Monday, November 24, 2014

The New Neutrality

TOKYO – Throughout the Cold War, the Soviet Union used every imaginable threat and inducement – including the ultimate prize of reunification – to bring about a neutral Germany. But German leaders of both the left and the right, from Konrad Adenauer to Willy Brandt, spurned every Soviet offer. Will authoritarian mercantilism now succeed where communism failed?

Countries join alliances, or entities such as the European Union, because these groups make the benefits and obligations of membership as unambiguous as anything in international relations can be. For Germany and South Korea, however, relationships with historic allies – NATO and the United States, respectively – appear to be changing before our eyes.

Through their huge purchases of goods, with promises of even more to come, today’s authoritarian/mercantilist regimes in Russia and China may be about to achieve by commerce what the Soviets could not achieve by bribery and threats. And the scale of that commerce is breathtaking, with German exports to China growing from $25.9 billion a decade ago to $87.6 billion in 2011, while South Korea’s exports have increased from $53 billion to $133 billion during the same period of time.

A form of stealth neutralism, indeed, appears to be entering both countries’ diplomacy. Witness Chinese President Xi Jinping’s recent trip to South Korea, German Chancellor Angela Merkel’s unwillingness to impose effective sanctions on Russia for its intervention in Ukraine, and the business-only focus of her just-concluded visit to China. In both Germany and South Korea, the idea that historic alliances may offer fewer tangible benefits than tacit neutrality – particularly in terms of exports – appears to be taking root, especially among business elites.

Xi’s visit to Seoul was another bold step in China’s systematic efforts to wean South Korea from its commitment to the US-led international economic order. By offering to permit South Korea to settle its bilateral trade accounts in renminbi, and to launch the first-ever Sino-South Korean initiative toward North Korea, Xi is seeking to convince South Korea’s leaders that the country’s future, including reunification, will be determined in Beijing. China’s invitation to South Korea to participate in a new Asian Infrastructure Investment Bank (alongside other countries in Asia and the Arab world, but excluding Japan and India) furthers Xi’s efforts to create an alternative financial system, with the AIIB mimicking the Asia Development Bank’s work.

China’s embrace of South Korea is part of a long-term strategy to turn it into a subordinate state in terms of foreign and national security policy (much as Finland kowtowed to the Soviet Union throughout the Cold War). And yet, though courted by all sides in the struggle to maintain stability in Northeast Asia, South Korea now runs the risk of becoming isolated. Every gesture by the South toward one of the protagonists – China, the US, Japan, and North Korea – elicits so much pressure by the others that its government must then somehow devise a compensatory policy.

For example, following President Park Geun-hye’s request that Xi honor the Korean assassin of a Japanese prime minister, to which Xi readily agreed, she began to discuss joining the US-led Trans-Pacific Partnership free-trade negotiations, in order to assuage the US. As China continued to pursue an anti-Japanese propaganda campaign throughout 2013, Park felt obliged to make some effort to revive ties with Japan by sending a private envoy to Prime Minister Shinzo Abe to seek talks on reconciling their disputes.

Given its insecurity, a by-product of the Korean Peninsula’s long division, South Korea requires, above all, calm and steady partners. But frequent changes in US policy toward Northeast Asia in recent years have disoriented South Korean policymakers, while Chinese policy, though consistent, confronts South Korea’s leaders with choices that they appear unprepared to make.

As a result, South Korea’s elite appears to be splitting into pro-Chinese and pro-American factions that transcend party lines. Over a period of time, the only beneficiaries are likely to be those who call for “Finlandization” of the Korean peninsula.

Meanwhile, the impact on German foreign policy of the country’s deepening economic ties with Russia has been evident throughout the Ukraine crisis. Though Merkel frequently admonished the Kremlin about its intervention in Ukraine, German public opinion – particularly that of the country’s business leaders – tied her hands. Indeed, German big businesses have been the main obstacle to imposing the type of systemic sanctions that might have dissuaded Russian President Vladimir Putin from annexing Crimea and continuing to back the insurgency (which Russia itself incited) in eastern Ukraine.

This is not the only recent case in which Germany has distanced itself from its allies and partners. In Libya in 2011, Germany refused to offer even rudimentary material support to the military intervention staged by its British and French allies. Germany has also continuously failed to meet its commitment to spend 2% of its GDP on defense, at the same time that it has insisted that troubled EU economies stick to austerity budgets that limit their deficits to a fixed proportion of their economic output.

Indeed, throughout the eurozone crisis, Germany did the absolute minimum – and always at the last possible moment – to assist its EU partners. And German leaders’ obsession with maintaining their country’s “golden decade” of exports appears to have gagged them on topics like China’s human rights abuses and its aggressive behavior toward its Asian neighbors. That silence is being rewarded with the first-ever joint cabinet sessions between a democracy and a communist dictatorship, which will take place in Berlin this autumn.

