Francis Moriarty: America First is becoming America Alone
WILLIAMSTOWN — The United States and China have just fired the first salvo in a trade skirmish — not yet a full-scale trade war — involving $34 billion worth of goods. The U.S. shot first and the Chinese have retaliated. That might sound like a lot of money but, in overall trade terms, $34 billion is pretty much a drop in the bucket. Still, it's reason for worry because of what it might presage.
If it were only a trade conflict with China, matters would be worrisome enough. But the U.S. now has simultaneous disputes involving trade and other issues with Canada, Mexico and Europe — and that's an incomplete list.
President Trump's approach toward other nations is looking a lot less like America First, and a lot more like America Alone.
Still time for accord
Domestic reaction to the tariffs has so far been muted, reflecting in part that the tariffs hikes were signaled well in advance so that importers and exporters could adjust for them. As polls show, there is also growing domestic support for the Trump administration's muscular approach toward trade, so — at least for now — even those directly affected are willing to give his approach a chance.
At this restrained level of sparring, there is hope that the differences between the administration and our major trading partners will prove manageable. The concern is that if a mutual accord is not reached in time, there could follow another round of tit-for-tat tariff impositions that might escalate and involve a wider list of items.
This is all a far cry from the controversy regarding trade with China that dominated in the early 1990s, when paramount leader Deng Xiaoping's policy of opening up was starting to hit its stride.
The issue then was whether China should again be extended most-favored-nation trading status, then known as MFN. This meant China would be treated no worse in terms of trade than any other nation with which the US did business. China's MFN status was revoked in 1951 and resumed in 1980, after which it was renewed annually by presidential action.
But things changed after the 1989 massacre at Beijing's Tiananmen Square. Emotions in Congress were running high over the crackdown, and over China's human rights record in general, along with its use of prison labor. There was also anger over textile exports, the trade balance, intellectual property rights and transfer of military technology, especially nuclear technology sold by China to Pakistan.
Granting MFN to China was no longer a trading norm to be automatically extended. Renewal became a chance to chastise China over, among other things, violations of human rights, labor standards, trade irregularities and its treatment of Taiwan.
Within the U.S., beating up on China was an easy game, whether you represented organized labor, rights organizations or domestic manufacturers. But it looked rather differently to many American (and other) businesspeople who already saw the future of the Chinese mainland as both a potential market and the world's future industrial base. A prominent voice was the American Chamber of Commerce in Hong Kong, the largest chamber outside the U.S.
As a journalist based in Hong Kong, I covered the MFN story extensively, including trips by Hong Kong delegations to Washington for meetings in Congress and at the White House. They were swimming against the political tide at the time, much as they would probably be going against domestic sentiment on a similar trip today.
Arguing in favor of MFN for China was not an easy case to make.
I clearly recall interviewing the last British colonial governor of Hong Kong, Chris Patten, at his hotel in Washington's Georgetown district. Patten was not China's preference for the top colonial job. Beijing wanted a member of British royalty, specifically Prince Phillip. Patten had been a member of the House of Commons and was the architect of the Conservative Party win that produced John Major as prime minister. Patten had lost his own seat in the process and Major subsequently named Patten, a fervent believer in democracy, to the Hong Kong job — much to Beijing's displeasure.
So Patten was already in the crosshairs when he made the trip to argue in favor of renewing the MNF status for China. It was no small irony, as I pointed out during our interview, that here he was in Washington to argue a position clearly in Beijing's favor. Patten, who has an appreciation of irony that has sometimes landed him in hot water, replied coolly: "Then I guess you could say that I am a fairly effective spokesperson for China." I could only imagine the eyebrows raising in Beijing upon hearing that.
Pesky values issue
Part of the argument put forward by Patten and others arguing for MFN, was that as China grew economically and more people gained financial security, they would begin demanding the democratic rights promised in their constitution.
Although President Bill Clinton would subsequently delink China's human rights record from its MFN status, it remains implicit in every debate over relations with China.
Trade is not just about numbers. Values intrude into trade our relations — not just value as expressed in currency, but also in right and wrong. It matters with whom we side and with whom we differ, even — maybe especially — when it comes trade. There may be benefits from going it alone in our relationhips, but there are also risks.
Francis Moriarty is a regular columnist specializing in China and Asia-related topics. He is a former senior political correspondent for Radio Television Hong Kong, a public broadcaster, and has reported from across the Asian region. He now lives in Williamstown.
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