2.1.1 Multilevel Governance of Public Goods

The multilevel governance of public goods may be characterised as a type of transnational constitutionalism. This constitutionalism establishes institutional and normative frameworks that aim to reconcile various political economies for administrating localised public goods with the requirement for synchronised and structured preservation of collective public goods, like public health, human rights, and climate change mitigation.⁸ It establishes and regulates governing institutions and rules of a legal hierarchy for the collective provision of public goods. It also does not pertain to a solitary form of multilevel relationship between national and transnational entities; rather, it encompasses a spectrum of legal pluralism that contemplates the subordination of domestic to transnational rules (and vice versa).

A key aspect of multilevel governance of public goods is the integration of national legislatures, executives, judiciaries, and independent regulatory bodies within a broader constitutional framework, which legally restricts their collective governance. This is achieved through multilevel regulatory institutions, which incorporate judicial remedies to safeguard transnational public goods. The European Union (EU) exemplifies such a dynamic, with member States’ national constitutions functioning within a more extensive set of constitutional law obligations for public goods, jointly overseen by the European Court of Human Rights (echr) and the EU Court of Justice. Furthermore, this constitutionalism demands innovations in transnational legitimacy formation and democratic accountability mechanisms to surmount governance, market, and constitutional failures that have arisen in recent years.

The undersupply of public goods is directly connected to numerous humanitarian crises in contemporary history. Despite the need for transnational collaboration in increasing access to essential goods, the current institutional and normative frameworks have led to failures that challenge the legitimacy of the global rules-based system. Without enhanced accountability mechanisms, their provision will be susceptible to narrow interest groups, hegemonic power politics, and mercantilist protectionism. These factors risk undermining human and democratic rights while exacerbating environmental and public health crises.

2.1.2 Erosion of Multilevel Governance of Public Goods

Numerous forces have led to the erosion of the multilevel governance of public goods, including heterogeneous national preferences and geopolitical tensions. Institutions of authority and their problem-solving capacities have struggled to keep pace with fundamental knowledge and technological transformations, creating a gap between deterritorialised networks and territorially-bound regulatory and governance systems. Within this gap have arisen failures from markets, governments and constitutional frameworks designed to place checks and balances on power politics and human nature. Governance failures occur nationally and transnationally, and influence each other. The US withdrawal from the 2015 Paris Agreement and its trade war with China exemplify actions that have undermined international cooperation. On the other end of the spectrum, international organisations, like the EU, have previously failed to vigorously uphold their legal obligations to address rule-of-law violations.⁹

The absence of effective legal safeguards against global collective action problems and competing preferences for managing transnational public goods can partly be explained by the inadequate implementation of the rule of law, human rights and climate change mitigation into the national legal architectures of States. The 2022 US Inflation Reduction Act demonstrates protectionist policies and trade discrimination in the service of environmental goals. Such trends are also evident in the brics countries, like China’s and India’s refusal to phase out coal-generated electricity by 2050. Despite the existence of ‘global commons’ to promote universal access, ineffective transnational judicial remedies and accountability mechanisms will continue to undermine public goods’ effective governance. Attempts to reduce government and market failures through competition have also been undermined. Instead of a level-playing field where jurisdictional competition leads to the most effective solution, the law is circumvented through power imbalances that aggravate unequal distributions of resources and erode public trust in institutions.¹⁰

2.1.3 Governing Transnational ‘Aggregate Public Goods’: an Asian Perspective

Contrasting to the European constitutionalism approach, China approaches aggregate public goods with its feet in two boats. Nationally, China’s single-party government’s political structure insulates the country’s political elites and military from legal constitutionalism restraints. China’s political economy also influences its approach to governing transnational public goods. Ineffective national constitutional and judicial remedies for citizens to challenge human and political rights suppression create localised conditions that obstruct the provision of aggregate public goods, like political opposition. Nevertheless, China has successfully participated in international governance bodies with constitutional features, like the unsc and wto dispute settlement system. This is partly because these bodies lack adequate, independent judicial remedies and multilateral rules to protect non-discriminatory conditions of competition, guarantee citizens’ human and democratic rights, and ensure the provision of aggregate public goods necessary to maintain stable environmental conditions.

