The Financial Express

Post-WW II international order in disarray

| Updated: October 23, 2017 11:09:56

Post-WW II international order in disarray

The rise of extreme far-right populist forces in Europe and North America is not simply rooted in the personality or psychology of  Trump, Le Pen and their likes but also in the seething popular discontent with the existing economic and political order that has evolved since the end of the World War II. These extreme far-right politicians are now using that seething discontent as the platform to advance their political agenda of hatred and bigotry. Trump's electoral success has heralded the beginning of challenge to that international order and emboldened politicians of similar elk in Europe like Le Pen and Wilders to mount quite formidable challenges in the forthcoming European elections. 
The post-World War II (WW II) international order has been fundamentally based on multilateralism.  Multilateralism is a rules-based system making it necessary for member-countries committ to those rules to make the system effective. The core of that system is the United Nations (UN). The conference at Bretton Woods in 1944 led to the establishment of two global economic institutions; the International Bank for Reconstruction and Development (IBRD) later to be  renamed as the World Bank (WB) and the International Monetary Fund (IMF). It is also widely recognised that these three multilateral institutions are fundamentally undemocratic. But the system has so far been able to avert any conflict engulfing the whole world. The Havana Conference in 1947 established the General Agreement on Tariffs and Trade (GATT) to further enhance and stimulate international economic cooperation and growth through more open trade flows. The GATT was the forerunner of the World Trade Organisation (WTO).  These multilateral institutions developed a wide range of universal  rules in order to promote international cooperation in economic and political areas. Finally, with the establishment of the World Trade Organisation (WTO) in 1995, the global trading system has been firmly put on a rules-based system. In effect, multilateralism is most frequently used in relation to the concept of international cooperation in relation to the global trading system.
The 1990s also witnessed the emergence of the big idea - Globalisation. The word in itself lacks any precise definition but in general term conveys an idea that the world is being shaped by economic and technological forces. There is no global institution to oversee the process and by default the WTO has become the global institution generally identified to oversee the process. Globalisation has led us into a shared economic and political space creating an environment where policies can no longer be based on nation-states. The rapidly changing global economy resulting from the globalisation is changing our lives so profoundly that a sizeable section of the population has reacted to this process (like the Luddite movement in the United Kingdom in the 1810s against new factory methods of production). Now that reaction is being capitalised by the extreme far-right politicians in many European countries and the United States to come up with an anti-globalisation agenda using the populist white supremacist slogans (couched in anti-immigrant anti-Muslim slogans). The European social fabric is now fraying at the edges. 
The international order was born in the wake of WW II to a very large extent fashioned by the USA, the new global super power replacing Britain. Over the years many European and Asian countries, such as Germany, Japan, and in particular, the emergence of the European community and its ultimate transformation into the European Union (encouraged by the USA) gained increased economic strength. This led to conflict of interests. The expansion trade globally rather exacerbated that situation as the USA took exception to the Common Agricultural Policy (CAP) and Europe to US hegemony. But the USA successfully reined in the European political and strategic challenges through the North Atlantic Treaty Organisation (NATO) which is under its complete dominance.The headquarters of both the EU and the NATO are located in Brussels, rather in a very close proximity.
The collapse of the former Soviet Union has given the USA complete dominance over Europe and  sway over  the world as the global hegemon by expanding the scope of the NATO by incorporating the East European countries formerly belonging to the former Soviet sphere of influence ( the US and its allies used to call them Soviet satellites). The incorporation of these countries into the NATO has given a whole new meaning to the word  "satellite state'' in the changing political climate in Europe. The former US defence secretary Rumsfeld even described these new US satellite states as "New Europe''. At the behest of the USA, the EU-15 has expanded to become now EU-28 (soon likely to become EU-27 with the possible exit of UK). The very rapid expansion of the EU  not only brought significant political challenges but also enormous economic challenges which are now rapidly unfolding as reflected in the BERXIT vote and continuing economic crises in the Southern European countries. 
