Clashes With Russia Point to Globalization’s End

Russia hopes to wield control over bordering states like Ukraine and block them from close ties with the United States and the European Union. The US and EU countered Russia’s military intervention in eastern Ukraine with sanctions and Russia responded by targeting McDonald’s restaurants as unsanitary. Unraveling symbols of cooperation could be the undoing of globalization, and trade can be used as a weapon, suggests Mark Leonard for Reuters. “Economic interdependence was supposed to defuse geopolitical tensions over time – or at least allow the two to be compartmentalized,” he writes. “But today the West is using Russia’s participation in the global economy to punish it for its actions in eastern Ukraine. The EU has announced sanctions that will hit Russia in the banking, oil and defense industries.” The World Trade Organization struggles for consensus and groups of nations are teaming up in little clubs for trade or security – NATO, BRICS, SCO, TTIP or TTP – that pointedly exclude certain major powers. Many global leaders are wary of the interdependence that has bound the world for the past three decades. – YaleGlobal

Clashes With Russia Point to Globalization's End

More nations pursue economic independence; sanctions are economic weapons; nations team up in exclusive clubs to exclude others that don’t share values
Mark Leonard
Thursday, August 7, 2014

As the European Union and the United States ramp up their sanctions on Russia, President Vladimir Putin’s plans for retaliation seem to include an attack on McDonald’s. There could not be a more powerful symbol that geopolitics is increasingly undoing the globalization of the world economy.

The burger chain was celebrated in the 1990s by the journalist Thomas Friedman’s “Golden Arches theory of conflict prevention,” which argued that the spread of McDonald’s around the world would bring an end to war. But almost 25 years after a McDonald’s restaurant opened in Moscow, it seems that deep interdependence has not ended conflict between great powers – it has merely provided a new battlefield for it.

As in any relationship that turns sour, many of the things that initially tie the parties together are now being used to drive them apart. For the past two decades we have heard that the world is becoming a global village because of the breadth and depth of its trading and investment links, its nascent global governance and the networks of the information age. But those forces for interdependence are degenerating into their opposite; we could call it the three faces of ‘splinterdependence’:

From free trade to economic warfare

Economic interdependence was supposed to defuse geopolitical tensions over time – or at least allow the two to be compartmentalized. But today the West is using Russia’s participation in the global economy to punish it for its actions in eastern Ukraine. The EU has announced sanctions that will hit Russia in the banking, oil and defense industries. When China felt its interests were threatened, it was also willing to use economic sanctions in its territorial disputes with the Philippines and Japan. In May, Beijing found itself on the receiving end as Vietnam turned a blind eye to anti-Chinese riots targeting Chinese plants when China put an oil rig in the disputed Paracel Islands.

From global governance to competitive multilateralism

Many saw global trade relations as a prelude to global government, with rising powers such as Russia and China being socialized into roles as “responsible stakeholders” in a single global system. But multilateral integration now seems to be dividing rather than uniting. Geopolitical competition gridlocks global institutions; the Ukraine crisis came about because of a clash between two incompatible projects of multilateral integration — the European-led Eastern Partnership and Russia’s Eurasian Union.

There is a global trend of competing mini-lateral friendship organizations. On the one hand, the “world without the West” encompasses the BRICs (Brazil, Russia, India and China), the Shanghai Cooperation Organization and a host of sub-regional bodies. On the other, the West is creating new groupings outside the universal institutions — such as the Trans-Pacific Partnership in Asia and the Transatlantic Trade and Investment Partnership — that deliberately exclude China and Russia. Rather than seeing international law as a way of de-escalating disputes between countries, people are increasingly talking about its use as a weapon against hostile countries — “lawfare.”

From one internet to many

Even the Internet is leading to hostile fragmentation rather than a global public square. Putin might have offered Edward Snowden refuge, but it is America’s closest allies — such as Angela Merkel in Germany and President Dilma Rousseff in Brazil — who are the most concerned about the National Security Agency’s prying into their citizens private lives. Anupam Chander and Uyen P. Le of the University of California at Davis contend that “Anxieties over surveillance … are justifying governmental measures that break apart the World Wide Web … the era of a global Internet may be passing.” They claim that countries such as Australia, France, South Korea, India, Indonesia, Kazakhstan, Malaysia and Vietnam have already moved to keep certain types of data on servers within their national borders.

After the end of the Cold War, when the apostles of globalization argued that trade would soon eclipse warfare, the military strategist Edward Luttwak predicted that they would soon be proved wrong. Although capital would replace firepower as a weapon of choice, and market penetration would play the role that bases and garrisons had in earlier generations, the driving force of international relations would be conflict rather than trade. As he put it, we would have “the grammar of commerce but the logic of war.” Luttwak’s prediction seemed misplaced at a time when countries such as Russia, China, India and Brazil were rushing to join the global economy.

The post-Cold War world these countries entered was marked by the development of an U.S.-led unipolar security order and a European-led legal order that sought to bind the world together through free trade, economic interdependence, international law and multilateral institutions. Today, we can see that the U.S.-led security order is fraying both as a result of war-weariness and the emergence of new powers internationally. As a result, great powers such as the United States are increasingly trying to weaponize the international legal order through sanctions to compensate for their unwillingness to use military force.

Interdependence, formerly an economic boon, has now become a threat as well. No one is willing to lose out on the benefits of a global economy, but all great powers are thinking about how to protect themselves from its risks, military and otherwise. China is moving toward domestic consumption after the threat of the U.S. financial crisis. America is moving toward energy independence after the Iraq War. Russia is trying to build a Eurasian Union after the euro crisis. And even internationalist Germany is trying to change the EU so that its fellow member states are bound into German-style policies.

In the years after the Cold War, interdependence was a force for ending conflict.  But in 2014, it is creating it. After 25 years of being bound together ever more tightly, the world seems intent on resegregating itself.


© 2014 Thomson Reuters