The United States building a 21rst Century alliance system

[a_majoor]

For those of us following what is really happening in WW IV and also factoring in subsidiary activities like the Tsunami response, who gets to visit George W in Crawford etc., it seems apparent the United States is forging a new system of alliances to supplement and eventually replace NATO, the UN and other organizations which no longer serve American interests at home and abroad. (Well, would you join or participate in an organization which worked AGAINST your interests?)

America has strong formal and informal links with the UK and Australia (the Anglosphere nations), "New Europe", Israel and Japan. America has scored a diplomatic triumph recently with India, so they now have a large, dynamic democratic capitalist nation which can assist in securing the southern portion of Asia through diplomatic, economic and (perhaps) military power added to that of the United States.

http://www.nationalreview.com/script/printpage.p?ref=/lowry/lowry200603030827.asp

A Diplomatic Triumph
Dubya in India.

President Bush has visited South Asia, and one would expect multilateralist hosannas to be showered on his head. In India, he worked to cement a burgeoning relationship with a dynamic country central to a region where — with China on the rise — geopolitics in the 21st century will be very "interesting," in the unsettling sense of the Chinese curse, "May you live in interesting times."

Next on the itinerary was Pakistan, a longtime enemy of India and another newly minted U.S. ally. That the U.S. is friends with both India and Pakistan has a lot to do with circumstances (the end of the Cold War and the advent of the War on Terror), but it also speaks to a certain level of Bush-administration diplomatic finesse. The administration won't get any credit for it since it runs counter to the media's favored "unilateralist behemoth alienates the world" storyline.

India especially falls victim to the new liberal standard in international relations, which is that countries that genuinely like us are discounted as allies. It's the diplomatic corollary of Groucho Marx's refusal to belong to any club that would have him. India falls into the same category as Japan, Britain, Australia, the democratic countries of Eastern Europe and a few Gulf emirates. These nations lack the simmering resentment toward the U.S. of a France, so close and fruitful relationships with them don't earn Bush any multilateralist points.

In fact, Democrats are perfectly content to alienate these natural friends. The United Arab Emirates is getting a swift kick to the teeth in the uproar over the port deal, and no Democratic members of Congress complained when the press revealed the existence of secret U.S. prisons in Poland and Romania, thus making it less likely that those countries would be helpful to the U.S. in the future.

India has always been a U.S. ally waiting to happen, but its tilt toward the Soviet Union in the Cold War kept the world's two largest democracies apart. Now, the natural affinities are coming to the fore. India and the U.S. are both commercial democracies with large middle classes (India's is more than 200 million strong) and heavily invested in international trade.

Former U.S. Ambassador to India Robert Blackwill identifies five vital U.S. national interests — defeating Islamic radicalism, checking proliferation of weapons of mass destruction, pursuing energy security, funneling the rise of Chinese power in a responsible direction and keeping the international economy healthy. India, with exceptions here and there, naturally lines up with us on all of them.

The Bush administration had a notion of this very early on. The American outreach began in the area of defense, with twice-yearly meetings between military officials of the two countries. In a crucial departure, the administration lifted sanctions that had been imposed on India after its nuclear testing in 1998. Ending the sanctions was a supreme act of realism, since they were never going to get India to forswear its nuclear-weapons program and were only an irritant in our relationship.

Now, the administration has cut a deal — finalized on Bush's trip, and pending congressional approval — to aid India's civil nuclear program in return for India opening up its civilian facilities to international inspections. This has prompted charges of hypocrisy: How can we bless India's nuclear breakout while trying to stifle North Korea's and Iran's? But there should be privileges to being a democratic, responsible government presiding over an open society. Nonproliferation advocates worry about the signal sent to the rest of the world by the deal — that message should be, "Create a consistent record of decent governance, and we won't be as alarmed if you pursue nukes."

India will probably never be as close to the U.S. as Britain or Israel. It has a proud tradition of international independence that it's not going to entirely relinquish. But it will be an important friend, partly due to the diplomatic work of the Bush administration. Multilateralists, take note.

