Initiative for U.S.-China Dialogue on Global Issues

James Green: Welcome to the U.S.-China Dialogue Podcast from Georgetown University.

This podcast series explores diplomacy and dialogue between China and the United States during the four decades since normalization of relations in 1979. We'll hear from former ambassadors, cabinet secretaries, and White House advisors -- who will share how they shaped the course of the most complex relationship in international diplomacy today.

I'm your host, James Green.

Today on the podcast, we talk to Ambassador Mike Froman.

In January 2009, at the height of the global financial crisis, Mike Froman was invited to join the incoming Obama Administration as the Deputy National Security Advisor handling international economics. Immediately upon taking office, this Princeton and Harvard Law grad had to quickly master the details of the new Administration's policies and reach out to foreign counterparts to prevent a further deterioration of the global economy. The key country new to international economic coordination at the head of state level -- was China. And by bringing China into the Group of 20 major economies -- also known as the G20 -- the Obama Administration was acknowledging a new truth: any solution to the Great Recession would have to include the world's new #2 economy, China.

The city of Pittsburgh hosted that G20 leaders summit in September 2009, where President Obama summarized global efforts this way:

“Here in Pittsburgh we’ve taken several significant steps forward to secure our recovery in transition to strong sustainable and balanced economic growth. We brought the global economy back from the brink. We laid the groundwork today for long term prosperity as well.”

But the Pittsburgh G20 and addressing the global financial crisis was only the beginning for Mike Froman's interaction with Chinese counterparts. In 2013, Froman was confirmed by the Senate to be the United States Trade Representative. Over eight years on issues from climate change to opening the Chinese market, he was able to use international meetings, visits to Beijing, and Presidential summits to push the U.S.'s economic agenda.

And in a fitting way, Mike Froman's last trip to China as a cabinet official was for the G20, hosted in the lakeside city Hangzhou. Chinese President Xi Jinping, opened that event:

“Now I declare that the G20 Hangzhou Summit now begins! Eight years ago, at the height of international financial crisis, the G20 acted in a spirit of unity and partnership, held the world economy back from the precipice and pushed it onto the track of stability and recovery.”

And now, here's Ambassador Mike Froman on summitry, trade negotiations, and how he shaped China's choices to align with the United States.

Michael Froman: It's hard for people to remember just how dire the situation was at the end of 2008, beginning of 2009. We were losing, literally hundreds of thousands of jobs a month. The economy was in contraction. At the end of the Bush administration in October they convened the G20 and the Leaders level for the first time. The G20 had been an organization that goes back to the 90s from the previous set of financial crises and met at the Minister level, but never at the Head of State level. And so the Bush administration decided to convene it in October. It was convened again in April in London.

And it was really sort of two sides of the same coin. Domestically, we were working on, the response to the crisis, TARP, bailing out the, the banks, the-

James Green: The Troubled Asset Relief Program.

Michael Froman: The Troubled Asset Relief Program, what became a bailout also for the auto industry and its financial, affiliates. But there was an international part of this. And the G20 became the mechanism for coordinating the international response to the crisis, including London under Gordon Brown's leadership mobilizing half a trillion dollars of resources for the IMF, to be able to sort of convey to the markets that the international community had come together, and was willing to do what was necessary to prevent this crisis from deepening even further.

So it was a very important set of developments. There were other things on the agenda as well, including dealing with tax havens and other issues.

James Green: Mm-hmm (affirmative). Right.

Michael Froman: But mobilizing resources over the international system, and then beginning the process of what became the financial stability board, and international regulatory, cooperation mechanism for the countries to come together and begin to rethink financial regulation. That was all done under the G20.

James Green: So in that run of the G20, which the U.S. is not hosting yet, and we'll get to the hosting, which is always much heavier on the host country than when you're going to another place; but just previewing in the pre-London and in London, was there a fair amount of disagreement or unity among the major economies, and then in this case, I would ask China as well. So kind of what's your recollection of what the major players were talking about, and points of divergence or convergence?

Michael Froman: I think there was fair degree of unity about the need to take collective action. What that action was-

James Green: And, and be seen as taking collective action.

Michael Froman: And be seen as taking that, but then sure that there was international cooperation and efficient mechanism for managing that cooperation, and one that took into account the seriousness of the financial crisis. I think that the precise elements of that cooperation is what had to be worked out before, during and after London, because ‑ this crisis was different than the previous crises. But you wanted to make sure you were using all the tools that were available to the international system.

And it was ... You know, the whole idea of the G20 became, and really the, the London meeting was the first instance of this, it became the mechanism that recognized the increasingly important role of the major emerging economies. There had always been a G8+5 meeting-

Which was, you know the G8 meaning the, the old G7, industrialized Western countries plus Russia. Russia was added in the 90s. And they would have, at their summits they would invite the five major emerging markets to come. But it was always sort of seen as a second-class citizenry.

