Tag Archives: trade

Trump’s ASEAN Summit That Never Happened

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Thursday, March 5, 2020

By Greg Rushford

As I reported on January 18, foreign ministers of the ten ASEAN nations — the Association of Southeast Asian Nations — meeting in Bangkok the previous day, had tentatively agreed to accept U.S. President Donald Trump’s invitation to host a special summit for ASEAN’s presidents and prime ministers. As Trump had angered ASEAN leaders in recent years by refusing to attend their summits held in Asia, this appeared to be a welcome signal that the American president was now paying attention to the region.

Trump had insisted that the U.S.-ASEAN summit had to be in Las Vegas, on March 14, to accommodate his schedule. It turns out, however, that he has found something better to do that day than meeting Southeast Asian leaders—-but that’s getting ahead of a story of what (sadly) currently passes for American diplomacy in one of the world’s most dynamic regions. 

As the second week in March was less than two months away, experienced diplomatic eyebrows immediately shot up when Trump’s plans for a Vegas summit surfaced in Bangkok. The normal planning process for such events that involve synchronizing the schedules of so many top leaders takes at least five months of hard work, at the minimum. Trump was asking a lot of his fellow presidents.

Skeptical questions were asked. Would there really be time for the U.S. State Department’s experienced Asian hands to organize the logistics? What diplomatic agenda would State and the National Security Council in the White House be pressing? Why was Trump insisting upon such an unserious venue as Las Vegas — known for casinos, spas and the international jet set — as the venue? And again, did it have to be on March 14?

The skeptics were prescient. By the time the Vegas summit was announced, “it was already too late,” as one insider who asked not to be identified put it. The necessary logistics remained murky; until the last minute nobody seemed entirely convinced that the summit would actually happen. And it won’t. Last Friday, U.S. officials cancelled the event, citing fears of the spreading coronavirus. That appears to be a cover story, if a somewhat plausible one, given Trump’s well-known germaphobia. Still, the failure opens a window into how important diplomatic opportunities are being handled in Donald Trump’s Washington. Or mis-handled. 

First and foremost, there was never a serious diplomatic agenda for the summit. The State Department was largely sidelined. Inquiring reporters were referred, off the record, to the White House, which wasn’t talking. Even inside the White House, the National Security Council — which doesn’t have the professional staffing able to handle the complex logistics to put on such an event anyway — seemed to be also somewhat marginalized. 

The real action was in the White House office of Trump’s son-in-law, Jared Kushner. Kushner is the go-to guy for savvy foreign officials who have figured out how to pull the levers of power in today’s Washington, D.C. And the Kushner-Trump agenda, hardly for the first time, reflected a keen interest in private commercial dealings, not important U.S. national security interests.

Despite the information blackout, in Trump’s White House, people still talk, albeit sotto voce. So it was possible to piece together the general outlines of what was happening behind closed doors — or in this case, not happening — by applying a little old-fashioned journalistic shoe leather.

In short, Trump wanted just a generalized Saturday afternoon group meeting of the Southeast Asian top leaders, on March 14. That would have been followed by a group photo opportunity. (There appears to be no truth to the rumor that, in true Las Vegas spirit, the assorted presidents would have worn Elvis costumes.)  

Trump, according to multiple sources, wasn’t much interested in meeting privately with fellow Southeast Asian presidents on the sidelines of the summit. Apparently pressed by Kushner, Trump only bothered to schedule one private bilateral diplomatic meeting with a Southeast Asian president. That lucky leader was Indonesian President Joko Widodo (who is often referred to by his nickname, Jokowi). But even that meeting — which seemed to be close, but never quite firmed up — would have involved mainly Trump’s interest in private commercial transactions, not important matters involving foreign policy and mutual national security interests.  

One especially interesting commercial opportunity has caught Trump’s eye. Jokowi plans to move Indonesia’s capital from Jakarta, which is sinking into the sea thanks to global warming, to the wilderness of Borneo. This promises to be an estimated $30-plus billion construction business. One of Jokowi’s most senior officials, Luhut Pandjaitan, flew to Washington, D.C. last month to discuss this project (among others) with Kushner and his wife Ivanka Trump. 

According to a report in Singapore’s Straits Times, Luhut has told Asian journalists that Kushner had related that Trump very much “likes the idea of Indonesia moving its capital, with a commitment of creating a green city there, where only electric vehicles will be allowed on the roads.” The Straits Times’s article also revealed that Luhut had said that Kushner “wanted [the] Jokowi-Trump meeting to discuss details on this moving capital project.” 

There are other commercial transactions in Indonesia that the White House seems interested in. Perhaps the most interesting involves an undersea fiber-optic telecommunications cable from Singapore and Indonesia to California that will be financed by the U.S. International Development Finance Corporation. The IDFC has a healthy $60 billion in development funds to invest around the world, backed by the U.S. government. Its head, Adam Boehler, is a former college roommate of Kushner. 

