Shadow Government

5 opportunities Obama should seize right now

By Will Inboden

It is not hard to see the many problems in the world. And it is not hard to be a policy critic. So in the spirit of being sympathetic and constructive, I suggest below five foreign policy opportunities for today. These are initiatives that are timely amidst prevailing global circumstances, and available as potential successes to the Obama administration and allied nations. These are listed not because they are easy, but because they are feasible. Not included are ideas in the "nice-but-near-impossible" category (see: United Nations Security Council, reform of) or the "Richard Holbrooke is already working on that" category (see: Pakistan, stopping meltdown of).

They are:

1. Strategic partnership with Indonesia.

A news story from last month that should have received more attention than it did was the emphatic rejection of Islamist parties by Indonesian voters in nationwide parliamentary elections. Just over a decade after the end of the Suharto dictatorship and Indonesia's remarkable political transition, the world's largest Muslim democracy and fourth-most populous nation has subdued its internal jihadist threat and is on a positive path of economic development and consolidating democratic institutions. It is also a nation with enormous affection for President Obama, particularly in light of his childhood years there.

The United States should capitalize on this positive confluence now by solidifying a strategic partnership that elevates Indonesia to the status of a major ally. Why not consider a bold basket of initiatives, including a presidential visit, a free trade agreement, and even a security treaty similar to those enjoyed by Thailand and the Philippines? Three of the main global challenges for the foreseeable future will be the need for reform in the Islamic world, the question of secure shipping and energy transit corridors, and China's increasingly assertive global posture. To address these, the United States will need reliable allies of shared values and interests. Indonesia brings considerable strategic value on all counts.  

2. Freedom for Zimbabwe.

Has the Mugabe regime in Zimbabwe, thus far stunningly resilient in maintaining power despite driving its country into the ground, finally reached its end? No one can know for sure, and the wily despot has consistently defied past predictions of his tyranny's demise.

But as Zimbabwe expert Roger Bate has argued, President Obama brings a unique dimension of soft power to African issues, and has the unprecedented ability to persuade other southern African leaders to bring sufficient pressure for Mugabe to step aside. Another variable is new South African leader Jacob Zuma, who while problematic in many ways, also has the opportunity to depart from his predecessor Thabo Mbeki's feckless indifference towards Zimbabwe's misery and implicit support for Mugabe. The beleaguered opposition party Movement for Democratic Change (MDC) has finally gained a tenuous power-sharing stake in the new coalition government. But the MDC itself is broke and has little capacity to govern.

If the Obama Administration were to combine targeted and carefully-monitored financial assistance to the MDC with an invigorated diplomatic campaign to enlist southern African leaders -- especially Zuma -- in isolating Mugabe and remove his last vestiges of support, the people of Zimbabwe might finally know freedom.

3. Free Trade Agreements with South Korea, Colombia, and Panama.

President Obama has already shown a willingness in office to take more responsible decisions on international economic policy than his campaign rhetoric indicated. Why not extend this streak by bringing to completion with Congress these three FTAs? The hard part of painstakingly negotiating the terms of the FTAs with each respective government was already completed under the Bush administration. And the complete Democratic control of Congress means that President Obama can exert his will on Capitol Hill on issues he deems important.

These three FTAs fit the bill. Besides being a bulwark against growing global protectionist impulses, the approval and implementation of these FTAs would signal U.S. commitment to strategic nations and regions and demonstrate responsible economic leadership during a time of global need. In South Korea, after years of chilly relations and divergent interests with the United States under former President Roh, the Lee Myung-bak government has emerged as an eager partner. Approving the FTA would reinforce ties with an important ally while opening further the lucrative Korean market to the U.S. economy. Colombia has been a steadfast U.S. ally that has made remarkable progress under President Uribe in taking back control of its country from the FARC narco-terrorists. But continuing to grow a sustainable economy based on alternative livelihoods to coca fields depends in part on consistent access to vast export markets like the United States.

