Globalization in Trouble – Part I

From financial woes to security worries, a new world seems to be dawning in which the process of globalization risks slowing down. In part one of a two part series, YaleGlobal looks at trade troubles that may arise from a non-trade failure. For all the praise of free and open trade creating prosperity in the post-World War II, analysts often forget how the stability of the international system supported such a trend. Trade-specialist Bernard K. Gordon reminds one that without the mutual and equitable security burden-sharing of the post war period, the world wouldn’t have enjoyed the benefits of trade globalization. Today, that burden-sharing seems to have gone awry. From NATO’s unwillingness to send troops to Afghanistan – despite commitments to the contrary – to Japan’s wish to renege on a three-year old agreement on stationing US troops in Okinawa, it would appear many nations that participated in global stability and security of the last half century want to opt out or lack the wherewithal to participate today. While still too early to tell, if burden-sharing transforms into burden-shifting, the prognosis for free trade, let alone security, is bleak. – YaleGlobal

Globalization in Trouble – Part I

Lack of equitable burden-sharing could undermine free trade
Bernard K. Gordon
Friday, February 12, 2010

WASHINGTON: The benefits of trade have been frequently noted by supporters of globalization. Jagdish Bhagwati recently stated that a half-billion people in India and China have been pulled out of poverty as a result of economic growth stemming from trade. Singapore’s Prime Minister has similarly cited his region’s “astonishing rise in prosperity” and its “more than doubling or even tripling of per capita GDPs” as “clear evidence of the benefits of free trade and globalization.” Both make the point that trade has been the key to the post-World War II explosion of world economic growth and the widening prosperity it has brought. 

Less widely acknowledged is that this economic growth developed within a largely stable global political background, based on a postwar international security structure itself grounded on two American alliances: NATO in Europe and with Japan in East Asia. But now, because of differences over mutually acceptable “burden-sharing”, both alliances are in trouble and so too is the pace of globalization.

In NATO the issue is the number of troops members will commit to their joint mission in Afghanistan. Washington hoped that would be a main focus of a January NATO meeting in London, and Mr. Obama set the stage in December at West Point. He reminded all that after 9/11 “For the first time in its history, the North Atlantic Treaty Organization invoked Article 5 – the commitment that says an attack on one member nation is an attack on all.”

Yet in Afghanistan, where the fight to deny sanctuary to terrorists continues, the interest of the allies is ebbing. Some 35,000 American troops are already in Afghanistan, and another 30,000 are being sent. But aside from Britain’s sizeable contingent of 9,000 troops, commitments are declining. Among the other NATO members, though each has suffered significant casualties, burden-sharing has so far meant little. Canada, France, Italy, and the Netherlands have each deployed roughly 3,000 in Afghanistan. Germany has 4,000 and was urged to bring that to 7,000, but days before the London meeting Chancellor Merkel pre-emptively announced she would send just 800 more. With no other NATO member at anywhere near those numbers, the NATO meeting turned instead to its principally non-combat Afghan roles.

There is of course little public support in Europe for more troops, as Germany’s case illustrates. Its new Defense Minister, Karl-Theodor zu Guttenberg, caused a public stir when he referred to the Afghanistan mission as a “war” rather than with the usual euphemisms. His predecessor and a top general lost their jobs when Afghan civilian casualties resulted from German military actions, despite their convoluted and restrictive “rules of engagement.”

Those restrictions stem from the detestation of war that today characterizes all of Europe. Its peoples, as military analyst Colin Gray writes, have been "thoroughly debellicized,” and nowhere more than in Germany itself, as I’m often reminded by a woman whose father and uncle were hanged by Hitler after the failed 20 July 1944 plot. She was too young to remember them, but vividly recalls how, with her mother and sister, she walked across a devastated Germany in 1945 hoping to escape the advancing Red Army. 

Those memories have produced a rejection of war under any circumstances that will need to be overcome if NATO is to deliver the equitable Afghan burden-sharing promised by its alliance with the United States. Mr. Obama put NATO on notice in his Nobel acceptance speech: “There will be times when nations—acting individually or in concert—will find that force is not only necessary but morally justified.” He added that “America cannot act alone. This is true in Afghanistan.”

This is a test that NATO, in terms of its own security and potential to corrode alliance cohesion, should not want to fail. There are already American concerns NATO is becoming mainly a talking shop. Europe’s often blinkered outlook on Russia’s growing revisionism promotes calls to reduce America’s foreign involvements, in order to be better prepared for threats at home.

Burden-sharing differences are also at the heart of alliance troubles with Japan, where the issues are US forces and military bases on Okinawa. They have long faced much local opposition to their noise and related problems, and in 2006 Japan and the US hammered out an agreement to move some forces to less crowded areas on Okinawa and others to Guam. But implementation was interrupted when Yukio Hatoyama‘s Democratic Party of Japan won a victory last August. 

That ended the 50-year dominance of Japan’s Liberal-Democratic Party, under whose auspices the Okinawa agreement was negotiated. Although Hatoyama’s election reflected essentially domestic issues and much dissatisfaction with the LDP and Japan’s bureaucrats, Hatoyama had long argued for a “more equal” relationship with the United States, and his coalition included many who resisted the alliance and opposed the Okinawa bases. 

Clear evidence the alliance was in trouble peaked in October when Defense Secretary Gates stressed in Japan that the 2006 agreement should be implemented without delay. Japan’s response has been that no decision would come until at least May, although Prime Minister Hatoyama personally asked President Obama to “trust me,” and his Foreign Minister gave similar assurances to Secretary of State Clinton.

Among the issues’ many complications are that Okinawans have long been regarded by many main-island Japanese as “second class” citizens whom Tokyo would not wish to further offend by implementing the 2006 Agreement. Another is that some American officials reportedly believe the bases are less critical to US defense needs than is publicly argued.

America’s response has combined an aura of patience about Japan’s domestic problems with a simultaneous insistence that the 2006 agreement – though negotiated by prior governments in both nations – needs nevertheless to be implemented. Likewise, Senate Foreign Relations Committee Chairman Kerry, who said recently “this is a time to give Japan a little breathing room,” pointedly noted Japan’s decision to end its refueling of allied ships aiding the Afghanistan effort.

Today’s Japan and NATO burden-sharing differences evoke earlier statements by two former Secretaries of State. In 1985, ANZUS alliance member New Zealand announced it would no longer accept any nuclear-powered or nuclear-armed US Navy ship. Washington effectively then canceled New Zealand’s ANZUS membership, and Dean Rusk, in what became known as his “call girl” letter, wrote to a Wellington newspaper that an alliance with the United States should not be confused with a call-girl’s phone number: for use “only when the need arises.” Another came when Thailand sought to close a US base there. George Shultz responded that “The United States does not stay where it is not wanted” and the base was closed. 

These NATO and Japan troubles should remind all concerned with globalization of the importance of an underlying international political structure. None existed in the 1930s, when regional blocs led instead to the fragmentation of world politics that made impossible the globalization and expanding prosperity characteristic of the postwar era. In stark contrast, this era has rested ultimately on a US-centered alliance structure which provided the political stability that fostered widening globalization.  Today’s insufficient burden-sharing in both the NATO and Japan alliances threatens that structure and needs quickly to be resolved because it threatens continuing globalization as well.

Bernard K. Gordon’s most recent book is America’s Trade Follies (Routledge 2001). He is Professor Emeritus at the University of New Hampshire.

Copyright © 2010 Yale Center for the Study of Globalization

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