that's more than double what apple, intel, and google spent last year combined. this budget marked a strategic turning point for the department of defense. the third offset strategy driving a wide range of new, innovative technological investments in order to advance and sharpen our military edge. we're making these investments because we aren't yet exactly certain what or where this area this offset is going to come from. it could be one area of technology or several. remember, previous offset strategies were generational successes. reflections of the security environment of their ear raz, and were only recognized as such after the fact. today speed and agility are key. and because of the world we live in, the next offset will not look like the previous ones.

it may not even end up being what we might consider a traditional offset strategy at all. that's why we're seeding these investments in lots of different technologies, so we can see which they germinate, how they can produce, and how to use them most effectively. in addition to these critical investments, it's important to note how dod is innovating technologically how we're innovating technologically, by creating technologies from within by bringing in technology from without and by repurposing technologies and capabilities we already have because different entities are focused on each. within the defense department, we have dozens of dod labs and engineering centers across the country, each one home to great technological innovators, both civilian and military who work closely with very innovative defense industry that's long supported us and kept us on cutting edge.

and they're continuing to do so today across a wide range of critical technologies. for example, our navy labs are developing and prototyping undersea drones in multiple sizes with diverse payloads, which is important, since among other reasons, unmanned undersea vehicles can operate in shallow waters where manned submarines cannot. also our army labs are working on gun-based missile defenses which can help defeat incoming missile raids at much lower cost per round than more expensive interceptors imposing higher costs on the attacker. in our air force labs, we're in your rowmorphic computing, that is hardware, software and systems is inspired by the working mechanisms of the human brain which offers the prospect of overcoming limitations of current computer architectures and enabling information superiority in air, space and

cyberspace. as i said, america's innovative defense industry is a key partner in this. because remember, we don't build anything in the pentagon. that's not the american way. the soviet union tried that, and it didn't work out very well for them. today, with more technological innovation happening in the commercial sector, we need to be able to identify and do business with companies outside our traditional defense orbit as well as those within, and welcome them into our defense technology community. that's why last year i created our defense innovation unit experimental or diux, to help bid bridges with startups and other commercial technology firms located in innovation ecosystems across the united states and help us more quickly adopt technologies that can help our troops accomplish their missions. diux opened its doors last august with a west coast office in silicon valley. and since then, we iterated and launched diux 2.0 in may and

opened a diux east coast office in boston and established an outpost in austin, texas. one important area where diux recently solicited proposals was in microsatellites and advanced analytics. leveraging the revolution in commercial space and machine learning to transform how we use space-based tools and advanced data processing to provide critical situational awareness to forces around the world, and also have added resilience, by the way, to our national space architecture. meanwhile, under the guidance of the strategic capabilities office or s.c.o.w., we're changing and adapting how we use existing platforms and technologies already in our inventory, giving them new roles and game-changing capabilities to confound potential opponents. as some of you know, i created s.c.o.w. in 2012 when i was

deputy secretary of defense, putting will roper, by the way, in charge of it. i lifted the veil on several of its projects that we're investing in, such as the arsenal plane, the new anti-ship capability for the sm-6 missile, and swarming drones on the sea and in the air. in fact, this technology took a large step forward just this week. you'll be hearing more about that in the months to come. a prominent theme of s.c.o.w.'s work is spearheading creative and unexpected new ways to use our existing missiles and advanced munitions across varied domains. one example i want to highlight, something that we haven't talked about publicly before today, is s.c.o.w.'s project to develop a cross-domain capability for the army tactical missile system. or atmss. by integrating an existing seeker onto the front of the missile, they're enabling it to hit moving targets both at sea

as well as on land. with this capability, what was previously an army surface to surface missile system can project power from coastal patients up to 300 kilometers into the maritime domain. going forward, as these and other investments yield new weapons systems and war fighting capabilities in the coming years, some of them much sooner than you might think, they'll need to be demonstrated so they're effective in deterring future conflict. it will be important to ensure they're allowed to run their course. we have to protect the most promising and integrate those concepts and ideas into our programs, rather than let them be uprooted just because they're new, which is always a tendency in tight budgets. of course, how we use technology is just as important as the tech itself, if not more, which is why we're also investing aggressively in operational innovation. our plans and operations must

account not only for the evolving challenges we face from our competitors but also the opportunities afforded by new capabilities as they come online. so technological and operational innovation must go hand in glove. here the strategic imperative is rooted in had the fact that while we spent the last 15 years innovating expertly, and i'm very proud of it, in how we kill terrorists and counterinsurgencies, we did so to some extent at the expense of our expertise in full spectrum war fighting. other nations have gotten good at that over the years. and in some cases they've been devising new methods to try to counter our advantages and preempt us from being able to respond, not just by developing high tech weapons, but also by crafting operational approaches such as hybrid warfare techniques. for these reasons, we've been reinvigorating our training across the services to return to full spectrum readiness.

and we've been rethinking how we operate to find new advantages against potential adversaries, including by changing and adapting how we fight with friends and allies. for example, in europe we've been working with our nato allies to adapt and write a new playbook for a strong and balanced strategic approach to russia, one that takes the lessons of history and leverages our alliance's strengths and new networked ways to counter our new challenges like sib ber and hybrid warfare to, integrate conventional and nuclear decertainties, and adjust our posture and presence so we can be more agile and responsive. in the asia-pacific, we've been modernizing our alliances, strengthening new partnerships and helping to build a principled and incluesive regional security network. this rubber meets the road in how we're revising our actual plans for potential operations themselves.

we're always updating our plans and developing new operational concepts to account for any changes in potential adversary threats and capabilities. but we've also updated our core contingency plans to make sure they apply innovation to our operational approaches, including ways to overcome emerging threats such as cyber attacks, any satellite weapons and any access area denial systems. and at the same time we innovate in our plans to counter these conventional threats, we're also ensuring that with respect to potential confrontations with nuclear powers, we continue to sustain america's nuclear deterrent as we recapitalize our nuclear triad and infrastructure. overall, we're building in modularity that gives our chain of command's most senior decisionmakers a greater varieties of choices. we make sure planners take into

account how to prevail if they have to execute their plan at the same time another contingency is taking place so they don't fall into the trap of presuming the one they're planning for would be the only thing we would be doing in the world at that time. we're injecting agility and flexibility into our processes because the world, its challenges, and our potential opponents are not monolithic. we have to be dynamic to stay ahead of them. and we're prioritizing trans-regional and trans-functional integration in our plans, which is imperative considering that conflict doesn't segment anymore. the challenges we face today are less likely than before to confine themselves to neat regional or functional boundaries. this is one of the goldwater-nichols reforms i proposed here at csis nearly seven months ago. and it will be accord mated on buy half by our chairman of the joint chiefs of staff, general joe dunford whom by the way we're very fortunate to have in

his job, representing him to president obama was one of the best decisions i've made as secretary of defense. the result of this is that we've revised all of our war plans to ensure that we have the agility and ability to win the fights we're in. the wars that could happen today and the wars that could happen in the future. and while i can't say more and if any audience can appreciate why a csis audience can, i'll tell that you i'm very proud of this evolving family of plans. innovation and technology and operations are necessary for us. but they're not sufficient. because at the pace today's world demands, we can only succeed in these by being an agile organization that nurtures innovation in all its forms. so we're also investing in innovative organizational structures and practices. the strategic imperative here is that dod must be an organization that better fosters innovative

thinking and ideas that can help us stay ahead of our competitors. the defense department is one of the largest organizations in the world. and as many of you know well, we can be pretty bureaucratic and slow moving. it's easy to default to the status quo of continuing to do things the same way we've always done them. but we can't afford that in today's security environment. we need to be a place where thinking differently is welcomed and fostered. not where good ideas go to die just because they happen to be new. over the last few years, i've created a number of entities to help signify and drive innovation throughout dod, including skow, and the defense digital service. i most recently created the defense innovation board to advise me and future leadership on how we can keep growing more competitive. as you know, the defense

innovation board is one of several advisory boards that report to me, each with a distinctive mission and membership chosen for a distinctive kind of expertise. the defense science board of which i was long a member is comprised of scientists and technologies with deep expertise in weapons systems and defense r & d. the defense policy board on which i also served and which by the way we're grateful that john hamry chairs, has a membership with exceptional foreign and defense policy making experience. the defense business board, to name another, has members who understand dod's vast business enterprise and practices. defense innovation board has a different membership and a different role. its members were chosen for their record of innovation outside of the defense department. and for their ability to suggest

innovative approaches that have worked in their leadership experience and that might be applicable to us. the innovation board is chaired by google alphabet's eric schmidt, and its membership represents a cross-section of america's most innovative industries, organizations, and people, people like amazon's jeff bezos, linkedin's reed hoffman, code for america's jennifer palka, astrophysicist neil degrass tie sorngs mike mcquaid from united technologies and retired admiral bill mccraven, now chancellor of the university of texas. i've charged them to help keep dod imbued with the culture of innovation. the people in our defense enterprise were willing to try new things, fail fast, and itier rate and to make sure we're always doing everything we can to stay ahead of our competitors.

