remarks now from joe hockey, as trillion ambassador to the u.s. he recently talked about u.s. australian relations in the term presidency international trade policy in latin america first means to the rest of the world. this event was hosted by chicago council on global affairs. >> it's my pleasure to welcome joe hockey to the -- council on global affairs. we've taken the opportunity to turn the temperature down in chicago. if you notice that comment negative three degrees celsius and i left this morning. you otherwise enjoy your stay. the united states and united states and estrada have long been strong allies and shared values and interests.

in fact, we've been intrinsically linked since the very beginning but then historians have noted one of the consequences of america's winning the war of independence against the british was they expect anymore convex bed prisons in pennsylvania anywhere were cut off from around 1783. it's no surprise then that a few short leaders in january 1788, governor phillip sailed around south had into what is now sydney harbour. it then became the foundation for a new nation. america's fourth of july celebration in yesterday holiday and they have endured into the modern era. since the early 1900s, australia has not missed a war. the u.s. has participated.

the economic relationship of the two countries remains very robust. and the leaders of the two countries nearly two weeks ago, there is some uncertainty about american involvement in the asia-pacific region and with regard to this trade generally. not coincidentally, china's foreign minister mr. wang also visited australia only capture with various discussions about the growing relationship between the two countries. so where to from here? an emerging china searching influence to the south china sea and perhaps beyond. the united states have been administration -- of the new administration withdrawing into somewhat away from certain world affairs. but this backdrop, and we look

forward to hearing about your hockey's perspective on nice and other issues of the day. i would lead to further introduce the ambassador to you. he served as ambassador to the united states since junior 26 in and before that was a member of the australian for more than 15 years. 2013 was appointed treasurer of the commonwealth of the straley up and served as the g20 finance ministers in 2014. imf, world bank, and the various aipac meetings. prior to service and government, ambassador hockey worked as a finance lawyer join me in welcoming ambassador joe hockey. [applause] >> thank you very much to all of the chicago council on global

affairs. thank you so much for involving me along to say a few words and also answer a few of your questions. the appearance is timely. it's a great city. and a long-standing relationship with australia and australians. in fact, wherever i've gone in the last 24 hours i've been running -- running into australians you are quite right, david here they are not familiar with this type of weather, but hopefully we can have a good influence and we are having a good influence for some of the extreme library that chicago is full of the payments were. mark twain who said it's hopeless for the occasional visitor to try to keep up with chicago and given that this is the only second time in 20 or said that here, i feel very occasional. she outgrows his prophecies faster than he can make them.

of course quite impressive. and some in moving quickly and it is. it's always been a city focused on trade, commerce and innovation. arguably the home and railway around the world. with so many developments that have changed the course of history including the self-sustaining nuclear chain reaction, which ushered in the atomic age in chicago. of course, being the home of first asked effects, a place where the car radio was invented as well. thank god for those long trips. in australia, you can drive for a day or two would not see another car. and you have a world series

winning baseball team again, which is something that i discovered near and dear to the hearts of many, many americans. so today i'm talking about the people of illinois no too well how important it is to stand by each other during times of adversity. when it's difficult, challenging, and at the same time with the friendship, the makeshift as we call it during the good times. our relationship goes back a very long way. we are both in the great nations. as david mentioned a little bit earlier, we were in one sense the beneficiaries of the american war of independence. the birds instead of coming here, and tended to send them to

australia. even in those days, with the oldest continuing culture in the history of humanity, the aboriginal indigenous culture in australia, which had been a continuing custodian of the land and astra per word as in years. quite shocked to have a bowl full of convicts follow from britain and sent out to a new town called sydney. i'll tell a little story. the french would send up a quality as well. at that point, the king of france was absolutely decided with the opportunity to get the breaks to the fire and appears the year to set up a colony. locker rooms to australia. in a race with arthur phillip, he had the stowaway off the ship twice. it was completely assess love

the concept he was trying to get on this boat to go and if he came on again on high view flop. and a few days to set up the colony of sydney. they did in those days and they were at war with each other. the two ships were never seen again. history would have changed quite dramatically had he been on that ship of course. we had a hand in history from that very moment.

