♪ ♪ >> c-span's "washington journal" live every day with news and policy issues that impact you. coming up saturday morning, "the wall street journal" supreme court correspondent talks about the retirement of justice anthony kennedy. and florida international university's frank mora discusses the political stability of central america and how it affects immigration to the u.s. then "u.s. news & world report"'s andrew sorville will be here to talk about the future of the u.s. construction industry and how it's responding to a worker shortage. be sure to watch c-span's "washington journal" live at seven eastern saturday morning. join the discussion. ♪ ♪ >> today trade experts and manufacturing leaders talked about the implications of u.s. steel and aluminum tariffs and

nafta negotiations during an event hosted by the global business dialogue are. the panel discussion is about an hour and a half. [inaudible conversations] >> okay. i think we can get started. good morning, everyone. my name is judge morris, i'm the president of the global business with dialogue, and it's a real pleasure to welcome each and every one of you here this morning. you may -- this morning for this program on the tariff, the 232, our national security tariffs and the wto and other related

matters. you may be among those who, like the administration be, feels that the direction of u.s. trade policy, the growing deficits, offshoring, etc., has reached a critical stage, and it's time for some dramatic action. or you may feel,tively, that the dramatic -- alternatively, that the dramatic action taken by the administration has precipitated the crisis. in any case, we have something of a crisis, and it's one i'm glad we're now going to talk about here this morning. and in a 90-minute period, we couldn't get all the views. and i'm aware, for example, that our trading partners have strong views, and some are tbd members, and they're not represented here. nevertheless, i think we have about the best panel you could assemble for this discussion, and i'm very grateful to each and we every one of them, especially to the ambassador who's a little urn the weather and made it here anyway, and

that's marvelous. i also want to say a word of special thanks to the sponsor of this morning's program, trade data monitor. nobody knows trade data better than don brasher who created that company. you'll forgive a small diversion. some of you may know i worked back in the '90s for an electronics company, and the founder of that company -- which made electronic connectors -- was fond of saying we take the end of a wire, and we engineer the hell out of it. well, that's what trade data monitor does with trade data. and if you're not familiar with him, i suggest you take a look at their web site. fabulous organization. i also wanted to say just a brief word about global business dialogue. in terms of our tax filings, for example, we're organized as a for-profit company. we're run really like a volunteer organization.pa

and i wanted to mention two volunteers in particular. joanne thornton, our volunteer vice president, has done something for this program which i'll mention, well, right now, as a matter of fact. she spent the last day or so at the library of congress trying to figure out, well, where did section 232 come from. and the fruits of that labor are in your, this little handout. i was myself particularly struck by this passage from the 1958 version which says in the administration of this section, the director and the president shall further recognize the close relation of the economic welfare of the nation to our national security. so there's something of a history here,e, and i thank joae for pulling it out for us. the other volunteer that i want to give special recognition to is what i think of as one of the

best trade analysts around, and that's john magnus of tradewinds. and he's done -- he's, among other things, the vice chairman of our advisory board. but this morning he's your moderator. he's the kicker for -- he's the conductor for this railroad to understanding, and i'm going to turn it over to him and thank all of you and look forward to the discussion. >> thank you, judge. good morning, everybody. once again the judge has done it and assembled just the right group on just the right topic at just the right moment. at a time of great ferment in the world of trade, the tariffs that the united states has imposed in the name of national security and the responsive actions of other governments are probably the biggest source of concern and uncertainty. now, i say that at a moment when the nafta is opened up on the

operating table, when the wto dispute settlement system is visibly swooning, when some number of hundreds of billions of dollars of trade are currently in harm's way in relation to the 301 china case and when, according to this morning's trade clips, our president desperately wants out of the wto to. so to say that this is the biggest source of t concern and worry is to say a lot. i think it holds up under scrutiny. there are provisions in the gaps recognizing the retained right of each member to take any action which it considers necessary for the protection of its essential security interests, dot, dot, dot, in time of war or other emergency in international relations. now, tariffs to adjust imports under section 232 are not the only or even the main category of u.s. measures that might need to rely on those security exceptions for legal cover. there are quite a

number of other things that the u.s. government might do, but section 232 tariffs are the measure du jour, and they are presently on track to give rise to what would be the first really substantive consideration in wto dispute settlement of what article 21 of gat does and doesn't protect and whether it is or is not self-judging. and meanwhile, prior to any such illitigation restrictions are begetting restrictions. that sounds biblical. i think it sort of is biblical. considerable values of global trades -- goods trade is now be taste facing extra tariffs or targeted for extra tariffs. it started with steel and aluminum, spread to motorcycles, blue jeans, beverage alcohol, and it seems set to sprawl in a short while to automotive trade, and then when the responses to that kick in, heaven knows what else. so it's a fine mess, and we are

all very lucky to have this group of panelists to address what's going on and what may happen going forward. i think i have the order of speakers right. if not, then please excuse me. rufus is president of the national foreign trade council. he previously served at the highestt levels of the federal government, ustr more than once -- [audio difficulty] and secretary for what i believe was a record-breaking 11-year stint in that capacity. there's a line that says he has more than three decades of experience as a lawyer, u.s. diplomat, u.s. trade negotiator and international official. the achievements in public service underlying that summary would take a long time to describe. and his fingerprints are everywhere, although i think if i'vets done the math right, they're not actually on the 1962

act. but during the time that he was serving in u.s. government positions during the '80s and '90s, the statutory part of the u.s. trade regime got a pretty thorough scrubbing, and these provisions were there straight through and certainly weren't left in place through inadvertence. jennifer hillman's main current affiliation is the georgetown university law center and its institute for international economic law. a along the way to this post, she's held most of the other interesting trade jobs a person can hold including stints as ustr general counsel, as chief tax negotiator, itc negotiator and as a member of the appellate body. i've also been able to see her work in private practice from close range, and i can attest her skills extend way beyond public service. >> nick giordano is vice president and council for

international affairs at the national pork producers council. he has attained one of the status of one of the elite business advocates on trade policy, has taken a leadership role inn working for andressional passage implementation of a series of trade agreements, and he chairs various food and agriculture trade coalitions. and scott paul is president of the alliance for american manufacturing which is an advocacy group established in 2007 by company and labor interests in the manufacturing sector. he's been part of the white house manufacturing jobs initiative, and he hosts a podcast calledwh the manufacturg report which ive commend to your attention if you are not already listeners. so really a stellar group and an important topic and, rufus, i believe that you're up first. [inaudible conversations] >> well, good morning, everyone, and thank you very much, john. thanks to judge and to global business dialogue.

