Inside Joe Biden’s Struggles to Create a ‘New World Economic Order’

Inside Joe Bidens Struggles to Create a New World Economic | ltc-a

The goal is to replace the old paradigms of globalization – free trade and dependence on markets – with a « worker-centric » trade policy that raises wages not just for Americans, but around the world.

But building a new world economy is proving more difficult than praising the old one. While the pro-globalization consensus has shown cracks for years — from the financial crisis to the election of former President Donald Trump — Biden’s team has struggled to outline how he will shape new rules and institutions to replace those that have ruled the world for the last half century.

Biden’s team is moving slowly to transform a crippled World Trade Organization, once the main enabler of globalization, into a new-look economic club that reflects its progressive values. As these efforts proceed, Biden has sought to forge new economic partnerships in Asia and Latin America, but the efforts are nascent they pale in comparison to China’s trillion-dollar infrastructure program for developing countries and are likely to replicate the old system’s business-friendly trade policies. Meanwhile, Biden’s quest to thwart China’s technological growth threatens to ignite a new cold war and divide the world into two or more global trade blocs, a fate the White House insists it is trying to avoid.

More fundamentally, Biden’s brain trust has yet to establish a vision for how the next era of the global economy will be constructed. Their initial ideas are abstract at best.

Sullivan, in his April speech before the Brookings Institution, likened Biden’s economic vision to a building by avant-garde architect Frank Gehry, all flowing lines of chrome and steel that look like nothing less than a roller coaster.

« Eventually, the way we’re going to build international economic architecture isn’t going to be with some kind of clear Parthenon-style pillars like we did after WWII, » Sullivan said, « but something that looks a little more like a Frank Gehry, a mix of structures and substances ».

Biden’s critics — from centrist free-trade holdouts to Trump-fueled populists who focus on competition with China — are hardly more concrete in their ideas. Across the political spectrum, American policymakers grapple with how to shape a new global economic system to replace the one they built decades ago.

« I don’t know if the administration has clearly outlined what that new world looks like, » said Sen. Mark Rubino , the top Republican on the intelligence committee, told POLITICO after a Capitol Hill hearing in February when he attacked the old pro-globalization paradigm. « But I don’t know if anyone else has it. »

Despite the backlash against the globalization era, the transition to a new economic model is not assured. Free trade advocates are eager to bend the arc of economic change towards lower tariffs, taxes and regulations. But even they recognize that they need to change their approach to responding to the inequality and discontent that the era of globalization has created.

“I wish we could push politics away, but we can’t,” Michael Froman, a free trader who served as President Obama’s second-term trade representative, said at a news conference. gathering of former U.S. trade chiefs at the Center for Strategic and International Studies, a Washington think tank, last fall.

« One thing we’ve all learned over the last few decades is that there are groups of people who feel alienated and left out of the system, that the system isn’t serving them well, » she said.

« If we ever hope to return to a coalition that can support a more proactive trade agenda, we will have to address this issue. »

And if Biden fails in his quest to reshape the global economy — and sell his reforms to voters — Trumpian populism is waiting in the wings, ready to assert its own more nationalist alternative to the neoliberal order.

“Do I think the previous global order is gone? Yes, I thought it was bad for America from day one,” said Robert Lighthizer, President Donald Trump’s former chief of commerce. last 25 years. I’d say they’ve worked for China and they’ve worked pretty well for Europe. »