International Politics

, Volume 44, Issue 5, pp 572–595 | Cite as

The Geopolitics of President George W. Bush's Foreign Economic Policy

  • Ian Jackson
Limits of American Power

Abstract

What will be the legacy that President George W. Bush bequeaths to his successor in the fields of global trade and finance? In answering this question, the article will analyse the three most crucial international economic issues that the Bush administration has faced during its two terms in office. First, Bush's policy of trade liberalization will be considered. While the United States has negotiated a significant number of new bilateral and regional trade agreements over the past 7 years, global trade talks remain deadlocked. With increasing protectionist sentiment in evidence in Congress, Bush is unlikely to conclude the Doha Development Round by the time he leaves office in 2009. Second, global trade imbalances partly caused by the US current account deficit threaten the stability of international financial markets and global prosperity. The article concludes that the US has pursued a policy of ‘begin neglect’ towards the problem and needs to act more proactively to prevent a hard landing for the American and world economies. Finally, the economic relationship between the US and China is examined. The article argues that the United States needs to continue to engage China in the interests of global economic growth and regional stability in Southeast Asia while avoiding a trade conflict.

Keywords

Doha George W. Bush trade economic growth trade imbalances financial markets 

References

  1. Adams, T. (2005) ‘Statement of Under Secretary for International Affairs Tim Adams Pre-G7 Press Conference’, September 21, http://www.treasury.gov/press/releases/js2935.html.
  2. Balls, A. (2005) ‘Foreign Exchanges: The American Diplomacy Behind China's Revaluation’, Financial Times, July 25, p. 15.Google Scholar
  3. Bergsten, C.F. (2005a) ‘A New Foreign Economic Policy for the United States’, in C.F. Bergsten (ed.) The United States and the World Economy: Foreign Policy for the Next Decade, Washington DC: Institute for International Economics.Google Scholar
  4. Bergsten, C.F. (2005b) ‘A Clash of the Titans Could Hurt Us All’, Financial Times, August 26, p. 15.Google Scholar
  5. Bergsten, C.F. (2007) ‘The Current Account Deficit and the US Economy’, Testimony before the Budget Committee of the United States Senate, February 1, 2007, http://www.iie.com/publications/testimony/.
  6. Bernanke, B.S. (2005a) ‘The Global Savings Glut and the US Current Account Deficit’, Remarks by Governor Ben S. Bernanke at the Sandridge Lecture, Virginia Association of Economics, Richmond, Virginia, March 10, http://www.federalreserve.gov/boarddocs/speeches/2005/200503102/default.html.
  7. Bernanke, B. (2005b) ‘The Economic Outlook’, Remarks of Ben Bernanke, Chairman, Council of Economic Advisors, at Macroeconomic Advisors Washington Policy Conference, September 8, http://www.whitehouse.gov/cea/outlook-20050908.html.
  8. Bremmer, I. (2005) ‘Why Bush and Hu Don’t See Eye to Eye’, Fortune, October 31, pp. 36–39.Google Scholar
  9. Bush, G.W. (2001) ‘Address to Joint Session of Congress by President George W. Bush’, February 27, http://www.whitehouse.gov/news/releases/2001/02/20010228.html.
  10. Bush, G.W. (2002) ‘National Security Strategy of the United States of America’, September 17, http://www.whitehouse.gov/nsc/nssall.html.
  11. Bush, G.W. (2005a) ‘President Signs CAFTA-DR’, August 2, http://www.whitehouse.gov/news/releases/2005/08/20050802-2.html.
  12. Bush, G.W. (2005b) ‘President Addresses United Nations High-Level Plenary Meeting’, United Nations Headquarters, New York, September 14, http://www.whitehouse.gov/news/releases/20050914.html.
