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By Philippe Legrain ADD COMMENTS

On a recent trip to Tokyo, Charlene Barshefsky, America’s trade representative, gave her hosts a wigging. She demanded concessions, threatening sanctions if Japan did not reflate, deregulate and curb steel exports. The Japanese shrugged. They have come to expect fighting talk from the woman they call “Dragon Lady”.

Trade tensions are rising fast in the wake of the Asian crisis. Thankfully, America is still booming, so firms are directing their exports there. But this makes Ms Barshefsky unhappy. America, she concedes, has to let in imports in return for access to foreign markets. However, she wants others, notably the Europeans and Japanese, to shoulder more of the “burden” of rising imports from Asia. This comes against the background of rows with Europe over beef, bananas and telecoms. Ms Barshefsky’s job should make her the natural champion of free trade in the country that has done more to promote trade liberalisation than any—and that is now calling for a fresh round of trade talks. Yet, because she is so determined to wring concessions out of her negotiating partners, trade’s champion could find herself not in trade talks but in a trade war.

Ms Barshefsky is a fearsome fighter. She cut her teeth at Steptoe & Johnson, a law firm in Washington, DC, where she was head of the international trade-law division. Her satisfied clients included Canada’s lumber industry, which she represented against the American government. After joining Bill Clinton’s trade team in 1993, she honed her negotiating skills in marathon sessions with the Japanese. “They will stay up night after night, and my feeling was, if they are going to stay up all night, so will I,” she recalls. Her colleagues nicknamed her “Stonewall”.

In 1995 Ms Barshefsky won acclaim for a deal she struck with the Chinese to clamp down on piracy of American software, music and videos. Admirers attribute her success to her tenacity, marvelling patronisingly at such toughness in a woman. In fact, the dogged attitude springs from her view of the world. “We expect foreign countries to provide the same level of access to us that we have provided to the world,” she proclaims. “You get what you give. It’s that simple. No free rides.” This is as good as seeing trade negotiations as a zero-sum game. No wonder she seems to regret each concession she makes.

A reputation for lawyerly toughness has served her well in Washington. In April 1996 President Clinton, who says “she is tough enough to bring tears to the eyes of a dead man”, gave her the top trade job. Even Republicans in Congress were impressed. They waived rules that bar from the job anyone who has lobbied for foreign governments.

As any good lawyer must, Ms Barshefsky has mastered her brief brilliantly. She rattles off figures and achievements with ease: America has signed over 260 trade deals since Mr Clinton took office. She memorises mind-numbing technical details that others neglect. Even so, Ms Barshefsky’s star has waned.

Despite her lobbying, Congress could not be persuaded in 1997 to grant the administration “fast-track” authority, which it needs to negotiate big trade deals. Critics say she is a great lawyer but a lousy politician. That is ironic, since she studied political theory at the University of Wisconsin (and considered doing a PhD in it before going on to study law). Somewhat unfairly, others have rounded on her for not having the president’s ear, unlike her predecessor, Mickey Kantor, an old friend of Mr Clinton’s. Rumour has it that on her appointment to the top trade job Ms Barshefsky asked Mr Kantor if she should write Mr Clinton a thank-you note. Mr Kantor smiled and replied that she was senior enough to pick up the telephone and call him. Nearly three years on, she still mentions the president’s name with awe.

Ms Barshefsky has certainly suffered from the perception that she does not have Mr Clinton’s full backing. But that is Mr Clinton’s fault. During her watch, trade has hardly featured on Mr Clinton’s radar screen, even before his present distractions. Previous experience has shown that it is only the president who can really twist arms on Capitol Hill to push through trade legislation. Indeed, Mr Clinton’s failure to win fast-track undermines his proposal, in this week’s state-of-the-union message, that America should launch a new round of world trade talks. Ms Barshefsky can more reasonably be faulted for sticking too narrowly to her brief. “Charlene is much too loyal to the president,” remarks an old friend. “She doesn’t use the margin of discretion available to her.”

But Ms Barshefsky’s biggest flaw goes largely unmentioned in Washington. That is perhaps not surprising, since she works in a country where lawyers hold sway. Her policy, like that of many of her predecessors, is based on a narrow, legalistic view of the world. It is about screwing concessions from other countries, rather than about the mutual benefits of free trade. It is about enforcing the letter of those 260-odd new agreements, at the expense of the bigger picture. It is about keeping clients, such as the steel industry, happy by picking fights, going to the brink and settling at the last minute, rather than finding ways to help consumers by opening American markets to trade.

Trade deals are a means to that end: they make it easier for countries to liberalise, and hence increase the prosperity of all. But for Counsellor Barshefsky, it seems, making and enforcing the law is an end in itself.

Posted 21 Jan 1999 in Published articles

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