Does Bill Clinton’s negotiation of free trade agreements through his persuasive narrative of ‘neoliberal globalization’ in an attempt to improve living standards for the US population

CandidateNumber:65165,Unit:SPAI30002,SeminarTutor:DrEVanVeeren,Wordcount:2997,ChosenQuestion:1.WhichUSpresidentwasthegreatestforeignpolicyfailureorsuccessandwhy?

1

DoesBillClinton’snegotiationoffreetradeagreementsthrough

hispersuasivenarrativeof‘neoliberalglobalization’inanattempttoimprovelivingstandardsfortheUSpopulationmake

himasignificantforeignpolicysuccess?

WhenClintonwas inaugurated, theUSwas experiencing almost a ‘unipolarmoment’(Krauthammer,1990:23),‘it’seconomywas40%largerthanthatofthesecond-ranknation…[and]it’sdefencespending[was]sixtimesthatofthenextsixcountriescombined’(Herring,2011:921).Therelativestrengthof the USmilitary and economy and the collapse of the Soviet Union gaveClinton extraordinary freedom of action. The need for a cautious grandstrategysuchasKennan’s ‘containment’(MrX,1947),whichwasconcernedwith the obvious and pre-eminent threat of the Soviet Union, was defunct.Despite flexibility, Clinton’s opportunity could have succumbed to ‘theparadox of unipolarity’ (Walt, 2000: 65), in which a state has ‘enormousinfluence’but‘littleideawhattodowithitspower’.However,Clintonavoidedthisparadoxbyseizingtheopportunitypresentedtohimin1993ofhisownvolition;hisconstructiveandresourceful initiative indefyingtheparadoxiswhatdifferentiatesClintonasthegreatestsuccess.Hedefiedtheparadox,andachieved ‘oneof thenation’s longestperiodsof economic growth’ (Herring,2011: 926), through persuasively using the narrative of ‘neoliberalglobalization’.Encouragingandleadingforeignstatestosignthehundredsoffree trade agreements that allowed for US foreign trade and investmentexpansion.Hisforeignpolicywasasuccessbecausetheeconomicgrowthasaresult of the global trade liberalization Clinton initiated, facilitated aremarkable and optimal improvement in the living standards of thesignificantmajorityoftheUSelectorate.Beforeproceeding,itisimportanttoclarifymyspecificdefinitionofsuccess.My conception of ‘presidential foreign policy success’, in recognition of the


2

US’unipolarmoment in this timeperiod, is anoptimal improvementof thecurrent,andreasonablypredictablefuture,livingstandardsofthesignificantmajorityoftheUSelectorate.Thisisaparticularlyuncharitabledefinitionof‘presidentialforeignpolicysuccess’,howeveritisthemostsuitabledefinition.This definition consciously does not focus on global living standards as thecriteriaofpresidentialforeignpolicysuccessastheUSpresidentisprimarilyaccountable to and responsible for the welfare of his own electorate andshouldacttoimprovetheirlivingstandardstotheirfullestpossiblelevel,asaresultofhisdemocraticremit.IndeedClinton’sowndefinitionresonateswiththisdefinitionofforeignpolicysuccess,‘asneverbefore…thesuccessofourengagement in the world depends … on the benefits it brings to workingmiddle-class Americans, our "foreign" policies are not really foreign at all’(Clinton,1991:17).Iacknowledgetheethicalambivalenceofthesub-optimalgrowthinlivingstandardsincountlessdevelopingcountries,whichhasbeencaused as a result of Clinton’s promotion of trade liberalization. However,because this specific definition of ‘presidential foreign policy success’emphasizes thepresident’s dutiful need toprioritize theUS electorate overotherglobalcitizens,thusthelivingstandardsofotherstates’citizensarenotmyprimarydiscursivefocus.

