The meetings between American President Obama and Chinese President Hu on November 16 & 17 were a rhetorical success. The communique after the meetings flourished with plans to cooperate at some time in the future.
But, according to reporters Jonathan Weisman and Ian Johnson, writing just afterwards for the Wall Street Journal, President Obama was clearly looking frustrated at the press availability with Chinese President Hu afterwards. Here's their reading of the body language:
(NYSE:T)he two leaders issued the statement in an awkward fashion—at a press "availability" where they took no questions, didn't address each other and exhibited body language that seemed to say they had been frustrated by the entire exercise....Presidential aids played down the lack of results:
White House spokesman Robert Gibbs said the president and his aides hadn't expected "the waters would part and everything would change over the course of our almost two-and-a-half days in China," adding, "We understand we have a lot of work to do."After the first meeting, the two presidents had held a press conference together where they talked past each other on economic issues:
HU JINTAO: "We reiterated that we will continue to increase dialogue and cooperation on macroeconomic and financial policies and continue to consult, on an equal footing, to properly resolve and address economic and trade frictions, in a joint effort to uphold the sound and steady growth of our business ties and trade." "I stressed to President Obama that under the current circumstances our two countries need to oppose all kinds of trade protectionism even more strongly."President Obama is testing a new American foreign policy strategy, based upon the power of rhetoric. Just a few days earlier he had given a beautiful speech in Tokyo in which he laid out the benefits to both sides of more balanced trade. America would get more exports to Asia which could create millions of American jobs. Asian workers and consumers would get a higher standard of living.
BARACK OBAMA: "Going forward we agreed to advance the pledge made at the G20 summit in Pittsburgh and pursue a strategy of more balanced economic growth. A strategy where America saves more, spends less, reduces our long-term debt and where China makes adjustments across a broad range of policies to rebalance its economy and spur domestic demand." "I was pleased to note the Chinese commitment made in past statements to move toward a more market-oriented exchange rate over time."
But why should the Chinese leaders change? Their mercantilist strategy (maximizing exports and minimizing imports) causes their economy to grow while the economies of their western rivals shrink. Soon they will have proven to their people and the world that totalitarianism can work better than democracy, when it comes to economic growth.
Obama's advisers did him a disservice when they sent him to China with only rhetorical arms. WTO rules give trade deficit countries a bludgeon through which they can force balanced trade. Specifically, WTO rules state:
(NYSE:A)ny contracting party, in order to safeguard its external financial position and its balance of payments, may restrict the quantity or value of merchandise permitted to be imported.Obama's advisors better wisen up soon, or they will have a failed presidency on their hands. Rhetoric alone does not cut it when it comes to foreign relations.
Disclosure: No Positions