Tony Blair cautioned U.S. presidential candidates not to lock themselves into damaging protectionist or isolationist policies they could have a tough time walking away from once in office.
In an interview with The Wall Street Journal yesterday at the World Economic Forum here, the former British prime minister expressed concern that a suddenly more gloomy outlook for the global economy could lead the U.S. and other nations to close themselves off.
"I understand all the protectionist pressures in the U.S.," Mr. Blair said. "On the other hand, I think it would be extremely unfortunate if people bolt themselves in positions that become difficult to extract themselves from, because the reality in the world is that we're going to have to open up world trade, not close it down."
Mr. Blair neither singled out candidates nor said whom he favors. However, Democratic candidates in particular have championed "fair" over free trade. Sen. Hillary Clinton has called for a "timeout" on multilateral trade deals.
Mr. Blair also said there is a risk that U.S. presidential candidates will lock themselves into isolationist policies during the campaign, given the price to the military of staying in Iraq, Afghanistan and other hot spots. "There's a ready political advantage to saying: 'Enough is enough, we don't want any more. Why should we have to sort out the problems of the rest of the world?' But on the other hand, for the rest of the world, that engagement is vital."
Mr. Blair, who is Middle East envoy for the U.S., the European Union and Russia and who recently joined J.P. Morgan Chase & Co. as an adviser, said that instead of turning inward, it is "urgent" that countries reach deals to increase trade and strengthen outdated international institutions -- from the International Monetary Fund to the United Nations -- as the global economy comes under strain.
That was a common refrain at this year's annual meeting of global business and political leaders in Davos, which was otherwise dominated by concerns over how to resolve a liquidity crisis in the global financial system...
Pascal Lamy, director general of the World Trade Organization, has been wrestling since 2001 to change the rules of global trade through the stalled Doha round of global trade negotiations. "Behind this technical side of the negotiations, there is a power game going on" between developed countries who set the old trade rules and poorer and emerging countries that want to change them, Mr. Lamy said in an interview.
Many of the changes sought by Mr. Blair and others at the U.N. Security Council, the IMF, the World Bank and the International Atomic Energy Agency aim to give emerging economies such as China, India and Brazil a bigger stake, often at the expense of overrepresented European countries...
IMF head Dominique Strauss-Kahn was also in Davos to push his efforts to change that organization's focus to include surveillance of global markets, adding to its dwindling business of lending to and stabilizing troubled national economies. But he said that in order to work, the U.S. and other developed economies need to let the IMF set up surveillance authorities on their territories too -- something that isn't happening yet.
"I don't want to use apocalyptic language, it isn't helpful, but it is now urgent to do these things," said Mr. Blair. "At some point, the reality is so sharp that it is going cut through the bureaucratic lethargy that has left the situation as it is."
♠ Posted by Emmanuel in Trade at 1/28/2008 01:58:00 AMFormer British PM Tony Blair has come out warning against US isolationism, particularly on trade matters. The newly-appointed JP Morgan advisor [nudge-nudge, wink-wink] suggests that there is much to lose if the US retreats from the world stage and more or less walks away from the international institutions it has helped set up over the years. From the Wall Street Journal: