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theodore M I R A L D I mpa ... editor, publisher, writer
Monday, January 9, 2017
Clearing Out DYSFUNCTIONAL Institutions
Trump will shake up the international order, too Peter Morici
President-elect Donald Trump swept into office promising what President Barack Obama failed to deliver — prosperity and personal security — to an America fallen prey to reckless globalization.
Many of his remedies — tax cuts, deregulation, trade and emigration reform — appear Reaganesque but are more radical. If implemented, those will put the United States on a confrontational path with international institutions it did much to create.
After World War II, the United States and its European allies established the IMF, GATT (which morphed into the WTO) and the World Bank to establish rules for exchange rates, trade and assistance to developing countries. The belief was that fostering international commerce and economic interdependence would promote prosperity and dissipate national enmities that thrust Europe and the Pacific into war.
The U.N. was established to peaceably resolve conflicts, promote human rights and instigate cooperation on global environmental problems and similar issues.
The creation and expansion of the EU intensified the process on the continent, and NATO was established to check Soviet power.
Those institutions are threatened or becoming unglued, because most have too often failed. Britain is leaving the EU and populist movements are emerging across Europe, because Brussels is better at writing onerous regulations and dictating national immigration policies than fostering decent economic growth and securing EU borders.
America like Britain is bifurcated. Brexit is terribly unpopular among well-educated Londoners who profit from its financial sector’s access to a borderless Europe. Mr. Trump’s message is unpopular in coastal cities that thrive in global markets for American technology, creative media and financial services. In other places, globalism has killed good jobs without replacing nearly enough of them, and immigration poses threats to personal security and cultural cohesion.
In Europe populist movements find support among those who have grown weary of national leaders preaching about international responsibilities while unemployment and low wages are rampant and terrorists gun down, blow up or otherwise murder innocent citizens.
Many emerging Trump administration and congressional Republican proposals address similar issues here. However, a 45 percent tariff to leverage renegotiation of exchange rate and trade arrangements with China and plans to make U.S. corporate taxes rebatable on exports and impose those taxes on imports likely conflict with WTO rules. Still, those rules as currently applied — which allow China and other nations to set currency exchange rates where they please and apply border adjustments to their value added taxes — disadvantage American businesses and appear impossible to alter.
With a $500 billion trade deficit killing millions of American jobs, a ruling by the global trading body that the United States must rescind those initiatives would more likely threaten its existence by instigating a U.S. departure than impelling America to back down.
Similarly, revamping CO2 emission regulations — imposed by Mr. Obama without congressional assent — that profoundly advantage Chinese polluters over American manufacturers would place the United States in conflict with its obligations under the U.N. Convention on Climate Change. Again with the millions of American jobs at stake, this raises serious questions about how fairly the U.N. balances the legitimate interests of ordinary American citizens with those of other nations.
Extreme vetting of immigrants from the Middle East for potential terrorists may raise issues with the U.N. refugee and human rights apparatus but the global body offers Americans few other remedies.
Detente with Russia and stronger support for Israel could unglue NATO but those recognize fundamental geopolitical realities.
Americans can’t be expected to secure the eastern flank of Europe and lean against Russian ambitions for influence in the Middle East with its treasure and the lives of its young men and women if Germany and other European nations won’t bear comparable burdens.
Ethnic factions within Muslin states cannot find peace among themselves so how can they be expected to reach consensus about a lasting peace with Israel. Notions about goals for U.S. diplomacy in the region that assume otherwise are fantasies best left to university professors who bear little accountability in the real world.
Americans cannot be expected to continue to participate in the WTO, U.N. and NATO — or to bear incredible burdens in the Middle East — if those do not deliver for Americans on their basic aims — prosperity and security.
If clearing the landscape of dysfunctional institutions is needed to achieve a more realistic and equitable global order, Donald Trump may just be the developer to provide the wrecking ball.