  13. Chinn, M.D. (2005) Getting Serious About the Twin Deficits, New York: Council on Foreign Relations.Google Scholar
  14. Cooper, R.N. (2005) ‘Living with Global Imbalances: A Contrarian View’, Policy Briefs in International Economics, Number PB05-3, Institute for International Economics (November 2005), http://www.iie.com/publications/briefs/.
  15. Council on Foreign Relations. (2005) ‘Asia Region Brief’, July, http://www.cfr.org/publications/8265/asia_issue_brief.html.
  16. Destler, I.M. (2005) American Trade Politics, 4th edn, Washington DC: Institute of International Economics.Google Scholar
  17. Eichengreen, B. (2005) ‘Sterling's Past, Dollar's Future: Historical Perspectives on Reserve Currency Competition’, National Bureau of Economic Research (NBER), Working Paper 11336, May, http://www.nber.org/papers/w11336.
  18. Ferguson, N. (2004) Colossus: The Rise and Fall of the American Empire, London: Penguin.Google Scholar
  19. Ferguson Jr., R.W. (2005) ‘US Current Account Deficit: Causes and Consequences’, Remarks by Vice Chairman Roger W. Ferguson, Jr. to the Economics Club of the University of North Carolina at Chapel Hill, Chapel Hill, North Carolina, April 20, http://www.federalreserve.gov/boarddocs/speeches/2005/20050420/default.html.
  20. Fukuyama, F. (2005) ‘Re-envisioning Asia’, Foreign Affairs 84 (1): 75–87.CrossRefGoogle Scholar
  21. Gale, W.G. and Orszag, P.R. (2005) ‘US Economy: We’re All Living on Borrowed Time’, June 1, http://www.brook.edu.
  22. Garten, J.E. (2004) ‘The Dollar Deluge’, Newsweek, November 29, pp. 47–50.Google Scholar
  23. Greenspan, A. (2005a) ‘Current Account’, Remarks by Chairman Alan Greenspan at the Advancing Enterprise 2005 Conference, London, February 4, http://www.federalreserve.gov/boarddocs/speeches/2005/20050204/default.html.
  24. Greenspan, A. (2005b) ‘Globalization’, Remarks by Chairman Alan Greenspan at the Council on Foreign Relations, New York, March 10, http://www.federalreserve.gov/boarddocs/speeches/2005/20050310/default.html.
  25. Greenspan, A. (2005c) ‘China’, Testimony of Chairman Alan Greenspan, Committee on Finance, US Senate, June 23, http://www.federalreserve.gov/boarddocs/testimony/2005/20050623/default.html.
  26. Haass, R.N. (2005) The Opportunity: America's Moment to Alter History's Course, New York: PublicAffairs.Google Scholar
  27. International Monetary Fund. (2005) World Economic Outlook, September, http://www.imf.org/external/pubs/ft/weo/2005/02/pdf/chapter1.pdf.
  28. King, M. (2005) ‘The International Monetary System’, Speech by Mervyn King, Governor of the Bank of England, Remarks at ‘Advancing Enterprise 2005’ conference, London, February 4, http://www.bankofengland.co.uk/publications/speeches/2005/speech237.pdf.
  29. Kissinger, H. (2001) Does America Need a Foreign Policy? Towards a Diplomacy for the 21st Century, New York: Simon and Schuster.Google Scholar
  30. Kohn, D.L. (2005) ‘Imbalances in the US Economy’, Remarks by Governor Donald L. Kohn at the 15th Annual Hyman P. Minsky Conference, The Levy Economic Institute of Bard College, Annandale-on-Hudson, New York, April 22, http://www.federalreserve.gov/boarddocs/speeches/2005/20050422.default.html.
  31. Lardy, N. (2005) ‘China: The Great New Economic Challenge’, in C.F. Bergsten (ed.) The United States and the World Economy: Foreign Policy for the Next Decade, Washington DC: Institute for International Economics.Google Scholar
  32. Leffler, M.P. (2002) A Preponderance of Power: National Security, the Truman Administration and the Cold War, 1945–53, Stanford, CA: Stanford University Press.Google Scholar
  33. Mearsheimer, J.J. (2001) The Tragedy of Great Power Politics, New York: Norton.Google Scholar
