The world stands at the precipice of a transitional moment in the international law writ caused by the reasonable likelihood that new architects will be joining (and eventually supplanting) the present-day architects. Transformative geo-political and economic developments such as
The world stands at the precipice of a transitional moment for international law affecting both the creation and enforcement of international law;1 access to financial markets;2 and global power politics.3 The reason for this historic shift is the reasonable likelihood that new creators (i.e., architects) of international law will be joining and possibly supplanting the present-day architects.4 To be an architect of international law is to wield significant power5 since the financial and legal orders are inextricably linked to the formation, context, interpretation, application and enforcement of international law. For example, powerful states (i.e., the existing architects) are rarely targets of trade sanctions, yet are uniquely positioned to employ trade sanctions against actual and/or potential rivals.6
The international legal architecture plays an integral role in the global strategic and financial orders.
However, the vocabulary for analyzing
u.s.power overseas is largely military and economic, as evidenced by terms such as “gunboat diplomacy” and “dollar diplomacy.” … The exercise of American power has been rarely based merely on the assertion of sheer economic and military might. From the beginning, it has been mediated through the language of law, as a matter of right.7
Who are the present architects of international law? The current founders of international law’s global economic and legal architecture are the “civilized” or “advanced” nations of the world8 —the Western Anglo powers9 led by the United States—“the indispensable nation”.10 International law architects are those nations which constitute the “civilized” nations of the world11 based upon the laws of sovereigns belonging to the group of “civilized nations of the world.”12 Since the 1800s this terminology has referred mainly to Western European nations and later in the 20th century, to the United States and its allies.13 As Chief Architect, the United States has benefited greatly.
The dangers of such arrogant and abusive “universalism” are especially striking in international relations, where normative disputes that cannot be resolved by rational persuasion or appeal to agreed upon international norms tend to be settled by (political, economic, and cultural) power—of which United States today has more than anyone else.14
Large swaths of “other nations” located elsewhere have traditionally been considered “uncivilized” and have thus been “outcasted” as sources of international law.
[T]he vast majority of Asian states literally did not participate in the negotiation of most of the agreements that define the modern international order … These observations are not unique to Asia, of course. Indeed, one could make a compelling case that the disenfranchisement of African states during these formative periods of international law was far greater.15
The existing political and economic mechanics of the global financial governance order—trading, lending, development—has been dominated by the United States and
Moreover, American military power has been vigorously projected to enforce the existing architecture. Dozens of United States land, sea and air military bases are embedded strategically in a large number of nations and powerful American warships and aircraft carriers sail throughout the strategic waterways of the globe.19 No other nation’s taxing authority mandates disclosure from another sovereign’s financial institutions.20 No other sovereign’s courts wield such power and influence.21 The judicial arm of Federal courts is extensive.22 Indeed, as with its military, the reach of
Notwithstanding these superlative indicia of leadership, an incipient adjustment is well-underway that poses potentially serious challenges to the intellectual construct of international law being created and enforced through the lens of the present-day “civilized nations.” The precipitating factor fostering these developments is the rise of “competitor states” and/or “revisionist states”—i.e., the new potential architects of international law.
A range of competitors will confront the United States and its global partners and interests. Contested norms will feature adversaries that credibly challenge the rules and agreements that define the international order.26
New builders (i.e., architects) are positioning for a significant role in shaping international law and contesting the existing global governance architecture.
Rising powers including for example, China, Russia, India, Iran, or Brazil have increasingly expressed dissatisfaction with their roles, access, and authorities within the current international system. The inability or unwillingness to accommodate the aspirations of these powers in the future may increasingly cause some states to challenge or even reject current rules and norms.27
Ramifications of the new landscape will offer striking opportunities and immense challenges in the realms of the international law writ—the definition and applicability of international law, treaty negotiation, global power balances, global trade, international monetary institutions and finance.
This transformation, currently well-underway, is enabled primarily by remarkable rising economic power.28 As will be discussed infra, the shift from strict adherence to the post
It would be naïve at best to presume that competitors will not contest the present architects. In fact, it would be an historical anomaly if the current legal and financial orders would not be significantly altered to comport with the advancement and furtherance of the beliefs and goals of the rising power(s).
In particular, there does not appear to be a comparable example of a great power (or multiple powers) rising within a normative framework not of its own making, where that normative framework has not undergone substantial change or revolution as a result of the new power’s values and interests.32
As former Treasury Sec. Jack Lew remarked:
The alternative [to the
usled order] will be a loss of u.s.influence and our ability to shape international norms and practices that ensure an open, resilient global economy.33
This Article raises the question of how the rising prominence of “competitor” and “revisionist” states will collide with current notions and values in international law. The question poses a most serious implication for international law—a definitional moment as several of the new architects’ customs and norms conflict inherently with current Western ideals. Will international law norms of the “newly civilized” converge closer to the Western ideal? Will Western notions gravitate towards the other spectrum in self-interest?
The question of how the new architects will influence international law has not been examined—nor could it—as the empowerment of the new architects is a recent phenomenon. The stakes for not addressing these issues have never been higher given the increase our inter-connected world.34 The failure to acknowledge and plan for this impending transformation will inevitably lower overall global prosperity, reduce international cooperation and possibly lead to greater military conflict. This Article proceeds as follows: Part 1 discusses the historical context of modern international law. Part 2 describes the increasing influence and power of the new architects and the impact on the existing framework. Part 3 provides examples of some new architects and the different norms these nations espouse. Part 4 examines the implications of the clash between the existing and new architects of international law.
1 The Historical Context of the Global Economic and Legal Orders
Over the last 70 years, the financial and legal orders of international law have been shaped by the
1.1 “Civilized” Nations as Architects of International Law
Underpinning modern international law is the foundational premise that the creation of international law is the domain of the civilized nations of the world; “the body of rules and principles of action which are binding upon civilized States in their relations with one another.”35 The term “civilized nations” is specifically listed in Article 38 of the Statute of the International Court of Justice which enumerates the sources of international law.36 Viewed favorably as an articulation of the correct foundations of international law,37 the following sources are listed:
(1) international conventions (treaties), specific or general, (2) international custom, as evidence of a general practice accepted as law, (3) general principles of law recognized by civilized nations, and (4) judicial decisions and teachings of highly regarded commentators of the various nations.”38
The vital importance of the term “civilized nations” cannot be over emphasized.39 The notion that international law is based upon civilized states is entrenched; “the principles of international law, as they result from the usages established between civilized nations, from the laws of humanity, and the requirements of the public conscience”.40 For example, in The Paquete Habana,41 the United States Supreme Court held that the prohibition against seizing an enemy’s fishing vessels during wartime had grown over time to become established by the “general assent of civilized nations, into a settled rule of international law.”42 Over 100 years later, the United States Supreme Court in Sosa v. Alvarez-Machain similarly relied upon the term “civilized nations” holding “courts should require any claim based on the present-day law of nations to rest on a norm of international character accepted by the civilized world.”43
Not all countries have been treated as “civilized” nations and thus privileged to enter the realm of international law creation.
