Joe Biden campaigned for a platform to restore America's prestige in the world by restoring ties with our allies, through improvements to the Affordable Care Act and aggressive efforts to advance the interests of women and minorities and accelerate greenhouse gas emissions in the US created more justice domestically, gases.
The country cannot run massive new programs without major deficits or taxes that a Republican Senate will not allow. He could pay his campaign debts with surgical improvements to the ACA, funded through earmarked levies, and persuade Republican cooperation by offering pie reforms and focusing on the GOP's ideas for improving competition. And with more aggressive enforcement by the Department of Civil Rights of the Department of Justice and the regulatory powers of the Departments of Labor and Education.
I am counting on China
Internationally, Biden must reckon with a China that will soon have a bigger economy, an impressive navy, flex its muscles in the South China Sea and Taiwan's straights, and suppress democracy in Hong Kong. At best, we are in a stalemate, and at worst, we could be caught up in a ruinous confrontation that will establish China as the pre-eminent power in the Pacific.
France and Germany together are just as populous and about four times richer than Russia. Of course, Europeans can afford to provide for their own defense. Europeans are told, if more politely, to do a lot more for themselves because America's resources are needed in the Pacific.
China's economy is complex at the same time – a state-orchestrated market system, similar to that in Germany and Japan in the 1930s – and simply a free-rider in the international trading system created primarily by the World Trade Organization.
The WTO allowed China to achieve export-oriented growth and create an economic and military juggernaut that now seeks to reshape the entire global system to serve the values and vision of the Chinese Communist Party.
The WTO system should link democratic market economies and support developing countries by establishing rules that encourage trade on the basis of comparative advantage. The agreements look very much like they were written by economists to create work for lawyers.
In addition to lowering tariffs and quotas – quite effective, but for agriculture and textiles – the WTO agreements contain general rules for product standards, customs administration, subsidies, intellectual property regulations and other domestic policy tools that clever bureaucrats can manipulate for mercantilist purposes. It is left to the dispute settlement bodies and an appeal body to work out their situational significance.
The rules are general as technology and the ways that governments can undermine open trade continue to evolve. A de facto general legal system has emerged which, when functioning well, offers predictable limits to the protectionist pressures that particular interests may exert on domestic politicians.
China's economic system is too inconsistent with Western market economies for the WTO to take into account. It has drawn circles around WTO dispute settlement and does almost anything it wants. It targets western industries by closing its markets, forcing foreign investors to transfer technology to gain market access, and exporting. For example, it has achieved a dominant position in solar modules and 5G technology.
The Obama and Trump administrations responded by refusing to allow judges to sit on the Appellate Body and this crippled dispute settlement. The Europeans, Chinese and others have countered this by creating a contingent arbitration mechanism outside of the WTO to review the results of the dispute settlement body.
What Europe wants
China shouldn't be in the WTO, but the Europeans want to deal with Beijing there. China has grown too big for the United States to confront without allies, and Europeans want concrete gestures that show that the Trump-era abuse of America First is over.
President Donald Trump's steel and aluminum tariffs are on the table, but Europeans have a number of problems.
Ambassador Robert Lighthizer suggested replacing the Appellate Body with bilateral arbitration that would not set precedents – but without precedents, the WTO system is rudderless and subject to the whims of the greatest player – soon to be China.
The Biden government could approve the appointment of new appellate judges, but requires an American exemption for dispute settlement with China.
This would allow the United States to take remedial action it deemed necessary to counter China's aggressive protectionism and to force Europeans and other advanced developed countries to look into it.
China needs trade to thrive. The exclusion of China from the WTO dispute settlement would force it to take multilateral negotiations seriously or to face increasing isolation.
Peter Morici is an economist and professor emeritus at the University of Maryland and a national columnist.