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November 26, 2017

The shifting global order


November 26, 2017

While we continue to be consumed by local issues – including the Faizabad sit-in – the world around us is changing in several significant ways. Two developments that have taken place during the last couple of weeks have had a bearing on how the international political and economic order will evolve.

US President Trump’s 12-day-long first Asia tour was an exercise in projecting his administration’s foreign policy objectives to a part of the world that has been shaken by his unilateral withdrawal from the Trans-Pacific Partnership (TPP) on his first day in office.

The much-talked-about Asia trip of the US leader served to achieve three broad objectives. First, it was a rigorous diplomatic push to align support for and urge unity in the Asia-Pacific region to confront and contain North Korea. Second, it was aimed at reassuring the old allies of continued US engagement with the region and reiterating Washington’s commitment to serve as a counterweight to rising China. Third, the visit reflected Trump’s view of trade deals, including his preference for bilateral trade arrangements and repudiation of multilateral trading accords.

Though President Trump received a red-carpet welcome in Japan, South Korea and Vietnam, the inherent contradictions in his broad message could not be more explicit. How can you urge a regional effort against a common enemy when you are averse to promoting trade and investment through a multilateral forum? However, the administration’s renewal of commitment to the Asia-Pacific countries is underpinned by rising profile of the region. The Asia-Pacific is characterised by the presence of three of the largest economies, seven of the fastest-growing markets and seven of the world’s 10 largest armies. To top it all, the region is likely to emerge as the producer of more than half of the global economic output in the years to come.

The increasing importance of the Asia-Pacific region is also underscored by former president Obama’s enunciation of the Pivot to Asia policy that guided his administration’s security, economic and trade policies. The policy sought to strengthen bilateral security alliances, deepen the working relationship with emerging powers, engage with regional multilateral institutions, expand trade and investment and advance democracy and human rights.

While the Pivot to Asia policy became dead after Trump was sworn in, he has, somehow, replaced it with a free and open Indo-Pacific policy. Trump repeatedly mentioned the policy in his speeches in Vietnam to reassure the bewildered audiences of the US continued commitment.

While foreign policy gurus have described the nascent Indo-Pacific policy as representing the continuation of Obama’s Pivot to Asia vision, it tends to revolve around four countries: Australia, India, Japan and the US. The impression being sent out to the world is that of a US foreign policy that focuses more on form than on substance and lacks coherence as well as an adherence to the larger ideals of democracy, human rights and a rules-based international order.

The second development related to the recently concluded Asia-Pacific Economic Cooperation (APEC) summit held in Da Nang, Vietnam. Organised on the heels of Trump’s Asia tour, the summit was more about realignment and the changing nature of the global economic and political architecture than any other event to date. The speeches delivered by Trump and Chinese President Xi Jinping were especially noteworthy. The contrast in their messages could not be more stark and pithy.

Trump took the opportunity to put across his ‘America First’ slogan much more vociferously than he has done to date in a foreign land. Vowing to protect American interests against foreign exploitation and advocating a unilateralist approach, he declared that: “we are not going to let [anyone] take advantage of [the US] anymore”. He told a group of leaders who had pinned hopes on the economic partnership with the US that: “I am always going to put America first, the same way that I expect all of you in this room to put your countries first”.

Trump particularly directed his ire at the multilateral trading forums, including World Trade Organization, when he said, “[W]e have not been treated fairly by the [WTO]. Organisations like the WTO can only function properly when all members follow the rules and respect the sovereign rights of every member,” Trump said. “What we will no longer do is enter into large agreements that tie our hands, surrender our sovereignty and make meaningful enforcement practically impossible.”

Though the US president fell short of directly naming China, he did assert that America will no longer “turn a blind eye to violations, cheating, or economic aggression” or “tolerate the audacious theft of intellectual property”. If we were to choose a headline for the speech, it would be none other than ‘economic nationalism’ – a slogan that has been central to the phenomenal rise of Trump who fought against heavy odds to make his way into the White House.

The emphasis on the theme of ‘economic nationalism’ was matched by a robust defence of ‘economic globalisation’ by Xi Jinping. Exuding renewed confidence after the 19th National Congress of the CPC consolidated his power at the helm of the second largest economy and paramount global military power, Xi Jinping used the APEC forum to highlight the issues that are at the heart of the evolving global order. He put up a defence of globalisation, free trade and multilateral institutions in addition to calling for further integration and cooperation among the countries of Asia-Pacific region. The themes that President Xi shed light on represented a reiteration of what he had stated at World Economic Forum in Davos in January.

“China will not slow its steps in opening up itself,”  Xi       said.   “We will work together with other countries to create new drivers of common development through the launching of the One Belt and One Road initiative.”

He also promised that “all businesses registered in China will be treated as equals” and China will “grant more powers to pilot free trade zones to conduct reform and explore the opening of free trade ports”.

In addition, Xi Jinping assured the Asia-Pacific countries that China will “stick to the path of peaceful development” and “promote the building of a new type of international relations based on mutual respect, fairness and justice, and win-win cooperation”.

His strong support for economic globalisation – citing it as “irreversible historical trend” – must have provided a soothing relief to the APEC leaders who were negotiating to seal the 11-member TPP without the US. Hailed as the largest trade agreement in history, the member countries would enjoy tariff-free trade with each other. 

In the run up to the APEC summit, Ian Bremmer,  the president  of the political consultancy Eurasia Group and a columnist with Time magazine tweeted: “Every foreign leader I’ve spoken with at APEC thinks Trump presidency has been enormous gift for the Chinese”.

While the US under Donald Trump is withdrawing from its global leadership role, China under Xi Jinping is moving in slowly but surely to fill in the void. This is likely to have huge implications for countries like Pakistan as they are ready to grapple with the shifting tectonic plates.


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