MARCH 2018 54 BETWEEN CHANGE AND CONTINUITY MAKING SENSE OF AMERICA’S EVOLVING GLOBAL ENGAGEMENT Mika Aaltola, Charly Salonius-Pasternak, Juha Käpylä and Ville Sinkkonen (eds.) MARCH 2018 54 BETWEEN CHANGE AND CONTINUITY MAKING SENSE OF AMERICA’S EVOLVING GLOBAL ENGAGEMENT Mika Aaltola, Charly Salonius-Pasternak, Juha Käpylä and Ville Sinkkonen (eds.) MARCH 2018 54 This publication is the final report of a research project conducted by The Finnish Institute of International Affairs entitled ‘America’s changing global role and its impacts on transatlantic relations’. The project is part of the implementation of the Government Plan for Analysis, Assessment and Research for 2017. The report has been previously published in the publication series of the Government’s analysis, assessment and research activities (3/2018) on 31 January 2018. Reports can be ordered from the Finnish Institute of International Affairs. +358 9 432 7707 [email protected] All FIIA reports and other publications are also available on our website at www.fiia.fi Graphics: Inka Reijonen Language editing: Joan Nordlund Graphic design: Mainostoimisto SST Oy Layout: Kaarina Tammisto Printed by Grano Oy, 2018 ISBN (print) 978-951-769-557-2 ISBN (web) 978-951-769-558-9 ISSN 2323-5454 The Finnish Institute of International Affairs is an independent research institute that produces high-level research to support political decisionmaking and public debate both nationally and in- ternationally. All manuscripts are reviewed by at least two other experts in the field to ensure the high quality of the publications. In addition, publications undergo professional language checking and editing. The responsibility for the views expressed ultimately rests with the authors. CONTENTS List of abbreviations 9 Preface 13 Introduction 15 PART I DOMESTIC DRIVERS OF CHANGE AND CONTINUITY 29 1. The political culture: competing visions for 21st-century America 33 Mika Aaltola & Ville Sinkkonen 2. Institutional and party-political dynamics in the United States 55 Anna Kronlund PART II FOREIGN AND DEFENCE POLICY 73 3. US foreign policy: the “Trump doctrine” 77 Ville Sinkkonen 4. Crosscurrents in US defence policy 93 Leo Michel PART III MULTILATERAL GOVERNANCE 113 5. The uncertain future of the liberal international order 117 Ville Sinkkonen 6. Global economic co-operation in the Trump era 133 Johanna Jacobsson PART IV NEW GREAT POWER POLITICS 151 7. The US-Russia relationship 155 Mark N. Katz 8. The United States and the transforming security environment in Asia 171 Bart Gaens 9. Trends in the transatlantic security relationship 189 Charly Salonius-Pasternak & Mika Aaltola 10. US engagement in the Arctic 205 Juha Käpylä & Harri Mikkola 11. The US and the security of the Baltic Sea region 225 Charly Salonius-Pasternak & Mika Aaltola Conclusion: the emergent waiting game 239 References 255 About the contributors 277 Previously published in the series 280 LIST OF ABBREVIATIONS A2AD Anti-Access and Area Denial AB Appellate Body (of the World Trade Organization) AC Arctic Council ABM Anti-Ballistic Missile AIIB Asian Infrastructure Investment Bank ANWR Arctic National Wildlife Refuge APEC Asia-Pacific Economic Cooperation BRI Belt and Road Initiative BRICS Brazil, Russia, India, China, South Africa (bloc of countries) CBO Congressional Budget Office CETA EU-Canada Comprehensive Economic and Trade Agreement CPTPP Comprehensive and Progressive Agreement for Trans-Pacific Partnership CSDP Common Security and Defense Policy CUSPP Center on US Politics and Power DACA Deferred Action for Childhood Arrivals DCA Dual Capable Aircraft EDC European Defence Community EDI European Deterrence Initiative EEZ Exclusive Economic Zone EMU Economic and Monetary Union (EU) EPA Environmental Protection Agency ERI European Reassurance Initiative ESDP European Security and Defense Policy FISE Finland – Sweden Defense Cooperation FY Fiscal Year FTA Free Trade Agreement GATT General Agreement on Tariffs and Trade GDP Gross Domestic Product GIUK Gap Greenland, Iceland, United Kingdom Gap GLACIER Conference on Global Leadership in the Arctic MARCH 2018 9 GOP “Grand Old Party” (the Republican Party) IAEA International Atomic Energy Agency ICC International Criminal Court ICS Investment Court System IMF International Monetary Fund INF Intermediate-Range Nuclear Forces ISAF International Security Assistance Force ISDS Investor-State Dispute Settlement ISIS Islamic State of Iraq and Syria ISR Intelligence-Surveillance-Reconnaissance JCPOA Joint Comprehensive Plan of Action KORUS US – Korea Free Trade Agreement MDR Missile Defense Review MENA Middle East and North Africa region NAFTA North American Free Trade Agreement NDS National Defense Strategy New START New Strategic Arms Reduction Treaty NORAD North American