Obama Struggling To Save Face On Asia Trip After Little Progress With G-20, APEC
President Obama received only the diminishing returns of America's waning economic clout as he toured Asia this month.
In Seoul, he made little progress in convincing the Group of Twenty that it should continue to defer to American interests, failing to secure either a critical free trade pact with South Korea or a G20 agreement on trade imbalances.
Now in Yokohama, Obama is feeling the same frost from APEC (Asia Pacific Economic Cooperation). With the organization's final talks ending Sunday, the U.S./China stalemate continues and no new allies have emerged.
Obama contends that the old paradigm, in which Asian economies depend on American consumers to buy cheap goods while American exports fall, is unsustainable. That may be the case for the United States, but Asian leaders made it clear they feel no responsibility to right the imbalance. The Christian Science Monitor said Obama was "smacked down":
"[W]ith countries watching out for their own bottom lines in a weak and uncertain global economy, coordinated economic action is not likely to flourish any time soon, international economists say."
Further, the debt-ridden American economy is balanced precariously on the backs of Asian (and other foreign) investors. This has been a major point of contention, and remains part of a larger conversation that includes currency valuations and national treasuries' decisions about whether to spend or save the bulk of their reserves.
Underneath the economic maneuvering, there is a battle between the superpower and the emerging superpower, the U.S. and China. The reemergence of Germany in Europe is also an important factor.
The AFP reported: "On the tit-for-tat currency allegations between the United States and China, IMF [International Monetary Fund] chief Dominique Strauss-Kahn noted dryly that 'everyone thinks that others should make more effort than oneself."
Obama is not unaware that his predicament is part of a long-term shift. The Washington Post reported Friday:
"In a news conference following the Group of 20 summit, Obama said the United States, while still the world's most powerful economy, can no longer dictate the terms of how the world does business, especially after a global economic turndown that many blame on American policies."
The same article noted that Obama had been received much more warmly last year, but that political niceties had given way to economic realities.
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