Arizona and Global Trade


TED SIMONS: 2017 STATE OF THE STATE LUNCHEON WILL BE HELD. GOVERNOR DOUG DUCEY WILL SPEAK. HERE FOR DISCUSSION IS FORMER ARREST SENATOR JOHN KYLE AND LOCAL ATTORNEY JAMES ARROWWOOD. SENATOR WE'LL START WITH YOU. ARIZONA'S POSITION IN THE WORLD ECONOMY, WHERE ARE WE?

JOHN KYLE: WE RELY A LOT ON TRADE. THE STATE'S NOT THE STATE THAT TRADES OIL, IT IS THE BUSINESSES WITHIN THE STATE, AND LAST YEAR THE STRAYED EXPORT ASKS IMPORTS WERE ABOUT $22 BILLION. OVER A THIRD OF THAT INVOLVES EXPORTS TO MEXICO AND THEN ABOUT 900 MILLION LESS IN IMPORTS. I THINK IT'S $8.3 BILLION LAST YEAR IN EXPORTS TO MEXICO. ALSO WELL OVER $3 BILLION IN TRADE WITH CANADA. SO TRADE IS A REALLY IMPORTANT PART OF THE ARIZONA ECONOMIC SITUATION AND IT'S GOING WELL.

TED SIMONS: INCREASINGLY SO, TRADE IMPORTANT TO ARIZONA? WE USED TO HAVE THE FIVE CS AND THE WHOLE NINE YARDS BUT ARE WE BECOMING A MORE TRADING STATE?

JOHN KYLE: WE HAVE BEEN. HISTORICALLY LAST YEAR WAS A LITTLE FLAT BUT I THINK SO COMPARED WITH OTHER STATES WE'RE DOING WELL.

TED SIMONS: HOW DO YOU SEE IT?

JAMES ARROWOOD: I THINK SO WE'RE ON A POSITIVE UP TICK IN PARTICULAR, AND WHAT MANY PEOPLE DON'T REALIZE,, ASU WAS RANKED HIGHLY. AND THAT'S WHERE ARIZONA'S TRADE HAS POTENTIAL IS INNOVATION, IN PARTICULAR ON VEHICLES, BUT ALSO AMAZON, APPLE, HIGH-TECH COMPANIES REALLY WANT THE COME HERE IN PARTICULAR BECAUSE OF THE LEGAL ISSUES THEY DEAL WITH CALIFORNIA.

TED SIMONS: CAN WE GET THEM TO BRING THEIR HEADQUARTERS HERE, THOUGH?

JOHN KYLE: I THINK THE GOVERNOR IS GOING TO BE TALKING ABOUT THAT ON THURSDAY. WE'VE ALREADY SEEN A BIG INFLUX OF FOLKS FROM CALIFORNIA. SO AS LONG AS WE KEEP OUR TAX RATES LOWER, OUR REGULATORY CLIMATE GOOD, AS LONG AS WE'RE A RIGHT TO WORK STATE AND OUR COST OF LIVING IS STABLE, WE SHOULD BE VERY COMPETITIVE BOTH WITH CALIFORNIA AND OTHER STATES, INCLUDING STATES LIKE TEXAS.

TED SIMONS: INTERESTING. AS FAR AS ECONOMIC ENGAGEMENT, BUSINESS ENGAGEMENT, POLITICAL ENGAGEMENT, TALK TO US ABOUT ADS AND HOW WE LOOK, HOW WE STAND, OUR PROFILE. THOSE SORTS OF THINGS.

JOHN KYLE: THE GOVERNOR IS GOING TO BE TALKING ABOUT THAT ON THURSDAY. THERE'S BEEN A LOT OF CONCERN ABOUT THE PRESIDENT'S ANNOUNCEMENT THAT HE WANTS TO RENEGOTIATE NAFTA. NAFTA IS THE AGREEMENT THAT ENABLES CANADA, MEXICO AND THE UNITED STATES BUSINESSES TO TRADE PRETTY FREELY AMONGST OURSELVES AND IT'S BEEN A BIG BOOM TO ALL THREE COUNTRIES. AGAIN, WE EXPORT TO MEXICO MORE THAN WE IMPORT. THE PRESIDENT COULD DECIDE TO RENEGOTIATE THAT AND MAKE THE FORMAL ANNOUNCEMENT, WHICH WOULD MEAN 90 DAYS AFTER WE COULD BEGIN RENEGOTIATING. BUT MY GUESS IS THAT WHILE THERE ARE A FEW THINGS THAT FOLKS WOULD LIKE TO TAKE A LOOK AT AND THERE ARE A LOT OF NEW TECHNOLOGY ISSUES THAT PROBABLY WEREN'T DEALT WITH 30 YEARS AGO. BY AND LARGE, I WOULDN'T BE TOO CONCERNED IF I WERE AN ARIZONA BUSINESS THAT THE RENEGOTIATION OF NAFTA IS GOING TO BE A BIG PROBLEM, IT MIGHT EVEN BE A HELP.

