Can Europe and America rebuild a rules-based world order?

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

File photo. The American and European Union flags fly side by side as preparations continue for the Ryder Cup 2016 at the Hazeltine National Golf Club in Chaska, Minnesota, USA, 26 September 2016. [Tannen Maury/EPA/EFE]

The first major test to revive liberal internationalism is likely to be the UN climate change summit in Glasgow next autumn, which should adopt an agreement with teeth, with enforceable rules and penalties for non-compliance, writes David Clark.

David Clark was Special Adviser on Europe at the UK Foreign Office 1997-2001 and now works as an independent analyst specializing in foreign policy and European affairs.

Joe Biden’s election as US President has been welcomed across much of Europe as an opportunity to revive liberal internationalism and rebuild the transatlantic alliance. After four years of Donald Trump’s ‘America First’ nationalism, there is a huge amount to do to make those hopes a reality. Multilateral institutions have become weaker, democracy has continued to retreat and established alliances have started to fragment. Almost all of the instruments required to reverse these developments are in need of repair.

The rise of populism and nationalism has done particular damage to the idea of a rules-based international order. Few were surprised earlier this year when Russia formalised its rejection of international legal norms by passing a constitutional amendment allowing it to disregard the rulings of international courts and tribunals. What is new and problematic is the extent to which Putin-style ‘sovereign democracy’ has found vocal and powerful advocates within the Euro-Atlantic community.

The determination of Hungary and Poland to flout EU governance standards on democracy and the rule of law – even to the extent of disrupting EU decision-making – is one example. Another is the UK’s Brexit populism and Boris Johnson’s threat to break international law by unilaterally renouncing his Withdrawal Agreement with Brussels. Trump may have been defeated at the polls, but his legacy continues to inspire forces that will be challenging for power in France and Italy in the next three years.

The retreat from rules as the foundation of international diplomacy has enormous implications for global governance and the EU’s future. Rules foster predictability and trust in relations between countries, generating global public goods like security and open trade, and making it possible to agree long-term solutions to the most serious global challenges. Populists, however, see everything in transactional, zero-sum terms, assuming bad faith and behaving accordingly. The problem is that you can’t fight a global pandemic, stop climate change or build collective security on that basis.

The weakening of international legal norms has already had destructive political and economic consequences. Democracy globally is in its fourteenth consecutive year of retreat according to Freedom House. The governance instruments of organisations like the OSCE have failed to prevent slide towards authoritarianism. The reward for Russia’s rejection of human rights norms has been election to the UN Human Rights Council alongside other authoritarian countries, like China and Cuba. The democracy and human rights conditionality the EU and US have often attached to aid and trade has been weakened by the willingness of Russia and China to undercut their efforts.

The arms control and security architecture built at the end of the Cold War has also been critically weakened. Russian violated its security guarantees to Ukraine with the annexation of Crimea, renounced the CFE Treaty and destroyed the INF Treaty with non-compliance. The Trump administration’s repudiation of the Iran nuclear deal has created an arms control vacuum in the Middle East. With very little impetus to create alternative mechanisms of mutual restraint, a free-for-all could lead to regional or global arms races the world can ill afford.

The abandonment of rules-based agreements is also having a harmful impact on international trade and investment. Economic nationalism – the driving force behind Brexit – is undermining support for global economic openness at a time when growth is already under pressure. Trump sidestepped WTO rules in his trade war with China and discussions on the Doha development round remain stalled. There is a risk of the world trade system fragmenting into competing blocs unless multilateralism can be made to work in the interests of all.

Countries increasingly flout the rules because it feels like a cost-free policy option. There was no meaningful pushback when Russia, faced with litigation over the expropriation of Yukos Oil, renounced the Energy Charter Treaty (ECT) in 2009. On the contrary, Russia was rewarded with German support for yet another big energy project – Nord Stream 2. Unsurprisingly, Kazakhstan followed Russia in ECT non-compliance, seizing the assets of a Moldovan company, Tristan Oil, in 2010 in circumstances ruled illegal by the Stockholm court of arbitration three years later. Despite countless rulings in favour of the company, the Kazakh authorities have refused to pay the arbitration award of $500m. Unfortunately, Russia and Kazakhstan’s repeated violations of the rule of law have come with very little protests from either the EU or the US.

If a return to rules is to become possible, the starting point has to be a strong transatlantic alliance. It seems clear that Biden plans at least a partial reversal of Obama’s ‘Asian pivot’ by making the restoration of close working relations with America’s closest European allies one of his early priorities. This is an opportunity the EU should seize. The first major test is likely to be the UN climate change summit in Glasgow next autumn. The goal should be an agreement with teeth, with enforceable rules and penalties for non-compliance.

The countries of the Euro-Atlantic community and their democratic allies across the world possess huge assets and still account collectively for around 40% of global wealth. If they reject the false promise of populism and commit to the task of building new multilateral processes and new forms of rules-based engagement, the effect would be transformative. Just as it was in the 1940s when the foundations of a liberal international order were first put in place in the midst of war and despair, success is primarily a matter of leadership and political will.

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