was seeking to position the US, already the most
powerful economy in the world, as the fulcrum of
global trade in the twenty-first century. But in the
autumn of 1997 Congress baulked at allowing
Clinton wider powers – fast track – to negotiate
further trade deals.
The failures of policies in China and Japan
during the early Clinton years were obvious; the
successes, whose benefits lay in the future, did not
make as much impression on the public as the
continuing scandals enveloping the White House.
Clinton alienated many of his own supporters; the
liberal Democrats condemned the policy of grant-
ing China most favoured nation trading status
despite its human-rights abuses; they were also
opposed to his plans for limiting welfare and to
the introduction of a tough crime bill. Clinton’s
agenda was changing and moving to the right; his
approval rate was falling. Recognising that there
was a political vacuum and a lack of a clear
mission, congressman Newton Gingrich, the
Republican whip in the House of Representatives,
seized the initiative and set out a new Republican
manifesto for the November 1994 congressional
elections, a ten-point conservative ‘Contract with
America’ which sought to end ‘undeserving’
welfare for unmarried teenage mothers; to
provide tax breaks for the better-off; to oppose
US participation to UN peacekeeping all around
the world; and to promote fiscal responsibility.
Many voters, disillusioned with politicians in
general and the Clinton presidency in particular,
chose to stay away from the mid-term elections.
The Republicans won a sweeping victory, captur-
ing both the House and the Senate; Newton
Gingrich became the new speaker of the House.
Despite a largely Republican Congress, from
the low of autumn 1994 Clinton managed to win
back the support that would lead to his re-
election in November 1996, showing a new polit-
ical astuteness and employing successful measures
at home and abroad. In the Bosnian wars the US
seized the initiative and put an end to the fight-
ing: the UN embargo on arms was ignored and
the Croats and the Bosnian Muslims were per-
suaded to form an alliance to defeat the Serbs.
Diplomatically the US played a predominant
role in fashioning the Dayton Agreement in
November 1995. A week later, on his visit to
Northern Ireland, Clinton was greeted as a peace-
maker. In March 1996 he took a firm line on
China’s threat to the Taiwanese presidential elec-
tions; China engaged in military manoeuvres,
firing missiles close to Taiwan, but the crisis was
averted. In foreign affairs Clinton could no longer
be regarded as a novice.
At home Clinton succeeded in portraying the
Republican Congress as extremist in its domestic
policies while he himself took the centre ground.
The ‘New Democrat’ agenda was tough on crime
and tough on welfare for the ‘undeserving poor’;
the government would provide education and
training to enable welfare recipients to return to
work, punishing the recalcitrant by withdrawing
support. The programme sounded attractive to
the majority of Americans, who were enjoying a
buoyant economy with unemployment under 5
per cent. The declining auto industry was restruc-
tured and modernised; ‘Silicon Valley’ symbolised
America’s leadership in the field of information
technology; up and down the country in busi-
nesses large and small management and workers
demonstrated their capacity to change and com-
pete. Prosperity now depended on the export of
goods and services, which made up a third of the
Gross Domestic Product. A political consensus
had been reached for the government to downsize
and to balance the budget by 2002. On these fun-
damental issues the New Democrats and the
Republicans were largely in agreement, although
Clinton vetoed the more stringent cuts to such
entitlements as the Medicare programme for the
aged. However, in December 1995 Congress and
the administration were deadlocked over the bud-
get. The spectacle of unpaid federal employees
rebounded on speaker Gingrich and the Republi-
cans, who were forced to compromise. Clinton’s
appeal became a broad one for moderates across
party lines. However, on racial issues he followed
more conservative and traditional policies of inte-
gration through education and training. As black
and Hispanic Americans climbed the ladder in
economic-social terms so, it was argued, would
the bitter divides of race diminish.
By November 1996 Clinton was well placed.
His most dangerous potential opponent in the