judge, i've enjoyed all of your work over the years. certainly no better time to be, to be active in this field than now.in may you always live in interesting times. we're certainly learning the wisdom of that, of that expression. and, john, thank you for all the work you've been doing, my colleagues on the panel. yeah, there's a lot to talk about. i don'tdofo even really know whe to begin. let me start in this way, i mean, as you know i'm now head of the national foreign trade council, an, so of 200 some -- an association of 200 some companies that really covers the whole u.s. economy from energy to the internet and everything in between. but i've also in connection with the 232 actions, my vice president, vanessa shar and i have put together is and helped to run something called the

alliance for competitive steel and aluminum trade, about 45 different trade associations in washington representing really hundreds and hundreds of producers both large and small of products that are consumers of steel and aluminum that are very concerned about the impact of this. and i'll talk about it a little bit. to step back just for a minute and look at what's happening, i mean, i think we have to recognize that this is a fundamental, now a very fundamental decision point the country's going to be reaching over the next 6-18 months about where u.s. trade policy goes. and, you know, it's now becoming much, much sharper focus. i'm not going to talk too much about the rumors today on withdrawal from the wto, but coming into very sharp focus that really the administration believes that a more mercantile

trade policy that's based on the use of instruments like tariffs is going to get us better results bilaterally country by country than the basic framework that's evolved over the last 70 years. you know, i heard one member of my board describe it this way, you know, they fundamentally believe that you can fix the problems of 21st century economy and 21 century industries by using, at best, 19th century policy instruments like tariffs and a 17th century place my like mercantilism. and, you know, to us that's not going to work in the long run. there are a lot of reasons why, so let's start with what the impact of taking tariffs up on a

sector like steel and aluminum has tone for manufacturing -- has done for u.s. manufacturing. already we're seeing price increases in that sector. it's driven, obviously, by a genuine concern about a real problem in the trading system, china, and chinese government melicies and practices that have created great overcapacity. but the solution here rather than try to work together with all of our allies and build a much stronger international and global alliance that relies on existing instruments like the bilateral trade agreements we have with those countries, the free trade arrangements, the wto system itself to push china towards or better behavior, you know, you think about what would have happened if we had joined tpp, if we had a ttip agreement,

if we were leading in the wto system and if we could work with partners using things that came from those agreements to push the chinese in the right direction. we also, by the way, have a lot of instruments like our unfair trade laws which have been used to deal with china versus where we are today. where we are today not simply raising tariffs around the world including on all our allies, imposing big costs on american manufacturing both large and small, and i'll get to that in a minute, t and really not putting that muchg pressure on the chinese to change their system. ..

>> it's ten time the size if you take all the manufacturing or 40 to 50 times the size of the steel and aluminum sector. if you start building restraints into the system and in the industry like that, you are really expanding this conflict tenfold. you're basing it on a concept tonight leave it's essential to national security to protect your other important industries. of course other industries pay the price for that. those industries don't to in the long run and prosper. i was in an auto plant this week in indiana and happen to be a toyota plant producing about

410,000 autos per year. almost 20% of their production is exported. i watched toyota highlander's come off the line to for the australian market. it is consuming 600 metric tons of steel per day. 1700 trucks coming into the plants. over 80% of what they produce is from domestic contents or north american contents. it relies on the nafta. we can talk about that later. hundreds of both large and small suppliers for that company. that's a recent flexion of the u.s. auto industry today. 17 million unit production in an industry that is experiencing tremendous resurgence all over

the country. no longer centered just in the industrial midwest, but in places like texas, alabama, and south carolina. we are exporting mercedes-benz from alabama to china. at least we were. we'll see what happens once retaliation hits. that gets me back to the major point. if we really think that the president is doing this to put us in a better position to negotiate with people, help we will begin to see what are the terms of those agreements and how quickly can they be resolved. from a business point of view, what were experiencing now is tremendous uncertainty. are we going to be getting new agreements to open world markets and thereby help this support

said tremendous resurgence of american manufacturing, or are we going to face world where tariffs go up everywhere, particularly against u.s. exports and we begin to see higher costs and prices and the consequences of protection in our own economy. that gets me back to my main point. where does this bring us in the long run? if you look at what the trading partners are doing, so we know the tpp have gone forward with the free-trade deal without the united states. that includes obviously are two closest neighbors, mexico and canada. we know that the europeans have finished the free-trade

agreement with the canadians. they have up there deals mexico. they're busy doing a free-trade. they already have free-trade limits with the number of asian markets. in the meanwhile, here is the u.s., still the risk we decide to withdraw from nafta, our most popular bilateral trade agreement. we did not go forward with the tpp. we are talking about revisiting other agreements. so, you see a massive free-trade zone developing that involves the rest of the world's and most of our major trading partners. in the meanwhile, here is the u.s. developing these exotic theories about protecting national security about closing all of your biggest markets.

now even potentially withdrawing from the potential multilateral framework. in other words creating circumstances in which the rest of the world may pass us by as we close. there are not many examples in history of that happening, particularly in an economy that is doing well. i asked the auto people, what is your biggest problem right now and by far the biggest problem is the unfilled jobs. finding the skilled workers, in this one factory that i visited this week, 1000 unfilled jobs that they have to figure out how to fill over the next six months. so finding skilled workers, the growth of our manufacturing sector.

