Category Archives: Global Summitry

“After You Alphonse” – The G20 and Building a “Firewall” Against Eurozone Contagion

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G20 Finance Ministers and Central Bankers have wrapped up their meeting in Mexico.

So what’s the result?

Well the battle has not yet been won to create a significant enough “firewall” to calm the markets and assure them that contagion will not spread beyond Europe.

But it appears to be coming.

The heart of the issue is Germany’s reluctance to add to the bailout fund that had been created – Europe had first built a temporary fund – the European Financial Stability Fund (EFSF) and then subsequently created a permanent European Stability Mechanism (ESM).  That combination would total about 750 billion euros.  But Germany is not yet ready to do that.  And the G20 – or at least many of the G20 countries – are not prepared to augment the IMF support standing around $358 billion by some $500 to $600 billion – until Europe makes a greater contribution.

The G20 countries have pressed Europe (see the G20 Finance Ministers and Central Bankers Communique) – that means principally Germany in this case –  to increase the European contribution.  It is still unclear whether Germany is prepared to commit – it would appear not to be by next week at the European Summit set for March 1 – 2nd.

Where do the G20 countries stand – and why?  Most critical in this discussion is Germany.  And Germany has resisted – and continues to resist though apparently less vociferously the enlargement of the Eurozone’s bailout fund.

Germany appears, in part, to be playing for time.  The German Government faces a crucial vote in its legislature on Monday – a vote to accept a second rescue package. – As a bit of an aside  the Netherlands and Finland also face legislative approval in the coming week.  It also seems that the German government is playing for time to see if the Greek government will be successful in swapping Greek debt held by banks and other investors that propose a significant reduction in the face value of the debt, or drawn out maturity and/or rate reductions – or all three.  And the Merkel government is all too aware that German public opinion is strongly opposed to to further bailout actions for Greece.  In fact in a poll released today,  Sunday, by Bild am Sonntag (quoted in Reuters) showed that 62 percent of Germans oppose further aid for Greece.  Thus, the German government for the moment continues to insist that an enlarged firewall may cause governments to ease up on their fiscal austerity measures and additional economic reform. The strongest views from the German government continues to argue that the ESM is sufficient as it is.  In the meantime, however, Greece, Ireland and Portugal are locked out of debt markets.

Most of the G20 countries – developed and large emerging markets alike – have urged Europe to take further steps to reduce the risk of contagion.  A number of developed countries such as the UK and Japan are prepared to raise further IMF support along with a number of developing and large emerging market countries, most insist that will not act without further actions by Europe.  And the United States has both urged greater European actions but has also made clear that it will not contribute in any instance to the enlargement of the IMF package.

So it is unclear today whether Europe will enlarge the bailout at the March EU Summit or that a complete package – somewhere near $2 trillion including European and IMF funds –  will be ready or concluded by the G20 Finance Ministers and Central Bankers when they meet again toward the end of April.  But we can see that the G20 Ministers and Central Bankers meeting has been important in trying to construct a bailout package.  Furthermore in looking at the comments of the ministers and central bankers there is not a simple divide between developed and large emerging market states and developing countries.

Speculation over the legitimacy of the G20 continues apace.  But the legitimacy focus is ill placed (see the Reuters blog – “The Great Debate” and the article by Terra Lawson-Remer, february 24, 2012) .  The current troubles in constructing a bailout package reflect  popular and legislative opposition in a number of countries – Germany most notably – but in other European countries as well and in the United States.  This is not a G20 legitimacy debate at all; it is a political battle in the domestic and international contexts.  That fact that executives and their officials cannot act without calculating legislative dis/approval is not new – remember the “failure” of the Kennedy Round  in the US Congress.  But this says next to nothing about G20 legitimacy.  What it reflects is that global economic negotiating, indeed almost any international negotiating – as we were told long ago by Harvard’s Robert Putnam – requires officials to negotiate in two ways – across the table with other leaders and officials, and backwards and over their shoulders with the legislators and broader publics of the country.  The “high table” of international economic negotiations has never been leaders and officials divorced from domestic politics.  And it isn’t now.