— Rich Lowry is author of Legacy: Paying the Price for the Clinton Years.

The question that faces Canada in the coming years is: will we be included in this new Grand Alliance of democratic nations, or be excluded through choice or inaction?

 

[HDE]

It strikes me that Canada has used the "best friends" concept towards the U.S. far past the expiry date.  Canada is more of a benign non-issue.  The only time the U.S. admin gives us much thought is when our leadership indulge in some gratuitous U.S. bashing.  There's a real need to foster closer ties to the U.S. as it looks more toward other, arguably, more important alliances such as India in the future.  In short we  need to make it a point of making sure we're seen as being onside

 

[54/102 CEF]

Some quick thoughts

The National Review Article has a basic inaccuracy – the US makes arrangements but never makes an Alliance forever. Check the US political dictionary – Forever isn’t a word.

Some comments on their vital interests from the article

Defeating Islamic radicalism – not soon

Checking proliferation of weapons of mass destruction – to non state actors

Pursuing energy security – its everyone’s pursuit

Funnelling the rise of Chinese power in a responsible direction and keeping the international economy healthy – they’ve been at this since Nixon’s trip in 72 (as has Canada and Trudeau`s trip)

My take on the trip – Let India Get Rich quick – it has a broad based economy vs. one horse Sheikdoms with Oil – they’ll demand the suppliers perform in line with normalised behaviour vs. look sideways at Anti-west shenanigans.

US Strategy in 25 words or less - if you think you’re in an Alliance with them think again. Their history since 1783 is that they will consider their needs first and yours if you put the shoulder to the wheel.

The US has been forecasting trouble in the Mid East since the early 1980s. Conflict has moved out of Europe – to the Balkans – to Iraq Afghan and it’s forecasted to evolve into Sub Sahara Africa. Check the 305 Meg Briefing from Thomas Barnett as well as the Changed Way of Warfare link I found on the CIA Website. One of the articles is the word for word script of the briefing by Barnett. Can’t find it? Just PM me.

I recommend reading James Mann’s book "Rise of The Vulcan’s"

It suggests US has written off all Alliances we commonly think of e.g.: NATO and the UN since the late 80s. see http://www.amazon.com/gp/product/0670032999/102-5365710-9661739?v=glance&n=283155

Reviews here
http://www.amazon.com/gp/product/customer-reviews/0670032999/ref=cm_cr_dp_pt/102-5365710-9661739?%5Fencoding=UTF8&n=283155&s=books

Another Book to read is Walter McDougall’s "Promised Land, Crusader State"

http://www.amazon.com/gp/product/0395901324/102-5365710-9661739?v=glance&n=283155

Review http://www.brothersjudd.com/index.cfm/fuseaction/reviews.detail/book_id/388

Crusader State says best to stay home - reviews their various foreign adventures since 1898. Published in 1997.

Rise of the Vulcan’s basic premise is that there is no future in any Alliance which says anyone in the world is an equal partner. Alliances have never been permanent – but they allow sluggish thinking to take hold as gospel. Cheney, Rumsfeld, Condi Rice, Colin Powel, and Richard Armitage are shown in depth, where they come from and why they think the way they do. All said there was no need to accept any less position than number one after Jimmy Carter and Henry Kissinger tried to get along with the world after Vietnam. They think there are no limits to the future as long as US Military Power in unchallenged. As you may know from your studies of Mao Tse Tung he has a simple rule akin to the Mafia. Power comes out of the mouth of a gun.

Canada can be onside very easily - do our share in line with our GDP. Deployments to every hell hole in the world are maybe not in our best interest but they are in our overall interest. It keeps the regulars sharp and us involved.  The quicker we get to the breaking pint of the regulars the quicker they’ll get more capability. We ain`t there yet.

The days are gone when our focus was Euro-Nato. It’s now global – but we struggle with a North American myopia.

