let's end on those happy words before you thank the panel let me just say two things first of all there's a break now and up on the Sam Narus there sam nunn Terrace there's coffee and I think edibles as well snacks and so please enjoy that and be back here at 11:31 and second thing is do not take these with you I'm telling you you take them with you Eric I was gonna come running after you and she will find you so do not take that with you but now join me please in thanking this terrific panel [Applause] thank you so thank you we'll resume now with a dialogue up here with three of the leading thinkers on private sector interests in all the issues we've been talking about trade integration trade agreements decoupling tariffs the clickers are no longer mobilized but we'll invite your questions after a brief discussion up here at the table so I'm joined I'm gonna start down there by Charles Freeman Charles is senior vice president for Asia at the US Chamber of Commerce his former assistant ustr for China Affairs we overlap when I was at the NSC at that time he was the PepsiCo vice president for global public policy he's a alum of CSIS where he was a Freeman chair in China studies and he has a Doctor of Law degree from Boston University School of Law and bachelor's degree in Asian Studies and economics from Tufts University Lorraine Holley his senior director for international government relations at the Arthur Archer Daniels Midland company she served earlier in her career as the director of international government relations at ADM and as international government affairs manager for Chevron focused in particular nation in the Pacific and she had one of these unique opportunities to transfer from the private sector into the East Asia Bureau of the State Department in 2009-2010 right during the so-called pivot to Asia actually right before the pivot to Asia I guess you set it up where she worked on economic and energy portfolios I guess under Kurt Campbell at the time she's like me as ice ice ice alum and Aaron Cooper to my immediate right is the vice president for global policy at the business software Alliance where he leads the Alliance's global policy team on issues particularly focused on data privacy cybersecurity intellectual property and trade he served earlier as chief counsel to chairman Patrick Leahy of the US Senate's Judiciary Committee he worked at Covington and Burleigh and he was legal counselor for my old senators Paul sarbanes yeah and has clerked for federal judges so I want to start a lot of the discussion that Matt led us through the clickers talked about the consequences of tariffs of trade agreements of decoupling of integration of diversion of digital another norm setting and so this is a real opportunity to hear about how those issues affect the private sector but also how the private sector is organizing to try to support a more engaged US trade and economic policy in the Asia Pacific so I'm going to talk about both those aspects we'll get to the politics in a moment but let me open by asking each to the panelists their broad assessment of how the u.s. is doing on trade policy in Asia right now the good the bad and the ugly as it affects each of these different connected with very different sectors of the US economy and global economic development I want to start with Charles because these days at the Chamber of Commerce it's very important to give people opportunity to be tweeted at by the White House so Charles why don't you open up tell us a bit about your overall view and your constituents and members view of the trade policy that's unfolding thanks Mike it's it's great thanks for the opportunity back at CSIS although when I was in CSAs we were in a much heavier location with due respect to the the landlords at 1,800 K you know if you I think stepping back a second to to have the president and and the administration articulate that they're aiming for a free fair and reciprocal trade policy with the rest of the world and with Asia well obviously we're in favor of that I'm not sure that when we say reciprocal we want to focused on bilateral trade surpluses or deficits but in terms of opportunity we're clearly in favor of reciprocity of opportunity and so from that standpoint we're clearly in favor and if you go back even with respect to the 301 that kicked off the 301 investigation which kicked off the China trade war you go through it and a lot of the the the data that led to the that was supported the findings of the report were footnoted to reports that were issued by the chamber so there are there are plenty of things in that that the administration is is aiming for that we support them and again and it comes down to - in many cases the right diagnosis of the challenge but at the wrong prescription and you know we we are not tariff guys at the chamber we we don't think it's it's helpful and as was raised earlier by Deborah and others the the business likes transparency we like predictability we like we don't like wild swings in the business environment and policies that that throw into question whether your investments will be successful tomorrow or the next day or the next day and the tariff the tariff approach really has been very damaging across the board - to our membership and how they view the rest of the you know the rest of the the the administration's policies yeah no I mean two arguments thank you I couldn't understand what you're applauding it wasn't that good a question it's attempted to repeat Charles tell us where traits were ranks in the priorities for the chamber and for your members because my impression was a few years ago it was important but it was not as important as things like tax cuts and and regulatory issues but it's it's more important now it seems where does it rank for your members well I mean you know how do you choose which is your favorite children you know the the chamber really has been very supportive of the domestic agenda particularly on the reduction of the tax burden the the reduction of the regulatory burden and all those things those have been very positive and then the numbers bear that out in terms of business confidence in the economy and our memberships of willingness to invest back in the domestic economy that's taken off but you're starting to see tray the tray dish is becoming a real headwind and business confidence and willingness to to invest in the US and the broader economy so it's