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Leon T. Hadar Headshot

Foreign Policy Absent From Obama's SOTU Speech

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I suppose that foreign policy has become another victim of the Massachusetts Massacre.The populist insurgency has begun shifting the center of US politics to an isolationist and protectionist direction. It is already having an impact on the global agenda of the Obama administration.

Obama administration officials had hoped that after stabilising the financial system and taking the first steps towards economic recovery, the White House would be able to start investing time and energy on some important foreign policy issues, including the Palestinian-Israeli conflict. But a politically weakened Obama will probably not be able to count on the kind of Congressional and public support that he needs in order to accomplish any ambitious foreign policy project, such as resolving the Middle East conflict.

Obama will be forced to focus much of his attention on domestic economic and social issues. The pressure from the populists is also going to make it close to impossible for the administration and Congress to try to promote any large-scale effort to liberalise global trade or even to get one or two bilateral free trade accords approved on Capitol Hill. If anything, the economically distressed Americans seem to be blaming free trade and America's trade competitors, led by China, for the loss of American manufacturing jobs.

Hence expect both the White House and Congress to embrace a more aggressive approach towards China and, in particular, to press Beijing to revalue its currency. Many in Washington believe that the main reason for the huge US trade deficit with China has been the decision by the Chinese authorities to keep the value of the yuan artificially low.

And the rising US deficit is certainly going to constrain the ability of Washington to expand its military operations in Afghanistan and Iraq and could weaken its bargaining power in the negotiations with Iran over its alleged plan to acquire nuclear military power.