At the same time - we can - by showing our willingness to demand neighbourly performance from countries around the world - that they police their own neighbourhoods - that it’s in everyone’s best interest. The less they do – the more we end up doing.

The worst thing we can do is say oh well, we are so far away. And do nothing. Why not recruit 5 more battalions – of short service soldiers and tell the US that the deal is you provide 5 of the 12 C17s for the next 20 years. This will Jack up the fighting power of the forces immensely. The 5 short service Bns would be the main deployment force – seeded with the full timers. In and out in 28 months for the short service soldiers. If they are any good after that let them go to a full time slot.

This leads to a changed Armed Forces. The non state actors out there don't have Fighter Jets and Blue Water Navies. They have sandal shod soldiers and AK74s. In two sentences that’s the rationalisation to get C-17s and the JSS to be able to rapidly deploy in support of the peace keeping and disaster stabilisation roles of the present. Yes – the present.

My bias - DND and the government have been soft selling the dangerous world beyond Suez far too long and the Canadian Public has not yet woken up. Internal to DND I would write off our strategists – if it was a real need (ie a political need) we would have heard it long before the end of the Lieberals. All the DND policy papers with soldiers tramping through Afghanistan don't make a bit of difference until we see the PM saying I have ordered the following to happen. In the same manner as bottom up soutions don't work in the old Armed Forces - where everyone tries to shave more of the pie for their parochial service interests (Subs anyone?) - the orders must come from the top with a mandate. We have re-organised - now we need the kit.

Canadians have been too happy to to sit back and sell autoparts south. When those auto plants go to Mexico or China, which they will - NDHQ moves to Calgary.

Frigates? I didn't say anything about them.

Cf18s? Coming soon to a Legion near you.

Can’t take your call – Rick is on the line! 

PS: Some strategic notes for you from Thomas Barnett`s Website and DNI
http://www.thomaspmbarnett.com/weblog/

Something to think about while the minions decide if there’s enough TD (TDY for US readers) money

From Chet Richards' PPT brief on Grand Strategy at

http://www.d-n-i.net/richards/4GW_and_grand_strategy.pps

 

[54/102 CEF]

Why pay for it? I don't think I said for free - every one hates Freeloaders.

I did say a deal though. What that might entail I don't know. Aim is get more troops and get them overseas faster. Rent the 5 planes? Buy 7 is my prediction.

Sherman - as a fellow USA Canadian you are forgiven for forgetting Cdns never took Lend Lease and aren`t about to start. As for Spine - flip through your Red White and Blue History - get a strategy - then get the tools to carry it out. We've just gone through the 1986 GoldWater Nicholls re-org. We do not yet have the fully developed strategic thinking in place - above the DND level.

But we do have a big landmass to cover which we cannot at present - hence the long reach required.
When Vancouver takes a swim - we'll need the long reach. As well - where ever we go is a long trip. We should have enough C17s to get a fair sized contingent anywhere quickly and avoid sea moves to the theatre.

They can come back by sea.

PS For all: I hear the boys are eating at Cheney's in Kandahar.

Anyone miss Camp Julien?

I bet you do.

 

[Recce41]

Well
I think most Canadians don't trust the US since the late 50s. ie Arrow, BOBCAT,etc. now with softwood. I think we should have done what was to be in the 60s. Get out of NATO, and go independant. With no one to tell us what to do, or who to sell our stuff too. I had read a story about this in a magazine, yrs ago. I outlined a large force, economic resources, and a few other things that would help us.
My father said we just went from one big brother (Britain)to another(US) after Korea.  And always told what to do.

 

[54/102 CEF]

Sherwood - my mistake on your name.

 

[54/102 CEF]

Well
I think most Canadians don't trust the US since the late 50s. ie Arrow, BOBCAT,etc. now with softwood. I think we should have done what was to be in the 60s. Get out of NATO, and go independant. With no one to tell us what to do, or who to sell our stuff too. I had read a story about this in a magazine, yrs ago. I outlined a large force, economic resources, and a few other things that would help us.
My father said we just went from one big brother (Britain)to another(US) after Korea.  And always told what to do.

