A new world order

What many have never understood is that the current world order was created by the USA post World War 2 and it has been sustained by Pax Americana’s economic and military power ever since. The willingness of the US and especially its population to spend blood and treasure sustaining is now very much in doubt. This break means that the world order is likely to change substantially in the coming decades. Globalisation which has been pushed by the US and much of Europe has now severely damaged the economic power of the West and also its political cohesion at home. The idea that those who have had their jobs and communities destroyed are going to champion free trade or whose children have died in foreign wars will support further interventions is deluded. The West is now going through a phase of economic and political retrenchment. We are seeing the first waves of this with Trump, Brexit, Salvini and many more. Populism is a catch all term for those left out finding a voice and pressuring the established order. The current system is not sustainable and is breaking. The next step in Western political and economic thinking will be more protectionist and driven by popular self interest.

You are already seeing this in the US response over trade with various partners but especially China. This is driven by US domestic political pressure but also a realisation that China is a direct threat to US leadership. There appears to cross party consensus on the issue and any new administration will seek to contain China. The Trump administration's efforts on trade appear to be multi-fold: - Slow the Chinese economy and perhaps stoke domestic instability - Close the yawning US trade deficit with China by forcing them to take more US exports - Use trade tensions to encourage some companies to move production away from China - Most importantly repatriate high tech supply chains to the US mainland / Mexico Many talk about a 2nd Cold war though this is an imperfect description. We are seeing an emerging competition between the US and China based on model - democracy and capitalism versus authoritarianism. This will take in the political, economic, technological, cyber, military and diplomatic spheres. It is a full spectrum competition for who will define the world over the coming decades. The biggest question will be how the other major powers will react.

Russia under Putin has to date sided with China due to lack of other choices. This has been extremely advantageous to China as Russia's military modernisation and the depletion of NATOs assets due to years of under-spending has meant the US has had to commit more money and forces to Europe. Alongside this Western sanctions have meant that China has signed a series of cheap energy deals with Russia.
This partnership probably won’t last over the medium term. It is not a meeting of equals and China’s embrace could turn terminal. Certainly reports coming out of the Middle East appear to show Russia attempting to find a way out of Western sanctions. This would open up investment and reduce their dependence on China. It is hard to imagine that the partnership will go beyond Putin who at 66 years old is unlikely to rule far into the future.

There are two other reasons for Russian urgency to escape the Chinese embrace. The first is the influx of Chinese nationals into Siberia which is a lightly populated region. If this continues into the future then facts on the ground could see it become Chinese by default. The second is the encroachment of China into central Asia which was part of the USSR and is considered by Russia to be its backyard. Chinese money is welcomed by many but it also provides leverage.

The Europeans are continuing their quest for ever closer political union. The EU as a whole has been in trouble since the Euro crisis in 2011 which was followed by the migrant crisis in 2015. Its obvious why so in the EU many talk about the rules based world order - its codeword for pre 2008 when the EU was left alone.

Both crisis showed that key parts of the project which had been trumpeted on creation are actually structurally unstable due to the gaps left between a set of transnational projects without a transnational government to manage them. The Schengen area which removed the internal borders from much of the EU also means that there is no ability to manage migrant flows once they breach the unfortified external border. Whilst without a fiscal or debt union the Euro is simply a capital flight tool from the periphery to the core.

When you include the ongoing Brexit process it is unlikely that any European power will have much input into the changing world order. A more likely outcome will be the ongoing slow breakdown of the EU into differing competing groups making the formation of a coherent position impossible.
Some members like Hungary and Romania are slowly being led away from democracy and may end up turning to China or Russia. The big unknown will be the reaction of France which is traditionally more independent and also Germany which has turned progressively more anti American in recent years. By comparison it is likely that the UK, Netherlands, Benelux, Nordics etc will line up behind the US in the traditional Western alliance.

This will likely form the basis of the new Western / democratic alliance. Into this grouping will be many of the traditional allies like Australia, New Zealand, Japan, Canada but in due course it will be joined by India and parts of South America and even Africa. Countries who are either worried directly by Chinese expansionism or who worry about the export of Chinese authoritarianism. You are already seeing the development of the military ties which will underpin this grouping. Alongside this US efforts to minimise the Huawei technology in 5G networks form an important component. Another is the steady expansion of the Five Eyes network to include other countries. Finally you can expect to see the economic ties being strengthened over the coming years in an effort to push China out. All strings will be pulled together to create a shield wall.

The world order as we know it is not going to end but many of its institutions will become more and more redundant. The world is returning to a more Westphalian approach to international relations. Nations will be less bound by transnational organisations and more by bilateral ties and alliances. In that it will look more 1960s rather than 2000s. The challenge for the West will be managing these changes at the same time as moving towards a post neo-liberal social and economic settlement at home.