reforms or were involved in these reforms, i think that's helpful. and that's what we want to be. that's how we want to be known we want to be known as the group that if you have a difficult structural reform you need to go through, we're going to help you get there. let me give you an example of a structural reform that's needed everywhere that is difficult to do but has so many positive impacts. that's the removal of fossil fuel subsidies. in egypt it's a huge portion of their budget. and they've started to make movements. they're moving to go away from fossil fuel subsidies. one, we know fossil fuel subsidies are regressive. the imf did a study. the top 20% benefits six times more from fossil fuel subsidy dises than the bottom. moreover it puts more carbon in the air and it is essentially a regressive tax that's takes money away from government so

they can spend much more effectively in other areas. but if you do it taxi drivers and truck drivers block your streets and it's tough. but we've now found ways and helped certain countries to get through it. it's not intuitive that you could do these things altogether and get through a potentially difficult structural reform like removal of fossil fuel subsidies. so we want people to think of us like that and we are going to literally scour the globe. looking everywhere on the earth to find examples of others who have do than effectively. >> i want to ask a final question about china. obviously, they've been a big part of the global slowdown. but you've been impressed, you were telling me backstage by just the discipline they have to take something that works in one province and immediately spread it to the rest of the country. >> yeah. so it -- with the china 2030 report, bob zoellick worked with

china for two years and really wanted to be sure that the chinese were comfortable with what was coming out in this text. so, you know, things like greater flexibility and currency all these things we thought china wouldn't commit to and they did. what was so successful, the first time i met the premier he said we love that project it was helpful to us. now we want you to take on urbanization. they have a lot of complex problems. if you were born in one province, you could only get services in that province. so when they come to the cities cities, it's difficult because they can't get services in the city when they move away from the province. one of the things we did was say here is a way that you can move away from that and they're beginning to do it. here are ways that you can build smarter, cleaner more livable cities and they were happy with

that. they're at 5% gdp. they're saying now do we want to go to 4% of gdp and have better health outcomes than anyone? we are now looking again all over the globe bringing in experts from all these different places and trying to help them see if they can take that curve and move it in the direction where they'll have better health outcomes for lower cost. we know if we come up with good ideas, they'll first of all, implement them for them on a small scale with like 100 million people and then they'll go and do it with 1.3 billion. it's quite amazing to watch that right in front of you happening. >> questions from the audience for president kim? >> so when you are talking with the private sector and they -- a company in the private sector has approached you or you are approaching a company, give us a

couple of examples where the ven diagram demarks enough mutual interest that a project goes forward. a for instance or two of companies such as this linking up with the world bank on a project that the companies found beneficial to their growth prospects in the developing world. >> you know, it varies tremendously. and so we've worked with companies on building hotels. you know tourism is 9% of the global economy. so the two places i just visited, i went to indonesia and there i went to bali. when i was in egypt, i went to sharmel sheikh because the meetings were happening in those places. it turns out the world bank was one of the first investors in bali to turn that into a tourism area. for tourism, there's a huge potential for us to be able to help with everything from wastewater management to the rights in the policy for the

government to make it worthwhile for tourism companies hotels and others to work in developing countries. in road building, for example, or the construction of dams. you know, we're back and focusing on hydro electric power because it's -- it provides the base load that poor countries need while at the same time taking carbon out of the air. so there are all kinds of possibilities from all areas of infrastructure. we work with companies around animal proteins, the demand for animal protein is shooting up all over the world. so we've seen worked in those areas. so if you can think of a sector we almost surely have experts who are looking to provide opportunities, specifically for mrern and other developed world companies. >> dr. kim, i wanted to ask about your own organizational change at the world bank. there's been some criticism that you've made a lot of changes trying to get the organization to focus on poverty and the cfos out there might be able to relate to this. you're trying to cut down the

silos that existed within each country and completely re structure structure. where are you and for folks who are trying to do their own organizational change, what has it told you? >> well, it's always really really difficult. and, you know i've had great people helping, so just a couple of months ago, alan mulally recently retired from ford and marshall goldsmith, a great leadership coach, my coach they came and spent a whole day with us trying to figure this out. so i would say try to get really great people who have taken organizations to change. fred haspen from the -- who has had a great experience in turning around pharmaceutical companies worked with us. here is what we did. we went from being almost six regional banks to creating a real matrix so that the technical areas in the region were forced to collaborate. before, it was basically giving

each of the regions their budget based on what they got last year based on cost of living. now we argue about the budget and we are forcing ourselves to work together and it was a huge structural change that upset a lot of people. but we needed to do it. we were from six regional banks to a real matrix is a big change and it's going to be an important one. the other thing we did is at the same time, we took 8% of the budget out. we took 400 million out of the budget. so structural change is hard. taking money out of the budget is hard. but we had to do both at the same time. we couldn't wait. and so the good news is, we're basically through it. and in a previous episode whether they did -- when they did this structural change 20 years ago, they put a couple hundred million extra into the budget and their business dropped 20%. this year, we took 400 million out and business grew 20%. so it was tough because we did so many things at once but my advice is if you've got to do it, just do it. just do it and get it -- you know, and get past it as soon as you can.