[P]ositivist international law distinguished between civilized states and noncivilized states and asserted further that international law applied only to the sovereign states that composed the civilized ‘Family of Nations’…. Jurists … postulated a gap, understood principally in terms of cultural differences, between the civilized European and uncivilized non-European world. Having established this gap they then proceed to devise a series of techniques for bridging this gap-of civilizing the uncivilized.44
The dichotomy between nations was noted by European legal scholars45 who perceived that their nations were superior in relation to the uncivilized non-European nations.46 Therefore, the term “civilized nations” has been equated with Western European states. “([A]s a definite branch of jurisprudence the system which we now know as international law is modern, … for its special character has been determined by that of the modern European state system.”47 The term “civilized nations” served to distinguish “superior” European48 nations from the “inferior” uncivilized nations49 and invoked to impose various legal and economic initiatives onto the “uncivilized nations.”50
European legal scholars also believed that “the rules of civilised conduct among nations applied to States within Christendom alone and that no rules of a binding nature could govern the relations of a Christian State with a non-Christian State.”51 In this narrative, international law, existed for the benefit of “Christian Europe and European-originated states”52 while Buddhist, Islamic and Hindu nations were excluded.53
The exclusion of non-European states from full participation in international law was justified variously by reference to culture, religion and biology. Much of this history can be explained by racism or realpolitik.54
Evidently, certain nations were considered as simply incapable of understanding international law55 and it is not surprising that several non-Christian states were explicitly analyzed and found to be “uncivilized.” “Semi-barbarous States like China, Turkey and Japan, whose municipal law and the judgments of whose courts are not recognised by civilised nations’ were excluded from full participation in international law.”56
Establishing conditions for economic intercourse took the form it did because capitulations reflected the Western concept of “civilization.” Capitulatory regimes were established between the United States and European countries and countries designated either “unchristian” or “uncivilized.” Crudely stated, the laws of unchristian or uncivilized countries could not be the basis for determining the rights and responsibilities of persons from Christian, civilized countries.57
Labeling certain nations as uncivilized, half-civilized or savage, provided the rationalization that the civilized Europeans were in fact justified or perhaps even obligated to “civilize” inferior states via exploitation and subjugation. “More particularly, in the context of the ongoing problem of violence in the international system, it is significant that since the beginnings of international law, it is frequently the “other”, the non-European tribes, infidels, barbarians, who are identified as the source of all violence, and who must therefore be suppressed by an even more intense violence.”58 Thus, “a colonizer might need to take ‘punitive expeditions’ in cases of ‘inroads or other outrages committed by savages of half civilised tribes.”59
Colonisation, and the reclamation of barbarians and savages, if possible in point of fact, are duties morally and jurally inevitable; and where circumstances demand the application of physical force, they fall within necessary objects of war. On this ground, the wars against China and Japan, to compel these countries to open their ports, may be defended.60
Interestingly, China was considered “uncivilized”. This characterization was puzzling from the perspective of China which considered itself a magnificent advanced empire that defended itself against the barbarous “uncivilized” nations at its borders.61 Moreover, it is ironic that “uncivilized and barbaric” China is spearheading the current effort at creating an alternative to the current global architecture.
As discussed in the following sub-section, the concept of “civilized” nations is essentially repeated in the Restatement’s definition of sources of international law. While the terminology employed is different—“major legal systems”—for all intents and purposes the meaning is substantially equivalent to “civilized nations”.
1.2 “Major Legal Systems” as Architects of International Law
The Restatement does not use the term “civilized nations” as a source of international law but rather the phrase “major legal systems.”62 The terminology “major legal systems” connotes those nations which are integral to the financial and legal order, i.e., the advanced or leading nations.63 The common denominators of these “major legal systems” are: states that constitute the significant global financial and military players wielding strategic importance. Nations considered to have the major legal systems are the advanced countries that are militarily strong, economically powerful and the leaders in the arts and sciences drawing on the concept of “civilized” per Heffter—that European nations were entitled to be participants in international law based upon their immense superior power.64 Bonfils similarly linked states involved in international law as those that are the leaders in terms of various indicia of advancement.65
This is a juridical system established by nations which demonstrated the superiority of their talents in arts, science and commerce, as well as in politics and government. Such nations are united by religion, customs and morals and ultimately by their custom of entering into treaty and diplomatic relations with one another.66
The common denominator between “civilized” and “major” is the understanding and belief that international law is created and controlled by those nations which are the “winners” in the arts, sciences, finance and law and have the military and economic power to enforce the rules and norms which constitute the international legal order. The terminology is different but essentially the “major legal systems” are the same states as defined by “civilized nations.”
European countries share a host of common legal values, legal concepts, and legal institutions. There is a Western legal tradition. As Edmund Burke said, the laws of every European country are ‘[a]t bottom all the same,’ being ‘derived from the same sources.’67
The nations presently constituting the “major legal systems” are primarily located in the Anglo Western World, mostly in the Northern Hemisphere. “Major legal systems” is therefore simply a more nuanced version of the concept of “civilized nations.”68 Regardless of the terminology—civilized or major legal system—those
1.3 The Current Architects
1.3.1 American Post
In the aftermath of the Second World War, the United States became the unrivalled global leader. United States led international financial institutions such as the World Bank and the
However, the times, they are a changing. Sensing a weakening of the unrivalled economic, political and military status of an “American Empire”76 allegedly exhausted by wars, burdened by debt and less able to marshal the instruments of state power to protect its vital interests, other nations are stepping in, filling the power gaps and vacuums.
The global financial crisis not only caused severe hardship at home, but it also raised profound questions about the long-term viability of the
useconomic model and the international liberal order the United States has championed since the Second World War, particularly when juxtaposed with the perceived success of China’s economy. Crisis at home and the wars in Iraq and Afghanistan generated a powerful centripetal force in the United States—a demand for greater focus within its borders rather than robust foreign policy endeavours.77
As the official statement of the
International governance structures designed within a different power configuration show increasingly evident signs of losing legitimacy and effectiveness.78
United States allies also sense a downsizing in the dominance of the
1.3.2 The Changing of the Guard: Taking Aim at the Indispensable Nation
Being an architect certainly provides privileges. For example, the President of the World Bank was always an American but this has now become challenged.80 Regarding the
Indeed, the immense leverage and power exercised by the
Although the International Court of Justice held in Nicaragua v. United States that the
u.s.had violated Nicaragua’s sovereignty under customary international law, an American veto in the UN Security Council prevented Nicaragua from enforcing the judgment in any meaningful way.84
The leaders of China and Russia have openly remarked that the current international architecture is no longer acceptable and are increasing bilateral economic and military cooperation.85 Manifesting a clear reference to the United States, Russian leader Putin stated:
We all know that after the end of the Cold War—everyone is aware of that—a single center of domination emerged in the world, and then those who found themselves at the top of the pyramid were tempted to think that if they were strong and exceptional…. we can no longer tolerate the current state of affairs in the world …86
The Chinese political leadership has similarly criticized the existing architecture which is perceived as inimical to Chinese national self-interest. President Xi has called for “a regional order that is more favorable to Asia and the world”, noting that China, “[b]eing a big country means shouldering greater responsibilities for regional and world peace and development.”87
Referring to the governance mechanics and rules as “a political game”, China recognizes that the international law architects are vested with the privilege to dominate the world.
