Will America choose bipartisanship or gridlock?

Thursday, November 15, 2018

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The midterm elections in the United States have given Americans a clear choice — greater bipartisanship in order to get tangible achievements or gridlock which means nothing of substance is achieved.

In conformity with the long tradition in American politics, the Opposition party — Democrats — have won control of the House, while the Republicans retained their hold on the Senate. Up for grabs were all 435 seats in the House, 35 of the 100 seats in the Senate, and 39 state governorships.

Whatever approach the American politicians choose — that is, bipartisanship or gridlock — the outcomes have implications for US economic policy and in turn, the performance of the global economy. The repercussions will most immediately be evident in international trade policy and taxation.

Prospects for bi-partisanship are grim given the animosity between the Republicans and the Democrats during the last two years. More likely is political gridlock founded on policy differences such as Obamacare, the environment and immigration.

There are several international trade issues which could be impacted, but up front and centre is the US Trade Agreement (USMCTA) with Canada and Mexico which has to be approved by Congress.

Although Trade Promotion Authority is valid until 2021, requiring a “yes” or “no” vote with no amendments, the Democrats are very likely to want changes, and that could mean a no vote. A no vote means the North American Free Trade Agreement (NAFTA) remains unchanged.

The Democrats will want a less-aggressive approach to the European Union (EU) and a more multilateral approach to the World Trade Organization (WTO).

The Democrats do not share the faith of Republicans in tax cuts, contending that these tax cuts benefit the higher income groups. The tax cuts of the Donald Trump Administration may prove politically difficult to roll back. Ironically, unemployment is very low simultaneously with an increasingly uneven distribution of income and wealth.

On the bipartisanship front, the Democrats are likely to find common ground with the Republicans on the need to reduce the trade deficit, support failing industries, and resist the rise of China.

While bipartisanship is usually the more difficult road to take for American political parties, they should bear in mind that cooperation is preferable to conflict. The wastefulness of conflict is fresh in mind as the world remembers and mourns once more the hundreds of young men and women, including civilians, slaughtered in their prime during World War I which ended 100 years ago last Sunday. Thousands of Jamaicans also died in that war.

Hopefully cooperation will develop based on an understanding that a country benefits more when national interests take precedence over party political interests. The world needs the United States to play a constructive role in the global economy, but this cannot happen in a politically destructive Congress.

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