US trade negotiator dumps the term MOU after Trump objects

US President Donald Trump at a meeting with China's Vice-Premier Liu He and US Trade Representative Robert Lighthizer in Washington last Friday.
US President Donald Trump at a meeting with China's Vice-Premier Liu He and US Trade Representative Robert Lighthizer in Washington last Friday.PHOTO: REUTERS

WASHINGTON • In trade talks between the United States and China, memorandums of understanding (MOUs) - the building blocks of what would be a historic deal - are officially out.

US President Donald Trump, in an extraordinary wrangle with US Trade Representative Robert Lighthizer last Friday, dismissed the MOUs that have formed the outline of a potential trade pact as a waste of time, despite protests from his chief negotiator.

Sitting in the Oval Office across from Mr Lighthizer and his Chinese counterpart in the trade talks, Vice-Premier Liu He, Mr Trump unloaded about his feelings on MOUs, which have reportedly been drawn up in six critical areas to form the outline of a broad deal.

"I don't like MOUs because they don't mean anything. To me they don't mean anything. I think you're better off just going into a document. I was never... a fan of an MOU," Mr Trump said.

Mr Lighthizer, who was sitting with other members of Mr Trump's negotiating team, including Treasury Secretary Steven Mnuchin, economic adviser Larry Kudlow and Commerce Secretary Wilbur Ross, explained that writing MOUs was a standard procedure in forming trade agreements.

"An MOU is a contract. It's the way trade agreements are generally used... A memorandum of understanding is a binding agreement between two people," Mr Lighthizer said. "It's a legal term, it's a contract," he said.

But Mr Trump was not satisfied.

NOT A FAN OF MOU

I don't like MOUs because they don't mean anything. To me they don't mean anything. I think you're better off just going into a document. I was never... a fan of an MOU.

US PRESIDENT DONALD TRUMP

"By the way, I disagree," he countered, addressing reporters as well as the Chinese delegation that has been negotiating the MOUs with the US team.

"I think that a memorandum of understanding is not a contract to the extent that we want... We're doing a memorandum of understanding that will be put into a final contract, I assume. But to me the final contract is really the thing, Bob, and I think you mean that too," he said, addressing Mr Lighthizer.

Negotiators are reportedly drawing up six MOUs on structural issues: forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture, and non-tariff barriers to trade.

 
 
 

Mr Lighthizer, clearly not making traction in the back-and-forth with his boss, decided to go for a change in terminology. "From now on we're not using the word memorandum of understanding any more. We're going to use the term trade agreement, all right?" he said.

"OK," the Chinese Vice-Premier, sitting next to Mr Lighthizer, responded.

"Assuming you decide on an agreement... it'll be a trade agreement between the United States and China," Mr Lighthizer told the President.

"Good," Mr Trump said. "I like that much better."

REUTERS

 
A version of this article appeared in the print edition of The Straits Times on February 25, 2019, with the headline 'US trade negotiator dumps the term MOU after Trump objects'. Print Edition | Subscribe