Economics Now at Core of U.S. Diplomacy
By Phillip Kurata
IIP Staff Writer,
November 19, 2012
“For the first time in modern history, nations are becoming major global powers without also becoming global military powers,” Clinton said at Singapore Management University November 17. “This connection between economic power and global influence explains why the United States is placing economics at the heart of our own foreign policy. I call it economic statecraft.”
In Singapore, Clinton unveiled the framework of U.S. economic statecraft , which she said exemplifies the importance of economics in the 21st century.
The nonstop flow of people, goods and capital through the city-state at the southern tip of the Malay peninsula is proof that a country does not need to be big to be mighty, respected and a leader, she said. “That makes Singapore’s security and stability a vital interest for the United States,” she said.
Clinton said the focus of U.S. economic statecraft is aimed at the Asia-Pacific region “because so much of the history of the 21st century will be, is being written in this region.”
After leaving Singapore, Clinton joined President Obama in Bangkok, then traveled with him to Burma to encourage its leaders to shed the vestiges of its recent military dictatorship. Then they moved on to the East Asia Summit, held this year in Phnom Penh, Cambodia.
The first place President Obama is visiting after winning re-election is the Asia-Pacific region, highlighting the importance his administration places on the region, Clinton said.
The thrust of U.S. economic statecraft in the region is aimed at finalizing a far-reaching new trade agreement called the Trans-Pacific Partnership, which will lower trade barriers, raise standards and drive long-term growth, according to Clinton. The partnership, as Clinton explained it, will cover 40 percent of the world’s total trade and establish strong protections for workers and the environment.
“Better jobs with higher wages and safer working conditions, including for women, migrant workers and others too often in the past excluded from the formal economy, will help build Asia’s middle class and rebalance the global economy,” she said. She extended an invitation to any nation, including China, willing to meet 21st-century standards as embodied in the partnership.
The increasing reliance on economic statecraft is leading the United States to seek economic tools to deal with strategic challenges such as those presented by Afghanistan and Iran. She said as the United States and its allies wind down the combat mission in Afghanistan, they are focused on shoring up its economic future, which will be key to its stability and security.
Another economic tool — sanctions — is having a telling effect on Iran, which is suspected of developing nuclear weapons, according to Clinton.
“Every major importer of Iranian oil has lowered their consumption. All 27 nations of the European Union have joined a boycott. In one year, Iran’s oil exports are down by more than 1 million barrels a day, costing the Iranian government at least $3 billion each month,” Clinton said.
The example of Iran shows the power of economic tools when applied creatively and collectively, she said. Other strategic threats, such as those presented by the Assad regime in Syria, Hezbollah and the Haqqani network, are vulnerable to sophisticated and meticulous market pressure, she added.
Another goal of U.S. economic statecraft is enabling U.S. businesses to boost exports, open new markets and compete on a level playing field. Clinton said the Obama administration is staffing its network of more than 270 U.S. embassies and consulates with personnel to advocate for American firms and help achieve President Obama’s goal of doubling U.S. exports.