The post-American hedge and the new regionalism

Michael Moran coined the phrase "post-American hedge" in his book The Reckoning to describe how regional partners now treat the US. This is an interesting description but apt description of our partners in the 21st century. Some countries want to have the US as a protective umbrella but they also want to go out and make their own regional arrangements. The hedge is a form of independence which the US will have to accept.

This hedge policy could be based on a number of factors. One, other countries do not trust the US. They do not believe that the US will live up to their commitments to other countries. Two, they do not believe that the US has to power to dominant discussions in other parts of the world. It could be either hard or soft power, but there is the belief that the US does not have the power necessary to make policy stick. Third, countries could believe that their interests are not aligned with the US. Policies across countries differ and if they belief they have enough power to assert their views in regional and global decisions they may follow a unique course.

In the economic area, this type of post-American hedge is seen in regional trade arrangements and international finance. If there is not a dominant power in trade and finance, there is less likely to be global arrangements which standardize terms and conditions for trade and finance. This ultimately will lead to more mercantilistic policies. While there are problems with a dominant hegemony, regionalism caused by diplomatic hedging could we worse for the global economy. There will be improvement in some regional trade arrangements, but bilateral power structures will lead to unique deals which cannot transfer across countries.