I’ve decided that, after all the bogus political rules and arguments over Russian planes in England, that “Axis and Allies 1940” is an anachronism.  A 2 sided game only makes sense after December 1941.

I’m inclining more towards the feeling that Global 1940 should have been a four sided game, rather than assuming that the classic Axis vs Allies 1942 alliances will automatically form.

Projecting ahead to an “Ultimate” version of A&A, my outline would be a game with 5 starting scenarios, on a map which can be set up for any of these.

The first 3 scenarios

Case White: September 1939
Case Yellow: April 1940
Barbarossa: June 1941

would be 4 sided games:

UK & France start as the “Allies”
USA is neutral, but can only ever join the Allies.  Until it goes to war, it behaves exactly the same as any minor neutral; that is it does not collect income nor build units.

Germany is Axis
For White & Yellow, Italy is neutral but can only ever join the Axis, which it does automatically on it’s first turn after Germany captures an enemy VC for the first time. Until then it behaves as a neutral.

USSR starts neutral, and can join or attack any of the other 3 power groups.  It can also invade any bordering neutral without provoking war with the other 3 sides.
Some limit when not at war - perhaps it can only spend to replace losses in battles with neutrals?

For Japan same as USSR.  Although not at war with a major power, Japan starts at war with China and therefore can collect income and build units.

Every country in a power group should play simultaneously; that is France, UK and USA (when it goes to war) move and fight at the same time and therefore often together.

Same for Germany and Italy when at war.

Alliances between any 2 of the 4 groups are limited - for example an alliance between the Allies and the USSR does not allow each of the groups to share territory.
The four groups continue to play separately, even when 2 or 3 of them are allied.

Alliances occur when 2 groups are at war with a common enemy, for example if the Axis is at war with the Allies and attacks USSR, then the Allies and USSR become Allies automatically until the Axis is defeated (i.e Rome and Berlin are occupied).*

However, it does not follow that USSR becomes at war with Japan just because Russia’s Western Allies are.
The Allies player may try to insist that USSR declare war on Japan in order to forestall a “Cold War”, at least until Japan is defeated…
But Russia is not forced to comply.

Chinese forces should be divided between Allied KMT (Nationalists) & CCP (Communists), the latter controlled by the USSR player. These forces can attack each other and fight Japan without compromising relations between the main powers.

4th scenario is December 1941

Initially a 3 sided game with USSR now allied to the Allies (though still played as a separate group).

5th Scenario is Case Blue: June 1942

A 2 player game with Japan now allied to the Axis.  This is the only scenario that really makes sense as a 2-sided game.

In all cases the OOP would be:

Axis (Germany & Italy)
USSR & CCP
Japan
Allies (UK etc, France, KMT, USA)

I personally am not convinced of the case for the UK and Empire economies to be split, though of course those of France and the USA would be separate, as would those of Italy and Germany.

*The following anomaly occurs: What if USSR attacks Axis and Allies forces simultaneously?  Since it cannot become allied to either side, it must become a third belligerent group, with all three at war with the other two at the same time.
Or should it be forced to choose, i.e. if it’s first combat on a round attacks Germany, does that automatically make Russia Allied and therefore force it to cancel combats (retreat) against Allied tts?
Or should it be banned from moving into combat against 2 sides at war with each other?
Or should alliances be less formal, that is even when having a common enemy 2 sides have to verbally agree to an alliance before it becomes formal?#

That is the 2 sides cannot attack each other until the common enemy is defeated.

Note that neutral alignments need to be adjusted, with some neutrals “Pro-Soviet”.  Well, Mongolia anyway.
Finland might best be described as “Anti-Soviet”, therefore Pro anyone at war with the USSR.