Joe Biden’s “ middle class foreign policy ” puzzle


If there is one thing Joe Biden and most countries of the world would agree on, it is the failure of Donald Trump’s “America First” foreign policy. The United States’ global trade deficit grew by almost 40% during Trump’s tenure – the yardstick he cared about most.

Biden, by contrast, took a much more fuzzy measure of diplomatic success – the health of America’s middle class. Each step will be evaluated based on its impact on ordinary Americans.

Biden’s “foreign policy for the middle class»Has an attractive ring. Like all good slogans, it refreshes the brand. But it’s unclear how different his product will actually be.

A skeptic would call this approach Trumpism with a human face. In other words, middle class foreign policy can be simply a euphemism for “no trade deal”. A less yellowed eye would say Biden is doing what’s necessary to restore public confidence in a globally engaged America.

Which one will he turn out to be? One of the most striking aspects of Biden’s administration is the gap in tone between its foreign and domestic policies.

On the home front, Biden threw caution to the wind. Contrary to the fears of the major divisions of the Democratic Party, the left welcomes the radical domestic projects of their leader.

Almost the reverse is true of his relatively cautious approach to the world. Among other complaints, the Liberals are unhappy with Biden’s tough stance in joining the Iran nuclear deal, his gentle treatment of the Crown Prince of Saudi Arabia, Mohammed bin Salman, and his Chinese warmongering.

Biden faces two problems presenting his diplomacy to Main Street. First, the allies of the United States yearn for more economic engagement. It means trade and investment agreements. Biden could differentiate himself from the previous ones by focusing on 21st century issues such as 5G and green technology, as opposed to Trump’s mania for soybeans and steel.

But unless the United States is prepared to deal with its Asian and European partners, China will continue to nibble on American market share. It would hurt both the American middle class and the United States’ global reputation. Most Asian American partners trade much more with China than with the United States.

Second, any type of trade negotiation is now treated as toxic in US politics, in part because many Americans accuse globalization of reducing incomes. Jake Sullivan, Biden’s strategically-minded national security adviser – and one of the architects of his middle-class foreign policy – argued that the United States allowed actors like Goldman Sachs and Big Pharma of dictate the terms past trade agreements. It is indisputable. Corporate lobby groups have always had a much greater influence in Washington than unions, environmental groups and other stakeholders.

In Sullivan’s view, the only way to restore confidence in trade deals, then, is to force US manufacturers to relocate production and close overseas tax shelters. But cheap China doesn’t produce most of America’s drugs. By value, it is Switzerland and Ireland.

Once again, Sullivan is close to the truth. The problem is, it could take years for such measures to begin to change perceptions of the middle class, if indeed Biden can deliver them. The biggest test of whether he is ready to face China economically is the Trans-Pacific Partnership, a trade deal widely negotiated by Barack Obama.

It would be political suicide for Biden to join the TPP at this point. Still, it would be a geopolitical disaster for the United States if China joins the group, as she said. might want to do. The prospect is not that far-fetched. While America reflects, China has been very busy concluding global trade and investment treaties.

The rest of the world is unable to influence American voters. This role falls to American leaders. Biden’s best openness would be to target the growing American public fear of China, which peaked at 73% last year according to Bench, with its still surprisingly high trade support in general.

Americans don’t automatically fear more trade – just trade with China. Biden might add that most of the erosion of industrial jobs in America has been caused by technology, not commerceand the lack of federal support for those losing trade. Washington has turned a blind eye to corporate tax evasion for decades. The generous treatment of shareholders was matched only by indifference to the fate of the workers.

Given the American political climate, I would be shocked if Biden joined the TPP or started trade talks beyond Europe. Yet his advisers are aware that the consequences of US inaction would be anything but dire.

Sullivan wrote that the fate of America’s great competitive power with China “will ultimately depend on how effectively each country manages its national economy and shapes the world economy.”

He also said that the lack of domestic investment is a “greater threat to national security than the US national debt”. The key to America’s fortune lies in the skill with which Biden can do two things at once: strengthen America’s middle class while outflanking China onto the global economic stage.

The good news is that Biden is make progress on the first. The bad news is that he can’t afford to wait for his putative re-election before taking political risks on the second. The world economy will not wait for Biden to make up its mind.

edward.luce@ft.com



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