Obama Administration

By Phil Levy

Wherever else the status quo ante may reign, the Obama administration has brought change to the tradition of sending foreign dignitaries home with lovely parting gifts. Back in September, the chairman of China's legislature was dispatched with a new set of tire tariffs. Now, German Chancellor Angela Merkel has been sent home with an auto jobs program that won't start.

This latest gesture flows from the U.S. government's majority ownership stake in General Motors. GM is a global company and its empire includes ownership in a European subsidiary, Opel. Half of Opel's 50,000 employees are in Germany. Thus, when GM was facing bankruptcy this spring, the German government took a strong interest. It offered a $2.2 billion loan to help Opel survive and preserve German jobs.

The Obama administration guided GM through bankruptcy and on to a distinctive ownership structure. U.S. taxpayers now hold a 61 percent stake in GM, with an additional 17.5 percent stake granted to the United Auto Workers. The bankruptcy process concluded in early July, at which point GM set about trying to become lean and mean. One aspect of that was a move to sell Opel to a Russian-backed Canadian group called Magna.

What does any of this auto arcana have to do with foreign policy? Aren't these just the obscure fiddlings from the back of the business pages? Well, consider the level at which this has been handled in foreign governments. In August, when GM was still pondering whether to sell Opel to Magna:

German Chancellor Angela Merkel expressed her regret at General Motors' failure to choose a buyer for its German unit Opel, and said that a decision was 'urgently' needed for the carmaker's future.

German Foreign Minister Frank-Walter Steinmeier was on the phone with his U.S. counterpart and reported, "Secretary Clinton said she would communicate the German government's position within the U.S. administration."

That sounds a lot like a foreign policy issue. There's more. After announcing its decision to sell Opel to Magna in September, GM's board reversed itself yesterday. Here was some of the commentary from abroad:

General Motors' behavior toward workers is completely unacceptable," German Economy Minister Rainer Bruederle told reporters the morning after GM's shock news, adding: "General Motors' behavior toward Germany is completely unacceptable."

In Moscow, Russian Prime Minister Vladimir Putin hinted the battle for carmaker Opel was not over..."

President Obama has made clear that he never aspired to run a car company and would like to get out of the auto business. But the administration is in the same position as an absentee landlord of a rundown property -- responsible, like it or not. The promises that GM would be run in a hands-off, all-business fashion have not been credible either to members of Congress or leaders abroad. (This is not the only uncomfortable aspect of GM's awkward ownership structure; GM's minority owners, the UAW, recently refused to cut costs for GM's private-sector competitor, Ford. Imagine.)

If the administration is truly eager not to run a car company, it could always divest. Sen. Lamar Alexander (R-TN) put forward a plan to do just that in July. It was voted down in the Senate, with leading Democrats explaining that the time was not right. That raises the question of just what the administration is waiting for. Unless the government plans further infusions of cash into GM, or plans to intervene in GM's decision-making, what benefit could there be to holding on to the company and inviting unwelcome domestic and foreign pressures?

One possibility is that the government is better able to predict GM's worth than the market. Perhaps the administration's financial seers believe they can time the recent run-up in stock market prices and ride it further with their $60 billion bet on GM. Alternatively, the divestment delay may just serve to hide the ultimate cost of the administration's auto intervention.

Whatever the reason, the entanglements deepen. The administration has been asked to provide further billions for GMAC, a key financier of car purchases (formerly known as General Motors Acceptance Corporation). Overseas, the Chinese have launched an investigation of U.S. auto subsidies (the pot calling the kettle red?).

And we still have the issue of German Opel angst. Perhaps this is why President Obama declined Chancellor Merkel's invitation to travel to Germany to celebrate the anniversary of the Cold War's End. Maybe he was worried about what she'd give him in return.

Bundesregierung/Steffen Kugler-Pool/Getty Images

It seems that no one can resist the temptation to opine on the one-year anniversary of President Obama's election. Shadow Government is no exception. In coming posts, Shadow Gov bloggers will answer any or all of four key questions:

• What, if anything, has surprised about Obama's foreign policy since the election?

• What one thing should be singled out for praise?

• What one thing should be singled out for constructive criticism?

• What prediction, if any, about where we might be 1 year from now?

