- International Economy
The International System after COVID-19
April 9, 2020
It is too early to draw firm conclusions about the international implications of the global COVID-19 epidemic, the greatest unknowns being how long populations around the world can sustain social distancing policies and the economic pain they produce; how quickly scientists will develop, test, and produce a vaccine; and how far the virus will spread while these two processes are underway. These are the key drivers of COVID-19’s international fallout. As time passes, though, several troubling hypotheses are emerging.
Weaker Collective Action?
One is that COVID-19 might significantly damage multilateral cooperation in dealing with what political scientists call “collective action problems.” In international affairs, collective action problems are challenges in which simultaneous efforts by states to pursue national interests undermine outcomes for all.
COVID-19 itself illustrates this: China’s under-reporting of cases for domestic political reasons seems likely to have slowed other governments in responding to the virus. Likewise, global competition among national, regional, and local governments to procure ventilators and personal protective equipment (including masks, gloves, and other supplies) has driven up prices, consumed precious time and money, and encouraged hoarding, profiteering, and illicit trade.
The combination of fear, mistrust, and unilateralism undermines government responses to COVID-19 everywhere. Human civilization must contend with many other collective action problems, including future pandemics and other global health challenges, climate change and wider environmental concerns, and traditional security threats like nuclear proliferation and terrorism.
A Decline in International Trade?
Another hypothesis is that national governments might face considerable political pressure to establish secure domestic supply chains for essential goods. In the United States, President Donald Trump and Secretary of State Mike Pompeo have urged dramatic increases in domestic manufacturing of pharmaceuticals and other key medical supplies; China’s Xinhua news agency lent weight to this argument—and angered US officials and members of Congress—by describing a hypothetical Chinese decision to cut off drug exports to the United States. [https://www.nytimes.com/2020/03/11/business/economy/coronavirus-china-trump-drugs.html]
This dynamic could dramatically reshape international trade, in that once one industry (drugs and medical equipment) is declared “essential,” other industries will seek the same designation and its perceived benefits. Food, fuels, energy systems, and electronics—as well as their key inputs—could swiftly follow medical goods in gutting international trade, at least among those nations that can afford the higher costs of domestic production and have the resources necessary to pursue it.
Alternatively, some nations could choose to rely solely or primarily on allies or close partners in sourcing critical imports. Whatever happens, the additional economic costs of this approach point toward a slower recovery rather than a swifter one.
Nationalists worldwide could similarly benefit from new political support for tighter borders and limits on immigration, including economic migrants as well as refugees. In the United States, Trump administration officials have stressed the role of border controls—something President Trump has sought since taking office—in containing the spread of COVID-19. In Europe, members of the European Union’s Schengen area have introduced temporary border controls until dates ranging from mid-April (e.g., Germany and Spain) to October (France) and even November (Denmark). [https://ec.europa.eu/home-affairs/what-we-do/policies/borders-and-visas/schengen/reintroduction-border-control_en] Germany and other EU countries had already experienced rising nationalism following the arrival of millions of refugees from Syria and the Middle East in recent years.
The New World
Some have argued that COVID-19 is not fundamentally altering international relations but instead accelerating existing trends. [https://www.foreignaffairs.com/articles/united-states/2020-04-07/pandemic-will-accelerate-history-rather-reshape-it] This is a persuasive view, in that many of the dynamics described above already existed and appeared to be gaining strength. Indeed, for foreign policy realists who believe that states focus first and foremost on advancing their national interests, these trends seemed inescapable during the return to historical modes of great power competition now underway.
Still, the international system could have responded differently to the COVID-19 pandemic, as it responded differently to earlier post–Cold War pandemics. From this perspective, government responses to COVID-19 are less a driver of change in international affairs than a reflection of the extent to which this change has already occurred.
To be more precise, the roots of international strategies of competition and cooperation are fundamentally psychological. Because each has costs and benefits that depend on others’ choices, deciding between them requires evaluating other governments’ probable behavior. As any individual government gains experience observing others, those evaluations appear to become more compelling (because they are based on more data), whether or not they reflect an accurate assessment of others’ intent.
Watching how key states—especially the United States and China—react to COVID-19 thus tells us a great deal about what each expects from the other and, to a lesser extent, from other major powers in the international system. This insight into what Washington, Beijing, and other capitals expect from their peers, their rivals, and even their friends is in turn a useful guide to future global trends. It doesn’t paint a pretty picture.