♪ Gavin> Welcome to This Week in South Carolina.

I'm Gavin Jackson.

This week we're talking about the latest economic development news in our state as well as our relationship with our neighbor to the north, Canada.

And to do that, I'm joined by the Canadian ambassador to the United States, Kirsten Hillman.

Ambassador, welcome.

>> Thanks, Gavin.

It's great to be with you.

Gavin> So, Ambassador, I'm grateful that your team reached out to us for this opportunity.

But our viewers are probably wondering why you you're here.

What's what brings you to South Carolina?

>> Well, I'm here to spend the week really talking about the Canada- South Carolina relationship.

It's an amazing relationship.

It's a huge economic relationship.

It's also a very strong relationship between our people.

A lot of Canadians come down to South Carolina.

And so I wanted to highlight this, this strong growing economic and personal relationship that we have in our defense teams too.

Gavin> So, Ambassador, when we talk about this, this tour that you're doing, you and other prominent Canadian officials have been going around the United States past couple of months, meeting with government officials, meeting with governors.

We saw a Wall Street Journal article headlined, ...Canada Fights for Economic Security in Pre-election U.S. Campaign.

So tell us about this relationship and this charm offensive that Canada is launching at this point.

Amb.

Kirsten> Well, let me talk about Canada, South Carolina.

First of all, we have we are your second biggest trading partner after Germany, $8 billion in bilateral trade between our country and your state, supporting about 120,000 jobs.

And it's growing.

Our exports of goods have grown.

Our services trade has grown.

And we had the biggest amount of Canadian investment into South Carolina last year than we've had in the last ten years.

So it's really an important and growing relationship.

But also and this is what I'm really hoping to emphasize over the next couple of days, it's a relationship that's very strategic.

Because the things that we're doing together have to do with the economy of the future, have to do with making sure that we're innovative and we're ready in advanced manufacturing, in technologies that we have the critical goods that we need to support.

Frankly, being at the cutting edge and you have a growing and highly skilled workforce.

We have a growing and highly skilled workforce.

And so I'm really trying to examine how that's going and what more we can do.

Gavin> Can you elaborate on those investments that you're talking about when it comes to growing that economic relationship between the two states, the country and the state of South Carolina when it comes to investments here?

Amb.

Kirsten> So we've seen investments in recent years across the board in the economy, from forestry to a large solar manufacturing facility to investments in the semiconductor supply chain, the battery supply chain, of course, automotive and automotive parts.

We have many companies here that have several facilities across the state.

So it's... pretty much across the board.

And as I say, it's largely focused on being cutting edge.

Right?

Being cutting edge in these areas where we know that we're going to find partners in South Carolina that are also interested in pushing the envelope in being the best in the, in the, in whichever sector we're talking about, whether it's aerospace or autos or battery technology.

Gavin> Yeah, a growing industry in South Carolina.

We're talking about EVs.

You know, rare earth minerals, which Canada's also a big player in that development of.

But when you're here right now, I mean, should we be expecting any major announcements when it comes to economic development, in the future here in South Carolina with Canada?

Amb.

Kirsten> Well, let's see what our businesses have to say, you know.

I'm here to promote and highlight them.

I'm also here.

I'm going to be meeting with the governor a little later on today with the speaker, with the president of the Senate, and with a number of congressional representatives and as I say, with a number of Canadian businesses that do a lot of business here in the state.

So I'd like them to speak about the investments they're making.

I think that I wouldn't want to steal their thunder on that, but all I can say is there's an awful lot of enthusiasm.

There's an awful lot of enthusiasm.

Gavin> But ambassador, kind of going back to what you were speaking about and what we're seeing with your government reaching out to other governments across the state and the country.

Tell us about how Canada is kind of gearing up for 2024 the big election here in America and what you guys see in terms of maybe preparing for whatever the outcome could be in November.

Amb.

Kirsten> Yeah.

So I guess what I would say is, yes, we are doing this because we're in an election year.

It's something we do all the time.

But there's a it's a greater intensity in an election year.

And yes, it's about the election in the White House, but it's also about in Washington.

Every single member of the House, a third of the Senate, are up for re-election.

And we have 11 states that are having gubernatorial elections this year.

