February, 2001: Players - Who's Up To What

By Greg Rushford
Published in the Rushford Report

Matters of Principle:
Anson Chan and Charlene Barshefsky

Reflect upon the differences between the loyalty of Hong Kong’s renowned civil service — reared in the British tradition of discrete civility — and loyal American political appointees.

On January 12, Anson Chan, the number two official in Hong Kong and head of the territory’s civil service, announced that she would leave office in March. Chan’s resignation announcement came eighteen months before her scheduled retirement in June 2002. U.S. Trade Representative Charlene Barshefsky stayed on her job until her term expired on January 20 along with the rest of President Bill Clinton’s political appointees.

The two women enjoy reputations for personal honesty, intelligence, and dedication.

But what a difference over matters of principle.

Americans officials rarely resign over principles.

If they did, Barshefsky might have been out of there in December 1999. Then, Clinton deliberately wrecked the launch of a “Seattle Round” of new trade negotiations. Clinton put his political interests in accommodating the antidumping protectionists in steel, and the quota-rent seekers in textiles, sugar, peanuts, etc. ahead of other far more important American economic interests. In Seattle, Clinton brought American economic leadership to an abrupt halt. In his eight years in office, Clinton (assisted unwittingly by corporate America) also helped wreck America’s traditional free-trade coalition, by constantly explaining the benefits of “free-but-fair” trade to the American people in dishonest, mercantilist, terms. Successor George W. Bush inherits protectionist gridlock.

Barshefsky went along without a peep. She vigorously advanced the political agenda of antidumping protectionists, even though as a veteran trade lawyer she knew very well the U.S. antidumping regime is rotten. She also carried water for domestic textile protectionists. But Barshefsky never blushed. On January 5, when she announced that she would be moving to the Woodrow Wilson International Center for Scholars, Barshefsky even put out a press release boasting that “during her tenure, USTR has negotiated more than 300 separate trade agreements.” She showed no embarrassment that dozens and dozens of these were (embarrassing) agreements to impose textile and clothing quotas that restricted poor countries’ access to U.S. markets.

“I know that I carp on this all the time and don’t want to be a Johnny-one-note. But the fact remains that U.S. hypocrisy — constantly demanding that foreigners summon the political will to open their markets, while refusing to do the same for America’s remaining protectionist schemes — has reaped a whirlwind of bitterness. Under the Clintonites, America’s claim to global economic leadership fell on that sword of hypocrisy.”

Then, as she was going out the door, Barshefsky told Evelyn Iritani of the Los Angeles Times that if the United States wants to get serious about launching a new round of trade negotiations, it must do something about U.S. protectionism in textiles and sugar, which she called our “Achilles’ heels.” Barshefsky also admitted to Iritani that the United States needs to reconsider its rigid position on antidumping, as other countries are striking back with copycat (abusive) antidumping regimes. “I’ve had more and more people coming to me and saying, “I was slapped for dumping in some foreign country,” Barshefsky admitted to Iritani, who published her piece on January 25.

I don’t mean to pick on Barshefsky, who really is a decent person. She is by far the first U.S. trade official who pretended not to notice the antidumping-textile-sugar-quota stink until safely out of office. Hong Kong has a different tradition.

Anson Chan’s January 12 announcement that she would be resigning ahead of her term was graceful. “The most important thing for my successors is to be loyal to themselves,” she told reporters. “They should make an example of themselves to uphold the traditions and values of the civil service.”

Chan’s resignation statement didn’t highlight her policy differences with her boss, Chief Executive Tung Chee-hwa. She didn’t have to. Everyone knew what Chan’s early resignation meant. Since the territory’s 1997 handover to China, Chan has repeatedly angered Beijing by defending Hong Kong’s freedoms and autonomy. Tung’s record establishes him as Beijing’s man, not Hong Kong’s. From his obvious distaste for universal suffrage to his assaults on the rule of law and the independence of Hong Kong’s judiciary, Tung seems unaware and unconcerned that his constant kowtowing to Beijing is gradually turning Hong Kong into just another Chinese city. But for Chan, there are obviously limits to the service one should be expected to do for one’s political masters.

In Washington, Charlene Barshefsky remained loyal to her political master to the bitter end.

In Hong Kong, Anson Chan has remained true to herself.

