Panelists discuss the COVID-19 outbreak and how this pandemic will alter globalization and foreign policy in the months and years to come.
HAASS: Well, good afternoon for those of you on the East Coast, good morning for those of you on the West Coast. Most important, I hope everyone is staying well and staying safe.
This is Richard Haass. For the next hour we are going to have a conversation, on the record, with three individuals who I will introduce presently. We’re going to discuss the world after the coronavirus; essentially, what implications will this have for international relations, for the world order, for American foreign policy writ large. We want to connect, if you will, the immediate concerns with those that are larger, some—(inaudible)—one step removed, and possibly longer lasting.
We would be hard pressed to find three people better to do this. In alphabetical order lest I bruise a sensitive ego you’ve got Kurt Campbell, who is chairman and CEO of the Asia Group. Kurt is a distinguished scholar-practitioner. As much as or more than anyone else he is associated with the pivot or rebalance to Asia that was designed and implemented by the previous administration. Full disclosure: when both of us were young we used to teach a course together at the Kennedy School, An Introduction to International Relations.
Second is Robert Kaplan. Bob’s a managing director of the Eurasia Group. It’s a geopolitical consultancy. He has written more books than I have read. His most recent book—I believe it’s his nineteenth—is titled The Good American and it’s about—it’s a biography of an unknown but really important human rights worker over the course of the last—over decades.
Last but far from least is Kori Schake. Kori directs foreign and defense policy studies at the American Enterprise Institute. Just before that she was the deputy at the Institute for Strategic Studies over in London. She’s also the author of any number of books, and the one I would highlight is a book called Safe Passage, which is a book about the transition from British to American hegemony, obviously of interest to all those who wonder where there might be hegemonic transitions in our own day and age.
I didn’t count before I began, but if you add up the books that these three people have either written or edited we’re up to about thirty-five. So basically, we’ve got a library hour coming up. (Laughter.) All three of them, I should add, have recently written shorter pieces that touch on the conversation today. So when I begin I’m actually going to ask them to in some ways talk to the pieces they’ve recently written.
And I’m going to begin with Bob Kaplan, who recently wrote a piece for Bloomberg, I believe it was, about Coronavirus Ushers in the Globalization We Were Afraid Of. And the word “dystopian” may be strong, but he describes a world—I think he calls it globalization 2.0. So, Bob, why don’t you describe where you think this is taking us? I think that provides a good, if dark, baseline for our conversation.
KAPLAN: Well, thank you, Richard. It’s a pleasure to be here with all of you.
I think that what the—historians love chapter breaks, and the coronavirus I believe will be seen as a chapter break between globalization 1.0 and globalization 2.0. Globalization 1.0 is basically a good-news, optimistic story. It was about growing middle classes around the world, enlarging them, you know, eradicating much extreme poverty, building international supply chains, creating a global upper-middle-class elite, and strengthening international institutions. That world has been gradually weakening over the last few years. And creeping in has been what I call globalization 2.0, which is about great-power rivalry, decoupling of supply chains, rise of populism, middle-class angst in Western democracies, and other things which—basically, it’s a story more friendly to pessimists.
Now, there’s obviously been an overlap between the two globalizations. But as I said before, the coronavirus will be a convenient chapter break. And what that leads us to, as I point out in the piece, are all these second- and third-order effects, geopolitical order effects, that are going to occur because of the coronavirus throughout the world. Remember, the Great Recession of ’08-’09 led to a lot of developments—Brexit, Trump, et cetera—and the coronavirus will do similar. And we could get into these second- and third-order effects in the course of the hour.
Let me just finish by saying that crises like wars put history on fast-forward, and history is now on fast-forward. So what takes five years to unravel in Iran will take two or three years today.
HAASS: This is great because normally I’m the most depressing person in the room, so I want to thank you for—(laughter)—for trumping me. I’m going to circle back to you, but I want to first bring Kurt into the conversation.
Kurt, when I read your recent piece in Foreign Affairs that you coauthored with our Rush Doshi called The Coronavirus Could Reshape Global Order, a lot of it is on U.S.-Chinese relations, and I’ll come back to that as well. But I want to read a sentence in the final paragraph which is a lot more positive than anything we just heard from Bob Kaplan. And you say: “Ultimately, the coronavirus might even serve as a wake-up call, spurring progress on other global challenges requiring U.S.-Chinese cooperation, such as climate change.” Close quote. What odds would you put on that? Because if that were to happen, you would obviously be considerably more optimistic than what we just heard?
CAMPBELL: Thanks, Richard. And like Kori and Bob, we’re so grateful to be convened by you and to join the audience there at the Council on Foreign Relations.
