Threat to the stability of the world order and the possibility of multilateral solving of international problems
Washington has had a sceptical eye on China’s economic rise for some time. After the global financial crisis of 2008 American decision-makers grew increasingly concerned that China’s enormous economic success would create a geopolitical challenge.
The financial crisis marked a turning point where the costs to the public budget restricted Washington’s ability to maintain its dominance in central multilateral organizations. Although Barack Obama’s Administration continued to support the international institutions and threw its weight behind multilateral conflict-resolution processes, it also significantly pared back its financial commitments, above all under pressure from Congress. At the same time China, which emerged from the financial crisis largely unscathed, poured massive fiscal resources into expanding its influence in multilateral organizations. From Washington’s perspective – and that of the rest of the West – the global geostrategic centre of gravity has followed the economic east to Asia, above all China, during the past decade.
The dawn of the 2020s finds the multilateral order in crisis, as China’s rise to become a great economic, political and military power collides with the rise of “America First” politics in the United States. The greatest political challenges of our time involve transnational phenomena, including climate change, inequality and pandemics. Yet at a time when one would hope for cooperation in international organizations to shift up a gear, we witness instead that multilateral organizations are paralyzed. The idea of taking the development of existing institutions and rulebooks up a level is almost inconceivable. China under President Xi Jinping presents itself as the champion of multilateralism, but in reality subverts the work of multilateral institutions. At the same time US President Donald Trump threatens to withdraw from multilateral organizations, alternating between declaring them useless and complaining that they are hostile and anti-American. Both states undermine the global order in their own way by flouting multilateral rules and abusing institutions for displays of power.
Neither China nor the United States behave consistently and exclusively destructively towards multilateral organizations. But both bypass multilateral organizations and rules. Both prioritize bilateral negotiations for resolving pressing conflicts. This harms the international organizations, which increasingly find themselves outmaneuvered. Among the areas of the global multilateral order displaying the growing rivalry between the United States and China, two stand out: firstly, the Bretton Woods institutions (World Bank and International Monetary Fund) and the World Trade Organization, which promote cooperation on economic, financial and monetary policy; and secondly the United Nations.
|
|
|
The Bretton Woods Institutions and the US-China Conflict
Under the surface of the visible trade dispute between the United States and China lurks a conflict over participation in global decision-making, whose origins date back to the early 2000s. That is when China began demanding a larger say, commensurate to its economic importance, within the Bretton Woods institutions. But the United States, supported by the other G7 states, blocked a significant expansion of China’s influence in the IMF and the World Bank. China responded by employing its enormous resources to found new formats and organizations, which it dominates as the largest single donor. This applies above all to the Asian Infrastructure Investment Bank (AIIB), the New Development Bank (formerly known as the BRICS Development Bank) and the Belt and Road Initiative.
At the same time, China has declined to obey a number of important trade rules ever since it joined the WTO in 2001. To this day some of the reforms promised in its accession protocol remain unimplemented, above all in the areas of market opening, market-distorting subsidies and protection of intellectual property. Unlike his predecessor Obama who maintained the multilateral rules while criticizing China’s neo-mercantilist economic policy, President Trump set a different course from day one. His Administration demanded that China implement reforms that would have completely upended its economic model. The United States – along with the European Union, Japan and Canada – accuse China of systematic theft of intellectual property and complain about competition-distorting requirements placed on Western companies in the Chinese market. But rather than conducting its economic conflict with China within the multilateral WTO framework, the Trump Administration actively weakens it in two ways.
|
|
|
Firstly, Washington itself overrides the agreed multilateral rules of the WTO by imposing comprehensive unilateral import tariffs on steel and aluminium and threatening further protectionist tariffs on other goods. This behaviour could serve as a model for other countries that – for domestic political reasons – want to protect their economy from foreign competition using tariffs. Washington’s actions could set off a vicious circle of unilateral tariffs and other rule-breaking.
Secondly, the Trump Administration has been blocking the WTO’s Appellate Body since June 2017. On 10 December 2019 it had to be suspended because it was impossible to replace two judges whose terms had expired. To this day the Trump Administration has refused to state any concrete conditions, such as particular changes to the rules, that would persuade it to lift its blockade. Instead it has worked to block a joint initiative by the European Union, Canada and Norway to establish an interim appeal arbitration arrangement without US participation. In mid-November 2019, shortly before the adoption of the WTO budget for 2020/2021, the Trump Administration blocked future financial support for the Appellate Body Secretariat to express its dissatisfaction with the initiative by Brussels and its partners. Because the WTO operates under the consensus principle Washington was thus able to both prevent necessary appointments to the Appellate Body and paralyze its Secretariat.
An incapacitated WTO could come at a significant cost for the European Union. A number of recently concluded trade agreements with important trading partners – among them Japan and the Mercosur states – will indeed allow the European Union to conduct about 40 percent of its trade in goods under bilateral and plurilateral agreements. But for more than half of its trade, including with the crucial partners United States, China and India, there would – at least initially – be no possibility of binding rules-based dispute resolution as currently exists in the WTO framework.
Дата добавления: 2021-02-10; просмотров: 38; Мы поможем в написании вашей работы! |
Мы поможем в написании ваших работ!