Charlie Bruce 0:01
From Thomas Jefferson's academical Village, this is academical. In our podcast we peek under the hood of the machine of public policy to see how things work. This week host Aiden Dowd interviews trade Ambassador CJ Mahoney on his role in the USMC a trade negotiations. Without further ado, here's our show.
Aidan Doud 0:22
Hi, everybody. Thanks for joining us. My name is Aiden Doud. And I'm one of your academical podcast co hosts. I'm a first year MPP student at baton on we're going to be talking about everything international trade policy. So Ambassador Mahoney is the former deputy United States Trade Representative for investment services, labor, environment, Africa and the Western Hemisphere. He then went on to clerk for Justice Kennedy in the Supreme Court and then as worked as an attorney for Williams and Connolly, Williams and Connolly, a firm in DC and as a lecturer at Yale Law, most recently at USTR, he was the lead negotiator for the United States, Mexico, Canada agreement usmca. The deal that the trade deal that replaced NAFTA, and actually passed overwhelmingly in the House of Representatives by a vote of 385 to 41, and the Senate by a vote of 89 to 10. So without further ado, joining me now, Ambassador CJ Mahoney.
All right, Ambassador Mahoney. I'm so glad you're here. You're the perfect person to discuss these topics with and I can't thank you enough for joining us on academical.
CJ Mahoney 1:25
Well, thanks so much, Aidan. Really glad to be here.
Aidan Doud 1:27
Yeah. So tell us a bit about your experiences and USTR. What was it like to serve as the representative of the US government and basically be involved in these high level conversations and trade negotiations.
CJ Mahoney 1:38
It was a fantastic experience, I came to the job not having first hand experience with international trade. I was actually, you know, selected for the job kind of Honestly, these opportunities come and come about by by happenstance, I had a mutual friend who was was good friends with Ambassador Lighthizer, we were put in touch after Ambassador Lighthizer was nominated. Bob's view was that it was important to staff USTR with good lawyers. And he was less concerned about the substance. He thought if he hired people who had good negotiating skills and good legal skills, that the substance was something that he could teach, or that could be learned. And hopefully, in my case that that worked out. And I came into USTR without, frankly, without a lot of strong views on these issues, really just wanting to have the opportunity to serve. And it was a very, very active somewhat a turbulent time in, in US trade policy with regard to China, the renegotiation of NAFTA, as well as a number of smaller deals that didn't get as much attention. But I think were very good for the United States opened up market access for for farmers and manufacturers and other businesses in the US. And so I'm, I'm very proud of my service.
Aidan Doud 2:57
Yeah. What were some of those smaller trade deals just since, you know, this is a good, you know, good outlet for people that honest and honestly don't hear a lot about these smaller things, because trade policy isn't, you know, such a glamorous sexy topic as many others.
CJ Mahoney 3:11
Why? I'm glad you asked that. Because aside from the USMCA and the deal with China, we're certainly the headline accomplishments of the Lighthizer USTR. But there were a number of other deals as well that were that were really pretty significant. We did a deal with Japan, that standing alone would be probably one of the most important trade agreements that the US has done in the last decade. It basically secured for the US most of the agricultural access that we would have if we had a proper free trade agreement with Japan, and also included a first class digital trade agreement that has very high standards and puts the US and Japan on the same page on on digital economy related issues. We did a small deal put important deal with the European Union, where we got the EU to eliminate its tariff on lobsters, which was something was that was really important to to lobster and men in Maine, who had seen a lot of their market in the EU be lost to Canadian lobsterman after Canada did a Free Trade Agreement with the EU. And so it turned out that these fish are these last straw men who fish in the same waters, the Canadians have an advantage because they didn't have to their exports didn't pay a tariff, which was you know something about something in the in the range of mid double digits. So it was a important thing. It was also we actually did reciprocal tariff reductions on our side. But you know, at the end of the day, working with allies, making progress on trade really requires substantive changes. And you know, what we did with Japan, Korea, the EU did result in substantive changes to to the trade trade regime, I think in ways that are good for the United States and confidence building in terms of, of all of those relationships going forward.