China’s governance of market public goods is filtered through a state-capitalist system that has selectively adopted UN human rights treaties to protect the Chinese Communist Party’s political monopoly. Its constitution does not effectively constrain this monopoly, which aggravates government-induced market failures, fuelled by opaque corruption and asymmetrical rights structures within oligarchic governance systems. Despite subsidy schemes distorting global competition and a lack of independent judicial protections, China, as a totalitarian state-capitalist country, is not outright abandoning rules-based systems’ advantages. Rather, value conflicts and geopolitical rivalries have precipitated a shifting landscape in trade and foreign policy programs with significant implications for adequate provisions of these aggregate public goods. For example, the rcep, which entered into force in China and 14 Asia-Pacific countries on 1 January 2022, and China’s political dominance of bilateral infrastructure and financing deals regarding its ‘Belt and Road’ (bri) development strategy,¹¹ reflect regulatory competition to other regional economic partnerships, like the cptpp. This disregard for global rules that limit the market, governance and constitutional failures coincides with a rise of ‘authoritarian alliances’ across Eurasia juxtaposed by regional trade partnerships between Western democracies and global south nations with varying national development priorities.¹²

2.1.4 Multilevel Constitutionalism in Asia and Europe: Uncovering the Divergences

European multilevel constitutionalism, applies transnationally by extending domestic constitutional principles to EU foreign policy and security matters. Increased transparency and predictability of EU foreign policies are achieved by embedding human rights, democracy, the rule of law and compliance with international sustainable development goals (sdgs) into policy-making via Arts. 3 and 21 of the Treaty on European Union.

National and EU powers are limited through the institutionalisation of multilevel regulatory agencies of a higher legal rank and democratic and judicial remedies for governance failures related to competition, environmental stewardship and monetary policy. To the extent that ‘regulatory competition’ exists among EU and European Free Trade Area member states, governance failures from diverging regulatory systems are constrained by constitutional law principles enshrined in the cooperation among European courts, national courts, and transnational institutions. Despite a trajectory of evolving constitutionalism that started over a half-century ago, similar efforts to progressively limit transnational governance failures through aligning national constitutions with new global realities have not been followed outside of Europe. Asia’s national constitutions also often fail to check abuses of power and collective action problems that have been addressed in Europe via constitutional reforms. There are several reasons why the multilevel judicial protection of rights via regional agreements does not exist in Asia. Post-feudal and colonial regimes in Asia represent relatively new constitutional approaches that differ from their European counterparts. While European and North American democracies emphasise individualist foundations based on equal freedoms and rights, Asian legal traditions embrace communitarianism within hierarchies and public good protections through ‘duties’ attributed to the state.¹³

In addition to general issues of power politics and procedural difficulties of amending constitutions, there are systematic differences between market economies and state-capitalist countries, which lack independent judicial protections and constitutional restraints on totalitarian regimes’ the anti-competitive conduct and human rights abuses. China’s ‘non-democratic constitutionalism’ model creates conflicts resulting in a fragmented framework for legal accountability. This is reflected by China’s adoption of the International Covenant on Economic, Social and Cultural Rights but not the International Covenant on Civil and Political Rights. This constitutionalism, deriving legitimacy primarily through state consent, diverges from EU multilevel constitutionalism and the UN’s ‘constitutional governance model’, whose foundations of legitimacy rest on human and democratic rights. The management approach to economic and environmental regulation common to state-capitalist countries also tends to be less restrained by multilevel constitutionalism.

Without the constitutional constraints of common market freedoms, customs union rules and judicial remedies applicable to executive decision-making, authorities in Asia and elsewhere can justify violations of ratified international treaties by invoking so-called sovereignty powers. Constitutional nationalism elsewhere, along with a broader trend of the power-oriented, intergovernmental pursuit of national self-interests, also creates an environment undermining the potential ability of UN and wto law to impose constitutional constraints on abuses of public power among states acting as trading partners with Asia. The inadequacy of the UN and wto’s constitutional framework for legislative procedures and judicial remedies to address competition, environment and social concerns also represents a constitutional failure on the transnational level due to the absence of legal principles capable of protecting aggregate public goods. While European law has responded to the emergence of transnational public goods wrought by globalisation with multilevel constitutionalism supporting rule-based cooperation, Asia’s limited number of constitutional democracies undermines the formation of multilevel judicial protections of the rule of law due to the absence of citizen-driven enforcement mechanisms of constitutional guarantees of market freedoms alongside civil, political, economic and social rights.