James Green: The kids', a kids' table, and-

Michael Froman: The kids' table, and they would come just for lunch-

James Green: (Laughs).

Michael Froman: Or they would come for just part of the meeting.

James Green: Mm-hmm (affirmative).

Michael Froman: And the G20 reflected the, the realization that that wasn't gonna make it anymore, that we needed to have China, India, Brazil, South Africa, Indonesia at the table at all times. And ‑ it was a real opportunity there to create new architecture for the international system.

James Green: To reflect the true economic forces and balances in the world as opposed to the way they were in 1945 or 1950.

Michael Froman: I think that's right. I think the challenge there was, it was one thing to have them at the table, but the question is what role were they gonna play, and would they step up to take responsibility including make commitments obligations on to help manage the international system.

When it came to the financial crisis in April and then later in Pittsburgh in September, I think China was a pretty active player, and there was a lot of very good interaction for example, between Wang Qishan who was the leading economic official at that time, and our Treasury Department and our White House, when it came to other issues later on around trade and the WTO, perhaps less willingness to take on obligations and responsibilities. But as they know the crisis, that G20 proved to be an effective avenue.

James Green: So on the Pittsburgh meeting, maybe just taking a step back and explaining what your role was in the White House at that time, and how you, as the architect for a lot of that G20 Leaders' meeting in Pittsburgh saw that, and then orchestrated to make it a success.

Michael Froman: So, one of my jobs at the White House was to be the Sherpa for the summits, for the G8 and also for, for the G20, which meant the, the person who managed the process of preparing for the summits. With the G20 it was actually really two tracks at work that come together. One is run by the Treasury Department, and it's with the other finance ministries and central banks, and then one by the Sherpa, who oversees the summit as a whole, and deals with a lot of the other issues that are on the agenda as, as well.

James Green: And in our system, that's run out of the White House to have that kind of leadership, connection.

Michael Froman: And that's run out of the White House. Yeah, each country does it differently. Sometimes it's in the Foreign Ministry. Sometimes it's somebody at the, the Prime Minister's office or the President's office. So each one is, is somewhat different. And the Sherpas meet regularly and engage regularly before the summits to work through what should be on the agenda, what are the proposals, work out the, the details of the proposals, and then, you know, ultimately the language, the communiqué which becomes the focus of a lot of the work, and, and the release of the summits.

James Green: Late night sessions of trying to make sure the language is agreed to, yeah.

Michael Froman: Lots of late night sessions. Exactly. And it was at the end of the London Summit when, the leaders said, well, should we do this again, year? Or should, do we need one to have, have one earlier? And somewhat to my surprise, President Obama put up his hand and said, "Yes, we need to have one earlier, and we'll do it." And so-

James Green: And that's when he looked to you and said, "Mike, make that happen."

Michael Froman: Exactly. Exactly. There wasn't a lot of downward consultation before that decision was taken. But I mean, he was absolutely right, and we did need, ... We, we couldn't have gone a whole year, given the nature of the crisis and how it was evolving to, to have another summit. And having another summit both created an action forcing event for the countries involved to further their cooperation, talk about what the next step was.

And then of course in September, demonstrate to the international community and the economy and the markets that in fact the countries were coming back together again, continuing to work to manage the crisis, and very importantly, continuing to put in place a new regulatory regime to prevent crises like these from occurring again in the future.

James Green: Well, so the regulatory regime was on that kind of future arrangement and there was also fiscal and monetary stimulus-

Michael Froman: That's right.

James Green: And the ways, coordinated ways that would, address the, the real-time crisis.

And so, I'm curious how we ended up in Pittsburgh. But then, as you were preparing for having all of these leaders there, and kind of figuring out what the communiqué would be, what would be in the communiqué, what you wanted to communicate, how was working with your counterparts, in China but also then with the other members of the, of the G20?

Michael Froman: Well, what emerged through this G20 process, and we had two summits in 2009, two summits in 2010, and then I think it went on to an annual schedule, was this really became much more than just a crisis management forum. It became a new piece of international architecture. And we used the summit, and we used the network of Sherpas and, and other contacts that we had, to address any number of other issues that became a mechanism for talking about what was going on in oil markets, and prices around that.

It became a channel for talking about climate change, and things that were going on in the climate change, the U.N. climate change negotiations. So it became a very useful, forum or mechanism for international coordination across any number of, of other issues. Um, in Pittsburgh, you know, as an example, we put on the agenda the issue of getting rid of energy subsidies, phasing them out over time. And-

James Green: As a climate change issues, or as market distorting issue?

