Rebuilding A Multilateral World After Trump

Repairing the damage to international cooperation will be a work of patience, diplomatic craftsmanship and the slow recovery of mutual trust. And it cannot be done by America alone.

Nibera for Noema Magazine
Credits

Ernesto Zedillo was president of Mexico from 1994 to 2000. He is currently the director of the Yale Center for the Study of Globalization.

This essay is adapted from his remarks at the Berggruen Institute’s 21st Century Council Understanding China conference in Guangzhou.

In September of 2003, Kofi Annan famously gave a speech titled “A Fork in the Road.” He was deeply worried at the time about recent events that, in his view, had indeed put the world at a point where tough choices had to be made.

The United Nations secretary-general’s serious concern essentially stemmed from a reemergence of unilateralism and disregard of international law, whose chief expression had been the invasion of Iraq earlier that year. Annan thought that the unilateral use of force — that is, not properly sanctioned by the Security Council — in reaction to real (or even just perceived) threats, such as terrorism or weapons of mass destruction, posed a fundamental challenge to the principles on which, however imperfectly, world peace and stability had rested for almost six decades.

He was raising the alert about a precedent that could result in the unilateral and lawless use of force, with or without justification. That precedent, he warned, would run against the belief in collective answers to our common problems and challenges, and neglected the shared vision of global solidarity and collective security that had been pledged in the Millennium Declaration three years earlier, in September of 2000.

To be sure, as Annan was ringing the alarm for a weakening of the multilateral system on issues of international peace and security, other aspects of that system seemed to be doing reasonably well.

For example, in the wake of the 9/11 atrocities, the World Trade Organization had nevertheless continued its plans to meet in Doha, Qatar in November, a landmark gathering where not only was China admitted at last, but also the organization had embarked on a new round to further liberalize international trade in merchandise and services. Moreover, early the next year, world leaders had gathered in the north of Mexico and agreed to the Monterrey Consensus to give economic and further political support to the pursuit of the Millennium Development Goals.

In short, multilateralism, the necessary companion of globalization, while certainly in need of being reformed and reinforced, was far from faltering and still providing good service to the causes of global prosperity and stability.

Notwithstanding the failings highlighted by Annan (and others) at the time of his “Fork in the Road” speech, today we can recall the state of the multilateral system back then with enormous nostalgia and wish we could be at least at the juncture he was then depicting. The international rules-based system, and certainly its key multilateral institutions, have been under an incredibly brutal and unprecedented assault for almost four years now. Although there is much blame to go around for the recent damage, the United States stands out by far as the main aggressor.

The Trump administration has literally vandalized many of the system’s institutions and agreements, which ironically were spearheaded by America, and used for its advantage. Instances of such assault abound: the withdrawal from the Paris climate agreement, the UN Human Rights Council and UNESCO; the plan to do the same from the W.H.O.; the termination of the Intermediate-Range Nuclear Forces Treaty; the refusal to negotiate and join the Global Compact on Migration; the repudiation of the Iran nuclear deal; and the paralysis of the WTO’s dispute resolution mechanism.

“The Trump administration has literally vandalized many of the system’s institutions and agreements, which ironically were spearheaded by America, and used for its advantage.”

Although practically all of the Trump government’s attacks on the international system can be shown to be against the national interests of the U.S. itself, this result is strikingly evident in the case of Trump’s trade policy.

Consider for a moment the main components of such policy:

First, the Trump administration aimed to correct the trade (and current account) deficit that for many years has been a feature of the American economy. The wrongheaded approach to pursue this equally wrongheaded goal was to engage aggressively, one by one, the country’s main trade partners and force deals supposedly to fix the respective imbalances. This approach — which not only ignored the basic insights stemming from the essential notion of comparative advantage and national income identity, but also conceives of international trade as a bellicose zero-sum game — led the U.S. government to use self-defeating protectionism to try to fix external imbalances.

The result: the U.S. trade deficit in August reached its highest level in 14 years, thus recording for the period of January to August a trade gap of $422 billion, up — despite the dramatic global economic slowdown — almost 6% from the equivalent period last year.

Second, on day three of his administration, Trump withdrew the U.S. from the Trans-Pacific Partnership (T.P.P.) without providing any economic or geopolitical justification for the move. That this action went against the interests of the U.S. is clear from the fact that the T.P.P. was agreed and constructed to satisfy the interests and demands, as well as the standards and practices, of the U.S. to a much greater extent than any previous trade agreement ever subscribed by that country.

The result: Trump’s decision caused the U.S. to incur not only a meaningful economic cost but also a substantial loss in geopolitical influence in a critical part of the world. Furthermore, the 11 remaining partners slightly modified the T.P.P. agreement and signed it in March 2018.

Moreover, a few days ago, China and 14 other nations, from Japan to New Zealand to Myanmar, formally signed the Regional Comprehensive Economic Partnership (R.C.E.P.). This pact was spearheaded by China purportedly, in the view of some observers, as a counterweight to American influence in the region. The successful negotiation of this pact, which is now the largest free trade agreement in the world, truly highlights Trump’s inanity of dropping the T.P.P. for no good reason.

Third, based on fallacious arguments, Trump forced Mexico and Canada to renegotiate NAFTA. Although his negotiators did not get all the rather awkward demands they maintained throughout most of the talks, they did get an agreement: the U.S.M.C.A. For the most part, it’s inferior to the old NAFTA, since it diminishes the region’s competitiveness in global markets.

