In January, John Baird told me he was proud that his first trip as Canada's new foreign minister was to Beijing rather than Washington. Canada values its ties with America, he said, and wants to sign a trade pact with Europe. But building new bridges to Asia will help protect his country's economy from an inevitable slowdown in the West. Canada has options.
In February, Taiwan's President Ma Ying-jeou used our scheduled meeting to deliver an impassioned monologue on his country's urgent need to diversify its commercial partnerships. Taiwan has profited from a major agreement with China in 2010, but dozens of other trade deals have been signed in Asia in recent years, and Taiwan has been shut out. Ma would love to see his country win membership in the U.S.-led Transpacific Partnership and sign deals with Singapore, New Zealand, Malaysia and India. But Beijing can make these agreements costly and complicated for all involved, Taiwan's business elite is rushing to deepen ties with the mainland, and Ma's government can't escape China's lengthening shadow. He knows Taiwan needs options but can't get them.
In March, Burma's military strongmen announced they would permit open local elections for the first time in a generation. In April, the votes were cast, the opposition won a resounding victory, and Western governments moved quickly to ease sanctions. This resource-rich country is looking for new friends to ensure it has options.
In April, China's government approved construction of a refinery capable of handling unprecedented volumes of Venezuela's heavy-grade crude oil. This is great news for Hugo Chavez and Venezuela's state oil company PDVSA, which can now ease its reliance on U.S. refineries and diversify its list of customers. In years to come, Venezuela will have new commercial options.
These and a growing number of other countries recognize the urgent need to build a broader set of trade and security ties. Some, like Taiwan, won't succeed, but others will use this strategy to survive and thrive.
There's nothing new about the wisdom of diversified investment, but ongoing fundamental changes in the global order will ensure that a country's ability to avoid over-reliance for security and prosperity on a single dominant ally is about to become more important than at any time in decades. In years to come, every nation will have to create its own options, because there will be no single government or alliance of governments with the political and economic muscle to drive an international agenda.
Welcome to the G-Zero era, a world of every nation for itself. The United States will remain the sole superpower for the foreseeable future, but war-weary, under-employed, debt-plagued voters will reject an activist foreign policy. Europeans won't fill the vacuum; they're busy fighting over how best to save the eurozone. China and other emerging powers won't be much help. They face too many complex challenges at home to accept new risks and burdens abroad. This leadership void won't last forever, but the problem won't be solved this year or next.
Yet, some countries are better positioned than others to prosper in this decentralized global order. Options, the ability to "pivot" among multiple political and commercial partners, can ensure that a country is blessed with resilience as well as growth. In an increasingly crisis-prone world, resilience will be a crucial advantage.
Take Brazil, Latin America's largest consumer market. Its middle class is growing. It's an increasingly important energy exporter, but has a well-diversified economy and a growing self-confidence. But there's another crucial factor that adds resilience to Brazil's strength. Commercial relations with the United States will continue to profit both countries, but Brazil's imports from China have risen more than 12-fold since 2000, and its exports to China have grown even faster. In 2009, China became Brazil's largest trade partner, helping the country absorb the shock of the financial crisis and U.S. recession. Brazil has become a pivot state.
Add Turkey. NATO membership gives Turkey influence in Europe and America. The citizens of many Arab countries look to Turkey as a dynamic, modern Muslim state. The country is a bridge that connects Europe, Asia, the Middle East, and the former Soviet Union. Turkey's government is using all these advantages to build new political and economic partnerships.
Africa has become a pivot continent. For years, cash-strapped African states had to turn almost exclusively to the IMF, World Bank and Western governments for financial help. But in 2010 alone, China's trade with Africa expanded by more than 43 percent, and it replaced the U.S. as Africa's largest trade partner. Africa can now expect multinational and state-owned companies from developed and developing states to compete for access to African consumers and favorable investment terms.
But this is not simply a story of countries pivoting away from America or the West toward China. In fact, Asia is home to several pivot states that want to expand ties with the United States precisely to avoid too-deep a dependence on China and its markets. Indonesia, the world's fourth most populous country and a well-diversified economy, maintains trade ties that are well balanced among China, the United States, Japan and Singapore. Vietnam draws most of its aid from Japan, its arms from Russia, its machinery from China, and its biggest export market from the United States. Traditional Pacific allies like Japan, South Korea, and Australia -- and new friends like India -- are working to bolster ties with Washington as a hedge against China's bid for regional dominance.
Finally, as John Baird reminds us, not all pivot states are emerging markets. Canada remains vulnerable to an American slowdown -- but, thanks to his government's foresight, not as vulnerable as it used to be. The percentage of Canada's exports to countries other than the United States jumped from 18 percent in 2005 to more than 25 percent, and its western provinces now export more to Asia than to the United States. Today, Canada draws nearly 40 percent of its imports from countries other than the U.S. It exports large volumes of oil, natural gas, industrial machinery, auto parts, timber, and other products to many different consumer markets.
We're living in a crisis-prone moment. In just the past four years, the United States has endured a financial crisis and the deepest recession in 75 years. Europe still faces a fundamental threat to the single currency and to the broader European idea. Upheaval continues in North Africa and the Middle East. In a world in transition and turmoil, it helps to have as many partners as possible. That's the power of the pivot.
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