A Grand Trade Bargain

David E. Sanger

From Foreign Affairs, January/February 2001

Article preview: first 500 of 3,991 words total.

Summary:  Washington faces two enormous tasks in forming economic policy: it must preserve U.S. economic supremacy while defusing the bitter resentment that America's clout provokes abroad. A grand bargain with developing countries is badly needed. For starters, America should slash its trade barriers in agriculture and textiles in return for a global accord on intellectual-property rights.

David E. Sanger is White House Correspondent for The New York Times. He previously served as the paper's Tokyo Bureau Chief and Chief Washington Economic Correspondent.

CLOSING THE WEALTH GAP

The Clinton administration came to Washington eight years ago with a straightforward plan to reorient American foreign policy. To spur a lagging economy, it put America's commercial interests -- promoting exports and opening markets -- on par with the country's traditional security interests. It was a strategy born of the "it's the economy, stupid" campaign. To its enthusiasts, this was a long-overdue adjustment in the country's foreign policy priorities, a recognition that the Cold War had ended and that Europe and Japan had long put their competitive interests first. To Clinton's critics, it was low diplomacy, a perversion of America's global role.

As Clinton leaves office, this argument over where America's diplomatic priorities should lie seems quaint and hopelessly out-of-date. Eight years of growing economic interdependence around the world have all but ended the debate. Moreover, the political and economic dynamics of America's world role have completely reversed. Today there is no question the American economy reigns supreme -- at least for the moment. Japan has been flat on its back for so long that few in the White House even remember when they were consumed with opening Japan's markets for American cars, apples, and cell phones. At the same time, the concept of how economic forces shape foreign policy and vice versa has become infinitely more complex. If most of the first Clinton term was all about boosting American exports, the past five years have been about stabilizing the rest of the globe, from Mexico to Asia to South America. The new administration comes to power with the far greater challenge of preserving America's place atop the world economy while defusing enormous resentments about U.S. economic, cultural, and military might. Washington must convince other nations -- both poor and rich -- that it is shaping a world economic system for their benefit as well as its own.

This task would be a nearly impossible sales job for any country, much less one that most of the globe perceives as an arrogant, self-interested "hyperpower" determined to preserve its lead. The new president's challenge is made even more difficult by the fact that the Clinton administration's efforts to reshape the global economy in America's image hit a brick wall in Seattle late in 1999 -- and this campaign has never gotten back on its feet. It falls to the new president to pick up the pieces and convince the rest of the world that the United States has a vision far broader than simply using its diplomatic power to enhance the profits of American firms.

The popular image of the Seattle protests, now emblazoned in the American consciousness, was formed from televised scenes of a few hundred anarchists heaving bricks through storefronts under a cloud of smoke and tear gas. That mess was cleaned up months ago. But the real Seattle rebellion, which has yet to be cleaned up, occurred in the hotel rooms and conference centers above the street chaos. It did not make for ...

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