Transcription
Hello, greetings. Thank you so much for uh inviting us to the stage here. This is a really an honor to have this opportunity to have this conversation with two of the greatest thinkers on international relations, Dr. Mir Shimemer and Sir Robin Nimblet.
Um, I'm really looking forward to having a a conversation where we can explore some of the challenges and opportunities uh facing APEC and really and facing the region and maybe looking into a bit how Korea fits into the conversation and how APEC uh along with G20 and other international institutions maybe can contribute to this time of transition. So before I hand it over to the distinguished panelists just uh uh we know them all. Dr. Mir Shimemer, distinguished Chicago chaired professor and uh leading proponent of political realism. Uh he he'll offer us some really great uh insights on power competition and how it's reshaping the geoeconomic landscape. And of Sir Robin Nibblet, former director of Chadam House. Uh I'm looking forward to hearing about his perspectives on uh the evolving relationship between United States and China as he laid out in his book uh the new cold war. So please join me in in warmly welcoming Dr. Mir Shimer and Sir Robin Nimble. So Dr. Mir Shimemer over to you. The mic is yours. could you please share your perspectives on what APEC is looking like these days and how it's looking to the future?
Okay, thank you very much. Uh it's a pleasure to be here uh with my two colleagues and especially to be back in South Korea which is one of my favorite countries on the planet. I always love coming here and meeting with people and talking. Uh the subject on the table today is basically the future of APEC and the future of the global order. Uh and when we talk about the global order, we're more or less referring to what people call the liberal international order. And my argument is that the future of Apac and the future of the liberal international order is not very promising. There's big trouble ahead and the principal reason for that is the shift from a unipolar world to a multi-olar world and I'll explain more about what I mean by that. But I want to start off with a number of definitions to begin with uh to give you a sense of the big picture because I think you can only understand where APEC is headed and uh where the global order is headed. uh if you want by understanding what those terms mean uh you know what is the relationship between APEC and the global order and APEC is an institution it's one institution and an institution is different from an order and what exactly do I mean by that an institution is a body of rules rules. It's very important to understand that that's what institutions are. They're rules that allow the member states to interact with each other. They prescribe certain forms of acceptable behavior and they proscribe unacceptable forms of behavior. That's what an institution is. APEC is an institution. NATO is an institution. An order on the other hand is a nest or a group of institutions that fit loosely together that are also designed to manage relations among a group of states. So APEC is a building block in the global order in the international order. So that's what you definitely have to keep in mind.
Now the second thing you want to understand is that great powers create institutions and great powers manage institutions. Countries like the United States, not South Korea, build institutions and they build orders. Furthermore, you want to keep in mind that institutions and orders can deal with security or economic issues to put it in rather broad terms. So to go back to the cold war, you had NATO and you had the European community which became the European Union. NATO was a security institution. security institution and the European community was an economic institutions and I'll talk more about this in a minute but they were all part of the western order. There was a western order in which NATO and the European community fit. Now the next definitional issue and the last one which you want to pay a lot of attention to is that there's a distinction between bounded orders and international orders. An international order includes all of the great powers in the system. A bounded order only includes one of the great powers. It does not include all of the other great powers. Now, you're probably saying to yourself, what exactly is he talking about? Is this political science speak? You know, bounded orders, international orders. I'll make it clear to you by talking about the Cold War, the unipolar moment, and the present.
When I grew up during the Cold War, we had three orders. Two of them, which were the most important orders were bounded orders. The Western Order, which is sometimes mistakenly called an international order, was run by the United States. It was set up by the United States to wage the Cold War. It was basically run by the United States. that western order included NATO. It included the world uh bank, the IMF, the European community. All of those institutions were bundled together in the Western Order which was initially designed to manage the Cold War. The Soviet Union, which was the other great power in the system, was not in the Western Order. The Soviet Union had an order of its own. It had a bounded order. That bounded order included ComicCon, the Warsaw Pact, and the successor organization to the Communist International. So these two bounded orders waged the Cold War. We also had an international order. That international order included the United Nations because the United States and the U and the Soviet Union were both in that institution. They were in that order. So the UN, a variety of arms control agreements, the NPT, they were all part of this thin international order. But the thick orders that really mattered during the cold war were the western order and the communist order. Two bounded orders and a thin international order.