Western States try to impose their system, whether political or economic, on other societies. They do this through direct means such as trade and aid, or indirect means such as the monetary and economic policies imposed through the financial arms of the West-the World Bank and the International Monetary Fund. This is, and has always been, part of the political game played by the major powers to enhance their position at the world stage because it is economic dominance that they want to achieve through the imposition of their system on weaker societies.88
As evident from the remarks of the Chinese and Russian leadership, the hegemony of the United States is being directly challenged89 with new governance heirs arguing that the West has been guilty of using “human rights issues as a tool of hegemony and power politics.”90 New architects such as China have long endeavored to obtain more influence at the
Not surprisingly, the United States has not welcomed competitors to the game.
We’re upholding the principle that bigger nations can’t bully the small—by opposing Russian aggression, and supporting Ukraine’s democracy, and reassuring our
natoallies. Well, today, it is America that stands strong and united with our allies, while Russia is isolated with its economy in tatters. That’s how America leads—not with bluster, but with persistent, steady resolve. But as we speak, China wants to write the rules for the world’s fastest-growing region. That would put our workers and our businesses at a disadvantage.93
Chinese proposed reforms of the
This has substantially incentivized the interest in developing alternative rules and institutions and thus attempts to develop a viable option to replace the current architecture is not surprising. “The use of financial instruments of power by the West to disconnect revisionist states will increase their incentive to pursue alternative political and economic arrangements.”98
Interestingly, the dissatisfaction with the existing international governance architecture is not new. Asian nations have previously attempted to address this perception of an unfair governance order imposed by the Western powers.99 The “uncivilized” or “non-advanced” nations endeavored to alter the governance architecture writ in general and the international law order in particular with the ‘New International Economic Order” seeking to promote an alternative international law, trade and investment regime.
Just as important as the
nieo’s economic objectives were the novel means it sought to implement its objectives through new mechanisms of international law. Rather than accepting international law as a neutral device, nieolegal theorists claimed that existing international law, unsuited to promoting structural reform, was biased toward economic incumbents and needed recasting in order to favor developing nations. More narrowly, nieoproponents argued that states in the south should not be bound by legal agreements made under an illegitimate transnational legal regime, particularly if those agreements had been concluded by pre-independence administrations or with private corporations. Just as the economic goal of the nieowas to enable the self-sufficiency and self-determination of countries in the south, the legal strategy was similarly predicated on the bedrock assertion of the absolute sovereign equality of every nation.100
Another example was the South American drive in the late 1960s to establish a rival to the World Bank “as a way of bypassing the stringent rules imposed by the World Bank on infrastructure loans.”101 Yet another example was the early 2000s endeavor of Asian states known as the Chiang Mai Initiative to establish a network of currency swap agreements to address objections to the
In evaluating the current drive to alter the
The Soviet failure to achieve its goal was caused by serious weaknesses in the realms of finance, technology and self-sufficiency. As President Reagan noted:
In the 1950’s, Khrushchev predicted, “We will bury you.” But in the West today, we see a free world that has achieved a level of prosperity and well-being unprecedented in all human history. In the Communist world, we see failure. Technological backwardness. Declining standards of health. Even want of the most basic kind—too little food. Even today, the Soviet Union still cannot feed itself.104
The Soviets were always on the “outside looking in” predicting America’s demise but contributing nothing more than flamboyant rhetoric, propaganda, military flashpoints and support for anti-Western dictators and “revolutionary groups”.105 The Soviets never undertook to assemble a potentially alternative architecture or to become a rule setter. The Soviet plan to dethrone America failed miserably. The Soviets never assembled an alternate architecture to the global governance order as China and other competitors have done.
Will China, India, and several other competitors or revisionists, i.e., the budding new architects succeed in contrast to the prior failed attempts at re-writing the international governance architecture? The current prospect is different from prior attempts at undermining American global leadership in several crucial aspects.
First, while China is the spiritual leader of the new architects, several other significant players are now allied with China. Unlike the Soviet Union, whose main allies were failed communist states with stagnant economies and little or no influence on the governance architecture, China’s allies are set to become some of the largest global economies in the near future.106 The
gdp, incidentally, was $16.8 trillion on World Bank numbers, and China’s was $16.2 trillion—within a whisker of knocking the usoff its perch. The balance of global economic power is on a knife-edge.108
Whether the United States could lead in each of three areas—military, economic, and soft power—is questionable. China by some measures is set to overtake the United States as the world’s leading economic power. A recent estimate in Bloomberg shows that in 2001, America’s
gdp($10.6 trillion) was eight times that of China’s. By 2015, the American gdpwas only 1.6 times China’s—$18 trillion to China’s $11.4 trillion.111
To put the decline into perspective, total
Get ready for a new economic order. In the world 15 years from now, the
u.s.will be far less dominant, several emerging markets will catapult into prominence, and some of the largest European economies will be slipping behind.114
In addition, nations located in Asia and Africa are slated to become substantially more important over the next 10–15 years.
gdpwill grow to more than twice its size today, helping the Asian powerhouse to almost entirely close its gap with the u.s.
Countries with the biggest advances … are concentrated in Africa, Asia and the Middle East.115
China is at the center of a booming Asia which is home to the fastest growing nations with immense populations and potential economic output.
