U.S. Leadership and the U.S.-China Phase One Deal

February 3, 2020
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Episode: 
8

U.S. Leadership and the U.S.-China Phase One Deal

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host jill o'donnell Jill O'Donnell
guest Andrea Durkin
Andrea Durkin

TradeVistas.org Editor-in-Chief Andrea Durkin dives into the U.S.-China Phase One deal, explaining why she believes it is an example of U.S. leadership at its best and how it may help U.S. agriculture over the long term. She also discusses the lesser-known joint effort of the U.S., EU, and Japan to tackle industrial subsidies to state-owned enterprises—a problem at the heart of the U.S.-China dispute—and highlights a trade issue that she believes should get more attention in 2020 and beyond.

Opinions expressed on Trade Matters are solely those of the guest or host and not the Yeutter Institute or the University of Nebraska-Lincoln.

Show Notes

Redesigning Trade Deals in the Age of Trump, by Andrea Durkin

How China’s Economic Aggression Threatens the Technologies and Intellectual Property of the United States and the World, White House Office of Trade and Manufacturing Policy, June 2018

Prisoners of Geography, by Tim Marshall

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 Andrea Durkin, Editor-in-Chief of TradeVistas, founder of Sparkplug, LLC and adjunct professor of trade policy at Georgetown University's Master of Science in Foreign Service program. Andrea, thanks so much for joining us on Trade Matters today. We really appreciate it.

Andrea Durkin: And thank you for having me.

Jill O'Donnell: So let's start by talking a little bit about your background. You're a veteran U.S. trade negotiator and editor-in-chief of an excellent trade policy website called TradeVistas. And you've also taught trade policy at Georgetown University's School of Foreign Service for a number of years. And I have to note that you were the instructor of a very popular trade negotiation simulation course that we offered here at the University of Nebraska–Lincoln last year. So you've got a really deep well of experience to draw upon to talk with us today about trade. So tell us just a little bit more about your background and experience as a trade negotiator.

Andrea Durkin: Sure. First you're very kind. Let me say this off the top I was so grateful to be able to teach the trade negotiation simulation at Nebraska. The students and you've heard me say this before, they were so incredibly enthusiastic and they did great in the negotiation. And in general, I just think exposing students to the opportunity to practice these kinds of skills and to learn experientially is not just something that can help them understand the dynamics of trade negotiations, but offers them the kind of skills that they can apply really anywhere in life. Listening well to others and exercising creativity to find solutions. So thank you for that opportunity off the top.

As for my own career, frankly I just feel very fortunate. I became interested in trade negotiations growing up in Detroit at a time when the auto industry felt very threatened by competition from Japanese producers. This was the 1980s and at the same time felt frozen out of Japan's market. And so this was for me, headline news in my local papers and negotiations were very active and they were led by a strong female figure Carla Hills, whom I'm sure you've heard-she's still an idol of mine-has this wonderful deep voice and very commanding presence. And it really, it captivated me and I wanted to be part of it.

So I was interested in representing the U.S. government on behalf of the American people and interested in the benefits of trade negotiations for American industries. So I ended up spending in the first part of my career, 10 years in the U.S. government with Commerce Department and with the Office of the U.S. Trade Representative. And I wanted exposure to different types of negotiations. So I sought out those kinds of experiences and was lucky to be part of multilateral negotiations in the United Nations in New York at the WTO in Geneva.

APEC was an opportunity to do plurilateral regional negotiations and I was also part of teams that negotiated auto commitments when Taiwan seeded to the WTO. We did an MOU with Korea. And what I consider to be that really the highlight and most fun in my negotiating career was to be part of negotiations with Central America. So I was able to work with counterparts in different regions of the world, different industries, different topics from environment to biotech to intellectual property and to work under the direction of negotiators that I admired and learned from. And that's really how you become better at this.

Jill O'Donnell: So that's really interesting that the trade issues faced by the auto industry really captured your attention when you were growing up in Detroit. And I think something similar is happening today where trade policy headlines in particular with respect to agriculture are capturing a lot of attention among the college students here at the University of Nebraska–Lincoln and you've seen that too. So we will get into more of those issues in a moment. I'd like to transition to talking about the U.S.-China Phase One deal that was announced and signed some weeks ago, signed on January 15th. Before we dive into that and also into an interesting piece that you wrote, analyzing that Phase One deal, let's just remind our listeners how we got to this point where we arrived at a Phase One deal. Can you just briefly touch on a couple of the longstanding issues that have been at the heart of this long running dispute?

