d.c. the event of student activists in response to the deadly scoot shooting in florida. we will have live coverage of the event saturday starting at noon eastern on c-span. our podcast, c-span's "the weekly" takes you beyond the headlines to explain in depth one significant news story shaping the conversation in washington and the country. you'll hear from leading journalists, policy makers and experts with background and context. find c-span's "the weekly." online any time at c-span.org. up next, a look at nafta negotiations and national security implications for the u.s. speakers include nebraska senator ben sasse. hosted by the heritage

foundation. this is about 90 minutes. >> good afternoon. welcome to the heritage foundation's auditorium. we welcome those who join us on the heritage.org website and those who are also joining us on c-span network. in-house, we ask that the courtesy of mobile devices turned off and those online you are welcome to send comments or questions simply e-mailing and we'll of course post today's program on the heritage home page for everyone's future reference. leading the discussion following our special opening remarks will be david shedd, david serves as a visiting fellow for national security and foreign policy. welcoming on behalf of heritage and welcoming and introducing senator will be kim holmes,

serving as our executive vice president. please join in welcoming him. >> good afternoon, everyone. it's a pleasure to welcome you to the heritage foundation. this is the second time that i've been at this podium this morning. we welcomed the president of georgia here for a two-hour discussion and he gave a speech from here but it's certainly an honor to welcome you, senator, to the heritage foundation. it's we who have a long history, certainly, from the work that when i was back here at an analyst and vice president for foreign policy back in the '90s trying to get nafta approved working with conservatives in the republican party. david shedd and ambassador negroponte involved in that and pleased to have you all here, as well. before i introduce your guest speaker i would like to start with a couple of facts.

going in to its 24th year, the north american free trade agreement has been in our humble opinion a success story. overall, nafta trade agreements of the three countries, the united states, canada and mexico increased from 290 br billion in 1993, the trade, has, between the three countries, $290 billion in 1993 to more than $1 trillion in 2016. u.s. manufactured good exports support more than 2 million american jobs. and mexico and canada are the first and second largest importers of american agricultural goods. often ignored in the nafta success story are the national security benefits of this agreement which you will be hearing more about in the panel discussion and certainly from senator sasse. as joint economic security between both countries expanded

as a result of the nafta agreement, american -- to identity opportunities and 0 address illegal immigration has also reached unprecedented levels. yet after seven rounds of contentious negotiations the future of nafta is uncertain. nafta could be certainly improved. i think almost everyone agrees with that. but it also has resulted in many proven positive impacts on the american economy, on american national security and just yesterday the heritage foundation published a new research paper exploring all these linkages. today, our distinguished fellow david shedd will lead a panel discussion with experts who have served in the highest levels of government to discuss the implications of withdrawing from nafta. but first, i'm honored to

welcome senator ben sasse of nebraska to deliver a keynote address why a stronger nafta would boost not only free trade but also the national security interests of the united states. trade issues are at the top of priority for senator sasse and we look forward to hearing your thoughts. senator ben sasse represents, of course, the great state of nebraska. we were having a chat about walking beans and doing various things to corn and i dare not talk about. because i don't fully understand what he was talking about. but he's a fifth generation nebraskan. he comes to the senate having spent previous five years as a college president. when he was recruited to take over the mid land university, he was just 37 years old. making him one of the youngest college presidents in the nation. the 130-year-old lutheran college on the verge of bankruptcy when he arrived and became instead one of the fastest growing higher education institutions in the country. most of senator sasse's career

spent guiding companies and institutions in times of crisis and he does so with straight talk and with strong determination. he's worked with the boston consulting group of mckenzie and company and private equity firms and not for profit organizations to tackle some of the failing strategies across a broad array of sectors and nations. so please join me in welcoming senator sasse. >> thanks, kim. thanks to heritage and thanks to all of you for having me. kim did tell me even though originally i had 15 or 20 minutes to kick off the panel he said if i would give details on agriculture particularly detasselling corn and walking beans i could have an extra hour and you will get into agricultural stuff and complimenting my boots which i appreciated and he asked what's up with that. he didn't realize that

nebraska's the largest beef state in the union and then wanted to ask technical questions of beef versus cattle and whether or not texans would be offended by the season and you migrate north to slaughter in nebraska and an extra hour of bonus time to unpack ag, as well. you have a really distinguished panels and technical things to learn from them and that i'm looking forward to learning from them, as well. i won't try to compete with that. there are a whole bunch of aspects to the way we do counterintelligence and border security and drug intradiction and how many trafficking partnerships or anti-human trafficking partnerships with mexico to hear this afternoon and i won't speculate on that and the implications of the timing and unfolding of that that negotiations for the mexican election but i would just like to flag that's a significant thing i don't think

is covered in the u.s. media accounts of what's happening in nafta, as well. so there's a lot to be discussed this afternoon. i'm going to limit myself to setting the backdrop for some of this discussion and with limited time i'm going to give you something more approaching a listical as a kickoff for the talk and unpack it more detail and offer six thesis for your consideration. the first is that when we discuss trade and our broader topic today is the relationship between economic partnerships and military partnerships, across the globe, but especially in north america, when we discuss trade the american people right now regularly jump to job change and job disruption and there's a basic true fact that we should all have in common we don't all have in common which is that technology not trade is overwhelmingly the primary driver of job change and job disruption in america.

that is technology, not trade, is the overwhelming driver of job disruption in america today. number two, if you look at the effects of the trade just from an economic standpoint, we'll get to national security implications of trade as well, today, but if you look at trade just as an economic matter, it is indisputably good for the u.s. throughout history. this is an academic theory. this is historical reality. and nafta in particular has been indisputably good for the u.s. and also good for mexico and it's also been indisputably good for canada. trade done right is a win-win. and regularly in our public discourse we don't talk about that clearly so i think it's useful to unpack a little bit looking at the economic ledger how to think about the consumer benefits of trade, the producer benefits of trade and then in

reverse if you look at more tariffs or more protection, the consumer costs of trade, the producer costs of trade and then the retaliatory synergistic trades as you cascade from one kind of protectionism to other types of protectionism and the second thesis is trade is indisputably good as an economic matter. number three, we have very little public understanding of what the term trade deficit means and not understanding what a trade deficit is has huge negative consequences for our public deliberation about trade. so we should talk just a tiny little bit about what the word -- the term trade deficit means and really we should fight hard and i think for those of us who are in public life for a time or those who are in the academic or the think tank world or those of you in the journalistic community to regularly stop whenever someone says trade deficit and say when

you say trade deficit do you mean trade product deficit? i assume you do. but if we talk about that make sure we also get back to the trade services surplus and the foreign direct investment surplus that the u.s. almost always has whenever we talk about a bilateral trade product deficit. number three, we didn't deliberate well about trade without unpacking what we think we're saying when we say trade deficit. number four, the american people are not to blame for this confusion. this is overwhelmingly the fault of leaders to not talk clearly about where we are in economic history. and unless we go slower and we unpack where we are in economic history there is going to be so much anxiety about job churn and job change understandably that people are going to look for boogie men and right now trade is suffering a lot of the boogie