Then you all remember the cold war ends in 1989. In December of 1991, the Soviet Union collapses and we go into the unipolar movement. By definition, there is only one great power on the planet. That's the United States of America. We are now in a position where the bounded orders disappear. The Soviet order disappears. The Soviet Union disappears. No more Warsaw Pack, no more Comic-Con, so forth and so on. What the United States does as the only great power on the planet is that it takes its bounded order, that Western order, and it makes it a truly international order. That's the order. That's the liberal international order. You get a really potent international order for the first time because you only have one great power on the planet. And remember, as I told you, when you have only one great power on the planet and that one power writes the rules for the institutions and manages the order, you're going to have what we had during the unipolar moment. Well, roughly around 2017, what happens to the unipolar moment? It disappears. We're now in a multipolar world. You all understand that. There are three great powers on the planet. The United States, China, and the Soviet, excuse me, and Russia. United States, China, and Russia. And the two most powerful states in that system in this multipolar system are the United States and China.
So the question you want to ask yourself is what is happening today in Asia? Well, just like the Cold War, you're getting two bounded orders and you're going to end up with a thin or superficial international order. Just think about the Chinese bricks. United States isn't in bricks. China's in bricks. Think about the Shanghai Cooperative Organization. Think about Belt and Road. Think about the AIB. These are all Chinese-led institutions. The Chinese are all for also forming military alliances with countries like Pakistan, countries like Russia, countries like Laos, countries like Myanmar. This is hardly surprising at all. You're getting a bounded order in East Asia. At the same time, the United States is doing the same thing. the quad alus tightening up of the bilateral alliances involving the United States and Japan the United States and South Korea the United States in the Philippines you're going to get two bounded orders in Asia in East Asia and those two bounded orders are going to wage a wicked security competition just like the United States and the Soviets did during the Cold War now you're saying to yourself what is Does this have to do with APEC? The answer is very simple. APEC is an international institution, right? It's an international institution and it's part of the international order. A really good example here you want to think about is the WTO. In 2001, the United States brought China into the WTO with great enthusiasm from first the Clinton administration, then the Bush administration. The World Trade Organization was going to help make China rich. We were really enthusiastic about that. Where is the World Trade Organization today? It's in the toilet bowl. It's in the toilet bowl. Why? We went from uniarity to multiparity. And you all understand once you're in the world of multipolarity, great power security competition is back on the table. And when great power security competition is back on the table and you've got at least two great powers in the system, you end up with bounded orders. And you still have an international order. You still have a United Nations. You still have a WTO. You still have APEC. But they are thin institutions. They do not matter that much. The bounded orders matter the most. Why? Because security always trumps economics. And therefore, APEC, which grew up in the unipolar moment and flourished in the unipolar ma moment, is now in an environment multipolarity that is not conducive to growth. It's not conducive to doing a lot to facilitate prosperity and security in Asia. So that is in a nutshell my basic story about where APEC is today and where it's headed. Thank you.
Well, thank you doc. Thank you Dr. Mayor Shimemer. That's a great introduction to really place this conversation in in both history and in structure and I think it's a great opportunity to turn to Sir Robin to maybe pull out a bit the US China piece of the story that you've just told and maybe so over to you to see how how you describe what we're looking at.
Thanks very much and fantastic to be back at the World Knowledge Forum and great to be on the panel Henry with you and obviously with Professor Mirshimer. Um I was taking notes because I was chance for me to get a um some some great insights to the context of where we are right now. I look forward to talking about how much the SEO or the bricks is a bounded order. That'll be a good thing to talk about when we come to the panel in a minute. I think China would like it to be whether it is will be will be debatable. But um let me put APEC in its context for me and I think it'll pull hopefully nicely off uh off John's comments just beforehand. Um I want to make five points. The first is that it strikes me that APEC is trying to think of the right word, an echo, a hangover of the period um of that postc cold war optimistic period um where we thought that globalization would be the future of the world and that the western international order would become the international order to use John Mishheimer's I think very accurate uh description but of course it is being undermined right Now um APEC like globalization by the emergence of what I think of as a new cold war between the US and China whatever we want to call it deep geopolitical competition.
Um and the second point I want to make is just to point out the extent to which APE actually contains um many of the fault lines that characterize uh this order. However, as I go on, let me just say I think I could be a little more optimistic about the role that APEC might be able to play in the current uh international context. I'll say a word or two about that at the end. So, just the first point um it does strike me that I was looking at the website of APEC before coming here because being a Brit we don't focus as much on APE. We might focus on the European Union and if you're British not being inside the European Union. Well, if you look at the APEC website, it has this little thing going on of thousands of containers and the containers are getting pulled left, right, and center. The images were all together building a united economic, you know, uh order or system in the Asia-Pacific region. Well, I can't think of any more that represented the past uh and certainly doesn't seem to be representing uh the immediate future. It was all about absolute gains, the opposite of zero sum. If I can drift a little bit into international relations theory. And if you look at the period since APEC was founded, um certainly you've seen some huge benefit from that deeper economic integration that accompanied the end of the cold war, the reduction of barriers to trade, the belief in open markets that expanded after the collapse of the Soviet Union. You've had real GDP increase in that period. uh uh between 1989 and 1990 and roughly 21-22 um of from about 19 trillion dollars to over 53 trillion dollars amongst APEC members. Uh four times increase in per capita income, nine times increase in the rate of trade amongst the members. Twothirds of the trade now taking place amongst the Asia-Pacific region. I mean you could say it really does uh it's had its period of great optimism.
But if we look at it today, it now contains right at its heart because it has the US and China in it. It has got the new cold war physically inside that actual uh institution. Um we don't need to talk too much about that now. We can if we want to. My sense is the USChina contest. What to me is a new cold war is going to persist and endure for a long time in the future. It's economic. It's of the military. It's the technological. I would even say uh at ideological levels. But what's interesting is that its front line is the Asia-Pacific region. It's not Europe. um you you know you could put Taiwan right at the core of it if you want to given China's determination to break the first island chain of islands that in a way uh threaten its geoeconomic security its ability to reach out to global markets oversea and not have to rely as much u on Russia uh over land uh uh behind it. So when you look at the nature of that competition right now, APEC countries themselves are getting pulled into the competition. Not only do we have the United States imposing tech restrictions directly uh on China um and limiting the kind of American technology that can be exported to China and China retaliating with limits on rare earth exports. You've also got the South Korean semiconductor industry being told as an ally of America that it can no longer export its semiconductor uh manufacturing capabilities into its plants that have been built in China of part of that uh uh you know win-win kind of world the absolute gains world that we thought of before that is now being uh limited. Japanese have been told that they can't sell their semiconductor manufacturing equipment to China just like uh ASLML the Dutch company can't do either. Uh Malaysian data center companies who thought they could be bringing in Chinese components and still serve as partners to American and Western companies are now having to rethink what components do we have inside uh our data centers. Um so we're in a situation where the whole logic of APEC one building on deeper integration moving into the technology realm is now being uh pushed backwards by uh an expansion of the US China technological which is economic and military contest through to them.
We've also got secondly actually more traditional security front lines of the new cold war running through the middle of APE as well. China and the Philippines are both APEC members. Uh and there's no more uh strong example right now of both the Biden and Trump administration's determination to strengthen their resistance to China's growing military capability than the uh much closer military relationship they now have with the Philippines. Uh and it's it's amazing if you think about it that Chinese Taipei, as it's called, is a member of APEC. And here we have uh Taiwan right now being put again on the front line of this new cold war, including with the Trump administration looking at it as part of its new kind of AI warfare uh uh uh supplier. You've got Russia as a member being sanctioned by other APEC members. Um and you have got as John noted Russia and China trying to build amongst some of the uh uh APEC members an alternative world order through bricks and SEO in parallel to the United States trying to say no some of those countries are allies of ours Japan Australia South Korea even Singapore to a certain extent you need to be with us uh on our side so in a way what you've got is geopolitics running through the middle of ape You've got the technology contest running through APEC. And of course, you also have third the good old-fashioned uh trade contest passing through the middle of APEC as well.
Because I think the other big challenge to the future of APE and to uh regional integration is the fact of the loss of confidence in globalization, the benefits of globalization um that the United States in particular is running through. Donald Trump is the voice of the left behind uh in America who did not benefit from globalization. And so we're moving into an era led by the United States in a way it is enabling it. It is leading the way of state interventionism, protectionism, uh uh national preference, bilateralism. I might argue China never left those particular approaches. It's been subsidizing its own industries even as it's developed. It has built up huge overcapacity that it is now exporting to the much of the rest of the world. But it's amazing to see the US uh uh leading the charge on forced inward investment, something we used to associate um with China rather than with uh uh the United States. Um it's a whole discussion of energy dominance, not just energy independence. It's a completely different mentality. one that is anti-absolute gains and is all about zero sum thinking. So again, I don't need to give you all the examples, but the impacts on APEC are fundamental because the US has said we'll have our own trade policy and we are going to whack tariffs up today. They're roughly 10 times what they were at the beginning of the year. US average tariffs have gone up from about 1.5% to 15% currently on average. I heard a panel earlier today where the South Korean and Japanese participants were comparing um who had the worst deal on the forced foreign investment they would have to make in America in order uh to try and get their tariff rates down from 25% uh to 15%. And I think most interestingly for APEC, the kind of solution that many APEC members, especially ASEAN members, but also Mexico, maybe to a certain extent Canada, the solution they had to the beginning of the new cold war, which was this famous China plus one idea, we will invest in China to get to the Chinese market. We will then uh uh invest uh if we are a multinational in Indonesia or in Malaysia or or in some Singapore in some other Assean country and then export to America. Trump has said no way. China plus one might be your language. I call it circumvention. I call it trans shshipment and you will get a 40% tariff slapped on you. So, APEC is also being undermined by this loss of confidence in globalization, the push towards state interventionism.
Now, you talked about opportunities, Henry. So, let me not all be negative and maybe hand over in the last couple of minutes um on to how things might not be entirely negative. What can we do if what can I'm not we I'm British. What can uh members of APEC do to try and deal with the situation? I mean, one option is keep APEC alive. Do what Shinszuabi did in Japan with the Trans-Pacific Partnership and say, "Well, look, the US may not be a valuable player, but what the hell, we'll keep it going. Let's buy time. At some point, a future US administration uh uh might join." Now, another way to think about it is actually to be also while you're buying time, think, you know what, Trump, his bark is worse than his bite. He says he's going to do all these things, but actually, you know what? We can keep doing triangulation. We can keep doing circumvention because there's no way American customs officials are ever going to keep up with all of the complicated rules of origin, you know, ideas that the Trump administration is trying to put in to avoid circumvention. And if you're not an ally of America, if you're Indonesia, if you're Malaysia, if you're Vietnam, you can probably get away with a lot a lot tougher if you're Japan or South Korea and you depend on America for your security. There's also the option to kind of go subreional within the apex zone. Asan has a new 2026 economic community framework. We'll see what becomes of it, but there's also a new digital project to deepen digital trade. You've also got interestingly the regional comprehensive economic partnership China initiative but it's reduced tariffs on something like 90% of trade amongst the bulk of APEC members excluding uh uh the United States excluding Canada excluding Mexico including uh many of the depends where you're looking at it the American side of the Pacific side but our itself is a huge trade agreement you know it's three billion people It's 30% of the world GDP and actually in that typical Chinese way it's quietly opening up markets um amongst its members quite intelligently. U now that's one way of looking at it. I think also if I can think of it in a slightly more uh international relations standpoint um APEC is interesting because maybe it could also be a soft bridge for the US and China. APE does not need to be dominated by uh the US and China. One of the most famous apex summits recently was the 2023 one when Biden met with Xi Jinping they buried the hatchet. Many people are hoping uh that the meeting in Kyongju in late October. Maybe we will have another Trump uh shei meeting and maybe again they will carry on the discuss discussions on nuclear confidence building measures should we call them that Trump certainly is incredibly supportive of and I imagine Xi Jinping might be as well. So it may be that APEC provides again back to John your point being bit of a part of an international system because it's got Russia and the United States in it. Maybe they can use it as a framework to try to uh uh uh uh lessen some of the restrictions they have. But the last point very last point I want to make and maybe it's a little bit different from John's point. Um you described Henry at the beginning as John as part of the realist school of international relations. I'm a Brit and when I did my PhD quite a long time ago, uh I discovered a thing called the English school of international relations. And the English school believes that states tend to compete with each other all the time. They're not very utopian, but they do believe in a thing called international society. That the majority of countries do want rules. And it's possible that in the future the majority of countries including the majority of APEC by deepening and thickening areas of uh uh sectoral and functional cooperation for example energy resilience grids uh standards for green technology uh climate negotiations in all of the areas that APEC is actually doing a lot of work. They might be able to sustain some of the thickening of of the relationships. It won't be open trade anymore, but it might be a world in which continued foreign investment, continued economic progress can be made. Uh, and the US and China will be left to one side to worry about things on their side. That would be my optimistic outcome to try and finish on a slightly up note.
Well, thanks for that. I think between these two presentations, we have uh the structure that's laid out and I think some very detailed and insightful perspectives on how APEC could fit into that order. Before we go maybe further down the structural road, I'd like to bring it just briefly maybe to Korea and just for you Dr. Shimemer just what kind of agency does a country like South Korea have in this bounded the new order that you've described with I mean whether it's related to the thin uh bound order of of institutional order that APEC represents or in the more multipolar sense and then for you sir Robin just to maybe expand a little bit on what you hinted at just what is South Korea what it specifically is its kind of next next step here given what we've been laying out here today.
Uh let me just start by saying that uh Robin made the point which I completely agree with that states need rules. Institutions are of enormous importance in a complex world like the one that we live in. You absolutely need institutions and you need order. Now the question is what kind of agency does Korea have in this order? And the answer is not much at all and there are two reasons for that. First of all, great powers build and maintain institutions and great powers build and maintain orders. And Korea is allied with the United States. This is in Korea's national interest. But as you all know, the United States is a ruthless great power. It likes to portray itself as a benign great power where the good guys, the Chinese are the bad guys. Used to be that the Soviets were the bad guys. I don't believe any of this, right? The United States is a ruthless great power. It does what's in its interest. And Korea has to suffer the fact that it is in this alliance with the United States. It is part of the US dominated order. And to make matters worse for Korea, Korea is a frontline state. If you're Australia, you're far enough away from China that you can get away with quite a bit. But if you're South Korea, there's not a lot that you can get away with. Japan can get away with more than South Korea can because Japan is a bigger country. South Korea is a small country. It's a frontline state and it is in an order that is run by a ruthless great power. So the amount of maneuver room you have is not much at all. Am I happy about telling you that? No. I understand why a South Korean would not want to hear that message, but I am a realist with both a capital R and a little R.
Yeah, completely agree with that. Maybe let me pull off back where where John is and I was going to write down here just written down for myself because Korea has limited choices for the reason that John just said it has to choose sides. So in this context, South Korea cannot be a swing player. the more meaningful, the more intense the new cold war between the US and China. And it certainly it is at a phase where this cold war does not have rules yet. We're not at the end of the cold war. We're not even halfway through it. At least you had rules in the last one, but there are no rules yet in the US China one or very few. In that case, at that phase or in this phase, South Korea has to pick sides. What do I mean by specifically? And technologically, it has to pick the US. it has to obey the demand uh not to support China in its journey to become a more powerful technological competitor. Now, I might add, it's probably in South Korea's interest to do that because it looks to me, I'm not an expert like some people are in where Chinese technology polic capabilities are going or South Korea's, but as an amateur looking at it from the outside, it looks to me that China is going to eat South Korea's lunch pretty soon in just about every area of technology. But the thing that South Korea will have is preferential access potentially to the US market and to the market of other US allies in Europe, in Australia, in Japan, where we're all going to have to make sure there's less Chinese technology. And although the South Korean technology might be a bit more expensive, it will be maybe not as heavily tariffed and it will be allowed in because you're on the right side of the security contest uh with China. So, I think you have to choose. go ahead and choose. That'd be the first point. Second, um South Korea has a chance to be a reliable investor specifically in the US despite this messy situation with the subcontractor workers at the Hyundai plant that has coincided with this meeting. You know, teething troubles is the way I would describe it probably. Um, but it's the right long-term play. And the more interesting play as well would be to see South Korean companies teamed up maybe with American companies going global to compete against the Chinese offer. The most obvious example being probably in nuclear technology where Westinghouse can be a great partner to the very uh successful and good uh Chinese civil nuclear plant builders. Um, and the third thing I would do probably just is at the end of my remarks. South Korea as a small state, and John, you'd probably agree with this. We're all small states, unless you're one of the three great powers. One of the things Britain has learned, you're either small or you're smaller, you know, um, and we're small. So, small states have to find a way um, to team up. And we do need the rules. So, I think that South Korea needs to be investing in APEC. I'm glad it's taking a lead on the energy uh uh cooperation side of the APEC agenda. It needs to invest in that. Um hell, it maybe should invest in ARP as well, which it is because that is the chance for it to be able to at least trade on the nonsensitive side with China and after all, Australia, Japan are in there as well. So, I think they need to build up some of the rules. That would be a useful policy to do to hedge that great power alliance it has with America.
Thanks. I think that's some good tips for the maybe to help the medicine go down from the tough message uh realist message that Dr. Mir Shimemer gave. Dr. Mir Shmer, you laid out the structure in in your first remarks. I I'd like to just maybe go back to that a little and just ask how do you see that maybe competition being managed? You you set up the structure, you set, you know, told us what the moment is like. How does this not go horribly wrong uh either in the how does it maintain competition and not move into conflict in the way the structure that you've described?
Yeah, I mean it's obvious that we want to make sure we don't have a war between the United States and China. And you can tell all sorts of stories about how you get a war in East Asia uh in the South China Sea or over Taiwan. Uh here's the basic problem that you face. The basic problem is that anytime you get into a security competition involving countries like the United States and China, each side is trying to take advantage of the other side. They're competing for power. We're looking for opportunities to gain advantages over the Chinese. And the Chinese, for good reason, are looking to take advantage of us. I've said many times publicly, if I were the national security adviser in Beijing, I'd tell Xi Jinping, "We want to push the Americans out of East Asia. We want to push him beyond the first island chain. We want to push them beyond the second island chain. And then we want to dominate East Asia. We want to tell the South Koreans and the Japanese that we call the tune in East Asia and you dance to our tune." That's what I'd do if I were a Chinese leader. That's the way it works in the Western Hemisphere. That's how we run the Western Hemisphere. You've all heard about the Monroe Doctrine, right? But the what you get here is you get two great powers who are competing with each other for advantage. When I was young, we used to talk about containment. You all know George Kennan was the father of containment. Then I came to realize reading Bruce Cummings work. You all know Bruce Cummings, I'm sure, who's one of the great Korean experts in the United States. But he taught me that the United States not only engaged in containment, we engaged in roll back. Roll back. And the first example of roll back was when we crossed the 38th parallel in 1950. Right? We were trying to roll back the Soviets during the cold war. Right? So the problem that you face in the US China competition is the United States won't merely be concerned with containment. It'll be interested in roll back. And I don't have to tell you that the mere word mention of the word roll back tells you there's potential trouble.
Now just to get to the management side of the story. The upside and it's a qualified upside is we're talking about two countries that have lots of nuclear weapons and you all know what happens if nuclear weapons get used. Not good things. So we have a very powerful incentive to make sure that we don't get into a crisis and that if we do get into a crisis, we manage it because of nuclear weapons. So I think paradoxically nuclear weapons, the presence of nuclear weapons give both sides really powerful incentives to manage the crisis. But I would juxtaposition that with the fact that good old-fashioned great power politics is a really nasty and brutal and dangerous business.
I'm going to stick with the hopeful note that you're saying that nuclear weapons and that that will help manage the conflict and keep us away from conflict incentives to manage. And maybe also to finish on uh another positive note to pull out from something we talked about already. um you mentioned SEO and also um other you know quad on both both sides of the equation these sub groupings but I'd also like to add in for you sir Robin the maybe not formalized groupings yet I mean there's a but between Europe and Asia and what are the how can these groupings subgroup contribute to this world order that Dr. Jamir Shmer has laid out how can they contribute like you've mentioned with APEC contribute to the management of this of this structure and to kind of the building of prosperity going forward.