I’d put the odds at less than 50 percent. You know, I hate to—everything hinges, really, on two things over the course of the next several months. One is how we manage ourselves domestically, in particular, in addressing this enormous challenge of the pandemic. And then the second issue is how Americans decide with respect to the upcoming election. I think both of those will say a lot about where the United States is going to go.
Look, I think in all likelihood—I liked the way Bob described the international dimension, but I think domestically I think you can find evidence that the crisis in many respects will reinforce sort of red and blue factions inside our country. I do believe that for most Americans that live in urban areas this suggests that there are many elements of the U.S. government response that has been inadequate, and they compare and contrast the United States with other democracies in Asia and Europe. It’s clear we don’t have a social safety net. We don’t have much of what is necessary to basically weather a storm like this. And you can imagine people coming back and saying, I want a more effective government, and I want to invest in that, and we need to do a better job. I can also imagine some saying, hey, you can’t trust these guys and you’ve got to depend on small, narrow groups, more survivalist options. And I think in all likelihood there will be those divisions.
My hope is that there is enough people that understand that there is an essential role for government that will take us to a new place in November. But still I think the challenges are enormous, and the next president no matter what is going to face a situation where the coffers are empty, many businesses are bankrupt, the social safety net has been ripped, and at the same time we have a rising power in the east. So enormous challenges in this, if you will, post-Cold War world that the next president will face—post-pandemic world that the next president will face.
HAASS: Thanks, Kurt.
Kori, let’s bring you in. You’ve also been writing some shorter pieces recently, one for the Atlantic, one also for Bloomberg. And in one, if I remember correctly, you write—you make the argument that we need more, not less globalization. But you also make the argument that this administration’s orientation, its embrace of America first—at the risk of putting some words in your mouth—is exactly what we don’t need and will actually make it harder to pull the world out of this. Do you want to say something about that? And if I’ve in any way mischaracterized what you wrote, I apologize.
SCHAKE: You have not. Yeah, I’m much more optimistic than either Kurt or Bob is on this note because I feel like just as the 2001 terrorist attack created a long shadow of twenty years of preoccupation with terrorism, the pandemic is going to do two things.
First, it’s going to cast a long shadow of concern about the suitability of health-care systems in America and focus on that. I think we’re likely to see a different kind of distribution between defense spending and social spending in America, because people are really worried about our ability to handle this and we’re seeing terrible consequences from our incapacity.
The second reason I’m more optimistic is because I feel like boring expertise is coming roaring back into fashion after we have seen the flattery damage that performative leadership as opposed to actual nuts-and-bolts solving problems for Americans. So I feel like it’s going to be a pretty sobering moment.
And the reason I think globalization is likely to be accentuated by this is if you think about the disruptions to supply chains, for example, it’s because we have single-point failure on where things are produced. And more globalization—that is, more options for where you can get supplies, more relationships, and more international institutions and cooperation that give us strategic depth as Americans, just like we have information earlier, we have the ability to cooperate, and the incentive to do it, which President Trump’s America-first policy has diminished—all of those things I think are coming back into fashion.
HAASS: I actually agree there’s going to be a big conversation about supply-chain diversification, domestic manufacturing, and stockpiling.
Bob, let me—let me raise one issue in particular in your rather negative view, which is an issue that hasn’t gotten a whole lot of attention. Everyone’s been focusing mostly on Asia and on Europe and here at home, but that leaves out a big chunk of the world called Latin America, Africa, the Middle East, and South Asia. Say something about that, both in the short run how hammered they’re going to be and then what that could mean for global debt. Because there’s people out there, me included, who say their needs are going to be enormous, orders of magnitude greater than the sort of need that the IMF and others normally have capacity to fulfill. So why don’t—why don’t you discuss some of the aftershocks we could expect there?
KAPLAN: Sure. Let me start with Latin America. Latin American governments—whether it’s Colombia, Ecuador, Argentina, Mexico—they’re really between a rock and a hard place, Richard. You know, they owe all this money, and yet their populations don’t want them to pay it back. You know, the populations want them to spend money on social services. The coronavirus is going to—is going to hit them with yet another kind of a double whammy on this, so that governments will really be squeezed.
Right now we have no demonstrators in the streets. Remember, just a few months ago we had massive demonstrations in Chile, in Colombia, in Ecuador, all over. That has stopped because the fear of getting infected. But when that comes back together, there could be more upheavals in Latin America because, remember, countries that we call developing countries are called developing for a number of reasons. Their infrastructure, their institutions, their bureaucracies are not as efficient, as effective as in the West, which means that their ability to handle a pandemic is also probably not going to be as effective as in the West. So they’re going to be hurt more.
Also, these countries in Latin America—and I include Africa here too—are often commodity-dependent. They’re economies that rise and fall based on coffee, or oil in the case of Nigeria and Venezuela and other places. And commodities were taking a beating before this crisis happened and are now taking an even deeper beating. So they’re getting hit from all sides in this.