Michael Froman: Well, it was ... That, the, in fact the reason we chose, and reason we focused on energy subsidies is because it was related to ... It was a fiscal issue, so kind the reason we were spending an enormous amount of resources on energy, subsidies that were distorting, markets. It was a, it was a, climate change issue as well in terms of leading to the overuse of fossil fuels. It was a health issue in many cases. And so it was, it was a issue that touched a number of different objectives. And, it created the beginning of a process for monitoring and phasing out energy subsidies.

Not that they're gone, but I think over time, putting this on the agenda, and this is the way international governance generally works, you put issues on the agenda, you create processes around them. You create reporting mechanisms on those processes, you assess the progress being made, you take on additional obligations, and over time, you make real progress. Even if you never achieve the ultimate objective, you're making progress in that direction.

James Green: Yeah, that process helps address some of the-

Michael Froman: Exactly.

James Green: Imbalances and some of the problems. So, for the Pittsburgh summit, is there one part of it you think, "Yep, we really got that right," or something that sticks out in your mind?

Michael Froman: I think, I think, what Pittsburgh did was begin to normalize the G20 process.

James Green: As an institution.

Michael Froman: As an institution. It was, it ... One of the outcomes of the summit was in fact the recognition that the G20 was the "premier forum for international economic cooperation." That was an explicit statement that the G7 or the G8, while very important, and could get certain things done as sort of the rich country club, that other ... For example, in terms of donor efforts in development or humanitarian issues, that, that the other forums might not be able to get done, it wasn't sufficient for international economic cooperation, and the G20 going forward was gonna be the focus.

James Green: And at Pittsburgh that was, consciously put into the language to kind of -

Michael Froman: Exactly.

James Green: Memorialize the G20 role in doing that. I guess I'll ask, do you recall, were certain countries pushing for that sort of language, or was there just a general recognition that, oh my gosh, the financial markets and the, the global trading system is so intertwined with these 20 economies, this needs to be recognized?

Michael Froman: I think some of the G7 countries were pushing against that language, because they-

James Green: With, without naming names, they didn't want to be diluted?

Michael Froman: Correct, correctly recognized that it diluted their, their special role that they had previously, had. Um, but-

James Green: Or at least in their mind they had, yes, yeah.

Michael Froman: but I, I think, not sufficiently that it would, that they, that it failed to move forward. And then as a small anecdote, I'll something that I think we failed at, at Pittsburgh. We focused on a lot of the specific details of the summit. One thing I did not focus on was on the size of the table. And when we got to Pittsburgh and walked in the room, it was the most enormous table, um, I'd ever seen. And in fact, it was very hard to see somebody all the way across-

James Green: A leader it was hard to see another leader,

Michael Froman: A leader, another leader. 'Cause the table tends to have two seats per country for the President and the Sherpa, or the President and the Finance Minister during the, the, the finance discussions. And so it's only 42, 44, it'd be the 21, 21 countries-

James Green: 'Cause the G20 actually is a little bit larger than 20, yeah, yeah.

Michael Froman: A little bit larger, and then you have some of the international organizations that sit there.

but somehow, we created a table that probably could've sat 100 or so, and it sets They gave bad press to them, because from then on, these tables were quite large, and we lost a little bit of the intimacy.

James Green: I see. Right.

Michael Froman: There's a certain amount of intimacy of leaders really just being able to reach across the table and talk to each other. And that's one of the great strengths in having summits, is that it not all be pre-scripted, but that you have some real interaction among leaders, and, that was something that was gonna be important to maintain going forward.

James Green: Right. So bringing a telescope now to these G20 meetings has been-

Michael Froman: It just says, no matter how much time and effort you spend on preparing for these things, you know-

James Green: The, the substance and the communiqué, and (laughs)-

Michael Froman: It all comes, it comes down to the furniture.

James Green: (Laughs). Um, speaking of a rather disruptive summit,one of the other things that you worked on in the White House was on climate change.

Michael Froman: Mm-hmm (affirmative).

James Green: And could you just step back and explain how the administration cane to the view that climate change was really important and a policy priority for the United States, and then how going into Copenhagen in 2009, kind of where we stood and what the goals were? And then I'll ask about the Chinese interaction.

Michael Froman: Well, I think the administration cane in, the President came in, in 2009 certainly with a strong view that climate change was a priority, a serious threat and needed to be dealt with. The President and the Secretary of State appointed Todd Stern as our Chief Climate Negotiator at the State Department. Um, and, and he worked very closely across the government to really manage our negotiations. We inherited from the Bush administration something called the, it was, I think they called it the Major Emitters Forum. We call it the Major Economies Forum.

