It is my pleasure to present today speaker. Dr. Paula Stern. Dr. Stern has just joined President Clinton's advisory committee on trade policy and negotiations and is a senior fellow at the progressive policy Institute in Washington, DC. Many of you may also know her as the former chair of the United States International Trade Commission, which she headed from 1984 to 1986. Dr. Stern is what many of us in Minnesota might call A Washington Insider. She was then Governor Clinton senior campaign advisor on trade and international economic matters during the 1992 presidential campaign. She is now a periodic counselor to the president and his senior International economic advisers her writings on Congress foreign trade policy women's issues and United States relations with Japan the Soviet Union the Middle East Latin America Asia, and Europe have been very widely published. I'm particularly proud to be here today to announce that doctor Stern has joined the Hamline University faculty as the Howard W alkire chair holder in international economics. We are structuring this chair in a slightly non-traditional way in the doctor's current will be based in Washington DC because we think those connections are so critically important for her to be bringing to a Midwestern University and Community the kind of information that we will all benefit from Hollister and received her undergraduate degree from Goucher College for master's degree and Regional studies from Harvard and her PhD in international affairs from the Fletcher School of Law and diplomacy at Tufts. Is a great pleasure for me to now present Hollister. Thank you so much. Larry for that very very kind introduction. I am delighted to be here delighted to be the recipient of the alkire chair at Hamline University. This is a very large group that we're room that were in the group is a little far away from me, but I would like to perhaps pull you closer of through an exchange of ideas. I'm aware also that this is being broadcast on radio so that we haven't an audience that is even further away in and not seen it all but I want to First say how thrilled I am to be here in the Twin Cities as some Larry read you my curriculum vitae. He did not mention the fact that I sent on a number of corporate boards and including the I got a Westinghouse which as you know his Thermo King here in in Minnesota and Harcourt general which Neiman Marcus is part of our family and I've been out here not only to speak and talk with the students at Hamlin over the last couple of years. But also to see some of your business is out here who are involved in international trade. So I'm very very happy to be here. And I also want to reflect on the fact that you have sent so many liters to us in Washington and and internationally to to the world and take your time thinking right now not only of Hubert Humphrey, but I was thinking of Walter Mondale who's now serving as our ambassador, but to Japan and I'm going to have a few things to say about Japan and I and I do think that the fritz Mondale has been responsible for some of the best thinking and the best exchanges it where With that particular country, I was dubbed by Larry is Washington Insider and I was saying to my friends at the table that being from Washington these days is so not so very comfortable. There's so much criticism and I think so much fun fair criticism. And I really think that the mission for a thoughtful person when talking about policy whether its trade policy or Health Care policy if anything else is to to be a responsible critic an analyst and I do feel that Washington seems to have gotten to the point where public service is so I make sure with Target almost for public pillory in and and I did and I regret that very much but nevertheless Washington is my home. I'm here to tell you what I think is happening in Washington that affects trade policy and therefore affects the Way businesses deal with the with the world outside. It seems it sadly Washington is always the last to learn about certain things. I think about John Nesbitt wrote megatrends always talked about how many of the trends start out in California and then roll their way across the the country in washing is always the last to learn I think that's the case here because we've had some terrific economic changes that have going on in this country that have equipped American Producers goods and services to be very competitive in the global Marketplace, but sadly is ice a political reality in Washington seems to be This Market reality. But to miss this development to miss these changes that are going on in American industry is to miss opportunities. I'd like to give you some insight as how I think Washington is reacting to some of these Economic Development. I believe that A-1 when it when one treats economic changes opportunity when one takes a positive approach to economic change that is a distinguishing characteristic of a winning trade policy. But when change is seen as a threat there tends to be in the body politic a feeling of fear and one tends to resort to policies that are defeatist and protectionist. I believe that the Clinton trade policy has Put a new mark on our thinking in in and how we treat the world and I think that the Hallmark of the Clinton trade policy so far has been that change is here to stay we cannot repeal but the laws of of change and it went out we need to a tree change as a friend and not as an enemy. Nevertheless