Dismantling The geopolitical Bretton Woods – Analysis

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Dismantling The geopolitical Bretton Woods – Analysis
Published 3-05-2016, 08:00

Neelam Deo and Aditya Phatak

Neelam Deo is Co-founder and Director, Gateway House: Indian Council on Global Relations; She has been the Indian Ambassador to Denmark and Ivory Coast; and former Consul General in New York. Aditya Phatak is a senior researcher at Gateway House.

Statements by Donald Trump, the business magnate turned serious contender for the Oval Office, assert that he wants "good” political and economic deals for the U.S. – even if it means dismantling alliances, i.e. the geopolitical equivalents of Bretton Woods that underwrote the U.S .domination in Europe, Asia and Middle East for more than six decades. A new era could dawn.

Until a few months ago, Donald Trump was not viewed as a credible candidate for the 2016 U.S. presidential election race. But now, it seems that the outspoken and mince-no-words real estate tycoon could secure the Republican Party ticket for the race to the White House.

Therefore, it is prudent to analyse Trump’s views on U.S. foreign policy to understand how geopolitical equations might change with Trump in the White House. The picture that emerges from the analysis of Trump’s exhaustive interaction with the New York Times, his campaign website, and his tweets is that he believes the U.S. is not getting the "respect” or "value for money” it deserves for the role it has played as a "global policeman.” So its allies need to pull their weight.

And if the allies don’t oblige the US, then the Trump White House will rethink its position to the point of dismantling its seven-decade-old alliance systems  – the geopolitical equivalent of Bretton Woods – until it can renegotiate deals that secure his country the same "respect” it had in 1950s[1]. The costs of this, of course, must be defrayed by the allies.

For instance, Trump believes the U.S. has done enough of picking up the tab for the crime and poverty the illegal immigrants flowing across the Mexican border, bring. Time to make Mexico pay for a wall across the border[2] if it wants to keep its lucrative trade with the US flowing.

Similarly, Trump thinks the U.S. should review its stand on NATO. He argues that the US has spent too much money on a system whose other members are not making contributions commensurate with the security benefit they derive from the alliance. In addition, he states that NATO has become "obsolete”[3], "complex” [4] and "bureaucratic”[5] and therefore incapable of addressing the threat of Islamic terrorism which, according to him, is the biggest challenge facing the world. Thus if NATO members are unwilling to raise their financial contributions, Trump proposes dismantling the alliance and replacing it with a new institution focused on terrorism.

The same principle of pay-more-or-face-dismantling-of-alliance is applied by Trump to the U.S.’s allies in Asia like Japan and South Korea, which for more than half-a-century have hosted numerous U.S. bases that today host around 83,000 US troops[6].  Trump alleges that US’ costs for maintaining these facilities are rising while the contributions from both Asian governments[7] stagnate. TheWashington Post[8] posted a rebuttal of Trump’s numbers, but that is unlikely to change Trump’s opinion.

To placate the nervousness that might be caused in Tokyo and Seoul due to a possible U.S. withdrawal precisely when bellicosity from North Korea is rising, Trump was okay with letting the two become nuclear weapons states. Both countries have highly developed industrial structures and nuclear power plants but have refrained from weaponising due to the availability of the U.S. nuclear umbrella and security guarantees. In one shot, then, Trump would end the nuclear non-proliferation regime that the U.S. had spearheaded for decades.

A Trump White House would possibly deal a mortal blow to the United Nations system since Trump believes the recent UN Security Council-approved deal with Iran was a "bad deal”[9] that must be revised.

This shattering of the geopolitical order created by the U.S. with its Western allies after the second world war, is already visible in war-torn West Asia. Trump believes that the U.S. should not be fighting other countries’ wars in the region. He is outraged that Saudi Arabia which "only exists”[10], despite the rising terror threat, thanks to the U.S. naval fleet and bases in the Persian Gulf, but still charges rent to the U.S. for having its bases in the country.

A pullback from West Asia may seem more appealing to Trump and other U.S. thinkers due to the maturation of shale gas technology in the West and Israel’s status as a de-facto nuclear weapons state. In addition is the unwillingness of the Gulf monarchies to put boots on the ground to halt the depredations of the Islamic State even though they are the most threatened by it.