Andrea Durkin: Yeah, I'm not sure there's any way to briefly do it. But there's so many issues at play and when I talk about this, I try to distinguish between the issues that are at the core of the Section 301 Investigation that the administration launched in 2017 which is really focused on intellectual property and technology transfer. But there's really a wider set of issues that encompass longstanding concerns about fundamentally, about the way China developed its economy and the way that China continues to support state owned enterprises and also state directed champions. So recall that it wasn't that long ago that China went from being a net importer to a dominant global supplier of critical intermediary goods, manufactured goods. Primarily glass, paper, steel, auto, auto parts, and became a leading producer and a dominant exporter of those products. And it happened in large part because there was government financing backing and fueling investments in capital intensive manufacturing industries.

And when that happens you induce overproduction and you can create a glut. It may have been that so much of that production early on was intended for the domestic market. But with overproduction, the production's got to go somewhere and it goes into global markets. It creates a glut of supply when the supplied outstrips demand in the Chinese market. And when you get an influx of large volumes of commodities in the global market, you set into motion a downward spiral in prices and ultimately in profitability impacting producers in other countries. And this is what is really at the heart of the complaints from the US steel industry, for example. But many other industries as well. So that leads us the subsidies right in the form in different forms that it took, whether it was low cost loans or artificially cheap raw materials like energy and land. It also took the form of funds for research and development, funds for technology acquisition. And here we come to kind of the core of the present-day concerns, which is this race for technological supremacy. So you've got this backdrop, right? Of longstanding complaints across many different industries. That kind of culminates in the Section 301 Investigation that really focuses on these core issues surrounding technology transfer. But it's all intertwined. And if you look at the White House report that was issued in June of 2018 I really recommend that as short reading for people, it's only 35 pages versus US TRS 200-page report. It outlines a wide array of complaints about the way that the Chinese government has placed restrictions on market access for not just American but foreign companies. And it includes procurement restrictions and a whole host of licensing requirements, approval restrictions, et cetera. And so you can see that there's this landscape of concerns that feeds into ultimately into this 301 investigation report, even though that, that report is sort of narrowly drawn.

Jill O'Donnell: So that's as you said, it's tough to summarize all of this in a brief fashion. But I think you did a great job setting us up to understand this Phase One deal and why it is just Phase One. So I'd like to mention now the article that you wrote on the tradevistas.org website that you edit. And the article was called, "Is It Just a Phase? Redesigning Trade Deals in the Age of Trump." And starting out with two points you made there, you indicated that the partial nature of the U.S.-China Phase One deal may have been inevitable. And you also indicated that the approach to the steel and it being partial in nature might also herald a change in the overall U.S. approach to trade agreements even with other trading partners going forward.

So on the first point, I'd like to quote from your article you wrote, "China's offenses cannot be pinpointed to one set of laws, regulations or practices. And so the complex wiring of China's national approach cannot be untangled or rewired in one pass in one agreement, even if China shared that goal. An agreement this ambitious would have to be built in phases." So just unpack that a little bit for us. I think that's a really interesting point. Why is it not possible to fix everything in one deal with China?

Andrea Durkin: Yeah, I mean again, I go back to this sort of helpful in 2018 report, it outlines 30 different ways. Thirty different ways and in broad brush strokes ways that the Chinese government has really embedded restrictions on foreign access into their market, into its economic system. And it includes such a wide array of things from physical and cyber-based fact of commercial intellectual property regulatory requirements that require companies to give competitive information as part of the approvals processes. Requiring foreign patent or technology holders to accept below market royalty rates for their intellectual property regulatory requirements that would expose competitive assets in exchange for the opportunity to participate in China's market. And even goes into things that they call China's outgoing strategy, which is state actors that are looking for open source science and technology discoveries in American institutions and investing in research institutions in the United States.

And I say in a different article, it sounds all very sinister, right? But the reason that I say it's so difficult to unwind all of these things is that they're articulated in many different places. It's not that we're drawing these conclusions on our own. The Chinese government actually states them out loud and on paper in national strategies made in China 2025 or China's National Program for Science and Technology Development. Five-year plans and the administrative guidance that's issued to agencies at the central provincial and local levels to execute these goals and these plans. And so when we think about the extent of the designs, the goals that are laid out in these various strategies, it would seem to me sort of obvious that it's next to impossible at one stroke and one agreement to solve concerns that we might have with these deeply embedded practices that, as I said, are implemented at different levels of government in China.