Also, their ability to do social distancing is harder because they live more people to a room. They don’t have private dwellings, often. Streets are more crowded. The climate is hotter. People are outdoor in crowds. It’s not like in the West where we can conveniently do social distancing. So it’s going to be a real challenge to help with the economies of developing countries.
And if the economies really get bad there in the future with the decline in commodities—for instance, if the coronavirus spreads significantly to places like Kenya, Nigeria, India, there’s going to be a lack of Western travel to those countries in the months to come, even after travel resumes in Western Europe and the United States. And that will be another factor.
So I think the real crisis to come that we have to work to alleviate is in the developing world.
HAASS: Thank you for that.
Kurt, I want to, first of all, commend you or at least note that the magazine Foreign Affairs is ninety-eight years old and I think the first mention of the word “chutzpah” in those ninety-eight years came in your article the other day—(laughter)—where you described—you associated it with China, which is probably a mixed metaphor, but I digress. But you are, I think, referring to, what, China was now trying to help others after, shall we say, doing more than its share to create this problem in the first place. But what I’d like you to do is to talk about U.S.-Chinese relations coming out of this. Going into the pandemic, one could argue that U.S.-Chinese relations had really deteriorated. Now you’ve had this experience. What is your sense of the trajectory and then its consequences for one another, but more important for the world?
CAMPBELL: Yeah. Thank you, Richard. And I think it’s the most important question currently in global politics, and I’m quite concerned.
I think—you know, as you rightly point out, heading into this crisis I think there was probably a hardening of views in the United States, a sense that there were elements of a longstanding engagement strategy that was not bearing the kind of fruit that a succession of American strategists had hoped for. And we saw in the Trump administration in particular a tougher line on economic issues, and perhaps behind the scenes more focus on technology and other matters that were seen to be new battlegrounds in U.S.-China relations.
My sense is that there, in many respects, is a bit of a battle. It’s a tactical battle that’s ongoing inside the administration. I think in the short term there’s a recognition that China can provide some urgent goods and services of a kind that both Bob and Kori have talked about. And we need those right now because, frankly, we’re facing critical shortages and we can’t buy up the rest of the world’s stock. We’re having challenges there. And China has indicated that they want to make some of that stuff available. So I think there has been a kind of a truce that has been struck, Richard, in which, you know, you will see in New York and other cities supplies being delivered with some fanfare.
But I think brewing beneath the surface is another sense, which is I think there is a deep anger in the United States about those very conditions that you talked about—how the fact that the Chinese concealed this, didn’t let experts in, perhaps have not been fully honest about some of the parameters of how the disease affected China in terms of deaths, et cetera, et cetera. So there is that growing anger. And I also believe politically over the course of the next couple of months, as President Trump and his team look desperately to something in which they can direct away their own responsibilities—which are clear with respect to a poor response—China will be an obvious destination.
And so I think the combination of all of those things lead me to believe that U.S.-China relations are going to trend more negatively. And that really makes it a challenge for those who argue that there are urgent tasks like fighting a pandemic, like thinking about climate change, that demand areas of cooperation between the United States and China.
HAASS: Thank you, sir.
Kori, let me ask one last question before we open it up to our members. When we were kids we all grew up with the expression “when the cat’s away, the mice will play.” Well, right now—you know, for the last seventy-five years the United States has been the principal cat in the world—(laughter)—and over the last few years we have decided we did not want to play nearly as much of a leading global role, and now on top of that you’ve got the consequences of a pandemic. Are you at all worried or are you at all predicting that, say, a North Korea, or an Iran, or a Russia, or others will basically wake up and say: “Ha, this is our opportunity.”
SCHAKE: Now’s the time.
HAASS: Right. The Americans don’t have the bandwidth. They don’t have the attention. They’ve got—you know, what happened on that carrier is an—is an example of—you know, the American military’s been hurt by the coronavirus. What is your sense about whether this could be seen as a—as a window of opportunity by some of the bad guys out there?
SCHAKE: I do think it’s a window of opportunity. North Korea’s tested missiles four times since the pandemic started. The crackdown in Egypt gets more severe. What I notice, though, is that a number of repressive countries—Russia, China, Egypt—are playing weak hands relatively well, right? China’s winning the propaganda war early out and the U.S. is a big, sloppy, stumbling mess. What free societies are bad at is prompt, decisive action. But what free societies are really good at is iterative improvements and broad social acceptance of what needs to be done. And so I think as this pandemic wears on—and I share your judgment, Richard, that this isn’t something we’re going to be dealing with till the summer; this is going to cast long shadows into our economies, into international relations, into development prospects as Bob mentioned.
