Category: Orlando, Florida Local News

A world ripe for the taking

An alternative superpower is not about to enforce an alternative arrangement. China, the other power comparable to the United States, shows little interest in taking the mantle of global hegemony to protect some liberal multilateral order.

The Asian giant played a part in bringing us to this moment. Its wave of exports to the United States contributed to build the sense of grievance that turned American voters against the liberal, globalized order and into Trump’s embrace.

Its persistent mercantilistic tactics, from undervaluing its currency to subsidizing exporting firms even as it closes its market to imports from abroad, make clear it has no interest in making the sacrifices needed to be a global leader. From Europe to Latin America, countries swamped by Chinese exports will have a hard time trusting Beijing to lead.

It is also unclear whether it wants to confront the US at this stage, likely preferring to wait and see what it can salvage from the present global order that has brought it such prosperity. But it is probably not worried about the implosion of the postwar international institutional architecture – built by the western democracies under the aegis of the United States – that it perceives as hostile to its form of government and national interests, from the South Pacific to Taiwan.

In the absence of a leader capable of providing tools with which to build a new international architecture and draw others into some new global understanding, the world risks being pulled apart by many uncoordinated efforts as countries cut ad-hoc deals to gain markets and buy insurance against the riskier global environment. Such deals won’t be based on any sense of shared values and principles, but on narrow calculations of costs and benefits. Alliances will be transactional, fluid, prone to be reassessed and jettisoned at the flip of the coin. This is a world ripe for the taking.

Alexander Stubb, president of Finland, has emerged as a leading thinker about the world’s present quandary, cited approvingly in Carney’s speech as providing inspiration for Canada’s new principled yet pragmatic approach to the world. “We live in a new world of disorder,” Stubb argues, on the level of other historical watersheds – the first and second world wars, and the end of the cold war.

Each of these ushered in a new world order, which lasted for a few decades until the next inflection point. The next five to 10 years, Stubb thinks, will shape the world order over the next 30 to 50.

Stubb would prefer a world order based on values and multilateral rules, perhaps one less hypocritical than the one we are abandoning, but which affirms dialogue and cooperation as the main tool to address global challenges.

Achieving that, Stubb says, will require rebuilding many of the global institutions erected after the second world war – from the United Nations to the IMF, the World Bank and the World Trade Organization – to reduce the dominance of the United States and other western powers, and give more voice to nations from the global south such as Brazil, India and Indonesia.

But that will be hard to build without the United States. Success will depend on whether Washington wants to preserve a multilateral world order in which it would not exercise power as freely as it has over the last 80 years. The odds for that look very long.

Even if were Trump succeeded three years from now by a reasonable human being with some decency and an understanding of the value of win-win international relations, eager to mend the global institutions and the trust he has done so much to destroy, it would be extremely difficult to convince countries which will have spent four years trying to protect themselves from American aggression to simply accept Washington’s word and walk happily back into a US-led global tent.

A more likely outcome, at this stage, seems to be that the multilateral, globalized order we are leaving behind will be replaced by no order at all – a system with no agreed upon guidelines to conduct trade or international finance and no common legal understanding to guarantee rights like states’ sovereignty, let alone things like asylum or human rights.

Perhaps this splits the world into competing spheres of influence, with weaker countries shoehorned, whether voluntarily or less so, into rival blocks, likely revolving around the two great powers, China and the United States. Or maybe we get a free for all in which the mighty wander the world imposing their will on the relatively weak.

It is unclear where the European Union or other rich countries like Japan, South Korea or Australia would fit in this arrangement. They are most likely to try to restore a multilateral architecture – supporting efforts to consolidate a dispute settlement mechanism without the US under the umbrella of the WTO. They will try to maintain trade and financial links to both China and the United States.

Some bigger nations in the global south – like Brazil and India and maybe even Indonesia – may have the heft to maintain their independence, playing off the rival powers against each other, taking what’s best from relationships with either. But many developing nations will have no choice but become some sort of vassal state, with limited policy autonomy.

Brazil may have the heft – and the distance from the United States – to protect its vigorous trade with China, which buys much of its iron ore, beef and soya beans. Others won’t – Mexico just raised tariffs up to 50% on imports from China, a move largely believed to be about placating Trump. Panama’s supreme court just invalidated the longstanding contract with Hong Kong-based CK Hutchison to run ports at either end of the Panama canal.

This new world will be very different from that which emerged from the second world war, when the United States promoted a vision in which economic interdependence would tie countries together in the pursuit of shared prosperity.

The cost-benefit analysis has changed for good. Over coming decades, the search for new opportunities will be met with the fear of new vulnerabilities. This will stunt trade and temper investment, raising costs for businesses and consumers, and limiting entrepreneurs to opportunities close to home. The world will lose economies of scale and forfeit common insurance against risk, forcing each country to seek protection against the many threats the future will bring – economic, environmental, about health or security – largely on its own.

We will come to rue having taken this path. History seems pretty clear that a world of roaming great powers is not particularly safe nor prosperous. For all the flaws and the hypocrisy in the postwar order, rules-based multilateralism and cooperative problem-solving provide a better way for organizing the world’s affairs.

That ship seems to have sailed, though. Whatever institutional architecture emerges from this moment, it will be hard to escape the world lamented by Carney, ascribed to Thucydides, in which “the strong can do what they can, and the weak must suffer what they must”.

• Eduardo Porter is a journalist focused on economics and politics. He is a Guardian US columnist and writes the newsletter Being There on Substack

• Spot illustrations by Ryan Chapman