2.1.5 Global Cooperation under Pressure: the Impact of Asia

While China has embraced domestic legal reforms and complies with the majority of wto rules and dispute settlement rulings, several recent actions have eroded global cooperation. These developments are part of a broader trend signalling the return of hegemonic, mercantilist, and neoliberal interest group power politics, undermining international cooperation frameworks. Because national constitutional and governance failures increasingly translate into parallel failures on a transnational level, China’s rejection of legal constitutionalism undermines global cooperation and the effective governance of transnational public goods. In addition, totalitarian policy-making facilitates a wide array of anti-competitive practices, including disguised subsidies and trade sanctions. These, directly and indirectly, discriminatory policies receive the state’s blessing, despite conflicting with wto subsidy rules and the rules-based international system’s foundational principles. Ineffective constitutional and judicial remedies in authoritarian states also fail to preserve non-discriminatory conditions of competition. Simultaneously, inadequate multilevel governance remedies to address market distortions have led market economies to increasingly resort to countermeasures, resulting in a bifurcated global trade system that undermines global cooperation and rights protections. The political domination of bilateral deals among bri development partners and authoritarian regimes also represents direct competition with existing, rules-based global trading and investment regimes.

Clear examples of power politics and national interest influencing decisions to explicitly disregard the embedded liberalism within wto law exist. Furthermore, China’s limited cooperation with the World Health Organization’s attempts at ascertaining the covid-19 pandemic’s origins highlights how power politics can dominate UN institutions at the expense of global public goods. China has also disregarded UN and wto sustainable development obligations through illegal extensions of sovereign rights in the South China Sea and disregarded a 2016 arbitral award under the Law of the Sea Convention (unclos).

While China is not the only actor undermining UN and wto systems and multilevel governance, geopolitical rivalries and constitutional nationalism between authoritarian and democratic countries are substantial catalysts of eroding global cooperation, particularly on sdgs and public goods. As a response to totalitarian Chinese state capitalism, democratic states are forming alliances to reaffirm and defend the liberal, rules-based international system from military threats and disregard for invading and enforcing human and constitutional rights by independent judicial bodies.

2.2.1 Systemic Rivalry and Its Implications for Multilevel Governance of Public Goods

Failures to preserve public goods are common in both democratic and non-democratic regimes. Mismatches between the domestic policy-making process and the multilevel governance of public goods cause these failures. Further, corrupted elites and undemocratic institutions, nations with internal democratic legitimacy may also harm transnational public goods. One example of the latter is the US Supreme Court restricting the administrative discretion of national environmental regulators to address climate change. International organisations may also act in a manner that undermines their democratic legitimacy while domestic policy arenas traditionally within national governance regimes become more deterritorialised. While all UN member states utilise constitutionalism to protect national public goods, globalisation has produced transnational public goods requiring a multilevel constitutional governance system that is still a work in progress. EU treaty constitutionalism complements the national constitutions of EU member states through a series of multilevel governance rights, rules and institutions. However, Europe’s multilevel constitutionalism is the exception. Power politics endemic to systemic rivalries also permeate international agreements, leading to deficiencies in fairness and efficiency. Despite formal recognitions of the multilevel framework response to collective action problems, practical shortcomings allow such problems to persist, particularly in the context of the rule of law, security and climate policy.¹⁴

