Saturday, March 17, 2018

Kudos to Donald Trump

By talking to North Korea, is Trump ready to make history? First posted on Asia Times.

Well deserved kudos should be given to President Donald Trump. By agreeing to meet with North Korea leader Kim Jung-un, he has made a clean break from the impasse that outlasted two US presidents.

Trump will be doing what his two predecessors were unwilling to do. Both George W. Bush and Barack Obama dismissed the notion that any meeting with the North Korea leader can take place in lieu of North Korea abiding by certain preconditions.

Without an agenda loaded with excess baggage, Trump and Kim can begin a conversation that could break the ice and make history together.

American leaders frequently forget that confrontation and upfront in your face demands rarely impress Asians favorably. It will behoove Trump to remember that in giving face, good things happen.

Given the suddenness of the development and unpredictable nature of Kim and Trump, it will be hard to predict the eventual outcome. However, Kim through the South Korean intermediaries has already indicated that the topic of denuclearization is on the table—certainly a concessionary gesture.

If Trump is a fraction of the master negotiator he has said he is, he has a real opportunity to resolve the Korean debacle that has bedeviled American presidents since the end of the Korean War in 1953.

If so, he would deservedly be honored around the world as the statesman that made a major contribution toward world peace. He could look forward to ticker tape parades not only in New York and Washington but Beijing, Seoul, Pyongyang, even Moscow and Tokyo, too.

Back to making America great again

Then, after a suitable breather, Trump can go back to making America great again.

Ironically, Trump’s “America first” strategy will depend on not only getting along with China, but figuring out various ways of enlisting China’s assistance and cooperation.

Indeed, as a professor from University of Texas pointed out in Fortune, Trump could not begin to meet his own goal of rebuilding the nation’s infrastructure relying just on public and private capital from within the US.

Obviously America needs capital from China, virtually the only source with the wherewithal to help. Furthermore, China has the proven skillset to plan and manage infrastructure projects that would complete on time and within budget. Therefore, that means the US needs China’s goodwill.

Firestein of University of Texas suggests that to avoid geopolitical controversy, the US invite only China’s private capital to participate. That distinction won’t work, because American policy makers have trouble distinguishing the difference between China’s private and state own entities in any case.

For example, Huawei is dominating the global markets with their telecommunication products because of their cost effective advantages. By alleging a shadowy connection of the founder with his previous PLA affiliation, Huawei has been shut out of the US, its privately held status notwithstanding. This is foolish xenophobia at its worst.

By continuing to treat China as an adversary justifies the defense budget and does nothing for the US as a whole—and won’t make America first.

Consistent with Trump willing to break the mold on dealing with North Korea, he should consider undertaking a brand new, history making, approach with China.

To do so, it’s probably necessary to first dispel the many myths and misinformation about China that circulate inside the Washington Beltway.

Many in the US expect China to become a democracy as it becomes an economic power, and are deeply disappointed when China goes their own way. Such expectation is in fact not founded by China’s past tradition and history, and can be attributed to a delusional mindset of the critics that every country must eventually be like the US.

The current government in Beijing believes in single party rule in the name of ensuring internal order and stability. If anything, the PRC government is most like the city-state of Singapore. Unlike the US, China does not attempt to export their way of governance to other parts of the world.  

Thus, nothing China has done could be considered provocative or hostile toward America. They do not try to interfere with the US elections. They do not engage in an arms race with the US.

They will not initiate a trade war because they understand very well that there will be no winners in a war of tit for tat rounds of retaliatory tariffs.

It’s true that China has become enormously successful in global trade. Their success comes from making products at a low cost and competitively priced. Their comparative advantage benefits consumers that buy their goods around the world.

Made in China industrial goods benefit the US economy and create jobs. For example, low cost solar panels increase demand to convert to solar power. The demand creates an industry of panel assemblers and installers.

In a trade war, tariff protection for one sector of the economy will damage other sectors that depend on reasonably priced imports to build a business. Also hurt would be sectors that export because their competitive advantages would be erased by retaliatory counter tariffs. The net effect will be mutually assured damage or even destrruction of their own economy.

There is nothing to be gained by insisting on casting China as America’s adversary and everything to the good by treating China as a friend.

As I commented previously, Chinese companies operating in the US, have already demonstrated their ability to rebuild America’s infrastructure cost effectively, such as China Construction rebuilding the bridge over the East River in Manhattan and China Railway Rolling Stock replacing old subway cars in major U.S. cities.

Both Chinese entities—yes, they are state owned—delivered quality results relying on American labor. These projects resulted in local US investments and created local jobs. A long array of win-win outcomes awaits US China cooperation, if America can get over their xenophobic bias and treat China as peer and partner.

Given President Trump’s bold move toward North Korea, he is just unorthodox enough to pull this off, namely change the narrative about the most important bilateral relations in the world.