Jill O'Donnell: So, because that is so complex to work through and solve or better manage some of these long running issues. You wrote in your article, "This administration has departed from the standard free trade agreement template." It sounds to me like from what you're saying that it is simply wouldn't have been possible to deal with everything at once. And so we get this Phase One deal and you also suggested that perhaps the administration might take such a phase approach with respect to other trade negotiations that may be forthcoming with for example, India, the UK, perhaps the European Union.

So, two questions for you here. One is, was getting something better than getting nothing in this case at the U.S.-China Phase One deal? And then just more broadly speaking, what do you think that approach tells us about what we can look for in future trade agreement negotiations the U.S. may undertake with other partners?

Andrea Durkin:

Yeah, I mean I feel kind of fortunate right now because I'm apolitical- I'm not working for a company nor a lobbyist and not any of those things. And so I consider myself kind of a social scientist at this point. So I can step back and look at these things with some amount of curiosity and openness. And I think that this administration has been just plainly pragmatic and so there are short term issues here. How do you deal with the issues at hand and what you want to achieve? And then there's a broader set of issues about whether this portends the direction of future trade negotiations or not. So there are different schools of thought about staging, first of all. It's true that in many cases if you leave, I mean as it is in life, right? If you leave the so-called harder things to negotiate until later, you may never get there.

You may use up your leverage, you may lose momentum; of course, our politics are subject to change as they are in many other places other than China. Our president may change. And so you risk, there's some risk in not holding out for a full package if you think you've got maximum leverage. And we had ratcheted tariffs up so high that one could argue that was sort of maximum leverage. But on the other hand, if you look at this deal, it's quite extraordinary, particularly with China that it's one sided. It's written in a way to try to balance out the commitments. The U.S. affirms that it already does certain things, but in reality when you look at the totality of this agreement, it's China that's doing all the doing, right? If they're taking all the commitments it's a fairly one-sided deal in that regard.

And you could argue that in terms of China's politics that because of that incremental may simply be more feasible. The other facet to this is that I think China watchers rightly have a healthy dose of skepticism about how China will implement these commitments. And in one sense, I think this is an opportunity to focus since there is still leverage. Remember there is still tariffs hanging over China's head and our heads to focus on how and whether China will implement what's on the table in front of them. And if you gave them too much, it's almost setting it up for failure. So I think there's some merit in this case, in departing and taking a kind of phased incremental approach. And I mean the format of this agreement is different from a regular FTA, a traditional FTA one that conforms to the expectations of a traditional market access driven FTA under WTO agreements would cover a substantially all trade between the parties.

And our agreements, U.S. agreements today, we don't have that many bilateral agreements. But they are all soup to nuts agreements. Covering terrorists, customs, rules of origin, government procurement, services investment, IP, digital trade and more. And here what you've got is a partial deal that's narrowly focused. However, it's so unique in that it really is our first major bilateral deal with China. And absent the ability to do what I've just described in the form of a traditional comprehensive deal, this seems to be a very pragmatic way to try to make progress. Now what it portends for other agreements, it's unclear, but the agreement with Japan came before this and that was built as a phased deal. Whether we get to market access on issues beyond digital trade and agriculture remains to be seen. But that one is a little bit more of an interesting example because it's not China. We actually did cover a wide array of full compliment of issues with Japan and the TPP.

So that I think says more about the administration's approach even than China does. Which is that they seem to have a preference to do what they want to get done, right? Focus on the priority issues and not worry about trying to get the sun and the moon and the stars. And that's been our traditional approach. So I just query whether this is sort of the direction that we're going because in many ways negotiating with major trading partners where you have such a complex relationship, it just may not be feasible. As we've seen with Europe, we've tried to do this for many years to get it done.

Jill O'Donnell: So you mentioned that this is really our first, being United States, our first major bilateral deal with China. And at the same time, as you pointed out in your TradeVistas article, you mentioned that the deal that we signed with China, "Envisions reforms to China's laws, regulations and policies as they apply to any foreign company operating in China, not just the American ones." So could this be a case of unilateral pressure brought to bear on China by the United States actually resulting in a win for other trading partners, other allies, other countries around the world that also trade with China. Is there a case to be made for unilateral pressure by this case if it results in changes that benefit other countries too?