But it was the same thing, and it was about 30 countries, developed and developing, a lot of overlap with the G20, by the way, and it sort of, these overlaps were sort of reinforcing. But these were the major countries that were involved int the climate change discussion, and where obligations from these countries would be necessary if we were going to solve climate change. And that therefore included countries like China and India, as well as, the EU and the United States.

Um, so, having inherited this from the Bush administration, the way it worked is that White House chaired it, and I chaired it, and Todd was our, Todd Stern was the U.S. representative, and we worked very closely to coordinate those meetings and the agenda. And, a number of the same people who played a role in the G20 ended up playing a role in the Major Economies Forum as well.

We spent 2009 really preparing the Copenhagen summit, and using [garbled] as the mechanism, to do that. And then as we got closer to Copenhagen, the, the U.N. and the, the Danes created their own sort of green room group of about 30 countries.

James Green: Why don't explain what a green room is.

Michael Froman: Well, green room sort of goes back to other international organizations. We're ... At the Climate, since this is a U.N. negotiation, you had, you know, 194 countries, or something of that sort there.

James Green: Makes it difficult to reach consensus or build anything.

Michael Froman: Exactly. And so you need to have some smaller, but representative group of countries who can get together and work through the specifics of, of various proposals. So in this case, there were about 30 or so countries who constituted that. A lot of overlap with the Major Economies Forum.

And Major Economies Forum was not intended to be a substitute for the U.N. negotiations, but a place where, you know, a sort of a safe space where you could, you could float ideas, flesh out options and then feed them into the appropriate UN processes, including this, this 30 room, 30 country process as well.

James Green: And these would be countries and economies that had the bandwidth and the interest in the issue. That is for some countries, you know, climate change was of interest, but they didn't, they didn't have the, the-

Michael Froman: That's right.

James Green: The technical expertise or it didn't really affect their economy or their population that much. And so you have a natural kind of attrition of, these are the countries that care enough, have the bandwidth and can actually bring something to the table in discussing language. And so, you were saying that the green room in Copenhagen or using that kind of subset-

Michael Froman: Right.

James Green: Of some of the members was an important part to them leading up to the summit meeting in December.

Michael Froman: Well the G20 countries played a key role. China played a key role, obviously. And we used, again, the Sherpa network as well as the climate change negotiator network to flesh out issues. So oftentimes, Todd and I would meet with the Chinese Sherpa and the Chinese Vice Minister from the NDRC to flesh out these issues and bring them back to the table in a way that helped move the negotiations forward.

James Green: And this would've been He Yafei and Xie Jianhua on the-

Michael Froman: Exactly. Exactly.

James Green: From the National Development and Reform Commission.

Michael Froman: Exactly.

James Green: So Jeff Bader who served as the Senior Director in the White House for east Asia for the first part of the Obama administration has written in his book about the summit meeting in Copenhagen in which there was not a lot of movement, and there was some fair amount of distance among, particularly the developing and the developed countries. And some of the major developing countries were meeting, and the U.S. side was trying to talk to particularly China, because China had an interest in some of these issues. Could you just recall, if you could-

Michael Froman: Sure. (Laughs).

James Green: About how, how that went, went down?

Michael Froman: It was a, it was a chaotic few days. The U.S. delegation had been there for a number of days, and as you said, there wasn't a lot of progress being made.

James Green: And you had been there early as well.

Michael Froman: Oh yes, yeah, yeah, no I was there throughout. Secretary Clinton arrived, and that was a very important moment, because she announced that as part of an overall deal, the U.S. would commit, not itself but on behalf of the, sort of developed countries, that we would agree to mechanisms that, with the goal of mobilizing a hundred billion dollars a year in climate finance to help developing countries with their, their mitigation and, adjustment needs. And that was not to be all official finance, but had to do with markets and philanthropy and a variety of other things.

That sort of unlocked some of the negotiations, and there was some progress over the subsequent 12 or 16 hours.

James Green: Because it was seen as addressing the concerns of the developing world.

Michael Froman: Of the developing countries, exactly, at which point, the President arrived. And I, I went out to, to meet the plane and briefed him on the way into town and said, you know, I'm afraid we're not anywhere near an agreement, and there's still a lot of chaos. And you know, we'll see what the day is going to hold. And he got there, and we had a whole series of meetings lined up for him. He met with Wen Jiabao, Premier Wen, early in the day. Went on to see other meetings. Gave his speech at the Plenary. We have various green room meetings that he participated in. And then later in the afternoon, her wanted to meet again with Premier Wen to go over some further ideas. He-

James Green: And this is talking about, sorry, about the communiqué, what was going to be agreed to for-

Michael Froman: And the package of the deal. I mean it was less the communiqué which is really about language, but more, what would a deal look like? Remember, the whole purpose of this, the key thing about Copenhagen was that it, it broke the mold of climate negotiations to that point. In Kyoto in the late 90s, the agreement was, there were developed, and there were developing countries. And developed countries had obligations and developing countries didn't.