I mean, China is the world’s biggest creditor. If countries start defaulting, that will have reverberations internal to China as well. And I’d be interested in your, Bob, and Kurt’s view, but my sense is that we should be almost as worried about a failing China about a succeeding China. And some of the aggressiveness we’re seeing now out of China may be a desperation on Xi Jinping’s part to try and divert attention away from how poorly they actually handled it. We may be giving them lots more credit than they deserve, but because we don’t have good enough information we’re giving them credit.
Where I would be worried about possibilities, I think the Russians have the potential to behave assertively and badly. And I think you’re right that we’re pulling in our roots on lots of things that we traditionally paid more attention to. Afghanistan could go very bad very fast. The brutality of Bashar al-Assad is going to win the Syrian civil war before too much longer. These are resetting the table for subsequent international problems.
HAASS: Thanks. By the way, just picture an article that in the last forty-eight or seventy-two hours was published also in Foreign Affairs, on Foreign Affairs.com, by Minxin Pei, which basically is similar to what Kori was just saying, takes the argument that this could well lead to a leadership challenge in China. And it’s a controversial point of view, but as always anything he writes is well worth reading.
Travis, let me—let me bring in our members at this point if I may ask you to open it up, instruct them how to ask questions, and we’ll respond as best we can to them.
OPERATOR: (Gives queuing instructions.)
We do have our first question.
Q: Yes, hello. This is Lyric Hughes Hale in Chicago.
My question is, China’s rise has been accompanied by global institutional capture, and—which is something that I think many people feel thwarted the response at the WHO. Also, China has recently joined the Human Rights Commission at the United Nations. Do you think that there will be pushback in the United States against this in the future?
And also, a second question about a legal tsunami that appears to be starting against—with legal actions against China in the U.S., Italy, and the U.K. Thank you.
HAASS: Kurt, why don’t you take the first shot at that, about what do you think will be the reaction?
CAMPBELL: Yes. Thank you, Richard. And, Lyric, it’s nice to hear your voice and I hope you’re well there in Chicago.
Q: Definitely. Thank you.
CAMPBELL: Let me—let me just say that, you know, one of the—one of the strategies that the United States and other countries practiced for decades was taking, you know, enormous steps to try to lure China to play a more active role in global institutions, in the G-22 (ph), and you know, economic organizations and the like. I think what we’ve seen of late have been Chinese efforts to actually design their own organizations or organizations that they play a large role in designing and then developing, and those organizations where the United States perhaps has not been as dominant trying to shape the outcomes in organizations towards preferences that China perhaps would be more favorable towards.
And I think what you’re describing with respect to WHO is clear. And lots—when we look back on this, we’re going to have to look carefully at, I think, perhaps undue influence that China presented in the organization in a way that stunted the global ability to address the challenge in a more timely fashion.
I think when we come out of this I believe a manifestation of greater tension between the United States and China is that I think we will likely compete much more directly in organization—(audio break)—of American foreign policy and diplomacy. So I think what you’re alluding to is exactly what is likely to happen, Lyric. Thank you.
Q: Thank you.
HAASS: I didn’t know if, Bob or Kori, whether you had any dissenting views about the likely trajectory of U.S.-China relations, so—
KAPLAN: Yeah, I’d like to—
HAASS: OK. Why don’t you, please, then we’ll go to another question.
KAPLAN: Right, sure. Very quickly.
As far as Kori’s—you know, Kori’s remarks about how China may have much more problems internally than we realize, I would go even further and say that the tumultuous presence of Latin America could be the future of China in ten or fifteen years because the larger they develop the middle class, middle classes are notoriously ungrateful, and have wants and needs and desires, and China will become harder to govern rather than easier to govern.
On the—on the first question that Kurt answered, I would just say that it’s—the less we—the less we engage in international organizations, the more that China will. All we do is open the door to China if we don’t—if we do not have an active internationalist policy towards international organizations.
HAASS: Thank you both. Why don’t we get another question, Travis?
OPERATOR: OK. Next question.
Q: Hi. This is Craig Charney from Charney Research.
You know, I recently read an article by Tinedin Brosco (ph) where he tried to sum up the current situation post-coronavirus in three words, “interdependent without solidarity,” leading of course to an every-man or every-country-for-themselves-type struggle. I’m wondering if the speakers would agree with this diagnosis and what chances still they think there is of developing more solidarity.