Andrea Durkin: I think so, yes. And in fact, for all of the criticism this administration that we're going it alone, I think this is U.S. leadership at its best you could argue that in many ways. Because what we want fundamentally is markets that are contestable on the same terms that are offered to Chinese companies in the Chinese market. And the same terms offered to companies from Europe, Japan, or elsewhere in China's market. That's the basis of the global trading system is non-discrimination in global trade. So we spent significant capital to get an outcome like this, but it really does stand for represent what we stand for, which is as I said, non-discrimination in global trade. My theory about it is that the administration felt they could drive a process faster toward a desired outcome without having to consult with other governments if they took this approach.

We took it on the chin with tariffs, but the trade-off is that you have, you're in the driver's seat, you have control over the outcome and I don't think it should bother anybody. In fact, it was kind of a revelation. I told you I spoke to farmers in Indiana last week and that was one of the things I mentioned that this would benefit growers in other countries the same way it would benefit us if China makes changes to its regulatory system for agriculture products. But that's okay because we can compete, we can compete on fair terms and that's what we hope to be an outcome. We don't want China to do something that is discriminatory in our favor in this instance because they could just as well do that for another government in another instance. I will say that what impressed me almost as much as the China deal was that there was a trilateral joint statement issued. I don't know if it was the same day or the day before by the U.S., European Union and Japan regarding China's subsidies to state owned and state directed enterprises. And this is a topic that I mentioned in my sort of long opening when you asked me about the concerns with China. This is at the core of the concerns--is China's subsidies and how it helps state owned and state directed enterprises succeed at the expense of companies in other countries. And that's something the administration has been criticized for not addressing adequately or really at all in its Phase One deal. So in this case you had the administration working pretty quietly with the European Commission and with Japan on a document that begins to address the core issues of subsidies to state owned enterprises and standing shoulder to shoulder with the United States on this. So the U.S. is not shouldering the burden alone on that topic necessarily if they succeed in advancing that and socializing that concept with other governments in the WTO. So you have the US deal on the one hand that we spend a lot of capital and sort of negotiated unilaterally, but at the same breath you see that the administration is working with other governments to achieve goals with respect to China.

Jill O'Donnell: Right. I think I'm really glad you brought that up. I didn't intend to ask you that. The U.S., EU, Japan trilateral actually issued its statement on January 14th, the day before the Phase One deal with China was signed. But the trilateral doesn't get a whole lot of play in the news. It's not at the top of the headlines. It's kind of a quiet sort of effort that's been going on in parallel over the last 18 months or so. And I think it's also interesting to note the word "China" doesn't appear in any of their joint statements that released, as I'm sure you've seen. So they're tackling a set of behaviors that certainly apply to China, but I think it's interesting to note that that's been going on and maybe starting to make a little headway. But I wonder what is the prognosis for what's agreed to there and the idea seems to be to bring a set of proposals with respect to industrial subsidies to change WTO rules or modify those rules, which would require consensus of course of WTO members. So how do you see that playing out or that kind of timeframe playing out on this?

Andrea Durkin: Yeah, I don't really have inside knowledge on it, but I was very struck by the way that the language was laid out. I almost consider it kind of phase one in building an agreement around these kinds of issues. They were the government's involved build it as core elements of a future set of commitments, additional commitments on subsidies in the WTO. And the next step I would imagine, and I think they've said this, is to kind of socialize the concepts with other members of the WTO. But when you look at the way that the languages is written, I think it's clearly written as draft legal language that could form the basis of new commitments. So it seems to me they're actually fairly far along in that process, which isn't to say that it would be easy to then migrate these things into additional commitments in the WTO. I don't think that's happened. You know that these longstanding agreements have had substantial significant additions to them in many years. So it's not a small feat that we're talking about it could take some time. But we do have a ministerial, a WTO Ministerial coming up in June where trade ministers get together. That would clearly be an action forcing event as we like to say in the trade world for getting some traction and moving these kinds of provisions forward. So I think that seems actually very promising.

Jill O'Donnell: Okay. One more question about the Phase One deal here and I'd like to focus that question on agriculture. So we've heard a lot about China's promises to increase purchases of agricultural goods, U.S. agricultural goods up to $40 billion over the next two years. But I want to discuss the non-tariff barriers that are addressed in this U.S.-China Phase One deal. It addresses Chinese regulatory barriers that were problematic for U.S. exports of beef and dairy and other types of agricultural exports. Nebraska’s agriculture exports to China in particular have been really inconsistent over the last few years. They actually peaked in 2012 long before this trade war started. And individual commodities have kind of spiked and dropped off at various times. I think do at least in part to non-tariff barriers and how China addresses those. So as I understand it, there are changes related to these types of barriers in the deal commitments that China has to take that may potentially be more important than the short term commitment to buy more goods. So how would you assess those two items and assess the significance of all of the non-tariff barriers that are part of this deal?