at the outset i gave them the very specific task of identifying innovative private sector practices that might be of use to us in dod. along the lines of our hack the pentagon pilot program, which invited hackers to help us find vulnerabilities in our networks and report them to us, similar to the bug bounties that several of america's major companies already routinely conduct, while this approach to crowdsourcing cybersecurity is fairly widespread in the private sector, our use of it in the pentagon was the first time in the entire federal government. and it was so successful, we're now expanding it to other parts of dod. this is the perfect example of the kind of recommendations i am looking for from the innovation board, things that are out there and that might be useful to us. now, of course not everything in the private sector will make sense for us because we're

always mindful that the military isn't a company. it's dedicated to the profession of arms. for important reasons, we're not always going to be able to do everything the same way others do. that doesn't mean we can't look ourselves in the mirror and look around the country for new ideas and lessons we can learn, ways we can operate moreectively. the defense innovation board held its first public meeting earlier this month and made some preliminary recommendations to me and the public about some innovative practices that might make sense for us to adopt. today i want to tell you about several i have decided we're going to do. first we're going to increase our focus on recruiting talented computer scientists and software engineers into our force, both military and civilian. we'll do you this through targeted recruiting initiatives ranging from our reserve officer training score to our civilian scholarship for service program. it's intended to help build the next generation of dod science and technology leaders. all with a goal of making

computer science a core competency of the department. second, we'll invest more broadly in machine learning, through targeted challenges and prize competitions, and not through a new brick and mortar institution but rather through a virtual center of excellence model that establishes stretch goals and incentivizes academic and private sectors to achieve them. since this is an area where both academy and commercial technology companies have been making significant strides, i've asked duix to pilot this approach by sponsoring an initial prize challenge focused on computer vision and machine learning. and third, we're going to create a dod chief innovation officer who will act as a senior adviser to the secretary of defense and will serve as a spearhead for innovation activities, including but not limited to those suggested by the defense innovation board such as building software platforms and human networks to enable

workforce driven innovation across dod at scale, sponsoring innovation contests and tournaments and providing training and education that promotes new ideas and approaches to collaboration, creativity and critical thinking. many different organizations have recently embraced this position, and also started to regularly run these kind of innovation tournaments and competitions, including tech companies like ibm, intel, and google. it's time we did as well, to help incentivize our people to come up with innovative ideas and approaches and be recognized for them. going forward, i'm confident the logic behind everything i'm talking about today will be self-evident to future defense leadership, as will the value of these efforts. but they also need to have the momentum and institutional foundation to keep going under their own steam and to continue to thrive. we must ensure that we keep

leading the way and keep disrupting, challenging and inspiring all of us to change for the better. and this brings me finally to how we're innovating into terms of our people and in the talent management of our all volunteer force. while it's the last area i'm going to discuss today, it's also the most important. because the fact is, our people are the source of every innovative thing we've ever done are doing, or will do. indeed, much more than our technology, operations and organization, our people are the key to us having the finest fighting force. in the defense industry that supports us that means we need to compete for good people as far as into the future as we can. the good news is there are lots of opportunity here as well as new techniques and technologies and talent management. such as the kind of advanced

data analytics that underpin companies like linked in. but there are also challenges we face in terms of the limitations of our current technology in the human resources area and as generations and labor markets change. even so, even as our force of today is outstanding, we must ensure that we continue to attract and retain the most talented young men and women that america has to offer in future generations of defense. and that's in why we've been taking step after step to build what i call the force of the future. i've announced four different links so far to the force of the future. the first focused on building and increasing on-ramps and off-ramps for technical talent to flow in both directions creating the defense digital service, expanding the secretary of defense corporate fellows program, and more.

this will let more of america's brightest minds contributor to our mission of national defense even if only for a time or a project. and it will also allow more of dod and the defense industry's innovative military and civilian technologists of which there are many to engage in new ways with our country's larger innovative ecosystem. especially the parts that may have no experience with or even hesitations about working with defense. next, the force of the future's second link focused on increasing retention among our ranks through increased support to our military families. it's often said when you recruit a service member, you retain a family. after all, it's no secret that military life is difficult and can be especially tough on our military families and let me remind that you our force is largely a married one. with 70% of officers and 50% of

enlisted who are married. now, we can't change the fundamentals of military service, but we can make some changes to make life easier for our married people. and increase the possibility that they'll want to stay at that critical moment when they're trying to reconcile military life and family life. that's why we expanded ma certainty and paternity leave. why we extended chald care hours on bases and why we're giving more families the possibility of some guarooe geographic flexibility in return for additional service commitments. after that, the third link to the force of the future focused on how we can make some common sense improvements to military talent management particularly for our officer corps. our current system problems too rigid. it can limit the ability of our forces to get the right force

mix they need when we're seeking to promote more experience, and training to strengthen the force. that's why we want to give the military services the authority to do things like expand lateral entry for more specialties and adjust lineal numbers based on support performance. superior performance and link number four to the fours of the future made clear this is not only about our military but also about our civilian workforce. people talk about dod civilians they're talking about over 700,000 talented americans serving across the country and around the world. more than 85% of them live outside of the dod -- excuse me, the d.c. area. they fix aircraft. they operate shipyards and ranges and more. they do critical jobs and without them, dod wouldn't function. so the goal here is the same as with our military personal to make sure our future civilian workforce is just as great as

the one we have today. in several ways. by directly hiring civilian employees from college campuses, by creating a new two-way civilian talent exchange program with the private sector, by expanding our scholarship for service program and mission critical engineering and mathematics and more. also, in addition to each of these things, over the last year, we opened up all combat positions to women. and lifted dod's ban on transgender service members. so that we can now draw on 100% of america's population for our all volunteer force. focusing purely on a person's willingness and ability to be our country and contributor to our mission. and giving everyone the full and equal opportunity to do so. going forward, there will still be much more work to do and

you'll soon be hearing from me more about the force of the future. but these links span the expect trum of our opportunities, our challenges and the lifetime of a member of our all volunteer force, recruitment, retention, development, transition. and also our valuable civilian workforce and for the first time in a long time, dod as personnel and readiness office has a real pro active agenda. a concrete action plan to guide its efforts so that they're doing more than just being reactive belatedly to issues that crop up. and based on support for these efforts that i'm seeing in the military services and across our department, i'm confident that the implementation of all these initiatives will continue moving forward and ensure that the force of the future is as great as the force of today. i've described today a lot of ways the department of defense is changing and will continue to change in the future but i want

to close by reminding all of you all of dod and all of america that as we sit here this morning, our country's strengths are undeniable. we have the best military, of course, spanning our people, our investments, our dedication to the mission and the public support we receive from the american people. but there's much more than that, our economy is growing. we have world class schools and universities. we uphold the right values which is one reason why we have an unrivaled network of friends and allies. meanwhile, the operational experience of our force hard earned is second to none. and we have the greatest innovative culture on the planet. when we brought that innovative culture to bear in service of others, that is to defend our country and help make a better world for our children, it's long been america's open

military secret, and we remain dedicated to do so and it can be so. we have a legacy of innovating, but that in itself is not enough. that's why we're moving aggressive toward a more innovative future and why everything i've talked about today is intended to ensure exactly that. going forward our success will depend on whether we can keep it up. like its predecessors, the next wave of innovation and advantage will be a generational success. it's only just begin. we probably don't even know yet the names of the people who will make it a reality. more likely than not, it won't be by me or anyone from my generation. instead, it will be the generation that comes after. it will be junior officers and dod civilians fresh out of graduate school, some of them here today perhaps. who decide to spend a year outside of the department at google or somewhere else, work

with an expert in data science or machine learning. it will be the software engineers and bioscientists to get to know our mission by working with one of our outposts and then choose to do a tour of duty or working at one of our dod labs. it will be inlets id soldiers, sairlers or marines who come up with new concepts for overcoming potential adversears used advanced technologies that may not even exist yet or defeating a terrorist group we haven't heard of. they're the ones, they're the ones who will end up reinventing and changings a new how we will deter, fight and win wars in the future. our job is to give them the foundation, the right kind of pentagon to help them succeed, one that's more agile and innovative than ever before. and as long as we do, they will ensure like those who came before them, that our military

remains it the finest fighting force the world has ever known. thank you. >> thank you. why don't you grab a seat? first of all, my apologies. a lot of you have been standing for almost two hours. the secretary has to leave. but those of you standing, you're going to get to the coffee first. secretary, thank you. and thank you for your remarkable service. it's, this has been challenging time and we're so lucky to have you there. we have very little time. let me just ask first, i remember after 9/11, companies all over america came to town and said we want to help. we'll do anything. how can we help. many of them left pretty disappointed. >> uh-huh. >> why have we failed as a

government to bring on board interesting ideas from the private sector? >> well, it's a good question, and it -- the answer is to many of them, we seem slow, we seem ponderous. we seem bureaucratic. that's not as true as it seems to them. but the reality is, we have to reach their way. this has to be a two-way. that's why i'm so intent upon this outreach to the technology industry. snowden made it worse. and so we have to build a relationship, build a familiarity, build a trust. a lot of these people have no experience us, john. they didn't serve. nobody in their family served. there's no uncle, father, coach, mom, guidance counselor, no one in their lives who told them about the feeling that it gives you to be part of the noblest mission a young person can devote themselves.

