agreement, about creating a sing sl market across the atlantic. i simply don't think this is going to happen. that just leads me to my sort of conclusion of what i was going to say which is that i think this is an agreement that at least in europe is going to be won or lost on its capacity to generate more growth, more jobs, that's the politics of it. if you're going to end up with an agreement that has only small benefits to that quest, then i think you're going to see all the other thorny problems and perhaps controversial issues are going to magnify and become far bigger. it is sort of chlorinated chicken or what have you. if you want to go for sort of the big net benefits you need to sort of run with the stream of what you've seen from a lot of estimates that come on potential growth. you need to grow into those sectors that can deliver huge scale benefits by taking aware tariffs and taking away perhaps

some new type of trade restrictions that are there. you need to think about services, data, and how you can sort of use the trade agreements itself to throw some friction into global trade policy in the sense that you really want an agreement here, which can at least for the future divert trade in the sense that you push countries like china, india, brazil and other large economies in the world to become far more favorable to more of a western type of model of these issues. so if you find that sort of combination, it is going to be a fairly good agreement but i don't think we're going to have higher hopes for going beyond that. >> i alluded a little to the geopolitics which sean spoke of. phil, what do you make of the geopolitical arguments for the agreement? how important is it relative to the economics which frederick just articulated about? is it about security or is it

about writing the rules of trade before china and india and brazil do and is that important? >> i think it is both, both the economics and the geopolitics. i think it -- i'm going to take the bait a little bit on the 29th. because i think that links in with the geopolitics. i think one of the things that we've seen -- we saw this in tpp, that if you want to have sort of success in tackling the difficult drad agreement you can either make progress on very thorny issues or expands. tpp was supposed to conclude in november of 2011 when the u.s. was hosting aipac. it didn't. bring in mexico, bring in canada, bring in japan. one of the major elections is what will the britsish decide their role in europe is to be.

one way of strengthening is expand, get involved in something bigger. not perhaps as far as bringing the united states in as a member but it looks that way. it is an expansion project, a tightening of ties. brings its own complex inters. now we have a few new difficult negotiating issues and that's what we have in ttip as well. geopolitically it is important to have a strong europe. for a whole range of issues and challenges you want to have a strengthening and the thought is this is the kind of thing that can bolster. as frederick said, having some growth, having more jobs would cure many of europe's ills. it would make everyone feel better about not just whatever agreement you reach but then the union itself so it can then serve as a sort of bolster in

that way. but i think that was a lot of what was behind it because it was no shortage of venues for the u.s. and europe to address economic matters. that's part of what the challenge of ttip is. they've been addressing these things haul along. you had eight rounds of negotiations. . transatlantic economic cooperation council where they were doing bilaterals. so if you wanted to tack it will chlorinated chicken, there were opportunities. doing it in this way with a big agreement i think is largely to sort of reinforce not only is sort of europe intact but then this bond between the u.s. and europe which obviously shaken through a number of events over the last decade or two that they sort of advertised that that's stronger. which is great -- so long as it works. >> i think we're missing the point a little bit here in that there is not that much room to grow through a traditional trade

agreement. through all the rounds of gat, the fact that the u.s. and eu have pretty low barriers, whether it is tariffs or regulatory barriers. if the purpose of the ttip is grow out of youausterity and gr out of the great recession because we're going to get rid of chlorinated chicken or hormone beef, that's just not borne out in the data. data shows in the very best case scenario the growth that you're going to achieve is a little more than a rounding error. that doesn't appear to us to be enough of an advantage of the ttip to really live with a lot of these other things that working people are pretty concerned about. with the ttip agreement it is not really, oh, we're going to move to london because that is a

greatoff shoring ptform to get back to the united states but it is a lot hf questions about who is going to have the final say over regulations, how we're going to structure our economy. i think working people are very concerned that there's going to be even more corporate power in the new form of globalism because it was really not advantage advantageous ouou oo working people. >> doesn't it depend on what the rules are and where we liberalize what the terms are? i've spoken -- i've questioned global governance agreements. is there a good agreement? can great savings for business be spawned and passed on in the form of new investment to create jobs and lower prices and things like that? >> absolutely. there are too many questions

