FIGHTING FOR THE AMERICAN WORKER.
WORKER. MARIA: COMMERCE SECRETARY
WILBUR ROSS TOLD THE HOWIE CAR
RADIO SHOW YESTERDAY HE CANADA’S
PARLIAMENT TO PASS THE LAW
WITHIN THE NEXT COUPLE OF WEEKS.
JOINING US NOW, COMMERCE
SECRETARY WILBUR ROSS.
THANK YOU FOR BEING HERE.
>> GOOD TO SEE YOU.
MARIA: WHEN SHOULD WE EXPECT
THIS INTO MOTION ONCE CANADA
PASS AS YOU’RE EXPECTING, TELL
US THE FIRST IMPLICATION OF THIS
ACTUALLY BEING THE NEW LAW OF
THE DAY.
THE DAY. >> WELL, I THINK THE FIRST
IMPLICATION IS CAPITAL EX BE PEN
EXPENDITURES, THERE’S BEEN A LOT
OF CONCERN ON THE PART OF
EXECUTIVES JUST WHAT WILL BE THE
ROUTE GOING FORWARD.
NOW, THEY KNOW WHAT THE ROAD MAP
WILL BE.
WILL BE. IT’S NOT CONTROVERSIAL IN CANADA
AT ALL.
AT ALL. IT IS JUST GOING THROUGH THE
MECHANICS.
MECHANICS. SO THERE’S A VERY, VERY HIGH
DEGREE OF CERTAINTY THAT IT GOES
THROUGH.
THROUGH. IN FACT, I WAS IN MEXICO CITY
TWO DAYS AGO AND WE IMPLEMENTED
THE FIRST BIG STEP TOWARD
INTELLECTUAL PROPERTY RIGHTS BY
SIGNING AN AGREEMENT BETWEEN THE
UNITED STATES PATENT AND
TRADEMARK OFFICE AND THEIR
MEXICAN EQUIVALENT.
MEXICAN EQUIVALENT. SO WE’RE ALREADY BEGINNING THE
VERY DETAILED IMPLEMENTING
MECHANISMS TO DEAL WITH THE VERY
IMPORTANT PART, INTELLECTUAL
PROPERTY RIGHTS.
PROPERTY RIGHTS. MARIA: THAT’S VERY IMPORTANT,
ACTUALLY.
ACTUALLY. OF COURSE, THIS RIGHT ON TOP OF
WHAT YOU’VE JUST DONE CHINA.
WHAT’S YOUR BEST EXPECTATION IN
TERMS OF WHAT THIS MEANS FOR
GROWTH, ECONOMIC GROWTH IN THE
U.S.?
U.S.? I’VE HEARD JOB CREATION FROM
USMCA ANYWHERE FROM 100,000 TO
600,000 NEW JOBS CREATED AS A
RESULT OF THIS NEW LAW.
HE’S WHAT’S YOUR ESTIMATE ON
JOBS AND ECONOMIC GROWTH, LET’S
CALL IT FOR 2020 AND 2021.
>> RIGHT.
>> RIGHT. WELL, THE REASON THAT THERE’S A
BIG RANGE IS THAT A LOT OF THE
INDUSTRIES, PARTICULARLY
INDUSTRIES, PARTICULARLY AUTOMOTIVE, ARE PRETTY CYCLICAL.
SO THE AMOUNT OF JOBS THAT WILL
BE CREATED IS PARTLY A FUNCTION
OF WHERE WE ARE IN THE
AUTOMOTIVE CYCLE.
AUTOMOTIVE CYCLE. BUT IF YOU TAKE THE OPTIMISTIC
PART, IT COULD BE 579,000 JOBS,
ALMOST 600,000 JOBS AND
235 BILLION ADDED TO OUR GROSS
DOMESTIC PRODUCT.
DOMESTIC PRODUCT. THAT’S ABOUT 1.2% OF OUR GDP.
SO IT WILL BE SOME MAJOR
FRACTION OF THAT, GRADUALLY
PHASED IN OVER THE FIRST FEW
YEARS.
YEARS. SO IT’S A VERY BIG INITIAL LIFT
AND IT’S ONE OF THE MANY REASONS
I THINK IT’S ALMOST PHYSICALLY
IMPOSSIBLE FOR THERE TO BE A
RECESSION THIS YEAR.
BECAUSE USMCA WILLED WILL ADD
SOMETHING.