nobody's given them that feeling yet. these are people who want to make a difference. they're innovative and talented. they want to make a difference. when they can match our mission to that personal as pir riggs of theirs, that's where the magic is made. i remember when i started my own life, i was a physicist and i kind of fell into this in the following way. i got an opportunity that was supposed to be one year. and what i found was this. i found that i actually could make a contribution because there was in a room where i happened to know what i knew. i didn't know a lot about defense as a whole but i knew what i knew. and i could see that without that piece, the right decision wouldn't have been made or the program wouldn't have moved forward. and secondly, i had the great thrill of going home every night knowing that i had been part of something bigger than myself and making this part, a small part

of this majestic mission. taking those two things that you can make a difference and that it's a huge thing to make a difference in, that's magic for any young person. and the more persons we can get to feel that magic who don't have it in their personal background, the better. that allows us to tap into all this. we need to reach their way. >> so when ceos come into town and meet with you and obviously as a mutual respect and a desire to have impact, and a recommitment. people want to do it. but then they bump up against the acquisition system. they bump up against the bureaucracy and mechanically those things. how do we get at that problem? because it seems to me that we're making people work with us on our terms. >> that's exactly right. we've got to work systematically to lower those barriers to entry. so that the people who win business aren't only the people who know how to play the game.

they're the best people. and that's on us. now, you know, it is the taxpayer's money. so i always haston to at the, we'll never make decisions quite like people who are spending their own money or company money. it is the taxpayer's money and the taxpayer expectses it everything to be done to their standards and they deserve that. at the same time, that's not an excuse for doing everything in this ponderous kind of way. i've got to give it to our leadership here. we have worked very systematically looking at our problems, rapidity of decision, volume of paperwork. willingness to take risks, all these things that are fundamental to being innovative and finding ways that we can reduce that. the way you do that is you start out, we have for example, a new contracting vehicle that we've spearheaded through diux which

allows us to disperse r & d funds much more agilely in small amounts. we had to go through the hoops and make that legal. it's possible. if you behind behind the legendary far, that's why i can't -- that's not an excuse. far in general has lots of work arounds in it. we can ask for more work arounds. i'm asking people be creative. i don't want to hear from innovators they really wanted to and thought they could make a contribution. and they were frustrated just by the mechanics of how we do things. we can't have -- that's one of the reasons why i'm just driving on us. and all of us are driving on us to put our heads up out of our foxhole, look around. how do other people do that, how much as government can we appropriately adopt. and there's a lot. >> and if i might, we've had companies that they're asked to design a product, use their own technology and then the government says, you know, we're

going to test that for two years and take your data and compete with it. >> this is the intellectual property. i happen to have been undersecretary for acquisition. i worked on there very hard and you're right. people want protection for their intellectual property. what we want is not to own their intellectual property but we want to -- what we do want is to keep a competitive door open for the future. and, of course, you know, one of the ways you use intellectual property is to lock in yourself as vendor. and it's not good for us in the long run. we're trying to balance our need to keep competition going wave after wave and the innovators' right not to have their stuff stolen and spread around. that's a balancing act. and i started out as at & l, i worked very hard during the time

i was there. frank has been working hard ever since. bob helps him. and it's doable. it's doable. but there are competing interests. but they have the same problem when they're selling to other people, as well. other people don't want to get locked in either. so the more you can have open systems where they can continue to keep the ip on the part that they plug in but the system's open enough that others can plug their own ip in, we can have our cake and eat it, too. it's just a matter of being smart about it. >> your staff said they're going to shoot me if i keep you much longer. >> we wouldn't do that. >> you want to bring in, talent from the private sector. i do, too. i think it would be great. yet, it's hard for us with our opm rules, our civil service rules to bring in talent that can work in the government. what can we do? >> well, i describe today one of

the things i just did in the last few months. this is a key one and i didn't really have time to spin it out. let me answer your question byive giving you this example. that is to do direct hiring off college campuses. you talk to kids and they say i wanted to try and a applied for a government job and i went to the web site and i filed my work and then you know, finally exam time came. no word back. graduation time came. this is where i wanted to work was my first choice but my parents are saying you've got go get a job, don't come home. i didn't have a job. so i took the job from somebody who could offer me a job which wasn't as meaningful as the i wanted from the defense department. i was six months into the job and lo and behold, up pops an e-mail from the government saying how would you like an interview. that just doesn't work for a kid. today's kids especially because they don't want to live life on

the way i like to put it is, they don't want to live a career that's an escalator where you get on the bottom stair and you wait and it takes you up to the top of an exexroshl system. they want a judge gym where they can get higher by climbing around. we need to be part of that and recognize that's the way many people see their lives and so they need to be able to see us in that context. and so you know, opm to the con contemporary notwithstanding, we can't use that as an excuse, opm, farr. come on. work around it. where we need to change the lot i proposed a number of changes in the law and i think that our committees are receptive to change and trying to give them the right ideas. so they can write them into law. but there's a lot we can do.

you just don't take no for an answer. and you can't expect this kid to put up with it. we've got to change the way it's done. >> you know, we're at the hour i have to let the secretary go. i happen to know from talking to the deputy secretary he has to brief him on a meeting you're going to in 15 minutes. let me say we're coming up on a transition of government. you know things fall through the cracks. i think it's up to all of us to sustain momentum on this innovation agenda. this is really the purpose of this conference. we cannot afford to let this agenda fall slack off. and secretary we want to thank you for your leadership. thank the deputy secretary for his leadership. thank everybody with your applause. >> thank you and thank cis. claps /* /- . >> just stay where -- we have a break in the two parallel

sessions. we have about a 20-minute coffee break. get some coffee. coming this up afternoon about an hour and 20 minutes from now, republican study committee chair congressman bill flores and mark walker will be talking about the future of the conservative movement in the new congress. live conch gets under way at 3 pp eastern here on c-span3. donald trump is in cincinnati, ohio today as part of his thank you tour of states that flipped from democrat to the republican during the election. ohio is one of those states. and that will be live on c-span starting at 7:00 p.m. eastern. politico reporting today preds elect trump and mike pence will be meeting with democratic senator heidi heitkamp at trump tower in new york tomorrow. the transition announced that today. senator heitkamp who faces a tough re-election fight in a

deeply conservative state in 2018 will be one of a handful of selected democrats to have made that pilgrimage to trump tower to meet with the president elect. "i appreciate is the president elect inviting me for a meeting." she said in a statement. mr. trump and mr. pence will be meeting tomorrow also with senator david perdue, jay cohen, florida attorney general pam bondi and former ambassador to the united nations john bolton. >> follow the transition of government on c-span as donald trump becomes the 45th president of the united states. and republicans maintain control of the u.s. house and senate. we'll take you to key events as they happen without interruption, w567 live on c-span. watch on demand at c-span.org or listen on our free c-span radio app. >> thank you all very much. welcome to congress.

>> tear rare golshan, why is jill stein seeking a recount in wisconsin, pennsylvania and michigan? what is she hoping to accomplish? >> it's an interesting questions because ultimately it will be really hard to change the outcome confident election and jill stein says that's not her purpose. she has notably said she doesn't support either main party candidate and that she just wants to make sure that the validity of the votes are -- that there is validity to the votes and that she wants to make sure that the green party the libertarian votes are being counted accurately. that's ultimately her mission that she wants to ensure the trustworthy of elections. >> where has she seen discrepancies? what's her evidence that there was something wrong in those states? >> so there was a report from a group of experts that raised questions about the validity it.

to be clear, there wasn't any direct evidence. the professors and election lawyers and stattiticians are not claiming there. they're just saying they saw some stick cal anomalies that could indicate possibly that something went wrong but there's no direct evidence there. so she kind of bounced off of that and said well, we should check. which is not necessarily the wrong thing to do here. like if there is a possibility we saw interference from international governments, we saw we did see hacking. and she is saying well, why don't we just check. there's a process to check. >> who is backing her effort? >> so she started a grassroots campaign to fund raise. i mean overnight she fund raised more than $2 milli2, to this da than $6 million. so people seem to be paying for

this effort and interested in it. i mean it, really kind of exploded over thanksgiving week. and i think it's a lot of democrats feel like hillary clinton should have won and they -- it's easy to hold on hope but that's not -- i don't think that's jill stein's point and i don't think that's what the evidence supports. >> well, is the hillary clinton campaign part of the effort? are they helping to pay for it? >> they did say that they would -- they would support the effort. in terms of like the direct organizing and planning and fund-raising, that is -- that's happening through jill stein. >> when does this recount start and what is the deadline? >> it's different for each state. so wisconsin is supposed to start today on thursday. pennsylvania is a little bit more in flux because essentially, the way that recounts happen in pennsylvania

is a little bit more complicated. and she filed a legal petition, and their court date is on monday. michigan was, she filed for it yesterday and it was accepted. ultimately, all the electoral votes need to be finalized disease 19th and before that by december 13th for the recount so that they can make the official announcement for how the states went. >> you said dr. stein is fund-raising for this. how much will these recount efforts cost? >> they cost a lot. so in wisconsin, the estimated amount was $3.5 million that she paid. it actually turned out that it was $3.9 million in estimated costs but the election commission in wisconsin due to a error gave her an underestimate for the cost and they'll charge her more if it costs more. in michigan, i believe it is just under $1 million.