Aidan Doud 4:54
Yeah, so I noticed that you mentioned specifically the automobile and then digital industries nd then I noticed also, we'll talk about NAFTA and USMC in a minute. But that was a common, like a recurring theme between all these deals that those industries needed some reform, did you like feel that was the case coming into it that, you know, those were sectors to focus on?
CJ Mahoney 5:15
I think the auto industry is just absolutely critical for the United States. It's not only an iconic American industry, I think it's one that drives a lot of a lot of economic activity and supports a lot of for something like for every man, every line manufacturing job, there are three or four, I think, you know, some people would say upwards of 10 additional jobs that are created in the supply chain. And so I think it's really important that the US maintain a vibrant auto industry, every trade agreement has certain rules that say that for manufactured goods, a certain percentage of the content have to be manufactured within the region, when we got to a point where Mexico really wasn't assembly platform for auto manufacturers in Europe and Asia, who don't give the United States reciprocal market access. It was an assembly platform for them to be able to get their vehicles into the United States duty free. So I think it was an important thing that we did. And you know, it's a problem now will be an even bigger problem in the future. Because the way that NAFTA is rules were set up NAFTA was an Agreement that was negotiated in the early 1990s. So cars in the early 1990s, were the reference point for those rules. And now his his cars have changed. And especially as we're on the threshold of big advances in New Energy vehicles and autonomous vehicles, it was important that those rules be reformed and adapted, so that they serve the needs to leave the United States. But I think of the entire integrated North American supply chain in the future. So I was very proud of that. I think that that was that was, I think, a really important reform.
Aidan Doud 6:47
So what are your thoughts generally on the like early NAFTA, like the original NAFTA in the early 90s? What did you think it did? Well, what did it do wrong? And then what did USMCA change about it that you think was really important?
CJ Mahoney 6:58
I think that the differences between USMCA and NAFTA are, you know, every bit as big if not bigger than the difference between a car that was manufactured in, you know, in 1994, and a and a Tesla, both are cars, they both sort of fit in the same category. At its most basic level, what it does is to have mostly duty free trade between the three countries, but every provision of it was upgraded significantly. And, you know, in some of these areas, there were there were things that were done that were that were we started with just I think, very, very different goals, the auto rules of origin being being the most important being the most important one, we wanted to come up with a set of rules that would rebalance the auto trade in North America to encourage more jobs, not only in the region, but specifically in the United States. In addition to having this tighter Rules of Origin and higher regional content requirements, we also had a provision that says that 40% of a car and 45% of a truck have to be made by workers who make at least $16 an hour. And so that's something that's going to encourage more investment in the United States. And again, so he just sort of puts a floor on wage competition, which I think is a reasonable thing to do. I mean, you know, there are some people who say, Well, that's managed trade, and you're, you know, interfering with with the hidden hand. But the but the labor conditions in Mexico generally don't have anything to do with, with with Adam Smith, they really have to do with, you know, a political situation down there that needed reforming. And over the years, that's one of the things that has resulted in wages that are artificially low. So having a mechanism that encourages the discourages competition on something like wages, I think is, I think, is really important. The other thing that we had is a as a sunset provision in the agreement, which, you know, I think, ultimately is going to be something that helps to keep this relationship between Mexico and Canada, the United States strong and refresh, because what it says is that there's a term on the agreement of 16 years, but that every six years, there will be a review to determine whether to extend the agreement out for another 16 years. And so what that means is that you have a you'll have an opportunity to make some of the revisions that frankly, I think I think we should have made to the original NAFTA. Well, before the Trump administration,
Aidan Doud 9:12
A lot of progressive lawmakers or interest groups in the United States have said in the past that USMCA did not do enough. What is your response? Do you do you think it did enough?
CJ Mahoney 9:22
This is the only trade agreement that received the endorsement of the steelworkers the AFL CIO, Teamsters. You can't turn turn the situation in Mexico around overnight. And you know, there are certain things I mean, Mexico is will remain it remains a sovereign country, it needs to regulate these issues in its own way.
Aidan Doud 9:43
What would you say you're most proud of with your time of us and USTR and what were some things you would have done differently as well?