there is this Legacy? I believe that this Administration inherited from the 80s. Even from the 70s when the US was really taking a competitive eating in the world and I think it is still infected a lot of thinking and is still creating this political reality that is making it very hard to shape trade policy and convince the American public and convinced the the Congress to go along with some of these highroad very export-oriented trade policy approaches today. Our economy in the facts of the matter is that the are kind of he's growing faster than any other industrialized country in the world and that's a great contrast as I say to the 1950s when we feared to use a Sony chairman docu Ameritas term the Halloween out of America. We heard in the 80s those revisionist thinkers particularly when it came to dealing with Japan who preached manage trade to Fight Fire with Fire. I think our political judgment and in many ways was blinded by this concern that Japan was going to overtake us that it was this Juggernaut that this Rising Sun was an unfair traitor and somehow the u.s. Couldn't compete and I think that infected much of our thinking including even the debate that we had last fall on the NAFTA when many of the arguments both Pro and an incon the NAFTA which dealt with Mexico and Canada of all things started to be a debate over Japan and the argument was well if we don't take up this NAFTA the Japanese will get into Our backyard in the end they will take advantage and then the other argument was well, if we do get to this NAFTA the Japanese will use it as a back door into the US market play. It really showed what an obsession we seem to be having from this industrial beating. I think that we were taking particular in the automotive industry in some of the other Industries in the 80s, but the facts today are the America's labor force is the world's most flexible and it is the best priced we are growing faster than not only Japan, but also Europe the US has the lead in advanced technology and skills and unlike the 1980s when the Super Dollar was a super headache today. The dollar is training competitively especially against the yen. but the descending dollar isn't the only boost to us industry as you are all aware because I think many of you who have been successful Business Leaders represent this trend us industry responded to the competition in the 80s and responded to the downturn in the last recession by rationalizing operations, pairing waste holding down labor cost and increasing technological Basie's and short meeting the challenge of global competition by getting leaner and meaner It's not mean or at least getting leaner and better. The Clinton Administration is riding this wave of US economic Resurgence. They have benefited in coming in at a really good time. This Administration also understands that America's economic vitality and indeed the president's top priority depends more than ever on healthy healthy economic expansion overseas in the last 20 years trade is doubled as a percentage of America's entire gross national product and exports now account for about 13% of US economic output and from 1984 to 1992 a million new manufacturing jobs were created because of the Sexes board expansion. The administration's economic policies, especially those of last year and it raining in the federal budget deficit have led to a favorable export climate as has low inflation low interest rates of until recently, but I still think that they're relatively they're quite low as well as competitive exchange rates. They have all led to a favorable export climate. There are however some thorns in this Rosy picture while the competitive position of us industry and service sectors has greatly improved nevertheless us productivity growth rate has slowed significantly in recent years and the early post-war years productivity grew about two and a half percent of year. But since 1987, the pace is slow to roughly 1.2% and the levels of US savings and investment, especially investment research and development as well as education and worker retraining are still inadequate. Well us net profit investment Rose marginally to 4% of GDP in 1993. It's still remain the lowest in the developed world and only about half of what it was 20 years ago. U.s. Personal savings rates continue to fall hitting a record low last year. This meager. Domestic savings rate doesn't come close to covering with the us spending on consumption and investment is and until this mismatch is remedied. It will be impossible to erase the US trade deficit with Japan and with the world and indeed. I think we're going to be seeing those trade deficit numbers go up again this year and possibly next. the economic performance of Key West trading partners is another Thorn that can snag America's economic prospects both Japan and Russia and Germany suffered actual declines in GDP last year and while the US certainly look Stronger by comparison, that's really cold comfort because recession in Europe and Japan hurts us businesses by Contracting are markets and by cutting our export growth The most recent Department of Commerce statistics showed that our trade deficit is the largest it's been in six years since 1987 and this reflects not only the Dismal prospects in those traditional export markets of Europe in Japan, but also in Mexico which had been really into riffic booming market for us, but which is cooled off recently. The Clinton