Federal Judiciary

Barack Obama, Dealmaker

Is Barack Obama as suave a diplomat as George W. Bush? His arrival in Bombay on Saturday morning, with 200 anxious American business executives in tow, will give him the opportunity to answer that question.

President Obama, sheepish recipient of the Nobel peace prize, is paying a visit to a world leader who actually deserves one: Manmohan Singh, who engineered the economic liberalization that has lifted many millions of Indians out of needless misery a decade before he took over the reins of government as prime minister. India's consequent rise as a significant world economic power, like China's, has been a source of bitterness and consternation for many Americans, particularly among Obama's most energetic supporters, the union bosses and entrenched business interests who accuse foreigners of 'stealing our jobs.' With U.S. unemployment hovering close to 10 percent despite a trillion dollars' worth of ill-considered stimulus shenanigans -- and with the president himself freshly shellacked -- the pressure is on to cut some deals.

#ad#Obama has been blunt about his intentions: 'The primary purpose is to take a bunch of U.S. companies and open up markets, so that we can sell in Asia,' quoth our American Gladstone.

As is the case with U.S. national-security matters, Obama, if he is clever enough to do so, has the opportunity here to profit from sound investments made by the administration of George W. Bush, whose cultivation of New Delhi was one of the great unsung diplomatic success stories of the era. The Bush administration's careful negotiation of the U.S.-India nuclear accord was the key to thawing the sometimes chilly relationship between the world's two largest democratic republics, an unhappy relic of India's regrettable Cold War cuddling with the Soviet Union, back when socialism was chic. Obama's challenge is to make that investment pay off by persuading New Delhi to allow American businesses, particularly retailers, better access to Indian markets, where narrow, parochial business interests and coddled unions hobble foreign competitors. Which is to say, President Obama is tasked with achieving a détente between his anti-trade union friends and corporate favor-seekers at home and their opposite numbers in India.

New Delhi wants three things that the Washington should be pleased to offer -- but not without extracting significant concessions in return. The big one is American support for a seat on the U.N. Security Council, whose permanent members include such has-been powers as France, as well as two of India's most important rivals: Russia and China. India is a large, liberal, trade-oriented democracy, one that suffers deeply from Islamic extremism and is threatened by Beijing's predations. The American interest in elevating India's stature as a counterbalance to China and the Islamic bloc is self-evident and worth supporting on its own merits. The other two things India wants are a freer hand in obtaining dual-use technology -- products with both military and civil applications, ranging from nuclear materials to biological matter -- and assurances that neither the Obama administration nor Congress will interfere unduly with its internationally oriented information industry, the hated 'outsourcing' of work ranging from software development to customer services.

The president's mind is on very little other than the economy right now, but the first two of these are not principally economic concerns, and our acceding to India's interests in these matters should be conditioned mostly on stronger support from New Delhi for American national-security goals and closer defense cooperation. The time to think about tomorrow's military necessities is today, and a stronger U.S.-India security relationship would tend to tamp down military adventuring in South Asia, potentially preventing conflicts before they become crises. But since Obama is a president  with money on his mind, it may be worth pointing out that if New Delhi sincerely wishes to acquire military materiel from abroad, it could do worse than to take its business to the United States: Boeing and Lockheed are at the moment in negotiations to build a fleet of new fighter jets for India's air force.

India's purely economic petitions should be met with economic stipulations. Its tariff protection of its domestic agricultural sector is an even less defensible mess than the American farm-subsidy regime, a trade barrier that India should lower as a prelude to razing it (as we should ours). Likewise, India's controls on foreign investment disadvantage too many U.S. businesses too severely; Obama can put the squeeze on India's ruling class by threatening to limit the number of temporary visas that allow Indian professionals to work in the United States -- an earlier hike in the visas' price grabbed the attention of India's elites right where they felt it.

Given the protectionist mood at home, the United States does not enter into trade-liberalization negotiations with towering moral stature, but then neither does India. Negotiating a true free-trade deal would benefit both countries immensely, making the world a wealthier and freer place, but that is a project for which President Obama lack sufficient political courage, to say nothing of the support of the diminished Democratic congressional caucus, which would crucify him for the mere thought of it. So we are left with the retro and slightly distasteful 19th century tit-for-tat political management of international trade, leaving only this question: Is Obama any good at it? We will find out this week.

Full post as published by Bench Memos - National Review Online on November 06, 2010 (boomark / email).