By Greg Rushford

Manila, Philippines — It’s past time to sound some national security alarm bells. The Philippines, America’s oldest treaty ally in the Pacific, has been facing economic and military pressures from China. Beijing’s bullying has been intensifying gradually for more than thirty years. The hard truth is that the Chinese are winning.

The PLA Navy — clearly contrary to international law, as determined by an international tribunal in The Hague in 2016 — has been preventing Philippine fishers from casting their nets in the South China Sea. Chinese predatory fishing in Philippine waters has been devastating to corals and other marine life, while also causing Philippine fish stocks to drop more than 60 percent. And now, adding insult to injury, China has been exporting Philippine fish it has stolen — back to the Philippines.

The same PLA Navy has been preventing the Philippines from developing much-needed oil and gas resources in Philippine waters — notably including Reed Bank, which is within the Philippines’ continental shelf and is believed to have the energy resources needed to keep the country’s electricity grids running. Xi Jinping, the general secretary of the Communist Party of China, has given his coast guard permission to shoot to kill any Philippine exploration vessels that interfere with China’s ambitions to develop Reed Bank’s resources. Former Philippine Supreme Court Justice Antonio Carpio observes that Xi’s bullying “clearly violates international law.”

Xi is essentially demanding that Philippine President Ferdinand Marcos Jr. negotiate away his country’s energy independence — at gunpoint. As Eduardo Mañalac told me, because of the political risk associated with the Chinese military intimidation around Philippine oil-exploration fields, no major western market-oriented oil company will touch the Philippines. Xi is basically asking Marcos to agree to negotiate only with Chinese state-owned drilling concerns which do not pretend to adhere to international standards of financial transparency.

Mañalac is a respected former president of the Philippine National Oil Company, and a former senior official in the Philippines’ energy department. His concerns over the corrosive effects of Chinese corruption are well-taken in leading international energy circles. And in Manila’s legal circles, the scent of scandal is in the air, fueled by pending civil litigation alleging high-level governmental cronyism, and also criminal complaints alleging graft.

If Xi Jinping succeeds in intimidating the new Philippine president, who has only been in office since June, China will develop and control a key part of the Philippine energy sector. The Philippines will have been shamed — and residents of cities like Manila will have Xi to thank, every time they turn their lights on.

It’s worth looking back briefly at how one of America’s most important security allies has landed in such a predicament. Last month, I spent two intense weeks of mostly off-the-record talks with the usual journalistic sources, ranging from ordinary citizens who chafe at Chinese bullying to the higher echelons from the worlds of national security, diplomacy, politics, law, and business. The gist of what I picked up points to one bottom line: a lack of necessary political will at the presidential levels in both Washington and Manila, dating to the early 1990s.

What Happens when the Yankees Really Do Go Home

In 1991, the United States Air Force and Navy evacuated the large U.S. bases at Clark Field and Subic Bay. Volcanic eruptions from nearby Mt. Pinatubo that covered both bases in ash were the immediate impetus for the pullout. But the real reason involved insular-looking Philippine domestic politics. That, plus American stubbornness during endless negotiations over the usual suspect: money.

Then-President Corazon Aquino and some of her aides who wore anti-American chips on their shoulders had made it plain that Uncle Sam just wasn’t welcome anymore. And the Yankees, fed up with years of negotiations over basing rights that went nowhere, were happy to go home.

While over the years, the Philippines has succeeded commendably in turning the former U.S. bases into one of the most thriving hubs of economic growth in Southeast Asia. But watchful military eyes in Beijing soon perceived that the Philippines was left defenseless.

In 1995, the Philippines discovered that the Chinese navy had seized Mischief Reef, a tiny speck in the South China Sea that is part of the Philippines’ continental shelf. Chinese officials insisted that that they were just erecting fishing shelters. Manila and its neighbors in ASEAN fussed for awhile, but basically shrugged.

The PLA Navy on the Move

Visiting Manila in 1998, I saw Philippine reconnaissance photos that showed that the Chinese had erected military features on Mischief Reef, gun turrets, and such. When those photos hit the Manila papers, there was a public outcry (at least involving ordinary Filipinos, if not so much business elites with their eyes on doing business with a rising China).

Meanwhile, officials in then-President Bill Clinton’s State Department were not much bothered. Don’t worry: China lacks the resources necessary to project real military power, I was told.

The Clinton White House was busy extending a helping hand to a mainland China that wanted to get back on its feet and join the market-oriented global economy, after decades of economic mismanagement by the Communist Party of China. Clinton saw a potential peaceable economic partner, not a strategic rival-in-waiting.

From 2001 to 2008, the drift continued. President George W. Bush, his hands full with Iraq and Afghanistan, never seemed to focus on the future dangers associated with Chinese mischief in the South China Sea.

As had his predecessor Clinton, Bush welcomed China into the World Trade Organization in 2001. Inside WTO headquarters in Geneva, China quickly assumed the mantle of a responsible participant in multilateral negotiations, including those aimed at persuading governments to slash subsidies to their fishing fleets that were engaged in illegal fishing. But on the high seas, the Chinese fishing fleets kept doing ever more environmental damage. By 2016, marine biologists were warning that the South China Sea’s fish stocks were heading toward collapse.

An American President Blinks

By the time President Barack Obama, who sat in the Oval Office from 2009-2016, completed his eight years in office, the PLA Navy had taken near-total control of the South China Sea.  

The PLA Navy, of course, had its eyes on much more than fish. The story is now as familiar as it is disconcerting: how the Chinese created artificial islands out of white sand and coral in Philippine Exclusive Economic Zone. What were once half-submerged specks in the sea are now modern Chinese naval and air bases. Mischief Reef, Fiery Cross, and Subi Reef have hardened runways for jet fighters, sophisticated radars, jamming equipment, lasers, anti-aircraft missile launchers, and more.

The United States Navy, which specializes in conventional surface warfare — but isn’t so adept at waging political warfare — watched America’s former military dominance of the South China Sea slip away. Beijing’s weapons of choice were a mixture of the usual sleight-of-hand: propaganda and disinformation proclaiming Chinese good intentions, sand dredgers, and coast guard ships that were accompanied by swarms of maritime militia “fishing” fleets. 

While all this was underway, Xi assured China’s neighbors that his military would not weaponize the South China Sea. That was, of course, a lie.  But the disinformation worked. As Seth Jones has written, China took the South China Sea “without firing a shot.”

Obama watched all this happen. He promised senior Philippine officials I’ve spoken with that America would not just stand idly by. But that’s what he did.

Washington Starts to Pay Attention

It wasn’t until 2020 that an American secretary of state, Michael Pompeo, working with David Stillwell, a respected Asian hand who headed State’s East Asian Affairs bureau, stated publicly that the United States recognized that the Chinese maritime aggression was in violation of international law. Last month in Manila, I was reminded several times how welcome that statement was. The State Department had signaled that America was starting to get serious about protecting its friends in the Pacific.

Indeed, in April 2020, the U.S. Navy helped Malaysia fend off Chinese Coast Guard and maritime militias, which were trying to bully the Malaysians out of exploring for oil and gas in Malaysia’s Exclusive Economic Zone.  This is still being talked about in Manila’s national security circles.

As Philippine investigative reporter and author Marites Vitug has noted approvingly, “three American warships and an Australian frigate conducted a joint exercise near the site” of Malaysia’s exploration activities. Vitug also pointed out that when faced with such resolve, the Chinese intruders backed off.

I still cannot report that America has yet put into operation what could be called a truly sophisticated political-military-diplomatic maritime strategy. But some steps in the right direction have continued on President Joe Biden’s watch.

Last month, to cite just one of several recent encouraging developments, U.S. Ambassador to the Philippines MaryKay Carlson announced that “the United States has now made available $100 million in foreign military financing in part for the Philippine military to use as it wishes.”

Searching for Presidential Political Will in Manila

But how does one help an ally who lacks the political will to defend its own sovereignty? Former Philippine President Benigno Aquino, Jr. clearly had the necessary determination to stand up to Chinese bullying. In 2013, Aquino filed a challenge in The Hague, asserting that Chinese aggression in the South China Sea violated Beijing’s obligations as a signatory to the United Nations Convention on the Law of the Sea. And on July 12, 2016, Aquino’s move became a resounding success, when an UNCLOS tribunal ruled that China had acted illegally. It was “an overwhelming victory for the Philippines,” as Greg Poling noted in his recent, very well-received book, On Dangerous Ground.

“The judges agreed that China had illegally destroyed the marine environment through clam harvesting, intentionally created the risk of collision [with] foreign ships, and prevented the Philippines from accessing the resources of its EEZ and continental shelf,” Poling wrote.  Moreover, “they berated China for building artificial islands while the arbitration was underway.”

But there was one problem with the tribunal’s finding: it was issued twelve days after Rodrigo Duterte had succeeded Aquino as president. And it turned out that Duterte, a man who enjoyed projecting an image of a tough guy in the political arena, wasn’t so tough after all when it came to standing up to bullies in Beijing. The Philippine “strongman” refused to enforce his country’s legal victory — leaving Philippine fishing communities hanging, and potential oil and gas exploration, especially in Reed Bank, subject to the PLA Navy’s intimidation.

Just one 2018 press release issued by the historically weak Philippine Coast Guard showed the atmosphere of subservience that Duterte nourished.

Duterte and Xi Jinping had signed a maritime cooperation agreement, the release noted. So the Philippine Coast Guard had gotten busy making friends with China’s Coast Guard.  Translation:  that meant that the two coast guards bonded when they got together in Guangzhou.  Readers who have ever experienced Chinese hospitality will have already imagined the partying and entertainment.

Afterwards, the Philippine Coast Guard issued a press release that celebrated its fraternal ties with the same Chinese Coast Guard that had taken control of Philippine fishing grounds. “The two sides noted the positive outcomes of the bilateral relations and expressed their willingness to further deepen cooperation by conducting port visits, joint exercises, personnel exchange and training, and utilization of hotline communication,” the Philippine press release enthused. 

The Philippine Coast Guard now has new leadership said not to be subservient to China. Whether that’s true or not, a Coast Guard spokesman told me last month that he was not authorized to talk about Chinese maritime aggression.

Political Risk

Meanwhile, on Duterte’s watch, Philippine government officials close to him allegedly pressured two American oil majors, Shell and Chevron, to sell their shares in the Philippines’ Malampaya gas field to a crony of Duterte’s who has a reputation of being pro-Chinese. This was “extremely suspicious,” notes Eduardo Mañalac, the former president of the Philippine National Oil Company.

Malampaya is important for two reasons. It supplies perhaps 40 percent of Manila’s electric grid. And it is running out of gas reserves, which makes future exploration on Reed Bank, and elsewhere very important.

Mañalac is not the only reputable Philippine critic of the Malampaya sale. Reuben Torres, a well-regarded former executive secretary to former Philippine President Fidel Ramos, is pressing litigation that alleges that the transaction was of dubious legality. 

And the Philippines’ Office of the Ombudsman is reported to be looking into separate charges that the Malampaya transaction was criminal. 

Whatever the truth, the whiff of political risk is hanging in the political air that Ferdinand Marcos, Jr., the new Philippines president known better as “Bong Bong Marcos,” has inherited. The message to international oil majors is that Philippine energy sector is tilted in favor of Xi and the PLA Navy. Such a lack of a level playing field explains why only the Chinese government has expressed interest in exploring for oil in Chinese-controlled Philippine waters.

So how will this story end? The answer depends upon how Bong Bong Marcos responds to the bullies from Beijing.  As Greg Poling has observed, while the Chinese have been winning, they haven’t yet “won.”  

I believe that despite the previous years of mistakes in Washington, involving both Democratic and Republican presidents, the new Philippine leader will have America’s backing — if he genuinely wants it.

Stay tuned.

July 16, 2022

Foreign affairs specialists will have seen various headlines in recent years suggesting that some American Republicans — Putin admirers like Donald Trump and Tucker Carlson are usually the first national names to be mentioned — believe that Democrats like President Joe Biden are greater threats to U.S. national security than Russia’s Vladimir Putin.

And earlier this month, the Brookings Institution turned in an analysis of recent national polling data suggesting that more Democrats than Republicans are prepared to keep on providing military aid to help Ukrainian President Volodymyr Zelensky defend his country from Putin’s bloody and unprovoked invasion.

We’ll get to that big-picture analysis. But first, a closer look at one small community in rural Virginia provides some insights into changing attitudes towards Russia that are playing out at grassroots levels of American politics.

Rappahannock County, Virginia, where I live, is nestled in the foothills of the Blue Ridge Mountains some 70 miles west of Washington, D.C. Our county is roughly the same size as Singapore, where the comparison ends. Singapore has skyscrapers and 5.7 million people. Rappahannock has idyllic country roads, lovely mountain views — and only about 7,400 residents, the majority of whom vote Republican.

This is Trump country. While the former president did not carry Virginia overall in 2020 in his losing re-election bid, he easily beat Joe Biden here in Rappahannock, 54-44 percent. In the 2016 presidential contest here, Trump thoroughly trounced Hillary Clinton, 59-40 percent. No Democratic presidential contender has carried Rappahannock in this century. Barack Obama came the closest in 2008, losing narrowly to Republican John McCain, 51-49.  