SOMETHING. THE ABSENCE OF THE GENERAL
MOTORS STRIKE WILL ADD A
FRACTION OF A PERCENT.
THE TRADE DEAL WITH JAPAN, BOTH
IN DIGITAL AND ESPECIALLY IN
AGRICULTURE, WILLED ADD A WILLED
FRACTION AND WE REDID OUR TRADE
DEAL WITH THE KOREANS.
WHEN YOU ADD ALL OF THOSE
TOGETHER, THERE WON’T BE THE GM
STRIKE AND HOPEFULLY AT SOME
POINT DURING THIS YEAR BOEING
WILL RECOVER FROM THE 737 MAX,
AND THAT WAS PROBABLY A QUARTER
OF A POINT OF ON GDP.
SO IF YOU ALLOW FOR THOSE
SPECIFIC FACTORS, AND THEN
ANOTHER BIG ONE, LAST YEAR WAGES
WENT UP, EMPLOYMENT WENT UP.
BUT WE ONLY GOT THE BENEFIT IN
CONSUMER SPENDING OF THAT FOR
ABOUT HALF THE YEAR ON AVERAGE.
NOW WE’LL HAVE ALL THOSE FOR A
FULL YEAR.
FULL YEAR. SO WHEN YOU ADD ALL THOSE
TOGETHER, ADD IN THE CONTINUING
STRENGTH IN CONSUMER CONFIDENCE,
ADD IN THE FACT THAT THE
CONSUMER SAVINGS RATE WENT UP
PRETTY WELL LAST YEAR DESPITE
THE VERY GOOD SPENDING, SO
THEY’RE NOT OUT IN POWDER, SO
YOU ADD ALL THAT TOGETHER, I
DON’T SEE A RECESSION.
MARIA: THAT’S GREAT TO HEAR,
OBVIOUSLY.
OBVIOUSLY. YOU’VE GOT A LOT OF POSITIVES
THERE TO TALK ABOUT, THE
BOOSTING OF ECONOMIC GROWTH.
THIS MORNING, HE THOUGH, THERE’S
THIS NEW WORRY ABOUT
CORONAVIRUS.
CORONAVIRUS. LOOK AT ALL OF THESE COMPANIES,
SECRETARY, THAT ARE CLOSING SHOP
IN CHINA, YOU’VE GOT AIRLINES
STOPPING ANY FLIGHTS GOING INTO
CHINA.
CHINA. YOU CAN SERIOUSLY SEE THE
CHINESE ECONOMY COME TO A HALT
AND GIVEN THE LARGE PERCENTAGE
OF GLOBAL GROWTH THAT CHINA
COMMANDS, DOES THAT ACTUALLY
THREATEN WHAT YOU’RE JUST
SAYING?
SAYING? >> WELL, FIRST OF ALL, EVERY
AMERICAN’S HEART HAS TO GO OUT
TO THE VICTIMS OF THE
CORONAVIRUS.
CORONAVIRUS. SO I DON’T WANT TO TALK ABOUT A
VICTORY LAP OVER A VERY
UNFORTUNATE, VERY MALIGNANT
DISEASE.
DISEASE. BUT THE FACT IS, IT DOES GIVE
BUSINESSES YET ANOTHER THING TO
CONSIDER WHEN THEY GO THROUGH
THEIR REVIEW OF THEIR SUPPLY
CHAIN.
CHAIN. AND TOP OF ALL THE OTHER THINGS,
BECAUSE YOU HAD SARS, YOU HAVE
THE AFRICAN SWINE VIRUS THERE,
NOW YOU HAVE THIS.
IT’S ANOTHER RISK FACTOR THAT
PEOPLE NEED TO TAKE INTO
ACCOUNT.
ACCOUNT. SO I THINK IT WILL HELP TO
ACCELERATE THE RETURN OF JOBS TO
NORTH AMERICA, SOME TO U.S.,
PROBABLY SOME TO MEXICO AS WELL.
MARIA: OH, THAT’S A GOOD POINT,
ACTUALLY.
ACTUALLY. YEAH, BECAUSE THESE COMPANIES
HAVE TO DO SOMETHING.
THEY’RE GOING TO HAVE TO HAVE AN
ALTERNATIVE ONCE THEY SHUT DOWN
THINGS IN CHINA IS WHAT YOU’RE
SAYING.
SAYING. >> ABSOLUTELY.
