Outside influence - Issue 10 - Magazine | Monocle

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With croissants picked over and orange juice drained, a recent breakfast discussion in New York about the impact of the internet on the US electoral process was almost over when a journalist stood to ask an impertinent question: when would citizens of foreign nations get to help choose American presidents?

Expressions of mere puzzlement ensued. Was this person serious? But then, whoever ends up leading the last superpower will significantly impact the lives of citizens abroad; perhaps more so than their own leaders.

Around the world people like to think that most Americans believe the planet ends at their own borders. True, a few Canadian teams are in the baseball World Series and Japanese players have become superstars. But blink during the evening news and you might miss the lone foreign story. Did you also know that since 2000, the number of foreign correspondents posted abroad by US media outlets has fallen by 30 per cent? As for Canada, how many US newspapers even maintain a bureau there? Not one.

With the 2008 election frenzy upon us, is the US more barricaded than ever before? Actually, the answer is no. Even if the US has made it harder for tourists to visit since September 11 – with new visa security, biometric scanning and fingerprinting – the path of Uncle Sam is more frequently deflected by global influences than most Americans realise. The drawbridge is down and traffic is up.

When George W Bush won a second term in 2004, pundits cited “family values” as a big factor – that translates as opposition to gay marriage, abortion and their ilk. All very domestic, in all senses. But scroll down the issues resonating most loudly this time and you quickly find the three “I’s”: Iraq, Iran and Immigration. Other global topics moving up the chain include climate change and the swoon of the dollar.

All these things matter to voters coast to coast. Iraq and immigration policy will play into the fortunes of every presidential hopeful in every state and, indeed, of every candidate for the US Congress or Governor’s office. Wherever she goes, Hillary Clinton is haunted by her vote in support of the Iraq invasion. The fact that Bush actually started the war stalks every single Republican candidate.

There are geographical variations of emphasis. Voters in California are more passionate about global warming – and US resistance to international emission caps – than those in rust-belt Michigan (there are not many hybrid drivers in Detroit). The battle over immigration, pitting those who want amnesty for illegals already in the country against those who want them turfed out, is felt more keenly in border states such as Arizona than in rural Rhode Island, for example.

All right, non-Americans will never actually be able to vote. Indeed, even non-citizens with green cards are denied that right, never mind that they pay US taxes. Nor, by the way, are foreigners allowed to contribute financially to any candidate’s campaign. In 2003 moveon.org, the Democrats’ internet-based grass-roots group, was chided for taking cash from a sister organisation in Sweden that wanted to get John Kerry into the White House.

But don’t imagine that foreign entities, from governments to corporations, do not insinuate themselves in domestic American politics and frequently spend millions in the process. Sometimes they want to influence legislation to protect their national or financial interests or boost a party or a candidate they favour. Other countries have large dollar stakes in the US but actually want to minimise their influence and visibility. And occasionally, you find a country meddling domestically for the fun of it.

Candidates visiting New York City, for instance, should avoid speaking negatively of America’s Latin nemesis, Hugo Chávez of Venezuela. Primarily to get up the nose of Bush – whom he called “the Devil” at the UN in 2006 – Chávez has not just been sending discounted oil to poor households in the city (and to 23 states), but also recently pledged $3.6m (€2.4m) in cash for community-based initiatives in the South Bronx, for ­housing, job creation and even the ­planting of green roofs.

China is looked upon with suspicion by many US voters. A few may remember the attempt in 2005 by the China National Offshore Oil Corporation to buy Unocal, the American oil company. It failed because of instant uproar in Congress. Just about everyone will have been aware this Christmas of the scare over toys made in China with lead-infused paint or swallowable parts.

Speak no evil of Beijing, however, when campaigning in Minnesota. They love China there, not only because of the long tradition of accepting its scholars into the University of Minnesota. (There are about 1,200 enrolled there right now.) Governor Tim Pawlenty has got high marks from voters in his state for actively cultivating trade ties with China, recently heading a 200-strong delegation of businessmen in the country. In the Minnesota Iron Range, meanwhile, the Chinese are considered saviours after they recently galloped into town to invest in iron foundries that only a few years earlier were shuttered and bankrupt.

With the dive in the dollar’s value, foreign investors are marauding through America. Mostly, this is considered healthy; investment, from wherever it comes, means jobs. But not always. Political leaders got the jitters in 2006 when a Dubai entity sought to buy control of a string of US shipping ports.

That affair persuaded some foreign players to lower their profile in the US, even as they increased their financial stakes in it, including Arab states with massive sovereign wealth funds waiting to be spent. When Abu Dhabi recently paid $7.5bn on a nearly 5 per cent stake in ­Citigroup, it insisted it had no interest in actually running the bank.

