UN & WTO & IMF

Reconstructing international organizations such as the United Nations, World Trade Organization, and International Monetary Fund should not only be a top priority, but also more of a collective effort by big states seeking to advance their economic standing. The United Nations was created to replace the failed League of Nations, and prevent any further world wars from occurring. In it’s most basic goal the UN can be looked at as a success because there has been no large-scale wars between nations since World War II. However the UN has potential that isn’t being recognized, due to the fact the United States seems to be the only driving force dealing with the day-to-day operations of the UN. We tend to forget that the United Nations was also created to handle global economic development, and aid nations with struggling economies. With that being said, the United States alone cannot have enough global impact. In my opinion, the problem stems from a lack of governmental authority. There are no substantial consequences for not conforming to the desires of the UN. Being a peaceful organization without binding agreements has tied their hands and greatly diminished the potency of their policies. Not suggesting that the UN should take a more dictatorship-like stance on implementing policy but instead work towards establishing more credibility worldwide. This can be achieved by having members of the UN agree on which policies to implement, and then agreeing to sign said policy into law in each state respectively.

The WTO is another example of an organization that doesn’t hold as much weight as you would expect. The World Trade Organization does not carry any force of law when they attempt to persuade governments against protectionism. If a government decides to impose import taxes to shield domestic business, the WTO cannot make that government remove such tariffs. They can only suggest that that government is hurting it’s own economy and the international economy as well. Lobbyist will still have their way in influencing domestic policies in order to receive tax breaks and keep their businesses on top. Simply painting a picture of why protectionism is bad is not sufficiently addressing the global economic problem. It doesn’t take a PhD holder in the field of economics to realize that states tend to benefit more from relatively free trade, but states have a moral duty to keep jobs inside their borders and not outsource every job in the name of a better global economy. It seems that the WTO will always have to operate under the confinements of the law of the land. The WTO is a great mediator but the proactive role it plays needs to increase.

The IMF has one major issue to be addressed if it is to continue to stand. The United States’ currency was backed by gold under the Bretton Woods system, but ended under Nixon’s presidency. Now we have a situation where the dollar is the supreme currency standing alone, and the reserve funds are also dollars. Straying away from the Bretton Woods system caused a series of unfortunate economic events that which ultimately leads to the decrease of the value of the dollar, which other states had also made as their standing currency. Now we have an IMF pool that is being filled by big state’s quotas whose money cannot keep up with the world’s booming economy. This issue most likely cannot be solved by diplomacy, but rather calculated cuts in big state spending, but as stated earlier it cannot be the United States alone, it must be a collective effort.

The New Reality of Economic Mutually Assured Destruction

In the past several weeks, the class has reviews foreign policy theorists and lecture notes having to do with International Political Economy and Mutual Assured Destruction or MAD. However, both fields of international relations have been discussed separately. It is my belief that the two are intrinsically connected. I argue that the Nuclear deterrence and prescribed peace from MAD has been replaced by the economic interdependence that has been established post 1945.  Just as Nuclear weapons appeared in the military arsenals in the hegemonic powers of the world, the world’s most powerful economies through direct action in the Brettonwood agreements or unintentionally the globalized interconnected economy of today is more of a deterrent than MAD in securing peace. No longer are Nuclear weapons needed, as more and more countries slowly get them, with the subsidization of the cold war. do these weapons of mass destruction even matter when a currency trader or analyst with a laptop has the power to decimate a countries economy in seconds? True power in the 21^st century is economic, the number of nuclear warheads a country has is insignificant when the usage of such a weapon at any time and in any scenario would create so much risk and volatility in global markets that they would certainty take a massive hit themselves and burdening every other country on earth. As well, the first thing to be analyzed in a nuclear attack, aside from the number of lives lost, is the economic devastation, the manpower, equipment, infrastructure that was destroyed.