people look at the decline in jobs in the manufacturing sector a job the conclusion that is due to trade and trade agreements. secondly they draw the conclusion that means manufacturing output is declining. 80% of americans think the manufacturing output is declining. actually, it is increasing and has been increasing since the downturn in 2008. producing the same number of autos in the 1980s but with the quarter first. if you go through pretend that you understand why. that's happening in agriculture, our economy has to adopt. the government policy has to be

better to allow workers to adapt to it and identify skills that workers will need in the future. we spend one seventh of what germany and japan spent on worker training and workforce development and workforce preparation. we need to be concentrating there. we need to be doing more with the infrastructure. if congress wants to do something good to help trade that we need an infrastructure strategy that is credible and will promote our greater global competitiveness. the path run now, people are accustomed to these data and they break out every ten or 15 years. i just hit my 41st year. i sorry throughout and i know we

look through a lot of but if we start explaining this to a general strategy that this is the way to the, what are we #one of the most dynamic companies in the world cannot find workers for our most skilled and important jobs in the economy. meanwhile, americans are struggling because they are not making good incomes and i don't have good jobs. you say something is wrong there with a solution is not the one identified by this administration. that's a concern i have. i look forward to the discussion. thank you for inviting me. [applause]

>> i did in fact get the speaking order wrong. our next presentation will be -- >> thank you and thank you to the global business dialogue for the opportunity to have a conversation about the national security -based tariffs. as the ambassador has demonstrated it is a complex set of issues we're managing. before i start particularly given the venue and given the shootings in annapolis in the murder it is worth pointing out that journalism is not an easy business under the optimal circumstances. journalists all over the world including the united states deserve unwavering support for their work in the freedom of the press. they deserve a president who feels the same as well.

i am from indiana. i grew up with hog producers in jasper county indiana who are members of the national pork producer counsel. and within sight of the steel mill sites. the largest still mill in the country. this is an issue that i take personally. i am glad the judge that the conversation by looking back at the legislative history. it makes sense to look at the 1962 act that was the foundational document for section 232. it was hailed as the tree -- the biggest legislative achievement of that congress. it included three fundamental things. it gave the president broad authority to negotiate trade expansion and negotiate u.s. barriers, particularly with cold

war partners in developing nations as well and design further economic ties. it included trade adjustment assistance. we know over 50 some years the ups and downs of that program and how it has become a political football and viewed as an afterthought rather than a pathway for workers to readjust. the third element was trade enforcement. that's where section 232 comes in. when president kennedy signed the bill he made a point of thinking george, the president of aa of l cio. think of the last time a president has something to labor leader for passing a piece of trade legislation. you have to go back a long way.

because this was supposed to be the foundation for the trade policy, we do the enforcement and expansion we've done the expansion reasonably well. there has been some demonstration with that. our enforcement tools are weak and reactive. the burden is placed on businesses and workers. they are incredibly expensive and not sharp tools. i have mentioned the adjustment. in a sense, the 62 act what has happened provide a foundation for understanding where we are today. to this particular case, steel and aluminum are essential to national security. that might sound 20th century, but if you look around us and think about what protects us in

this country, it is aircraft carriers that are nuclear powered but involved in tens of thousands of aluminum. it's f35's made of an aluminum just invented within the last ten or 15 years. it's a resilient electrical grid that depends on electrical steel of which we have one remaining producer in the united states. the virginia class submarines that will be part of our nuclear submarine flight for at least 50 years and contain an amazing amount of metal. if you do not think the potential conflicts don't involve steel and aluminum, you have been reading too much fiction. they do. i think our military establishment understands that. are we facing a challenge in the

steel industry? and the answer is yes. we have face bankruptcies in the steel industry, we have lost 30 - 40 steel companies in the early 2000's, in part because the clinton administration refused to take action during the financial crisis. we have faced a situation with china coming online in the global economy where you now have five of the ten largest steel companies in the world on by the chinese government and don't respond to market conditions. you have a nation, china that produces half of the stealing consumption varies depending on the domestic program. the excessive steel creates bad behaviors, not only among chinese producers but governments around the world

look to hang on which otherwise are efficient, productive should be competitive. so, the steel industry has a search for solutions for many years. if the wto was a solution to it, we would have done it by now. the wto is not well-equipped to deal with the massive amount of state capitalism coming from china and the amount of capacity they overproduce. and the impact it has on the global market. other markets were set up. dialogues. there is a global steel dialogue involved with large steel producers that is plodding along at a slow pace. meanwhile the steel industry faced its latest crisis a few years ago when the rest of the economy was humming along and it

was in a technical recession. the only reason was because of this chinese excess capacity. so these companies complaining right now received an exceptional discount in 201,415 and 16 for the type of steel and aluminum they produce. i do not see car prices come down or the price of a can of beer. they held onto the savings. it is disingenuous to say we are facing this price shock now. when we look at relations because some people will say the military aspects of steel only account for about 3% of the production so how is that a national security issue. we don't have nationalist still meals or subsidies for the steel industry. our mills compete in a competitive market. the u.s. has the lowest taste

tariffs for steel around the world. it's correct to say that we have dumping orders in place on some steel. but we are the dumping ground for steel around the united states. these other countries have put up safeguards where they have mechanisms to keep steel out of their market. the solution proposed and i encourage if you have not read it yet, read the 232 report that was established. delays out in great detail what the goals are and why it is necessary. i will stated as follows. the goals are to get the steel industry to about 80% of capacity utilization. that is the rates that most say the steel industry is able to

operate on an adequate profit margin and reinvest in the workers in capital to become more competitive as we had further into the 21st century. about a 75% of operating capacity right now. since 2009 we've seen in part penetration coming in and increase by 50% in the united states. we've seen six or seven blast furnaces placed out of operation over the last decade and a half. during the most recent crisis we saw about 15000 steelworkers lose their jobs in an otherwise healthy economy. some people will say, why the broad effort and why not just focus on china? here's the answer.

