WASHINGTON — Susan Schwab has been a virtual commuter to Geneva during her six weeks as the Bush administration’s chief trade negotiator.
Schwab, who grew up in Africa, Asia and Europe, is at home abroad — and she needs to be.
As U.S. Trade Representative, the 51-year-old former university dean is now a player in international commerce and politics, thrust into deadlocked trade talks that have the potential to remove economic barriers and help alleviate poverty in some of the world’s poorest countries.
With a varied background in government, business and academia, Schwab is a policy wonk who has the intellectual heft and the personality to be the public face of the Bush administration’s trade agenda, colleagues and experts said. However, that agenda is largely set and its jewel — World Trade Organization negotiations in Geneva — has dimmed as deadline after deadline has been missed.
Schwab will meet again with her counterparts from the European Union, India, Brazil, Japan and Australia this Sunday and Monday and on July 28 and 29 to try and reach a framework agreement on how global tariffs on industrial and agricultural goods could be reduced. A deal would need to be approved by the WTO’s 149 member countries.
Launched in Doha, Qatar, in 2001, the Doha talks might cut tariffs on apparel and textiles, an outcome sought by retailers because it would lower prices, but opposed by domestic textile firms competing with low-cost imports. Many countries are afraid that freer trade in apparel and textiles would only strengthen China’s dominance.
The Bush game plan has been to pursue the Doha talks while signing smaller regional deals, such as the Central American Free Trade Agreement. In executing that plan, Schwab faces rising antitrade sentiment in Congress and the expiration of the presidential Trade Promotion Authority, which restricts Congress’ ability to amend trade bills.
“I suspect that Sue will be limited to closing up regional agreements or negotiating a limited WTO deal, which is something she says she won’t do, but if the President decides to do it, she’ll do it,” said former colleague Peter Morici, professor at the University of Maryland’s Robert H. Smith School of Business. “I have a lot of respect for her, but this is not an enviable position.”For supporters such as Kenneth Duberstein, chief of staff to President Ronald Reagan, Schwab has all the tools to succeed.
“Too many in this town are good at knowing everything about a widget, but not much about the world,” Duberstein said. “Sue Schwab has the ability to understand all of the fine points, but also be pragmatic in understanding what the big goals are.”
In addition to the Doha talks, Schwab has inherited an often tense relationship with China — the U.S. had a record $202 billion trade deficit with the Chinese last year. The Bush administration, as well as Congress, has called for China to adjust currency policies that artificially lower the prices of its exports.
The obstacles are formidable for Schwab, who made her itinerant childhood — her father was a foreign service officer — a source of flexibility and worldliness.
Some critics viewed Schwab’s selection to succeed her boss, Rob Portman, who was named director of the Office of Management and Budget, as a signal that the administration was downgrading trade as an issue because Portman, a former Republican congressman from Ohio and a Bush friend, had a high profile. Schwab was his deputy.
“There’s no getting around the political loss of Rob Portman moving to O.M.B.,” said Dan Griswold, director of the center for trade policy studies at the Cato Institute. “He had a lot of good will on the Hill and was well liked on both sides of the aisle.”
Comparing Schwab and Portman is tricky, said Frank Vargo, vice president of international economic affairs at the National Association of Manufacturers.
“His strongest set was knowing people on the Hill,’’ Vargo explained. “Susan I don’t think is going to have those Hill skills, but in some ways is going to be a tougher negotiator. She really knows trade. She is tough, but she’s not nasty. She’s got good antennae. She reads the person she’s negotiating with. She doesn’t concede.”
Duberstein said the White House’s ability to move on trade is strengthened by Portman’s move to O.M.B. and Schwab’s appointment, especially considering they join other high-profile free traders, including chief of staff Josh Bolten and chief political strategist Karl Rove.Although she had been thrust into the spotlight, Schwab was relaxed during a meeting with reporters on her first day as trade chief, leaning back in her chair with legs crossed and hands clasped on her lap, sipping tea from a navy blue mug with a pink heart that read “Best Friends.”
“I suspect every trade representative, anyone who’s ever been in this position, has probably assumed that the geopolitical and the domestic political situation that he or she is facing is the toughest that any trade representative has faced,” she said.
The trade debate in textiles and apparel won’t make her job any easier.
During a question and answer session after a speech this month at the National Press Club in Washington, Schwab said: “The discussion on textiles and apparel tends to be somewhat schizophrenic — maybe that’s a bad word and I probably just said something that we’re all going to regret later.
“There are countries that want to see markets opening in textiles and apparel because they want access, and yet they’re very nervous about it because they look at the competition from China, for example, and don’t necessarily want others to have the access,” she said.
Schwab’s ascension to trade chief has brought her full circle.
Her first job 29 years ago was in the trade office, negotiating access to the Japanese market for U.S. beef and citrus products. By then, she had lived in at least eight countries, from Togo in West Africa to Thailand, and received a bachelor’s degree in political economy from Williams College and a master’s degree in development policy from Stanford University.
Schwab, who lost family members in the Holocaust, always has been persistent and competitive, said her father, Gerald, who now lives in Alexandria, Va.
“One time in Togo, she for some reason decided that she was going to be an Olympic swimmer,” he said. “Keep in mind at that point she was six. She decided to start training. I think if her mother hadn’t hauled her out, she was going to drown. She was going to become an Olympic quality swimmer that afternoon.”His daughter, who lives in Annapolis, Md., has since developed a sense of patience and planning, if not a career in sports.
