CETRI
No winners in economic war
Trump’s Liberation Day tariff announcement on April 2nd poses a common challenge that everyone needs to take seriously. Dismissing it as crazy or stupid for rejecting conventional policy wisdom is useless.
Politics and economics have been said to be war by other means. This old insight helps make sense of our times. His announcement emphasised it is about world domination, not just tariffs.
His first shot was arguably fired when Canada arrested Huawei’s founder’s daughter at the behest of the first Trump administration. Others suggest different starting points.
Obama announced the US ‘pivot to Asia’ to contain China. The Nobel Peace Laureate also undermined the multilateral World Trade Organization (WTO)’s ability to settle disputes by blocking arbitration panel appointments.
Trump’s approach is termed transactional. It presumes ‘zero-sum games’ and ignores cooperative ‘win-win’ solutions. Its implications mean we live in perilous times.
His penchant for ‘shock and awe’ is well-known. As if demanding instant gratification, Trump seems uninterested in the medium-term, let alone the long-term.
He insists on bilateral one-on-one transactions – weakening ‘the other’ by refusing collective bargaining. He rejects plurilateral and other collective arrangements but embraces cooperation to share costs. China is different but exceptionally so.
ASEAN
The Association of South East Asian Nations (ASEAN) did not include all in the region when it was formed in 1967.
Malaysia had recently had conflicts with all other founding members. Indonesia and the Philippines both opposed the new British-sponsored Malaysian confederation established in 1963, and in 1965, Singapore seceded from it.
Like the European Union, ASEAN helped resolve recent conflicts. But ASEAN soon got its act together, even before the Vietnam, Cambodian and Laotian wars ended in 1975.
In 1973, ASEAN leaders agreed that Southeast Asia should become a zone of peace, freedom, and neutrality (ZOPFAN). But its progress has been mixed.
The Philippines removed all US military bases before the end of the 20th century, but now has eleven, with four new ones in the north, facing Taiwan.
ZOPFAN is especially relevant now as several Global North powers have a military presence in the South China Sea. Worse, several Asian leaders have made generous concessions to ‘circumvent’ personal legal ‘problems’ with US authorities.
The recent ASEAN summit will be followed by a second one later in 2025. Two ASEAN precedents, established in response to earlier predicaments, remain relevant.
Bandung
The 1955 Bandung conference of Asian and African leaders of newly emerging nations, which led to the birth of the Non-Aligned Movement, remains relevant.
Europe recently celebrated the 80th anniversary of the defeat of Nazi Germany. Now rejecting peaceful coexistence with its erstwhile liberator, Europe insists on fighting Russia to the last Ukrainian.
Military interventions after the first Cold War now exceed the number during it ! Despite its rhetoric, the Global North seems uninterested in freedom and neutrality.
Western pundits deemed the world unipolar after the 1980s. However, many now see it as multipolar, with most in the Global South preferring not to be aligned with any particular world power.
Major Western powers have increasingly marginalised the UN, undermining its capacity for peacemaking. Few in the West, especially in NATO, remain seriously committed to the UN Charter despite giving much lip service.
But realistically, ASEAN cannot really lead international peacemaking. It can only be a pro-active, pro-UN voice of reason for peace, freedom, neutrality, development and international cooperation.
East Asia
Meanwhile, the world economy is stagnating, mainly due to Western policies since 2008. ASEAN+3 (including Japan, South Korea, and China) is especially relevant now with its Regional Comprehensive Economic Partnership (RCEP).
The earlier ASEAN+3 Chiang Mai Agreement responded to the 1997-98 Asian financial crises. After years of Northeast Asian encouragement, ASEAN nations agreed to move from bilateral to multilateral swap arrangements.
Meanwhile, the ASEAN Free Trade Area (AFTA) has progressed little since its creation over three decades ago.
More recently, the governments of Japan, China, and South Korea met without ASEAN in late March to prepare for Trump’s tariffs.
Sadly, key ASEAN leaders can hardly envision regional economic cooperation beyond yet another free trade agreement.
Trump has declared he wants to remake and rule the world to make America great again. His tariffs and Mar-a-Lago proposals should be seen as long overdue wake-up calls that ‘business as usual’ is over.
Will East Asia rise to the challenge and go beyond defensive actions to offer an alternative for the region’s economies and people, if not beyond ?
The UN-led multilateral system still largely serves the US, but not enough for Trump. Thus, the US still invokes multilateral language self-servingly, e.g., it claims its unilateral tariffs are ‘reciprocal’.
Hence, despite his blatant contempt for them, Trump is unlikely to withdraw from all multilateral organisations and arrangements, especially those which serve him well.
