White wall with crack
Decoupling is a process that is fraught with tensions. | Photo: AYOUB AALLAGUI, Unsplash

Decoupling and the “New Cold War”: Cautionary Lessons from the Past

An emerging “new Cold War” appears to pit democracies, led by the US, against autocracies, led by Russia and China. But the analogy between today’s regime competition and that of the “old” Cold War is deceptive. China and Russia today are much more closely intertwined with Western democracies than the Soviet Union ever was. These linkages will complicate the conflict considerably. There is already growing pressure to engage in “decoupling”, that is, to break these interdependencies. Research on past instances of decoupling shows that such processes often exacerbate conflict. This research offers four lessons about the general dynamics of decoupling – and little cause for optimism about today’s disengagement processes.

From interdependence to decoupling

After the Cold War, the creation of a dense web of economic interdependence among states was widely seen as a way not only to improve prosperity but also to secure peace. After all, states enmeshed in interdependent relationships were expected to be wary of disrupting those relationships. Otherwise, they would pay a heavy price by losing access to markets and supplies and harming their own domestic economies.

There are, however, numerous instances in which states have chosen to break existing interdependencies nonetheless in order to pursue goals they valued more highly. Examples range widely from Iran’s radical break with the West in 1979 to the UK’s negotiated exit from the European Union in 2020.

Today, there are powerful voices in Russia, China, and the US-led West that also call for decoupling. They argue that there is a global competition between Western democracies and non-liberal powers and that existing interdependencies create vulnerabilities that could be exploited by the other side. Decoupling, albeit costly, is regarded as a way of reducing these vulnerabilities and increasing security. Early signs of economic decoupling in these relations include moves towards energy independence and supply chain re-organization through “friend shoring” in the West, China’s initiative to reduce its dependence on foreign technologies, and Russia’s reorientation of its energy exports towards Asia.

Decoupling may look like a promising way to disentangle conflictual relationships. However, past episodes of decoupling have demonstrated that the process itself often exacerbates existing conflicts.

Learning from past episodes of decoupling: the Drifting Apart project

Drifting Apart, a recently concluded research project funded by the Leibniz Association, brought together historians, area specialists and peace researchers to examine five past cases of dissociation, i.e. of states disengaging from international cooperation. It covered a broad range of cases: Iran’s split from the West in 1979, East Germany’s exit from the Warsaw Pact, Russia’s disengagement from the European security order since the mid-2000s, China’s creation of alternative financial institutions since 2013, and the UK’s exit from the EU since 2016.

Despite the differences between the cases and although the project’s findings are only a first cut, some typical patterns are evident and four general lessons can be drawn.

Lesson 1: Decoupling tends to increase tensions

Decoupling is very likely to increase tensions for at least two reasons.

First, processes of decoupling are often embedded in broader conflicts. As our cases show, states typically withdraw from cooperation because they have wider disagreements. The individual act of disengagement is then easily categorized as yet another contribution to the broader conflict. Take China’s initiative to establish the Asian Infrastructure Investment Bank (AIIB). Even though China attempted to depict its move as complementary to the global financial architecture, the US saw it as an attack on that architecture and another attempt to strengthen China’s position in strategic competition with the US.

Secondly, the act of decoupling is by definition disruptive. It removes established ways of doing things and makes it necessary to come up with new ones. This readjustment will typically be a process fraught with friction and conflict. Even in a benign case like Brexit, where the former partners explicitly negotiated and codified the contours of their new relationship, tempers flared and at one point there were even navy vessels dispatched in a dispute over fishing quotas.

Lesson 2: Ideational conflict increases tensions

Our cases also show that some dissociation conflicts are more difficult to manage than others. We distinguished between dissociation conflicts that centered on the distribution of material costs and benefits (“distributional conflicts”) and conflicts that centered on disagreements about fundamental values (“ideational conflicts”). Tensions increased especially in cases where both sides focused on their ideational differences.

A case in point is Iran’s dissociation from the West since 1979. Especially in the confrontation between the United States and Iran, both sides emphasized their ideational differences, so that relations quickly deteriorated and remained very conflictual in the long run. West Germany and Iran, on the other hand, de-emphasized the ideational side of their conflict, allowing them to maintain low-key forms of cooperation despite the rift.

Similarly, Russia’s distancing from the Western security order since the mid-2000s  escalated in part due to its ideational framing on both sides, which pitted Western ideas about order against Russian ideas. This made it next to impossible to treat territorial and economic conflicts as issues to be resolved through negotiation. In 1989/1990, in contrast, Germany and the Soviet Union were able to treat East Germany’s exit from the Warsaw Pact mainly as a distributional issue, in which West German payments to the Soviet Union were instrumental in settling the conflict peacefully and reducing tensions. The conflict about the AIIB also was difficult to resolve as long as the U.S. viewed it in the context of its ideational competition with China.

Lesson 3: Domestic dynamics reinforce international conflict

Given how an emphasis on ideational issues tends to increase tensions, it would seem rational for policymakers to avoid ideational framings of their policies. However, our case studies also show that they are rarely free to do so. They are often confronted with domestic processes triggered by dissociation that push them toward an ideational framing and uncompromising stance at the international level.

