US ambassador hides steel behind silk scarves

US Trade Representative Charlene Barshefsky vividly recalls her first meeting with China's top trade negotiator in Beijing. Madame Wu Yi, the trade minister known in Asia as "Iron Lady," ordered Barshefsky to "sit."

"[Ms. Wu] was being commanding," says Ambassador Barshefsky, who stifled a chuckle and obeyed patiently. "The lesson from that is you pick your fights very carefully. You can't be too thin-skinned."

It was the last time Wu pulled the stunt on Barshefsky, who refused to become exasperated. Instead, she quickly turned the tables and psyched out the former Beijing vice mayor. "Straight talk works with her. Not a lot of fluff. No diplomacy," she says in the flat tones of her native Chicago.

Six years later, Barshefsky has a slew of concessions from Wu on her belt. Indeed, her patient, methodical approach to prying open China's vast market is about to pay off - big time.

As early as May, Barshefsky's team of American negotiators - in Beijing for talks this week - is expected to wrap up the most sweeping deal ever for US market access in China. The unilateral Chinese concessions, granted to win US support for China's entry later this year into the World Trade Organization (WTO), are expected to create major new inroads for billions of dollars worth of American products.

"This will significantly enhance our exports to China," Barshefsky says confidently, taking a break in her spacious office suite a block from the White House.

'Stonewall'

Known for her flowing silk scarves and steely determination, the petite Barshefsky has emerged from the China trade deal with her own "Iron Lady" title.

Both President Clinton and Chinese Premier Zhu Rongji have recently complimented her as the "toughest" US negotiator.

Colleagues, after watching her endure a grueling 51-hour session in Japan with only a 20-minute cat nap, nicknamed her "Stonewall."

Still, Barshefsky faces a final, daunting hurdle in the long-awaited China WTO agreement, which has been 13 years in the making.

She must bring home the bargaining and political skills honed over Beijing negotiating tables and win congressional backing for the deal. During the past three weeks, Barshefsky has virtually lived on Capitol Hill, holding dozens of meetings with scores of lawmakers.

Opposition at home

Despite what she describes as some "very, very positive" feedback from Democrats and Republicans, Barshefsky has faced concerns over trade terms as well as critical broadsides from opponents of the Clinton administration's China policy.

"The congressional hostility is quite real - would that it were merely strategic in nature," says Barshefsky, responding to an administration joke that the rumblings in Congress are part of a plan by Washington to extract even greater concessions from Beijing.

In order for the US to apply the WTO rules to bilateral trade with China, Congress must vote to end its annual review of China's trade status and grant Beijing "normal trade relations" (formerly known as "most-favored-nation" privileges).

That vote could come in May or June, as part of this year's congressional debate on China trade, or it could be addressed separately later in the fall.

Barshefsky says she expects a single, make-or-break vote. "I don't think members want two votes," she says.

Currently, agreement by the House and Senate is by no means assured.

Senate majority leader Trent Lott has opposed Clinton's support for China's WTO entry as "the wrong decision at the wrong time."

China's record

Several House lawmakers - concerned about Beijing's conduct on human rights, labor, and weapons proliferation issues, as well as alleged Chinese espionage - are especially unreceptive to WTO accession.

"The conversation [with congressional critics] is really like two ships passing in the night," says an administration trade official.

Nevertheless, Barshefsky can count on powerful lobbying support from US business interests eager to reap the benefits of dramatic Chinese market openings in industrial goods, services, and agriculture.

According to USTR figures, the WTO accord would reduce China's applied tariffs from the current average of 20 percent to 7 percent in US priority sectors.

Meanwhile, foreign firms would gain full trading and distribution rights within China, as well as the opportunity to invest directly in Chinese service sectors such as telecommunications and banking.

As a result, US exports into what have been China's most highly protected merchandise markets are likely to increase by $3 billion to $5 billion a year, with further gains possible in other markets, says Daniel Rosen, a fellow at the nonpartisan Institute for International Economics (IIE) in Washington.

US exports to China grew 11 percent to $14.3 billion last year, but were greatly surpassed by US imports of Chinese goods, leading to a $57 billion US trade deficit with China.

Beyond creating new opportunities for trade and investment, Barshefsky argues that the WTO accord with China will promote Chinese market-oriented reforms, bolster the rule of law and human rights, and advance China's economic integration with Asia and the rest of the world - all trends beneficial to US interests.

The accord will help the United States "build a peaceful, prosperous and open Pacific region, and ... advance fundamental American principles of freedom," Barshefsky told a Senate hearing earlier this month.

She admits, however, that even with hundreds of businesses giving her intelligence on trade barriers, China's lack of transparency remains her toughest challenge in concluding a water-tight deal.

"Nothing is fool-proof," she says.

Scenes from a negotiation

Relaxing last week in a tweed suit and soft-toned scarf, Barshefsky offers behind-the-scenes reflections on the breakthrough in US-China talks.

A key turning point came in January, she says, when Mr. Zhu dispatched his chief negotiator Long Yongtu to Washington. During several lengthy meetings, Barshefsky said, Mr. Long told her "that Zhu wanted us to understand fully that he would be personally involved."

Soon afterward, Wu began giving ground, clearly authorized by Zhu.

Timing had something to do with Zhu's decision, Barshefsky says. His trip to Washington was nearing.

Also, with a new round of WTO talks scheduled for November, he didn't want China to be left out and risk facing a higher bar to entry down the road.

Zhu also realized that with China's economic slowdown and shrinking foreign capital inflows, WTO membership was vital to keeping the nation attractive to overseas investors.

Most important, Barshefsky believes, was Zhu's desire to propel forward China's domestic economic reforms by locking deadlines for market opening into international agreements, thus corralling opposing economic and political forces.

"Zhu is striking a very bold course for China, and we obviously want him to succeed in that," she says.

Barshefsky applauds Zhu's vision, but the sweeping US-China WTO also bears her distinct imprimatur.

Nimble persistence

Speaking in the crisp, precise language she perfected during 18 years as a private international trade lawyer, Barshefsky rattles off her secrets of successful negotiating:

"Knowing what you want, which sounds rather elementary but is so critical. Persistence. And a recognition that there are 1,000 paths to the same goal.... So there's a certain agility you need as a negotiator, the ability to see the opportunity, and the ability to think through the thousand variations and permutations so that you can get to where you want to go."

Barshefsky rolls her eyes at the histrionics of "certain [foreign] counterparts," who "get up, scream, yell, pound the table, walk out of the room, [and] with a grand flourish call off the talks."

She sighs, "It's all so theatrical and pre-planned."

Instead, Barshefsky projects a style that is both savvy and calm, taking cues from body language and "woman's intuition."

"I simply stick with it and hammer away," she says.