[jwtadvice]

Interestingly at today's White House Press Briefing, a reporter asked the Press Secretary whether the Trump Administration thought that it could surround/contain China with bilateral trade agreements the way that the TPP had intended to do on a multilateral basis.

China has a couple of free trade deals in the region. It has a multilateral effort (RCEP) which is somewhat stalled and primarily pursued bilateral trade agreements.

This may put American and China toe-to-toe in reaching agreements with Asian Pacific states. There’s a question about the quality of the trade deals that can be reached, if the target nations are clever enough to play Beijing and Washington off against one another.

The Trump Administration has suggested that bilateral agreements are better because they don’t devolve into “least common denominator” the way multilateral deals do; and that they also allow the deals to be quickly withdrawn from or renegotiated to account for new realities.

[hackuser]

Here's the real story every time you read about the comparison between multilateral and bilateral international agreements (speaking very generally):

* Powerful nations want bilateral agreements, because it's the strong negotiating with the weak. Imagine the U.S. negotiating a trade deal with Nicaragua: The U.S. position is overwhelmingly strong; they could walk away and cancel all trade with Nicaragua; the U.S. would hardly notice and Nicaragua's economy would be devastated. (EDIT: I'll add that this is true of the powerful everywhere; e.g., large businesses don't want to negotiate with government or Congress (law and regulation) or a class in court (a class action), they want to deal with individual consumers one by one.)

* Supporters of an international rules-based, law-based order, and of a democratic and rights-based order want broad multilateral agreements. Then the weak nations can band together and resist the powerful; it gives them self-determination, the foundation of democracy; it creates rule of law rather than rule of the powerful. Also, instead of an exceptionally complex system of individual agreements between each pair of countries, it creates one standard - much more like a law. Imagine a global business trying to parse the individual trade deals between every pair of countries from its supply chain to its retail customers - an incredibly, needlessly complex level of regulation compared to one international standard. Imagine if the 50 U.S. states only had bilateral trade deals with each other - that would be 1,225 deals, endless red tape for a national business (and there are many more countries than U.S. states). A major reason the U.S. is so wealthy is that it's the largest single, unified economy; that's what the EU hopes to equal.

For example, in the South China Sea, China says they want bilateral negotiations with each country - they oppose the current U.S.-led international order and want negotiations they can dominate. The U.S. and China's neighbors want a multilateral deal; they want to continue the rule of international law and the U.S.-led order, and want to negotiate from a position of strength.

My guess in this case is that it's a reflection of the fact that Trump, the Republicans, and their big business constituents prefer rule of the powerful.

[jwtadvice]

Thank you! Very keen.

To add to this comment, there’s more nuance when speaking less generally:

* In cases where there is competition between powerful nations, weaker nations can and do gain advantage by playing the interests of one country off of one another. For instance, during the Cold War the United States and Soviet Union would engage in trade, weapons, and security deals. States caught in the middle understood that both empires were competing with one another to either expand their network outward or prevent the other from doing so (America often included “and you may not trade with the Soviet Union” as an aspect of its bilateral negotiations) would try to internalize the security/strategic value that the empires sought - rather than the pure quid-pro-quo of markets.

* The United States effort with both NAFTA and the TPP were to contain Russia and China, respectively, by building a coalition of countries with trade that excludes each specific United States adversary. This strategically weaponizes the second point above: coalitions of nations together banded together against a more powerful economic force. Similarly, the Chinese RCEP agreement bands together trade centered around the Chinese economy, and excludes the United States. Indeed, the Soviet Union was, as a security/power concept, an idea that a trade network on the Eurasian Supercontinent would be able to outperform and outcompete other continental sized trade networks (the United States), which led the United States to disrupt the trade framework with proxy war, etc.

* Similar episodes are common throughout history: Nasser’s Egypt had tried, unsuccessfully, to create a Republic of Arab nations in the Middle East, so that they could collectively bargain and negotiate with external powers such as Europe and the United States. This was considered a security threat to these powers, because the West much preferred strong-on-weak bilateral agreements, protectorates and mandates.

From the security side of the coin, great nations including China, Russia (now the Eurasian Union), and the United States strategically try to build coalitions of small nations against their powerful adversaries in an attempt to disrupt their ability to successfully compete.

The Trump Administration decision to abandon this represents an idea that the United States will be able to “out-deal” regional competitors (primarily China but also Japan, South Korea) on a one-for-one basis. My guess is that the diplomacy will get very nasty - even if its all in the back room.

[hackuser]

Thanks; that's a great addition to the discussion. One important nit:

> The United States effort with both NAFTA and the TPP were to contain Russia and China, respectively, by building a coalition of countries with trade that excludes each specific United States adversary

As I understand it (I'm no expert in the field), U.S. policy in regard to China is that its rise to superpower status is inevitable, and the U.S.'s strategy is to get China to join a rules-based (i.e., law-based) international order - preferably the existing one - rather than create an anarchic great power competition that often results in terrible wars. On a political level, TPP was designed as a step in that direction; it wasn't intended to exclude China but to compel them to join a rules-based trade regime for the Pacific - i.e., either play by the rules or be excluded from trade. The goal was that they would join.