Inthisdiscussion,IoutlinethemainfreetradeagreementsClintonbrokered.Iexplainhowtheensuingtradeliberalizationwasasuccessbecauseithadantremendously positive impact on US domestic economic growth and livingstandards. I explore how Clinton brokered these free trade agreements,despite the principal beneficiary of thembeing theUS, by perpetuating themyth of neoliberal globalization. I address the main challenges to myargument that claim that Clinton’s foreign policy brought just a nominalimprovementinlivingstandardsforthemajorityoftheUSelectorateandnotan optimal improvement, as a result of various residual effects of tradeliberalization.Penultimately, Iaddress themajorqualificationcomprisedbythe environmental concerns arising out of trade liberalization. Finally, IconcludethatmyinitialclaimthatClintonisthegreatestpresidentialforeignpolicysuccessremainsvalid,despitechallenges.‘Pactomaniaforfreetrade’(Brinkley,1997:123)ensuedduringClinton’sfirstterm. Clinton’s most notable achievements were the formation of theplurilateralNAFTA,APEC,andFTAA.HissecondtermsawhiscompletionoftheGATTUruguayroundandtheenshrinementoftheGATTprinciplesinthenewly-established, multilateral, WTO. During the Clinton years, the USconcludedmorethanthreehundredtradeagreements’(Herring,2011:937).The trade liberalization following the free trade agreements had a clearnominalpositiveimpactonUSdomesticgrowthandlivingstandards.Bytheend of Clinton’s presidency ‘22.7 million new jobs had been created,unemploymentdroppedtoa30-year low,andgrossdomesticproductgrewby35percentoverallthroughthelongestperiodofsustainedgrowthinU.S.history…Averagehourlywagesincreasedby6percentafteraccountingfor


3

inflation, and median household income grew by 14 percent’ (AmericanProgress,2011:2).ThissubstantialpositivenominalimpactongrowthandlivingstandardsafterreflectedtherealitythattradeliberalizationwasextraordinarilybeneficialtoUSinterests.However,despitethefactthat ‘asglobalizationhasprogressed,[nominal] livingconditionshave improved…invirtuallyallcountries’(IMF,2000), the rules enshrined in these free trade agreements are certainlynotbeneficialtothesametodegreetoallstates’interests.ThefreetraderulesinthefreetradeagreementsthatClintonpetitionedfor, ‘privilegetheinterestsof largerdevelopedeconomiesoverthoseofemerging,developingand low-incomeeconomies’(Broome,2014:146)andhaveprovenovertimetohaveimperialistically ‘served the interests of the more advanced industrialisedcountries…ratherthanthoseof thedevelopingworld’(Stiglitz,2002:214).OneofthebiggestbenefactorsoftheseagreementshasbeentheUS.TheUSandotherhighly-developedcountrieshavebenefittedmostdramaticallyfromfree trade agreements due to the opportunity to ‘crack overseas markets’(Johnson,2004:268)indevelopingcountries,sellingthemexportproductsorseizingthebestinvestmentopportunitiesthatarepresentedbyrule-enforcedmarketopenness.Thelackofdevelopedpre-existentcompetitiveindustryindevelopingmarketsmeansthatadvancedUSfirmsquicklycometodominateandreplaceinfant,inefficientdomesticenterprise.Thispermeationofforeignmarkets, particularly developing markets, with US firms (provoked byClinton) iswell exemplified by the fact that ‘by themid-1990s, four out ofevery five bottle of Coca-Colawere sold outside of the US’ (Herring, 2011:918). This open access to developing economies and the appropriation oftheirprofit-generatingpotentialbyUSfirmshasbeenabletooccurbecausethe free trade agreements embodied the neoliberal philosophy of whatFriedman characterizes as the neoliberal ‘Golden Straitjacket’, wherebystates, developed or developing, are implored to stick to it’s strict rules inordertoattaineconomicprosperity.The‘GoldenStraitjacket’establishes‘theprimacy of the private sector, removes all restrictions on trade, foreigninvestment,andthemarket’(Friedman,1999:86-87).Such imbalanced ruleswere legislated as part of the free trade agreementscaused in a largely by Clinton’s persuasive narrative of ‘neoliberalglobalization’ and his propagation of it’s myths; ‘globalization was theadministration buzzword’ (Brinkley and Ambrose, 2011: 438). Clintonpresentedglobalizationasmorethanasetofobservablephenomenasuchasimproving communication tools and transportation methods. Clintonpronounced globalization as not full of ideological content but a benign,natural, inevitable,an inescapablepathwhereby theonlyway fora state inthe global system to reap globalization’s benefits in the form of trade-generatedprofit,was to transform it’s economy in theneoliberal image.Anexponential increase in global trade and the continual lowering of tradebarriers was presented as being just as inevitable as technologicaladvancementwithinthe‘neoliberalglobalization’myth.ForFriedman(1999:


