Editor's note: Harvey Dzodin is a senior research fellow at the Center for China and Globalization and a former legal adviser in the Carter administration. The article reflects the author's opinion, and not necessarily the views of CGTN.
Over the holidays I went south to speak at the Guangzhou International Shopping Festival. In the five hours of flight time I managed to read Bob Woodward's devastating new book "Fear" that paints a government in chaos presided over by a profane, boorish, juvenile and out-of-control Donald Trump. The book is consistent with others of the same genre which have come before it.
On October 1, however, the bully in Trump was crowing in the White House Rose Garden that he had gotten Canada to fall in line with Mexico and, if approved by each country, the North American Free Trade Agreement (NAFTA) will be replaced with the United States-Mexico-Canada Agreement (USMCA).
"Fear" by veteran journalist Bob Woodward is displayed at a book store in California, US on September 11, 2018. /VCG Photo
This does not bode well either for bilateral Sino-American trade and political relations, or for the commonsense recommendations for solving the trade dispute recently released by the think tank Center for China and Globalization (CCG) where I am a senior research fellow. In the current climate, the recommendations are DOA - dead on arrival.
In "Fear" Trump seems to be a tabula rasa with few original ideas. One idea that he does have, one not shared by mainstream economists, is that trade deficits are inherently evil.
This is coupled with a visceral hatred for China because China is "winning" at America's expense and he was clearly being egged on by his kooky colleague Peter Navarro, author of "Death by China" and US Trade Representative Robert Lighthizer; and Commerce Secretary Wilbur Ross. Their fingerprints can be seen all over the USMCA.
Representatives from Canada (L), Mexico (C) and the US brief media after talks in Mexico on March 5, 2018. /VCG Photo
There are three worries that stem from this new agreement. The first two are psychological. First, Trump's already supersized ego has grown enormously, a seeming impossibility and secondly, now he is freer to concentrate on attacking China even more aggressively. The third is substantive: Article 32.10 of the USMCA.
This USMCA provision more or less gives veto power to the three signatory countries over any of them establishing a free trade agreement with any "non-market economy" which China, the clear target, is.
In 2016 China and Canada agreed to study just such a deal but now if Canada hopes to not scupper USMCA, they will no longer be free to pursue a bilateral free trade deal.
Talk about anti-competitive and economic encirclement of China; well, this is it! If the same mechanism is written into future agreements with US trading partners like the EU and Japan then it isolates China economically, putting the country between a rock and a hard place.
Japanese Prime Minister Shinzo Abe (L) and US President Donald Trump shake hands during their talks in New York on September 26, 2018. /VCG Photo.
The Woodward book had numerous mentions of the old Korea-US Free Trade Agreement (KORUS) which Trump frequently and angrily brought up, claiming that the US was getting ripped off by South Korea.
There is no USMCA-like veto provision in the revised KORUS announced last month leading me to conclude this this is a newly minted anti-China strategy and a potential game-changer. It's a much more effective strategy than ripping into one's erstwhile allies.
The CCG recommendations seem quaint in a paradigm-shifted world now dramatically changed, even in the few weeks since CCG announced them. They would have been more doable in the less charged days of the Obama administration when the emphasis in "frenemies" was on the former, rather than the latter, and in an atmosphere in which disagreements were aired in dialogues, not angry tweets and saber rattling.
Pedestrians walk along Wall Street near the New York Stock Exchange in New York, US, on October 1, 2018. /VCG Photo
It saddens me that China canceled this month's high level Security and Defense Dialogue with the US Defense Secretary Jim Mattis in light of Trump's trade war. It troubles me that a provocative near-collision in the South China Sea between a Chinese and US naval vessel came within a few meters of possibly igniting an unintended war with horrific consequences. Such actions seem to be the new normal.
Although I had no input to CCG's commonsense recommendations, they included a number that I have advocated previously including reviving the long-negotiated Bilateral Investment Treaty, as well as redefining the way trade surplus and deficits are computed to reflect "value-added" rather than the misleading final total cost of products that contain components from the world over due to the global supply chain.
Some other CCG recommendations included a bilateral intellectual property rights treaty; increasing US business participation in "Made in China 2025"; increasing cooperation in infrastructure development; and establishing a bilateral infrastructure investment fund.
Reading "Fear" made me very worried. Looking at the current Sino-US bilateral relations on almost every level challenges my optimism that these hardened positions will now outlast the craziness that is Trumpworld!
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