This is so because decoupling affects the economic interests and ideational preferences of actors within states. Governments have strong incentives to shift blame for problems resulting from decoupling to the other side, closing the ranks at home and thus ensuring their political survival. Brexit strained EU-UK relations because Theresa May and Boris Johnson had made their governments dependent on a domestic coalition of actors supporting a “hard” Brexit. Following Iran’s abrupt dissociation from the Western world in 1979 the religious leadership deliberately cultivated the image of the US as the arch-enemy and escalated the conflict with Washington in order to suppress moderate voices within the revolutionary coalition.

Among our five cases, there is only one in which a government deliberately tried to ignore domestic voices for a tougher stance. This forms the basis for our final, somewhat hopeful lesson. But even this case shows how difficult it is to resist pressure for international escalation.

Lesson 4: Defusing conflict is difficult but possible

That one case is East Germany’s withdrawal from the Warsaw Pact in 1989/1990. Gorbachev and his supporters sought a cooperative solution but met resistance in the Politburo because withdrawal threatened the Warsaw Pact as an organization and could be seen as ultimate defeat of the Soviet Union in the ideational conflict with the US. Gorbachev, however, chose to de-emphasize this wider frame and instead focused on the immediate distributional issues resulting from the withdrawal. In particular, he demanded economic concessions from Germany to compensate those who were directly affected, namely the troops who were transferred from East Germany. When he received those concessions, the GDR’s disengagement from the Warsaw Pact became an example of a successfully managed dissociation.

This shows that despite all the factors favoring an intensification of conflict in decoupling processes, their peaceful management can be achieved. However, it also shows the dangers decision-makers expose themselves to in such instances. By basically overruling dissenting voices in the inner decision-making circle, Gorbachev chose a high-risk strategy that endangered his political survival. It contributed to the attempted coup against him in August 1991. Ideational dissatisfaction with the new situation remained a strong political force in post-Soviet Russia and is still a key factor in Putin’s imperial policies today.

Managing decoupling in times of regime competition

The lessons from past cases of decoupling are sobering. Although they have different historical backgrounds and the scope of the interdependencies affected varies considerably, they all show that decoupling is a process that is fraught with tensions and tends to exacerbate underlying conflicts.

Of particular concern is that the underlying conflict today – regime competition – is increasingly understood as an ideational struggle. Russia’s war against Ukraine has exacerbated this situation by further supporting the narrative of a fundamental ideational conflict between the two sides.

Managing decoupling in this context will require de-emphasizing ideational issues and, wherever possible, treating conflicts as distributive issues for which compromise solutions can be found. But this will be easier said than done. It will require hard choices. Governments would not only have to be willing to provide material compensation to the disadvantaged side. They would have to prioritize defusing international conflict over asserting their own values and build domestic coalitions to support this approach. Otherwise, there is a real danger that the hardening of positions on all sides will lead to a spiral of conflict. The “new Cold War” would then feed itself: decoupling in the context of regime competition would generate resentment, as the other side could be blamed for cutting off profitable economic ties for ideological reasons. This would then reinforce the ideational framework and further increase tensions.

 

Further reading:

Forum “Drifting Apart: The Dissociation of States from International Cooperation and its Consequences”, ed. by Matthias Dembinski and Dirk Peters, Historical Social Research 47: 2, 2022.

Christian, Ben / Coni-Zimmer, Melanie / Deitelhoff, Nicole / Dembinski, Matthias / Kroll, Stefan / Lesch, Max / Peters, Dirk: Multilateralismus als Rahmenordnung: Zur Krise und Zukunft der multilateralen Weltordnung, PRIF Report 2/2023.

Matthias Dembinski
Dr. Matthias Dembinski ist wissenschaftlicher Mitarbeiter im Programmbereich „Internationale Institutionen“ und Projektleiter an der HSFK. Er forscht zu Fragen von Gerechtigkeit in den internationalen Beziehungen, regionalen Sicherheitsorganisationen und humanitären Interventionen. Sein regionaler Schwerpunkt ist Westeuropa. // Dr Matthias Dembinski is Senior Researcher in the research department “International Institutions” and project manager at PRIF. His research interests are questions of justice in international relations, regional security organisations and humanitarian interventions. His regional focus is Western Europe.
Dirk Peters
Dr. Dirk Peters ist Vorstandsmitglied und wissenschaftlicher Mitarbeiter der HSFK im Programmbereich „Internationale Institutionen“. Seine Forschungsschwerpunkte sind EU-Sicherheitspolitik und die sicherheitspolitische Rolle von Parlamenten. // Dr Dirk Peters is Member of the Execuive Board and Senior Researcher at PRIF's research department “International Institutions”. His research focuses on EU security policy and the security policy role of parliaments.

Matthias Dembinski

Dr. Matthias Dembinski ist wissenschaftlicher Mitarbeiter im Programmbereich „Internationale Institutionen“ und Projektleiter an der HSFK. Er forscht zu Fragen von Gerechtigkeit in den internationalen Beziehungen, regionalen Sicherheitsorganisationen und humanitären Interventionen. Sein regionaler Schwerpunkt ist Westeuropa. // Dr Matthias Dembinski is Senior Researcher in the research department “International Institutions” and project manager at PRIF. His research interests are questions of justice in international relations, regional security organisations and humanitarian interventions. His regional focus is Western Europe.

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