And what we know is that all of those partnerships are really important to us.

So here's what I my team and I have really noticed in the last year or so, is we we spent a lot of time in Washington, in D.C., in a few of the large centers across the country.

And we have 12 offices across the country that work regionally.

But it's not clear that all across this country people are aware on a day to day basis of the depth and breadth of the relationship.

So we have...$2.8 billion in trade between Canada, and the United States, every single day, every single day, biggest bilateral trading relationship in the world.

It has reached an all time high, biggest...amount of economic bilateral trade last year than ever in the history of our two countries.

This is really important.

It's really important because we live in a bit of an unsettled world, right?

There's a lot of conflict globally.

There are a lot of countries around the world whose neighbors are not that friendly to them.

And sometimes I think and I say this often, that perhaps we spend not quite enough time focusing on what's going well for our two countries, focusing on the partnerships that are making us stronger.

And there's no question that Canada makes the United States and South Carolina stronger, more resilient, more economically prosperous, that we're greatly fortunate to have each other as neighbors.

So that's the underlying message that we're taking across the country, And as I say, not just in the big centers, but everywhere that we you know, everywhere that we operate, which is pretty much everywhere in this country.

Gavin> Ambassador, when we talk about that, we did see that relationship between America and Canada strained somewhat during the Trump administration during those years.

When we talk about threats of steel and aluminum tariffs, as well as that threat to shred the NAFTA agreement which was renegotiated, and it has to be, I guess, reviewed back in 2026.

Looking forward, has the U.S. Mexico-Canada agreement been beneficial right now?

Amb.

Kirsten> It has.

So I was I was appointed under President Trump.

I worked under his administration as ambassador for a little over a year.

And I worked before that on the renegotiation of the NAFTA.

And what I can say is for sure, you know, the negotiations weren't easy, but I've been negotiating trade agreements my whole career, and they're never easy.

And that's okay because they're important.

And in doing things that are important for one's country need to be done in a serious way.

But it's a great agreement.

It's...an agreement that provides stability, transparency, enforceability.

And it has led to, as I said, the greatest bilateral trade figures in the history of our two countries.

And the same is true of Mexico, U.S. trade.

So there's no question that it is fantastic and it is an accomplishment of the Trump administration and those folks in Congress who supported the passage of that.

We also worked very closely together on COVID.

When COVID first hit, we had to put some pretty serious constraints on our border.

And the Trump White House was very effective in working with us to do that in a way that would protect people but allow commerce to continue to flow.

So I think that, you know, I think that the reality is that the Canada-U.S. relationship, it sort of stands on the shoulders of the millions and millions of citizens in both of our countries who interact together every day and every political leader will recognize that and will see the value of that.

And we saw it with President Trump.

We saw it with President Biden.

And I have no doubt we will continue to see it, regardless of what happens in the next election or the one after that.

Gavin> That being said, Ambassador, I want to kind of go back to the G7 summit that wrapped up in Italy over the weekend.

Many headlines coming out of that international summit point to unity among the leaders, but weakness back home, citing changing politics and a rising tide of populism.

But again, still unity among the leaders that are in office right now, A kind of a contrast, again, going back to those Trump years when the former president called Canadian Prime Minister Justin Trudeau very dishonest and weak.

You were just in Philadelphia with the prime minister about a month ago where he pointed out how protectionist economic policies like tariffs will not just affect Canada, but states like Pennsylvania and other important economic states in the country.

If we see a return of isolationist policies, what could that mean to both of our countries?

Amb.

Kirsten> Well, I think it would be... it would be bad for our countries.

It would be bad.

Most importantly for our workers, it would... We are a deeply integrated partnership, Canada, United States.

We don't just sell stuff to each other.

We build things together.

And this is, you know, South Carolina is an automotive powerhouse, right?

So the auto sector is a perfect example of that.

We see parts and components going back and forth between Canada and U.S. sometimes five, six, seven times before a vehicle is finally assembled.

And that's because we have different... technologies and different capabilities and we've designed it that way to make it efficient and effective.

And those differences of, you know, within our value chains are making us stronger, both countries.

So I think that adding to the cost of those inputs will raise prices and this is not a moment when anybody wants to see prices being raised in our in our two countries.

