What's Obama doing in Asia?
The Obama administration made a very large show of confronting China this past week. But as Clyde Prestowitz argues, even as Washington pushes forward toward "containment" on the security side, they're completely undermining their strategy on the economic front:
Now the military agreements and statements in Australia and Manila are part of a much ballyhooed campaign by the Obama administration to demonstrate that it is pivoting in its foreign policy away from Iraq and Afghanistan and toward Asia where it is loudly telling everyone that it is "back."...But if that is the case, why is the United States pursuing trade and globalization policies that tend to undermine its own economic competitiveness while feeding the Chinese dragon? If he thinks the threat of China is sufficient to justify increasing U.S. military deployments in the Pacific, why does the president (who also presumably is interested in creating new American jobs) not call his friend Jeff Immelt out on moving avionics production to China?
The president said in Honolulu that China is purposely undervaluing its currency in ways that are incompatible with free trade. He knows that China is manipulating its currency in violation of its IMF and WTO commitments. Why doesn't he direct his officials to file formal complaints and seek redress?
Or for that matter, why is he "back" in Asia with more military deployments? These deployments serve primarily to dampen conflicts between the various Asian countries, to calm region wide fears, and to make Asia safe for investment by global companies engaging in labor arbitrage by off-shoring their production to the Pacific. In effect, the U.S. military makes Asia safe for off-shoring and out-sourcing of production and jobs. One of America's great competitive advantages is that it operates under a rule of law with strong property protection and is a safe place to invest. Why do U.S. policy makers want actively to negate that advantage?
I was tempted, after reading this, to conclude that the Obama administration is merely doing what powerful stakeholders want. There are large constituencies eager to see a Cold War-style arms race heat up in the Pacific - the better for the defense budget. There are also plenty of well-heeled corporate interests who are seeking labor arbitrage. Opposition to both measures is very scatter-shot and not as effective.
So while the administration's strategy might appear incoherent intellectually, it makes perfect sense politically. Just follow the money.
Alternatively, and more charitably, you can look at the administration's strategy as a bit of a carrot/stick approach. The thrust of Washington's efforts toward China for at least the last two decades has been to convince the Chinese that it is in their economic interests to work with the institutional structures designed by Western powers after the second World War. Deepening economic ties is a way of incentivizing China to play by those rules (even though, as Prestowitz documents, they regularly flout them), while upping the military ante serves as a reminder that the U.S. is still willing to project power to protect its interests.
I'm open to more (or less) sympathetic interpretations of what the administration is getting at here, but both interpretations above strike me as eminently plausible.