we do have dumping orders in place against chinese steel. spent effective enough that in terms of direct import volume into the united states they dropped about 11th out of our trade partners. it is found another way into the united states and has been modestly transformed and shift. it has been shipped through other markets like vietnam and malaysia, indonesia and korea. it has caused other governments to engage in bad behaviors as well. so, if there were were not a global solution for this, it would not be affected. others may ask why are their quotas on some countries, why are there tariffs on our allies, and how does it look so

different. there is also an answer for that. it is trickier for canada and mexico than some of the other countries. part of it is volume. the largest volume of imports combined are from the e.u., canada and mexico. i will not think the dumping is the most serious problem that we face from mexico, canada and the e.u. when it comes to steel. but they need to be part of the solution. the relief that was designed, i believe was designed to get the e.u., canada and mexico to engage with us, to find a solution in quarantine this capacity. there is five or 600 million metric tons of steel that needs to come out of the global market right now. the united states does not even produce 100 attract tons.

so, you see the scope of the challenge. when we look to see if this relief has had a positive impact, i think there are signals that are encouraging. first, we are seeing steel mills come back online. granite city, illinois to blast furnaces are stirre starting upt have been closed for a few years. you see 13 or 14 steel and aluminum facilities either increase the production, add-on workers, or reopen after long closures. some are attracting foreign or direct investment. using the manufacturing job numbers be very south over the last few months as tariffs have been implemented. there is reason to believe that

will continue. we are in a strong economy that has lots of fundamentals. you have to consider that if these tariffs are fully implemented that is about $6 billion in it 9 trillion-dollar economy imposed on a corporate sector that has received a tax benefit from this administration. the idea that this very limited range of steel and aluminum tariffs is somehow going to spiral out of control defies logical comparison. it's not the same. we are in a strong economy. in relation to the size of our economy, it is minuscule. finally, is it legal for us to do this? i would submit that the companies retaliating are those

violating the wto. as the investor has submitted, article 21 very clearly states that it is self judgment and it even stated that when the suite said we need to put a quota in for our footwear for the military. if you have to assume that footwear is essential to national security, you have to assume that steel and aluminum fit the bill. people are say there's a reasonable chance the united states will lose the case. i would not be so sure about that. we'll see what happens. i encourage you to take a look at ambassador submission to the wto on these retaliatory tariffs. this is not a safeguard action. it's a national security action

as well. finally, i do not disagree with ambassador. i think we need to invest in infrastructure and learning. there's a lot we can do domestically. all of that is less effective if we do not have a level playing field on trade. or if we don't have an industrial base that's can supply us in times of peace. thank you, i look forward to the conversation. [applause] >> next up, the honorable jennifer. >> thank you. thank you to the judge. i think joann for the work she did i think it would help us answer the question scott raised the answer is absolutely not, no way. just to back up a little bit on

section 232, if you think about it in the context i didn't use it to imply import restraints. if you look at the actual path decision based on the statue the question answered, is the united states overly reliant for critical it's on import. and is that coming from countries we don't want to rely on at a time of war that's what the gist of it was if you think about in the context of steel. the answer will be no. we are not overly reliant on

imports to serve critical needs. where do they come from? the canada, e.u., mexico, japan, brazil, these are our strongest allies. can we count on them in a time of war? yes. no ways in which this have been read in which you can apply these to steel. hence the reason why the administration has gone to the one phrase that is highlighted in the legislative history that completely erases the notion of a distinction between national security and economic security. the same anything that we need must be in the national security and vice versa. there comes the legal problem. that might be the definition under section 232 under u.s. law, it's not the definition under international law or under wto law. what's happened since these

tariffs have been brought? there have been challenges at the wto immediately by china. followed by a case brought by india challenging the united states another one but by the european union, canada, mexico and norway. discussions that japan and others will follow suit. what is the gist of the challenge? if you look at the complaint it raises trailers under article one and will go to the very beginning. was the challenge there? the most favored nation. the extent to apply tariff you have to apply them on a equal basis. here, we are not were not apply meant to argentina or brazil so were clearly violated. count two in the european

union's complaint is article two. were going straight back to basics. article two says you cannot charge tariffs in excess of your bindings. you are bound tariffs and can allow that. what is are bound to terra fun steel? zero. anything above zero is a clear violation. no question about it. what are the tariffs on aluminum? they range between zero and 5.6%. clearly a 10% duty is a violation. they are arguing a claim under article 103 of the gap that's going to administer trade thoughts in a fair, open and transparent way. unequivocal violation. you can't put duties on goods that are on the water before they got to this let tariffs on the essay that you've applied your rules and anything that

does that. it's unequivocal violation. also of article 11 says you may not impose quotas. we've impose quotas on korea, now on brazil and argentina. we've imposed the the most are conan way. we told the koreans we would give them a quota, it was the equivalent of 70% of their trade in steel. 2.68 million tons. then you heard nothing about how this quota was going to be administered. nobody knew until 9:00 o'clock at night until the evening they were gonna go into effect at midnight. the administration divided the quota into 54 limits and then at accordingly limits on top of that. you had 216 limits and no flexibility. no ability to move it from one quota to another.

no ability to transfer. for those of us who have lived in the quota world, flexibility was part of the regime including the 1980s and wish they negotiated. in this sense just zero flexibility. one of the quotas on korean steel, the total amount is 15 kilograms. if any of you traveled your allowed to put in your suitcase 30 kilograms. so to import 15 kilograms of steel is a joke. effectively it's a huge portion is not available. it's not a 70% cut. probably closer to 50%. just because the ciccone and weigh their administer. that's a challenge. another challenge under article