[A] future Shanghai Cooperation Organization (
sco) could represent up to half of the world’s population, 35 percent of global economic output, and account for nearly 20 percent of the world’s oil production.116
China is also the Chief Architect of
Second, unlike China, the Soviets never really set forth an ambition to integrate into the existing order and/or establish an alternative vision. The Soviets were outliers or outcasts. In contrast, China has embraced globalization and economic partnership and is leading the charge on climate change.119 China has already advanced the prospect of a reduced global American role to a far greater extent by masterfully integrating—and immensely benefiting from—globalization and free trade. Indeed, an impressive array of metrics indicates that China is a bonafide rival “of equals” to the United States. China is the lone nation that can wield enough military power to openly confront the United States120 and a recent comprehensive analysis121 indicates that China’s military is close to reaching parity with the Western powers.122 Aside from military empowerment, China is also investing substantially in education123 and is attempting to rival Western academic institutions.124 In the most vital technological spheres of the coming decades, robotics, space exploration and artificial intelligence, Chinese aspirational hegemony is self-evident.125 A Chinese White Paper envisions China as the most powerful space nation126 and China is indeed on course to achieve a relative parity or perhaps superiority to the United States exploration.127
Third, Chinese leadership on several impressive economic and geo-political initiatives. The Soviet Union’s failure to exercise influence on the global governance architecture stands in stark contrast to China’s global initiatives such as the
Fourth, adding credibility to the potential transformation of the governance architecture, the impetus for change is not solely the non-Western states; some Western nations have been alluding to a needed “re-assessment” of the current governance architecture.129
‘Europe wants it. Europe demands it. Europe will get it.’ The “it” here is global financial reform … Just hours after their closed-door meeting had finished, Bush and Sarkozy, along with European Commission President Jose Manuel Barroso, issued a joint statement announcing that a summit would be held next month to devise what Barroso calls a “new global financial order.130
The willingness of
Representatives from Britain, Germany, South Korea and Australia were among those who took part in a ceremony to sign the articles of association in the Great Hall of the People, with the United States and Japan the most notable absentees.135
In sum, the previously “less civilized/advanced” nations are increasingly becoming players in the military,137 financial,138 technological139 and scientific research spheres.140 Accordingly, the “uncivilized” and “less advanced” nations are now poised to become the new architects and are now in a position to deploy for their own purposes those instruments of which they previously been victims. Dissatisfaction with the existing governance order is not new as
2 The Current Framework Challenged
International law norms are substantially influenced, shaped and perhaps dictated by the Golden Rule—he who owns the gold; makes the rules. For approximately 70 years, the United States imprimatur on the global order has been undeniable and has resulted in a virtually unchallengeable hegemony. As former President Obama remarked:
In fact, by most measures, America has rarely been stronger relative to the rest of the world … Our military has no peer … Meanwhile, our economy remains the most dynamic on Earth; our businesses the most innovative. Each year, we grow more energy independent. From Europe to Asia, we are the hub of alliances unrivaled in the history of nations…. So the United States is and remains the one indispensable nation. That has been true for the century passed and it will be true for the century to come.142
The backdrop to American supremacy lies in the Bretton Woods agreement which effectively conferred the prize of global economic leadership on the United States. The agreement served as the backdrop to the development of an institutional framework which was created, shaped and influenced by the United States in unrivalled fashion. Through these international financial institutions, particularly the
But, the times, they are a changing. Referring to China’s move to establish a rival development bank, former
I can think of no event since Bretton Woods comparable to the combination of China’s effort to establish a major new institution and the failure of the
usto persuade dozens of its traditional allies, starting with Britain, to stay out of it.148
The following sub-sections describe these new developments.
2.1 China’s New Development Bank—The
It “is natural that when nations become more prosperous and more powerful, they try to find their own independent role and place in the galaxy of nations.”149 China is promoting “a regional order that is more favorable to Asia and the world” and noting that China, “[b]eing a big country means shouldering greater responsibilities for regional and world peace and development.”150 As a counter balance to the
The United States and Japan were caught off guard when a total of 57 countries, including Group of Seven members Britain, Germany and France jumped on board the
aiibbandwagon by March.152
The new bank “is seen as encroaching on the regional financial clout of Tokyo and its ally Washington.”153 Not surprisingly, Japan is attempting to strengthen its ties to other Asian nations as a counter-balance to the new Chinese led bank.154
China’s spearheading the new bank manifests China’s ambition to take a seat at the table of international law governance architects. China will be empowered to leverage the
China’s One Belt One Road (“OBOR”), is a trillion dollar grand strategy157 envisioning a massive new network of inter-connected railways, roads, sea and airports throughout Asia, the Gulf Cooperation Council (“GCC”), Africa and into Europe, substantially influencing the global economy.158
In terms of scale or scope,
oborhas no parallel in modern history. It is more than 12 times the size of the Marshall Plan, America’s post-World War iiinitiative to aid the reconstruction of Western Europe’s devastated economies. Even if China cannot implement its entire plan, oborwill have a significant and lasting impact.161
2.3 The Yuan’s Challenge to the
u.s. Dollar’s Reign
2.3.1 Why Reserve Status Matters
The status as global reserve currency is not merely a prestigious talking point; a nation whose currency is the world’s reserve currency reaps substantial benefits: “reserve status permits discounted borrowing of loans. And, central banks of other countries must hold [the reserve currency] in reserve to facilitate trade, in turn appreciating the [reserve currency]…. aid[ing] the reserve country with running a trade deficit in perpetuity.”167
The dollar’s role as the world’s primary reserve currency helps all of us Americans by keeping interest rates low. Foreign countries buy United States Treasury debt not just as an investment, but because dollar-denominated assets are the best way to hold foreign exchange reserves.168
Nations whose money does not enjoy the status of reserve currency cannot create staggering amounts of new currency without shouldering increased risk of inflationary currency debasement. If the dollar were no longer the world’s reserve currency, the
u.s.would be forced to assume similar risk, severely constraining the flexibility of American policy makers.169
This distinctive status of the Dollar is the objective of international envy170 and
The petro-dollar system is the heart and soul of America’s domination over the global reserve currency, and their right to make all nations have to purchase
u.s.dollars to be able to buy oil in the open market. Bound through an agreement with Saudi Arabia and opecin 1973, this de facto standard has lasted for over 41 years and has been the driving force behind America’s economic, political, and military power.171
The pricing of energy sales seals in Dollars has been a major boon to the United States. Yet this may also change over time.
While this new agreement between China and Qatar is only for the equivalent of $5.7 billion over the next three years, Qatar becomes the 24th nation to open its Forex market to the Chinese currency, and solidifies acceptance of the Yuan as a viable option for the future in the Middle East.172
Traditional opponents of
Russia and China intend to use their national currencies to settle more energy deals to guard against instability in a world energy market dominated by the
usdollar, Russian President Vladimir Putin said….176
2.3.2 The Yuan’s Burgeoning Role as a Reserve Currency
The strongest potential rival to the Dollar is the Chinese Yuan.179 China clearly has a major interest in promoting the Yuan since “[t]he No. 1 status of the greenback leaves China’s wealth and economic health reliant on
The signing of deals using the Yuan instead of the Dollar is increasing181 and Brazil, India and Russia are entering into non-Dollar deals.
Beijing has struck numerous agreements with Brazil and India that bypass the dollar. China and Russia have also set up rouble-yuan swaps pushing America’s currency out of the picture…. Gazprom Neft, Russia’s third-largest oil producer, is now settling all of its crude sales to China in renminbi, in the most clear sign yet that western sanctions have driven an increase in the use of the Chinese currency by Russian companies.182
While the pro-Yuan users are expectedly the new architects as well as developing nations such as Indonesia,183 surprisingly many
Clearly the long-term prospect of diversification of energy sales being priced in Yuan would substantially enhance China’s empowerment. Moreover, without the exclusive support of the
brics Bank— ndb Bank
The objective of the
The New Development Bank
brics( ndb brics), formerly referred to as the bricsDevelopment Bank, is multilateral development bank operated by the bricsstates (Brazil, Russia, India, China and South Africa) as an alternative to the existing US-dominated World Bank and International Monetary Fund.195
Unlike the United States dominated
It makes sense that Russia would be the first to ratify the bank. The
ndbnow is in their political interest, perhaps more so than in Russia’s economic interest. The country is currently viewed by the West as the biggest antagonist state around, with sanctions against Russia heading into a year starting next month. Since then, Russia’s government has been touting non-dollar deals with China, a minor trading partner at the moment, and created a small non-euro customs union with Belarus, Armenia and Kazakhstan.198
In an early indication of using the
ai and Space Exploration—Portents of Change
While the United States is home to important tech giants such as Intel, Microsoft, Google, Facebook and Twitter, Chinese rivals are making global inroads into diluting the corporate technological leadership of the United States.202 Many Chinese tech companies are becoming major players203 and “China’s leaders are also pushing for China to become not just the world’s largest robot buyer, but a leading robot maker…. [Chinese companies] are developing a range of robots for use in factories, and  now the world’s largest consumer-drone maker by dollar sales.”204 Western technology is at risk of losing customers to China.