it defines how loyal they are to each other. australia made a massive equipped commitment and the great world war i. in america's population, we have sacrificed the equivalent of 3 million soldiers. for a country of just 5 million people at a time, we had massive casualties, particularly on the western front in france. you've got to take the town of hormonal off germans. otherwise you're never going to crack the western front. and so, they said we are going to get some of these new americans have come home, that just joined the war.

i formed this bond, this affection for each other based on shared values. and then general pershing found out and said sorry, we are not fighting on the foreign generals. the american soldiers said we are not abandoning our buddies. he took -- they were the first of their kind and arguably the first world war. when america contributed to mobilize 4 million soldiers and it was a turning point and did so in the back of an engagement

with the rest of the world. to the congress as president in january of teen 18. we will engage this is how we want to define the 20th century. the american century. key components are not plan that are as relevant today as they were back then. in particular, article iii for the removal so far as the establishment in the quality of trade conditions among all the nations. free trade he said that for america, the basis upon which america would engage with the world. he went on to talk about freedom and navigation of ac and that's

as relevant, particularly in the south china sea at china sea as it was back then and continues to be. the united states saw him up to the platform. the people of the united states signed up to that platform. they said yes, we believe in enterprise. we believe in freedom. we believe in democracy. we believe in transparency. we believe in empowerment of individuals that they can take control of their own lives. america has effectively forged out over the last 100 years they do not provide in order to win over the hearts and minds. it hasn't had to go and condemnation in order to spread their values. the unique position in humanity is being given to the united states because the united states

embodies that. and what happened, people joined up. people wanted to join the great american dream. american scalded exceptionalism. but it was more than not. it was a set of values that it's easy to share. it is more than not. countries all over the world walking away from communism, walking away from socialism, walking away from totalitarianism, wanted to embrace the values that entire woodrow wilson said was the basis upon which the united states would sacrifice its soldiers. to help deliver the world. it's a powerful message. we joined you. from that day, and july 1918,

till today we are the only country on earth that has fought side-by-side with the united states in every major conflict. the only one. we don't do it because you're the big brother. we do it because they both have the same values, the freedom of enterprise, democracy, loyalty to support, for liberty. it's based on values. so the last few weeks have been talked about it might've been some robust discussion between the president and prime minister. that happens from time to time. make ship is about being honest with each other. you say what do you think, that you respect each other and that was still the case. it was still the case today.

whoever the united states he? , it's the prerogative of the american people and we work constructively and honestly and loyally for the values continue to be shaped. that is what you do. and we are ever mined old that there are 150,000 dead american soldiers buried in between japan. america is mindful of that. all of those souls who fight and died for the values that made america great. and they will never leave and should never leave the asia-pacific region. of course the dynamic shifts. america is somehow expect dead

to solve every problem around the world. i get the burden can sometimes be traveling to the american people. when you lose your job in chicago or detroit and jobs end up going to china or to eastern europe. sometime you don't feel as magnanimous as you might have china has lost 19 million manufacturing jobs between 1995 and 2005. automation, robotics, companies moving their manufacturing to achieve destination with low wages. it happens. the question is how do you live the time so that all votes are off. america's been good at that.

australia has been very good at that. estrada hasn't had a recession for 26 years. it comes about because a site to cope with the changes in the world. one of the challenges we face is how we promote the values and importantly defends the values that are so important. the military sense, australia has military personnel and 31 u.s. states. not many people know about that. australia has probably did eat the engagement with intelligence communities in any country in the world here in the united states. maybe even one of the largest military presence in iraq and

syria. the europeans have contributed more troops until we have the second highest number of military personnel undertaking connecticut cavity as they call it in syria and iraq, making sure that we work together with the united states. a free trade agreement with the united states in 2005. you have a two to one trade surplus with australia. they had a beneficiary of the trade. we don't mind that. some of our benefit that he had the largest investment in australia have any country in the world. including in particular businesses like chevron and conoco phillips and others that

