Blogs & Comment

First day on the job...

One of the first matters of business for the new president-elect Barack Obama will be to successfully insert himself into discussions about how to deal with the dramatically weakening U.S. economy.
According to The Washington Postthis morning, one of the first orders of business on that front will be his attendance at the economic summit President Bush set up for November 15 in Washington, D.C. A short piece on this so-called Bretton Woods II meeting ran in the latest issue of the print version of Canadian Business, which isn’t up online yet.
In the CB piece I talked to Sebastian Mallaby, director of the Center for Geoeconomic Studies at the Council on Foreign Relations in Washington, D.C. One of the interesting things he pointed out (but which we couldnt fit into the print piece) was that, assuming Obama won the election, this meeting would represent the first face-to-face between the Chinese government and the incoming administration. Talk about historic.
For this reason alone the meeting will be interesting. But dont get your hopes up that much will accomplished on the 15th. As the print story in CB points out, the big issue is the unnaturally low peg of the Chinese yuan to the U.S. dollar. But according to Mallaby–who has talked to people in the Obama camp–the incoming administration is unlikely to broach the idea of the need for currency revaluation with the Chinese administration at this meeting. That just wouldnt be polite. Rather, this meeting will be about getting to know one another, setting the grounds for further talk, and getting in place a process for moving towards a possible Bretton Woods II agreement much further down the road. I dont think Obama’s people will want to spring that in this meeting. I don’t think this issue is quite ripe, said Mallaby. I think well see some common principals come out of it. The good thing: It is the beginning of a process.”