But when it comes to foreign affairs — notably concerning the importance of countering Vladimir Putin’s dreams to restore the Russian empire by force —  it appears that Rappahannock County Republicans are no longer the party of John McCain. McCain stood against authoritarians like Russia’s Vladimir Putin (and Donald Trump).

Our local Republican congressman has voted against providing military aid to help Ukraine defend itself from the Russian invaders. A Rappahannock lawyer has been flying the Russian flag —and the top Republican in the county won’t comment on whether Republicans should cheer or boo that. (Another local resident has been displaying a sign in his front yard that says F*ck Biden. Again, our local Republican chairman — who is also a Baptist deacon who teaches Bible classes — declines comment on whether Republicans should keep their mouths shut when faced with such indecency.) 

Even some prominent local Republicans who don’t admire Putin in the slightest — and consider him a dangerous threat — have said they believe that Joe Biden is the more immediate national security threat to America.

Still another current Republican candidate for Congress, a decorated Navy hero and a graduate of Annapolis, says that he is Joe Biden’s “worst nightmare” — but declines comment on whether he would be Putin’s.

That’s a mouthful. Let’s digest this more carefully, one grassroots bite at a time.

Waging culture wars on the Pentagon

Rep. Bob Good, the self-styled Biblical conservative who represents Rappahannock County in Virginia’s sprawling 5^th congressional district, was one of 57 House Republicans who voted in May to deny the Biden administration’s request to provide an additional $40 billion in urgent military aid to Ukraine. Good was joined by such House members from the extreme-right wing of his party as Reps. Marjorie Taylor-Greene (GA), Lauren Boebert (CO), Matt Gaetz (FL), and Jim Jordan (OH). On the other side of the Hill, eleven Republican Senators from the nationalistic wing of the party also voted to pull the plug on Zelensky, including presidential wannabees Rand Paul (KY) and Josh Hawley (MO).

Good, an ardent America Firster, justified his anti-Ukraine vote by blaming “the Biden-Pelosi America-last agenda.” The Democrats, he said, “are ignoring the many crises plaguing our country, including family budget-busting inflation, supply chain shortages for baby formula and other essentials, surging violent crime in our cities, and millions of illegals trafficking across our Southern Border.”

Last week, Good voted — not for the first time — against the annual National Defense Authorization Act. NDAAs are at the core of congressional support for America’s national security fundamentals; without this legislation, the Defense Department could not function. The Pentagon could not support American troops and American weapons systems worldwide. This Fiscal 2023 NDAA bill that Good refused to support also authorizes more military support for Ukraine.

Good’s basic frame of reference when addressing U.S. national security priorities seems to be rooted in his enthusiasm for fighting America’s culture wars. He is outraged that U.S. military leaders keep insisting upon the importance of vaccinating “our men and women in uniform.” He also believes the top brass are intent upon brainwashing — there is no softer way to put it — American troops through misguided “woke indoctrination” on racial issues. And Good is further outraged over Defense Department analyses that point to climate change as a serious national security threat.

Flying foreign flags

Driving along our country roads, one sees that Rappahannock County residents, as in many other rural communities across the United States, are displaying an impressive number of blue-and-yellow Ukrainian flags. Such indications of support come from local Republicans and Democrats who are united in their opposition to Russian aggression.

But conspicuously, along one of our charming roads where three scenic rivers converge, one well-known Rappahannock lawyer has been flying a Russian flag.

Lawyer David Konick has been anything but shy about publicly supporting Putin’s reasoning on why Russia has waged war on Ukraine.  Hey, it’s a free country! Konick enjoys a reputation as a skilled advocate, and as a man who relishes taking no prisoners when debating with those who have differing views. Despite such acrimony, though, Konick brings a valuable insider’s perspective to the debate. (I enjoy reading his online postings, as they provoke thought, which is what free speech is supposed to do.)

Notwithstanding, the point here is that traditionally, the leaders of the party of Dwight Eisenhower and Ronald Reagan would have been quick to take sharp issue with Americans who would fly the Russian flag.  

Not the Republican Party of Rappahannock County, it seems. It’s chairman, Terry Dixon, refused repeated requests to say which side he thinks good Republicans should be rooting for: Russia or Ukraine.

Dixon also ignored questions asking about the national security logic driving Rep. Good’s vote to deny that $40 billion in additional military aid to Ukraine.

Nor did the Baptist deacon respond to questions about the angry Rappahannock neighbor who has been displaying “F*ck Biden” and “Let’s Go Brandon” signs on a village thoroughfare close to several local churches, including his own. (The offensive signs, at least, do not appear to have been displayed on Sunday mornings.)

Who’s more dangerous to America, Putin or Biden?

Even more traditional prominent Rappahannock Republicans who clearly are no admirers of Vladimir Putin seem to have more important concerns.

“America has three extremely dangerous enemies: The Chinese Communist Party. Vladimir Putin, and Joe Biden,” according to an online posting by one of Rappahannock County’s most well-known Republican opinion leaders. But “right now, Joe Biden is doing the most damage to America and Americans,” she contends.

Those were the words of Demaris Miller, whose husband Jim served as Ronald Reagan’s director of the Office of Management and Budget. She holds a PhD in psychology — and clearly doesn’t think much of Joe Biden’s psychological makeup.

Miller and local lawyer David Konick — the neighbor who supports the Russian side of the security equation — have at times exchanged sharply differing views on Rappnet, our local online community discussion forum that is an excellent place to try to understand local Republican attitudes.

(I’ve been monitoring Rappnet, with the consent of its administrator, since shortly after the January 6, 2021, Trump riots on Capitol Hill. It can serve up some pretty raw local opinions from the backwoods, such as those from one conservative gentleman who dismissed Central American children desperately trying to cross the U.S.-Mexican southern border as “wetback slime kids.”)

Miller told me that despite the appearance of acrimony, she and lawyer Konick remain “very good friends” As for “the sparring between us,” she said in one e-mail, “it is not as acrimonious as it seems to those who do not really know us. There is no real rancor there.”

In Miller’s view, while Putin is a far greater danger to America, meanwhile President Biden has “gutted our National Defense while continuing the Obama policy of weaponizing the IRS and the Justice Department against those not loyal to the Democrat party.”

In another posting, Miller contended that “Joe Biden never cared about anyone except his own power, bank account, and the Biden Crime Syndicate that made it all possible.” Since Biden’s earliest days in the presidency, Miller has also voiced her opinion that the “senile” American president is controlled by “a secret cabal” in the White House. She stands behind those sentiments.

Hung Cao to the Rescue?

A retired U.S. Navy Captain named Hung Cao is running in the forthcoming November mid-term elections to become Rappahannock County’s next Republican congressman. (Thanks to redistricting aimed at eliminating the undemocratic consequences of Bob Good’s 5^th District, where the odds have been heavily gerrymanderd in favor of Republican candidates, Rappahannock has been moved to Virginia’s 10^th congressional district. The tenth district includes some heavily populated suburban areas now represented by a Democrat, Jennifer Wexton, who lives in one of those adjacent counties. It looks to be a tight race.)

Cao is a recently retired U.S. Navy captain who says he was motivated to get into politics after watching President Biden’s bungled withdrawal from Afghanistan.

Cao certainly has a most admirable life story. His family escaped from South Vietnam shortly before the communist takeover in April 1975. Armed with nothing other than his native intelligence and a driven desire to succeed in his new country, Cao went on to graduate from the U.S. Naval Academy at Annapolis. A Navy diver, he served with distinction in special-forces operations during a 25-year career — earning a chest-full of combat ribbons. His is the classic American immigrant success story.

Healing divisions, or exploiting them?

Cao — who declined to be interviewed for this article — has said that if elected, he would work to heal America’s divisions, as his hero Ronald Reagan once did. But the shrill tone of Cao’s campaign literature suggests otherwise.

Basically, Cao has been running against imaginary Democrats who don’t love their country. “My father was on the Communist Party’s kill list, but America welcomed him with open arms,” Cao declared in one recent fundraising pitch. “I am forever in debt to America, and I won’t let the country I owe my life to go down the same path as the communist horror I left behind.”

Cao did not respond to my written questions concerning whether he agreed with congressional Republicans like Bob Good who have voted to pull the plug on additional military assistance to Ukraine.

The closest answer to that question I was able to find in an extensive public record search was this ambiguous statement Cao recently posted on Twitter: “Biden economic advisor says American families should continue suffering with high gas prices to protect the liberal world order. Are you kidding me?”

To be sure, rising inflation is nothing to kid about, especially here in rural America where it can cost workmen well over a hundred dollars just to fill the tanks of their trucks. And nobody denies that the higher energy costs that are driving that inflation are part of the price for American support of Ukraine’s defense.

So far, as Brookings analyst Shibley Telhami wrote on July 5, most Americans are willing to pay that price, if that’s what it takes to draw the line against Russian aggression against its European neighbors.

But Telhami pointed to recent national polling that indicates there is a growing political divide. “There are substantial differences in the degree of preparedness to pay a price for supporting Ukraine between Democrats and Republicans, and the gap between the two is slowly growing, with Democrats expressing much greater willingness to pay a price,” the Brookings scholar wrote.

“While 78 percent of Democrats are prepared to see higher energy costs, only 44 percent of Republicans say the same; while 72 percent of Democrats are prepared to pay with higher inflation, only 39 percent of Republicans say the same.”

Democrats who support Ukraine

For readers who will be wondering where the Democrats stand on supporting Ukraine, there isn’t much news to report. The incumbent Democratic congresswoman from the 10^th district, Jennifer Wexton, has voted consistently to support military assistance for Ukraine.  Her stance does not seem to have been controversial in her district’s Democratic circles. (Despite Hung Cao’s fundraising appeals, Wexton does not hate America. Readers will just have to trust me on this!)

In the congressional district next door, Democrat Abagail Spanberger, a respected former CIA officer, is considered to be one of her party’s bright lights when it comes to national security.

The political problem for congressional moderates like Wexton and Spanberger is that the forthcoming congressional elections are hardly shaping up as favorable to socially liberal candidates who don’t offer red meat to angry constituents.

Back to the Political Future?

In the olden days before America became so bitterly divided, two of Rappahannock’s most well-known residents were James Kilpatrick and Eugene McCarthy. Republican Kilpatrick was a very conservative newspaper columnist. Democrat McCarthy was a very liberal U.S. senator from Minnesota who in the 1960s challenged President Lyndon Johnson for his (mis)conduct during the Vietnam War.

But the two political opposites became fast friends and drinking buddies who told war stories over whiskey. And each could write beautifully.

Those days of political civility, alas, are long gone.

Surely, from his desk in the Kremlin, Vladimir Putin — a man who has spared no efforts to exploit divisions in American society as he plots to restore Russia’s lost empire — must be smiling.

By Greg Rushford
November 9, 2021

Add the World Trade Organization to the list of international organizations where one doesn’t have to look far to glimpse China’s so-called Wolf Warrior diplomacy in action. One way or another, fellow WTO members including the Philippines, Indonesia, Ecuador, Australia, Malaysia, Indonesia, Lithuania, even Hong Kong and of course Taiwan — plus too many other Indo-Pacific, African and Latin American WTO member countries to name in one line— have been on the receiving end of Beijing’s geopolitical influence operations.

Cordell Hull, who served as Franklin D. Roosevelt’s secretary of state from 1933-44, saw firsthand how ultra-nationalistic trade wars fueled animosities that contributed to the loss of millions of lives during World War II. Today, Hull’s vision of working for peace by dismantling trade barriers still resonates amongst enlightened diplomats and international civil servants who toil inside the WTO’s Swiss headquarters, perched along the shores of Lake Geneva. Outside the building, though, in the capital cities of the WTO’s 164 member countries, it’s often a different story. Especially in Beijing.

If President Xi Jinping appreciates Hull’s wisdom, the General Secretary of the Communist Party of China certainly hasn’t shown it. What Xi has shown is a disdain for international law and, when push comes to shove, the institutions created by the western democracies that stand for respect for the rule of law.

Xi is responsible for those massive Chinese industrial fleets that have been illegally devastating fellow WTO member countries’ fishing grounds. It is Xi’s fishing fleets that have repeatedly been caught using slave labor. But inside the WTO’s negotiating rooms, it is often difficult to find smaller, intimidated WTO members who would risk upsetting the Wolf Warriors by speaking clearly about China’s pillaging of the high seas.

Nor — unsurprisingly, considering how the Chinese Communist Party has humbled the once-proud Hong Kong — has Xi spent any energies to use the WTO’s trade-liberalizing agenda to ease tensions with Taiwan, a fellow WTO member which mainland authorities consider a breakaway province. Instead of giving the (democratic) Taiwanese reason to trust that they can rely upon closer trade ties to co-exist peaceably with the (undemocratic) mainland, Xi has instead used the WTO to wage political warfare against Chinese Taipei.

Toward that end, China has bullied other WTO members like Lithuania, which have sought to expand trade ties with Taiwan. Lithuania recently moved to establish a Taiwanese trade office in Vilnius. Beijing reacted furiously, cutting off rail service and recalling the Chinese ambassador in Vilnius — signaling to the European Union’s 27 member countries that the Wolf Warriors are watching their trade routes.

Hong Kong learns to kowtow

The Chinese Wolf Warriors have even persuaded Hong Kong — which, before the mainland’s crackdown on its political autonomy, proudly behaved as the independent WTO member it is supposed to be — to help Xi implement one of his influence operations targeting Taiwan.

