MARIA: WELCOME BACK.
U.S. TRADE REPRESENTATIVE ROBERT
LIKE KAISER DID IT TAKE TO GET A
NEW NAFTA AGREEMENT IN PLACE IN
A WEEK OR TWO.
THOSE NEGOTIATIONS ARE FRONT AND
CENTER FOR CLIENTS OF THE BANKS
OF CANADA.
THE ROYAL BANK OF CANADA SEPIA
SAT DOWN WITH EXCLUSIVELY.
DAVE MACKAY.
THEY GIVE A BIG CLUE AS TO
WHETHER NAFTA NEGOTIATIONS ARE
HEADED BUT NOT BEFORE EXPLAINING
HOW UNCERTAINTY IS IN FACT
BEING -- AFFECTING CUSTOMERS.
>> IN ATTENDING MAKE LONG-TERM
INVESTMENTS YOU THINK ABOUT THE
STABILITY AND POLICY AROUND
THAT.
YOU HAVE TO LOOK AT NAFTA INTO
FRANCE.
ONE IT'S IMPORTANT TO GET IT
RIGHT.
TWO, THE INSURGENT CAUSES
CUSTOMERS TO HOLD BACK ON
INVESTMENTS.
THERE'S A NUMBER OF CAUSES WE
HAVE TO GET RIGHT.
IT'S REALLY IMPORTANT TO HAVE A
FARE DISPUTE MECHANISM.
RULES OF ORIGIN IN NON-EMOTIVE
MANUFACTURE THAN THEY DID MAKE
SOME GOOD PROGRESS THIS WEEK ON
RULES OF ORIGIN.
THEY SUSPENDED NEGOTIATIONS TO
GET BACK TOGETHER NEXT WEEK
PARTICULARLY WHAT QUALIFIES AS
ORIGIN AND WHAT% NORTH AMERICA
AND WHAT% THE UNITED STATES IS
IMPORTANT TO THE GLOBAL SUPPLY
CHAIN OF THE OEM.
WE HAVE TO GET THERE.
BIG COMPANIES HAVE MADE
LONG-TERM INVESTMENTS IN SUPPLY
CHAINS WE DON'T WANT TO DISRUPT.
GETTING THAT RIGHT IS REALLY
IMPORTANT.
MARIA: EXPLAIN BEFORE YOU GO
ONTO THE NEXT ONE IN TERMS OF
GETTING THIS RIGHT IN THE
INVESTMENT HERE.
I'M NOT SURE PEOPLE UNDERSTAND
IN TERMS OF THE OUT OF BUSINESS
THIS IS THE STICKING POINT.
>> ONE OF THE LARGEST STICKING
POINTS FOR SURE IS 80% NORTH
AMERICA AND CONTENT, 75% WHAT
QUALIFIES FOR FREE TRADE, THESE
ARE ALL CAREFULLY BALANCED
AGAINST EXISTING AND LONG-TERM
PLANS OF THE AUTOMOTIVE
MANUFACTURERS LIKE GENERAL
MOTORS AND FORD BETWEEN MEXICO,
CANADA AND THE U.S.
FLYING ACROSS THE BORDER
MULTIPLE TIMES BEFORE THE END
PRODUCT WAS FINISHED.
IT'S BEEN A LONG-TERM INVESTMENT
BY THESE MANUFACTURERS IN
CREATING THIS COMPETITIVE GLOBAL
SUPPLY CHAINS.
WE HAVE TO TAKE THAT INTO
CONSIDERATION.
THESE ARE TIGHTLY INTEGRATED
PARTS AND MANUFACTURING PROCESS
THAT BENEFIT ALL COUNTRIES.
THERE'S BEEN SOME GOOD PROGRESS.
HOW DO DEFINE WHAT IT PARTIES.
NOT JUST ABOUT THE TIRES, THE
DOOR, IT'S ABOUT THE SOFTWARE
AND THE IP THAT GOES IN.
APPLE CART AND OTHER KEY
INGREDIENTS, WHAT IBM IS DOING
WITH THE CARD IS TO TALK ABOUT
THE SOFTWARE THAT RUNS AN
AUTONOMOUS VEHICLE.
THAT CONTENT WILL CHANGE, SO
IT'S TIME TO MODERNIZE NAFTA
APPEARED VERY IMPORTANT TO GET
THIS RIGHT.
YOU CAN'T RUSH INTO THESE
AGREEMENTS.
IT TOOK A LONG TIME TO CRAFT AND
THERE'S AN URGENCY TO GET THIS
DONE AND MOVE ON TO GREATER
STRUCTURAL ISSUES LIKE CHINA.
RULES OF ORIGIN IS A BIG ONE.
SUNSET CLAUSE AS AN INVESTOR
UNITS ARE AN INVESTOR YOU NEED
CERTAINTY WHAT DETERMINES YOUR
INVESTMENT AND HOW LONG WILL THE
POLICY APPLIES.
RIGHT NOW NAFTA IS ON AN
EVERGREEN AGREEMENT TO DO UNLESS
THE PRESIDENT OR CONGRESS
INSTITUTE 180 DAYS CAUSE TO
REMOVE THE UNITED STATES.
BUT IT RENEWS AUTOMATICALLY.
THE PROPOSAL LOOKS MORE LIKE THE
U.S. BUDGET PROCESS WITH THE
BUDGET TERMINATES OR NAFTA WILL
TERMINATE ON A FIVE-YEAR CYCLE
OR SIX-YEAR CYCLE UNLESS IT'S
RENEWED.
YOU CANNOT GET INTO A PARTISAN
POLITICAL PROCESS EVERY TIME
THEY MATURE EVERY FIVE YEARS
BECAUSE OF AN INVESTOR WANT TO
KNOW THE UNCERTAINTY BEYOND FIVE
YEARS.
