Barack Obama: Speaking softly, but without the big stick

So much attention has been paid to Barack Obama's stimulus package and to his borrow-and-spend budget, that his emerging foreign policy has been largely ignored. Not a good thing: the recession will end, and America will survive. But a foreign policy error can be fatal.

The most noticeable feature, at least according to the President's critics, is his failure to respond to provocation - to the testing that now-Vice-President Joe Biden correctly predicted would come early in the Obama reign. Iran put a satellite in orbit and developed enough uranium to fuel a nuclear bomb. Russia threatened to deploy weapons against the nations it formerly enslaved, and cut natural gas supplies to Europe.

Obama responded by offering to stop plans to deploy anti-missile systems in the Czech Republic and Poland in return for a bit of Russian help with Iran, and by having his vice-president tell the Munich Security Conference that "it is time to press the reset button" and end "the dangerous drift in relations between Russia" and Nato countries. Hardly robust responses to provocations.

But perhaps designed to show our allies that a kinder, softer America is in their future if they do more to share the burden of re-establishing a workable world order. Obama has specialised in studied ambiguity, to use a kind word, or in saying one thing and doing another, to use his critics' preferred formulation.

What Biden called "the new tone" of American policy includes a refusal to torture (but see footnote for authorised exceptions to deviate from Geneva Convention rules), a promise to close Guantánamo Bay (when homes can be found for detainees), and a commitment to draw down our forces in Iraq (but not right away, and leaving 50,000 troops there, to the consternation of Obama's Left).

In short, it is no easy task to predict which way the President will move as the world's problems beat their way to the White House door, as Gordon Brown will no doubt find in Washington this week. But some things are clear.

One is the extraordinarily important role Obama ascribes to Asia. He has assigned Richard Holbrooke to be special envoy to the region's trouble spots in Pakistan and Afghanistan, presumably reporting to secretary of state Hillary Clinton - "presumably", because Holbrooke, a former ambassador to the UN, is known to lust after Clinton's job and is the sort who will not hesitate to go over her head to the President when he deems it necessary.

Then there are Japan and India, nations that George W. Bush successfully wooed and who now stand as stalwart counterforces to an expansionist-minded China. Their continued goodwill is high on the Obama list of priorities.

Even more important is China. The President knows that the US Treasury will be selling increasing amounts of notes and bonds to fund deficits that will be in the trillions for the next few years, and then into the mere hundreds of billions for as far ahead as the eye can see.

So far, China has decided it must buy these IOUs, lest the value of those it already holds declines, and lest the dollar weakens to a point where Chinese goods are so expensive in America that imports from China decline even more sharply. In return, Clinton declined to make much of an issue of the Chinese regime's human rights violations when she visited that country, and Pentagon officials reacted with enthusiasm to China's decision to reopen high-level meetings on military issues.

Of necessity, Obama will have to respond to international pressure on him to defuse the Arab-Israeli dispute. There is still talk of a two-state solution, but no one in the administration really believes that that can be achieved, so long as the Palestinians remain divided between the Hamas and Fatah factions. Here, American and European views are certain to conflict, as the Europeans require ever more concessions from Israel in an effort to cater to the demands of their increasing Muslim populations, and special envoy George Mitchell, reunited with Tony Blair in a new peace-finding mission, seeks a more balanced solution.

This attention to Asian affairs does not necessarily mean that Britain and Europe will be ignored. Co-operation on global warming is likely, although the failure of Germany, Spain, Italy, Denmark and other countries to meet their Kyoto targets - not to mention Japan - suggests that some scaling down of ambitions is called for.

The litmus test so far as Obama is concerned is Afghanistan. Europeans who always disliked George Bush's "you are either with us or against us" attitude might just find that when it comes to Afghanistan that is exactly what Obama thinks.

The underlying reality of all of this can be read in the numbers cascading across the pages of Obama's budget. Soft power is cheap, hard power is expensive. The President is proposing not only to turn down his security advisers' request that he replace the presidential helicopter fleet with craft less vulnerable to missile attacks, at a cost of $11 billion, but to cut out expensive weapons systems.

His budget reduces military spending to three per cent of GDP, the level it was at the time of the September 11 attacks, before we became aware of the threat posed by radical Islamists. The Taliban, North Koreans, Iranians, Russians and assorted bad guys must find it comforting that Obama plans to speak softly, but do without Teddy Roosevelt's big stick.