President Obama's most visible gesture in Latin America thus far was his dubious handshake with Hugo Chavez. A more meaningful gesture towards the region would be approving the FTAs with Colombia and Panama.

4. Strategic engagement with Central Asia.

For all of the new foreign policy challenges posed by the global economic crisis, some geopolitical opportunities are emerging because of it as well. The twin shocks of the credit crunch and plummeting energy prices have pummelled the extractive-industry dependent Russian economy. This in turn has reduced (though not eliminated) Russia's capacity for coercion and mischief-making, even in its near abroad. While recent years have seen a diminished U.S. influence in Central Asia -- from a combination of factors including the U.S. focus on nearby Afghanistan and Pakistan, democratic backsliding in Kazakhstan and Kyrgyzstan, the Andijan massacre in Uzbekistan and subsequent loss of the K-2 airbase, and increased Russian and Chinese enticements throughout the region -- its dire financial straits may be diminishing Russia's ability to exert hegemony in the region and could provide a new opening for the US.

Moreover, the emerging Russia-China condominium in the region represented by the Shanghai Cooperation Organization seems to have stagnated. And though the Obama Administration has adopted a curiously neglectful posture towards India, potential cooperation on Central Asia represents a signal opportunity for the United States to expand its regional partnership with India beyond just Pakistan-Afghanistan concerns. India can also serve as a strategic bridge to Central Asia and a values-based partner for the United States in a renewed engagement in the region. A strengthened U.S. role in Central Asia in turn creates opportunities for progress on numerous issues, including regional assistance on Afghan reconstruction, energy supplies and corridors, more stable military basing rights, counter-radicalization, and growth in democratic governance.

5. Renewed initiative on Burma.

One year after cyclone Nargis wrought even further misery on the Burmese people, already the victims of decades of suffering, the ruling junta still holds the country in its paranoid grip. Secretary Clinton has reportedly ordered a State Department review of U.S. policy towards Burma. Now is a good time to renew and expand a dormant initiative first begun under the Bush administration: bringing the situation in Burma before the U.N. Security Council for action, specifically a full resolution that includes an arms embargo.

The prior effort on this front two years ago advanced far until being derailed by Russia and China's cynical double-veto. Yet here President Obama's considerable global popularity, especially in Europe, and his renewed emphasis on multilateralism can be harnessed towards a greater chance of success. While most European nations have resisted his policy entreaties on other fronts, they would likely be receptive to an appeal for an enhanced multilateral push on Burma, especially under the "responsibility to protect" doctrine that fellow U.N. Security Council permanent members the U.K. and France fought hard to include in the U.N.'s 2005 World Summit Outcome Document.

Likewise, in the face of strengthened European pressure and their own desire to maintain positive relations with the Obama administration, Russia and China would be less inclined to bear the stigma cost that they would incur with a second veto. Most importantly, a Security Council resolution and arms embargo would positively alter the incentive structure that currently allows India and Thailand to maintain friendly ties with the junta, would reduce the flow of arms used to tyrannize the Burmese people, and would bring strategically targeted pressure on a regime which, as my colleague Jean Geran has pointed out, responds to nothing else.

This list is not meant to be, and surely is not, exhaustive. Readers are, of course, invited to suggest other opportunities that come to mind.

Shadow Government

Congress to Obama: "No you can't" on China

By Phil Levy

When the Obama administration rethought its China currency policy last month, we seemed to have dodged a bullet. China stopped giving speeches bemoaning the failings of the dollar, the administration bought time to select an ambassador to Beijing, and we assumed we could all turn to other preoccupations for a while. Not so fast. Serious trouble is still brewing in the more obscure reaches of U.S. commercial policy, and it will be tough for the administration to head it off.