are helping to export massive amount of resources out of our country by the end of this decade will be the biggest exporter of liquid gas in the world. we are the biggest exporter in the world. we're the biggest exporter of coal in the world. with the massive growth in asia. in particular with the middle-class in a shed that is going from 500 million people today larger than the whole of north america, the same size of your appearancappearanc e in a class is going $500 million today, 500 million people today to 3 billion in the middle-class by less than 15 years, six times larger. and that's a massive opportunity

for the manufacturers in the united states, for service providers in the united states says it is for others in australia. because resources, even though they are a big part of our economy, they are actually only about 9% of our economy. agriculture is about 3% of our economy. beef, pork. so we are big services-based economy. 70% of our economy services, education, tourism, health care, nursing homes and so on. the united states is a pretty similar profile. so therefore, the opportunity to tap into that middle class of asia is a great win for both of us, for all of us. and that's why we are vigorouslvigorousl y for the transpacific partnership. it's about american standards, about australian standards been the benchmark for commerce in the fastest growing region not

only in the world, but in the history of humanity. the asia-pacific region. fast-growing dynamic, wealthy and day the people of the asia-pacific region want what we have. they want better quality health care. they want better quality education. they want clean air, clean food. they want to travel, explore the world for consumer goods that have driven the american economy are desired by this massive growing middle class in asia that is going to drive the global economy over the next 100 years. that is why you cannot abandon a ship. the entire asian region, asia needs you.

here in chicago, los angeles, des moines, iowa, wherever it might be, there is a partnership. a partnership forged in blood nearly 100 years ago. a partnership that will continue sadly to require both of us to make massive sacrifices that a partnership that is necessary for the prosperity of the american people and yesterday in people as well. thanks very much. [applause] >> thank you very much for your remarks. we want to get right into the phone call. can you elaborate what was said. as well as how your government

is responding? >> the prime minister didn't refute afterwards. the agreement goes to the previous administration before the election and the united states would accept some economic refugees from two islands to the north of australia and have responsibility for. the refugees on the different circumstances from the united states. these things happen all the time. i understand the president was a lack of it. we understand he was elected on the basis of a certain policy.

we respect that. but there was an agreement between two nations and before the election. the president agreed to respect that agreement particularly the way close allies and that's where it's at. >> but was the response and that's really a to the nature of the call. in the united states, certainly there is concern it was seen as disrespectful towards the prime minister. >> well, you know, these conversations to happen between prime ministers and presidents. i get. i've been involved in an honest and frank diplomatic discussion and the g20 hudson pretty vigorous discussion. but you do that when you are speaking to your brother or sister.

we have a vigorous discussion. if people listen to the conversation, you might not get on too well. it's just a fleeting moment in a large dialogue. from our given australia, it was a reaction, but we emphasize and it happened under president roche's role and it's happened at various points along the way. the american media has covered globally into a decree that is exceptional. the american presidential election got more coverage in australia the minister and coverage. go figure that. everyone has an opinion on president trump. and there might be a good opinion. it might be indicative opinion as it is here in the united states. what we have to do is remind

people that the partnership with the united states is deeper than any single individual, whoever that may be. it is very important anti-bush or anti-trump or anti-obama mood in various parts of the countries cannot turn turn into an anti-american view. no single person totally reflects the attitude of the vision of the population and that is what we are doing. our prime minister was i going to join the conga line of commentators in the international sphere, giving a view about the executive order. he didn't do that. he resisted it despite provocation and that is because we are not going to become commentators on american politics. you can switch on 35 channels and say commentary and politics. we're not going going to add to

it. >> you no doubt have conversations with numbers that the administration as well as members of congress after the phone call. what he senses the mood of the australian u.s. relationships in washington? >> well, it's very strong. i was quite surprised to receive that probably 20 or 35 calls from very senior congressman and senators. and we were looking for that, but it was spontaneous and genuine and heartfelt. for example, senator mccain, his opening words to me, 500 died in vietnam series and you know, i said yeah, i knew of some of them. certainly my family was close to seeing one of them, member of white families. of course there is a history.

