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Dysfunctions Last Updated: Dec 6, 2018 - 11:52:36 AM


The Art of the Underwhelming Deal
By Alex Shephard, New Republic, December 4, 2018
Dec 6, 2018 - 11:51:06 AM

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Trump touts agreements with foreign leaders as historic accomplishments, but they're just rebranded versions of the status quo.

Nine months ago, President Donald Trump brushed off growing criticism of his escalating trade war with China and a host of traditional American allies. “When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with,” he tweeted, “trade wars are good, and easy to win.”

In recent days, after a “highly successful” working dinner with Chinese Premier Xi Jinping at the G-20 summit, Trump has all but declared victory in the trade war. On Saturday, he described the potential agreement as “one of the largest deals ever made,” and tweeted on Monday:

Trump’s version of events differed substantially from the White House’s version, and from reality. As Vox’s Jen Kirby pointed out, the potential agreement is “more of a trade-war time out” than a resolution of the issues that led the United States and China to this point. Trump has simply offered to delay raising an additional $200 billion in tariffs; the two countries have 90 days to come to an agreement. In a cautious statement, the White House noted that China had agreed to purchase “a not yet agreed upon, but very substantial” amount of American products in order “to reduce the trade imbalance between our two countries.” This is probably good news for both countries and the suddenly sputtering global economy, but it’s nothing close to the success that Trump is claiming.

This fits a familiar pattern. Trump ratchets up hostilities with foreign governments in an attempt to negotiate (or renegotiate) deals that are more favorable to the U.S. But then he agrees only to superficial changes, which he nonetheless presents as historic wins that only he could accomplish. It’s a reminder that his real skill as a businessman—and now a politician—was never in making deals, but in marketing himself as a dealmaker. While that proved effective on the campaign trail in 2016, it may come back to haunt him in 2020.

Trump began his presidential campaign by touting his business experience as proof that he could improve trade deals. “Free trade can be wonderful if you have smart people [negotiating], but we have people that are stupid,” he said in his announcement speech in 2015. “When was the last time anybody saw us beating, let’s say, China in a trade deal? They kill us. I beat China all the time.”

While campaigning for president, Trump routinely cast himself as the world’s greatest negotiator—someone who would use the techniques that made him rich to benefit the country. “I have made billions of dollars in business making deals,” he said while accepting the Republican nomination for president in 2016. “Now I’m going to make our country rich again. I am going to turn our bad trade agreements into great ones.”

One of Trump’s first acts as president was an executive order withdrawing the U.S. from the Trans-Pacific Partnership. Then he went after NAFTA. He picked diplomatic and personal fights with the leaders of both Mexico and Canada, bickering with their respective leaders about immigration and trade, respectively. (Trump went as far as to refer to Canada’s prime minister, Justin Trudeau, as “weak” and “dishonest” at a G7 meeting in June.) But he also used tariffs, hitting Canada and Mexico on steel and aluminum in particular, in an effort to draw them to the table. “Without tariffs, we wouldn’t be talking about a deal,” he said after the new deal was announced in October. “Just for those babies out there that talk about tariffs—that includes Congress, ‘Please don’t charge tariffs’—without tariffs, we wouldn’t be standing here.”

But the United States-Mexico-Canada Agreement (USMCA), announced in September, mostly just tweaks NAFTA. It doesn’t do much to alter its corporate-friendly framework or to help workers or consumers, as Trump promised a renegotiated NAFTA would do; instead, the deal largely benefits existing industrial titans at the expense of labor, with only auto workers receiving a raise (though car companies have already found a loophole to avoid raising wages).

“Overall, the changes from the old NAFTA are mostly cosmetic,” the Brookings Institute’s Geoffrey Gertz wrote shortly after the deal was unveiled. “After a year and a half of negotiations, the three parties are going to end up with a new trade deal that looks remarkably similar to the old NAFTA.” Facing resistance from Democrats and some Republicans, Trump has threatened to terminate NAFTA in order to pressure Congress to approve the deal.

The situation with China is somewhat analogous. While Trump’s trade war was partly intended to prop up U.S. industry, its primary purpose was to punish the Chinese for unfair trade practices, particularly the use of American intellectual property by Chinese corporations. To do business in China, many American companies are often required to hand over trade secrets, which are then provided to Chinese companies providing similar services. This costs U.S. companies as much as $50 billion a year. “China has engaged for a very long time in the theft of our intellectual property as well as practices like forced technology transfer,” Trump administration trade adviser Peter Navarro told CNBC earlier this year. “We’re hopeful that China will basically work with us to address some of these practices.”

“China has to open up their country to competition from the United States,” Trump said last week. “Otherwise, I don’t see a deal being made.” But in the interview in which he made those comments, Trump was unable to offer specifics for how China should “open up,” beyond generalities about taking down “barriers.” But that does not seem to be on the verge of happening—and it certainly seems impossible to resolve such a vague condition in 90 days. Instead, the White House is touting Xi’s willingness to “reduce the trade imbalance,” which is indeed massive. That’s something, but it’s nothing close to the world-historical accomplishment Trump is suggesting.

Two years into his presidency, it looks as if our major trade deals with Canada, Mexico, and China will have changed substantially less than Trump has repeatedly promised. He has followed a similar playbook in other diplomatic negotiations. He kicked off relations with North Korea by threatening nuclear annihilation; he then settled for a deal that contained, according to Global Zero’s Jon Wolfsthal, “no details, no specifics, and kicks any commitment to concrete steps down the road.” (Trump insisted that Kim Jong-un was “de-nuking the whole place. It’s going to start very quickly. I think he’s going to start now.” But North Korea reportedly has continued its nuclear program.) With Iran, Trump ripped up the nuclear deal in the hopes of renegotiating with the country—which hasn’t happened, leaving the United States to apply economic and military pressure.

The wide gap between Trump’s boasts and reality is due largely to the fact that he’s uninterested in the details of policy-making, yet demands a central role in negotiations. So he looks for ways in which he can sell the status quo as a victory. Thus far, he’s largely done so without suffering much political damage, perhaps because he has spent his first two years skating from crisis to crisis. But as the focus in Washington, and America broadly, shifts toward 2020, Trump looks increasingly vulnerable. He can no longer run on his record as a businessman. He will be forced to defend his first term in office, including the merely rebranded versions of the deals he once decried as terrible for America.


Source:Ocnus.net 2018

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