But what do you think?

Buzz Hargrove will be the New Hon Col of NDHQ - a Regular Force Unit - as he`s doing everything he can to move it to Calgary as I note above. .

 

[a_majoor]

Moving back on topic; since India is an emerging power, with a free market economy and a liberal democratic system of government, it is a natural fit as a military, political and economic partner for Canada (certainly more so than another Asian nation with a vast population I could name). Most of the reasons the United States is moving to establish closer relations with India (as well as the Anglosphere, New Europe and Japan) apply to us in full measure as well.

We need to look at the alliances and groups we belong to, assess if they promote our interests, if we have any impact in them and if they are an efficient use of our resources. If they are lacking, then we need to cut our losses and say "goodby/a dieu".

 

[Kirkhill]

We need to look at the alliances and groups we belong to, assess if they promote our interests, if we have any impact in them and if they are an efficient use of our resources. If they are lacking, then we need to cut our losses and say "goodby/a dieu".

Agree entirely.  I would add however that Canada is in a unique position with respect to resources.  In addition to minimal military forces, and a strong cash position,  a combination that ultimately allowed Britain to achieve Pax Britannica, it has a massive base of natural resources which I would argue is under-exploited.  If Canada ever fully exploited its available natural resource base, similar to the manner in which Alberta exploits its resources then Canada could become as rich as Alberta.  (Unfortunately that would make a bunch of others feel about Canada the way the a lot of Canadians feel about Alberta and then, rather than flying under the international radar we might actually have to consider ourselves a target and act accordingly).

In the meantime, Canada's resource base is such that it can afford not to be efficient in their use and use them to experiment with new policies and alliances.  Experimentation is inefficient but it opens the door to progress.

Canada needs to try more and worry less.  It can afford to make mistakes.

 

[a_majoor]

Kirkhill, although you are right in one sense (we could be an immensely wealthy nation if we exploited our natural resources to the fullest), the key resource in this (and any) age is manpower. Do we have enough trained hands to do all the work, trained thinkers to do the inventing, producing, managing, negotiating and creative work, and of course, enough fit and willing men and women to stand on guard and protect the rest?

Canada has a very small population base (in relative and absolute terms) and is suffering from a very low productivity due to the unfortunate policies of our late and unlamented Liberal government. The new government can make incremental changes to increase productivity in this term in office, but the manpower issue will haunt us for many years to come. Full blown immigration is no help if the new arrivals do not assimilate and follow Canadian values, and of course the policies of allowing unskilled and dependent immigrants simply makes them a net drain on our other resources so long as they are allowed to remain dependent.

India gives us some unique opportunities, since their middle class is about 2/3 the entire population of the United States. This is a vast market, and certainly a willing consumer of our resources, and we can literally "outsource" India for some of our foreign policy goals since their interests and ours are aligned (in a very broad sense). You can picture, for example, a Canadian battlegroup doing "Roto 0" in trouble spots, and having a large Indian Brigade following up to secure and stabilize the AOR. We supply the high tech forces to provide the asymmetrical western advantages, and they provide large numbers of professional troops to hold the area. Similar ideas can be floated in the fields of diplomacy, economics and so on.

 

[tomahawk6]

Made me chuckle over that post a_majoor. Like it or not Canada and the US are joined at the hip economically and militarily. Any other relationship for Canada is pure fantasy. Would India protect Canada from a Russian invasion ? I think not. The US would because it is in our national interest. India is a regional power and thats all she will ever be. As a result her interests are primarily tied to defending itself from its neighbors.

Alliances are created for a purpose and when that purpose is no longer relevant it is discarded. NATO is the last vestige of the cold war. There is no longer the threat of Russian invasion and as a result the alliance should be dissolved. As DS showed we can create temporary alliances to acheive specific aims. By dissolving NATO the US can free up manpower sitting in various NATO headquarters for better use.

Right now the war on terror is front and center. One day islamic radicals will no longer be the threat and may be replaced by some other threat or perhaps the world will see a long stretch of peace.