Taiwan and Hong Kong have each joined the WTO’s Government Procurement Agreement. The GPA’s 48-member countries have opened their lucrative government contracts to international competitive bidders. These are basically the more economically enlightened WTO members: the European Union, the United States, Australia, New Zealand, Canada, and so on. China has asked to join the GPA since 2002, but has never summoned the political will to meet the market-oriented admission requirements.

This summer, Taiwan nominated a woman to chair the GPA who enjoyed a sterling economic reputation — in everyone’s eyes except those of the Communist Party of China, it turned out. Accordingly, when the WTO’s general council met this July, Hong Kong vetoed the Taiwanese candidate.

Having a Taiwanese chairwoman would “not be conducive to advancing [the GPA’s] various work programmes… and accession of new GPA Parties,” a Hong Kong diplomat declared. Translation: China, which has never met the requirements to join the GPA, had found a way to exercise a veto over who should chair the committee that runs it.

There’s more. Last month, Reuters reported that Australians were puzzled why Hong Kong considered Aussie lobsters a threat to China’s national security. China — as part of its trade war to punish Australia for suggesting that the Chinese open their records on the origins of the Covid-19 virus — has launched a trade war against lobsters from Down Under. Unsurprisingly, considering the usual unintended consequences of economically indefensible trade wars, a lot of the crustaceans have turned up in Hong Kong. Seems some have been smuggled across the mainland Chinese border to be enjoyed by Chinese people.

Hong Kong’s new customs commissioner, Louise Ho, told reporters that cracking down on smuggling of Australian lobsters from Hong Kong to the Chinese mainland was an “important part of protecting national security.” The smuggling activities, she explained with a straight face, “undermine our country’s trade restrictions against Australia.”

Lobsters are just one component of trade-distorting activities that have been keeping mainland Wolf Warriors busy on the high seas.

The eyes of the watching world

In less than three weeks, the WTO will hold ministerial-level meetings in Geneva. At the top of the agenda: a forceful push by the WTO’s energetic new director general, Ngozi Okonjo-Iweala, to successfully conclude the WTO’s longstanding negotiations aimed at bringing economic discipline to save the world’s threatened fishing grounds. Global fish stocks are being depleted by overfishing, thanks to more than $20 billion in annual harmful governmental subsidies that encourage such.

These negotiations have been languishing for two decades, with nothing to show for them, thus casting a — pardon a bad pun — a rotting-fish smell to the notion the WTO can finish anything important anymore. Of the $20-plus billion lavished annually on the world’s most harmful fishing subsidies, China counts for some $6 billion. Japan and Europe come in next, with about $2 billion each. India has only $174 million in the smelly subsidies — although the Indians are demanding to be given special exemptions as a poor country to continue subsidizing their fishers for the next quarter century.

Ambassador Santiago Wills, a rising young diplomatic star from Colombia, heads the WTO rules committee that is pressing to wrap up the fish talks. Born in 1986, Wills was a teenager when the negotiations began. Other talented WTO fish negotiators who also tried their best have long since retired.

Dr. Ngozi, as the WTO leader is often called by her colleagues, rightly told the WTO’s fish negotiating group this week that “the eyes of the world are really on us.”

The World’s Coast Guards Eyes

While the WTO negotiations drag on, the world’s Coast Guards have been quietly on the move. It is the Coast Guards which are vested with the necessary law enforcement responsibilities to police threatened fishing grounds — definitely including the Exclusive Economic Zones of WTO member countries where China’s huge industrial factory ships have no right to exploit.

This April, the U.S. Coast Guard “released a new strategy to enhance maritime security and the rule of law by combatting illegal, unreported and unregulated (IUU) fishing particularly in the Pacific,”the authoritative Maritime Executive reported.

The Wall Street Journal has also published a well-researched recent report that the U.S. Coast Guard has been working with Pacific island nations such as Palau to seize “tens of thousands of dollars worth of sea cucumber” that had allegedly been harvested by the Chinese. Chinese fishing fleets, WSJ reporters Lucy Craymer and Ben Kesling noted, had also “shown up in force around island nations like the Republic of Kiribati and Tuvalu, which have some of the richest tuna fisheries in the world.” The U.S. Coast Guard has also begun to work more closely with traditional American allies like the Philippines; hundreds of Chinese fishing vessels have been plundering Philippine waters for years.

Other recent headlines point to similar law enforcement actions being undertaken by a variety of countries with important Indo-Pacific interests: including Australia, New Zealand, Japan, New Zealand, Canada, and Fiji.

In Latin America, Ecuador has complained about hundreds of intrusive, illegal Chinese factory boats that threaten the fishing stocks in the Galapagos Marine Reserve. The Ecuadorians are moving to rally other Latin American neighbors to protect the reserve.

While all numbers regarding threatened global fish stocks are by nature imprecise, a 2018 report published by UNCTAD — the United Nations Conference on Trade and Development — estimated that perhaps 90 percent of global fish stocks are “now fully exploited, overexploited, or depleted.” Peter Thompson, a veteran diplomat from Fiji who is now the UN’s special envoy for the ocean, co-authored that report. Thompson summed up the sense of present urgency succinctly in an online conference convened by the World Economic Forum this July: “We have to end this madness.”

Toward ending the “madness”

All WTO trade-liberalizing negotiations are hard. As the current fish talks loom toward their hoped-for conclusion when WTO ministers forthcoming December meetings, many difficult issues remain to be resolved.

This summer, Ambassador Wills released the WTO’s first-ever public draft of what a successful fish agreement would look like. The sharp-eyed Peter Ungphakorn, a Geneva-based journalist and a former WTO official, noted that the draft contained “84 pairs of square brackets in only eight pages.” Each bracket denotes an issue where no agreement has been reached. Yesterday, Wills released the current working draft, which had 91 brackets. Of course, as Ungphakorn explains, the number of brackets doesn’t necessarily mean that all of them are going to be intractable. Such complex negotiations, as only insiders really know, can turn on only one or two really politically entrenched positions.

In fish, besides India’s insistent demands to be allowed to keep its fishing subsidies going for another 25 years, Spain has to date been adamant that it needs to be allowed to continue its fuel subsidies that enable Spanish fishing fleets to sail to distant waters.

Meanwhile, China, the world’s second-largest economy, a country with a space program, ballistic missiles, and nuclear submarines, has been demanding to be given special exemptions to continue some subsidies — claiming implausibly that China is still a poor, developing country. Inside the negotiating rooms, nobody’s laughing out loud. Many of China’s fellow WTO members —Pakistan, to cite just one supporter of China’s negotiating positions — face difficult financing issues with China’s Belt and Road infrastructure. So they play along with the Wolf Warriors.

Devastating African Fishing Grounds

A July 13, 2021 authoritative report by the UK-based Environmental Justice Foundation highlighted Ghana to illustrate how the Chinese typically operate in West African waters: “A particularly destructive form of illegal fishing in Ghana is known as saiko, where industrial trawlers illegally target small pelagic fish, the staple catch of small-scale canoe fishers, and sell this catch back to coastal communities for profit.”

Some 90 percent of Ghana’s fishing fleet is “linked to Chinese ownership,” the EJF report added. “Ghana’s fisheries are at the point of collapse…Ghanaian authorities need to act urgently,” urged Steve Trent, the foundation’s CEO.

But if there is such a sense, this reporter has been unable to unearth it. Repeated e-mails earlier this year to the West African’s trade office in Geneva went unanswered. It was much the same when I reached out to trade officials in other West African WTO members.

A 2019 press release posted on the website of the Chinese embassy in Ghana perhaps illuminates the reticence. That December, Ghana’s president, Nana Akufo-Addo, “thanked China” for helping the construction of a $50 million Jamestown Fishing Port Complex, near Accra. The Chinese dredging and construction deal, estimated to be completed by 2023, was struck during President Akufo-Addo’s 2019 state visit to China. According to a March, 2021 report by Xinhua, the CRCC Harbour and Channel Engineering Bureau Group, a Chinese marine engineering company, has now completed some 20 percent of the construction.

It’s About the Geopolitics

There are encouraging hints that the WTO will successfully negotiate a fish deal in Geneva next month. Several well-connected diplomatic insiders say they believe that the Chinese negotiating position is more nuanced than it appears to outside observers. Beijing will, at the last hour, play a constructive role in wrapping up a deal, some insiders believe.

These observers believe that Xi is aware of the many reports that his Wolf Warrior diplomacy is making China increasingly disliked in the WTO. The Chinese are already celebrating the 20th anniversary of China’s accession to the WTO — and don’t want to ruin a good party by helping kill the fish negotiations, also in their 20th year, according to this view.

Still, it’s worth noting that when China became a WTO member in 2001, China had begun to occupy the South China Sea in the mid-1990s. For instance, Mischief Reef, an atoll in Philippine waters, had already been seized in 1995. In October 1998, Philippine Air Force reconnaissance planes took photos of Chinese warships tied alongside a dock on Mischief Reef, which Beijing had already started to weaponize.

There was a helicopter pad, gun turrets and sophisticated communications equipment on the once-deserted atoll more than 1,600 kilometers from the Chinese mainland. Chinese diplomats claimed that the construction was only to help its fishing fleets. This was the beginnings of a deep-water armada envisioned by Chinese Gemnral Liu Huqaing, a veteran of the Long March who envisioned that a strong, blue-water navy was “supremely important” to Chinese ‘Honour.” Today, Mischief Reef has an 8,675 foot runway, protected by anti-aircraft Chinese weapons, plus a missile-defense system.

Elsewhere in the Pacific, by 1998 the Chinese had built a satellite tracking station on Tarawa, to keep their eyes on America’s Kwajaein Missile Range, 800 kilometers to the north in the Marshall Islands. Beijing was also building new destroyers, frigates and nuclear submarines to complement naval equipment purchased from the cash-strapped Russians.

There is no doubt: China’s maritime strategy to seize- and weaponize the South China Sea was already clear when the WTO’s fish negotiations began two decades ago — and years before a tribunal in The Hague determined it was in violation of international law.

Even as the WTO’s trade ministers prepare for December’s fish negotiations, in recent weeks hundreds of Chinese fishing vessels have again shown up in the Exclusive Economic Zones owned by the Philippines, Indonesia, Malaysia, and Vietnam.

Xi and his Wolf Warriors might reflect upon a suggestion floated in Foreign Policy magazine by two influential figures on the Atlantic Council, Franklin Kramer and Hans Binnendijk. NATO, they wrote, “should form a new partnership with willing Asian partners negatively impacted by China.” Whatever NATO does, China has to worry about other similar security arrangements across the Pacific that are being made, as the WTO fish talks continue in Geneva.

Cordell Hull would understand where all this is headed.

Talk about a political whirlwind. How to explain America’s bitter divisions to the watching world? 

The basic facts are a mouthful. Joe Biden’s electoral victory on November 3, 2020, which has been determined many times over to have been free and fair. Donald Trump’s defiant refusal to accept defeat. The dozens of (embarrassingly) failed Trump lawsuits. The lies of a stolen election. Violence in the streets of Washington, D.C., stoked by pro-Trump militias like the Proud Boys and Oath Keepers (each of which has connections to the convicted-but-pardoned Roger Stone). The January 6 riots on Capitol Hill, followed by impeachment and the predictable acquittal at the hands of 43 out of 50 Senate Republicans. Whew. 

Still, the ruckus failed to prevent Biden’s electoral certification and January 20 inaugural. “Welcome back, America,” said friends around the world, who have been watching in real time. 

From my home in rural Rappahannock County, VA. (Population: 7,420), I also watched the February 13 U.S. Senate’s vote to acquit Trump in real time — on French television.

But the international headlines can’t by themselves explain what’s been driving American politics. Always remember former House Speaker Tip O’Neil’s truism that “all politics is local.”  So let’s look at America’s divisions narrowly, through an international lens focused on how prominent politicians in one congressional district in rural Virginia have been dealing with the turmoil.  

Virginia’s 5^th congressional district is as rural Americana as it gets. It stretches from the outskirts of the Washington, D.C., suburbs to the foothills of the lovely Blue Ridge Mountains in Rappahannock County, and down through the scenic Shenandoah Valley, to the North Carolina border. 

Such parts of the southern United States are often referred to as the Bible Belt, where socially conservative evangelical Christians have significant political sway. The lines of the 5^th district have been drawn to ensure that it would be extremely difficult for any Democrat to win election here.

Bob Good to the rescue

Which brings us to the 5^th district’s newly-elected congressman, Republican Rep. Bob Good. He’s a self-described “biblical conservative” and a former athletic official at the Lynchburg-based Liberty University, the private evangelical school founded by the late Jerry Falwell Sr. 

Last summer, Good replaced the district’s former Republican congressman, Denver Riggleman, who was knocked off the ballot in a convention of party insiders engineered by angered 5^th district Republican bosses. Their ire was aroused after Riggleman had officiated at the wedding of two gay men. Championing gay rights is anathema in 5^th district Republican circles. 

In last November’s general election, Good routed his Democratic challenger, a mild-mannered physician named Cameron Webb who expressed concerns about the Trump’s administration’s erratic responses to the coronavirus pandemic. On the campaign trail — refusing to wear a mask — Good basically ran against the “radical left” and “socialists” who support the sort of violence perpetrated by “Islamic Jihad” terrorists. Dr. Webb must still be scratching his head. 

