Economic blocs of the 2020s

A week after American media called the presidential election for Joe Biden, and foreign governments began to call him president-elect, fifteen Asian nations agreed to form the biggest trade bloc in the world, RCEP (the Regional Comprehensive Economic Partnership), at a virtual summit hosted by Vietnam. They were China, Japan, and South Korea; the ten southeast Asian nations of ASEAN; and Australia and New Zealand. 

This clarifies the economic structure of our multipolar world. North America (USA, Canada, Mexico) has USMCA, formerly NAFTA. Europe has the EU. Russia has its Eurasian Economic Union, which is integrated with China's Belt and Road Initiative. Belt and Road is a scheme for economic integration that is a product of China's own ideology, but RCEP now also gives China a trading bloc friendly to the neoliberal ideology of the west. 

India could have been part of RCEP, but didn't want to be in a bloc dominated by China. They will instead cultivate their own networks, like the BIMSTEC organization of nations bordering the Bay of Bengal (to India's east); and the North South Transportation Corridor that links India's west with Iran, Russia, and Europe; and One Sun, One World, One Grid (OSOWOG), a "solar alliance" that plans to share renewable energy across borders, by linking national power grids. 

Russia works with the Middle East oil producers in "OPEC Plus". China will assist the creation of a "continental free trade area" in Africa. The "D-8" organization links eight of the biggest Muslim countries, from Indonesia and Bangladesh in the east, to Egypt and Nigeria in Africa (actually, Nigeria is more half Muslim, half Christian). South America has the Mercosur common market. And perhaps the BRICS summit of Brazil, Russia, India, China, South Africa, weakened in an era when Brazil and India were aligning with America, will become important again. 

World trade, already rocked by America's trade war with China, declined even further during the coronavirus emergency. The virus is still spreading, but western pharmaceutical companies (Pfizer, Moderna) are now declaring that they have promising vaccines, finally rivaling Russia (Sputnik V) and China (Sinovac). Biden will likely make coronavirus his focus for the first half of 2021. The rest of the world will eventually join China in having vanquished the virus, and globalized life will resume, organized around the economic blocs. 

The big picture, again

I'm very busy, but it's just a few days until America votes, so I shall hurry to get down my current thoughts in advance. 

America will vote, but we may not know the outcome for a while. In 2000, it took them a month after the vote to decide... And who could have guessed that the 2020 election would be something more than a referendum on Trump's populism? It still is, but it's also the coronavirus election. 

What is the state of the world? I like to focus on four great powers here, though I remember there's more to the world. And let's think in terms of politics and economics, as well as the virus and its effects. 

Strategically, we can compare the present to the 1945-1990 cold war. In the cold war, it was America versus Russia. China started out on Russia's team, but diverged ideologically. India was nominally non-aligned, but it was always a democracy... After the cold war, there was a unipolar world for a generation, with America ascendant. But now we have a new polarity, between China and America, backed up by Russia and India respectively. 

For years, America has been pulling out of various cold-war-era arms control treaties (e.g. for nuclear weapons or missiles), most recently saying that they need to include China to be meaningful. Russia's response has been to develop new generations of weapons (e.g. their hypersonic missiles) to maintain 'deterrence', i.e. the ability to nuke America if America nukes Russia. As for the American desire to bring China into arms control, Putin has remarked, okay, but why just China, what about all the other nuclear powers in the world? As long ago as the 1980s, Trump was interested in nuclear arms reduction; and during the primaries, Democrat Tulsi Gabbard called reducing the nuclear threat her top priority; so there is some chance that whoever wins this week, there will be a return to arms control during the next presidential term. 

So that's Russia and America, the two nations with by far the biggest nuclear arsenals. Meanwhile, what are China and India doing? On the recent anniversary of China's intervention against America in the Korean war, Xi Jinping warned the American military against pressuring China. One presumes that such warnings pertain mostly to Taiwan. Meanwhile, we have had Chinese political scientists making proposals: Tsinghua's Yan Xuetong asked Putin about an overt military alliance between China and Russia, and Shanghai's Liu Zongyi said China should start treating India as simply an American ally. 

India itself hosted another '2+2' meeting of its defense and diplomacy chiefs with those from America, and national security advisor Ajit Doval declared that India would not just fight on its own territory, but would go after foreign threats at their source. One supposes that this refers mostly to Pakistan, supported by China; but it could also mean something in the calculus of India's border dispute with China itself. 

We therefore appear to be in a period, in which Russia and India are siding more overtly with China and America, respectively; increasing the polarization among the great powers, rather than building connections across the divide. It's China and Russia's 'Eurasia', versus America and India's 'Indo-Pacific'. 

But this is an economic competition as well as a military one. And while both sides have economic and military power, perhaps we can say that China's biggest strength is economic, while America's biggest strength is military. That suggests that the conflict can be conceptualized as the "Quad" - America's Indo-Pacific military alliance - versus the "New Silk Road" - China's Eurasian economic plan. The old order, trying to suppress the new. Sometimes the old order succeeds, sometimes it does not. 

This new polarity is the world order that Covid-19 unexpectedly invaded. On balance, I think coronavirus accelerated the breakdown of the liberal internationalism left over from the time of America's unipolar hegemony - itself already disintegrating since at least 2014, thanks to challenges from Putin, Xi, Modi, and Islamic State, and then challenged from within since 2016, by the reborn western populism of Brexit and Trump. The virus crisis re-energized the nation-state; and even if Trump's conservative nationalism is replaced by a warring coalition of liberal and progressive Democrats, I see the restoration of power to America's political and cultural establishment as mattering only for countries in the American bloc. The rest of the world will continue to go its own way, and the new polarity will continue, even as the fabric of the world economy is stitched back together. 

There's much more to say about world events and trends, always, but further commentary will have to wait until some time after the 2020 US election.