  34. Mearsheimer, J.J. (2005) ‘Better to be Godzilla than Bambi’, Foreign Policy January/February (146): 47–48.Google Scholar
  35. Office of the United States Trade Representative. (2002a) ‘2002 Trade Policy Agenda and 2001 Annual Report’, http://www.ustr.gov/Document-Library/Reports_Publications/2002/2002_Trade_Policy_Agenda.html.
  36. Office of the United States Trade Representative. (2002b) ‘United States Proposes a Tariff Free World’, www.ustr.gov.
  37. Office of the United States Trade Representative. (2003) ‘2003 Trade Policy Agenda and 2002 Annual Report’, http://www.ustr.gov/Document-Library/Reports_Publications/2003/2003_Trade_Policy_Agenda.html.
  38. Office of the United States Trade Representative. (2004) ‘Doha Talks Back on Track as WTO Agrees on Negotiating Framework’, July 31, http://www.ustr.gov/Document_Library/Press_Releases/2004/July/Doha_Talks_Back_on_Track_as_WTO_Agrees_on_Negotiating_Framework.html.
  39. Office of the United States Trade Representative. (2005a) ‘2005 Trade Policy Agenda and 2004 Annual Report’, http://www.ustr.gov/Document-Library/Reports_Publications/2005/2005_Trade_policy_Agenda.html.
  40. Office of the United States Trade Representative. (2005b) ‘United States Leads the World to Liberalize Trade Through the Doha Round’, September 14, http://www.ustr.gov.
  41. Office of the United States Trade Representative. (2007a) ‘2007 Trade Policy Agenda and 2006 Annual Report’, http://www.ustr.gov/Document-Library/Reports_Publications/2007/2007_Trade_Policy_Agenda.html.
  42. Office of the United States Trade Representative. (2007b) ‘United States and Korea Conclude Historic Trade Agreement’, Press Release, 04/02/07, http://www.ustr.gov.
  43. Paulson, H. (2007) Remarks by Treasury Secretary Henry M. Paulson, Jr. before the Economic club of Washington, http://www.treasury.gov/press/releases/hp285.html.
  44. Peterson, P.G. (2004) ‘Riding for a Fall’, Foreign Affairs 83 (5): 111–125.CrossRefGoogle Scholar
  45. Peterson Institute for International Economics. (2007) ‘Global Imbalances: A Time for Action’, Policy Brief Number PB07-7, March 2007 available at http://www.iie.org.
  46. Rato, R. (2005) ‘Remarks by Rodrigo de Rato, Chairman of the Executive board and Managing Director of the international Monetary Fund to the Board of Governors of the IMF at the Joint Annual Discussion, September 24, 2005’, September 24, http://www.imf.org/external/np/speeches/2005/092405.html.
  47. Rajan, R. (2005a) ‘Current Account Imbalances: Hard Landing or Soft Landing’, Talk by Raghuram Rajan, Economic Counsellor and Director of Research, International Monetary Fund, at the Crédit Suisse First Boston Conference, March 15, http://www.imf.org/external/np/speeches2005/031505.html.
  48. Rajan, R. (2005b) ‘Global Imbalances — An Assessment’, Speech by Raghuram G. Rajan, Economic Counsellor and Director of Research Department at the Ronald Reagan International Conference Center, Washington DC, October 25, http://www.imf.org/external/np/speeches/2005/102505.html.
  49. Roach, S. (2005) ‘The Rising Risk of a Hard Landing’, Financial Times, November 1, p. 19.Google Scholar
  50. Rubin, R.E. and Weisberg, J. (2003) In An Uncertain World: Tough Choice from Wall Street to Washington, New York: Random House.Google Scholar
  51. Rubin, R. (2005) ‘US Trade Policy in 2005’, Luncheon Address at the conference ‘US Trade Policy in 2005’, Institute for International Economics, February 15, http://www.iie.com/publications/papers/rubin0205.html.
  52. Rumsfeld, D.H. (2005) ‘Remarks as Prepared for Delivery by Secretary of Defense, Donald H. Rumsfeld, Beijing, China, Thursday, October 20, 2005’, October 20, http://www.defenselink.mil/speeches/2005/sp20051020-secdef2041.html.
