In an interview with the website of the Strategic Council on Foreign Relations, Ata Bahrami, referring to the signing of the world’s largest free trade agreement at the end of the virtual summit meeting of the leaders of the Association of Southeast Asian Nations (ASEAN), said: In examining the dimensions of this agreement, the situation in East Asian countries, especially China and Japan, should be specifically analyzed in particular. China is a rival to the United States and naturally welcomes any order that is divergent from the existing American order.
Referring to the formation and expansion of the Shanghai Cooperation Organization and increase of China’s influence in the Middle East and Africa with an aim of changing the existing order, he continued: China is practically looking for replacing the United States in the current hegemony and intends to be the hegemon; but the Japanese have identified themselves with the United States in terms of security and are not pursuing China’s goals. The fact that they have participated in this plan even under the status quo in which they are in tension with China in terms of security, seems strange.
Japanese Say Current Dollar-Based Economic Order Is Coming to an End
The international economy expert said the move shows that even for the Japanese, the current dollar-centric economic order is coming to an end and, therefore, they are preparing for a multilateral economic system. It seems that perhaps this was the most important message that was witnessed in this pact.
Referring to India’s non-participation in the economic pact, Bahrami said: India’s economy is defined with the United States and is considered by the Americans as a country that will replace China as the buyer in the future. The Americans want to oust China, a country that exports more than 500 billion dollars to the United States, and replace it with India with an aim of both controlling the growth of China’s economy to avert its risk and strengthening India to strike a balance of power in South Asia against China.
Long Stride on the Path of Giving Orientation to World Economy in Future
Saying that the agreement of the 15 countries is the biggest free trade pact in the world, which includes one third of the world’s gross domestic product, he added: By doing so, they have taken a very long stride towards giving orientation to the future world economy to the East and the orientation of the economy towards the East is quite tangible. Earlier, other pacts were not much successful, but this agreement will direct the economy towards the East.
Meanwhile, Bahrami stressed: Of course, one should not think that each country in the East has homogeneous interests with this organization; India, for example, has conflicting interests with the organization, and on the contrary, they certainly welcome Pakistan’s joining to the treaty in the future; in order to balance with India.
Noting that the move showed that the weight of the world economy is not as strong as in previous decades so that the United States could force others to make it a partner in their covenants, the political economy expert said: In 1945, the Americans controlled 48% of the world economy but the figure has dropped to 22%. That is to say, if others come together, they practically do not need the United States, and this means that there is not necessarily need for the presence of the United States in any treaty.
Referring to some analysis that member countries in this partnership collectively hold 30% of the world economy which is a declaration of war against Europe and the US, he said: In the past, the United States, the World Bank and the International Monetary Fund have played a key role in the economy but now China, due to having constant trade surplus for several decades, has large amounts of dollars in its possession and could get involved in financing and giving loans. By doing so, the International Monetary Fund and the World Bank have been challenged and they are no longer the ultimate lending authority as there are others who can lend.
Consumer Market, Production and Independent Banking System of China Pact with 14 Countries
Bahrami referred to the US successful attempt to push back Japan in creating a monetary fund in the 1997-98 crisis and said: More than 20 years have passed since then and in the meantime China has grown to the extent that it could do what the Japanese could not. In other words, in practice, this alliance has both a large consumer market as well as a large production market, and has a proper banking system that can finance, for this reason they were able to exclude the Americans.
As for the absence of European countries in this pact and noting that Europe’s presence in such pacts has long been irrelevant, he said: They were always defined with the Americans and did not play a role alone. When the US fails, they can never play a role; because they do not have enough weight and coherence. For this reason, nothing will happen in the absence of Europe.
He referred to the post-World War II conditions that led to the domination of the US hegemony in terms of the economy and said: The current system of the world, that is to say a very big economy and conflict of interests, is no longer useful to all. This means that if the Americans want to remain loyal to this system, the Chinese, at the same pace they had for the past four or five decades, will come forward and replace them. The Americans do not want this happen, so they are destroying the foundations of their own system.
Bahrami explained: The first pillar they destroyed was the World Trade Organization and in the lawsuits that took place, the Chinese won, but this does not relieve the pain. The Americans want China to be slowed down from its current growth and not get any closer to the US like Japan in the 1990s. Naturally, the Chinese are looking for alternatives, but finding alternatives for more than 500 billion dollars is not an easy task. The United States can print dollars to buy goods, but other countries cannot do the same. For this reason, the Chinese who have felt the risk have stood up to the American attempts to disrupt the game and do not wish this happen; but it is not an easy task.
We Have Reached a Purgatory System
According to the expert on international economic affairs, the first message of this system, no matter which side wins, is that we have now reached a purgatory system. The previous system does not exist and the new system has not come yet. During this purgatory period, various things would happen. For example, Iran will be offered a 25-year strategic agreement guaranteeing purchase of oil and 400 billion dollars investment. This has never happened in the Iranian economy; but China is making such an offer because it intends to select partners in the global economy.
Bahrami added: The Americans will naturally be forced to give more concessions to their allies than in the past; because the other side is also making suggestions. In fact, rivalry between powers makes smaller countries to have better conditions by bargaining and demanding more concessions. Therefore, we will have no unipolar world and we will enter a multipolar world with different blocks.