Aerospace Defense Command NORDEFCO Nordic Defence Cooperation NPR Nuclear Posture Review NSC National Security Council NSS National Security Strategy OCO Overseas Contingency Operations OIR Operation Inherent Resolve OMB Office of Management and Budget PLAN People’s Liberation Army Navy PSI Proliferation Security Initiative QDR Quadrennial Defense Review R2P Responsibility to Protect RCEP Regional Comprehensive Economic Partnership RNC Republican National Committee ROK Republic of Korea SDF Self-Defence Forces (Japan) TAC Treaty of Amity and Cooperation THAAD Terminal High Altitude Area Defense TPP Trans-Pacific Partnership TTIP Transatlantic Trade and Investment Partnership UNCLOS United Nations Convention on the Law of the Sea UNESCO United Nations Educational, Scientific and Cultural Organization UNSC United Nations Security Council 10 MARCH 2018 USAID United States Agency for International Development USTR United States Trade Representative WMD Weapon of Mass Destruction WTO World Trade Organization MARCH 2018 11 PREFACE This report focuses on key internal and external tendencies that influence how the United States understands its role in the world. It also investigates the development of US policies in the international arena, and highlights the potential implications of America’s current and future foreign engage- ment for Europe in general and the Nordic-Baltic region more specifically. The report details the work of a research project that was carried out at the Finnish Institute of International Affairs in 2017. It was previously published in the publication series of the Government of Finland’s analysis, assessment and research activities (3/2018) on January 31, 2018. The research project was carried out and funded within the framework of the Government’s analysis, assessment and research activities, which aims to generate information that supports decision-making, working practices and management by knowledge. The report has been edited by Mika Aaltola, Charly Salonius-Pasternak, Juha Käpylä and Ville Sinkkonen, all from the Finnish Institute of Inter- national Affairs, with the support of an international team of lead authors. The editorial team would like to thank all the contributors for their hard work and insightful efforts. The team is also grateful for the helpful comments provided by the project’s steering group, and the instrumen- tal role played by the coordinating staff and the publications team at the Finnish Institute of International Affairs. MARCH 2018 13 INTRODUCTION BACKGROUND This report investigates the evolution of America’s global engagement after the election of Donald J. Trump as the 45th president of the United States. In particular, the study maps out key internal and external tendencies that influence – even beyond one election cycle or single administra- tion – how the US understands its role in the world. It also investigates the development of US policies in the international arena, and highlights the potential implications of America’s current and future foreign engagement for Europe in general and the Nordic-Baltic region more specifically. In conclusion, a number of rules of thumb are suggested, which Finland as a small but internationally networked and export-oriented state could follow as it (re)formulates its approach to the United States now and in the future. As the results of the 2016 congressional and presidential elections illustrate, the American politico-cultural climate is experiencing pro- found polarisation. Conflictual cultural dynamics with long historical roots have accentuated the inability of the US political system to govern effectively through pragmatic compromise. The demographic makeup of the United States is also undergoing a historical transformation, as the proportion of ethnic minorities in the population keeps increasing. At the same time, perceptions of structural injustice have fuelled a protest mentality among certain sections of society, most notably in the African American community. This belief in the inherent unfairness of the sys- tem is also increasingly apparent among Americans of European descent, MARCH 2018 15 manifest most recently in the activation of Donald Trump’s voter base in the 2016 elections. Coincidentally, new modes of election campaigning and political mobilisation based on fake news and social-media bubbles, along with suspicions of foreign collusion and influence, are topics of everyday discussion in the US. Although the American economy recovered relatively quickly from the 2007/8 financial crisis, the perception prevails that globalisation has not created equal opportunities throughout the country. Income inequalities are increasingly viewed as an ever-strengthening barrier against social mobility – the realisation