2.2.2 Rivalries and Resonance in Asia?

Opting for economic collaboration among authoritarian governments rooted in power politics, rather than participating in global cooperation through multilateral institutions, exemplifies how Asian nations aim to capitalise on the benefits of rules-based, liberal trading systems amid the decline of multilevel trade governance. A case in point is the bri, a significant instrument of Chinese economic statecraft, which encompasses approximately 64% of the global population and 30% of the world’s gdp.¹⁵ In addition to serving as a stimulus for China’s domestic economy and labour force and an avenue to increase international use of China’s currency, the bri also represents a channel for laying the foundations of an alternative trade regime based on bilateral power-politics that excludes multilateral rules, independent judicial remedies and guarantees of citizens’ rights¹⁶ – this aligns with the path pursued by increased Sino-Russian and pan-Eurasian cooperations.¹⁷ The bri has also been framed as a source of ‘new ideas and plans for reform of the global governance system’.¹⁸ Regulations establishing international commercial courts and dispute resolution services for bri-related projects raise open questions about the degree of divergence or coherence with established international legal and institutional practices. Coupled with Russia’s dominant influence in Eurasia, China’s political dominance of bilateral bri infrastructure projects, financial networks, and their linkages to regional Asian institutions create a Sino-Russia bloc based on power politics, economic cooperation and selective adherence to multilateral rules and human rights obligations. Concurrently, China has framed the bri as an effort toward providing global and regional public goods, including free trade, and governance sensitive to the contributions of developing countries.¹⁹ Central and Southeast Asia are two areas where the bri prompts the emergence of Asia-based systemic rivalries. For instance, China is currently a major force shaping Southeast Asia’s future.²⁰ Yet, through the Association of Southeast Asian Nations (asean), Southeast Asian nations are seeking to offset China’s overwhelming influence by diversifying investment and trade sources while pursuing partnerships and security impacts with international partners.²¹ China is currently asean’s closest partner; linked institutions, such as the Asian Infrastructure Investment Bank, provide platforms and channels for assistance with technical and financial matters and fora for discussions and meetings between parties.

China’s economic statecraft, through bri projects, represents a revival of political and economic forces originally meant to be restrained by rules-based market competition and independent dispute resolution. Limited competition and non-transparent subsidy practices allow China to export competition distortions on world markets while deploying trade sanctions or restrictions for political reasons. These developments mirror the rising influence of authoritarian state capitalism and anti-competitive practices that create government-induced market failures and conflict with multilateral obligations to adhere to a rules-based trading system built on non-discrimination and fairness. While the bri deals’ terms often lack transparency,²² this mode of development and its associated rules of the game begs questions about whether new norms, regulations and practices will be compatible with previous standards or capable of transforming national markets into transnational ones. To the extent China attempts to attach strings to the bri for geopolitical purposes, dynamic shifts could emerge in democratic and authoritarian alliances vying over political power and control of multilevel governance regimes.

2.2.3 Connecting Asia to the World: Systemic Rivalry between Europe, the US, and China

In reaction to totalitarian power politics and the disdain for global laws supporting non-discriminatory commerce and human and democratic rights, the EU and the US have undertaken programmes that promote coordinated and cooperative policy-making and alignment on issues like trade and climate remediation, which has become more institutionalised and comprehensive following the implementation of formal mechanisms, like the EU-US Dialogue on China.²³ In 2019, the EU classified China as a ‘systemic rival’, requiring ‘a flexible and pragmatic whole-of-EU approach enabling a principled defence of interests and values’.²⁴ This strategy was informed by three main challenges: local infringement of freedoms, rights, and market opportunities by the Chinese leadership; coercive tactics within the region; and growing assertiveness by extending bri strategies into Europe.²⁵ Global interdependencies and tensions in the EU-China systemic rivalry are evidenced in the currently stalled Comprehensive Agreement on Investment (cai). Despite the potential of significant concessions on discriminatory investment policies, sanctions and counter-sanctions reflecting ongoing concern over human rights violations underline the ongoing constitutional and governance failures as a result of systemic rivalries unchecked by adequate multilevel constitutional safeguards.²⁶ The cai also highlights that rivalries and geopolitical power politics not only exist between opposing authoritarian and democratic alliances but also among them. These tensions have persisted following the US Inflation Reduction Act’s adoption, which pursues the decarbonisation of the US economy through discriminatory tax credits, domestic content requirements and trade discrimination.

In addition to more recent pledges of support for Russia in February 2022, China and Russia have strengthened their strategic partnerships through bilateral economic relations and improved cooperation in international organisations.²⁷ Meanwhile, close trade relationships between China and democratic states have been weaponised for political gain and to the detriment of treaty obligations and the integrity of the multilevel governance of public goods. Thus, following the US’ illegal trade war against China, both have since entered into a ‘bilateral opt-out’ of wto legal and dispute settlement obligations via discriminatory reciprocity negotiations that excluded third-party adjudication.²⁸

2.2.4 Geopolitical Rivalries Impact on UN and wto Law and the sdgs

Systemic rivalries accelerate hegemonic power politics, undermining global rules seeking to preserve sdgs and aggregate public goods through limitations on the market, governance, and constitutional failures. Unilateral and coordinated responses to ‘authoritarian alliances’ among China, Russia, and other Eurasian countries risk accelerating economic fragmentation, which entrenches obstacles to multilevel governance and magnifies tensions between diverse national development priorities. Because localised and regional actions increasingly result in extraterritorial effects, domestic and national solutions are inadequate to address transnational problems and the side effects emerging from complex and interdependent systems of exchange of goods, services, and financial capital.²⁹ Transnational governance failures perpetuate and are undermined by national constitutionalism, which attempts to retain its grip on rule setting and manage the disruptive processes of globalisation, technological intermediation, and legal and economic interconnectedness. Parties enmeshed in geopolitical rivalries resist the constitutionalisation of foreign policy powers for many reasons. For totalitarian, state-capitalist nations seeking to preserve political monopolies, constitutionalisation risks imposing constraints on abuses of powers that could lead to the promotion of citizen-driven solutions that undermine the legitimacy of previously unaccountable leaders. Democratic nations can be plagued by welfare nationalism; regulatory capture by business interests and neo-liberal interest group politics disrupt the rules-based world trading system and are incentivised to continue perpetuating the status quo despite short-term, narrow interests being put before the common interests of an international polity. Geopolitical rivalries also risk fomenting populist power politics that undermine the effectiveness of multilevel governance of public goods through failures to hold governments democratically and legally accountable for violations of treaties, upholding the transnational rule of law and compulsory third-party dispute settlements.³⁰

2.2.5 Geopolitical Rivalries: Uncovering the Path-Dependent Value Conflicts

The persistence of path-dependent geopolitical rivalries creates obstacles for global cooperation in achieving sdgs. Intergovernmental power politics and prioritisation of national interests exploit inadequacies of UN and wto law to legally constrain market distortions and human rights abuses while resisting efforts to reform multilevel constitutional frameworks to address hegemonic mercantilism and climate change. Factors such as Russian aggression, politically-motivated interruptions in Sino-US environmental dialogue, and rejection of regional human rights regimes disrupt the multilevel governance of public goods and challenge democratic constitutionalism to respond within international law constraints.

Historical and political path dependencies underlie geopolitical rivalries that hinder global cooperation. Therefore, it is improbable that managerial, mission-oriented approaches can effectively address the interconnected governance, market, and constitutional failures at the heart of these conflicts.³¹ Such governance is ill-suited to address the collective action problems obstructing necessary transnational cooperation on the provision of globalised, aggregate public goods and the facilitation of digital markets. It also lacks the legitimacy and strength of bottom-up, democratic social regulations required to overcome top-down failures to regulate state-owned enterprises (soes). As totalitarian power politics reject rules-based legal restraints on non-discriminatory competitive actions and abuses of political and social human rights, democratic states increasingly respond via coordinated countermeasures and collective defence alliances within UN and wto law.

Simultaneously, certain elements of wto law, which perpetuate power imbalances between rent-seeking business entities and political party monopolies, hinder the effective restraint of welfare nationalism and other discriminatory, state-controlled governance systems. Although healthy regulatory competition can potentially stimulate the adoption of socially advantageous and economically efficient structures, insufficient transnational governance leads to the exploitation of dominant positions, compromising equitable jurisdictional competition. Power politics and unregulated unilateral transgressions of wto trade remedy regulations persistently contribute to the fragmentation of the multilateral, rules-based trading system into regionally-based political alliances. As transnational governance failures exacerbate the unequal distribution of economic resources and public goods, the diminishing trust and perceived legitimacy of political elites and institutions will further erode the rule of law and democratic, citizen-centric accountability mechanisms essential for advancing social welfare and public goods.

