Countdown to USMCA

Show Notes

Clashing Over Commerce, by Douglas A. Irwin 

Trade is Not a Four Letter Word, by Fred Hochberg

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Transcript

Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the audio before quoting in print and write yeutterinstitute@unl.edu to report any errors. Transcripts will be posted within one week of the show.

Jill O'Donnell: Welcome to Trade Matters, a podcast of the Clayton Yeutter Institute of International Trade and Finance, at the University of Nebraska, Lincoln. I'm Jill O'Donnell. Our guest today is Kellie Meiman Hock, managing partner and trade practice lead at McLarty Associates. She previously worked at the Office of the United States Trade Representative as director for Brazil in the Southern Cone, where she had primary responsibility for trade negotiations with Brazil, Argentina, Chile, Paraguay and Uruguay.

Kellie, thanks so much for joining us today on Trade Matters.

Kellie Meiman Hock: Pleasure to be here.

Jill O'Donnell: All right, let's talk about USMCA, something you mentioned you're doing a lot of work on right now as preparations are being made for this agreement to enter into force on July 1st. As you know very well this was always going to be complex for the auto industry given more stringent auto rules of origin, including a first of its kind labor value content provision, but now it seems like an especially heavy lift for the auto industry because the Covid-19 pandemic has really disrupted the highly integrated North American supply chain and the auto industry, and other industries as well.

But, we've seen auto industry representatives in all three countries, US, Mexico, Canada, asked their respective governments to delay the auto rules entry into force, members of Congress have made a similar ask to the US trade representative's office, and even a private sector advisory group to the Customs and Border Protection, has also made a similar recommendation that this be delayed in terms of how it impacts the auto industry when it enters into force. So all that to say, what is your view of whether July 1st is really a realistic timeframe for USMCA to enter into force or is there a strong case to be made for delaying implementation?

Kellie Meiman Hock: Well, at this point, and thanks for the question, this is the million dollar question- is enter into force. And at this point, July 1 is go date. According to USMCA once all three countries have notified, you're good to go after that 60 day plus a few days time period that the agreement stipulates. That said, there are areas where it's not quite clear yet if we are ready to press play. In some areas, it's not a big deal. I think it's important to remember that while there are very critical updates in USMCA, around digital and regulatory issues in particular, a lot of USMCA is included in the original NAFTA.\

So the countries are already ready to go for that, or TPP, where both Canada and Mexico remain part of the CPTPP. So they're ready to go in that regard as well. But if we're talking about autos, or we're talking about not just the labor component of rules of origin for autos that you referenced, but also the rapid response mechanism, which is a special Dispute Settlement mechanism that allows for investigations on a factory by factory company by company basis. Those are pretty innovative, and it's not clear at least... excuse me, to me at this point, that the mechanisms are ready to go to implement those.

Kellie Meiman Hock: For example, it's not clear yet what body and what mechanism will define what part of that 40% of your labor that goes into a vehicle, at $16 an hour or more, what falls into that bucket and what doesn't fall into that bucket? You've got the fact that the uniform regs, which need to detail exactly how various aspects of the agreement including rules of origin will take place. Those uniform regulations and they're uniform because they're consistent between the three countries. Between Canada, Mexico and the United States.

Typically, uniform regs are developed over a period of time and the countries consult about it. And there's public comment periods. And that would be a more typical course. At this point, we've got entry into force a mere weeks away, and we have not yet seen the uniform regs. We understand that they should be available on June 1st, but with entry into force July 1st, that doesn't leave a lot of time for either a comment or for clarification, because it's important to remind, rules of origin in particular are very, very technical. So, it's often the case that regulations will come out, uniform regulations will come out and it's not 100% clear exactly what you're supposed to do, right?

So there's usually some a consultative process that takes place because to be clear, the auto industry wants to comply and is prepared to comply. I think the issue is that there's, I think, an understandable nervousness around how they can be ready to comply as soon as July 1st, when these uniform regs aren't available, and when they in great measure, the battle they're fighting in the day to day is not preparing for USMCA implementation, it's dealing with essential and non essential industry determinations in all three countries, Canada, the United States and Mexico that touch the auto industry due to Covid-19. No one in any sector right now, is operating as business as usual.

