Category: International Relations

Martin Jacques argues that the war in Iraq has revealed the likely limits to American imperial power.

Following 9/11, we have witnessed the birth of a new American unilateralism and self-interest to which every country in the world has been, and is being, obliged to respond and relate. Iraq is the first true test of that American imperial ambition and it has already served to suggest some of the limits to that power.

If anything gets buried in the news this week it will be the story about Japan’s missile defence. This decision has massive implications for the region, most especially China and North Korea.

Japan buying missile defence technology from the US and deploying it in Asia could have huge consequences. Do not underestimate China, it will not like this decision.

The Japanese may destabilise the entire region.

Breaking News…

Libya have admitted they sought long range missile and WMD’s. Libya approached the UK in March. Libya is abandoning its WMD program. For the last 9 months negotiations were happening between the UK and Libya, and no one knew about it.

Until we know what they had, or what they were planning to have, we won’t know how successful it was.

Blair seems delighted, and Libya will no doubt be accepted back into the global community in a full way, and be removed from the famous axis of evil. Libya has also agreed to limit its missiles to a range of 300km.

Perhaps Gadaffi seeing Hussein being caught has helped him to change his mind…

I was following this story over the last while, Dave emailed me to try and highlight the position. It is a curious argument that has developed.

Anne Bayefsky started with writing an article in the Wall Street Journal last week.

She then was interviewed on RTE’s Five Seven Live. The former Irish Minister for Foreign Affairs, Michael O’Kennedy, then responded on the same radio programme.

Atlanticblog had picked it up already here.

John Ihle over at Back Seat Drivers has added his two cents worth here.

Anne wrote:

Ireland has shepherded resolutions on religious intolerance through U.N. bodies for nearly 20 years without introducing anti-Semitism. In mid-November current events prompted demands in the Irish Parliament for an explanation of this omission from Foreign Minister Brian Cowen. The shabby excuse offered at that time was to sacrifice Jewish rights on the U.N.’s alter of “consensus and a wide level of co-sponsorship.” In plain language, to Ireland, Arab and Muslim opposition to condemning anti-Semitism meant . . . cut and run! Irish unwillingness or inability to stand up for principle at a time when it is assuming the Presidency of the European Union, does little to enhance the credibility of either the U.N. or the EU as honest brokers in the Middle East peace process.

The behind-the-scenes story of this Machiavellian plot involves an Irish breach of a deal struck between Foreign Minister Cowen and Israeli Foreign Minister Silvan Shalom only two weeks ago. Israel agreed to drop efforts to include “anti-Semitism” in the religious intolerance resolution in exchange for a promise from Ireland to introduce a new resolution specifically on anti-Semitism. But after the General Assembly’s Third Committee adopted the resolution on religious intolerance minus any reference to anti-Semitism, Ireland refused to carry out its side of the bargain.

Brilliant article in the IHT today, on the rise of Chinese economy. Most strikingly, China’s share of the global economic output has doubled since 1991, fast approaching EU output.

It seems like it might be China’s century, followed closely by huge growth rates in China.

For decades, the United States was the world’s only significant mass market, offering businesses more than enough consumers to buy up ever greater volumes of their merchandise and services.

To gain access to all these consumers, companies had to operate inside the country. And they could do so very profitably because they benefited from economies of scale, meaning that each item coming off an assembly line was less expensive to produce than the one before.

The wealth generated, in profits and wages, has made the United States far and away the world’s most powerful nation for nearly a century. No one else had ever been able to match the American achievement. But now the world is witnessing the birth of a mass market in China, whose 1.2 billion people hold the promise of consumption on a much greater scale than in the United States.

That prospect is still a generation or two away, economists say, and assumes that political or economic disruptions do not derail it. But a consumer class is rising fast. The Chinese are buying cellphones, refrigerators, computers, cars, toys, furniture, television sets, airliners and designer clothing in ever greater numbers.

As this mass market asserts itself, China becomes a problem for the United States not just for the exodus of tens of thousands of American jobs but also for the potential to use economies of scale to keep those jobs, even if Chinese wages rise to American levels.

“The notion that God intended for Americans to be permanently wealthier than the rest of the world, that gets less and less likely as time goes on,” said Robert Solow, the Nobel laureate in economics.

This sense of entitlement to pre-eminent wealth and world power has been a national characteristic stretching back to Theodore Roosevelt and Woodrow Wilson. Now China is undermining that singular influence More and more, it can defy American demands and worry less about the economic effects. Last week, for example, Prime Minister Wen Jiabao, visiting the White House, again ignored President George W. Bush’s pleas to increase the value of the Chinese currency. A stronger yuan would make it more expensive for American manufacturers to shift operations and jobs to China.

In Asia, China is supplanting the United States as the principal trading partner for several countries, including South Korea. This influence reduces U.S. power in the region, not only economically but also militarily. China’s power seems certain to increase as it develops its mass market, chipping away at the American role as the world’s buyer of last resort, the only nation capable of bolstering other countries’ economies with its vast purchases of their goods and services. For 60 years, that purchasing power has made America the unchallenged leader in trade negotiations and political influence, a leadership now gradually eroding.

A big stick in this leadership, apart from military might, has been the threat of tariffs and import quotas – of cutting off the golden American consumer from outsiders. But with the rise of China as an alternative mass market, American restrictions on European steel imports or Brazilian citrus, for example, lose potency. Why worry that much about being kept out of the United States when China provides more than enough buyers?

Mass markets were critically important in inflating America’s sense of itself. As the economic historian Alfred Chandler has pointed out, Microsoft and Intel grow rich today on economies of scale just as Ford Motor did nearly a century ago with the assembly line. A thousand copies of Microsoft Word or a thousand Intel computer chips role off the line in little more time than the first 100, adding only pennies to the cost of the initial production. Invention and development are already paid for, and also most of the labor.

That makes selling all this output critically important. If sales rise 20 percent a year in the Chinese mass market and only 5 percent in the much older, more saturated American market, then the pressure builds on Microsoft and Intel to make China the center of production, not merely the site of many factories, and to export to the United States as a secondary market.

In this new arrangement, the American mass market survives and grows, but China’s grows more quickly – holding Microsoft and Intel in place there even as Chinese wages rise to the U.S. level. The productivity that results from economies of scale – that is, rising output per worker – generates more than enough revenue to pay the higher wages and also fattens profits, a compelling reason to stay put rather than move on to a country with even lower wages. Pressure mounts to shift research and marketing from the United States to China.

“As the Chinese become richer and their tastes move closer to those of the higher-income world, then companies that put their plants in China basically to export from there will find themselves increasingly producing for that market,” said Richard Nelson, an economist at Columbia University. “That seems to be what is beginning to happen now.”

China’s share of the world’s output of goods and services has nearly doubled since 1991, to 12.7 percent, closing in on the European Union’s 15.7 percent and approaching America’s 21 percent, according to the International Monetary Fund.

No other nation comes close to China’s explosive expansion, all of it generating purchasing power for a rapidly growing work force.

India has increased its share by 33 percent since 1991 but still accounts for a meager 4.8 percent of total global output. The American share, although clearly the largest, has not changed since 1980.

As dramatic as these developments are, the tipping point is a long way off, said Stephen Roach, chief economist at Morgan Stanley.

“The Chinese are producers now, and they will become mass-market consumers, but only after a long lag,” Roach said. “And the reason is lack of income. The Chinese are still firing eight or nine million workers a year as part of their reforming of state-owned enterprises, and those workers don’t have a safety net” – much less a wage.

Even so, it is no longer possible for the United States to regain the special access to income and profits that its mass market made possible, Solow argues.

America, like everyone else, must get used to being a loser as well as a gainer in the global economy.

In the end, the 21st century is unlikely to be the American Century.

This phrase I have come across on a number of occassions. I first came across the phrase in this article in the Atlantic, by Charles Kupchan. I can’t remember now but I did come across the phrase again in another article, and now in this article in the Guardian, used in a different context.

Martin Jacques believes that the end of the west will come with the birth of Asia as the center of population, economy and power in the future. Kupchan used the phrase to talk about a future war between Europe and America, the results being the same as Jacques’ prediction.

President Chirac demonstrated how much Europe can matter when he stood up to the Americans over Iraq with a courage and foresight that helped to set clear limits to the exercise of US power. But it remains that Europe is – and will increasingly become – a secondary stage in world affairs, to be displaced by the US and east Asia, which, of course, above all means China.

He has a point. Europe’s population continues to decline, but I still think Kupchan’s scenario of a greater EU being strong enough to fight the US at least in a cold war is possible; leaving Asia pretty much to its own devices.

If not, Asia will still outstrip Europe anyway, especially India and China, in the future. But what can Europe do?

The taking in of Turkey is inevitable, their population is crucial to stabilising population, as are perhaps further former Soviet countries like the Ukraine, Belarus etc., but in the end the ancient Greeks/Athenians, I do believe, faced similar problems with declining population and never reached a solution, that was until they were invaded…

Kofi Annan on the future of the United Nations:

We have come to a decisive moment in history. The great threat of nuclear confrontation between rival superpowers is now behind us. But a new and diverse constellation of threats has arisen in its place. We need to look again at the machinery of international relations. Is it up to these new tests? If not, how does it need to be changed?

One can always have hope…

Jonathan Power has a good piece in today’S IHT.

We have to stop looking at terrorism as if it is the end of the world. It is for the people who die from it. But the rest of us have aduty to ourselves and to the equilibrium of our countries to keep it in perspective.

Bob Herbert from the Times has a good article in the Herald Tribune –

The United States has tried again and again to get help from the United Nations as a way of legitimizing its tragic misadventure in Iraq. But the UN, which was founded in 1945 to foster international cooperation as a way of promoting peace, is following the quiet guidance of its secretary general, Kofi Annan, whose response to the latest U.S. entreaty has been a polite but firm no.
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At a private lunch last week with members of the Security Council, the secretary general made it clear that there was no chance he would go along with a U.S. proposal to have the United Nations assist in the effort to rebuild and reestablish security in Iraq even as the United States retains full control of the country.

“The U.S. would like to have its cake and eat it,” said a diplomat who attended the lunch. “It wants to fly the UN flag to demonstrate to Iraqis and others that it is no longer an occupying power. But the U.S. would still be the occupying power because it would still be ruling the country.” The latest American request, a proposed Security Council resolution calling for a multinational security force in Iraq, is going nowhere, officials said. The word Thursday was that the U.S. might well abandon it.

I popped along to the WNA Annual Symposium in London yesterday to try and find out more information on nuclear waste. Low and behold who did I meet only former UN Chief Weapons Inspector, Dr. Hans Blix.

And no, no exclusive interview, just a polite and softly spoken – “Sorry I am not doing interviews”.

Nice enough guy, shame I didn’t get an exclusive!