And what Copenhagen's import was, was the recognition that to solve climate change, it wasn't enough for the developed countries to take on obligations; that if China and India were the fastest growing emitters in the world, in China's case, the largest emitter in the world, if they didn't take on obligations, we were never gonna solve climate changes. And so it was to break down that wall between the developed and the developing.

It took then, several years between Copenhagen and Paris to actually reach an agreement, to what those obligations might be. But Copenhagen was the key moment. It was the turning point, because it opened up a post Kyoto reality. The President wanted to see Premier Wen to lock in some of these issues, to talk about the outstanding issues.

James Green: And these would be kind of what obligations countries might take on-

Michael Froman: Exactly.

James Green: In eventual Paris [crosstalk 00:27:27].

Michael Froman: As part of an overall package. What kind of verification mechanisms there might be, how the climate finance fit into it. But the overall, the overall, framework for, for the negotiations going forward. He, the advance teams reached out to the Chinese team. Um, there was no response. Various people were sent to go look around to see where the Chinese team was, without success. Finally, somebody spotted, a Chinese security personnel, outside a conference room. And by the way this conference room, this conference facility in Copenhagen.

The conference facility was adjacent to a mall.

James Green: Shopping mall.

Michael Froman: A shopping mall. And so a lot of the meetings took place in what was basically closed shops in the mall.

James Green: They closed the shops for them, yes.

Michael Froman: They closed the shops for this. And so we're walking through this mall looking for the Chinese delegation. We hear on the radio that somebody's found a Chinese security official, and we think we know where, where -

James Green: The Premier would be behind that door.

Michael Froman: Where the premier was. The President said, "Let's go." So we walk over to this, this room. It's a room that's, it's a glass room, but there are shades. There are curtains pulled so you couldn't see into it. Um, knock on the door, the President pushes his way in, and it's not just Premier Wen, but it's also, Prime Minister Singh of India, President Zuma of South Africa, President Lula of Brazil. They're all meeting there on their own, while the rest of the, countries are sort of waiting for them in order to move the negotiations ahead.

And, there was this kind of very, interesting moment, a very, I think probably unprecedented in diplomatic history, where the President and the Secretary of State pushed their way int this room. There's a little scuffle between the Chinese official and the Secret Service. Um, they make room for the President and for Secretary Clinton at the table. A number of us, Todd, myself, Jeff Bader, Denis McDonough are sort of standing on the side behind them, watching the negotiations.

And this group of leaders and, and Ministers start negotiating the final framework for Copenhagen. Um, they went back and forth, and President, Secretary Clinton is handing President Obama notes, handwritten notes with ideas, and they're drafting language and, were making good progress, in the negotiations. And at one point, Todd hand the President a note, making sure that he reiterates that countries, all countries, developed and developing, are going to have to notify the U.N., this process of the obligations that they intend to take on, of how much they're gonna reduce their emissions by, or-

James Green: So the-

Michael Froman: What year they're gonna peek their emissions by-

James Green: There would be some transparency and what, the goals would be announced publicly-

Michael Froman: Absolutely.

James Green: And they would have to then meet those goals.

Michael Froman: And meet those goals, and there would be some monitoring process to, to do that. And this has been a, a sticking point. Because as much as the Chinese and Indian delegations recognize that we weren't going to be able to solve climate change unless they too, participated, they were reluctant to breach this firewall between developed and developing countries that had been established in Kyoto.

And so the President said, "Just one more thing. I just want to reiterate," and he, he laid out the issue about, you know, I want to make sure you know how important it's gonna be that you express what your commitments are, and that they be capable and subject to monitoring." And Premier Wen said, "Yes." And at that point, other members of his delegation started yelling, in Chinese, obviously, in Mandarin, at the Premier. The translator, this went on for perhaps 20 or 30 seconds, so awkward seconds, the translator on the Chinese side,said, "Internal discussion only." (Laughs).

James Green: (Laughs).

Michael Froman: And did not translate the back and forth.

James Green: And you got it through the headsets or something?

Michael Froman: Yeah.

James Green: Yeah.

Michael Froman: No, it was all -

James Green: Consecutive.

Michael Froman: Consecutive.

James Green: Wow.

Michael Froman: And so at that point, we were done, and we got up and left and went to another part of the conference facility to brief the Europeans on what had been agreed to, and make, bring them onboard, as well. And then, the rest was left to the details to, to work out over the next 36 hours in, in Copenhagen.

