Speakers: US forfeiting leadership in world
America's global leadership was the topic at last week's Cameron Business Forum, and two professors from the University of Oklahoma agreed that the United States is not exercising the leadership it has shown for the past seven decades.
The topic was "America's Place in the World: Are We Forfeiting Global Economic Leadership?", and Mitchell P. Smith, chair of the Department of International and Area Studies at OU, had no hesitation in his answer.
"I believe the answer is yes," he said.
Since World War II, he said, the global economic system has been largely a creation of the United States, which has overseen the institutions like the World Bank and International Monetary Fund and rules of the economic order in the interest of global stability and prosperity.
"From an American perspective, this system has been extremely beneficial for U.S. interests," he said.
The dominance of the U.S dollar, for example, allows the federal government to borrow at low rates, and the strong dollar has attracts investments from around the world.
He said trade deficits are not an indication that the United States is "losing" in the international economy. The United States has a trade deficit with Bolivia because it imports everything from Brazil nuts to metals that are used to make products. Even the huge trade deficit with China is misleading, he said, because the Chinese are credited with the full value of exports even though they may have imported materials to make products.
If the United States' didn't have the world's pre-eminent reserve currency, he said, it might be able to have a trade surplus. But that would lead to higher interest rates and and more expensive imports. "We'd be worse off, not better off," he said.
For years, he said, Congress refused to make changes in the IMF that would give greater representation to developing nations at very little cost to the United States, Smith said. The United States withdrew from the proposed Trans -Pacific Partnership after both Donald Trump and Hillary Clinton panned it in the last presidential election and the European Union and Japan have a new trade agreement.
And China has formed an alternative to the World Bank, the Asian Infrastructure Development Bank, he said, and is forging trading and infrastructure improvements around the world.
"If the United States isn't going to lead, someone else will have to fill that gap," Smith said.