Everyone has had to alter their business models, the way that they operate, the way that the manufacturer due to Covid. And so it's incredibly difficult to take on that task of compliance, while you're having to manage a pandemic. It goes without saying so... So maybe I'll just leave it there for any follow up questions.

Jill O'Donnell: Yeah, sure. So there's a lot of focus here on the auto industry, because that was just a major portion of the agreement where the rules became more stringent and that the auto industry had to comply with. There were auto rules of origin in NAFTA that these are more stringent here in the USMCA. Is there a way for parts of the agreement to go forward without... while still giving the auto industry more time to regain its footing after this pandemic, or just have more time to figure out how they're going to deal with it, developing uniform regs that the three countries are working on or how they might prepare themselves to comply?

Kellie Meiman Hock: Yeah, how they can actually come into compliance, which again is the goal, right? I think that the good news is, that all of the parties involve, from all three countries want us to be successful. So I think that that's a good starting point. And yes, I do think there's a case that can be made for phasing in the auto's piece for sure. And perhaps elements of the labor piece as well. Just to be sure that this is successful, and you did see both the US and Mexico come out with transition regimes, that auto companies can ask for a delay in their implementation, what worries me about that... And that's great, that shows some flexibility.

But my concern is that I have not seen anything that would guarantee that you would not suffer the duty penalties, if you're not in compliance by July 1. In other words, if it's a... Yes, you've got time to transition, but during that transition time, you're going to have to pay the duties, as though you are not in compliance with USMCA or NAFTA, then it's a bit symbolic, right? So, I think that is the certainty particularly in this uniquely uncertain time economically, that is the certainty that companies are looking for. And I think on... You're asking about autos, but on the labor piece as well, I guess, I would argue, there were more democratic votes for USMCA than any trade agreement in history.

And a huge reason for that was because of this rapid response mechanism, that would allow for petitioners to look and investigate, look at factories on a factory by factory basis and be sure that they're in compliance with certain labor standards. That was a big deal and the US labor movement was and is excited and proud to have that as part of an agreement. I would hate to have us rush to implement and not have the panel's fully decided and not... frankly I even think about how do you even go and investigate a factory right now tailed as it is, so I just think there's a lot of open questions.

And just looking at it as I sit in Washington, I unfortunately have to look at things from a political perspective more than I might want to. But, both Republicans and Democrats want that peace to be successful, because that's what allowed Democrats to confidently vote for the agreement in great measure. So, I do hope that as we near the July 1 day, that there'll be some real thought given to how we can be sure that these most innovative pieces of USMCA come together in a way that can make everyone feel like we've put together something that's going to be an enduring success in a model going forward.

Jill O'Donnell: Right. So the rapid response mechanism with respect to the labor provision that you mentioned for example, is that getting as much attention right now as the difficulty faced by the auto industry with complying with USMCA because as you said, it's hard to see how, for example, the US could establish labor attaches in the embassies and consulates in Mexico or how you would investigate a factory when everything has been so paralyzed to some degree by the Covid-19 response?

Kellie Meiman Hock: Absolutely. I'll say this. There are a lot of people working hard on both of these questions. So I absolutely think that there is a full court press effort to be ready on both of these fronts. I think the media has spoken more about the autos issue, because that has an immediate jobs impact in the United States and in Mexico and in Canada. So, I think it makes sense particularly in the fraught economic environment that we're facing right now with Covid-19. That is where the media would more immediately focus, given the on the ground realities in a lot of these states. US states and Mexican states and Canadian provinces.

There's going to be a real impact if this doesn't go smoothly. So I think that's why you're just hearing about it a bit more, but there's a lot of work going on both fronts.

Jill O'Donnell: Okay. So shifting to another issue related to this that you mentioned, and that's the definition of the phrase essential business, which is yes, causing a lot of issues right now, and to remind our listeners the issue there is that Mexico seems to be taking a narrower view of what constitutes essential business and this has to do with Mexico's countermeasures to prevent the spread of Covid-19 by closing factories temporarily. And yet our supply chain which is another phrase we're hearing a lot about these days, is really integrated with Mexico's with the auto industry and other sectors too. So, how do you think the two countries, US, Mexico are working through this?

