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Former U.S. Trade Representative Charlene Barshefsky is likely to go down in the history books as the woman whose unparalleled negotiating skills set China on track for its expected entry into the World Trade Organization — a monumental victory for free trade enthusiasts. Several months after her government stint ended, Barshefsky is in her Washington, D.C., home engaged in a heated negotiation over something entirely different — phone privileges. Barshefsky’s teenage daughter wants to use the phone, and having seemingly inherited her mother’s knack at winning concessions from her opponents, has been granted 10 minutes of phone time, which delays a prescheduled interview with her mother by exactly 10 minutes. In a few weeks, Barshefsky will be out of her daughter’s hair, and back to brokering international trade agreements, this time as a senior trade partner at D.C.-based Wilmer, Cutler & Pickering. Reporter Tatiana Boncompagni spoke with Barshefsky about her new job, the banana wars, and the Bush White House’s controversial stance on the Kyoto environmental accords. Corporate Counsel: After pressure from the U.S. and a ruling by the WTO, the European Union agreed to amend its banana import system. The WTO found that the E.U. illegally favors banana imports from Europe’s former colonies over those from Latin America, where U.S. companies like Chiquita and Dole have plantations. What can we learn from this victory about dealing with the E.U.? Charlene Barshefsky: There are a few lessons. Lesson number one: Anything having to do with agriculture and the European Community will be complicated and torturous for both the E.U. and the complaining party. The second lesson is that from time to time retaliation does prove effective. Europe was certainly spurred to change its banana regime, in part by retaliation, particularly against the French, but also against several other key [E.U.] countries. While oftentimes sanctions do not work effectively — they tend to be more cathartic than of real value — in this particular instance, sanctions did prove to be a necessary catalyst for necessary action on the part of the European Community. The third lesson is that the U.S. and Europe need to have at their disposal a variety of ways in which to resolve disputes that don’t necessarily depend ultimately on litigation. The banana dispute went on for almost 10 years by the time it was resolved, so the resolution was not a very efficient one. The question is: Can the U.S. and Europe develop alternative mechanisms — [such as] alternative dispute resolution, arbitration, [or] conciliation? CC: What about antitrust — or, as they say in Europe, competition — issues. The U.S. and Europe seem to be working at cross-purposes on merger approvals. Do you expect this problem to persist and what does it mean for U.S. corporations? Barshefsky: There is a temptation, particularly in the General Electric/Honeywell International situation, to claim that politics is what drove the E.U. decision. But I think that while politics played a role, in the sense that the European Commission was heavily lobbied by competitors of both Honeywell and GE against approving the merger, the European Commission tends to look at competition issues somewhat differently than do U.S. antitrust authorities. CC: As I understand it, the difference is that the U.S. cares more about how the merger will affect consumers and the European Union is more concerned about maintaining a competitive landscape. Barshefsky: Correct. Some people characterize it as Europe caring somewhat more about competitors and the U.S. caring more about competition. But the way you said it is equally correct. It just depends on the case and how it is characterized. I don’t think these differences will prove, generally speaking, crippling, because the vast majority of mergers are in fact approved. CC: President Bush backed away from the Kyoto treaty on global warming. How will that affect the United States’ role in international trade negotiations? Barshefsky: The U.S. will always be able to engage in trade negotiations because we are the market. We are the “it” country. However, I thought what President Bush did on Kyoto was, first of all, stupid politically, but, secondly, unilateralism at its worst. And in that regard — to the extent that countries view the U.S. as less a reliable partner and more a competitor — that is an unfortunate outcome. And to the extent that other countries begin to view U.S. policy as a zero-sum policy, meaning the U.S. gains, and everyone else loses, that would be a very unfortunate outcome. I do think the administration made a terrible error on Kyoto — putting aside the substance of Kyoto itself — in the way it decided to voice its objection. There is no question that the prestige of the United States has suffered as a result.

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