President Trump’s top trade negotiator Thursday cast US-China relations, at least in his sphere, in unexpectedly positive terms and called reports of a setback in purchases of US soybeans perhaps the result of “disinformation.”
US Trade Representative Bob Lighthizer acknowledged the relationship with China is “complicated,” not only by all the contentious issues, from cybersecurity and intellectual property theft to tensions generated by the pandemic, but because of all the different parties to deal with within China.
He spoke to members of the Economic Club of New York via video hookup. Trade policy cannot address all the issues and his focus, he said, has been on fixing the unbalanced commercial dealings between the two countries. He said he is not in favour of dropping out of the World Trade Organization, an entity designed as a forum to work out differences and which he said has now devolved into a “court.” It has not facilitated any true trade agreements beyond “technical” customs arrangements and he said he looks forward to helping reform the organisation. “I think you do need a body that that hosts negotiations and that keeps track of what the agreements are and the WTO does that,” he said, adding about the overall relationship, “I feel very good about it.”
Lighthizer did not even hint that he shares concerns that the relationship is on especially thin ice or that he aligns himself with the tenor of President Trump’s lengthy criticisms delivered just last week as he announced a pull out from support for the “China-centric” UN World Health Organization. He said to China’s credit it engaged in good-faith trade negotiations that looked at mutual benefits and grievances. The trade deficit “ballooned up to over four hundred billion dollars and it went up and up and up,” he said. It was the result of market efficiencies and “state capitalism”.
“China is not like one thing,” he said. “China is a lot of different people and they have a lot of different interests and like the United States over a period of time, they have a way of working out who’s on top.”
The “Phase One” trade agreement was “historic,” the first ever negotiated between “the two biggest economies in the world.”
In the context “of this crazy virus, I think they’ve done a pretty good job” with enforceable structural change, he said, adding, “I think the fact that it’s enforceable and covers these substantial structural things is often lost by people” who focus only on the commitment “to a certain amount of purchases.
“I would say on the structural changes that China has done a good job and I think under the circumstances they’re committed to living up to the agreement on the purchases side also.”
In time, Lighthizer said, everyone will “know what the score is, you know before too long.” The people he negotiated with, he said, were “honourable people” who wanted the negotiations to be a success. Last week’s report that China is pulling back its purchases of US agricultural products, particularly soybeans, “is not true,” last week, he said, China bought $185 million worth. “I don’t know where that report came [from],” he said, calling it “disruptive and unhelpful,” the possible result of “bad sourcing or intentional disinformation.” He added, “I expect you’ll see them live up to their agreement.
“I stay in my lane. I can’t solve all the problems between the United States and China,” Lighthizer continued, saying what he can do “is try to negotiate an agreement that begins the process of balancing our relationship and helps Americans have more and better jobs.”
If he tried to address all the issues, “I’ll end up doing nothing.”
The pandemic has shown, he said, that the US needs to bring the supply chains back so the country has what it needs in a crisis, including pharmaceuticals. “We have to have enough policies that we never find ourselves in this position again where we’re not independent” with the supply of personal protective equipment and other items that are “really, really important to the country,” he said.
Lighthizer said he is ready to celebrate the July 1 start of the new NAFTA. In recent years NAFTA operated as warned about by presidential candidate Ross Perot, pulling US manufacturers across the border and making a “huge sucking sound.”
Negotiations with the UK resume in a couple of weeks and will take “some time.” Both the UK and the US believe they have a comparative advantage in services products, he said.
“We have a negotiation of sorts going on with the European Union,” he said. “We have a very unbalanced relationship there. We have a hundred and $80 billion goods deficit and it’s growing.”
He said he understands the EU “won’t enter into agreement with anyone that doesn’t have a climate change provision.” That, he said, “is not my problem. We’ll see what happens as we move along.”