in pennsylvania, it is a bit more than that, as well. so i think she would need around $7 million to pay for it. >> and any indication she's able to raise that much? >> it does look like she she is being able to. so there is the donations keep coming in. and she has -- she has raised a fair amount of money thus far. >> tara golshan, politics and policy reporter for vox, thank you for laying that out for us this morning. >> thanks so much. house ways and means committee chair kevin brady, u.s. trade representative michael froman, a number of economic expers and republican and democratic vat gists nowen ot impact of the election on trade policy in the future of current trade agreements. fedex freight president and ceo michael ducker leads this off. [ applause ] >> good evening. hi, everyone.

wow. what a great turnout. i think we've picked the right topic. i'd like to thank you for joining us here at the news seeiam in washington, d.c. for this important conversation on the election aftermath, the new politics of trade. i'd like to join everyone on the live stream at politico.com. everyone across the country watching on c-span and even those viewers in canada watching on cpactv tonight. we're really glad you're all here. we all know if there was one big issue in this election, it was trade. it's hard to think of any policy issue that was more high profile and people around this country and around the world are watching to see what happens next. so we have convened some top policy experts and politics experts to help us unpack what just happened. and we're going to do this in three parts tonight. first, we're going to ask whether the anti-trade sentiment in this election was merely a

temporary divisive political rhetoric or did we just witness a fundamental and long-term realignment in u.s. politi? we're going to talk to republican and democratic strategists fresh from the campaign trail in battleground states. and we're going to talk to some big picture thinkers as well as industry. then we'll have a conversation about the future of trade policy on capitol hill. and third, our outstanding senior trade reporter doug palmer will have a conversation with the u.s. trade representative which will be followed by cocktails and hors d'oeuvres so be sure to stick around. but before we get started with this jam packed and important program, i'd like to thank our wonderful sponsor fedex for their generous support of this event. and now i'd like to welcome to the podium michael ducker, fedex's freight president and ceo. [ applause ] >> thank you, luisa and thanks

to politico for hosting this great event. and it's aptly titled "aftermath." and i think we just experienced a pretty extraordinary election. would you agree with that? and as with the aftermath of any election, it's going to take some time to sort out all the implications of the u.s. policies and programs like trade. but i hope we can agree that for the united states, trading with the world isn't just an option. it's a necessity. 95% and i know this is a well worn phrase, but 95% of the consumers are skouds evoutside borders. so we do need to find ways to reduce barriers to u.s. goods and services around the world so we can reach new consumers, grow our domestic economy and

strengthen the bottom line for american families. supporting international trade is something that we at fedex are particularly passionate about. because we live it every day. trade time and again, we've seen that small and mid-sized customers who export tend to grow even faster and create more jobs than similar businesses that do not trade internationally. recently, fedex released a small business index which was a national survey of over 1,000 small business leaders, and results of that survey showed that more than 70% of small businesses are seeing increasing global trade as a way to also help the economy as a whole. interestingly enough, 70% of small business executives said that they were more likely to support trade if the u.s. provided effective job

retraining. now, business has a real role to play in that. government and business have to work together to ensure that displaced workers are retained and can transition to the new jobs and careers that our economy is creating. with the election results behind us, mercifully, it's time that trade politics be replaced with sound trade policy. ripping up trade deals or raising tariffs on imports will not grow our economy. what is needed to build greater support for trade is to adopt a comprehensive pro-growth, pro-competitiveness agenda that will make the u.s. the most competitive economy in the world. domestic policies that build american jobs and energize the economy will go a long way to build support for future trade initiatives.

expanding trade opportunities for americans has been a bipartisan pursuit since this country started. and that's why we at fedex are pleased to sponsor this evening's program and to hear from congressional leaders on both sides of the aisle who are helping to shape the debate, and to forge the path for how our country will address trade, american competitiveness moving forward. thanks, luiza. and i'll leave it to you to get right to it. >> thank you so much. [ applause ] so, before we get started, i want to let everyone know to tweet your questions, our hash tag is #tradepolitics. our moderators will have a device to track them onstage. without further delay, i want to introduce the moderator of our first conversation, my colleague glenn thrush, who is senior

political correspondent. you may not know him only from his indispensable coverage of politico, but also his podcast called off message, where he interviews newsmakers, including president obama isthis year. when we were thinking about drilling down on the politics of trade, i thought about glenn and the events that he hosted with us at both republican and democratic conventions about the future of the republican party and the future of the democratic party. and i really see this conversation as part and parcel of that conversation that he started at the convention. so we look forward to hearing from you. and your wonderful panel. thank you, glenn. [ applause ] >> good evening, everybody. and we'd like to thank fedex for sponsoring this event. first i'd like to introduce the panel. sitting to my immediate right is linda dempsey, vice president for international economic affairs at the national

association of manufacturing. by the way, this is completely out of order. facial recognition software worked to a tee. sitting next to her is my good friend john ashbrook, who is founding partner of cavalry llc. and a very familiar face on capitol hill in all kinds of interesting roles. sitting next to him is jill alper, a principle at the dewy group, home to, i suspect, home to many more former folks who worked in hapolitics after this cycle. and on the end there is my fellow maryland neighbor john judis, who is author of the pop populist explosion, how the great recession transformed american and european politics. i will start off briefly by talking about a conversation i had in the white house, right before i went out on the trail.

probably in february of 2016. actually, right before the primaries and the caucuses. it was probably late january. i was sitting with a senior administration official. because that's what we do, we talk to senior administration officials and never quote them on the record. which i am not going to do now. and i said to them, president obama has clearly done very well in the last two years, you know, very well sort of objectively by asserting executive power in the last two years of his administration after a very rocky first two years after being re-elected in 2012. give me the one to three, one, two, three, your top priorities as he winds down the administration. and this person turned to me and said, tpp, tpp, and tpp. things turned out a little bit differently. so i want to start off the conversation, starting off with john and kind of working our way down. sort of a general question here. how big a deal was trade in last

tuesday's election? and what in general can you glean going forward? how is this issue going to play out politically over the next couple of years? >> well, thank you for having me. trade was a really big deal. and when you look at polls and it says people were worried about the economy, they don't usually include trade in those kind of -- in those issues. if you look at ohio, right? michigan, wisconsin, i looked at those figures when i was coming over here. it's about, oh, i don't know, 52-30, does trade harm us or help us? if you look at the 52%, it's about 60/30 or something like that trump over clinton. you have to remember, too, that those are votes that are salient. it's much more likely that

somebody's going to vote who's worried about trade hurting their jobs than someone who thinks it's okay. especially in those midwestern states. so it was an enormous issue. of course, trump's advantage was that from the very beginning of this campaign, he made it a major issue. i first saw trump in august 2015 in new hampshire. and i had expected more of a conventional republican, or even tv celebrity, and here was a guy who was railing against nabisco for taking their factory out of chicago and into mexico, ford for taking its assembly plant out of the united states to mexico, leaving workers out in the cold, who used the same metaphors as perot used about trade and the trade treaties. nafta sucking jobs out of the united states.

so while the most incendiary aspects of trump ended up getting covered a lot in the media, if you actually went to the rallies and listened to him, three-fourths of what trump had to say is about runaway shops, bad trade deals and things like that. i think that was a big part of his appeal. i'm not saying it was all of it, but i think it was important. >> jill? >> yeah, i mean, i totally agree. i'm from michigan. and michigan trade is often a big issue. and they're fighting words, you know, nafta and outsourcing and all the rest of it. many of the recent presidential elections not as much. we had a robust primary, trade was being talked about on both sides. clearly in a general election. and it was a fulcrum, i think, really about anger, about him connecting with people who no longer as their parents did or grandparents did could expect to

have a solid middle class way of life. they're worried about their pensions, they're worried about the cyclical nature of the auto industry, worried about a dollar not buying as much as it used to. i think a lot of folks thought there's a go-along get-along crowd, and if you felt okay about where you were, things were getting better or things were going to pretty much be the same, you were a hillary clinton voter. if you were angry and worried and in michigan that was about 25% were really hard core worried, 70% voted for donald trump. so it's an emotional issue. and you saw it in the map. you saw higher turnout in rural areas, and lower turnout in blue areas. and you saw the home of the reagan democrat go up as well. and that led to a narrow defeat. in that state for secretary clinton. >> and the final tally in michigan was, what, 20,000 to 40,000?

