The future of the liberal international order: Where are we headed?

March 15, 2019

Japanese diplomats, scholars and government officials exchanged views at a series of public policy debates organized by The Genron NPO on the future of the post-WWII international order and Japan's desired posture in coping with the ongoing changes.

In the first session of the series, held Feb. 22, two scholars and a former bureaucrat joined Yasushi Kudo, president of The Genron NPO, as their moderator in the debate.

The three panelists were Yoshiko Kojo, a professor of international relations at the Department of Advanced Social and International Studies, Tokyo University, Masatsugu Naya, an adjunct professor at the Sophia Institute of International Relations, Sophia University, and Naoyuki Shinohara, a former vice minister of finance for international affairs and a former deputy managing director of the International Monetary Fund (IMF).

At the outset of the session, Kudo asked the panelists to define what a liberal international order is.

Kojo of Tokyo University said that an international order premises a consensus among key member states of the global community over the distribution of value added and the predictability, albeit to a certain degree, of the member states' deeds. "During the Cold War, a liberal order flourished within the Western bloc with principal pillars of an open economy, political and social freedom, and multilateralism," she explained.
With the end of the Cold War, however, international society witnessed a growing diversity among its member states, as exemplified by China and Vietnam whose political systems differ from those of major Western states, Kojo said, adding that the overt schism in values and consensus has brought to light confusions, necessitating full-fledged adjustments.


Naya of Sophia University stated that it is difficult for the world community to maintain a liberal order due to the absence of a world government and that individual freedom could not be guaranteed without the presence of a domestic order. "The postwar liberal international order that champions individual freedom was created and maintained under the strong leadership of the United States," he recalled.
Naya acknowledged that it is natural to see confusion in the world order now that the United States appears to have become exhausted as if it has lost its way while many other states act in pursuit of their respective national interests.

Meanwhile, former Vice Finance Minister Shinohara observed that when the Western-style open and liberal system functioned well, economic growth prevailed, income distribution was not so uneven and promotion of economic growth was deemed to lead to the wellbeing of people.
"However, the economic growth of the entire world has slackened, the gulf between rich and poor has expanded, making many people think that something is wrong with the conventional way things have been done," he said.
In the United States and some European states, dangerous levels of frustration and unease are manifesting themselves in the growth of populism, and an aversion to the conventional liberal order, the authorities and the establishment," Naya said.

Changing U.S. attitude as the guardian of status quo

Genron NPO President Kudo asked the panelists, "Is the decline in U.S. influence the sole reason for the malfunctioning of the conventional world order?"
Kojo said the structure of the world economy and international politics has been transformed dramatically. "The larger the number of standpatters, the more stable society is. With the advent of forces favoring reforms, society becomes unstable," she noted. Today, the United States, once the leader of the forces promoting the status quo, now desires to change the status quo and is heading for unilateralism by discarding multilateralism," Kojo said.
Naya is critical of the capability of the United States to build an international order in the first place. "During the Cold War, the security structure remained stable in spite of the U.S.-Soviet rivalry and a liberal order developed within the Western bloc," he observed. In the aftermath of the end to the Cold War, such a structure began to wobble, and stepped-up economic deregulation caused a widening of differentials. And importantly, new rules best suited to these drastic changes have yet to be created, according to Naya.

Shinohara shared Naya's views about the decline in American influence on world affairs. "The dominance of the United States continues to decline, ushering in a situation marked by U.S. unilateralism and the progress of multipolarization, he acknowledged. "The days when the United States served as the world's policeman are over and Washington is preoccupied with its own matters," Shinohara said. At the same time, many people are beginning to feel the limitations of capitalism and have realized that the abundance of money and goods does not ensure happiness," he said, adding that it is time that a new system was created.

Can we coexist with China?

Then, Genron NPO's Kudo raised the issue of the worsening U.S.-China confrontation, and asked whether we could deal with China and other states that adopt political systems and rules different from Western ones, whereas mutual dependency and reciprocity are the foundations for the world economy.

Kojo admitted that it is quite a difficult question to answer. Since China's entry into the World Trade Organization (WTO), many experts of international politics and economics have been asking whether a communist country could adapt to the rules of the liberal order, she recalled. Kojo noted that it is becoming increasingly difficult to apply external pressure to make China correct its behavior because it is now so powerful. However, she expressed hope that China will be able to make compromises, albeit within a politically admissible scope. "As long as China desires to prosper on the premise of mutual dependency with the rest of the world, it cannot escape the need to come to terms with reality and accommodate the rules of the market economy, Kojo said.

On the other hand, Naya could not hide his doubts about coexistence with China. "The reality is that the United States and China are engaging in a fierce battle over security matters and are rivals as the world's largest and second-largest economies," he acknowledged. Naya said it is unfortunate that China is refusing to abide by reciprocity that would allow it to coexist and co-prosper under shared rules. "In the field of international politics, it is a commonly shared assumption that we could coexist with states of different value systems by maintaining the balance of power and avoiding armed conflict. However, it is quite another matter whether we could reach a stage of sharing basic values (with China)," he said.

Meanwhile, Shinohara said there is no alternative but to stick to coexistence. In the days of the U.S. administrations of President George W. Bush and President Barack Obama, Americans believed that China would reach out to their world so long as its economy continued to grow, he recalled, noting that this ultimately did not happen. "Then along came President Donald Trump. It is not a bad thing that owing to Trump's high-handed approach, China's problems have been brought to light for our scrutiny," he said.
As a former IMF official, Shinohara predicted that in 20 years' time, China's gross domestic product (GDP) would surpass that of the United States and China may become the largest investment country. "If that should happen, the IMF's head office would move to Beijing, leading to a change in the structure and substance of the organization, and prodding the United States and European states to keep their distance from the IMF.
"There is no denying the possibility that we will be witnessing the establishment of a new organization for international monetary cooperation as a substitute for the IMF," he said.


What is Japan required to do?

Finally, Kudo asked the panelists' opinions on what role Japan should assume in such a chaotic world.

Kojo of Tokyo University said that Japan, which is comparatively stable socially, should strive to provide various venues and occasions for the rest of the world to build a consensus or new rules on diverse issues. "It is also meaningful for Japan as a country that cannot survive without multilateralism and international cooperation," she added.

Naya of Sophia University said that from the standpoint of Japan's national interests, Japan-U.S. relations should remain the axis of its foreign policy, but that Japan needed to maintain cooperative relations with China. "It is undesirable for Japan to be forced to choose between the United States and China as its principal partner."
He also said that the liberal order should not suffer a setback in the global economy. Japan is in an advantageous position as the leader of the TPP (Trans-Pacific Partnership) 11 and the Japan-EU EPA (Economic Partnership Agreement), he said, adding that such economic frameworks should be maintained so that the United States would be able to return or join anytime in the future.

Shinohara referred to the results of an opinion survey, conducted by a Singapore think tank , covering the 10 ASEAN member states, in which Japan is ranked first as the "most reliable country," and China is named as the "most politically and strategically influential country." Despite the decline in its economic and military might, Japan could contribute to the international community in its own way," the former IMF official said.

For instance, Japan is known as "a leading developed country in confronting various global and other issues humankind faces today," he said. It will be of paramount importance for Japan to create an international framework in which it shares its problems with other countries and find solutions to the issues together with them," Shinohara proposed. (End)

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