19, the safeguard agreement and then a whole series of agreements. to me, the question of our these questions who are challenging these tariffs likely to win? a hundred% chance they will win. there is no doubt that these photos totally violate those obligations. then, the question is what is united states response. here it is a clear question of a first instance. arguably a genetic an important one. what the united states will say is that these are justified and we have a defense there is no affirmative right to impose it. that is not equipped. if you wish to impose tariffs you can only do it in four ways. dumping, negotiated change in

your bindings those are the only ways. this is outside of those. then the question is, do you have an excuse for doing? where the united states is going is article 21. here, the emphasis is on what john referred to as the dock. they're not just .-ellipsis, their clear limitation on when can you use article 21. no, or, is says yes, a country can put on any action which it considers to be in this their social security interests. but it must relate to material, last i like they are not nuclear materials it must relate to trafficking, arms, or munition of war. not so clear it fits into that

or taken into a time of war or emergency. so, can the united states actually prevail no. unless the united states gets away with what they're doing now in geneva, for the first time ever, article 21 is the subject of a challenge. for all of the existence from 95 onward, no one wanted challenge under article 21. nobody wanted to raise this concern. it was the third rail of che drama and the concern was that you did not want channels deciding what is there not security. this is come up clearly now on it's in disputes between russia and the ukraine as a result between the russia and ukraine, russia did things equally as

unequivocally as what the united states did. they banned transit of goods between ukraine and kazakhstan and going further east by ukrainian goods. among the most of the wto as if you are landlocked country cannot be precluded from transiting somewhere else otherwise every landlocked country would have no right. so it is that you cannot bar transit through your territory. mexico is barring trying to go east, it must go over land and piece of russia. a clear violation and ukraine has challenged russia. russia has claimed article 21 defense. because it's an issue of first depression, the panel said they want everybody's view. how should we interpret it, is it -- had we leave it for its

security interests. what is happened is the united states and russia and no one else has made the claim this is non- -- as soon as anybody says article 21 out loud the panel has to stop and go home. it cannot rule on anything, nothing at all. as soon as you say article 21, the case is over. that is the u.s. position with russia. everyone else has taken a different position, the canadians view is at least that a panel has to decide is a trafficking of arms or time of war. decide which of those pillars here under. and then you have to have some evidence that the materials were nuclear materials are there was

a time of war. you have to have some evidence to support what you're doing. on the far end would be the european union that is contending that article 21 should be interpreted as article 20. is this measure necessary and is it contributed importantly to national security goal. many of this will depend on challenges to the u.s. will depend on what happens in terms of the issue of the case before the panel right now. a very prominent -- my understanding is that they're expecting to make a ruling by the end of 2018 on the whole russia ukraine case. >> the second major issue of the

first instance, eight we have an issue of power we thinking of this article 21 and what you have to prove. the other major issue has been the response by these countries to impose their own tariff on the united states. again, a huge number of country has put on their own duties. china, the e.u., mexico pending the new duties. everybody else i said you're putting these on me i'll put unilateral duties on you. a modest irony i find with canada and mexico who started the duties on steel and aluminum. if we think the measure was to benefit the u.s. steel industry, it also exports steel. where does 50% of our steel expert go? canada. the other 40% to mexico. we have now put on measures to

help the steel industry that resulted exports with 90% and subject to the same duties being applied. it's not clear how much this will help on the steel side. if we go to what is the challenge for the retaliation duty. everybody puts them on says we will deem them to be safeguards. they look and act like a safeguard. to some degree a lot of the rhetoric around why we're applying the duties sounds like a safeguard. the steel and aluminum industry is a global solution. in every other way the argument is that they look and sound like a safeguard. do they have the right to do the were right to retaliate? on the second issue, do they

have a right to retaliate it clearly says if you put a safeguard on your required to compensate everybody for the right to taken away. that is clear under the rules. you're allowed to do it under the 90 day provision. you have to wait 90 days from when the measure went into effect. the 90th day is june 21. you are free to look at your compensation and give 30 days notice. assuming those have been met they say yes, you can seek to rebalance. if the u.s. does not agree you can do it unilaterally. however it goes on to say that you don't necessarily have that right for three years unless the measure has been taken not as a result of an increase in import,

which is in the number of times it's the case. secondly, you can do it if the measure doesn't conform. that's the contention everyone's making. the u.s. never considered it to be a safeguard agreement. then the question is, do these countries have unilateral right to make that decision? they can deem this to be effectively a safeguard. that is a much harder question for the wto to answer. theory you're supposed to go there first and asked them to adjudicate before you take any unilateral action. on the other hand, the concern is it's a direct and blatant violation of the united states by its commitment the question is is it appropriate to ask for them to wait for adjudication before they do anything.

it allows an immediate form of retaliation. is it right the united states can deprive everybody to take this because they didn't call it a safeguard. how much will we depend on what people call a measure versus what the effect will be. if they say the formatters and ease the word safeguard, then the retaliatory actions will be viewed as that violation. if they say is the substance that makes a difference, then you're entitled to do that. as of september will be down to maybe three members. you maybe have an noneffective appellate body. [applause]

>> last, but not least. >> thank you judge and the global business dialogue for inviting me to be here on behalf of american 60000 pork producers. it's an honor to be on the panel with these esteemed panelists. pork producers association is comprised of 42 state pork producer organizations. we serve as the global voice of the u.s. pork industry. in 2017, we had over 120 million hogs. those hikes generated total cash receipts of within $20 billion and supported 550,000 u.s. jobs. you may not know this, pork, not

chicken, not be, pork is the number one meat protein consumed in the world. in the past ten years, the united states on average has been the top global exporter of pork. in any given year, we ship pork to over 100 nations. typically, we are the low-cost pork producer in the world. when you couple affordability with safety and quality that are second to none, you can see why consumers worldwide value our product. exports add significantly to the bottom line of each and every producer, all 60000 of them regardless of their size, where

they are located in there's production in all 50 states. exports in 2017 totaled 5.4 billion pounds. that's a lot of pork. valued at nearly $6.5 billion. that represents almost 27%'s of u.s. production of those exports added more than $53 to the value of every pig marketed. to put that in context, exports responsible for $53, the average price received for a hog was hundred $47. exports are very important. they support approximately 110,000 jobs in the pork and allied industries.