            A failing economy anywhere drags the entire global economy with it, in modern international relations with limited military engagements and all out war out of the question, either because of this MAD, or economic interdependence, Nuclear weapons are never on the table as a viable option. The power of economics is seen everyday, after Russian involvement in Ukraine was seen earlier in the year, threats of military engagement certainty not nuclear engagement was every used, even in rhetoric, to put pressure on Russia to back down. Instead, economic sanctioning is primarily used. Even with Iran, serious trade limitations and other economic sanction to deter further escalation have hit the country to deter them from obtaining nuclear capability. Most Nations with Nuclear capabilities have the economic resources to support it.   

Just as the United Nations, and NATO were formed to ensure global piece after world war II, in this new hopefully more secure, globalized world, The Brettonwood agreements in establishing the International Monetary Fund, the World Bank, and later the World Trade Organization, all ensure relatively reliable and smooth economic interactions throughout the world. By working to mitigate economic destabilization, these organizations provide a better foundation for peace in the world, that a Nuclear Arsenal no longer provides.

Iran as an Irrational Actor

            There have been a variety of ideas about the future of the Middle East with a nuclear Iran.  This religiously motivated state has proven to be a state sponsor of terror, has ties to a variety of people in terror groups and has alienated them from the west while aligning themselves with the axis of evil.  Today, we realize that they may be building a nuclear bomb, which would completely change the layout of the world.  However, just because we have the concept of Mutually Assured Destruction, or MAD, doesn’t mean we can allow irrational leaders to gain nuclear weapons.

            Iran is a scary country.  Their leaders have supported so many dangerous groups of people, such as Hezbollah, Hamas and Al Qaeda.  Their blatant sponsorship of terrorism leads us to believe that they are not afraid of supporting their own political causes, no matter how much western countries pressure them to do so.  The U.S. and the EU have levied a number of sanctions aimed at hitting the Iranian economy.  The goal of these sanctions is to cripple the economy so much that the rational thinking of the government leaders will shepherd them to allowing international oversight committees access to their plants, and hopefully the cancelation of their nuclear program, with the sanctions being released in return.  However, despite the serious harm western sanctions have done to the Iranian economy, they still have not changed their nuclear program, until very recently.  This shows that the government and leaders of Iran truly are irrational, since they are pursuing a goal that has little return for them at the expense of their economy and country. 

            Since we have established the fact that we can classify Iran as being irrational, we can further apply that to their use of weapons.  Someone who is irrational with weapons will do things such as the tragedies of Newton, 9/11, Aurora, Colorado, Columbine and Virginia Tech.  These people will perform an act that kills other people while having the belief/understanding that they will not survive after the event.  This concept can be applied to the leaders of Iran.  They will not hesitate to commit their crime with the intention of not living to see the consequence.  Similar to everybody who commits some form of terrorism or mass murder, they do so with this acceptance of fate in mind.  Since we have proven that the leaders of Iran are irrational, and they are irrational with the use of weapons, we can further infer that they will use a nuclear weapon if given the chance to do so.   Despite the concept of Mutually Assured Destruction, Iran has continued to build their nuclear weapons program despite strong pressure from the international community.  Iran would have no incentive to go through the long and strenuous process of building a nuclear bomb, while enduring the sanctions from the west if they had no intention of using the weapon in the first place. 

Japan and U.S.

Trade and foreign investment create both hope and skepticism amongst many nations. According to a new survey done by Pew Research Center, 81% believe trade is good for their countries and 53% believe it creates jobs (Reuters). But of the two biggest economies, Japan and United States, there is less hope and more skepticism about trades level of improvement for their nation with regards to economy and employment. When comparing skepticism versus hope in trade, 68% of Americans and 69% of Japanese believe trade is good while 20% of Americans and 15% of Japanese believe international commerce creates jobs (Reuters).

This skepticism is suggested to cause the delay and protectionism in finalizing a free trade deal amongst Japan and the United States in the Trans-Pacific Partnership, especially at the summit this past weekend. Overall, the United States insists that Japan lower barriers to agricultural imports. But Japan argues that is important for them to protect sensitive products such as pork, beef, dairy and sugar. The concern of losing exporters benefits as well as consumers benefits leads to types of protectionism such as these barriers to free exchange, tariffs, and quotas that the United States wishes to lower.