The various stages of institutional, political, and economic failures that have given rise to the EU’s current system of rights and obligations provide lessons for Asian countries, which are increasingly adopting legislation and international agreements protecting a wide range of rights and obligations related to the governance of public goods.³² First, limitations on economic and political ‘markets’ arise from the fact that they are socially and legally constructed. Historically and empirically, human rights, the rule of law, democracy, and republicanism are the constitutional core principles that are most effective in limiting failures to protect public goods and general consumer and citizen welfare.³³ Empirically speaking, constitutional rights that facilitate localised and decentralised civil society support for transnational public goods are more effective governance tools for addressing globalisation than state-centred and power-oriented models disconnected from legal, democratic, and judicial accountability.³⁴ For legal instruments to perform their social regulation and construction functions properly in a multilevel context, strong constitutional protections for citizens and non-governmental actors are required to overcome ineffective transnational democratic institutions and a singular polity. Multilevel constitutionalism must enable legal and policy priorities that reflect democratic, localised preferences of people. Such citizen-driven, ‘bottom-up network governance’ provides a more robust framework for limiting abuses and failures of ‘top-down chessboard governance’ through increased democratic pressure for solutions to common public goods crises that transcend political and economic interest groups. Stronger rights, citizens’ participation and remedies within multilevel governance systems are also necessary to ensure a transnational legal order that provides adequate incentives for public goods protection and imposes limitations on collective action problems and abuses of public and private power. These goals are achievable through measures, including joint administration of public pool resources, ‘republican countervailing rights’ and judicial remedies of citizens, and the transformation of ‘pure public goods’ into ‘club goods’ that reduce free-riding through reciprocity requirements.³⁵

3.1.1 Innovative Plurilateral Initiatives: Asia’s Response to Evolving Trade Challenges

In addition to conventional regional accords, Asia has established non-traditional agreements in response to the rise in protectionist measures. Countries in the Asia-Pacific region are increasingly adopting club-membership agreements, which involve a limited number of participating nations. One such example is the Digital Economy Partnership Agreement (depa), signed by Singapore, Chile, and New Zealand on 12 June, 2020.³⁶ Notably, Canada, South Korea, and China have also expressed interest in joining this agreement. The agreement, whose provisions mirror that of the cptpp,³⁷ represents an attempt to create best practices and regulations on digital trade and facilitation,³⁸ and addresses existing and upcoming technologies. Crucially, the chapter on emerging trends and technologies is a crux of the depa,³⁹ because digital trade, as one of the most dynamic sectors in the world, will play a significant role in trade and investment, whilst driving the growth of e-commerce and cross-border payments by utilising technologies, including blockchain technology.⁴⁰ It should be noted that although accession is open on terms that all parties have agreed upon, in reality, only wto members can accede to the agreement.⁴¹

Another example is the Declaration on Trade in Essential Goods for Combating the covid-19 Pandemic (the Declaration). Launched on 15 April 2021, it is based on the Joint Ministerial Statement affirming commitment to ensuring supply chain connectivity, initially signed in March 2020 between Singapore and New Zealand. It further develops the statement’s pledges. Among other obligations, participating countries must facilitate the movement of essential goods, including sanitary products, by removing tariffs and disallowing export restrictions.⁴² Similar to the depa, the Declaration is open to accession by wto members, which have also submitted their acceptance of the document.

Asia’s response to the challenges of rules-based and liberal trading systems has been multifaceted, involving both traditional and non-traditional agreements. The emergence of plurilateral initiatives, such as the depa and the covid-19 Declaration, demonstrates the region’s adaptability and commitment to addressing contemporary global challenges. By embracing innovative approaches and fostering cooperation among participating countries, these regional agreements exemplify Asia’s dedication to sustaining a rules-based and liberal trading system.

3.1.2 Obstacles to Multilateralism: Power Politics and Constitutional Nationalism

The liberal rules-based system constitutes a series of multilateral rules, judicial remedies and human and democratic rights guarantees, that are created and enforced by relevant public and private stakeholders. This brings many advantages. The system is key in most sdgs’ materialisation, including global poverty reduction and sustainable development. It also devises the required international cooperation to deal with the deterritorialisation of public goods and the subsequent failures to protect them, which are progressively out of the reach of national governing structures and constitutions. Within the wto, the monitoring of domestic policies with the Trade Policy Review mechanism encourages domestic and multilateral transparency.⁴³ Further, compliance with its compulsory legal dispute settlement mechanism limits protectionism and potential escalations of trade conflicts, whilst preserving the international system’s security and predictability.

