This Autumn marks the 25th anniversary of the fall of the Berlin Wall. A quarter of a century on, the US-led international order that emerged from the end of the Cold War faces a number of significant challenges on the security, economic and political fronts ranging from the rise of China, the freeze in relations between the West and Russia, the continued economic aftermath of the ‘great recession’ of 2007-08 and the proliferation of so-called Islamic terrorism.
However, as many risks and uncertainties as this environment poses, US administrations have nonetheless enjoyed significant success in a long-term goal of encouraging growth of democracy and open markets across the world since 1989. Inspired by the success of predecessors in the post-1945 period, both the administrations of George H.W. Bush and especially Bill Clinton sought to respond to the collapse of Communism by encouraging expansion or creation of a range of economic and security institutions including North Atlantic Free Trade Agreement (Nafta), Asia-Pacific Economic Cooperation (Apec), World Trade Organisation (WTO) and North Atlantic Treaty Organisation (Nato).
And, these bodies are now potentially in the process of being reinforced by new ones, advocated by US President Barack Obama, including the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). TPP could see a deal with around a dozen countries in the Americas and Asia-Pacific that collectively account for about 40 per cent of world gross domestic product (GDP), while TTIP would represent the largest regional free trade and investment agreement in history with the US and Europe accounting for more than 50 per cent of world GDP.
As with predecessors post the collapse of the Berlin Wall, a key ambition for Obama appears to be embedding regional and global institutional frameworks to extend and enhance US influence. This parallels the post-Second World War creation and nurturing of key international bodies that exist to this day from the United Nations, to the International Monetary Fund (IMF) and World Bank. In the last 25 years, on the security front, Nato has been expanded in three main waves since 1989 in an attempt to lock much of Central and Eastern Europe (mostly formerly Warsaw Pact countries) into the western security system. Today, Nato membership stands at 28 with 12 additions since the fall of Soviet Communism.
On the economic front, the creation of Nafta, Apec and WTO have enhanced the incentives of emerging market and/or newly democratic governments towards political and pro-market economic reform from Asia-Pacific to the Americas. For instance, Nafta has consolidated Mexico’s embrace of free market, international orientated policies. Moreover, the creation of WTO has been a step towards facilitation of world trade. The body has reinforced multilateral trade laws and embedded some 160 states, including China, into a system that, for instance, helps ensure agreed rules are correctly applied and enforced.
While the US has benefited from creation of these institutions, other states have also gained by tying in what is still the world’s most powerful country into bodies that make its policies more predictable (for instance, Washington is subject to the WTO’s multilateral dispute settlement mechanisms), while enabling potentially enhanced access to the US marketplace.
However, these institutions have not been without significant criticism and opposition. Nafta, for instance, has been condemned, just like the proposed TPP and TTIP today, by free trade critics, including in the US itself. However, it is perhaps the expansion of Nato that has prompted most controversy. The enlargement of the military alliance eastwards has been an especially difficult pill for Russia to swallow. And a gradual build-up of tension in Moscow exploded this year, following the unseating from power of Ukrainian President Victor Yanukovych, a key Russian-ally. The new pro-western leadership of Kiev wants to secure Nato membership.
As well as proving sometimes controversial, these security and economic institutions have experienced mixed fortunes in recent years. Nato is in the midst of a major period of change that will set a revised strategic direction for the next 5-10 years. The WTO has also experienced a difficult period that has seen the Doha round of multilateral talks collapse. Reform measures, including ending the need for unanimity on future world trade deals, are thus now being debated.
Moreover, even some of the keenest supporters of Nafta have acknowledged that the impetus towards freer trade within North America has ebbed in recent years. And there appears no major enthusiasm for a significantly ‘deeper’ trilateral US, Mexican and Canadian agreement.
Meanwhile, the future for Apec is also uncertain too. At next month’s Apec summit in Beijing, China will push for creation of a free trade area by 2025. However, other member countries want to achieve a similar ambition on the basis of the alternative TPP framework advocated by the US. Taken overall, all four bodies have proved of enduring significance, despite the multiple challenges they continue to face. This is demonstrated by, for instance, the pipeline of countries still wanting to join Nato and the US-led proposal to build upon Nafta and Apec with the TPP project.
Both TPP and TTIP underline that Obama appears to see a key role for institutions in extending and enhancing US influence internationally in years to come. In this, he parallels US strategy not just during much of the post-Cold War era, but also the last seven decades since the end of the Second World War.
Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics. He was formerly a UK government special adviser.