>> the nature of the u.s. australia alliance which you alluded to in your remarks surprised many of us ignorant about how close we are in the nation you mentioned 31 states were australian troops were here troops were herein indicted state senate intelligence agreement on the lake. does that surprise members of congress when you talk with them? >> no serious members of congress at a very deep understanding, particularly the intelligence committees, defense committees and anyone who served in the military and the united states tends to know the background because essentially wherever the united to its military personnel go, and whether you like it or not. and you know, there is genuine goodwill. we have says crocodile dundee

for hugh jackman or great norman , not that their stereotypes, don't get me wrong. but that's part of our mutual business. it's not going to change. >> how about the same question from the other side. how do you sense the mood about the nature of the relationship? what are people concerned about? what are they concerned about? >> by diplomatic buses going off here. look, when america says america first, and as someone with nearly 20 years in politics, i get that. i get the argument. but what the rest of the world is hearing if they are coming back and and they are the losers and america is the winner.

america is the biggest military power in the world, the biggest economy in the world. its culture is more pervasive and powerful than any other in the world, even arguably the english culture. that's pretty remarkable. so when you say, you know, america comes first. everyone else comes after that, i get that for domestic reasons. i get that where the worker who lost his job and house may be in detroit, he wants to hear that. but also, a lot of american companies trade outside of the united states. they actually sell goods. one of the income that comes in the united states. the reason why is the richest nation on earth is because it exports so much and culture and manufactured goods and products in other things. if people start overseas looking

for alternatives to the united states, still have a horrible impact in the u.s. you need to sort of recognize that there's something on the table for the other party. american exceptionalism is based on a certain amount of humility. americans are very humble people. they are modest people, humble people and make it up, too. that is part of your exceptionalism that you can be the richest, and be humble. i would urge that humility to be a continuing part of the dialogue. >> change the conversation a bit towards trade, which are referenced. you're quoted as saying for the night states to withdraw from tpp was quote, would be hugely damaging to the united states

reputation in asia. what did you mean by that when he said that, what are the ramifications for the united states because that comment was made before the president withdrew. >> was a very honest statement that are the benchmarks we want. we want to have a free and transparent with the dispute resolution process that is fair. reasonable and affordable. countries are in a gene over covert practice has too increased the price of good and manipulate the currency is. we are with that. we signed up to it. they tpp halsted many of those areas. it set a benchmark and you've

got a fast growing economic region that hasn't not consistent benchmarks. who is going to set those benchmarks? we will take a leadership role. that has to get everyone signed up and say we are going to set this benchmarks and start to rebuild trade barriers. are they going to impose tariffs? the second thing is about 20 years ago before advanced manufacturing good comment it has component tray for four or five different countries. the raw materials, something will be made a semi-conductor in my country, robotics in another country. far different countries would form part of that and manufactured goods. today it's about 20 countries.

so if every country starts imposing taxes on its going to end up twice, three times more cost, which takes it out as the assessable range for a lot of people. so frankly, the faster we can remove trade barriers, and the faster we can get rid of taxes and tariffs, the better. some countries are complying and all complied. they've got to bring them along. they tpp did that and it was based on american values, american experience that the region embrace. now when america says we don't even stand by those values, someone is going to fill the vacuum. >> do you still see the united

states as the leader in free trade and do you think potentially mentioned u.s. free trade agreement hasn't come into the firing line, the two people back at home worry about that is the next tweet of the moment? >> well, and america has a two to one trade against australia. we are comfortable with that because there are other benefits of out of that. componentry, barring headquarters here in chicago, key components made in australia. in fact, boeing's second biggest offshore workforce is a must really helping to make passengers. and of course, part of the flipside is for example where the second biggest purchaser of the joint strike fighter.