The joint push to limit alleged Western dominance in the digital sphere is not limited to regulation. In hardware, many Russian customers are switching from
ciscosolutions to zteand Huawei technologies.205
In the crucial upcoming technological frontiers, the realms of artificial intelligence and space exploration, United States dominance is at risk. In the most vital technological spheres of the coming decades, robotics, space exploration and artificial intelligence, Chinese aspirational hegemony is self-evident.206
[China] laid out a development plan  to become the world leader in A.I. by 2030, aiming to surpass its rivals technologically and build a domestic industry worth almost $150 billion. Released by the State Council, the policy is a statement of intent from the top rungs of China’s government: The world’s second-largest economy will be investing heavily to ensure its companies, government and military leap to the front of the pack in a technology many think will one day form the basis of computing.207
A Chinese White Paper envisions China as the most powerful space nation208 and China is indeed on course to achieve a relative parity or perhaps superiority to the United States exploration.209
Moreover, United States dominance in the internet has raised the self-interests of both China and Russia in developing an alternative internet and accompanying technology211 to challenge the
[China’s] government is pushing to rewrite the rules of the global Internet, aiming to draw the world’s largest group of Internet users away from an interconnected global commons and to increasingly run parts of the Internet on China’s terms. It envisions a future in which governments patrol online discourse like border-control agents, rather than let the
u.s., long the world’s digital leader, dictate the rules.216
Significantly, from an economic standpoint, an alternative internet may very well lead to a change of control with respect to commerce:
‘It is something [Russia and China] will be able to control’ … Traffic to these countries ‘doesn’t have to go through the World Wide Web anymore. It goes through this system, which has been set up mainly by China.’217
In addition to economic ramifications, an alternative internet will also have characteristics that are contradictory to Western style freedoms.218 “Both [China and Russia] are also tightening domestic control over digital data and have essentially axed formal cybersecurity relations with the United States.”219 The cooperation includes an agreement to “jointly develop technology that protects their “socio-economic atmosphere,” including campaigns to thwart technologies that might “disturb public order” or “interfere with affairs of the state,”220 These initiatives run contrary to current notions of freedom. “As the U.S. and Europe have started to press for United Nations norms guaranteeing Internet freedom, Russia and China have led a movement in the opposite direction.”221
China and Russia have also agreed not to hack each other. “And while an unprecedented pact not to deploy network hackers against each other may prove largely symbolic, it’s yet another glaring sign of the two countries’ shared desire to shake up a world order largely dominated by the U.S. since the end of World War II.”222 This also may be a harbinger of conflict as nations may seek to use technology as a weapon223 and can also use it to enforce domestic control.224
vpncrackdown and the pursuit of a narrow “cyber sovereignty” reveal much that is worrying about Beijing’s vision for an illiberal global order. The free flow of information, whether it be economic, political or scientific in nature, has been an essential underpinning of global prosperity in recent decades.225
The next section will describe some of the potential new architects and will highlight their contrasting notions of norms. These differences in outlook stem from the differing historical, political, religious and cultural contexts than found in the nations of the present architects.
3 The New Architects Knocking at the Gate
Irrespective of whether the
The center of gravity for the world’s population continues to shift from the developed world to the developing world. The highest growth in population is likely to occur in Africa, while the populations of most countries in South Asia and the Middle East are expected to continue rising, with India surpassing China as early as 2022 as the most populous nation on Earth.228
The historical, cultural, religious and political experiences of some of these rising states translate into legal norms and understandings that are substantially different from Western notions. The next sub-sections briefly describes several of these rising nations and contrasts their notions of rights with the current perspective.
Brazil is an example of a “BRIC” nation and a rising power that “has more embassies in Africa than does the United Kingdom”229 and is projected to be the 6th largest economy in the next 15 years.230 However, Brazil’s enforcement of Western based international norms and democratic principles is lackluster.231
The 2016 Rio Olympics highlighted serious human rights abuses (in the context of Western values) such as state sponsored police executions, torture as well as prison abuse.232 A host of “lesser” human rights abuses including police brutality and child abuse related to the Olympics have been well documented.233 Human rights organizations have chronicled extra judicial executions, prison torture, juvenile criminal system abuse and violence against protesters in Brazil.234 In addition, the media is under severe restrictions and journalists risk arbitrary arrest for coverage of political protest.235 State sponsored torture has been singled out as a consistent and pervasive problem.236
The “spiritual progenitor” of the new architects, Chinese notions of democracy and individual rights vary significantly from Western norms. For example, in contrast to conferring rights onto individuals, “in Chinese Confucianism ‘rights’ are placed strongly on the idea of collective or group rights and manifest themselves individually only in the form ovf duties that an individual has to the group. In this sense, in Confucianism there are no rights that are individual in nature.”237
China employs one of the world’s most exhaustive Internet censorship regimes to suppress dissidence and other information that affects “national security”. It uses technology to enforce censorship and discipline political opponents238 which in the eyes of the West limits freedom. Social-media postings can be deleted and search terms blocked, and websites including Facebook and Google have withdrawn from the country or have been barred from operating.239
China’s crackdown on
ustech company, was forced at the weekend to remove from its China App Store popular applications that enable users to bypass the “Great Firewall of China”.240
From the perspective of Western norms, there have been extensive reports about serious abuse of rights in China.241 A United Nations Committee has shown grave concern over China’s record on torture.242 In 2016, the Permanent Court of Arbitration rejected, in the absence of China, most of Chinese historical claims in the South China Sea and ruled against artificial island building in the region.243
India is rapidly becoming an economic powerhouse and has emerged as the fourth largest—and by some measures the third biggest global economy244 —making India an integral member of the
India has been critiqued (based on the norms of conduct framed by the existing architects) for a variety of human rights abuses including: limitations on freedom of expression, discrimination, child labor and domestic violence such as honor killings.245 Children are forced to work rather than attend school and often work in dangerous and abusive conditions.246 Approximately half of young children are malnourished and thousands are trafficked and sold.247 Honor killings are culturally accepted and Indian legal remedies to address “honor killings” is lackluster.248
[F]emale suspects in particular are disproportionately vulnerable to sexualized forms of extra-legal violence by state actors … [the] Indian governments, both at the national and state levels, misapply statutory immunity provisions to shield security forces who commit violence against women.249
India provides an example of a nation that is modernizing and becoming a player yet has kept numerous cultural traditions and practices that are not in sync with Western norms of conduct.
