Opinion

Thinking Global

Obama’s chance for a legacy

Feb 19, 2013 19:52 UTC

President Barack Obama devoted just one sentence in last week’s State of the Union address to call for a new transatlantic trade and investment deal. However, if negotiated with sufficient ambition and presidential engagement, it is Obama’s best chance yet at leaving a positive foreign policy legacy.

The other global issues Obama catalogued in his speech were largely about avoiding the worst: North Korea, cyber threats, Iran, Syria and other Middle Eastern upheavals.  Achieving what Obama called “a Transatlantic Trade and Investment Partnership,” however, has all the makings of grand strategy.

It is about nothing less than combining the world’s two largest economies and communities of common interest in a manner that could reshape all global trade and investment standards. It would also reinvigorate the Cold War’s victors, known then as “the Free World,” at a new inflection point of history. Only through common cause can the United States and Europe ensure they continue to write global governance rules even as they lose relative power and influence to countries that are less committed to democratic rights and free markets.

The magnitude of U.S.-EU economic relations still has no rival. Despite the euro zone crisis and slow U.S. growth, the United States and the European Union still account for roughly 50 percent of the world’s gross domestic product and enjoy more than $3 trillion in cross-foreign direct investment. U.S.-EU trade in goods and services accounts for 40 percent of the world total, or $636 billion in 2011. The U.S. Chamber of Commerce reckons that figure could increase by $120 billion in the next five years  – if the two sides can eliminate tariffs.

Yet numbers don’t tell the whole story. A far-reaching trade and investment agreement would mark a transatlantic recommitment ceremony of historic significance, reversing a dangerous drifting apart.

Are the financial markets really Europe’s savior?

Jun 11, 2012 21:23 UTC

If the euro is saved, the much-maligned power of global financial markets will deserve much of the credit.

The conventional wisdom among many on the intellectual left is that unbridled financial players threaten to destroy the European Union, one of history’s noblest, war-ending projects. The truth, however, is something else. To be sure, speculators lack noble motives, and global capital is a blunt instrument that tends to overshoot. But markets are forcing European leaders to fix their fatally flawed monetary union, a union that can only last with deeper economic integration and greater political (and democratic) legitimacy.

Last weekend’s agreement by Spain to accept a bank bailout, based on a European aid package of $125 billion, is a dramatic case in point. Senior Obama administration officials, in a series of urgent conversations with their European counterparts, warned that Spain posed the possibility of a “Lehman moment,” with global reverberations that no one could predict. If European leaders didn’t demonstrate to markets that they would pool their resources to address the banking meltdown of Europe’s fourth-largest economy, the contagion could have spread, what remained of U.S. and global growth could have evaporated, and the European Union itself would have been endangered.

NATO’s biggest security threat is now economic

May 25, 2012 15:21 UTC

CHICAGO — As measured from President Obama’s re-election campaign perspective – the White House’s litmus test for foreign policy issues through November – last weekend’s G-8 and NATO Summits were bell ringers.  Obama campaign strategists couldn’t have scripted their outcomes better – perhaps because they did script them.

Given the potential for dissent, President Obama could be satisfied that his guests adhered (mostly) to the desired story line. At Camp David, President Obama was the jobs-and-growth champion. In hometown Chicago, with leaders of some 60 countries arrayed around him, he was the president who would wind down an unpopular war. (That his Chicago White Sox trounced the Cubs during NATO Night at Wrigley Field, in a game that opened with an honor guard carrying flags from the 50 countries engaged in Afghanistan, was an added benefit.)

The only problem with this pretty picture is that getting the campaign message right is a long way from getting the world right. What really connected the G-8 and NATO meetings was a growing realization that the biggest threat to the alliance – and, for that matter, to Obama’s re-election hopes – is the euro zone crisis. That risk comes at a time when U.S. debt and political dysfunction makes the West far less resilient. So for all the talk in Chicago about common purpose in Afghanistan, NATO’s most existential danger now comes from within, and its root causes are economic.

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