>> oh, no, right now, starting today, it was between 11,000 and 12,000 votes, and they're still counting today and tomorrow. >> i will tell you that the clinton people when i talked to them on election night about why they thought they were losing michigan, it had to do with turnout in detroit. they were not at that point talking about working the excerpts. mr. ashbrook, you just came off of a very successful, congratulations, you had a very good cycle. you worked for rob portman. he obviously was able to finesse this issue in a way that a lot of politicians associated with pc were not. can you talk a little bit about that? >> sure. i could just echo what jill said, as an ohio person, i saw very, very closely that this is an emotional issue for a lot of voters out there. and, you know, john had a stat earlier that so many of these voters out there think that -- think of trade as something that sends jobs overseas. 48% of ohio voters, according to

the exit polling, think that trade sends jobs overseas. they just do not have a positive association with the topic. but among that same 48%, rob portman won -- got like 75% of that vote. so he beat strickland by 51 points among that subset of the electorate. and he did it because he talked directly to people on their level about how trade is really -- it's a people issue. i mean, we talk about it as a jobs issue. but really, it's an issue that people think affects their lives in such a powerful way. and what he spent a lot of time talking about is how he was protecting them, defending them against unfair practices from overseas. from china and from other bad actors out there. and there was an ad with a powerful testimonial from a local cincinnati steel company that has 90 employees, and

portman fought for them, with the itc, and it protected the company. it was an ad that ran state-wide. it was written up, very powerful spot. it demonstrated to people that on the issue of trade, he's somebody that's looking out for them first. >> and tell me a little bit about just in terms of, linda, from your perspective, at n.a.m. obviously you have a political perspective. but what they're talking about is it being a proxy for a sense of sort of a generalized economic anxiety disorder, right? that it is a manifestation of that. you are concerned about specific policy. from your purview, how does all of this kind of affect how you're going to move forward? >> first, i would say that, you know, elections are resets. we have an incoming administration that has -- is talking very differently on trade than we have seen past incoming administrations coming in.

we have lessons learned about all the things my colleagues up here were just talking about, that people are seeing some of the negatives on trade, but not seeing the other side of it. and frankly, a lot of the substantial transformation that we see in manufacturing. manufacturing in the united states, we produce more than ever before. i don't think most of the voters in ohio or michigan understand that, or see that. but we also, at the same time, i think we need to recognize that we do face big challenges overseas, be it china and elsewhere. so as we look at it, and as we look at policies going forward, we certainly agree, we all need to do a better job and work with the administration and congress going forward to address some of these barriers that haven't been addressed. we've got big barriers in china and elsewhere. but we also need to take a step back, i think, and look at the value that trade has had in the manufacturing sector as well as other business sectors in the

united states. 6 million men and women in manufacturing today have their jobs because of exports. we get millions -- billions -- trillions, actually, of dollars of foreign direct investments in manufacturing because people want to see the united states, and they want to be here. so how can we take what's good, and broaden that out, and address some of the challenges that we have. and that's what we're going to be looking to work with a new administration, a new congress on. >> while i've got you on that, to put you on the spot here, when we were in philadelphia, you know, hillary clinton, her biggest flip-flop of the entire campaign was on tpp, which she had, as you know, called the gold standard of trade deals and then she read the fine print and then it was fool's gold standard. in terms of presidential candidates, do you feel you would have gotten a better smak from hillary clinton than you're

going to get from donald trump? >> whoa. look, i think we take -- we're a nonpartisan organization. we take our democracy seriously and we are going to work with either one. i think it's hard to say. when secretary clinton was in the senate, she voted for some trade deals, and she voted against other trade deals. it wasn't a clear record. when she was secretary of state, she strongly supported some of the trade agreements that president bush had negotiated, but president obama made some modifications to and moved across the finish line. and she supported that for a number of reasons. so, you know, it's hard to look backwards. >> let me slice that one other way. and i think this is a larger question that's really important in terms of moving us forward. do you feel at this point in time, given that the president-elect has backtracked on a couple of other issues that he is somebody the organization can really communicate with moving forward?

>> absolutely. i think we -- i think what we've seen, look, we've been in contact with the transitions, in contact with both transitions, we know a number of folks who work on these teams. some of our folks at senior levels in our companies certainly know the incoming president. and we're going to sit down and talk about these issues. and try to get to the solutions. because i think at the end of the day, we want to get to the same solutions. and that is to make america the best place to manufacture in the world. to make america globally competitive on manufacturing. if we can agree on that, which i think we do, then we've got to figure out what those policies are that handle it. now, some of the trade competitiveness has to do with other issues. the drag on u.s. competitiveness by regulation, by tax policies. those are issues where i think people are expecting to see some substantial movement.

>> i should just say we're going to take a couple of questions at the end, so those of you who are ready and rearing to go, prepare your questions. john judis, let's look at the historical perspective of this. one of the really striking components of this is you can close your eyes early on in the cycle, go to a bernie sanders rally, go to a donald trump rally, they're saying the same thing about trade. what's the difference between those two positions? the left and the right on this issue? >> on that particular issue, there's very little difference i would say. and i think that both of them of, you could see as being a sense of revolt against globalization, and two features of it. i guess here is how i would make the difference. that for trump, capital mobility, which is a key feature. again, from the 1970s. corporations could move wherever they want. a lot of the trade deals have as much to do with making it easy for corporations to move around

as they do with exchanging goods. that was a key issue for him. labor mobility, immigrants can go wherever they want. that was also a key issue for trump, but it wasn't an issue for sanders. but both of those have to do with wages. both of those have to do with this kind of split in america between the 30%, more educated, working in tech, working in high-valued services, and the other 70% skilled, semiskilled, only some college or high school. and, you know, again, if you look at a map of where we've lost manufacturing jobs from 2000 to 2010, i looked at this, the two key states are north carolina and michigan. and again, if you look at that map and you look at where clinton lost and trump won, a lot of -- there's -- they're very congruent. it's the same kind of thing. so i think over time we'll have to figure out what to do about this split of the 30% and 70%

and how we can somehow recreate the middle class. i think that's what a lot of donald trump was about. >> jill, the democrats used to own this issue. this was something that was a core democratic issue, and the notion of the mitch mcconnell being at the head of a party in the senate that is now lock stock, and barrel against, largely against sort of free trade is sort of amazing as a turnabout. how do the democrats reclaim this issue? we just had president obama give a press conference saying that democrats have to get out in the places they haven't been before. how do the democrats reclaim it as an issue? >> i think it has to be almost simplified again to where we are with people in their communities and meeting with them on an emotional level. secretary clinton had a very thoughtful plan about how to deal with the economy, how to deal with trade, how she looked at things. she gave a speech in mccomb

county, putting all the details out. i think people couldn't hear it because they couldn't see democrats feeling their pain. ironically. so we have to get back out and we have to articulate what we're about. and i think that we need to see the people have been hurt and affected, to get the help and support that they need, not just the advocacy that truly people are able to make their way in the new economy. >> the feel your pain part, we know where feel your pain came from, it came from her husband. >> right. >> now she's feeling the pain because she didn't sufficiently feel other people's pain. isn't this just a matter of a politician who has the capacity to emphasize? barack obama felt enough pain to win mccomb county, right? >> i think we were talking about this before, a lot of these races the way things play out, are tied to someone's character. perhaps if more people were

aware of donald trump's actions in his personal life, whether it was making ties in china or suits in mexico, or using chinese steel in the buildings that he was building, of course, that was part of the dialogue, but i don't know that that filtered to the ground. i don't know if that was in gross rating points in all of the key states in the midwest. people may have had a real issue with him. >> would bernie sanders have been in the general election, jill, still on you -- you're not going away -- would bernie sanders have been a better messenger in the general election on that? >> no. >> why? >> because i don't think he was credible in the sense that people did want answers. people did want real world solutions. and that he felt he could channel the anger, but somebody wanted someone to go be the president of the united states. and hillary clinton won on experience. she won on being a pragmatist that gets things done. so i think that would have been trouble for bernie sanders in a general election.

>> john ashbrook, these states are not one size fits all. i remember talking to a trump person after they lost wisconsin and said one of the reasons they lost wisconsin was because the trade issue doesn't cut the same way in wisconsin as it does in a place like ohio. there's a lot of dairy exports, for instance, that are advantaged under that stuff. talk a little bit about, we have 2018 coming up, but talk a little about the microclimate in some of these states and how it differs from state to state and region to region? >> we also consulted on the arizona race, and the talk about trade in arizona is different from the conversation about trade in ohio. we also worked on the indiana senate race. it's very different from the conversation about trade in indiana, just in terms of the intensity. it's just much more on the forefront of every conversation in both of these states. and you mentioned the 2018 map. you know, the campaigning never stops in this town. already talking about 2018.

if you look at the states that are up, democrats are defending 25 seats, 23 plus two independents and republicans defending eight seats. among the 25 seats the democrats are defending, it's ohio, it's indiana, it's michigan, pennsylvania, wisconsin, some of these same states where trump did so well, and i think that a lot of these candidates who are looking -- either thinking about challenging one of these democratic incumbents or the democratic incumbents themselves watched very closely the cycle to see how this issue was litigated in a real way in these campaigns, and i think that, you know, for example, senator brown and senator portman have a very good working relationship. i'm confident senator brown was watching very closely at what senator portman did in his campaign. and i wouldn't be shocked if i see -- i wouldn't be shocked if we see him replicate some of the same tactics.