Right now the US requires allies with large ground force's that can compliment the US military should war fighting be required. If the US cannot accomplish this then the US Army and Marines will have to be maintained at current levels.

 

[54/102 CEF]

You can picture, for example, a Canadian battlegroup doing "Roto 0" in trouble spots, and having a large Indian Brigade following up to secure and stabilize the AOR. We supply the high tech forces to provide the asymmetrical western advantages, and they provide large numbers of professional troops to hold the area. Similar ideas can be floated in the fields of diplomacy, economics and so on.

Why yes I can imagine! A great observation. But if where you got this idea is where I think you did - remember we have to be willing to seed our support forces not just our combat elements with CAPABILITY.

Still you are leading the tinkers on the board in a good direction!

 

[54/102 CEF]

The National Security Strategy of the United States of America

http://www.whitehouse.gov/nsc/nss.html

All should read as it helps you understand the concepts behind the headlines

 

[a_majoor]

Tomahawk, while I recognize that the United States is our primary partner in all arenas, there is no reason that Canada cannot and should not (as a sovereign nation) work to secure our own national interests. Since we are a small nation, it only makes sense we should join and work with like minded nations wherever and whenever there is a convergence of interests.

This works to the advantage of the United States as the senior partner as well. Since Canada's interests are closely aligned with those of the United States and her allies, then advancing our interests works to advance the interests of all. India is a good fit for Canada, I think, since many of her interests, such as creating a stable political and economic environment in the region, developing her internal economy and opening up the region for Indian economic growth mesh nicely with ours (and yours); if Canada and India are doing the heavy lifting in south Asia, then the United States is free to devote more attention and resources to other areas (depending on which theory you subscribe to, this could be Huntington's "Civilizational fault lines" or Barnett's "Non Integrating Gap" or some other construct).

54/102, thanks for the vote of confidence. I will certainly continue to "tinker" with ideas onn the board ( ), in the hope that some of them may catch fire and our leaders will indeed provide resources to develop the capabilities to make these visions a reality. Of course, we could also end up following up large, professional Indian Brigades when they complete the Roto 0 mission so we can secure and stabilize the AOR....

 

[tomahawk6]

What would that national interest entail majoor ?

 

[a_majoor]

What would that national interest entail majoor ?

From DFAIT:

http://www.dfait-maeci.gc.ca/foreign_policy/menu-en.asp

At the Department of Foreign Affairs and International Trade, we develop and implement strategies to promote the Government of Canada's agenda abroad: global peace and security, prosperity and employment for Canadians. We also work to better worldwide understanding of Canada, our values, our culture and our capabilities.

In my opinion, these ends can be best served by teaming up with other free market and liberal democratic nations throughout the world (the Anglosphere nations, New Europe, Israel, India, Taiwan, Japan, and South Korea are the biggest names which come to mind right now) which seems to be the model the United States is following anyway.

 

[tomahawk6]

Seem's pretty general. World peace. Security. Business opportunities for Canadian companies. What does India produce that Canadians want ? More call centers ? India could use Canadian oil, but ME oil is closer and shipping cost is lower. The PRC would love Canadian oil and would garrison troops in Canada to protect their energy source.

The bottom line is that Canada lacks the military power to be an attractive alternative to the US as a military partner for India or anyone else. Second, a nation needs the political will to use military power to acheive national goals. This I think is the major weakness of your argument. The next Liberal or NDP PM would use Canada's military for very limited goals and certainly would not fund the CF to be able to pursue an independent military policy.

 

[a_majoor]

Tomahawk, I see I was a bit unclear.

1. The initial agument is the United States is creating new systems of alliances and partnerships to reflect the changing environment. Canada certainly could and "should" be part of that system, since we share so many common values (including "World peace. Security. Business opportunities"). Your point about will was understood, our political class hasn't been playing the US card very well so we risk being shut out of many of the attractive opportunities the new American order might have to offer.