there. one is the transparency with which it is negotiated. if working people and other members of civil society are locked out of the room, but everyone knows the big corporate lobbyists are maybe not in the room but have the best access to the negotiators and the most influence over the rules that are written, those rules are not going to be written in a way that favors workers. secondly, businesses achieving more efficiencies is terrific in a vacuum but it cannot be argued based on current economic models, that that's automatically going to be shared with workers. what we see and not just in the united states but in the uk, in germany, in mexico, in south korea is that workers are getting a smaller and smaller share of national income. particularly as productivity goes up, workers that he's ' in not rising. if workers can prosper as the companies prosper, you will see

continuing skepticism and doubt is a the ttip as you saw in germany on saturday. >> follow-up. you envisioned work erers locke out of the room. i know from time to time the obama administration speaks with organized labor. do you feel that there's not useful communication that the current model doesn't work to give workers a say? >> it's not really about communication so much as about influence and balance of power. certainly there are labors of -- amongst the 600 or so advicers. about 30 of them represent labor. just numerically you don't have a fair representation in regards tots number of workers in america versus the number of businesses in america. but more important than the numerical representation is the impact, the influence and the effect. certainly the obama administration has a very open-door policy.

we present issues. we have meetings. they take our phone calls. but in terms of our proposals translating into what's put down on the negotiating table and at least trying for the things we're asking for, we don't see it. >> let me just sort of contest that idea a little bit. globalization trade deals deliver benefits for the economy when they expose economies to more competition. that's the main driver of gains from global trade and trade agreements. problem we've had for the past 25 years is that we haven't seen any sort of trade agreement that's been able to push that competition much which is buy in the 1990 in america and europe when productivity growth was

actually accelerated going, more investment went into the economy where you had sort of a big boost in trade volumes. at that point you saw take-home pay for workerers. doesn't matter where they worked and how they worked. salaries were going up. ever since then we've been on a declining trend for productivity as a consequence pay hasn't increased that much. but the functional income distribution between labor and capital has been flat for 30, 40 years. it is not that labor itself is taking a hit and that capital is sort of feasting on the caucuses of what we are seeing is growing income inequality because skills are rewarded more than other types of skills in the modern economy which means that blue-collar workers have not seen pay go up so as much as in the past. but in order to shift into a different type of economy that

can expose economies of different type of globalization, that expose more economies to more competition and to transmit new technology and innovation at a faster pace, then we need to begin to return to trade agreements again and to design trade agreements that have the capacity to achieve that. >> celeste, do you want to offer -- >> sure. the data we're looking at does say labor income is down in comparison to the past so we perhaps are looking at different data. you talked about the standard economic models for trade agreements. not accounting for everything. part of what they're not accounting for is the movement of capital. so it is not just that u.s. producers are being outcompeted by an import sector. it is that whole factories are shutting down and moving and companies are deciding we're

going to produce overseas where it is cheaper and export back to the united states. that's quite different than the traditional model that we're both making wine and whoever's better at it should be the one that exports it. not only that, but we've already seen a concentration of capital since this era of trade agreements. more mergers, more acquisitions, less competition. so if we're talking about becoming more efficient and having more competition, we've got to look at the effect of trade agreements on that concentration and what that does not only to consumers but to workers who are trying to sell their labor in the marketplace. >> susan wants to the chime in. then i'd like to ask marjorie about business' perspective. >> it seems like we're talking about three different things that are clearly related. one issue is what's happened to the share of labor in terms of globalization and -- are trade agreements the proper place to address that problem given labor's declining influence.

so that's one. i don't know where we all stand on that. it would be interesting to see. the second thing is does labor have influence. i would actually argue, labor has tons of -- it's seen -- it's certainly heard, if you look at the labor rights provisions since they've evolved over time, certainly congress has to some extent tried to meet them as have various administrations. the question is why is that not working to help labor. then the third issue is process, right? how do we negotiate a trade agreement. who's in the room. is the process considered transparent and accountable, which seems to me an issue we should talk about at another time. but clearly is i think a very important issue because it is an issue about trusting governance. and if governance agreements, as i call them, are becoming ever more influential and ever larger with more countries and more sectors, how we do it is

important as what we include in there. i'll shut up now. >> marjorie, i'd like to you how focus is the chamber and business on the ttip and what types of it problems can it resolve for u.s. business here as exporters and u.s. multi-nationals in europe? >> thanks, dan, very much. thanks to cato for organizing this. i did rib down a little bit about the fact that we're having this very interesting conference on a federal holiday but clearly enough people are interested in the topicic that the room is nearly full. kudos to you for bucking the trend and going ahead and having us all here first thing in the morning. let me start by asking how many people in the room start from the premise that ttip is or can be a good thing?