HAASS: Well, that’s such a good question of whether this could actually stimulate some progress in global governance. Is there anybody on the call of the three speakers who thinks that it will, that basically the world will—as Kurt, I think, described it—get a wakeup call and we’ll actually see some progress, whether it’s in the World Health Organization or in the Paris process on climate or dealing with cyber or some other global challenge? Does anyone see more momentum coming out of this? I’m curious—
CAMPBELL: I see a little more of—yeah, Richard, I see a little bit more momentum, because the more that humankind experiences the same traumas, whether it’s the coronavirus, it’s climate change, there will develop a global sensibility that humankind is a species in nature inhabiting an ecosystem subject to the travails of that ecosystem, and that will engender a certain commonality. But working against that are the urges that we’ve been seeing: nationalism, populism, every man for themself. That’s the immediate future, I think. But the middle- and longer-term is for more global governance and interdependence.
HAASS: It seems to me there’s a difference, though, between interdependence, which is a fact of life, and global governance, which is a choice.
HAASS: And I think this crisis highlights interdependence and interconnectedness. The question is whether it does lead to greater collective governance. And I would simply say, the jury is out. I hope you’re right, but it’s not inevitable.
SCHAKE: I want to weigh in on this.
HAASS: Go ahead.
SCHAKE: I want to weigh in on this too, because I have once heard Richard Haass say that this is likely to create momentum for more globalization, because we have most of the downsides of globalization right now without many of the potential upsides. And I do think that—you know, even if every country in the world puts a travel ban in, shipping things from one country to another are still going to create exposure. And so the alternative to that kind of, you know, dog-eat-dog world is cooperation that shares information, that Russia’s assistance to early outbreaks and other kinds of maybe not global governance, maybe not, you know, a unified body that gets to tell states what to do or enforce things, but creating the norms of cooperation in the way that organizations like NATO create the norm of cooperation among its defense allies.
HAASS: Well, as we would say, from your mouth to God’s ear, but put me down as wildly skeptical.
KAPLAN: Can I just jump in really quickly, Richard?
HAASS: Yes, sir.
KAPLAN: Richard, I know you want to get to other calls. But I like what we’ve heard so far. I do think, look, at the beginning of this crisis there has been very little global coordination. In fact, most of what we’ve seen has been competition more recently, with the United States not announcing, even with their allies, travel bans, and competing mostly to try and capture scarce medical supplies. But even though there’s very little cooperation at the beginning, I think you could make an argument that there is the opportunity for much more at the end. And so I believe that there will be this window where America, perhaps under new leadership, could convene the leading players to talk about global standards and the way forward.
Clearly, Richard, there will be, I believe, a vaccine at some point. The challenge will be not just to deliver it to the first world, but how it’s going to be administered to the vast underdeveloped world, countries with little infrastructure and the like. And that will require cooperation across the board. And it will need more cooperation from Europe and from countries in Asia. And so I think the United States is uniquely positioned to play that role. And it is the role that will be emerging in the next six to twelve months.
HAASS: Well, again, we will see. Let me just ask the speakers, when they’re not speaking, to put their phone on mute. So we got some—a little bit of background clutter. The only thing is they then have to remember to put it back—to unmute it when they speak. But I’m hearing a lot of background noise.
Travis (sp), why don’t we ask another question.
OPERATOR: OK. Our next question. Hello, Martin, your line is live.
Q: Thank you. Martin Indyk.
Just to follow up on Kurt’s more optimistic level of cooperation. You know, the United States, of course, under Donald Trump, was already self-isolating before we got into the crisis. And one can see developing a very strong argument for autarky in taking the trend that, particularly on the issues of supply chains, that Trump was already pushing, seeing that go even further. And in the meantime, the world is looking at the United States not as the leader and the way out of this, but the epicenter of the disease itself. And people, it strikes me, across the globe thinking that the United States is no longer the place that they should look to for leadership. So I just wonder whether all of this positive talk is really overestimating the extent to which U.S. leadership in the—in global affairs is going to be seriously impacted by the incompetence that our leadership has managed to demonstrate, and the way in which we are putting up walls rather than seeking to cooperate.
SCHAKE: Can I take a swing at that one? Because I think we very often mythologize the past in which the United States was—you know, never had failings, and upheld the liberal international order, and, you know, we had statesmen instead of crummy politicians. And it’s just not true. I mean, during the Eisenhower administration you had National Guard troops forcing the integration of American schools. The impeachment of Nixon and the Vietnam War. We fail an awful lot in our domestic tranquility and in our international responsibilities. But we dust ourselves off and we pick ourselves up. And so I think the ability to correct mistakes is often underestimated as a force for sustaining American power.
And let me just give one example, which is: For all of the talk of the Trump administration’s pullback, the Federal Reserve has just made a breathtaking expansion. It’s basically central banker to the world right now. And so we can get it right. And in important ways, even now we are getting it right.
