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The Trump administration has taken U.S. foreign economic policy in directions not seen since the establishment of the postwar liberal regime for international trade.  The US has been unprecedentedly critical of the WTO, sought to replace NAFTA with a new US-Mexico-Canada agreement, and cast the EU as a foe in trade relations while halting progress on the Trans-Atlantic Trade and Investment Partnership. But the most significant trade moves have targeted China and focused on the Asia-Pacific: opting out of the Trans-Pacific Partnership, criticizing Chinese policies and practices as unfair on issues ranging across market access, currency manipulation, coerced or illicit intellectual property transfers, industrial policy, import duties, government subsidies, and Chinese firms鈥� violations of US sanctions on third countries.  Initial rounds of tariffs from both sides and threats to escalate portended a possible full-blown US-China trade war as negotiations failed to move expeditiously toward a mutually acceptable deal.

The TPP has moved forward without the US, as the CPTPP with Japan in the leading role. The China-led Regional Comprehensive Economic Partnership is emerging, with overlapping membership and less demanding rules. China鈥檚 Belt and Road Initiative and the Asian Infrastructure Investment Bank may further change the regional economic and institutional landscape.  Alongside its more confrontational stance on trade, the US has pressed for a 鈥渇ree and open Indo-Pacific.鈥� What have been, and are likely to be, the regional impacts of recent US policy? What are the prospects for multilateral cooperation in the region?  Is the current US approach, associated with President Trump but with some roots in earlier periods, likely to change and, if so, with what effects? Join us for a discussion on the challenges ahead in dealing with the new trade realities and what it means for U.S. relations with Asia in particular.

Selected Quotes
 

David Dollar

鈥淣ow the rumors are that China is willing to open up financial services, auto, they鈥檙e talking about cloud computing, so I think there is potential to have some significant opening. Having said that, I would not expect it to be radical, China does do things gradually. I think they have been gradually opening up the economy, and the best prospect is they accelerate that somewhat, but I think it would be na茂ve to think that there would be radical change. Any of this opening is going to benefit everybody, you鈥檙e not going to open up to American firms, you鈥檙e going to open up to foreign firms and imports. So the whole regional economy will benefit and our partners would be very happy to see the U.S. make progress on market access.鈥�

鈥淧robably, this purchase program is not going to reduce the U.S. trade deficit. We can be pretty sure it won鈥檛 affect the overall U.S. trade deficit, that鈥檚 largely a macro phenomenon, but it probably won鈥檛 have the effect on the bilateral trade balance that we think. If you look at the last couple years, our imports from China are up 17% over the last two years. So as long as the U.S. economy is growing well, we Americans, we鈥檙e likely to keep importing from China. Unless there is a reactivation of the trade war, we鈥檙e going to be importing a lot from China. So even if we sell some tens of billions of dollars of extra products, we鈥檙e going to be importing tens of billions of dollars more.鈥� 

Meg Lundsager

鈥淭his administration seems in the U.S. to be focused on fair trade and I think that鈥檚 something everybody supports鈥� Now what has frustrated me the last couple of years is the U.S. has walked away from the Trans-Pacific Partnership and of course those countries have gone on on their own to form the agreement and we鈥檙e already seeing trade expanding among countries in Asia and the U.S. being cut out, so I think that has hurt the U.S. a bit.鈥�

鈥淲hen I look at the trade issues, the concerns the U.S. has are the same concerns many other countries have, whether in Asia-- Japan, Korea, others, Australia, or in Europe or Canada and we鈥檙e not using the WTO. The U.S. is very frustrated with the WTO鈥� but it鈥檚 an organization with binding rules in it and mechanisms for pursuing problems. And I think the U.S. should come back and work constructively to make it more effective and then you can use the WTO to band together when you have concerns...鈥�   

