Well, not exactly. Apparently American kids do not spend enough time on core subjects to compete internationally on standardized tests, which is not necessarily a bad thing.
My wife went through the Taiwanese educational system, and she deeply regrets having started to late (college) trying to be a dancer. She spent the years that one best acquires a sense of rhythmic coordination and muscle control (the language-learning years) cramming for tests. Not coincidentally, have you ever tried to listen to Asian pop music or watch 'the average' Asian movie or TV series? Of course, there is the occasional exception, but the overall quality of creative and artistic products is _much_ lower, and even the good stuff is usually an adaptation of something that originated in the West. Maybe 20 years ago one could blame this copycat-ism on economic disparities between the West and East, but not anymore. Western-ness isn't t nearly as fashionable as it used to be. Western kids learn how to paint, play instruments, dance, etc at the only age when people are really well suited to learn these subjects.
Anybody who has ever had a professional job should probably be aware that one learns roughly 80% of the skills one needs on the job. Yet the time learning these skills pales in comparison to the amount of time spent learning the other 20%: the 'foundation' skills that one acquires via the educational system. This is a terribly inefficient system.
Things are the way they are because HR departments need a filtering mechanism, since they don't have the time to interview everybody, and educators have the incentive to say that more education is required, since their paycheck is directly related to the amount of time that everyone spends in school. Societally, its a match made in hell.
If we, as a society, were really concerned with efficiency, we'd spend 20% of our educational time learning the foundation skills for our profession of choice, and 80% of our time learning (and producing) on-the-job as an apprentice. Instead, for the last century or two in Western countries, since people aren't starving at nearly the rates they used to be, we've become a lot more concerned with satiety than efficiency.
All this hubbub about standardized tests is really fairly meaningless unless one can extrapolate their results into overall economic performance. As presented in the economist article you listed, all we know is that Western kids have fallen behind on the acquisition of a set of more-or-less useless skills. When you say "compete at the global level," one ought to ask, "Compete at what? Taking standardized tests? Who wants to be good at that?"