A new congressman’s priorities

Rep. Good’s two top declared priorities in Congress will be to fight for “religious freedoms” and for citizens’ rights to have concealed-carry permits to carry guns across state borders. He’s also a hardliner on immigration who has recently visited (and praised) a section of Trump’s wall along the U.S.-Mexican border in Arizona. 

Good voted against certifying Biden’s electoral win. He has expressed admiration for a fellow Republican freshman from Georgia, the hard-right Rep. Marjorie Taylor Greene. Greene has also drawn international headlines by espousing extreme conspiracy theories. She wants Joe Biden to be impeached, on grounds he has been “compromised” by America’s enemies and is a security risk. 

For Good, extreme rants have also come closer to home. His top district aide, Sandy Adams, had to apologize after she posted a Twitter attack on Democratic Rep. Alexandria Ocasio-Cortez, likening the young progressive New Yorker to Adolf Hitler. 

[Adams also was among the crowds on Capitol Hill on Jan. 6, with her husband, Melvin Adams, the 5^th district Republican chairman and one of the party bosses who helped elect Bob Good to Congress. (To his credit, Melvin Adams told supporters in a private communication that he had tried to talk some ruffians out of perpetrating violence. He declined to respond to a query asking if he had shared what he had seen with the FBI.]

Sandy Adams posted a meme in 2015 that pictured then-President Barack Obama “along with Adolf Hitler and Joseph Stalin as an opponent of gun ownership,” Richmond-based political reporter Ben Paviour noted on National Public Radio news last month. 

A “Phony” Pandemic — and “Sissies” from Brazil

Good believes the coronavirus pandemic is “phony,” a “hoax” perpetrated by radical Democrats to shut down businesses, schools, and churches. Speaking last December before the Campbell County Militia near Lynchburg — again, maskless –Good asserted that social-distancing regulations issued by Virginia’s Democratic governor, Ralph Northam, were a threat to “our First Amendment rights to assemble,” not sensible precautions aimed at protecting Virginians’ health. 

Readers will be reminded of Brazil’s far-right president, Jair Bolsonaro, who claims that Brazilians must not be “sissies” about the coronavirus. “All of us are going to die one day” anyway, he says. A Trump admirer, Bolsonaro has cultivated a passionate base including Christian conservatives and also paramilitary forces who don’t want their country’s gun laws loosened.

Two awkward facts: Brazil’s virus death count is approaching 240,000, second in the world only to the United States, which is now more than 485,000 — and rising. Trump and Bolsonaro have sought to deflect the blame for their poor performance to communist China. 

Enemies of the People

Let’s really narrow the lens, focusing on two upstanding citizens from the 5^thdistrict’s Rappahannock County. Terry Dixon and Ron Frazier seem to illustrate the continuing resonance of Donald Trump’s persistent campaign to sow distrust of America’s free press as “enemies of the people.”

Dixon chairs the Rappahannock Republican committee. A deacon in a local Baptist church, he appeared at a Sunday service during last year’s election campaign with then-candidate Bob Good. (Virginia’s Democratic candidates tend to speak to the district’s black churches.) Dixon also played a leading role in Good’s ouster of then-incumbent Republican congressman Denver Riggleman last year. 

Frazier, a member of the county’s board of supervisors, is the longest-serving public official in the county. Frazier seems to personify the historical grievances of many Rappahannock natives, when he refers to the U.S. Civil War as the War of Northern Aggression. 

A little historical research indicates the term is often associated with 20^th century segregationists who opposed civil-rights legislation. Frazier did not respond to repeated invitations to explain whether that notion fit him. Nor did he respond when asked for his feelings about the Confederate flags being waved by Jan. 6 rioters at the U.S. Capitol.  

[One thing that is guaranteed to inflame emotions in rural Virginia is to suggest to latter-day Johnny Rebs that the American civil war was an insurrection rooted in pro-slavery views. There is a statue on the county courthouse grounds dedicated to the memories of Rappahannock residents who gave their lives defending the confederacy. Their cause was “righteous,” according to the inscription. Armed men patrolled that statue last summer, should Black Lives Matter or Antifa decide to show up. They didn’t. While the lingering resentments in the American south are not as openly hateful as, say, the centuries of festering animosities in places like Armenia or Serbia, they have never gone away.]

Frazier was recently the object of some controversy in the local Rappahannock News, after it came out that on January 6 he had attended Trump’s “Stop the Steal” rally at the Ellipse, and then the mass demonstration on the East Side of the Capitol. “We were on the ground,” Frazier stated in an account posted on social media. “Not sure about any property damage but a woman that tried to breach was shot.” 

Unsurprisingly, that raised eyebrows. Exactly what did Frazier see that day? Did he cross police lines? If so, he would have been breaking the law, said the local chairwoman of the Democratic Party who suggested the possibility of a censure. Others in the community questioned Frazier’s judgement — not for peaceably exercising his constitutional rights to protest, but for believing what Republican senate leader Mitch McConnell has famously called presidential “lies.”

In his reports in the Rappahannock News, editor John McCaslin has also highlighted comments supporting Frazier from the chairwoman of the county’s board of supervisors, and also Republican committee chairman Terry Dixon. 

It’s hard to see how any reporter could have been more even-handed. McCaslin is a veteran journalist whose 40-plus career has included stints as a White House correspondent for the Washington Times, and a columnist for the Los Angeles Times syndicate. He has a reputation as a straight shooter. Toward that end, McCaslin has recently run several missives from residents who have strongly supported Ron Frazier. 

But Republican chairman Terry Dixon hasn’t been impressed. Dixon circulated a private e-mail in local religious circles that vented his deep-seated beliefs. It’s revealing of the passions that are roiling American political waters.

“Dear Friend,” Dixon began. “I need your help to stop something terrible from happening next Monday at the February 1 Board of Supervisors meeting. Rappahannock County Democrats are trying to censure Supervisor Ron Frazier because he attended a Trump rally. With the help of the Rappahannock News they are lying and distorting the truth.” 

Continuing, Dixon asserted that Rappahannock County Democrats are “far-left” socialists who are “behind an effort of character assassination that echoes the propaganda efforts of Saul Alinsky, the Soviet Union and the Chinese Communist Party.” 

Dixon electronically whispered that “for years,” the Democrats “and the leftist Rappahannock News have aggressively tried to damage Ron Frazier’s reputation.” They have accused Frazier of breaking the law he claimed. “All of us are next on their smear list,” he added. “If we don’t stop them now they will get bolder and more dangerous.”

Thus fired up, a group of concerned local citizens turned up at the Feb 1 supervisors’ meeting — two meetings, actually, as there were both afternoon and evening sessions — arguing that the board should not censure Ron Frazier. 

Never let the facts get in the way of a good political argument, as they say. Here, nobody had accused Frazier of breaking the law. The board of supervisors had no intention of censuring him. Discussing Frazier’s attendance at the Stop the Steal events was not even on the agenda. Rappahannock Democrats had not questioned Frazier’s constitutional rights to peaceable assembly. 

I sent written questions to Frazier, asking if he thought he’d been fairly treated by his local newspaper. He did not respond. Nor did Dixon respond to repeated written requests for his comments.

There’s a lot more that could be said about moral leadership at the American grassroots level. Many attendees at the Rappahannock County supervisors’ February 1 meetings, including Ron Frazier, were captured on video not wearing masks to protect the public health. Nor were many of those good citizens willing to practice safe social-distancing. Why the Rappahannock County board of supervisors is willing to hold public meetings that could endanger the lives of their own constituents is a matter perhaps best left to moral historians. 

Meanwhile, Brazil’s Jair Bolsonaro — and other authoritarian-minded world leaders like Hungary’s Viktor Orban and Philippine President Rodrigo Duterte who sew distrust of the press — would understand. 

And so would Russia’s Vladimir Putin, who has long used misinformation tools aimed at dividing Americans by sewing distrust of a free press. Sometimes one wonders why Putin need bother, when so Americans — from Donald Trump down to America’s small communities — unwittingly do his work for him?  

Reversing our lens to look at the bigger picture, however, suggests a different set of emerging political realities. Republicans with insular attitudes are only competitive in four of Virginia’s eleven congressional districts. Trump won the small rural counties, but the majority of Virginia’s urban- and suburban voters have moved on. They support America’s multicultural, multiracial, rule-of-law based modern society.

Hillary Clinton easily beat Trump in Virginia’s 2016 presidential election, winning 49 percent of the state’s vote to Trump’s 44 percent. In 2020, Joe Biden thumped Trump even more: 54-44 percent.  

Asked for any ideas on how Republicans might become more competitive statewide, Virginia 5^th congressional district chairman Melvin Dixon did not respond.

June 15, 2020

If all politics is local, as Tip O’Neill, the late Speaker of the House, used to say, it’s clearly the same for international trade politics. 

This story begins with a definite local twist, involving Republican Party inside politics in rural Virginia. But international trade aficionados everywhere will appreciate certain ironies that stretch far beyond Virginia’s sprawling 5th Congressional District, which ranges from the foothills of the Blue Ridge Mountains west of Washington, D.C., and down the Shenandoah Valley some 250 miles to the North Carolina border. 

The gerrymandered district, which heavily favors Republican candidates, is larger than six U.S. States, including New Jersey and New Hampshire. 

A sitting first-term U.S. congressman named Denver Riggleman has just been denied renomination by a handful of Virginia Republican activists. At first blush, this sure looks curious. Riggleman is a conservative Republican with a libertarian streak who boasts of voting with President Donald Trump more than 90 percent of the time. And he has supported international trade positions championed by the pro-market U.S. Chamber of Commerce and dozens upon dozens of small businesses in Virginia. 

On June 13, a convention of 2,537 Republican insiders voted to replace Riggleman with a challenger named Bob Good. Good trounced Riggleman by 58.1% to 41.8. So Good, not Riggleman, will be on the ballot in the forthcoming November 3 U.S. national elections. He will run against one of four Democrats who will be competing for their party’s nomination in a June 23 primary election. 

Good comes from southern Virginia’s Bible Belt. He’s a self-styled “Biblical Conservative” and a proud America First hardliner, even when it comes to legal immigration policies. He would deny automatic citizenship by birth. He would require immigrants to speak English. Good would deny women the rights to abortion, even when the mother’s life would otherwise be at risk. 

Such “bright red” positions, as Good puts them, would hardly be winning in Virginia statewide elections — especially with moderate-to-socially liberal Republicans from Washington, D.C.’s northern Virginia suburbs, and cities like Richmond and Charlottesville (home of the University of Virginia). But in the rural 5th District, they have much support. 

Moreover, the energetic Good simply outworked and outmaneuvered the hapless Riggleman at every turn. 

Most local press reports have rightly noted that Riggleman first landed in hot water with his Party’s social conservatives after officiating last summer at a wedding of two gay conservative Republican men. His stance reflected a refreshing tolerance and a sense of personal decency, not to mention respect for Virginia law that allows for same-sex marriage. Riggleman said all he saw was two fine young people who were in love.

But many 5th District Republicans saw a Biblical travesty. While the Party insists it is inclusive, such inclusiveness seems to extend only to supporters of the Republican platform — which considers marriage strictly a religious matter between men and women. 

But leaving the biblical politics aside, it’s the international trade ironies to this story that stand out. 

A central part of his campaign was putting “Americans, American jobs, and America first,” Bob Good told reporter Charlotte Rene Woods, who interviewed him for a May 14 Charlottesville Tomorrow article. “We’ve got to place a greater premium on protecting American jobs, American workers and reducing the number of worker visas to only what is truly needed and doesn’t depress wages or eliminate job opportunities for Americans.”

To further explain his agenda, Good posted a stirring commentary on his campaign website that one of his strongest political allies from Rappahannock County, VA, had published in local newspaper, the Rappahannock News, on March 12. 

Ms. Miller is a prominent 5^tth District Republican who is well-known for bringing a passion to her political jousting. She is no stranger to hyperbole. “I am an avowed free-market capitalist living in a country that was sinking toward Marxism — then Trump began righting the ship of state,” Miller has tweeted. 

And in her commentary that became a centerpiece of Good’s campaign, Miller didn’t pull punches in criticizing Riggleman’s record on immigration. Riggleman had been serving the interests of “the power elites and special interests” on Capitol Hill, not his own constituents, she declared. 

In particular, Miller pointed to Riggleman’s vote for a measure last year aimed at increasing H2B visas for foreign workers. “This is for foreign workers to take the high-tech jobs your children and grandchildren are looking for,” Miller asserted. 

Miller also called Riggleman to task for voting for H.R. 1044, a House bill titled the “Fairness for High Skilled Immigrants Act,” aimed at increasing U.S. immigrant visas for high-skilled foreigners. The measure had been sponsored by Rep. Zoe Lofgren, an “ultra liberal Democrat from California’s Silicon Valley, the home of tech giants Google and Facebook,” Miller wrote.

Miller asked: “Why is the Republican congressman from the 5th district of Virginia doing the bidding of Democrat Zoe Lofgren’s Silicon Valley masters of the universe? Why isn’t he listening to his own constituents?”

One would expect a savvy incumbent congressman to shoot back that there definitely was another side to that story. That he had been listening to Virginians who wanted to be globally competitive. And that he had voted in the best economic interests of his constituents. 