Andrea Durkin: I think it's hugely significant. I always joke, maybe unfairly, that non-tariff barriers and regulatory issues are sort of the most boring, but important part of the trade regime these days. I mean we get a lot of attention to tariffs because the administration deployed them in an unconventional way. But in reality, the reduction of tariffs are only so good as being able to get your product approved and on the market. And that requires managing through a thicket of regulatory requirements here. I think you're right to say that that behind the scenes has been a really pernicious problem with respect to securing true market access for agricultural products and predictability in that market access. So I know that the growers remain concerned that China, even with this deal, has not formally lifted its retaliatory tariffs on U.S. agriculture exports. Instead, they're going to rely on tariff exemptions to make the purchases that they've promised. So there's still some short term overhang here. But I think the fact that the administration succeeded in one package in getting quite a substantial amount of commitments on the way that China regulates agricultural products, I think represents really important, long-term, potentially fundamental change. If institutionally China does things differently, right? With respect to the way that it regulates agricultural products, biotech products and other products, I think that represents a more sustainable long-term opportunity for U.S. growers. And the same with the TRQ commitments I think you mentioned, that there's been a lot of complaint over the last, well really, I mean since China entered the WTO, China has been underfilling its tariff rate quotas. And if this agreement forces some permanent change in the way that the China administers those TRQs and allows for private buyers in China to make market-based decisions, it's more likely that we would be able to sell more product and fill those TRQs. And those are very significant advances in this agreement I think.

Jill O'Donnell: Right. Excuse me. So the tariff rate quota system, just to remind our listeners what a TRQ is- a sort of a two-level system where a certain amount of product can come into the country at lower or no tariffs and then once that threshold is reached, any amount over and above that threshold that is imported does face a higher tariff. So the TRQ for corn, wheat and rice I think was of interest here because China was not filling that quota and the U.S. alleged China was not administering that TRQ in a very transparent way and actually won a case at the World Trade Organization about that. And did make an appearance here in this document as well that China agreed to take specific commitments as part of this Phase One agreement with respect to how it can better administer that TRQ.

Andrea Durkin: Yes. Right.

Jill O'Donnell: So, Andrea, you do a lot of speaking, I know to groups about trade including to agriculture producers all over the country. And I know you were very recently in Michigan, Indiana, Ohio. And I'm wondering, are you hearing a difference in the types of questions people are asking about trade now as opposed to a couple of years ago, one or two years ago?

Andrea Durkin: Yes. You're right. I've been very fortunate to be able to go out and speak primarily to agricultural groups. And I like to speak to students as well. But with the agriculture groups in particular, I think for many years, I mean rightly so, understandably so, growers were very focused on the issues that affected their business. I mean that's normal. And now what I see is that they're extremely informed on a wide array, a broader rate of trade policies. They see how everything is interconnected and they're not just more informed, which of course they are, they're more curious actually about our trade history, about trade policies that affect manufactured goods, about how negotiations are conducted, about how we make decisions about who to negotiate with and the types of deals we do. And I think all of that is great. I think that that is a healthy discussion to be having because for too many years we really left trade policy discussions to a very narrow subset of policymakers, rarely had these kinds of discussions outside of the Beltway. And the more we do that, the better off everybody is. I think there would be much more support and broadly speaking among the American public if we had these kinds of discussions. And yes, absolutely, the growers are interested in everything that they can learn now about trade policy and have wonderful insights about it.

If I can share with you one of the comments that I got on the margins of this trade talk, it was in Indianapolis, one of the growers came up and said to me, this is I looked at USMCA, USMCA is very legalistic. It's very long. The U.S.-Canada-Mexico agreement. And this deal with China seemed to be very plainly written, written in a very straightforward way. And in a way that I could read it and understand it. And I think that's a really significant observation actually. I thought that was a great observation and I felt the same way too reading it.

Jill O'Donnell: I did too. Now that you mentioned that, because I have looked at USMCA as well. They do read very differently. It's interesting to hear you talk about the spike and curiosity and interest level among the people that you go out and speak to in the agriculture groups. And I think the TradeVistas website that you edit is an absolutely excellent tool for meeting that curiosity for informing people who are curious about all these different aspects of trade now. So I want to ask you, in your plans for 2020 for that website, is there any trade issue that maybe it's not getting much attention right now that you think should be getting more attention that you might even be planning to write about on TradeVistas?