show of hands. cool. how many of you start from the premise that under no possible circumstances could it be a good thing? all right. golly, where to begin. chamber has been a long time -- first off, let's back up and realize that the chamber, yes, it represents a lot of big businesses but we also, 95% of our members actually are small and medium sized enterprises. so the notion for starters that the chamber is only about representing big business is a bit disconnected from the reality of our membership. business is painted as -- i don't want to say the devil , bt

business is painted negatively in the application of ttip. why are we negotiating trade agreements? we're talking about trying to liberalize the free flow to have trade in goods and services and investment flows and agriculture, wherever we can. by definition, business has a stake and a fundamental role in why these negotiations are happening. workers have a fundamental role in them as well because they are employed by business. so this notion somehow that there is a dichotomy between what business wants and what is in the interest of workers and consumers, it strikes me as it is an unfortunate dichotomy. i think, frankly, what you see happening in europe right now in terms of the massive demonstrations, it wasn't just in berlin this weekend but in amsterdam as well.

i was in the hague last week and dutch officials are growing increasingly concerned about the trends in their country as well. i think that the debate that you see -- i'll come back to your question in just a second. the debate that you see going on in europe is much larger than what may or may not be included in this particular negotiation. it is a much more fundamental conversation about the role of business in society. and frankly, it is a much more intensive dialogue that's happening in europe right now. i think that in some respects at some point we'll get around to having that conversation. i think now that tpp's negotiations have concluded, we will pea start to see more of that conversation. the chamber has been an advocate for these negotiations even before the negotiations were negotiations. we began in i think 2010, 2011 with our friends at some of t

the -- some of the think tanks in europe to look at the potential benefits deriving from a comprehensive agreement, initially just looking at benefits of tariff reduction. from there the conversation grew to one about what could be the benefits extending beyond tariff reductions. the notion being, quite frankly, that in the absence of -- or the relative posity of monitoring fiscal options to promote jobs and growth, that trade liberalization should in fact be part of the solution. so we have been advocating for this for a long time because we do see the opportunity for greater growth in trade and in investment flows. practical reality is, as many of you know, because we're talking about in many instances mult

multi-national corporations, much of the trade that goes on between the u.s. and europe is intracompany trade. something like 40% of the trade that goes on across the atlantic is intracompany trade which means the companies are paying duties twice for goods flowing back and forth. i'm sorry, but that just creates unnecessary costs in the economy. i do think when it comes to regulatory cooperation, people talk about coherence. i'm talking about cooperation and coherence. our members do see something opportunities there. you have to stop and ask yourself why if european and american air satisfy the agencies can deem airworthy an airbus in europe and allow that to be flown here in the u.s., and have a boeing aircraft deemed airworthy by the f p.a. a and therefore flown without being retested in europe, why is

it, if we can do that, we have to have -- why is it that -- i don't know if it is mattel -- i think it is mattel -- forgive me if i'm wrong -- why do they have to make two different versions of a baby rattle? because the standard in europe and the u.s. is different on the level of decibels that the rattle can make next to the baby's ear. >> can i interrupt? this issue is a big issue. it is identified as the source of the greatest gains and the european left likes to talk about it as a race to the bottom to u.s. standards. and the u.s. right likes to talk about global governance and exceeding to these ridiculously economic squashing standards. clearly there is a middle ground. you identified rattles. it just seems to me all along that business should do a better job of getting out in front and coming up with example after example after example of products where two sets of

standards or regulatory schemes need to be complied with that achieve the exand the same safety or environmental or labor protection goal, whatever it is. are you guys compiling a list? >> well, in fact we are. it's interesting that you ask that question. look, there is no doubt about it, especially in europe, business hasn't done enough to articulate the benefits of these negotiations. in the u.s., i would say we're doing a better job but we're doing it in an environment where nobody's really listening yet. let's face it. the level -- the attention span of the american public is fairly limited. and to the extent people are thinking about trade right now, if they're thinking about it at all, they're thinking about tpp. and i think that the conversations that we're going to be having about trade over the next number of months, as it relates -- as we saw over the summer with tpa, being in effect a referendum on tpp and that we