However, the system is facing numerous challenges globally. Constitutional nationalism and hegemonic power politics have exacerbated weaknesses in global governance systems struggling to address abusive regulatory competition, national security restrictions on international treaty obligations, and shifting global realities. Constitutional reform efforts targeting UN and wto governance and global climate remediation have been resisted, due to geopolitical power politics and constitutional nationalism. Additionally, these proposed reforms’ limited scope and structural limitations of existing multilevel governance systems fail to implement constitutional governance models that adequately protect human rights, the rule of law and democratic accountability mechanisms, thus exacerbating the above-mentioned challenges in delaying and obstructing efforts to maintain and expand rules-based, multilevel governance systems necessary to address transnational public goods challenges across various dimensions. Compulsory judicial remedies have also not been pursued to address international human rights law enforcement and other protections of democratic rights and rule of law.⁴⁴

Government accountability and effective judicial remedies covering transnational relations remain elusive despite compulsory adjudication mechanisms. Examples include the ongoing US obstruction of the wto Appellate Body and Russia’s disregard of 2022 judicial orders.⁴⁵ Proposals to enhance the rules-based, liberal system have also been prevented by unsc veto powers abuse and disruption of wto dispute settlement mechanisms via illegal veto practices.⁴⁶ These reflect that power politics remains the primary impediment to UN and wto law’s ability to limit collective action problems, protect human rights and provide and protect public goods by implementing effective multilevel constitutionalism.

Real and perceived national security risks have also challenged the rules-based system. International health pandemics have prompted the rare exercise of unsc action to call for extended suspensions of armed conflicts globally and the extension of humanitarian assistance to conflict zones.⁴⁷ However, globalisation has also created the potential for the weaponisation of interdependence by dominant political actors,⁴⁸ prompting the invocation of national security exemptions to treaty obligations. Such disguised protectionisms result from geopolitical ‘chessboard governance’ that has fostered abusive regulatory competition and effective obstruction of multilevel constitutional restraints on governance, market and constitutional failures.⁴⁹

3.1.3 Safeguarding the Benefits of Rules-Based and Liberal Systems through rcep and cptpp

Despite diverse, unilateral state actions undermining UN and wto law and explicit disregard for treaty obligations to protect public goods, states and actors globally persist in pursuing the rules-based, liberal trading system. It is estimated that the rcep, which represents the biggest trade bloc in history and accounts for approximately 30% of the world’s population and global gdp at the time of signing,⁵⁰ and the cptpp together will offset global losses from the US-China trade war, excluding China and the US. In addition to improved economic efficiencies, these new agreements create linkages across North and Southeast Asia, covering technology, manufacturing, agriculture, and natural resources.⁵¹

The rcep is potentially central to regional integration by standard-setting for all asean economies. Instead of the successful economic integration of geopolitical rivals, regional cooperation among affinity partners through the rcep and the cptpp represents a ‘second-best’ building block approach, inviting wider participation from countries seeking to reinvigorate their economies post-pandemic. The cptpp’s openness has created opportunities and challenges. Achieving sdgs and spurring many nations’ economic growth will require liberalised international markets, which provide stability and predictability.

The rcep’s flexible structure reflects that micro, small and medium enterprises (smes) constitute more than 90% of business organisations. It provides measures to reduce bureaucracy, addressing globalisation-related issues facing businesses and facilitating access to funds from the bri. Unlike the cptpp, the rcep includes no guidance on soes or state subsidies. Labour provisions and environmental protections are also absent or inadequate to align with all parties’ Paris Agreement commitments and pledges under the 2030 sdg Agenda.

The two agreements will optimise the North and Southeast Asian economies, linking their technological, manufacturing, agriculture, and natural resources strengths.⁵² Absent a delayed US entry into the rcep or tpp, US involvement in future growth across the Pacific will largely hinge on the ipef’s scope and success.

3.2.1 Indo-Pacific Economic Framework in Context: Asia’s Noodle Bowl of Trade Agreements

During times of crises, trade and foreign direct investment flow, thanks to well-designed ftas. However, the abundance of overlapping and complicated ftas in East Asia risks becoming cumbersome and hindering trade.⁵⁴ This is the spaghetti bowl phenomenon of economic agreements, or the ‘noodle bowl’ effect, as referred to in Asia (Figure 14.1).⁵⁵

Notably, the proliferation of transactions has raised transaction costs, especially for smes, which can afford them the least because of the ftas’ complicated rules and variable tariffs.⁵⁶ The proliferation of bilateral and multilateral agreements also undermines efforts to reach a more comprehensive agreement on world trade.