TED SIMONS: AND YET, I WANT TO TALK ABOUT NEGOTIATION IDEAS, WHAT WOULD MAKE NAFTA BOATER BUT YOU STILL HAVE A PRESIDENT WHO'S BEEN CALLED ONE OF THE WORST DEALS. BUT HE WAS NOT VERY HAPPY WITH THIS. HE SEEMS A LITTLE MORE UNDERSTANDING. DOES THAT HELP ARIZONA BUSINESSES?

JAMES ARROWOOD: I READ AN INTERESTING COMMENT WHICH IS LOOK AT WHAT THE PRESIDENT DOES VERSUS WHAT THE PRESIDENT SAYS AND I THINK THAT COULD APPLY HERE. MEANING WITH NAFTA, THERE'S OBVIOUSLY TREMENDOUS BENEFITS TO US BECAUSE WE'RE A BORDER STATE. BUT I THINK WITH REGARDS TO NEGOTIATIONS AND THINGS LIKE THAT, WHERE ARIZONA IS REALLY GOING TO GET A BOOST IS IN THE TECHNOLOGY SECTOR AND I THINK AS LONG AS WE STAY THE COURSE ON THAT, WHICH THE GOVERNOR IS DOING, I THINK ARIZONA AS A STATE HAS POTENTIAL. NOW, WE HAVE WHAT'S CALLED A COMMITTEE ON FOREIGN RELATIONS HERE IN ARIZONA AND MANY PEOPLE DON'T REALIZE THAT, SO THERE ARE PEOPLE LIKE MYSELF, AND I'M A CALIFORNIA TRANSPLANT TO YOUR POINT, SENATOR, I MOVED OUT HERE FOR THE COST OF LIVING, FRANKLY. IT IS HALF OF WHAT IT HAVE IN LOS ANGELES, AND IT'S REALLY A TREMENDOUS PLACE. I CAN DO BUSINESS ACROSS THE COUNTRY. SO THAT IS ONE OF THE REASONS I'M HERE.

TED SIMONS: IF THE PRESIDENT CALLS AND SAYS SENATOR KYLE I WANT YOU TO RENEGOTIATED NAFTA, WHAT WOULD YOU DO?

JOHN KYLE: WHAT I WOULD DO IS SEE WHAT NEW TECHNOLOGIES OR ISSUES MAY HAVE ARISEN IN THE 30 YEARS OR SO SINCE NAFTA WAS NEGOTIATED AND SIGNED. I THINK THE BASIC PROGRAM WAS FINE. NONE OF THE COUNTRIES HAD LARGE TARIFFS. BUT ANY AGREEMENT THAT'S 30 YEARS OLD PROBABLY HAD SOME AREAS IN WHICH THERE CAN BE SOME MODIFICATIONS. BUT I WOULD THINK THAT IMPROVING IT AT THE MARGINS RATHER THAN FINDING SOME INHERENT FAULT IN IT WOULD BE THE APPROPRIATE WAY TO APPROACH IT.

TED SIMONS: AND THE IDEA OF WHAT THE PRESIDENT SAYS AS OPPOSED TO WHAT HE DOES, THERE'S SOME UNCERTAINTY.

JOHN KYLE: WE HAVE A LOT OF CHECKS AND BALANCES IN OUR GOVERNMENT THAT KEEP EVERYTHING SOMEWHAT IS IN THE MIDDLE AND THE PRESIDENT HAS SAID A LOT OF THINGS IN THE CAMPAIGN THAT AREN'T BEEN IMPLEMENTED IN HIS PRESIDENCY. SO MUCH COMES OUT OF CHINA. WELL, CHINA DOESN'T PLAY BY THE RULES ALL THE TIME. IT VIOLATES THE RULES ALL THE TIME. IT'S VERY HARD THE TO ENFORCE THAT. AND YET THE PRESIDENT NEEDS CHINA TO DEAL CAN NORTH KOREA. SO HARD WILL HE REALLY BE IN LEANING IN THE TRADESPHERE.

TED SIMONS: LET'S TALK ARIZONA AND ASIA. TRANS-PACIFIC PARTNERSHIP. IMPACT ON ARIZONA.

