Australia Can Lead the G20 Back to Economic Freedom

The Buzz

President Obama and other G20 leaders should listen carefully this weekend (Nov. 15-16) in Brisbane, because Australian Prime Minister Tony Abbott has a powerful story to tell them about economic revival.

Abbott hopes to focus the gathered heads of state— representing some 80 per cent of the world’s Gross Domestic Product—on how to boost economic growth because, as he says, stronger economic growth is the key to addressing almost every global problem.  Growing economies tend to produce more jobs, better infrastructure, freer trade and greater international co-operation.

Australia is already leading by example, inking job-creating free trade agreements with Korea and Japan.  Abbott took office just 14 months ago. Since then, Australia—a country of fewer than 24 million—has created 110,000 net new jobs. Meanwhile, gross domestic product (GDP) has grown at an annualized rate exceeding three percent.

While the Abbott government actively pursues free trade, the Obama administration has dragged its feet. It blocked approval of Free Trade Agreements (FTAs) negotiated in 2007 with South Korea, Colombia and Panama, then spent nearly four years renegotiating them. It has also dragged out negotiations for Trans-Pacific and Trans-Atlantic FTAs, and made no attempt to push an FTA for Brazil. Its support of the pro-market “Pacific Alliance” trade area of Chile, Colombia, Costa Rica, Mexico, Panama and Peru has been lukewarm at best.

On the home front, President Obama has followed the EU mega-welfare-state model, ramped up government spending, and added onerous layers of regulation. In the latter area, the U.S. president has far outdone the Europeans.

The Competitive Enterprise Institute reports that the U.S. Code of Federal Regulations (CFR)—the "codification of the general and permanent rules published in the Federal Register by the departments and agencies of the Federal Government"—filled 175,496 pages by the end of 2013.  In Brussels, the “Acquis”—the European Union’s rough equivalent to the CFR—tops out at roughly 170,000 pages.

What’s worse, under Obama the CFR has been growing. According to the Competitive Enterprise Institute, 63 Federal departments, agencies and commissions issued 3,659 rules last year, yet Congress passed and the President signed just 72 laws. That’s a ratio of 51 new regulations for every new law!  Overall, in his first five years in office President Obama added 17,522 pages of regulations to the CFR, an 11 percent increase in the size of the regulatory state.

The Abbott government, however, has gone in the other direction.  Under its twice-yearly “Red Tape Repeal Day” it has now eliminated more than 57,000 pages of unnecessary red tape under a plan expected to save Australian taxpayers at least $2 billion per year.  Although the mechanics of regulation are different in the U.S. and Australia, there can be no mistaking the starkly different approaches of the Obama and Abbott governments.  Obama wants to grow the administrative state, while Abbott wants to rein it in.

Perhaps PM Abbott’s most exciting move to date has been his government’s repeal of carbon and mining taxes.  Such regressive taxes destroy jobs, retard economic growth, and fall most heavily on the poor. Even sadder, they don’t make a dent in global greenhouse gas emissions and therefore have no noticeable impact on global temperatures.

In short, the Aussies are busily taking steps to grow their economy. Meanwhile, the U.S. economy remains hamstrung by the unworkable complexities of Obamacare, a heavy-handed, top-down approach to financial regulations, wrong-headed energy and environmental policies, and a whole host of other problems that have resulted from too much government.

Much of the EU faces the same problems, and for the same reasons.  A voracious appetite for spending by EU governments is eating up nearly 45 percent of GDP.

Prime Minister Abbott wants other G20 countries to send the same message to their citizens that he is sending to Australians, that the country is open for business—not hostile to it.

After last week’s midterm elections, President Obama said that he had heard the message delivered to him by the American people.  Let’s hope he listens to our friends down under, too.

James M. Roberts is a Research Fellow For Economic Freedom and Growth at the Heritage Foundation. Before joining Heritage in 2007, Roberts served in the State Department for 25 years. As a Foreign Service Officer, he completed tours of duty at U.S. embassies in Mexico, Portugal, France, Panama and Haiti. He also worked on a wide variety of international trade issues and helped to coordinate major U.S. assistance programs, including efforts to reform Eastern Europe economies and to reconstruct Iraq.

TopicsG20 RegionsAustralia

Green Politics: Could This Be the Secret to Saving Obama’s Legacy?

The Buzz

Judged by his achievements to date, President Obama will not be remembered as a successful foreign policy president.  Yet there are signs that administration officials still hope to rescue a positive legacy for the president in the guise of energy and environmental policy.  Through a combination of domestic policies and international agreements, the White House might yet bequeath some policy triumphs of lasting significance.  Unfortunately, however, the political pathway to success will not be easy for Obama’s team even in this chosen area of focus.