While not an economic superpower, Russia is another example of a nation that has widely differing views on rights and is trying to obtain a seat as an architect of international law. Russia, successor to the
Russia has been severely criticized—when evaluated by Western standards—by the United Nations with respect to state sponsored torture and cruel and degrading treatment.250 According to
In May 2013, the United Nations special rapporteurs for freedom of association, human rights defenders, and freedom of expression voiced serious concerns about the “obstructive, intimidating, and stigmatizing effects” of waves of inspections of Russian
ngos in connection with the “foreign agents” law.252
“It is not the exception but the norm in Russia for police to torture and abuse detainees.”253 It is well documented that in Russian prisons, “[d]uring interrogation, detainees were forced to crawl on the ground and were beaten so severely that some sustained broken ribs and injuries to their kidneys, liver, testicles, and feet. Some were also tortured with electric shocks.”254
Restrictions on expression are increasing255 and freedoms of assembly and association are all under extreme limitation by the Russian government.
Growing numbers of individuals were arrested and criminally charged for criticizing state policy and publicly displaying or possessing materials deemed extremist or otherwise unlawful under vague national security legislation.256
Russia has endorsed China’s crackdown on internet access and “passed a law banning software that allows users to view internet sites barred in the country anonymously.257
Russia has moved closer to the Chinese model of internet policing in recent years. In 2014, lawmakers approved legislation demanding that companies handling the private data of Russian citizens base their relevant servers inside Russia. This allows security forces to inspect and raid server facilities and also gives Moscow a greater ability to censor unwanted content.258
Russia has been criticized for violating Western norms of conduct in neighboring Chechnya for which “the European Court of Human Rights (ECtHR) had issued over 200 judgments holding Russia responsible for grave human rights violations in Chechnya.”259 Russian military adventurism in Crimea260 and Syria261 has also resulted in severe criticism over human rights violations.262 The majority of states in the
3.5 Saudi Arabia
Another nation with rising influence and a potential shaper of international law is Saudi Arabia. Saudi Arabia enjoys an important role as the largest crude oil producer which has produced an incredible amount of cash—now a potential $2 trillion dollar sovereign wealth fund264 which dwarfs the current largest
Saudi law and custom have very different understandings as compared to the Western world. For example, the right of women to vote and drive is not well settled267 and females are restricted to home without male consent or a male family member escort.268
It is important for women coming to Saudi Arabia to know that women are not allowed to drive vehicles. In view of this fact, the University does provide daily transportation to and from the campus in University buses. Transportation is also provided for some of the evenings and on the weekends for shopping.269
Interestingly however, Saudi Arabia has recently moved somewhat towards a more Western model of gender equality with respect to women. In 2015, Saudi females were permitted to vote, although Saudi women had to be driven to the polling station270 as the ban on women driving remains strictly enforced.271
Another example of different notions of fairness and equality from existing Western norms include different understandings of rights.
In addition, various rights and freedoms Western citizens enjoy are limited or curtailed. The right to critique religion or government is not tolerated as in Western nations and can result in severe criminal punishment. “Saudi Arabia’s Supreme Court upheld the sentence of blogger Raif Badawi: 1,000 lashes and 10 years imprisonment. Badawi was arrested  for cybercrime and “insulting Islam through electronic channels.”272
The government severely restricted freedoms of expression, association and assembly, and cracked down on dissent, arresting and imprisoning critics, including human rights defenders … Torture of detainees was reportedly common; courts convicted defendants on the basis of torture-tainted “confessions” and sentenced others to flogging. Women faced discrimination in law and practice, and were inadequately protected against sexual and other violence despite a new law criminalizing domestic violence…. The authorities made extensive use of the death penalty and carried out dozens of public executions.273
Executions and beheadings have attracted much attention as the death penalty is imposed on a relatively frequent basis.274 Saudi Arabia has come under intensive criticism for the imposition of the “ultimate punishment” for non-serious crimes.275 Often, foreign nationals—ones without resources or Arabic language skills—are executed.276
The above section listed several nations that are considered rising powers and thus entering or on a path to entrance to the “club of advanced nations.” International law will have to come to terms with potential international law sources that have radically different notions of rights and liberties than existing values, raising the specter of a radically different perspective to international law than the current notions of norms and principles.
4 Ramifications and Challenges of the New Architects on International Law
Norms and “rules only come into existence at particular historical periods under particular social conditions. They are in no way universal features of the human condition.”277 It would be an historical anomaly for the new rising powers not to transform or substantially alter the existing governance architecture to reflect the new power(s) interests.278 Accordingly, the international law writ will become increasingly shaped by nations once considered “developing” and/or “less civilized.” Moreover, the prospect of Western nations moving norms towards the new architects’ exists. Economic and military power talks and “[s]tates may be particularly vulnerable to external pressure and thus tempted or even compelled to offer purely formal endorsements of international norms advocated by leading powers.”279
The new architects of the developing international financial and legal orders will:
no longer prepared to tolerate the interventionist attitude of the West, or accept the imposition of imprudent and perhaps harmful social and economic policies driven by Western countries, whether through direct or indirect means.280
Shifting notions of acceptable conduct is hardly surprising as international law does change over time.281 Accepted norms are subject to cyclical change depending upon shifting social and economic conditions thus allowing alternative notions of norms to emerge.
All major civilizations have for long periods treated a significant portion of the human race as “outsiders” not entitled to guarantees that could be taken for granted by “insiders.” Few areas of the globe, for example, have never practiced and widely justified human bondage. All literate civilizations have for most of their histories assigned social roles, rights, and duties primarily on the basis of ascriptive characteristics such as birth, age, and gender.282
Further corroborating the cyclical nature of international law, some argue that the current Western conceptualization of international law is itself a successor to a previous value system rather than constituting the true ideological progenitors of international law. Is international law really based on Western Christian civilization?
If the examination is limited to the nineteenth century and onwards, then the conclusion would be based on a rather narrow Euro-centric perception of international law. However, if the inquiry goes farther back in history, taking into account all evidence available in writing since the days of thriving ancient civilizations of other regions of the world, then the conclusion is a broader global one based on a universal outlook of the history of international law.283
This view claims that “modern international law” is a concept usurped from previous architects.284 However, “[t]he absence of sufficient literature unearthing and analyzing the practices of ancient States of Asia, Africa, and other parts of the world does not signify that human rights have their origin only in Christian Western civilization.”285 International law may thus be viewed as a cyclical circle of architects, where dominant powers of centuries ago may re-assert themselves depending upon new conditions. The following sub-sections identify several specific (and at times overlapping) areas where these potential clashes may occur.
4.1 Core Issues Defining International Law
4.1.1 The Vision of International Law
China and Russia envision a very different narrative of the international law writ. For example, in 2016, China and Russia issued a joint Declaration on the Promotion of International Law286 corroborating the titanic gap that remains after 70 years of the current international law paradigm. China and Russia critique “the practice of double standards or imposition by some States of their will on other States, and consider that imposition of unilateral coercive measures not based on international law, also known as ‘unilateral sanctions’, is an example of such practice.”287 Moreover, crucially, the non-mention let alone de-emphasis on human rights and promotion of democratic notions of governmental legitimacy also demonstrates the irreconcilable vision of international law.