[jwtadvice]

> As I understand it (I'm no expert in the field), U.S. policy in regard to China is that its rise to superpower status is inevitable

Interesting. My understanding is quite the opposite: that the U.S. policy in regard to China is that its rise to superpower status is in question.

China is 25 years or more from being on par with the United States in terms of military projection in its own region (much less power projection in distant lands and seas). China has legitimate issues with all of its territories that have strategic resources: its water is in Tibet, its minerals and oil is in its Uyghur region. The United States today has China surrounded by the "first island chain." China's economy is robust, but has inherent weaknesses that could cause it to fracture as it tries to jump the 'middle income gap'. Indeed out of several dozens of states that have attempted jumping the gap, only a couple have succeeded. Ongoing sovereignty disputes in Hong Kong and Taiwan keep the Chinese mainland divided and focused in on its own territory. Japan today could match Chinese military might, and with the right trajectories could maintain an upper hand in the future. America has tried to block Chinese multilateral/international banking efforts (AIIB, ADB, etc) and it's admission into the Special Economic Basket of currencies at the IMF. Today the United States (well, under the prior administration...) is trying to prevent full membership of China inside the WTO, and it's membership isn't guaranteed. India forms a natural check on Chinese regional power as its population is larger than China and its economy is growing at even faster rates. Russia (which shares a huge and important border with China) and America both eye China and it's ambitions and could individually or together align to snuff Chinese expansion where they to find a good justification. China's international investments are questionable, as much of them are in countries with poor histories of solvency (this is a strategic bet on the part of China). It's One Belt One Road infrastructure project is vulnerable to stability issues in Central Asia (of which there is a long history). The people's party in China also (rightly) fears regime change operations in their country - this remains a real possibility. China has a burgeoning nuclear power (DPRK) on its border, a nation in dispute with a long time American military protectorate.

The United States has a lot of issues it can make with China, from internation trade, currency practices, South China Sea settlement, Taiwan and recognition of independence, Japanese security (look at their reform of National Security legislation), Indian bolstering, Korean Unification, Russia's far east, Central Asian proxies, etc.

The United States is hoping that, with containment pressure on all of China's strategic bets that it won't be able to realize its ambitions to greatness - and will fizzle. This is a practiced playbook: it's how the United States prevented the Soviet Union from realizing super power parity. Curiously, the timeline originally predicted by strategic thinkers for the Soviet Union for parity was also "25 years."

Including China into the "rules-based international order" isn't code for "we want a nation as powerful as our own to also rule the international order." The United States Grand Stategy toward China - indeed toward any and every potential adversary - is to prevent their rise by raising obstacles and costs to its succession.

[hackuser]

Great talking with you, by the way.

Our understandings are different, of course, and it's great to learn another perspective. I agree with much of what you say, I just think it weighs less heavily. But a few concrete points:

1) A minor point: China's massive and questionable investments in poor countries are not grants, but loans (at least, based on what I've read). They may be creating leverage over those countries via debt, similar to what the West had at least until massive debt forgiveness.

2) 25 years is a larger number than what I understand. Depending on how it's measured, China's economy already is ~75% of the U.S.'s size and growing much more quickly (though with many serious risks, as you point out). Also, they don't need complete parity, just the prospect of parity - that will be enough to intimidate neighbors. Finally, China currently can focus all their resources on one region; the U.S.'s are distributed globally - one reason Obama hoped to withdraw from some situations.

3) My understanding was that the Cold War 'containment' strategy was not based on the assumption that the USSR would reach parity, but that their Communist economic system was fatally flawed, would inevitably collapse, and all the West had to do was wait and keep the USSR contained. At the time, some did claim that the USSR would or even did catch up - IIRC (a hazy memory of the histories I read) Kissinger thought so and so did the CIA at some point(s). But mainly we tried to pressure them into failing; that's the popular wisdom for why Reagan engaged in an arms buildup and 'Star Wars' missile defense. Regardless, based on hazy memory of numbers from the 1970s that I saw a year ago, the USSR and Warsaw Pact grew to around 50% of NATOs economic strength.

> The United States Grand Strategy

From what I've read many times from foreign policy insiders, such a thing doesn't exist. The foreign policy institutions are so massive and complex, from Dept of State to Dept of Defense to the National Security Advisor and staff, to all the large subcomponents of each, to Congress, to all the career bureaucrats that outlast any President, that getting them all moving in the same direction is impossible. Also, those people are disappointingly and shockingly focused on the day-to-day; few have time for grand strategy. As one person observed,

If, as F. Scott Fitzgerald said, '[t]he test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function,' then the government is a genius.

I think you would enjoy the whole article:

http://foreignpolicy.com/2013/12/05/how-the-u-s-saw-syrias-w...

[jwtadvice]

Absolutely. Shared respect.

1) Yes agreed here. The investments/loans aren't gifts. They are expected back - with interest - and there is real risk that insolvency and default will stall the investments. This gives China leverage, it develops regions that create the possibility of alternative trade routes and supply chains from the US system, and ultimately China expects their investments not only to produce growth but also pay back into the Bank of China.

