During his 2012 election campaign, President Barack Obama will focus on his foreign policy victories, which include the killing of Osama bin Laden, the successful execution of the war in Libya, and the announcement of the end of the Iraq War. But America’s international victories far outshine America’s domestic economic wins.
U.S. elections have historically hinged on economic issues, and this one will be no different. American unemployment is still at a staggeringly high 8.5% and the U.S. trade deficit has widened to an unacceptable 10.4%. U.S. foreign policy should not be the priority; rather, economic integration like trade and domestic investment should be the focus for the president if he hopes to win reelection. Obama must consider this as he revs up his 2012 strategy.
Foreign policy, though, can easily be tied in. High tariffs, strong regulations, and even the U.S.’s international agreements affect the economy. Obama could use foreign policy, especially U.S. foreign trade, as a tool to help him win reelection.
A recent example is Iran’s future investment in Latin America following President Mahmoud Ahmadinejad’s five-day tour in the region. This may be a direct response in circumventing U.S.-imposed sanctions on Iran’s central bank. At a time when tensions with Iran are high and any sort of armed conflict with the country would hurt the U.S. economy, America could instead strengthen relations with Iran through better trade policy. The U.S. should consider policies that would improve foreign investment here, while proving to Iran that opportunity costs weigh more in the U.S. than Latin America.
Secondly, the U.S.’ sanction on North Korea could be renegotiated, as North Korea transitions into new leadership. America could use this as an opportunity to create a stronger economic relationship with the country through diplomacy; helping to gain American jobs in the process.
Thirdly, the recent rise in the Mexican peso may have resulted from the improvement in the U.S. economy. The U.S. is on the rise again, Mexico is reaping benefits through remittance, and this serves as the basis for the argument that the U.S. is missing out on the benefits. In 2011, money going into Mexico is estimated to have been around $23 billion. Legislation efforts should be imposed to keep more money circulating in America. Foreign policy needs to be more aggressive on ensuring the remittance multiplier is benefiting U.S. economy.
U.S. foreign policy needs to better define its economic goals. With U.S. unemployment still standing at 8.5%, it’s safe to say that one solution would be to cater to the market that the $47 billion trade gap suggests. Despite poor relations with Iran and North Korea, America can find common ground to improve our relations with these countries and help our economy in the process.
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