>> and it's very expensive. >> yeah, we are reducing the cost. though we are there. you know? we are massive caterpillar equipment. so cancel the ways. i don't think you can unscramble and it's possible to do that. certainly you can poison that. >> file and united states with draw from tpp, what's the future in your view for that agreement? >> well, we are certainly proceeding after discussions with the other countries that has tpp, go ahead without the united states and we still certainly encourage others to join. there are a number of countries that could join that haven't. obviously china has enjoyed and

may choose to join. china has obviously put more effort into the relationship and particularly as the data, you know, promoting a regional comprehensive economic partnership which is essentially a nation free trade agreement for asian countries. we want the tpp to continue to proceed and other countries that haven't joined that are strategically very important for all of us, by south korea and indonesia, who are thinking about joining the tpp and still join the tpp. we will wait and see. >> in a letter last year you go to the obama administration when the topic of a potential renegotiation is coming up, and he sat in the letter and i'm quoting from an excerpt here come the renegotiation of any form or some other form of an

additional commitment is not an option would jeopardize approval by other tpp countries. given the president's withdraw, to fill up his blooper proves u.s. participation during this administration and potential at all future administrations given that mrs. clinton and her campaign decided she was against tpp and needed further renegotiation? >> you can try to negotiate for domestic compensation package for domestic adjustments that helps ease which you might think some of the pressure point. understand this. if you renegotiate the tpp, and the clear message to every other country is you've got to give us more. that's pretty hard to sell and must really for japan or malaysia. actually, you're giving united states more at your expense. all of a sudden they say they're

not going to do that. it is hard sign free-trade agreements in australia. believe it or not, every other country has these challenges. it's only an eight to the united states. there are people who are anti-free trade or post to the tpp in all the tpp nations. and we have to address those domestic politics just as you do. when you sit down and negotiate a deal, i think you're on paper would assume you've got the best deal. and if you don't think you've got the best deal, and your country it's not the best deal. renegotiating with one or two countries is sometimes possible. renegotiating with 11 other countries when it's someone else that might want to play in this ballpark, it's just unlikely. highly unlikely. >> how have you given the fact is domestic opposition for

free-trade come of it seemed that the governments of both parties have overcome that. how did those people in the united states who believe in re-trade to find the merits to the populace who may not be cnet? >> well, at the end of the day, it means cheaper imports, and cheaper components. most significantly, and the united states exports go into the fastest growing region in the world without a ball and chain around their legs. the ball and chain is unfair taxes on the stories. it means that she'll have that her protection for intellectual property. currently, for example, vietnam has no restrictions on the intellectual property of pharmaceuticals. america dominates the world pharmaceutical market. it is the innovator, the promoter and frankly when you've got a fast growing economy like

vietnam, you want to have protection and that is where the tpp was delivering for american pharmaceuticals. there are dispute resolution. we wouldn't want to try and defend our intellectual property for their local courts. and the disputes could be resolved in a free and fair court. it's a big innovator in with a number of companies that the cutting match of manufacturing development. there were many protections they are. australia has free-trade agreements with korea japan and china. and frankly, the united states, for example are going to go into

china and compete directly with us. and we would've lost out of that. and now the big farmers are cheering, great? except they note that at the end of the day if you are trade areas, the less tax on for agriculture, the better it is for everyone. a new compete on quality and that's what we want to do. australia hasn't had a recession for 26 years. longest continuous period of growth in modern history. it's not an accident. we had to fight for survival. we are tied from a regime where we had a fixed current theme, where we had tariffs right across the board and the tax system, centralized wage fixing, and governments on both sides of politics recognize that was unsustainable and over the years

there's 26 years have removed those barriers. it has made us trillions more prosperous. the highest minimum wage in the world, one of the highest household incomes in the world. one of the highest wealth of families in the world. it's not an accident. complacency and this really is our enemy. that is our big enemy and there a few people arguing against that complacency. there is some people that think this is the norm. it isn't. the fact is if you don't benchmark yourself against the best in the world, then you are going to fall behind. the united states has always seen itself as having the capacity to be the bad karma to be the benchmark. it still can be, but it's got to be prepared to lead. >> will open up next to audience questions. prepare yourself. let me ask one more is everyone's getting their questions in mind. in your view, given that we've

