The United States’ former top trade negotiator excoriated the current administration on Thursday for having “no policy” on China and for pursuing a trade deal with Beijing that undermined long-standing efforts by past administrations to challenge its state-run economic model.
The Trump administration’s approach to China has been characterised by inconsistent messaging by top US officials, who are themselves contradicted by the president himself, said Charlene Barshefsky, who served as the US trade representative for four years during Bill Clinton’s administration.
“What that tells me is that the US has no policy with respect to China,” said Barshefsky, who oversaw China’s accession into the World Trade Organisation (WTO) in 2001. “It may have personal predilection, there may be individual pronouncements made by people in the administration, but that’s not a policy.”
Her comments, made at a webinar event hosted by the Washington-based Centre for Strategic and International Studies (CSIS), came as US President Donald Trump publicly contradicted his current trade representative, Robert Lighthizer, who told a congressional panel on Wednesday that decoupling from China was not “a reasonable policy option”.
“It was not Ambassador Lighthizer’s fault )yesterday in Committee) in that perhaps I didn’t make myself clear, but the U.S. certainly does maintain a policy option, under various conditions, of a complete decoupling from China,” Trump tweeted on Thursday. “Thank you!”
Trump’s approach to dealing with Beijing has come under increased scrutiny this week after the revelation of damning allegations included in an upcoming book by John Bolton, a former national security adviser to the president.
An excerpt published by The Wall Street Journal painted a picture of an administration whose public hawkishness toward Beijing jars drastically with Trump’s private attempts to curry favour with Chinese President Xi Jinping, casting aside concerns over human rights in order to preserve a trade deal he sees as instrumental to his re-election chances.
Under that deal, signed in January, Beijing committed to increasing Chinese purchases of US goods and services to US$200 billion above 2017 levels over a two-year period.
Barshefsky on Thursday called the numbers “fantastical”, adding that the coronavirus pandemic had made them “somewhat more fantastical”.
During his testimony on Capitol Hill, Lighthizer said China was “on track” to fulfil its commitments, telling lawmakers that “the indicators now that we have are that they are going to meet them”.
That assessment jarred with recent analysis by the Peterson Institute for International Economics, which found that China’s purchases to date were significantly below the prorated target. As of April, China’s total imports of products covered by the agreement stood at US$26 billion although the year-to-date target is US$57.6 billion, according to the report.
But even if China manages to meet the targets, the US trade deficit with the country – a singular focus for Trump – would not be erased by the managed purchases, Barshefsky said: “Trade flows and the complexity of global trade is such that micro decisions will not affect the macroeconomic outcomes.”
Targets and numbers aside, Barshefsky criticised the purchase-focused trade deal for its tacit approval of China’s state managed economy, noting that it was state-owned enterprises, and “not the mom-and-pop shop”, that were buying up the goods.
“When we demand that these purchases be made, what we’re saying to China is: ‘Use your state enterprises, dictate to them what they have to buy, make sure they buy it’,” she said.
“This is exactly what the US has fought against – not just with respect to China but with respect to Europe and many other countries – for the last 40 years.”
As the top trade official during the Clinton administration, Barshefsky oversaw China’s admission to the WTO in 2001. The country’s place at the table is a recurring grievance for the Trump administration, which believes that its economic and trade policies have escaped necessary scrutiny under the WTO system and that it should no longer be considered a “developing country”.
Lighthizer told lawmakers at Wednesday’s hearing that the organisation had “failed America and failed the international trading system,” and said the next head of the trade body should understand that “an extremely large state-run economy cannot be disciplined under the current WTO rules”.
The current director, Roberto Azevedo, unexpectedly announced last month that he would be stepping down at the end of August, a year into his two-year tenure.
Defending the decision to bring China into the WTO, Barshefsky said on Thursday that the Clinton administration sought to build on the reforms set in motion by Deng Xiaoping and “mould” them in such a way as to become “more compatible with Western economic norms”.
“As China’s reform became more robust, the US – and we in the Clinton administration – attempted to capture that, to expand it, to deepen it, to broaden it,” she said.
But China’s reform and opening began to sputter in 2007 and had stopped altogether under Xi’s governance, said Barshefsky, who acknowledged that the US had failed to hold China to its commitments to the rules-based world trade order.
“We were, I think, inexcusably lax as a country through many administrations in enforcement of the WTO deal.”
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This article Ex-US trade representative Charlene Barshefsky says Donald Trump has ‘no policy’ on China first appeared on South China Morning Post