And I don't think, you know, that's going to get us to the place where we want to be, which is from our perspective, to take this growing and positive trajectory that we're on as partners Canada, the United States and move it forward.

So, you know, I, as I say, I am a very strong proponent of fair, open, transparent and predictable rules that maximize trade and investment in both of our countries because we're stronger when we're both strong.

Gavin> Do you think the pandemic killed globalism or do you think we just need more resilient supply chains at this point?

Amb.

Kirsten> I think that the pandemic pulled back the curtain a little bit on areas where we may have lost sight of some strategic vulnerabilities that we had in our international value chains.

Critical minerals is an excellent example.

Canada has two thirds of the minerals that are deemed critical globally.

We produce them and we process them.

But it wasn't an area of great focus because we were getting a lot of those products from China, in particular.

Then we realized that maybe it wasn't in our best interests to be relying on countries that may not always be reliable.

Right.

And so we've had a very strong effort in Canada in the last number of years to double down on that sector of all of our critical minerals and rare earths.

And we're growing it significantly and we're creating a value chain that will be available to us, but also available to our closest partners.

So I do think we did learn that lesson from the pandemic.

And I think that I don't think globalization and trade overall will cease.

But I do think that we are going to have to be much more careful about some of these strategic areas and make sure that we are only relying on partnerships with countries that we know will be there for us.

And look, this is the this is the main thrust of my message every day is that there is no more reliable partner for the United States and Canada.

We are...we are and have been always the closest of friends.

Right...and the closest of allies.

And so we need to be focusing on that and deepening it.

Gavin> And I'm going probably borrow some time from my other interview because we have so much to cover.

Maybe about five more minutes left with you there, Ambassador.

But G7 leaders just agreed on a financing plan that would provide Ukraine with as much as $50 billion in aid.

That's from investment returns generally by roughly $300 billion worth of frozen Russian assets.

What message does this send to Ukraine, to Russia and to China when it comes to this unjust war, in your opinion?

Amb.

Kirsten>Well, I think it sends the message that we are we are behind Ukraine.

We will be there with Ukraine, that this is an unjustifiable and an unacceptable action, obviously, by Russia, this illegal war, and that the allies are going to stand with Ukraine to the hilt.

So Russia is out of Ukraine.

Gavin> We just saw the Russian president meet with the Chinese president, Xi Jinping last month, and he's currently in North Korea meeting with Kim Jong Un, a first such visit in 25 years.

How do you assess the current threats facing the West, whether it be Canada or the West in general?

Amb.

Kirsten> I think we need to be vigilant.

I think that there is a rise of behaviors that threaten territorial sovereignty of sovereign nations and democracies.

And we as democracies, have to stand together and protect each other.

Canada has just made a major announcement of a major investments that we are putting into our defense system in the far north and in the Arctic.

And we're doing that because the presence of Russia, but also China is growing in the Arctic and that territory is essential to North American territorial sovereignty, Canadian territorial sovereignty.

So we need to... continue to ensure that our homeland is safe, to work together to do that and at the same time, be clear and open and straightforward with countries that are, as I say, taking actions that are incurring on the sovereignty and the self-determination of our fellow democracies.

Gavin> So with that being said, do we see Canada, I guess, spending more on defense because the NATO's secretary general was just at the White House on Monday meeting with President Biden in preparation for that upcoming summit in July.

They announced a record 23 of 32 native countries are hitting that alliance's 2% defense spending target.

Canada's military spending is only set to reach 1.76% of GDP by the end of the decade.

And there is not a current plan to reach that 2% mark.

So what's holding Canada back from spending more on defense?

Amb.

Kirsten> So I think that the plans that we have announced to date achieve the figure that you mentioned, 1.76%.

However, we have also put in our recent defense policy update that we are looking at a number of other significant military procurements and those military procurements, our defense minister has said quite clearly and publicly will take us well, well over 2%.

So for us, it's a question of we don't announce any plans until we have booked it, if you will.

We have the sort of the political endorsement to spend the money.

So we're very cautious.

We're a very cautious country.

And so we will, we will announce our plans when those plans are solid and they're, and they're absolutely incontrovertible.

