Jaw Dropping Dispute between Trump and Trade Rep Robert Lighthizer on MOUs

-edited

Trade Rep Robert E. Lighthizer and Trump debate the legal meaning of "Memorandum of Understanding".

Please consider a video of Lighthizer and Trump on the legal meaning of Memorandum of Understanding. The video was made at the White House on February 22. It just came my way today.

Lighthizer Response

Here's the full video where Lighthizer corrects Trump on the legal definition of MOU, not once but numerous times.

The debate went back and forth with Lighthizer repeatedly correcting Trump.

Trump said to Lighthizer "I don't care if you do it [an MOU] or not. To me it doesn't mean very much. But if you do a memorandum, how long will it take to put that into a final binding contact?"

Since the MOU is a binding contract, Lighthizer answered: "What? From now on we're not using the word memorandum of understanding anymore. No more, we'll never use the term again. We'll have the same document. It's going to be called a trade agreement. We're never gonna use MOU again."

Trump still did not get the idea that the MOU and the trade agreement were the same thing and asked: "Are they going to put that into another agreement?"

An exasperated Lighthizer danced around for a bit talking about "major hurdles", concluding "assuming you decide on an agreement, it will be signed by the two people and it will be a trade agreement between the United States and China."

Trumpian Vocabulary

Trump was pleased.

Please strike MOU from your Trumpian vocabulary.

Mike "Mish" Shedlock

Comments (17)
No. 1-13
AWC
AWC

We could trade some bacon and beans, if we had some bacon, but we don't have any beans.

abend237-04
abend237-04

His bluster and swagger disgust me, but I empathize with Trump's disdain for the damned MOU. If you ever find yourself in a dilemma where you really don't want to do a deal just now, for whatever reason(s), then do an MOU. Just stuff it full of enough weasel words on both sides and that will prevent it having any real binding effect on either party...yet. And if I'd ever pulled that stunt of upbraiding my chief negotiator in front of god and the world, I would have expected to be cussed out or swung at, or both. It said a lot, all bad, about how much attention Trump has paid to getting a deal done with these people.

Sechel
Sechel

Trump knows one thing, branding. As far as understanding trade, defense , law or national security he's like a 10 year old trying to discuss physics with PHD. All he can do is argue about acronyms

shamrock
shamrock

I think Trump might be right. From investopedia:

" What is a Memorandum of Understanding (MOU)?

A memorandum of understanding (MOU) is a nonbinding agreement between two or more parties outlining the terms and details of an understanding, including each parties' requirements and responsibilities. An MOU is often the first stage in the formation of a formal contract."

thimk
thimk

whatever legal instrument the trade deal is consummated with - it will be the "greatest" .

awc13
awc13

i know you can't trust everything on the internet but here is the investopedia definition

A memorandum of understanding (MOU) is a nonbinding agreement between two or more parties outlining the terms and details of an understanding, including each parties' requirements and responsibilities. An MOU is often the first stage in the formation of a formal contract.

hmk
hmk

So it sounds like Trump is correct in his interpretation and Lighthizer is incorrect.

billgates9999
billgates9999

Looks to me like Trump was right:

https://www.differencebetween.com/difference-between-mou-and-vs-contract/ The key difference between MOU and contract is that MOU is an agreement between two or more parties that is not legally binding whereas a contract is a legally binding agreement between two or more parties that creates an obligation to do (or not do) a particular task. Apart from this main difference, both MOU and contract are largely similar in terms of the objectives they desire to achieve.

Sechel
Sechel

This is ridiculous. Trump may not be a rocket scientist but its a slam dunk Trump has has engaged in more than one MOU while in business. He knows the difference between an MOU and an MOA.

But Lighthizer is right that MOUs between governments can be legally binding under international law. As the U.S. State Department’s guidance on international agreements explains,

While the use of a title such as “Memorandum of Understanding” is common for non-binding documents, we caution that simply calling a document a “Memorandum of Understanding” does not automatically denote for the United States that the document is non-binding under international law. The United States has entered into MOU’s that we consider to be binding international agreements.
Sechel
Sechel

Looks like Trump assumed the business world and government world treat MOU's the same. Maybe another example of hubris and he knows more than the experts. I'm sure Trump has experience with MOU's from his business dealings and closed his mind off to assuming it could be different when it comes to international trade. We just got a glimpse into Trump's willingness to listen to experts.

Carlos_
Carlos_

Trump doesn't like MOUs and thinks they aren't worth the paper they written on most likely because he has broken many of those in his business dealings and think they are the same type.

Mish
Mish

Editor

Trump entered into an MOU with the Russian government re Trump Tower Moscow in the summer of 2016.

Mish
Mish

Editor

Trump was wrong. From the FT "Last week Mr Lighthizer publicly corrected Mr Trump’s definition of a memorandum of understanding, which the president said was not a binding trade deal. Mr Trump had confused a real estate MoU with what it means in trade parlance."