man negative consequences of us not deliberating clearly about where we are in economic history because we are going through a time of radical change. the technological and in particular digital revolution that we are living through may well 100 years from now look in the rear-view mirror as disruptive, not just to economics but to basic human community as industrialization and urbanization. and if we're going through that kind of a revolution we should have some sense of what we are living through so that we as a people deliberate about it clearly and this town is failing radically to have any meaningful discussion of where we are in economic history and so a lot of what feels like washington breaking down is washington breaking down at the basic level of policy deliberation but more fundamentally it's washington not having done the first thing of leading to help the american people have a big, broad conversation about what we think, what sort of probables are amenable to political solutions and probably not

amenable to political solutions. when we unpack that i would say it's a time of such radical erosion of social capital, radical and rapid, that most people feel such hollowness in our lives and as people who are meant to be relational beings, meant to be tribal beings, if our tribes are evaporating, we try to create tribe in a lame way to create tribe doing anti-tribe and that's happening all around us. where people are saying, well, i don't have a lot of tribe but maybe i can at least have the enemy of my enemy be my friend for a time and there's a whole bunch of that going on and some of the reason that washington doesn't look like it makes much progress on pragmatic, small ball legislative policy making. number five, and this is more than the mcdonald's thesis of

sam huntington and other people but number five i would say that when you have lots of economic relationship between two countries or between a bloc of countries, when you have a lot of commerce between peoples, you end up building other kinds of relationships, as well, which often have huge global security implications. this isn't really that profound. it turns out you are les likely to go to war with people that you know and like and have shared interests with. it's not profound but talking about trade and isolate from global security and national security considerations, we're pretending this people have just disembodied rational robot sort of calculators making decisions about what their interests are in the world as if they aren't embodied people that have economic interests and communities and relationships and friends. and it turns out when you have a lot more economic relationship you're much more likely to find

shared understanding about global security matters, both for the good sort of building alliances, but also, for the avoid dance of the bad. misunderstandings tend to be dealt with better if you have lots of overlapping relationships. to take it from some of the literature of familiar length breakdown out there right now. breakdown out there right now. captioning performed by vitac captioning performed by vitac of little bumps in your marriage but share lots of common friends and have family members and neighbors, it turns out you can solve lots of problems that might otherwise spin out of control. the same is true in economic and military security. sixth, and, finally, reaching far beyond just our nafta discussions today, we should be clear about where we are in geopolitical competition over the coming decades. china has a plan and we don't have a plan. china has a plan for where they

would like to see global economic relations and global security relations go, and the united states right now surely doesn't look like we have a plan. again, those six thesis are far more than enough. i promise i won't be able to finish on time. but i'll try to go very fast back through them and take a few questions and kim will pull me from the stage. so back to number one. it is indisputable that what is happening right now in the disruption of work is a consequence primarily of technology not primarily of trade. trade is a big deal. i don't think there is anybody in the u.s. senate that is more pro-trade than i am. i think trade has immense human benefits, and yet trade is not really what's driving most of the anxiety people feel right now. and we need to be clearer about what is happening economically. so by analog, let's look at what happened to agriculture over the

last century and a quarter and then what is now happening to industrial, i think of them as big tool economy jobs, because if we understood the analogy to agriculture, we would know how ridiculous it is to talk like we're trying to make america 1950 again. no one is ever going to make america 1950 again in terms of large scale industrial jobs and no one is ever going to make america 1850 again in terms of agricultural jobs, and none of us would think that we want that. so in 1900, 41% of american workers worked on the farm. today, it's well under 2%. total agricultural output is off the charts higher in terms of quantity and quality than 118 years ago. 41% americans on the form in 1900. more still lived and worked on the farm, but as a matter of work, 41% of workers on the farm. today, less than 2%, more total

output. what's happening in manufacturing? the rhetoric in this town where politicians always lie and pretend they can fix whatever bit ow anxiety you have, we're going to bring back industrial factory jobs from the 1950s. no, we're not. that is simply not true. it's not what's going to happen and there is no economic theory to defend that rubbish. the high watermark of industrial employment in u.s. history was in the mid-1950s where 31% of american workers worked in factories. today, 7% of american workers work in factories and there is more total output in terms of both quantity and quality. the shape of the curve from the agricultural revolution, and i don't mean thing aresult ral revolution revolution 11,000 years ago. the shape of the curve is really similar. from 41% to 2%. in industrial jobs, from 37% to

7%. and the shape of that curve is going to continue to go down. the way it goes down matters a lot to particular family's lives and we should have bigger discussions about what that looks like, but we should start by understanding where we are in history. transition to the second point. when you talk about protectionism as if it's going to protect those jobs, you don't have any theory to defend your position and you don't have any history to defend your position. so here's what actually happens when there is more protectionism, and let's talk a little bit of detail about the current steel tariffs idea. here is what happens if we put these steel tariffs in place. consumers lose. whenever there are more tariffs, which just means tax on consumers, whenever there are more tariffs, consumers on both sides of a border lose. because you're telling voluntary parties who wanted to make something and sell it and another voluntary that wanted to make something and buy it that they can't go through with that transaction. a government is going to stand

between you and say, we want less of these transactions so we're going to put taxes in here to disincentivize this transaction. consumers on both sides always lose whenever there is more protection. there were voluntary choices people wanted to make for higher quality lower costs goods they're prohibited to make because of some policymaker. that's register one of the eication. registry two is what happens to it the protected industry and other industries that need that industry an aninput? i'm going to come back to that in just a second. because the assumption most americans make is that, well, consumers may lose from protectionism, but producers must win. so then we net out whether or not this equation is on net good. that's not true, but i'm going to come back to the question about the equation around producers in steel. then the third register in the equation is retaliatory stuff. when we decide to put protective

tariffs in place, we can be sure, because it's always what has happened, that there will be retaliatory tariffs against the u.s. as recently as a couple of months ago when we decided to put tariffs in place against washing machines and solar panels, what did china target? they -- who have come into my office and talked to me about what's happened to them about their marketplace and the future of the markets in their space. so retaliatory tariffs are inevitable in that we always lose in that register three as well. the only thing that is disputable is what happens in register two. how many steel workers do you think there are? take a guess in your head. how many people do you think work in production steel in the united states? 140,000. how many people do you think work in industries that use steel as a primary input for their factory jobs? 5.5 million. the steel tariffs that we're

talking about in washington, d.c. will kill jobs in america in steel. so consumers always lose with protectionism. retaliated against industries always lose with protectionism, but even the politicians' rhetorical lie that they're going to save steel jobs, it's not true. you're going to cost steel jobs with these tariffs. the only question is how many. there are two studies that have been done so far trying to model what happens with these protective tariffs and they have between 6 to 1 and 13 to 1 job loss. "the economist" had a miss out last week called "the president's war with adam smith" and their analysis says it's going to be 13 lost jobs for every job preserved in the steel industry. there is a bigger modelling that's been done that speculates 33,000 saved steel production jobs and 179,000 lost jobs. so a net loss of 146,000.