HAASS: OK. Since you were the—
CAMPBELL: I’d like to sort of—Richard, I like the way Kori—I like the way Kori put it very, very well, and—very much. And I just think this sense that we have a tendency to look back at these halcyon days in which American leadership was always deeply appreciated and that our role was straight, and we’re straight shooters, I think it’s just wrong. I think we are actually going to face a bigger challenge, particularly if there is a new government. And that is that I think it’s undeniable and it just happens that advisors around presidents tend to think that, oh, we’re back, and that this is an America that Europe and Asia will recognize more. And there will be a sense, maybe unstated, to expect a degree of gratitude or appreciation. And that will not be the case.
In fact, I think what’s much more likely is a brutal outpouring of disappointment, and how could you guys have done this to us, et cetera, et cetera, et cetera, that will require a maturity and a patience and, I think, a flexibility and understanding that what will be needed is not just leadership skills, but very complex management skills in a more multilateral setting. That’s where I would be.
HAASS: Yeah. Let me just jump in here, go slightly beyond my presider role, which I think one has to take into account two things. Kurt was just getting at one of them. One is the world’s going to be a very different place. There is a distribution of capacity that’s far broader than there’s ever been. So it’s—the challenge facing the United States after this convulsion is going to be structurally far more difficult to contend with than, say, after the convulsion of World War II. Our share of GDP is a much lower percentage now than it was then. There’s global challenges that no single country can handle by itself. So I think structurally it’s a more difficult situation externally.
And then the question is internally, given the needs we will have at home, given the political divisions, given the economic problems we’re going to face coming out of this, whether we’re going to have a domestic basis for playing the sort of role that we have played more often than not for the last three-quarters of a century. And I would just simply suggest that I think it’s going—the idea that we can step into where we were is probably not going to be an opportunity.
And I apologize for overstepping my role. So, Travis (sp), why don’t we go to another question.
OPERATOR: Next question.
Q: Hi. This is Bhakti Mirchandani from FCLT Global.
Thanks for a fascinating discussion. I would just ask if you think of what global companies are doing and global investors, there’s a lot of focus on providing paid leave or not for workers, prioritizing health and safety, maintaining employment, those types of issues. Do you see kind of a global permanent change in the way that companies and investors view the relationship between labor and capital? Thank you.
HAASS: Bob, do you want to take the first—the first swing at that?
KAPLAN: Yeah. What I would say is that the United States has different labor standards and different safety standards than in many other parts of the world. And that is why, you know, companies have fled the United States for cheaper labor under cheaper conditions. But again, there’s been a lot of pushback on that, and especially from U.S. labor unions, et cetera, to equal the playing field. In other words, that led to stronger guarantees in Mexico. And so what I think is gradually—very, very gradually—there will be some kind of a leveling, but not in the immediate future. In the immediate future it’s—I think if companies come home to America it’s going to be for tax breaks and things such as that, or they’re going to, you know, transfer partially supply chains from China to perhaps Southeast Asia, which can never really replace China completely but can partially replace it. So I think—I think it’ll be a very gradual movement.
Let me just say a word about the last question, which is Kori is right. The Eisenhower years were very tumultuous. But Eisenhower also carved a middle way, as he put it. And it was in this middle way centrism that guided the country without having a nuclear war, or something. And technology, digital, cyber, and other social changes have essentially eroded the political center in the United States and have been—and have been an advantage for the extreme. And because it’s been an advantage to the extreme, that’s the problem. That’s what gave us the current administration. And that’s what makes it challenging to come back to a more recognizable American administration.
CAMPBELL: Richard, can I just add to that, if I could? I like what Bob has said, but I will say I think that one of the challenges will be—and all businesses are confronting this. And we see it with businesses that are working in Asia and businesses that are focusing on just the narrow American market, is that when the time comes to restart the global economy or the American economy, I think it’s wrong to think of it as just sort of restarting an engine that has gone, you know, dead for a couple of months. I think in all likelihood this time away is going to fundamentally change the nature of work in many ways. Travel, the use of offices, the gig economy—I mean, you can go down the list. It’s going to have a profound consequences on how Americans work, and the relationship between labor and folks who run businesses will also change as well.
And so I think what we’ve seen to date for most companies that require skilled labor, they are trying to not let those people go with the understanding that you’d have to train up a whole bunch of new people at some point, and it’s better to keep those people idly by as you get ready to, you know, surge forward. The challenge is that gets more and more difficult as the timespan of the kind that Richard was talking about, when we are likely to reemerge as it sort of disappears into the future.
HAASS: Thank you, sir.
Travis (sp), let’s get in a few more questions.
OPERATOR: Next question.
Q: This is Nick Turse from the Intercept.
Thanks to all of you for taking the time to talk today. Can you speculate on the effect COVID-19 will ultimately have on U.S. military operations abroad, especially in Southwest Asia, the Middle East, and Africa?
HAASS: Kori, why don’t—
SCHAKE: I’ll take it. I was just volunteering as you were conscripting me, Richard.