The Mexican Foreign Minister, Marcelo Ebrard has said that Mexico will not reopen closed factories including those that make materials needed for food and medical goods until Mexican health official advise his government that it's safe to do so, and that he said that Mexico won't change its definition of essential businesses to include supply chain needs. So this seems like a pretty deep division. How is the US working through this definitional issue with Mexico do you think and how might this also impact USMCA implementation?

Kellie Meiman Hock: Yeah this is playing out in the day to day, literally. And I think that what you're seeing on the essential, non-essential question, which is probably what I'm from spending about at least 50% of my time on right now, you're seeing how challenging dealing with an unprecedented health situation like we have right now, how challenging that can be in a federal system. We're seeing that here in the United States, where different states are looking at openings in different ways. Whether you're talking about manufacturing or in Nebraska, the meatpacking plants or in Mexico, but auto parts.

And their states have also looked at this in different ways. You also have very different prevalence rates going from state to state. So for example, in Nuevo León, where Monterrey is, Monterrey is one of the big industrial centers in Mexico, their prevalence rates are actually quite low. So if you could look at what the realistic health impact would be, very carefully and with appropriate health and safety measures, opening factories in Nuevo León might be, that is not going to be the same as it is in some of those Mexican States where prevalence rates are much higher. So, I think that this is a great example of making policy as we go, because it is an unprecedented situation.

This isn't something that we've had to face before. And because of that, it's something you wouldn't even think about considering in a trade agreement like USMCA. I will say this, one of the most lasting impacts of the Covid-19 crisis has been, is thinking, does it make sense for us to have our supply chains as far flung as they are to be sourcing as much as we are from China? Now that's a dynamic. That's a dynamic that was already underway. And it was just intensified and magnified by the Covid crisis. Now, what country would be better positioned, when we're speaking the US market, of course?

To take advantage of that dynamic than Mexico. NAFTA was the original regionalization of supply chains. Everyone's talking now about regionalization of supply chains. It's very fashionable. Well we were fashionable in North America first. We already started doing this over 25 years ago. And so it does give Mexico a competitive advantage. So I do hope and obviously, health and safety has to come first for any government, but I do hope that we can collaborate with Mexico and frankly investors from all over the world that are invested in Mexico, that have manufacturing there, that we can bring global best practices, not even just North America best practices on how to open safely, and that yes, we can take into consideration how our supply chains interact, and what the impact might be economically to not considering those connections when they're relevant.:

But again, you are seeing a lot of push and pull. You see it here in the United States, and just imagine that, and that's exactly what you're seeing in Mexico. Where the federal government will make a statement with respects to opening plans and state governments are tasked with implementing that and might view it in a little bit of a different way. So it's a political dance. I'd like to think that North America will land in the right spot on that, and that that will be a competitive advantage for North America as economies come back online, that will be very important that we are able to do so in North America in a very integrated and a very impactful way, so that we not only can make up for lost ground that we've lost here during the months of closure, but that we can also have a leg up on others that are only now looking to regionalize those supply chains.

Jill O'Donnell: Interesting. Okay. Just a quick follow up there. Because as you said, we've heard so much discussion right now about this idea of regionalizing supply chains or localizing supply chains more, or bringing them back so to speak. We've also heard a lot about this idea of building resilient supply chains and what that might mean, do you think that there's any risk that a supply chain being too concentrated in one region makes it less resilient... or not?

Kellie Meiman Hock: Yeah... Here's what I would say. I think that a lot of the discussion of regionalization of supply chains is not based in the reality of how companies source inputs at this point in time. For the most part, companies... Again for the most part, try to manufacture where it is economically feasible close to where their end customer is, depending on what the good is, how heavy it is, how hard it is transport, et cetera. There will always be inputs into... In particular high tech production. So, your automobiles, your computers, your smartphones, et cetera. There are always going to be components that are so high tech and so specialized, that they need to come from a limited number of countries.

