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Expert trade negotiator Stephen Olson guides student negotiators, who are among 49 students from seven Hong Kong universities who gathered on February 23 to take part in the Hinrich Foundation’s international trade negotiating course at the Asia Society Hong Kong Centre, in Admiralty. Photo: Hinrich Foundation

US-China trade war: simulation gives students lesson in negotiation and diplomacy

  • The Hinrich Trade Negotiation Simulation offers students a rare insight into the reality behind the scenes of trade talks, with guidance from experts
  • Students from seven Hong Kong universities took part last month, the first time the event has been held in the city in the middle of a trade war

Events have taken an unexpected turn for the worst for the Chinese trade delegation gathered around the conference table, and their lead spokesperson is looking noticeably uncomfortable. Having spent hours trying to reach a consensus with other nations about removing tariffs on specific food items, their entire negotiating strategy has been turned on its head.

The team has been handed a “top-secret diplomatic communique” from Beijing, telling them that a life-threatening epidemic is spreading rapidly across Chinese cities. Four children have already died and scientists think the source of the health emergency could be imported food.

They have received instructions that under no circumstances should they hinder the government’s ability to block food imports. However, they must still achieve consensus on this vital regional trade deal.

Fortunately for the China team, these trade talks are not the real deal. Its members are among 49 students from seven Hong Kong universities who gathered on two Saturdays last month to experience the internal dynamics of international trade negotiating under the watchful eye of seasoned professionals and experts. They also receive specialist coaching in the key techniques and strategies for success.

Trade negotiators are made, not born
Australia’s deputy consul general to Hong Kong, Ken Gordon

The free programme is a unique initiative introduced by the Hong Kong-based Hinrich Foundation, which promotes sustainable global trade through international trade research, education and career development programmes.

It is the second time the event has been held in Hong Kong, but the first time it’s been run in the middle of a trade war. The relevance is not lost on the participants, some of whom are from the US and China, but currently studying in Hong Kong.

Australia Consul General Ken Gordon briefing the Australia team. Photo: Hinrich Foundation

The world’s economic prospects could be dictated by the high-level US-China trade negotiations now being thrashed out, but very few people know what it is like to be involved in these complex and intense discussions, or what skills are essential for a top-level trade negotiator.

US-China trade talks: has Beijing been playing an ancient game?

Fluency in multiple languages, expertise in economics, nerves of a poker player and the ability to endure sleep deprivation might be a start.

“Trade negotiators are made, not born,” says Australia’s deputy consul general to Hong Kong, Ken Gordon, a former international trade negotiator.

Gordon made the opening address on the final day of the Hinrich Trade Negotiation Simulation, held at the Asia Society Hong Kong Centre, in Admiralty.

Jason Koehn, spokesman for team China, addressing fellow delegates during the Hinrich Foundation’s international trade negotiating programme. Photo: Stuart Heaver

Berenice Voets, director of strategy and public affairs at the Hinrich Foundation, says: “We started these trade negotiation simulations to create a constituency of future business and policy leaders who believe in mutually beneficial trade.”

Alex Boome, the programme director, says it helps participants understand how trade outcomes can affect economies. “We want to expose young people to the issues of trade via experiential learning.”

Nothing is agreed until everything is agreed. This is multidimensional chess
Hinrich Foundation research fellow Stephen Olson

Katie Dionne, from the University of South Carolina, is currently studying international business, Chinese studies and marketing at Chinese University of Hong Kong, and was part of the six-person US delegation at the simulated trade talks. However she was the only team member who is actually American.

Dionne says she is interested in pursuing a career at the US Department of State, and the experience of being in a top-level trade negotiation scenario was invaluable.

“I certainly have respect for those negotiators in Beijing. It’s a tough job,” she says.

It is evident that every effort is made to make the simulated talks as realistic as possible.

Participants are briefed that they are under strong pressure from their respective political leaders to take a tough stand at these regional trade talks, involving the US, China, Australia, India, South Korea, the Philippines, Indonesia and Japan.

US and China negotiators at the Eisenhower Executive Office Building in Washington in January at the start of two days of face-to-face trade talks. Photo: AFP

They have to be fully conversant in their nation’s key trade priorities and issues, and are coached in negotiating strategies by expert trade negotiator and Hinrich Foundation research fellow, Stephen Olson.