It is a truism that presidents in their second term turn to foreign policy as a way to cement a legacy for themselves.  Partly, it is argued, this is because second-term presidents suffer from waning influence in the domestic arena as their political capital dwindles and attention gravitates towards who will be the next to occupy the White House.  Six years into his presidency, President Obama certainly lacks the kind of clout in domestic politics that he began with, the Democrats having lost control of the House in 2010 and the Senate in last week’s elections and with Obama’s personal approving rating leaving much to be desired.

Chief executives looking to inject some energy into their presidencies are also said to be inclined towards international affairs because of the supposed leeway that the commander-in-chief enjoys over matters of foreign policy.  This notion was best captured by political scientist Aaron Wildavsky in his 1966 article, “The Two Presidencies,” in which Wildavsky argued that U.S. presidents are severely constrained by constitutional checks and balances when it comes to domestic policy-making but are veritable Caesars when it comes to their authority over the country’s conduct on the world stage.  How else to leave an imprint on the political landscape when gridlock in Washington prevents progress on domestic issues?

Is Obama trying to leverage this fabled outward face of the presidency to craft a lasting legacy for himself?  There are signs to suggest that he is.  Earlier this year, for example, the White House used executive orders to expand the scope of federal conservation zones in the Asia-Pacific in a move that was explicitly framed in terms of the Administration’s broader policy on climate change: “The pristine waters [of the U.S.-controlled Pacific Remote Islands] provide a baseline comparison for important scientific research that monitors and evaluates impacts of global climate change,” the Administration insisted, “including benchmarking coral bleaching and ocean acidification.”

More dramatically, the president this week revealed a quietly negotiated deal with China over cuts to carbon emissions.  While skeptics have pointed out the underwhelming scope of China’s commitment under the new agreement, the size of America’s undertaking is ambitious and headline-grabbing, sure to appease the president’s supporters at home and likely to buoy his relevance as an international leader amid criticism that the Administration is a spent force.

All of this pales in comparison to the lucrative opportunities on offer next year at the upcoming United Nations Climate Change Conference to be held in Paris.  After the failure of Copenhagen, the Paris conference will represent a somewhat last ditch opportunity for President Obama to inspire, coordinate and close a broad-based and far-reaching deal on climate change.  The result could be an international agreement more significant than even the Kyoto Protocol, especially if Obama is able to fully invest the United States in the agreement and ensure the compliance of other large-scale emitters of greenhouse gases.

The problem for the White House, however, is that Wildavsky’s “two presidencies thesis” is somewhat overblown.  That is, U.S. presidents do not wield unlimited power when it comes to foreign policy.  Instead, and as James Lindsay among others has pointed out, Congress possesses several important levers with which to interfere with and even overrule a president’s foreign policy agenda.  The Administration’s abject nervousness that Congress might initiate legislation to undercut negotiations with Iran is testament to this fact.

As Paul Pillar has already noted, the domestic process of converting international agreements on climate change and energy will throw up some “formidable” obstacles to Obama making good on his pledges regarding energy and environmental policy.  Public spending on renewable energy technologies and new measures to restrict the use of fossil fuels will not be slam dunks with Republican lawmakers, and not every roadblock in Washington can be circumnavigated via executive action.  The bottom line?  President Obama will need to work across the aisle if his climate change agenda is to amount to more than restricting tuna fishing in the Pacific Remote Islands.

Image: Flickr/Creative Commons. 

TopicsEnvironment RegionsUnited States

Breaking Down Obama’s Big China Win at APEC: It's Not What You Think

The Buzz

Let’s be clear, the United States won big this week, but not for the reasons most people think. The media and China analysts have focused overwhelmingly on the climate deal, touting the new commitments from both the United States and China as exceptional, even “historic.” But this is missing the forest for the trees. The real win for U.S. President Barack Obama is keeping China in the tent or, in political science speak, reinforcing Beijing’s commitment to the liberal international order.

To be sure, the climate “deal” is no small deal. The joint announcement—and for the sake of clarity, let’s note that there is no real deal here, just two separate pledges presented together—represents an important step forward for both countries. President Obama has committed the United States to deeper cuts in CO2 emissions than previously put forth, and Chinese President Xi Jinping has promised that China’s emissions will peak around 2030. But it doesn’t get the world where it needs to be with regard to climate change, and many climate experts in both countries appear to agree that much more can and needs to be done by both countries.

