The Exceptional American—or Not
January 30, 2018
I have not been a fan of the concept of American exceptionalism. At the very least, it’s bad manners. Even if we are exceptional, it’s rude to brag about it. It is true that we are one of the few countries, if not the only one, founded on an idea, but a review of our history reveals the numerous occasions when we have fallen short of our ideals. We may dream great dreams, but more often than not we’re just like everybody else—doing our best in a complicated world and often falling short.
Still, two world wars brought us thoroughly into the world after a long period of self-imposed isolation, and we emerged after the second one the world’s paramount power, if only because so many of the others had been destroyed. To our credit, we spent the postwar years creating and then preserving a multilateral tripod (International Monetary Fund, World Bank, General Agreement on Tariffs and Trade) designed to foster the growth of freedom and democracy and prevent global war and depression from happening again. In that we largely succeeded, at the cost of a lot of taxpayer money and many American lives, although sometimes it appeared we were taking two steps backward for every one step forward.
Despite the occasional misstep, we have a lot to be proud of, but much of that construction is now under fire from both the left and the right. The left finds the system deficient in attacking inequality, advancing labor rights, protecting the environment, and overzealous in defending the interests of large multilateral companies at the expense of workers. The right sees it as a threat to national sovereignty—a set of rules that impinges on nations’ ability to do what they want. Together, they have seriously eroded the political center when it comes to trade and international economic policy. Add to that the activities of other nations like China, whose enthusiasm is limited for the postwar system they had no part in creating, and you can see why we’re in trouble.
And it is trouble because the system has been good for America over the years both economically and politically, and with 95 percent of the world’s consumers outside the United States, our future is inextricably tied to the global marketplace whether we like it or not.
Normally at a time like this, the U.S. president rides to the rescue, and President Trump had a golden opportunity to do just that last week in Davos. He gave a restrained speech that clearly outlined his philosophy, but he once again undermined the trading system instead of reinforcing it. While he came out for trade, it was clearly on his terms, and if you read between the lines those terms are clearly mercantilist. Trade is good, but it must be “fair,” which apparently means it must leave us with a surplus and must not involve anyone else breaking our rules. In turn, we are going to be the enforcer of those rules and retaliate against anybody who breaks them. In other words, my way or the highway, politely phrased, of course.
From a narrow, short-term strictly American point of view, we should not dismiss the possibility this might work for a while. Countries have not always met their World Trade Organization obligations and have tried to game the system to their advantage. Perhaps they can be bullied into better behavior, but early signs suggest that will not happen on a large scale. Big countries, like China, can retaliate, and smaller ones can ignore and work around us.
The latter is already happening. The Trans-Pacific Partnership-11 has closed and will be signed in March. A Japan-EU agreement has been reached, as has an EU-Canada pact. Other plurilateral and bilateral efforts are underway in Asia and parts of Latin America, while the European Union has significantly expanded its negotiating agenda. In short, rather than kowtowing to the United States, the rest of the world has decided it doesn’t need us and can do perfectly fine on its own, even though many of those deals are not as ambitious as the ones we have demanded in the past.
Those are centrifugal forces pulling the multilateral system apart, and our failure to defend it vigorously will come back to bite us in the form of lost market access because of agreements that exclude us and weaker rules in those agreements that don’t benefit anybody except China. Ambassador Robert Lighthizer, U.S. trade representative, has argued that the system needs to be reformed, and he has a point. But you don’t get there by walking away from it. You get there by slogging through the hard work of multilateral negotiations that address the complaints of the critics, while loudly reminding everybody how important the system is and how committed we are to defending it. So far, we have done neither of those things, and the president’s Davos speech provided no signs of change. Indeed, while arguing exceptionalism, he is in the process of proving we really are just like everybody else.
William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.
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