>> ABSOLUTELY. AND YOU’VE ALREADY HEARD APPLE
TALKING ABOUT FIGURING OUT HOW
TO REPLACE SOME OF THE CHINESE
PRODUCTION.
PRODUCTION. YOU HAD OTHERS ALSO DOING THE
SAME THING.
SAME THING. AND SO I THINK THERE’S A
CONFLUENCE OF FACTORS THAT WILL
MAKE IT VERY, VERY LIKELY MORE
REASSURING TO THE U.S. AND SOME
RESHORING TO MEXICO.
MARIA: LET ME ASK YOU WHAT THE
NEXT PRIORITIES ARE IN TERMS OF
TRADE, SECRETARY.
TRADE, SECRETARY. BREXIT IS OBVIOUSLY DONE,
BRITAIN POISED TO LEAVE THE EU
TOMORROW, TEEING UP THE 2R5EUD
NEGOTIATIONS BETWEEN THE U.K.
AND REST OF THE WORLD.
THE PRESIDENT HAS BEEN ADAMANT
IN SAYING, LOOK, THE U.K. IS
GOING TO BE THERE FOR US AND
WE’RE GOING TO BE THERE FOR THEM
IN TERMS OF A TRADE DEAL.
IS THE U.K. LIKELY A PRIORITY
BEFORE THEST U OR IS INDIA THE
NEXT PRIORITY?
NEXT PRIORITY? WHAT IS IT?
>> WELL, MANY COUNTRIES ARE
PRIORITIES.
PRIORITIES. BUT THE PRESIDENT HAS MADE CLEAR
WHEN WE HAD OUR BILATERALS AT
THE WORLD ECONOMIC FORUM IN
DAVOS THAT EU AND BRITAIN ARE
BIG, BIG PRIORITIES AND HE WOULD
HOPE TO GET ONE OR BOTH OF THOSE
DONE THIS CALENDAR YEAR.
MECHANICALLY, U.K. IS PROBABLY
EASIER.
EASIER. ITS ECONOMY IS MUCH MORE SIMILAR
TO OURS THAN EITHER OF OURS IS
TO THE EU.
IS NUMBER ONE.
NULL BETTER TWO, -- NUMBER TWO,
A BIG PART OF BOTH ECONOMIES IS
FINANCIAL SERVICES AND OTHER
SERVICES AND THOSE ARE PRETTY
WELL INTEGRATED ALREADY.
MARIA: YEAH.
MARIA: YEAH. >> FURTHER, U.K. DECISION
MAKING PROCESS IS MUCH SIMPLER
THAN THE EU.
WHEN YOU NEGOTIATE WITH THE EU,
EACH TIME THERE’S TO BE A MAJOR
CHANGE IN THEIR NEGOTIATING
POSITION, THEY HAVE TO GO BACK
AND GET A MANDATE FROM EVERY
SINGLE ONE OF THE -- WHAT WILL
BE 27 COUNTRIES IN THE EU.
THAT MAKES IT VERY HARD TO DEAL
QUICKLY.
QUICKLY. SO I THINK THERE’S A REASONABLE
CHANCE THAT WE’LL FIRST MAKE A
DEAL WITH U.K., NOT THAT WE’RE
PUSHING IT OVER EU, BUT ASSUMING
WE DO, THEN THAT WILL PUT THE EU
IN A VERY INTERESTING POSITION
OF HAVING TO NEGOTIATE WITH THE
COMBINATION OF THE U.S. AND THE
U.K.
U.K. MARIA: AH, THAT IS INTERESTING.
I KNOW INDIA IS ON YOUR LIST AS
WELL AT SOME POINT.
>> YES.
>> YES. MARIA: WHAT’S YOUR TAKE ON
HUAWEI ENTERING THE U.K.,
BRITAIN ON TUESDAY REALLY
BASICALLY SHIRKING OFF U.S.
CONCERNS, ALLOW ALLOWING THE CHI
TELECOM GIANT TO PARTICIPATE IN
5G, EXCLUDING IT FROM, QUOTE,
CORE PARTS.
CORE PARTS. SECRETARY, YOUR COLLEAGUE,
SECRETARY POMPEO WAS IN THE
STUDIO OVER A YEAR AGO AND HE
SAID TO ME, IF EUROPE USES
HUAWEI INFRASTRUCTURE, THE U.S.
WILL BE FORCED TO SHARE LESS
INFORMATION.
