The Pandemic Depression
The Global Economy Will Never Be the Same
During the campaign, U.S. President-elect Donald Trump made it clear that he does not like the prevailing international order and rejects key components of traditional U.S. foreign policy. In contrasting his “America first” approach with status quo “globalism,” Trump implied that Americans are not the chief beneficiaries of the current world order but victims of it. Weakened by bad trade agreements, shortchanged by free-riding allies, and called to endless military interventions, the United States, in the president-elect’s view, should no longer expend blood and treasure propping up the international system.
And yet, as his team will discover upon taking office, knocking down the liberal, rules-based international order would only worsen the problems Trump has identified. If Trump seeks to enhance the security and well-being of the Americans who sent him to the White House, he will need to mend the global order rather than end it. It is thus good news that, in true “Nixon goes to China” fashion, Trump’s months spent railing against allies, trade agreements, and current rules uniquely position him to reform and strengthen the U.S.-led order, if he chooses to do so.
Trump’s months spent railing against allies, trade agreements, and current rules uniquely position him to reform and strengthen the U.S.-led order.
Taking on the task would require a change in perspective by Trump and his national security team. But perhaps it will be just the kind of transformation prompted by the shift from campaigning to governing. As the Trump team takes the reins of foreign policy, it will see that the components of the international order are quite concrete and were in large part created by the United States and its allies. As such, the interlocking web of norms, institutions, rules, and relationships that makes up the liberal international order—ranging from maritime law to the nonproliferation regime to trade and financial arrangements—has delivered tangible benefits to the United States.
THE LIBERAL ORDER AND ITS CRITICS
Successive presidents have used U.S. power to bolster the international order’s rules and punish transgressors. In the seven decades since the world shifted away from a spheres-of-influence order ruled by might alone, the liberal order has helped to preserve peace among the great powers, foster economic prosperity, and facilitate the spread of freedom.
That’s why Republican and Democratic presidents alike have emphasized the importance of world order, while differing in key ways about how best to shape and bolster it. Democratic U.S. President Barack Obama’s 2015 national security strategy document, for instance, devotes an entire section to international order, stressing the United States’ obligation to reinforce and create “the rules, norms, and institutions that are the foundation for peace, security, prosperity,” and human rights. For Republican President George W. Bush, the goal was “to use our position of unparalleled strength and influence to build an atmosphere of international order and openness.”
On the campaign trail, Trump articulated a very different view. Poorly negotiated trade pacts, he argued, have killed American jobs and sent them to lower-wage and currency-manipulating nations. U.S. taxpayers spend billions of dollars to uphold the country’s disproportionate responsibilities, while free riders grow prosperous off of the stability Washington provides. The United States takes on security responsibilities better left to locals, and the effort to fill vacuums and right wrongs on the world stage leads to misguided adventures such as the interventions in Iraq and Libya. Put this way, it’s clear why many Americans might reasonably conclude that the United States’ traditional role in global order is a raw deal and that a major course correction is needed—and soon.
Indeed, a key lesson of the presidential election is that globalization and its current structures aren’t working for a major portion of the U.S. population. The traditional arguments used to defend globalization have fallen flat. If the global order, buttressed by U.S. power, purports to generate the blessings of security, prosperity, and freedom . . . well, a lot of Americans feel they’ve been missing out.
A key lesson of the presidential election is that globalization and its current structures aren’t working for a major portion of the U.S. population.
They’re on to something. The international order so cherished by modern presidents has become increasingly frayed in recent years. Russia continues to challenge basic norms of sovereignty and self-determination in eastern Europe, and the Islamic State (also known as ISIS) has upended the notion of borders in the Middle East. China’s globally competitive state-owned enterprises have revealed gaps in global trade rules, and the United States has had little recourse to stopping its currency manipulation. Beijing’s claims over virtually the entire South China Sea and its attempts to limit freedom of navigation there pose a serious challenge to the traditional maritime order. North Korea and Iran have pursued nuclear programs in defiance of nonproliferation rules. Despite a formal embrace of universal human rights by the greater international community, freedom in the world continues a decadelong decline. And just at the moment when the order needs bolstering, a number of the United States’ closest allies in Europe have embraced austerity and curtailed their spending on defense and foreign aid. In turn, they have looked, once again, to Washington to do the heavy lifting.
MEND IT, DON’T END IT
It is clearly tempting for the United States to walk away. Yet to do so—or, more likely, to let the liberal order wither under neglect—would be profoundly dangerous. Its creation was a response to the destructive wars, economic depressions, and rise of dictatorships that marred the first half of the twentieth century. Since then, the world has seen the longest period of great-power peace in modern history, the largest number of people ever pulled up from poverty, and an unprecedented expansion of democracy. To paraphrase British Prime Minister Winston Churchill, the liberal order is the worst form of international organization—except for all the others.
Despite Trump’s campaign rhetoric, it is possible that the president-elect will come to see the merit in the liberal international order rather than only its drawbacks. Like infrastructure, it is a critically important component of national life that needs to be refurbished and modernized. On both, Trump will be judged not by what he knocks down but by what he can build.
Here he has a profound opportunity. His controversial campaign pronouncements have already motivated foreign action. Key allies from NATO to Northeast Asia are discussing boosting their defense budgets and taking on more burdens, which would make them better equipped to become active supporters of international order. NATO Secretary-General Jens Stoltenberg, for instance, recently called for better burden sharing within the alliance and an increase in European defense spending. A South Korean government minister observed that his country would have to spend more and take on more defense burdens if the new administration demands it. Other allies, such as Japan and Australia, are already in the process of raising their expenditures and military capabilities.
At the same time, trade partners, desperate to avoid a closing of the global economic system, are open to tweaking the North American Free Trade Agreement (NAFTA), the Trans-Pacific Partnership (TPP), and other agreements in ways that could make them more politically sustainable at home. Canadian Prime Minister Justin Trudeau, for example, said after the U.S. election that his country is “more than happy” to talk about NAFTA, even if that means reopening it. New Zealand Prime Minister John Key recommended making cosmetic changes to the TPP that would help it move forward in the United States. Others have privately signaled their openness to bilateral free trade deals in lieu of the TPP.
With respect to the United States, Trump seeks to increase defense spending and grow the U.S. Navy, which would help to enforce rules such as those that Beijing is now actively breaking in the South China Sea. And his ability to communicate with average Americans could help him build a sustainable program of support for international order.
There is more his administration could do. Partners such as Brazil, India, and Indonesia want a seat at the global table and closer relationships with the United States. The United States should jump at the opportunity, pursuing tighter military ties with India, particularly in the maritime domain, promoting greater coordination with Brazil in key multilateral forums such as the G-20, and increasingly integrating Indonesia into the web of security ties that is emerging in Asia to balance China. Trump should likewise work to extend the order’s reach to cyberspace, where there are no norms governing international behavior. And he should, as he has promised, intensify the fight against ISIS and other terrorists who seek to destroy the international system.
The idea of President Trump using his atypically acquired diplomatic capital in defense of the key structures that have helped make the United States safe, free, and prosperous might seem unlikely. But his unique rise to power might also allow him to make some of the savviest foreign policy moves since President Richard Nixon went to China. At a time when the future of the United States’ role in the world is more contested than at any period in recent memory, the belated embrace of a reinvigorated international order would be welcomed by its friends and resented by its adversaries. It might even have the result, once again, of putting the United States first.