  53. Sawhill, I.V. (2005) ‘The Danger of Deficits’, August 16, http://www.brook.edu.
  54. Schott, J. (2004) ‘Reviving the Doha Round’, http://www.iie.com/publications/papers/.
  55. Schott, J. (2006) ‘Completing the Doha Round’, Policy Briefs in International Economics Number PB06-7. http://www.iie.com/publications/briefs/.
  56. Segal, A. (2004) ‘Practical Engagement: Drawing a Fine Line for US–China Trade’, http://www.cfr.org/publication/7063/practical_engagement.html.
  57. Snow, J.W. (2004) The Honourable John W. Snow, Prepared Remarks at Chatham House, The Royal Institute of International Affairs, London, November 17, http://www.treasury.gov/press/releases/js2105.html.
  58. Snow, J.W. (2005a) ‘Statement of Secretary John W. Snow on the FOREX Report’, May 17, http://www.treasury.gov/press/releases/js2449.html.
  59. Snow, J.W. (2005b) Treasury Secretary John Snow, Remarks at Conclusion of Europe Trip, Amerkia Haus, Frankfurt, June 16, http://www.treasury.gov/press/releases/js2497.html.
  60. Snow, J.W. (2005c) ‘Testimony of Treasury Secretary John W. Snow before the Senate Committee on Finance’, June 23, http://www.treasury.gov/press/releases/js2505.html.
  61. Summers, L.H. (2004a) ‘The United States and the Global Adjustment Process’, Third Annual Stavros S. Niarchos Lecture, Institute for International Economics, March 23, http://www.iie.com/publications/papers/summers0304.html.
  62. Summers, L.H. (2004b) ‘America Overdrawn’, Foreign Policy July/August (143): 46–49.CrossRefGoogle Scholar
  63. Taylor, J.B. (2007) Global Financial Warriors: The Untold Story of International Finance in the Post-9/11 World, New York: Norton.Google Scholar
  64. Volcker, P. (2005) ‘An Economy on Thin Ice’, Washington Post, April 10, p. B07.Google Scholar
  65. Walt, S.M. (2005) Taming American Power: The Global Response to US Primacy, New York: Norton.Google Scholar
  66. Wang, J. (2005) ‘China's Search for Stability with America’, Foreign Affairs 84 (5): 39–48.CrossRefGoogle Scholar
  67. Wolf, M. (2005a) ‘A Postponed Correction of Imbalances Would be Painful’, Financial Times, September 21, p. 19.Google Scholar
  68. Wolf, M. (2005b) ‘Policy Change Can Ward Off Risk of Abrupt Adjustment’, Financial Times, October 8–9, p.10.Google Scholar
  69. Zoellick, R.B. (2001) ‘Countering Terror with Trade’, http://www.ustr.gov/Document_Library/Op-Eds/2001/Countering_Terror_with_Trade.html.
  70. Zoellick, R.B. (2002a) ‘So What is There to Cover? Globalization, Politics, and the US Trade Strategy’, Robert B. Zoellick, Address to the Society of American Business Editors and Writers, Phoenix, Arizona, April 30, http://www.ustr.gov.
  71. Zoellick, R.B. (2002b) ‘Unleashing the Trade Winds’, December 7, http://www.ustr.gov/Document_library/Op-eds/2002/Unleashing_the_Trade_Winds.html.
  72. Zoellick, R.B. (2003) ‘A Return to the Cradle of Free Trade’, June 23, http://www.ustr.gov/Doucument_Library/Op-Eds/2003/A-Return_to_the_Cradle_of_Free_Trade.html.
  73. Zoellick, R.B. (2004) ‘A Strategic Opportunity for Trade’, Speech to French Institute of International Relations (IFRI), Paris, May 13, http://www.ustr.gov/Document_Library/Speeches/2004/A_Strategic_Opportunity_for_Trade.html.
  74. Zoellick, R.B. (2005) ‘Whither China: From Membership to Responsibility?’, Robert B. Zoellick, Deputy Secretary of State, Remarks to National Committee on US-China Relations, New York City, September 21, http://www.state.gov/s/d/rem/53682.html.

Copyright information

© Palgrave Macmillan Ltd 2007

Authors and Affiliations

  • Ian Jackson
    • 1
  1. 1.Faculty of Humanities, De Montfort UniversityLeicesterUK

Personalised recommendations