Olson spent eight years as a US trade negotiator, split between the Office of the US Trade Representative and the US Department of Commerce. “Don’t compromise too early. Hang tough for as long as possible,” he tells the students.

The national teams then split into smaller groups to seek agreement on specific issues, before returning for the final plenary session. In one conference room, eight delegations are thrashing out the details of a complex trade deal on agricultural and fishing subsidies, and non-tariff measures on food products.

Olson ducks down behind delegates, whispering advice, as the discussions continue in formal diplomatic language. Their aim is to achieve a joint trade communique agreed by all eight nations within the two days available, and time is running out fast.

“The end game is a document that eight nations will vote to approve. If we don’t get the agreement we might as well have all stayed at home,” Olson says.

While the China team struggle to cope with the epidemic back home, what they don’t know is that all the other teams have received similar political bombshells designed by Olson to upset their negotiation strategies.

Members of the China team (from left) Cecilia Zhuoshi, Metis Menghan Xu and Yuan Feng at the Hong Kong-based Hinrich Foundation’s trade negotiating programme. Photo: Stuart Heaver

“You can often find that something works between professional trade negotiators, but it just won’t fly politically at home,” Olson says. This political dimension is a “huge factor” in the recent round of high-profile US-China trade talks, he adds.

“The inherent contradiction is that you have to achieve the best deal for your own nation, but you all want to reach agreement, too.”

The spokesperson for the China delegation is Jason Koehn, a student from American University in Washington currently studying international relations at Chinese University.

“I think it helps you to think on your feet and from a multiple perspective,” he says at the end of the bruising food tariffs session. The experience has given him a more informed perspective on the China-US negotiations, he adds.

“I think I will now read the newspaper headlines about the current trade talks with more insight. I used to wonder why these things took so long but now I realise it’s because it’s really complicated.”

Alex Boome, programme director, Hinrich Foundation. Photo: Stuart Heaver

Koehn’s colleague – one of three Chinese members of the China team – is Yuan Feng, a postgraduate student in business information systems at City University of Hong Kong, who has been thrashing out a deal on health-care services and the digital economy in another conference room.

“What I have learned is that negotiating takes time; every country needs to hang onto its own standpoint,” he says.

Though it’s a challenging job, the simulation organisers say the role of the trade negotiator is now more high-profile than ever.

“Trade has gone to the top of the media agenda,” says Glenn Shive, executive director of the Hong Kong-America Centre, the education, scholarship and student-exchange organisation that co-organised the event.

You’ve got to master your portfolio, you can’t be the guy banging the table the whole time
Stephen Olson

“Previously, agricultural subsidies were just not a sexy news item, but due to the China-US trade tensions, everyone in Washington is now talking about soy beans.”

Shive says there is now a human dimension to international trade, and a top trade negotiator needs a highly varied skill set. It’s a view supported by the trade experts.

“You’ve got to master your portfolio,” says Olson, adding that all top negotiators need to know the issues inside out and must be fluent in different negotiating styles. Elite trade negotiators must also be capable of sifting through volumes of data and cutting to the core issues.

“You can’t be the guy banging the table the whole time,” he adds.

Gordon is a former lead negotiator for Australia in multilateral trade talks at the World Trade Organisation and in bilateral free-trade talks with China, South Korea, Japan and India. He has been offering some informal tips to the Australia student team and agrees that knowledge and hard work is vital, but points to another attribute, too.

“The ability to communicate with people – to establish those interpersonal relations. I think that’s the most important skill,” he says.

Australia Consul General Ken Gordon (third left) with the Australia team at the Hinrich Foundation programme. Photo: Stuart Heaver

Olson says that both the US and China would have the very best negotiators representing their governments, and he once worked with the current US trade representative, Robert Lighthizer, who leads the real US delegation. “He is Mr A of the A team,” Olson says.

But even with the best people on the team, it can still be a highly uncertain business with no guarantee of success, Olson explains. However, while every case is unique, sometimes, no deal is better than a bad deal.

Good news for markets: Trump badly needs a China trade deal

Late in the afternoon, the student teams successfully manage to agree on a trade deal and the official communique is approved by all eight nations, to great relief and delight of all the participants.

“Nothing is agreed until everything is agreed. That is the watchword of every trade negotiator,” Olson says. “This is multidimensional chess.”

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