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Next Steps for International Economic Policy

If the Obama administration can give international economic issues due attention and find common ground on these issues with conservatives in Congress, such bipartisanship would be good for domestic economic growth.

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Pundits and politicians across the ideological spectrum predict gridlock in Washington on most domestic issues in the wake of the U.S. midterm elections. But there is a glimmer of hope that the Obama administration will be able to give international economic issues due attention now and perhaps even find common ground on these issues with newly empowered conservatives in Congress. If it happens, such bipartisanship would be good for domestic economic growth.

The recent global financial crisis, America’s still declining share of worldwide manufacturing output, and the steady but slow pace of economic recovery in the United States now challenge our preeminence on the global economic stage. To restore our lost economic luster our economic policy must become more international in its focus. The United States became a major manufacturing exporter after World War I by supporting Britain and France during that bloody conflict. Then, in the aftermath of World War II, the United States led the charge to coordinate global economic recovery after widespread devastation, which fueled our own economy while adding to its heft on the global stage.

Now, we must once again think beyond our own borders. To do this the Obama administration and Congress must focus on three priorities.

First, policymakers and the public must recognize that in a globalized world the dichotomy between the domestic and international economies is not straightforward. The United States must craft a competitiveness strategy that takes other countries into account. Second, the United States must address its complicated and co-dependent relationship with China. And third, America must bolster exports to create more jobs here at home while simultaneously cultivating new markets and consumers for our products and services. Let’s examine each of these priorities in turn.

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