(Yicai Global) March 14 -- Charlene Barshefsky was the United States’ chief negotiation officer for China’s accession to the World Trade Office, and opened up the world’s doors to China almost 20 years ago.
I met Barshefksy on the afternoon of a drizzling spring day in Washington DC.
“There was no moment when I was completely hopeless,” Barshefsky said of the ups and downs that took place over the 15-year negotiation period. “There’s always a way to do something if you want to get it done. You just have to find the way.”
“I never had a moment of total despair,” Barshefsky said, despite the ups and downs China went through during its 15-year negotiations. “I believed that if you desired to do it, you would always find the method that works. You must find the method. If you believe doing something is good for you, you are sure to find the solution.”
The United States Congress had to approve China as a most favored nation every year before 2001. US import duty was 3.4 percent for most favored nations in 1999, but 37 percent for those without the status. When China joined the WTO, it boosted trade growth with the US.
China entered the WTO in 2001, after which the huge overseas market allowed its economy to develop at an unprecedented rate. With globalization, free flowing capital, technology and goods, and no trade barriers, East Asia became the new home of the high-income manufacturing industry, with Japan, South Korea and eventually China taking over from North America and West Europe.
The change created a shift in global wealth. Many workers in the west lost their jobs as China’s poverty population fell to 12 percent in 2010, down from 84 percent in 1981, and a middle class was formed. China took over from Japan as the world’s second-largest economy in 2011 as its manufacturing exports rose to 18.8 percent in 2013, up from 2.3 percent in 1991.
Bharshefsky was shocked by just how fast China developed after joining the WTO.
“I think the surprise to me was how quickly China became the hub of Asia,” she said. “That was surprising not that it happened, but its speed. But I had always thought the economy would take off pretty rapidly once China began to implement these further reforms.”
As China continued its journey in the world trade system, great change occurred around the world.
Washington used to be the driving force behind the integration of the world economy, but soon after his inauguration, US President Donald Trump pulled his country out of the Trans-Pacific Partnership Agreement and was skeptical of the powerful organizations that maintained the world after World War II, particularly the WTO and the North Atlantic Treaty Organization.
Twenty years after the collapse of the Berlin Wall, there were repeated calls for a new wall. Meanwhile, the United Kingdom chose to completely withdraw from the European Union. Emmanual Macron, who supports world trade and the EU, was elected president of France, and Angela Merkel won Germany’s federal election last year, but populism and anti-EU sentiment is on the rise in the Netherlands, Italy, Germany and France.
Barshefsky was born in a Jewish immigrant family in Chicago. Her parents were immigrants from Poland and Russia, and she’s worried about the current anti-trade and anti-immigrant momentum building in the US and around the world.
“It’s extremely painful,” she said on the current anti-immigrant sentiment. “They’re no longer living, but I think often of my parents and I think that it would have been very difficult for them to understand this anti-immigrant sentiment. It would have been very painful to them to hear the language used to describe immigrants or immigrant groups, or groups in general.”
This anti-globalization movement is not entirely groundless. When China first embraced globalization, people expressed dissatisfaction. When the WTO was holding negotiations in Seattle on Nov. 30, 15 days after China and the US penned a bilateral trade agreement, the first large-scale anti-globalization protest took place. The situation got so bad that the city mayor declared a state of emergency.
Protesters disagreed with insecurity and unfairness to developing countries brought about by globalization. In subsequent protests, emerging nations stressed the need not only for free trade, but for fair trade, too.
At the time, workers in developed countries complained too. In the first few years of the 21st century, the proportion of American people in support of globalization was increasing. A survey by the University of Maryland showed that on the whole, Americans tended to think that globalization was more positive than negative, and only a small minority hoped to stop it.
Why is it that 17 years on, people in developed western countries have become the main force of the anti-globalization movement? And why was it that Donald Trump, a man with no charisma, could be elected president of the United States? Watch the video to find out.