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| Opportunities & Exposures: Politics |
Economic Diplomacy
Edward J. Lincoln
09/01/2005
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The world economy has changed dramatically in ways that have profound
implications for foreign policy. Unfortunately, these changes are largely
ignored or misunderstood by the Bush administration. Americans are far more
closely interconnected with their counterparts around the world through trade
and investment than at any previous point in our history. The Bush
administration, however, appears to have forgotten that our leadership on
international economic issues requires cooperation, compromise and concessions.
Being the world’s sole superpower seems to have given us an inflated view of
what we can make the rest of the world do.
The unilateralist thinking that
has accompanied our military prowess is a liability in other areas. It impedes
us, for example, in hammering out a workable deal in the current Doha Round of
multilateral trade negotiations in the World Trade Organization.
More than a
decade ago, during multilateral trade talks, the U.S. government agreed to end
the so-called Multi-Fiber Agreement (under which industrialized nations were
permitted to establish quotas for textile imports) this past January. But the
Bush administration is already acting to contain the rapid increase in textile
imports from China. Furthermore, taking protectionist action on steel and
raising subsidies to U.S. farmers at the same time that the administration
claimed to be pressing for completion of the Doha Round was hardly a productive
step. We want other countries to open their markets to our exports, but our own
protectionist actions send the wrong message.
The beauty of economic gain is
that it is not a zero-sum game. We are better off when other nations also
prosper. We do not accomplish this goal by protecting textiles, and thereby give
other nations an excuse to maintain barriers to goods and services in which we
are most competitive.
This kind of contradictory behavior occurs because the
Bush administration has failed to articulate a foreign economic policy. What we
should have heard in Bush’s inaugural or State of the Union addresses was an
explanation of why the health of the global economy would boost our economic
interests and enhance our security. He could have woven an interlocking set of
policy ideas for open trade, reform and bolstering the important multilateral
economic institutions, and improved foreign aid for impoverished countries that
would advance our strategic goals.
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