you look back to the end steel tariffs at the end of bush 43's administration, the administration knew by the 11th month they were losing jobs in the industry they were seeking to protect with their steel tariffs. second point here is, indisputably trade is good for america overall and trade is good for workers, even in the industries we're seeking to protect. that doesn't change the fact that there are bad actors out there. china is doing bad things with a bunch of their oversupply in general in industries and in steel in particular. here is the good news, when the u.s. uses dispute resolution mechanisms that already exist, we almost always win. when we go to the wto, we win more than 90% of the time. steel tariffs against china's bad practices have led to a reduction on the order of 2/3, slightly more than 2/3 probably over the last 48 months because we've been targeting certain chinese bad practices, and it

turns out when we're concerned about other chinese bad practices, the best way to move forward is with other people who believe in the rule of law and getting them to come together with us to try to defend anti-tariff behavior and non -- and attack nontariff beariers as well. all of that would assume we have enough shared literacy to understand what's happening in trade. here's one of the big problems we have, the term trade deficit sets off bells in people's minds that we're losing in some definable way because someone else is cheating. sometimes there is cheating and we should be vigorous and vicious in our response, but we should be public and deliberate. we shouldn't make up a national security clause as a way to try to do something when there is specific bad action by china we can resolve by mechanisms that exist in a rule of law order. here is the problem with trade deficit, we have a picture in our mind what trade deficit

means. if you go to mexico and you go into a retail store, it is true that you're not going to find a whole bunch of products made of plastic and steel that have stamped "made in the usa" on the bottom. when you go into a walmart ten miles from here, you're going to find lots of steel and plastic products that have "made in mexico" stamped on the bottom of them. so is the u.s. losing? are we losing as consumers? losing as producers? if you go to the factory in mexico that is supplying a lot of the plastic and steel stuff sold in their retail stores and our walmarts, the big machines in those factories in mexico are probably made in the united states. what does that mean? it means that they're loaded up with services surplus. they have u.s. accounting in those machines, they have u.s. engineering in those machines, they have u.s. lawyering in those machines, they have u.s. product design in those machines, they have u.s. finance

in those machines. so the export of that machine carried with it a whole bunch of services surplus and the dollars that we're spending to buy stuff that come off that assembly line in new mexico are reinvested in the u.s. in terms of foreign direct investment that allows us to advance the next generation of those higher end machines. the failure of washington to have a big discussion with the american people about what is actually happening in the economy has huge negative implications for our economics, for our civil society and for our national security. because ultimately the people need to be told the truth. the people deserve to be told an honest answer about where we are in economic history. the people need not to be lied to, saying we're going to make it 1950 again because it's not true and it's not going to help the specific workers in the sprisk disrupted industries and it sure as heck isn't going to help their kids to be told the primary problem they face is that they're a victim of other

people cheating them. that's not true. what's actually needed for the united states and for our workers and for our indicational system, which needs to be radically upgraded is to prepare for the more nimble economy of the future, which is inevitable. i was born in 1972. average duration at a firm in the '70s was six years. leverage now is four years and change. where do we talk about this? the number one driver of uninsurance in america, health uninsurance, is job change. the public has no idea. when you survey the american people, why do we have so much -- why is uninsurance so much greater in 2010 than in 1990? because of a radical increase in health unassuraninsurance. the public think two big answers, socioeconomic status and health status. we don't have more sick people and we don't have more poor people so why do we have more uninsured people? because you tend to be uninsured for four to six months every

time you change jobs. once you're changing jobs every four years, it means you're uninsured 1/8 of the time. that's a structural problem that means when you get the breast cancer decisi cancer -- that means you're the uninsurable population, you're the people with the pre-existing conditions, five and ten and 15 years from now. we should talk honestly about that. we need to create a mobile economy where we rethink the architecture of industrial-era job benefits from the mid-1960s because we're not going back to the 1950s and 1960s natural how many anybody wanted to. the only thing this city has gotten done in the last half century about the assumptions we make about our where our benefits come from is defined benefit retirement plans. until 1986 we had an assumption that everyone would have a defined benefit pension from their whole life from their one firm that was the cradle to the

grave or the high school or college graduation retirement experience. that's not what people go through. when i was a college president, we would look at survey data about what do we know about the graduates of that year? what was the current expectation? the average college graduate in 2014, the last year i was a college president. the average graduate of our college could assume they were not going to change just jobs but industries three times in the first decade post-college. we need to radically relook what it looks like to be a nimble worker. and that starts with telling the truth about how fast a.i. and machine learning are going to disrupt this economy. i used to work at the mckenzie institute. they had a report come out in november of 2017 that i highly recommend to you. they spent about 18 months modelling 46 countries, 91% of global gdp and 800 job categories.

91% of global gdp. and their prediction based on their modelling is that 55% of total economic tasks in the global economy today will be disrupted inside 12 years based on already available a.i. this is not two chess moves from some new technology that may be created in 2021 and be applied by 2029. this is based on a.i. that exists today, what share of global economic jobs are disrupted within the next 12 years. that's not to say, mind you, 5% of jobs evaporate. this is 55% of tasks. when you bundle and unbundle current jobs, they speculate that 60% of today's jobs are more than 30% automatable. automatable. that tends to set off bells in people's minds that make the assumption nobody is going to be able to have any stability in a job. that's not true, but you probably won't have stability in a job if you don't plan to upscale as you go forward in your career. this is what atms did that

surprised americans in the 1970s and '80s. my mom, farm kid, coming off the farm, didn't go to college, didn't know anybody who had really gone to college in her family and she became a bank teller soon after graduating from high school and this is in the late 1960s. the atm is created in 1967 in london and starts coming to the u.s. in 1969-70. the assumption at the time was that atms are going to upend all of these teller jobs in america. know what actually happened over the next 30 years? a pretty significant expansion in the number of tellers in america. why? because it turned out tellers did a whole bunch of different things, and most of their time was spent on really, really low value tasks like recounting the money in their drawer and trying to match it with their book at the end of the day and counting it over and over and over again, and turns out machines are much better at this than people, but tellers at that point were almost a 100% female job. loan officers were almost a 100% male job. know what happened over the course of the 20 years the atm came to the u.s.?

the average bank went from needing 21 tellers to needing less than 13 and what that led to was a radical expansion in the number of branches and franchises that banks could afford to open and what happened was women climbing the career ladder and beginning to take over more and more of the tasks that had been loan officer jobs, as they started to sell investment products and sign people up for credit cards and all sorts of different products that seemed to be well beyond the historic role of the teller. it reoriented things in ways that no central planner could have ever predicted but ultimately in ways that led to the greater service of banks to lots of people across the economy, but also lots more career opportunities for people. i think the mckenzie study suggests that similar things will happen in our time. lots of jobs that look like they might evaporate might actually climb the ladder of productive value for your neighbor. all of this points us forward and i will move toward wrapping up here, points us forward toward what are the global security implications of this. we are in a geopolitical

competition with primarily china, but what we should recognize is, if you think about global security challenges for the u.s., we tend to bucket them five ways. we say russia, china, north korea, iran and a catch-all category for jihadis. there's jihadi mess all over the world but not primarily driven by a particular set of nation state actors. when you look at the chinese strategy, the russian strategy and the iranian strategy, ask yourself this question. do their neighbors like them or not? why? why do china's neighbors, russia's neighbors, and iran's neighbors, not like them? this may seem a little too poetic, it may seem a little too romantic but because those nations don't believe in souls. we actually believe in universal human dignity. the american idea is premised on a certain set of assumptions about dignity and so we believe particularly for the 320 million