>> linda dempsey, here's the many trillion dollar question here. tpp is dead. trump is talking about opposing some of the european stuff. how do you sell free trade? do you break it into little bite-sized portions? how do you see generally speaking over the next several years how you get back into it? >> you've got to rebuild the discussion, and i think we in business can certainly do a better job. we in manufacturing, what are the positives that we've seen out of trade, and past trade agreements in terms of, you know, what is it that we produce? the dentist's chair i sat two hours in last week, that was produced in the united states. the security devices in airports and federal buildings, that's made in the united states. people don't recognize it as such. we've also got to be more clear-headed at getting at the foreign trade practices overseas and what are the best ways to do that.

there was a lot in tpp that would have gotten at a lot of very bad foreign bad practices, state-owned enterprises, theft of property, discriminatory tariffs, localization measures. what are the other tools we can do? this incoming president talked about doing bilateral deals more than multilateral deals. there are pros and cons to that. we have to take each one as it comes. but we need to focus on getting the big markets where we have the biggest problems. most growth is outside the united states. if manufacturers just sold to ourselves, we wouldn't be able to grow. we certainly wouldn't be able to hire more workers. we've got to have greater access to markets overseas. and we're going to look and we're going to prioritize those markets, and the barriers that we see. and work with this congress, and the incoming administration and figure out how we can tackle it. >> on that note, do we have any questions out there?

anybody? >> way back there. >> i saw a hand way back there. whoever it is, speak now or forever hold your peace. >> i have a question. >> yes, hi there. >> one sec. we have someone with a microphone. >> good evening. following up with miss linda dempsey. could you please give us, if you will, a pitch about what we can expect that will really benefit the average person as far as how trade works and why we should be concerned about it? so if you could tell us -- make us feel good about trade since tpp as you pointed out is dead. what else can we do? >> so, the united states has doubled manufacturing output since nafta. we have more than doubled our exports. we talk to small businesses all

the time that have been able to increase their exports, increase work forces here, or increase wages, or keep jobs here. as a result of agreements. we have a small company that sells medical rehabilitation equipment out of maryland. and when the european union completed their deal with korea, before we did, they lost i think it was 40% to 60% share of that market. once we got our deal in place, they were able to grow again and take over and win back sales and increase. we have a lot of really great manufacturing in this country. a lot of high-tech manufacturing. a lot of manufacturing, as i said, that people don't see. and our companies want to get overseas, and we see more trade. and we have, you know, big agreements like the trade facilitation agreement that nobody wants to talk to, that's going to make it easier for our companies to be able to sell.

i'd say the other big thing is ecommerce. for small business owners, being able to get on the internet and put up their storefront, just like in their hometown, they are selling more than ever. they are, you know, using new delivery methods, and express delivery methods and other methods to get their goods to people all around the world. and so we're hoping to see a revival in economic growth. and we're hoping to see more of those exports. >> let's squeeze one more question in. this gentleman here. yes. >> i'm jim callahan. i had a question about nafta, if you could talk a little bit about the potentiality of renegotiating that, what it could mean. there's a lot of linkages, what are the implications, how is it benefitting the united states, what might happen going forward? if you could speculate a little bit, give us some insight on the time?

>> in donald trump's campaign, they've said that canadian-mexican officials have talked about renegotiating nafta based on his kind of tough talking rhetoric. does anybody want to address that? >> i can. there haven't been a lot of specifics out of the incoming administration about what is wrong with nafta. but we know, certainly, as jill was talking about, and john, that there's a view of nafta, and there's certainly been that substantial transformation in some of the rust belt states, in manufacturing sectors. whether that's a result of nafta, automation, china, other factors, i think we all need to figure out what the right diagnosis is of the issue. and we're just going to have to -- you know, we are going to sit down with the new administration and congress, what are they talking about, what do they want to see changed? there's over 2 million manufacturing jobs in this

country that are dependent on our trade relationship with canada and mexico. so as we go forward, we certainly don't want to put those jobs in jeopardy. but are there ways to improve our relationship with canada and mexico? i think the path is a bit uncertain at this point. >> i would like to thank everybody for coming. it was a great discussion. and i'd like to welcome up my colleague adam behsudi, who will lead the next conversation. thanks, guys. [ applause ]

>> thank you, glenn, for that interesting panel. we're thrilled tonight to have on the stage chairman of the ways and means committee, kevin brady, whose committee is in charge of all things trade in congress. and whose party will continue leading the house. so it will be interesting to hear what he says on that. and next to me is jennifer harris, senior fellow at the council of foreign relations. she's an alum of the state department working under secretary hillary clinton. and was -- has been billed as the architect of the secretary's economic state craft agenda. so i guess i'm going to begin, you know, it's -- everyone's kind of trade hopes and dreams have been dashed. we're looking at what's left on the agenda. and what could still be done.

i know everyone's very -- we're all ready to hear what the chairman here has to say on kind of what's going to be happening. so chairman brady, you've been a champion for free trade during your tenure in congress. and as has your party, to a large extent. how do you reconcile that this is kind of a broader question, that position with the policies, the trade policies that president-elect donald trump has announced so far? and as you look at the next congress, finishing up business from this congress, what will your priorities on trade in the next congress be, and, you know, or is this, as a lot of people fear, an issue that will fade into the background? >> thank you for the upbeat assessment of everything, very encouraging. so, look, i am still champion of free trade. so are republicans. for a couple of key reasons. one, donald trump was elected to

get this economy moving again. and clearly tax reform, balancing regulation is key to it. but finding new customers, for american goods and services are a big part of the economic growth. trade is what provides that opportunity. we have some challenges obviously. but i look at mr. trump, who made a very strong case for enforcement first, in trade policies, which congress has given this president and the new president the strongest enforcement tools ever, period, to pursue that. and i hope he allows us to make the case that, to grow our economy, it's just not enough to buy american. we have to sell american all throughout the world. these trade agreements done right, strictly enforced, level that playing field. turn one-way trade into two-way trade, to allow us to create a number of jobs here. so i'm not as downbeat as others

are on the trade agenda. i think six days into the transition, i think it's early to be sort of assuming where the new administration's going to be. you know, i'm hopeful we get a case, as the president lays out his economic policy, to make the case for keeping what's good about trade, including accessing those new customers around the world, and then improving the areas the public feels needs some addressing. >> so one of the points we've heard from the campaign trail, from donald trump, is that he wants a renegotiation of nafta. that is something he wants to do in very short order when he takes office. your district, the eighth district from texas is probably very connected to nafta in many ways. how do you see that deal being renegotiated? what specific things could be improved in that deal? you know, what could be reflected in nafta, in the

renegotiation of nafta, that would reflect donald trump's vion forrade and what it should be? >> i haven't spoken to him or his team about exactly where in nafta they would want to improve. i notice as he talks about these issues, he really talks about not so much withdrawing but going back and negotiating table, trying to make it a bigger win for the united states. we have a manufacturing surplus with the nafta countries. these relationships helped us. frankly, move through some worldwide recessions better than other free countries as well. look, i would encourage the president to take a look at parts of nafta, that looked right in the 1990s, that can be modernized today. my advice always, if you're going to renegotiate an agreement, is make it more free

trade, be bolder about reducing tariffs in all directions, give us more economic freedom to sell what we're making here in america and buy the products, frankly, consumers want to buy as well. so if the approach he's going to take in nafta or tpp is to go bolder, to open more of that market to american goods and services then i think that will be welcome. >> could you provide a specific in terms of how he would make it bolder or freer or more open? >> he's got to set his priorities in the trade agreements, and on tpp, my advice to him earlier this year, which still stands is, look, that's a critical market for us. that region of the east pacific will hold half the customers in the planet by the end of the decade. we want to be there. if we withdraw or abandon that field completely, we lose and

china wins in a major way. my advice will continue to be to him to not withdraw, but renegotiate. take the areas that he's got real challenges with, make it better, make it better for america. and then let's stay on that trading field in that region, i think is critically important. >> so on the issue of tpp, i mean, how do you see that being revisited at some point in the future? he's made that a very strong point of his speeches. what would be a way in which he could revive that deal and still appeal to his base and what he's been saying. >> so leaving him all that discretion, because this is a new president running on trade, he really needs to set those priorities. but we know within congress today that the outstanding areas currently in tpp from making sure we've got adequate intellectual property

protections from biologics. making sure our financial services are not discriminated against. making sure there are real implementation plans. so we know how countries are going to implement those key areas we're so interested in. there are a number of areas you could begin with immediately. these are the areas the white house continued to work since the agreement was signed because there were member concerns, strong, significant member concerns raised that weren't yet completed. with the election clearly the agreement is on hold until the president-elect can lay out his trade priorities going forward. he could start there, for example. >> this is maybe getting more specific but tpp was meant to tackle some of these 21st century issues. digital trade is a big issue. that was going to be the

platform to get countries to prohibit prohibitions on data flows and requirements for this. with tpp sort of in the purgatory or maybe even dead at this point, what other forums, are there other forums in which those issues can be addressed? is there something you all can do in congress that the republicans in congress will do to push these business priorities forward? >> so, just as at the wto level if you can't find agreement in larger groups, then you try to find it, sort of the coalition of the willing is sort of the phrase so often used. countries who want to go further on trade areas, especially in the regulatory area and those cross flows of data and other areas, really critical because the trade barriers today are

want just limited to the old here's our tariff s at the border, the barriers at the border. it's more sophisticated than that. one of the many things i liked about trans-pacific partnership is that it went beyond the borders and really created a process where in the past countries, sort of like putting an american plug into a european socket, they are designed not to connect. the tpp was the first agreement in a significant way that connected those markets on regulatory side, digital side, a number of areas that allowed our companies to connect with those markets and compete on a level playing field. i'm hopeful that continues, tpp, but if that agreement is not to be, we ought to be looking for other vehicles to tackle sothe same issues. >> now, jennifer, a lot of focus was placed on hillary clinton's shifting stance on tpp through

the election. but as someone who worked closely with her at state, i want to focus on the future and whether you see her vision for economic statecraft having a place in this future administration. so how do you see this incoming administration approaching its economic relationship with the asia-pacific, with china? do you think it will be a more transactional-type relationship, or will there be as we had under administration bigger picture look at the geostrategic implications involved in the region. >> donald trump said a lot of things on this campaign. my guess is not as good as many of ours, or certainly house odds on how much of that will come to pass. so maybe just to speak a bit to what i would hope to see under any administration. that is putting trade in its proper context.

