Can East Asia Show the Way?

By Jomo Kwame Sundaram

KUALA LUMPUR, Malaysia, Jun 3 2025 (IPS) - With two-fifths of the world economy, East Asia can inspire others by creatively responding to the US President’s tariff challenge by promoting fair, dynamic and peaceful regional cooperation.

No winners in economic war

Trump’s Liberation Day tariff announcement on April 2nd poses a common challenge that everyone needs to take seriously. Dismissing it as crazy or stupid for rejecting conventional policy wisdom is useless.

Politics and economics have been said to be war by other means. This old insight helps make sense of our times. His announcement emphasised it is about world domination, not just tariffs.

His first shot was arguably fired when Canada arrested Huawei’s founder’s daughter at the behest of the first Trump administration. Others suggest different starting points.

Obama announced the US ‘pivot to Asia’ to contain China. The Nobel Peace Laureate also undermined the multilateral World Trade Organization (WTO)’s ability to settle disputes by blocking arbitration panel appointments.

Trump’s approach is termed transactional. It presumes ‘zero-sum games’ and ignores cooperative ‘win-win’ solutions. Its implications mean we live in perilous times.

His penchant for ‘shock and awe’ is well-known. As if demanding instant gratification, Trump seems uninterested in the medium-term, let alone the long-term.

He insists on bilateral one-on-one transactions – weakening ‘the other’ by refusing collective bargaining. He rejects plurilateral and other collective arrangements but embraces cooperation to share costs. China is different but exceptionally so.

ASEAN

The Association of South East Asian Nations (ASEAN) did not include all in the region when it was formed in 1967.

Malaysia had recently had conflicts with all other founding members. Indonesia and the Philippines both opposed the new British-sponsored Malaysian confederation established in 1963, and in 1965, Singapore seceded from it.

Like the European Union, ASEAN helped resolve recent conflicts. But ASEAN soon got its act together, even before the Vietnam, Cambodian and Laotian wars ended in 1975.

In 1973, ASEAN leaders agreed that Southeast Asia should become a zone of peace, freedom, and neutrality (ZOPFAN). But its progress has been mixed.

The Philippines removed all US military bases before the end of the 20th century, but now has eleven, with four new ones in the north, facing Taiwan.

ZOPFAN is especially relevant now as several Global North powers have a military presence in the South China Sea. Worse, several Asian leaders have made generous concessions to ‘circumvent’ personal legal ‘problems’ with US authorities.

The recent ASEAN summit will be followed by a second one later in 2025. Two ASEAN precedents, established in response to earlier predicaments, remain relevant.

Bandung

The 1955 Bandung conference of Asian and African leaders of newly emerging nations, which led to the birth of the Non-Aligned Movement, remains relevant.

Europe recently celebrated the 80th anniversary of the defeat of Nazi Germany. Now rejecting peaceful coexistence with its erstwhile liberator, Europe insists on fighting Russia to the last Ukrainian.

Military interventions after the first Cold War now exceed the number during it! Despite its rhetoric, the Global North seems uninterested in freedom and neutrality.

Western pundits deemed the world unipolar after the 1980s. However, many now see it as multipolar, with most in the Global South preferring not to be aligned with any particular world power.

Major Western powers have increasingly marginalised the UN, undermining its capacity for peacemaking. Few in the West, especially in NATO, remain seriously committed to the UN Charter despite giving much lip service.

But realistically, ASEAN cannot really lead international peacemaking. It can only be a pro-active, pro-UN voice of reason for peace, freedom, neutrality, development and international cooperation.

East Asia

Meanwhile, the world economy is stagnating, mainly due to Western policies since 2008. ASEAN+3 (including Japan, South Korea, and China) is especially relevant now with its Regional Comprehensive Economic Partnership (RCEP).

The earlier ASEAN+3 Chiang Mai Agreement responded to the 1997-98 Asian financial crises. After years of Northeast Asian encouragement, ASEAN nations agreed to move from bilateral to multilateral swap arrangements.