4

486), largely a supporter of Clinton, globalization in the neoliberal imagewasn’t a choice it was a ‘reality’. Lake, Clinton’s National Security Advisorspokeof the inevitabilityof globalization in theneoliberal imagedue to it’sinherent‘demandforpoliticalopenness’(BrinkleyandAmbrose,2011:409)orasClintonputit,neoliberalpolicyprescriptionswereprudentdueto ‘theinexorablelogicofglobalization’(Clinton,1999).Clinton’smythof‘neoliberalglobalization’ was potent as an ‘intellectual sedative’ (Johnson, 2004: 261)compellingstates to sign the free tradeagreementsof the1990s for fearofmissing the benefits of benign globalization. Johnson (2004: 255) aptlyexplains the efficacy of the narrative as a way to open the markets ofdeveloping countries to the US, before neoliberalism became a pejorativeterm;‘anexpansivenationmustatleastattempttodisguisewhatitisdoingifitwants to consolidate its gains, itmustpretend that its exploitationof theweak is in their own best interest, or the result of ineluctable processesbeyond human control … anything but deliberate aggression by ahyperpower’ (Johnson, 2004: 260). It is the free trade agreements that thisnarrative facilitated and the subsequent economic growth and improvedliving standards in the US, which makes Clinton the greatest presidentialforeignpolicysuccess.The first criticism to my argument that Clinton was a presidential foreignpolicysuccessisthattradeliberalizationwillcausesuchUSlabourinstabilitythatthemajority’sfuturelivingstandardswillbenegativelyimpactedduetoperpetual structural and regular unemployment affecting themajority, andnot aminority (as has been the case thus far). This argument that ‘puttingeconomicsatthetopof…[the]foreignpolicyagenda’(BrinkleyandAmbrose,2011:409)hadthisimpactisn’t,onthefaceofit,unreasonable.Despitenewjobs being created, unemployment dropping, and average wage increasing,thefreetradeagreementsofthe1990sundeniablycaused‘jobinsecurityinarapidlychangingandharshlycompetitiveenvironment’andagroundswellof‘a sense of powerlessness and uncertainty about the future’ (Cutter, Speroand Tyson, 2000: 97). The assertion that labour instability wouldpermanently getworse as a result of free trade is not unreasonable in thecontextof ‘costlyjobdisplacement’asaresultoffreetradeagreements,and‘eliminated jobs in the nation’s already moribund manufacturing sector’(Herring, 2011: 926)(particularly as a result of NAFTA). However, whilsttradeliberalization‘broughthugeshort-termtradeoffs’(Herring,2011:926)in the formofUS labour instability,and labourredundancies,old jobswerereplacedbynew,betterjobs.Friedman (1999: 477) made the observation that in the US tradeliberalizationwas‘rapidlydestroyingoldjobsandharvestingnewones’.Nau(1995:3)makes thepoint that thesenewer jobsareactuallypreferable,heasserts ‘changes intechnology,educationandpublic infrastructure…createhigh-wagejobs’.Duetothisphenomenonofthereplacementofoldjobswithmodernized jobs, the short-termUS labour instability (in the form of shorttermstructuralunemploymentcausedbytradeliberalization)doesnotmean