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ipef and the noodle bowl of agreements

source: elaborated by the author from various public sources

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The ‘noodle bowl’ effect is per se bad as it skews markets and threatens trade regulations’ coherency. Companies must comply with many intricate international treaties, which adds to their transaction costs. If strong states can demand better terms from partners, they also introduce asymmetries.⁵⁷

This effect is a villain to regional agreements as Asia is currently crisscrossed by dozens of frequently wildly inconsistent bilateral agreements, as opposed to having a single, integrated set of trade rules that apply equally to all governments.⁵⁸ Each has its standards for administrative procedures, non-tariff trade policy reforms, and rules for tariff reduction.⁵⁹ Therefore, it complicates trade negotiations, especially the ipef.

3.2.2 The Genesis of the Indo-Pacific Economic Framework and Its Purpose

First, by treating the ipef as an executive agreement, the Biden administration seeks to bypass congressional approval that has stymied similar deals in the US and abroad.⁶⁰ Parties to the negotiation can select among the pillars for negotiation while being bound to the agreement on all ‘modules’ within each pillar. The US is currently considering applying ‘early harvest’ to the ipef, which allows narrow agreements on individual pillars to take effect immediately upon agreement instead of entering into force following comprehensive agreements on all ipef pillars.⁶¹ This flexibility heightens the likelihood of successful plurilateral progress on transnational public goods.

Contrasting to China’s inroads across Asia and into Europe via its bri, the ipef seeks to ‘build bridges between the Indo-Pacific and the Euro-Atlantic’.⁶² Concurrently, broader acknowledgements of transnational public goods are reflected in commitments to seek cooperation with China in areas, like climate change.⁶³ Consequently, although the Sino-American relationship has been plagued by antagonism and mistrust,⁶⁴ the ipef potentially showcases multilevel governance on public goods, where both countries’ opposing interests are put aside, and a consensus is reached. Similarly, the collaboration between Indo-Pacific countries demonstrates Asian countries’ acknowledgement of the rules-based, liberal trading systems’ benefits, despite the challenges multilevel governance faces in the region. A focus on the promotion of sustainable and durable infrastructure also reflects a rhetorical commitment to a path more reminiscent of the Paris Agreement than ‘America First’ (the Inflation Reduction Act notwithstanding).

While continuing with a more competitive posture toward China established under the Trump administration, the ipef rhetorically shifts from a more confrontational approach toward closer engagement with allies and capacity-building. India’s inclusion within the ipef also creates opportunities and obstacles for implementing a rules-based, liberal economic framework within the Indo-Pacific region. The strategy document specifically cites ‘India’s continued rise and regional leadership’ as critical elements of success for the framework. Structural deficits in multilevel governance institutions, pre-existing geopolitical and systemic rivalries, and ongoing military conflict in Ukraine represent key obstacles to the successful implementation of the ipef’s vision of an open, interconnected, and sustainable Indo-Pacific economic bloc. One major limitation of the negotiations of ipef is the exclusion of potential tariff reductions,⁶⁵ a primary tool for facilitating market access in international trade agreements. This creates challenges for participating countries in identifying the precise economic gains associated with ipef and incorporating clear costs and/or benefits into their analysis.

Critics of the ipef have suggested it is primarily intended to reduce the regional influence of China, given the ongoing Sino-US rivalry, with numerous member states indicating that the framework should surpass geopolitical rivalries and seek an effective and mutually beneficial economic bloc for all participant economies.⁶⁶ Protectionist populists, labour groups and environmental advocates, which have previously lobbied against the tpp, have raised similar concerns regarding the prospect of outsourcing highly-skilled trades and the rigour of multilateral labour and environmental standards.⁶⁷

While the ipef aligns with India’s Indo-Pacific orientation and ‘Act East’ policy focus, welfare nationalism and cronyism in key Indian economic sectors undermine the free and open regime outlined in the ipef strategy document.⁶⁸ The Ukrainian war has also placed India in a difficult position due to its reliance on Russian weaponry and military equipment.⁶⁹ Despite moves to implement the ipef as an executive agreement, congressional resistance to the Biden administration’s Build Back Better infrastructure program may create obstacles in deploying political and financial support for foreign infrastructure development.⁷⁰ It also risks being overturned by subsequent administrations with minimal legal obstacles.⁷¹ In the absence of available resources for States to meet their infrastructure demands, bri may be the most practical alternative.