Lighthizer lays out trade news ahead of House vote on USMCA
Joining me right now is, US. Trade Representative, Robert light Heiser and ambassador it's wonderful to see you this morning thanks so much for being here Murray it's a pleasure to be here first a big congratulations to you and your team you've been working on this for a long. Time you, finally got it across the finish, line in terms of getting. The agreements, that you needed how tough was it in, the last couple of weeks and what about this most recent snag with Mexico can you tell us what happened and how you ironed it out, it's. The first of all it's been a you know a real, slog for for, more than two years that, the president, ran on in part, NAFTA, being a really unbalanced. Agreement for the United States and it had turned out to be one plus. It was in desperate need of being upgraded and, so, we had us focus on that we focus on it, over. The course of two years we finally got the negotiation. Done in about a year and then the last year we spent. Trying. To find a way to get through Congress I think we have we have the the, first, trade agreement, in a long long time that has support of almost every business group almost every agriculture. Group labor groups. Democrats. And Republicans, so we're really excited about where we are this. Last minute slag I think a snag I think was more of a misunderstanding. We're. Putting. Some. Some labor, out of shades in the embassy down there we have added shades all over the world and not, just labor but as you, know a defense, and the whole variety of agencies have them some dozen. Agencies and so I think there was a misunderstanding down there but what their function was so but that was easily taken care of this is a really, really really good agreement for the United States for manufacturers. And. Workers. And farmers. And the like so it. Should pass with a big number yeah tell me about that because farmers, get to see more. Of a market in terms of their dairy. You've. Got manufacturers. Also seeing. More work, and of course the auto workers a part, of the deal it, was key in terms of having much of the production of the vehicle in North America tell us the most important points of us MCA. Well. I mean for me the first thing is it's going to bring back manufacturing jobs. To the United States look at, before. The president, directed me to start this process eight of the previous eleven. Manufacturing. Facilities, manufacturer. Created. Built-in, in North America were built in Mexico there was a huge, flow. Down, towards, there of our of our automobile. Industry, we've, now turned that around at. The same time it's good for Canada in Mexico, also it's not just good for the United States so I think we're going to bring back we think somewhere, around 80, or bring, back or create around 80,000, jobs directly, and indirectly in the auto industry, creates. Some 25, or 30 billion, dollars of new investment, in, the in the agriculture. Area there. Is there's new market opportunity. As you say the dairy problem, particularly in Canada was a huge, problem, remember. Those stories about those dairy farmers, going out of business we've. Turned that around we. Have new access, in in, wheat in poultry. And eggs so. You. Know there's just an awful lot in there for a lot of people and then we have the whole new economy we have what is really, the. The absolute gold standard, on digital, trade and financial services, stuff that's never been done before, so so this will be the template, I think for. For new trade agreements, going forward, and hopefully they'll be more balanced we have it we have a big trade deficit, problem we were losing our jobs for years to to, it to a variety of places including, China, and the president the, president ran on that he ran on trying to bring these jobs back, ambassador. I'm sure you saw the Wall Street Journal, op-ed yesterday. Titled, North American, damage control, and in it they write the shame is that in many respects, this new deal is worse than NAFTA especially.
