QUESTIONS ABOUT A CHINA LOBBYIST
Byline: Jim Ostroff
WASHINGTON — Two months after conclusion of a new textile pact with China, industry advisers at the Beijing talks still are questioning the propriety of allowing a Chinese intermediary to join a U.S. government briefing at a critical juncture.
At issue was the attendance of William Houston 3rd, a registered lobbyist for Synergy Sports International Ltd., at a Jan. 31 Beijing briefing by Rita Hayes, the chief U.S. textile negotiator, during which she detailed the status of talks when an agreement appeared imminent. The accord was signed Feb. 2.
Houston served as the U.S.’s chief textile negotiator and Commerce’s textile program director during the mid-Eighties. Synergy, a Kowloon, Hong Kong-based maker of sportswear, outerwear, children’s wear, swimwear and skiwear for major U.S. retailers, is headed by Stephen Lau, who Hayes said is an adviser to Chinese trade officials. Houston registered as a lobbyist for Synergy with Congress on Feb. 19, according to records.
Houston’s participation in the briefing was legal, given the State Department’s 1994 decision to end the Cleared Adviser system, for textile negotiations only, under which officials with U.S. makers, retailers, importers and unions received and discussed confidential materials and were sworn to secrecy. It’s a system many advisers feel should be reinstated because without it the briefings are less informative.
Legalisms aside, however, several industry advisers who attended the Beijing talks said in recent weeks that Houston’s attendance at a briefing made them leery of discussing confidential, potentially competitive matters and raised questions about the propriety of a foreign agent receiving any information from U.S. trade officials. Advisers said Hayes discussed agreed-to cuts in Chinese import quotas and unresolved issues in the ongoing talks, sternly admonishing participants not to talk with Chinese trade officials.
Hayes insists Houston’s attendance was proper, that no U.S. negotiating strategy was compromised then or during her private meeting with Lau. Though neither Hayes nor Houston would discuss Lau’s role in the talks, sources said he served as an intermediary between Hayes and Madame Wu Yi, China’s trade minister, during a critical stage in the talks.
Houston, now with the Washington office of Sandler, Travis & Rosenberg, a Miami trade law firm, said he asked Hayes’s permission to attend the Jan. 31 briefing for industry advisers.
“My client wanted an agreement; he wanted to expand trade,” he said in an interview. “Without an agreement, the U.S. could invoke Section 204” of the 1956 Agriculture Law, unilaterally imposing tight quotas on China’s U.S. apparel and textile exports.
Lau, in a telephone interview from his office, said Houston “represented me at the briefings. I asked him what was going on because the majority of our production is in China. But [Houston] is very conservative, and he didn’t give me any information about the briefings.”
Lau, Synergy’s ceo and chairman, said he was at the Beijing negotiations to “meet attorneys representing retailers because I would like to establish relationships to grow my business,” adding that Houston helped to arrange these meetings.
Lau denied he served as an intermediary in the Beijing talks or that he accompanied Hayes in a Chinese government-owned Mercedes to a private meeting with Chinese trade officials on Jan. 31, prior to the industry briefing. Lau said he met with Madame Wu during the Beijing talks, but insisted he did not arrange for her to meet Hayes, adding that his ride with Hayes simply was coincidental. “I was in a rush to get somewhere, and they gave me a ride and dropped me off,” he said. “I didn’t discuss the negotiations with her during the ride.”
Hayes said in an interview that neither Lau nor Houston “were given information on U.S. negotiating strategy or positions,” adding that her meeting with Madame Wu and other Chinese officials was cleared by the U.S. Embassy in Beijing. Hayes said, “Lau was an adviser to the Chinese government, and there’s nothing wrong with me meeting with him,” adding she also met with U.S. advisers representing all interests.
Advisers said there is no evidence Hayes compromised U.S. negotiating positions in talks that yielded Chinese commitments to allow some U.S. apparel and textile imports beginning in January, as well as cuts in China’s U.S. import quotas for such categories as yarns, wool fabrics, knitted cotton shirts, cotton underwear and men’s and boys’ wool suits, but higher quotas for children’s wear and outerwear of various fabrics, cotton skirts and woven cotton blouses.
Yet officials from various sectors expressed concern or surprise over Houston’s inclusion in the briefing. One, Larry Martin, president of the American Apparel Manufacturers Association, said, “It’s not a good idea to have people who represent an offshore company sit in on briefings between the U.S. and its advisers. We are there to give frank advice to our negotiator, and we don’t want that relayed to the people who will negotiate with our negotiator.”