They did so for fear of the potential political fall-out. It was for the same reason that the UAE prepared the way, hiring lobbyists in Washington to improve its image and sweet-talk as many politicians as possible.

Name a foreign government that has not paid lobbyists in Washington to cosy up to congressmen and candidates. China does it to keep Taiwan out of the UN. Taiwan does it to get into the UN. Saudi Arabia paid lobbyists to repair damage to its image when some of its nationals were identified among the September 11 hijackers. Pakistan’s President Musharraf hired a unit of WPP – a British consulting giant – to raise his profile in Washington while the party of Benazir Bhutto recently paid another WPP firm to do the same for her (How does Sir Martin Sorrell sleep at night?). Israel lobbies politicians through aggressive groups such as the American Israel Public Affairs Committee and the Anti-Defamation League. A recent book by John Mearsheimer and Stephen Walt, The Israel Lobby and US Foreign Policy, caused a storm by suggesting that Israel has become so influential in American politics as to endanger national security.

Which of these foreign governments can claim to expect to impact the 2008 elections materially? Perhaps only Israel by virtue of Jewish voters, whose political influence is quite disproportionate to their actual number – just 2 per cent of the population. Iraq, meanwhile, might be the only foreign issue that almost every US voter will give thought to in November. But look beyond the cliché of hidebound insularism and you quickly see that just as the rest of the world is not immune to American influences, America is not immune to the rest of the world, even in its domestic affairs.

Israeli and Saudi lobbying in Washington DC

When it comes to lobbying Washington, few countries can match the groups representing the interests of Israel and Saudi Arabia. But while these groups are renowned for their efforts and expenditure, experts disagree on how much power and influence they actually have.

John Mearsheimer, a professor at the University of Chicago and co-author of the 2007 book The Israel Lobby and US Foreign Policy, argues that the main Israeli lobbying group – the American Israel Public Affairs Committee – has almost infinite power over the US Congress. He says AIPAC, with an estimated annual budget of $40m (€28m), is also the reason why none of the main US presidential candidates will risk challenging America’s longstanding support of Israel. “The candidates will have disagreements over almost every issue except one: Israel. AIPAC makes sure of that,” he says.

But others feel the sway of the so-called “Israel Lobby” has been overstated. Stephen Zunes, a Middle East political specialist and professor at the University of San Francisco, says the interests of AIPAC and other pro-Israel groups merely run parallel to US foreign policy in the Middle East, which is why they are perceived to have so much power. “But they are not the cause of our policy,” he said. “We’ve had interest in the Persian Gulf since before Israel even existed.”

Nor does Zunes feel that Saudi Arabia’s lobbying has done much good. It hasn’t overcome congressional opposition to a massive US arms deal to the country.

The view from Minnesota

This autumn, just as the campaigning for the US presidential primaries was getting started, Ambassador Wang Yunxiang travelled from the Chinese consulate in San Francisco to the embassy in Washington DC. He stopped to make a speech in Minneapolis. It is rarely remarked, but the midwest, particularly Minnesota, is a Chinese-American stronghold, with a history almost as long as those of the Chinese communities on the east and west coasts. And what was Ambassador Wang’s message to this heartland? “What is good for China is good for the United States. And what is good for the United States is good for China.”

As Greg Hugh, the owner and publisher of China Insight – the leading Chinese-American journal of the midwest – puts it: “The Chinese speak softly and carry a big stick.” Namely, trade. After Canada, China was Minnesota’s biggest trading partner last year – Chinese demand for steel and lumber has reopened Minnesota mines and revitalised mills. Hugh sees the Chinese-American community in Minnesota as essentially trade-oriented as well: “Shrewd business people; risk-averse and always with an alternative plan.”

Hugh is an ABC – American-born Chinese – and he compares his community to another Asian community with a big presence in Minnesota, the Hmong. The Hmong ethnic group were the CIA’s shock troops in Laos during the Vietnam War, and they were granted special immigration rights after the war ended. “Look at the Hmong. They already have their own language on bus signs. The Chinese have been here – panning for gold and building railroads – for how long? What lobbying have we done?”

Kaimay Terry, the former president of the Chinese American Association of Minnesota and a prominent fundraiser in the state’s political scene, also points to the Hmong. “They vote as a bloc: 99 per cent Democratic.”

Chinese-Americans, however, do not. Terry says: “There is no group cohesion, no solid vote.” It’s a sad truth, but what may bring the Chinese-American community together is China-bashing. Sino-American trade disputes have been escalating, most recently over a series of highly publicised recalls during the summer: first of toxic pet food, then toxic toys, and then faulty tyres. “China is a whipping boy, but it’s American companies that are getting fat off the profits of the trade,” Terry argues.