James Green: Um, while we're summit hopping, maybe we can get to the, the APEC summit in 2014 when China is hosting, you're at the USTR at the time. You were U.S. Trade Representative. You had moved there in 2013. And, could you talk a little bit about, in 2013, what the main goal was on the trade front for, there was bilaterally meeting between President Obama and, and Hu Jintao, that had a couple of elements. And the main trade on was around the information technology agreement-

Michael Froman: Right.

James Green: Under the WTO. So could you talk first, what that agreement is, and then how we tried to use the APEC year that Chine was hosting in 2014, and then the summit meeting to kind of make a breakthrough and, and get this agreement through.

Michael Froman: Well one of the important, things about APEC, is that it, it oftentimes was a, a place where new ideas were floated that then made their way into the WTO. So trade facilitation, for example, really started in APEC, and then became a WTO agreement in, 2013 in Bali. The same was true on the information technology agreement. There had been an agreement to eliminate tariffs on about 200 information technology products, back in the 90s. But obviously, information technology had evolved greatly in 20 years, and so-

James Green: Fax machines, right? Not so popular anymore, yeah.

Michael Froman: Yeah, exactly. New, new issues. So we, there had been a negotiation to enhance that list, to add more products to that list for tariff elimination. And in fact, we ended up eliminating tariffs on another 200 items. China was a critical player, had become very much a critical player in the production of these products. So they had a lot of gain from this. But they also felt that a number of these sectors were sensitive, and they were not used to eliminating tariffs where they still had sensitivities, even though they probably had the, among the countries that had the most to gain from the agreement in terms of their export potential.

We used APEC to drive this, because in our view, China was the host of APEC. If APEC were to have credibility as an important international forum, under China's leadership in particular, we had to see progress on the information technology agreement. And we had moved the other countries along well in the negotiation, but the key issue, as often was the case, was what would China agree to. And so this became a bilateral negotiation between the U.S. and China. We had our list of, of priority products. They had their list of, of priority sensitivities, and the question was, could we find a common ground?

And that APEC meeting and the bilateral meetings around it between the two presidents, proved to be important, because it was an opportunity for them to actually reach an agreement that then drove and allowed the WTO agreement to move forward.

James Green: I think one of the key parts about your participation in that was the number of meetings that you were able to come to China for, and meet with the Vice Premier, who was in charge of trade investment at the time, Wang Yang. Could you just recall what those meetings are like, for those people who have not been in Zhongnanhai-

Michael Froman: (Laughs).

James Green: At the leadership compound of how, how that orchestration works?

Michael Froman: Well, first of all, I was very grateful. The, the, the Chinese, leadership was deeply engaged on these issues and made themselves available, and gave us access in order to have these conversations. Um, and we're always very well prepared and well briefed by the teams. The meetings, are in quite a formal setting. You sit side by side in large chairs with a, interpreter between you, interpreting, lots of people on both sides.

Um, Vice Premier at the time, Vice Premier Wang Yang was very interested because he, he liked philosophy, he liked to read, and we came into this habit of exchanging books every time we saw each other. And I would give him books on American history and American politics, and he would give me books on Chinese philosophy and the next time we saw each other, we would, we would talk about the books, and then get into, you know, the issues of, can we add advanced medical equipment to the list of information technology products et cetera. But it was a, it was a very good process and a reiterative process.

And what would generally happen is we would generally come in with our list of suggestions, and they would go through some process internally, including with a relevant industry, and come back to us and say we can do A, B and C, but we can't do D, E and F, or we can only do 50% of that. And we would determine whether that was sufficient or not, or whether we need to keep on, on pushing. And at the end of the day, we got a good agreement.

James Green: How would you just compare your access and interaction with Chinese officials at that level, versus other economies that you dealt with, both allies like Japan and Korea, but also Europeans or other countries? I mean, for those of us that are in Beijing serving the United States, it's just very frustrating to interact with many parts of the Chinese bureaucracy. China has opened up in a lot of ways, but their bureaucratic system is still quite stove piped, and granting access is part of their negotiating strategy. How did you find it, given you dealt with trade ministers from many different countries? How did you find your visits to Beijing and your access to Chinese officials?

Michael Froman: You know, I, I found, the ... I found, as a, as a non China expert, but just somebody who dealt with China over the years in various negotiations, I found the Chinese side to be very disciplined. You got the impression that there had been a lot of preparation for these meetings, that there was a set of talking points, that no matter who you saw in the system, they all repeated the same set of talking points.

As you moved from one meeting to the next over the course of a day, they clearly had received a readout of your previous conversations. So there was a great deal of communication and coherence. And I ... On one hand, I think that was a positive, because they spoke with one voice, and certainly knew what the issues were that needed to be dealt with. On the other hand, you got the impression that nobody around the table necessarily had a lot of discretion themselves to cut a deal.