Pharmaceuticals- another issue that people are talking a lot about now. The active ingredient in pharmaceuticals, often is not available in every country. And so I think that we're going to have to temper this move towards regionalization of supply chains, with the reality of where goods are available for a reasonable price. And there's going to be I suspect, a great deal of push pull between this need particularly today with national budgets globally under enormous strain due to Covid. I think we're going to see... I hope we're going to see some, rather than politicized, I hope that we'll see some really pragmatic discussions about what the most efficient way is to ensure that supply chains are as you say resilient but, diversified enough and with access to the highest tech products, so that at the end of the day, we're not making products that no one can afford.

Jill O'Donnell: Right. That sounds like an important point you've made there at the end today. I'm sure we'll be hearing a lot more about... We'll have to pick up on that again. A couple more questions on USMCA. We've talked a lot about the auto industry so far, but what's likely to be the greatest non auto industry impact of USMC implementation for the US? So in other words, which sectors had the most work to do in order to comply with USMCA or seem to gain the most from it?

Kellie Meiman Hock: Yeah, as I say, most sectors are pretty ready to go. I think that autos in the labor provisions are the standouts, because those portions of the agreement are so new. I do think that the digital chapter is, it's a standout and every company is a digital company now. I think there's no such thing as a non digital company, and that's only been magnified during Covid where I think everybody has a digital strategy, if they didn't before they do now. And so I think it's great that we're going into the second part of this year with very strong rules on digital trade that should benefit all in the sector.

But honestly, the biggest win of getting USMCA through, is reducing uncertainty. And the biggest hit really that we took as a North American market during the renegotiation was this constant uncertainty on, will a new deal being reached? Might the US withdraw? Will all the parties be able to get it through its Congress? And at this point, particularly agriculture setting in Nebraska, the ag sector, absolutely lives and dies by NAFTA. If you look at every state in the union, virtually every single state has Canada and Mexico as their number one and number two... sometimes in different orders, sometimes China's in there too.

But it's usually the number one or two export destination. So, America's farmers really needed that certainty, needed to know that the rules of the road for North American trade are set. And frankly during the renegotiation, we saw some purchasing patterns change, right? Some Mexicans would say, "Well, I'm not sure I'm going to be able to buy my wheat or my corn from Nebraska farmers anymore. Maybe I should start looking at Brazilians." That happened. So I think taking that uncertainty off the table is just going to be terrific for all sectors of the American economy.

Jill O'Donnell: Okay, and that certainly is coming July 1st, when it really is in force.

Kellie Meiman Hock: Yes, we'll see what happens with autos labor, I hope there is a bit of a phase in but I'm a hopeful person.

Jill O'Donnell: Okay, last question on USMCA and this harks back to a conversation I had in December with Ken Smith Ramos and I know you know him, who was the lead negotiator on USMCA from Mexico. And I thought-

Kellie Meiman Hock: Yes, going back to Georgetown days, when we were 18-

Jill O'Donnell: Yes your college days. Yes.

Kellie Meiman Hock: Yeah. Exactly.

Jill O'Donnell: So, he said something really interesting. I thought about the periodic review mechanism in USMCA, which will require the three countries to review it every six years to analyze how it's going, whether changes might be needed. And he really talked about the public consultation elements of that periodic review and the participation of civil society. And I'm going to quote from the interview with him, he said that this element could, quote, "Try to bring trade agreements closer to the people and make them feel that they can have a voice on how these trade agreements get implemented." Unquote. I've talked to lots of people over the last 18 months or so who don't really feel like they've got much ability to influence or change trade policy.

So do you foresee through the USMCA periodic review mechanism, do you foresee that as being a conduit for any person to truly have a voice in US trade policy beyond the usual players, will this really be a meaningful mechanism for public input?

Kellie Meiman Hock: Yeah, I love Ken, but I don't think we need the public consultation. I don't think we need the mechanism, the checking mechanism to do that. I worked at USTR. We would have people checking in all the time, I was there for the fifth anniversary of NAFTA back in the day, right? And we were constantly getting feedback from companies, from labor groups, they are set in our system, which is different from the Mexican system. We have congressionally mandated consultation groups that meet regularly with government officials. So I would hate to have us wait for the review period to pass, to try to perfect the agreement.