right up there and you know if we have to look out and say okay everything's going great but here's the biggest challenge that's clearly you know you can look at immigration and sort of that the challenges there for for employment and if the rest of the things but but trade is certainly right at the top of the list it's my favorite child oh yeah so Lori and I I know from my own experience in the White House that agricultural interests are incredibly important to any effort by any administration to get any trade deal moving and so you you know your company other associations have been critical but it seems fairly recent that agriculture has started coming together and what you call the dialogue so maybe you can tell us a little bit about the dialogue and also the broad view that's a lot of different interests within that group the broad view of how the administration is doing absolutely Mike thank you for the opportunity to be here today so for those of you that don't know ADM is a global agribusiness company we operate in 160 countries around the world and employ about 33,000 people we came together with those in our community within the agriculture food sector to form the agriculture and food dialogue for trade this was formed actually when we were in the neh since stages of the TTIP negotiations but we got it back together again during the beginning of the Trump administration to address some of the objectives that we had for the trade negotiations under this negotiate under this administration and so I guess when we look at the trade agenda and where we currently stand now I think there are a few key points that I would want to make and the first one I'll talk about is actually not related to Asia but probably something you all are watching right now which is the progress of us MCA passage the agriculture and food sector is very pleased with the outcome that we found in the u.s. MCA it retained the core provisions that have served the food and agriculture sector so well over the last 24 years but then also was an opportunity to include modernization so for the SPS a sanitary phytosanitary chapter for rules of origin biotech market access for wheat so we're very pleased with what the outcomes were in that agreement and we think that there are lessons learned from that negotiation that can be replicated within the context of for example a US Japan free trade agreement talking about Japan I think that agreement we have a lot of optimism around we're very pleased that we've learned that the two governments will meet in July after the diet elections to discuss agriculture market access for us you know Japan would be an extremely important market it was one of the largest markets within the CP TPP and it is the fourth largest export market currently for American agriculture products so seeing a US Japan free trade agreement come to fruition and passed in the US Congress would be very very important in terms of an outcome that would be meaningful to the American agricultural community and then a topic of that of course will come up has come up and will continue to come up today is related to the trade negotiations with China clearly the American agriculture sector has been hit by retaliatory tariffs as a result of the ongoing trade discussions between the two countries I think that we understand very much the administration's interests in seeing these long-standing issues related to the systemic areas intellectual property cyber theft tech transfer addressed with China and that's something as an American company that's doing business in China that we support these are issues you know that that have needed to be addressed for some time clearly the tariffs for us the retaliatory tariffs are a challenge and you know we would acknowledge though that the tariffs on the US side have been successful in getting China to the negotiating table we continue to feel optimistic about the outlook for a deal between the two governments I think both countries know we need each other we're two of the largest economies and we come to agriculture we are two of the largest producers and consumers of food and agriculture products so we continue to feel optimistic that there will be a deal we're very pleased the two leaders are meeting during the g20 next week and so we remain optimistic about a positive outcome at some point so I'll stop there thank you so Erin tell us first a little bit for those who don't know what about the software Alliance and then you know how your members look at some of these issues sure thank you thank you very much for for having me I represent VSA the software Alliance which is primarily association of enterprise software companies so companies that are providing cloud computing data analytics development of AI to a range of companies from the agriculture sector to manufacturing and pretty much everybody the Charles represents at the Chamber and I can strike an optimistic note here because our focus because where the software industry is on digital trade and the importance of making sure that for instance data can flow across borders easily so that when you're doing analytics of crop yields or you're doing customer relations management or you're running an HR processing system that did the ability to transfer data from one place to another for your IOT devices and for other things is crucial to the way companies across all sectors are conducting business and getting a competitive advantage by using the most advanced data analytics we were been really pleased that with respect to some of the initial negotiations around us mca for instance the digital trade has been a priority it's an easy one to be a priority and that it is something that wasn't part of earlier agreements the TPP which we were very supportive of it was the first agreement that has digital trade provisions as enforceable provisions on data flows and prohibiting data localization requirements and the u.s. MCA take took that one step further and between Canada Mexico and the United States has once it goes through Congress enforceable provisions that are even a step stronger than where TPP was and it makes us very optimistic about further negotiations with Japan in particular where you have like-minded countries that see the importance of making sure that the data economy can be successful not just because of tech sectors within the US or Japan but because any other industry any other local industry