Trump’s foreign pol­icy is sound, but the econ­omy gets shorted

China, which be­lieves in nei­ther free­dom nor mar­kets, re­mains a chal­lenge

The Washington Times Daily - - OPINION - By Peter Morici Peter Morici is an economist and busi­ness pro­fes­sor at the Univer­sity of Mary­land, and a na­tional colum­nist.

Pres­i­dent Trump rec­og­nizes U.S. foreign pol­icy has for too long sac­ri­ficed eco­nomic in­ter­ests and the liveli­hoods of or­di­nary work­ing Amer­i­cans for other im­por­tant goals — spread­ing democ­racy, hu­man rights and al­liance build­ing. And we are not get­ting our money’s worth — our al­lies ex­pect Amer­i­cans to bear dis­pro­por­tion­ate shares of the costs and risks to mil­i­tary per­son­nel of deal­ing with mael­stroms cre­ated by Rus­sia, ter­ror­ists in the Mid­dle East, China in the Pa­cific and the like.

Amer­ica is sim­ply not wealthy enough to bear all those bur­dens. Along with the harm from one-sided glob­al­iza­tion, Pres­i­dent Obama and Sec­re­tary Hil­lary Clin­ton ac­knowl­edged this re­al­ity but ul­ti­mately ac­com­mo­dated those by join­ing hands with our al­lies to ap­pease Rus­sian ag­gres­sion in Ukraine and else­where with half-hearted sanc­tions, en­abling the as­cent of China through the in­ad­e­quate rules and false jus­tice of the World Trade Or­ga­ni­za­tion (WTO), cav­ing in to Iran with a lousy Joint Com­pre­hen­sive Plan of Ac­tion (JCPOA) and pro­cras­ti­nat­ing on North Korea.

The ma­lig­nant dys­func­tion China cre­ates in the WTO is du­pli­cated on a smaller scale by trade deficits through bad deals with Ger­many, Ja­pan, Mex­ico, South Korea and oth­ers.

NATO, WTO, NAFTA and other re­gional eco­nomic agree­ments were lop­sided from the start and in vary­ing mea­sure are now out­dated. TPP would have been un­fair and an anachro­nism be­fore the ink dried, be­cause Mr. Obama on key issues like cur­rency and phar­ma­ceu­ti­cal patents did a bet­ter job of ne­go­ti­at­ing for our pros­per­ous trad­ing part­ners and the NGO poverty in­dus­try than for Amer­i­can na­tional in­ter­ests.

Amer­ica can’t re­treat into the nor­malcy of War­ren G. Hard­ing or the protectionism of Her­bert Hoover. Nu­clear mis­siles and In­ter­net-en­abled ter­ror­ists reach too far, and Amer­ica’s big eco­nomic driv­ers — high tech, health care, agri­cul­ture and en­ergy — need global mar­kets to sell the fruits of Amer­i­can R&D and cre­ate broader eco­nomic growth.

The Axis of Medi­ocrity — the Bush-Clin­ton-Bush-Obama al­ter­nat­ing dy­nas­ties — were too heav­ily in­vested in global gover­nance. With the ex­cep­tion of the Iraq War, they bent to our al­lies’ love of in­ter­na­tional in­sti­tu­tion and most ba­sic man­i­fes­ta­tion of the mul­ti­lat­eral in­san­ity — when diplo­macy and half-hearted sanc­tions fail and then fail ab­so­lutely, do yet more diplo­macy and half-hearted sanc­tions.

That’s how we got Rus­sia in the Crimea, the Iran deal, end­less ter­ror­ism in the Mid­dle East and North Korea with mis­siles aimed at Seat­tle.

Leon Panetta says Mr. Trump is in­tent on dis­man­tling his pre­de­ces­sor’s achieve­ments with­out a strat­egy to re­place them. While his tac­tics — man­u­fac­tur­ing crises by with­draw­ing from the Iran deal, threats and blus­ter for Kim Jong-un and re­fus­ing to co­op­er­ate with Europe in the flawed WTO -- are un­ortho­dox, his vi­sion is crys­tal clear.

Mr. Trump wants a fair share for all Amer­i­cans from the op­por­tu­ni­ties glob­al­iza­tion of­fers. On se­cu­rity issues, he wants our al­lies in NATO, the Pa­cific and the Mid­dle East — Saudi Ara­bia — to stop be­ing clients and bet­ter de­fend their own sovereign in­ter­ests — and to be­have like al­lies, not ad­ver­saries, on eco­nomic issues too. And a deal with Iran that per­ma­nently ends its nu­clear am­bi­tions, bal­lis­tic mis­sile pro­gram and ter­ror­ist ac­tiv­i­ties, and an equiv­a­lent ar­range­ment with North Korea.

The pres­i­dent has a strong uni­fied team on se­cu­rity issues with John Bolton, Mike Pom­peo and Jim Mat­tis all singing from the same score — but not so eco­nomic issues.

He sent to China Peter Navarro, wil­bur Ross, Lawrence Kud­low and Steve Mnuchin to per­suade China to re­form its econ­omy in ways that make it broadly con­sis­tent with Western free mar­ket cap­i­tal­ism and WTO rules. That’s an im­pos­si­ble task, be­cause Pres­i­dent Xi Jin­ping and the Chinese Com­mu­nist Party be­lieve in nei­ther free­dom nor mar­kets. In the offing appear lim­ited agree­ments with few pos­i­tive con­se­quences for the trade deficit.

The Amer­i­can trade quar­tet can’t even agree about the de­tails of an ac­cept­able deal. The Chinese ex­ploit­ing these di­vi­sions peeled off Trea­sury Sec­re­tary Steve Mnuchin for pri­vate talks with­out the oth­ers. He rep­re­sents Wall Street, which does not see a prob­lem with the mega trade deficits it fa­cil­i­tates with neat fi­nan­cial engi­neer­ing. He pro­tected Wall Street’s in­ter­est in the re­cent tax re­form — he safe har­bored the much re­viled car­ried in­ter­est, which lets fi­nanciers earn­ing mil­lions pay lower tax rates than your fam­ily doc­tor.

The de facto goal — har­mo­niza­tion of China with the West — and team’s di­vi­sions are laugh­able and of the sort once thought more likely in a third Bush ad­min­is­tra­tion. Thank­fully, Mr. Obama’s off­spring have yet to sprout pres­i­den­tial am­bi­tions.

Mr. Trump wants a fair share for all Amer­i­cans from the op­por­tu­ni­ties glob­al­iza­tion of­fers. On se­cu­rity issues, he wants our al­lies in NATO, the Pa­cific and the Mid­dle East — Saudi Ara­bia — to stop be­ing clients and bet­ter de­fend their own sovereign in­ter­ests — and to be­have like al­lies, not ad­ver­saries, on eco­nomic issues too.

ILLUSTRATION BY GREG GROESCH

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.