Turmoil in the Global Geopolitical Order
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By Tai Wei Lim

Turmoil in the Global Geopolitical Order

Jul. 27, 2018  |     |  0 comments

July 2018 saw turmoil in the global geopolitical order. At the NATO meeting from July 11-12, US President Donald J. Trump urged his NATO colleagues to increase their defense spending and contributions to the world’s most powerful alliance. Many Europeans reacted to this call and agreed basically to increase their defense and military spending to meet agreed NATO requirements. Some quietly acknowledged that Western European states had been lagging behind in military spending (and that Trump had some valid points), including the strongest EU and NATO member state of Germany. The Americans want the Europeans to increase their contributions to 4 percent of their respective economies while the Western Europeans are struggling with meeting the already agreed-upon figure of 2 percent.


Some countries like Germany appear to be on track to meet this 2 percent requirement. But Germany was cited for other problems by the US. Germany was singled out for criticism by Trump for not doing enough for NATO defense. Trump was also critical of the pipeline deal between Russia and Germany, highlighting the potential vulnerability of Germany to Russian interests if the pipeline deal goes through. Trump was also scathing in highlighting former German Chancellor Gerhard Schroeder for heading this project and being the business leader of a Russian consortium. Trump reiterated American ambitions for global energy exports and suggested considering US exports as an alternative.


Trump’s ideas about NATO and the EU were received with surprise and triggered a backlash amongst the Europeans. Trump’s stance in his meeting with NATO divided American domestic opinion. The conservatives supported Trump’s hard-line stance on his European allies. The liberals were upset that Trump offended the most powerful alliance that the US enjoyed and were critical that the US President even labelled traditional allies as “foes.”


This meeting came on the heels of the G7 meeting in June, where the US President had an exchange with the Canadian PM Justin Trudeau. In the Canadian-hosted G7 summit, Trump reiterated the need to reconsider Russia joining the G7 (essentially a revival of the G8), something criticized by his Western European colleagues and even liberals and the left within the US. Russia was expelled from the G8 for invading Crimea.


Against the ongoing turmoil is the spectre of a trade war. The US imposed trade tariffs on a number of countries around the world, both foes and allies alike. But the bulk of the retaliation was reserved for China, with Trump announcing on July 11 a 10 percent tax on USD 200 billion of Chinese products as specific as dog leashes. China retaliated with tit-for-tat tariffs and formally forwarded their complaints to the World Trade Organization.


Fearing further retaliation, Beijing had taken steps to address this by reaching out to other major economic powers. Chinese Premier Li Keqiang went to Germany where they signed billion-dollar deals and vowed to defend free trade and react against rising protectionism in the global arena. The international media even labeled them as unlikely allies in trade. For the past year, these two countries were the most vocal in upholding the neoliberal world order, especially with Chinese President Xi Jinping’s speech in Davos. Chinese overtures also went out to Japan and the ASEAN countries to offset the increasing trade tensions with the US.


Meanwhile, the EU and Japan signed the world’s largest trade deal and trade bloc through the EU-Japan Free Trade Agreement on July 17. It makes up nearly 20 percent of the world’s GDP. European cheese, wines and farm products will find it easier to enter Japan while Japanese carmakers will find a much larger market in the EU. In these two instances, East Asian powers are moving fast to seal deals with their European counterparts in trade items of common interests. In both instances, the moves appear to underlie a new economic order with the Pacific countries extending their reach to the Atlantic sector of the global trade system.

The EU are winners as they have established free trade bridges to major East Asian powers like China and Japan.

After the NATO summit, Trump visited the UK from July 12-15, where he met with PM Theresa May and Queen Elizabeth. May is simultaneously battling her political survival as anti-Brexit forces gathered to resist her soft-Brexit approach and negotiating a tough Brexit deal with the EU. Trump tried to persuade May to sue the EU and use a legal solution to get out of the organization. He threatened to pull out support for a US and UK trade deal in his interview with a British tabloid. Trump avoided London during his working visit except for a brief stopover. Anti-Trump protestors (some figures pegged it at 50,000 people) had gathered at London and flew a baby Trump blimp over the city as a form of protest. Trump alluded that he did not feel very welcome in London. In fact, his visit was described as a “working visit” rather than an “official visit” due to awkwardness in the perceived symbolism of this visit by the political elites of both countries.


But the most controversial trip was Trump’s summit with Russian President Vladimir Putin in Finland on July 16. The world’s two greatest nuclear powers stood side by side with each other in an attempt to re-establish their stalled relationship in the aftermath of the Russian Crimea annexation. Here, he defended the idea of good Russian ties as a cornerstone of his diplomacy. But what enraged his countrymen (this time, both Republicans and Democrats, conservatives as well as liberals) was him seemingly taking sides with the Russians instead of his own intelligence agencies in relations to the meddling of the 2016 US presidential elections. Trump then threw a press conference to acknowledge he made a mistake with his choice of words.


What could be the consequences of this turmoil? First, NATO may become stronger after Trump’s criticisms as member states are prodded to be more faithful to defense spending to secure the security of their own countries. This may make NATO stronger and more able to withstand challenges from Russia. While the EU and the US clashed over trade issues and security contributions, there are no fundamental changes to the solidly united common worldviews of both entities when it comes to security issues. In fact, they are cooperating fully in issues like freedom of navigation operations (FONOPs) in maritime regions like the South China Sea.


The US outreach to Russia is clumsy and controversial. But Trump has established a bridge through which the world’s two greatest nuclear powers are now on talking terms and has established some form of rapport. This may open the way for the future normalization of ties even as the two countries remain strategic rivals. It is better for the US and Russia to be than not to be on talking terms. Russia may feel less encircled even as it seeks to look East to establish new partnerships with major powers in East Asia. This is not an ideal situation for the West. Russia is essentially a European power and has commonalities with the West like Christian roots and civilizational origins.


The EU are winners as they have established free trade bridges to major East Asian powers like China and Japan. China can seek more partners in maintaining a neoliberal economic order that has benefitted her economy tremendously. Germany is one major partner that stands out in this case. Because China and Germany (or the West) will never have similar strategic interests in the security and military spheres, having stronger trade ties may mitigate the diametrically opposite ideologies found in both countries (or with the West for that matter, in the form of liberal democracies vs strongman authoritarianism). China’s hope is to utilize trade interdependence to mitigate any excessive competition in the military and security spheres with the West. Germany and the EU and even Japan are useful buffers against the US trade offensive.


Japan is also a major winner. Together with Australia, it has taken the initiative to establish the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Japan is now a leader of this trade deal in the absence of the US, reserving the right for US to join the CPTPP later. Japan is also one of the four major powers in the Quadrilateral Security Dialogue and has a pivotal role in the US-led Indo Pacific Strategy. The Quad has announced their intention to build an alternative to China’s Belt and Road Initiative (BRI). Japan has also signed the EU-Japan trade deal, giving it access to the world’s largest economic bloc and an injection of strength to its automobile industry. Japan is also open to the idea of joining the BRI, the Chinese-led Asian Infrastructure Investment Bank (AIIB), the Regional Comprehensive Economic Partnership (RCEP), and a trilateral initiative with Seoul and Beijing.


This is a complex clash of rising ideologies in the world: populism, isolationism, liberalism, conservatism, trade constructivism, etc. The world is no longer in a binary order but one in which partnerships are forged when there are incentives to do so, and alignment of strategic interests if all are willing to contribute to the overall budgets. Some call this a new form of transactional diplomacy, extremists label this as the end of the Washington consensus while conservatives and populists label the changes as a re-assertion of national sovereignty.


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