The rule-maker race

In the coming decades, the question of who sets the global rules, standards, and norms guiding technology, trade, and economic development will be paramount. Having lost their exclusive prerogative in this domain, some Western governments have begun to rethink the universality of the rules-based order

Shanghai, China

Will the West remain committed to the rules-based international order when it is no longer the one making the rules? That will be one of the most intriguing questions of the next two decades. If there is one principle that has united electorates, policymakers, politicians, and media across the West, it is that rules matter for just about everything else. Disrespect of common rules has long been met with intense anger and a forceful response.

Consider the United Kingdom, where prime minister Boris Johnson’s raw charisma enabled him to win and hold on to power, effectively redrawing the country’s political map in the process. Until recently, his public approval had withstood florid displays of incompetence, a rising pandemic death toll, and an economic recession. But Johnson is now finally haemorrhaging support for one simple reason: he and his government went too far in disregarding the rules. The revelation that there was a Christmas party at 10 Downing Street (the prime minister’s residence) last year while the rest of the country was in lockdown has hurt Johnson’s reputation more than any of his other scandals or transgressions.

At the international level, Western governments routinely condemn others for rule-breaking. Russia, for example, has been rebuked for its annexation of Crimea, repeated cyber-attacks on other countries, and physical attacks on Russian dissidents abroad. China, too, has been condemned as a major transgressor. US president Joe Biden may not agree with much that his predecessor said or did, but he has maintained a striking continuity with the Trump administration’s characterisation of China as a global menace that steals intellectual property, maintains illegal subsidies, permits rampant corruption, and is carrying out genocide.

And yet, in the coming decades, the biggest global threat will not be China the rule-breaker, but China the rule-maker. China’s growing influence over international norms, standards, and conventions is a game changer. For centuries, Western powers have taken it for granted that they are the world’s norm-setters, massively influencing other countries’ policies through the “Washington Consensus,” the “Brussels effect,” and other channels.

A term coined in 1989 by the economist John Williamson, the Washington Consensus now broadly refers to market-based economic policies and a limited role for the state. For decades, this Western liberal approach underpinned the work of the International Monetary Fund, the World Bank, and the World Trade Organization, because it was seen as a universal recipe for good governance and prosperity.

The Brussels effect is a newer coinage, popularised by legal scholar Anu Bradford to describe the global impact of the European Union’s regulatory policies. The EU’s standards governing data privacy, product safety, genetically modified organisms, sexual rights, and other issues tend to be adopted as a matter of course by multinational corporations and other countries seeking access to Europe’s massive single market.

Over the last decade, however, the free-market Washington Consensus has been challenged by a “Beijing consensus” of managed globalisation, industrial policy, and state capitalism, while the Brussels effect has run up against a potential “Beijing effect”: China’s export of technology standards through its “Digital Silk Road.”

Moreover, many global rule-setting bodies that once underpinned European and American predominance now have Chinese leaders. These include (or have included) the International Telecommunication Union, the International Organization for Standardization, and the International Electrotechnical Commission. China is poised to set the standards for rapidly developing technologies such as artificial intelligence and robotics, and Chinese companies’ technological infrastructure – built to Chinese standards – has spread to numerous countries.

Would Europeans and Americans respect a global rules-based order that followed “Xi Jinping Thought” instead of Western Enlightenment thinkers? Many in China, Russia, and other countries assume not

As Bradford notes, while the Beijing effect operates differently to the Brussels effect, it still has far-reaching consequences. And as China becomes a bigger trade partner to more countries, its global influence will continue to increase.

Whether the Western commitment to rules will endure therefore has become an urgent question. What if that commitment was always more about the power it conferred than about the underlying principles it upheld? Would Europeans and Americans respect a global rules-based order that followed “Xi Jinping Thought” instead of Western Enlightenment thinkers? Many in China, Russia, and other countries assume that we would not, taking that as proof that our commitment is merely a means to our own ends.

To stay ahead of the curve, some Western governments have begun to rethink the shape of the rules-based order. There is talk of departing from universal, global institutions in favour of a new arrangement based on rules set within likeminded clubs. The EU, for example, is now holding a debate about “strategic sovereignty,” recognising that if it operates as a single bloc, it could have the clout to preserve the rules-based liberal order for itself and other willing participants. The alternative is to submit to illiberal challenges from Xi, Russian president Vladimir Putin, or a return of Trumpism in the United States.

A similar shift is visible across the Atlantic, where the Biden administration has gone from supporting global institutions to imagining a new kind of rules-based order comprising the world’s democracies. The White House’s recent Summit for Democracy could be understood as an archetype for how this new order would function.

It remains to be seen how smaller powers would navigate the changing landscape. One striking clue can be found in the Johnson government’s March 2021 Integrated Review of Security, Defence, Development, and Foreign Policy. Concluding that, “A defence of the status quo is no longer sufficient for the decade ahead,” it advocates a more dynamic approach than merely “preserving the post-Cold War ‘rules-based international system.’”

The defining fights of the twenty-first century will be about who has the power to make the rules. It is currently anyone’s game.

Originally published on 31 December 2021 in Project Syndicate.

The European Council on Foreign Relations does not take collective positions. ECFR publications only represent the views of their individual authors.


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