because u.s. pork is an export juggernaut it's a great for trade retaliation. so we have the distinction of being on three retaliation list. china and mexico to 32 in china to 31. those are very important export markets for us. mexico is our largest volume market and our number two value market taking almost 802,000 metric tons of pork, worth more than 1.5 billion in 2017. china was our number two volume market and more than 495 metric tons. in our number three value market at 1.3 billion last year. there is never a good time to have a problem in an industry.

for an industry like ours that depend on exports there's never a good time for an export disruption. the timing years particularly bad. the u.s. pork industry is in the middle of an export driven expansion with production expected to grow about 5% in 2018. as the world's most competitive producer pork, the u.s. pork industry was anticipating increases with japan in vietnam, and others to the transpacific partnership. they were counting on shipping more pork under u.s. trade agreement. obviously, things have changed. ambassador greg dowd, the chief agricultural negotiator with the office of the trade representative summed it up recently, by telling our

producers quote, the lead tip of this fear and all of this is your port. and he got that right. the january 2018 i was state university analysis forecast moderate profits for our producers this year. now, those tariffs are expected to result in producer losses for the year of over $17 per pig. meaning industry losses in excess of $2 billion. while producers are feeling financial pain, they also recognize the administration is trying to make double trade more reciprocal and advantageous. so, the focus of this panelists to 32 in legality. the broader question being asked

is, does the post-world war ii trading system that the u.s. was the primary architect of still serve our national interest? if you are an industry that was dealt on the current trading roles and you export, it's tough. change is tough. so, i have to say that the administration has been very helpful in opening new markets. argentina and paraguay will be working with the administration to open several other markets such as brazil, india, and thailand. our producers understand the administration balances many interest in trying to realign u.s. trade policy. we think that's what is going on. that's a broader question that was be looked at today.

it's a transition. i'm not saying it's good, i'm not saying it's bad. if you are an expert dependent industry like ours that was built on one set of rules, it's a challenge. the question is, putting trade and economic security at the center. i know, a lot of times there have been with pork industry since 1995. i am a lawyer by training. i did several cases and lots of times in my career i said things like economic security and interests are being subjugated to national security and foreign policy. so having said that, my sectors

in a painful position. we see it as a transition. maybe i'm on. whether or not we are in a transition it is a difficult spot. were clearly redefining the trade relationship with china. i was the modernizing nafta. these are complex matters. our producers get it. they know the president is committed to strengthening agriculture in the economy. they acknowledge that the tax and regulatory reforms the administration is implemented has set a course for proof by congress and economic growth. the president ask secretary purdue and other officials have made it clear they have the back of the american farmer. the administration has told us it will take steps to mitigate pork producers pain.

i want to be clear, were not asking for payments for producers. but, the best outcome for us is the restoration of lost trade and the opportunity to increase exports. it should come as no surprise that we are very eager to see a complete enough to deal that, among other things will exclude mexico and canada from 230 to tariffs. were also eager to see a deal with china to resolve the problems at issue with that trade relationship. moreover, we are clamoring for fta negotiations with japan. japan is our top value export market. we are very concerned about the

impacts of the japan fta and the tpp on our exports. today, our hair on fire issues mexico and canada. two huge markets for us. we are also concerned about our shipments to japan. some pig farmers aroun are on te front lines of what we see is a realignment on u.s. trade policy. i think our producers are showing tremendous fortitude and patience. make no mistake, it is a very painful place to be. we had a financial collapse in our industry 20 years ago. it was horrible to see people that you know lose everything they have work for. i will never forget it.

thank goodness we are not at that point. the longer this retaliation continues, this transition, the more difficult it will become not just for pork producers but other sectors. i always have to have an ask. i ask you as potential consumers to think about our pig farmers as you make your food choices this fourth of july throughout the summer. whether you are republican or democrat, perpetrator and try trade, our pig farmers are hurting. please show them some love and eat pork. thank you. [applause] >> we have a less than ideal

window for q&a. there is a microphone to be passed around. we will have to be careful to stick with questions not speeches. introduce yourself and remember that you are on tv. >> i am eric with the national association of foreign trade. it's an interesting discussion. my question, if we are abandoning the current set of rules being established in the work over the past 70 years, what set of rules will they be replaced with? the administration's interpretation of its powers under 232 is setting a precedent where the president can impose tariffs at any level against any country against for any time.

on reviewable by the wto, the u.s. courts are congress. so, is it just the law of the jungle? what are we looking at that we could transition to? >> i will only comment quickly. for what it is worth, you may know a lawsuit was filed in the past two days by the international iron and steel institute that is basically raising that question. this is a challenge effectively suggesting that the delegation of power to the president under the 1962 act was unconstitutionally vague. it did not put the restraint your question implied on the president in terms of his exercise of the authority. as result, the broad delegation

with an open window in terms of timing is unconstitutional. it may be the lawsuit we bring an answer to part of your question. >> it is the right question to be asking now. were looking at an ministration. the only real rule was the role of power. if you had enough power you got what you wanted, if you are weaker, you didn't. the accumulation ultimately led to a greater conflict. there was not real rules. if i was a government with the wto case i would want jennifer for my lawyer.