            The United States insists that Japan lower their barriers of agriculture imports to allow consumer benefits to be increased. When these barriers are reduced, trade will increase and so will the gross domestic product (GDP), which gauges the health of a country’s economy. But the problem here is that if and when Japan reduced these barriers on their agricultural goods, it will cost them the money they would make in exporting these high demanded goods: pork, beef, dairy and sugar.

In my opinion, barriers are something that cannot be avoided, but they can be reduced. Protectionism, and its other forms, is key in the foundation of a successful free trade agreement. Because of concepts like comparative advantage, absolute advantage and opportunity cost, the gap between countries and efficiency is lessened when protectionism comes into play. Japan has an absolute advantage, ability to produce more units of a good than another country using the same quantity of resources, over the United States with these agricultural goods. I believe that because Japan has this absolute advantage over the United States, they should lower the barriers. This is because if Japan doesn’t reduce the barriers on agricultural imports, the United States could produce these goods on their own, raising the opportunity cost for the United States, and ultimately causing them to raise the barriers on their goods that they have absolute advantage over Japan. Thus, if Japan does not reduce these barriers and compromise with the U.S. they could cause a never ending cycle of unfair trade that will ultimately destroy both their economies and future relationships in trade organizations. 

Mutually Assured Destruction

Mutually Assured Destruction (MAD) is a theory that two nations have enough nuclear weapons to attack and destroy the other. It also incorporates the fact that if one side is attacked, the other nation is able to attack back with greater force. Typically the concept of MAD prevents nuclear weapons from being used since they are so destructive and it is also associated with deterrence theories. Also, with MAD a nation with the most nuclear weapons is seen as the most stable. I believe that the Cuban Missile Crisis was a threat of MAD and a factor in determining what happened with the crisis. I also think that nuclear proliferation should not be condoned but at the same time can’t be completely dismantled.

During the Cuban Missile Crisis, the Soviet Union leader, Khrushchev, had put missiles directed toward the United States in Cuba. The nuclear missiles had enough power to destroy most of the United States. In terms of MAD, the United States also had missiles in Turkey pointed toward the Soviet Union to fire a second strike if necessary. One event that could have occurred was that the Soviet Union or US used their nuclear weapons and a nuclear war would have begun. In lecture it was discussed that no rational leader would use nuclear weapons without thinking about the consequences. US is a rational nation and nuclear war is very unlikely from happening. Also dictators like Stalin and Mao had access to nuclear weapons but never used them. I believe that was showcased when the US dropped atomic bombs on Hiroshima and Nagasaki. The effects of that deterred even the most of irrational leaders from using nuclear weapons. That then led to the Cuban Missile Crisis to be resolved by the US retrieving their missiles from Turkey and the Soviet Union doing the same in Cuba.

A critique of MAD is that it is seen as wanting to spread nuclear weapons. Also, a state with more nuclear weapons is seen as the most stable state. I believe that it’s almost impossible from stopping a nation from creating nuclear weapons or getting that nation to dismantle them. No amount of different sanctions could prevent a nation from halting their nuclear weapon programs. An example would be when North Korea successfully continued building nuclear weapons, although, they were put on various different sanctions by the UN security council. The Nuclear Non-Proliferation Treaty was a start to creating a universal treaty to stop nuclear weapons from being created and to get them dismantled but in essence can’t completely prevent a country from creating or dismantling their nuclear weapons. Iran is seen as irrational and them having access to nuclear weapons is a major threat to Israel and other nations. As stated in the Foreign Affair article that the reason Iran wants nuclear weapons, it is for the purpose of security. I agree with that statement considering that the most irrational leaders have not used nuclear weapons. Of course the crisis of Iran and nuclear weapons should be monitored but the chances that nuclear weapons are used is almost unlikely.

The Cuban Missile Crisis was an example of the threat of MAD and how it ultimately allowed the US missile crisis to end how it did. Also, the desired idea of having no nation build up their nuclear weapons is a difficult one to accomplish. Nuclear weapons are destructive that almost no nation will actually use their weapons. Most nations have nuclear weapons as a sense of security and it makes them a stable nation.