But Canada is a is a steadfast ally.

Gavin>Kind of wrapping up, I want to talk a little bit about politics in Canada, because you guys have an election coming up by next September and it seems like the liberals, your other party, the prime minister's, is trailing to the conservative rivals... And that's not unique to Canada.

That's what we're seeing in Britain, France, Germany and Japan, even here in America, too.

And there are media reports that Prime Minister Trudeau could lose next year.

But how concerning is this rise of far right rhetoric and policies to your government?

What do you think is fueling this, especially since Canada's economy is doing so well right now?

Amb.

Kirsten> Well, you know, I think the people are still... have lingering challenges and discomforts and unease from everything that we've been through in the past number of years, the pandemic in particular, the disruption of lives that came along.

Inflation has been high.

We in Canada have challenges with affordable housing, as you do across the United States.

So people are feeling their pocketbooks, you know, some concerns.

Our government is putting in place all sorts of measures to address that from, from drug pricing programs to house building programs at the federal and the provincial level.

And as you say, our economy is strong, but we have to listen to what people are saying and how they're feeling and make sure that we're putting in place policies that address those directly.

>> Canadian Ambassador Kirsten Hillman, thank you so much.

Amb.

Kirsten> Thank you.

Gavin> Joining me now to discuss the latest on the economic development news in the state is Secretary of Commerce Harry Lightsey.

Secretary, welcome back.

>> Well, it's great to be back.

Thank you so much.

Gavin> Secretary, last time we spoke to you was early last year, shortly after the announcement of the major $2 billion investment of Scout Motors for the electric vehicle manufacturer's first plant being built right here in the Midlands.

I just want to get an update from you on how that's going and what's the latest?

>> Well, it's going very fast and very well.

The site is really progressing.

And, you know, it is an amazing feat that's going on out there as it's really the largest earthmoving project in the southeastern United States right now.

So literally, hundreds of thousands of cubic feet of dirt are being moved daily out there.

And as we get that site level and ready to be utilized by Scout.

And they have started putting up the structural steel for their first buildings and they're moving along.

So we're everything is on schedule.

We are continuing to deal with the issues, just the size and scope of the project presents and hopefully get all the right resources there to move that project forward on schedule.

Gavin> And that should be by the end of next year.

And we're talking about 4000 new jobs for that, just alone?

Secretary Lightsey> That's right.

So 4000 for that just alone.

It's clearly incredibly impactful to the whole Midlands area.

Gavin> So, Secretary, there is about $1.3 billion incentives package approved by the state to get that manufactured to the state.

We've talked about this before.

A lot of people have heartburn about when it comes to incentive packages, but do we have to continue using these taxpayer dollars to lure big companies or is that just the nature of business these days?

Secretary Lightsey> Well, that is, you know, the way that economic development works.

And in order to be competitive with 50 other states and hundreds of foreign countries, they all offer economic development incentives.

And so in order to be competitive, that's part of the part of the table stakes.

We try to be very competitive.

We try to be very judicious in the use of the taxpayers money.

We're very conscious about the fact that we're using taxpayer dollars with these incentives.

In South Carolina, the way we use our incentives is that all those moneys are going into infrastructure in the state or into the site itself so that the company really gets to take advantage of that investment.

But the state does as well.

So if the company leaves, that investment is still there for the citizens in that area or for the for another company to come along and utilize that investment.

So, the investment stays with the state and that's very important.

Gavin> Do you think we could be doing more to incentivize smaller businesses, too?

I mean, is there a way to do that or is it when it comes to incentives or is that just for larger projects?

Secretary Lightsey> So, right now, the way the incentive structure works, it clearly is geared towards larger projects with larger manufacturing projects.

But we are very cognizant of what's going on in the world in terms of new developing sectors.

So life sciences, for example, is one of our new target sectors that we're really working to develop in South Carolina.

Advanced energy is another one.

And in those areas, those technologies are so brand new and developing so quickly.

A lot of the companies that are bringing these new technologies to the market are not that big, and they're really moving out of research and development into commercialization.

And so we've begun discussing with our legislative policymakers the need to reflect that in our...incentive structure so that we can provide incentives to smaller companies that don't classify, work, really fit for our typical manufacturing classifications that we have today.