Meanwhile, the ASEAN Free Trade Area (AFTA) has progressed little since its creation over three decades ago.

More recently, the governments of Japan, China, and South Korea met without ASEAN in late March to prepare for Trump’s tariffs.

Sadly, key ASEAN leaders can hardly envision regional economic cooperation beyond yet another free trade agreement.

Trump has declared he wants to remake and rule the world to make America great again. His tariffs and Mar-a-Lago proposals should be seen as long overdue wake-up calls that ‘business as usual’ is over.

Will East Asia rise to the challenge and go beyond defensive actions to offer an alternative for the region’s economies and people, if not beyond?

The UN-led multilateral system still largely serves the US, but not enough for Trump. Thus, the US still invokes multilateral language self-servingly, e.g., it claims its unilateral tariffs are ‘reciprocal’.

Hence, despite his blatant contempt for them, Trump is unlikely to withdraw from all multilateral organisations and arrangements, especially those which serve him well.

Related IPS Articles

• Will Europe Wage Peace?

• Trump Accord Sows Discord in US Empire

• Trump Wants World to Subsidise US Empire

• Trump’s ‘Shock and Awe’ Tariffs

• New Geopolitics Worse for Global South

• The Global South in the New Cold War

• How NOT to Win Friends and Influence People

• Reject CPTPP, Stay out of New Cold War

• Nothing to Learn from East Asia?

• Trade, Currency War Weapons Double-Edged

• What’s different about Trump’s tariffs?

• Trump’s Trade War in Perspective

Available online here: Can East Asia Show the Way?

Will Europe Wage Peace?

By Jomo Kwame Sundaram

KUALA LUMPUR, Malaysia, May 20 2025 (IPS) - With President Trump’s efforts to end the Ukraine war, Europeans are now mainly responsible for prolonging it. Despite lame protestations of peace, Europe seems committed to fighting ‘to the last Ukrainian’.

Unsustainable peace

As Europe celebrated the end of the Nazi-initiated Second World War earlier in May, it does not seem to know how to sustain peace after war.

Both ‘world wars’ of the 20th century started in Europe as inter-imperialist wars, killing millions. In 1884-5, the Berlin Conference divided Africa among the dominant European powers.

After attending the Versailles palace negotiations following WW1, the young John Maynard Keynes’ The Economic Consequences of the Peace warned the agreement’s terms undermined a sustainable peace, almost anticipating Nazism’s later rise.

Towards the end of World War II (WW2), FDR’s Treasury Secretary, Henry Morgenthau, insisted Germany should not be allowed to re-industrialise after the War.

After starting and losing two world wars, German military aggression seemed unavoidable. For Morgenthau, reindustrialisation would inevitably lead Germany to war again.

For FDR, only postwar recovery for all would ‘win the peace’, not subjugating and destroying the loser.

His WW2 generals, famously Eisenhower, Marshall and MacArthur, imposed ‘pacifist’ constitutions and reforms for postwar growth on Germany and Japan.

Imperial oversight?

Despite his brilliant contemporaneous insights into the unsustainability of the peace secured at Versailles, Keynes ignored its outcome for China.

At Versailles, the Shandong peninsula, previously ruled by the Germans, was not returned to China, but given to Japan instead!

The resulting May 4th (1919) movement culminated in the Chinese revolution. Keynes was as blind to this as to WW2’s three million lives lost to the Bengal famine.

Although invisible in movies, tens of thousands from China were involved in WW1, mainly digging trenches for European troops in a war primarily remembered for trench warfare.

German possessions in southern Africa were not returned to Africans, but instead held ‘in trust’ by European powers, including the white South African regime.

While there have not been more ‘world wars’ since the end of the Cold War, there have been many more wars in the supposedly unipolar/multipolar world.

NATO v the UN

At the UN General Assembly, 141 countries condemned the Russian invasion of Ukraine in 2022. But many also oppose North Atlantic Treaty Organization (NATO) expansion via Ukraine to threaten Russia.