AGAIN, VERY IMPORTANT PROCESS
AROUND BUSINESSES IN CANADA AND
THE UNITED STATES HAVE BEEN
QUITE VOCAL GETTING THE SUNSET
CLAUSE IS CRITICAL TO
UNDERSTANDING THE TENOR OF YOUR
INVESTMENTS.
>> AFRAID OF GETTING A DEAL,
THIS WOULD BE BAD FOR ALL
INVOLVED?
>> IT WILL.
WE'VE SEEN THAT GEOPOLITICAL
UNCERTAINTY, TRADE UNCERTAINTY,
POLICY AND CERTAINTY.
WE SEEN THAT IN THE ENERGY
INDUSTRY AND OUR COUNTRY AND
CANADA FOR THE INABILITY TO GET
OUR PRODUCT TO MARKET AND
PIPELINES APPROVED, TO GET HER
PRODUCT TO GLOBAL MARKETS HAS
COST A SIGNIFICANT REDUCTION IN
FOREIGN DIRECT INVESTMENT IN
CANADA AND THE U.S. AND SENATE
BENEFIT FROM THAT.
THE PIPELINES FROM THE GOLD
COAST COMMITTED NEAR NATURAL GAS
IN EUROPE AND ASIA, BECOMING
GLOBAL ENERGY PRODUCERS.
AGAIN, GETTING YOUR PRODUCT AND
POLICY IN PLACE IS IMPORTANT.
MARIA: YOU THINK CANADA WAS AT A
DISADVANTAGE AS A RESULT.
>> CERTAINLY.
SPECIFICALLY THE PIPELINES.
WE SELL AT ROUGHLY A 30%
DISCOUNT BECAUSE WE HAVE ONLY
ONE BUYER FOR PRODUCT TO LIMIT
THE NUMBER OF SUPPLY CHANNELS.
IT COST THE ECONOMY 10 TO
$12 BILLION DURING DISCOUNT.
SO JUST GETTING ACCESS TO YOUR
RATION OR EUROPEAN MARKETS WILL
GET US BACK PLUS A DEMAND FOR
OIL AND NATURAL GAS COMING OUT
OF HER WESTERN ECONOMIES.
MARIA: IN TERMS OF THE
INVESTMENT SIDE OF THIS, IF YOU
LIKE EVERY TIME THE MARKET FEELS
LIKE WE'RE NOT GOING TO GET A
NEW DEAL, WE HAVE A MAJOR
SELLOFF IN STOCK PRICES.
LAST TIME JUSTIN TRUDEAU SAYS
WE'RE WILLING TO WALK AWAY.
I WAS THE FIRST MOST RECENT
1000-POINT SELLOFF.
SO DO YOU HAVE CONFIDENCE WE
WILL SEE A NEW DEAL?
>> I DO.
IT'S SO IMPORTANT TO BOTH
COUNTRIES.
35 OF THE 50 STATES WILL AND
CANADA AS THEIR NUMBER ONE TRADE
PARTNER.
ALL OF THE SWING STATES FOR THE
U.S. ADMINISTRATION ARE BIG
TRADE PARTNERS OF CANADA.
THERE IS A BALANCED TRADE
BETWEEN THE TWO COUNTRIES.
NOT A STRUCTURAL DEFICIT THE
WEDNESDAY WITH MEXICO, GERMANY
AND CHINA.
THE U.S. IS RIGHT TO LOOK AT
ISSUES, BUT THAT DOES NOT EXIST
WITH CANADA.
IT'S BENEFICIAL TO BOTH
COUNTRIES THAT WILL GET OVER THE
THREE REMAINING CRITICAL ISSUES
AND GET TO AN AGREEMENT.
MARIA: TELL US ABOUT YOUR OWN
BUSINESS.
INDEED THE LARGEST LENDER, YOU
ALSO HAVE SUBSTANTIAL OPERATIONS
IN THE UNITED STATES WERE TO
DRIVE 23% OF REVENUE.
YOU ACQUIRE CITY NATIONAL.
HOW IS BUSINESS RIGHT NOW?
>> IT'S REALLY STRONG.
75% OF OUR BUSINESSES IN CANADA.
23% OF THE UNITED STATES.
U.S. FRANCHISE IS DOING
EXCEPTIONALLY WELL.
PRESERVING INSTITUTIONAL
CUSTOMER ON A PER OPERATION IN
NEW YORK CITY.
A VERY STRONG OPERATION.
NUMBER 10 GLOBALLY BUT WE'VE
BEEN VERY, VERY WELL.
A STRONG CORPORATE CLIENT IN THE
NATIONAL FRANCHISE WE ACQUIRED
THREE YEARS AGO IN OUR LARGEST
ACQUISITION EVER BASED IN LOS
ANGELES REALLY SERVES THE
COMMERCIAL AND HIGH NETWORK
FRANCHISES.
ENTERTAINMENT INDUSTRIES ARE
VERY STRONG AND REAL ESTATE
QUICK SERVICE RESTAURANT
FRANCHISE, FRANCHISEE
RESTAURANTS COME UP WITH
FASHIONABLE SERVICES.
THEIR BUSINESS AND THEIR
PERSONAL NEED AND WE GREW 35%
YEAR OVER YEAR LAST YEAR.
WE ARE HIRING.
WE'VE ADDED 25% MORE FRONT-LINE
SALES STAFF AND WE ARE REALLY
GROWING THE NATIONAL FRANCHISE
ABOUT A THOUSAND PEOPLE IN THE
LAST TWO YEARS.
WE CONTINUE TO GROW IN NEW YORK
CITY.
VERY MUCH THE TAX CUTS TO INVEST
MORE PROGROWTH.
MARIA: AND YOU ARE HIRING TO