Administration is well aware of all these challenges to our future Prosperity as exporters believe that this Administration will continue to pursue trade expanding initiatives which u.s. Space companies enjoying are now renewed competitiveness are well-positioned to take advantage of President Clinton ran against President Bush focusing on the domestic economic challenges and concerned but if you think about it in the foreign policy area including the foreign trade area continuity was the watchword and indeed since the Clinton Administration has occupied office it's been its first year in office wrapping up the unfinished business of its predecessors the North American Free Trade Agreement which was a bush initiative the Uruguay round which had been started seven and a half years before or in the Reagan Administration and even the asia-pacific economic cooperation Summit meeting in Seattle which had been on the agenda when Clinton was President Clinton was sworn into office Early on President Clinton put his personal stamp on this agenda by stressing as he did in the campaign Economic Security. He said that we cannot be strong overseas. If we aren't strong at home and sends his feature to continue to call for Global growth for improved export expansion and intensified trade particularly with emerging markets in Asia and in Latin America, and recently the administration launched a set of proposals for improving investment in education and worker retraining and for boosting private-sector and government investment in R&D, particularly a civilian or dual-use Technologies. And as I mentioned a moment ago, I navigate through Congress The Five-Year deficit-reduction package designed to increase savings. I think this Administration will continue to pursue as did its predecessor all shapes and sizes of trade agreements multilateral ones such as the Uruguay round which was the GATT General agreement on tariffs and trade negotiations, which was wrapped up last December by the presents trade representative. They'll pursue Regional ones such as the NAFTA the North American Free Trade Agreement and they will pursue bilateral runs as attempted in the framework Hawks with Japan. And I believe that we will see as we get into the summer season with the G7 meeting of leading industrialized economies in July in Naples that the Clinton team will continue to encourage macroeconomic policies aimed at increasing growth and demand abroad and in promoting tax cuts in Japan and interest rate Cuts in Germany as well as economic liberalization in deregulation throughout the developing world. These are there are distinguishing features of the Clinton Administration, which I I would like to just point out and then develop particularly the emphasis on developing countries in Asia in particular. Also, this president has had the opportunity to really accelerate the reduction of export controls and licenses that were required during the Cold War on technology that had both military as well as civilian applications and because of the end of the Cold War this president has had the opportunities and is taking the opportunity to really have some sweeping deregulations, which have been extremely important because if you look back to Stone a few years ago over 40% of our exports had some kind of control on and you had to go and get a license of some form or another in particular for the technological. Peter's here it in the in this area. I know many of you have had many years of experience with with these really frustrating regulations. This Administration is a set is focused on Emerging Markets. Particularly in Asia. President Bush has NAFTA as a as an initiative and I think that there were many in Asia who were concerned that somehow they were being neglected that there was a signal being sent that the US was turning into a regional thinker in focusing only on this Hemisphere. And I think this Administration is tried very hard and was helped by having the Seattle Summit of leaders of all the Asian Nations save one come to Seattle to focus on Asia and to talk to the American public about Asia as a an opportunity for markets and not just Asia as a threat of producers that we're going to ship goods to the United States. Throughout I think this president has argued in his speeches for economic engagement worldwide blind. The fears of many that the Democratic president would be isolationist in protectionist. There was a lot of fear of that he took on even those within his own party some in his own party on the NAFTA and that was an extraordinary battle by fighting and winning this bipartisan Victory. It made him appear quintessentially presidential and it made this nation appear as a world leader concerned about achieving Market opening overseas and engaging positively in in trade with not only our partners and in Mexico and Canada, but worldwide he argued successfully that he Konami change is a friend not an enemy. And that we could not repeal those laws of change. We saw this also in speeches that he gave it was saving University in Tokyo last year and elsewhere and it's really quite ironic on now that you're hearing so much criticism of the administration's policies in Asia when in fact this Administration started out really a very positive track with with Asia. The most of the yin criticism that we've been hearing in the last 5 months or so and has had to do with not only are our policies with a Japan but also