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The company we keep

The company we keep

Risk and reward in the time of Trump

Extract

 

Australian foreign policy has never had to deal with a world like this. For sixty years the international system seemed to be moving towards a world that was ever more integrated. The path was never smooth, but whatever its twists and pitfalls, the destination seemed clear. Driven by the ambition and power of the United States, the overwhelming victor of World War II, a new international system was created in which multilateral institutions like the United Nations and the World Bank would help secure peace and prosperity. New states in Asia and Africa threw off their colonial bonds and joined the global community. Later in the twentieth century, the technologies of the information revolution made possible the investment flows and supply chains of economic globalisation, helping to bring some of the largest of those states into the global economy.

But by the close of the first decade of the twenty-first century, the journey’s end seemed more uncertain. Terrorist attacks in New York and Washington in September 2001, followed by the two great policy catastrophes of the early millennium – the invasion of Iraq and the global financial crisis – disrupted the politics of Western societies. The technological innovations that had promised to bind the world together as a global village had instead generated economic upheaval and sharpened divisions, allowing new allegiances to be built across national boundaries and introducing a complex cyber domain into global strategic competition. Small Salafi-jihadist groups fortified by a theology of martyrdom showed that terrorists could – with little or no weaponry or training – threaten the security of citizens and massively shift the allocation of a state’s resources. Millions of refugees and displaced people trying to escape the turmoil in the Middle East and North Africa strained the sense of solidarity in Western countries.

The weight of global power shifted slowly, but with increasing speed, eastwards, taking with it chunks of the established manufacturing jobs of the developed world. China’s economy, less than half that of the United States in 2004, became the largest in the world by some measurements. As China’s economy grew, so did its defence budget, making it capable of contesting the United States’ military primacy, which had shaped East Asia since World War II.

Meanwhile, in Europe and North America, the jobs of workers from truckers to lawyers were threatened by new technologies like robotics, artificial intelligence and 3D printing.

Policymakers stabbed away at familiar buttons but the responses were sluggish. Assurances that open trade and investment would deliver growth and that democratic systems would ensure the fruits of that growth were equitably distributed sounded increasingly hollow to Western voters. Wages were falling, inequality rising and productivity stagnating.

The foreign and economic policy elites who had delivered these conditions seemed to be the last people you would want to lead you out. The 2017 Edelman Trust Barometer, which surveyed citizens in seventeen countries, showed a precipitate drop in their trust in media, government and business; 53 per cent of respondents believed the current system had failed them. The policymakers and pundits of Washington, London and Canberra appeared increasingly like the Hollywood executives so famously characterised by the screenwriter William Goldman: “Nobody knows anything.”

In the resulting uncertainty, cosmopolitan hopes and globalising norms were elbowed aside by nationalist political goals, protectionist economic aims and nativist cultural instincts. In his inaugural address in 1961, President John F. Kennedy spoke to and about “citizens of the world.” President Trump’s senior national security and economic advisers, H.R. McMaster and Gary Cohn, declared, in contrast, that “the world is not a ‘global community’ but an arena where nations, non-governmental actors and businesses engage and compete for advantage.” This was not just a Western phenomenon: by 2017 strongly nationalist leaders had taken power in Russia, China, Japan, India and Turkey. 

The question for Australia is how it can remain prosperous and secure in a world whose current form and future trajectory seem so uncertain. What can it change, and where must it adjust? How can Australia maximise the options available to it? Foreign policy will be central to its response.

A nation’s success depends on many things – a strong economy, a cohesive society, robust institutions, an effective defence force. All these elements comprise statecraft, and foreign policy is the dimension of statecraft that engages most directly with the outside world. Its purpose is to expand the space in the international system within which the state can operate, making sure that in the constant flux of world politics its interests are protected and that choices are always available to policymakers so the country is not forced or coerced along particular paths.

The end of the postwar order

A country like Australia, which has global interests but not enough clout to get what it wants by throwing its weight around, will always be better off in a world where negotiated rules – which it has played a part in setting – prevail over ad hoc deals. That applies to everything from the environment to the rules of war. It’s the reason successive Australian governments have worked hard to help build the structures like the United Nations and the World Trade Organization where the rules are made.

All Australian governments have declared their support for a rules-based international order, but what does that mean? Phrases such as “rules-based order,” “liberal international order” and “existing order” are often used interchangeably. Foreign Minister Julie Bishop told a Singapore audience in March 2017 that “the long and prosperous peace” depended on the continuation of “the liberal rules-based order.” Malcolm Turnbull has said the maintenance of regional dynamism depends on the “rules-based structure that has enabled it.” But these are different things. A rules-based order is simply one in which the rules are agreed by the states involved. It doesn’t much matter what those rules are. All it requires is negotiation and reciprocal commitment. The International Civil Aviation Organization doesn’t require a particular set of values to be embedded in its regulations to prevent planes from crashing into each other. In contrast, the liberal international order was the specific system which emerged from the US-led efforts to remake the world at the end of World War II. Its characteristics included an open international trading system; new institutions, such as the United Nations, with universal membership, a security system anchored by a network of American security alliances; and the promotion of liberal norms in areas like human rights. Its liberal aims (contrasting with the earlier state-centred Westphalian system) were backed by American power.

But that postwar order, in the way we have known it, is over – for several reasons. New states want greater say in the way the rules are set. No consensus exists on what those rules should be. And in areas such as open trade, the US administration has backed away from some of its founding principles. As a result, global rule-making is at a low ebb and the institutions that support it are increasingly weak and frayed. It is unclear what will come next, but the status quo certainly can’t be sustained.

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This is an extract from Australian Foreign Affairs 1: The Big Picture. To read the full issue subscribe or buy the issue.