Joe Biden’s years in the US senate, particularly in the 1990s, coincided with the rise of the “Washington Consensus”, which resulted in the flourishing of free trade all over the world. He took a leading role in implementing quite a few of the signature moves of that consensus, including some NAFTA-style trade deals. He will also be, arguably, a president with remarkable prior experience in foreign policy since George Bush Sr. took office.
However, the time, the world, and, most importantly, the USA – all have changed drastically. Stung by criticism over exporting domestic jobs overseas through various trade deals during his campaign, Biden vowed not to “enter into any new trade agreements” unless American concerns on labour and environmental issues are addressed. The pall of gloom over global trade may be lighter now but it has not entirely lifted.
Biden will not be able to go soft on China simply because the tech and trade rivalries between these two countries have now transformed into a decisive battle for global supremacy. His method of creating international coalitions with other democracies may differ, but the inherent objective of countering China will remain intact. The Trans-Pacific Partnership (TPP), which excludes China, is likely to be back on the table again.
Under the Biden Presidency, the US is expected to rejoin the Paris Climate Accord and WHO. The country is likely to be less hostile at the WTO, giving the body a fair chance to recuperate. All these measures will put the country back into the international leadership game. But, the inertia of the Trump Presidency will not fade easily.
A sharply divided domestic polity and economy would compel Biden — most of the time — to look inwards, but reviving American global influence would require active political, economic and strategic engagement. Biden has all the acumen to do that, but will he be able to use that acumen fully? That is the principal question around which geo-economics will evolve in the Biden Presidency.
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Abhijit was Senior Fellow with ORFs Economy and Growth Programme. His main areas of research include macroeconomics and public policy with core research areas in ...
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