5

thatUSlabourinstabilitywillintensifytotheextentthatthelivingstandardsof the majority are negatively impacted. Rather, US labour instability andshort-termstructuralunemploymentsignifiesadomesticpolicy failing.ThisisafailureofClinton’sdomesticadministrationtoeasethepainoftransitionwith theproperprovisionof training inorder tobringUShumancapital tothe‘thecuttingedge’(Nau,1995:64)tosatisfymodernizedjobdemands.ItisvalidtopointoutthattheneoliberalismengrainedwithinClinton’sfreetradeagreements encouragesminimal social expenditure.However, this doesnotprecludemodesttargetedsocialexpendituretomodernizehumancapital.ThesecondcriticismtomyargumentthatClintonwasapresidentialforeignpolicy success is that global living standards, includingUS living standards,wereandcontinuetobenegativelyimpactedbytradeliberalizationduetoUSmonopoly privilege in developing countries. This criticism is levelled aparticular length by Evan, an intellectual leader of the ‘alterglobalization’movement. TRIMS and TRIPS, negotiated by Clinton, enforced ‘politicallyprotectedmonopolyrents’through‘intellectualpropertyrights’that‘provedtobe a goldmine for transnational corporations’ (Johnson, 2004:270). Forexample, maintenance of ‘exorbitant prices of American pharmaceuticalcompanies’ (Johnson, 2004: 255)was enabledworldwide. This criticism ofmy argument highlights the ‘second enclosure movement’ (Boyle, 2003)whereby anything from ‘tropical plants to musical chords’ is made intointellectualpropertyanda ‘profitable intangibleasset…bypoliticalmeans’(Evans,2008:278), andownedbydevelopedcountries,particularly theUS.Such ‘politically maintained monopoly power’ over intellectual propertyarguedtohave‘anti-developmentaleffects’(Evans,2008:278).Block(2008:28) argues that thesemonopolies ‘slow further technological progress to acrawl’. The argument is that, for example, when building-block drugs (inorder to create new drugs) become proprietary drugs and developmentsoftware isn’t open source, development is slowed because enactment ofideas is precluded in many cases due to the sunk cost purchasingmonopolised intellectual property. This stifling of innovation in developingcountries allegedly leads to slowed global production-efficiencyimprovementswhichsub-optimallyimpactsglobal,andUSlivingstandards.Nevertheless, inrealityit isnotthecasethattheintellectualpropertyrightsenshrined inTRIMSandTRIPSstifles innovationglobally.These intellectualpropertyrightsdirectlyincentiviseinnovationbythecreationofthepromiseof international proprietary rent when a new innovation is made. Park’s(2005:40) studyof the impactof intellectualproperty rightson the rateofinnovationina41-nationsamplesubstantiatestheexistenceofthisincentivesystem.The incentive to innovatepredominatesandnegating the impactoflostinnovationthroughthesunkcostofmaterialsneededtoenactinnovativeideas. His research ‘shows that IPRs do not stimulate productivity growthdirectly,butdoindirectlybystimulatingR&Dinvestments’(Park,2005:40),i.e.byofferingtheincentiveofpotentialreturnonR&Dprojects.


6

The third criticism ofmy argument that Clintonwas a presidential foreignpolicysuccessisthat,intheprocessofbenefittingnominallyfromtradewithdevelopingcountries(asaresultofClinton’s freetradeagreements), theUShas created an economically unviable Global South. Allegedly there is nowinsufficient to facilitate US business operations infrastructure in the GlobalSouth unless aid is utilised. In addition, allegedly, this means US netprofitabilityindevelopingcountriesisdamaged,andthus,USlivingstandardimprovements are sub-optimal. It is argued that orthodox neoliberalprinciples,whenappliedthroughthefreetradeagreementsofthe1990s,tothedevelopingworld,createdaGlobalSouthasstateswere ‘shelled-out’bythe brutal cutting of government bureaucracy, seen as an economicinefficiency. This has led to a Global South with underdevelopedbureaucracieswhopracticeineffectivegovernanceandshowendemicfailureto sustain the necessary business and social infrastructure to facilitate USinvestment. This failure to sustain infrastructure in light of Clinton’s freetrade agreements is demonstrated by the rise in aid from $100million to$700millionduringClinton’spresidency (Bouchet,2013:166).According tothis criticism, the permittance of infrastructural deficits in the developingworldtrading-partnersbytheUSdemonstrates‘short-sightedself-interestinbeing able to profit from the absence of governance’ and leaves US ‘neo-liberalelitesincapableofconstructingeventheorderthattheyneedfortheirownlong-termaccumulationofcapital’(Evans,2008:280).However, the ‘shelling-out’ of developing country bureaucracies hasdisplayed a level of covert malevolent virtuosity. The ‘Golden Straitjacket’(Friedman,1999:86-87),hasservedaswhatItermthe‘GoldenLeash’inthehandsoftheUS.Althoughmorallyrepugnant,theneoliberal ‘shelling-out’ofdeveloping country trading-partners has been effective as it has keptdeveloping countries reliant on the US for aid in order to maintain basicinfrastructure and thus the ‘Golden Straitjacket’ has kept the Global Southcontinuallysubjugatedona‘GoldenLeash’,andimportantlyforUSeconomicinterest, enduringly open to US investment. The current subjugation of the‘Global South’ is optimal for the US because the cost of aid isminiscule incomparison to the economic benefit of unrestricted trade with the GlobalSouth.Althoughmalicious,anation‘candonothingwiserthantothrowawaytheseladdersofhergreatness’bypreaching‘toothernationsthebenefitsoffreetrade’(Chang,2002:4-5).