For openers, Riggleman could have pointed out that H2B visas are not for “high-tech” jobs. He could have said that dozens of Virginia’s small businesses — notably including landscapers — depend upon H2B visas to bring in temporary workers from Mexico and Central America — only after American workers cannot be found. 

These temporary foreign landscape artisans work during the growing seasons, pay their U.S. income taxes, and then return home to their families. Riggleman could have argued strenuously that such legal immigration is entirely defensible, and that it discourages illegal immigration. That the visas are not only good for the American economy and American enterprises — but very Republican. 

The congressman might also have reminded Good and Miller that the H2B visa legislation was strongly supported by a long list of such mainstream pro-market business advocacy organizations as the U.S. Chamber of Commerce, the Virginia Forestry Association, the Virginia Nursery and Landscape Association, the National Fisheries Institute, and the Seasonal Employment Alliance. These are top-notch outfits, and respected on both sides of the aisle in Washington. 

As for H.R. 1044, which does bring in high-tech foreign workers, Riggleman could have explained that it was simply wrong to accuse him of doing the bidding of the “ultra liberal” Zoe Lofgren from the Silicon Valley. (Lofgren is not regarded as a leftist firebreather on the Hill; she enjoys a reputation as a sensible lawmaker who is respected across party lines.) 

In truth, H.R. 1044 was clearly bipartisan; it was co-sponsored by Colorado Republican Rep. Ken Buck, a lawmaker with strong conservative credentials. It passed the House last summer with a substantial bipartisan majority of 365-65. Every Virginia Republican congressman voted for it. But only Riggleman will be soon be out of a job because of his vote. 

There’s a lot more: The measure’s companion bill in the Senate is being supported by such Republican stalwarts as Sense. Josh Hawley of Missouri and Tom Cotton of Arkansas. These legislators are hardly “ultra liberals.”

In sum, there were plenty of opportunities for Riggleman to have reminded his constituents that he had been supporting measures designed to promote legal immigration in the interests of helping American businesses to compete for talent in the global marketplace.

But the congressman never effectively made the case to his constituents, essentially ceding the political territory to opponent Good. (In the weeks before the June 13 convention, Riggleman’s press secretary did not respond to repeated requests for comment for this article.)

That political naiveté — a certain back-footedness, if you will — goes a long way toward explaining why the June 13 Republican convention delegates who voted outside the Tree of Life Ministries in Lynchburg enjoyed chucking Riggleman out.

Miller declined to comment for this article. But she told a reporter for the Rappahannock News after last Saturday’s vote that she had been “disappointed” in Riggleman’s performance in Congress. And the newspaper quoted a triumphant post-convention e-mail written by another ardent Rappahannock County Republican named Ron Maxwell. “Vote for more foreign workers and you’ll be voted out of office!”  

The late Speaker Tip O’Neill, who said that all politics is local, would understand (and lament) the current polarized political atmosphere in America. So would former Republican President Ronald Reagan. Reagan touted what he called the Eleventh Commandment: “Thou Shalt Not Speak Ill of Any Fellow Republican.”

Despite their differing political philosophies, conservative Reagan and the Democratic liberal O’Neill operated with mutual respect for each other. They knew how to forge political compromises in the best interests of their country.  

Republican candidate Bob Good doesn’t seem to be interested in Tip O’Neill or Ronald Reagan. “I’m not going to Washington to compromise for the Democrats,” he told reporter Tyler Hamilton of the Daily Progress earlier this month. “I disagree with the Democratic Party on everything.”

May 24, 2020

NOTE TO READERS: This text is the third of three lectures that I presented via Zoom to students at the Wakefield Country Day School in Huntly, VA.  I presented this third class on May 19, 2020.  For the first lecture, click here, and for the second lecture, click here. You may also return to the main page and click on the links there.

Welcome to the third of three classes on the fundamentals of International Political Economy. This one’s on the big picture: the World Trade Organization. The WTO is the international institution that has presided over the rules of global trade flows for the past 25 years. 

The WTO has been part of the world’s most successful international economic experiment that has served the world well for 70-plus years, but is currently facing an uncertain future. 

This is because political support has waned for its mission in key world capitals has waned — notably including New Delhi, Beijing, and Washington, D.C. Before we’re finished this morning, I’ll pass along some context aimed at helping make some rather confusing current headlines, well, perhaps less so. 

This topic is important. There’s not enough time this morning even to mention all the issues, much less answer the inevitable questions. But I can explain the basics, and offer an analytic framework aimed at equipping you to think through some big thoughts independently. And I can point you to sources aimed at smoothing the path for further reading and reflection. 

Let’s take this from the top.

More than 600 international civil servants who come from 80-some countries work in the WTO’s secretariat, which is headquartered in Geneva, Switzerland. The Centre William Rappard building is a gem of European classical architecture. The building dates to the 1920s, and is situated in a lovely park — adorned with inspiring sculptures — that runs along the shores of Lake Geneva, with distant views of the famous Mont Blanc and the Swiss Alps. 

Regardless of the impressive surroundings, keep this in mind: the responsibility for the decision-making is not vested in the staffers and their Director General who work in Geneva, as important as their renowned expertise is. The responsibility for setting the rules of global commerce is to be found at the highest political levels of government in 164 member countries. 

To repeat, because this isn’t always understood as well as it should — the key to understanding the international economic issues that drive the WTO’s trade negotiations is to be found in in the political calculations in various world capital cities. 

So why is the WTO so important?

The importance of tariff slashing

The driving economic idea when the WTO was launched in 1995 was to broaden the successes of its predecessor organization, the General Agreement on Tariffs and Trade. The GATT — just 23 countries led by the United States —had been established in 1947. It was first tasked with slashing high protectionist tariffs that had been notorious drags on global economic growth during some particularly nasty trade wars of the 1930s. 

But before we get to the economics of dealing with tariff wars and dismantling other barriers to trade, the first thing to keep in mind is the fundamental rationale that has always driven the GATT and the WTO: national security. 

National security drives the economics

I highly recommend that you google a 2018 report: The International Trading System at Risk and the Need to Return to First Principles. The report was written for the economics and security committee of the NATO Parliamentary Assembly. This is as good an explanation of the importance of the GATT and the WTO, historically and currently, as I’ve seen, even though the NATO economists are not connected to the WTO in any way.  

The NATO Parliamentary Assembly is based in Brussels. It brings together parliamentarians — members of the U.S. Congress and their legislative counterparts in the 30 NATO countries— to exchange ideas.

The acronym NATO stands for the North Atlantic Treaty Organization. This North American-European military alliance was created in 1949 as a defensive shield against military aggression from Joseph Stalin’s Soviet Union. (The world’s oldest military alliance, today NATO forces remain on the watch for mischief from Russia’s president, Vladimir Putin. American leadership in NATO has always been regarded as central.)

To be clear: NATO and its parliamentary assembly are totally separate institutions from the GATT/WTO. People who work in these organizations don’t even talk to each other. I’m not even sure how much the NATO parliamentarians talk to their counterparts on the military side of NATO.

Still, it’s important to recognize that prominent NATO circles understand and respect the economic portfolios of the GATT and WTO. They understand that this is about more than economics. And they certainly do not want NATO countries to start slapping each other with high tariffs and other trade restraints, as such would weaken the vital security ties. 

The 2018 report looked back over the years at what the GATT/WTO had accomplished:  

“[T]he liberal trading system established after World War II had not only contributed to an unprecedented rise of prosperity on both sides of the Atlantic, pulled millions out of poverty, and encouraged the diffusion of technology and ideas, it had also reinforced the security order. In fact, security, democracy and free trade proved mutually reinforcing.” 

The report recognized that world leaders who had created the liberal international economic order after World War II “knew full well that during the 1930s an array of ‘beggar thy neighbour’ protectionist measures had contributed to the Great Depression, poisoned inter-state relations and had doubtless been a central factor in the descent into World War II.” 

In other words, as former U.S. Secretary of State Cordell Hull, who served under President Franklin D. Roosevelt from 1933-44, was fond of saying: trade wars tend to end in real shooting wars. 

“I saw that you could not separate the idea of commerce from the idea of war and peace,” as Hull recollected n his memoirs. “I thereupon came to believe that if we could increase commercial exchanges among nations over lowered trade and tariff barriers and remove international obstacles to trade, we would go a long way toward eliminating war itself.”

This nexus between national security, peaceful resolution of conflicts, and economic prosperity is so fundamental to the WTO’s mission that it’s often overlooked, or just taken for granted.

The business of streamlining global trade flows

Why have the GATT and the WTO been regarded as the world’s most successful international economic experiment? The short answer is that when the GATT was launched in 1947, average global tariffs had been in the 20-30 percent range — with peaks for some import-sensitive products far higher than that. 

This was, at least, a measurable improvement from the higher (prohibitive) tariffs during the 1930s Great Depression. 

But the GATT’s founders realized that there would inevitably be powerful domestic lobbies around the world that would always seek protection from import competition. Nations cannot be counted upon to dismantle their protectionist schemes unilaterally, even though such would be in their own self-interests. 

A series of GATT multilateral negotiating rounds steadily slashed tariffs, which had fallen to an average of perhaps 11 percent when the WTO took over the GATT’s legal framework in 1995. Presently, they are about nine percent worldwide — and are roughly between two- and three percent for the most advanced economies in Europe, the United States, and Japan.

As tariffs and other restraints to trade have been slowly-but-steadily slashed in the past seven-plus decades, world trade volumes have risen a whopping 4,136 percent, the WTO has reported. The lives of countless millions of people worldwide who have never heard of the GATT or the WTO have been enriched. 

It’s more than just tariffs

These days, the WTO deals with far more than tariffs: too many issues to list here. 

There have been successful negotiations that have smoothed the flow of information technology across international borders. And others aimed at giving the poorer WTO members a helping hand in expanding their international trade. Perhaps the most difficult political issues are associated with making international agriculture trade more efficient. The WTO’s website has the details. 

You might also familiarize yourself with the sites for the World Bank and the Organization for Economic Cooperation and Development (OECD). The Bank, headquartered in Washington, D.C., is one of the so-called Bretton Woods institutions, dating to 1944. The OECD, based in Paris, is an organization whose members are the so-called rich countries). These sites house some of the world’s best international economic research.You will never run out of term-paper materials. 

The importance of being true to core principles

It is always worth keeping in mind the core principle that has always driven the GATT and the WTO. It’s called MFN: most-favored-nation. It’s simple — but not simplistic. MFN’s so-called “national treatment” means that WTO member countries must not discriminate against other trading partners: all must be treated equally. 

The United States, once again, was first-among-equals in insisting that the GATT and WTO would be based on the core MFN obligations. That’s not surprising, as the concept of treating all of America’s trading partners equally goes to the heart of who we are as a people. 

I strongly recommend a book called Clashing Over Commerce: A History of US Trade Policy. This tome looks rather daunting; it runs over 800 pages. Fortunately, it is smooth reading and can be absorbed in bites. This remarkable scholarship was researched and written by Douglas Irwin, the nation’s leading economic historian who teaches at Dartmouth College. I keep this book close, for the perspectives it sheds on current, sometimes confusing, headlines.

And some of the most valuable perspectives shed light that is related to the American character — and is particularly striking in current political environment in Washington.

Irwin notes that Thomas Jefferson wrote in 1785: “I think all the world would gain by setting commerce at perfect liberty.” And consider this observation on trade, from Benjamin Franklin: “Most of the restraints put upon it in different countries seem to have been the projects of particulars for their private interest, under the pretense of public good.” 

It’s that last phrase where Franklin nailed it. (Remember last class, when we talked about globally uncompetitive U.S. rose growers who lobbied for high “unfair dumping” tariffs on Colombia that would have resulted in sky-high prices for all American consumers?)

Difficult Global Politics

So why, despite the impressive history, is the WTO today an institution in serious trouble? 

Since its creation in 1995, the WTO has not been able to conclude one major multilateral trade-liberalizing round of negotiations. The so-called Doha Round, which began in 2001, has been in a coma for more than a decade. (Paul Blustein, a former top Washington Post reporter, wrote about the Doha collapse in his 2009 ground-breaking book, Misadventures of the Most Favored Nations. This book is required reading.)  

The most important reason for concern is simply put: the political will in key world capitals when it comes to dismantling trade barriers has been gradually but steadily weakening. 

I’ve been tracking this decline for years, and immodestly suggest that you might want to go to my website, www.rushfordreport.com. I wrote “Murder on the Doha Express” for the Milken Institute Review in 2012. Two years later I contributed “The General Disagreement on Tariffs and Trade” to Foreign Policy magazine. In 2015, I contributed “The WTO Struggles in Nairobi” for the Wall Street Journal. And in 2018 I wrote “Trump’s War on the WTO,” again for the Journal. 

While there are many complexities, a quick look at the attitudes of just three WTO member countries — India, China, and the United States — illustrate what’s been going on. 

“India First”

India, although that country has only about a two-percent share of global trade flows, has always been difficult. Indian politicians have never really seemed to believe in multilateral trade liberalization. They will tell you that India can cut its own (high) tariffs and dismantle the rest of its (considerable) trade barriers when leaders believe that is in their own self-interest — which doesn’t happen frequently. 

When Indian trade diplomats speak, many other developing countries’ leaders tend to listen. So protectionism, New Delhi-style, has champions far beyond the Subcontinent. 

