Stuck in the Middle

By FRED KAPLAN

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An intriguing story in the New York Times reports that—in the face of disenchantment with China and distrust of the United States—middle-size countries, led by Australia, “are urgently trying to revive the old norms of can-do multilateralism.”

The spark for a new sort of transnational coalition—a third way that avoids the dominance of today’s superpowers—comes from the COVID-19 crisis, which has cemented the already-widespread view of China’s Xi Jingping as an authoritarian bully and Donald Trump as an empty suit, both of them, in their own ways, incapable of global leadership.

Impatience with Xi hardened when Australian officials proposed an independent investigation into the origins of the coronavirus—and, in response, China’s ambassador threatened to boycott its agricultural products if the demand for a probe persisted. Ordinarily, Australia would have joined with the United States in making such demands—especially since Secretary of State Mike Pompeo has called for an investigation, as well—but Trump has been so cold toward America’s alliances that there was no chance or desire for joint action. In fact, Australian officials disputed Pompeo’s claim that they were joining the U.S. push. They also expressed anger when Pompeo claimed that the virus may have originated in a Chinese bioweapons lab—contrary to intelligence, which the U.S. and Australia share, indicating that the virus was not man-made.

It is a brazen thing when a country like Australia so openly criticizes both China (its leading trade partner) and the United States (its guarantor of security). It is more remarkable still that, as the Times puts it, “a fluid working group has emerged” among Australia and other countries of similarly modest global stature—Denmark, Greece, Israel, Singapore, and New Zealand—all of them emboldened by the clear fact that they have handled the COVID-19 crisis more transparently and effectively than the larger powers, especially the U.S. and China.

The question is whether these midsize countries can extend their consortium to other issues.

To some degree, this was already happening. When Trump withdrew from the Trans-Pacific Partnership at the start of his presidency, Australia and Japan worked together to pull some of the other signatories—New Zealand, Singapore, Vietnam, Malaysia, and Brunei as well as Canada, Mexico, Chile, and Peru—into forming their own trade alliance, without the United States, which is known as TPP-11. By all accounts, they have been fairly successful. David Livingston, an analyst at the Eurasia Group, told me, “The economic slowdown from the coronavirus crisis will likely accelerate the urgency for Thailand to join” soon.

Daniel Sneider, a lecturer at Stanford University who writes frequently from Asian capitals, says that Japanese diplomats felt a boost of self-confidence and empowerment from the experience of putting together this new deal. “They’d never initiated negotiations like this before,” Sneider said. “They’d always been on the passive, receiving end of talks, making at most minor adjustments to instructions from Washington. This has given them a whole new perspective on what they can do.”

As Livingston put it, “The vacuum created by the perceived absence of U.S.-Chinese leadership and credibility, amid the coronavirus crisis, is creating a pretty expansive sandbox for other ‘middle tier’ players to experiment.”

Still, the sandbox has its limits. This is especially true when it comes to security. No country besides the United States has the military power to deter or stave off aggression from China or Russia. Members of the European Union discussed creating their own defense alliance early on in the Trump presidency after he suggested he might not come to their aid in the event of an invasion—despite Article 5 of the North Atlantic Treaty, which pledges each member to treat an attack on one as an attack on all. But they soon realized that a U.S.-led NATO was indispensable. First, the military and intelligence establishments of all the NATO countries are intricately bound up with their American counterparts. Second, even if they somehow extricated themselves from those networks, none of these countries, either singly or jointly, have the resources or logistical prowess to mount an effective defense without the giant eagle across the Atlantic.

On the economic front, too, the gravitational pull of the dollar is a near-inescapable force in global finance. This was revealed when Trump pulled out of the Iran nuclear deal, reimposed sanctions on Iran, and threatened to impose “secondary sanctions” on countries that continued to do business with Iran—even though the nuclear deal, which had been codified as a U.N. Security Council resolution, committed the signatories to normalize economic relations with Iran. The EU tried to set up alternative banking arrangements to buy and sell goods in euros or some other currency, but the threat of being cut out from all dollar transactions was too daunting to ignore.

In the East, challenges are being mounted to China, but again they can go only so far. Xi has set up the Belt and Road Initiative, a massive network of Beijing-backed infrastructure projects, in more than 60 countries, encompassing two-thirds of the world’s population, with an investment value of $200 billion (rising to more than $1 trillion in the next few years). Some countries have balked at the political conditions attached to the money, but they have no place else go to—especially since Trump, unlike previous presidents, has offered them no real alternative.

Xi sees the Belt and Road as laying the foundation for a Beijing-controlled global trade system, possibly eclipsing the West’s dominance since the end of World War II. Unless the U.S. steps up its game, he may succeed. The main question leaders across the world, especially in Europe and Asia, are asking is: Will the United States become a leader again? In the meantime, some of them are forming coalitions among themselves. But these are provisional arrangements, with very interesting but ultimately limited impact. The United States is the only power that can contain China while also dangling incentives attractive enough to keep Beijing within the international system. There are many issues at stake in the coming election, and this one is far from the most urgent, but it may have the most globally enduring consequences.