Reshaping the order

This month’s topline events

France-AUKUS Fallout. Australia, the United Kingdom, and the United States announced a new Indo-Pacific security partnership, known as AUKUS, that involves the sharing of advanced technologies and joint production of nuclear-powered submarines. But in entering the agreement, Australia also cancelled a major submarine contract with France, resulting in an acrimonious public rift among allies in which French leaders castigated Australia and the United States for a betrayal of trust and temporarily recalled its ambassadors to the two nations.

• Shaping the Order. The formation of AUKUS represents a significant effort to bolster the defense capabilities of US allies in preparation for a long-term strategic competition with China. It also showcases America’s emphasis on the Indo-Pacific and the importance of new alliance frameworks that connect transatlantic and transpacific partners. But the fallout with France — though partly stemmed by a subsequent Biden-Macron phone call — could have serious ramifications, potentially undermining allied solidarity to deal with China and other key global challenges.  
  
• Hitting Home. America is stronger and more likely to succeed in confronting global challenges when it is working closely with its core allies and partners.
  
• What to Do. With President Joe Biden set to meet with French President Emmanuel Macron in late October, Washington should seek to supplement AUKUS with an additional framework for cooperation that incorporates France’s important role in the Indo-Pacific, while continuing efforts to forge a common strategic approach among leading democracies on China.

Biden’s Quad Summit. Biden hosted the first ever in-person summit of the Indo-Pacific Quad, bringing together the leaders of Australia, India, and Japan for an hours-long meeting at the White House that resulted in a joint statement affirming their shared values and commitment to defending an open, rules-based order. The leaders also agreed to advance cooperation on COVID-19 vaccines and semiconductor supply chains, as well as to establish a student scholarship program. China’s foreign minister denounced the Quad as an “exclusive closed clique” that runs against “the trend of times.”

• Shaping the Order. The summit reaffirmed the Biden administration’s commitment to global alliances and partnerships – amid doubts about US leadership following the Afghanistan withdrawal – and highlighted efforts to strengthen Indo-Pacific cooperation in the context of a rising China. In addition, Indian Prime Minister Narendra Modi’s participation in the summit reinforced India’s gradual foreign-policy shift away from its traditional non-aligned role and toward closer cooperation with the United States and leading democracies.
  
• Hitting Home. With its focus on technology cooperation, the Quad could serve as a platform for reducing dependence on China for critical goods and lead to new opportunities for US businesses. 
  
• What to Do. The US should continue efforts to bolster the Quad, which provides an important framework for strategic engagement with key Indo-Pacific democracies. At the same time, with European allies eager to engage in the region, the Biden administration should establish an additional coalition, such as a D-10, that brings America’s core transatlantic and transpacific allies under a common umbrella to advance a free and open Indo-Pacific.

China’s Pacific Trade Gambit. China applied to join the CPTPP, the transpacific free trade pact initially negotiated by the United States and several major trading partners, including Japan, Australia, Canada, and Mexico, as a potential counterweight to China, but from which the Trump administration withdrew in 2017. Taiwan quickly followed with an application to enter as well, while the UK began talks to discuss its interest in joining. With the consent of all members required for expansion, Japan’s economic minister cast doubt on Beijing’s application, stating that China would have to meet “extremely high standards” before it could be considered for entry.

• Shaping the Order. China’s bid to enter the CPTPP represents a diplomatically savvy move to position itself as a willing trade partner and global leader on free trade, in contrast to the United States, which is increasingly viewed as pursuing a more protectionist agenda. While unlikely, at least in the short-run, Beijing’s entry into the agreement potentially increases economic dependence on China, particularly among smaller member states. 
  
• Hitting Home. Though they can result in economic dislocation and cause adverse impacts to certain industries, free and fair trade agreements generally increase overall prosperity, create new jobs, and lower prices for consumers, and America’s decision to stay out of the CPTPP has likely been a net loss for the US economy.
  
• What to Do. The Biden administration should seek to join a renegotiated CPTPP as part of its broader plans to reframe global trade benefits for the middle class. Alternatively, Washington should seek to develop a new trade framework that binds together leading democratic economies across the transatlantic and transpacific into a single common market.

Quote of the Month

“We are liberal democracies that believe in a world order that favors freedom.  And we believe in a free and open Indo-Pacific because we know that’s what delivers a strong, stable, and prosperous region so our citizens, our peoples can realize their hopes and dreams for their futures in a liberal and free society.” 

– Australian Prime Minister Scott Morrison, Quad Summit, September 24, 2021

State of the Order this month: Unchanged

Assessing the five core pillars of the democratic world order    

Democracy (↔)

• China released two Canadian citizens who had been detained for three years over what appears to have been an act of “hostage diplomacy” in response to the earlier arrest by Canadian authorities of a Huawei executive on US fraud charges. The two Canadians were released hours after the Chinese executive was released in Canada.
• The International Criminal Court approved a formal investigation into possible crimes against humanity allegedly committed under the leadership of Philippine President Duterte in the context of his “war on drugs.” Days later, Duterte announced he would retire from politics, walking back reports that he was planning to run for the vice presidency in 2022.
• The Taliban effectively banned girls from secondary education in Afghanistan, by ordering high schools to reopen only for boys, and said it would resume executions and amputations of the hands to enforce its harsh interpretation of sharia law.
• Under pressure from Russian authorities, Apple and Google removed an app that allowed Russians to coordinate protest voting in the country’s recent parliamentary elections, a sharp escalation in the Kremlin’s campaign to constrain political opposition to President Vladimir Putin and regulate internet activity.
• Belarusian president Alexander Lukashenka and Vladimir Putin agreed to bolster security and economic ties as the two countries resumed previously stalled efforts to move toward closer political integration. Having alienated Europe, Lukashenka has become increasingly reliant on Putin’s support to remain in power, for which the price may be surrendering elements of Belarus’ sovereignty.
• On balance, the democracy pillar was unchanged.