Michael Pillsbury

鈥淎 lot of administration spokesman have said, quite accurately I believe, that we are 90% of the way there. Then of course, the stock market goes up. Then another commentator will say 鈥榳ell, there are a few issues left鈥� and then the stock market goes down. So our markets are having a difficult time, as are our scholars, knowing what is the essence of this secret deal.鈥�

鈥淚f one [a trade agreement] is worked out successfully, if the enforcement mechanism starts to work, then we are looking much more toward a G2 kind of consensus about how U.S.-China relations will work. This has enormous implications for European Union, Southeast Asia, Japan- it鈥檚 a nightmare for many countries, India would be a good example. India declined to support the Belt and Road Initiative, they won鈥檛 attend the meetings. If they see a U.S.-China condominium for global governance, this leaves India alone and isolated unless it reassesses and changes its policy.鈥� 

Taeho Bark:

鈥淧resident Trump did not seem to trust regional trade agreements either, you know, that he announced the withdrawal the U.S. from the TPP right after he entered his office. However, President Trump showed his strong preference of using the bilateral approach based on the power of the U.S. economy. In any event, the point I鈥檇 like to make here is that a reason behind the U.S. trade conflict with China could be the fact that multilateral trading system of the WTO was not effective in dealing with unfair trade and investment measures.鈥�

鈥淲e should remember that WTO is the member-driven organization. Therefore, this time, all members must agree to make a firm agreement for fundamental reforms. Recognizing that not much life is left in the WTO. The minister conference, the highest decision making body of the WTO should find critical ways to achieve fundamental reforms of the WTO.鈥� However, again, we know that agreement should be made by consensus among 164 members, which would be almost impossible. Under these circumstances, forming a coalition of strong supporters of the multilateral trading system would be crucial.鈥�

鈥淎s we can see, the world trading system these days, no single system will dominate the global trade environment in the future, which is the reality we must accept. In other words, along with efforts to reform the multilateral trading system, regional, as what as bilateral trade agreements will be simultaneously pursued鈥� It will be important for major countries, developed or developing, should cooperate each other to maintain the stable global trading system through making different approaches complimentary among each other.鈥� 

Bradford Ward

鈥淚 think there鈥檚 again more recognition that these continuous dialogues of whatever name over many years have produced uneven at best results, no real fundamental changes. So all that鈥檚 to say that whether this administration goes on for two or six more years, I would expect trade policy at some point to deviate in tactics but not necessarily in the fundamental concerns that China is a primary economic challenge facing the United States going forward.鈥�

鈥淲e鈥檝e been talking about what companies have, how companies react. I think for countries, we鈥檝e got the TPP withdrawal, we鈥檝e got the Iran nuclear agreement, we鈥檝e got other agreements or understandings if you will, in a general sense that the United States is changing its mind about. And I think those have very, very long-term practical implications at the working level with diplomats, with trade people, as to 鈥榗an you convince someone in another country to support your idea, to support your concern with respect to, in this case in particularly, China.鈥�      

AGENDA

11:45Registration and lunch12:10Introduction and opening remarks12:15-1:45Panel I: Regional impact of the 鈥渢rade war鈥� David Dollar, Senior Fellow, John L Thornton China Center, Brookings Meg Lundsager, Public Policy Fellow, 乐鱼 体育 Michael Pillsbury, Senior Fellow and Director for Chinese Strategy, Hudson Institute Bradford Ward, Partner, King and Spalding Jacques deLisle, Director, Center for East Asian Studies and Stephen A Cozen Professor of Law, University of Pennsylvania Law School (moderator)1:45-2:00coffee break2:00-3:15Panel 2: Trade realities and prospects for cooperation Taeho Bark, Professor Emeritus, Graduate School of International Studies, Seoul National University Jacob Schlesinger, Senior Correspondent, Wall Street Journal Washington Bureau Wayne Morrison, Specialist in Asian Trade and FInance, Congressional Research Service Shihoko Goto, Deputy Director for Geoeconomics, Asia Program, 乐鱼 体育 (moderator)