For practical purposes, there are two parts to U.S. trade policy: a deliberate part and a part on autopilot. The deliberate part is much better known to non-trade economists. It involves free trade agreements, Buy America measures, and opportunities to denounce trading partners. Then there is the part on autopilot. This is the part that can sound like a seating chart at a large stadium -- Section 421, Section 301, Section 337. Each refers to a part of U.S. trade law that a business or individual can invoke. In the same vein, you'll hear talk of anti-dumping measures and countervailing duty investigations -- all part of "administered protection." Does all this make your head ache and remind you why you always avoided economics and trade law? If so, the autopilot part is having its desired effect.

Beyond their stated purposes, there are two features of these "administrative remedies" that users find attractive. First, they are opaque. That tends to shield them from the backlash we saw when more transparently protectionist measures were put forward.  Second, they limit policymakers' discretion. Industries seeking relief from imports, and their supporters in Congress, have long complained that the executive branch tends to go soft on trade. Presidents often have a broader perspective on trade than congressmen. They look at the national economic impact of trade measures and at the foreign policy repercussions.

To avoid this sort of second-guessing, Congress has written laws that limit the president's role in the process. In two looming China cases, Obama does not have the authority to block a filing in either one. In each case, the industry had the right to start an investigation with the International Trade Commission (ITC). If the ITC finds that the industry has been hurt, the investigation continues. In one case (Sec. 421), the Obama administration would have an interagency review and a chance to stop short of trade barriers. In the other cases (antidumping), there is no such policy review, only technical judgments at the Department of Commerce.

This poses a foreign policy challenge. Will our trading partners understand when the president's hands are tied? They likely would in democracies where there is strong separation of powers. But what about in China, the target of these investigations? Will they misperceive this as a deliberate act?

The early signs are not good. The People's Daily reported that China summoned the U.S. Chargé d'Affaires, Dan Piccuta, last week and objected. Vice Minister of Commerce Zhong Shan reportedly told the chargé:

US industries have recently filed for trade remedy investigations into Chinese-made oil well tubing and tire products. China is paying close attention to the matter, as the cases involved a large sum of money and affected numerous Chinese enterprises.

The story continued:

Zhong stressed that in the current situation in which efforts are being made around the globe to cope with the financial crisis, it is inappropriate to put forward the two applications. If they were improperly handled, serious problems could occur, which would not only be harmful to the settlement of bilateral economic and trade issues between China and the US, but also generate a negative impact on the recovery and development of the global economy.

And just in case the State Department's lines of communication are not fully functioning yet, the Minister of Commerce, Chen Deming, wrote in the Wall Street Journal Asia last week:

Regrettably, however, trade measures by the U.S. against China are on the rise. Recently, American industries have petitioned the U.S. government for antidumping investigations, and for investigations under the World Trade Organization's "special safeguard provision," which could restrict imports of Chinese products. This will seriously test China-U.S. economic and trade relations.

To connect the dots, the special safeguard investigation, a.k.a. Sec. 421, deals with imports of Chinese tires. This is the one the administration could block, if it so chooses. The problem will be political. There is a very low hurdle for the ITC to find injury in a 421 investigation. The ITC did so in a number of cases during the Bush administration, all of which died after executive branch review. Obama's supporters in the manufacturing sector are clearly hoping for change. In an interview with Inside U.S. Trade, Alliance for American Manufacturing Executive Director Scott Paul said:

Since [the Obama team] made such an emphasis [during the campaign] on trade enforcement, it would be a real surprise to me if -- should the ITC find injury on 421 -- the President does not accept the finding.... Then you would have a much stronger case that the Obama administration is not living up to its commitment than the first currency finding or the NAFTA piece.

Battle lines drawn. Warning shots fired. 

On oil well tubing, the antidumping case, the administration will have no such chance for review. Once launched, the investigations proceed according to a set timetable. The ITC checks for injury, Commerce checks to see how far the price was below "fair value," and if everything checks out then tariffs are applied. The administration can try to tell the Chinese it had no choice in the matter, but will China accept "No, we can't!" for an answer?