DespitethethreepreviouslyrebuttedchallengestomyargumentthatClintonwas a foreign policy presidential success, there is a potentially effectivechallengeandqualificationtomyargument.Thisqualificationisthatiftradeliberalizationwere to beproven to increase expedite ‘change in the earth’sclimateanditsadverseeffects[which]areacommonconcernofhumankind’(UN, 1992: 4), this would require a reassessment of my argument. This isbecause environmental disaster would impact global living standardsincluding those of theUS population. There is an on-going and contentiousfield of research on this issue. The White House argues that every 1% in


7

income as a result of trade liberalization leads to pollution concentrationsfalling 1% as a result of the adoption of clean technologies that offsets‘emissionsresultingfromincreasedtransportationorproduction’(2015:4).However,therearecontradictoryargumentssuchasthattradeliberalisationhas incentivised polluters to relocate to states where environmentalregulationislessstringentinordertoupholdpollutingpractices(Etsy,1994:121)andthattradeliberalizationstimulatedgrowthhasledtoanetincreasein pollution (Brack, 1996). The outcomeof this debate has implications forthis argument, however as this debate is on-going, this aspect of tradeliberalizationremainsoutsideofthescopeofthisdiscussion.

Whileacknowledgingloomingpresenceandqualificationtomyargumentofthe outcome of the debate surrounding the environmental implications oftradeliberalization,IconcludethatoptimalimprovementofthecurrentandreasonablypredictablefuturelivingstandardsofasignificantmajorityoftheUS electorate was achieved by Clinton’s persuasive use of the myth of‘neoliberal globalization’ in order to encourage foreign nations to sign themanyfreetradeagreements.Clintoncertainlydidn’tcreatea‘globalutopiaoffree-market democracies’ (Brinkley and Ambrose, 2011: 430) but he didcommendablyserve the livingstandardsofhiselectorate througheconomicmeans,asanintegralpartofhisforeignpolicy,andindoingso,pro-activelytook full-advantage of the defunct need for a hyper-cautious protectiveforeign policy. For this reason Clinton should be deemed the greatest USforeignpolicypresident.


8

Bibliography:• Ambrose,S.E.andBrinkley,D.G.(2011).Risetoglobalism:Americanforeignpolicysince

1938.NewYork:PenguinGroup.• AmericanProgress(2011).Powerofprogressiveeconomics:TheClintonyears.Availableat:

www.americanprogress.org/issues/economy/report/2011/10/28/10405/power-of-progressive-economics-the-clinton-years/.(Accessed:29December2015).

• Block,F.(2008).Swimmingagainstthecurrent:theriseofahiddendevelopmentalstateintheUnitedStates,Politics&Society,36(2),pp.169–206.

• Bouchet,N.(2013).BillClinton.InCox,M.,Lynch,T.,andBouchet,N.,USforeignpolicyanddemocracypromotion:fromTheodoreRoosevelttoBarackObama.London:Routledge.pp.159-173.

• Boyle,J.(2003).Thesecondenclosuremovementandtheconstructionofthepublicdomain,LawandContemporaryProblems,66(1),pp.33–74.