will now have going forward with tpp is a different set of circumstances because the relationship between the u.s. and the asian countries with whom tpp has been negotiated is fundamentally different than the relationship between the u.s. and europe. should the business community be doing a better job here? you bet. do we need to get more information out there? you bet. i'm not spending enough of my day -- and in fact this is my day job -- trying to make the case for why improvements in regulatory cooperation, whether it is sectoral or whether it is in terms of a broad grframework for dialogue is important. i need to do a better job explaining why you do need an effective state investor dispute settlement mechanism where there is an "i" in the middle of these situations and where investments plays such a significant role in the bilateral relationship. yes, there is more business

should be doing, but i also think it is more difficult in some respects to make the argument, if you will, sort of straightforward business argument for why this agreement is needed when tyou're faced wih what i would describe as more fundamentally emotional arguments. it is easier to raise people's concerns about things like -- i'm sorry, i have to come back to it -- chlorinated chicken or race to the bottom on regulation or lack of transparency. a number of very fundamental concerns that derive i think from something that extends far beyond really what is the ttip negotiation, has much more to do with the basic role of business in society. >> thanks, marjorie. you touched upon one of the hot-button issues, shawn mentioned ifds. that's an issue that we at cato

and the chamber don't really see eye to eye on. axel has written quite a bit on it. would you share with everybody why it is problematic, share your thoughts. i think a lot of people here have thoughts about that so this could be a good debate. >> sure. yeah. thanks very much for the invitation. it's a great conference. now investor state dispute settlement. that's the topic if i look at it from a german perspective, which is in the center of the debate. investor state dispute settlement procedures or mechanisms are part of most of international investment agreements. there are more than 3,000 of these agreements. essentially it is about foreign investors have is the right to bring claims against foreign states. right? and that's very unusual thing in

terms of international law because if you think about the wto, the world trade organization, only states have the right to sue other states. that's a very unusual thing in international law. of course, there are many issues, many criticisms you can have when it comes to isds. only big and foreign companies can bring those claims. not something small and medium size enterprises can use. there is a question of the impartiality of the arbitrators. there are arguments that arbitrators have been counselors before, so there is this whole question of impartiality. the big issues also that the decision of these arbitrary tribunals are based on very wide concepts and wide vague

provisions like fair and equitable treatment. our colleague has wrote about that. and just to mention last point, our calculations show that strong treaties, strong investment treaties, those that include isds provisions do not have an additional positive effect on fdi. there is a big question market in terms of effectiveness and impact. now we go to the proposal by the commission, i think it is an intriguing proposal. no doubt about that. shawn talked about it. there is a point when a panel of judges, there is an appeals mechanism which is missing so far. it has increase cd transparency and so on and so on. although i think it is an intriguing concept, intriguing proposal, i think it is missing the fundamental question -- why do you need an additional layer, if you want, of international

law in a agreement negotiated by two countries with rather mature domestic legal systems. my proposal was just leave it out. right? it is perfectly possible to imagine a free trade agreement, investment agreement between two industrial countries without with isds. you can focus on lenforcement o protection standards in domestic legal settings. that would be my idea. and but of course another question we should think about is -- in case there will be no isds in ttip. when this be taken up in other investment treaty negotiations with the likes of vietnam, china, japan and other developing countries? so that is one of the big questions. and also that's one of the big questions when it comes to the

reform of the international investment regime. so what kind of impact will this proposal by the european commission have beyond ttip. >> anybody have -- ya. >> i think you can have two perspectives with be a constitutional perspective and more a pragmatic political economy view where you try to figure out exactly what was the question to which the answer was on isds. from a constitutional point of view, i think it is perfectly obvious. its system which doesn't conform to basic constitutional principles and there is actually a very easy way to solve this which is for europe which we have been arguing for which is basically to allow complainants, whether they are foreigners or flash nationals to reference international agreements when they go to court. period. sadly, there are a lot of people

arguing against that, both on sort of the part of european governments who simply don't want to have international agreements to become part of sort of the legal and regulatory fabric in that way. they want to have the opportunities to sort of avoid having laws to have consequences for them. or international agreements to have consequences. a lot of the people have been arguing against isds don't like these either, because what they really would like to get away from is the fact that international agreements should have consequences, even little consequences. so that's the sort of -- i think it is pretty easy to solve that problem if we would really like to sort of make the system more did shall to conform to basic constitutional principles. now let's go to the much more difficult issue which is about the political economy and to understand why did these sort of agreements emerge, why didn't they conform to basic