speaking candidly, i think a lot of the problem right now is americans generally and hard truths to my party, democrats in particular have pursued international economic agenda divorced from domestic economic agenda that we're pretty clear on at home, at least, on the left. we support large companies without going after tax havens that keep their profits abroad. we allow ourselves to sort of be on our back feet around investing in new tech like solar without going after the chinese dumping that really puts solar out of business. i think there's a similar story to be told there with how tpp has been constructed and the design choices that reflect the priorities that it was built around. these deals are hard. i've served in the u.s. government long enough to know that. i'm not here to monday morning quarterback tpp, but i do think the american people are

skeptical about whether their interest and interest of middle class families are being put firmly at the center as the litmus terrorist of trade, good or bad. i think even good faith efforts that the obama administration has pursued. these deals have not come to pass in the way we expected by best of itc estimates, partisan or bipartisan estimates. until we really have our arms around how to model trade, how to get a sense of the predictive impacts, certainly better than we saw, of course, which was meant to be the model for tpp, i don't blame anybody. >> so when it comes to china, this administration has, by some accounts, taken a pretty hard stance on trade cases and trying to get china to address some of its issues like subsidies and overcapacity. do you think this relationship

is going to suffer in the next administration, there will be even more acrimony that the cases -- not just cases but what has been promised in terms of tariffs and things like that will really just make the relationship unproductive or do you hope for a real attempt to address overcapacity and things that have really dogged their relationship? >> so i want to be clear. i don't think that ustr in the past eight years has been sitting on cases they could be bringing. by and large, the problem is we dont have the tools to fit the abuses that we're seeing today. so point number one should be to invent those tools. that's going to take legislation. i hope we're pushing on an open door and rewriting section 301 to keep up with the sort of shape shifting qualities that a lot of the chinese abuses are taking. i would take away sovereign immunity from a lot of these things, a chinese company can be

private one day and show up the next day, i'm pretty sure even our most nimble trade tools are not going toet ahead of that. it's not just a matter of bringing new cases and using the rules we have, we need new rules. point number one. and you know, i quite suspect that a new trump administration may not be patient enough to allow those tools to be conceived around legislation. in fact, may well be in a situation where tariffs look like the more preferable choice. i'm not sure that i would go down that road, at least in the broad across the board way he's been suggesting. but i do want to remind everyone that as deficit country, united states holds the reins of adjustments. i think we should begin to think a little creatively how we use that leverage. it shouldn't look a whole lot different than japan in the '80s where we did wrestle the japanese to some kind of agreement.

that was at the most basic level about a desire for them to repatriate their surplus in the form of investment and we said, okay, but going to take the form of factories employing americans. that's the way we have to do those plans this way we do today. i don't see those chinese factories. >> so we have maybe time for one or two questions. before we get to that, i wanted to ask one quick question of the chairman. with this focus on enforcement by the president-elect, do you foresee any sort of work with him, with the administration on trade enforcement legislation? any type of new ideas floating around there? >> sure. look, both parties, i think, agree on strong enforcement. mr. trump ran on the strongest enforcement of the two candidates in one, and i think most people agree that was a convincing part of that -- of his support nationwide.

so i think given the opportunity and chance to assess new tools, the new ones we gave this new president less than ten months ago because he may find there are tools there he didn't know. secondly put those tools in place. make sure -- for example, the wto is where the trade rules stand and where they are enforced. so he has the opportunity, i think, to assess within the wto, aggressively pursue, for example, china's behavior that don't follow, that violate our trade rules. one of my suggestion would be, look, it started in the bush administration. ustr worked it very diligently. i still think if we're serious about going after china on intell intellectual property and protections, then we ought to be aggressively pursuing and

concluding a bilateral investment treaty with china. i would go straight toward that issue rather than play it on the sides or merely through the wto. that's one offense. i would take a second one. >> we will take questions from the audience. anything from the trade agreement? >> okay. good to see you, chairman. >> thanks. >> now that tpp is on hold for the future, we don't know how long, the obama administration still has some trade initiatives that they are negotiating or trying to finish by the end of this year. maybe you could comment on tisa and ega and where you see those going, even concluding maybe.

also, do they need congressional approval? >> i hope they do conclude, i think the environmental goods agreements in closer to the finish line there. china still needs to step forward in a major way. europe has to as well to make sure we're actually addressing environmental goods of today and not of 20 years ago. so i'm hopeful that makes progress. it depends whether they are changing u.s. law in that process and whether that has to be submitted or not. tisa, i think the service agreement is really important for trade, competition, for lower costs, very important. i think some of the decisions europe has made, for example, requiring each country to approve it, i think they are creating roadblocks and making it very difficult to move in

agreement forward that should be i think agreed to in a major way that has so much upside globally in an economy worldwide that's not so hot, not doing so well. i'm hopeful that progress can be made. again, i think u.s. administration has worked very hard to continue those agreements. i hope they are concluded. >> i think we've run out of time. i think the chairman has to get along to -- >> that vote thing? >> yeah. >> yeah. >> thank you so much for joining us tonight. i'm going to hand it over to my colleague. doug palmer, senior trade reporter. thank you so much. [ applause ]

>> well, hello, everyone. thank you for coming and thank you for coming, ambassador froman. on behalf of politico and our sponsor, fedex, and everyone here. i think it's fair to say when we booked this event a few months ago, we expected a different discussion, focused on the possibility of congress passing the trans-pacific partnership in the lame duck, but the election of donald trump appears to have swept that off the table, although i do want to ask you if you agree with that. now we're looking at a potential new era of tit for tat trade wars with some of our biggest trading partners such as china and mexico. as u.s. trade representative, ambassador froman has trafled all around the world negotiating trade deals. i've had the pleasure to go

on maybe 5% of those trips. including the time we went all the way to columbia, maryland, for talks on south korean agreement. that was one of the finest suburban hotels i've ever visited. >> absolutely. >> the real reason i mention that is that the trump campaign often tried to hang the credit or the blame for the korea agreement on hillary clinton. for the record, i was there the whole week and i never saw hillary clinton one time, but i did see ron kirk, who was ustr at the time, and wendy cutler, the chief u.s. negotiator, and michael froman, who was obviously running the whole show on behalf of his friend, president obama, who he met when they were both back in harvard law school way back in the 20th century. >> man. where is this going? >> just one last paragraph. i'm sorry. my favorite fun fact about ambassador froman is that he got his start in international affairs by helping resolve albanian blood feuds which unfortunately we won't have time

to get into today. although i would be curious how they compare to washington blood feuds. are they any easier to resolve? anyway, i'm going to shut up and just give ambassador froman the opportunity to talk. first i have to ask the question that's on everybody's mind. ambassador froman, the obama administration launched talks on the trans-pacific partnership in march 2010. there were 19 rounds of negotiations and after that another 15 senior official and ministerial agreements until an agreement was finally reached october 5th, 2015 in atlanta, georgia. mr. ambassador, after all that work, after all that travel, after all that time you were away from your wife and two children and other negotiators were away from their families, is the tpp agreement really dead? >> well, i was about to say, thank you for having me, doug. i may revise that. let me revise that comment. look i think --

first of all, thank you for having me back. i think the work that's been done on tpp, both in terms of opening new markets for american exports and raising standards there so we can create more good jobs, more well paying jobs, i think it's a very strong agreement. as the president has said we've not been fully successful in convincing people how it addresses the concerns they raised but we are fully committed to asia-pacific region, it's absolutely critical to our strategic and economic interests and we believe that the kind of high standards we were able to negotiate in tpp does exactly what the american people want, which is leveling the playing field. we've heard a lot of -- certainly one of the themes coming out of the election are people's concerns that we face an unlevel or unfair playing field.

that was one of the main motivations behind us when we went into tpp to make sure we did open our markets disproportionately for our experts, other countries have big barriers to exports. and that we raise standards. labor standards, intellectual property right standards, standards in terms of how an enterprise should operate so they don't compete unfairly against our private firms, standards on the digital economy. those are all things tpp accomplishes. so i'm hopeful over time as people look into it and see what's at stake as the rest of the world moves on and pursues their own trade agendas and we see what the implications are for us economically and strategically, that we'll be able to see that work move into effect. >> okay. so not completely dead. but -- >> in the previous panel i heard somebody use the word purgatory. i think i prefer the word purgatory.

i think there's a lot in there. i think other countries are certainly not going to stay still. they are going to move forward. whether they move forward by taking tpp forward without us or they move forward in their own bilateral or tri-lateral or regional trade agreements, the rest of the world isn't going to stand still. that means we're going to be left on the sidelines seeing not only the opportunities tpp represents lost but seeing existing share in markets eroded by other countries getting access. that i don't think is in our interest. >> right. right. but one curious thing today, i notice that you and secretary vilsack met with state agriculture secretaries at the white house. >> that's actually tomorrow. you have great foresight. >> you have a premonition of what's going to happen tomorrow. >> that seemed like a tpp event.