As for India, apart from being impressed by the intellect of Indian students and mouthing the usual criticism of the outsourcing of U.S. jobs to Asia, Trump had little to offer from a foreign policy angle. There are implications though, of Trump’s ending the U.S.’s world "policeman” role. It could bring a new edge to the Pakistan-China alliance. In turn, this can be offset by increased influence of New Delhi in the Persian Gulf region thanks to its old and cordial ties with Iran and the Arab countries. India’s current position as the world’s fourth largest buyer of oil at a time when plummeting oil prices and demand, gives it leverage against the once-arrogant Gulf Cooperation Council (GCC) states that are now desperate for big buyers.

There is some commonality with all the contenders in the US presidential race: an opposition to the North American Free Trade Agreement (NAFTA)[11] and Trans Pacific Partnership (TPP), even though free trade was a key part of American policy after the second world war.  Trump believes in using trade as a bargaining chip for securing U.S. geopolitical goals. This means that a Trump White House will push for a return to bilateral trade agreements. This can benefit India which has been largely left out of the mega trade agreements and often been on the losing side. A bilateral focus will create a more equal negotiating process for developing countries, an element not present in plurilateral negotiations.

The long-and-short of the big geopolitical dismantle may therefore be to open windows for new partnerships across the globe. This may energise a multipolar world with stronger regional engagements, and Trump may be the unwitting catalyst for a more equitable era.

*About the authors:
Neelam Deo is Co-founder and Director, Gateway House: Indian Council on Global Relations; She has been the Indian Ambassador to Denmark and Ivory Coast; and former Consul General in New York.

Aditya Phatak is a senior researcher at Gateway House.

This feature was written for Gateway House: Indian Council on Global Relations.

References
[1] Haberman, Maggie, David E. Sanger, "Transcript: Donal Trump Expounds on His Foreign Policy Views”, New York Times, 27 March 2016, <http://www.nytimes.com/2016/03/27/us/politics/donald-trump-transcript.html?_r=0

[2] Positions, Donald J Trump, IMMIGRATION REFORM THAT WILL MAKE AMERICA GREAT AGAIN, https://www.donaldjtrump.com/positions/immigration-reform

[3] Haberman, Maggie, David E. Sanger, "Transcript: Donal Trump Expounds on His Foreign Policy Views”, New York Times, 27 March 2016, <http://www.nytimes.com/2016/03/27/us/politics/donald-trump-transcript.html?_r=0

[4] ibid

[5] ibid

[6] Fifield, Anna, "Donald Trump says U.S. is bankrolling Asian allies’ defense. That’s not really true.” Washington Post, 30 March 2016, <https://www.washingtonpost.com/news/worldviews/wp/2016/03/30/donald-trump-says-u-s-is-bankrolling-asian-allies-defense-thats-not-really-true/?wpmm=1&wpisrc=nl_wv

[7] Committee on Armed Services, United States Senate, Inquiry into U.S. costs and Allied contributions to support the U.S. Military presence overseas, 15 April 2013, <http://www.armed-services.senate.gov/download/inquiry-into-us-costs-and-allied-contributions-to-support-the-us-military-presence-overseas

[8] Fifield, Anna, "Donald Trump says U.S. is bankrolling Asian allies’ defense. That’s not really true.” Washington Post, 30 March 2016, <https://www.washingtonpost.com/news/worldviews/wp/2016/03/30/donald-trump-says-u-s-is-bankrolling-asian-allies-defense-thats-not-really-true/?wpmm=1&wpisrc=nl_wv

[9] Haberman, Maggie, David E. Sanger, "Transcript: Donal Trump Expounds on His Foreign Policy Views”, New York Times, 27 March 2016, <http://www.nytimes.com/2016/03/27/us/politics/donald-trump-transcript.html?_r=0

[10] ibid

[11] McCormick, John, "Americans on all sides united in opposition to free trade”,Japan Times, 27 March 2016, <http://www.japantimes.co.jp/news/2016/03/27/business/americans-sides-united-opposition-free-trade/#.VvzWN3Gqqkp

 

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