people that we are all called in this room to service. we believe it for 7.5 billion people across the face of the globe. we believe they are created with inherent dignity and that god gives them rights by nature. government just exists to secure our rights. government isn't the author or source of our rights. nobody in tehran, in moscow or beijing thinks about their economic and military ambitions by talking first about the dignity of their neighbors. they talk about how they can sow chaos among their neighbors to create a buffer and a barrier against other people getting to them. they think if their near neighbors are weak, they are protected, insulated. we believe exactly the opposite. we believe that when our allies are strong, we are strong. and when we are strong, our allies are strong. we don't believe there's a zero sum game between the u.s. and canada. we don't believe there's a zero sum game between the u.s. and mexico. we actually believe that when

mexico is thriving, there's less chaos on our border. we believe when canada is thriving, the global shop floor that is north america means bmw and mercedes decide to start manufacturing cars destined for europe in south carolina and alabama. that's pretty extraordinary. if you go to germany today, the x series, one of the most common bmws on the road, the x series doesn't have any manufacturing in europe. it's done exclusively in south carolina. that's amazing. why does that happen? because we have a north american global shop floor that produces really high quality, low cost stuff, because we don't believe things are a zero sum game. so when american public rhetoric starts, when american public rhetoric degrades and declines to the place where someone can say a phrase like nafta has been bad -- sorry, nafta has been good for mexico and americans hear in their mind well then, we must have got taken, we must

have negotiated some bad deal because if nafta's been good for mexico then we must have lost. that assumes that every deal is a zero sum game. it's not true of trade. trade is a win/win. there are deals in the world, in a real estate deal, if after the deal, you find out your counter party got a really good deal, then you maybe didn't negotiate that well. because if that deal went through, and your counter party got a really good deal, you probably left some money on the table. you probably overpaid. but that's not how trade works. and trade is a really good picture of a commerce between peoples who believe in their dignity, who want the best for each other, who want the best for their own consumers and families and producers, and who therefore also end up thinking that military alliances between us are probably good for them and good for us. it's the best bulwark against the chinese belt and road initiative but right now we are doing none of that in this city

as we deliberate about what the next century looks like. thanks for having me. >> kim asked me to take one question and i'm going to defer to someone -- we will go right here. >> -- is regarding trade, specifically on nafta, you opposed his nomination originally last year, but where are things at this time? has the conference moved somewhere towards more free trade position, or it's always been there, and how you think gop voters will hear this message of tariffs and protectionism going forward? >> yes. i will speak, kim wanted us to take one question i think to keep me on a short leash on time and you just asked a question that's worthy of about eight hours of response. i will just say very briefly something about the folks that i'm privileged to serve at home

and then i will make a slightly longer comment about if the republican party knows what it stands for. at the level of getting to represent 1.9 million nebraskans, we are i think the most export-dependent state per capita in the union. we are the most productive land in human history. there's nobody better at feeding the world than nebraska farmers and ranchers today, and what we grow, we can't possibly eat it all. so we need export markets to do well what we do great. so ultimately, we want a world where comparative advantage works for us as consumers and families and moms and dads at the store but as producers who are better than anybody else in the world. in the same way your household shouldn't spend time doing something it would cost you a lot more to build than you could buy, no nation should want to be filled with people who spend a whole bunch of time producing something that's far more costly to produce than they could buy abroad, and nebraskans get that. so where i'm from, quite apart

from party, people understand that trade is a really, really big deal. our politicians, lot harder to understand what motivates these people. i'm one of i think a single digit number of people in the u.s. senate who has never been a politician before. being skeptical of politics is not an argument for a mushy middle. i'm the second or third most conservative voter in the u.s. senate by voting record, i think according to the heritage score card i'm second. so this is not an argument for mushy middle, but i'm really skeptical of both of these parties standing for very much right now. i think there was survey data out last fall where, when you do forced choice on the american people, are you more republican or more democrat, you don't give them the choice to say none of the above. are you more republican or more democrat, about 46% of people which is the plurality winner, say none of the above. when it's not a choice they still want to register their disapproval with these parties. i think it's about 29% down to about 25% r.

if you are in my party that's pretty scary because the 29% that's dem are much younger than the 25% that are r, when you look toward the future. but when you drill a layer deeper, why are you republican, why are you democrat, about two-thirds of voters respond by telling you how much they hate the other party. so all we are really doing is ante right now. i think it's a fair hypothesis to say america is 10% democrat, 8% republican and 82% toss you all out. i get that sentiment. so i think that at trade, the public wants a big discussion. that's my belief, when you give them a binary choice, right now it's a lot easier to scape goat trade than to talk in any detail about the complexities of what we are going through with automation and disruption in the economy. we need that bigger discussion so we can make rational decisions on policy about trade. inside my party, inside the 51 republican senators, i think

overwhelmingly almost everyone is still pro-free trade, whether or not they have the courage of their convictions to say that in public is much less clear. thanks a lot for having me. >> good afternoon, and continuation of this discussion on the north america free trade agreement and its implications,

ambassador negroponte asked as we were walking up here why did you schedule the senator first. this is going to be difficult to able to top those remarks and the discussion that he engendered but i think it does better inform it. i'm going to go out of order in terms of who's sitting up here, and start with ambassador negroponte by, in the interests of time, obviously everyone up here has had a very distinguished career in government and in service to our nation, and so i'm not going to spend a lot of time on that. but in introducing ambassador negroponte with the first question, i would simply say as my ambassador in mexico in the 1989 to '93 period, i can tell you with nafta 1.0, in which we served together, he was a five-time ambassador, deputy

national security adviser, deputy secretary of state and the first director of national intelligence where i went and had the privilege of serving with him again as his chief of staff in 2005. so distinguished career. probably because of that early start on nafta, take us back, ambassador negroponte, 25-ish years ago to what led to why we had nafta in terms of mexico's commitment to it but also the united states and canada. what was the vision that has served us so well over the last 25 years? >> thank you, david. good afternoon, everybody. david refers to our service together in mexico. it was an absolute delight to work with you and to work with you in subsequent years as well. david did have quite a bit to do

with the economic issues that we were following at that time, including the two-way negotiations. well, it's a long story. how do i make it brief. i think you have to start with 1985. mexico decides to join the gat. madrid takes the decision that it's time to better integrate the mexican economy with the rest of the world and there ensued a period of time where we were holding trade discussions with mexico on a sector bisector basis, automobiles, whatever, appliances, blah, blah. and we got to the administration of carlos salinas and we sort of continued with that approach for awhile, but then president salinas went to davos in january i guess it would have been of 1990, the berlin wall had come down, the eastern european

countries had liberated themselves from the soviet union, and president salinas saw all these eastern europeans lobbying for investments and funds from different private sector investors because they knew going forward they were going to have to depend more on the private sector, and he concluded that mexico needed to do something more to compete for the world's savings and the world's capital. he then proposed to president bush that we consider negotiating a free trade agreement. he expected it to be trilateral. initially we went -- preferred to go the bilateral route, frankly mainly because mr. baker had not been enamored of the experience he had had negotiating the fta, bilateral fta with canada not much before then. but once we started down the road of pursuing and exploring

