An exasperated Robert Lighthizer, the US trade representative, tried to gently educate his boss, Donald Trump, on the meaning of a "memorandum of understanding" in the Oval Office on Friday, leading to a presidential lecture in front of television cameras and a top Chinese official.
The exchange between the president and his top trade negotiator unfolded Friday when the president was asked during a meeting with a Chinese trade delegation about how long so-called memorandums of understanding would last in an eventual accord with Beijing. Negotiators have been drafting MOUs on areas such as agriculture, non-tariff barriers, services, technology transfer, currency and intellectual property as the two nations work toward a deal.
Trump told gathered reporters that the memorandums would "be very short term. I don't like MOUs because they don't mean anything. To me, they don't mean anything."
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Lighthizer then jumped in to defend the strategy, with Trump looking on. "An MOU is a binding agreement between two people," he said. "It's detailed. It covers everything in great detail. It's a legal term. It's a contract."
But the president, unswayed, fired back at Lighthizer. "By the way I disagree," Trump said.
The top Chinese negotiator, Vice Premier Liu He, laughed out loud.
"The real question is, Bob," Trump said, "how long will it take to put that into a final binding contract?"
The exchange marked the latest instance in which Trump tried to reshape the branding of a major trade agreement during high-stakes negotiations. Last year, he persuaded leaders from Canada and Mexico to change the name of the North America Free Trade Agreement, known as Nafta, to the US-Mexico-Canada Agreement, or USMCA. Trump said the prior agreement carried the baggage of closed factories, while his new acronym evoked the US Marine Corps.
Derek Scissors, a China expert at the American Enterprise Institute, said that Lighthizer is in a bind because he wants China to treat a deal with the US as binding even though it's not.
"The Trump administration originally chose MOUs because no truly binding agreement can be made on the exchange rate or large future purchases of corn, much less technology coercion China denies has ever happened," he said. "If the administration switches to calling it a binding trade agreement, members of Congress will want to vote on it. If they don't get to, this looks exactly like Obama not wanting Congress to vote on the Iran nuclear deal."
Memorandum of understanding
But in Friday's debate over memorandums of understanding on Friday, Lighthizer eventually deferred to his boss.
"From now on we're not using the word memorandum of understanding anymore. We're going to use the term trade agreement," Lighthizer told reporters. "We'll have the same document. It's going to be called a trade agreement."
He then turned to Liu to ask if the Chinese would accommodate the new terminology, winning a nod from the Chinese leader.
"Good, I like that term much better," Trump said, before again complaining that memorandums of understanding were not that meaningful.
"We'll never use that word again!" Lighthizer responded.
As Trump turned to take another question from reporters, Lighthizer whispered to Liu about not calling the agreements an MOU.