Indian political leaders have always championed restrictive “Buy India” laws, aimed at keeping globally competitive foreigners at bay. It’s terrible economics, the evidence for which is seen in India’s continuing poverty. But the politically-connected domestic lobbies in India that benefit from the schemes have never complained. 

India has just this year played a leading role in once-again delaying the most important current negotiations the WTO has underway. Those negotiations are aimed at prohibiting harmful governmental subsidies that have contributed to overfishing and the depletion of fish stocks worldwide. They have been dragging on for some two decades, with no particular sense of urgency. (If you are wondering why, stay tuned. I intend to publish a report on the fish negotiations in my online journal in the very near future.) 

“China First”

Naturally, everyone is curious about China’s contribution to the WTO’s decline.  

I was among those who welcomed China’s joining the WTO in 2001, and was thrilled when that formerly impoverished country started to embrace global competition — lifting hundreds of millions of ordinary Chinese people out of cruel economic miseries. 

But anyone who scans the current headlines can see ample cause for concerns about where China is now heading.

For openers, China has also been one of the obstacles to a successful WTO deal to save the world’s fishing grounds. China is the world’s biggest subsidizer of its huge industrial-scale fishing fleets that are devastating fishing grounds as far away as West Africa. (Check out the website of the Environmental Justice Foundation for those sobering details. It has fascinating and alarming documentation.)

China is also the world’s second-largest economy. Yet in the WTO fish negotiations, China is insisting that it be given special carveouts to continue the destructive practices — as if China it were still one of the world’s poorer nations. 

Since joining the WTO in 2001, leaders of the Chinese Communist Party in Beijing have often spoken highly of the institution. They have praised multilateralism, in general. But if I had to write an article making the case that China is anywhere close to becoming a respected WTO leader today, it would be, well, short. 

Beijing has been negotiating to join the WTO’s Government Procurement Agreement, under which member countries agree to open public contracts to competitive international bidders since 2002 —without summoning the political will to seal the deal. 

In 2008 China helped put the WTO’s so-called Doha Round of multilateral trade liberalization in its coma, by refusing to cut high tariffs on a range of about a dozen key industrial tariffs. (India was an accomplice. As mentioned previously, Paul Blustein’s Misadventures of the Most Favored Nations has those details.)

Remember how trade politics in New Delhi turn on Buy Indian trade rules? Beijing has its Buy Chinese rules, and the Party has many ways to make life uncomfortable — miserable, even — for foreign investors, while propping up its own government-owned enterprises. 

This month, Australia called for a global medical investigation to pinpoint precisely how the global coronavirus pandemic began. Who wouldn’t want to know that?

It seems the Communist Party of China is, well, sensitive on this particular issue. Furious Chinese officials immediately banned imports of Australian beef from four processors — keeping straight faces to pretend the ban was driven by health concerns. As the Wall Street Journal editorialized last week, this constitutes flat-out “coercive” economic diplomacy. (Not to mention the cruelty of denying delicious Aussie steaks to innocent Chinese diners.)

Such Beijing bullying is hardly an isolated case.

The Chinese have also just slapped on prohibitive 73-plus percent anti-dumping tariffs on imports of Australian barley. Here’s a term-paper idea: figure out how Chinese officials calculate that Australian barley farmers are so generous that they would sell their stuff to Chinese consumers at a 73 percent loss.  

“America First”

Meanwhile, America’s political support for multilateral trade liberalization has been declining in recent years.

President Barack Obama never gave the WTO much of a priority. His three favorite words, Obama told campaign audiences, were “Made in America.” Unwilling to focus on the WTO’s multilateral trade-liberalizing negotiations, he focused on a smaller regional trade deal with eleven trading partners called the Trans-Pacific Partnership. But Obama failed to obtain the necessary approval for even that deal from the U.S. Congress. 

(In one of his first acts of office in 2017, President Trump withdrew the United States from the TPP, saying it would have been a terrible deal, while offering no evidence for that assertion.)

President Donald Trump’s stated positions on the WTO are clear. Multilateral trade liberalization is simply not on his agenda. 

He has repeatedly called the WTO a “disaster.” He has repeatedly said that he is a “Tariff Man.” He has launched a series of trade wars against “cheating” American trading partners ranging from Canada and the Europeans to China. Trump has said that he believes that trade wars are “easy” to win. (The WTO’s website reports that global trade growth had already begun to slow last year, before the coronavirus pandemic struck.)

The WTO was created “to benefit everybody but us,” Trump asserted on Fox News. He has threatened to withdraw.

And when it comes to matters of national security, the White House has been working to raise tariffs on certain imports on grounds they present security threats to America. These products include — I’m not making this up! — automobile bumpers, and nails. And the White House has also called steel imported from Canada, our NATO ally to our immediate north, a national security threat. Talk about material for student term papers! 

The United States has also brought to a halt the WTO’s legal machinery to resolve trade disputes between members. This has been accomplished simply by withholding consensus to replace the expiring terms of jurists on the Appellate Body. That judicial body — established when the WTO was created in 1995, with strong U.S. support — now cannot function because it lacks a quorum. 

United States trade officials no longer stress that Washington still believes in the WTO’s core principle: Most-Favored Nation non-discriminatory treatment of all trading partners. I’ve recently asked President Trump’s top trade negotiator, Robert Lighthizer, if he would care to issue a statement stressing the MFN’s importance. There has been no response. (U.S. Trade Representative Lighthizer hasn’t visited WTO headquarters in Geneva, sending another unmistakable signal that multilateral trade liberalization remains in disfavor in the White House.)

It’s important, of course, to see how the White House defends itself from its critics. I suggest you google some recent columns in the New York Times written by Peter Navarro, a White House trade official, and by Ambassador Robert Lighthizer, the U.S. Trade Representative.  (Navarro has also authored a recent opinion piece in the Wall Street Journal, and has appeared on cable television frequently. And the Office of the U.S. Trade Representative has a website that further explains the Trump administration’s thinking.) 

Senator Josh Hawley, a Republican from Missouri, has been pressing for a congressional resolution calling for the United States to withdraw from the WTO. He also wrote it up for the New York Times’ opinion pages. (Remember, when the authors are politicians, the trick is to sift through the rhetoric, looking for economically viable thought.)

You might also want to become familiar with some  academically sound sources whom your university economics professors will expect you to be familiar with. In Washington, D.C., check out William Reinsch’s columns that appear on the site for the Center for Strategic and International Studies. The respected Peterson Institute for International Economics also publishes helpful research and analysis. 

In Europe, the site for the Brussels-based European Center for International Political Economy (ECIPE) is another must-read. 

Here’s another piece of unsolicited advice, if you want to keep on top of international affairs: If you aren’t already doing so, start reading The Economist immediately — and keep reading it for the rest of your lives.

So why be optimistic?

One final thought: don’t let the gloom-and-doom get the best of you. 

The declining support for the WTO’s international economic architecture that has served the world so well is deeply troubling to many. Still, there is good reason to end this class on an optimistic note. 

The problems that young people faced in previous generations were also daunting — even much worse. When I was born in 1944, people were still being killed in World War II. In 1945, after the war ended, Europe was devastated, with millions upon millions of refugees struggling to survive. Across the Pacific, Japan was flattened. People were starving in the Philippines. Africa, still in the grip of European colonialism, was unfree. 

When I first visited Europe in the early 1960s — almost twenty years after the fighting ended — piles of rubble from previously bombed-out cities like Rotterdam and London were still visible. Faces on the streets of Paris were still gaunt. 

Today, these wonderful European cities have been restored. They are marvelous — visit them. 

And go to Asia, Tokyo sparkles, as do other Asian cities that have embraced global competition: Hong Kong, Singapore, Seoul, Taipei. 

The Philippines unfortunately remains poor — due to insular “Filipino First” protectionist sentiments fueled by an entrenched corrupt elite that have long held that country back. 

But in recent years the Philippines has begun to open up to global competition, enough to become one of the fastest-growing economies in Southeast Asia. And while all of sub-Saharan Africa only has about one percent of global trade flows, there are some encouraging signs of progress there, also.

So there is much important work to do. Whatever you make of your lives, this is a wonderful time to be young and well-educated. 

As the 19^th Century American thinker Henry David Thoreau once put it: “Go confidently in the direction of your dreams — Live the life you’ve imagined.”

May 22, 2020

NOTE TO READERS: This text is the second of three lectures I presented via Zoom to students at the Wakefield Country Day School in Huntly, VA, earlier in May. For the first lecture, click here, or return to the main page and click on the link. I will post the third lecture in a couple of days.

Welcome to the second of three classes on what international-trade economists call Political Economy. This is the same basic presentation that I’ve made over the years in college economics classrooms. But if it sounds rather daunting to present college-level material to high school students, it shouldn’t be.

As you would know from last week’s class, the fundamental concepts are not difficult. Anyone can get this, simply by understanding a few simple economic definitions, and by looking around at what’s in their daily lives. 

For sure, looking around us here in Rappahannock County, Virginia, doesn’t immediately suggest that global trade flows touch our lives at all. We are in the boonies, tucked away in the foothills of the Blue Ridge Mountains — only 70 miles west of downtown Washington, D.C., but in the middle of nowhere.  

Rappahannock County is about the same size as Singapore, but instead of nearly six million people, there are only about 7,300 of us. Why, we don’t even have one stop light on our quiet country roads! 

But look more closely — look to the Virginia Inland Port, about twenty minutes to our north, just outside the little town of Front Royal. You’d be surprised at the amount of international cargo that goes through Customs at this inland port. The Front Royal port handles twice the cargo traffic as do the major U.S. southern seaports of Miami and Jacksonville, combined.

Many of the goods come into Front Royal’s customs zone from nearby Dulles International Airport, an hour’s drive from the East, on Interstate Highway I-66.

The imports also come into Front Royal — by rail and interstate highways — from the international terminals at Norfolk, VA, the big U.S. deep-water seaport some 220 miles to our southeast. And then they are sent on to other major cities whose economies also depend upon international trade: Atlanta to the south, Chicago to the west, and so on. And of course, the same international products are here in Rappahannock County. 

My wife and I often look around our American-made home and marvel at how the international marketplace is at our front door. Literally. That door comes from mahogany that was harvested in Honduras and finished in Costa Rica. Our cherry-wood floors come from Brazil. We’ve got lights made in China. A granite kitchen countertop from India. Some fixtures in our bathrooms come from Italy — and much more. 

So, if trade is obviously so important to our lives, why do many Americans believe it is “unfair?”

The heart of the matter begins to be seen in just two economic definitions that are in Economics 101 college textbooks. The first is Price Discrimination. Second: International Price Discrimination. The terms are presented in a rather dry fashion. But they aren’t dry to those who understand the politics that fuel the antagonisms toward trade.

Price Discrimination involves products that are sold at lower prices in some markets than others. Widgets might be sold at cheaper prices in, say, South Dakota than in Manhattan, based on calculations that New Yorkers might pay more. 

Or they even might be sold below their costs of production. You’ve perhaps noticed so-called “loss leaders” in your supermarkets: items priced so cheaply that they entice shoppers into the stores. This is often called cutthroat pricing. Economists tend to praise such ruthless pricing wars, as they encourage healthy competition. 

Only if Price Discrimination becomes predatory, in the legal antitrust sense of the term, do economists frown. Predation happens when, say, a large corporation with deep financial reserves deliberately prices products so low as to drive the little guys out of business. Then the big guys are left with so-called “market power,” or monopoly power — so they can raise prices on helpless consumers who don’t have a choice. The antitrust laws are meant to police such uncompetitive economic behavior. 

An automobile could be made in Detroit, and then sold more cheaply to Americans who live in Alabama, for example. But what if the Canadians make automobiles, and export them to Americans at prices that are lower than in Canada? Now we’re talking about International Price Discrimination.

International Price Discrimination is the same as domestic Price Discrimination. Except here, the goods cross international borders and are considered as having been “dumped,” and politically “unfair.”

Such “unfairly dumped” goods can be taxed, with high tariffs. Here in the United States, this happens a lot. Domestic concerns that can’t match the prices of their foreign competitors find themselves good lawyers. Those lawyers then file “anti-dumping” lawsuits with the U.S. government, which investigates and decides whether to tax the “unfair” imports with tariffs. 

 (Those “anti-dumping” cases are considered by the U.S. Commerce Department and the International Trade Commission, each of which has bureaucracies to consider various aspects of anti-dumping complaints by looking at the costs of production.)

Domestic advocates of the anti-dumping laws frame their arguments using antitrust-like language of predatory pricing. Politicians often misleadingly call International Price Discrimination “Illegal Dumping.” It’s in fact not illegal — or unfair — to price, say, automobiles or bicycles, you-name it, at lower prices in some countries than the home market. The item to which International Price Discrimination is applied, again, is just subject to being taxed. The rationale is more political than economic. And over the years, the cries of “unfair trade” have landed at the heart of the debate over whether international trade is a good thing, or not. 

Here’s how this works. 

I first began to understand the emotional world of anti-dumping litigation almost exactly thirty-six years ago to this week, around Mother’s Day, 1984. American flower growers were upset that Colombia was exporting roses to U.S. markets at low prices. Prices that rose growers in, say, Michigan, couldn’t match. That was unfair, the American rose lobby complained.

So the U.S. rose growers hired lawyers to petition the federal government to put high tariffs on the import competition from Colombia. 