Andrea Durkin: Yeah. Thank you for the compliment. It's funny, Jill, when we started off planning the content for TradeVistas before there was any content, and we drew up a list of topics and issues that we thought should be on the site-and this was before the Trump administration came into office-so the list looked very different. It did after the president came into office because I never thought I would be writing about Section 232 on national security, and Section 301 the investigatory tool that we're using with China that we haven't used in decades. So, there were definitely things that overtook the list originally that I had drawn up. But that said, I think beyond the day to day, you have to chase the news to some extent because our goal is to provide context for what's happening currently without being newsy in our approach.

But I think there are some very big issues out there that deserves some attention that aren't foursquare in trade policy, but I think should be informing future trade policy. And one of those is the nexus between workforce needs of the future and where we might be spending more negotiating energy based on the sectors that are growing where we are competitive- the source of economic competitiveness and job growth in cities where that's happening. I think that from a trade policy standpoint we might pay more attention to those things in determining how we spend our negotiating energy what would have the most amount of benefit.

So I think exploring without advocating really just exploring workforce issues and the relationship with trade policy is something that I want to spend more time on. And the other issue is infrastructure. We don't have a lot yet on the site about hard infrastructure. We're about to produce a series in partnership with the Information Technology Industry Foundation, sort of a digital trade primmer because digital trade, at least the rules around it, are becoming increasingly important we already do have a great amount of digital trade. So we want to make sure that people understand the fundamentals about digital trade. But having said that, we're going to have a big debate in this country about infrastructure investments and the competition to deepen and expand ports and to protect maritime straits and all of these issues are actually vitally important to global trade flows. And I think that we would like to write a lot more about that so that we start to generate more of a policy discussion around infrastructure investments and the future of trade.

Jill O'Donnell: Well, we have a lot to look forward to, to read on the tradevistas.org website this year, which I encourage everyone to check out. Last question, Andrea, which I ask every guest on the show, and that is what have you read lately or what are you reading now about trade, book or article or otherwise that has been particularly striking to you?

Andrea Durkin: So I like to joke, you know you get those sort of the Google pop up ads based on your searches. Because I write so many quirky things on TradeVistas, I think anybody looking at my search history would be absolutely perplexed about what kind of person I am and who I am. And I draw a lot of my ideas about what to write about by reading non-trade publications. And one of the books that I just read that I thought it was going to be fairly non-trade that turned out to be, I think have to have a strong relationship with trade, was Prisoner of Geography. I think it's Tim Marshall. I picked it up in the airport in Rome actually and I thought it was going to be incredibly dry and I would probably get 10 pages into it on the airplane and put it down. But it's written by a guy who's a journalist and it's fantastically written. And it's really all about how countries, despite all of the modernity-and I just mentioned digital trade and e-commerce and things like that-we are still making heavy political and security decisions based on geography. The limits of geography, aspirations around geography, and I was fascinated with this. And it obviously has a nexus with trade because we think about all of our historical interactions and the silk roads and wars that are fought over access to natural resources or ports. And I didn't really stop to think about the fact that those considerations may drive major political decisions today. If we look at Russia's incursion in Crimea in part for access to a warm water port, which is fascinating. Again, Russia's and other country's interests in the Arctic routes have a lot to do with trade. China's Belt and Road Initiative is being driven by commercial interests. And so this idea about geography driving decision making today that will reshape political and economic interactions as being as strong an impulse today as it ever was, is kind of a fascinating topic to me. So I recommend this book Prisoner of Geography.

Jill O'Donnell: Thank you. We'll definitely put that in the show notes. And I also, I really like how you bring in this bigger strategic context and something so fundamental as geography into this conversation about trade. Because that's something we really seek to do in the Yeutter Institute is to broaden the conversation so that we are inclusive of all the elements that really impact how trade actually happens and impacts our own lives. So thanks for bringing that up.

Andrea Durkin, thank you so much for this really informative conversation today. We really appreciate you taking the time to do this interview.

Andrea Durkin: Oh, thank you so much Jill. I love what the Yeutter Institute is doing and I love working with you.

Jill O'Donnell: Thank you. Likewise. Thank you so much.

That's it for this episode of Trade Matters. Thanks for listening. And a big thank you to Bryce Doeschot, Alex Voichoskie and Brianne Wolf for helping produce this podcast. Please subscribe to Trade Matters on iTunes, 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, or follow us on Twitter @YeutterUNL [corrected.] Opinions expressed on Trade Matters are solely those of the guest or host and not the Yeutter Institute or the University of Nebraska–Lincoln.