In her view, the Chinese vote will not coalesce until the US-China relationship is addressed head-on by one of the candidates. “No one dares to say the truth,” says Terry. “Trading with China has enormous benefits. It’s a virtuous cycle: win win.”

States of play

Peru is one of New Hampshire’s top trading partners; China is Idaho’s leading export market; and in Pennsylvania, 230,000 people are employed by foreign companies. The states are starting to realise that the key to prosperity lies beyond their national borders (see map overleaf).

  1. Alaska
    While Canadian and Japanese firms already run many of the seafood, diamond mining and tourism operations, major UK investors – including BP and Fox Petroleum – are exploiting the state’s oil reserves.

  2. California
    California is the top US destination for international companies and attracts more foreign direct investment than any other state. It also has the largest concentration of foreign consulates. Top trading partners for the state are Canada, Japan, China, South Korea and Mexico.

  3. Delaware
    Delaware can claim one of the nation’s highest percentages – 24.3 – of manufacturing jobs supported by foreign affiliates. Foreign companies operating here include pharmaceutical giant AstraZeneca, Switzerland’s Ciba, Japan’s Fujifilm USA, and Germany’s Volkswagen.

  4. Florida
    Florida’s Cuban-American community is influential in the US election race. Florida is also the gateway to Latin America for many foreign investors. Finland’s Nokia recently opened its Latin American headquarters in Miami and more Chinese companies are following suit. Currently, Spain has the most foreign investment in the state, although the largest single investor is Germany’s Siemens.

  5. Hawaii
    The state’s Asian population of 41.5 per cent means Governor Linda Lingle is wisely trying to strengthen her ties with her Asian-Pacific neighbours. She has targeted Indonesia to co-operate on regional security and disaster preparedness, and is courting Japan to promote economic investment in Hawaii’s science and technology sectors.

  6. Idaho
    China is the number-one destination for Idaho products, and on Governor Otter’s trip to four Chinese cities last November he found new customers for compressed hay and pork, and formed strategic partnerships with local companies.

  7. Illinois
    Despite having a governor who has not ventured outside US borders since 2003, Illinois’ Mayor Daley of Chicago has just opened a development office in Shanghai. Since 2004, exports to India have risen by 60 per cent to almost $440m (€300m) annually. Come election time, its large Irish-American population could prove to be either party’s secret weapon.

  8. Indiana
    Indiana is among the top midwestern states for employment by Japanese firms. Following government-led trips to Japan in 2006, Indiana became home to a Toyota plant and Honda is building a facility in Greensburg that will employ 2,000 people.

  9. Maine
    Maine’s biggest export market is Canada but Malaysia and El Salvador are the fastest growing. Maine also more than doubled its exports to China, UAE, Taiwan, Finland and Denmark. Exports are computers, electronics, paper and transportation equipment, but the main growth is in petroleum and coal products.

  10. Michigan
    Forty per cent of Michigan’s jobs are in manufacturing and 43 automotive-related companies have relocated or expanded operations to Michigan in the past year – Siemens, Toyota, Nissan and Hyundai among them. Governor Granholm’s 2005 trip to Japan brought in an additional $116m in capital investment.

  11. Minnesota
    This summer Taiwan signed a $3.9bn deal to purchase soybeans, beef, corn and wheat from Minnesota. Minnesota’s fastest- growing export markets are Columbia, Chile, Israel and India. The state also controls an oil pipeline from Canada and in 2006 exports to Canada hit $4.1bn.

  12. Missouri
    Governor Blunt travels extensively to promote foreign investment. China is the state’s fastest-growing trading partner, worth $769m. Canada is the top export market along with Mexico and South Korea. Missouri’s exports to Argentina, the UAE and Belgium tripled from 2002 to 2006.

  13. Nevada
    Foreign investors in Nevada include the UK, Canada, Switzerland, France and Japan (mainly gaming companies). Primary metals are Nevada’s top exports and the state’s other exports between 2002 and 2006 increased 367 per cent, the largest percentage gain among the US states.

  14. New Hampshire
    Peru is one of New Hampshire’s top trading partners and this longstanding relationship will get stronger now that a bill has been passed in the US Senate to enact a bilateral trade agreement between the two countries. Foreign investment in New Hampshire was responsible for 6.1 per cent of the state’s total private-industry employment in 2005.

  15. New Mexico
    Nearly half of New Mexico’s population is Hispanic or Latino. Recently, Malaysia announced a $30m investment to build a plant in Gallup using the first commercially viable, waste-free method to recycle tyres. New Mexico’s exports to the Ukraine – primarily computer and electronic products – are the fastest growing.

  16. New York
    New York City’s role as a global financial centre buoys the state economy. In November last year, China Merchants Bank, which is partially run by the Chinese government, received permission to expand to the US with a branch in the city.

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