Evaluating a Cabinet

Joe Biden's picks project an image of assured competence

The Dow Jones Industrial Average, the commonly used marker for share prices in the United States, crossed a record 30,000 points for the first time in its history on Tuesday. The S&P 500, another closely watched index, also closed at a record high. This caps a roaring period in the US markets following major lows in March, when the extent and impact of the pandemic caused a rout. While positive news on vaccines for Covid-19 has played its part in this rally, another major cause of bullish sentiment has been news about President-elect Joseph R Biden’s Cabinet picks. Mr Biden has not announced his entire Cabinet, and some of the appointments are only speculative, such as those of former chairman of the United States Federal Reserve Board of Governors Janet Yellen as treasury secretary. And, even afterwards, Mr Biden will have to get his appointments confirmed by an obstructive upper house of the US Congress controlled by the opposition Republican Party. Yet, the image of assured competence given off by Mr Biden’s choices so far has created optimism. None of the names are any great surprises. Most, like Antony Blinken as the secretary of state — the US’ equivalent for the minister of external affairs — have a long history with Mr Biden and within their respective policy establishments.

The question, however, is even if markets are calmer, what do these choices mean for India and for the Indo-Pacific region more generally? There are multiple pressures at work here. On the one hand, under Mr Trump’s administration the US’ approach to bilateral relations was transactional and the president’s own attitude seemed determined by conflict over trade. On the other hand, Secretary of State Mike Pompeo and his predecessors steered a blunter approach to aggressiveness from the People’s Republic of China that could also have been seen as reassuring. And concerns about human rights shortcomings in India are more likely to be issues for an administration in Washington that is led by the Democratic rather than the Republican Party.

Mr Biden’s own signals on China have been that he will not try to minimise the issues brought up by that country’s distortion of international trading systems or its attempts to bypass and bend international norms. However, he has both overtly and subtly indicated that, unlike his predecessor, he will avoid confrontation and attempt to work more through multilateral networks and in co-ordination with allies and like-minded countries. In recent remarks on the subject of India in particular, Mr Blinken has indicated that he and Mr Biden see India as central to managing “common global challenges” and that a desire for a closer partnership between the two democracies was a bipartisan consensus in both the US and India.

Mr Biden’s first proposed major foreign policy showcase is reportedly a “summit of democracies”, at which India should hope to play a major part. The open question, however, is about the economic side of the relationship, which has been more fraught in recent years. If Ms Yellen takes charge of the treasury department, questions about monetary co-ordination and emerging markets instability will certainly receive a patient hearing. But much depends upon who Mr Biden picks as the US Trade Representative. Markets will hope that the next US administration will seek to move beyond a transactional zero-sum approach to trade with India and look for the common gains in a closer partnership.