Leadership for the Rule of Law Community of Nations, John Hamre, CSIS

I suspect this memo will anger some people. I have deliberated whether or not to write it.

The world is dividing now into geopolitical tectonic plates. The metaphor to geology is imprecise but is relevant for the purposes of this discussion. President Biden announced a significant round of new tariffs last week. My trade expert colleagues say the economic significance of these tariffs is not that great, but the political significance is enormous. Europe will see the tariffs on electric vehicles as diverting EV exports from China to Europe. So, they too are likely to impose tariffs. No doubt China will retaliate in some manner, reciprocating the economic insult.

This is just the latest manifestation of a dividing international system. Russia’s illegal invasion of Ukraine triggered a massive response by Europe and the US, weaponizing international finance and commerce against Russia in a yet-unsuccessful effort to push Putin back from his aggression. China’s President Xi Jinping has made national security the preeminent objective of Chinese industrial policy. That, combined with the arbitrariness of China’s covid lockdown, has caused many companies to quietly pull back, diversifying their supply chains away from China. Putin and Xi met for the 40th time two weeks back, again reinforcing their partnership without limits.

The world is dividing now into four geopolitical tectonic plates. (1) The G-7/OECD “rule of law” countries, (2) the authoritarian axis (Russia, China, Iran, North Korea, etc.), (3) so-called “connector states” (Turkey, India, Mexico, Brazil, Saudi Arabia, Indonesia, Egypt, etc.) that want to maneuver between the first two blocs, and (4) the so-called “Global South”. These terms are arbitrary and think tank types will devote endless hours arguing over such definitions. I use them here for their utility, not their precision. But these do seem like plausible categories, and it does appear to me to be the way the world is now evolving.

The UN is now permanently frozen by Russia’s invasion and Putin’s fixed antipathy for Europe and the United States. So who leads to shape the culture and values of the international system? For the past 70 years, we championed the so-called “rules-based international order”. This order is based on profound civic values shared by these countries, defined by rule of law, representative accountable governments, due process in domestic and international relations, transparent/accountable governments, open capital flows and increasingly liberal trade policies.

I still believe these are superior values and provide the best opportunity for everyone on the planet. Only the G-7/OECD bloc of countries will champion these values now. But who takes the lead for this bloc? (We have a lot of work to do in the Global South, where they widely believe we champion these values only to benefit ourselves.)

At present this group is led by the G-7 group of countries—Germany, UK, Italy, France, Canada, US and Japan. The G-7 (Group of Seven) traces back to 1973. My mentor and friend George Schultz gathered the finance ministers of the UK, Germany and France to meet in Washington. President Nixon offered to host the meeting in the White House library, and initially it was called the “Library Group”. The idea proved valuable and grew through the years to be the premier heads-of-state gathering for the 7 countries, plus the European Union, which is a “non-enumerated member”.

The problem with the G-7 is it is European over-weight and Asia under-weight. Asia now is the center of gravity in global commerce and arguably in geopolitics as well. But only Japan is represented on the G-7. While Japan is an enormously worthy leader in Asia, it isn’t enough to carry the full interests of Asia in global leadership circles.

I strongly believe the G-7 should be expanded to include Korea and Australia. Australia has a per capita GDP larger than all G-7 states except the US. Korea is a technology and culture powerhouse, and the 10th largest economy in the world. The G-7 needs Korea and Australia, and both countries need the G-7. Both Australia and Korea can and should play a larger role internationally. There is no way to do this in the UN Security Council. The G-20 is now a frozen animal because China and Russia are members. Only an expanded G-7 can take the lead in establishing and sustaining global norms good for the planet.

(There is also discussion about bringing in Spain. I personally think that would help make the G-7 more attuned to issues in South America.)

But the G-7 (hopefully G-9 or 10) needs some institutional refinement. At present, there is no standing secretariat for the G-7. The agenda for each session is set by the host country when it has its turn. Japan hosted a highly successful G-7 summit in Hiroshima last year. There were minor elements of parochialism in the Hiroshima summit, but it was largely focused on global matters. Italy is hosting the G-7 this summer and it will be dominated by concerns of the Mediterranean region.

The G-7/G-9 needs a more sustained global perspective, and this likely would come from having a standing secretariat to augment the host nation in setting the annual agenda. This would help provide continuity from one session to the next on genuinely global matters. I would nominate mighty little Canada to host that secretariat, but it should be open for discussion.

We are entering a period where the rule-of-law community of nations will need stronger coordination on economic, trade and security matters. A haphazard application of tariffs and investment restrictions creates confusion and friction within the community. These would be matters that could be assigned to working groups organized by the G-7/9 or 10 secretariat.

This new geopolitical tectonic plate world is unfortunate. Open flows of capital and goods were the primary driver of the phenomenal improvement of living standards around the world over the past 70 years. The coming years are likely to see growing impediments and friction points in the so-called globalization order. It would be good to have a stronger mechanism that would organize a coherent response to preserve as much as possible of this rule-of-law international system.

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