Two Views of U.S.-China Trade Relations That Shape American Diplomacy

WASHINGTON—U.S.-China trade relations have largely been shaped by two veteran trade lawyers with very different views of how to influence Beijing.

Charlene Barshefsky, President Bill Clinton’s trade representative, now 67 years old, negotiated China’s accession to the World Trade Organization. She is a multilateralist who sees herself as part of a tradition dating back to the Roosevelt administration of officials who nurtured international organizations, like the United Nations and the WTO, to build a peaceful and prosperous world.

Adding China to the WTO in 2001 was the latest expansion of that U.S.-dominated system, she told a Senate panel in 2000.  “WTO accession represents a potentially profound and historic shift, building upon but going much further than China’s domestic reforms to date,” she said.

In a July interview, she counted the gains. China has opened its economy in many sectors and become the world’s second-largest importer, giving a boost to rich and poor nations alike.  It has turned toward a more peaceful path than it was on in the 1990s. During the 2009 global financial crisis, China spent freely and helped the global economy from tumbling even more deeply into recession.

“China’s contributions to the global commons have been more than people might have imagined,” says Ms. Barshefsky, now chair of WilmerHale’s international trade group. She frequently meets with Chinese officials in Beijing.

Now she sees her work challenged by the current U.S. Trade Representative under President Donald Trump, Robert Lighthizer, a 70-year-old former steel-industry trade lawyer. His office argues the U.S. “erred” in joining the WTO. In the 1990s, Mr. Lighthizer opposed the WTO deal, believing it would cost millions of jobs.

“It’s inarguable that it hasn’t worked out,” says Mr. Lighthizer, in a July interview.  “The whole premise was China was going to become a more open society and a more open economy.  It’s demonstrable that none of that has happened.”

Mr. Lighthizer is a unilateralist. He believes the way to get China to change is by threatening to cut off access to the vast U.S. market, the world’s largest. On fights with nations, “you stick up for your interests,” he says.

The two negotiators are “professional acquaintances,” Ms. Barshefsky says. Personally, they are alike. Both are slim and sharp, and delight in making lawyerly arguments. On some matters they agree.

Both think China has misused the WTO system to become a predatory trading nation. They argue China pressures U.S. companies to transfer technology to Chinese partners and also improperly subsidizes Chinese firms to compete globally.

“China’s technology practices are highly disruptive,” Ms. Barshefsky says, in words that could come out of Mr. Lighthizer’s mouth. “They are designed to discriminate against foreign companies.”

They also  agree that the Bush and Obama administrations should have been tougher in imposing sanctions against China. Ms. Barshefsky negotiated one WTO provision that allowed the U.S. to impose tariffs to protect industries threatened by China, which was barely used. These measures “were a positive thing and should have been used more often,” Mr. Lighthizer says.

But the two diverge sharply about how to get China to change. Mr. Lighthizer, the unilateralist, put together a 200-page report detailing China’s unfair trade practices and got the administration to impose tariff on $34 billion of Chinese goods—and threaten levies on hundreds of billions of dollars more imports—to press for  fundamental changes. At the same time, though, the U.S. is pursuing separate trade fights against the European Union, Japan, Mexico and Canada, alienating allies that agree with the U.S. that China is an unfair trader.

Ms. Barshefsky, the multilateralist, says she would try to rally support by other nations against China, including putting together an all-but-China trade deal, and challenging Beijing to join that pact and accept U.S. trade rules. She would also bring broad WTO cases against China arguing that it has so undermined WTO rules and practices—in WTO lingo, it has “nullified and impaired” other WTO members—that it should be hit with global trade tariffs unless it changes.

Ms. Barshefsky acknowledges such a case would be a long shot. Back in 2010, Mr. Lighthizer recommended the same action in testimony before a congressional China panel.  No longer.

These days, Mr. Lighthizer says he is skeptical that multilateral pressure accomplishes much. He is especially wary of trying to get China into a U.S.-led trade pact.

“Why wouldn’t (China) just ignore the rules or use the ones convenient for them?” he asks.


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‘Get Moving’: How Trump Ratcheted Up the Trade Battle With China (June 7)

The Architect of Trump’s Threatened China Trade War (April 6)

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