Image Credit:  Chris Skinner – Financial Services Club Blog

 

 

Tackling ‘Peace and Security’ at the G20 – Sort of

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This weekend a number of these foreign ministers – most notably United States Secretary of State Hillary Clinton and Germany’s Guido Westerwelle  – will convene at the invitation of Foreign Minister Patricia Espinosa in Los Cabos Mexico (in June the G20 Leaders Summit will meet at Los Cabos). – For the first time these ministers gather under the G20 umbrella to discuss – at least in principal – “foreign and security” policy.

Is this then the final grand leap of the G20? Will the Leaders Summit now include a full global summitry agenda economic, financial, peace and security?  Will G20 Leaders gather to tackle economic and financial regulatory reform and securities crises as well?

Well – not exactly.

Among the G20 there has always been tension, if not outright contention, over the scope of the Leaders Summit agenda.  While some G8 countries have urged tackling at least questions on nuclear non-proliferation, or crisis management and resolution, others, notably non G8 countries such as China and Brazil have resisted any extension which would bring peace and security issues to the G20 agenda and remove it from the UN Security Council.  As Bruce Jones Director of “Managing Global Order Project”   at the Brookings Institution declared

What is left behind is foreign and security policy … In this regard, the G-20 foreign ministers meeting in Los Cabos represents the first real opportunity we’ve had to begin that work.

Bruce has gathered a number of experts and former ministers from around the G20 to reflect on this upcoming meeting at the Brookings Institution website. In general Bruce and his colleagues support the calling of this meeting.  Among those is Celso Amorim, former Foreign Minister of Brazil, who writes:

Without exaggerating the scope of the changes that may begin with the February meeting of Foreign Ministers in Mexico, one is allowed to hope that it can at least initiate a process which someday will impact on the formal institutions that deal with political and security matters.  In order that such a process may take place, it is essential that the FM meeting focuses on concrete questions – such as the ones mentioned here [Arab Spring, the Iranian nuclear program, a broader-based approach to Africa] – and does not lose much time and energy on more abstract issues of institutional nature Nor should it bother too much with other subjects – important as they may be – which have already found an appropriate locus for debate, such as climate change.

So support for sure, but also demands for greater precision as well on the agenda.  And the reality matches the commentary.  Clearly there was no unanimity on the need – desire for – this meeting.  The Mexican foreign minister, the host, has made clear this meeting is “informal” and not a Summit – meaning no summit declaration.  In addition 8 countries have not sent foreign ministers but rather lower ranking officials including France, China, Brazil and India.

So it appears that there are a number of questions that ‘dog’ the question of G20 foreign ministers meetings.  Key among those is the agenda.  The Mexican foreign minister has suggested that the meeting will tackle “pressing issues” including food safety, strengthening the rule of law and providing efficient and coherent leadership to tackle global challenges.  He also made clear that the the group would discuss but rule out statements on critical crisis issues such as Syria.  So less on crisis management – at least formally – and more on issues that Lee Dong-hwi of IFANS in Korea, another of the Brookings invited experts,  calls “hybrid issues” – issues where economic and security issues are inextricably linked.  This indeed may be the incremental way to extend the agenda to more “peace and security-like” issues.  But food security and climate change might best be discussed by others – rather than the foreign ministers.  The foreign ministers after all represent a more traditional conception of diplomacy.  Once foreign ministers were the only officials that  dealt with international matters in global settings.  But that is long gone.

In the “Iceberg Theory” of global summitry (see my June  2011 blog post “The Iceberg Theory of Global Governance – Seeing it Work”), of which I am a strong advocate, obviously,  significant ministerial, working party and transgovernmental regulatory networks (TRNs) including a wide variety of intergovernmental, ministerial, regulatory and administrative institutions, are tasked  – by Leaders and Ministers – with developing standards and policy reforms that then need to be implemented by national authorities. Leaders Summits are but the “tip of the iceberg” of global summitry.

So, it is not at all clear that foreign ministers are the best at dealing with many of these not really policy subjects for foreign ministers. But if it is “crisis management” that will occupy the agenda, then the China’s, Brazil’s and others will insist that the discussions need to be at the UNSC.

Nevertheless it may be that the foreign ministers may best tackle crisis prevention matters and at least publicly limit, at least for the moment, the immediate crisis situations – though it is a setting where at least countries avoid the distorting impact of the “all mighty Security Council veto”.  And I think Bruce Jones has picked up on this crisis prevention agenda and the “speak softly approach”  for crisis management:

Far more important is relationship building, building shared perspectives on key security issues, nd an informal space for back room negotiations.  I suspect that Secretary Clinton will use quite a lot of her time in Los Cabos cornering her Chinese and Russian colleagues on the Syria question – and that’s very much to the good.