Illustrating the desire to recast the governance writ, China issued a White Paper on international law clearly attempting to attack the existing Western narrative.288 The position paper makes no mention of human rights or the rights of citizens. Instead emphasis is placed on sovereign equality, non-interference in others’ internal affairs, and the non-use of force. China advances the argument that “international and regional rules should be discussed, formulated and observed by all countries concerned, rather than being dictated by any particular country. Rules of individual countries should not automatically become “international rules,” still less should individual countries be allowed to violate the lawful rights and interests of others under the pretext of “rule of law.”289 The latter statements are hardly surprising given Chinese allegations that the
The emphasis on state sovereignty, non-intervention in the internal or external affairs of states, insistence on the
4.1.2 Western Notions of Human Rights
Human rights advocacy has a distinctive Western slant since “at the time of the adoption of the
Are human rights “universal”? Under which lens should “international law” examine human rights conduct? In China, the discourse on human rights can be viewed in the context of “the group”.295 This is of course different from the individual based Western system. For example, in every Chinese Constitution, (1954, 1975, 1978, and 1982) human rights are enumerated296 and pursuant to each Constitution, the rights of “society” or the “collective” trumps individual rights.297
The 1993 Bangkok Declaration, favored by many developing powers, reduces “universality” by reference to national and regional influences:
[W]hile human rights are universal in nature, they must be considered in the context of a dynamic and evolving process of international norm-setting, bearing in mind the significance of national and regional particularities and various historical, cultural and religious backgrounds.298
Such language has moved towards the “mainstream” appearing in the 2005 World Summit Outcome Document and other contexts such as the 2012
All human rights are universal, indivisible, interdependent and interrelated. All human rights and fundamental freedoms in this Declaration must be treated in a fair and equal manner, on the same footing and with the same emphasis. At the same time, the realisation of human rights must be considered in the regional and national context bearing in mind different political, economic, legal, social, cultural, historical and religious backgrounds.299
Some believe there is an inherently unsolvable conflict of values.
In the aftermath of the so-called “Islamic Revolution” in Iran in 1979, an Iranian delegate to the United Nations (
un) Human Rights Committee stated that international human-rights instruments, such as the 1948 Universal Declaration of Human Rights ( udhr) and the 1966 Covenants on Human Rights, contained provisions whose implementation would be contradictory in a country where Islamic law was observed. Another delegate from Iran stated to the Human Rights Committee that whenever divine law (i.e., Islamic law) conflicted with man-made law (i.e., human rights law), divine law would prevail.300
The eminent Harvard political scientist Samuel Huntington anticipated conflict between modern Western states and Confucian and Islamic nations.301 Huntington foresaw the “uncivilized” states modernizing and becoming militarily and economically powerful without accepting Western values and norms.302 This prophetic narrative has been substantially accurate as the new architects have largely remained unaffected by Western criticisms303 and this fact has great implications for international law.
The first [upcoming challenge] is contested norms, in which increasingly powerful revisionist states and select non-state actors will use any and all elements of power to establish their own sets of rules in ways unfavorable to the United States and its interests.304
As detailed supra Part
Moreover, the issue is not simply whether the modern Western concepts of human rights should be transplanted into the “newly civilized”. The opposite is also true—certain rights currently entrenched in Western nations308 may in fact constitute egregious violations of cultural norms and be considered illegal, abhorrent and sacrilegious.309 Similarly, freedoms of speech, to assembly, to protest, to drive, or to worship, may be denied by the new architects based upon criteria that would be considered the most severe violations of human dignity the existing architects;310 but it is perfectly acceptable—or perhaps even obligatory—to deny these rights to certain groups based upon a religious, ethnic, gender or political basis.311
The new architects have objection to the Western push for human rights and perceive self-interest as the driver arguing that the West has cynically and exploitatively invoked human rights as a tool of hegemony. For example, the new architects perceive The Universal Declaration of Human Rights (“UDHR”) as reflective of the interests of the existing architects. The
Some have vigorously contested the Western contextual foundation of human rights; namely that such rights are universal.
Because the emergence and development of rights is tied up with the relationship of one class to another, and because rights are bestowed by the state and law, they simply cannot be universal, or equal for all classes. In a class society man cannot transcend national boundaries, but belongs to a certain class and a certain state. Whatever rights man has are class rights, they have distinctive class nature.314
In contrast to the
Opponents of the advancement of Western norms on developing nations can argue that not every nation will prosper under a Western inspired democracy and that some cultures require a vastly different value system or the society will be damaged.318 Interestingly, the ‘Pew Global Attitudes Project’ found that “86 percent of Chinese said they were content with their country’s direction, double the percentage who said the same thing in 2002. In contrast, a mere 23 percent of Americans polled in the survey said they were satisfied with their country’s direction.319 Apparently, Chinese citizens do not feel oppressed.
Should the West attempt to impose its vision of norms?
It was not about international relations, but rather an attempt to change other countries’ domestic policies. On this issue, there are some important questions that need to be asked: Why should we try to make the rest of the world more like us? If we should try, in what specific ways should they be more like us? And finally, what is the best way to make others more like us?320
If the citizens of a nation are happy with their governance, should that model be copied or at a minimum respected as “working for its citizens”? Perhaps the West will look to embrace the norms of China out of enlightened self-interest?
4.1.3 Global Litigation Against Individuals and Businesses for Violations of International Law
Global litigation against individuals and businesses for international law violations will also be affected.321 In the United States, the Alien Tort Statute (“ATS”) permits aliens to file suits against defendants for violations of international law.322 Pursuant to the
[W]e are persuaded that federal courts should not recognize private claims under federal common law for violations of any international law norm with less definite content and acceptance among civilized nations than the historical paradigms familiar when § 1350 was enacted.324
Therefore, the misconduct is only actionable if considered a violation of international law through the lens of the “civilized nations”.325 However, what if the benchmarks change as international law evolves?326 Ironically, modern
What happens when states that employ torture become international law architects? What would happen if a majority of the nations of the world found that discrimination against certain groups based upon ethnic, gender or religious criteria was not merely permissible but obligatory? Perhaps child labor is not abuse but educational or mandatory culturally to a majority of the nations?
We can all agree that actions should be in the “best interests of the child,” but who decides what is in the “best interests of the child”? Opinions may vary. Could some of these provisions be interpreted in ways that conflict with
Are honor killings a legitimate exception to the rule against extra judicial executions? Are public beheadings and executions torture or a method to prevent violent crime and moral decay? Moreover,
4.1.4 The Global Discourse on
Similarly, the discourse on a host of
Environmental crime adversely impacts sustainability and development332 but different nations have different interests. “What may constitute a crime in one country, is not in another”333 and relatively few nations have taken substantial remedial enforcement and/or preventative action on environmental crime.334 In fact, several of the new potential architects are prominent actors in perpetrating, and/or aiders and abettors of, environmental crime.335
As the new architects rise in influence, their divergent interests and values will likely make international enforcement and agreements on environmental and sustainability more difficult. An example is climate change where rapidly developing new architects may have vastly different self-interests than those of the existing architects.336 Similarly, the capacity of governments to enforce criminal law greatly varies. This is particularly true in many of the potential new architects, where very little development support has gone to strengthen the enforcement and judicial sector.337
In the R2P context, both China and India have expressed serious reservations.