with China the two major powers in Asia. I think that this Japan policy is I suggested in my opening statement has overtones of this 1980s obsessiveness with Japan. Is this export Juggernaut? That's 10 ft tall. That is somehow going to overtake the United States and over the years the Reagan Administration the Bush Administration and now in the Clinton Administration, you've had this kind of focus on the trade deficit with Japan, which is high-profile very corrosive and it has has some Resulted I think in some unfortunate pass policy decisions that have been made last summer President Clinton and then Prime Minister. Miyazawa of Japan launched a series of framework talk that were aimed at trying to come up with a different bilateral approach mind you since President Clinton was sworn in he's had to deal with three Japanese prime minister's. Miyazawa. Then we then we had hosokawa and now we have hot tub and if you look at the paper, isn't it? Maybe the hot tub won't be around for very long after that the Naples Summit Inn in July. But if governments while the prime minister's may come and go you have a very strong permanent of bureaucracy there and you have a certain sense on both sides of the Pacific that we have got to do better in in our tribulations. These framework talks have been complex and multi-dimensional and in spite of some progress in government procurement areas and in deregulation and trying to break a break open the Japanese Market at the talks nevertheless stumbled in February over the definition of what is considered a numerical indicators of success. And as you know in February of this year those talks between the president and the Prime Minister of Japan broke off and they both agreed to disagree and not paper over the disagreements. We have since I've been seeing a debate discussion some changes going on in Washington and in Tokyo as to how best to deal with this problem my view on this is that in spite of everyone trying to stand up and show that they can be tough with Japan and who's going to be tougher. I have no problem being tough Japan when it comes to Market opening but I think we have to not only get tough, but we have to get smart as well and my recipe for getting smart with Japan would focus much of our attention and our diplomatic priorities. On the radical deregulation that has to go on in Japan with her tens of thousands of laws and rules that not only hamper our exports in the exports of other countries to Japan but hamper new entrance by Japanese entrepreneurs as well and the other part of a get smart policy, which Japan would would be the focus on the fact that your pans in the longest recession and has had since World War II what is needed there is immediate physical stimulus tax reform to get that economy growing because of wild we had a little Boom Like An exports to Japan in the late 80s and during the Bush Administration it petered out and it's very difficult. Even if you had open markets in Japan to be selling where there is no demand. So we have really should be focusing our efforts on on that kind of macroeconomics. coordination and on the deregulation agenda are the other part of a get smart policy with Japan that I would suggest is one that's simply steps back and says we have simply been too obsessed with Japan. And as long as this Market is as close as it is and is growing as slowly as it is in mine last year. The growth rate was one tenth of 1% Then we should be looking at other markets that are growing faster where there more opportunity where there's a greater predilection to purchase from the United States markets in Asia has the fastest growing markets. But now it's not just in China. It's the other Asian Nations as well and we should be looking to Latin America which has the greatest propensity to purchase when it Imports in the US and import Goods. So we really need to play Japan on this trading map in such a way that it's important even very important, but it should not be All consuming for opportunities. We need to be exploring markets. Not only in Japan to the east but to the South as well. I mentioned these other Asian Nations outside of Japan and the Seattle Summit of the asia-pacific economic cooperation that we had here that the first time I think really elevated at the presidential level the concerns and interests and opportunities in these other markets over it in the asia-pacific. In almost every respect long-term market growth potential overall Market size composition of us export to the region and per capita of US exports the asia-pacific region represents the best prospects for US exports exporters in the last 12 years the volume of our trans-pacific trade outstrip the volume of our transatlantic trade by 50% and it's very interesting because again, this is this business about economic realities and political reality in spite of that economically reality that are volume of trade has out has been out his outstripped transatlantic trade when you look at the trans-pacific trade Americans when they're pulled still think that Europe is much more important than than all these these Asian markets. So we have a lot of kind of adjusting to do in our own thinking us trade with Asia continues to climb for example of the u.s. Exports to the six-member. The asean which is the association of Southeast Asian Nations more than doubled between 88 and 93 and US exports to the Chinese economic area, which includes China Hong Kong