To be sure, moving Jakarta’s capital is an attractive idea. And U.S. government financing for worthwhile telecommunications contracts could well be defended on its merits. But what business does a senior White House political adviser have in injecting himself, and the president of the United States, into such commercial transactions? This isn’t diplomacy. It’s deal making. 

And why would any American president’s keen interest in meeting the president of Indonesia involve talking about billions of dollars in future construction opportunities in Borneo — not serious matters of mutual diplomatic- and security importance?

It’s not difficult to think of important matters of state that a president of the United States might want to talk to his Indonesian counterpart about. They might exchange ideas on how Indonesia and the United States might work more effectively to counter illegal Chinese aggression in the waters of the China Sea. After all, those waters are positioned astride some of the world most important shipping lanes. Just because of Indonesia’s position om the map, that country will always be important to U.S. security interests.

Or they might want to talk about how to work effectively with the World Trade Organization’s ongoing negotiations to cut back government subsidies that lead to overfishing in the same South China Sea. Beyond that, Jokowi and Trump might well consider how to advance some mutually beneficial international trade-liberalization deals to enhance the flows of commerce throughout ASEAN? They might even talk about working to take more effective action about global warming, instead of simply looking for ways for private contractors to profit from such. 

Readers will already have noticed that taking effective action on global warming and liberalizing international trade flows are hardly Donald Trump’s strong suit. On U.S.-ASEAN trade, there is no American agenda.

Trump’s interest in Indonesia, put starkly, involves matters of money. Last August, the president’s son, Donald Trump Jr., visited Jakarta to talk up the Trump Organization’s two plush Indonesian resorts (one in Bali, and another a theme-park complex south of Jakarta). Donald Jr. told reporters that the Trump family had turned down “a lot of deals” since his father became president. Should such statements be taken at face value? 

To be sure, the Trumps are well-connected in influential Indonesian commercial and political circles. Trump’s Indonesian business partner, Hary Tanoesoedibjo, who chairs the MNC Group, is in tight with Jokowi. Hary’s daughter Angela Tanoesoedibjo is Jokowi’s deputy minister of tourism and creative economy. And when Donald Trump was inaugurated as U.S. president in 2017, Hary was there at the invitation of the new president.

As for the answer to the last question that ASEAN watchers have been asking: Why was Trump so insistent upon holding only a quick afternoon summit in Las Vegas on Saturday afternoon, March 14? Why weren’t there supposed to be any bilateral meetings on the sidelines (at least until Indonesia’s savvy Luhut buttonholed Jared Kushner)? 

Inquiring Asian diplomats were told simply that March 14 was the only date that fit the president’s schedule.

As I reported in January, March 14 is only three days before the Democratic presidential primaries in the key electoral U.S. states of Ohio, Illinois, and Florida. A photo opportunity with important Asian presidents would have allowed Trump to appear presidential, conducting serious diplomacy instead of mere politicking. 

Obviously, drawing the ASEAN leaders to Vegas, where the president has a hotel, would have been good for the Trump brand. And ten Asian presidents, prime ministers, and their entourages would have injected always-welcome cash into the Nevada resort industry in general. (The March 14 ASEAN event was supposed to have been held in the Westin Lake resort and spa in Henderson, a short drive from the action down on the Strip.)

Bringing money into Nevada is also important to Trump, who hopes to carry the state in this November’s presidential election. 

But there is another, more important, reason the weekend of March 14 was important to Trump. One of Trump’s biggest sources of campaign cash, gambling magnate Sheldon Adelson, will be in town that weekend. 

Adelson has pledged to fork over as much as $100 million dollars to help Trump be elected to a second term in the White House on November 3. Adelson’s other chief political interests revolve around his strong support for Israel.

During the weekend of March 13-15, the Republican Jewish Coalition has announced plans for top Republicans to convene for the RJC’s annual leadership meeting. It will be “a terrific weekend of politics, policy, and poker at the fabulous Venetian/Palazzo Resort and Hotel, on the Vegas Strip,” the group’s literature promises.

Sheldon Adelson is on the RJC board, which runs one of the most influential lobbies in the Republican Party. Adelson also owns the Venetian and Palazzo. And the weekend of March 13-15 will bring Jewish Republican activists “from across the country” to Vegas, the RJC’s website notes. 

And guess who’s speaking on March 14 to the Jewish Republicans at the Venetian? Donald Trump — who was not interested in spending much quality time with ASEAN presidents, some of whom are Muslims anyway — will be busy hanging out on the Strip with people he is really interested in.

Tickets for Trump’s appearance at the Venetian are $1,750 per person. But they are going fast, according to an RJC press release. 