The real takeaway from the Obama-Xi meetings at the Asia-Pacific Economic Cooperation (APEC) summit is that China has put itself back in the U.S. game. The entirety of the package—extending visas, establishing rules of the road for maritime and air encounters in the western Pacific, reducing or eliminating tariffs on as many as two hundred information technology goods, and pledging to do more on climate change—is a win for the United States. That doesn’t mean it is not a win for China too; it is. It is just a win that binds China more deeply to U.S.-backed international security, trade, and environmental regimes.

Keeping China in the tent is no small achievement. Over the past two years, since he assumed power, President Xi has pursued a China vision of world order, evincing much more interest in flouting established rules of the road than in buttressing them. He has moved to enforce China’s maritime claims—recognized by no other party—in the East and South China Seas; proposed an Asian Infrastructure Investment Bank that could compete with the World Bank and Asian Development Bank; offered up a new regional security architecture in Asia that would exclude the United States; and initiated an Asia-Pacific–wide free trade agreement that threatens to upend President Obama’s drive to complete the U.S.-backed trade agreement, the Trans-Pacific Partnership (TPP).

The APEC summit does not represent a strategic change for China but a tactical one. Xi is not stepping back from any of his own efforts to establish competing institutions; indeed, he underscored his plans during his joint press conference with President Obama. The U.S.-China relationship will thus continue to be a challenging one underpinned by two competing visions of global order. Nonetheless, the White House can rightly claim a significant win for its China and broader Asia strategy. The pivot has proved its worth; it is here to stay.

This piece appears courtesy of CFR's Asia Unbound blog. 

Image: White House Flickr. 

TopicsSecurity RegionsChina

12 People to Follow on Twitter for the Iran Talks

The Buzz

It’s fish-or-cut-bait time in the Iran nuclear talks, with the deadline for an agreement now less than two weeks away. Events are moving quickly. How can you prepare for the flurry of coverage as the deadline draws closer? And who should you listen to, knowing that every pundit with a pulse will soon be playing Iran expert? Here are some of the key voices to watch on Twitter—journalists, wonks, wags, and others—who actually know what they're talking about.

Laura Rozen

A veteran of Iran talks coverage who’s written for many outlets (presently, Al Monitor), Rozen’s feed is a clearinghouse for the most recent information on the talks.

Arash Karami

Another Al Monitor journalist, Karami keeps a close watch on the Persian-language press and has a great eye for the oddities that sometimes turn up in it.

Ariane Tabatabai

An associate at Harvard’s prestigious Belfer Center, Tabatabai has an excellent grasp of both the technical side of the talks and their day-to-day development. Her October analysis of just how many centrifuges Iran and the West will accept is a good example of how useful this combined perspective can be.

The Institute for Science and International Security

Headed by physicist David Albright, ISIS is a tiny outfit with a big voice in Washington. Its assessments of International Atomic Energy Agency reports cut through the bureaucratese, highlighting what’s new and charting Iran’s progress. Their consistent calls for stricter monitoring make it hard to say whether Tehran should be more worried about Albright’s ISIS, or Al Baghdadi’s.

Sam Cutler

Any deal will see major adjustments to the Western sanctions on Iran. And there are few who know the sanctions in more detail than Cutler, who works at a law firm that specializes in sanctions litigation.

Mark Dubowitz

What ISIS is to the technical side of the talks, Dubowitz is to the sanctions side, appearing regularly on Capitol Hill and in the press. Dubowitz has been a tough critic of the Obama administration’s conduct of the talks, arguing that the sanctions relief granted under the initial framework agreement sharply reduced Western leverage, allowing Iran to stabilize its economy and take its time in talks.

Reza Marashi

Marashi serves as the research director of the National Iranian American Council, one of the main organizations opposing the current sanctions regime. He’s already practicing a “celebration dance” for the possible deal.

Mohammad Ali Shabani

The London-based former editor of the Iranian Review of Foreign Affairs and an alum of the Center for Strategic Research (headed until last year by a Dr. Hassan Rouhani), Shabani is one of the most active Iranian voices in the English-language Twitter conversation on Iran.

Abas Aslani

Aslani directs international coverage at the hardline Tasnim News Agency and has served in a similar role at the more (in)famous Fars News Agency. Expect him to be at the final rounds of talks, and expect him to get good access to the Iranian negotiating team.

Iran Nuclear Energy

The social media account of a website defending the Iranian nuclear program. A steady stream of quotes from Iranian officials and details of the logistics of the talks.

Matt Lee

The tenacious Associated Press diplomatic reporter is often the first one to get a quote from the State Department when news is breaking. He’ll also fill you in on the latest Buffalo Sabres developments.