HAASS: It’s always dangerous to volunteer. But go ahead.
SCHAKE: (Laughs.) So I think we are going to see enormous downward pressure on defense spending because of other urgent American national needs, like health care, that the pandemic is going to raise. I think in the near-term, you’re likely to see a continuation of the trend we have seen actually since about 2006 of American presidents feeling overcommitted and wanting to draw back from military obligations we’re already having. But that only holds if international stability roughly holds.
That is, if we start seeing wildfires—if authoritarian governments not only use the opportunity of the pandemic to become more authoritarian—as we are seeing in Hungary and in Russia, for example—there could be needs for the United States and its NATO allies to stand shoulder-to-shoulder. And the possibility for state collapse in Egypt and in other places could precipitate calls for stabilization forces that help governments get back into effect in friendly countries where we have interests.
So I think the initial response is less defense spending and even stronger continuation of the trend to recede from ongoing operations. But I think we’re likely to see more problems emerge internationally, as Richard had suggested, and Bob also. And that could create the need, because America continues to have important interests in the world. And as Richard said, the world’s not waiting for us to fix this problem.
HAASS: Kori, I’m not sure if this is to you or either Kurt or Bob. Isn’t it also possible that the pressures we saw before the crisis to get American forces out of Afghanistan, get American forces out of Syria, some of the anti-alliance rhetoric in Europe, but also in Asia, the friction with South Korea and Japan over burden sharing, isn’t it possible that in the wake of this, given the pressure on resources, that we could see a come home America push?
KAPLAN: Yeah, Richard, I think we will see it in some places, but not in other places. You have to make a distinction between Afghanistan, Syria, and five thousand troops in Iraq, where the withdrawal began under the last president, it continued under this president, and it will continue or be completed under the next president, whoever they are—whoever it is. Whereas Japan, South Korea, then you get into U.S. treaty alliances. It gets much more complicated, where it’s an easy for American leader to make a case for engagement and keeping troops. We have I think it’s forty-two thousand troops and an aircraft—nuclear aircraft carrier strike group in Japan. I don’t see that being pulled out so easily.
I think the real focus of your come home America will be to the Middle East, unless there is, as Kori alluded to, for instance, a kind of cataclysm in Iran, because Iran has been hit not just by COVID-19, but by the collapse of oil prices as well, and massive demonstrations before all of this happened last November.
CAMPBELL: Can I just—Richard, just—I’d just add to that. Look, I think the logic of global politics would suggest that the United States would be shifting more of its capabilities to the Asia-Pacific region over the course of the next ten to twenty years. That would make sense. And that would seem to point to where sort of the global stakes are the highest. However, the interesting thing that if you look—if there is an abiding Trump philosophy, it is a general view that it was established over decades, that if there is one region that is taking advantage of the United States, it is Asia. And he does not discriminate terribly between allies and countries like China. Some of his most, you know, darkest reflections about countries that have taken advantage of us in trade and military have been our allies.
And so I think it will not take very much of a push for the president to revisit our forward presence in both Korea and Japan. I know that sounds hard to imagine, but I don’t think we realize how close we’ve gotten to that on a couple of occasions in South Korea. It’s pretty well documented. And I think if he is reelected he will be thinking in those terms. And ironically, even though he’s referred constantly to the Middle East as a place—you know, kind of the death, and sand, where American dreams have gone to die and such, the one area that he has bolstered in terms of military operations has been the Middle East. And so it’s almost a—you know, contrary to strategic rationale, but I could imagine that direction play out.
KAPLAN: Yeah, one just small point to Kurt, which is that the Japanese-South Korean trade war of sorts that’s been going on would not have happened in any other administration because we would have had alliance maintenance to snuff that out quickly.
HAASS: Yeah. There was an assistant secretary named Campbell, if I remember once, who never would have permitted that on his watch, I’m sure. (Laughter.) OK.
Travis (sp), let’s get another question here.
OPERATOR: Next question.
Q: Good afternoon. It’s Jose Fernandez in New York.
Thank you for this wonderful discussion. I’d like to go back to Kurt’s pessimistic assessment, in the short-term, at least, of future U.S.-China relations. And given Trump’s interest in blaming China for some of the pandemic troubles, how would you expect China to react? Are they under any pressure to tamp down the tensions? Or do you think they might react for domestic reasons differently?
CAMPBELL: Look, that is a great question. And frankly, we’re seeing elements of a nuanced response, if you will. So on the one hand, I think you’re seeing steps on the part of President Xi to ease some areas of concern with President Trump. I think they are trying to step up their provision of equipment and support here in the short term. And I think they are doing what they can at senior levels to reassure and to seek arenas for cooperation. But simultaneously they are very aggressively trying to step up their support to other countries in Europe and elsewhere, suddenly underscoring that they’re the only country out there that is really trying to help other nations that are suffering through this coronavirus.