In blogoyears, it has seemed like a lifetime since President Obama culminated his historic campaign with a decisive victory. But in reality, it was only a year ago. Imagine a latter-day Rip Van Winkle who went to sleep hung-over from the election night festivities and waking up to reality today. What would strike him about President Obama's foreign policy? Here are our answers...

PETER MUHLY/AFP/Getty Images

By Michael Green

Surprises?

The biggest (most pleasant) surprise on Asia has been the Obama administration's willingness to use pressure on North Korea. After campaigning on a promise to meet with the leaders of nations like North Korea without conditions, the Obama White House has turned out to be quite hard line vis-à-vis Pyongyang.

Of course, it would be difficult to miss the obvious failure of Ambassador Chris Hill's conciliatory negotiating style at the end of the Bush administration -- let alone the fact that North Korea responded to President Obama's initial promises of engagement by detonating a second nuclear device. Still, in the case of North Korea the administration seems to have embraced the premise that there must be consequences for proliferators.

The administration has moved forward smartly with implementation of sanctions under U.N. Security Council Resolution 1874 (unlike the Bush administration's decision not to implement UNSCR 1718 after the first nuclear test) and thus far the Special Envoy for North Korea has refused to sit down with the North Koreans until they first agree to return to the Six Party Talks. Even the visit of former President Clinton to Pyongyang was done with most of the administration holding its nose and limiting the mission to the humanitarian goal of bringing home two American journalists taken by the North. We will see how long this holds, but for now the administration looks pretty tough.

Praiseworthy?

The Obama administration deserves praise for its selection of an Asia team. There were more than 60 "advisors" on Asia to the Obama campaign (close to the total number of advisors for the entire world working with McCain). Most of these advisors were calling for wholesale changes in Asia policy, echoing the usual canards about the Bush administration's "unilateralism" and "militarism." But in the end, the top jobs in NSC, State and Defense were filled by non-partisan centrists and pragmatists who recognized the successes of the Bush administration's Asia strategy and wanted to tweak rather than redefine the U.S. approach to the region. Better yet, the top officials at State, NSC and DOD are associated with the successes of the Clinton administration's Asia policy, including the revitalization of the U.S.-Japan alliance and the successful negotiations to bring China into the WTO. The team is professional, knowledgeable and very reassuring to the region.

Constructive Criticism?

The administration deserves criticism on two fronts. The complete lack of a trade strategy leaves the United States without any tools to counter the growth of exclusive regional economic arrangements within Asia. This will become obvious when Obama travels to the Asia Pacific Economic Cooperation (APEC) forum in two weeks and calls for an open and inclusive architecture like his predecessors -- only his predecessors actually were bringing something to the table in terms of trade liberalizing agreements with Korea and other countries in the region. The second area of criticism would be the administration's willingness to pull punches on human rights and democracy. The president's decision not to meet the Dalai Lama in Washington in August (the first rebuff to the Tibetan Spiritual Leader by a U.S. President in recent memory) was particularly problematic.

Predictions?

The Obama administration will grow tired of China. Obama expanded the Bush administration's Strategic Economic Dialogue into a Strategic and Economic Dialogue and raised expectations of progress with Beijing on everything from climate change to Iran and North Korea. But in the wake of the financial crisis Beijing sees itself as externally stronger and internally more vulnerable. That is not a recipe for more cooperation with Washington. Chinese support for North Korea's economy is increasing in the wake of Pyongyang's nuclear test and China will be relying on coal for 80 percent of its energy no matter how well discussions of climate change cooperation go (and they are not going that well). Then there is the unyielding PLA position on the South China Sea, cyber-security and a host of other security problems that will vex the Obama administration's China policy over the coming years. Usually, new administrations come into power in Washington having talked themselves into a tense relationship with Beijing during the election campaign and then they adjust to a more centrist and stable relationship with China (true of Regan, Carter, Clinton and G.W. Bush). The Obama administration came in without having engaged in a contentious debate over China policy with McCain, but may now find itself under increasing pressure to be tough with Beijing.

Photo by Korean Central Television/Yonhap via Getty Images

By Tom Mahnken

Surprises?