the possibility of a nafta, brian mulroney beat a hasty path to kennebunkport, maine to ask to join in that negotiation because i think he was concerned that the u.s. under the other circumstance of us having a bilateral each with mexico and canada would be sort of in this cockpit where we would be just driving everything ourselves. so that brought us to the nafta. i really do think it happened because on trade grounds, because i think we realized that the sector by sector approach had exhausted its limits. just how much more can you do that. you really had to move to the model where you identify the exceptions to your overall free trade policy rather than going through sector by sector and decide what in the myriad sectors of our respective economies we were going to allow in or out, which could take

forever. you could actually still be negotiating a sector by sector trade agreement with mexico. that's kind of how it started. the other, i want to introduce the personal and the political notion because i think it was important. the bush administration was primarily run by texans. he was a texan. jim baker was a texan. robert mossbacker was a texan. they understood then, as they understand today, the importance of trade with mexico. so there was sort of a political and geographic convergence there that made this possible. the rest is history. >> the rest is indeed history. but i think it spoke volumes of the vision that president salinas took on as well, really in challenging his own party at the time in terms of looking at the north and really making that

commitment to go into an agreement with the united states. >> except that all of you who know mexico know that everybody who works on economic policy in mexico in the last 30, 40 years, has got a ph.d. from m.i.t. or chicago or yale or harvard, you name it, or princeton. >> the best one's from harvard. >> salinas was harvard. the treasury secretary was m.i.t. i think the trade negotiators, quite a few of them were from chicago. i think that's true to this day. so they were ahead of their people and salinas by the way spent a lot of time selling his public on the fta, the -- that he would take one day a week to different states of mexico. he would meet with ordinary people. i went with him on a couple of them. he would sit down and painstakingly explain to them why an fta would be in their interest.

they were not that easy to convince. there were a lot of people in mexico who were afraid of a free trade agreement, including practically all the chambers of commerce that you could find in the country. >> let me introduce ambassador wayne. anthony wayne, long distinguished career as an ambassador as well, with having served in mexico from 2011 to 2015. he is a career ambassador as of 2010, i believe, in terms of your nomination, served us well as a nation in afghanistan and argentina as ambassador and just a long and distinguished career. ambassador wayne, can you give us a sense of expanding what i think was senator sasse's fifth point about how nafta affected and continues to affect other elements of the relationship with mexico in particular, but

obviously feel free to talk about canada, well outside the ambit of trade and finance. >> sure. i think, one, those were outstanding remarks by the senator. second, he's exactly right on that point, that when you start trading and investing and working with others, you find other common interests and you develop those. and what we can see over the history of u.s./mexico relations is that this developed during the 1990s and 2000s, the last decade, as you know, there was a large peso crisis in 1995 and president clinton made a bold move to support mexico. that further solidified that cooperation not just with the trade negotiators but in that case with finance. and right after that, we

started, we supported mexico joining the oecd, for example, the sort of club of largely developed and wealthier economies. >> we decided that in the bush administration. >> but it took place in '96, i think, as it takes awhile to get there. then still in the early 2000s we had very good discussions among the financial and trade folk but it was a little more distant. quite a bit more distant with the foreign ministry. arturo is here today, the former ambassador to mexico and i have talked about this and written a piece about it how through the 2000s we gradually expanded our cooperation in foreign policy areas, in other types of international work together, and then sort of the big jump forward was the creation of the merit initiative in 2008. and that was under george bush

the son, and president calderon, and what that did for the first time, not that there hadn't been cooperation but it set up a formal program where we weren't just having law enforcement people work to track down this criminal or that criminal, but we were actually working together to improve institutions and processes. with the mexicans very much in the lead, but with us providing technical expertise and funding certain kind of equipment and training that went forward. and that over the years since 2008 has just gone forward and gradually expanded into different areas. it took, when president calderon left and president pena-nieto came in, there were a number of months where the new administration would say what are we doing with the united states, are we sure we want to do this. eventually they said yes, we do

want to keep doing this, because they saw it was of great mutual value. what's happened under this program is people have also got to know each other. they have built confidence with each other so now we have very intense dialogues and practical relationships across the border in dealing with migrants coming forward, in dealing with drug gangs, trying to counter drug gangs and drug trafficking. it still has a ways to go in reaching the ultimate ends. it's quite clear, if you look at the facts. but just the number of issues that we work on and this continued in the foreign policy area, let me say also, in international organizations, in helping central america, in looking at the caribbean, in a whole host of areas that we would not have thought of cooperating about when i first came across mexico in the '70s and '80s early in my career.

so it really has transformed the way mexicans and americans have looked at each other and that's one of the things very honestly that i'm most worried about right now in this situation, and you can see it in the polling results. the polls taken by pugh and others in mexico show that from a 66 favorable view of the united states it's dropped down to 30 some favorable view of the united states in mexico. when i talk to colleagues and friends, they say you know, our sons and daughters who grew up in the post-nafta era who looked at the united states as a close partner, a place to learn, a place to grow, sometimes to live but often just to go study and come back to mexico, are now taking another look at the united states through these lenses and that i think is the really dangerous potential in

this current situation. we don't want to go back to that period of time where ambassador negroponte started off, where we were characterized as distant neighbors. >> very well said. i can't emphasize enough the current pena-nieto stance on venezuela and the crisis we are facing there as being part of the partnership that reflects. it's not just the border issues or the immigration issues or the transnational crime organizational cooperation in terms of countering that. juan zarate, chairman, co-founder of the financial integrity network, former colleague of mine at the white house, deputy national security adviser for counterterrorism. juan, i put in the category of being a national treasure. when it comes to really the

design in the previous decade of the illicit finance identification as an instrument of national power. so juan, turning to you with the question of nafta in the context of international finance and a platform in which nafta has been a very useful means to an end of identifying in a transparent kind of way the issues related to illicit finance and challenges that by mexico's own admission, they face and that we cooperate on in our current relationship with mexico. talk to us a bit about that from your perch where you are today and your observations. >> well, thank you. first of all, thank you for those really kind words. coming from you, it's the highest honor. thank you for the invitation, to herrage, for having me. i'm happy to carry the bags of

these gentlemen who have had distinguished careers. i'm just happy to be up here. your question is a really important one because if you take the sort of lens back, both historically and systemically, nafta is part of a broader story of the deepening of the relationship between the u.s. and mexico in a way that has drawn our systems much more closely together. i think to tony's point, my experience in the white house, especially during the merit initiative period was one in which we had built upon what were very strong relationships sector by sector, institution by institution, military, law enforcement, intel, and the financial services sector. and what you saw in that period was both a deepening of the relationships and a sense of the strategic in some very important ways. i think there's two things that have not been mentioned that are worth talking about and then touch on your question. first was the notion that the

u.s. and mexico were part of a broader global environment in which we had a stake not only in each other's success, but in what was happening around us and with us. and so part of the success was the u.s. and mexico looking outward towards central america, toward latin america, even beginning to talk about the challenge from china in a very interesting way. and i think that began to sort of reshape a bit of the conception of what nafta meant in terms of that relationship. secondly, it was again, nafta that drove this but in recent years, a deepening of the sense of the systemic links between the u.s. and mexico. the natural links of commerce rdd trade and communities, communities, et cetera, are well known to us but those between the financial community, those between the infrastructure sector, the transport sector, the whole controversy around