The Neo-Conservatives (neo-cons) in the USA even postulated a doctrine of permanent US global dominance from here to eternity by maintaining its economic and political supremacy buttressed by its military might - a USA with complete global reach with a string of 800 military bases across the world costing an estimated amount of US$85 billion in 2014. In effect, Washington has become Rome of our time. Their 'Project for the American Century' was designed to "to promote America's global leadership'' claiming that "American leadership is good both for America and the World". With that kind of intellectual fantasy and imbued with new-found faith (like all other religious zealots)  to prove their case, the neo-cons  went for invading and occupying Iraq. The consequences of that invasion leading to the occupation of that country are all too clear to the rest of the world. While the 'Project for American Century' is defunct now, a more realistic group of policy planners consider the decline of the USA both in economic and  political terms. The inability of the USA to  win the numerous wars it has brought about costing billions of dollars fundamentally weakened its economic capacity which is reflected in its declining position as an exporting nation with consequent impact on stimulating growth and also  manifested in many other forms of economic and social  malaise. Now the new US Secretary of Commerce  Wilbur Ross wants to balance trade with each and every country with which it has trade deficits. The USA at the current reckoning runs trade deficits with 101 countries including Bangladesh. He clearly stated in a  television interview very recently that this balancing act would start with Mexico and China first, then move on to other countries. If he does what he says that will completely disrupt the global trading system with serious consequences for the global economy. Trade balances are a multilateral issue, it can not be solved bilaterally. Any attempts to do so will definitely result in a global economic recession. 
While the end of the Cold War created opportunities for the USA and Russia  to cooperate, both still have a plenty of issues over which to clash - with Ukraine and Syria becoming the  major points of confrontation leading to mutual sanctions imposed in 2014 which are still in place. President Trump has made positive overtures of friendship to the Russians with the hope of making two big white nations join together against the others i.e. non-whites. But the US foreign policy establishment is generally very sceptical of President Putin and there is also the economic interest of the war industry in the USA which is very strongly against any reproachment with Russia.  At the same time, Putin also needs to maintain an anti-US stance  for his domestic constituency. All these together will impede any possibility of a US-Russia détente. 
China's economic and  military growth has already caused serious concerns for Washington. The USA's dangerous  military posturing in the South China Sea using the pretext of freedom of navigation is fundamentally an exercise in heightened fantasies of US military omnipotence. The US has also mustered Japanese and Indian navies to its assistance to threaten China in its own territorial waters including EEZ (exclusive economic zone). China in self-defence has installed anti-missile systems on seven of the Nansha islands against the US threats supported and  aided  by its client states. Obviously, war drums are beating in Washington in response to China's defensive preparation. Washington is rationalising its aggression against China on the grounds of installing anti-missile system. But impeding navigation in this vital trade route is against China's vital economic interest.  The US aggression against China will completely  disrupt trade in the region with global consequences. However, that has not deterred  the USA developing plans to go to war with China with the intellectual inputs from the Council on Foreign Affairs (the elite foreign policy think tank in the USA). In one of  its studies ( Revising US Grand Strategy Towards China), it has argued that  that hostilities between the two nations ( China and the USA) are grounded in China's reluctance to embrace the core US foreign policy identified by the Council as preserving US global supremacy in this century (which is  not surprisingly in the similar vein as that of the neo-cons' assertion of the earlier times). This is an ammunition President Trump needs and is likely to use in his  strategic as well as racially motivated aggressive posturing against China.
Against this background, we are witnessing the coming to power in Washington of a man who completely fails to see the writing on the wall that the USA is on a terminal decline as an imperial power. His grandiose illusion of  making 'America great again' can potentially  lead to a global economic and political crisis of historical proportion. President Trump is about to make the world an even more dangerous place to  live by throwing overboard all the universally  accepted norms and codes of behaviour (i.e. multilateralism) which so far have ensured  global peace and prosperity.

The writer is an independent economic and political analyst.


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