President says protectionism no path for innovation

Creating a global banking system that is transparent and works collaboratively with all nations is the foundation of economic stability; who those banks loan money to and what projects they support is becoming a matter of policy.  During difficult times, it is easy to pull inward and protect those interests that deal solely with national concerns, but reaching out is an integral part of the growth principles associated with a global economy.

Earlier today, President Obama spoke to the press at the G-20 London Summit.  During the news conference, the president referred to the size of the economic challenge that faces the global community, acknowledging that trade is shrinking and unemployment is rising.  National economies are now linked, he said, everyone has been touched by this crisis.  Collectively, we can pull ourselves out of it.

The message coming from the G-20 seems to be one that is echoed elsewhere; echoes of the ‘yes we can’ campaign.  The road will be a long one, but one that can be broken down into phases of innovation timed together with policy.  Although the world may have been slow to act in economic crises of the past, not recognizing the dangers it faced nor the opportunities at present-hand, today we have hopefully learned those lessons from the past century because they will be necessary to climb up out of the bear pit we have cornered ourselves into.  

Overpopulation, energy, climate change, and economic recovery are all linked now; by dealing with the first three issues, we can assure the last one.  As innovations ready-up for commercial deployment, policy measures can be put in place to get the new technologies into the marketplace.  In the past, economic depressions resulted in nations turning inward, instituting protectionist measures; this is not they way to go, the president said.  Supporting open markets will ultimately grow the export market and create new jobs globally.  The world can either go down the long road of gearing-up collectively in clean energy, or it can go down the even longer road (and more expensive) racked with political ideologies and by nationalistic tendencies.  From the signals given by the Obama Administration at the G-20 Summit in London, an international openness, especially in trade, seems to be developing.

So, what would creating new jobs globally look like on a local level?  WalMart may have the answer.  That’s right, WalMart may begin selling Chinese designed electric vehicles manufactured in Mexico as part of a program to get the electric vehicle market up on its feet.

President Obama met on the side at the G-20 with leaders from Russia, China, India, South Korea, and the U.K. to discuss a range of issues including energy and how to “protect our planet from the scourge of climate change”, he phrased.  One of the two major contributors to carbon emissions is transportation fuels, the other being electrical energy generation.  The long-term goal is to reduce global emissions; in the short-term, though, countries vary on ways of how to do that.  Is selling electric vehicles at WalMart part of the solution?  Without more clean energy powering the grid, the answer is ‘no’; from a nationalistic perspective, the answer would be ‘no’; but from a long-term open market perspective, retrofitting the grid and growing the EV industry is central to the goal of reducing the U.S. transportation-fuel load and, if ahead of the IT curve, can contribute significantly to domestic economic recovery.

This trend of forging partnerships with nations as opposed to dictating solutions is part of an overall strategy being employed by the Obama Administration to expand U.S. influence in international affairs.  Forming a consensus from conflicting views is a skill the world community is in desperate need of; whether he is successful is a matter of the degree to which all nations are willing to work together toward solving the problem.  What the solution is will ultimately have to be absorbed at the local level.  

What does expanding the market share of Chinese auto manufacturers do to domestic local jobs?  In today’s tumultuous domestic auto market, timing new EV releases with new domestic emission regulations and higher fuel efficiency standards is key.  The plan would be to time policy with innovations ready for commercial deployment, so opening up the U.S. market to Chinese EVs would have to coincide with Chinese markets opening up for American EVs; international standards applied, of course.  While the U.S. auto industry is still lagging the EV market leaders in terms of market-ready products, the domestic auto industry as a whole is poised for a complete overhaul, which could result in a bevy of American EVs hitting Asian shores by the end of the decade.

The president pointed out that there may be points in the short-term where the interests of nations like China and the U.S. might differ, but in the long-term, open market partnerships with regulatory boundaries will ultimately lead to global economic prosperity.  President Obama made note that America’s fate and interests are inextricably linked to the fates and interests of the larger world.  To work from a protectionist standpoint is counterproductive to our own growth.

As for working with China, President Obama acknowledged the influence a nation like China can have globally.  China and America together, single-handedly, can solve the global emissions problem, but dictating solutions to China is not in President Obama’s cards.  He said that his presidency will be judged by how well he meets American concerns, not Chinese ones.  For example, he recognized a responsibility to put legislation in place to protect against local job losses from the globalization of industries resulting from international trade agreements.  

One such type of agreement that China may be interested in is the electric vehicle market.  The entire transportation industry is in flux right now.  Who will emerge in the EV Age with the tools in-hand to meet the new growth demand in the international automobile industry?  Japan, South Korea, India, China, even the U.S. are all competing for a piece of the EV industry.  Battery technology seems to be becoming the defining link in the process; and reverberations seem to be getting louder concerning the arrival of safe, cheap, reliable, commercially-available batteries.  Of course, this kind of overhauling signal from the transportation sector is inextricably linked to the electrical grid.

A massive push toward upgrading the coal-dominated, electricity-generating facilities in China and the U.S. to be more efficient and less emitting concerning their use of power is essential to the two nations, in actuality, achieving overall emission reductions.  The two industries (transportation fuel and electrical energy generation) and the two nations (China and the U.S.) have to link their energy and climate strategies together in order to make any substantial gains in global emission reductions.

With the fate of the American gas-guzzling auto industry in jeopardy and the reality of the surge in demand for cars from Asia, it is no wonder that China seeks to become a leader in the emerging electric vehicle market.  “China wants to raise its annual production capacity to 500,000 hybrid or all-electric cars and buses by the end of 2011”, a Chinese auto executives said.  A consulting firm, CSM Worldwide, “predicts that Japan and South Korea together will be producing 1.1 million hybrid or all-electric light vehicles by then, and North America will be making 267,000”.   China’s commitment in the electrical vehicle market is surging; and the North American EV market may be distracted from the overall goal by things like bankruptcy.

Even though the Chinese have begun building up their EV industry while the U.S. auto industry teeters on bankruptcy, the U.S. cannot be considered...

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