The Clinton pattern: trade first

This week's China pact is evidence of how he uses economics as a leverfor change.

A breakthrough deal to bring China into the world trading system will cement President Clinton's standing as the first US president to explicitly use global economics as the paramount force behind American national security.

Although he may have instituted this approach haphazardly, Mr. Clinton has perhaps opened the door to a new age in which economic clout supplants military-based might as the biggest US tool for resolving difficulties abroad.

"The crucial link between closer economic integration and our national security is this: We are much less likely as a nation to be drawn into conflict if nations of the world are strong, confident, and forging ever closer connections," summed up Treasury Secretary Lawrence Summers in a recent policy statement.

In the case of China, administration officials hope that greater trade liberties will help dissolve the social and political barriers that surround the world's most populous country. If the plan succeeds, China could look less like a military rival and more like a burgeoning ally.

While many see this Clinton administration effort as trailblazing, critics say it is applied inconsistently - leaving allies and enemies alike to guess whether the US will invoke economic interests (as with China), human-rights concerns (Kosovo), or military strategy (North Korea) in any given situation.

US efforts to add China to the World Trade Organization, for example, may have come at the expense of human-rights concerns.

"Economics have driven foreign policy - and that has complicated our role in the world," says Patrick Cronin of the US Institute of Peace in Washington. "We have become an unpredictable giant."

While human rights became the focus of President Carter's foreign policy, and nuclear deterrence and antiterrorism dominated the agenda of Presidents Reagan and Bush, Clinton has put much stock in strategically building economic ties around the world.

One reason is America's sheer economic might. Another is a lesson learned in the cold war, when the US defeated its greatest rival - the Soviet Union - not with nuclear weapons but with dollars.

In addition to bringing China closer to the World Trade Organization, Clinton counted it a major victory to complete, at the beginning of his presidency, the North American Free Trade Agreement initiated by Mr. Bush. In opening the floodgates of business among the US, Canada, and Mexico, Clinton bucked a powerful part of the Democratic base - unions and environmental groups - that opposed NAFTA.

Other trade agreements, though less significant, have been pursued with Africa and the Caribbean nations.

IMF as economic lever for US

Clinton has also used US economic prowess to help create a world financial infrastructure that acts as both a carrot and a stick for poor countries. The US-dominated International Monetary Fund (IMF) has almost tripled its loan approvals in the past two years, from $27.8 billion to $76 billion.

The importance of IMF money has been on display in recent weeks as the Russian offensive into Chechnya has intensified and taken more civilian lives. While there is some desire within the administration to urge the IMF to cancel loans to Moscow because of human rights abuses, the prevailing opinion is that to do so would only cause Russia's economy to collapse and trigger greater instability in the region.

During the Asian financial crisis that began in 1997, Clinton went a step further in defining the importance of global economics: He all but handed over foreign-policy responsibilities concerning the region to Treasury Secretary Robert Rubin.

According to Richard Haass, director of foreign-policy studies at the Brookings Institution here, the Clinton strategy is abandoned from time to time, but it has been evident from the beginning of the administration.

"Clinton came to office with the idea that economics are replacing military and security views as the dominant force in the world," he says.

One of Clinton's first acts in office was creating the National Economic Council, which advises him on international economic issues and has a parallel role to the National Security Council.

Mr. Haass, however, stopped short of calling global economics a "legacy" by which Clinton will be remembered - because the president allowed domestic policy to get in the way of foreign affairs and because he "ran away from it when it became controversial."

Clinton could have made a deal with China in April, for example, but backed down because of anti-China sentiment in Congress. It is still possible that Congress will prevent Beijing from getting into the WTO by rejecting a normalization of trade relations.

And while the Clinton team once said human rights violations should prohibit economic ties with China, it now has drawn a different conclusion.

"One shouldn't take it as a matter of faith that the trade agreement will have a pro-reform or a pro-democratic impact [on China]," says Gene Sperling, White House economic adviser. "But that is likely to be the case."

For other nations, a guessing game

The flip-flop on China is symbolic of overall US inconsistency in foreign policy, which is only made worse by the predominance of US economic leverage, analysts say.

According to Mr. Cronin, America's unpredictability has infuriated other nations to the point that they no longer know how the world's only superpower will react at a time of crisis. Leading the chorus of criticism has been Russia, whose relations with the US have deteriorated to their lowest point since the end of the cold war. European allies also complain that they never know when the US will decide to act unilaterally.

"We've gone from all-economics policies to policies in which we say [Yugoslav President Slobodan] Milosevic is the next Hitler," Cronin says, referring to the US-led intervention in Kosovo, which was justified on the grounds of human rights violations against ethnic Albanians.

Moreover, critics say, economic sanctions are applied unevenly. For example, Myanmar, the poor country formerly known as Burma, is one of 10 countries on the US black list because of "large-scale repression and violence against the democratic opposition," according to the Treasury Department order. But oil-rich countries like Uzbekistan and Turkmenistan are easily forgiven for rampant human rights violations.

As a result, says Reed Brody of the New York-based Human Rights Watch, it is increasingly difficult to take US foreign intervention at face value. For example, he asks, did the Clinton administration intervene in Haiti to reinstate democracy - or to stop refugees from coming to Florida, where they might burden the economy? "The overreaching concern for human rights in the Clinton administration is outweighed by the corporate round table," Mr. Brody says.

(c) Copyright 1999. The Christian Science Publishing Society

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