Presidential Addresses

I am delighted to be with you today in this prestigious setting and before such an august gathering.  I arrived in Hong Kong a few days ago, and I look forward to a splendid visit, including interviews with Radio/TV Hong Kong and the South China Morning Post.  I have upcoming meetings at the Hong Kong Science and Technology University and The Chinese University of Hong Kong and with others in higher education.  I am also visiting a number of secondary schools as well.  I am delighted to see Dean Albert Chen here from the Hong Kong University Law Faculty.

I consider myself fortunate to have been able to visit and work in Asia and Europe many times.  I have taught American law and international trade in Denmark, France and China, and also at the superb Salzburg Seminar, in Salzburg, Austria.  In an intensive week-long session in Hanoi, Vietnam, I taught international trade to nearly 100 officials of the Vietnam government to help them particularly understand the issues that would be arising in their bilateral trade negotiations with the United States and their broader work   with ASEAN and the WTO.   I also helped establish an international summer program between Duke University and the University of Hong Kong, where we conduct a month-long session on international and comparative law for participants from many different countries.   This program is ongoing and is conducted every July at the University of Hong Kong campus, where the participants stay at the Robert Black College.

I am an internationalist by training and by habits of reading and travel.  It is a special privilege to be here outside of my home country and in a place where I have spent many happy hours.

Today, I want to discuss the topic of globalization from three perspectives.  First, I want to examine the prospects for the conduct of US foreign policy given the way in which President Bush was elected, the evenly divided Congress between members of the Republican and Democratic parties, and current economic and business interests.   I am very proud to hail from the state of California and to be president of one of the finest private colleges in that state and in the United States.    So, second, I want to address the outlook on globalization from the standpoint of California, the fifth largest economy in the world, and a leader in global trade with Asia and under the North American Free Trade Agreement.   Last, I want to address the global leadership role of U.S. higher education in securing the future prosperity, political stability, and national security of the United States and other countries as well.

Washington Gridlock:  Is It Possible to Shape and Sustain a Coherent Foreign Policy?

The American people and their government operate under the second longest continuous constitution in the world.    As a matter of information, do you know which country is first?    It is the Nordic country of Norway.   Our founders deliberately made it difficult for the national government to work.  This outcome was accomplished by an exquisite system of checks and balances among the three branches of government – the executive branch, led by the President; the Congress, composed of two houses that must agree to enact a piece of legislation (and which then must not be vetoed by the President); and the judicial branch, which has the constitutional authority to declare an act of Congress null and void as unconstitutional.   Our founders particularly wanted the national government to be one of delegated and limited powers and they wanted to avoid monarchies and tyranny.     Since our founding in 1789, the United States has been successful in democratically electing 43 presidents and no monarchs!

Our president is elected as follows.  Individual voters in each state of the United States vote for a presidential candidate.   These votes are used to determine the votes, in turn, of state representatives to the Electoral College.  The number of electors equals the number of persons in Congress representing that state.   The candidate who wins the most electoral votes becomes President.  Let me use California as an example.  Vice President Al Gore won the popular vote in California, so all the electors from California voted for him in the Electoral College.  Under this system, we can elect a president of the United States who does not win the highest number of total popular votes, but who still wins the largest number of state electoral votes.    This is exactly what happened in the election of George W. Bush as the 43rd president of the United States.    Candidate Al Gore won the popular vote, but George W. Bush won the most votes in states whose electoral votes totaled the most.    To make this election even more dramatic, the determination of which candidate won the most electoral votes came down to who won the most popular votes in the state of Florida.    The vote was so close that ballots were recounted and several lawsuits were filed in both state and federal courts concerning the ways to recount and read the ballots.    Litigation reached the Florida Supreme Court twice and the U.S. Supreme Court twice.   The American public was captivated by the television coverage from Election Day in early November until well into December when the U.S. Supreme Court finally decided the outcome of the election.   A 7-2 majority of the Court determined on the basis of due process and equal protection grounds that the position of the state government of Florida on recounting ballots was appropriate, reversing the holding of the Florida Supreme Court.    The United States Supreme Court then divided 5-4 on how to handle the remedy.  Both the overall decision and the remedy approved by the five-person majority of the United States Supreme Court favored George Bush, so Al Gore then conceded the election.  The Presidential election, although indeed complicated, was determined by the United States Constitution and the United States Supreme Court, and thus by the rule of law.  Mr. Gore respected the Court’s opinion, and the United States had an orderly transition of power.