• Brack,D.(1996).InternationaltradeandtheMontrealprotocol.London:ChathamHouse.• Brinkley,D.(1997).Democraticenlargement:theClintondoctrine,ForeignPolicy,106,pp.

111-127.• Broome,A.(2014).Issuesandactorsintheglobalpoliticaleconomy.Basingstoke:Palgrave

Macmillan• Chang,H-J.(2002).Kickingawaytheladder:developmentstrategyinhistoricalperspective.

London:AnthemPress.• Clinton,W.(1991)TheNewCovenant:ResponsibilityintheAmericanCommunity.

23/10/1991.Availableat:www.c-span.org/video/?23518-1/clinton-campaign-speech.(Accessed:29December2015).

• Clinton,W.(1999).Remarksbythepresidentonforeignpolicy.26/02/1999.Availableat:www.mtholyoke.edu/acad/intrel/clintfps.htm.(Accessed:29December2015).

• Cutter,B.W.,Spero,J.,Tyson,L.D.(2000).Campaign2000:newworld,newdeal–ademocraticapproachtoglobalization,ForeignAffairs,79(2),pp.80-98.

• Etsy,D.C.(2001).Bridgingthetrade-environmentaldivide.JournalofEconomicPerspectives,pp.113-130.

• Evans,P.(2008).Isanalternativeglobalizationpossible?,Politics&Society,36(2),pp.271-305.

• Friedman,T.L.(1999).TheLexusandtheolivetree.NewYork:Farrar,StrausandGiroux.• Herring,G.C.(2011).Fromcolonytosuperpower:U.S.foreignrelationssince1776.NewYork:

OxfordUniversityPress.• IMF(2000).Globalization:threatoropportunity?AnIMFissuesbrief.

https://www.imf.org/external/np/exr/ib/2000/041200to.htm#.(Accessed:29December2015).

• Johnson,C.A.(2004).Thesorrowsofempire:militarism,secrecy,andtheendoftherepublic.UnitedStates:Holt,Henry&Company.

• Krauthammer,C.(1990).Theunipolarmoment,ForeignAffairs,70(1),pp.5-17.• List,F.(2005).Nationalsystemofpoliticaleconomy-volume3:thesystemsandthepolitics.

NewYork:CosimoClassics.• MrX(1947).ThesourcesofSovietconduct.ForeignAffairs,25(4),pp.566-582.• Nau,H.R.(1995).Tradeandsecurity.WashingtonDC:AmericanEnterpriseInstitute.• Park,W.G.(2005).DointellectualpropertyrightsstimulateR&Dandproductivitygrowth?

Evidencefromcross-nationalandmanufacturingindustriesdata,IntellectualPropertyandInnovationintheKnowledge-BasedEconomy,9.

• Stiglitz,J.E.(2002).Globalizationanditsdiscontents.NewYork:Norton,W.W.&Company.• UN(1994).UnitedNationsframeworkconventiononclimatechange:resolutionadoptedby

theGeneralAssembly.20/01/1994.Availableat:https://unfccc.int/resource/docs/convkp/conveng.pdf.(Accessed:29December2015).

• Walt,S.M.(2000).TwocheersforClinton'sforeignpolicy.ForeignAffairs,79(2),pp.63-79.• WhiteHouse(2015),TheeconomicbenefitsofUStrade.Availableat:

https://www.whitehouse.gov/sites/default/files/docs/cea_trade_report_final_non-embargoed_v2.pdf.(Accessed:29December2015).


9

PhotoCredit:

• History.com,(2016),ClintonsignedNAFTA(theNorthAmericanFreeTradeAgreement),anagreementwithCanadaandMexico.17/11/93.Availableat:www.history.com/topics/us-presidents/bill-clinton/pictures/bill-clinton/signature-of-the-nafta-agreement.(Accessed29December2015)[Description:PhotoofNAFTAbeingsignedbyBillClinton]

Documents

Does Bill Clinton’s negotiation of free trade agreements through his persuasive narrative of ‘neoliberal globalization’ in an attempt to improve living standards for the US population