united states and must really a british air defenders of values that enterprise democracy family, what d.c. is the biggest threat and our shared asia-pacific region? >> well, there's a threat around the world. be not of politics has given me a moment of clarity. think about these things. you're seeing antiestablishment around the world. it's not unique to the united states. you see it in some forms and horrendous terrorist rebellious movements, and usually in countries where there's no free and fair vote. in other places you see it as a rebellion by a totalitarian autocrat. in other countries who see it as a vote against anything the government proposes from bright faith to peace plan to the

reelection of their own party. in part it is because people feel incredibly disenfranchised as individuals. governments and businesses of centralized power, such less decision-making, whether washington for headquarters, you know, chicago or los angeles, london, companies have taken decision-making out of this mess is an individual companies and individual states and has centralized. would have been a social media comes along and it becomes a loudspeaker for individuals. all of a sudden they say it sometimes and really unedifying ways. it has become a megaphone for individuals to be ... they hang on, how about me? what happened with consumers to his consumer goods have not empowered individuals.

consumers have empowered individuals, media, social media has empowered individuals, the still government and big businesses centralize power and disenfranchised as individuals. that is why you see people kick back and say i want to have more power. we've all got to look at how we can localize more decision-making, more power the hands of communities and individuals, which is a big, big step in politics to give our power, to hand it to individuals and communities. usually only happens every two or four years. but to do it on a daily basis is a big debt. i don't take anyone's work that out. >> thank you very much. if you wouldn't mind raising her arms and waiting for the microphone because we are on lifestream. right over here.

>> thank you very much for your comments. can you hemi? if your background in world finance which is exceptional, imf, world bank and the asian thing, et cetera, given the disruption worldwide that you talked about, the e.u. being endowed, the greek debt crisis, the trend for conservatism and the insane "saturday night live" fame we have going on in washington in 20 hours a day. what do you see as the future of global finance? you've been in the world to, imf. people say that the u.s. institution. it was reputed to be a bit calmer. but it's happening and where do you see world finance giving out these other people as you mentioned? >> the infrastructure bank was established by china and

rejoined the number of others. the u.s. has in china and japan hasn't joined the private 30, 40 other countries have. the study house because we live in the asian region and there's a $7 trillion shortfall in infrastructure funding and asia over the next 10 years. so we want to be part of it. we are the biggest exporter of coal, biggest exporter of iron boiler. if we can build a railway line into indonesia tickets or paddle for court -- cattle four-port. if we can build a pipeline that goes through the middle of india and gives energy to the hundreds of millions of people that were dirty brown coal or wood in order to get keyed at night. we give electricity. fantastic. in china within the greatest alleviation of poverty in the history of humanity over the last 30 years. more than 300 million people

have come not as clearly defined poverty and race humanitarians should be celebrating not. but in response, there are pressure points. in china there are 40,000 new businesses set up every day in china and bair advanced businesses. they are not restaurants or coffee shops. you know, they are now empowered for the world, as is india which is an entire generation of communications of landline telephones. they've now gone straight to mobile. now they are going to catch the societies in indonesia -- in india. so there's great movement. and that will continue. the challenge in the world economy is based. you know, governments have only so many lovers.

you've got taxation, another letter. you've got government spending, which is the third and then you've got monetary policy set by the central bank which is the fourth letter. you can't keep regulating. sooner or later, you are going run out of cash. you can't tax your way to prosperity. you can't do it because you take more money out of the market. so i have been with the central banks loosened policy. a lot of a lot of money went out into the economy around the world. they've just built up and that creates asset inflation. that makes it harder and harder, particularly if you don't own it. even though interest rates are very low, they have to go back. the central bank is going to listen to anyone else. as interest rate goes up the government runs out of money, is

a popular movement here. we better regulate more. and that becomes a constraint. the challenge now is that interest rates are going to have to go up around the world. vicious unsustainable to have so much free cash out their are effectively free cash provided by banks because then you get this ridiculous level of asset inflation and the rich get richer, poor get poorer. so it's going to have to be managed really, really carefully because governments run out of money and monetary policy. they can't regulate. so what would i be doing? i'd be looking for how you improve product to believe. how do you improve their speed and dynamics of an economy? investing in infrastructure is one of those things. better quality of the structure helps you with better, cheaper

outcomes in daily life and daily business. and also, government has to get smaller. it's got to be less constraining on individuals. people calling for bigger government. what are you thinking? smaller government will empower individuals and help lift the type. government doesn't create wealth. business creates wealth. in government doesn't create jobs. enterprise creates jobs. >> banks. also we will be hosting someone from the aai visa will keep an eye on that for the programming. they do right here with the glasses. you're welcome to join. >> that was the first in the world. >> one of the top three people there, we are making the plans right now. >> thank you, ambassador for your remarks. given the precedents current

mood to be look at nafta, he moves to withdraw the tpp. do you think the it's trillion u.s. bilateral free-trade agreement would approach the estrada government to renegotiate at and what would be the it's trillion government's view on that? thank you. >> now, i don't think he would. look, everyone's entitled to look at agreement sensei can we make it better? the president said he was going to do that. he's got a mandate to do that. i get that. we all get that. but it's not as simple as just ringing up your colleague and say look, can we shut down because every business that engages in commerce and i think between canada and the u.s., its $4 billion a day that crosses the border.

that is a very complicated relationship. and what happens is businesses built into their risk return models, the rules of the game. so imagine the middle of super bowl they change the rules. i find it hard enough to follow at any rate. especially when no one can probably explain that the extra time was about. imagine halfway through super bowl or three quarters of the way for the super bowl big up to tom brady is a list in may, you don't throw the ball forward, only backwards. you can't do it. game over. so when you change the rules of trade or taxation, unless you make it easier, changing the rules actually has a cost. in this town of all counts, we toured the great trading forces of the world, focusing on hedging risk. you guys know that there's

certain risk. it is political and regulatory risk. and then you start building into the price of everything. you just build it in. so it might cost $10 if it's made in a country where there's a civil war brewing. it will cost you $12. if you have great innovators and they are working in the basement costing you $100,000 a year to employ, in a country where there is suddenly a civil war, you start to think we've got to get them out of there. we don't want to be in their country. people react to fear. people react to adversity and they do it dramatically. so you've got to be very considerate and how you engage

in the trade -- change of trade. and i think the president is in that space. i really do. the president understands that. he's only been there three weeks. give him a go. >> next question, please. lady right there. >> thank you, ambassador. the value of tenacious in global affairs is certainly based on this he talked about, trade and defense. what else is connecting this cultural interchange, educational exchange? ..

children's hospital here in washington. we operate on a friend of mine. so you know, at the medical level, it's very vague. the pharmaceutical companies in different businesses are engaged. in education, plenty of students here at the university of chicago it's literally thousands of students studying here in the united states on campuses but also studying in australia. even on capitol hill, there's a vast number of australian interns that rolled through all these congressional offices every year. and a number of the congressman now answering a congressman came up to me and said thank you. we have producers like basil lerman and directors and you

know, we have business entrepreneurs from rupert murdoch to andrew livers, head of dow chemical to the chief executive james gorman of morgan stanley. so every area, there is cross engagement and one of the things that quite struck me is there was 1 million american soldiers that were based in brisbane in australia during world war ii. and what was not reported at the time because we're managing the media a little more carefully was that there were brawls between australian men and the american men. the american men had uniforms, would get paid and are australian women and the net result was 40,000 australian women moved to the united states.

so i get a little shivery when people come up to me and say my father was australian because like with american soldiers, it really is a very big pie and i suspect it's still happening today. it's still happening today, that's fantastic >> when we do our accounts, we work with two different entities in australia in the consulate here and i think that's all we have times for so thank you. thank you very much david, thanks 1 million. leading gentlemen please join me in thanking our speakers today. [applause] >>. [inaudible conversation]