It was very good this week to hear US President Barack Obama speak out against protectionism, even going so far as to take a position against his own Democratic Party. This recognition that no one country can solve the world's problems on its own is an important part of the appeal of the new American administration, and Obama's direct words to American legislators will help build his moral authority in the multilateral world that is trying to recover after the disaster of the Bush years.
The $800 billion-plus (Dh2.94 trillion) stimulus Bill from the Obama administration went through the House of Representatives this week, and attracted an amendment that would force the use of American-made iron and steel for public construction projects, and the Senate is considering even stronger language as it gets its turn on the Bill.
But Obama has been clear. He told Fox News it would be a "mistake … when worldwide trade is declining, for us to send a message that we're just looking after ourselves". He also told ABC News that "we need to make sure that any provisions that are in there, are not going to trigger a trade war."
The Chinese example
The economic problems facing the world have to be solved by the nations of the world acting together, since a rescue package in one country should not rebound on any actions being taken in another country.
Different countries' attempts to find answers to the slowdown will certainly collide without careful multilateral leadership. Some countries might need their banks to be refinanced, while others have liquid banks but need export guarantees. Some may need government spending to save jobs, while others just need more market confidence to get restarted.
One example is how the Chinese government has announced one of the world's biggest rescue packages to try to shift its economy from being export-led (good news when the rest of the world is buying) to domestic-led (better news when everyone is cutting costs). But the government plans to create work by building 3 million new homes, which is over half the total number of new homes already being built.
The new cheap government houses could well drive Chinese house prices down dramatically, reducing growth in China with worldwide consequences.
Over this year, the global economic crisis will force countries to come together to solve their desperately urgent economic requirements, in the firm knowledge that if they do not act together their economies will slip into desperate shape. It is important that the new American leadership helps take this new commitment to multilateral thinking and builds on it in other areas. Obama's comment against the protectionism in the House and Senate is a useful start since he cannot be accused of hypocrisy when he meets world leaders at the G20 summit in April.
Such joint thinking is vital to be able to finish the Doha Round of trade talks, which are very near a successful conclusion with only a few more points left. The WTO and its predecessor, the GATT (General Agreement on Tariffs and Trade), have done more to increase prosperity around the world, and free trade has become a vital cornerstone of any global reconstruction.
Such thinking will be the only way to move forward in the Copenhagen talks in December on how to complete the Bali talks on climate change. Nothing is more important than this, since the globe itself might overheat, and the human race will be in deep trouble.
Finally, if national respect for multilateral organisations is mandated, it will be very important for the United Nations to reclaim its proper place at the heart of world diplomacy. America's seven-year foray into unilaterally-led military solutions for the world's problems has failed.
In this brave new world, any initiative to tackle a problem should welcome a buy-in from all sides. The Palestinian crisis cannot be solved without a unity government in Palestine, which needs Hamas to agree.
Iraq will not find a peaceful future without Shiites, Sunnis and Kurds (and hopefully secular Iraqi parties as well) in agreement on the way forward. Even belligerent and frightened Russia cannot be forced into acquiesence by Nato missiles.
If the Obama administration can help shift the world back into seeking joint solutions through the formal world bodies, the answers arrived at are likely to be more long-lasting, and will certainly have more support.