When you sat with a minister from another country, oftentimes these ministers were politicians themselves.

James Green: And they'd been elected.

Michael Froman: Elected they were part of the Parliament, they were part of a cabinet. They understood how to cut a deal. They were expected to find compromises and trade off one interest or another and, had enough of a sense of where the different interests lay in order to be able to do that. With China, you got the impression that you would lodge your request, and then behind the scenes, there would be some extensive process that was quite opaque, and whatever came out of it-

James Green: The magic machinery was turning-

Michael Froman: Yeah, exactly.

James Green: And you couldn't quite see what was there.

Michael Froman: Whatever came out of it-

James Green: Something would come out.

Michael Froman: Came out of it, but it was not a situation where you could have a negotiation at the table and say, well what about this, what about that. Everything had to be sent back to Beijing for consultation. And that's a little frustrating. At the WTO, you find, you know, that you're staying up all night for several nights in a row trying to work through issues and come up with creative solutions, and some Ministers around the table are, empowered and capable of doing that. In other cases, everything has to go back to capital. China wasn't the only country in which that was the case, but because of its importance to the international community, one always hoped that China could come to the table with a bit more flexibility to find solutions, on the fly.

James Green: I wanted to end, we started talking about the G 20 and, and London and Pittsburgh. With the final, G20 that China hosted that you came to in 2016 in Hangzhou, that I that that moment we were working on two separate, trade negotiations, one multilateral and one kind of bilateral. The Bilateral Investment Treaty was the bilateral one in which we were trying to make progress, on the Chinese negative list-

Michael Froman: Mm-hmm (affirmative).

James Green: To grant more market access to investors. And then under the WTO, the Environmental Goods Agreement of trying to bring to zero a range of tariffs on a range of environmental products. Could you talk just a little bit about how ... what happened and what your experience was in dealing with Chinese officials on those two issues, and how those fit into kind of broader U.S. goals?

Michael Froman: Yeah. On, on the Environmental Goods Agreement, like the Information Technology Agreement, it was really just about coming up with a list of products that countries could agree to eliminate tariffs on. And it should have been a relatively easy negotiation. And again, because China is a major producer of these products, it had a lot to gain-

James Green: And a major exporter.

Michael Froman: A major exporter, exactly. They had lot to gain by reaching an agreement and having other countries draw up their tariffs. We made a lot of progress. We were very close to reaching an agreement. There were certain difficult to reconcile issues. China was determined to eliminate tariffs on bicycles. The EU was determined never to eliminate tariffs on bicycles. But we thought we could find ways through that.

And then at the last minute, China came, literally the last day in Geneva, and tabled a new proposal that was clearly designed to blow up the whole negotiation. It had a lot of things that crossed the red lines for both the United States and for the EU. And to me it was a disappointment because I think China could have very much harvested a very positive agreement that would have had substantial economic effect, but also impact on the environment, on climate change, on addressing a lot of China's own environmental issues in terms of getting, environmental technology into the Chinese market, more expeditiously. But for whatever reason, they made the determination they wanted to kill that agreement.

James Green: And show leadership at the WTO as well, that is-

Michael Froman: Yeah, absolutely.

James Green: At a time when people were questioning the value of the World Trade organization, that would have been a major accomplishment [crosstalk 00:45:55].

Michael Froman: And, and this goes to my point from, from the start, which is, when it came to some international finance issues they were willing to step up. It was in their interest to do so, but they were willing to step up at the G20. When it came to trade issues, they really have not been willing to take those steps of leadership commensurate with their role as a major trading party, as the second largest economy in the world.

James Green: And, and, and by leadership, you mean reducing barriers or tariffs for companies or goods or services to operate within the Chinese market, yeah.

Michael Froman: In this case, in this case. It can be about rules, or it can be about market access. But looking at the system as a whole, for 75 years the U.S. viewed the multilateral system in such a way that, we were willing to take certain steps because the system benefited us and everybody else. And sometimes that meant that we went the extra mile to make sure that, the system worked.

China has been more of a free rider on that system. That system has been very good to China. It's allowed the tremendous growth of China's export regime at, sometimes at the expense of jobs and industries in other countries. Now we see the pushback from that. And I think one of the reactions to the pushback needs to be China re-thinking, is it wiling to step up and play more of a stewardship role for the international system?

James Green: And one of the areas that they were looking to write the rules on was on investment, and they saw the Bilateral Investment Treaty with us, negotiations with the United States and with Europe as a way to kind of do that.