to be successful needs the most advanced analytic tools in order to compete in a global environment so we have we see a lot of real possibility it's an issue where both Congress and the administration see it as a priority and see it in the same way and there aren't very many of those and so we're we're pleased that at least on the digital trade issues there's been a lot of progress and we've seen some good developments to the u.s. MCA and making it one of the priorities for the early harvest between US and Japan um let me let me ask about some of the specific trade agreements if I could next and let's focus on the US Japan you know the best white hyzer Minister Motegi sounded a very optimistic note they're going to meet in July I think Matt and I know others who are who don't have skin in the game and are just sort of watching and know Japanese politics are having a hard time understanding how the trade agreement can get through the Japanese diet that's not reciprocal so the obvious ask on the other side is TPP levels of AG access Lorraine correct me if I'm wrong the pretty strongly held view in Tokyo is well there's got to be reciprocal to be WTO consistent to be politically viable on the diet and and the you know the the TPP issue was you know light trucks Auto Parts it's hard for me to see the president giving on that given the politics this year and then as you mentioned Erin you know I think agaisnt branched in the old but very important TPP levels of access but you know some of those issues have moved on since TPP to us sense here so I'd be interested in each of your takes on what a good US Japan outcome would look like from your from your perspectives I think maybe you have the most at stake is a range so we'll start with you thank you we have plenty to say about this thank you I think yes we want to see as a baseline the provisions for market access that were included in the CP TPP for a us-japan bilateral free trade agreement for agriculture I think we also want to make sure that we're also we're looking at the EU Japan economic partnership agreement provisions as well because they also include market access for agriculture and we want to make sure that as the u.s. is being considered that we would be coming in on a level playing field when you look at improvements in what could be done to kind of modernize the US Japan free trade agreement passed the CP TPP like I said earlier you know you could look to the US Mexico Canada agreement and adopt some of those provisions including SPS sanitary phytosanitary the biotech provisions and that would help to bring the us-japan Free Trade Agreement negotiations past the CP TPP and make them a little bit more modern so I think those are some of the things that we would see as far as our objectives and the ideal outcome I would note that because the CP TPP has been implemented and the EU Japan EPA has also been implemented that we are very hopeful that these negotiations move quickly because we are vulnerable to lost market access to these competitors who have duty free or reduced tariffs market access now to Japan and so while I mentioned Japan was the fourth largest export market for American agriculture that may eventually erode as you know the implementation continues and as the CP TPP member countries as well as the EU have enhanced market access that we just don't enjoy so we're very hopeful these negotiations move quickly the ring can ask to follow up the the market lost makes a lot of sense when you think about you know the trade classes I took it sites is it theoretical or things already happening are your members already feeling the squeeze because of the or non you know participation in TPP there are members of our sector who are definitely feeling or seeing the initial stages of you know this competitive advantage that's a CP TPP members have in particular I don't think we're in a state where there's a significant impact yes but that will obviously happen over a period of time and Aaron what's a good outcome from your perspective for the us-japan talks it's very important that digital trade be part of it it's something that we've been pushing very hard for and because the u.s. and Japan had previously agreed on on many of the digital trade provisions as part of the TPP agreement and the u.s. then took that one step further in u.s. MCA I think it makes it very viable that it be one of the easy things that you can enhance from previous trade agreements both on the Japanese side and on the American side and even though both countries have really good domestic laws on these issues it's important that like-minded nations start putting together what a solid international framework is going to look like you don't see that as a heavy political lift no it's actually it's one of the things that the administration has been very strong and supportive Congress has also been been strongly supportive of you see it not just in questions asked at hearings but also just in the TPA document itself digital trade is one of the things that specifically called out and I think that's that's been a really positive combination of effort from Congress and from the administration Carlson um I I don't think that anything less than a truly comprehensive recipe respirable as you say trade agreement between the Japan and the United States would pass political muster here I just don't see it and everything that you STR is saying in terms of its negotiating objectives that it's submitted to Congress and and the conversations that we've been having suggest that that comprehensive agreement is what they're looking for yes there's certainly a possibility of doing things in stages where are you where some you know politically helpful concessions from on AG and on autos kind of gets the ball rolling but you know ultimately I think we're headed to a comprehensive agreement and you in private talks and in both capitals it seems that's where we're heading so I'm at least hopeful of that I I worry a little bit about expectations and on the AG side because the longer we go on you know the the more market access is being taken a budget Japan's existing part new partners and existing partners to the to the detriment of our exporters and candidly because of the way the CT or the TPP and the CP TVP bad concessions were negotiating with Japan additional exports to Japan can trigger surges and tariffs and would cut the would cut the benefits to our AG