AN ERA OF FUNDAMENTAL CHANGE
The United States enters the 21st century as the greatest beneficiary of the global system it helped create after World War II. As a power with unrivaled dominance, prosperity, and security, it must now lead the peaceful evolution of this system through an era of significant changes. Rapid shifts in technology and the embrace of markets by developing and formerly communist countries are shifting the balance of power among nations, between nations and nonstate actors, and between nations and global economic forces. New technologies are making the world much more interdependent. These technologies are accelerating the movement of goods, services, ideas, and capital across national boundaries. They are also displacing traditional security threats with nontraditional worries like international terrorism, organized crime, drug trafficking, and environmental degradation while strengthening the capacities of nongovernmental organizations (NGOs) to influence policy. Tension is mounting between the fixed geography of nation-states and the nonterritorial nature of global problems and their solutions.
The United States cannot shield itself from the effects of globalization. In today's interdependent capital markets, global perceptions of the stability of the American economy and the credibility of American economic policy can significantly affect the dollar's value and domestic interest rates. Despite its economic and military might, the United States cannot protect itself from global environmental problems like ozone depletion, climate change, and threats to biodiversity by acting alone.
The international economic challenges facing a new American president are twofold: first, to grasp the fundamental changes in the global economy, and second, to respond by fostering the conditions and institutions required for a world in which the United States can remain secure and prosperous. The central task of international economic policy is to help develop a new system of global economic relations—a task made essential, rather than simply desirable, by the enormous and irreversible changes now sweeping the world.
THE TRANSITIONAL 1990S
When the Clinton administration arrived in Washington in 1993, the changes engulfing the world economy were already
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