“I would say she doesn’t even like games of chance because you can’t control that,” her father said. “Where she could depend, or was able to express herself or accomplish something on the basis of her own work, she always did well.
“She is a workaholic, but she also knows how to ease off if the opportunity presents itself,” he said.
Schwab shares a love of the opera and musicals with her parents, who took her to the opera in Vienna as a child. She also likes fine wines and is considered a good conversationalist.
“She’s the kind of person that, if you’re looking for a date, you’d love to have her for a date, just good to talk to, lots of fun,” said Tom Schelling, a Nobel laureate in economics and former University of Maryland professor who chaired the search committee that picked Schwab to be dean of the School of Public Policy in the Nineties.
“She’s a good listener,” he said. “She makes you feel good when you talk with her.”
After that first job as an agricultural negotiator, Schwab moved on to be trade policy officer in the U.S. embassy in Tokyo and then, in 1981, joined the staff of Sen. John Danforth (R, Mo.), chairman of the Finance Committee’s international trade subcommittee, a capacity in which she helped shape several major trade bills.
In 1989, she joined the administration of President George H.W. Bush to be an assistant secretary at the Commerce Department and director general of the U.S. and Foreign Commercial Service, which promotes U.S. goods and services abroad.
Throughout her career, Schwab has placed an emphasis on preparation, which was apparent when she worked on her doctorate in public administration and international business at George Washington University.
“She reads everything she can get her hands on,” said Susan Tolchin, who guided her dissertation and is now a professor at the School of Public Policy at George Mason University. “She goes well beyond what she has to do.”Tolchin said Schwab was one of her brightest students in 40 years of teaching.
“I encouraged her to get a doctoral or a law degree,” she said. “To compete with the men, you’re going to have to have a law degree or a PhD.”
So Schwab went to classes at night while working crushing hours for Danforth on the Hill. Her dissertation was published as a book, “Trade-Offs: Negotiating the Omnibus Trade and Competitiveness Act.” (Harvard Business School Press).
In addition to giving a behind-the-scenes, nonpartisan look at the 1988 legislation, “Trade-Offs” traces U.S. trade policy from the Boston Tea Party through the protectionist Smoot-Hawley Tariff Act of 1930 and into the Eighties.
After working at Commerce, Schwab went into the private sector in 1993 as director of corporate business development at Motorola Inc., and then to academia in 1995.
Schwab’s scholarly approach and sense of trade history informs her decisions and she is quick to turn to historical references when examining, for instance, the enthusiasm for free trade in Washington.
“In terms of the politics of trade, there has been some erosion in the bipartisan consensus favoring a pro-trade agenda, favoring an agenda that is steadily continuingly opening markets, that the United States launched initially in 1934,” she told reporters.
Understanding the pressure points, especially on Capitol Hill, is a must for Schwab, given that the legislature must ultimately approve major changes to trade policy.
“The USTR has to understand that Congress has a significant role and Sue’s been there,” said Michael Farren, a former undersecretary in the Commerce Department who is now a vice president at Xerox Corp. “She’s frankly been on the Hill, in the Senate Finance Committee pounding on the table, demanding that USTR be responsive to the concerns of the Hill, so she will know how to respond.”
The President’s standing during his last two years in office will influence how much Schwab can accomplish.
“She’s subject to the overall status and condition of the White House and the President she works for, and it’s really a function of, is George Bush a lame duck and if so, every Cabinet agency is going to suffer,” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition.Much of what gets done will also depend on external forces, including global economic conditions.
“She has what I think is so important in a USTR,” said Robert Mosbacher, Commerce Secretary under the first President Bush, a time of trade tension with Japan. “She can not only deal with them intellectually, but she can do it in a more personal, less confrontational way than others might. Particularly with Japan, she could very often and did get one of the negotiators aside to discuss things with them on an informal level.”
That personal touch seems to set Schwab apart.
“She is very persuasive in a kind of interesting way, you sort of don’t know what’s happening to you,” said Walter Broadnax, whom Schwab recruited to be a professor while she at the University of Maryland. “She’s got this wonderful smile and even when she’s disagreeing, you think she’s agreeing with you. She just has this tremendous ability to get people to do what she wants.”
Broadnax, now president of Clark Atlanta University, had been deputy secretary and chief operating officer of the Health and Human Services Department and planned to take a position at Case Western Reserve University before Schwab wooed him, mostly in a series of phone conversations.
“Susan loves the telephone, she’s a telephone person,” he said, noting it was apparent that she had prepared between conversations. “She likes to be able to do her homework. She likes to know what she can do to move a process. She doesn’t want to show up without something in her kit bag.”
After eight years as dean, Schwab became president and chief executive officer of the University System of Maryland Foundation, before returning to the trade world as one of Portman’s deputies last year.
“As I started to watch her in action, I realized that she had the potential to not just do the day-to-day work of a deputy, but really lead, to be proactive,” Portman said.
As deputy USTR, Schwab wrapped up difficult negotiations for free trade pacts with Peru and Colombia and reached an accord with Canada on a long-running softwood lumber dispute.“She works with intensity and sometimes tenacity and persistence,” he said. “She literally had an all-nighter with the Colombia agreement. The same was true with Peru and softwood lumber. She was willing to go the extra mile to get to ‘yes.’”
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