It's Both, vows to politically manage trade it tries to steer auto investment, with new rules of origin, that 75% of a cars contents, must be made in North America, this, raises the cost of manufacturing, making, North America, products, less competitive, worldwide they, also had a problem with the biologics. He says mr. Trump also, bowed, to the Pelosi, Democrats, demand to remove the ten-year protection, for data exclusive. To biologics, a blow to one of America's growth, industries, what do you say, well. I would say first of all clearly. Getting, rid of the biologic, provision, was a step backwards, and that's compromise, you know there are consequences of, the Democrat. Control. The house and that was necessary, I'm sorry about that with, respect to everything else in that negotiation I, think it made the bill better in. Terms of the Wall Street Journal, look and there's two approaches. To trade one. Is that the objective, of trade is, purely. Market, efficiency, and protecting. Investors and that's. That's one view and that's the Wall Street Journal's, view the, president's, view is we have to in addition to that think, about the effect on manufacturing. Workers, and farmers, and the people that are involved in this process and that our real objective, is is is. Is. More wealth and and. And, and better lives for working-class, people and farmers that's what the president's, view is he. Believes, in market efficiency, but he also believes we have a broader, responsibility. And I understand, the people that believe in in just, protecting, investors and, and and pure. Market efficiency, they're not going to be happy because we. Are making, it more expensive to operate, in some other areas, and less expensive, in the United States the, president's, objective, is to help, manufacturing. Workers in this country it's to help farmers in this country global. Efficiency, is a nice objective, but, he always, says, he, got elected president of the United States not president, of the world so he has a different he has a different philosophy and, and. Hopefully, the Wall Street Journal, understand that they seem to acknowledge that a number of the things in this bill or even by, their standards good for example the digital trade and these sorts of things so look, there's a little different philosophy, the, president, is taking care of American.
Workers And farmers and that's what his objective is and that's what he told me to do but it also doesn't change the US law right which is 12 years of protection, but, Mexico allows only five in Canada eight does. They, write this new deal sends a signal that the world can loot American. Property rights so, so. On this question of biologics. You're, right it does not change. US. Law at all my. Objective, was to have Mexico, and Canada have a higher standard than they have right now I. Think, there's some general. Trend towards higher standards, and this protection anyway, and hopefully see that it's. Important, that we protect intellectual, property rights in the United States one, of our great great, competitive. Advantages, is innovation. Where we're. A country of innovators, and and the the biologics, area in the pharma area are a great, example of that I always. Tell these people to criticize these, these companies what, happens when your child gets sick you're going to want to have this medicine available yeah, so so there's a balance there but look this is a spectacular. Deal for. The, American economy literally. It'll, it'll raise the, GDP, somewhere, between a third and a, full percent, great somewhere between a hundred, and seventy-five. Or eighty and five hundred thousand, new jobs I think more towards the high end and it's, going to set that. A template. A trajectory, for, how much trade should be dealt with in the future and it really really, really is good for America that's a big boost to GDP, you think that's gonna be be, seen within the next year or so I mean will we feel this strength in GDP so. I think you're gonna see a real growth and all that Larry Kudlow and, computer tomorrow or other economists, talk about when what, the ITC, said at the high end when, fully implemented yeah, it'll, create, 1.2. Percent. Of GDP and about over 550,000. Jobs so that's one fully implemented, so it's it's clearly going to have a big impact right. Away investment let me move on to China because, this is your first cable news interview since the announcement of that phase one trade deal with China white house economic advisor Larry Kudlow says that the US exports, to China will double, under, this agreement, which could be signed next month what, I'm what I'm concerned, about is the Internet intellectual, property issues here as well China.
As You know just came out with these new rules I feel like they're coming at us that at all at all ends, with new rules to change the. Dominance, and continued dominance I mean the. Gordon, chang rights after all these cybersecurity rules are in place no, foreign company may encrypt data so that it cannot be read by the Chinese central government and. The Communist. Party Chinese officials will be permitted under Chinese law to. Share seized, information, with state enterprises, so, what does this phase one deal really do to, protect intellectual property in the u.s. so. Let, me take a step back again, he Mariya we have we, have two different systems we have a free-market system they have a state-run. Socialist. System. We. Have to find a way for these two systems, to work together and, that's. What we're starting, to do the. The relationship has been very unbalanced, for a long period, of time to, the United States we we have huge trade deficits, and we have other other. Problems. The. President, two and a half years ago said we're going to take