NOTE: We will analyze events related to the storming of the US Capitol in next month’s State of the Order, which will assess the month of January.

Reshaping the order

This month’s topline events

A Big Deal for Brexit. After a protracted year of negotiations, Brussels and London reached a post-Brexit trade agreement, just days before Britain’s impending departure from Europe’s single market on January 1. The deal averts the imposition of quotas and tariffs and maintains free trade across the channel, as Britain charts its own course following its formal withdrawal from the EU last January.

• Shaping the order. The deal between the world’s second and fifth largest economies prevents a significant disruption in global trade that many economists predicted would occur without an agreement. While other aspects of the UK-EU relationship still remain to be negotiated, the agreement also marks the ends of a period of rancor among America’s closest European allies and could open the door to closer cooperation on global challenges.  
• Hitting home. The agreement is good news for Americans, as the free flow of goods between Europe and the UK will benefit US businesses and consumers.
• What to do. Despite leaving the EU, Britain will continue to be an influential actor on European and transatlantic political and security issues. Washington should embrace London’s desire to play a greater role on the global stage, while simultaneously reaffirming America’s commitment with the EU and cooperation with NATO allies in Europe. 

China’s Economic Moves. The EU and China announced a new Comprehensive Agreement on Investment (CAI), a deal seven years in the making that significantly expands China’s market to European investors and has been described as the “the most ambitious agreement that China has ever concluded with a third country.” The agreement comes amidst an escalating trade dispute between China and Australia after Beijing posted a fabricated image showing an Australian soldier murdering an Afghan child – a move in which the EU joined the US, Canada, Japan, and other nations in castigating Beijing for its “irresponsible” actions. 

• Shaping the order. While it commits Beijing to a more level playing field on European trade and investment, the EU’s decision to move forward with the CAI could undercut the Biden administration’s desire to develop a coordinated approach among the US and its allies and partners for dealing with China.  The deal could also embolden China, suggesting there is little price to pay for its “wolf warrior” diplomatic tactics against Australia and other nations and for its continuing crackdowns in Hong Kong and Xinjiang.  
• Hitting home. China’s efforts to sow divisions between the US and its allies on economic engagement with Beijing could place US companies at a competitive disadvantage.  
• What to do. While the CAI moves through the EU review process, the incoming Biden administration should proactively engage with Brussels to strengthen alignment of policy on Chinese trade and investment. At the same time, the US should continue to support Australia and work with the EU and other partners to counter China’s coercive economic diplomacy.

Forging a New D-10. British Prime Minister Boris Johnson has invited the leaders of Australia, India, and South Korea to the G7 Summit, which Britain is hosting this summer, marking the first time that the “D-10” grouping of democracies will meet at leaders level (officials from the D-10 have convened at lower levels under the aegis of the Atlantic Council). The move is consistent with President-Elect Biden’s intention to strengthen democratic cooperation by organizing a Summit for Democracy after he takes office.

• Shaping the order. The expansion of the G7 to a new D-10 could provide an influential forum for the US and its allies to coordinate strategies on a range of pressing global issues, from China and Russia, to technology norms and climate change. The meeting could serve as the first step toward permanent expansion to a D-10, which will require unanimous support among current G7 nations.
• Hitting home. As the US confronts its own domestic governance challenges, the D-10 could also provide a venue for discussion among allies on defending democracy at home and addressing economic grievances.
• What to do. Washington should embrace London’s effort to forge a new D-10 and work closely with allies to identify priorities for a common strategic agenda. But before agreeing to a permanent expansion, Washington should reach out to New Delhi and seek to overcome potential obstacles regarding India’s participation in this format.

“And so I say again, directly to our EU friends and partners, I think this deal means a new stability and a new certainty in what has sometimes been a fractious and difficult relationship. We will be your friend, your ally, your supporter…[Although] we have left the EU, this country will remain culturally, emotionally, historically, strategically, geologically attached to Europe…”
– British Prime Minister Boris Johnson

