The Research Group on 'Economy-Security Linkages' FY2021－# 1
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In the midst of a global pandemic, in June 2020 the U.S. President Donald Trump announced he would cut ties to the World Health Organization (WHO). This action followed exit from UNESCO and rejection of international agreements including the Paris Climate Accord, Trans Pacific Partnership (TPP), and Open Skies Agreement. He had threatened in 2018 to withdraw from the World Trade Organization (WTO) as he directed a barrage of criticism at the organization, claiming it treats the US unfairly. This trend to leave organizations would reverse 75 years of international cooperation built on membership in international organizations. Even as the Biden administration has reversed some of these decisions and the United States will remain a member of the WHO, many continue to question the direction of U.S. foreign policy. Brexit offers another shock to multilateralism.
Member states sit in the driver seat of international organizations. Their governments write the rules, elect the leadership, and fund activities. They commit to reciprocity for mutual gains and shared burden. But just as national laws do not enforce equal tax payments or provide equal benefits, international organizations are subject to the same variation in outcomes across countries based on need and power. China has long complained that weighted voting rules favor the United States influence over the International Monetary Fund, and now the United States accuses the WHO leadership of catering to China.
As with any bureaucracy, international organizations are open to manipulation, group-think, and inefficiency. Their decision rules may allow states to have their proposals rejected by the majority or vetoed by great powers. Collective decision-making means a government may not get its favored outcome. High principles of universal goals belie discrimination over who is allowed to join organizations.1 Power politics exclude some who otherwise could contribute to global peace and prosperity - South and North Korea could not join the United Nations until after the end of the Cold War, and Taiwan remains excluded from many organizations today. But despite the reality that politics shapes their rules and membership, international organizations remain useful as a forum for states to address global problems that cannot be solved at the national level. Through sharing information and monitoring behavior, states achieve common goals and reduce uncertainty. Research has shown that states who belong together in international organizations trade more and fight less. The wide array of international organizations form the basis of an international society, which Hedley Bull described as requiring that states "regard each other as subject to the same set of rules."2
Leaving an organization means letting others navigate the direction of international order. In 1950 the USSR declared it would boycott the UN Security Council meetings to protest the representation of China by the Nationalist government. As the organization proceeded in its absence to authorize a UN led military force to defend South Korea from communist invasion from the North, the USSR recognized its mistake and returned to the Council. Today Britain grapples with the consequences of Brexit as policies decided in Brussels impact its economy even as the British government no longer votes on their content. As a participant, states retain the ability to guide the agenda - whether to block action, promote compromise, or direct a new global agenda. That is why exit is quite rare - among multilateral economic organizations there is less than one percent frequency of states ending their membership.
Exit does more than terminate a contract. It represents withdrawal from international society. Japan's dramatic departure from the League of Nations in 1933 after criticism of its aggression in China marked rejection of collective rules. This fateful step toward going it alone led Japan into a war that brought disaster on the region and itself. Departure from an organization worsens the breakdown of cooperation by signaling disdain for both the process and participants in the organization.
Governments may want to make better deals outside of international organizations. But this ignores the fact that departure marks the government as non-cooperative. Like a new driver, or worse, a driver with a bad record, exiteers will be charged a risk premium for uncertainty about their future behavior. Consider trade policy. The UK now struggles to negotiate access to European markets equivalent to terms it enjoyed as a member of the EU, and the US bilateral trade agreement with Japan concluded last year offers less benefits than the Trans-Pacific Partnership agreement Trump rejected in 2017.
If the U.S. had exited the WTO under the Trump administration, it would have been a disaster for the trade regime and the United States. The United States has acted like a drunk driver in its abuse of WTO rules of the road. Launching a trade war with China, raising tariffs on steel and aluminum imports under the guise of national security, and refusing to approve the appointment of new judges to the trade court, the U.S. policies of the past five years undermine the organization. The Biden administration has not yet changed course on trade. Some may even wish the United States would leave. Nevertheless, exit would be an even more dramatic rejection of the WTO than open non-compliance. Such a move would seal the reputation of the United States as an unreliable trade partner. Bargaining outside of the WTO for new agreements, the U.S. would have a hard time regaining current levels of market access for U.S. exports. As world trade plummeted in the largest economic disaster since the Great Depression and protectionist tides rise, the United States cannot afford to be on the outside asking for favors. U.S. exit from organizations also sends a dangerous message that participation is conditional on getting your way on decisions. Confidence in all international organizations suffers as a result.
Done right, exit could encourage reform of organizations. This requires others to follow and an absence of alternative sources of leadership among the group that remains. The exit threats of the Trump administration were ineffective because others who share some of the U.S. concerns like Europe, Canada, and Japan favor incremental reform from within. China stands ready to fill any leadership vacuum. Crises bring opportunities for changes, and China will steer reforms toward its preferred direction because it will remain in the driver's seat.
In the case of the TPP, Japan provided the alternative source of leadership to forge ahead with an agreement absent U.S. participation. Japanese trade policy of gradual liberalization paired with compensation and targeted welfare state benefits based on employment and region has formed an effective strategy.3 Where other countries struggle with backlash against globalization in the form of populist movements hostile to multilateral institutions and free trade, Prime Minister Abe stood out as a strong supporter of both the WTO and regional trade agreements.
Yet even Japan jumped on the trend to exit international organizations as Prime Minister Abe announced in 2019 that Japan would leave the International Whaling Commission (IWC). It had been many years since the interests of Japan diverged from the policies in the organization - Japan had joined in 1951 to show willingness to abide by international rules for sustainable whaling, but the 1982 moratorium on commercial whaling passed by the IWC began decades of tense exchanges in meetings where members condemned Japan's scientific whaling program. In many ways, the surprise is that Japan stayed a member for as long as it did. Other governments such as Canada had left the IWC years earlier. Fear of international criticism stood as a barrier for Japan, which had long seen international organizations as its pathway to normalize diplomacy after the war and show leadership without arousing fear. Yet when the IWC members voted to reject a Japanese proposal to resume commercial whaling, the government turned toward making the decision to exit. The United States made no comment and the Japanese public was supportive. At the level of a decision to exit an organization where it disagreed over core policy goals, Japan leaving the IWC is not at all controversial. The danger is when similar decisions to exit organizations accumulate. The result could erode the community-based approach to cooperation within international organizations. On balance, the Japanese government remains deeply embedded within many international organizations. It will be important to assure other states that exit from the IWC is neither a trend for Japan nor a signal to others against multilateralism.
International organizations are a weak restraint on great powers. Nevertheless, they remain important during this time of rising international tension when a common forum for dispute resolution and certainty over behavior is more important than ever. Indeed, rivalry with China for influence demands countries should remain inside organizations. To counter Chinese influence, the United States should expand its own leadership. This means paying dues and offering ideas for tackling difficult problems. Forty years ago, superpower rivalry produced one of the greatest triumphs of global public health with the help of the WHO. Unwilling to let either side claim credit for global health leadership, the United States and Soviet Union decided instead to jointly work under the umbrella of the WHO on a global vaccination campaign that successfully eliminated the scourge of smallpox. Cooperation amidst rivalry is again critical, this time to combat COVID-19 and rebuild opportunities for economic growth. Success depends on not going it alone.