Moving to the Congress, we have a closely divided House of Representatives and Senate between the two major parties.   The Republicans barely control the House, and until a few days ago, the Republicans controlled the Senate by 1 vote; and now the Democrats control the Senate by 1 vote.   Both the manner in which the President was elected and the evenly divided Congress mean that the President must lead more from the middle and the Congress must manage itself with bipartisan leadership in order for any significant piece of legislation to be enacted.   This approach is difficult for both.  In fact, the spread across the parties is wider than ever and Congress possesses fewer moderates in both parties clustering around the middle.

Now let us look a moment at how this will impact the conduct of U.S. foreign policy.   It is a truism in America that the United States public is not very interested in foreign policy.   As a result, the following outcomes tend to occur.   First, U.S. foreign policy does not impact the outcome of elections.   In fact, it played almost no role in our last three presidential elections.  Second, special local interests opinions about trade will be the only international area taken seriously into account by a politician running for office, and these local interests will exert an impact out of proportion to their numbers.   For example, the textile owners and workers in congressional districts and states always tend to influence their members of Congress to vote to restrict textile imports.   Third, in Congress, domestic political considerations will drive U.S. foreign policy on most issues.     Given these factors, the gridlock in Washington will have a significant impact on the conduct of many issues of U.S. foreign policy.   In particular, those issues of foreign policy that require explicit Congressional approval to be pursued likely will not rise very high on the President’s agenda.  It will require an expenditure of an extraordinary amount of his political capital to achieve anything.

One of the best examples of these outcomes is the current U.S. position on international trade.   The U.S. constitution delegates to the Congress the power to regulate domestic and international trade.   On the one hand, the constitutional delegation to Congress to regulate all trade immediately created within the United States at its founding a total free trade area that has contributed tremendously to the economic growth and prosperity of the United States.  On the other hand, delegating to Congress the primary power to regulate international trade means that trade often is captured by local domestic politics. These circumstances led Congress in 1974 to enact a new type of legislation called “fast-track authority,” by which Congress authorized the President in advance to negotiate international trade agreements on particular topics and then agreed to approve them, generally without any amendments, on a fast-track basis in both the House of Representatives and the Senate. 

This methodology worked well for the United States, and helped us succeed in completing several international trade agreements, including the establishment of NAFTA among the United States, Canada, and Mexico, and the Uruguay Rounds that established the World Trade Organization and extended topics covered to foreign direct investment and intellectual property.   This presidential authority expired in 1994.  President Clinton tried later to have this fast-track authority renewed, but he was unsuccessful in his attempts.  Thus, President Bush enters his Presidency without fast track authority.  This places him in a difficult position.

No president can be an effective international trade negotiator unless the subjects and priorities of the trade negotiations have been cleared ahead of time with the Congress.  It is impossible for the U.S. to enter into trade negotiations with 100 countries or more and then bring the agreements back to Congress for its approval as normal legislation, since Congress will want to amend the agreements and this, in turn, would break down the international negotiations.

What, then, are the prospects that international trade negotiations will be high on the President’s agenda?   They are very limited.  The prospects for the current Congress to enact a statute, giving the president “fast track authority,” or “trade promotion authority” as it is called today, are highly unlikely.    One person recently told me that he counted fewer than 30 democrats out of over 270 democrats in the House of Representatives who would vote positively for “trade promotion authority.”

Because of these overwhelming difficulties, you will see and hear President Bush and the U.S. Trade Representative mostly focused on completing the introduction of China to the WTO, perhaps voting on the U.S. Vietnam trade agreement, and perhaps pursuing some purely political bilateral trade agreements with other countries, such as the proposed bilateral agreement with Jordan, with whom we have almost no trade.   The President has positively mentioned expanding NAFTA throughout the western hemisphere, but even this effort would be extremely difficult.   Politically, however, pushing the expansion of NAFTA might be helpful to President Bush in the Latino community of voters in the United States.   You may also hear him speak affirmatively about starting up another multilateral trade round under the WTO, but I do not see that the votes exist in Congress to support the President in this endeavor.