I'm surprised that the Obama administration hasn't tackled the reform of U.S. national security institutions. Before assuming office, many of the administration's top officials -- to include Jim Jones and Dennis Blair -- argued persuasively for the need to update the organization of the national security community to meet the challenges of today and tomorrow. Since assuming office, the administration has been largely silent on the issue. There's still time to act, but the momentum for change appears to be slipping away.

Praiseworthy?

Easy. The decision to keep Secretary of Defense Robert Gates and a handful of his advisors onboard was a wise one.

Predictions?

I predict that a year from now we're likely to be involved in a crisis that the administration either hadn't foreseen or for which it hadn't adequately prepared. I can't tell what that crisis will, be of course; merely that the unexpected is to be expected.

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By Dan Blumenthal

Overall, Obama's Asia policy has been largely driven by events and domestic priorities rather than by an overarching strategic vision. The Obama team had to closely coordinate with China on financial matters in response to the financial crisis. Passing a cap and trade bill at home means that we need China to sign up to a global climate change pact; Americans will chafe at a costly bill if the world's largest carbon emitters do not agree to carbon reductions.

The Obama team attempted a new policy on Burma. The idea is to find a way to engage the military junta which would strengthen relations with the Association of Southeast Asian Nations, of which Burma is a member. But the policy change has been overtaken by events.

Aung San Suu Kyi was unfairly punished when an American swam across a lake to her residence. And the junta began a new round of repression, as its leaders jail and harass political opponents in the run up to their 2010 "elections." Obama could not radically shift Burma policy. Rather, adjustments to our relations with ASEAN and Burma have been only marginal. There has been some more contact with the junta. And as part of the broader attempt to build stronger relations with Southeast Asia, the administration signed the Treaty of Amity and Cooperation (TAC). These and visits to Southeast Asia by Secretary Clinton and her deputy, Jim Steinberg, demonstrate a desire to deepen American engagement with that region. It is unlikely that engaging Burma or signing the TAC will increase America's regional influence.

Surprise?

There are several Obama Asia policies that have been surprising. On a positive note, the Obama team has given much greater attention to the Japan alliance than I had expected. Secretary Clinton's first stop in Asia was in Tokyo, which eased Japanese concerns that they were in for another round of "Japan passing." Since the Democratic Party of Japan took over last September, Obama officials have visited Japan frequently to get a sense of how to deal with a party that has never before governed. The Obama team should be commended for trying to find its way with this inexperienced and eclectic ruling coalition.

Constructive Criticism?

Other policies should give us pause. For example, Obama is sticking to his campaign promises on trade, which means we have no trade policy. The Korea-U.S. Free Trade Agreement has been collecting dust in the Congress. The rest of the region, however, is not standing still. China seems to sign a trade agreement a minute and South Korea is moving forward on an FTA with the EU. If this continues, not only will our economy be disadvantaged, but our regional leadership will also suffer. While the Obama administration has done a fine job showing up to Asian multilateral meetings, without new trade proposals it has shown up empty handed.

A second troubling policy is the absence of any agenda on Taiwan. The Obama team was effusive in its praise of President Ma when he was elected in March 2008 and they applaud his attempts to ease tensions with the Mainland. The Taiwan president is doing what he thinks Washington wants - easing cross Strait tensions. But there was an implicit bargain with Taiwan that we are not upholding. We were supposed to strengthen Ma's hand by strengthening our ties to Taiwan. The Obama team is not helping Ma.  We have not sold any arms to Taiwan even as China has continued its arms buildup across the Strait. And Obama has no plans of yet to deepen economic ties as Taiwan goes forward with a China FTA.

Third, the bluntness with which the team has downplayed China's miserable human rights record is an unfortunate break with past administrations' practices. Secretary Clinton announced that she would deemphasize human rights concerns on her first trip to China. This was followed by the president's refusal to meet with the Dalai Lama when the Tibetan spiritual leader was in Washington last month. The administration has also been silent on Uighur repression and will not meet with Uighur leader Rebiya Kadeer. It does not help either country for us to pretend that we are indifferent about Chinese respect for human rights, when in reality we have a huge stake in China's political liberalization.