CJ Mahoney 9:50
By far the thing I'm most I'm most proud of is USMCA proud not only with the agreement that we're able to strike, but probably even more more so than even the substance of the agreed but I'm really proud proud that we were able to get strong bipartisan support for the agreement in Congress. And, you know, we did that the year before a presidential election in a time that was, you know, otherwise very fraught. I think that the the, the Trump administration deserves credit for USMCA I think it deserves credit for changing the conversation about trade with, with China and forcing the country to recognize that, you know, the relationship that changed was different than it was in certainly after that, in some of the hopes that people had about China, when trying to join the WTO weren't fulfilled, exactly. China has an economy, which is, you know, driven in large part, it's by the state, there's a lot of dynamic capitalism there as well. But it's not, but it's supported by, by state subsidies and, and some barriers to trade, that make it difficult for other countries to, to have as much market access into China, as China has into other countries. And it results in big macro economic distortions. You know, my own preferred policy is one that focuses less on trying to change China and more done trying to make the us more competitive. But I certainly don't want an adversarial relationship with China. But I think, you know, the assumptions that underlay the relationship that we have with China before 2017, were needed to be re evaluated, and we need to have, we need to have a new relationship going forward. That doesn't mean that we need to be in an adversarial relationship, but it doesn't mean that the US needs to, you know, recalibrate the policies that we have, and what we want out of the relationship.
Aidan Doud 11:41
Thanks for engaging with all these pretty deep questions. And you know, really substantive things about politics, trade, all of that good stuff that everybody hopefully learned a lot about. I also have a few more interesting fun questions. You know, talk about something different. So what's something about the life and job of a trade representative or a diplomat like yourself that most people don't know?
CJ Mahoney 12:03
I think you really, you find yourself really being as much of a mediator as you do a negotiator because there are a lot of just different interests that you have to accommodate, you know, we were thinking about, how's the Congress gonna react to this, how's labor community going to react to it as a business community, and then the foreign country you're you're negotiating with, so it's really about kind of trying to come up with a solution that works for everybody, as opposed to just trying to get your own. Pursue your own your own policy preferences. It's a it is though, it's, it's also a job, that is a lot of fun, in that you work with really, really great people and the people, USTR, the career staff, in particular, were fantastic, I can only hope that everybody has the opportunity to work with work with somebody, and work under somebody like Ambassador Lighthizer, who, you know, for me was just an absolute, you know, inspiration, not only in, you know, in how he conducted himself professionally, but also in his in his personal life and in his, in his personal values and how he treated people. I mean, he's just, you know, there's just, it just doesn't get any better in, in, in my book, and, and those things are, you know, when you're dealing with people in you know, stressful situations where a lot at stake, I think you really, you really learn about somebody's character. And you know, those are those are great experiences to have, even if even if they do take a few years off your life.
Aidan Doud 13:21
What would you say is an important leadership lesson that Ambassador Lighthizer somebody on that you've worked with has taught you,
CJ Mahoney 13:27
It's really important to listen, a lot of people who are, you know, hard charging, and, you know, get to these positions get to them, because they are confident in expressing their opinion and like to hear them like to hear themselves speak. Yeah, but you really learn a lot more and you can make better decisions, you actually sit back and listen and really kind of sit back and try to figure out, you know, what is it that's really motivating this person? What is their what is their bottom line? Another way to express that is that, you know, empathy, I think it's just, it's just really, really important. If you have the ability to kind of step back and reflect on those things. I think you can make better decisions, I think you can make more progress. And so, you know, that's something that it's hard to do, especially in the heat of the moment. Sometimes, you know, emotion, things can get very, you know, very emotional and temperatures can be raised. But if you can step back and do that, I think you'll I think you'll be more effective and I think that's a really important and perhaps underappreciated quality in a good leader.
Aidan Doud 14:20
Many thanks to Ambassador CJ Mahoney for speaking with us about USMCA. If you have any questions, comments or guest suggestions, you can email them to us at Virginia policy. email@example.com See you next time.
Transcribed by https://otter.ai