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Free World 2.0?
How the United States and its allies across the Atlantic and Pacific can work together to build more resilient economies in the face of autocratic coercion
Russian President Vladimir Putin will almost certainly order a full-scale assault on Ukraine, one that goes above and beyond the overt deployment of Russian troops to the occupied Donbas region of the country. There’s little else to conclude from Putin’s unhinged public rant denying Ukraine’s right to exist as a sovereign nation-state and the massing of three-quarters of Russia’s military power on Ukraine’s borders. His recognition of the independence of two separatist “republics” – artificial statelets wholly owned by Moscow – triggered the first of many promised sanctions from the United States, the European Union, and other nations around the world.
Here at The Liberal Patriot, we’ve already taken a look at some of the strategic and geopolitical implications of the world this crisis will leave in its wake.
It’s equally important to think about what this new world will mean for economic cooperation among the nations of the latest iteration of the free world – how democracies across the globe can come together and build a better future for themselves in the face of severe challenges from autocratic regimes the world over.
In the days and weeks to come, the world’s attention will rightfully dwell on Putin’s invasion of Ukraine and all its attendant consequences, from massive refugee flows to food and energy crunches. Former Russian president Dmitri Medvedev immediately threatened a doubling of European gas prices when German Chancellor Olaf Scholz put a halt to the Nord Stream 2 gas pipeline. Meanwhile, President Biden ordered additional U.S. forces to help defend NATO’s eastern flank, including ground troops, Apache attack helicopters, and F-35 stealth fighters.
These defensive measures represent just the first steps the United States and its allies will take - the beginning of the beginning. But looking ahead, liberal democracies will need to broaden their horizons and think more creatively about what they can do in the diplomatic and economic realms to bolster their own positions vis-a-vis China, Russia, and other autocratic regimes. Now’s not the time for retrenchment or “restraint.”
Expanding economic cooperation across oceans
As in traditional geopolitics and defense strategy, the United States needs to think in more expansive terms when it comes to economic cooperation with its allies and partners in Europe and Asia. Right now, we tend to look at our economic relationships in bilateral or regional terms: think long-standing science and technology cooperation agreements with countries like Japan, for instance, or the recently founded U.S.-EU Trade and Technology Council. These agreements and conclaves could serve as a solid foundation for larger initiatives that deal more directly with the world we’ll find ourselves in moving ahead.
It's a world in which the United States along with its European and Asian allies should seek to reduce their dependence and vulnerability on the likes of China and Russia – both of whom have used corruption and coercion to further their geopolitical goals and weaken democratic nations. For its part, the United States has been slowly but surely disentangling itself from China over the past several years. Other allies like Australia and Lithuania have found themselves on the sharp receiving end of Chinese economic bullying, while new German Foreign Minister Annalena Baerbock wants the EU to ban imports on goods made with forced labor – a prohibition that would hit China especially hard.
Decoupling from Russia will come hard and fast should Putin launch a full-blown invasion of Ukraine. The United States and European Union have already promised to match Russian military escalation with increasingly stringent economic sanctions, and Biden administration officials have vowed that no Russian financial institution would be safe from sanctions should Putin move further into Ukraine. What’s more, American allies Japan, Singapore, and Taiwan have already agreed to effectively cut off Moscow’s access to semiconductors when the Biden administration gives the word.
As reactive and ad hoc as many of them may be, these measures do set the stage for greater and more coherent economic cooperation between the United States and its allies worldwide – cooperation that can unite and bind the world’s liberal democracies together across oceans.
Looking ahead, here are three areas for ripe for increased economic cooperation:
1. Energy and climate change. The past year or so has demonstrated that the transition away from fossil fuels in the United States and Europe will be far more challenging than most expected. Maintaining high standards of living and acceptable energy costs while weaning economies off oil and gas entails a tricky policy balancing act that in turn requires a more sustainable politics of climate to succeed – especially in the face of blatant Russian threats to raise gas prices in Europe if countries like Germany don’t meekly acquiesce to its dismemberment of Ukraine. That means that America’s allies in Europe will require secure sources of oil and especially gas in the near term, and they’ll most likely find them in the Middle East and North Africa. It’s a problem the Biden administration is acutely aware of, though it’s had little success in convincing Saudi Arabia to increase its own oil production while Qatar says it has little gas production capacity to spare at the moment.
