Inside Joe Biden’s Struggles to Create a ‘New World Economic Order’
The goal is to replace the old paradigms of globalization — free trade and reliance on markets — with a “worker-centric” trade policy that raises wages not just for Americans, but around the world.
But building a new global economy is proving harder than celebrating 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 it will shape new rules and institutions. to replace those who have ruled the world for the last half. -century.
Biden’s team is moving slowly to transform a crippled World Trade Organization, once the prime enabler of globalization, into a new-look business club that reflects its progressive values. As those efforts progress, Biden has sought to forge new economic partnerships in Asia and Latin America, but nascent efforts pales in comparison to China’s trillion-dollar infrastructure program for developing countries and risks replicating the business-friendly trade policies of the old system. Meanwhile, Biden’s quest to counter China’s tech growth risks sparking a new Cold War and splitting the world into two or more global trading blocs – a fate the White House insists it is trying. to avoid.
More fundamentally, the Biden brain trust has yet to finalize its vision for how the next era of the global economy will be built. Their initial ideas are abstract at best.
Sullivan, in his April speech to the Brookings Institution, compared Biden’s economic vision to a building by avant-garde architect Frank Gehry, all flowing lines of chrome and steel looking like nothing less than a roller coaster.
“At the end of the day, the way we’re going to build an international economic architecture is not going to be with some sort of clear Parthenon-style pillars like we did after World War II,” Sullivan said, “but something which feels a bit more like a Frank Gehry – a mix of structures and substances.
Biden’s critics — from centrist supporters of free trade to Trump-fueled populists who focus on competition with China — are little more concrete in their own ideas. Across the political spectrum, American policymakers are grappling 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 described what this new world looks like,” the senator said. Marco Rubio , the top Republican on the intelligence committee, told POLITICO after a hearing on Capitol Hill in February, when he attacked the old pro-globalization paradigm. “But I don’t know if anyone else has either.”
Despite the repercussions of the era of globalization, the transition to a new economic model is not guaranteed. Proponents of free trade are keen to redirect the arc of economic change toward lower tariffs, taxes and regulations. But even they recognize that they must change their approach to respond to the inequality and discontent that the era of globalization has created.
“I wish we could wish for an end to politics, but we can’t,” Michael Froman, a free trader who served President Obama’s second term as Trade Representative, told a rally. former U.S. trade chiefs at the Center for Strategic and International Studies, a Washington think tank, last fall.
“One thing we have all learned over the past few decades is that there are groups of people who feel alienated and excluded from the system, that the system is not serving them well,” he said. declared.
“If we ever hope to return to a coalition that can support a more proactive trade agenda, we will have to address that.”
And if Biden fails in his quest to reshape the global economy — and sell his reforms to voters — Trumpian populism awaits in the wings, ready to assert its own more nationalist alternative to the neoliberal order.
“Do I think the old world order is gone? Yes, I thought it was bad for America from day one,” said Robert Lighthizer, former chief commerce officer for President Donald Trump. “My position is that these institutions have not worked in the interests of the United States for the past 25 years. I would say they worked for China, and they worked pretty well for Europe.