[laughter] although, apparently i'm glad nate is here. jennifer is not aware there never was a peace treaty in the pig war with canada. the pig war was when the soldier colonial statin long island shot a u.s. pick and it never did get a peace treaty. the president might argue were still at war with canada. i don't know. the real issue is that if we start to throughout the rules and i think that's what's happening. jennifer gave us a brilliance legal treat on article 21. i tend to agree that ultimately, what is the purpose of having the rest of the wto system including a sophisticated safeguard agreement that tells you when you can and cannot protect your thomistic industry

for economic purposes. if every country can do what it wants by invoking national in fact, if countries were to lose on the retaliation against the u.s. because it wasn't justified, they could turn around and do it on national security ground. were living in a world where retaliation will be a fact of life, upwards of 70 billion of u.s. exports identify as retaliation in place were to come. if the u.s. goes with all of its factions. you cumulate that when you get into sections which are huge. so, what's happening to us industry as this is going on? tremendous uncertainty. to end up with new rules? what will the rules be? or, do we end up with everyone for themselves, tariff

retaliation, terror force and the escalation of those which is what we're seeing today as more and more industries face the challenges. you saw the harley-davidson story. there will be more stories like that. the question is, is it really worth it? will it give us a better economy than what we have? or is there a better way to build on the system that evolves over 70 years. right now what the industry is facing, big and small producers, i have small companies in this alliance, one was on a call with us yesterday. small companies who make the nuts, bolts and screws said, upwards of half of their members

will be out of business if this retaliation continues. if the cost increases in the u.s. economy continues. that is really the challenge that industry is facing. the double whammy. costs are going up because you're protecting your economy. then you're getting hit by your export markets and your competitors costs are going down. you create a high structure for the input of all manufacturing fields. the world prices 40% lower than the price your pain at home. when you go to export your getting hit with tariffs abroad. what are the rules to replace that? that's what the administration will have to answer. if they have a secret plan to make it work really ugly. this will be a magnificent

brilliant to think it's better agreements, that's what we want to see. 95% of the world consumers of outside the u.s. we lose export markets, american industry is dead in the water. >> anything else in response? [inaudible] maybe a quick factual question. anecdotally i hear that dealers and what have you in the midwest, auto dealers are starting to advertise that by your card now before the tariffs. and while the quality is good. my only question, are you hearing the in the midwest? are you seeing evidence there is a pre-buy? a lot of us remember cash for

clunkers. thinking in terms of demands, consumer activities and wonder if that is just the one off? >> that's a good question. first, aluminum gutter installers say come get it now and get a deal before the tariffs go into effect. you have to take that with a grain of salt. they want to make sales as well. the other factor is what speeding up the end of the business cycle by inadvertently the capital investments that companies are making. that is mostly due to the tax law and not to the tariffs. from a supply point of view

there are games being played. while this process played out over the last year and a half we have seen import search. they were of 15% last year. steel imports went up in february and march in advance of this. the game is being played both ways. i am sensitive to price manipulation. the secretary pointed out that if dealers, brokers or warehouses are playing price games they ought to be stopped on this. the price of steel and aluminum will eventually settle down. it's very cyclical and commodity based. any see this in just a couple of years ago. you could buy steel for less than at the bottom of the great recession two years ago. you'll see price swings before

it adjusts in light of this. >> need to get ready for this kind of speculative and pressure tactics out there all over the place. creates uncertainty for consumers. if you saw this remarkable, by secretary ross that these price increases are people who are taking advantage of the situation reminded me of casablanca one said i'm shocked your gambling is going on. that's exactly what will start happening across the board. the more sectors that begin to apply this the more it will happen. >> we have a more question. >> -the embassy of malaysia. i was interested in what scott

was talking about just now. i had malaysia been mentioned. under the census bureau our export of steel and aluminum is quite low, consistently low from last three years. in 2017, our experts are sealed to the u.s. was 0.28%. this actually amounts to about 42300 district toads. therefore, i think at this point i would like to ask, how do you think if overcapacity is to be addressed in shipment is perceived as the problem coming from the smaller economy like ours, how do you think the u.s.

and the administration should be deliberating or discussing with us on the way forward to solve the problem? >> thank you for the question. i refer back to the 232 report where you can detect changes in trade flow from china with respect to volumes of steel. sealing the exports being diverted and then seeing a slight uptick from those countries coming into the united states. with respect to vietnam, there's an established trade case on this for transshipment. i think some of the u.s. is willing to consider alternate arrangements that do not undermined the impacts of the

measures that have been deployed. mostly through tariffs, but also through quotas. if the government of malaysia wishes to pursue something, i think engaging with ustr on the in an alternate arrangement would be the right way to proceed. >> another question over here on the right wing. >> i'm with international trade today. i have a question, one is on the aluminum and national security, given we do not mind any box site how can limiting any imports of the finished products really protect our national security? and also do you think that we should be putting 20% tariffs on

autos? >> with respect to aluminum, i am less familiar with the fundamentals of that case. i will say that it does raise other questions about the strategic material. including materials that are not found her mind in the united states or rare. i know the department of commerce is exploring that right now. with respect to the lines of aluminum subject to the release, again, i point back to the fact that the united states has been greatly diminished over the last few years. i do not think there should be aluminum tariffs placed on canadian aluminum. i think that is an over step.

i'll go back to steel for a second. i think my hope is that negotiations can get started again after the mexican election that their quickly completed. it is a very integrated market. to your auto-parts question i will defer. it is too early to tell. it's a highly integrated industry in the united states and raises questions. the harkening back and i think one of the rationales is that if you need to mobilize the defense industry you need to have a platform. it's hard to mobilize a shopping mall to make armaments. it's easier to do that with auto plants. i will defer until you see what the commerce department is

thinking about that. >> i have a hunch this will be our last question. >> thank you. i came late because i had a meeting. if you covered it we can take it privately. two quick and then i have to take issue compromise with nick. renegotiated doing away with -- korea entered into an agreement with us with the understanding under the wto. president trump helps to negotiate these deals separately and so on. if we negotiated deal and someone withdraws, how does the wto deal with it? nick, i would love to help you but i with a religion that does not allow it. we're going by month many more

muslims that do not eat pork. but, if pork is used in manufactured products like leather, please let us know what they are and i will buy them on july 4. >> i will start with the second one, can you withdraw wto case, normally what happens is you either don't seek the placement of panelists individually, or you can reach a mutually agreed settlement. if the cases before panel you can stop the proceedings to reach that. that part would be easy if the parties could agree. and it has happened in many cases. on the bra issue, this is where the rule change with respect to what you can and cannot do. so it's like no. that is part of the point of doing that.