INFORMATION. THERE ARE BACK DOORS THAT DATA
GOES DIRECTLY BACK TO THE
COMMUNIST GOVERNMENT AND HERE
YOU HAVE THE U.K. SAYING YEAH,
OKAY, HUAWEI, YOU CAN
PARTICIPATE IN OUR 5G
INFRASTRUCTURE ON A LIMITED
BASIS.
BASIS. >> WELL, FIRST OF ALL, WE HAVE
TO SEE EXACTLY HOW IT’S
IMPLEMENTED.
IMPLEMENTED. WHAT THEY’RE TRYING TO DO IS TO
TRUNCATE THE PORTION OF THE
SERVICE THAT CAN COME FROM --
FOR 5G, FROM HUAWEI.
THEY’VE SAID THEY’LL LIMIT IT TO
35% OF THE EQUIPMENT.
THEY’RE TRYING TO LIMIT IT TO
VERY SPECIFIC PARTS THAT THAT
THEY VIEW POSE LESS OF A
SECURITY THREAT.
SECURITY THREAT. OUR VIEW IS IF IT’S TOO
DANGEROUS TO TRUST THEM WITH THE
WHOLE THING, IT’S TOO DANGEROUS
TO TRUST THEM WITH ANY PART OF
IT.
IT. SO WE HAVE A MUCH MORE HOLISTIC
VIEW OF THE SITUATION.
SO I’MED I’M GLAD THAT THEY AT L
RECOGNIZE THAT THERE ARE SERIOUS
ISSUES WITH HUAWEI.
WE DON’T THINK THAT THEIR
SOLUTION GOES AS FAR AS IT
SHOULD, BECAUSE THINK ABOUT IT.
WHAT IS 5G -- WHAT DOES 5G MEAN?
IT MEANS THE INTERNET OF THINGS,
EVERY THING IS GOING TO BE
CONNECTED TO EVERY OTHER THING
AND EVERY THING IS GOING TO BE
CONNECTED TO EVERY PERSON.
HOW MUCH RISK CAN YOU TAKE WHEN
YOUR ENTIRE SYSTEM IS UP FOR
GRABS IN CASE YOU GOT YOUR
JUDGMENT WRONG.
JUDGMENT WRONG. WE JUST THINK IT’S TOO BIG A
RISK FOR ANYBODY TO TAKE AND IT
ISN’T A PROTECTIONIST THING BY
THE U.S.
THE U.S. WE DON’T HAVE A HUAWEI
EQUIVALENT RIGHT NOW.
MARIA: YEAH.
MARIA: YEAH. >> I THINK WE WILL IN A YEAR OR
TWO, BECAUSE OUR TECH COMPANIES
ARE WORKING VERY HARD NOT ONLY
TO CATCH UP TO HUAWEI, BUT TO
LEAP-FROG THEM AND GO BEYOND.
SO THERE’S ALSO THE DANGER THAT
U.K. FACES THAT BY GOING HUAWEI,
THEY COMMIT THEMSELVES TO WHAT
COULD TURN OUT TO BE NOT THE
LEADING EDGE TECHNOLOGY.
IT’S VERY RARE -- JUST TAKE IT
WITH THE iPHONES, VERY RARE
THAT THE FIRST PRODUCT IS THE
ULTIMATE BEST PRODUCT.
BECAUSE TECHNOLOGY CHANGES.
WE LEARNED FROM THINGS AS WE GO.
BUT THE MAIN REASON WE P P OPPOS
IT, WE JUST THINK IT’S TOO BIG A
RISK TO TAKE.
IF YOU WERE THINKING ABOUT
BUYING A NICE NEW CAR AND THERE
WERE ONLY A 10% CHANCE THAT YOU
WOULD BE KILLED THE FIRST TIME
YOU DROVE THAT CAR, WOULD YOU
BUY IT.
BUY IT. MARIA: NO.
MARIA: NO. >> I DON’T THINK SO.
MARIA: NO, I DON’T THINK SO.
I UNDERSTAND THE ISSUES VERY
WELL, SECRETARY, AND THE HUAWEI
SITUATION IS CERTAINLY SOMETHING
WE WILL BE WATCHING CLOSELY.
IT’S GREAT TO SEE YOU THIS
MORNING, SIR.
MORNING, SIR. THANK YOU.
THANK YOU. >> THANK YOU.
MARIA: SECRETARY WILBUR ROSS