When I first started in the trade law world, Japan was still the big threat everyone was worried about. Things have definitely changed since then. From a recent NY Times opinion piece, here's a theory as to why:
Japanese trade negotiators noticed an almost magical sweetening in the mood in foreign capitals after the stock market crashed in 1990. Although previously there had been much envy of Japan abroad (and serious talk of protectionist measures), in the new circumstances American and European trade negotiators switched to feeling sorry for the “fallen giant.” Nothing if not fast learners, Japanese trade negotiators have been appealing for sympathy ever since.
The strategy seems to have been particularly effective in Washington. Believing that you shouldn’t kick a man when he is down, chivalrous American officials have largely given up pressing for the opening of Japan’s markets. Yet the great United States trade complaints of the late 1980s — concerning rice, financial services, cars and car components — were never remedied.
Now, of course, trade conflict is all about China. Here's the latest, from the WSJ:
President Barack Obama plans to create a U.S. government task force designed to monitor China for possible trade and other commercial violations as part of a larger White House effort to get more assertive with Beijing this election year, people familiar with the matter said.
The group, called the Enforcement Task Force, will aim to enforce U.S. trade rules. Despite the generic name, officials said the group is specifically meant to target China. It will include officials from various government agencies, including the Treasury Department, the Commerce Department, the Energy Department and U.S. Trade Representative's office.
Mr. Obama is expected to announce the initiative during or around his State of the Union address later this month. The committee—and Mr. Obama's broader effort to be tougher on China over currency, market access and intellectual property rights—also are expected to be on the White House's agenda when Vice President Xi Jinping of China visits Washington next month.
Part of Treasury Secretary Tim Geithner's mission during a trip to Beijing on Tuesday and Wednesday is to discuss the administration's plans with China's leaders, officials said.
The formation of the task force has significant political implications for the 2012 election. It is a large plank in Mr. Obama's broader intent to challenge China more, an effort he telegraphed during a trip through Asia last November.
China has emerged as an important issue in the Republican presidential candidates' battle. Former Massachusetts Gov. Mitt Romney has argued the U.S. needs to get tougher on Beijing. Meanwhile, Mr. Obama's former ambassador to China, Jon Huntsman, who also is running for the GOP nomination, has urged more caution in the U.S. approach. The two sparred over the issue in debates this past weekend, with Mr. Romney criticizing Mr. Huntsman's service in the Obama administration.
Confronting China has cross-party appeal. Democrats, particularly organized labor, would like the U.S. to get tougher on Beijing. That stance also resonates among Republicans and business owners, who have expressed concerns about Beijing having an unfair economic advantage.
Should China hope for an economic catastrophe (as some people think is possible), in order to get some sympathy in trade matters?