Trade negotiations have become further complicated by additional factors.  For the most part, depending on the topics being negotiated, the next global trade rounds are likely to benefit wealthier countries much less than developing countries.    Moreover, United States businesses in particular are conducting effectively their activities nearly anywhere in the world, so they have no sense of urgency.   There also exists a group of organizations and individuals possess opinions that trade destroys local culture, degrades the environment, and introduces unhealthy work conditions.   When times are prosperous, more serious consideration is given to environmental and labor effects of international trade.   Many corporate and political leaders, including Republicans, are now assuming that any further progress in international trade must be accompanied by a toolkit of approaches to address both labor and environmental issues, included but not limited to using WTO negotiations.

Putting all of this together, no one in Washington really knows how to put together an effective trade agenda in the United States.

Looking to the future, it is essential that U.S. higher education play a more important role in educating U.S. students and its future voters to the benefits of international trade.    These benefits are based on the principle of comparative advantage.   This proposition is true, but it is not obvious to most people.   Under comparative advantage, even if one understands the importance of specialization, the costs to specialization are very specific and the benefits across society are very diffuse.    International trade can be an effective tool for open economies, which in turn support open and democratic societies.  Open markets and open democracies go hand in hand.  A country cannot expect its people to go to an open workplace and use their education and creativity to produce goods and services for a market economy, but then go home to a closed civil society.  Education and political leadership and courage must work to continue to assure that foreign policy supports a global trading system for prosperity, stability, and peace.

CALIFORNIA AND GLOBALIZATION

California often holds a fascination, for better or worse, among Americans and foreigners alike.  Some view California as providing a cutting-edge laboratory for many economic and societal issues.  For example, how will California work with respect to race relations when no racial or ethnicity group makes up a majority?  Or, how will California deal with scarcity of water and energy?    California is also the entertainment capital of the world, and it is home to a large portion of the leading edge of the United States economy, including biotechnology, computing, and aerospace and defense.  It is also home to a magnificent agricultural industry, as well as many of the finest universities and colleges in the world.  On top of all of this, it is a state of dramatic landscapes, with the highest mountain in the lower 48 states, a lengthy Pacific coastline, and miles and miles of deserts.

Without question, California provides a splendid bridge for the United States to the rest of the world, particularly the Pacific Rim.  Overall, if California were a nation, it would rank as the world’s fifth economy, after the United States as a whole, Japan, Germany, and the United Kingdom, but ahead of France.  Los Angeles alone would rank as the world’s 16^th largest economy among nations.

California is very much a cosmopolitan and global community.  One in eight Americans lives in California, making a total of about 34 million people.  Among these people, 47% are white, 29% are Hispanic, and 11% are Asian.   For the first time ever, no racial or ethnic group forms a majority in California.  It is the first big state in which this has occurred, reflecting what will also likely take place in the other big states of Texas, Florida, and New York.

California is very much oriented to Asia.  The port of Los Angeles is the second busiest port in the United States.  The combined ports of Los Angeles and Long Beach compose our largest gateway for Asian cargo.  65% of West Coast container volume and 1/3 of all container volume for the United States originates in Asia and comes through these two ports.

California is also the largest export state of the United States, with $130 billion in exports in 2000.  $55.2 billion, or 42.6% of these exports went to 10 Asian destinations.  Japan in California’s second largest export destination after Mexico.

California is also very much a Pacific state because of its Asian population.  California is home to the largest number of Asian-Americans.  Moreover, the recent 2000 census showed the Asian population in California grew 38% since 1990, most of it as a result of immigration.

California is also very much a Latino state.  1/3 of the U.S. Latino population lives in California, and 1/3 of this statewide Latino population lives in Los Angeles County.  The single largest export market for California is Mexico.  Analyzing trade by regions, after Asia, NAFTA is the second largest export market for California.

California has experienced less growth due to immigration from 1990 to 2000.  California’s share of immigrants dropped from one in three in 1990 to one in four in 2000.  Nevertheless, California possesses a very young citizenry, with 28% of the population under 18, of which 43% are Hispanic.