JAMES ARROWOOD: I THINK AS THE SENATOR SAID, RATHER THAN BE REACTIVE, WE NEED TO WAIT AND SEE WHAT ACTUALLY HAPPENS. THERE'S A LOT OF LEVERS AND SWITCHES THAT PEOPLE WANT THE PULL BUT YOU REALLY, ESPECIALLY IN PRACTICE, I TELL MY CLIENTS JUST SIT TO IT AND SEE WHAT HAPPENS. AND OBVIOUSLY WITH WTO AND NAFTA, THESE ARE ALL INTERRELATED CON ACCEPTS BUT AS THE STATE GOES WE'RE REALLY NOW BECOMING THE TECHNOLOGY STATE AND THAT'S WHERE I THINK WE HAVE AN EDGE.

TED SIMONS: TRANCE PACIFIC PARTNERSHIP.

JOHN KYLE: YES I AM.

TED SIMONS: WHAT DOW MAKE OF US NOT BEING INVOLVED?

JOHN KYLE: IT'S VERY HURTFUL. ONE HAS THE THINK THAT AT THE END OF THE DAY WE'RE GOING TO FIND WAYS TO HAVE EITHER MULTILATERAL OR BILATERAL AGREEMENTS WITH THESE COUNTRIES BECAUSE THEY'RE ALL SO IMPORTANT. WE CAN'T NOT HAVE AGREEMENTS TO TRADE WITH THESE COUNTRIES. WHAT IT DID WAS CREATE A VACUUM AND GUESS WHO'S VERY HAPPY TO FILL THE VACUUM. CHINA. WOULD YOU RATHER HAVE RULES OF COMMERCE ESTABLISHED ON AMERICAN PRINCIPLES, WHERE WE HAVE DISPUTE RESOLUTION MECHANISMS, THE RULE OF LAW, ALL OF THE THINGS WE ARE USED TO, OR WOULD YOU HAVE THE CHINESE MODEL WHICH VERY SECRETIVE AND VERY GOVERNMENT ORIENTED AND WRITING THE RULES OF THE TRADE? I THINK WE WOULD BE MUCH BETTER OFF WITH AN AMERICA ENGAGED.

TED SIMONS: FROM A DISTANCE IT SOUND LIKE THE TRUMP ADMINISTRATION IT'S BEER FOR AMERICA IF WE WORK DEALS ONE-ON-ONE WITH THESE COUNTRIES AS OPPOSED TO A BROAD PARTNERSHIP. MAKE SENSE TO YOU?

JOHN KYLE: YOU CAN DO BOTH AND TO SOME EXTENT THE MULTILATERAL DEALS ARE EASIER IN THE LONG RUN. BUT I THINK IT WAS A MISTAKE NOT JUST FROM A TRADE PERSPECTIVE BUT AS MY FORMER COLLEAGUE JOHN MCCAIN LIKES TO MENTION, FROM A NATIONAL SECURITY PERSPECTIVE, IT KIND OF TELLS THE WORLD WE'RE LEAVING, GO AHEAD AND MOVE IN IF YOU WANT TO CHINA.

TED SIMONS: YES, WE HAD DISCUSSIONS ABOUT THAT ON THE PROGRAM. LAST POINT HERE. THIS ADDRESS IS THURSDAY, CORRECT? GIVE US SOME DETAILS ON THIS.

JAMES ARROWOOD: IT'S RARE THAT SOME OF THE MEETINGS THAT WE HAVE ARE OPEN TO THE POLICE CARS, BUT THIS ONE IN PARTICULAR, IT WILL PUBLIC IS INVITED TO ATTEND, AND THE GOVERNOR WILL BE SPEAKING ON THESE ISSUES THAT ARE IMPORTANT NOT JUST TO ARIZONA BUT THE COUNTRY. A LOT OF THE COMMERCE COMES FROM CALIFORNIA PORTS INTO ARIZONA TO THE REST OF THE COUNTRY. SO THERE'S A LOT OF RELEVANCE HERE. WE'RE GOING TO TAKE QUESTIONS AND SPEAK OPENLY ABOUT SOME OF THESE ISSUES. IT'S NORMALLY STUFF THEY DONE IN THE POLITICAL AND LAW OFFICES AROUND THE STATE.

TED SIMONS: THURSDAY, GRAND SHERATON AND WHAT TIME?

JAMES ARROWOOD: LUNCH. 11 O'CLOCK. PHOENIX COMMITTEE OF FOREIGN RELATIONS.

TED SIMONS: ALL RIGHT. GOOD TO HAVE YOU BOTH HERE.

The 2017 International State of the State Luncheon will be held at the Sheraton Grand Phoenix on May 4th. Governor Doug Ducey will speak at the conference, which covers the themes of international economic, business and political engagement between Arizona and the world. Former Arizona Senator Jon Kyl and local attorney James Arrowood will talk about how Arizona is faring in a global economy that is seeing major changes.

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In this segment:

Doug Ducey: Arizona Governor
Jon Kyl: Former Arizona Senator
James Arrowood: local attorney

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