Gavin> So when we're still talking about electric vehicles going back to that and other plants are investing heavily in those offerings.

What does the automotive manufacturing and supplier environment look like for EVs right now?

There's been a bit of an industry slowdown, seems like a little bit of a pullback as consumers are catching up or trying to see that infrastructure come online to support EVs.

So how do...you see that affecting this whole EV push in South Carolina, right now?

>> Yeah, So we've definitely seen a huge investment cycle in EV and EV structure and in South Carolina, the automobile sector is our largest manufacturing sector, employing over 75,000 South Carolinians.

So it's incredibly important to our state and it's incredibly important to our state that we stay in touch with where the industry is going and that by that investment you can see that the industry is moving towards EV.

Now, will it all happen tomorrow?

No.

We will not all wake up tomorrow and go buy a brand new EV.

Infrastructure has to catch up and other things.

We have to think about it, you know, the automobile, the gasoline combustion engine, which is the previous generation of what propels cars and vehicles on our roads, is really, technology is over 100 years old.

So it's a very mature technology.

But in the early days of automobiles, there were actual discussions of whether automobiles would ever replace horses and horsepower.

So we have to see the infrastructure develop.

We have to see EVs become more competitive in price to gasoline combustion engines, all that is occurring, it will occur over the next decades to come.

And that replacement cycle will, eventually happening.

But we're really literally talking about decades and years into the future.

And so we all just have to be patient with the technology.

The investment is significant and having it in our state is really important because it really ensures that those jobs will grow into those decades, into the future.

And we feel that is very important for our citizens.

Gavin> We've about a few moments, minutes left.

I want to get to a couple of questions, but one of them is speaking of investments in the state is, last Fall, the Biden administration designated 31 tech hubs across the country, including one here in South Carolina, thanks to the 2022 Bipartisan Chips and Science Act, the South Carolina hub, SC Nexus has to do with advancing the clean energy supply chain.

So tell us a little bit more about that and what that's going to mean for us going into the future.

Secretary Lightsey> Yeah, so, as you said, this is was under the CHIPS Act and the U.S. Department of Commerce designated 31 tech hubs four in the area of advanced energy.

The CHIPS Act designated ten technologies that were key to the future of US national security and the economy.

And so to be one of these 31 is incredible.

There were well close to 400 different areas that applied for tech hub designation.

So they designated 31.

So we feel very good about that.

And it's a partnership with the US Department of Commerce to develop South Carolina to be a recognized global leader in this sector.

And if you think about where we're going with the movement off of fossil fuels as our primary energy source, this is an incredibly growing sector.

There's a lot of new technology coming to bear in this area.

And South Carolina really will be the focal point for the United States and for the world in terms of commercializing these technologies.

So we're incredibly excited about that opportunity.

>> I would ask you more about energy development in the state.

Of course, we're talking about Dominion Energy and Santee Cooper needing to build a gas fire plant but I don't have much time left.

So I just want to ask you a broad question with about 30 seconds left about our economy.

Our economy's in good shape.

The country's economy is in good shape, but what more needs to be done to boost our prospects in the state when folks are looking to relocate here?

>> Well, as I said, we're right at a place South Carolina has developed manufacturing as the base of our economy for decades, and we've been very successful at that.

But we need to continue to look at what sectors are developing into the future and to diversify our economy so that we don't have if one sector, if we become overly dependent on, say, manufacturing and that sector takes a dip, we need to be diversified so that we have other sectors that are picking up where those go down.

So we're looking, as I mentioned previously, we're looking really hard at developing in biotech, which is an incredibly fast growing sector.

We're also looking at the advanced energy sector with a tech hub, a key asset in that.

And then we're looking at headquarters and R&D, higher level jobs, higher paying jobs for our citizens.

We think we can be very competitive in those areas.

Gavin>I didn't even have a chance to talk about rural infrastructure and development out there, but that'll be for next time.

That's South Carolina Commerce Secretary.

>> We're doing a lot there too Gavin> Harry Lightsey, thank you so much.

And that's it for us this week.

For South Carolina ETV.

I'm Gavin Jackson.

Be well South Carolina.

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