Monday, December 31, 2012


According to William Wordsworth, the “Happy Warrior”

“... is the generous Spirit, who, when brought
            Among the tasks of real life, hath wrought
            Upon the plan that pleased his boyish thought:
            Whose high endeavours are an inward light
            That makes the path before him always bright:
            Who, with a natural instinct to discern
            What knowledge can perform, is diligent to learn;
            Abides by this resolve, and stops not there,              
            But makes his moral being his prime care;...”
            –  'Tis he whose law is reason; who depends
           Upon that law as on the best of friends;
           Whence, in a state where men are tempted still
           To evil for a guard against worse ill,                    
           And what in quality or act is best
           Doth seldom on a right foundation rest,
           He labours good on good to fix, and owes
           To virtue every triumph that he knows......

December 20 saw the temporary “swan song” of a Washington institution – who, himself, started his own institution – C. Fred Bergsten, deciding it was time to step aside, but not retire, from his Peterson Institute for International Economics.

Mr. Bergsten said during a farewell/holiday part at the Institute that he would be back soon – but instead of doing the day-to-day business of running an institution he will be climbing the “ivory tower” and looking at ways to direct the Institute forward and wondering out loud about the economic future of the world.

Much of his work over the past 30 years – to his own admittance – had one eye on ways to attract capital, while maintaining intellectual honesty.  It was a tough job, but well accomplished.

My relationship with Mr. Bergsten started at the end of the Carter Administration – with me, a young trade reporter at the Bureau of National Affairs and he, an assistant treasury secretary for international affairs.  At that time Treasury had control over imports – from running the Customs Service to running a rapidly expanding imports program.

I remember calling his office at least twice a week over a three-month period to request an interview.  And twice a week I got a solid “no.”  But I was persistent and the emphatic “nos” continued to echo.  Until a few days after the 1980 election, which put an end to the Carter Administration.  I received a call from his office asking if I still wanted an immediate interview with the assistant secretary.  I responded “no thanks” for obvious reasons.

What the incident really told about the then-assistant secretary was that the phone call came on a day when there was at least a foot of snow on the ground and the government was closed.  I was headed home.

Mr. Bergsten wasted little time after his Treasury tenure in carrying out a dream of building a respectable international economic think tank.  He mentioned last week the effort started from scratch – literally nothing in the bank – a couple of chairs and old desks in a small office off Dupont Circle.

But the dream grew until the present, where the scrubby office grew into a modern four-story all-glass building on Massachusetts Avenue, just across from the monumental Brookings Institution.

The Institute grew over the next 30-plus years into a highly respected and honest nonpartisan economic research institution.  It published hundreds of books and monographs – many of which set the foundation for innovative and federal policies.  One monumental work was the economic benefits of a successful Doha Development Agenda and ongoing work on the Asia-Pacific Economic Cooperation and its TransPacific Partnership offspring.  Whoever was Director General at the World Trade Organization had a standing invitation as did top US trade officials.

  At every policy luncheon and some evening dinners – along with a host of informal get-togethers – were an array of thinkers on all sides of the topic at issue.  Those sessions had the effect of moving policy debates forward and creating comradery among otherwise rivals in the business.

Mr. Bergsten graciously opened the doors to the press – including WTD, to which we are thankful.

Having started my own modest publishing business, I have a lot of respect for what Mr. Bergsten accomplished.  It ain’t easy.  I know there were times when the former assistant secretary could have abandoned the effort to join the incoming Clinton Administration.  But he stuck with his dream.

The “swan song” event included a small gathering of his closest friends and colleagues – (most of whom could assume both descriptive).  All were unpretentious and all were influential policy movers in Washington – from high-ranking Administration officials to other – and competing – “think tank” chiefs.

WTD salutes C. Fred Bergsten and his three decades of work.

Wednesday, December 12, 2012

A "Right-On" Blog From the NFTC

Here's a "right-on" blog by National Foreign Trade Council Vice President Bill Reinsch -- who I almost always agree and have since the 1970s.  Jim Berger

December 7, 2012
Fear of Failure

The trade policy community is seized right now not only with Trans-Pacific Partnership (TPP) negotiations but also with the likelihood we will launch an equally significant negotiation with the European Union.

While a U.S.-EU negotiation appears to have significant support at the highest political levels, I detect less enthusiasm among the actual negotiators who would be charged with reaching an agreement. This should come as no surprise – these are the same people who have been beating each other up for more than 20 years on a wide variety of regulatory and standards issues with precious little to show for it. (If you have any doubts about that, I refer you to the infamous chicken episode of several years ago.)

In my view, this time will be different because of the competitive challenge China poses for both of us. If the Americans and Europeans can work together to develop common standards and regulations, our combined market power will help make them global standards. If we do not, then we risk seeing Chinese standards become the de facto global standard by virtue of their market power. In other words, as Ben Franklin said in a different context, "we must all hang together or most assuredly we will all hang separately."

Making progress on standards harmonization is also important because it is where the greatest opportunity for trade gains between the U.S. and EU lies. Aside from some peaks, tariffs are generally low, labor and environment issues are less divisive than with other countries, and, aside from agriculture, access barriers are less onerous than elsewhere. What American companies most often complain about is the thicket of regulations in the EU they must navigate through in order to sell their products and services, and European companies have the same complaint about us. So, progress in this area would have the double benefit of enhancing trade between two very large and highly integrated markets and of pursuing a common policy in dealing with the Chinese economic challenge.

So, what is holding us back? Apparently, it is fear of failure. Negotiators on both sides have said, privately, that these negotiations "cannot fail," meaning that we should not launch them until we are entirely sure they will succeed. Of course, 100 percent certainty is an elusive commodity in the best of circumstances, but in order to approach that in this case both sides have entered into extensive pre-negotiation discussions intended to assess the odds of failure. In the process, they have also settled on some confidence building measures, mostly in agriculture, which, if successfully completed, will presumably demonstrate to each side that the other is not only serious, but that it can deliver.

That may well work, but the process is disturbing nonetheless because it is tantamount to a negotiation before the negotiation. If we pre-negotiate everything, what is left to talk about once the "real" negotiation is launched? More important, the real question is what's wrong with failure? Being afraid to fail amounts to being afraid to risk, an attitude that runs counter to what most successful businesses are doing in today's hyper-competitive marketplace. America has been built on risk and on failure. We fail constantly, pick ourselves up, and try again. It's one of our endearing qualities, and we should remember it as we consider launching new trade negotiations. The price of not trying is far higher than the momentary embarrassment of failure.