trucking, et cetera, but the very notion we were part of systemic links that were critical and important to not only economic growth and security but also national security. and in that, then, was a recognition that between particularly the u.s. treasury and the mexican treasury department that there was a shared interest in the both security and integrity of the financial system, where we faced challenges from drug money laundering, faced challenges from organized crime groups, ms-13 now, much in the news. the ability of actors to move money easily globally to evade sanctions. all the things that the u.s. cared fundamentally about from a financial integrity perspective was now a part of the dialogue with mexico. now, that has not been without challenge, of course. we have all seen and been part of these discussions on the derisking of banks and the challenge there, where u.s. institutions, u.s. treasury,

u.s. authorities have demanded much more of mexican institutions along with others globally. but the reality has been that that has forged a much deeper conversation around the systemic links between the u.s. and mexico and what the shared values, standards, practices are. to the extent that it's actually forced and created some incredibly important innovations. the u.s. and mexico have had a strategic dialogue, bilateral dialogue, where the banking regulators, for example, have cooperated more closely than most other regulators between neighbors. often worried about the same banks or institutions together. have y you have had financial intelligence units working very closely together. you have had vetted units and law enforcement units working together on networks of concern. we have just seen recent indictments out of san diego tied to u.s./mexico related links in criminality where u.s. and mexican authorities have worked very closely together.

you have even had the discussion of how to deal with special interest aliens from a counterterrorism perspective and how that works. so in all of its forms, the u.s./mexico relationship has been largely around these systemic links and ties and how the u.s. and mexico through their authorities and frankly even their private sector can work more closely together to strengthen their systems and to strengthen the ability to deal with financial integrity in a fundamental way. and maybe just a final point, if you will allow me. this is really important as we think about the geopolitical aspects of the challenge from china but also the future of regional economies, because i think the reality is that we are, like it or not, systemically tied to mexico, whether it's in the financial sector, whether it's in the infrastructure sector, whether it's because of community ties. my father comes from

guadalajara, full californian, full american, but the reality is systemically the ties are going to grow even more closely. when you listened to secretary nielsen from the department of homeland security, she's talking rightfully about the security of systems and the cascading threats and resilience that we have to be worried about, and we have to begin to think about mexico as a key systemic partner as well as a key element of that resilience when we think about things like supply chain security, when we think about cybersecurity, when we think about transport security. all of that is critical to our own security. that often is an unstated strategic dimension of the relationship that goes above and beyond catching one particular criminal or worrying about one particular money laundering case. >> so i give you a little bit of breathing room there. >> thank you.

i have eric farnsworth to my left. he's had a distinguished career of focusing on the western hemisphere, state department, and the bureau of western hemisphere affairs. with the office of u.s. trade representative as well as senior adviser to the white house and special envoy to the americas. eric, as you look at perhaps as some have termed it the necessity to reopen nafta, what would be some of the objectives and goals 25 years later as to what we should be looking at by way of outcomes? >> well, thanks, david. as much as i admire you, i was hoping you wouldn't come back. then i could answer any question i wanted to, i think. indeed, i will try to deal with that question. i'm glad you're still with us.

let me also add to all of my colleagues my thanks to heritage for the invitation and it's not just i think the two ambassadors who are national treasures, it's all four of the others who i share the panel with. sesame street which some of you may recall from your respective youth, used to have a song that was one of these things is not like the others. and you had to choose which one was not like the others. clearly, that's me on this panel. nonetheless, i'm delighted to be with all of you to have this opportunity. the second thing i would say before i try to answer david's very important question is that senator sasse, i completely agree with what's already been said, gave a terrific presentation in defense of trade but one of the things that particularly stuck in my mind is the fact it's a midwesterner and so am i. for those of you looking at your ncaa brackets as many of you probably are, one bit of advice. don't ever, ever, ever overlook the midamerican conference. i had buffalo. so it's something that for next

year, remember the mac indeed, it is a conference to be reckoned with. nonetheless, david, a very important question. nafta was a creature of a previous time. it was almost 25 years ago, the world has changed. think about it in the context of everything. we heard from senator sasse about technology and the changes there. many of the things that we take as routine today, phones and e-mail and social media and just everything that we do in our daily lives didn't even exist back then. think about it in terms of the automobile you were driving in 1994 and compare it to the automobile you're driving today. or should i say the automobile that drives itself today. this is technological change that is rapid, it was completely unimaginable to those who negotiated with all apologies to those who negotiated, but you can't predict the future. nafta, however, as a document of the early '90s didn't capture these changes.

it couldn't have. that was impossible. when you say what should we be looking to do, we should be looking to update and upgrade the arrangement including whole categories of beneficial economic exchange that simply didn't exist before. we also should be including categories of economic exchange that did exist but weren't included in the original agreement for political reasons. specifically energy. now, energy was not included in the original nafta because it was too politically sensitive in mexico. it was reserved to the constitution. it was something that was simply not timely to talk about. now it is. mexico has gone through a reform program, energy dynamics globally have shifted fundamentally, the united states is now exporting energy as opposed to being energy-dependent on other countries. this is a shift in the global economy. we should be bringing energy into a new nafta and why would we want to do that? for one of the reasons that has been alluded to by the previous panelists, let me focus on it. the idea of locking in behavior.

in other words, trying to determine what is permissible in terms of north american economic exchange and what falls outside of that so that when there are reforms that are made and brought into nafta, it makes it politically much less likely, if indeed not impossible, to backtrack on those reforms. that's critical. that's not just an academic exercise. i think it was ambassador wayne who referenced the peso crisis in 1995. the peso crisis would not have come out the same way had nafta not existed back then. the reason why is we had seen that movie before in the 1980s when mexico went through a similar peso crisis and it took them, what, eight years, nine years to get back to global capital markets. after nafta, after the next peso crisis in 1995 it took them nine months. why was that? because nafta required certain behavior that mexico had to take to keep its market and borders open, to keep its trade open with the united states. and to keep it as an economy to

require certain behaviors of the political class that they could not take that they mooight have wanted to take and they did take later on. beforehand, in the previous crisis. all of us have elections. canada, certainly, united states, mexico, elections have consequences. mexico faces an election in july. we don't know how that will turn out. what we do know is if countries have come the a conclusion that it's in their best interest to lock in certain patterns of behavior for the long term, that's then going to bind the leaders of those respective countries to take certain steps so that's very much one of the things we should be looking at in the negotiations as we are talking about them. for example, does it make sense to put in place sunset clauses that would require a whole new negotiation every five years. probably not. not in that context. nor in the context of certainty and credibility for not just investors but for the entire

people of north america who are trying to plan a future together and trying to figure out what that future looks like. so the second point i would say along those lines is credibility. look, nafta was negotiated by a republican president. it was passed under a democratic president. it was passed on a bipartisan basis on a bicam reral basis. that's about as solid as you can get in the context of the united states supporting and underwriting anything. if now the united states is able to unilaterally say we were just joking, who is then going to come forward in any context to say to the united states yeah, sure, we are going to take your word. so that whole basis of trust the three previous panelists have been talking about, it's not to say it's going to evaporate because countries have their own interests but it will be more challenging, in my view, to be able to come to the same place strategically to say this is what the united states is going to do and you can count on us. so that's something i think we have to be very, very careful

