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2017: The end of the liberal world order?

Editorial by Alain Guidetti

The countless reactions to the surprise election of Donald Trump in the US, on 8 November 2016, have at least one point in common: the risks posed to the global liberal order by a forthcoming president whose protectionist convictions and isolationist sentiments will shape international relations for years to come.

The liberal order inspired, developed and sustained by America over three generations, underpinned by an array of values (democracy, free markets) and institutions (UN, WTO etc.), seems promised to a rapid break down under the populist-revolutionary assault of a US president who promised “America first” to replace “American leadership”.

The most famous voices have taken the stage to denounce a historic rupture to come, what Francis Fukuyama, author of “The End of History”, calls “as momentous a juncture as the fall of the Berlin Wall in 1989”, and Robert Kagan, author of “The World America Made”, describes as “a decisive break” that brings “the US, for now, out of the world order business”. Ian Bremmer, head of Eurasia Group, formulates these somber conclusions: “the era of American leadership is over (…) the US has become the single biggest source of international uncertainty”. For its part, the Financial Times wrote in a column that Mr. Trump’s election does not reflects the promise to “make America great again”, but rather “a terrible sign of national decadence and decline”.

Besides these superlatives, most analysts have stressed the danger presented by Mr. Trump’s proclaimed intentions of breaking or ignoring international agreements and institutions that sustain trade in a globalized world, a world in which US multinational companies have major interests and myriads of (American) jobs are at stake, notably in advanced technologies sectors. They project little chances of survival for an international order of shared institutions and common practices which will be deprived of leadership by a US president claiming to understand and to protect American interests unilaterally instead of universally.

In particular, they warn against the threats made to the WTO, the North American Free Trade Agreement and the (already moribund) Trans-Pacific Partnership; the denial of climate change and the vow to withdraw the US from the Paris Agreement; the snubbing of international institutions and more generally of all consensus-based negotiations. In the security field, they decry the threat to scrap the Iran nuclear agreement and the denunciation of the US-led system of international security alliances, including NATO. They underscore the dumb-struck reaction of most of the US partners, in Europe and East Asia, to the perceived abandonment of US military commitments towards its allies, in the face of increasingly assertive pressures from a rising great power, China, and an aggressive declining power, Russia. They deplore that all these prospects illustrate a departure from a traditional leadership policy towards a transactional approach of international affairs informed by Mr. Trump’s experience as businessman and his ignorance of international politics.

These critical voices express dismay at the swift slide of US and Western societies toward populist and ethnic nationalisms, as demonstrated by the Brexit, the election of Donald Trump and the rise of the “alt right” in the US, the rise of the National Front under Marine Le Pen in France, and similar developments involving far right and ultra-nationalist movements and parties in numerous European countries, including Austria, Hungary and Poland. But they also bitterly recognize that this radical transformation of the political landscape emerges as a consequence of the elites’ blatant failure to respond to growing concerns in Western societies about inequalities, economic uncertainties and loss of identity enhanced by globalization. The ignorance of the legitimate concerns of large segments of Western societies created the seeds of discontent, fueled by astute demagogues.

To relativize these lamentations on the rise of populism and the demise of the liberal order, things have to be put in context. The world order is no longer the model we claim. Forged in the aftermath of WWII and universalized after the end of the Cold War, it has suffered a series of blows. To quote the most recent: the 2008 financial crisis that seriously questioned the merits of the Western financial and economic order (called Washington consensus) to the failure of the war in Iraq, the breakdown of the Middle East; increasing instability in East Asia and the military annexation of Crimea.

In sum, the international system has been shaken to the point that we now face, to quote Ian Bremmer, a “world of disorder” instead of world order. This essentially reflects the shift in the global power balance associated with the rise of China, and the subsequent waning of the Pax Americana, the security legacy of the world order. And this is exemplified by the prudent approach to international affairs by the Obama Administration, often qualified as restraint, which mirrors a predominant reluctance of Americans towards interventionism after the Iraq war. Interestingly, a similarly restrained policy is advocated by Mr. Trump. Both recognize that the US has no longer the means to police the world.

But what Mr. Trump promotes in a unilateralist “America first” approach of international relations represents a fundamental shift in American foreign policy. Political scientists would define it as a revolutionary posture towards the world order, akin of the one advocated by the Russian president V. Putin, who makes no mystery of his distaste of an international system dominated by the US. Like Mr. Putin, the president-elect sees international relations through the prism of a Hobbesian order, made of a collection of powers governed by zero-sum game interactions. While the current order ruled the world with more or less success over the last decades - ensuring notably a relative peace and the spectacular rise of China - the international system put forward by Mr. Trump (and Mr. Putin) is the one that prevailed in the 19th century and in the 1920s and 1930s, the period that lead to WWII. 

China to replace the US ?

But there is no certainty that the global world order is about to collapse. Whatever the defiance of the president-elect towards globalization and his reluctance to seriously engage with the world institutions underpinning the global order, it will continue to exist and evolve anyway. There cannot be a return to pre-globalization, save a collapse of the world economy that nobody wants. And it is certainly no accident that, at the time a protectionist and globalization-wary Administration comes to power in Washington, other actors show interest in the sustainability of globalization and the international economic order.

Europe should be the first to come to mind to take the lead. But the current weaknesses, from its existential troubles to the lack of unity on major challenges and the meager economic performance make of the EU an uncertain candidate.

Thus, the first to come up may well be China, which has already responded to the collapse of the Trans Pacific Partnership, initially a US sponsored project, vehemently criticized in the US. Beijing is actively promoting rival trade frameworks, in particular the Regional Comprehensive Economic Partnership (RCEP) that is bound to link all Asian economies within a free-trade agreement under Chinese leadership. Furthermore, Beijing promotes the One Belt One Road project that will connect China to Europe through an array of infrastructures shaping the development of Eurasia and beyond.

In a strikingly symbolic gesture, Xi Jinping will be the first Chinese president to visit the World Economic Forum in Davos this year, to showcase the “responsible leadership role” that he wants to play in global affairs. It is not even clear that the transition team in Washington will send someone to the Mecca of globalization. China has largely taken advantage of globalization in its stunning rise to great power. As Joseph Nye says, China’s interest is not in scrapping the institutions underpinning globalization, but in inducing them into a more favorable orientation towards it.

The question is whether China is willing to take the lead in the management of world affairs, and whether it would be able to do so, given the considerable responsibilities it involves. This is complicated by the contradiction of the apparent US willingness to vacate the driver’s seat of the global order, while still keen to maintain a posture as the sole great power.

Two elements invite prudence. First, the security component (military alliances) of the world order is the highest point of contention between the US and China. There is no sign that either would like to back down in the competition for regional and global preeminence. Second, the president-elect has made China the major target of an assertive trade posture, threatening to impose huge tariffs on Chinese products. Economists have already warned against a trade war that could have tremendous effects on the growth prospects of the world economy. Both of those factors shape a very complex bilateral environment that, in addition to other irritants such as Taiwan and North Korea, may have a potentially extremely disruptive impact on the world order.

Alain Guidetti is Senior Diplomatic Advisor at the Geneva Centre for Security Policy (GCSP). The views expressed here are the personal views of the author.

Photo: Creative Commons