I’m a free trader, like Ronald Reagan, like most conservatives.  But I am open to learning why those suspicious of “free trade” have some good arguments.  Berkeley Law School scholar John Yoo joined me Friday to explain one very subtle, very large obstacle –a “structural barrier”– to free trade: The claim of “sovereign immunity” by municipality-owned manufacturing concerns in the PRC:

Audio:

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Transcript:

HH: I am joined now by John Yoo. John is the Emanuel S. Heller professor of law at the University of California, Berkeley. For a time, he was also a visiting professor at Fowler School of Law at Chapman University where he was my colleague for a while. He goes back to George W. Bush years. He is an author extraordinaire on many things. But I wanted to talk to him about trade today. John Yoo, welcome, good to have you back, Professor.

JY: Oh, Hugh, thanks, great to be with you again.

HH: Now President Trump is on a mission to talk about, he was talking about trade with Poland yesterday. He’s talking about the fact that China’s trade with North Korea has gone up, not down. They’re not helping us. And trade is at the center of all of these discussions. And I learned that China has a unique approach to some trade disputes, and that you’re an expert on it. Would you lay this out for me? An advantage they bake into the cake for themselves?

JY: Yeah, sure. It’s a really important issue, and it’s one of the things that trade agreements have a hard time getting at. And the fact is that unlike our country, in China, a lot of the businesses are owned by the government, or by subdivisions of the government, or by the Chinese Army, the People’s Liberation Army. And that renders them immune from a lot of the remedies that you and I would have against an American producer of a good. So let me give you an example. There is this case I was looking at involving Hisense. Hisense is a Chinese manufacturer of television screens, a competitor to Samsung or Sony, or Vizio, which you might see at like a Costco or a Best Buy. The thing is Hisense is completely owned by a Chinese city, by a subdivision of the Chinese government. That means that if you or I were injured in some way by a Hisense set, say the Hisense sets were giving off too much radiation, for example, and was made in violation of federal regulations or federal law, you and I couldn’t sue them, because governments in our courts have what’s called sovereign immunity. So if you were ever injured by a Samsung or a Sony set, you and I could go to California court and sue for damages in what is called a tort action. In the case of Hisense, you can’t.

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Well, we certainly live in interesting times.  I have quite a few friends from, and with a lot of family still in, Seoul.  It’s hard to be objective.  This problem seems intractable.

Pretty much any military action, short of completely destroying all of North Korea’s military capabilities in one fell swoop, would result in heavy, if not massive, casualties in Seoul.  And how likely is it even our military can get all of it all at once?

Assassination is not quite as illegal as we tend to think it is, but would it be helpful?

Negotiations got us to this point (Clinton – remember?)  What do sanctions mean to a third world country seemingly without desire to join the rest of us?  Containment?  Well, containment only works if the other side is rational.  Batman has been trying to contain the highly irrational Joker for decades now.  The Joker won’t be contained.  How rational do you think Kim is?

This feels like a Kobayahsi Maru scenario.  (Yes – that is a Star Trek reference after a comic book reference.)  But consider what the Kobayasi Maru scenario really is:

The Kobayashi Maru is a training exercise in the fictional Star Trek universe designed to test the character of Starfleet Academy cadets in a no-win scenario.  [emphasis added]

The no-win scenario is a test of character.

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In a speech last week, Facebook CEO Mark Zuckerberg said he, “wants Facebook groups to play an important role that community groups like churches and Little League teams used to perform: Bringing communities together.”  The CNBC story continues:

He added, “People who go to church are more likely to volunteer and give to charity — not just because they’re religious, but because they’re part of a community.”

Zuckerberg thinks Facebook can help, using its networking power to organize people.

“A church doesn’t just come together. It has a pastor who cares for the well-being of their congregation, makes sure they have food and shelter. A little league team has a coach who motivates the kids and helps them hit better. Leaders set the culture, inspire us, give us a safety net, and look out for us.”

The need for community in this country is immense, but Zuckerberg’s analysis is so very wrong.  Just on the face of it, if church goers volunteer and give not because of their religiosity but because of the community, then why do other types of communities not show similar giving patterns?  Secondly comparing church and Little League, even the communities that surround them, certainly strikes this observer as an apples and oranges comparison.  And Facebook, while a useful communication tool when properly used, will never comprise “community.”  Simply put, genuine community involves communication on levels not possible through digital mediums.

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The audio:

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