about. the final thing i would suggest is looking at where the negotiations could come out. china has already been referenced. i think it was by juan, if i'm not wrong, and that's absolutely right. china existed in 1994 but certainly not in the same way that it exists now in the global economy. and if the united states is looking forward in terms of the ability to compete globally with china, but also with other countries, whether it's on technology, on whatever it is, you can't do that as an isolated economy. you have to do it with your neighbors. in terms of the supply chains that have developed, in terms of the u.s. content that is now in all of the mexican and canadian production, 25% from canada, 40% from the united states. the equivalent u.s. content in chinese production is 4%. ten times higher with mexico than with china. so if we are looking at partners to try to be able to build our

own economic capacity, forget about the strategic for a minute. if it's simply economic, the way to do that is to get closer together with our partners, develop those supply chains in an even deeper way, include more categories than previously existed in the agreement and bind that in for the longer term, then we've got the basis of a strategy that the senator was talking about in terms of us needing to have something that we can rely on going forward as we increasingly seek to compete effectively with china. i think there are a number of big issues here. hopefully we keep them in mind as we negotiate the agreement. >> thank you. let's continue to pull the camera back and open the aperture to the implications of a withdrawal from nafta. tony, talk to us a little more in terms of the credibility not only of the united states were that to happen in terms of other objectives in the western

hemisphere and beyond but how do other countries respond and react to what they would view potentially as real opportunities to come into that particular space as well. >> well, there are a couple different angles to this. one is certainly the chinese angle. we know very well they have already greatly expanded their trade and economic interaction with the rest of latin america. and others would certainly see a sign that the united states is pulling out of nafta as a sign that they better develop relations with other countries. now, very happily, there's a more positive model that took place with the tpp 11, the other members of the tpp, who many including me were worried that they would not be able to continue their negotiation and

that china would thus have a lot of space, but japan really started to show and demonstrate leadership working with australia, and brought the other 11 together and they just signed in chile this new agreement, which is the most up-to-date agreement, free trade agreement, in the world and for the first time as an integrated internet related chapter, and it really is a rules-based agreement that binds everybody, including the least developed countries like vietnam that are in there, and it sets good standards for them. a lot of those, of course, are standards the united states argued for and helped to get in there before it left. so but at a minimum, it's these countries saying we don't want to be left out there by ourselves and we can do it working with others. you can have a multi lateral

rules-based agreement that works and is beneficial. but the chinese, as the senator said, as others have said, they have a long-term vision and they are going to work at that and they are good at having a long-term vision and working at it. they make mistakes along the way sometimes, as their post-1949 history has shown. some big mistakes. but right now they seem to be on an economic roll. and as the senator also said, it's not at all clear that we have a strategic plan and vision to take on that competition that's out there. but it's not just about competing with china. this is a global economy where things are going to be changing very rapidly. most observers agree the rapidity of that change is going to keep going, and it's going to mean that all competitors just have to be smarter and better if

they want to keep raising the standard of living effectively of their countries and in their economies. and we need to do that, and trade is a vital part of that. especially trade in our own hemisphere. already, if you happen to have looked at one of these maps that shows who is the number one trading partner of countries in the world ten years ago and who's the number one partner today, there's a big jump in china and big reduction in where the u.s. was number one. that's a clarion call to action for us that we should be thinking with that bigger vision and working out from a basis which should be our production basis as north america. we can make this the north american century if we do it right, or we can let it be somebody else's century if we fall back. >> john, as senator sasse spoke of technology being the big

disruptor as opposed to trade. how do you respond to those who would suggest that nafta is a big employment dislocator, it's an employment loser for sectors of economy in trying to sell the changes that nafta would project in terms of where we are as an economy, building off of what tony, eric and juan have already said? >> first, let me just say i agree with others who thought that the senator's remarks were terrific. i really enjoyed them. also, you asked me a question about history before. there's one part i forgot to mention. which was actually a key piece of our ability to move from this sector based to a broader based trade negotiations and that was that mexico resolved its debt

issue. the brady bonds and all of that stu stuff, nick brady, citibank leading the consortium, and that was kind of a bellwether event. and someone mentioned the peso crisis. somebody who works on the issue of greece told me, you know, if only the eu had responded as rapidly to greece's problems. bill clinton extended whatever that was called, some kind of bridge loan of $50 billion to mexico within weeks of when this crisis erupted and saved the situation. if somebody had done that for greece at the beginning, they could have, might have been able to spare their entire crisis. the question of job loss and technology and so forth, i think you can -- i haven't gone and done this lately, but you can

probably demonstrate where nafta has saved jobs in the united states by going to the point about 4% versus 40% or whatever. you can even find examples of companies that had relocated to china and now are starting to come back to north america because competitive conditions here have improved. i think the answer is we're not losing jobs because of manufacturing jobs and there were some instances where i remember explicitly companies telling me by putting a plant in mexico we are saving a number of very high quality jobs in the united states. i wouldn't be surprised if that argument still prevails. but i think the broader argument is the one tony's making which is this north american platform.

one other point. an area i would be very afraid of if we were not to renew or if we were to abandon the nafta which i personally don't believe we will, but if we were to do that, is in the energy sector because here we are, they've got energy reform. we are just becoming this major energy producer and i understand now in the last round they agreed to have an energy chapter in the nafta, and you know, why create an opportunity for china and russia to penetrate the mexican energy market which, if you just look, you want to see the copy, just look at what's happening in venezuela if you want to know what's going to happen in mexico long-term if we drop the nafta. and don't have good provisions on energy in this revised

agreement. >> juan, you look like -- >> i want to say amen to what ambassador negroponte just said. i'm not an economist so i can't speak to data and obviously, there's issues of worker retraining and other things to deal with the technological changes. but i think the reality here is if we absence ourselves from nafta or a trade deal that binds the u.s. and mexico and the north american corridors tony was talking about, we shrink the imagination and shrink opportunity. the last example that ambassador negroponte gave is the best, because we are now at a point of being not only an energy exporter but an energy giant in a way that has strategic impact that we haven't even fully conceived yet. so if we shut off the aperture of the opportunity because of not only not having nafta in place but creating anti-american

antibodies in the system which needs to be recognized and i think senator sasse alluded to this, there's a human dimension to this and tony, you did as well. if we pull back, there's going to be a sense of resentment and a sense of retreat in a way that does not only hurt the united states in terms of what's in the realm of the possible but also from the mexican side, what they are willing to do, willing to sacrifi sacrifice, where they are willing to see mutual benefit or interest or even cost. so that's exactly where the chinese and other actors are very willing to play, especially when they are perhaps playing by different rules, willing to play by different economic margins, all the things we have seen china do in other environments. i worry about the ripple effect of sort of both the psychological and the element of

economic imagination that's lost if we retreat, because then we are left with picking up the pieces as opposed to thinking forward in as aggressive a way as possible. that also has regional impact. david, you and tony were talking about this a bit. i do wonder what this does for a broader u.s./latin policy and how other partners around the world and particularly in the region view u.s. staying power, view the attractiveness of u.s. capital investment. they are still going to be interested in it, of course, but it will have a different tinge to it. i worry about the economic and political impact of that which i don't think anyone can project yet and there are probably no numbers for it but at the end of the day that's harmful to the u.s. overall, not helpful. >> can i just add one fact to it that i think is really useful to remember, especially because the

first number came out of a heritage study in 1993, i think it was. the estimate was 700,000 u.s. jobs tied to trade with mexico. so the estimate looking at 2015 numbers was 4.9 million. so it's hard for me, it makes it very hard to argue there's been a net loss of jobs. there is a loss of jobs and it's not the same people that got new jobs. that's the problem. that's what the senator was talking about. that's what we all need to talk about. but there's no question that we have created new jobs in all three countries but for this debate, importantly in the united states, out of our growing trade with mexico. there's another study that was just done down in texas, just looking at the border states. it argues that if we take the next step forward in border integration, we will create