Overall, despite a regular barrage of criticism by Candidate Obama directed at President Bush for his supposed neglect of Asia (never a fair criticism), the Obama team has not wowed the region with new ideas or lavished it with attention. During Bush's first year, his administration had offered the largest arms package ever to Taiwan, was well on its way to substantially upgrading ties with Japan, and was negotiating a diplomatic breakthrough with India of historical significance. Then-U.S. Trade Representative Bob Zoellick was negotiating free trade agreements with Singapore, Australia, and Korea.

The criticism of the Bush administration was that it was "distracted" by the war on terror. The Obama team is learning that fighting a war saps a nation's energy and attention. Now in office, the Obama team can see that the threat from Islamic extremism is very real. The Obama team may have really believed that they could "fix" Afghanistan, disengage from Iraq, and then move on to "re-engaging" the rest of the world.

As Obama is learning, it is not so easy to "move on" when you are at war. No president can disconnect a major foreign policy issue such as war from other foreign policy issues. Asians have a stake in America's Afghanistan policy. A loss in Afghanistan would have stark consequences, as friend and foe alike would question our resolve, and Islamic extremism would rear its head again in Southeast Asia.

Prediction?

Obama's Asia team must be finding that during wartime, presidential attention is the scarcest of commodities. Obama has no choice but to focus on "the wars we are in," often at the expense of the Obama team's hopes for a grand "re-engagement" with Asia.

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By Phil Levy

Surprises?

I have been most surprised by President Obama's policy toward China. Trade with China was a major concern of labor groups in the election and then-Senator Obama signed pledges about the aggressive approach he would take. This included a commitment to find that China was a currency manipulator -- a stance reiterated by Treasury Secretary Geithner in his confirmation testimony. If anything, the facts shifted in favor of a currency finding against China: the exchange rate has not moved in over a year and the United States is borrowing less from abroad (suggesting less dependence).

Praiseworthy?

However, in April and October, the Obama Treasury repeated the finding of the Bush Treasury, that there were no currency manipulators worth mentioning. If you combine this with the docile stance on human rights that my Shadow Government colleagues have already mentioned, it might be explained as a surprising but consistent attempt to engage China as an important economic player. Yet the administration also chose to confront the Chinese with a weak decision on low-cost tires.

Constructive Criticism?

For constructive criticism, I would turn to the administration's broader trade policy. President Obama has attempted to warm international relations while chilling commercial relations. In China, Colombia, S. Korea, Brazil, India, and the European Union, there is growing aggravation at the administration's lack of a trade policy. It is high time that the president deliver his long-promised speech and resolve the conflicts within his party on trade. That could clear the way for reengagement with the rest of the world.

Prediction?

Finally, as a prediction for one year hence, I forecast serious international rancor over the environment. President Obama is in a bind. If there is no U.S. action on climate change, there will be sharp condemnation and disillusionment from abroad. If there is action, it seems likely to entail border measures (tariffs) that could threaten the global trading system. It is hard to see how this ends well.

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By David J. Kramer

Surprises?

I have been surprised -- and disappointed -- by the extent to which the administration has been willing to extend a hand to rogue regimes and enemy states at the same time it seems to keep many of its friends at a distance.

Praiseworthy?

The president's speeches in places like Moscow, Accra, and Cairo have, for the most part, hit the right tone and messages. His visit to Moscow in July was well done (though his policy toward Russia since then has raised some serious questions).

Constructive Criticism?

The president personally needs to make a strong and relentless push to address the challenge posed by Iran and tell Moscow that this issue more than any other will define whether the reset efforts with Russia succeed or fail. That Secretary Clinton did not push the Russians on sanctions during her recent visit was inexplicable. Hopefully, Gen. Jones last week raised this. One senior U.S. official recently admitted that the administration didn't know what it wanted/needed to do next. With an end-of-December deadline not far away and Iran up to its usual tricks, the administration better figure out a strategy fast before Israel takes matters into its own hands.

Predictions?

Iran, more than Afghanistan and Iraq, may well be the dominant foreign policy issue next year.

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By Dov Zakheim

Surprise?

I was surprised by the administration's deliberate downplaying of human rights issues. One might have expected a Democratic administration to emphasize such concerns rather than to pursue policies that are often ascribed to realist Republicans.

On the other hand, given the president's deliberate and sustained outreach to states with whom America's relations have been chilly at best, all of which have terrible human rights records, perhaps the decision not to mention those rights is not really surprising at all.

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