Michael Froman: That was a very interesting negotiation, because here, President Xi clearly saw this as a priority and put a lot of emphasis on it in the Chinese system. And you could see that by the seriousness of the teams at the table, by how much homework they did between sessions. We heard about meetings back in Beijing with hundreds of negotiators being trained on various issues. They, they really took this very seriously. We had ... It was an intense negotiation. We met dozens of times. Our teams got together almost constantly for, for two years. And we made a lot of very good progress. I think we were about 90, 95% done by the end of the Obama administration.

There were very few issues left, although the issues that were left were, were difficult and, and important. But I, to me what was interesting is, we would have this conversation with our Chinese counterparts about SOE reform or State of Enterprise reform, or the importance of committing to, not force technology transfer, or the importance of respecting international, intellectual property rights. All the sort of things that are still on the table now-

James Green: And those written in, sorry, just to be clear, those are written in rules-

Michael Froman: Rules.

James Green: That would have been in-

Michael Froman: Fully enforceable.

James Green: An agreement, mm-hmm (affirmative).

Michael Froman: Fully enforceable, fully enforceable. And then China would take this back and would convene meetings internally, whether it was by, Wang Yang or others, to bring together the various constituencies within the Chinese system to build consensus around that, and show that they were willing to move forward. And we actually made a lot of progress.

A lot of the things that China's dribbling out now as concessions to the U.S. are things that we got them to agree to in the context of the Bilateral Investment Treaty. When I, say got them to agree to, we put it on the table and they determined through their own internal processes, that it was in their interest to do this. And that's what was important is that, it helped move the agenda of reform in the Chinese, in the Chinese system. And you know, we'll see where it goes. I think, obviously the Trump administration has not continued those negotiations, but those issues very much remain on the table, and I think the big negotiation process demonstrates that there is a possibility of sitting down with China, having a conversation about these issues, and then creating the mechanism by which they reach consensus internally to pursue the reform agenda.

James Green: Just lastly, one of the things that really brought the Chinese to the table was where the Trans Pacific partnership was, in the sense of being left out. And one of my abiding memories of the 2014 APEC meeting was setting up the Leaders meeting in our embassy gym and your Ministers meeting in another part of the embassy. And in fact, on the Chinese side, they would talk about how a bilateral investment treaty with the United States could be a stepping stone to eventually joining the Trans Pacific Partnership. Could you just talk a little bit about the kind of regional dynamics, and how you think that played into what china's thinking was?

Michael Froman: Well I think that's right. I mean, when we launched, the, or entered the most intensive phase of the Trans Pacific Partnership negotiations, this really, it wasn't about containing giants so much as creating an alternative model in the region that other countries could aspire to, and associate themselves with about raising standards, labor, environmental standards, protection of intellectual property rights, free flow of data things of that sort. Deep market access.

And China was ... When we first announced it, there was some hostility. Over time it became more curiosity, and every time I would go to China, I would be asked to debrief them on the status of the negotiations. They never asked to join, but they would ask questions like, what do we think the most difficult aspects of TPP would be for them to comply with. So they were certainly looking at it with great interest. And when the text was finally done and published, the next time I went to China, everybody had it on their desk. Clearly-

James Green: Translated into Chinese.

Michael Froman: Translated into Chinese. Clearly everybody was studying it to see what the next generation of standards, would look like. In the BIT negotiations, we took a number of elements from TPP more or less, almost 100% in some cases, and put them into the BIT negotiation and so I think there was a possibility of using these higher standards through the BIT process to help encourage, greater discipline on China's part.

James Green: Thanks so much. I wonder if you'd just say, kind of in closing, you've spent a lot of time dealing with a lot of different countries negotiating a lot. For the next generation of Sinologists and U.S. officials that have to interact with China, have to try to push U.S. interests, what sticks out in your mind of things to kind of keep, keep a tab on keep focused on?

Michael Froman: Well, look, I think one needs to be patient, particularly with the pro ... bureaucratic process on their side. But I, I found the more frank you could be, in diplomatic terms, in polite rhetoric, but the more frank you could be in laying our, what the respective interests were of the countries, what, the pathway forward was, and recognize where they might have divergent interests and try and find a way through that, the more responsive they were.

Sometimes I, I felt as though, it might be difficult for them internally to wrestle through some of these issues on their own, but if we could lay out a pathway, then they had something to take back to their system to chew on. And so we certainly didn't success on everything, but I think we made some significant progress. And given the importance of China to the global economy now and going forward, I think this is all gonna become, you know, more critical.

James Green: Thanks so much. Really appreciate your time, Mike.

Michael Froman: Thank you.

James Green: United States Trade Representative Michael Froman - speaking with me from Washington, DC. You’ve been listening to the U.S.-China Dialogue Podcast from Georgetown University. I’m your host, James Green.