On the international economic
scene, President Obama's first year featured more style than substance. He was
warmly welcomed by world leaders. There were grand proclamations of intent
covering free trade, coordinated fiscal action, financial regulation, and the
environment. And the G-8 was supplanted by the G-20.
Yet most of the tricky
substantive questions were kicked down the road. The administration did not
pass any trade agreements, nor even make any significant advances. Countries
pretty much did what they liked on the fiscal front, each balancing concerns
about joblessness and creditworthiness in its own way. The administration could
barely persuade its own party's committee chairman of its plans for financial
regulation, much less the rest of the world. And we can simply take note
of the outcome of Copenhagen.
So what can the
administration do moving forward? One of the problems with kicking issues down
the road is that they rarely get easier and interlocutors get impatient.
The international impasses over fiscal action, financial regulation, and the
environment are rooted in the various countries' domestic political constraints
and will not soon be overcome.
Trade is a little different.
Yes, there are some significant
differences that have stalled the Doha round of global talks. But the Obama
administration might make significant headway, if it could just overcome its
own domestic political hurdles. The president has spoken of support for Doha
and of interest in a trans-pacific
trade agreement. For other countries to take him seriously, however, he'll
need to establish his bona fides. He
could do it by passing the pending FTA
with South Korea.
At a blow, he would lend
credibility to his claims of being pro-trade and market-oriented, he would help
secure a major U.S. role in Asia, he would have an instance of bipartisan
cooperation that could play well with voters, and he would demonstrate his
independence from labor unions.
Let me be clear
-- the labor unions would hate this.
The president would also have to face off against a growing anti-trade chorus within
the Democratic Party. But the president said
on his visit to Korea that he'd like to get the deal done, sooner or later.
Doing it sooner could send a dramatic and positive signal and clear the way for
greater accomplishments in the rest of his term.
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