It makes all the difference.

Firing Thelma Askey, Hiring Dennis Devaney

After a nostalgic last presidential trip back home to Little Rock last month, President Clinton said that he will leave office “more idealistic than I was when I took the oath of office eight years before.”

Apart from carting nearly $200,000 in gifts of silverware, fine china, and golf clubs out of the White House as he left — plus pardoning sleazy-but-connected fugitive billionaires and assorted criminal dirt bags — Clinton also demonstrated his idealism by firing Thelma Askey.

As I reported in December, George Becker, the United Steelworkers of America president, and other luminaries of the steel lobby were plotting to persuade Clinton to get Askey, a Republican free trader, off the International Trade Commission. The steel guys got their woman on January 3, when Clinton replaced Askey and gave a one-year recess appointment to Dennis Devaney, a Republican labor lawyer from Detroit’s Butzel Long.

Talk about dirty business. Once again, the U.S. steel lobby has reached out to try to end the public career of an official who based her decisions on an honest evaluation of U.S. trade law.

The steel guys obviously expect that Devaney will understand that the fix is supposed to be in.

But it might not turn out that way.

First, House Speaker Dennis Hastert (R-Ill.) was rightly embarrassed that a woman he had supported was thrown out into the street. Hastert is now trying to find a place for Askey in George W.’s administration. The highly qualified Askey could end up with a more prominent trade job than the one she had.

Moreover, Devaney sounds like an honest man.

“I’m a Bush-Cheney guy, and basically a free trader,” Devaney says. “I’m sure the steel people have their agenda, but I’m going to call the shots the way I see them.”

Considering the fact that he was not picked because U.S. steel lobbyists want him to call the shots honestly, is there reason to believe Devaney?

Could be. Two of Devaney’s friends are highly regarded lawyers with solid free-trade credentials: former ITC Commissioners Susan Liebeler and Ronald Cass. Practically the first word out of their mouths when I called them to ask what they thought of Devaney was, “honest.”

“I think he will be a good commissioner,” says Cass, who is Dean of the Boston University School of Law. “I haven’t talked to him about trade, but he is a reasonable, decent person who will listen to the facts and make up his own mind.” Liebeler, who now runs a legal research business in Malibu, said the same.

The United Steelworkers’ trade agenda for 2001

Remember the $1 billion steel-industry bailout that Sen. Robert Byrd (D-West Va.) sneaked through Congress in 1999? The United Steelworkers of America, which had absolutely groveled for the money, now says it wasn’t enough. The billion-dollar subsidy, they declared in January 23 press release, was “a good idea with problems that in practice made it close to useless.” Now they have a better idea: a $10 billion loan fund.

“Steelworkers have suffered enough, they have worked hard and played by the rules, and they have earned a right to a decent living and decent life,” the USW statement claimed.

The USW wants the Commerce Department (which the steel lobby owns) to administer the $10 billion in loans. To make sure the bureaucrats funnel the money into the right hands, the union wants to be included on an “oversight” panel.

The USW also wants “five-year import restraints on all steel.”

Because uncompetitive U.S. steelmakers are headed south, the USW says that in coming years the United States “could easily wind up with only three or four steel companies.” This is fine with the USW, as long as the government steps in to protect their jobs. Meanwhile, what about those labor contracts the USW has foisted upon steelmakers that guarantee most USW members 40 hours of pay every week? Does the USW now think that perhaps it might be reasonable for the union to make some concessions to help keep their employers out of bankruptcy? Not a chance. “We are proud of this protection and have no intention of giving it away,” the union statement stresses.Let’s get back to that $1 billion that the USW begged for and now disdains as not enough. Robert Guy Matthews reported last month in the Wall Street Journal that while the program “was designed to save the domestic steel industry,” it “threatens to have the opposite effect.” Matthews summed it up this way: “By propping up marginal producers, the government has added to a steel glut, further depressing prices and threatening the health of even the stronger U.S. steelmakers.”

The WSJ reporter quoted Keith Busse, the CEO of one of those stronger steelmakers, Steel Dynamics Inc., saying that the guaranteed-loan package “just makes my job harder.” If the USW gets its $10 billion, Busse’s job will become ten times harder.

“If you can’t compete, you deserve to die,” Busse declared.

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