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2006 Northern Trust Forum

Globalization and the Politics of Economic Adjustment

[Lecture Flyer]

When Chinese President Hu Jintao visited the United States last spring he hoped to convince America that its interests would not be jeopardized by China's development. He apparently did not succeed. There seems to be widespread agreement in the United States that we should be worried about China's economic and political ascent. Economic protectionists wring their hands over the $200 billion US trade deficit. Globalists voice concern over China's actions in trying to corner the world energy markets. Almost everyone wonders about, and many worry about, China's geopolitical ambitions.

This fall's Northern Trust Forum is entitled "Globalization and the Politics of Economic Adjustment." It will focus on the political and policy challenges that the United States faces from globalization, with a particular emphasis on relations with China. The keynote address, "Unpacking Globalization: What China Means for America," will be delivered by Professor Geoffrey Garrett. Dr. Garrett is President of the Pacific Council on International Policy and Professor of International Relations, Business Administration, Communication and Law at the University of Southern California.

Sino-US relations encompass most, if not all, of globalization's opportunities and challenges. On the positive side of the ledger, China represents a vast market for American high-tech products like automobiles, commercial airplanes, and computer software. On the negative side, China is a potential geopolitical rival, and Chinese firms and workers compete against their American counterparts.

Here are examples of the kinds of questions that motivated the 2006 Northern Trust Forum:

  • What public policies, if any, should the US adopt to facilitate adjustment to global economic change?
  • Should the federal government expand its Trade Adjustment Assistance to displaced workers? What role should retraining and wage insurance programs play America's policy response to globalization?
  • How should the US formulate its foreign policies to find a mutually beneficial mode of co-existence with countries like China?
  • Should the US compromise and expend political capital to salvage the current round of multilateral trade negotiations in the WTO, or "go-it-alone" by negotiating trade deals on a bilateral basis?
  • Should the US use its influence within the IMF and World Bank to pressure countries like China to revalue their currencies?

Considering the challenges of globalization in the context of US relations with China serves to highlight their importance and complexity.

  • Should the fact that China annually provides the US with hundreds of billions of dollars in low-priced goods affect US domestic policies in areas such as the minimum wage, health insurance, taxation, etc.?
  • Should the US government promote and/or regulate Boeing as it attempts to capitalize on the fact that China does not have it own commercial aircraft manufacturing capability?
  • How should the US react to the outsourcing of hi-tech jobs to research centers located in China? If Chinese scientists can do the same quality of work as their American counterparts at a fraction of the cost, what hope is there for hi-tech workers in the US?

Energy issues have moved to the fore in US-China relations. In 2005 the US Congress stopped the attempt by a Chinese company to purchase Unocal. In response, the Chinese began to pursue other energy reserves at a furious pace. China struck a deal with Iran to purchase as much natural gas as it can produce over the coming decade. This agreement has had the political effect of softening China's criticism of Iran's nuclear ambitions. It also has prompted China to commit to expanding its naval fleet to protect vital shipping lanes. China's aggressive pursuit of energy sources to satisfy its rapidly increasing demand has raised a number of concerns.

  • Will this inevitably lead to a volatile geopolitical rivalry between China and the US?
  • How might the European Union - or countries like Japan, North Korea or South Korea - react to this development?
  • To what extent, if any, are China's efforts to meet its energy needs in conflict with US needs and interests? To extent there are conflicts what how should the US attempt to resolve these conflicts?

This summary look at Sino-US relations provides but a glimpse into the challenges and opportunities that globalization presents for American policymakers. The US undoubtedly will have to make political and economic adjustments in response to those challenges and opportunities. The Northern Trust Forum will use this important bilateral relationship as a springboard for thinking about a more general strategy of adjustment to globalization. The topics, questions, and issues to be explored at the Forum were certainly important as well as timely. These topics have no easy answers. But thinking, discussing and debating them was an informative and enlightening experience for everyone who attended or participated in this 2006 Northern Trust Forum.



Keynote Speaker: Prof. Geoffrey Garrett

 

Geoffrey Garrett became President of the Pacific Council and a tenured member of the USC faculty as a Professor of International Relations on July 1, 2005. Previously Garrett was founding Dean of the UCLA International Institute, Director of the Ronald W. Burkle Center for International Relations and Vice Provost of International Studies at UCLA. He has also served on the faculties of Oxford, Stanford and Yale universities as well as the Wharton School.

An expert on globalization, Garrett has written widely on the effects of free trade and capital mobility, European integration, international law, and partisan politics. For example, Professor Garrett is author of Partisan Politics in the Global Economy and co-editor of The Global Diffusion of Markets and Democracy. His commentary has appeared in Los Angeles Times, San Francisco Chronicle, Seattle Times, San Jose Mercury News, San Diego Union Tribune, Le Monde, South China Morning Post and Mexico's El Financiero.

Professor Garrett is a Fulbright Scholar and has held fellowships at the Center for Advanced Studies in the Behavioral Sciences, the Hoover Institution, the Juan March Institute in Madrid, the Institute for Advanced Studies in Canberra, and the Wissenschaftszentrum Berlin.