I think that sure, what's on paper is what's agreed and that is now USMCA and those are the rules that we'll follow and that's what companies need to be able to invest in North America is that certainty. But as I was saying before, with respect to the implementing regs, there's always areas where you can clarify where you can... and also too, because we're dealing with this new labor mechanism. That's going to be iterative. This is new. And so I think that we're going to have to do a good job throughout the life of USMCA, and continuing to build support for it. And I'll say this, and I actually, back at Georgetown wrote my undergraduate thesis on NAFTA before they even started the negotiations.

So I've literally been watching and caring about this agreement since I was a teenager and I think we did a really bad job of trying to bring along civil society in understanding the benefit of having a North American competitiveness zone, which is what I've always called NAFTA. Because at the end of the day, that's what it is. And so, I do think that that's a bit of a gift if I can say that Donald Trump gave us because, by threatening to withdraw from NAFTA, you have people in the Congress and various stakeholders that typically are pretty critical of NAFTA. NAFTA is always a punching bag in every presidential campaign, Republican, Democrat whatever.

But it's really funny because the minute it was at risk, people were like, "No, we actually... this creates jobs in my state." So, it had the perverse but happy perverse effect of having people realize what would happen if we didn't have integrated North American trade. So, I hope that that dynamic will be lost. I hope that that lesson won't be forgotten. And that we can continue to in a pragmatic way, move forward with further North American integration. I think it'll only make us more competitive. Yes, but not necessarily waiting for those check in times that are mandated by the agreement.

Jill O'Donnell: So, if I can just briefly follow up on this, you're a Nebraska native, Native Omahan-

Kellie Meiman Hock: I am, born and raised. Millard South High School. Got to give a shout out for the high school there.

Jill O'Donnell: There you go, Millard South. So, if you were talking to a group of let's just say Nebraska agricultural producers, and they told you they don't feel like their voice matters unnecessarily or that they have an effective way to make their voice heard on trade policy. What would you tell them to do?

Kellie Meiman Hock: Well, I think farmers have I think a great opportunity to be a voice for not just their sector, but for the country on the importance of trade, the importance of having reliable, consistent export markets that you can plan around, knowing what seed you need to put in the ground, because that either in Mexico or China, or Europe, there will be a buyer on the other side. I think that we've seen a lot of trade uncertainty over the course of the Trump administration, and he was elected because he was rejecting a lot of previous post World War II trade policy, right? We're a democracy that's meaningful.

So I say this, not necessarily in a critical way, but in a fact based way. That swinging of the pendulum from the post World War II trading order of trying to expand globe... not just US exports, but global trade and seeing that as in the US national interest, the swinging of that pendulum and public opinion to the other side and starting to doubt, "Is that good for us? Is that not good for us?" I think that the loudest voice I would hope in this debate would be the sector that benefits the most in the US economy from exports, and that is agriculture. So, there are a number of organizations from the Farm Bureau to Corn Growers.

Practically every crop has an organization that represents its interests. In Washington we love our organizations, right? But I think that there are a lot of opportunities to raise the voice, and one of... actually with the passage of USMCA, one of the most compelling groups that fought for it was called Farmers for Free Trade, they did a great job. They had an RV that was wrapped and said Farmers for Free Trade and had pictures of farmers and corn and stuff on the side, it was really cool. I was upset because I wanted to ride around in the RV when they were in Nebraska and it didn't work out with my work schedule.

But that long way to say that, grassroots matters, too. This is something that I do think no one understands the need to trade more than a farmer. And so, I think that finding ways either as individuals with your representatives and senators, local officials, it all matters and honestly, it's an important part of education because if you're not from Nebraska, like I am, maybe you don't understand the agricultural sector. So I think it's an important role that the American farmer has to play in that university like the University of Nebraska has to play as well.

Jill O'Donnell: All right, thanks Kellie. Let's shift for just a few minutes to Brazil before we close out here. You have done a lot of work in Brazil and US-Brazil trade. The US and Brazil are reportedly aiming to conclude an agreement on trade sometime before the end of 2020. And this is not a comprehensive trade deal to be clear, it's not focused on tariffs, but focused rather on quote, "Trade rules, transparency, trade facilitation and good regulatory practices." That could sound a little arcane. So if you could break that down just a little for us and explain what you would see as the potential big wins coming out of a limited trade deal like this?