and Taiwan Rose 15% in just one year from 91 to 92. I think the US is beginning to position itself to reap the benefits of this growing economic dynamism in Asia, but we have a long way to go and we have to be very important and how we shape our policy not only with those countries in Asia outside of Japan, but as we shape our policies with Japan and with China What whatever the reasons whether it's Market barriers American managerial lassitude or ignorance cultural preferences that are expressed in the public. I think we have to improve the situation. Whereby we see 40% of us Imports are coming from Asian countries, but those same countries only account for 26% of American exports. And in another figure which I think is stunning which shows this kind of disconnecting and instill lack of it of appreciation of these Asian markets. There's an oecd figure that shows in a 1991 less than 10% of total US Direct foreign investment was in these Asian Apec markets suggesting that us firms are not position to take full advantage of the ever-mounting waves of trade in Asia. At in Washington. I think that there is a job to be done to help American business, but I am a firm believer that the washing and should not cannot substitute for business decisions made by business people on on the ground nevertheless. I think Washington can take a lead and in shaping an international framework such as the Apec in and the Apec meeting there other ways. I would argue that we should think about building a bridge if you will between the important markets for America and Asia and the important markets in Latin America in the NAFTA to demonstrate a commitment that improving ties with Asia is important for us both for economic and political as well as some symbolic Ruiz reasons bringing an Asian nation into the NAFTA. Singapore for example one of these days. I might be an important signal of us interest in Asia and would create a bridge and it would be a quick strike that would dispel any fears in Asia that the NAFTA discriminates against these Asian Nations or that washing is somehow downgraded Asia in favor of increased emphasis on Latin America debate about the future architecture will be continuing in Washington. As you may know come next December. The president will be hosting all of the Latin leaders near Miami and there was a lot of discussion going on right now as to what are after NAFTA strategy should be what this architecture should be. I and it is extremely important to appreciate what terrific opportunities there are in Latin America opportunities that have come about from let the Latin countries self initiating privatization and deregulation and liberalisation is part of the deregulation removal of trade barriers Mexico did a lot of liberalizing on its own and what the NAFTA did was simply to memorialize many of these changes in a an agreement with the United States and Canada so that they will be permanent. And so the signal will be sent to the world to investors that when there was political change in Mexico that will not be changes in the liberalized trade regimes that have been adopted. This is not happening only in Mexico. Chile. As you may know is likely to be next in line for negotiation either as a member of NAFTA or in a bilateral with the United States again to reward the Chileans for the Democratic developments as well as economic profit ization nnn deregulation of this going on in Chile as well as to assure that America will gain from Market access in Chile as other nations such as Japan start to see the advantages of that market. So we're likely to see what happens after chili and that is the debate that's going on there. Will it be in architecture which just focuses on this hemisphere? Are we when we make sure that we also have an opening or a bridge for countries that are liberal that Have open markets to investment and trade irrespective of their geographic location that they might become members of a an open an open Regional arrangement. I would like to just close by mentioning the most important fight that we still have coming up this year in and that deals not with the bilateral discussions of Japan though. They're the most prickly and that deals are not just with the regional developments of after NAFTA. But with the multilateral agreement of the Gat round that was just wrapped up in December now Congress this week started considering the legislation that the president sent to implement the changes that were negotiated in Geneva at the general agreement on tariffs and trade in the Earth. around multilateral trade talks The Congress will have to vote on this new Gadget agreement and on the new World Trade Organization and there is some jogging going on. I think it's an important opportunity again for this Administration and for congress in a bipartisan way to send a signal that America is positively engaged in the world. We're talking about opportunities, which mean reductions in in in barriers worldwide there over a hundred different countries who were members of the Uruguay right of the of the new World Trade Organization. We have seen a new agreements that have eliminated tariffs in many areas totally and have reduced tariffs basically worldwide by 1/3 over a. Of the face in about 10 years and indeed the you Has managed and it's negotiations to get its Partners based on our trading patterns to reduce tariffs as much as 40% So we we've done a good job of negotiating. It's