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Trump’s War on the WTO

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Economic nationalism is a threat to world-wide—and American—prosperity.

by Greg Rushford

July 4, 2018, in The Wall Street Journal

President Harry S. Truman and Secretary of State George Marshall successfully pressed America’s war allies to create the General Agreement on Tariffs and Trade more than 70 years ago. Leaders across the globe, mindful of how economic nationalism in the 1930s had contributed to the devastation of World War II, wanted to open the world up again. The agreement focused on slashing of tariffs and other barriers to trade—bringing unprecedented prosperity to hundreds of millions of people. The GATT, which evolved into the World Trade Organization in 1995, became the world’s most successful international economic experiment.

But now economic nationalism and tariff wars are back. President Trump regards the WTO with disdain and would like to withdraw. He has ordered aides to come up with ways to inflict punitive tariffs on U.S. trading partners anytime he wishes—in clear violation of the system the WTO administers. And it’s not only talk. Mr. Trump and U.S. Trade Representative Robert Lighthizer have taken a wrecking ball to the legal machinery sustaining the global trade regime.

The White House is slowly killing the WTO’s seven-member appellate body, which is the institution’s court of final appeal in trade litigation. The ploy is a simple war of attrition: The U.S. has whittled the court down to four members by withholding the consensus to replace jurists when their four-year terms expire. Another vacancy in September will leave three—barely a quorum but not enough to handle the caseload. By the end of next year, only Hong Zhao, a veteran Chinese trade official, will be left.

Mr. Lighthizer, who declined to comment for this article, has left WTO diplomats in the dark as to what he wants. But that’s not difficult to figure: higher tariffs. Mr. Lighthizer has been a longtime advocate for the protectionist domestic steel lobby, which has often lost at the WTO.

Mr. Lighthizer argued in 1995 that it had been “a mistake” when the appellate body’s decisions were made binding on member countries. American presidents since Ronald Reagan had championed that reform. It meant that losing parties would have to bring trade policies into compliance with their WTO legal obligations or pay compensation. To economic nationalists like Mr. Lighthizer, this infringed on sovereign rights.

In a 2001 speech, Mr. Lighthizer raised eyebrows in the normally genteel trade bar by saying that he believed some WTO jurists “may be crooked, although I have no evidence of that.” Perhaps due to such intemperance, his 2003 campaign to become a WTO jurist was rebuffed. Now he can exact revenge.

Mr. Lighthizer’s gripes about judicial overreach could find some support—if it weren’t for his bullying. The WTO’s negotiated trade agreements, subjected to rounds of compromise, include imprecise legal obligations. Stuck analyzing diplomatically fudged language, the appellate body has been forced to fill the gaps by applying enlightened international legal theories.

“There are issues that governments have chosen not to raise in negotiations in the hope that they could obtain their goals through litigation at the WTO, even though they knew what they sought had never been agreed to by the other members,” Washington trade lawyer Terrence Stewart wrote last year. It’s a legitimate concern, but judicial overreach still is in the eye of the beholder.

Despite Mr. Trump’s assertion that the WTO has been “a disaster” for the U.S., Washington has won 85% of the 117 WTO cases it has brought against foreign trading partners. Japan complained in 2003 that WTO jurists had stretched the law by determining that Japanese health officials used phony science to ban American apples.

The real U.S. gripe is that foreign governments have won most of the 145 cases that they have brought against American protectionist policies. Mr. Lighthizer’s steel clients have screamed the loudest whenever jurists in Geneva have found legal hanky-panky in the way U.S. antidumping officials hit foreign competitors with tariffs. This is fodder for Mr. Trump’s base.

The Democratic Party has its share of protectionists too. In 2011 President Obama’s trade office, cloaked in secrecy, blocked the appointment of Washington trade lawyer Jennifer Hillman to a second term on the appellate body. Ms. Hillman was subjected to a whisper campaign suggesting her vote was not considered “reliable.” Translation: She was too intellectually honest to tilt her legal determinations in the White House’s favor. This pleased the steel lobby.

In 2016 Mr. Obama’s trade advisers blocked Seung Wha Chang, a South Korean legal scholar, for a second term on the appellate body. Mr. Chang had ruled against the U.S. too often, especially in cases involving steel and aluminum. The Koreans complained bitterly.

Tim Reif, the Obama trade lawyer whose fingerprints were all over the moves against Ms. Hillman and Mr. Chang, is currently advising Mr. Lighthizer. On June 7 he was nominated by President Trump to fill a vacancy on the U.S. Court of International Trade. As a federal judge, Mr. Reif will enjoy lifetime tenure. He declined to comment.

The debate over the WTO isn’t going to be resolved by lawyerly tinkering. The real problem rests in the return of economic nationalism. Both political parties would be well-advised to consider the wisdom of Truman and Marshall. They understood that true national-security imperatives meant resisting protectionism.

Mr. Rushford edits the Rushford Report, an online journal that tracks trade politics.