i wondered, is there some crazy possibility president obama could still present it to congress. >> i think we made clear we stand ready to move forward. we've worked to address outstanding issues, the poor producers had some issues, and now they're supportive of the agreement. dairy farmers had issues, now they are fully supportive of the agreement. financial services sector had issues, now they are fully supportive of the agreement. even on the major outstanding issue of biologics and intellectual property rights, i think your publication as well as others reported we were very close to an agreement in the run-up to the election. so we stand ready to move forward, but this is fundamentally a legislative process. it's up to the congressional leadership to decide whether and when it will be taken up. >> what's going to happen when president obama meets with other tpp leaders at the apec summit this week? will they make some sort of statement to try to move the process forward? is there something they can do to somehow memorialize the

agreement so it's there if the trump administration wants to take it up in the future? >> the other countries are already moving ahead. many of them are far down the line in their own approval process. the lower house of the diet in japan approved it last week. others are moving forward through their own respective ratification processes. so i think this meeting that we'll have in lima among tpp leaders will be an important opportunity for the leaders to share perspectives on where they are each domestically, and i'm sure they'll want to hear from the president and his perspective on where it goes from here. >> last week i was at an event and dan pierson from the cato institute joked that trump could wait a few years and rebrand it the trump pacific partnership. do you see something like that happening? >> we never thought of selling the naming rights. it's an interesting idea. i'll leave that to the cato

institute to suggest. >> i want to ask about nafta, donald trump says he's going to renegotiate -- going to withdraw from nafta unless mexico and canada agree to renegotiate it. didn't president obama say he was going to renegotiate nafta? did you guys ever get around to doing that? >> he did and we did. he said back in 2008 when he was running for president that he wanted to renegotiate nafta. he was very clear about what he meant. it was because labor and environmental issues were dealt with in nafta as side agreements that were not fully enforceable. he made the point if we're going to have trade agreements we have to treat labor and environmental issues as seriously as every other issue in the agreement. that's what we did through tpp because mexico and canada are part of tpp. when they agreed to binding and enforceable labor and environmental provisions that was renegotiation of nafta. there are other parts, too. we got more market access to canada than we had in nafta in

dairy and poultry, access to mexico in certain yare areas w they reformed such as the energy sector. so tpp is, in fact, renegotiation of nafta. in that area, like so many other areas, if tpp doesn't move forward, until it moves forward, those gains are not to be seen. if we care about, for example, raising labor standards in mexico, both because that's good in and of itself and because it helps level playing field for our workers, it's important to move forward with tpp. because that's exactly what it does. >> for whatever reason, nafta seems to resonate negatively with voters. did you ever -- did the administration ever suggest to hillary clinton that she try to sell the tpp agreement as a renegotiation of nafta that did all these things you just described? >> we have certainly in our efforts to describe the benefits of tpp mentioned and talked about how it is the renegotiation of nafta. it's the most significant

expansion of workers rights, 500 million workers around the world would have binding and enforceable labor rights. as i said, that's not only good for itself, in terms of the dignity of work but in terms of leveling the playing field for our workers and our firms. one of the main complaints is we live in a world where we compete with low wage labor. that's a reality. that genie is out of the bottle. the question is what are you going to do about it. our view was through tpp, if you could get other countries to agree with the right of association and right to bargain collectively and prohibition of child labor and forced labor, that would improve labor standards in other countries and level the playing field for our workers. that's what's at stake with tpp moving forward. i have to say for critics of tpp or opponents of tpp, i think the question really is by defeating tpp, or delaying tpp, how are

they improving workers rights around the world? how are they leveling the playing field for our workers? in the meantime when we could be raising these workers rights, why are we imposing on our workers a continuing unlevel playing field. >> do you have a theory of what -- i know you say you prefer to think of tpp in purgatory. do you have a theory of who put it in purgatory? >> are you asking about divine intervention here? no, look, i think what we've seen is a rise of populism. >> right. >> not just in this country but around the world. a populism that was both the right and the left. i think you've seen a politics th dn't always permit a full debate based on facts. i think that combination of events has made it difficult to

get the message through about just what's at stake here. >> yeah. do you remember where you were october 7th, 2015, when hillary clinton came out against the trans-pacific partnership? >> i think i was probably at work, in my office. that was a few days after we had completed the tpp negotiations and we flew back to washington, to immediately go up to the hill and consult on it and were in the process of doing so. >> do you remember how you felt? >> i'm not going to comment on any candidate past or present. i think this election process has very much underscored that there are a lot of people who feel left behind. whether it's because of technology, demographics,

globalization. we talked about before, we don't get to vote on technology or next generation of robots or software. you don't really get to vote on globalization, it's just a force. trade agreements become the scapegoat for quite legitimate concerns that people have about income inequality, stagnation of wages, about feeling left behind relative to others in the global economy. that's something we need to deal with. if there is a silver lining to this whole debate, it is that i hear both republicans and democrats coming back from the campaign trail talking about how we need to do more to deal with displaced workers, communities affected by change, wherever that change comes from. whether it comes from technology or from globalization. that's going to be an important debate going forward. i would hope coming out of this

campaign and coming out of this election we don't draw the wrong lessons or pursue the wrong remedies. cutting off trade is the wrong remedy. we know that. 14 million americans owe their job to exports. we export over $2 trillion worth of goods and services a year. cutting us off from the global economy is not the answer to these concerns, as legitimate as they are. it's dealing with these other issues about dislocation, about transition in a way that goes beyond what we've done before. >> right. i mean one thing the trump campaign has suggested is sort of a more radical use of trade defense measures in order to keep out imports from china. what do you think of that idea? is there more the administration could have done on that front? >> i think we've been very committed to trade enforcement and to the use of the trade remedy laws. i think as you see now, i think there are more trade remedies being imposed by the commerce department and itc than ever before in history.

a lot were in the steel sector. on the trade enforcement side we brought 23 cases before wto, more than any country in the world, 14 of those cases brought against china. we've won every case that's been brought to conclusion and we're continuing to work on those cases. so i think we believe that enforcement is very important. that clearly is an issue that's been underscored by this campaign as well i expect it will be important in the future as well. >> i had a theory that you had at least one or two more wto cases you were going to roll out during the tpp debate. >> we work on them on an ongoing basis and we bring as soon as we are confident they are ready to go. wherever they're ready to go, we bring them. >> could we see more between now and the end of the administration? >> as soon as we're confident in the case so we're ready to bring it, we'll bring it. i don't want to ruin the surprise. >> will the obama administration

declare china a market economy under anti-dumping laws before it leaves office? >> well, look, i think as china itself has recognized, the determination of market economy status is actually a determination that falls under each of our statutes, each country's statutes. we have criteria in our statute about what constitutes a market economy. china can apply for market economy at any time. i think the last time it did so was back in 2004. i think there is widespread view that based on those criteria, that it has not yet achieved that status. i think what they are focused on is what happened at the end of the year when part of their accession protocol to the wto expires and how will that affect our application of anti-dumping laws in the future. that's something we're continuing to work through. >> so there could be some announcement on that? you could announce a change? >> haven't made any decisions on that. >> but it's still under consideration. what do you think you can get done in the closing days of the

administration? do you think environmental goods agreement could come together, could there be a conclusion of the u.s.-china bilateral investment treaty? >> the g-20 leaders back in september underscored the importance of trying to get the environmental goods agreement done this year. we've been working to follow up that commitment. we've made very good progress. we still have a ways to go. it will be absolutely critical as it was with information technology agreement that china play its appropriate role in this and puts on the table. china has potentially one of the greatest beneficiaries of ega both in terms of the country that produces environmental goods and the country that desperately needs those goods to deal with very serious environmental problems. but it's going to be important that they put on the table the kind of access the rest of the countries are willing to offer if we're going to be able to reach that agreement. we're looking forward to engaging with them on that in the near future. >> bilateral investment treaty?

>> those conversations are ongoing. i think it's important that it be a high standard agreement that really reforms and opens up the chinese economy and creates real disciplines to address the kinds of problems that our companies have had in that market. again, we've made progress but we're not there yet. >> i was wondering, what's the morale like at uscr now? as we started the conversation, you guys spent five years negotiating this agreement. it looks like it's not going to go anywhere in the foreseeable future. that must be very disappointing. you also have a president-elect who repeatedly on the campaign trail talked about how stupid america's trade negotiators were. do you think they are going to be able to work for this administration? >> well, uscr is a great institution. i worked in a number of different parts of u.s. government, and there is no finer group of career civil

servants than usdr. they are incredibly dedicated, incredibly hard working, and incredibly dedicated to their mission of both negotiating strong trade agreements and making sure they are fully enforced. i have every confidence as they have with every previous transition, and i was reminded when we came in in 2008 that -- 2009 that they had a number -- we raised a number of concerns about previous trade policies and renegotiating agreements and the like -- that we will work well with the new administration as well. they are very professional and i have every confidence they will be able to work with new administration to execute on their priorities. >> we talked about how much you travel on the job. after january 20th, you'll have a lot of time. do you have any travel plans? what will you be doing next? >> i'm going to be finding a hammock on a beach and sleep for some undetermined period of time. that's the only plans that i've made so far. >> but you seem, i don't know, i