very important to seize the opportunity of agreeing to the GATT agreement. It's under attack right now in Washington by those who are fearful that we are somehow going to lose our sovereignty. I think that this argument is really a mask for those who are afraid of of change and frayed of opportunities afraid of opening up the the US ever more to trade and in and I believe that we're going to Have several months of talking on this but with the leadership that the president showed last year on the NAFTA. I think that he will prevail and it's very important unaligned importance of a bipartisan support because trade legislation like foreign policy legislation has to have a bipartisan basis for it to be successful and that wasn't it has been demonstrated every piece of trade legislation up until now underlined with NAFTA and it will be the case also with the Gat so we are standing right now, I think at a time when American industry American Service Providers are very productive Prime to compete we're trying to make sure that in our agreements worldwide that these opportunities are reaped. We're at it right time for healthy forward-looking us companies such as those here. In Minnesota this new opening in the World Trade environment coincides with the sleep and US competitiveness and propelled by the shifts in the domestic and international economies combined with their own efforts on the factory floor and in marketing and in Washington American firms, and the American public are poised to take full advantage of these newly accessible markets. I would very much love to take questions and I'm looking forward to seeing what your specific interests are. I know I've covered the the whole world here in looks like a half hour. But let me let me hear what's on your mind. Thank you listening audience that you're hearing Paula Stern a member of the president's advisory committee on trade policy and negotiations addressing. Today's Minnesota meeting. We have our first question from Jeffrey Arnold. First thank you, mr. And for your comments and give us an interesting perspective on the global trade, I have a specific question with regard to the ministration and the current situation in China seems to me that we have worked ourselves into a no-win situation with the trade-off between mfn and human rights. Would you comment on how the administration might move forward to resolve this issue will I think the administration will renew the most favored nation Tara treatment for China. I believe that the president again course inherits situations that that are on the books in this case the law of a Jackson Vanna commitment of having to write a book on the subject a long time ago Jackson Vanek Amendment which ties trade with non market economies to their performance on immigration of all things, but it's really not human rights, but nevertheless. We have this Legacy of the Cold War was intended it to the name that the Soviet Union and when it was written was never expected that it would be a shame to China. So it's really funny how we inherit these things and then I have to deal with him. I thinks it's a long-term that the way to go is to really a launch of study and examine the proposition weather China itself is a non-market economy. It is growing over 50% of the of the economy is now a privatized and I think that as a carrot and is an incentive for for China to accelerate its privatization. We should have this study and it would then graduate if you will out of the strictures of the law. Cuz if I said it only applies to non-market economy, but I think that this time around in June in a week or two we're going to see the president renew it it's very possible that as he did on the When he added to the trade liberalization package that the Bush Administration had negotiated the labor and environment side agreement that this present to may catch some additional conditions or Arrangements such as a Human Rights Commission to report on changes in in China, but the fact is that I think it's present should feel very comfortable with renewing mfn and advancing human rights because over the 15 years were the US and Chinese trade is increased as rapidly as it has the Chinese people and they're in their their rights and freedoms while it's not a democracy have nevertheless improved. So I think the trade has been as it has been a liberalizing has had a liberalizing effect on the on the political domain in in China. They'll be some steps back and forward and mixed signals, but I think that renewing trade also advances long-term human rights objectives Patrick Star in our second question comes from Bob White perhaps you can help me reconcile a couple of ideas that seem to be in conflict in and out here on the you were talking about the regional trade organizations and the potential expansion expansion of NAFTA. I hadn't heard the idea of including Singapore that I'm not sure I'd want to fog that idea too hard right now. Did you say flag nevertheless? It's the vision of it of a regional trading Bloc that's on the one hand on the other hand you have gas and assuming that the registration you spoke of goes through then we'll have a better World Trading environment. In the negotiations on the the real problem was a whole a whole range of issues. But one of the car ones had to do a, Niagara cultural policy not to mention French filmmakers and so on. But the, Niagara cultural policy what's up with a manifestation of