Clyde Prestowitz

Clyde Prestowitz is the author of Rogue Nation: American Unilateralism and the Failure of Good Intentions. He is also president of the Economic Strategy Institute, a nonprofit research organization in Washington, D.C.

Recent Articles

The Pacific Pivot

America needs to try something new when it comes to international trade.

(Flickr/James O'Sullivan)
On November 12, 2011, I listened as President Barack Obama told business leaders attending the Summit of the Asia-Pacific Economic Cooperation forum in Honolulu that “we’ve turned our attention back to the Asia Pacific region” and announced two vehicles for that return. These were the Trans-Pacific Partnership (TPP) Free Trade Agreement, now under negotiation and to be concluded by the end of this year, and the Pivot to Asia, meaning a redeployment of American priorities and military forces away from Europe and the Middle East to Asia. The president said that Asia will be central to America’s future prosperity and that it was imperative to correct unsustainable trade and financial imbalances while continuing to expand economic ties. This would require that all countries play by the same rules appropriate to the current global economy. The TPP, he said, would be a template for a “21st-century agreement” that would eventually be open to all the countries of the region. He emphasized...

Our CEOs, Their Foreign Agents

From our July/August print issue: International business executives with enormous domestic influence cater to the demands of authoritarian regimes abroad.

In December 2004, IBM announced the sale of its personal computer division to China's Lenovo. The announcement came as a surprise in Washington but was old news in Beijing. As IBM Chairman Sam Palmisano later told The New York Times , the deal had originated during his July 2003 trip to Beijing to meet not with Lenovo but with top-level Chinese government officials from whom he sought permission to sell to a Chinese company. IBM wanted to support China's industrial strategy (including the upgrading of its technological capacities and know-how), Palmisano told the Times , partly because "if you become ingrained in their agenda and become truly local and help them advance, then your opportunities are enlarged. ... You become part of their strategy." After Beijing approved the proposal, Palmisano proceeded to Lenovo to negotiate the deal that wound up not only with Lenovo taking over IBM's PC division but also with IBM and the Chinese government as co-investors in China's fifth largest...

China as No. 1

In the 15th century, Venice was one of the world's richest cities and ranked among the great powers because its navy controlled the Mediterranean and its merchants controlled the trade in goods, especially spices. Then Portuguese Captain Vasco da Gama arrived in India in 1498. By 1515, the Portuguese controlled the Straits of Hormuz, the Indian Ocean, the Moluccas (or Spice Islands), and the trade with China. The spices, gems, and silks that for centuries had passed from Asia through the Middle East to Venice and then to the rest of Europe were now carried around Africa on Portuguese caravels. The Egyptian sultans had been able to keep the price of pepper for Europe very high by limiting shipments to 210 tons annually. With the Portuguese in the game, the price of pepper in Lisbon dropped swiftly to one-fifth the price in Venice. The Egyptian-Venetian trade was destroyed overnight, and Portugal knocked Venice out of the ranks of the great powers without firing a shot. That history came...

Snowed Under

As the Labor Department reported employment falling last week -- in the midst of what the White House is calling a strong economic recovery -- Secretary of the Treasury John Snow traveled to Japan and China, where he and his request for more flexible exchange rates were buried beneath the treacly politeness Asia employs when handling irritating Western barbarians. One factor behind the loss of U.S. jobs, particularly manufacturing jobs, is the enormous and seemingly ever-growing U.S trade deficit -- or to be precise, current account deficit. Having reached $244 billion for the first six months of the year, America's trade deficit is on track to top a record 5 percent of gross domestic product, and Japan and China together account for a whopping 35 percent of it all by themselves, with China last year having passed Japan to become the country with the largest trade surplus with the United States. A significant factor behind these surpluses is the exchange-rate policy of each country...