"kinder, gentler US"

[Doug Henwood]

[from the World Bank's daily clipping service]

'KINDER, GENTLER' APPROACH TO GLOBAL ECONOMY:  LINDSEY.

While US President George W. Bush is spending this week stressing the 
importance of US military alliances, his chief economic adviser is 
signaling a similar approach to the global economy, reports the 
Financial Times (p.4). In the run-up to the administration's first 
international economic summit this weekend-the meeting of G7 finance 
ministers and central bank governors in Palermo, Sicily-Lawrence 
Lindsey is promising a kinder, gentler relationship with America's 
economic allies.

The news comes as Reuters notes that the ministerial meeting in 
Palermo will set part of the financial agenda for the main G7 summit 
in Genoa on July 20-22. Italy is pushing for reform of the World Bank 
and other international financial institutions, and helping the 
world's poorest nations through freer trade and the lifting of tariff 
barriers.

The Americans' new diplomatic approach represents more than just the 
moderated tones of a new administration, says the FT. The president's 
senior foreign policy officials-Secretary of State Colin Powell and 
National Security Adviser Condoleezza Rice-have made clear their 
desire to integrate economic issues into their broader foreign policy 
goals. Lindsey noted "a desire by the agencies that are more 
concerned with foreign policy to have more of a say in a decision 
before it's made".

"The president has certainly indicated his support for free trade," 
Lindsey is also quoted as saying. "There are any number of countries 
with whom we might expand free trade. There are proposals to do it on 
a bilateral and multilateral basis..."

In a separate report, the FT (p.4) notes that if the US lacks 
domestic authority to negotiate free trade deals, there is unlikely 
to be any progress internationally on various initiatives-from a new 
world trade round to a Western hemisphere free trade deal. Fears of a 
halt in trade liberalization have led many top US companies to try to 
broker a compromise between Democrats and Republicans. In an effort 
to reach out to moderate Democrats, the companies have abandoned 
their traditional opposition linking trade agreements with provisions 
to protect labor rights and preserve the environment.

But the effort has already provoked a backlash from Republicans, some 
of whom still view the linkage of trade, labor and environment issues 
with suspicion, seeing it either as a covert form of protectionism or 
as a backhanded effort to impose a liberal regulatory agenda on the 
US.

The FT (p.8) also notes in a separate report that UN diplomats are 
hopeful about Powell, whose choice [to visit] UN headquarters today 
as his first "international" trip as secretary of state did not go 
unnoticed.