One of the consequences of the Trump Administration actions has been the decline of the “Bretton Woods” rationale underlying U.S. trade policy.
Under the impulse to “Make America Great Again” the plan is to extract concessions, country by country, wielding our economic power to reduce trade deficits. This drive overwhelms the orthodox view that trade agreements and multilateral structures served both American security by promoting growth abroad, and American prosperity by opening markets to U.S. exports.
How bilateral trade demands would cohere with other policy concerns has yet to be determined. The lack of definition was made clear in the President’s tweeting, on the one hand that he would give China better trade deals if they helped curb North Korean nuclear ambitions, and on the other that he wanted to renegotiate the U.S. – South Korea Free Trade Agreement. The revision of campaign calls to exit NAFTA, to a resolve to renegotiate it, suggests that even core campaign positions are not definitive.
Some might call this pragmatism. But if we try to use trade as a geopolitical chip, for instance to spur Chinese support against North Korea, inserting pure trade issues, e.g. calling China a currency manipulator, makes that chip unreliable. If our purpose is to extract bilateral trade concessions, our readiness to compromise or place demands for geopolitical reasons offers others a way to deflect our economic power.
The crossing of trade and security agendas suggests lack of clear goals. It risks making us neither feared nor trusted, either in trade or geopolitical negotiations.
To use Walter Russell Mead’s terms, the Trump administration is inherently Jacksonian, and its approach may or may not succeed. If that approach should fail, someone will need to fashion new stances. The Bretton Woods objective of precluding Fascism by increasing global prosperity addressed Wilsonian, Jacksonian, and Hamiltonian concerns. Our opposition to Communist claims fit that rationale, as did America’s domination of the Bretton Woods’ institutions.
But today the Bretton Woods’ rationale has been rejected by populists and leftists, with its strains noted by establishment thinkers as well. A new rationale will require a new synthesis of American sentiments and current world issues, and still project clarity in our priorities.
As opposing the Soviets and preventing new Fascisms proved a durable drive under Bretton Woods, we might be tempted now to set a doctrine of competition with China, as a stand-in for non-democratic rivals of the past. China is mounting an explicitly economics-driven challenge, touting its Silk Road project as heralding a “new type of international relations … with no confrontation and of friendship rather than alliance.” But geopolitical opposition through trade plays into their narrative, that our moral claims are a sham, and only compensate for our moral and material weakness.
Our fundamental purpose is not to oppose China, or necessarily to revive Bretton Woods. Our purpose is to validate America’s founding creed, that all persons have inherent rights including the pursuit of an undefined happiness, and that legitimate governments serve to secure those rights. Bretton Woods is useful only as it fits that purpose.
China’s influence is of concern only if we discredit our principle of individual rights. Such discredit diminishes any case against their ethos of top-down social discipline, already bolstered by their tangible successes.
America’s policies on trade and economics, as well as security, rights and law, and environment, need to cohere under our larger purpose. Only deliberate orientation to our national creed will demonstrate our intentions for global development, explain why we value trade and put limitations on it, and counter the narratives of our adversaries.