Kellie Meiman Hock: Yeah, no, I think it's a positive that we're talking with Brazil. We've always had a difficult trading relationship, because there have been issues that are very, very important to the United States to include and a comprehensive agreement, like intellectual property, services, government procurement, et cetera. That the Brazilians just weren't that interested in discussing. I should say that what they're talking about discussing now, well it's a limited deal. It's a limited non tariff deal is what they're talking about because, under Article 1 of our constitution, the Senate and House, the Congress have responsibility over tariffs.

Jill O'Donnell: Mm-hmm (affirmative).

Kellie Meiman Hock: So this is an agreement that will be going forward without needing congressional approval, because it really does just address those rules that you're talking about. And I get it that regulatory issues don't sound super sexy, but when you're doing business in a overseas market, it's so important to have reliable timeframes. How long will it take for the regulatory approval for my innovative corn seed to be approved? I've worked with Corteva, for example, on these issues around the world. American innovative agriculture, brings an enormous amount of value, not just to the American economy, but also to farmers around the world. But you've got to get those seeds approved to be able to use them right?

Jill O'Donnell: Right.

Kellie Meiman Hock: And to save them. So I think in particular, the thing that makes me most excited especially looking at it from a Nebraska perspective, is that the Brazilians are very aligned with us on the need for high tech ag. If you're talking about seeds or crop protection products, they get it. That they have to farm efficiently. And they're the most competitive... I think they're actually probably a little bit more competitive than us even. They've got amazing soil and they're one of the most competitive agricultural markets in the world. So, if we can align on regulatory practices that allow us to unleash that technology in a way that helps to feed the world better, I think that's terrific.

Then trade facilitation, that's just making goods flow better. Customs, procedures, again stuff that's... might not going to make the front page of the Omaha World Herald or anything, but to folks that are actually doing business it matters a lot. How long is it going to take for my goods to get through customs? And are we going to be able to get it to my end customer in time for their factory to stay open? It harkens back a little bit to your question on the essential non essential factory determinations in Mexico. Companies need to know when their goods can get to their facilities so that they can plan and hopefully the rules that we come up with between the United States and Brazil over the course of this year, it's an ambitious timeframe given everything that's going on, but I think it's doable.

And hopefully it'll lead to positives on both sides.

Jill O'Donnell: All right. You've been involved deeply in trade and including US-Brazil trade in economic relations throughout your career. So I'd like to ask you a big picture question. Particularly when it comes to agriculture, Brazil's an agricultural powerhouse of course, farmers in Nebraska know that very well. How are you seeing this overall US-Brazil trade and economic relationship evolve over the time you've been working on these issues, particularly when it comes to agriculture? What things for example, have improved and what remains really challenging?

Kellie Meiman Hock:

Yeah, I think the collaboration on biotech has been a plus, as I said before, that's definitely... there's always more we could do, but it is an area where we have good dialogue is on the issue of agricultural technology. And what the Brazilians would love to. And this has been an impediment frankly at the World Trade Organization to us coming up with any global deal frankly, on trade. Something that really frustrates the Brazilians is the level of agricultural subsidies and domestic supports in the United States and in Europe. From a Brazilian perspective, they say, "Okay we're efficient without subsidies, you're efficient, but you get heavily subsidized or you have domestic supports."

And Brazil, it's still an emerging market, right? It doesn't have the budget to be able to do any thing with the nature of the CAP, the Common Agricultural Policy in Europe or our programs here in the US. That's always going to be a burden on the side, right? Just because those programs, I don't need to tell you as you sit there in Lincoln or Sacrosanct here in American politics. And obviously, over the course of the trade war with China, and now farmers getting hurt by Covid-19, that level of support from the federal government has only increased. So, that's something that I think on ag in particular, will always be dangling out there with Brazil.

But I think with any trading partner, it's important to try to focus on where you can make progress and where you can't. And certainly particularly coming off of the economic downturn that we're all facing around Covid, this is not a good time to talk about subsidies.

Jill O'Donnell: Okay, so no prospects probably on the horizon for a truly comprehensive FTA with Brazil, which just goes to... Would that run into its membership in Mercosur that would probably open up a whole different set of issues?