constitutional principles to start with, and what's the role that they have played in the broader landscape of various types of international agreements, trade investment and many other issues that have been negotiated in the past 30, 40 years. well, the simple answer is that isds is a sort of safety valve for a host of different type of agreements where it has allowed governments to basically ignore or at least avoid settling the difficulties of previous agreements which is to detail the consequences for regulations and laws in those countries that have contracted party to them. so absent that sort of safety wall, we are have to become far more detailed and prescriptive what the consequences for loss and regulations that international agreement should have. we need to in they go ate muneg

more on the books in the country not on broad sort of textural principles that you have in the international agreement and that's a different type of international negotiation we are looking at. if we take away the safety walls then we have to become far more preskrikt prescripted, lock in governments in greater detail than exist. >> i'm a bit more favorably disposed towards isds. maybe imanticipate not grasping the constitutional front. if you think about trading goods, for example or other sort of regulatory things, if you say i wonder whether the u.s. approach to foreign sales corporations is conforming with commitments that were made in the past. we don't say we'll just take that up in u.s. courts or sea see what the u.s. administration says. there is a broader body that

arbitrates this. i think the case is pretty clear that there is an investment component to trade that is a very important thing. this is not tangential. marjorie just gave statistics how linked these are. then i guess the question of how does one address this. now i think on investment matters, the real challenge of the ttip context is that idsd looks slightly out of place because it is largely a measure, say what happens if you have concerns about the other country's legal system. having some sort of redress is good for investors but you could say, your legal system looks pretty good, so does the u.s. legal system. what happens when you talk about vietnam or when you talk about peru and peruvians will krit

si criticize their own legal system. this is not casting aspersions from afar. in the united states the president plays a very big role in u.s. trade policy that we have seen and will continue to see the difficulty of moving trade agreements through congress. part of how this is accomplished is you keep agreements relatively consistent. people will talk about slight changes of the margin but not sort of redoing agreements so you re-open discussions all at once. i think there's two reasons then for why you'd want to include something like this. one is the sequential reason which is that you have a precedent. fine, maybe we don't think it would be used very frequently. i think the question you raised earlier, is this a fundamentally bad thing or is it all in how it operates. other thing is, as shawn mentioned in his opening remarks, if we are ultimately aiming towards sort of a grand harmonization of all this where we get away from the ravioli and noodles and have our big

lasagna -- due credit -- then it is going to be far easier if the pieces fit together from the start as opposed to a bunch of disparate rules that need reconciliation. >> what about the hypernational treatment aspect of this? we're giving foreign investors two paths to resolve their issues whereas u.s. investors at home have one. and visa versa. is that not precedent setting? is it not problematic in some way zp. >> i think it will depend entirely on how this operates. it is like having an appellate mechanism. you could give somebody two cuts of the question. . one is sort of an automatic overturning, then that's problematic. if instead this really looks for problematic instances and says only in those rare circumstance where something went very wrong, this is much less troubling. >> so i think when we're looking at first principles on this we've never actually had any

empirical data that foreign investors are distesystematical discriminated against before the u.s., for example, has got be into an isds agreement with any country. that's where you start, not just people think peruvian courts are bad. if they're bad, they're bad for everyone who lives there, not just the foreign investors. so you are trying to solve a problem that we've never demonstrated exists in the fairs place. and i think first we need to show that that problem exists, and then say, is isds, given what it is, the best solution for it, or even the investment court system and. now the commission has now proposed. because we haven't talked about that there are plenty of other options. state to state dispute settlement as you settle all other trade disputes, whether it's in trade agreements or at the wto. there's political risk insurance. and it is not -- there is a disparity about how domestic investors are treated versus

international investors. but it is also the rest rf society. we have to look at how isds privileges one form of rights and those are property rights. versus all other rights. so to take an extreme example, this is from a paper by gus van harten, the canadian professor. if the owners of a foreign investment are tortured by a host government. right? quite extreme. those investors can use all the domestic systems at their disposal. plus, isds. if the workers of that foreign investment are tortured by their own government, they can't use isds. they have to go to the domestic system. so at what point have we decided that in terms of it global governance there's one right that's quite privileged and all other rights have to use whatever's available to them

regardless of what system it is. >> seems like everybody wants to say something about it. this is a hot topic. we're running short on time but i'll go to you. but maybe we can put it in the context of in the tpp there was the tabco carve-out. talk about precedent setting. tobacco's carved out. what does that say about the precedents being set for other industries getting similar discriminatory treatment? anybody. >> i'm so glad there's at least one other person up here who actually thinks isds is not it the most demonic elements of these negotiations. look, let's be very clear on the fact that what we're talking about here is again what i would describe as a relatively