sector so it it's not simply as calm as as simple as you know we want the TPP benefits that we know who no longer have unbalanced URLs don't your members prefer multilateral agreements like TPP to bilateral agreements or is it a more nuanced and differentiated perspective our members prefer liberalisation wherever its found you know politically it's it's not that much easier to pass a bilateral as you remember to buy some bilateral agreement with with Australia or Morocco rather than a TPP or a a broader multilateral agreement so you know we'd rather do multilateral I understand that there is a perception of greater leverage from the US side in a bilateral agreement but I'm not sure that a way we're seeing bilateral negotiations proceed that that leverage is yielding particularly concrete results I think part of our challenge with Japan is going to be a good chunk of the leverage for us was the multilateral aspect and what that brought forward in Japan so we have a little bit less to offer maybe a lot less to offer when we're doing it bilaterally makes makes the politics of what we're describing harder but as we've been saying Motegi and light highs are sounding notes of optimism and as we all know that's not normally what happens in u.s. you can trade chalks so fingers crossed now let's go to China you know it looks like president Trump will meet Jinping for a bilateral on the margins of the treaty g20 summit in Osaka now same question what what what's a good outcome what would you like to see what would be a bad outcome when she started off sort of soft Charles and yeah I mean you know just going back to the earlier session the slide had four options yeah you know nobody voted well two people two mysterious people voted for a a real agreement yeah one of them was not professor - he admitted the overwhelming view in the room was it's gonna be some kind of stalemate yeah no I look I mean and I'm not a sort of prediction so much as a what would be an Audi Academy I think the Chinese side has said they they should meet President Lee in guy in guy in guy wait you meet me present from so that hasn't fully been confirmed yet but we'll see I'm assuming it's gonna happen and and I'm assuming the two leaders who really do want to see a cessation of the tensions and are returned to the talks on some form I think we'll see a some market calming statement and a return to to negotiations so you'll see something I would assume something similar to Buenos Aires then than anything else the notion that we'll get a comprehensive agreement anytime before the end of this year is is doubtful to me and then the question for my mind you know did the Chinese start looking at the political calendar here and saying okay maybe it'd be easier to deal with a Pete Buddha judge or whomever then then a Donald Trump so which I think would be dangerous but that's a separate conversation chlorine are their offensive objectives for you in this us try negotiation or is it mainly about getting these tariffs to end well I'll just reiterate the fact that we're very pleased that the two leaders are scheduled to meet during the g20 I think a good outcome for us from the agricultural standpoint would be to see resumed market access to China it was our top export market in 2017 we shipped 16 billion dollars of soybeans alone to China and so it will continue to be a very important export market I think you know you're asking for a bad outcome I think a bad outcome would be that the negotiations just stall and there's you know no progress being made moving forward I really the optimist to me does not think that will be the case the American farmer and agriculture community tend to be optimists and so we are hopeful and believe that there will be a positive outcome at some point it may not be this year it may be later than that but we do believe that both governments really want to see a resolution here and you know our trade relationship is just too important to let things go for very long well then I'll be optimistic too then I think any ratcheting down of the tensions is really important we do as an industry have serious concerns with some policies within China that make market access difficult raising tariffs are not helping this situation and to the extent that both sides can get together and even if it's not a comprehensive deal at least start moving in the direction of trying to limit some of the market access barriers and also try to relieve some of the pressure that's coming from from the tariffs I think would be a positive outcome and for for your industry Aaron the broader g20 agenda is I would think at least as important to the bilateral discussion and you know Prime Minister avi has made an effort to lead with a free flow of data with trusts and other initiatives he's I think the Japanese government has you know made heroic efforts to try to bridge the enormous gap between the US and Europe on digital issues I mean who wouldn't want to get between US and Europe I don't know but they've they've they've I think it's largely Japanese leadership that's produced these trilateral statements it tell us a bit about what your ambitions would be for that broader agenda that the obvious one is championing in the g20 yes I think it's a ministerial the document that came out that addressed a lot of the digital trade issues that we care about was was excellent and not easy given the countries involved in the g20 but I think the the the Japanese and Prime Minister's concept of free flow of data was trust is a is a good one especially as as it was elaborated on at its through them through the ministerial meeting because I think it helps to start to bring together different countries some of which have thought a lot about free flow of data issues and data localization issues and some which really haven't yet but it brought them all together around the concept of trying to make sure the data can flow freely but provided that there's some accountability that if you're transferring some personal data from one country to another you continue to respect the the privacy laws from the country the year you're transferring from and I think that's it's important to start to get coalesce international consensus around those principles and that's it it's great for it to happen at the g20 it's also really important that it happened in bilateral multilateral trade agreements where there's an enforceable 'ti component to it