Over the long haul, though, that means more cooperation on research, development, and deployment of technologies like electric vehicles and energy sources like nuclear, wind, and solar power. While the United States can and should work with like-minded partners on advanced nuclear energy – Japan’s national nuclear energy agency, for instance, is working with the Department of Energy and Bill Gates’ advanced nuclear power company to build a new experimental reactor in Wyoming – others nations like Germany remain allergic to nuclear power. In those cases, the United States can instead pursue cooperation on wind and solar power as well as advanced batteries to store energy from intermittent renewable sources for later use.
Finally, there are trade measures and policies that can help bring carbon emissions down. The previously mentioned steel and aluminum agreement with the EU represents one example, while negotiations with Japan on lowering carbon emissions in its steel industry. Carbon tariffs represent another potential tool, though one that democracies should use with care against fellow democracies – prior to the recent steel and aluminum deal, for instance, the EU looked intent on slapping carbon tariffs on the United States. But these differences can be worked out, as they were with the long-running dispute between the United States and EU over commercial aircraft subsidies.
2. Trade. The Biden administration has already made some progress on improving trade relations with fellow democracies, striking deals with the European Union and Japan that rolled back its predecessor’s steel and aluminum tariffs on both. Importantly, the EU steel tariff deal includes provisions to encourage comparatively clean steel and aluminum production in Europe and the United States while restricting exports of less climate-friendly steel and aluminum from other countries, principally China. As with scientific research and technological development, it will be important for advanced industrial democracies to see each other less as rivals and competitors and more as partners in achieving shared goals and upholding their values. Recent deals with the EU and Japan represent significant if imperfect steps forward, but their spirit needs to be carried forward.
Above all, liberal democracies need to bolster economic ties with each other in the face of decoupling and disentanglement from Russia and China. The present crisis with Russia offers a golden opportunity for the United States, Great Britain, and other European nations to finally shut the door on the strategic corruption their finance and real estate industries facilitate so well. As with Germany’s move to halt Nord Stream 2, such measures would reduce the vulnerability of democratic nations to economic coercion – and similar actions should be taken to eliminate other vulnerabilities and dependencies in critical sectors. That’s not a call for autarky by any means, but it makes sense to ensure that countries like China or Russia do not acquire monopolies on the manufacture of vital products like semiconductors and medical equipment or corner the market on essential resources like rare earth elements, critical minerals, and, for the time being, fossil fuels.
3. Science and technology. In particular, semiconductors, space exploration, and advanced computing including artificial intelligence. All three of these areas already have solid foundations on which to base closer cooperation. As noted, a triptych of America’s Asian allies and partners have already agreed to cut Russia off from access to their semiconductors if and when the Biden administration deems it necessary. Similarly, the United States and allies like the Netherlands have worked together to deny China access to critical equipment needed for semiconductor chip manufacturing. But more could be done to strengthen semiconductor manufacturing capacity and supply chains, which now stretch from Taiwan and Japan through the United States to the Netherlands and Germany.
Likewise, the Artemis Accords provide a useful framework for cooperation on space exploration. The European Space Agency already builds the service module for NASA’s Orion crew vehicle, for instance, and together with the Japan Aerospace Exploration Agency and the Canadian Space Agency it’s committed to help NASA build the Gateway space station in lunar orbit in the coming decade. European astronauts also want ESA to build its own spacecraft; NASA and American aerospace companies could help them do so in much the same way ESA builds the Orion service module for NASA. Whatever form it takes, tighter cooperation between the United States and its Artemis Accords partners would reduce their reliance on Russia as a partner – and preclude potential future dependence on Chinese systems.
Same goes for advanced computing and artificial intelligence. In 2018, for instance, French President Emmanuel Macron plowed €1.5 billion into artificial intelligence research. But there’s no reason why Europe, the United States, or Asian countries like Japan or South Korea should go it alone in these lines of research and development. Democratic nations should not ask how they can compete with one another for technological and economic advantages, as Macron’s AI initiative appeared to do, but how they can work together to compete with the likes of China and its digital authoritarianism – and the U.S.-EU Trade and Technology Council represents a good first effort to do so. In time, the United States and EU should seriously consider bringing countries like Japan and South Korea into the council’s deliberations as well.
No matter the specifics, the role of the United States will be crucial by dint of both its enormous economic power and its unique geographic position. America looks across both the Atlantic and Pacific, maintaining alliances and economic relationships with democracies across both oceans. It remains the only nation able to weld these fellow democracies together in common purpose and common cause.
But as with diplomacy and defense strategy, we need to stop seeing the world as made up of disparate regions that can be considered in isolation. We instead need to see it as more of an integrated whole, forging a community of power across oceans among a group of nations committed to shared values and goals. It will take time and hard work to pull this community together, but there’s no time like the present to start in on the task at hand.