So let’s urge a crisis prevention  approach and a discussion of current security crises – even if those aspects of the discussion are left to the back room for now.

Photo Credit: Wikimedia Commons

 

Steve Clemons and the Revisionist Liberal American Foreign Policy Voice

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So returning to Steve Clemons’s and his review of grand strategy approaches in the Atlantic with his “Rebuilding America’s Stock of Power” which itself is a lead in for Steve to lead an  Atlantic Live session that will be streamed live on January 11th.  Well, I hope to get there but meanwhile let me attempt a partial review of Steve and his review of various ‘in the beltway’ types in the most recent issue (Issue 23, Winter 2012) of Democracy: A Journal of Ideas.

Steve has an outsized personality that is a Washington and New York presence.  Now Steve is a realist – a ‘happy realist’ – but a realist nevertheless.  The ‘bug-a-boo’ for Steve is the rise of China.  As Steve points to:

China is driving realities in the global economic sphere today; not the United States – and America, to revive its economy, needs to figure out how to drive Chinese-held dollars (along with German and Arab state held reserves) into productive capacity inside the United States while not giving away everything.

America must knock back Chinese predatory behaviors by becoming more shrewdly predatory and defensive of America’s core economic capacities.  Without a shift in America’s economic stewardship – which also means a shift in the macro-focused, neoliberal oriented, market fundamentalist staff of the current Obama team – the US economy will flounder and on a relative basis, sink compared to the rise of the rest.

For these experts, and for Steve I suspect, it is all about finding restraint in a new US grand strategy.   With the end of the Iraq War for the US and a growing intensity to end their military involvement in Afghanistan, there is a loud and growing chorus of voices in Washington to husband US resources.  Turn down the urge to go abroad to slay dragons.  The attack is on against unrestrained US interventionism which Steve argues is, as he calls it, “the dominant personality” of both US political parties.  So for the Democrats you have the humanitarian interventionists – read that as Libya – and for the Republicans you have the neoconservatives’ regime change – read that as Iraq.  The critique from Steve:

Neoconservatives and liberal interventionists put a premium on morality, on reacting and moving in the world along lines determined by an emotional and sentimental commitment to the basic human rights of other citizens – with little regard to the stock of means and resources the US has to achieve the great moral ends they seek.

So restraint and husbanding resources – economic and military – is the new objective.  And each of the experts, in their own way, urge it.  Thus Charlie Kupchan declares that in order to rebuild American leadership the US must:

  • restore the American consensus  on foreign policy and the rebuilding of its economy;
  • work with the newly emerging market powers to create a new global order and protect a liberal international order;
  • revitalize the transatlantic relationship; and then
  • judiciously retrench and deal with the overextension of US global commitments.

In a similar vein  a quick look at this recent press release at the CFR website for Richard Betts’s  new book entitled,  American Force: Dangers, Delusions, and Dilemmas in National Security, Betts too recommends, “the United States exercise greater caution and restraint, using force less frequently (“stay out”) but more decisively (“all-in”)”.

Bruce Jentleson performs a reprise of his and Steve Weber’s approach in The End of Arrogance.  In the journal article Bruce narrates a Ptolemaic versus Copernican world, where the central image is the displacement of the US from the center of the universe.  Now contrary to more realist interpretations, this diffusion of power as described by Bruce, anticipates that China too – the new rising power – will be unable to exert hegemonic power in this new 21st century global system.  As Jentleson declares,”Peaceful rise is one thing, assertive dominance quite another.” The Copernican world, according to Jentleson, is a disorderly place, but a global order that, “… means demonstrating the capacity to implement policies that reduce our vulnerabilities, enhance our competitiveness, and cultivate a shared sense of purpose.”

Diffusion of power, the end of hegemony or at least the enlargement of leadership with the inclusion of the rising powers like Brazil, India and China, and a requirement that the United States husband its resources – economic and military.