emotionally driven debate about what is a pretty fundamental ly basic construct of international law and precedent that's been in existence for 50 years. it isn't the case that a company can sue a government if their employees are tortured. there are very strict and narrow definitions on when isds -- when an investor can in fact pursue the route of isds. it is a very limited number of circumstances in which contractual obligations have been violated or there's a perception of violation. it's interesting to me that in this whole conversation so far, the one thing that we haven't heard, which in fact is what's driving most of the conversation in europe, is this notion that somehow it's corporations that are going to be writing regulations. and that they're going to take

away government's right to regulate. and here again, the practical reality is that if you talk about the tobacco case, i'm not going to speak to the specifics of the case in australia because we don't yet know the outcome, but the practical reality is that somehow the notion that this mechanism will allow a company to force a change in a government's regulation is simply a misrepresentation of the facts. >> susan. >> well, i think we need to, again, rephrase where we're at here. the first question is do investors deserve protection and then the second question is how should that system -- what should that system look like. it seems to me that in countries where the rule of law is good, do you really need a separate legal system? and what does that do for rt rule of law? for example, united states

obviously, we do have systems. right? we have mediatory systems as well as the legal system and the law says that at times you have to go through the arbitration system as opposed to the legal system. for example -- okay, i won't get into the detail of that. but what we've seen i think is real abuse by corporations of that system, and that i think is what is fueling discontent, as well as the notion that do investors deserve this separate legal system. so let's look at that and why there was the tobacco carve-out. if you look at, for example, that canada eli lilly case where a government's policy spa is to ma -- space to make decisions related to intellectual property protection has been challenged by a company, a company believes its patents deserves that protection and it has used multiple venued to ts multiple venued to t to try to that straightened out. it seems to me we need to ask,

does this need to be in this particular trade agreement. to your point, phil, about precedent. the precedent issue here is really interesting, because the united states does include things it never included before in its trade agreement, so it evolves over time, but it also takes things out when they're not relevant. and i would say, while a trade agreement with pakistan, you probably would want to have investor state dispute settlement. do you really need it, just for the reason to have the precedent in the next trade agreement for eu/u.s. and i think given concerns about the way that system has been used over time, we should really be asking that question. >> dan, i'm sorry. i just got to say -- >> real quick. >> okay. really quickly, let's back up and realize the whole conversation and the whole sort of kur if you hafuffel has to d

negotiation and that's the u.s. you have to ask yourself why. now there is some question let's go back and look at it, is what's been written on paper able to be interpreted in a way that's comporting with the sort of basic principles that are reflected in the commissioner's new proposals. i think you have to step back and recognize part of what's driving this is not a rational conversation about the upshidz a sides and down sides of trade. why not have it? how can you pick and choose which agreements you're going to put it in? >> you have any concluding remarks on this topic? >> yeah. again on precedents. that's also it relates to the bigger debate we have about ttip because that's increasing the argument, our policymakers are

trying to sell ttip. right? we need this in order to set the global standard. with regard to isds and ttip, a lot of attention is on china. right? we need isds because we are negotiating these two treaties, the u.s. and the eu with china. but we are forgetting that china's doing this since the late is t late 1990s with. they include isds in their treaties. they are interested in having these things in their treys. china just recently concluded a treaty with australia with isds. you may know australia is one of those companies that excluded isds from a treaty with the u.s. so i think this precedence argument is a weak argument but this then relates to the whole debate about ttip. we are having trouble selling ttip on the basis of how much

exports will it generate, how much income will it generate. so we are tempted to use these more geopolitical arguments. china bashing arguments, in a way, to sell ttip. >> well, this issue is very prominent. i don't think we'll resolve it here. if you want resolution, go to our website at cato and read what simon and i said. obviously we won't get to all the issues i hoped we would, but i find these negotiations -- i find the european negotiators to be on my side because they're troo trying to open up my market. they want to get to the federal jones. they want jones act reform. financial services reform. these are things that are important to u.s. consumers and businesses. so what are your thoughts? what are your thoughts, phil,