This is reminiscent of broad international support for President John F Kennedy in 1962 when he insisted Soviet missiles be withdrawn from Cuba, just off Florida.

NATO was established for the Cold War and should have been dissolved at its end. Its raison d’être, the rival Warsaw Pact, was gone. Worse, NATO expansion continues while it conducts unlawful wars not sanctioned by the UN Security Council.

German Chancellor Angela Merkel and French President François Hollande have both confessed that the 2014 Minsk deal with the Russians was intended to buy time to arm Ukraine for war later, not to secure peace.

Similarly, British Prime Minister Boris Johnson successfully blocked negotiations between Ukraine and Russia in the last half-year of his tenure. A peace deal would have ended hostilities and saved hundreds of thousands of lives, mainly Ukrainian.

Europe has continued to insist on war despite worsening odds. And when NATO allies blew up the gas pipeline from Russia to Germany, no protests followed.

NATO should have been dissolved at the end of the Cold War, once its raison d’être, the rival Warsaw Pact, was gone.

Despite Europe’s pretensions of leading worldwide efforts against global warming, it quickly reversed earlier commitments, even abandoning its 2021 Glasgow commitment to reject coal less than half a year later.

Unsurprisingly, the Global South remains sceptical of the EU’s carbon border adjustment mechanism (CBAM), perhaps only the latest form of European trade protectionism.

The EU has already worsened world economic conditions by raising interest rates, imposing illegal sanctions, insisting on fiscal austerity and cutting social spending in favour of military expenditure.

European leaders now proudly announce military Keynesian policies, expecting growth from more war spending. Thus, the turn to war has meant less growth and more inequality.

A non-aligned South?

FDR envisaged a peaceful new multilateral order offering progress for all. But such hopes have been squelched by political pressures for informal empire abetted by a resurgent military-industrial complex.

A different world is needed based on much stronger commitments to peace, freedom and non-alignment. It may be time for the West, the Global North and others to learn from the South-East.

In 1955, Indonesia hosted the Afro-Asian summit in Bandung, which boldly spoke for the post-colonial South and made the case for non-alignment as the Cold War began.

Over half a century ago, in 1973, the Association for South East Asian Nations (ASEAN), set up in 1967, committed to creating a zone of peace, freedom and neutrality (ZOPFAN).

Creating the enabling conditions for ongoing cooperation, development, and progress can help sustain the bases for a peaceful and progressive new world order.

Trump Accord Sows Discord in US Empire

By Jomo Kwame Sundaram

KUALA LUMPUR, Malaysia, May 6 2025 (IPS) - US President Donald Trump has deliberately sown discord worldwide in attempting to remake the world to serve supposed American interests better. He will not cede influence, let alone power and control, to other nations, let alone people.

Mar-a-Lago Accord

His chief economic adviser, Stephen Miran, has offered some rationale for Trump’s tariffs besides promoting his ‘Mar-a-Lago Accord’ plan for US imperial revival. But even if most governments comply, the US deficits dilemma will not be resolved.

For Miran, Trump is reshaping the US-led unipolar world more equitably by getting others to bear more of the costs of ‘global public goods’ that the US ostensibly provides.

As geopolitical economist Ben Norton has noted, the US spends trillions on its global empire, with around 800 military bases abroad! While influential US corporate interests have benefited most, others have also gained.

The US contributed to the Global North’s reconstruction boom after World War II (WW2). After pre-empting growing Soviet influence from the last year of WW2, the US enhanced its hegemony by strengthening allies during the first Cold War.

However, Miran complains it is too “costly” to maintain the post-Cold War unipolar order without others bearing their “fair share” of the US costs of providing a “global security umbrella” and international dollar liquidity.

1985 Plaza Accord

In the 1980s, many complained about how Japan and Germany, which had lost WW2, had benefited from imposed military spending constraints and US occupation to gain industrial leadership worldwide.

At its second meeting at New York’s Plaza Hotel, the US-led Group of Five (G5), of the largest Western economies, agreed that the yen and Deutschemark should greatly appreciate against the US dollar.

