“President Obama will play a bigger role in re-inventing the international system than any other president before in past decades,” according to a former Clinton administration official who now teaches at Harvard. He predicted that the new U.S. focus will emphasize financial affairs, probably including efforts to start a more global regulatory system in the wake of the financial meltdown that started in September.

The expert, David Rothkopf, has written that the financial crisis was a bigger blow to the United States than the terrorist attack of Sept. 11, 2001.

Mr. Rothkopf emphasized the need for a global financial regulator – something a summit meeting of the so-called “G-20” in Washington on 15 November is likely to discuss but probably will be unable to agree upon, because the outgoing Bush administration opposes this idea and the Obama team is not yet in charge.

Speaking in a video conference organized by the Brussels office of the Carnegie Endowment for International Peace, Rothkopf said that he expected the Obama administration to seek a much closer partnership with Europe in trying to overhaul a number of organizations and treaties, ranging from the Doha talks at the World Trade Organization to the nuclear non-proliferation treaty and to the International Monetary Fund (IMF) and the G-7 excluding some leading industrial economies. China, for example, does not belong to either of these two groups.

The so-called “G-20” – including China and major emerging economies – will probably hold a second meeting in the first months of 2009, he predicted, and might then take concrete steps toward creating a new regulatory body and reform the IMF. Any financial agreement will be likely to include a leadership role for the US in coalition with the EU and other countries, Mr. Rothkopf said.

In terms of what a global financial regulator would look like, Mr. Rothkopf mentioned the EU as an example of “creating super-national structures – but noted that enforcement may pose problems for such a regulator. “Getting everybody in a room and agreeing on principles is easy,” he said, predicting this easy step will probably come at the 15 November summit. Then next year, he said, “We’ll see whether we’ll get institutions that have the ability to enforce new global standards on the international financial markets.”

As part of this effort, he predicted that President Obama will move quickly to improve teamwork with European governments, most likely traveling to Europe within weeks of his inauguration. While hoping to cooperate with Europeans, especially on financial reform, Obama will have to weigh multilateral ambitions against a deeply held U.S. view that Washington must not subordinate financial controls to any international body.

Tags: Bush, David Rothkopf, Financial Reform, G-20, Multilateralism, Obama

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