original trading? So what I'm trying to reconcile is why we should be in favor of is as I was of an atom of an expanded Regional block here when we have so much trouble often with the European community and you could have the problem of the blocks rather than and more open global trading system. We probably never would have had the split duration of the free trade agreement with Canada or the North American free trade agreement with Canada and Mexico if the gas had moved along and the negotiations have been wrapped up sooner and I think that is indeed. If you look back at the history of the Reagan and Bush Administration Bill Brock was a trade representative at the time in the Reagan Administration sees the Canadian initiative to have this Free Trade Agreement, even though it was going to be a original agreement as a prod to the other European. Community now that European union and others to come to the table at the ghat it was and it was kind of a tactical move and if you look at the NAFTA the same thing we missed the deadline in 1990, the Bush Administration had planned to try to wrap up the negotiations in 1990 couldn't wrap it up. And so the NAFTA got this new impetus that had come along in the Bush Administration again seizing the initiative in Salinas of Mexico again is an effort as a prod I think as long as these Regional Agreements are not diverting trade from other regions. And as long as the barriers to the outside countries are reduced rather than or stay the same rather than raised then you are you are not Tampering with the overall multilateral trade system and indeed if you look at the NAFTA there were agreements on investments and agreements in in some of the service areas and an intellectual property areas which are far more advanced than we were able to achieve with the other hundred countries at the cat. And so it becomes like a beacon if it comes like a higher standard to try to achieve and as long as you that you have a more liberal regime, I think we're not following and into this danger of regional blocks, but I think there's a role that the new World Trade Organization can play dealing with the realities of these Regional Arrangements have been writing in the past vacuum of the cat and the role the new World Trade Organization can play is almost as an arbiter. Two if there is a country that feels that it has been hurt by some Regional Arrangement that it's not a member to it can come to the World Trade Organization and have a fact-finding review. And and in the World Trade Organization short of that being in a judicata. NG a body and in the in these kinds of dispute could be an information-sharing body so that each Regional group on sub-regional group because for example in in in Latin America have and I don't even have to put you have the Marcus or and you have the Andean pack and you have these other small or sub-regional agreement could be all registered at the World Trade Organization. So the rules and transparent and known and you would have an information-sharing roll there. So I don't think that they're necessarily in contradiction. I can you know, I understand that we would always we would like to some sort of the purity of a purely multilateral system. But if it's not operating then you have to find something that you know less than optimal bet that never less is an improvement. Thank you. Just turn we have time for one last question from Ron Smith. Dr. Stern to questions. The first question is as if you do believe that the Mexican economy is moving along as stated when during the argument on NAFTA and if you believe that there has been a over reaction to the death of the presidential candidate in the protests in the Mexican state of Chiapas. What should the Mexican Government and our Administration do to a correct? That misapprehension. Do you think about the Chinese government statement that there's going to be no change as far as Hong Kong is concerned after the Takeover. I think it's the US in The Mexican government in the Canadian government have done this the the currency interventions in the currency the effort to try to calm the markets, which I think it's been extremely important. For continuing, you know trade and continuing investment and I think that's probably the most important confidence-building measures that this Administration initiated in building on one that they had that hit they had inherited and as far as in Hong Kong, I mean, I think that the greater Chinese operation where where where you have Hong Kong China and Taiwan trading in the most phenomenal way and much of the investment in China, as you know is is is coming from other Chinese in Taiwan and Hong Kong and much of the trade flows that we see to the United States from from China are really just a displacement of trade flows. It had been originating in Hong Kong and Taiwan and is as long as we have this kind of open Training regime in a like I think it will be very reassuring and I think will be very very important. I just think it's extremely important to however to to make sure that the that the rights and and Democrat Democratic Values which have been honored in Hong Kong are perpetuated and that's why I say, I don't think we can completely a divorce in our trading relations with China these human rights concerns. It's how we express our dual objectives as well as the Strategic objectives not whether that they aren't there's a linkage is how we express that link.