The Cowboy At Commerce| Wall Street Journal | 1.5.2016

By Clark S. Judge | Published: January 5, 2016

Ronald Reagan was once asked if he considered any member of his cabinet a “true visionary.” Two, Reagan replied: United Nations Ambassador Jeane Kirkpatrick and Commerce Secretary Malcolm Baldrige.

In Reagan-era Washington, Baldrige was best known as the cowboy secretary. A card-carrying member of the Professional Rodeo Cowboys Association, he retained his professional status by winning, as PRCA rules required, a nominal amount of prize money every year of his cabinet tenure. But as one-time White House reporter Chris Black and former Baldrige speechwriter B. Jay Cooper make clear in this deservedly admiring biography, it was far more than rodeo skills that inspired the president’s esteem.

A Yale graduate, a veteran of the Army’s fierce Okinawa campaign during World War II and a highly successful Connecticut industrialist, Baldrige came to his government post in 1981, just as global trade was moving to the center of the policy-making stage. Thanks to a combination of insight, canniness and integrity, he made himself and his department formative forces in the reconfiguration of the nation’s approach to the international economy.

While the Reagan administration squarely embraced the post-World War II American free-trade consensus, what free trade meant and how to advance it began to change almost as soon as the president entered office. From the 1950s through the ’70s, freeing trade meant lowering tariffs. By the early ’80s, successive rounds of multilateral agreements had transformed most tariffs from barriers to nuisances or had eliminated them entirely. The real obstacles had become quotas, regulations and procedures.

At the same time, after decades of balance, in the mid-1970s America’s trade ledger had turned negative. At first, policy makers considered the OPEC oil cartel’s boosting of crude prices the primary culprit. But by the early ’80s it was clear that the retreating market shares of such signature pillars of the economy as steel and autos were also to blame. Pressure to protect these faltering giants began to build in Congress and the country.

Meanwhile, new industries based on largely homegrown technologies, such as personal computers and medical devices, were rapidly emerging as export powerhouses. So, too, were financial and travel-related services. The postwar trade agreements barely touched any of these.

Baldrige was one of the earliest senior officials to address the many facets of these transformations. Resolving a long-building steel dispute with Europe was among the first tasks he tackled after taking office.

In part because of the emergence of Japan and Korea as major producers, global steel prices were in rapid decline. American producers charged that many of the price cuts were predatory. Pro-business Republicans and pro-union Democrats demanded that the administration take action. Responding as they wished could have set off a full-scale trade war.

To buy time, as Ms. Black and Mr. Cooper note, Baldrige launched a number of antidumping investigations, including against West Germany and Austria. As the studies proceeded, he dedicated himself to learning the ins and outs of the steel business. When it came time for one-on-one talks with the various European countries, Baldrige made himself lead negotiator—and a crafty one he was.

One Saturday morning, days from a key deadline, he assembled his team shortly before a negotiating session was scheduled to start. He told them that an office down the hall would have coffee, sandwiches and pastries—and that they were to keep this knowledge to themselves.

At noon, the European side suggested a lunch break. Baldrige insisted that they continue talking “because we are so close.” An hour later, the Americans started stepping out one by one for visits to the secret lunchroom. At 4 p.m., the Europeans agreed to all the American terms. As one U.S. negotiator later explained, “They were starving.” Denying them lunch was part of Baldrige’s “negotiating ploy.”

But even as he was hammering out steel deals abroad that helped stem the protectionist tide at home, Baldrige began working on, as we would say today, changing the narrative. While acknowledging that some foreign producers were selling below their costs, in part thanks to subsidies from their governments, he preached that the failure of American producers to keep pace with global productivity improvements was U.S. industry’s biggest problem. “The determining factor [in success],” he said, “is our ability to compete worldwide.”

Baldrige’s trade diplomacy was not all confrontation. As anti-Japanese protectionist pressure was building in Congress, the secretary arranged for the department’s No. 2 man, Joe Wright, to host a dinner for him, the Japanese ambassador and their wives at Mr. Wright’s home. “Mac insisted on doing the serving,” Mr. Wright told the authors. “He went right into the kitchen. And afterwards the Ambassador and the Secretary of Commerce were washing dishes together as they negotiated a trade deal.”

Baldrige also knew how to use humor to deflate tense moments, as when the U.S. toy balloon industry petitioned for protection against cheap Mexican imports. Baldrige was opposed, but after debate the entire cabinet favored sanctions. Sensing this was not where the president wanted to go, Baldrige pulled from his pocket a dozen toy balloons and tossed them on the cabinet table. As the room filled with laughter, he said, “This is what we are talking about.” Reagan denied the sanctions.

Baldrige was actually the choice for the Commerce position of Vice President George H.W. Bush, to whom Reagan had given that slot to fill and whom Baldrige had supported in the 1980 presidential primaries. This book demonstrates what a brilliant selection Mac Baldrige was.

Mr. Judge, managing director of White House Writers Group and chair of the Pacific Research Institute, was special assistant and speechwriter to the president from 1986 to 1989.

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