about some movement in those areas? the u.s. going to create reforms on jones act, government procurement, financials services totally off the table. what should we expect and would europe walk away from a deal that doesn't include reforms there? >> i'll let our european panelies speak to whether or not they're going to walk away. i think you've hit on the core challenge of the ttip which is as i knowed, it is different from most other trade agreements that you take up in that there's been so much liberalization that's taken place in the past. that's wonderful. you have a healthy trading relati relationsh relationship. we talked about why you'd want to have this bonding if you pulled it off, but the problem is the areas that you just cited are the traditional highly intractable trade issues. yes, it would be nice to change

the jones act. >> many of them on here are pretty intractable. >> i don't advise anyone to hold their breath until the jones act is changed. gmos. that's the problem. it is a whole bunch of these things that have survived sort of time after time where people look for deliverables for some bilateral and you just couldn't move on these. i think that's what we saw with the agenda setting on this right from the start when you said audio visual with france. then in the u.s., what do you do on financial regulation? as you started -- it was a great idea to have us work on some things but the remaining issues are really tough and it makes for a difficult negotiating dynamic because often shawn was talking about whether one was in the mid game or late game. there is often this sequence where first let's tackle all these easy issues. we'll build confidence, work together, you can note all the progress we've made. when it comes down to it, we'll hit the hard ones. the problem is with the ttip, you hit the hard ones right off

the bat. there was no beginning game. but get right to the difficult issues. yes, it would be great to tackle these things. there are entrenched political interests that are behind them and it is why we haven't tackled these things. then you're going to have a question which is either you sort of summon the political wherewithal to overcome those which would be really remarkable if they do, or you -- well, you summon the wherewithal to overcome them, you come up with something that's sort of much more modest than you first intend and declare victory, or you walk away. it goes with the difficult choices for the ttip. >> anybody else? >> i think the reason why some of these have stuck around all the time as you've said, they're really politically intractable. but in some sense, there's a reason for that and maybe it is not necessarily a bad thing. i mean the other option is to have absolutely no regulation, right? at the extreme?

so that there is no conflict over what that regulation is. and anything goes. if that's not what we're trying to set up, sort of super regulatory council that can sort of whack a mole and bat down anything that's not the least trade restrictive mod ol, that's where you're getting political push baeshg a pushback and thaet's the idea that citizens want some say in what their economy looks like. in some senses some citizens want greater government intervention in the economy, cato would say less government intervention in the economy. but these are really, really important questions. and it really gets to again i think marjorie's question when she said raise your hand if you already think ttip is a good thing and you're for it. i sort of went half-way up. we're in the sort of could be camp. i think this again gets back to the question of power that we often don't want to talk about in trade negotiations. if you're already for it, and you don't have any idea how it is going to come out, that means

you're pretty confident it is going to come out in a way that benefits your interests. i think for working people, we're theoretically for it because we haven't yet seen one that really comes out that takes the proposals that we put in and they get put in to place. so it is a really critical, critical question about how confident you are that your influence and your power is going to determine the outcomes. >> thank you. >> marjorie? >> yeah. so you asked the question about some of the more intractable issues. i can tell you that, like cato, the chamber actually sides with the europeans on a number of these issues. we do think that financial services should be included in the regulatory portion of the conversation. we do think that there is government procurement liberalization to be had, although i don't think it is purely a european offensive interest. i think it is actually a u.s. offensive interest as well.

we do support the notion of lifting the ban on crude oil exports which is obviously one of the drivers for including an energy and raw materials chapter from the european perspective. so i thinkperspective. so i think we are, like you, interested to see liberalization occur not just in europe, but there are things that have to happen here as well. i would say -- i just have to say very quickly, i don't think is celeste was saying this is what we're doing, that is to say, advocating for the elimination of all regulation, because that's not what business is advocating for. what business is advocating for is a structure that allows for dialogue among regulators to identify ways to, where possible, and it isn't going to be possible in every instance, but where possible to reduce the costs associated with regulation. no one in this country is any more interested in reducing

protections for workers or consumers in the environment than they are in europe. we have the same level of concerns in this country. so the notion -- i don't think you were saying this, but i just want to make it very clear that business is not saying in the context of this negotiation, we want to use this key element of regulatory cooperation as a way to simply eliminate or have a race to the bottom on regulation. >> bill? frederick? >> just very quickly, celeste said citizens want to have a say, but i will say on many of these issues, according to the chicago public opinion surveys, you get strikingly strong numbers in terms of trade, even when you ask about things specifically like ttp. so it is much more interest group politics. >> yeah, and just to follow on that last point, i think that's

