Joe Biden wants a ‘new economic world order.’ It’s never looked more disordered.
The goal is to replace the old paradigms of globalization — free trade and a reliance on markets — with a “worker-centered” trade policy that raises wages not just for Americans, but around the world.
But building a new world economy is proving more difficult than eulogizing 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 that governed the world for the last half-century.
Biden’s team is moving slowly to transform a paralyzed World Trade Organization, once the premier facilitator of globalization, into a new-look economic club that reflects its progressive values. As those efforts crawl along, Biden has sought to forge new economic partnerships in Asia and Latin America, but the nascent efforts pale in comparison to China’s trillion-dollar infrastructure program for developing nations and risk replicating the corporate-friendly trade policies of the old system. Meanwhile, Biden’s quest to counter China’s technological growth risks sparking a new Cold War and dividing the world into two or more global trading blocs — a fate the White House insists it is trying to avoid.
More fundamentally, Biden’s brain trust has yet to settle on a vision for how the next era of global economics will be constructed. Their initial ideas are abstract at best.
Sullivan, in his April speech before the Brookings Institution, compared the Biden economic vision to a building by avant garde architect Frank Gehry, all flowing lines of chrome and steel resembling nothing less than a roller coaster.
“In the end, the way that we are going to build an international economic architecture is not going to be with kind of Parthenon-style, clear pillars as we did after the Second World War,” Sullivan said, “but something that feels a little bit 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 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 outlined what that new world looks like,” Sen. Marco Rubio , the top Republican on the Intelligence Committee, told POLITICO after a Capitol Hill hearing in February when he assailed the old, pro-globalization paradigm. “But I don’t know if anybody else has either.”
Despite the backlash against the globalization era, the shift to a new economic model is not assured. Supporters of free trade are keen to bend the arc of economic change back toward lower tariffs, taxes and regulations. But even they recognize they must change their approach to respond to the inequality and discontent that the globalization era has created.
“I wish we could wish politics away, but we can’t,” Michael Froman, a free trader who served President Obama’s second-term trade representative, said at a 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 past few decades is there are groups of people who feel alienated and left out of the system, that the system is not serving them right,” he said.
“If we ever hope to get back to a coalition that can support a more proactive trade agenda, we’re going to have to address that.”
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 nationalistic alternative to the neoliberal order.
“Do I think that the former global order is gone? Yeah, I thought It was bad for America from Day One,” said Robert Lighthizer, President Donald Trump’s former trade chief. “My position is that those institutions didn’t work in the interest of the U.S. for the last 25 years. I would say they did work for China, and they worked pretty well for Europe.”
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