and it's not something that a lot of leaders of bureaucratic institutions have tried before so it watts really new to the world bank group. but boy am i glad we did it. if we hadn't done it we would have to start now. and so i -- that is my advice. get really great help and figure out what you need to do and get started as soon as you get and get it done. >> thank you very much. >> thank you. >> "the wall street journal" cfo network conference continues in a few minutes. we are showing you several sessions from the day-long event tonight. you can see more wsh including what several members of congress said at the conference at c-span.org. >> on the next washington journal, two members of congress discussion issues before the house of representatives this week including u.s. military

strategy against isis, the withdrawal of troops from iraq, international trade and the affordable care act. we will talk to missouri republican vicki hartsler, and connecticut democrat joe courtney, also on the armed services committee. washington journal live at 7:00 a.m. a eastern on c-span. >> chief financial officers for major corporations gathered in washington, d.c. this week to discuss the financial challenges facing their companies and the global economy. next is several international trade pacs are finalized and the government considers whether to give fast track trade authority we heard from michael froman and charlene barshefsky. this is a half hour. >> so thank you. we have a lot of trade

negotiators up hear on stage. this is good. we should all get some action and have a negotiation session. you know, the best strategies for that. mr. froman, this has been quite a remarkable day just in sort of the evolution of this -- the latest trade pact. let's assume for the moment so we don't get into the politics of this since we've been discussing it a fair amount so far today, that tpa, the trans-pacific partnership gets to a vote. what does this trade deal hold in store for these companies in the room? what's an opportunity for them and what also might be new competition that that -- they have to be concerned about that might result from the trade deal? >> well, we start from the premise that our market is also an open market. we have an average applied tariff in the u.s. of 1.4%.

70% of all of our imports come in duty free. actually, 80% come in duty free from the tpp region. and we don't use regulation as a disguise barrier to trade. so we're competing in the global economy. we're already competing against other markets that have lower labor standards, lower environmental standards. what we're trying to do through these doppler radar agreements is proportionately removing the average applied tariff in these tpp countries is three or four times as high as ours. it's 70% on autos, 50% on machinery. 35% on chemicals 50% on beef. these are all going to go to be either zero or much lower than they are now and that's going to create more opportunities for american firms and american workers to be able to compete and to export the product abroad. and at the same time, we're using the trade agreement to raise standards in these other

countries. whether it's putting discipline on endser prices so that when they compete with our private firms and they have the benefit of being a state-owned enterprise and having the subsidy dids that that might involve, ta they have to do so a commercial basis. if they don't, we now have a trade action. >> they can't be subsidyized and use those unfairly. >> is there a way to track that? >> well we're engaged with them in that and they're using tpp frankly to drive a lot of reform of their state-owned enterprise sector as well. we'll be able to hold other countries into account if they violate these agreements. i think one of the great benefits is the small and medium sized businesses who find negotiating different customs procedures border procedureses, tariff regimes, nontariff

bewildering, if we're able to get rid of a lot of those, it makes it easier for the 98% of the firms in the u.s., over 275,000 firms in the u.s. that are small and medium sized businesses that are exporting to increase their exports and to bring more small and medium sized businesses into the global economy. >> so there are a lot of elements to this state-owned enterprises is one. patent protection you mentioned incident electal property rights protection. how is that going to work? how does a company move some technology overseas and not have it ripped off inspect how is that going to be protected? >> that's a very good question. we have a whole series of disciplines in here that first and foremost go to the enforcement of intellectual property rights requiring countries to have laws and to enforce those laws to protect copyright, protect trademarks, protect patents, you know, as appropriate. we have got a mechanism for ensuring that -- whether it's in the creative industries, laws

against cam cording people walking into movie theaters recording a movie on their cam corders and selling it immediately on the internet. we've got rules against downloading illegally material from data lights or from cable. we've got rules to make sure that the digital environment -- the first trade agreements deal with the digital environment, to make sure there's a free and open internet. >> so service based in singapore but serve clients in malaysia. >> right. you don't have to move your business from the u.s. to one of these markets. you can put your -- >> what you require. >> exactly. right now we're seeing one of the great threats to the global economy, i think particularly the 21st century global economy is the vulcanzation of the internet. the effort to use digital protectionism and tpp puts a major stake in the ground about keeping the internet open and free.