The result: With the U.S.M.C.A., both Mexico and Canada lose, but so does the U.S. as well.

“It has been left to American consumers, farmers and taxpayers to suffer the folly of Trump’s acute trade bellicosity against China.”

Fourth, the Trump administration, by blocking the appointment of new members to the W.T.O.’s appellate body of the dispute settlement system, has crippled the organization. To justify his animosity towards the W.T.O., Trump has argued that his country loses almost all lawsuits and that the system has been “terrible” for the U.S. (both of which are far from true).

The result: One of the best and most useful multilateral institutions has been left in a state of hibernation thanks to the Trump government.

Fifth, initiating unjustified trade wars has been the Trump administration’s most egregious trade policy. Doing so against “friendly” trade partners like Canada, Mexico, Brazil and the European countries was ill-advised, but it pales in comparison to the aggressiveness displayed against China. Step by step, the Trump administration set off an authentic trade war practically without precedent since the 1930s.

Regretfully, but not surprisingly, China responded in kind. The clock of these two countries’ trade cooperation and interdependence has been set back many years. Every serious legal and economic analysis of the arguments provided by the U.S. government to justify its massive trade attacks on China have found the alleged American justification questionable at best and patently illegal at worst.

The result: The U.S. has not won the trade war Trump initiated — there are never winners in these kinds of episodes. It has been left to American consumers, farmers and taxpayers to suffer the folly of Trump’s acute trade bellicosity against China.

Unfortunately, Trump’s animosity toward China has not been limited to trade issues, but has extended to other matters, somehow also influencing the negative attitude of other countries toward China. Deplorably, China itself has been a counterpart eager to play to the tune of the confrontational and aggressive tone set in motion by the U.S., including a worrisome dismissiveness of some key multilateral institutions.

The ill-fated events of recent years have led to a boom in the dubious occupation of predicting unavoidable fatalities. The Thucydides Trap, Graham Allison’s term for when an emerging power threatens an existing one, and the Cold War have been given a renaissance by pundits of geopolitics. Much ink has been spilled in describing the inevitable confrontations to come, including military ones, rather than denouncing the folly of the tit-for-tat game being irresponsibly played by global powers.

That is how the world has arrived at a 2021 fork in the road, a much more challenging situation than the one described by Kofi Annan in 2003.

“Deplorably, China itself has been a counterpart eager to play to the tune of the confrontational and aggressive tone set in motion by the U.S., including a worrisome dismissiveness of some key multilateral institutions.”

The global powers can choose to move forward along the path that in all likelihood will lead to disaster. This path is about dismissing the rules-based international system; neglecting the value of international cooperation; reaffirming unilateral, or at best bilateral, approaches to address issues of collective interest; spending on the military instead of diplomacy and human wellbeing; continuing to blame others and interdependence for the social consequences of essentially homegrown policy failures; and continuing to look at international trade, investment and migration as zero-sum games.

In short: Proceeding to undo the positive aspects of the world order painstakingly constructed only after the shameful experiences (two world wars and a great depression) suffered in the first half of the 20th century.

Staying on this path could lead to a repetition of past episodes of immense, unnecessary and unjust human suffering, or worse.

Or: The global powers, joined decisively by enlightened emerging countries, can decide to work together on the other path where international peace and prosperity, which are good for every country, if not guaranteed, indeed constitute the most probable outcome.

Needless to say, moving on that path, despite its promise, will not be easy. For one thing, movement in the other direction has gained significant momentum in recent years. An adversarial view of the world has become influential even among otherwise cosmopolitan citizens of open societies.

Repairing the damage suffered by international relations and cooperation will be a work of patience, diplomatic craftsmanship and slow recovery of mutual trust. But although the U.S. under Trump has been the worst offender, and President-elect Joe Biden has signaled he will return to the international agreements and institutions repudiated by Trump, the reconstruction and improvement of the system requires the goodwill and effort of all stakeholders.

This is certainly the case for China. For example, even though Trump’s trade actions against China have been illegal, unjustified, excessive and harmful to both countries, China must also work hard to repair the damage.

The new U.S. government will need good economic and political arguments to leave behind Trump’s wrongheaded trade war. China must consider putting on the table serious offers not only concerning market access, but also much stronger disciplines for other aspects of the economic interaction between the two countries that traditionally have been causes of irritation and recently the excuse for confrontation.

“Even though Trump’s trade actions against China have been illegal, unjustified, excessive and harmful to both countries, China must also work hard to repair the damage.”

Would this be too much to expect from the Chinese government? Not really.

The U.S. and China had actually substantially walked this talk by making significant progress in the negotiation of a U.S.-China Bilateral Investment Treaty that had been launched in the George W. Bush administration. None other than the chief American trade negotiator in the Obama administration, Michael Froman, wrote that when Trump took office, “a bilateral accord that imposes binding and enforceable requirements on China to dramatically increase its intellectual property rights enforcement, prohibit forced technology transfer, adopt meaningful disciplines on state-owned enterprises and open vast portions of the Chinese economy to market competition, including from U.S. firms” was more than 90% complete.

Completing that as soon as possible, or even better expanding it by including robust disciplines on cybersecurity, would work wonders not just to achieve “trade peace” between the two countries but to start shifting the American public’s attitudes toward China in a much more positive direction, something that is also indispensable to address other thorny issues of the bilateral and multilateral agenda.