you are not based on powerbase rules where one party has a lot of power and exerts it by demanding an agreement to voluntary restraint. i'm not sure they would agree they are voluntarily agreeing to these limits on the steel exports when it was done in the context says if you don't agree with it will take away the trade agreement or charge tariffs anyway. how voluntary was that? the point is, you're not supposed to be going down the road of using your power to impose on countries powers. that is not permitted under these rules. >> i'm going to squeeze in a moderator question. this is for the whole panel you

posted in geneva about the systemic implications of what we're seeing. in particular, not the systemic implications of what the united states is doing but what everyone else is doing, this should a person litigate later ploy with which is based on reframing this thing as a safeguard action, do you have concerns about whether that will have systemic effects and implications additional to what we are looking at because of what the united states is doing? >> again, part of me steps back from this and says the huge tragedy for me of this approach and i think everybody would agree that ultimately a huge

portion of this problem stems from china and their overcapacity and their lack of disciplines on subsidies and bankruptcy law on competitive laws. huge agreements with what was in the section report with respect to china. arguably you have the whole world agreeing on this problem with china. and of the importance of the wto and other systems and 100% disagreement across the world with united states tactic. however you describe it they are fundamentally unilateral and they drive away your potential allies. the problem is even in the u.s. approach that says we will solve the trade deficit problem with china by asking them to boy by more soybeans, then you've made an enemy of brazil because then they're not selling soybeans to

brazil. to me, the tragedy is that there could have been a big broad case against china brought by the united states, the e.u., mexico and japan. fundamentally went to the heart of what the real problem was and give the wto a chance to see that they can deal with the big case, and a series of challenges and the ways in which china has violated the wto. had that happens maybe it could still happen then, i think this system could come through with a long-term fix what is a fundamental disconnect what's going on in china. it would be my hope we could get the systemic case going.

i know everybody's bending their time, energy, and resources dealing with the actions by the united states in the response. is it a systemic issue from the wto? yes. if on the national security front you side with united states, every country could oppose anything at anytime and say that they're just as much in their interest as we are. on the other hand, if the w wto says you're free to recharacterize at any time as he did not comply with these than that raises issues that everybody's walking away from a binding rural system and taking unilateral action. either way, unilateralism is the

threat. to say the united states started and is the worst aggressor, i'm not sure how far that gets you if everyone else is doing it too. >> i totally agree with the assessment. if you cut down the trees in the forest to go after your enemy, what you hide behind when people come after you? clearly, there are systemic issues. those, worker to see more countries say that the rules to work because of the way this has unfolded. this is after we have spent decades talking to countries into observing more rule-based system. i take the point there are cases where enforcement has been week.

i agree. you obviously have to do more to make sure these rules work and being enforced. but, throwing out the rulebook is not the way to do that. the second thing, the big systemic problem we have is china's emergence as a major economy in the way their system operates that is not as easy to deal with under wto rules. a lack of transparency or a degree of government intervention. all the opportunities we have had to build that effective global coalition to put the pressure. if you look at an agreement like the tpp which made quantum leaps in creating discipline on state owned enterprises, on the digital economy and others that will be future challenges, and

then to build an effective alliance with europe, japan, our nearest neighbors, how do you get back to having that kind of collective will and pressure? the make a case that was just talked about it is a doable case. and could gain broad international support if they were to focus on the systemic challenge. instead of creating circumstances where the issue systemic challenges the u.s. is having. >> we have been out fantastic panel. let's give them the appreciation they deserve. [applause] based on the judge is not, we are adjourned. thank you. enjoy your day.

[inaudible conversation] [inaudible conversation] [inaudible conversation] [inaudible conversation] [inaudible conversation] [inaudible conversation] >> watch american history tv this weekend on c-span three. highlights include saturday at 6:00 p.m. eastern on the civil war, the constitution and secession. at 8:00 p.m. on lectures in

history. popular culture during the 1840s. sunday and real america 4:00 p.m., salute the canadian army. at 8:00 p.m., white house art. watch american history tv this weekend on c-span three. >> syndicated columnist talks about her book, sex matters. how modern feminism lost touch. >> we send confusing messages to young people. young women, i do not envy them. this was a story i put in the book about a number of women athletes who have posed topless or semi- topless for "sports illustrated". one of them i quoted said, i'm proud of my body and i want to help young women who have body issues. my feeling is, that is a crock.

woman should be dignified, they should remember that when you disrobe it is hard for people to take you seriously. a man looking at a picture of a topless woman is not going to say, look at that fantastic athlete. isn't it wonderful she doesn't have a problem with body image. he's going to think about sex. his second be thinking of her in a respectable way are either. so andrea merkel, the chancellor of germany would not take off a blouse to prove she doesn't have body image issues. if women want to be respected they need to be haven ways that elicit that. >> c-span, where history of the staley.

in 1979, c-span was created as a public service by america's cable television company. today, we bring you unfiltered coverage of congress, the white house, the supreme court, and public policy events in washington, d.c. and around the country. c-span is brought to you by your cable or satellite provider. canada's foreign minister announced new tariffs on u.s. export products with $12.5 billion. they are in retaliation to steel and aluminum. she said the candidate would be filing a complaint with the wto. this is half an hour. [applause] >> thank you for your hard work. you do amazing, difficult, important jobs every day supporting yourself and families in this community. we are proud to be here