Tariffs, of course, are taxes imposed on American businesses that import foreign products. American consumers who buy the foreign goods are taxed again when importers pass along their extra costs in the form of higher prices. The American rose growers hoped that higher tariffs on Colombian roses would allow them to keep prices high. 

I took the roses story to the CBS Evening News in May of 1984: The Rose you Buy for Mother’s Day is Part of an International Trade War. That was when I realized that economics could be easily explained to normal Americans who have never heard of price discrimination. 

The economic principle in the Colombian flowers “dumping” case was what the famous economic theorist David Ricardo — you’ll hear his name in your first college economics course — called comparative advantage. Rough translation: Countries export products that they are better at making than their trading partners. They import products that others make better. 

This isn’t rocket science. In the roses case, the Colombians’ comparative advantage was — sunshine. Simply tropical sunshine that nourished rose beds, for free. By contrast, rose growers in places like Michigan had to pay the high costs of electricity necessary to heat greenhouses in cold weather. The American rose growers thought that was unfair. They thought that the rest of us should pay far higher prices to keep them in business. 

The American petitioners lost the rose-dumping case in 1984. It’s easy to argue that that was a sensible economic outcome; just go into your local grocery store and see those wonderful flowers from Central America, offered at affordable prices. And trade is a two-way street: Colombian buy American machinery,  cereals, various electrical and electronic goods, and more. 

Fast forward from the 1980s, and today there are hundreds of such “dumping” cases in which globally uncompetitive American industries have successfully sought high tariffs on too many products to mention here.

Many of these mini-trade wars have involved various types of steel: pipes, tubes, wire, hot-rolled steel, cold-rolled steel, and so on. There have been anti-dumping fights over bicycles, pencils, nails, bedroom furniture, candles, softwood lumber, manhole movers — and even something called extruded rubber thread, which is the rubber-like stuff that puts the snap in your underwear. 

Seafood products including crawfish, catfish, salmon, and shrimp have their own anti-dumping politics.

American catfish farmers from states such as Mississippi and Arkansas were upset that they couldn’t compete with catfish from Vietnam — so upset that they persuaded the U.S. Congress to make it illegal to call catfish from Vietnam, “catfish.” When you go into the seafood section of your supermarket, check out “swai,” or “basa,” or “tra” — ways to say “catfish” in Vietnamese. 

The idea was to make the affordable Southeast Asian catfish look perhaps too scary to eat. That didn’t work, as “Basa” sounded, well, exotic and interesting, to American consumers. 

Then the word was spread that foreign catfish is unhealthy. When nobody got sick, the American catfish lobby’s lawyers persuaded the U.S. government to hit the tasty foreign fish with anti-dumping tariffs. While the Vietnamese exports to America then slowed for awhile, the Chinese saw an opening and started to sell us their catfish. Economists call that: trade diversion. Erect high tariff walls on imports from one country, and exporters in other countries will take the advantage. 

Or take shrimp. Americans catch wild shrimp off coastlines that stretch down the Atlantic Ocean from the Carolinas to Florida, and then onto Louisiana and Texas along the Gulf of Mexico. Problem is, they can’t harvest enough shrimp even to supply one national U.S. grocery chain such as Costco. There isn’t enough American wild-caught shrimp to supply Red Lobster restaurants nationwide, or any other nationwide restaurant chain.

It takes foreign shrimp, mostly of it grown on farms in twenty-some countries around the world, to supply the shrimp you buy in your grocery stores. When I was young, living in a small city in Illinois, I didn’t get fresh shrimp until our family took a vacation to Florida when I was about eight. Now, thanks to international freight services, fish dealers all across the United States sell fresh imported seafood from everywhere to Americans, every day. 

That’s what trade does when free markets work properly. It creates winners. 

But that’s only one side of this story.

International trade also creates losers. 

Never forget this. We’re talking about people with real lives here. People who lose their jobs through no fault of their own, but because they had worked in industries that no longer could compete globally.

We could talk all day. Tell a steelworker in Ohio or Pennsylvania whose mill is shut down to praise economic efficiency and just move on with his life. Tell those steelworkers whose factories move to Mexico to appreciate the economic efficiencies. 

Tell women who have worked for generations in textile mills in the Carolinas that they should go to community college or enter various training programs where they would learn to do something else. Tell catfish farmers in the Mississippi Delta that they should realize that their competitors in the Mekong Delta in Southeast Asia can offer the same fish to Americans, at lower prices. You won’t get far. Change may be necessary, but it’s often wrenching. 

The losses from global competition can shake entire communities. I’ve been in declining steel towns in Pennsylvania and West Virginia to see Stand up for Steel rallies. Angry people came for miles around: the unemployed workers, their families, high-school bands, mayors, and even preachers who railed against foreign steel. 

(But then again, even that story wasn’t so simple. One CEO of the local steel mill in Wheeling, West Virginia, stirred the crowd by shouting that the foreigners could take their steel and “shove it where the sun don’t shine.” But when I later went to his office, it turned out the same CEO had also been busy doing profitable business with his Korean steel-making partner. In political economy, where people fight over money and jobs, things are often not quite what they appear.)

We are talking about a political-economic problem that nobody has ever been able to answer satisfactorily. The Luddites in the 19^th century tried to prevent new machinery being brought into their mills that would throw some workers out in the streets. The blacksmiths were trapped when automobiles began to replace horses. Whenever there is rapid progress in technology and science that demands change, the lives of decent people will be upended. Not everyone will be able to cope, without help. 

Next week in Class Three, we’ll talk about how these fights over money and jobs are handled in the World Trade Organization, the international institution based in Geneva, Switzerland. The WTO presides over the rules of international trade. This institution’s smooth functioning is absolutely crucial to the health of the global economy. And it is currently in danger, thanks to parochial politics in key WTO member countries. 

So bring your thinking caps next week, as there are big issues here. They will be with you for the rest of your lives. Hopefully these classes that introduce International Political Economy will help you think them through yourselves.

May 20, 2020

Note to readers: The following is the first of three Zoom presentations, lightly edited and amplified, that I delivered this month to high school students at the Wakefield Country Day School in Huntly, VA. Huntly is tucked away in the scenic foothills of the Blue Ridge Mountains in Rappahannock County, Virginia, 70 miles west of Washington, D.C. Its population is 7,300 persons. 

The setting would seem to be as removed from global trade and its controversies as it gets. But the three Zoom sessions explained how the world — especially the GATT/World Trade Organization, which is presently under the most severe political attacks from various world capitals in seven decades — is tightly woven into the daily lives even in remote corners of America. 

In these three classes I tried to share some of the most valuable basic lessons that I’ve learned over the past half century — which go far beyond the pre-university level. I encourage readers to share them with friends and relatives who wonder what the fuss is all about, and why they should be greatly concerned where the controversies are headed.

(I also encourage American readers to bring these materials to the attention of their local Members of Congress. Both Republicans and Democrats in the U.S. House and Senate are currently standing by in a sort of passive ignorance while some of the world’s most valuable international institutions are being deliberately weakened. And a few me-first CEOs who are afraid to stick their political necks out might also benefit from seeing how easy it is to explain the benefits– and importance– of trade.) 

The first session was held on May 5:

Good morning. The inspiration for today’s class, the first of three, was a question on many American minds in these days of the coronavirus pandemic: Should we manufacture medicines right here in the USA, both to protect American jobs and ensure that we are not dependent upon the goodwill, or perhaps not, of foreigners to protect our public health? 

I’m not going to answer that, really. But by the time we finish the third class, I hope that each of you will be better equipped to think through such questions independently. I’m going to offer you a framework for analytic thinking aimed at giving you the “ammunition” you need to understand the reasoning behind such questions. And I’ll point you to some links and sources aimed at provoking further research and independent thinking— certain that your teachers here at Wakefield have already said over-and-over again is the point of any true education.

We’ll be talking about perhaps a new concept: Political Economy. That’s a term familiar to every economics professor you will have in college. 

Today, let’s concentrate on the economics part, focusing on some simple-but-very-important examples of how the international economy functions. 

International trade is in all of your daily lives. The clothes you wear. Your iPhones. Your schools. Your laptops. The cars you drive. The homes you live in. What you eat. And certainly the world is in your medicine cabinets. 

This fact is undeniably true. Still, many so-called “normal people” — friends and neighbors who are not economists or political analysts, who are happy to live their lives outside of the political pressure cooker called Washington, D.C., aren’t necessarily aware of how much international trade is in their lives. Many believe what they are told by certain political leaders who know how to punch so-called “hot buttons:” that global trade is “unfair.” 

We’ll get into that next week, when we look at the political part of “political economy.” Not parochial partisan politics. Not Republicans vs. Democrats. Not “liberal” or “conservative.” Not Trump vs. Obama, although if the subject is Political Economy, such names sometimes have to come up to illustrate this-and-that.

Polls consistently show that perhaps two-thirds of Americans, year-in, year-out, instinctively believe that trade is a good thing. But the remaining third tend to fear it. 

To prepare for next week’s class, you might want to glance at two fundamental definitions that are in Economics 101 textbooks. Unless one knows better, they seem rather innocuous, boring even. But those two definitions define a subject matter that will be with you for the rest of your lives. 

The first concept is called price discrimination. The second: international price discrimination. Just take a few minutes to google them — and next week I’ll explain why those two terms are not only not boring, but absolutely essential if one wishes to understand the difficult politics of international trade. 

The first thing to understand is that anyone can grasp the fundamentals of political economy. This might be university-level principles, but they are not really difficult to grasp. If I can get it, anyone can.

That’s because my qualifications to try to explain such things are actually slim to nil. My career goes back more than a half century, to the late 1960s. 

In the beginning, I ran traditional national security investigations as a congressional aide — working for both Republican and Democratic senators and congressmen on oversight issues ranging from the security of nuclear weapons to secret intelligence operations and analyses at the Central Intelligence Agency. 

Economics was not then in the picture. After I left Capitol Hill in the1970s, I’d been to the Pentagon, State Department, and the CIA a gazillion times. But had never given the Office of the U.S. Trade Representative a thought. Nor the Departments of Commerce and Treasury, each of which has international trade responsibilities.  

For the last several decades, I’ve been a journalist who has specialized in the politics of international trade. I publish an online journal called the Rushford Report, which you can find at www.rushfordreport.com. 

I have also been an occasional contributor of columns to the Wall Street Journal, and economics magazines such as the Milken Institute Review. That publication is read by many who have doctorates in economics from the Ivy League universities in the East to the University of Chicago and onto the University of California at Berkeley. The trick in reaching even such sophisticated audiences is to grasp the basics, in clear English. 

And it turns out that even journalists like me who have absolutely no economics pretensions can grasp the fundamentals. 

A confession. I never even took economics in college. In fact, I dropped Economics 101 three times. Didn’t understand why the subject was so important. Didn’t quite trust my professors, especially one of whom was a fast-talker who wore colorful bow ties. He wanted me to assume this-or-that, when I wanted to argue why anyone should make such assumptions. When my old professor died a few years ago, the university honored him as one of its greatest teachers, ever. My role was having been his worst student, ever.

A disinterest in economics became something of a dilemma. I was an international studies major, where economics was required. I finally just switched my major to history — that’s how much I hated Econ 101. 

That was really ignorant, of course. But it took years to figure that out, until one day the economic light bulb went off. 

So basically, these three classes explain the kind of stuff that anyone can think through for themselves, if they know where to look. 

It all begins with a decent respect for facts. And some basic facts of economic life lay a solid foundation that illustrates exactly how the economic underpinnings of international trade work in real life. 

First, let’s call it the Nutella Principle, named of course for the delicious chocolate-tasting stuff that so many of us love. 

Roberto Azevedo, the director general of the World Trade Organization (WTO), explained the importance of Nutella very well in a speech a few years ago. (We’ll get to what the World Trade Organization is, and why that crucial international institution is presently under political attack in class three. For now, just trust me: the WTO is very important to your daily lives.) 

Azevedo said: “A jar of Nutella can contain hazelnuts from Turkey, palm oil from Malaysia, cocoa from Nigeria, sugar from Brazil and flavoring from China.” That’s five countries. Which one made the Nutella?

Nutella’s multinational headquarters are in a sixth country, Italy. But the Nutella jar that we Americans are likely to buy comes from one of their factories in Canada. That’s the seventh country. The finished bottle of Nutella comes into the United States labeled Made in Canada.

Next, think about where Master Lock padlocks come from. While Wakefield lockers may not use padlocks, Master Locks are famously in many, many high-school lockers nationwide. Perhaps you remember those Super Bowl commercials, showing locks tough enough to withstand bullets. 

Master Lock employs several hundred workers in Milwaukee who make “Made in the USA” padlocks. But there’s more to this, beginning with the company’s operations in places like Mexico, Taiwan, and China. Here’s how it works:

Locks have parts that come from just about anywhere: keys, cylinder assemblies, ball bearings, plated shackle stop pins, anti-saw pins, screws, and so on. One internal Master Lock company memo I found by googling on the Internet listed examples of 20 different products that Master Lock needed to get just from China. 

Another Google search showed how difficult it is to tell where a padlock really comes from. This particular lock had ten different components from various countries. The lock’s basic body was put together by American workers in Milwaukee — working with imports, including a shackle from China.

Those components from around the world were then shipped from Milwaukee to Mexico for final assembly. When the padlock came into the United States, it was labeled by U.S. Customs as a product of Mexico. Millions of normal American high school students would be unaware that their own locker rooms offer a perfect model of how international trade is in their lives.