Kellie Meiman Hock: It opens up a whole different set of issues. And I'll say this, the Trump administration has been more open than previous administrations to doing many deals. If you look at the deal that they did with Japan for example, it was nowhere near comprehensive. So, it's a new day when it comes to what you actually can call a trade agreement in Washington terms. So I think we should just keep talking with Brazil and see how far we got.

Jill O'Donnell: All right. We'll be looking at that later throughout the course of this year two. Okay, Kellie, the last question, and I ask this of every guest in the show is, what have you read lately about trade? And I know you read a lot about trade, because I've heard you talk about it before. But what have you read lately about trade that's been particularly striking to you?

Kellie Meiman Hock: Well, the two books that I have read this year on trade, I'll recommend both of them. But folks can decide which one is their speed. So, one which is a lighter read is, Trade Is Not a Four-Letter Word, by Fred Hochberg. I actually did a plug for the McLarty Associates podcast. I did an interview with Fred talking about his book a few weeks ago. And it does a really good job of breaking down complex [inaudible.]

It's not something that you're going to just pick up light reading about, but this actually is light reading. He makes it fun. He talks about a number of items from a college degree, to Game of Thrones, to a taco bowl, to a banana and talks about how those services and goods represent global trade. So it's a lighter look, it's a lot of fun. One that I love, but you need to be a really hardcore trade nerd to get into this one is, Clashing over Commerce by Doug Irwin.

Jill O'Donnell: Yes.

Kellie Meiman Hock: This thing is like the Manhattan phone book. It is really thick. But it goes through American history all the way back to revolutionary times. Completely through the optic of trade policy. I loved it. It was a true page turner for me and the thing that I liked the most about it is that, we've been going through as I was talking about before, such uncertain times when it comes to trade policy, and there's been so much trade policy uncertainty and a lot of folks that are in my little trade nerd ecosystem, but lament, "Oh this is the worst of times, and we're turning away from the post World War II trading system. And we're becoming protectionist, and oh, no."

And some of that may be true. But what was really great about this book to me is that if you look at various chapters of US history, it's always been this pendulum between those who need to export those farmers we were talking about before, and folks that are worried about foreign competition. This is something that literally goes back to the Boston Tea Party, it goes back to the Civil War. There have been moments in our history where we've had these inflection points, right? So I found that somewhat comforting to think that the moment that we're at right now in trade policy, it may seem really complicated.

And there are days that I want to beat my head against the wall. But, this is all part of the American story. And part of our challenge is going to be to get these policy prescriptions right in the next chapter.

Jill O'Donnell: Thank you Kellie. I do have Clashing Over Commerce as well and you can take it at your own pace.

Kellie Meiman Hock: But it's a really useful reminder though, that trade has always been hard.

Jill O'Donnell: Yes, always, and I did listen to your podcast as well with Fred Hochberg on the book Trade Is Not a Four-Letter Word that was really fun listening to as well.

Kellie Meiman Hock: Yeah, Fred's a blast. It was a good time.

Jill O'Donnell: Well, Kellie, thank you so much for joining us on the podcast today. Thanks for sharing your time and insight. This has been really useful and really enjoyable.

Kellie Meiman Hock: Jill, thank you. This has been a lot of fun and I love any excuse to get back to my Nebraska roots and both my parents and my sister went to University of Nebraska. So even though I didn't go there, I feel like I've got some Husker-link there. So just a lot of fun to be here with you today.

Jill O'Donnell: That's it for this episode of Trade Matters. Thanks for listening. And a big thank you to Bryce Doeschot and Jacy Thoman for helping produce this podcast. Please subscribe to Trade Matters on iTunes, Spotify, Stitcher, or wherever you get your podcasts. If you have ideas or topics you would like to hear about on Trade Matters, we'd love to hear from you. Send us an email at yeutterinstitute@unl.edu. That's Y-E-U-T-T-E-R institute@unl.edu, or follow us on Twitter @YeutterUNL. Opinions expressed on Trade Matters are solely those of the guest or host, and not the Yeutter Institute or the University of Nebraska-Lincoln.