State of the Order this month: Weakened

Assessing the five core pillars of the democratic world order    

• Democracy (↓) – Despite the Electoral College certification of Joe Biden’s victory in the US election, President Donald Trump refused to concede, amplifying his unsubstantiated claims of voter fraud and vowing to fight on. China continued to implement its brutal crackdown on Hong Kong, handing prison sentences to prominent pro-democracy activists, including Joshua Wong, and detaining media tycoon Jimmy Lai, a leading figure of the pro-democracy movement, and reportedly forcing billionaire entrepreneur Jack Ma into hiding. The EU-China investment agreement also sparked criticism for downplaying China’s human rights practices. French president Emanuel Macron gave Egyptian dictator Abdel Fattah el-Sissi France’s highest honor, the Legion d’Honneur, during a visit to Paris this week – a controversial move given el-Sissi’s dismal record on human rights. In a more positive development, the US blocked cotton imports from China Xinjiang province over forced labor concerns. Overall, the democracy pillar was weakened. 
• Security (↓) – Russia was reportedly behind a massive penetration of several US government computer networks and those of major private-sector companies, raising significant security and intelligence concerns. In addition, Iran planned to ramp up uranium enrichment closer to weapons grade level in response to the assassination of its top nuclear scientist. On a positive note, Morocco became the latest Arab nation to recognize Israel; however, the Trump administration’s unilateral decision to recognize Moroccan claims to the disputed territory of the Western Sahara as part of the deal prompted concerns.  On balance, the security pillar was weakened.
• Trade (↑) – The resolution of Brexit talks in favor of free trade across the channel was as a significant positive development toward maintaining an open global economy. The EU-China investment agreement may help expand market access for European companies, but the escalating dispute between China and Australia resulted in new trade restrictions. Separately, the US designated Switzerland and Vietnam as currency manipulators, setting the stage for the imposition of tariffs against two otherwise friendly nations. Overall, the trade pillar was strengthened.
• Commons (↓) – The coronavirus pandemic continued to soar across Europe and the US, as a new more contagious strain began to spread in the UK, spurring more drastic lockdowns – even as distribution of the coronavirus vaccine began. China successfully landed a robotic spacecraft on the surface of the moon, becoming the third nation after the US and the former Soviet Union to bring back lunar samples – and prompting concerns that Beijing may be preparing for a great power competition over resources in space. Overall, the global commons pillar was weakened.
• Alliances (↔) – On a positive front, the US and its allies in Europe and Asia stood together with Australia in criticizing China aggressive economic tactics. The European Commission put forward a proposal for a new transatlantic agenda highlighting the pursuit of common interests and shared values as President-elect Joe Biden takes office; however, the EU’s separate investment agreement with Beijing could hamper unity and coordination. Separately, the US imposed sanctions on Turkey over its acquisition of Russian S-400 air defense system, a move likely to worsen already problematic ties between the two NATO allies. On balance, the alliances pillar was unchanged.

Strengthened (↑)________Unchanged (↔)________Weakened (↓)

What is the democratic world order? Also known as the liberal order, the rules-based order, or simply the free world, the democratic world order encompasses the rules, norms, alliances, and institutions created and supported by leading democracies over the past seven decades to foster security, democracy, prosperity, and a healthy planet.

This month’s top reads

Three must-read commentaries on the democratic order     

• Joseph Nye writes in the National Interest that the question Biden faces is not whether to restore the liberal order, but whether the US can work with an inner core of allies to promote democracy and human rights, while cooperating with a broader set of states on rules-based institutions.
• Anders Fogh Rasmussen suggests in the Wall Street Journal that Biden should build a global democratic alliance to rebuild multilateralism and advance a free world.
• Laura Rosenberger writes in Foreign Affairs that democratic values provide the United States and its allies with a competitive advantage over authoritarian challengers. 

Action and analysis by the Atlantic Council

Our experts weigh in on this month’s events

• The Scowcroft Center for Strategy and Security hosted a virtual event on December 15 and 16 on renewing US leadership in the world as the Biden administration gets set to take power. The event featured the release of a comprehensive allied strategy for China by Jeffrey Cimmino and Matthew Kroenig and a report on top ten risks and opportunities for 2021 by Mat Burrows and Robert Manning.
• Fred Kempe writes in support of Biden’s call for a summit of democracies and lays out a transatlantic agenda for a “new global alliance of like-minded partners.”
• The Washington Post highlights the efforts of the Atlantic Council and Ash Jain to advance the concept of a D-10 grouping of democracies to address global challenges.  
• British MP Tom Tugendhat and Rep. Tom Malinowski co-chaired a virtual hearing of the Free World Commission, convened by the Atlantic Council and comprised of influential legislators from leading democracies, on December 9 to discuss China’s challenge to a rules-based, democratic order. 
• Jeffrey Cimmino, Ash Jain, and Matthew Kroenig, in an Atlantic Council report for the Free World Commission, outline the challenges posed by China and set forth recommendations that leading democracies can take to counter these challenges.
• Anna Downs and Ash Jain, in an Atlantic Council issue brief prepared for the Free World Commission, set forth recommendations for leading democracies to counter China’s crackdown in Hong Kong.
• Frances Burwell explains, in an Atlantic Council issue brief, that the Biden administration must meet the challenge of building better US-EU cooperation on digital issues for the sake of transatlantic security, prosperity, and shared values.
• In Foreign Policy, Matthew Kroenig and Jeffrey Cimmino review Dan Blumenthal’s new book, The China Nightmare: The Grand Ambitions of a Decaying State.
• Edward Fishman and Ash Jain write in an Atlantic Council issue brief prepared for the Free World Commission that leading democracies should coordinate on strategies to counter the Kremlin’s challenge to a democratic world order.

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The Democratic Order Initiative is an Atlantic Council initiative aimed at reenergizing American global leadership and strengthening cooperation among the world’s democracies in support of a rules-based democratic order. Sign on to the Council’s Declaration of Principles for Freedom, Prosperity, and Peace by clicking here.

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Image: European Commission President Ursula von der Leyen welcomes British Prime Minister Boris Johnson in Brussels, Belgium December 9, 2020. Olivier Hoslet/Pool via REUTERS