>> ambassador barshefsky, china is not part of the tpp. is that a problem? >> well, look there are a couple of aspects on to that. one is that china is the major player in the asian region. it's the center of most supply chains in asia. so i think with tpp companies need to think about rationalized supply chains potentially reorganizing their supply chains. but china is absolutely critical in that respect. it is also the major trading partner of almost every one of the tpp countries. in excess of the united states and in excess of other countries around the world. but one of the big questions is how to reconcile tpp with the china not in the tpp, but such a

major force in the region. and it seems to me there are a couple of different things to think about in that regard. one is eventually china joining the tpp that obviously could only happen if it could come up to the very high disciplines in the tpp that mike and his team have set out. another is for the united states and china to agree on certain modifications of china's current regime to make it over time more compatible with tpp standards. a third is to take the agreements that china is in in asia, which is u.s. is not in which includes a variety of agreements with the asean countries as well as the new agreement being negotiated now, initials rcep, and decide that over time those agreements ought to either merge with tpp or find

some means of harmonization or accommodation between the two to better rationalize, if you will the asian region. i think the thing that we want to be careful not to see is an asian that is developeded into two trading blocks one headed by toous one headed by china. and the reason i think we want to be careful not to see that in the longer run was that if countries in the region are asked to choose as unfortunately, the u.s. set up in part with the asian infrastructure investment bank, the answer will not be favorable to the united states. so i think that it's going to be very important ultimately, to find a way for china to work with this agreement this agreement to work with china using some of the mechanisms that i just outlined. >> so china presumably has been back channeling a little bit to try to influence these

negotiations. is china prepared anytime in the near future to make the kinds of concessions that you're talking about, we're talking about restriction from state-owned enterprises, intellectual property rights protections that china might find onerous. is china anywhere close to being -- >> i don't think china is close now, but i do think that as it restructures its own economy to move increasingly from an investment investment-led and export depend economy to the economy that is more balanced toward domestic demand led growth, for example and services china might find it in its interest, at least in part, to deal with the tpp countries on a tpp basis. those are decisions china will have to make. they aren't going to be made

soon, in my view. but it's not impossible that china would begin to move up the scale, if you will of these kinds of agreements. when we did the china wto deal it was inconceivable china would have made the agreement and restructured the entirety of its economy the way it did. before it did. so when china makes the decision -- >> you could not have made these expectations in the tpp during the wto negotiations? >> no. no, no, no. but, of course, china was a command-and-control economy, very, very small, and a minor contributor to overall global growth at the time. so all i'm saying is that when china decides to move in a point of view direct, it can do so quickly. it has a way of driving consensus fairley quickly, even

though consensus is still needed. and over time, i think we may see them move in a more positive direction. right now the direction of china with regard to multi nationals is more negative, even hostile to what it was five years ago. >> a lot of democrats and a lot of unions say this is a job killer. this is just one more open door for job out migration from the united states. if we're thinking about wage stagnation in the united states over the last 15, 20 years, this kind of agreement is what has facilitated that kind of wage stagnation it's going to create more wage stagnation and job loss. what do you answer? >> we're already competing as an open economy and a globe economy. we know every $1 billion of additional exports supports somewhere between 5,000 and 7,000 jobs and that those jobs pay up to 18% more on average

than noengs port related jobs in the same sector. firms that export tend to invest more in their r&d their productivity. so we view this as a way of creating more jobs and creating better jobs. higher paying jobs. we've also the department of commerce has done a study that shows as you reduce other country's tariffs, it has a positive effect on wages here and it varies from sector to sector but anywhere from 1% to 12% higher wages. so we see this very much as being supportive of what the president calls bioeconomics and that goes very much to creating more jobs and making sure that there are high paying jobs. >> so logically suggest that if there's equalization or tariffs come down in vietnam and a little bit more here, but we already have pretty low tariffs if i was a light manufacturer if i haven't outsourced it to china, costs are going up there, maybe i'll consider vietnam now.

in other words, i'll send my jobs over there low wage low labor cost manufacture there and ship the product back to the united states. that's not going to happen? >> again because we're already so open this creates incentive to keep your jobs here and export to vietnam a fast-growing economy where they're going to need capital goods, they'llny greater nutrition and higher agricultural products, better quality agriculture products they'll need services. and to provide them from here to these fast-growing economies around the world. >> currency manipulation has come up in the discussion. the auto industry in particular says wait a second why are we grocerying this when we have a japan driving its yen down, making exports cheaper in dollar terms and hammering us?