>> WE IN THE UNITED STATES NEED
TO BE VERY CLEAR, WE ARE
ENTITLED AND WE ARE RIGHT TO
REJECT CHINESE CHEATING, CHINESE
VIOLATION OF THE RULES, RULES
THAT DON'T COVER UNFAIR
PRACTICES.
WE'RE RIGHT WHEN WE'RE AGAINST
THAT.
BUT WHEN OUR POSITION IS, THE
CHINA CAN'T SUCCEED, AND CHINA'S
NOT ALLOWED TO SUCCEED OR
SOMEHOW WRONG FOR CHINA TO
SUCCEED, THAT IS AN UNTENABLE
POSITION FOR US POLITICALLY AND
UNTENABLE POSITION FOR US
ECONOMICALLY.
NEIL: ALL RIGHT.
SO TALK TOUGH BUT DON'T GET TOO,
TOO TOUGH.
READ FROM FORMER TREASURY
SECRETARY LARRY SUMMERS, "WSJ AT
LARGE" WITH MY BUDDY GERRY
BAKER.
THAT PREMIERS TONIGHT 9:00 P.M.
EASTERN TIME.
SO DOES THE PRESIDENT RISK GOING
TOO FAR IN THIS APPROACH ON
CHINA?
FORMER TRADE REP UNDER PRESIDENT
BARACK OBAMA MICHAEL FROMAN WHAT
HAPPENS IN THINGS GET REALLY BAD
HERE.
GOOD TO HAVE YOU, AMBASSADOR.
THANKS FOR TAKING THE TIME.
>> THANKS FOR HAVING ME.
NEIL: IT'S A DELICATE WALK,
ISN'T IT.
HOW THE PRESIDENT MOVES FORWARD
THIS WEEKEND.
PRESUMABLY AFTER THE FEDERAL
RESERVE AND THAT SURPRISE
ANNOUNCEMENT MAYBE THE RATE
FEARS WILL EASE A LITTLE BIT, TO
COMPLETE THE PICTURE HERE HE HAS
TO SCORE A DEAL WITH THE
CHINESE.
WHAT DO YOU THINK?
>> WE, LOOK, I CERTAINLY THINK
HE HAS GOTTEN ATTENTION OF THE
CHINESE LEADERSHIP WITH HIS
TARIFF MOVES.
THE QUESTION NOW IS, IS THERE
KNOW AGREEMENT?
IN WHICH CASE THERE WILL BE
INCREASING TARIFFS OVER TIME.
DO THEY REACH A SUBSTANTIVE
AGREEMENT ON KEY ISSUES AROUND
CHINESE INDUSTRIAL POLICY.
IS THERE SOME SORT OF PROCESS
AGREEMENT WHICH IS MOST LIKELY
OUT COME WHERE THEY JUST AGREED
THEY WILL TALK, AND PROVIDING
TALKING THERE WON'T BE AN
INCREASE IN TARIFFS.
THAT IS BETTER THAN AN
ESCALATING TRADE WAR CERTAINLY,
BUT IT DOESN'T YET RESOLVE
FUNDAMENTAL UNDERLYING ISSUES.
NEIL: YOU DEALT WITH THIS.
PRIOR ADMINISTRATIONS DEALT WITH
THIS.
NO MATTER WHAT THE CHINESE SAY,
YOU CAN'T STICK TO THEM.
CAN'T TRUST THEM.
HOW DO YOU STICK TO THEM STAYING
WITH WHATEVER THEY'RE GOING TO
DO?
>> YOU NEED TO HAVE VERY CLEAR
RULES.
YOU NEED TO ORGANIZE
INTERNATIONALLY SO THE REST OF
THE WORLD ARE FOCUSED HOLDING
THEIR FEET TO THE FIRE ON EXCESS
CAPACITY ON AREAS LIKE STEEL AND
ALUMINUM AND YOU NEED TO USE ALL
THE TOOLS YOU HAVE AVAILABLE,
TAKING THEM TO THE WTO WHERE WE
BROUGHT LOTS OF CASES AGAINST
THEM.
WON EVERY CASE THAT WENT TO
ULTIMATE CONCLUSION.