this on we've had a plan that we followed consistently we. Put out a report for eight months that. Took eight months to write we put in place a. Variety. Of tariffs, over a period of time we've tried to negotiate, there's. Been ops there's been down as you know because you've followed it very closely, this, is a very very important. Issue. For the United States not. Only now but but in the years and years ahead we've, now gotten to the point that where we have a very good phase one agreement, and we're, going to find out whether or not it works is this Agreement going to solve all the problems between the United States and and, try to know for sure it will not but. It has real, real, structural, change it's not just about purchases. And, it's really important, that people understand, that this, has real, protection, on IP, real. Protection, against tech transfer, financial. Services opening currency, provisions, there. Are agricultural. Barrier. Eliminations. And then, there. Are these purchases, and and, yes we, expect this to just, about double, overall, exports, to China which, is really important, and and. And particularly, for some of our constituents, that have had problems in the, agriculture, area between, 40. And 50 we think 50 billion dollars worth. Of sales in. Yo. In, China so this is a really, really important, bill is it gonna solve all the problems now will. It work it's totally, enforceable. So. We're. Hoping that it works but ultimately that's going to depend on what's happens in China yeah, if the hardliners, in China are in control and they don't make changes that's, one case if you, see the Reformers who really want to see, China. China. Adopt. Some of the normal principles, of. Trade. That I think you'll see a different outcome we're, all pulling we're hopeful yeah I think, what, I like most about this phase one deal is the US didn't give up too much I mean you didn't put those tariffs on on Sunday which we're. Expecting the increase in tariffs but you also just cut tariffs from 15 percent to seven and a half percent so you didn't really give up too much but in terms of these agricultural buys, walk. Us through this, because for. A long time we were expecting, that the Chinese would agree that 50, up to 50 billion dollars in agricultural, purchases, was on the table but they wouldn't admit it so can you walk us through exactly how these.
Details, Are emerging on how China will increase imports to the US by, as much as two hundred billion dollars, over the next two years what. Are they going to be buying and what is the commitment so. All right first of all I would. Be happy to do that let me sit before you're. Right we still have tariffs, on, 380. Approximately. Billion. Dollars worth of Chinese goods there's, plenty of leverage on both sides to make sure that this Agreement, works, the. President, kept in place these tariffs, and so the. United States I think made a really really good deal now on the purchases, there's an agreement over. The next two years to purchase 200 billion dollars worth of the new products there. In four, categories, there's, manufacturing. Energy agriculture. And then services, in the agriculture. Area let me tell you how we get to fifty billion dollars all right twenty. Four billion dollars, is the base from, 2017. That's what we had before all this at. The high-water mark before all this recent. Change, in addition. To that China's agreed to by thirty. Two billion dollars where the products over the next two years so that would be 16 with kitchen to 40 they, aren't they are striving. To take an additional five billion dollars, and then there are other products, that and this will all be written out they get you 250 that. Are in areas, that. That are, agriculture. But sometimes, are classified, as other, manufacturing. Let me give you an example of that Forest Products hardwood. Lumber, so there are a variety of issues it gets you up to 50 billion dollar we're. Very excited about, it that's that's, just, about doubling our agricultural, sales and it's. Going to be good for farmers across, the board and by the way it's gonna be good for China the United States has the best agricultural, products. We, have we have the best prices, and so, we're, really excited about that part of it but I want to emphasize this. Is not just, about purchasing, this is about structural, change this, is about taking, the first big step to, determine, whether or not two different systems, can, work together in the future to. Their mutual benefit, and that's what the president, has asked us to do and then we'll move forward we'll, see how this goes we'll see how its implemented and we'll move forward. You. It is a feat because you've got completely, different approaches. To governing, the US and China so that whole conversation about the, human rights abuses the, Weger, in, China in concentration. Camps is this a side conversation is, this not part, of the current discussions, in terms of trade and open, access for financial, services companies within China. Looking. For me it is I'm. Not trying to solve all the problems in the world the president asked me to work on work on trade trade it's really important, to our workers our farmers, as, a real, effect on Americans, or other people working on other things and, if you try to get it all balled up together you literally will accomplish nothing this, is an enormous. One. Last thing I should say on this point let's, remember it, took a long time to get to where we are no. Other President, did anything, on this they all talked about it they all complained, no president did anything, like this this, president, has taken on a very very. Difficult task he's done it with a plan he's done it over two and a half years now he has a very, very, significant.