I think that's one of the things that was excellent about TPP it's one of the things that we really hope to see in US Japan and and was in the u.s. MCA let's turn to the mega theme for this conference which is the United States decoupling from Asia's economic architecture as we were saying this earlier this morning we've done 13 of these before with JETRO where each year we had some theme about economic integration and with our colleagues from JETRO we realized this by the year we have to start asking this question is is decoupling happening is it conceivable so I'm gonna break that down in some some pieces I think one piece is tariffs which Matt's panel talked about a second piece is the trade agreements and being in them or not in them I think those are different the problem sets and then third one is the national security or national security on steroids 5g Huawei decoupling questions so I'm gonna ask you at each of those so starting with tariffs the president likes tariffs most your constituents don't what is the impact of of tariffs on your on your industry or on your members in the early earlier panel people got to vote on that and the sort of the question was well it encourages more protectionism which Deborah pointed out is maybe the most worrisome part the audience was more focused on you know lost opportunities if we're doing tariffs on our friends and allies were threatening section 232 it's often hard to cooperate on new 21st century issues like digital reciprocity so there's opportunity costs there's a median impact on industry there's retaliation so just because this I think I suspect part of the reason we're hearing more from the chamber more from your alliance is is concerned about going protectionism really so going down the line start with you Charles what do tariffs do what are the scenarios worried about what what are they doing now we heard from the earlier panel that the I think Debra pointed out that the actual supply chains at least measured by shipping are not changing what do you see what do you worry about yeah I mean it's a it's it's a fundamental question activity to the extent that part of the tariff strategy has been to to onshore part of the supply chain from Asia back to the United States we're not seeing a lot of that and and the really as Debra pointed out you know things are sticky it's really hard to up move production particularly in higher value goods from one place to another and period of insert period of time so I you know if you look at our members and you ask them okay what are you thinking about in terms of your supply chain in terms of removing it from from China or from Asia or whatever there's about a third of them that say already did it you know we you know we were kind of we've moved production to to Vietnam or Thailand in some cases or in some cases Mexico about a third of them say you know we've done the math and we just you know we're sunk you know we're gonna have to eat if it's 25% tariffs well that's what we'll have to eat for the foreseeable future unless we're being alone inanity list intervenes and we're not able to sell and then the third are saying well you know it's a matter of time if this goes on for four nine months a year six more months or six to two more years then we'll face a known as significant challenges but you know the let's remember that particularly in the case of China that there were already competitive challenges that were causing companies to rethink exposure to the marketplace as much as it had been and so there were already decisions that were being taken with respect to where's the next market or where's the next place for a supplier to for the supply chain and and so the the tariff thing has accelerated that a bit but still you have the the basic issue of costs and timing are you seeing evidence of bad behavior because government's in the region are saying well heck if the Americans are going to use national you know questionable national security justifications for tariffs or you know use tariffs to try to solve immigration issues or you know why should we have more tariffs non-tariff barriers are you seeing that bad behavior I mean never mentioned yeah there's certainly been there's certainly been on the retaliatory tally Ettore side some some bad behavior in terms of slowing down on licensing decisions and that kind of thing in certain markets and then you you you you wonder whether issues on cyber in Indonesia and Vietnam and elsewhere and any of your places like Malaysia are whether the decisions that are being taken there you know are impacted by the notion that well okay the gloves are off and and we can we can make decisions that we would not ordinarily have made because the sheriff's no longer in town well we always would prefer tariff free trade and I think as we look to feed a growing global population we benefit all of our consumers and our country's benefit when there are duty-free food and agriculture products because that allows our countries to provide safe reliable affordable food feed and fuel for their consumers I think that you know we as the agriculture sector are always at the tip of the spear when it comes to retaliatory tariffs we're a very attractive target because of our volume and perceived political influence and so we've seen that in all of these cases where there have been implementation of tariffs on products coming into the u.s. we have usually been at the front of the retaliatory tariffs on the other side and so that obviously is a problem for our industry we were pleased for example when the administration decided to review you know the 232 tariffs on steel and aluminum as they pertain to Canada in Mexico and we're hopeful that maybe that model can be replicated when it comes to other countries maybe the EU for example so that we can resume you know fullest market access once the 232 tariffs were dropped here for Canada Mexico the rather the tariffs were dropped here the retaliatory tariffs were of course dropped by Canada and Mexico and so you know many of our products and the food and agriculture sector were able to then resume market access duty-free which was very important for our competitiveness your companies our targets the way the rains are but but towards many interesting point atmospherically is that two tariffs complicate your you know effort to get rules yes and it has Effects for a few different reasons so I kind of look at it in