Quoted Text

Obama acknowledges decline of US dominance
TNN, Nov 8, 2010, 01.14am IST

MUMBAI: Implicitly acknowledging the decline of American dominance, Barack Obama on Sunday said the US was no longer in a position to "meet the rest of the world economically on our terms".

Speaking at a town hall meeting in Mumbai, he said, "I do think that one of the challenges that we are going face in the US, at a time when we are still recovering from the financial crisis is, how do we respond to some of the challenges of globalisation? The fact of the matter is that for most of my lifetime and I'll turn 50 next year - the US was such an enormously dominant economic power, we were such a large market, our industry, our technology, our manufacturing was so significant that we always met the rest of the world economically on our terms. And now because of the incredible rise of India and China and Brazil and other countries, the US remains the largest economy and the largest market, but there is real competition."

"This will keep America on its toes. America is going to have to compete. There is going to be a tug-of-war within the US between those who see globalisation as a threat and those who accept we live in a open integrated world, which has challenges and opportunities."

The US leader disagreed with those who saw globalisation as unmitigated evil. But while acknowledging that the Chindia factor had made the world flatter, he said protectionist impulses in US will get stronger if people don't see trade bringing in gains for them.

"If the American people feel that trade is just a one-way street where everybody is selling to the enormous US market but we can never sell what we make anywhere else, then the people of the US will start thinking that this is a bad deal for us and it could end up leading to a more protectionist instinct in both parties, not just among Democrats but also Republicans. So, that we have to guard against," he said.

He pointed out that America, which once traded without bothering about barriers put up by partners, could not promote trade at its own expense at a time when India and China were rising. "There has to be reciprocity in our trading relationships and if we can have those kind of conversations - fruitful, constructive conversation about how we produce win-win situations, then I think we will be fine."

Obama's remarks at the town hall meeting exposed his tremendous anxiety over the failure of his policies to spur the US economy fast enough and create jobs for Americans facing nearly 10% unemployment rate.

Obama, who just lost control of the House of Representatives to the Republicans, unbashedly said the objective of his visit was to find jobs for his voters. "I want to make sure we are here because this will create jobs in the US," he said, but stressed he was for a kind of relationship which will create jobs in India as well. As he put it: "A win-win proposition."

However, his frank remarks on the need for US to square up to Asian competitors may also suggest that the spectre of action against outsourcing may recede as protectionist impulses may have to be balanced by the need to bag contracts to deliver more jobs in America. Going by media reports in the US of his first day in India, his focus on jobs and investments was well received.

While replying to a question on how Republican gains would affect US policy towards India, he switched to a larger exposition of how he saw new realities shaping geo-politics and the economy. Saying the competition from India and China was potentially a good thing, Obama suggested that the US had to face up to a changing world order. ...........................>>>>.....................>>>>.................http://timesofindia.indiatimes.....icleshow/6885877.cms