true. i don't think anyone should be afraid of having sort of a big, broad, principle debate about trade. i think the point here is that when you actually look at the political economy of trade liberalization, you're not going to find many places in world history where external liberalization or external globalization has pushed through an enormous amount of deregulation. what you will find is that external negotiations were not informants, they have managed to lock in patents open to trade domestically. every now and then, perhaps pushed countries a little bit to open up more. but trade agreements, they are broadly defined by the bigger sort of trend on political economy inside each country. and right now, and for the past years, we're simply not on a big deregulatory trend. we're on a trend where

regulations at some point are increasing, but i think more importantly for trade negotiations, are becoming ever more complex and ambiguous by design, that regulators have been afraid of doing regulations simple, transparent and readily understandable for everyone simply because they don't want to face up to the consequences of the offense regulations when it's applied. last week they were making the poipt point of how the slew of financial regulations that have emerged has created a lot of uncertainty under the quoting of one financial regulator who was explaining some of the compliance philosophy behind financial regulation basically said we call the banks in, we line them up, and then we shoot one of them so the others are going to get the message.

>> ouch. >> all right. that is not a cato-endorsed policy, i'll have you know. susan? >> i want to make three points. point one, perhaps it's worrisome, but i don't think that in the future, labor law will be happy with trade agreements. i don't think they're really meant to address the problems of workers, which is both unfortunate, and i think what we've done over time is try to come up with some fixes. so in the work that florence and i participated in, something for the ilo, we came out with some new ideas but they're all out at the margins. they're not really, in the end, going to change the situation, yet i think the situation must be changed. that we need to find ways to empower workers in the global economy. second point, it's -- what i love about ttip and ttp, the

public seems more supportive of trade, but it's also been revealed that our legislators are ever more -- i don't want to use the word protectionist because i don't know what word to use, but skeptical because of all of this interest group pressure. yet i'm really hopeful as i see trade agreements evolve over time because i do think we need to find common ground on spillovers that affect people's privacy and quality of work and the environment, et cetera. as the process becomes, i think, more transparent, i see more people engaged in the debate. and i think that that is a good thing. i hope that more people will learn about the global economics, global equality. i hope having these debates will get people thinking about it. that doesn't mean the pundit

class isn't -- of which i'm probably one -- isn't involved in skewing the debate in some ways. but i still think we have more opportunities to modernize trade policy making to make it more accountable, and that's a good thing. the more you have that feedback between government and the governed, that's a good thing. and what the united states does affects europeans and vice versa. just as what china does affects south korea. >> susan, you brought a very thoughtful essay on our cato on-line forum about how to address labor concerns. i urge you to go read those. we're just about out of time and i don't want to be accused of dominating the questioning, so i'm going to ask if anybody has a question from the audience, feel free to raise your hand and ask it. no? okay. yep, this woman right here in the middle. please identify yourself and

adjust your question and make it a question, please. >> i thank you for your presentation. i wonder in times of capitalism, we are talking about free markets. you have big visioners that present in small numbers and the usa have big corporations and have small people. usa didn't really -- [ inaudible ] >> i just wondered if we can say regulations in global trade, we cannot have a good law in united states, implement a good law to protect all the people. so how are we going to handle this global situation in this

global trade agreement? >> thank you. i think she was addressing you, margie. >> so the u.s. chamber of commerce doesn't represent everyone. the u.s. chamber is an organization that works with business. among our members, we have businesses of all sizes and across all sectors. we have u.s.-based head quartered companies among our members, we have european-based headquart erd companies among our members. i'm not entirely sure i understood the point you were making about the chamber. the point you were making about regulation and how can we propose to promote better regulatory practices in an agreement like ttip if we don't ourselves have entirely

effective or adequately representative approaches to regulation in this country, i think, is technically the subject for a much, much longer conversation. i think it's a fair question, but i don't know that we have the opportunity to answer it here. >> no, i don't think we do. i must say we are out of time. i got through about half the questions i want to ask so i've got to do a better job of timing things in the future. we're going to go to a coffee break now and i think we're going to reconvene here at 10:30. please help me in thanking the panel. [ applause ] c-span has your coverage of the road to the white house 2016 where you'll find the candidates, the speeches, the debates, and most importantly, your questions. this year we're taking our road to the white house coverage into classrooms across the country with our student cam contest, giving students the opportunity

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