Business and Foreign Policy
Article Summary and Author Biography
The connection between American business and foreign policy is poorly thought out and mismanaged, on both sides. It is, however, vital to the national interest. For most of the country's history, foreign policy has reflected an obsession with open markets for American firms. At one time, protecting the interests of a company like United Fruit was synonymous with policy toward Latin America. While those days may be gone, commercial interests must still play a central role. Herewith, a framework for the second Clinton administration to guide cooperation between the government and the business community for the benefit of both.
Jeffrey E. Garten, the Under Secretary of Commerce for International Trade from 1993 to 1995, is Dean of the Yale School of Management. This article is based on his book, The Big Ten: The Big Emerging Markets and How They Will Change Our Lives, to be published in May by Basic Books.
DESTINATION UNKNOWN
Throughout most of American history, commercial interests have played a central role in foreign policy, and vice versa. During the next few decades the interaction between them will become more intense, more important, more difficult to manage, and more complicated for the American public to understand. The second Clinton administration should lay out a framework for this interaction to provide the necessary guide for setting priorities, making difficult tradeoffs between economic and foreign policy issues, and gaining popular support.
In mid-1997 it is not clear where either Washington or the American business community is headed. The president's first term ended on a note of ambiguity. The early enthusiasm for aggressive trade negotiations -- for NAFTA and GATT and with Japan -- was absent in the 1996 election as trade liberalization, possibly the administration's greatest accomplishment, was nowhere on the political agenda. High-profile trade missions had wound down even before the death of Secretary of Commerce Ronald H. Brown in a plane crash while on a mission to Bosnia in early 1996. A Republican Congress made it a high priority to eviscerate the Department of Commerce, the Overseas Private Investment Corporation, and the Export-Import Bank in the name of slashing "corporate welfare," and campaign contributions from abroad raised a host of questions about whether America's commercial diplomacy, particularly in Asia, was for sale. The administration's efforts to save the export promotion agencies seemed hollow, and the president's defense of aggressive commercial engagement was less than resounding. Perhaps this was just a hiatus while a new administration and Congress got organized. But it was likely more than that: the executive branch had lost its laser-like focus on the importance of foreign markets to the United States, and a business community that since 1995 had been distracted by tax cuts and deregulation had become complacent about its long-term competitive position in the world economy.
This is a premium article
You must be a logged in Foreign Affairs subscriber to continue reading. If you wish to continue reading this article please subscribe , or activate your online account to get full online access.
Sign-up for free weekly updates from ForeignAffairs.com.