Steve argues that he holds a line similar to the Kupchan approach though he criticizes Kupchan for holding to such neatly drawn pillars of action for the US.  But it seems to me that constraint has been the mantra of the US before – back to the 1970’s and the end of Vietnam.  It is not a strategy and it is apt to be forgotten, or ignored, by a new political leadership especially across the political divide that exists in the US.  The dilemma that exists today is not a search to enunciate some new grand strategy, but an effort, and here I tend to agree with Bruce Jentleson, to ‘lead’ in initiating collective behavior – the impetus for collective action.  And there needs to be a concerted to avoid the China Threat syndrome that is embedded in Washington.  Restraint will evaporate unless US policy makers find a way to open a political space for China. This is the overwhelming need in US foreign policy.  In the coming years, according to the review of Richard Betts’s book

China is the main potential problem because it poses a choice Americans are reluctant to face. Washington can strive to control the strategic equation in Asia, or it can reduce the odds of conflict with China. But it will be a historically unusual achievement if it manages to do both,” notes Betts. Although conflict with China is not inevitable, “the United States is more likely to go to war with China than with any other major power.

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Not For Me! No Yearend Predictions

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Though I appreciated all the list of international relations 2011 horrors – or the 2012 predicted horrors, I shall avoid the feeble speculation indulged in by many of blog colleagues.  No crystal ball for me.

Instead I shall look at two approaches  – both designated as part of US grand strategy.  The first is a series of articles brought together by my good friend Steve Clemons, the Washington Editor of the Atlantic in a piece called “Rebuilding America’s Stock of Power“.  In this piece  – besides bringing his own unique insights to American foreign policy, Clemons responds to various Washington beltway folk including Charlie Kupchan from Georgetown University, Rosa Brooks of the Georgetown University and Law Center and the New America Foundation, Rachael Kleinfeld of the Truman National Security Project, Tom Perriello a former Virginia Congressman and Duke University Professor, Bruce Jentleson.

The second grand strategy analysis will focus on the concept of “offshore balancing” and I shall use Steven Walt of Harvard University has the locus for this examination of a long established international relations perspective that has come back into vogue as the United States struggles to deal with the the end of one conflict – Iraq, the almost end of another – Afghanistan, and the emergence possibly of another – the Rise of China.

Stay tuned.

 

Photo Credit: Wikimedia Commons

Asia Pacific Leadership – So Crowded – A Scorecard to Tell the Players Apart

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Global summitry was on full display at the early part of the week.   It is again as the week ends.  Many of the Leaders who had just been to the G20 Leaders Summit at Cannes basically turned around and headed to Honolulu for the 19th Leaders Asia-Pacific Economic Cooperation (APEC) meeting.  And by the end of this week a number of these same leaders have gathered again in Bali for the 6th East Asia Summit (EAS).  This Bali gathering is notable for including for the first time the President of the United States and the President of Russia thus making it a first time meeting of 18 leaders.  As a final gesture of global summitry, the US President stopped on his way to Bail in Australia for a long postponed state visit by this President to the continent.

With the US (re)engagement in the Asia Pacific  – more on that in our next blog post – we saw significant attention placed by the President on the APEC meeting – it is his sorta home state – except for Illinois of course – which is other home state.  President Obama spent some time touting the Trans-Pacific Partnership (TPP) framework – a next-generation trade and investment agreement, as the APEC Leaders have referred to it, including currently nine Asian and Pacific countries and the new/old attention paid to joining these negotiations by the Prime Ministers of Japan and Canada and the President of Mexico.

APEC is an unusual organization that was first proposed by Australia in the late 1980s.  The 21 current members represent separate economies which allows Chinese Taipei – Taiwan and Hong Kong to members though they are not states or not readily acknowledged ones (it is one of the few organizations where both Taiwan and China are members)  The US organized the first Leaders level meeting (note Taiwan sends a ministerial level official) in 1993.

In the Honolulu Declaration, the communique ending the leaders’ meeting, the countries repeated the voluntary trade liberalization mantra of this forum:  trade and investment liberalization, business facilitation and economic and technical cooperation:

APEC’s core mission continues to be further integration of our economies and expansion of trade among us. We come together in APEC to pursue these goals, recognizing that trade and investment are critical to job creation and greater economic prosperity for all our economies.  We further recognize that strengthening regional economic integration also plays a key role in promoting regional peace and stability.

The reliance on consensus and voluntarism has always raised questions over the effectiveness of the organization.  These limitations remain to this day.