How about Harley Davidson motorcycles? Those Hogs and Fat Boys, made in Wisconsin and Pennsylvania, are about as American as it gets, right? 

But the American workers who make the bikes couldn’t keep their jobs without access to imported components — transmissions from Japan, wheels from Australia, tires from Spain and Thailand, and so on.

Perhaps about one-third of the value of a Harley motorcycle comes from parts sources outside the United States. Harley buys the best parts it can get, at the best price, wherever they might come from, wherever at home or in the world. The economic forces that drive international trade flows are as simple as that. 

Here’s another real-life illustration of how international trade — imports and exports — works.

Boeing’s 787 Dreamliner has suppliers from everywhere. Former President Barack Obama said the following in 2012 when he visited Boeing’s manufacturing operations in Seattle: “Boeing has suppliers in all 50 states, providing goods and services like the airplane’s ground-breaking carbon fiber composite aircraft structure from Kansas, advanced jet engines from Ohio, wing components from Oklahoma, and revolutionary electrochromic windows from Alabama.” 

Take President Donald Trump’s private Boeing 757 that he used to fly around the country while campaigning for president in 2016 on his America First platform. Both Obama and Trump were cheered by audiences when they said their favorite words were “Made in America.” 

But there’s much more to Buy American politics.

Mr. Trump’s jet couldn’t have flown anywhere without those Rolls Royce 211 engines from Great Britain, for openers. The campaign audiences who cheered the Buy America appeals didn’t notice the famous RR logo on the airplane’s side. Nor did the press corps.

The bottom economic line is clear: Boeing’s airplanes come from — just about everywhere. Here’s how it works:

The Swedish National Board of Trade has published a study showing that some 70 percent of the Dreamliner’s parts come from an atlas’s worth of countries. “The wings are produced in Japan, the engines in the United Kingdom and the United States, the flaps and ailerons in Canada and Australia, the fuselage in Japan, Italy and the United States, the horizontal stabilizers in Italy, the landing gear in France, and the doors in Sweden and France.”

While Boeing makes airplanes in the United States by importing parts from around the world, Boeing also exports its aircraft to customers all over the world — notably including those in countries that supplied components. That’s why, intellectually speaking, one can’t speak of trade only in just terms of imports, or just of exports. We’ll get to the politics of that next week.

For today’s purposes, the focus is on the economics that drive the import side of the equation.

Take careful note of this: “Half of the goods the United States imports are inputs and raw materials that are necessary for U.S. companies to operate their domestic production.” That quote comes from Scott Miller, a former Procter & Gamble executive who is affiliated with an economics research project of the Center for International and Strategic Studies, a prominent Washington, D.C., think tank. 

Miller adds the obvious: such imports are “absolutely essential to the health of American manufacturing.” That means that American workers’ jobs depend upon access to the global economy. 

So, the question is: if imports are so essential to our daily lives, and our domestic manufacturing jobs are dependent upon it, why is international trade so feared and despised by many Americans?

That brings us to next week’s class — the “political” part of political economy, and why trade politics can be so difficult. Besides a few minutes of homework involved with looking up the definitions of Price Discrimination and International Price Discrimination, I’d ask that you visit my www.rushfordreport.com and search for an article from August 15, 2003, that I wrote for the Wall Street Journal: “The Politics of a Dying Industry.” You might also be able to find it via a Google search.

That column helps explain why the lives of decent, hard-working people who were brought up to work in textile mills in the American South were upended as the mills became globally uncompetitive. 

And please check out the website for the World Trade Organization. In class three we’ll talk about what the WTO does — why it is so important, and why it is now being either neglected or deliberately undermined by some key world leaders. This is the big picture. It takes some effort to understand why the WTO is so important. I suggest that anyone would benefit by plunging into the subject. 

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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January 18, 2020

Meeting in the Vietnamese seaside resort of Nha Trang yesterday, the foreign ministers of the ten ASEAN countries — the Association of Southeast Asian Nations — tentatively decided to accept President Donald Trump’s offer to host a special U.S.-ASEAN summit in the United States. The confab will be held on March 14, in Las Vegas, the Bangkok Post reported.

If all other things were equal, this would constitute a welcome piece of news. Trump has offended diplomats across the region by snubbing top Asian leaders’ summits for the last three years. The venerable Australian national security authority Carl Thayer voiced the frustrations of many when, in 2017, he likened the first Trump snub to an act of “political vandalism.” But now, Trump has signaled that the United States remains interested-and-involved in one of the world’s most dynamic regions. 

But with The Donald, nothing ever seems to be so simple. His awkward diplomatic- and political timing has raised eyebrows in key Asian capitals since Trump first floated the invitation last November. And Trump’s insistence upon the famous Nevada gambling and entertainment city as the venue has raised even more concerns. Plus, hardly for the first time with Trump, there is the distinct whiff of presidential self-dealing and cronyism in the air. 

I’ve been watching this diplomatic drama play out behind the scenes for the last two months. Here’s a quick rundown of the concerns that are being raised in well-connected Asian diplomatic and business circles.  

Awkward timing

First, the manner in which Trump offered to host a summit in the United States was perceived in the region as arrogant. He didn’t even invite the Asian chiefs of state in person, sending instead his national security adviser, Robert O’Brien, to a November 2019 summit of Asian leaders in Thailand. There, O’Brien delivered a letter with Trump’s proposal. Offended at the American president latest snub, seven of the ten ASEAN chiefs of state refused to meet with O’Brien.

Another problem with the timing was the familiar diplomatic ineptness factor that has become normal whenever Trump interacts with fellow world leaders.Top-level summits that involve coordinating the schedules of presidents and prime ministers usually take many months, perhaps a year, as the complex logistical challenges are worked out. Trump, in November 2019, was expecting the leaders of ASEAN’s ten countries to change their schedules to accommodate his, and by March 2020. In response to the raised diplomatic eyebrows, all that Trump’s aides offered, with no further explanation, was that March of 2020 best fit Trump’s schedule.

Of course it did. March 14 is just three days before the Democratic presidential primaries in the key electoral U.S. states of Ohio, Illinois, and Florida. Trump’s prospective Democratic Party challengers will then no doubt be busy fighting each other for the Democratic presidential nomination. They will project the image of mere partisan politicians jockeying for personal advantage.  

By contrast, Trump will be poised to appear presidential, a respected world leader hosting a diplomatic summit involving important Asian top leaders who have come to the United States, to pay their due respects. While he could easily do such in, say, Washington, D.C., Trump appears to have another agenda than projecting a sober image. 

An unserious venue

To be sure, Las Vegas projects anything but the image of presidential sobriety: the famous casinos, the sexy-dancer shows, the tables for high-rollers, the paparazzi with their flash bulbs, and so on. Every ASEAN summit is also well-known for the photo opportunity of the presidents and prime ministers, wearing the host country’s traditional costumes, sometimes a tad outlandish. What are the ten ASEAN leaders expected to do as they pose for posterity in Vegas: wear Elvis costumes? 

And in which luxury hotels and casinos will they choose to stay?

The whiff of presidential self-dealing

When Donald Trump is involved, world leaders can never be sure how to ascertain whether he is seeking to advance legitimate U.S. national security interests, or whether he is mainly looking to advance the Trump brand and his family’s personal financial interests. 

Speaking of branding, it happens that Las Vegas is the site of a Trump International Hotel. 

The Trump Organization’s promotional materials for the hotel boast of “our sleek, gold building” with its 1,282 “exquisitely appointed” accommodations. “This is living to the highest standard — the Trump level of luxury in a city that never disappoints.”

If some Asian leaders would risk putting their country’s sovereign wealth funds on the tables, they might end up disappointed, goes one sotto voce quip from one veteran Asia-watcher when informed of Trump’s preference for Vegas.

The 64-story Trump hotel — the tallest in Vegas, naturally — doesn’t have a casino. It does have, however, lots of Chinese tourists, who have been coming in increased numbers since Trump won the 2016 presidential election, the Washington Post has reported. And the Trump Organization has luxury condos for sale, complete with whirlpool baths, plush beds, and bars.

Such sales opportunities have sparked more sotto voce quips — to the effect that the condos could be of possible interest to Russian speakers who would know how to conceal their ownership behind shell corporations. Trump properties in Florida are crammed with such people, according to an authoritative Reuters investigative report. 

So where would the ASEAN leaders and their entourages be expected to stay? Who would occupy the “ultra luxurious” presidential suites that the Trump Organization boasts of? Where would the U.S. Secret Service and the plethora of American diplomatic and security aides stay? Where would U.S. tax dollars come into the picture? The answers to such questions have not been made public.

It’s worth recalling how Trump backed off his plans to host this year’s G-7 summit of world leaders at his National Doral golf resort in Florida, but only after a public outcry against the president’s obvious financial conflicts of interest. That was last October.

But once the president gets a notion in his mind, he is famous for not letting go easily. A month after the G-7 embarrassment, Trump quietly offered to host still another important summit in the United States. This one would have brought the corporate leaders of the top-level Asia Pacific Economic Cooperation forum to the United States — again, this March, again in Las Vegas. That idea was quickly shot down by the offended Malaysians, who are chairing APEC this year. 

On November 7, the Straits Times newspaper in Singapore reported that Trump’s offer to host an APEC summit in Vegas “was not a good idea,” as Malaysia’s foreign minister, Saifuddin Abdullah, put it. Apparently, that was that. Since that press report, nothing has been heard of hosting any APEC summits in Vegas this year.

The cronyism factor

Nobody is considered to be closer to Donald Trump and his family than billionaire Sheldon Adelson. (The Adelsons are worth an estimated $40-plus billion, according to various published speculations).

Adelson’s importance to Trump was on public display last week, when the president held a ceremony in the White House to celebrate the recently inked “Phase One” U.S.-China trade deal. A wide array of leading American political-and business leaders were in the audience, along with Adelson and his wife Miriam. They are,Trump declared, “two very good friends” and simply “great people.”

Conspicuously, Trump praised the Sheldon and Miriam Adelson before mentioning Henry Kissinger, a covey of sitting U.S. senators, son-in-law Jared Kushner, television demagogue Lou Dobbs, and the heads of such blue-chip American corporations as Boeing, Honeywell, Mastercard, and Dow Chemical. 

Ambitious Mega Donors

Trump has good reason to like the Adelsons.They gave him perhaps $10 million in campaign cash to help him win his 2016 presidential race, plus another $5 million and chump change for the January 2017 Trump inaugural party — and then upwards of $100 million to back Republican congressional candidates in the 2018 elections. 

Sheldon Adelson is well known in Asia. His breathtaking Marina Bay Sands that illustrates Singapore’s skyline was highlighted in the movie Crazy Rich Asians. He also has casinos in Macau, which cater to Chinese tourists. 

Adelson may be 85 years old and reportedly ailing, but he is still ambitious. The gambling magnate has been working hard to obtain a casino license in Japan. Toward that end, his friend Donald Trump is thought to have pressed Adelson’s Japanese aspirations with Prime Minister Shinzo Abe, according to a well-researched report by ProPublica’s Justin Elliott that was published late last year.

The ambitious octogenarian has also been hoping to open a casino in North Korea. That country is presently an impoverished wasteland, but one which Trump has also said he believes has potential high-value real estate opportunities. 

Adelson is also well-known in Asia as one of Israel’s strongest supporters. He is a fervent defender of Trump’s hardline policies towards Iran’s ayatollahs, and was thrilled when Trump moved the United States Embassy in Israel to Jerusalem. To ASEAN leaders of countries that have substantial Muslim populations, this could be the most awkward aspect of Trump’s Vegas proposals. 

Some Asia watchers contacted for this article said they found it somewhat of a stretch to imagine the prime ministers of Thailand or Malaysia, or the president of Indonesia, or the sultan of Brunei — all countries with substantial Muslim populations — rubbing shoulders with the likes of Donald Trump and Sheldon Adelson in Las Vegas. And it is near impossible to imagine that, one way or the other, Adelson would not be involved in an ASEAN summit held in his city. 

And that’s where matters presently stand. The final decision on whether to attend a US-ASEAN summit in Las Vegas on March 14 will be made by the chiefs of state of the ten ASEAN countries, the January 17 article in the Bangkok Post reported. 

Who would show up, and who might not, is a matter of intense speculation.

Philippine President Rodrigo Duterte, for one, has vowed not to travel to the United States for any reason. (At least, everyone blames congressional Democrats, not Trump, for that one. Duterte is understandably concerned over recent legislation that could deny his entourage entry visas, on human-rights grounds.)

Trump forgot another thing — nobody seems to know what the agenda for a US-ASEAN summit would be. 

Toward that end, all eyes will be on Vietnam, which is chairing ASEAN this year. Will the leadership in Hanoi seize the opportunity to work with the Americans to press the Chinese hard over Beijing’s illegal aggression in waters of the South China Sea that are rightfully within the exclusive economic zones of such ASEAN members as Vietnam, Malaysia, and the Philippines?  

If so, there is a real opportunity for Donald Trump, despite his unfortunate diplomatic style, to shine. Trump could work to accomplish something that his predecessor in the Oval Office, Barack Obama, utterly failed to deliver. Obama stood by passively while Xi Jinping’s China weaponized the South China Sea — clearly in violation of international law. 

Stay tuned.