Security (↑)

• The AUKUS agreement forged by Australia, the United Kingdom, and the United States will bolster US and allied undersea naval capabilities and broader technology cooperation in the Indo-Pacific, while helping to deter China’s coercive actions in the region.
• The Quad Summit also enhanced cooperation among leading Indo-Pacific democracies to counter China’s growing influence.
• Following joint exercises between Ukraine and NATO military forces, Russia warned that any expansion of NATO military infrastructure in Ukraine would cross its “red lines.”
• Iran became a full member of a Central Asian security body led by Russia and China – the Shanghai Cooperation Organization – in an effort to bolster security and economic ties with the two powers and help avert sanctions imposed by the West.
• With new initiatives to advance cooperation in the Indo-Pacific, the security pillar was strengthened.

Trade (↔)

• As discussed above, China applied to join the CPTPP, the transpacific free trade agreement, a move that if successful would create the world’s largest free trade zone. It would also, at least for now, exclude the United States, which initially negotiated the pact as a potential counterweight to China. Taiwan and the United Kingdom also sought to join the agreement.
• With prospects dimming for a post-Brexit free trade agreement with the United States, British officials said they were considering joining the US-Mexico-Canada free trade agreement.
• Top US and EU officials met in Pittsburgh for the launch of the US-EU Trade and Technology Council, discussing plans to coordinate joint responses to emerging technologies and pursue common efforts to counter unfair foreign trade practices — an implicit reference to China.
• Overall, the global trade pillar was unchanged.

Commons (↔)

• President Biden, speaking with global leaders at the UN General Assembly meeting in New York, announced that the US will donate an additional 500 million doses of the COVID vaccine to developing countries, bringing the total US donation to over 1.1 billion vaccines.
• Amid US special envoy for climate John Kerry’s visit to China, Chinese officials warned that mutual cooperation on climate cannot be separated from other geopolitical issues. Separately, Chinese President Xi Jinping pledged that China will stop building coal-burning power plants overseas, a move that, if implemented, could have a significant impact in reducing greenhouse gas emissions. 
• Overall, the global commons pillar was unchanged.

Alliances (↔)

• As discussed, the AUKUS agreement resulted in an unusual public rift between France and the United States, leading Paris to recall its ambassadors to Washington and Canberra. Biden and Macron, later speaking by phone, agreed to further discussions on resolving the issue, and Macron agreed to the return of France’s ambassadors.
• AUKUS and the first-ever in-person meeting of the Quad Summit, hosted at the White House, both served to advance US alliances and partnerships in the Indo-Pacific, enhancing mutual cooperation in the context of China’s rise.
• Meeting with Ukrainian president Zelensky at the White House, President Biden reinforced the administration’s commitment to support Ukrainian sovereignty and pledging, in a detailed joint statement, to bolster cooperation with Ukraine on defense, energy, and economic issues.
• 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     

• Charles Edel and David Shullman, writing in Foreign Affairs, argue that the Chinese Communist Party is seeking to promote its style of authoritarianism to illiberal actors around the world by spreading propaganda, consolidating its economic influence, and meddling in foreign political systems.
• Fiona Hill, in Foreign Affairs, contends that the polarization of American society has become a national security threat, hindering the projection of American soft power and leaving it more vulnerable to the Kremlin’s subversion.
• Tom McTague, in The Atlantic, suggests that the success of AUKUS could mark the beginning of a new world order consisting of “multiple and complementary alliances” being forged by the US and its allies in context of China.

Action and analysis by the Atlantic Council

Our experts weigh in on this month’s events

• Fred Kempe, in CNBC, suggests that Xi Jinping is making the most audacious geopolitical bet of the 21st century by demonstrating that he can produce the world’s dominant power by doubling down on his state-controlled economy, nationalistic propaganda, and far-reaching global influence campaigns.
• Barry Pavel, in the New Atlanticist, contends that by forging AUKUS, the Biden administration is taking an important step to build a key alliance element of the edifice required for the new era.
• Ash Jain, writing in the New Atlanticist, contends that while its specific outcomes were relatively modest, the Quad Summit successfully laid the foundation to advance three strategic US goals: countering China, aligning India, and revitalizing alliances.
• Emma Ashford and Matthew Kroenig, in Foreign Policy, debate the ramifications of AUKUS and China’s interest in joining the CPTPP.
• Dan Fried, writing in Just Security, responds to the restraint school and discusses tensions between the realist and values-based foreign policy traditions.
• The Atlantic Council’s GeoEconomics Center launched the China Pathfinder project, featuring a new system to assess China’s record of economic liberalization and performance in comparison to the United States and nine other leading open-market economies. The project suggests that while China has made demonstrable progress toward economic liberalization over the past decade, it still falls far short of other OECD economies in terms of market competition.

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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: U.S. President Joe Biden delivers remarks on a National Security Initiative virtually with Australian Prime Minister Scott Morrison and British Prime Minister Boris Johnson, inside the East Room at the White House in Washington, U.S., September 15, 2021. REUTERS/Tom Brenner