Eskandar Sadeghi-Boroujerdi

A scholar of Iran’s Reformist movement whose feed is a good mix of pressing developments and deeper analysis.

So there you have it: a dozen accounts that’ll keep you up to speed on the Iran talks. (If twelve isn’t enough, you can follow me, too.) November 24, the deadline under the current framework, can’t come soon enough!

TopicsNuclear Proliferation RegionsIran

U.S.-Taiwanese Relations After the Midterms: A Unique Opportunity

The Buzz

On the 35th anniversary of the Taiwan Relations Act, I argued in The National Interest and at an event at the American Enterprise Institute (AEI) that our relationship with Taiwan has suffered from benign neglect for far too long. Sustaining a productive partnership with Taiwan is critical to the success of U.S. strategic goals in the Asia-Pacific region. Unfortunately, the Obama administration still needs to do more to reinvigorate the bilateral relationship. It should work directly with Taiwan to actively promote peace and stability in Asia; strengthen the bilateral economic and trade relationship; preserve democracy, human rights, and media freedom; reopen blocked channels of communication; and facilitate meaningful participation in international organizations.

Will Republican majorities in the House and Senate benefit Taiwan in concrete ways? It’s hard to say. On the one hand, Congress is able to successfully speak out on sensitive bilateral issues that are more difficult for the administration to address directly and forcefully in public. In recent years, Congress has also held a number of public hearings focusing on various aspects of the U.S.-Taiwan relationship. The previous generation of Congressional Taiwan hands pushed for the island to respect human rights and democratic norms during the White Terror. Yet, China’s increasingly aggressive behavior is demonstrating to a new generation of Congressmen and women that the United States must support Taiwan’s continued democratic consolidation and international diplomatic breathing space as well as promote enhanced bilateral economic and security relations. These are nevertheless all largely bipartisan efforts.

Perhaps the strongest potential benefit of a Republican Congress is enhanced support for the Asian rebalance and regional trade agreements. If the GOP leadership can facilitate the renewal of Trade Promotion Authority (TPA), then it might ultimately hasten Taiwan’s ability to join the Trans-Pacific Partnership or signal the possibility of a bilateral free trade agreement (FTA) in the future. According to the Congressional Research Service, while “TPA is not necessary to begin or even conclude trade negotiations… it is widely understood to be a key element of defining congressional authority, and of passing trade agreement implementing legislation. Therefore, its renewal can be construed as signaling serious congressional support for moving ahead with trade negotiations.” Although both the United States and Taiwan would need to commit to serious negotiations before either of these potential trade agreements could come to fruition, having a trade-friendly Congress is a positive first step.

On the other hand, although Congress has the capacity to pass laws that address specific bilateral problems—for example, mandating that the Senate must confirm the position of the American Institute in Taiwan director, our de facto ambassador in Taipei—it is the arguably the White House National Security Council and U.S. Department of State that have the greatest role in shaping, implementing, and managing Taiwan policy. It is thus unlikely that shifts in the political makeup of Congress will have a substantial effect on the overall contours of our bilateral relationship.

Although many members of Congress would undoubtedly like to pay greater attention to the Asia-Pacific region, developing a strategy to combat and destroy ISIL will remain a high priority for both the executive and legislative branches of government. Opportunities for pragmatic engagement with Asia—including Taiwan—will nevertheless emerge. Scholars, policy experts, and the American public at large must remain ready to grasp these opportunities as we work with our partners around the globe to secure long-term peace and stability.

When the 114th Congress convenes in January 2015, it would behoove them to think critically about the ways in which U.S. policymakers can leverage Taiwan’s strengths to enhance the proper functioning and effectiveness of the Asian rebalance. Washington cannot rely on traditional military allies alone. Our leaders must engage in robust, transparent, and honest dialogue with counterparts in Taipei to discuss how the island can help counter military threats from Beijing. Congressional leaders should also focus on bolstering our bilateral trade relationship while helping Taiwan lay the groundwork to enter into TPP negotiations. Diversification represents the key to Taiwan’s future growth, and is necessary to hedge against systematic risk from China.

The relationship between Taipei and Washington rests on a firm and durable foundation. Yet, a new generation of lawmakers has a unique opportunity to re-envision and reinvigorate the U.S.-Taiwan strategic and economic relationship during a pivotal and transformative period in our two nations’ development. The time is now to reaffirm our shared values and mutual stake in promoting a peaceful and prosperous Asia-Pacific region.

Julia Famularo is an International Security Studies Fellow at Yale University.

Editor’s Note: Excerpts of this article first appeared in Ketagalan Media Debrief here.

Image: Flickr/Creative Commons. 

TopicsSecurity RegionsTaiwan