In both Germany and South Korea, economic strength seems to have produced an illusion of policy independence that is opening a chasm between the two countries and their allies – a chasm that revelations of US spying, on Merkel in particular, have deepened. Germany and South Korea, however, will gain little, and risk much, if they downgrade their alliance ties in favor of commercially motivated, if unofficial, neutrality. Whatever short-term benefits they receive will be more than offset by their strategic vulnerabilities vis-à-vis Russia and China.

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    1. CommentedDavid Olsen

      I think Mrs Koike is absolutely right.
      Germany is reliant on China as a principal export maeket. Germany promoted austerity within Europe which has weakened demand for its' products within the EU. It is now trying to make Europe an export driven economy similar to its' own. This can only lead to the export of European deflation to the rest of the world. Trips to China are more as a supplicant than anything else to maintain some kind of consumer demand for its' products.

      At some point Europe has to reflate or China is going to say get stuffed in the politest possible way.
      If we are looking at the de facto setting up of three trading blocks, (Europe, China, the US) then both Japan and South Koreas' choice is how long can they straddle the divide between China and America, between the economic benefits of Chinese trade and Chinese Imperial aspirations. Also figure out who is going to protect their shipping routes to Europe.
      Traditionally Korea has always had to do this - sometimes a vassel state of Chine fighting off Japanese pirates and sometimes as an independent nation fighting Cninese Imperial armies and Japanese feudal navies. An independent neutrality probably looks pretty good to South Korea. The question is how to maintain it. Japan is not exactly an innocent here.

      Russia should be looking a bit more realistically at its situation. If it could settle things on its' European flank, develop some kind of trading/manufacturing entrepots within Russia using European help (Peter the Great efforts in this area come to mind) then it won't just be reliant on state capitalism to finance the neccessary military force needed to protect its' border with China.
      The day will come as the Japanese see only too clearly, when the Chinese think ok we're ready, let's take back our former lands stolen from us in the past. Those former lands are mostly in Russia.

    2. CommentedHeiner Hartmann

      In my opinion there is nothing neutral about Mrs. Merkels policy towards Russia in particular. She clearly confronted Mr. Putin on human rights several times in the past and as a result both have a very bad relationship. Emblematic for this was an episode when Mr. Putin kept Mrs. Merkel waiting in a room with an empty chair and a dog chained to it (Mrs. Merkels fear of dogs is well known...). It is true that Germany is looking after its national interests in its dealings with Russia and China, but the same can be also be said about France (sale of Mistral carriers) and the UK (calling openly for tough sanctions while doing anything to avoid financial sanctions on Russia that could hit "the city"). The US is in a better position as it doesn't have much trade with Russia , so it is a lot easier for them to ask for sanctions. This symmetrie as constructed by Mrs. Koike between the german/ russian relations and the korean/ chinese relationship is in my opinion far fetched at best.

      On China, I actually have a hard time to remember any country doing much on the human rights front. Germany's vice-chancellor Mr. Gabriel tried to get in touch with opposition lawyers during his last stay in China. When was the last time a japanese member of gouvernment tried something similiar?

      Also i don't see any weakening of NATO ties, if anything the Crimean crisis did bring Germany and NATO closer together. I appologize in advance but to argue that if Germany had agreed to tougher sanctions against Russia from the beginning could have avoided the annexation of the Crimean is just laughable. Russia clearly would and could not after it took its gamble with the Crimean back off. Also the EU is not only Germany there are many countries with interests in Russia that were unwilling to go much further. E.g. Austria recently did strike an agreement with Russia about investments in Energy.

      It is true that the german/ US relationship did suffer from the latest spy scandals. However all german gouvernment officials are stressing how important that relationship is for them. Although this episode might help both sides to refocus on their interests and not on some vague "shared values". It clearly isn't in the german interest to have US moles in sensitive state institutions. Just imagine if german spies would have turned up in the US Congress and the Pentagon in one week...

      To sum it up, this japanese perspective is interesting. But nonetheless "The New Neutrality" is a bit too strong relying on the construction of similarities between the german and korean position. Which for one differs in important points (e.g. the koreans have not even a remote alternative to the US, Germany is deeply embedded and committed to the EU). Of course Germany hesitated to support the euro rescue package. Japan would have done the same to ensure it would get the best possible deal and to live up to its responsibilities to its taxpayers. However in the end and that is what most outsiders from Wall Street to Ōtemachi fail to understand is that there was never any doubt in german political mainstream to safe the EURO even at high cost. With this article Mrs. Koike demonstrated that she also didn't understand Germany but she is in the good company of people like George Soros and Paul Krugman who also showed that lack of understanding of german political will.