There is a lot of material sort of beneath the surface, officially sanctioned, that is deeply critical of the United States and praises China’s response. And so it’s a classic dualist approach, where on one hand trying to court better relations between the presidents and at the same time compete assertively. Ironically, one of the one areas that is providing some ballast in the relationship between the United States and China is President Trump’s very good feelings about President Xi. And unfortunately, I think he admires President Xi and China for all the wrong reasons. But at the same time, that is providing at least a modicum of stability during this period.
HAASS: OK. Thank you, sir.
Travis (sp), let’s get one last question, then I’m going to have one last question of our three speakers. So let’s get a last question from one of our members.
OPERATOR: Next question.
Q: Yes, hi. It’s Natasha Lebedeva with NBC News.
Thank you so much for the discussion. I have a question coming back to China. How would you say China’s coronavirus response may shape the future of its flagship Belt and Road Initiative?
HAASS: Good question. What implications will what’s happened here have for Belt and Road? Both what China wants to do and how it’s perceived.
KAPLAN: Can I take it?
KAPLAN: You go ahead, Kori.
SCHAKE: No, you go ahead, Bob. You’re the expert on this.
KAPLAN: No, no, no, please. Please.
HAASS: Oh, for god sakes. (Laughter.) Kori, go first.
SCHAKE: I was going to say that I think the solvency of lots of the Belt and Road Initiative projects is going to come under enormous pressure. And so the Chinese government, as countries—first of all, with the economic downturn, there aren’t going to be the kind of returns, because there isn’t going to be the amount of economic activity that people may have been anticipating with markets booming and low unemployment in most places.
Second problem is that I think they’re going to face defaults, and the Chinese government’s going to have to make a choice about whether it wants to be a beneficent lender and strike out terms, or whether it has either domestic need or political requirement for being a bare-knuckle repossessor of infrastructure. And that will have enormous consequences for the United States, for Vietnam, for Malaysia, for India, and lots of other countries, either because they are direct recipients of BRI loans or because they may be called on to defend countries that come under Chinese pressure.
HAASS: Kurt or Bob want to weigh in on that?
KAPLAN: Yeah, I’ll just say that China’s loans and its infrastructure projects, and Belt and Road, whether it’s across the Indian Ocean, it’s across Central Asia, it’s through the Mekong River Delta, wherever, always had an imperialist, mercantilistic motive, not a pure—if you try to look at it in pure economic terms, you kind of miss the point. You know, this is the British East India Company in reverse, going from east to west rather than from west to east. And this will be curtailed by COVID-19. But the beauty of Belt and Road, from the Chines perspective, is at least it’s a direction, at least it’s a grand strategy, subject to much tinkering, postponing to restarting. It’s more the direction than the United States has had over the last four years.
CAMPBELL: Yeah, can I just say, Richard, I like very much what we’ve heard from both Kori and Bob. I think it’s exactly right. I would say that the thing that’s going to affect every country, large powers and middle powers, on the global stage—it’s going to cause everyone to step back a little bit from their highest ambitions—and China is not excused from that. So I think the Belt and Road will continue, projects will be elongated, some things will be suspended. You know, some terms will be relooked at. But remember, they are the only game in town for many of these countries. And I think a lot of this has to do with how the disease plays out. I believe that one of the new planks of Belt and Road going forward will be steps to address pandemic preparedness and other health care support, even basic things. And that will be more prevalent in relations between China and its neighbors.
HAASS: A good point. The collective answers to that were sufficiently long that the filibuster worked, and my last question has been preempted. So well done. (Laughter.) What I want to do is two things. I want to thank all three of these individuals, Bob Kaplan, Kurt Campbell, and Kori Schake, not just for today but for their day-in, day-out participation and in contribution to the public debate about the world and the U.S. role in that world. What I want to say to you, the members, is we’ll have several more calls this week, and we will continue with several calls every week. I will give you a heads-up in my weekly note to you that you get on Fridays.
And all the calls will be posted on CFR.org. Speaking about CFR.org, it really is an extraordinary resource. If you haven’t been to Think Global Health yet, a sub-site there, you really should to look at the collection of articles there, and also ForeignAffairs.com, a rich set of articles on a daily basis. Plus, the May issue of the magazine will shortly be out, with a focus, of all things, on climate change, lest we forget. So again, I want to thank the three of you. I want to thank you, our members, for your interest. And as they used to say at the end of every Hill Street Blues, let’s be safe out there. Be well. Thank you very much.
KAPLAN: Thank you, Richard. Thanks very much.
CAMPBELL: Thank you, Richard.