0 Speaker List

News

A Missed Opportunity for Even Greater U.S. Influence

Robert B. Zoellick
 

(The New York Times) – During the Cold War, Presidents Dwight Eisenhower, John Kennedy and Ronald Reagan stressed that America’s economic vitality was the foundation of U.S. power. Trade agreements complemented military might by boosting partnerships for reform, growth and openness. The open U.S. economy overcame the problems of the 1970s and innovated technologically while the closed and centrally planned Soviet economy fell further behind. When oil prices plummeted in the 1980s, Gorbachev was forced to launch a “perestroika” to restructure the economy amid a “glasnost” to open Soviet society. But the reforms failed, and the Soviet Union collapsed.

Even as President George H.W. Bush achieved a peaceful end to East-West struggle, he had the vision to press trade initiatives in North America, the Asia-Pacific and globally, building the economic underpinnings of a new international order. The United States now has free trade agreements with 20 countries, representing about 10 percent of global gross domestic product but almost half of America’s exports. In the first five years of these deals, U.S. exports on average increased three times as rapidly as export growth globally. All but one of these agreements was established after the Cold War.

But over time, the beacon of free trade ideas faded, flickered and dimmed. Plans to upgrade rules of commerce and competition across the Pacific and Atlantic — and perhaps further into Latin America and with the Middle East and Africa — have lapsed. The U.S. didn’t push forward with trade initiatives consistently, and now the new Trump administration threatens to raise barriers to trade drastically.

Despite President Clinton’s initial enthusiasm, Democrats have routinely hemmed and hawed on free trade; they found it too hard to persuade domestic constituencies. Republicans failed to overhaul ineffective programs aimed at helping workers transition to new skills and work. Employers did not discuss with workers how trade boosted pay and jobs. The newly powerful tech industry did not signal their support for free trade with Congress.

Today’s new conventional wisdom is that trade is bad politics. But the fall of the Soviet Union showed that U.S. security requires economic policies that encourage America’s private sector dynamism as well as military means. The economic and strategic potential of the U.S. to shape the future world order through a strong global trade policy may be an opportunity lost.

Get A Quote For: