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American foreign policy under Donald Trump is widely described as transactional. And rightly so. The president’s mindset could only be described as hugely inimical to international co-operation.
Trump has little regard for global norms or institutions — witness his immediate withdrawal, on taking office, of the US from the Paris climate accord (once again) and the World Health Organization. His world view is zero sum, focused on short-term wins rather than grand strategy.
The narrowness of the president’s conception of security and economic interests is exemplified by his threats to wage a 1930s-style tariff war on friends, neighbours and foes alike. And, more colourfully, by his view of alliances as protection rackets.
Note, though, that the world was going transactional long before Trump. The rise of China, which under Xi Jinping has sought ruthlessly to assert power and influence around the world, made a fracture into transactional global power blocs pretty much inevitable.
Also striking is that rising transactionalism extends far beyond foreign policy. Intractable challenges for international co-operation abound.
First and foremost is climate change which, all agree, requires global solutions. That is what the UN-backed COP summit process is all about. Yet the UN itself says that to keep global warming to no more than 1.5C, emissions need to be cut by 45 per cent by 2030 and reach net zero by 2050.
Too bad that national climate plans by signatories to the Paris agreement would lead, the UN suggests, to a paltry 2.6 per cent decrease in global emissions by 2030, compared with 2019 levels. An orderly energy transition is thus, on current policy, a mirage. In effect, governments’ and companies’ growing concern over the political and economic cost of decarbonisation has spawned an increasingly transactional approach to this immense global challenge.
Meanwhile, the developed countries’ failure to fulfil climate finance pledges to the developing world has shaken confidence in the multilateral process among those experiencing extreme weather or rising sea levels.
A fundamental difficulty is that, if China accounts for over 30 per cent of current global emissions, it is because the developed world has outsourced its dirtiest industries to Asia. Yet Europe’s comparatively low emissions allow populist politicians to say we have no moral obligation to retreat from fossil fuels.
Next, immigration. Geopolitical strains and global warming in the Middle East and Africa drive countless immigrants towards Europe. Given the resulting pressure on housing, public services and the rest, this cries out for co-operative burden sharing between EU member states. Unfortunately the time for co-operative humanitarian solutions is past.
The rise of anti-immigrant populist parties is now an entrenched feature of the European political landscape. Germany is the prime exemplar, not least because former chancellor Angela Merkel fuelled the rise of the far right, anti-immigrant Alternative for Germany (AfD) by offering an open door to asylum seekers escaping the Syrian civil war.
The AfD is now running second in the polls to the Christian Democrats before the federal election on February 23. For Germany and Europe, there is no escape from a national, transactional approach to immigration.
Artificial intelligence is equally problematic. There are few areas of human activity where it will not deliver benefits. But those benefits are being unequally distributed by a handful of countries and companies. There are also myriad risks, among them ethical ones; job losses from AI-induced structural adjustment; and existential risks where AI might surpass human intelligence. Yet co-operative international initiatives have made little progress. Governments and companies are too desperate to muscle in on the AI gold rush.
Finally to business. The economist John Kay has argued convincingly that successful modern companies are necessarily co-operative communities in which technical progress and business development are based on deploying collective intelligence in innovative combinations. If he is right, corporate success is being too frequently subverted by a bonus culture in which executives’ incentives are driven by flawed performance-related pay metrics. This encourages a short-term transactional approach — witness frenetic share buybacks along with reduced investment to inflate the bottom line.
These flourishing and costly species of transactionalism are fast becoming all pervasive. We live in what may soon be an irredeemably transactional age.
john.plender@ft.com
