Jamieson Greer on Trade with China and the Iraq War

In a recent speech, U.S. Trade Rep. Jamieson Greer offered the following thoughts on past U.S. government efforts to bring market economics to China:

Back in 2003 or 2013, international trade did not figure prominently in discussions about conservatism. Where it was a topic of discussion, it consisted of virtue-signaling comments about promoting economic freedom and exporting market economics to China, India, and other countries. Indeed, when George W. Bush was running for President, he proclaimed his broad agreement with President Clinton on totally liberalized trade, particularly with China. Then-Candidate Bush was effusive, saying:

“The case for trade is not just monetary, but moral, not just a matter of commerce, but a matter of conviction. Economic freedom creates habits of liberty. And habits of liberty create expectations of democracy.

…

I believe that trade serves the deepest interests of our country and advances the hopes of the Chinese people for a freer society. Our greatest export is not food or movies or even airplanes. Our greatest export is freedom. The people of China stand ready to receive it.”

We could be tempted to say in retrospect that this sentiment was quaint, but in reality, it was very damaging to our country and the conservative cause. So-called free trade has not brought democracy to China or anywhere else, nor has it led to peace. Bush’s hubris in attempting to bring democracy to Iraq was matched only by his expectation of bringing market economics to China – both quixotic misadventures that were incredibly harmful to our country, economy, and culture. I can say that, as someone who served in Iraq and deals with China every day.

At the outset, I want to note that the U.S. government has never practiced "totally liberalized trade" with China or anyone else. There was plenty of protectionism even before 2017. We can debate the precise level of protectionism, which can be a bit hard to characterize, but we have not been anywhere close to free trade.

But the main reason for this post is that I want to use Greer's remarks to make a point that I've brought up before: There was an opportunity after it joined the WTO in December 2001 to push China to become more market-oriented, but that avenue was not explored as much as it could have been.

Greer seems to be presenting the Iraq invasion and the push for bringing market economics to China as going hand in hand, but I would say they are more like alternative paths.

During the late 1980s and 1990s, the U.S. government negotiated hard with China to get binding international commitments on moving the Chinese economy in a market-oriented direction. By the time that deal was done and China was in the WTO, however, the 9/11 attacks had taken place and U.S. foreign policy had completely shifted its focus. Instead of pushing for China to be more market-oriented (or to protect human rights better), U.S. foreign policy was focused on the Iraq war and the broader War on Terror.

I do agree with what I take to be Greer's view, as set out in the speech, that the Iraq war was a mistake. However, I'm not sure many lessons have been learned from it and it's easy for me to imagine similar things happening again today.

Instead of more foreign policy adventures though, what if we shifted back to the 1990s focus? Could China be convinced to move in the direction of market economics today? I don't think anyone can have too much certainty about this, and it requires a lot of speculative analysis. Nonetheless, my view is that U.S. policymakers got distracted during the best moment for it and didn't push the issue hard enough at the WTO (aside from some safe WTO complaints, which were fairly successful but did not get at the core issues), and as an alternative to many things that are being done now, it seems worth pushing the issue harder and seeing how it goes.

Relatedly, there is a question as to whether bringing market economics to China could have led to improvements in human rights or democracy there. My instinct is to say maybe on the former and no on the latter, but on those issues I think it's a good idea to defer to China experts, who, in my view, should be consulted on these issues more than they have been.