2. As a sovereign nation in our own right, we need to take steps to cultivate relationships with other nations which share our values, regardless of the actions of the United States. This will take the form of finding different means to achieve similar goals. For example, one of the great fears during the Free Trade debates was the United States would create a series of unique bilateral free trade agreements, acting as the "hub" of the system, while our solution was a multilateral NAFTA, which prevented us from being bumped out of other markets. (How well this worked is open for debate [in another thread]). It is true that we are not a military power, but we are an economic one, and also one of the great gateways to the American market, which makes us a potentially attractive partner to the other nations of the world. The big question is what does Canada produce that everyone else wants?

3. Although there is no short term prospect of an Indo-Canadian multi national brigade racing out to the hotspots of the world, it was included as a thought exercise as to what other benefits we might accrue through joining forces with other nations having similar values. Even in a situation such as posted earlier, this should be considered in the sense that we would (finally) be pulling our weight as a member of the larger multi-lateral "Western" (or American, if you prefer) system, not as an alternative or in opposition to it.

Certainly Afghanistan could become one place this gets put into action. Canada is destined to commit troops and resources for ten or twenty years to rebuild the nation to protect our national interests. India has a market capitalist economy and democratic traditions they wish to safeguard, and are much closer to Afghanistan, so at some point, I believe they will be coming into Afghanistan to protect their own interests. At that point, since we will be on the ground doing similar things for similar reasons, a certain level of formal and informal collaberation will begin. This will be a lot easier to achieve if the two nations are already bound by bilateral or multilateral political and economic agreements.

 

[Old Guy]

I think Tomahawk6 has identified the major issue both for Canada and the US.  The US possesses the necessary military power and currently has an administration willing to use that power to achieve national goals.  But there's no guarantee that future administrations will continue in that effort.  Unlike the situation that existed throughout much of the Cold War, the opposition party has degenerated into mindless fury and obstructionism instead of functioning as a 'loyal opposition'.  This situation is bad for both major parties and for the country in general.

Canada, at present, has a professional military too easily dismissed by other countries because of its small size and inability to project intself in meaningful numbers to trouble spots around the globe.  The current administration seems willing to move toward increasing military capabilities, but will that effort survive the next election?  Or the next?

So both countries are faced with the possibility that efforts will go forward in an atmosphere rife with short-term political opportunism and unreal expectations.  In fact, unless exterior forces act to change our current direction, I fear we're in for a period of indecisive muddling.

For the US, a continued trickle of casualties from A-stan and Iraq will gradually drive the electorate to seek alternatives, especially if the administration doesn't do a better job of explaining things.  Another obvious situation that might push voters away from another Republican president would be an intervention in Iran without unmistakeable provocation by the mullahs. 

What if Canada begins to experience a low-level, but seemingly endless, stream of casualties?  Are Canadians as a whole prepared to accept that? 

A future of mundane activity against the Islamofascists is possible.  Such a future would make it difficult for either of our countries to persist effectively in the war on terror.  America's goals in seeking closer ties to India, New Europe and others could easily come undone in an atmosphere of political backbiting and fantasy.  In the face of casualties and lacking a clear sense of danger, Canada may not seize the opportunity to rebuild its military until things get a lot worse.

If America backs away from its responsibilites and if Canada continues to muddle along, what sort of future will we bequeath to our children?  Radical Islam would flood over the Middle East, Africa and probably Europe.  Not all at once -- not in a manner calculated to alarm those among us who shrink from conflict and who have no understanding of the fundamental humanity inherent in modern Western civilization -- but inexorably, a black wave would engulf much of humankind.  What cost in blood and treasure to eliminate that horror twenty years from now?

But, change seems to proceed in a couple major ways.  Either all at once, such as when Pearl Harbor was attacked, or in virtually invisible ways, recognizable only with hindsight.  Seldom does a perceived pattern continue unaltered for any length of time -- at least not recently.  I'm pretty sure we aren't living in one of those stable periods.

