Trade
The illusion of a middle power moment
Author: Andrew Carr, ANU
To be a middle power requires a modest disbelief in power. These states take their medium-sized resources and direct them towards big objectives. This may be reactive, searching for self-preservation in the face of a hostile larger power. It might also be proactive, trying to shape institutions and norms to build a more hospitable environment.
Over the past few decades significant scholarly ink and political rhetoric have been expended on middle powers’ potential contribution to the maintenance and expansion of the international order. Speculation was particularly active in the early 2010s, with a ‘renaissance’ of academic theorising and a new organisation for middle-power states — MIKTA (named for the member states Mexico, Indonesia, South Korea, Turkey and Australia). But as the new decade dawns middle-power potential remains wanting. With structural and domestic trends discouraging activism, middle-power norm entrepreneurs are moving from endangered status towards extinction.
Norm entrepreneurs seek new standards of appropriate behaviour. While anyone can simply call for states to change their behaviour, successful campaigns involve four elements. First, there is a need to frame the new approach desired, establishing for it a persuasive rhetorical jacket. If this description can be tied to existing community notions — expanding liberty or supporting justice, for example — so much the better.
Norm entrepreneurs then need to apply resources, establishing an organisational platform for their actions. This may mean a new bureaucratic organisation or multilateral institution. Third, there needs to be a strategy for socialisation, which targets rhetoric and resources that help convert key actors and spread the norm. Finally, the norm entrepreneur needs to be willing to sustain criticism and endure. Changing standards of behaviour necessarily undermine established positions and norm changes can take many years to achieve.
The prototypical example of this kind of behaviour by a middle power was Australia from the late 1980s to the early 2000s. While involved in numerous campaigns, Canberra’s most notable efforts sought to liberalise trade, secure the non-proliferation of weapons of mass destruction and establish cooperation on irregular migration. In the latter case, Australia embodied the sense of originality implied by the entrepreneur label. In the former two cases, it simply brought new energy to help spread and strengthen existing norms.
By the early 2000s the middle-power label was freed of its Western origins and increasingly applied to countries such as South Korea, Indonesia, Turkey, Mexico and South Africa. South Korea particularly wrapped itself in middle-power icons and language by beginning campaigns on the environment and development. The high point came in 2013 when MIKTA was formed as a G20 offshoot. In a joint op-ed, the five foreign ministers of MIKTA announced their ‘common interest in strengthening multilateralism, supporting global efforts for stability and prosperity, [and] facilitating pragmatic and creative solutions to regional and global challenges’.
On the academic side these years also saw hope for a ‘middle power moment’. The global structural transition was welcomed for opening spaces for these countries to shape international politics. Most of this research came from scholars based in a middle power who wanted their country to adopt a more stereotypically middle-power approach — that is, liberal and cosmopolitan. They also sought to address wider problems, from the US–China relationship to climate change and global poverty.
As we survey the arrival of the 2020s it is clear such hopes were misplaced. The middle-power moment never arrived. Many middle-power states are now shifting to a more reactive search for security. This does not mean they will not occasionally try and promote norms, but the idealistic tone of the 2010s is out of place with the world we are now entering.
There are several reasons for this downturn. Structurally, the global order has become less hospitable to influence from the middle. Australia’s 20th-century norm entrepreneur efforts were indulged by a benign hegemon in the United States which did not see negotiations in stark zero-sum terms. Other great powers, such as China and India, as well as institutions like the United Nations, the European Union or ASEAN, have also proven unwilling or cumbersome sponsors for middle powers to work through. This places most of the resource demands for initiating and…
Trade
Self-Reliance and Openness: Core Principles of China’s Third Plenary Session
The Third Plenum communique from the CCP indicates a prioritization of stability and compromise in response to China’s economic challenges. It highlights the concept of Chinese-style modernization and establishes political guidelines for balancing regulation and market forces.
The CCP’s Third Plenum communique signals a focus on stability and compromise in the face of China’s economic challenges. It emphasises Chinese-style modernisation and sets political directions for balancing regulation and market forces. While not as groundbreaking as previous plenums, it acknowledges the importance of market mechanisms and technological self-reliance, aiming to address issues like high youth unemployment and private sector uncertainty. The communique seeks to navigate the complexities of global competition and domestic innovation, potentially reshaping global supply chains and trade dynamics. Overall, it presents a pragmatic blueprint for China’s economic future.
Source : Self-reliance and openness central pillars of China’s Third Plenum | East Asia Forum
Trade
Trade Prevails Over Political Persuasions in China-Germany Relations
China and Germany maintain a strong bilateral relationship, rooted in economic cooperation despite ideological differences. Recent visits and agreements focus on expanding trade and addressing mutual concerns, navigating challenges while nurturing ties.
Evolving Bilateral Ties
China and Germany share a strong bilateral relationship, rooted in history since 1972. This connection has seen moments of cooperation intertwined with periods of tension. German Chancellor Olaf Scholz’s April 2024 visit underscores Germany’s commitment to fostering this partnership, reflecting a mutual interest in maintaining economic ties despite ideological differences.
Economic Pragmatism
As the second and third largest global economies, China and Germany’s economic interdependence is crucial. Germany emerged as China’s primary trading partner in 2023, with trade values reaching €254.4 billion (US$280 billion). In response to global scrutiny, Germany has taken a balanced approach, emphasizing economic stability over political discord. This was evident during Scholz’s prior visit in November 2022, where his diplomatic tone contrasted with broader EU sentiments.
Facing Challenges Together
Despite increasing public skepticism in Germany regarding China’s global influence and human rights issues, both nations continue to seek common ground. Their October 2023 Joint Statement highlights intentions to pursue cooperation in areas like carbon neutrality and open markets. To navigate these complex terrains, Germany can utilize its institutional frameworks to enhance dialogue, while also considering supply chain diversification to reduce dependency on China. The intertwining nature of their economies suggests that, despite challenges, both countries will continue to prioritize their substantial trade relations.
Source : Trade trumps political persuasions in China–Germany relations
Trade
Fixing fragmentation in the settlement of international trade disputes
Fragmentation in global trade due to the lack of development in multilateral trade rules at the WTO has led to an increase in FTAs. The Appellate Body impasse has further exacerbated fragmentation, requiring a multilateral approach for reform.
Fragmentation in Global Trade
Fragmentation in global trade is not new. With the slow development of multilateral trade rules at the World Trade Organization (WTO), governments have turned to free trade agreements (FTAs). As of 2023, almost 600 bilateral and regional trade agreements have been notified to the WTO, leading to growing fragmentation in trade rules, business activities, and international relations. But until recently, trade dispute settlements have predominantly remained within the WTO.
Challenges with WTO Dispute Settlement
The demise of the Appellate Body increased fragmentation in both the interpretation and enforcement of trade law. A small number of WTO Members created the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) as a temporary solution, but in its current form, it cannot properly address fragmentation. Since its creation in 2020, the MPIA has only attracted 26 parties, and its rulings have not been consistent with previous decisions made by the Appellate Body, rendering WTO case law increasingly fragmented.
The Path Forward for Global Trade
Maintaining the integrity and predictability of the global trading system while reducing fragmentation requires restoring the WTO’s authority. At the 12th WTO Ministerial Conference in 2022, governments agreed to re-establish a functional dispute settlement system by 2024. Reaching a consensus will be difficult, and negotiations will take time. A critical mass-based, open plurilateral approach provides a viable alternative way to reform the appellate mechanism, as WTO Members are committed to reforming the dispute settlement system.
Source : Fixing fragmentation in the settlement of international trade disputes
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