    3. CommentedNathan Weatherdon

      They should ban stealth neutralism. If countries want to strike out their own path on the odd occasion rather than operating at all times under the watchful eyes of their good friends across the Atlantic, they should be required to state their case more clearly and publicly.

      For example, if Japan wanted to engage in stealth neutralism with China, this would assuredly bring about a decline in the probability of global peace (not).

      But never mind. That won't happen. Because Japan won't admit to what it did last time.

      I suggest adding the following paragraphs to the school books.

      Victims of "World War II". It is the greatest shame of humanity that acts such as those perpetrated during the last century, and before, have happened so many times. Let the victims be the authority on their suffering. Since it took us so long to say so, interested students are recommended to ask China about the experience of those victims. Nanjing happened. It was a massacre.

      It is with pride, and much face, that we acknowledge our shame.

    4. Commentedj. von Hettlingen

      Ms Yuriko Koike observes a new "phenomenon" in foreign politics - the "New Neutrality" and cites Germany's chancellor Angela Merkel and her South Korean counterpart, President Park Geun-hye as advocates of this policy. She may see the two women leaders putting trade ahead of human rights in their dealing with Moscow and Beijing respectively.
      China's President Xi Jinping travelled to South Korea beginning of July and held talks with President Park. He returned home, just in time to receive Germany's Chancellor Angela Merkel. This has inspired Ms Koike to take a closer look at Germany and South Korea and their "strategic vulnerabilities". The two countries do have something in common. Both are regional key players with a strong economy. Both know the pains of division. Although West Germany had unified with the East, it is still trying to work out the political and socio-economic differences. South Korea aims at unifying with the North one day and is trying to forge "national reconciliation".
      Germany and South Korea also face the same challenges. Each has historic grievances with its neighbours and copes with their self-assertiveness in its backyard. Strong and ambitious, Russia and China are giants in their own right. Both are unilateral actors and aim to defy the status quo - Pax Americana.
      China and Russia had emerged as economic powerhouses since the 1990s. Deng Xiaoping's economic reform had put China on a path of double-digit growth. Russia saw the rise of an oligarchy, that transformed the planned economy into market capitalism. While their economies took off, the two countries are - to date - still ruled with an iron fist. In the absence of political reforms, Ms Koike dubs this economic system as "authoritarian mercantilism".
      How on earth can she say that "For Germany and South Korea, however, relationships with historic allies – NATO and the United States, respectively – appear to be changing before our eyes"? Not only is Angela Merkel pragmatic, she also seems determined to make a strong Euro her legacy and strengthen the EU including the NATO. There is no sign that she wants to see a weaker relationship with Washington, although the US had betrayed Germany's trust and the two have different views on, how to deal with Russia and Vladimir Putin.
      The same can be said about President Park, she knows well South Korea would not benefit from turning away from the US. It is highly doubtful whether she and her citizens would want to see a "finlandised" South Korea, as favoured by China. She is likewise pragmatic as Merkel and makes national security and economic revitalisation her priorities. On top of her agenda are buildinga strong deterrent against the North and improving social welfare.
      Just because the two women leaders put realpolitik ahead of their historic relationship with the US, doesn't mean that they "downgrade their alliance ties in favor of commercially motivated, if unofficial, neutrality". The Eurozone countries in the South will not agree with Ms Koibe that "Germany did the absolute minimum – and always at the last possible moment – to assist its EU partners". In fact it had been the driving force behind the unpopular austerity measures, which had helped some parts of Europe recover little by little. All in all, Ms Koibe has been unfairly critical of Angela Merkel and Park Guen-hye.

    5. Commentedhari naidu

      If Abe's Japan can induce Obama - with gourmet Sushi! - to allow re-militarization of Japan - as a surrogate to deal with South China Sea (islands) dispute with mainland China - NASA/CIA culprits can induce Berlin to counteract American hegemony on the continent.

      In fact, it's happening rather faster than expected...

      South Korea is disenchanted with Obama's flirtation with Abe's Japan re-militarization tactics to play the role of a proxy in the region. History is not too far away from Korean peninsular...including Japanese War.

      Bottom line, your (cynical cold war)arguments don't hold water in Berlin or Seoul.

      Moreover, Modi's India is now flirting with mainland China to balance western influence in the subcontinent; BRICS Development Bank, in Shanghai, as agreed, will be run by an Indian national.

    6. CommentedVelko Simeonov

      Of course that US allies will start to look for new partnerships and solutions in order to guarantee their security and economic development in the face of the waning American empire. Alliances shift constantly and that has been the case for as long as humanity has existed. I am surprised that the author, given her credentials, is bewildered by that fact..