I mean, one of the things I'm interested in exploring now that I've got a bit more time to to explore things, um, is the extent to which the United States and China in particular, I think Russia is already a proof point of this, that these three great powers maybe not as powerful as the great powers have been in the past in past periods of history. It needs testing as a thesis. But if you look at the United States with its current debt level, you look at what Donald Trump considers and some Democratic leaders also considered the overuse of the dollar and America's hold of the choke points of the financial system. overuse of those tools um as part of their foreign policy in the last 10 years that is leading to a blowback and an effort to try to not be as reliant on the dollar as one has been in the past. looking at China now using the weapon of its rare earth dominance certainly of processing uh rare earths now leading to European companies and Americans to think well hold on we used to process rare earths maybe we can do it in a different way maybe we don't even need magnets for very specific types of renewable energy and we don't as it turns out it's all about money and and supply chains um and then you look at I don't need to talk to this audience here about China's demographic problems it's difficulty in transitioning from middle income to high income as a as a country. Um, you it strikes me this is an interesting moment for countries like Japan, like South Korea, like Australia, like Canada within APEC, but also to your point, countries like Britain, Germany, France, the European Union as a whole to think about how they can try to build up structures of cooperation that recognize the realities that we're still in a strong man world. We haven't got yet to a position and we may never um where they don't wield ultimate influence but certainly try to push it um in that direction and I think here being a poison pill inside other institutions is not a bad thing. That's why I wanted to mention the bricks. Clearly China would like to use the bricks club and Russia would like to use it as a counterpoint to the G7. But you know with India in there which has a hugely suspicious relationship to put it mildly uh with China um uh with Brazil again not wanting to be couched as a pure anti-American um player it strikes me that's going to be a very difficult difficult bounded order if I can call bricks a bounded order to try to use to balance uh the existing or continuing American bounded order built around what is still obviously a very much existing NATO. So um similar in the SEO, you've got one or two members. Turkey showed up to the last meeting. You got Saudi Arabia showing up and some of the Gulf states. These are as well American allies. I mean you know you actually got bases American bases in the Gulf States and obviously American bases in Turkey as well. So it strikes me that you you don't have a Warsaw packed against NATO moment like you had in the last cold war. In a way, both sides are trying to build teams, but the teams aren't as committed and maybe not quite as dependent as they were uh the last time round. After all, yes, Russia is a nuclear power. It threatens Europe, but Russia is struggling just to beat Ukraine. I mean, Ukraine, it's remarkable. So, I think that um there's an opportunity here, and we're seeing it with European countries trying to sustain some of the partnerships with their Asian counterparts to say, look, maybe we need to have our own life raft. Let's not rely as much on America for our f future security. Who knows where where it will be there where it will be after Trump has stepped down. Let's start developing our own future combat aircraft things like the Brits are doing with the Italians and the Japanese. Let's keep up some form of Indo-Pacific strategy. Let's perhaps create an EU TPP trade deal that's being discussed right now. Um, uh there was an EU India deal that's perhaps going to be built at the moment. I think the smaller states are trying to test the thesis that we're not going to be dominated by the big ones next time round. At least you got to try. They might fail. Um, but have a go at it.
Can I can I make an an optimistic quasi optimistic point? You know, I never want to be too optimistic, but it's important to understand that the United States cares greatly about three areas of the world. Europe, which has historically been the most important area of the world to the United States, but no longer is, the Middle East, and here mainly the Persian Gulf. And then three, East Asia. And East Asia is the most important of the world part of the world for the United States strategically today because of the US China competition. But the fact is that the United States is deeply enshed in wars in the Middle East mainly because of our alliance with Israel. And there's a good chance, as you know, we may go to war against Iran in the fall. And furthermore, we're deeply enshed in the Ukraine war. We're trying like crazy to get out. At least Trump is, but he's been unsuccessful. The fact that we're inshed in the Middle East and we're enshed in Europe means that the last thing we want is a crisis in East Asia. Have you all been noticing that President Trump is going to great lengths to make sure we don't have trouble in East Asia? Because we would be really really in the deep kimchi. And the reason is that we have all sorts of military liabilities visav China in terms of our force structure here because we haven't paid enough attention to building up our force structure. Plus, we're pinned down in East Asia, excuse me, in uh Europe and and in the Middle East. So I think that one could make an argument for the foreseeable future it's likely that there won't be a major crisis in East Asia and that is all for the good. So all of this is to say you Koreans should hope that the United States remains deeply engaged in the Middle East and deeply engaged in Europe so that we don't cause any trouble in East Asia. and you live peacefully for the foreseeable future. I, as an American, have a deep-seated interest in greatly reducing our presence in the Middle East, getting out of the Ukraine conflict so we can concentrate on containing China.
That's a a great way to end. Uh I'm going to call it optimism uh that we are going to have a period of time here in in East Asia in South Korea where we can focus on the the problems we've talked about today about focus on the the challenges that APEC is seeking to address to build peace and prosperity in this region. So I want to thank Dr. Mir Shy, Dr. Nibblet very much for their great insights and please let's uh thank them with a nice round of applause. [Applause] Thank you very much.