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High cost to new neutrality

by Yuriko Koike

Throughout the Cold War, the Soviet Union used every imaginable threat and inducement — including the ultimate prize of reunification — to bring about a neutral Germany. But German leaders of both the left and the right, from Konrad Adenauer to Willy Brandt, spurned every Soviet offer.

Will authoritarian mercantilism now succeed where communism failed?

Countries join alliances, or entities such as the European Union, because these groups make the benefits and obligations of membership as unambiguous as anything in international relations can be. For Germany and South Korea, however, relationships with historic allies — NATO and the United States, respectively — appear to be changing before our eyes.

Through their huge purchases of goods, with promises of even more to come, today’s authoritarian/mercantilist regimes in Russia and China may be about to achieve by commerce what the Soviets could not achieve by bribery and threats. And the scale of that commerce is breathtaking, with German exports to China growing from $25.9 billion a decade ago to $87.6 billion in 2011, while South Korea’s exports have increased from $53 billion to $133 billion during the same period of time.

A form of stealth neutralism, indeed, appears to be entering both countries’ diplomacy. Witness Chinese President Xi Jinping’s recent trip to South Korea, German Chancellor Angela Merkel’s unwillingness to impose effective sanctions on Russia for its intervention in Ukraine, and the business-only focus of her just-concluded visit to China.

In both Germany and South Korea, the idea that historic alliances may offer fewer tangible benefits than tacit neutrality — particularly in terms of exports — appears to be taking root, especially among business elites.

Xi’s visit to Seoul was another bold step in China’s systematic efforts to wean South Korea from its commitment to the U.S.-led international economic order. By offering to permit South Korea to settle its bilateral trade accounts in renminbi, and to launch the first-ever Sino-South Korean initiative toward North Korea, Xi is seeking to convince South Korea’s leaders that the country’s future, including reunification, will be determined in Beijing.

China’s invitation to South Korea to participate in a new Asian Infrastructure Investment Bank (alongside other countries in Asia and the Arab world, but excluding Japan and India) furthers Xi’s efforts to create an alternative financial system, with the AIIB mimicking the Asia Development Bank’s work.

China’s embrace of South Korea is part of a long-term strategy to turn it into a subordinate state in terms of foreign and national security policy (much as Finland kowtowed to the Soviet Union in the Cold War). And yet, though courted by all sides in the struggle to maintain stability in Northeast Asia, South Korea now runs the risk of becoming isolated. Every gesture by the South toward one of the protagonists — China, the U.S., Japan and North Korea — elicits so much pressure by the others that its government must then somehow devise a compensatory policy.

For example, following President Park Geun-hye’s request that Xi honor the Korean assassin of a Japanese prime minister, to which Xi readily agreed, she began to discuss joining the U.S.-led Trans-Pacific Partnership free-trade negotiations, in order to assuage the U.S.

As China continued to pursue an anti-Japanese propaganda campaign throughout 2013, Park felt obliged to make some effort to revive ties with Japan by sending a private envoy to Prime Minister Shinzo Abe to seek talks on reconciling their disputes.

Given its insecurity, a byproduct of the Korean Peninsula’s division, South Korea requires, above all, calm and steady partners. But frequent changes in U.S. policy toward Northeast Asia in recent years have disoriented South Korean policymakers, while Chinese policy, though consistent, confronts South Korea’s leaders with choices that they appear unprepared to make.

As a result, South Korea’s elite appears to be splitting into pro-Chinese and pro-American factions that transcend party lines. Over a period of time, the only beneficiaries are likely to be those who call for “Finlandization” of the Korean peninsula.

Meanwhile, the impact on German foreign policy of the country’s deepening economic ties with Russia has been evident throughout the Ukraine crisis. Though Merkel frequently admonished the Kremlin about its intervention in Ukraine, German public opinion — particularly that of the country’s business leaders — tied her hands. Indeed, German big businesses have been the main obstacle to imposing the type of systemic sanctions that might have dissuaded Russian President Vladimir Putin from annexing Crimea and continuing to back the insurgency (which Russia itself incited) in eastern Ukraine.

This is not the only recent case in which Germany has distanced itself from its allies and partners. In Libya in 2011, Germany refused to offer even rudimentary material support to the military intervention staged by its British and French allies.

Germany has also continuously failed to meet its commitment to spend 2 percent of its GDP on defense, at the same time that it has insisted that troubled EU economies stick to austerity budgets that limit their deficits to a fixed proportion of their economic output.

Indeed, throughout the eurozone crisis, Germany did the absolute minimum — and always at the last possible moment — to assist its EU partners. And German leaders’ obsession with maintaining their country’s “golden decade” of exports appears to have gagged them on topics like China’s human rights abuses and its aggressive behavior toward its Asian neighbors. That silence is being rewarded with the first-ever joint Cabinet sessions between a democracy and a communist dictatorship, which will take place in Berlin this autumn.

In both Germany and South Korea, economic strength seems to have produced an illusion of policy independence that is opening a chasm between the two countries and their allies — a chasm that revelations of U.S. spying, on Merkel in particular, have deepened.

Germany and South Korea, however, will gain little, and risk much, if they downgrade their alliance ties in favor of commercially motivated, if unofficial, neutrality. Whatever short-term benefits they receive will be more than offset by their strategic vulnerabilities vis-a-vis Russia and China.

Former defense minister and national security adviser Yuriko Koike, is a Lower House member. © 2014 Project Syndicate