Thus, California is global and inextricably linked in economic, societal, and cultural terms with many countries around the Pacific Rim.

Yet, for all its glowing features, California is being stretched to its limits.  It takes a very great deal of resources, infrastructure, water, electricity, energy, education, and safety social nets to take care of so many people.

California is facing a new level of challenges.  I am a member of the Board of the State of California Chamber of Commerce.  At our last Board meeting, we discussed the major problem of running out of airport capacity.  We also discussed the shortage of electricity in California. until 2004 to straighten out these energy shortages.

California also faces other significant challenges as well that will impact its future competitiveness in a global economy.   One of the most important is the future of higher education in the state.  In this decade,  1.5 million more students will enroll in institutions of higher education in the United States, and 750,000, or one-half, of these new students will be in California.  Can you imagine finding 750,000 new places for enrollment within 10 years?  In the prestigious University of California system, plans are being implemented to increase the number of students from 147,000 to 210,000, a growth of 63,000 students, or 43%.  Much of this growth will be absorbed in building one new campus, and in rapid growth in the southern California locations of UC-Riverside and UC-Irvine.

How California handles these pressing issues will very much impact its ongoing economic success, as well as its quality of life.

GLOBALIZATION AND HIGHER EDUCATION

In the United States, educators understand that they have a responsibility to educate our students in the context of our external environment in the world of the 21^st century.  What are some of the key characteristics of that environment?

• there exists an explosion in knowledge;



• the new economy places a premium on education, including analytical skills and problem solving, as well as good judgment, communication skills, teamwork and leadership;



• people will change jobs many times over a lifetime, with health improvements increasing life longevity;



• science and technology continue to be the driving force of competitive advantage, economic growth and prosperity, and quality of life and health;



• globalization means increased cross border capital flows and trade in goods and services, rapid technology transfers, real time communications and information flows, all causing more economic integration and interdependence;



• global population continues to increase rapidly, and pressures on movements of people will continue to increase due to the divide between rich and poor countries, global communications and transportation, and the failure of some nations to treat their citizens well;



• electoral democracies represent 119 of  192 nations, covering 58% of the world’s population, and liberal democracies represent 85 nations and 38% of the world’s population.

In the world that I have just described, U.S. higher education carries a tremendous responsibility for the future prosperity, political stability, and national security of the United States and for other parts of the world.  It does so in at least four dimensions.

First, U.S. higher education supports globalization in preserving some of our most important core values, such as fundamental freedoms of liberty and democracy, which are reinforced by open economies and open trade.  Human and economic rights are an important value for both moral and pragmatic reasons.  In a modern state in a global economy, if you do not treat people well, the smartest will leave for a place that provides a tolerant and open society and equal economic opportunity.  Human capital is the most important asset of any country.

Second, U.S. institutions of higher education are also committed to preparing their students for global responsibilities.   In particular, they are being educated to be competent to function professionally in an international environment.  Moreover, because US domestic and foreign policy must reflect the fact of globalization, students are being educated to make public policy decisions as voters and participants in a civil society that is both local and global.

More than ever, students must be better educated in the core areas of a liberal education.  They must learn to think critically; to work through lots of information and to analyze data and texts; to formulate arguments and counterarguments; and to write and communicate well.   They must be educated to move across cultures with ease, to possess social and teamwork competencies, to possess science and technology literacy; and to develop exceptional leadership skills.

Third, higher education is a tremendous resource for the conduct of soft diplomacy.  One of the most effective means of assuring peace and prosperity is through what I call the “soft diplomacy” of higher education, by which faculty and students freely travel to study in other countries.  The significant importation of international students into the United States is one of the most important techniques in our foreign policy toolkit.  This year, over 500,000 foreign students studied in the United States, and well over 200,000 of these were from Asia.  California leads the nation with at least 66,000 international students studying in its universities and colleges.

Many come for education in engineering and science, and many find graduate level financial support.  Much of this support is financed by U.S. government research grants, which include support for graduate students.   At wealthier institutions, graduate level support is also provided from  institutional sources. 

