Double Feature!

This week I want to continue last week’s discussion about the conflict between trade rules and other, non-trade priorities, and then I will succumb to the opportunity to say “I told you so” regarding partisanship about China.

Rules conflicts came up again when a group of nongovernmental organizations, and separately, members of Congress, wrote the president asking him to support India and South Africa’s request at the World Trade Organization (WTO) for a temporary waiver on intellectual property protections. The waiver would allow for the production of Covid-19 vaccines in developing countries by forcing their licensing from the companies that created them. There are several reasons why this is a bad idea.

1. There is already a process in the WTO that permits compulsory licensing of drugs in cases of emergency, and Covid certainly qualifies as one of those. In other words, an additional waiver is not necessary.

2. “Temporary” waivers in the WTO have a habit of becoming permanent, as we have seen with the existing drug waiver, the moratorium on taxation of internet commerce, and the prohibition on filing certain types of complaints at the WTO. They all tend to expire at the time of a ministerial meeting, which means they get caught up in bargaining on other issues and end up being extended until the next meeting. This is not to say some of them should not be extended. The point is that “temporary” is not a term that has any credibility in the WTO, and we should not agree to something without understanding it is likely to be permanent.

3. As I said last week, a waiver also addresses the wrong problem. As production from existing facilities ramps up, the problem for developing countries will be distribution—getting the vaccine into the arms of their citizens—more than access to the product, and a waiver is not going to solve that problem.

Of course, as usual, this is also an argument about money. Nobody likes to pay licensing fees. That may be a good argument for least developed countries, but India and South Africa are not two of them.

In fact, what is particularly annoying about this proposal is less its substance than its source. India and South Africa have been the skunks at the WTO garden party for years, objecting to virtually everything that has been proposed, and also objecting to efforts of groups of countries to develop plurilateral agreements that would not affect either of them. In other words, their long-standing position has been: “We want what we want, and if we can’t get it, we’re going to make sure nobody else gets anything they want.” The organization’s current paralysis has a lot more to do with them than with China.

Speaking of China, the recent Conservative Political Action Conference (CPAC) in Orlando has produced an “I told you so” moment that is too good to ignore. Behind the gold statue of Trump, who appears to be wearing American flag boxers, are no less than six panels discussing China on topics like “China Subverts America” and “Corporate America Surrendering to China.” Featured speakers, most of whom are already running for president in 2024, are trying to outdo each other in their hostility to China and in their accusations that Democrats in general, and President Biden in particular, are soft on China and busy selling out our country. As I predicted in multiple past columns, the hysteria has begun and is not going to end anytime soon.

This is unfortunate because it will complicate thoughtful policymaking. China poses a serious security and economic challenge, and it deserves a serious policy response. The Biden team has got it right in focusing more on the “running faster” strategy than on the “tripping the other guy” strategy. Both are important and have their place, but people who have negotiated with China know you don’t win by negotiating from weakness. Strengthening our innovation base and building up our overall competitiveness is a crucial element of any successful strategy.

Unfortunately, what we heard at CPAC and are likely to hear from Republicans over the next four years is attacks on the fecklessness of U.S. companies that do business with China and on the Biden administration for not sufficiently punishing China. This is the politics of blame. Rather than engage in a thoughtful debate about the best strategy, it simply identifies the guilty parties and attacks them along with the Chinese. U.S. companies have not always pursued smart strategies in China, but overall, they need to be considered part of the solution rather than part of the problem and should be dealt with accordingly.

Biden’s task is complicated by Congressional Democrats who yield to nobody in their ability to maintain high dudgeon. The biggest difference between the parties is that the Democrats at least put more of the blame where it belongs—on the Chinese rather than the president—and spend more time talking about how to implement “running faster” solutions.

The combined effect, however, is to limit the president’s maneuvering room, and with public opinion clearly negative about China, that is not likely to change anytime soon. Since all parties want to take a hard line, it makes sense to stop chest beating about who is the toughest and instead work together to fashion a bipartisan strategy that will actually accomplish something rather than just produce sound bites for the next election. This is too important for hysteria.

William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).