This would ensure US recovery from its slowdown following dollar strengthening due to the Fed’s high-interest rate policy to quell inflation after the second oil price hike.

As the yen appreciated, Japan’s 1989 ‘Big Bang’ financial reforms sealed its fate. Its asset price bubble burst, also ending the post-war Japanese miracle boom.

Miran acknowledges US dollar “overvaluation has weighed heavily on the American manufacturing sector while benefiting financialised sectors of the economy in manners that benefit wealthy Americans”.

From Plaza to Mar-a-Lago

Unlike Plaza, Miran’s proposed Mar-a-Lago Accord, named for Trump’s private Florida retreat, will be imposed on all, especially allies in the Global North.

The Global North must improve the US trade balance by deterring imports and increasing exports by letting the dollar depreciate. Allies have been threatened with tariffs and unilateral withdrawal of the US security umbrella.

Miran’s proposal also envisions foreign governments holding 100-year US Treasury bonds. This should transfer long-term losses due to inflation to bondholders abroad.

He also wants a US sovereign wealth fund financed by revaluing US gold reserves to market prices. Meanwhile, his proposed cryptocurrency stabilisation fund already threatens to disrupt international finance.

His plan claims to reduce US trade deficits and bring back good jobs. Miran expects it will significantly shrink the US current account and fiscal deficits without requiring more tax revenue or spending cuts.

Weaker dollar not enough

Jenny Gordon has challenged Miran’s argument. She reasons that his plan is unrealisable without significantly shifting US resources from non-tradables to tradables.

Manufacturing investments needed to substitute imports and increase exports have to be financed. But the US has been a net borrower for almost half a century!

Its current account deficit reflects these savings-investment imbalances. The US would have to cut its capital account surplus by borrowing much less from others to reduce its current account deficit.

Making manufacturing more competitive requires a weaker dollar and new investment. The US must encourage Americans to save more, consume less, divert investment from elsewhere, and cut its fiscal deficit.

Otherwise, foreign borrowings financing manufacturing investments will strengthen the US dollar. Worse, a weaker greenback is needed to boost US competitiveness.

Miran may prevail

Even if US manufacturing recovers, well-paid jobs in depressed areas remain unlikely. Besides ageing, changing technology, consumption, and incomes have adversely affected prospects for reviving US manufacturing.

Government spending cuts have hurt state-sponsored research, which enabled the US to lead technological innovation worldwide until early this century.

Miran’s proposed forced conversion of US Treasury bonds held in official reserves to ‘century bonds’ will reduce confidence in the dollar and its liquidity value.

Besides lowering US borrowing costs, it would undermine the deep secondary market for US T-bills and dollar-denominated trade and financial flows—all key to dollar privilege.

The dollar’s status as a reserve currency has enabled the US to maintain massive fiscal deficits without high interest rates or the threat of currency collapse. But it has also constrained US economic options, favouring finance and other modern services.

Trump does not want to lose the dollar’s status as a reserve currency. His threat to the BRICS suggests likely harsh retaliation against efforts to reduce reliance on the US dollar.

The dollar’s status in international finance also enables the US to threaten others credibly. However, Trump’s treatment of allies reminds us that compliance does not ensure stability.

Miran presumes that trade and investment partner countries will do as he wants. While few may agree to his proposal, which will not work, not many may stand up to Trump. Worse, some are already giving lip service to the proposal.

Related IPS Articles:

• Trump Wants World to Subsidise US Empire

• Trump’s ‘Shock and Awe’ Tariffs

• America First Deepens World Stagnation

• Imperialism (Still) Rules

• An ‘Exorbitant Privilege’ for All?

• New Geopolitics Worse for Global South

• The Global South in the New Cold War

• Trade, Currency War Weapons Double-Edged

• What’s different about Trump’s tariffs?

• Trump’s Trade War in Perspective

Available online here: Trump Accord Sows Discord in US Empire