What will happen to jolt us into new paths?  If the terror masters were smart and if they really had the level of control over all terror groups that we sometimes believe, they'd simply run a campaign of attrition against us -- and wait.  But I don't see that happening.

Again, what might shove Canada into a more realistic view of the Islamofascist threat?  What might push the average American into supporting the forced ouster of the Iranian and Syrian governments?  What could cause both peoples to understand how poisonous radical Islam really is?

I don't think the present situation will continue.  Bush will attempt to strengthen and broaden his 21st century alliances and he will keep pressure on the terrorists.  Canada has begun the process of stepping back into reality.  I have a general understanding, I think, of how those processes might fail -- but how might they succeed? 

Jim

 

[a_majoor]

This article exerpt outlines the issue in economic terms which, when you think about it, is what really counts in the end. After all, the Roman Empire essentially bankrupted itself through destructive taxation and wealth redistribution schemes, the British Empire became economically exhausted by fighting two global wars back to back, and many other past Empires and civilizations reached some sort of economic crisis (usually due to brittle and centralized organizations) which either precipitated an exterior crisis (either they attempt to go to war in an effort to distract the population from the economic crisis, or predatory outsiders come to steal whatever is of value) or prevented them from responding to the crisis in an effective manner. The role of the military should be to protect the citizens and their wealth from predatory outsiders.

http://www.nationalreview.com/nrof_comment/darda200603080849.asp

Dynamism vs. Demagoguery
Politicians represent the greatest threat to this ongoing economic expansion.

By Michael T. Darda

The first batch of February economic data has sent the weak-growth-Fed-is-close-to-done crowd running for the hills. The Institute for Supply Management’s Non-Manufacturing Index (ISM Services) jumped to 60.1 in February from 56.8 in January. (Consensus pegged February’s reading at 58.) This reading is consistent with 3.8 percent real GDP growth and is about in line with my own full-year 2006 forecast.

It is worth noting that the global bond market sell-off has occurred against the backdrop of record tightness in emerging-market credit spreads, which hit new all-time lows last week. And despite $60-plus a barrel crude oil prices, the Dow Jones Transportation Index reached another new all-time high last week. I think this tells us more about the health of the global financial system and the grassroots economy than the zero-sum accounting metrics that dominate the GDP statistics.

While the near-term growth outlook remains quite favorable, it makes sense to worry about an undercurrent of trade protectionism and xenophobia that seems to have infected both U.S. political parties like an anti-growth strain of the avian flu. Unveiled threats of currency manipulation — and proposals to impose punitive 27.5 percent tariffs if China doesn’t acquiesce to U.S. pressure to significantly raise the value of its currency — have continued.

Do politicians in Washington think it is worth short-term political points to seriously jeopardize our $200-plus billion trading and investment relationship with China? The fact that the key to a peaceful resolution to the Iran nuclear predicament ultimately may lie in our relationship with China — and Russia — means that submitting to the seduction of trade protectionism and zero-sum mercantilist economics couldn’t come at a worse time.

And the flap over Dubai Ports World’s takeover of a half dozen U.S. port facilities — when the entity will not be in charge of security — only adds xenophobic insult to trade-protectionist injury. Slapping one of our few Arab allies in the face at a time of war could have catastrophic consequences for growth and peace.

Low tax rates, stable monetary policies, and strategic alliances based on wealth creation, private property, dynamism, and trade represent the path to global prosperity. Strategic pro-growth partnerships may also help extinguish crises before they metastasize into war. Conversely, a competition between misguided members of both political parities to demagogue and xenophobe their way to higher poll numbers ultimately will produce policy outcomes that fail both growth and peace.

— Michael T. Darda is the chief economist and director of research for MKM Partners, an equity execution and research boutique located in Greenwich, Conn. He welcomes your comments here.
 
http://www.nationalreview.com/nrof_comment/darda200603080849.asp

India is not mentioned (their trade figures with the United States are not anywhere near the $200 billion mark), but many of the same observations apply to India, New Europe and other American partners as well.