Recruiting and matriculating international students is now viewed as so important to highly selective private colleges and universities, that scholarships are increasingly provided from institutional funds.  For example, the very best law schools in the United States provide partial or full tuition scholarships to a limited number of international students.  At the undergraduate level, private universities such as Princeton, Yale, Harvard and MIT have committed themselves to admit the best students from anywhere in the world and to provide the financial aid to enable them to attend.  My own college, Claremont McKenna College, provides every year several scholarships to outstanding Asian students.  Our grants for the 2001-02 academic year will be $36,500, covering all the costs of attending our college, including tuition, fees, room, board, and even health insurance.

One of the primary methods by which American undergraduate colleges and universities seek to broaden the global outlook and education of their students is through the so-called “study abroad” programs.  This year, more than 130,000 US undergraduates studied outside the United States.  This number is still small, because it composes less than 10% of the 1.4 million students in US institutions of higher education.  Moreover, these students come disproportionately from the very highly selective colleges and universities.  At Claremont McKenna College, nearly 50% of our junior class will study abroad next year, and at some of the nation’s best colleges and universities, the percentage will be as high as 70% to 80%.

It should also be noted that only about 10% of those who study abroad do so in Asia.  Many Americans feel more comfortable in English-language speaking countries, or in countries in which Spanish or French is spoken.  This reflects the general lack of education in Asian languages among American students.  Although US colleges and universities have greatly strengthened the resources devoted to Asian studies over the years, we still possess a serious shortfall in the number of students being reached compared to the importance of Asia to the United States.  These gaps need to be closed to pursue successfully the soft diplomacy side of US foreign policy with our Asian neighbors.

Last, US higher education has a significant role to play in US prosperity and national security through its superb research and teaching in science, technology, and engineering.  American research universities are world leaders in these fields, which is one of the primary reasons that so many foreign students study in the United States.  American liberal arts colleges prepare a very high number of undergraduates who go on to pursue Ph.D. degrees in science because of the tremendous amount of individual attention and opportunities that they provide for undergraduates to pursue research with a faculty member.

Nevertheless, there exists in the United States a great sense of urgency about the current trends in both science and technology teaching and research.  We are not producing enough excellent teachers in science and mathematics to support the needs of K-12 educational levels.  Studies show a gap in educational attainment in the United States relative to other wealthy nations in the fields of science and mathematics.

U.S. federal government funding for basic scientific research has been declining.  A recent national bipartisan government commission concluded that if the U.S. government did not double the amount of funding for basic research, U.S. national security would be impacted negatively.  Moreover, since a significant amount of this funding goes to U.S. research universities, if the funding shortfall is not corrected, these universities could decline in their relative effectiveness and leadership and in their future attraction to international students.

In the ways that I described, U.S. institutions of higher education are contributing to globalization in positive ways.   I have also noted some of the challenges that lie ahead, including better funding and education in science and mathematics, and also more attention to the education of Americans about Asia and sending more American students to study in Asia.   A positive future with Asia depends a very great deal on appropriately meeting these challenges.

A CLOSING OBSERVATION

Let me close with one observation about the United States.  Many inside the United States believe that our economic and military strengths compose the source of our foreign policy strength.  Indeed, they do.   But many outside the United States find us attractive because of our basic ideals of liberty, equality and equal opportunity, and democracy.  These   fundamental values provide the United States with whatever moral authority it possesses to be a leader on the world stage.  Let me provide just two examples of moral authority.  Many of the smartest people in the world leave their country and come to the US, and not to other wealthy countries, because we tolerate and respect individual liberty and difference.  No European leader wants the US military to leave Europe outright, even though we possess so much military strength.  What country normally welcomes foreign soldiers onto its own soil?

The sources of our moral authority are liberty, equal opportunity, and open democracy must be preserved and constantly guarded with diligence.  The United States has accepted so many immigrants that our educational institutions have the primary responsibility to educate the new Americans about the importance and verities of these fundamental values.  Through this educational process, we preserve our moral authority and that of our soft diplomacy side of the conduct of US foreign policy.  These values and these educational efforts exist regardless of who is the President of the United States, or which political party is in power in Washington.

Thank you again for your gracious invitation and your hospitality. My colleagues and I look forward to welcoming you – and I hope some of your college-bound children --- to Claremont very soon.

Thank you and good afternoon.