The EAS is a leaders summit that focuses on regional trade but also security issues.  The first leaders’ meeting was held in Kuala Lumpur in December 2005 and is held always at the conclusion of the Association of Southeast Asian Nations (ASEAN) leaders’ meetings.  Thus President Obama is holding bilaterals as The ASEAN leadership meets today in Bali.  ASEAN includes the core 10 countries of southeast Asia and is committed to the acceleration of economic growth, social progress, cultural development among its members, the protection of regional peace and stability, and to providing opportunities for member countries to discuss differences peacefully.  It is the core institution for Southeast Asia containing not only the economically vibrant members such as Singapore and Malaysia and newly vibrant Vietnam but also the large and now G20 member Indonesia.  The EAS was promoted by ASEAN plus three – the three being China, Japan and Korea – though there is confusion over whether members prefer the ASEAN plus three or the EAS.

In any case it would appears that this year’s EAS meeting will follow up on trade and investment liberalization discussed at APEC but additionally add discussion on making the region a nuclear free zone, easing tensions on the Korean peninsula and continuing efforts to develop a code of conduct acceptable to all states to facilitate disputes in the South China Sea.  The latter will very likely raise serious hackles among China officials where they have insisted that they do not wish discuss these matters and insist on resolving South China Sea disputes bilaterally and not – as the US and others insist – on a multilateral – basis.

The multiplicity of regional organizations in the Asia Pacific is striking.  As international legal scholar Sungjoon Cho of Chicago-Kent College of Law wrote some years in his examination of APEC (“Making A Better Dispute Settlement Mechanism for Regional  Trade Agreements: Lessons of Integration Efforts in East Asia” in Mitsuo Matsushita & Dukgeun Ahn (Cameron May: London, 2004):

This region is characterized by deeply rooted heterogeneity or, to use a more benign term, “diversity”.  As a result it lacks the glue of homogeneity needed to bond different states together to create a formal institution.  First the existence of many states in this region is based on ethnic identity.  The different countries speak different languages.  Their cultural underpinnings – customs, ways of life and thinking and moral system – are quite different.  Their religions also vary.  Second, colonial experiences in some states may have politically blocked formal institutionalization in this region.  Third, the lack of a single dominant leadership, in particular after the Cold War, may explain the difficulty of forming an official regional arrangement. Fourth, the payoff matrix, geopolitical or economic, of Asia Pacific states may in fact be too complex to bind them with a single formal tie.

So where do the countries go with this summitry spaghetti.  Tan See Seng, the deputy director and head of research at the Institute of Defence and Strategic Studies Nanyang Technological University Singapore in his post for  RSIS Commentaries entitled “Visions at War? EAS in the Regional Architecture Debate”  argues that there are three contending summitry models in Asia.  The first, what he refers to as the “Canberra School” model promotes a “command” or centralized brand of regionalism – an overarching institution.  Australia’s former Prime Minister and currently the Minister of Foreign Affairs, Kevin Rudd, promoted what he called Asia-Pacific Community model (I was fortunate enough to attend the Sydney gathering in 2009 where Australia pushed for the creation of the APc). Many of the smaller countries especially Singapore but also Vietnam and Cambodia expressed strong reservations over the creation of the this large institution.  Many representatives saw this institution as a threat to ASEAN and its continued existence.  While the initiative did pose a threat to the continued influence of the small states in Asia the primary purpose was to create an overarching security community – to date no such institution exists in Asia.  The Australian hope was to create under one umbrella a security community that could act as a platform for dialogue and discussion for China, US, India and the other powers in the region. But for the time being – that initiative is not possible.

The second approach referenced by Tan See Seng was what he called the “Washington School”.  This approach promotes a functional or results-based approach to regional governance.  The US calls for effectiveness and suggests ending the functional overlap that currently exists in the summitry in Asia.  Thus the ASEAN+3 and all of the ASEAN plus organizations should work on trade and investment liberalization while the EAS focuses on security.

Finally Tan See Seng identifies the “Singapore School”.  This approach accepts the current system – in particular acknowledging the centrality of the ASEAN – in other words the small country core of Asian regionalism – and promotes the continuation even augmentation of the institutional  system of ASEAN + settings. It permits the continuing membership diversity.

Whatever the future the Summitry diversity is a reality for now.  The burning question is: can these institutional settings help US-China manage their relations in Asia?  Or is all this beside the point.

Image Credit: Wikimedia Commons