2) The 25 year forecast is for regional military parity. Economic parity is on a similar timeline, but I don't know offhand what the most recent projections are. If you look at the strategic literature, many analysts (even journalists) focus on China's ascention in 2040-2050: 25-35 years. (25 years is the smaller number of the projections.) You will have difficulty finding analysts discussing Chinese ascension in 2030 or 2020. I would be interested, of course, in any such literature.

3) "their Communist economic system was fatally flawed, would inevitably collapse, and all the West had to do was wait" - this was Cold War propaganda, which reinforced the message that "The USSR is the wrong trade network to be in" ("Our trade network is the one to be in ;)"). The strategic thinkings from the National Security core of the United States was focused on economic warfare of all kinds that would put pressure on the USSR to collapse. The USSR had attempted to organize strategic resources across nations. When these states were flipped, either by "accidents to their leadership", economic pressure from the US trade network, diplomatic pressure, or internal instability, the USSR needed to reallocate and adjust its system. Twenty five years of unconventional warfare intended to cut the Soviet Union from strategic resources in key areas (Middle East and Central Asia), raise its costs with proxy wars and arms races, containment strategies that limited its options for economic flexibility, and pressure on China to pry the Soviet Union apart from the inside ultimately thwarted the attempt to foment the Eurasian free trade network. The Security State in America was _not_ resting on their laurels, waiting for the USSR to "just collapse". The actions of the United States were meant to put as much pressure toward insolvency and inflexibility in the Union as possible.

> From what I've read many times from foreign policy insiders, such a thing doesn't exist. The foreign policy institutions are so massive and complex, from Dept of State to Dept of Defense to the National Security Advisor and staff, to all the large subcomponents of each, to Congress, to all the career bureaucrats that outlast any President, that getting them all moving in the same direction is impossible.

No, the US has Grand Stategies. You can download, for example, the once-leaked copy of the Bush Administration era "Wolfowitz Doctrine".

Now the interagency process of getting a giant organization like the United States government and private sector to act together in coordinated concert? That's another problem entirely, and something that -rightfully- foreign (and domestic) policy insiders complain about. The difficulty of administering a giant bureaucracy is not the same as there being no Grand Strategy: indeed you can find declassified documents, leaked copies (as mentioned), strategic advice for modernization of Grand Strategy and the like.

Thanks, I'll read this later! FP is... okay. It's just so full of childish references ("pee"-otus), quips and nationalist gilding it's hard to read some times. Though some of their authors are very nice when the editing isn't heavy handed and there's not much competition on the subject (incredibly).

[rayiner]

> Supporters of an international rules-based, law-based order, and of a democratic and rights-based order want broad multilateral agreements. Then the weak nations can band together and resist the powerful; it gives them self-determination, the foundation of democracy; it creates rule of law rather than rule of the powerful.

Ironically, most of those small, weaker countries are not democratic.

[hackuser]

Yes, and it raises a challenge: Who speaks for their citizens? I think the best argument is that their own governments do - that's true de facto, regardless; and foreign powers are very poor and understanding the needs of locals, no matter how good-willed. The foreign powers tell them what's good for them (and coincidentally what never conflicts with the foreign powers' interests); they don't listen so well.

[pavlov]

Powerful nations want bilateral agreements, because it's the strong negotiating with the weak.

And this is why "hard Brexit" is such a risky endeavor for the UK.

The EU is much larger and more experienced in trade deals. From day one Britain will be negotiating from a position of weakness. Once negotiations begin, Britain has a hard 2-year deadline... And to make it worse, they don't have people with experience in bilateral trade agreements because the EU has been in charge of those for 40 years.

The British press is trying to spin this inherently weak position into a matter of EU countries looking to punish Britain, or other such nonsense.

[hackuser]

I'd add that the leading European nations, such as the UK, Germany and France, used to be global powers.

Power, soft and hard, depends in large part on pure economic capacity; that enables many things, including economic leverage, larger militaries, and high tech. I don't have the old numbers, but look at this list and imagine their relative power as individual nations before the rise of China and India:

https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28no...

But China and India likely will take two of the top three spots, along with the U.S., leaving those individual European powers far behind - $5 trillion economies in a world of $25 trillion superpowers (making a guess at future growth). They will be small fish among the sharks, no longer with a place at the table or influence on global affairs. A unified EU would be a fourth power, but that takes time, especially the political unification necessary to conduct foreign affairs (where the EU government has unified control of foreign policy - otherwise their words aren't backed up by the actual power). They are moving the wrong way.

[makomk]

China's ability to reach trade deals is probably somewhat limited by the fact that they do not believe in free trade or free movement of money and goods. Seriously, if America put anywhere near the kind of obstacles to trade that China has, economists and the press would freak out.

[hackuser]

> China's ability to reach trade deals is probably somewhat limited by the fact that they do not believe in free trade or free movement of money and goods.

China's economy is built on international trade - specifically, their massive exports - and the movement of money and goods. They don't like it in some cases, but that's true of every nation.