Top 5 in 2017: International Affairs
CSG Director of Federal and International Affairs Andy Karellas and Senior Policy Analyst Jack Cobb outline the top five issues in international affairs policy for 2017, including the impacts of macroeconomic policy, global trade, national security, conflicts overseas and global public health.
Macroeconomic Impacts of Policy
In its General Assessment of the Macroeconomic Situation, the Organization for Economic Cooperation and Development, or OECD, warned that “worsening protectionism and the threat of trade retaliation could offset much of the (president’s proposed) fiscal initiatives’ impact on domestic and global growth.” Overall, the OECD estimates1 that President Donald Trump’s proposed stimulus plans could boost the United States’ gross domestic product by around .4 percent in 2017 and .8 percent in 2018 through infrastructure investment and tax and regulatory reform, a promising sign for state revenues. Rising national and global GDP would have similar positive impacts on state tax revenue and budgets. But this potential growth could be upset by protectionist macroeconomic policy, which could disrupt global trade, supply chains, services and stability.
2017 will be a critical year for shaping the future of global trade. The U.K. will negotiate its departure from the EU, Trump has promised to renegotiate NAFTA as well as take actions in response to Chinese currency manipulation, and China is set to push the Regional Comprehensive Economic Partnership agreement across Asia in the vacuum left by the Trans-Pacific Partnership, or TPP. These issues will shape state efforts to grow their economies through trade and the development of the new state-federal coordination plans on trade promotion.
One of the critical areas where international and state policies intersect is national security. This ranges from providing state services and support to citizens deployed abroad in the armed services and their families at home to protecting against cyberattacks that not only impact critical infrastructure but also state records and personally identifiable information. Another area that could significantly impact states is a potential round of military base realignment and closure, or BRAC. While this has not happened since 2005, the new presidential administration’s proposed spending plans and tax cuts could necessitate a new round of BRAC.
While global conflicts may seem distant to state policy, they often have significant impacts on the states. As conflicts around the world continue, or come to a conclusion, states also will see changes in the arrival of refugees, the establishment of friendly democracies with which to engage, or the emergence of failed states that can become breeding grounds for security threats. In addition to the commonly discussed conflicts in the Middle East and Eurasia, states bear significant social and security impacts from the drug wars raging in Central and South America.
As state health officials have seen over the past decades, new global health challenges are emerging constantly. While 2016 marked the final containment of the West African Ebola outbreak, it also brought the new threat of the Zika virus to North and South America. In 2017, states will likely find the emergence of new, or resurgence of old, health threats, which will require effective collaboration with national and international partners to combat.
1 OECD, General Assessment of the Macroeconomic Situation, Volume 2016, Issue 2. http://www.oecd.org/eco/outlook/general-assessment-of-the-macroeconomic-situation-oecd-economic-outlook-november-2016.pdf