ULTIMATELY THEY DO RESPOND WHEN
THEY LOSE CASES AT THE WORLD
TRADE ORGANIZATION.
NEIL: PRESIDENT IS TALKING,
PEOPLE ARE TALK, YOU HAVE TO BE
TOUGH, TAKE NO PRISONERS
ATTITUDE, MAYBE EXPLAINS WHY
PETER NAVARRO IS THERE, TOUGH
TRADE ADVISOR WHO WANTS TO PUSH
THEM AGAINST THE WALL, IS THERE
A DANGER OR THEIR VIEW SEEMS TO
BE, ALL ELSE FAILED IN THE PAST,
THIS IS THE WAY WE HAVE TO MOVE
FORWARD?
>> AS LARRY SUMMERS SAID ON YOUR
CLIP, I THINK THE PRESIDENT AND
ADMINISTRATION IS RIGHT TO FOCUS
ON ISSUES WHERE CHINA IS
CHEATING.
THE QUESTION IS, THEY HAVE THEIR
OWN INTERESTS AND POLITICS AND
WE HAVE TO FIND A WAY FORWARD
WHERE THEY CAN ADDRESS THESE
ISSUES IN A WAY CONSISTENT WITH
THEIR INTERESTS.
THE PROBLEM ABOUT PAINTING THEM
INTO A CORNER IS THAT THEY HAVE
LOTS OF WAYS OF REDUCING OUR
EXPORTS TO THEIR MARKET, CLOSING
THEIR MARKETS TO OUR BUSINESSES.
THAT IS NOT IN OUR INTERESTS
EITHER.
SO HOPEFULLY THERE IS A PATHWAY
FORWARD HERE, WHERE THEY CAN
FIND WAYS TO ACCOMMODATE THE
INTERESTS, NOT ONLY OF THE
UNITED STATES BUT OF THE REST OF
THE GLOBAL ECONOMY AS WELL.
WOULD I SAY IN THE LAST COUPLE
YEARS OF THE OBAMA
ADMINISTRATION WE WERE
NEGOTIATING A BILATERAL
AGREEMENT WITH THEM WHICH
ADDRESSED MANY OF THESE ISSUES,
FORCED TECHNOLOGY TRANSFER,
ENFORCEMENT OF INTELLECTUCAL
PROPERTY RIGHTS BUT IT WOULD
HAVE REQUIRED A BILATERAL
AGREEMENT WHERE U.S. MADE
ASSURANCES AS WELL.
HOPEFULLY THE TRUMP
ADMINISTRATION CAN PICK UP ON
THAT AND CONTINUE THAT WORK.
NEIL: A NUMBER OF
REPRESENTATIVES OF TRUMP
ADMINISTRATION HAVE RESPONDED TO
THAT, WHY SHOULD WE MAKE ANY
KIND OF CONCESSIONS WHEN IN FACT
THEY HAVE BEEN PLAYING THIS
GAME, HAVE ALL THE ADVANTAGES
AND ALL THE OFF THE CHART
TARIFFS NOT FAIR.
IT IS THERE, THE OBLIGATION IS
ON THEM TO DO SOMETHING.
YOU SAY?
>> I THINK THERE ARE CERTAINLY A
LOT OF CHINESE POLICIES WE NEED
TO GET AT.
I DON'T THINK THERE IS ANY
EQUIVALENCE WHAT WE HAVE VERSUS
WHAT THEY HAVE BUT GETTING THEM
TO MOVE AWAY FROM THEIR, STATED
PATH THAT THEY'RE ON I THINK IS
GOING TO BE QUITE DIFFICULT.
IT MEANS MAKING SURE THAT WE'RE
FINDING WAYS TO ACCOMMODATE THEM
INTO THE INTERNATIONAL
COMMUNITY.
THE ALTERNATIVE WE'RE PURSUING
PARALLEL PATHS IN GLOBAL
ECONOMY.
WE'RE PURSUING A PATH WITH OUR
TECHNOLOGY AND THEY'RE PURSUING
THEIR PATH WITH THEIR
TECHNOLOGY.
THAT IS A VERY DIFFICULT
COMPETITION.
THEY WILL SEEK TO SET A
INTERNATIONAL STANDARDS.
GIVEN SIZE OF ECONOMY, EMPHASIS