Step, Forward we'll, see how it works out well what's next in terms of priorities. British. Trade negotiations. Obviously, have been talked about Prime Minister Johnson, reportedly, adding a revision, to the brexit bill that would rule out extending, the transition, period beyond. December, 2020, raising, the risk of a No Deal brexit, sending, the pound down the British Pound a great. And expected to leave the European Union by January, 31st of 2020, is that, the next priority or is it the EU, in terms of the next big trade deal. It's. Funny the president. Tells. Me what my priorities, are I don't tell him and he has a lot, of priorities so, for sure the UK is a priority. As, soon as they get their objectives, agreed to we'll start talking it'll, take a while before it all comes into effect because of their circumstance, it'll, be a really big deal we're looking forward to that negotiation. We have issues with the WTO, we have issues, with with. With. Europe as you suggest, and then there are a lot of other countries with whom we're talking, so there's a lot, on the on the plate as you know this is something the president cares, about he thinks about it every day he. Wants manufacturing. Jobs with accurate when services, workers to make more money once, farmers, to reverse this trend and income so there's. A lot a lot to do and he's very focus on it and and, trust. Me I don't go a day without him. You. Know keeping, the pressure on I'm sure but, there is a lot at stake certainly, with Europe, in, terms of tariffs, potentially, increasing. On cars vehicles, coming, out of Europe talk to us about the chicken tax the president calls himself a tariff man and yet, a lot of worry around, what he may do with. Regard to Europe, where are the worries there. Well. I mean let's yeah, look at the, WTO, decided. In in, favor of the United States after many years of. Litigation. On this Boeing. Airbus case, and we put in place tariffs, on 7.5, billion dollars worth of products we're looking at that we, may increase that our objective, is to get a some, kind of a negotiated, solution but we have a very, unbalanced. Relationship, with Europe it's. About a hundred and fifty maybe even this year 180, billion. Dollars. In. The negative that can't continue there, are a lot of barriers to trade there and. There are a lot of other. Problems that we have to address so dealing. With Europe is something that's that's it's very important, the president has focus on we began to take steps we've. Put tariffs in place on a variety of products, and we're, going to in you to focus on that it's something the president cares about you.
Can't Get the global trade deficit, down without, getting the trade deficit down with Europe so Italy, significantly, so so, that's a really important focus for us but. The other hand we have a very good relationship with your by don't want oh I don't want to make it look all all negative, we have a there's. A lot of trade between the two bodies that's, very positive but, but would fixing, the trade imbalance with Europe hurt, the US economy. Because. Of higher prices, paid for vehicles here. Well. I'm, not I'm, not prejudging what, we're, gonna put tariffs on and I'm not saying that that, carl's will be more expensive I don't want to get into you that we we, have a basic, trade problem, with Europe we have to figure, out a way to sell more in Europe and, and, I think we're under gonna undertake that but. But on the other hand there there are hundreds of billions dollars for the two-way trade but to us in Europe and I don't wanna I don't want to overstate the problem ambassador, before we go let me ask you about the changes at us MCA post, all the pushback from Nancy Pelosi and the Democrats, because according to Nancy Pelosi the, the bill she first got was, a non-starter, from President Trump she's taking, she's at least trying to take a lot of the credit for this success, I know you've been working incredibly hard, well. In. Terms of getting this done and to where you wanted it but is it much different. Why. I would say we improved it but let me say this from, the very beginning. We. Worked with the Democrats, this is not like the Democrats, came in at the end we worked from the very beginning look at look, at working, men and women supported. The president. Very. Very strong absolutely, these are these are his constituents. Too so, in terms of our negotiations should, the speaker get credit of course you should get credit and so should a German, neo a and so she should chairman Grassley and so should. Kevin. Brady and and, the leadership on Republican, endeavor the thing about this bill is, it. Has business agriculture, Republicans, Democrats and, labor unions it is the way forward and in, terms of this this, this this business thing to know that we increased labor, enforcement. Of, course we did yes, but but but, that's not against republican, principles that's, consistent, with them Bob light house just great to see you you are a true diplomat, thank you sir, thank. You.