900,000 to one million some new jobs just in the border states of the united states, not counting the mexico side. so there's no question that a new modern nafta with more efficiency at the border, with more connectivity, can create a lot more jobs and can make us more productive compared to others in the world. >> eric, in the little bit of time that we have left, can you talk a little bit about what canada's demands are and where might it come off the rails from the canadian standpoint in terms of dispute resolution, dairy, i think those are a couple of the areas where there's been some real conflict but there may be other areas in terms of canada. >> well, those definitely are two of the most important areas. i would also add cultural reservations. the interesting thing about this is that these aren't new issues. these are actually issues we had

to deal with the first time and this gives our negotiating partners another bite at this apple and to have actually expanded in some cases the demands. but they are real and it's interesting in washington, oftentimes we think we are the only ones, we in the united states are the only ones with interests or demands, and we have to remember that our negotiation partners have theirs as well and they are equally politically sensitive in those economies, and they are equally tied to elections and democracy and results along those lines as well. the interesting thing about canada, of course, it does not have the same electoral calendar as we do. parliamentary system, et cetera. they are not on the mexican calendar. they don't have elections coming up in july, they don't have u.s. midterms, et cetera, so they have the ability to wait this one out a little bit longer knowing they are playing that and prime minister trudeau when he was in chicago recently said as much. he said look, we want a nafta but we want a good nafta and that's what we are going to hold

out for and in the canadian context, that's in some ways arguing for some of the same things that were so controversial in the past and had to be part of the final negotiation. in fact, according to some histories, the last thing to be resolved in the original nafta had nothing to do with mexico. it was actually chapter 19 and it was a demand of canada and it was jim baker who ultimately had to make the call and say yeah, for nafta we are going to do this. canada was willing to say we are not going to do it based on chapter 19, of course, is dispute resolution. so that's something that remains a very important part of the dialogue today. so in some cases, it's one of these things, but the final thing i would say, i know time is short, but there was a letter that was just released yesterday actually by ten former commanders of the united states northern command which of course canada and mexico as well as continental united states and former commanders of the southern command, and talked specifically about those issues,

the issues of nafta from an economic perspective, sure, but more importantly, from the broader strategic perspective and if you haven't seen that, i would call it to your attention. it is really an important statement and i think it captures in a very short space some of these issues that i think really call to attention the fact that nafta is an economic agreement, yes, but more importantly, it's a strategic agreement. on that basis i would say the united states really needs to keep pushing forward and see if we can't come to some sort of closure on that basis. >> juan, rapid round with the four of you, two months from now, where will we be on nafta? >> i'm an optimist but i have to be honest, i'm not quite sure. i have to think the emphasis on national economic security that's now in the national security strategy for the first time in a very heavy way, the heavy focus on china as a competitor and even a challenger in the economic space, the need

for the u.s. not to upset too many apple carts with too many allies and i think we have seen this in the tariff debate, i think lends at least in my sense, lends itself to suggesting we are going to see positive progress and not a ditching of nafta. i don't know if we get a deal before the relative elections, but i'm more optimistic than not given both the dynamics internally but more importantly, the external dynamics which i think are going to be more and more important. in that regard, watch the iran deal because the question about what happens to the iran deal impacts how the europeans view the united states and whether or not the u.s. is viewed as simply a bull in the china shop destroying every agreement possible, or whether or not the president can demonstrate he can capture a win with key allies in canada and mexico. >> i agree with juan that it's very important to look at the broader geostrategic playing board and that that will impact

this negotiation, where we are. i think we will be one of two places. we are either going to make good progress, so we will take a pause as the elections take place on the basis of that good progress, and maybe have technical work go ahead and look forward to reengaging or nafta will be dragging on in this uncertain state until the mexican elections and the new president comes in and we have to take it up either very, very late this year or early next year. i hope it's the former. i hope juan's optimism is correct. i think that would be much better for all three countries and the united states. but i'm not yet sure which of those two it's going to be. >> i think it will go through. whether it happens now or later, i don't know. but it's in the mutual interest of all three countries and i think we have enough interests, affected interests in this country who have spoken up so

that it must have registered in the white house. in fact, i'm sure it has. the other thing is, in addition to watching whatever happens to the iran deal, i would watch what we do with china. if we take some tough measures against china, that might actually relieve some of the pressure on nafta. to take tough action on nafta. >> i obviously have no crystal ball, either, although one positive signal i would note is that in the recent 232 steel tariffs, canada and mexico were both exempted at least temporarily. that's probably a good sign. and i'm also optimistic in the sense that i think people do recognize the importance of nafta and are going to continue to work forward to try to bring this to a conclusion. whether that will be done in the next two months, i can't say. be next two months i can't say. the final thing i would say however is generally to this point and for obvious reasons this has been a conversation among the three consecutive branches. it is apparent the congress and senate are increasingly become

active on this as well and making clear to the white house what provisions they would accept. don't forget, once this thing is negotiated it has to be brought back to the u.s. congress. if it can't pass the congress it doesn't matter what is negotiated. this has to be brought to account. from a positive perspective my sense is congress is increasingly part of this conversation it should be and needs to be and that will continue to push forward to a positive conclusion. >> i would add to the congress and number of governors affected as well have now joined the conversation. my call is nafta will continue strategic pause probably in the next two months and we will be looking at it toward the end of the calendar year/2019 in terms of closure. thank you, panelist, thank you very much. thank you, heritage for hosting us and go free trade.

education secretary betsy devos is on capitol hill testifying for the budget appropriation noers department and on guns and school safety. we'll bring the house appropriations subcommittee to you live at 10:00 a.m. eastern on c-span3. the issue of guns and safety will be front and center when the march for our lives rally takes place in washington, d.c., the event being organized by student activists in response to last month's deadly school shooting in parkland, florida. we'll have live coverage of the event saturday starting at noon eastern on c-span. c-span's "washington journal" live with issues and policies that impact you.

coming up tuesday morning, new york congresswoman claudia tenney will be with us and discuss the mueller investigation and a look at president trump's shake-up on his security team and brendan boil a member of the house foreign affairs and budget committees and discuss the data firm hired by the president trump campaign that took and kept data of 50 million facebook users and talk a be sure to watch "washington journal" tuesday morning. join the discussion. next, a look at the u.s. role in africa with the general who overseas this region and talked about working with regional partners to counter with violent regional