maybe three different buckets one is when tariffs start to be used for foreign policy objectives that aren't related to traditional trade purposes that that can cause problems they're just not not really the right tool for it the second is there are some tariffs that would then do hit our companies directly if you're anytime you're using cloud computing what that really means is you have a server somewhere and the and the equipment that goes into the servers have tariff lines associated with them and that price is going to get passed on to the consumers but the third is when tariffs hit other portions of industry well our companies then the enterprise software community is providing services to those companies and when their bottom line goes down and they're looking at raising prices on customers it also means that they're not going to be using the same kind of advanced analytic tools and I think for all those reasons but look at terraces as not the best tool for even though it doesn't for the most part you have a direct impact so the wandering of quote unquote decoupling that that is it seems to me to be real and have some support in the Congress is in the area of national security in a particular or 5g but you know where do you draw that line is pretty you know national security is catnip for protectionists so we're drawing a line is tricky I think there's a probably a broad consensus in the Congress that banning Huawei made sense for national security reasons but the entities list which you know complicates every business and all our allies economic policies and and supply chains and everything maybe in a bridge too far it is not on think we would have some decoupling after all we have that with satellites nuclear power there lot of areas where you know sensitive national security or national champions where where we've had decoupling but now we're talking about something that controls the Internet of Things as much it's bigger than those so I'd be interested in that aspect of decoupling I think maybe hit you hard us in some ways we can start with you Aaron is that something you worry about is there a is there a is there a scalable kind of decoupling in the national security space how do your members think about that well I think the national security considerations are something that in every trade agreement you have that as an as an exception right and I think that's important you need to be transparent about how country is using it but I think but it's it's a legitimate when used properly it's a legitimate tool for countries to use I think complete decoupling really becomes not practical and think about most of the software that we use is built upon open source in some way so you're gonna have contributors to the code from all around the world even before it becomes the before companies provide the value add that then sell so I think well we well there can be some separation particularly when there's a clearly identifiable national security need we need to be clear that there's not going to be we're not going to be able to go back to a place where all of our technology components or software development is going to happen in one place that everything is built upon something that happens in the international community I'm imagining rain but they were in wrong this affects you less except for the atmospherics and the politics of it how do you see it well I mean you know Aaron's right we need to have a transparent national security apparatus and that's important and well-respected and in fact the food and agriculture sector under the Sofia's process would be one component of national security I think we're you know we are again at the tip of the spear would be on the outcomes when the use of tariffs for national security purposes may then lead to retaliation on American AG products and other markets and so I guess that is where our main concern would be when you look at the use of those tools well you'll remember those old debates we used to have you know 15 years ago about the comprehensive national security as as the as the Chinese would would talk about it included Economic Security and and we would say no no no no economics is separate and distinct and you know you can't put that well we've lost that debate at this point and economic security is very much front and center and particularly as you look at a 5g environment which the entire economy is potentially manipulated by by external forces and you know our precious bodily fluids are all somehow exposed so I you know it it it has an enormous impact and and I think that the the increasing role of the defense and intelligence agencies in economic policy is very new and and it's something to be carefully monitored and managed I think if you look at the entire spectrum of our trade relationships with with allies friends and competitors you can take that area of sensitivity and really push that up the spectrum pretty quickly if you really follow the bouncing ball of security so I really think that you know our job in the private sector and and does is that that are interested in genuinely free and fair trade is to push that that that exception as far down the spectrum as we can and manage it carefully well quick lightning round starting with you Charles is the United States decoupling from ages economic architecture yes no impossible I worry about it no no no no it's not and and you know we talked about ASEAN and if in Belton Road and and I know there's a lot of concern about about but if you look at that the the in stock of investment of US investment in Southeast Asia as an example it far outweighs ways others in in the region with some exceptions so no we're not decoupling and and private sector will figure out figure out ways to to to take advantage of regional architectures and and the like you know I'm not sure that the current the the current emphasis is doing us a lot of good and but I don't think it's necessarily short-term but I don't think it will have a fundamental effect on the US private sectors engagement with Asia I agree no we are not decoupling and from a food security standpoint we cannot decouple and the asia-pacific is one of the largest and most growing dynamic markets for food and agriculture products growing in demand for high-quality value-added products and so you know this integration that we've seen I think will continue yeah I agree with that I mean I think what what policies do