Job Surge Leaves Foreign Policy Outdated
Six years ago, just as the Cold War had drawn to a close, then-President George Bush ushered in what amounted to a new era in U.S. foreign policy when he told the country the reason he was traveling overseas was for “jobs, jobs, jobs.”
Now, as the events of the last week show, we seem to be approaching the end of that period. The American preoccupation with commercial diplomacy may be reaching its limits. In plain and simple terms, this country needs new jobs to a lesser extent now than it did at the beginning of the 1990s.
Washington seems slow to take account of this change. The steadily falling unemployment rate alters many of the underlying realities for this country’s foreign policy. It has ramifications for the way the United States deals with trade legislation, or the defense budget, or Pentagon base closings, or policy toward China.
Last week, America’s unemployment rate dropped to 4.7%, its lowest level since 1973. We have reached the point where, it was recently reported, Florida hotels are importing people from Central and Eastern Europe on short-term contracts because they can’t find enough workers in this country.
And yet in different ways and at different times, the Clinton administration, Congress and the U.S. business community all still occasionally behave as though creating jobs were the highest, or even the only, priority in America’s dealings with the rest of the world.
Let’s look at some of the implications of low unemployment in different policy areas:
TRADE LEGISLATION: Since taking office, President Clinton has made the promotion of trade one of the highest priorities of his foreign policy. He signed the North American Free Trade Agreement and the General Agreement on Tariffs and Trade. And, of course, during the last few weeks, Clinton tried mightily to persuade Congress to give him “fast-track” authority expanding his power to negotiate new trade deals by arguing that such trade creates jobs.
He claimed that a third of the 13.5 million jobs created since he took office have come from international trade. Supporters also argued, correctly, that every president since Gerald R. Ford has had the same trade authority Clinton was seeking. But Congress wasn’t swayed, perhaps in no small part because the percentage of Americans out of work is lower now than it ever was for any of these other presidents.
Clinton ultimately was unable to win congressional support for fast-track. One way of looking at his defeat is that many members of Congress are happy with the way things are going in the economy now. They don’t see the need for change.
THE PENTAGON: When Clinton first took office, his ability to cut the U.S. defense budget, or to close military bases, was constrained by a concern about employment. Repeatedly, the argument was made that if this or that military base were closed, the people who worked there wouldn’t be able to find new jobs.
Once again, the jobs argument carries less weight now. The lower unemployment should enable the Clinton administration to make more of the defense cutbacks that are needed to adjust to a post-Cold War world.
Secretary of Defense William S. Cohen announced this week a new Pentagon reorganization that may include trimming the bureaucracy and two more rounds of base closings. Some members of Congress are virtually certain to resist the cutbacks. Have they looked at the unemployment rate lately?
CHINA: American businesses often suggest that jobs should be a prime determinant in U.S. policy toward China--a factor that should be kept in mind whenever the White House or Congress voice concern about China’s record on such issues as arms proliferation or the environment.
American nuclear companies recently have lobbied Congress to clear the way for the businesses to sell nuclear reactors to China by pointing to the jobs that might be created. Westinghouse Electric Corp. argued that each order for two new reactors creates 5,000 jobs.
Last weekend, China blocked the Yangtze River to start work on the Three Gorges project, the world’s biggest hydroelectric dam. American companies have complained that they can’t get contracts on this project because the U.S. Export-Import Bank, citing environmental concerns, last year refused to provide the concessionary financing.
Now, U.S. companies are pushing the Ex-Im Bank, a federally funded agency, to ease up on its environmental restrictions and help them win Three Gorges contracts. But at a time when unemployment in this country is so low, these complaints would seem to count for less than they would have a few years ago.
The point is not that the United States is on the verge of abandoning its support for U.S. business interests overseas. However, the need to do so can be more easily balanced against other foreign-policy interests. Low unemployment at home also creates new opportunities for the Clinton administration in dealing with other countries.
In short, with unemployment at 4.7%, the worry about jobs, jobs, jobs seems to be subsiding. For American foreign policy, that’s a huge change.
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Jim Mann’s column appears in this space every Wednesday.