is have an effect on the speed of integration but I think that there the synergies between different markets is so important that it'll continue to happen it's just a question of speed so the bad news is you're making us policy wonks feel pretty and consider abut the good news is this is the most optimistic answer we've gotten all day the business of America is business and we search for it I'm going to turn to the audience from one sec on ask a last quick question I've been fascinated a long time you guys are professionals in this business by the politics of trade in this country support for TPP is actually higher since 2016 in polls by the Chicago Council and others Stephanie Murphy this morning gave a really I thought powerful speech on on the need for centrist Democrats like herself Republicans to speak up for trade and she's introducing legislation but it sure is chaotic right now I'd be interested we'll start with you Erin's you you are on the front lines of this how do you see the politics of trade in particularly with Asia but generally in the u.s. in the front lines that you are in between business and government and politics it's it's complicated I think there are some issues that are clearly bipartisan on the hill and consistent with what the administration supports there are some that have with that the administration supports that have bipartisan opposition so the trick and this is similar to negotiating a multilateral trade agreement you have to figure out where all the different moving pieces are to figure out what what the right fit can be to be successful but there is bipartisan support for trade certainly on Capitol Hill and in the administration and it's just finding the right combination of provisions to make it work it's not the same combination it's not the same moving pieces that it was five ten years ago yes so yes trade is always politically complicated but I guess I would underscore the fact that there is an understanding that from an agriculture and food export policy standpoint you know these export markets are really important for the success of our country and our for our rural economies we produce way more calories than we can consume here at home and so export markets around the world are very important ensuring that we you know we have economic opportunity to spend America's agricultural bounty to high demand areas so I'll leave it at that we produce more calories and we can consume but we sure try you know tray I mean look this is a politically polarized you never we're politically polarized or politically splintered on every issue it's not surprising that trade is is another issue that that splinters political support yes support for trade is increasing significantly but again is there and pointed out you know that if you get into questions of Huawei or other issues things get complicated and messy pretty quick so let's open it up to questions from the floor going back to some of the issues discussed in the earlier panel or what you heard today we have microphones feel free to give a short opinion as well if you want to react to anything you heard yeah Debra in the front here Thanks I was interested in asking a question of Aaron you were talking earlier about us-japan and adding digital to the agenda and I'm curious why you think digital should be added and not services not investment not IP I mean there's a million things that you could add why digital and why not all those other things I was just I was listing it as a focus for for us but it's not to say that IP shouldn't be included in fact I think on most IP issues us in Japan are also very close and certainly they were part of TPP together so I think that there are there are many things that you could put together in an early harvest and a first round of of agreements for us digital trade is what we focus the most on and that's why I've raised him I I do think it has unique resonance in the context of US Japan we talked about bad behavior in other countries on digital trade and to the extent that the United States Japan as a collective group want to send a message message on things that are important and genuinely create you know 21st century platinum standards Digital is one area I'm not going to get into your why do it deal with the United States which is another question but you know I think digital has a special place in between the two countries and and there's a meek role for not that there is not equal importance to be placed on on services and investment but digital is a is some place where we share pretty common values professor - I have a question for cows and China now is a very important topic English foreign policy but in my pression the number of China experts in the u.s. of demonstration is smaller than the number of the our family members so why doesn't the US government invite or recruit more China experts to make a smarter policy toward China sometimes in this town experience is equated with failure and there is a question asked the political question asked who lost China and it's all those smart people from previous administrations like Mike Green so what you said so you know I I I think the administration is is learning that there is some value and having expertise or China expertise but not everybody in the administration feels that way you know trying to deconstruct what happened in your strand relations I think big factor was the financial crisis in 2008 9 which really we you know in my view scared she didn't mean when he came to power from reform made us look bad made reform and look bad that was a big tectonic shock I think she Jean pings worldview is different we pulled out a TPP a lot of things happened I'm messing you as both a trade pro-ana China Pro TPP was designed in large part by Republican it started with Bush went through Obama was designed in large part to try to bend the arc of rulemaking in Asia to in a way reinforce reformers inside China and try to move towards more integration not decoupling now we're going to the other direction is there a scenario where we get back on the track of somewhere down the road of of a strategy where we're looking at integrating China under rules that work for us or do you think we sort of lost that we lost that opportunity now in government I don't think we've reached history's end yet Mike so I I certainly see scenarios in which the the the administration or administration's here we recognize the value of a multi a commitment to a multilateral rules-based order and where where Beijing recognizes that it's true success did not come through authoritarian capitalism but through the reforms that produced the explosion of of of non-state business actors and yes I think you know sometimes you you you need to build down to build back up again and so you ask me you you asked about optimism yes I'm very optimistic that both Beijing and Washington can return to a view in which they recognize the value is greater in in a more liberal approach both to domestic economic reform and to integration with a broader rules-based order when you and I were in in in government over a decade ago you know Chinese companies began listening in large numbers on the New York Stock Exchange they were not subjected to the same external audit rules because there was a sense of momentum governor Jolla the People's Bank of China promised change in reform there's evidence that that had been happening Huawei ZTE these were interesting innovative companies now they're huge companies they can't undo their relationship with the Chinese government that easily you know they're just the scale and and and growth of what's happened with Chinese companies means that original sin if you will the the lack of external audits the close symbiotic relationship with Chinese government cluding security services all these things now become so big I mean the question is can we it's gonna be awfully hard to put the genie back in the bottle isn't it it is and I and I think that the the important thing is for us to recognize that it's not only we that recognize that but I think many Chinese businesses recognize that you've seen increasingly Chinese businesses move try to move as much of their they're not back office is not the word but but governance structure to places like Hong Kong which at least until a couple days ago was a was a true rule of law order in part because they recognized that having that governance structure with exposure to audience audits and the rest of them made them more successful as businesses maybe perhaps less successful as tools of the Chinese state or the Chinese Communist Party but as businesses and I do think you know sometimes we forget that there are plenty of Chinese companies that are just trying to be successful and make big money which is what we understand and what we all want to see at the end of the day yes in the back hi my question is for Aaron and I'd like to ask about the potential for increasing domestic concerns about privacy and how that might affect the consensus on digital trade and also in Congress and also it's sort of impact in trade agreements going forward so I think first of all we have at least des with the privacy is a bipartisan issue in Congress which makes it a possibility that we'll see it move forward and it's something that we would really like to see I think that the gdpr in Japan the personal information Protection Act and California the CCPA have all among other things done a really good job of focusing attention on the importance of making sure that consumers have the right to object to their data being processed and object to their data being used in certain ways that they don't want and the right to access their data so they can take it from one place to another and those are really important principles that we think should be part of a federal law I think in terms of it impacting the digital trade agenda I think it's I think it's important it would be helpful I don't think it's a necessary part of ensuring the data can flow from one country to another I think one of the things that the Japan in particular has done really well is with its personal information Protection Act making sure that when the data could continue to be transferred from Japan to another country provided that there be accountability to how how it's going to be treated when it's transferred to the other country and I think that that's the key that should permit data to be to flow across borders regardless of what the privacy law is in the other country as long as you are continuing to treat it the way it did the way it would have been in the original country that that that's what should be important that said I think it is important that the US have a federal standard and I think gdpr and the Japanese personal information Protection Act both have very similar right similar to what's in the California law and those those those consumer rights that come from the OECD principles that the US help form a while back I think are important for a federal law as well so I think this has been a really helpful panel it added real dollars and cents to the policy and structural and systemic examination of Matt Goodman's panel to me and it's it's in some ways a more optimistic panel you if you map out the interest groups around the trade question and I you know total sensei's picture of the cavemen was I don't know if you were saying that's where we were that's where we're heading or both but but if you map out interest groups you think about your industries you think about Japan Singapore Australia a lot of our partners you think about still in China reformers who if we get past the politics to your point Charles you know see business and making money as much better than confrontation you map all that out and we're in a bit of a mess but it's it's there is some hope and maybe next year saw so I guess I don't know I don't know maybe our 15th conference the title will be few become bleak didn't happen we passed us Japan we got a us-china deal we got access tag markets we started making digital rules our SEP I'm not so sure but we'll see but this I think was a hopeful reminder of all of the real interests not just firms but farmers workers that that that depend on age and depend on trade that's gonna really in a structural and a political way have an influence on this that we sometimes lose and the tactical you know ups and downs of trade politics in Washington so thank you I also want to thank Matt Goodman Nixon Cheney from the Japan share the teams from Simon chair Japan chair and Asia programs at CSI so thank you all for joining us we'll see you next year at the next CSIS JETRO conference thank you [Applause] [Music]

Channel: Center for Strategic & International Studies

Views: 227,413

Keywords: Tags, go, here!

Id: L-kA7PMn-O8

Length: 239min 59sec (14399 seconds)

Published: Wed Jun 19 2019