Hegemonism, power politics and all forms of “new interventionism” pose a direct challenge to basic principles of international law including respect for sovereignty and territorial integrity and non-interference in other countries’ internal affairs.338
India has also expressed deep hesitation on the R2P perhaps a reflection of “the contradiction between India’s commitment to democracy internally and its stance on non-intervention internationally.”339 While the new architects may have substantially different views on
4.2 Rules Governing the Global Order
Leading—always—with the example of our values. That’s what makes us exceptional. That’s what keeps us strong.340
Unquestionably, the status of the United States as the indispensable nation is inextricably linked with the fact that global finance and trade is encapsulated in the rules and institutions dominated by the United States and has proximately caused “the spread of [United States] values, both in Asia and beyond”.341 However, as the new architects rise, these rules and institutions will likely change reflecting the interests of the new powers.
4.2.1 Financial Regulation and
ifis/International Organizations/ swfs
In the virtual world of Disney, the character Jafar states the “Golden Rule” as “He who owns the gold makes the rules”.342 However, with respect to the global governance architecture, the Golden Rule is: “He who makes the rules owns the gold”. The architects of the global governance order reap the rewards.343 An important exemplar was the
saps contain a standard of globalization that demands that developing countries implement policy, legal, and institutional reforms consistent with those believed successful by the developed world.346
Emerging liberal thinking about the international legal order argues increasingly that it is possible to divide the world into zones, with a liberal zone of law, constituted by liberal states practising a higher degree of legal civilization, to which other states will be admitted only when they meet the requisite standards. This is in some respects a continuation of recurrent patterns in the history of Western legal thought, traceable, for example, in the sixteenth-century European divisions between Christians and infidels, or in James Lorimer’s late-nineteenth century division of the world into a hierarchy of civilized nations, barbarous humanity, and savage humanity.348
In other words, the “civilized” world deemed the “uncivilized” as deserving of modernization (i.e. civilizing”). Thus, to deserve the benefits of Western “principles of sovereign equality and non-interference, they had to admit the inferiority of their cultures and permit massive interference with their internal affairs.”349 The uncivilized have resented this approach and accuse the civilized of using the rationale of “the ‘civilizing mission’ justify the continuous intervention by the West in the affairs of Third World societies and provided the moral basis for the economic exploitation of the Third World that has been an essential part of colonialism.”350
Another aspect are the rules with respect to transparency, accountability and fairness, as such values are shaped and are a function of the existing Western
The regulation of
As dominant and controlling shareholders act in public companies, it is normal to extract self-advantage. Since the new
4.2.2 International Economic Law, Dispute Resolution, Trade and Investment Treaties
International trade agreements may encompass broader, geopolitical and concerns global governance contexts have always played a role in investment treaty law.358 The strategic implications are conceded: trade agreements with the U.S. are a form of “entrench[ing] the presence of the U.S
Investment treaties and agreements were “[h]istorically conceived as an instrument to be used by developed, countries to protect their firms’ investments against political risks361 which always played a role in investment treaty law.362 Self-interest drives law and economics363 and in some ways
Like old capitulation agreements, present day
bits also exempt foreign investors from having to go to local courts. They merely substitute international arbitral mechanisms for the former’s recourse to consular officials. Further, while investment agreements are formally the product of mutual state consent, the consent by ldcs to terms that are extremely favorable to foreign investors largely from the West has been heavily constrained by the dictates of the market as well as the privatization and other demands extracted by institutions like the World Bank and the imf.364
But power is shifting and while the “developed” civilized nations had initially designed and shaped these instruments and institutions, the non-civilized nations have become economic powerhouses. Investment treaty law decisions365 —including claims and defenses366 —are impacted by and reference international law.367 The definition, contours and application of treaty obligations will have different outcomes depending upon interpretations of international law.368 Thus, the terms and rules of international trade, the usage of certain dispute resolutions and the interpretations of disputes based upon international law are all potentially affected by the new architects since “investment tribunals should and actually do apply all, or major parts of, international law and not just a specialized segment.”369
International law is becoming increasingly important in investment treaty law370 and the new architects will have their own interests to advance—numerous issues will be affected. These issues include: debt restructuring, treaty commitments, sovereign defaults, whether certain conditions constitute an emergency or fiscal crisis (and thus override a treaty) are all subject to various international law that may change.
For example, pursuant to current international law, the ability to move capital across borders is considered fundamental. “[T]he free movement of capital is a fundamental freedom in the European common market, and as such can be restricted only in clearly limited cases.”371 However, international law also allows “member states to restrict the movement of capital to or from other member states or third countries when given grounds as a matter of ensuring public order or public security.”372 Will the new architects have a different view or will they continue to define public order and security as is presently defined since the new architects “will be increasingly dissatisfied with the current Western-derived notion of international order.”373 China has already stated that it has strong reservations regarding the existing Western rules.374
Sustainable development and corporate responsibility including human rights, anti-corruption, labor law, and environmental concerns.375 In recent years, sustainability and social responsibility have steadily increased376 and arbitrators have increasingly incorporated these factors into rulings.377
Specifically, 287 of the 1113 decisions surveyed mention at least one of these issues at least once—that is, 26% of the documents deal in some way with these
sd/ rbc-sensitive issues. The breakdown of references is as follows:
- The term “environment” occurs in 165 decisions;
- The term “human rights” is found in 131 documents;
- “Corruption” is referred to in 81 decisions, and “bribery” in 29 documents;
- References to “labour conditions”, “labour standards” or “labour law” can be found in 2 decisions. A broader key word search on the term “labo(u)r” produced 131 results.378
Corruption and bribery as a defense provide an excellent example of shifting interests since:
within the current state of international investment law, it has been relatively well settled that bribery/corruption is considered contrary to international public policy. The result has led arbitrators both within
icsidand other arbitral regimes to increasingly accept an affirmative defense commonly known as the “corruption defense” which allows tribunals to void an underlying contract if procured through an act of corruption or bribery.379
Yet it is the new architects that seemingly do not value bribery and corruption to the same extent.
While reporting to
traceis voluntary and therefore inferences should admittedly be drawn with caution, in the countries of Brazil, China, India and Russia (the appropriately named briccountries) between 47–75% of respondents reported multiple bribe solicitations per year with 7–20% stating they received over 100 requests.380
As international law potentially undergoes a new architectural basis, investment treaty decisions may “evolve” to incorporate the norms of the new architects.381
Right now, China wants to write the rules for commerce in Asia. If it succeeds, our competitors would be free to ignore basic environmental and labor standards, giving them an unfair advantage over American workers … We can’t let that happen. We should write the rules.382
Alternatively, trade may be reduced and nations may simply decide the irreconcilable differences militate towards pulling away from global integration and trade. Several new architects such as India and South Africa have considered withdrawing from investment treaties.383 As a corollary several of the existing architects are also becoming less welcoming on investment treaties384 and trade pacts.385
Some argue that the Chinese challenge will be rebuffed and the United States will remain the global hegemon for the remainder of the century. Indeed other nations have been considered as threats to the United States only to ebb. “[H]istory is filled with shocking miscalculations—the exaggerations of Soviet power in the 1970s and Japan’s economic rise in the 80s.”386
[T]here is no United States demise. For the rest of the 21st century the United States will remain the world’s strongest military power, its most innovative economy and the chief defender of the core values on which our country was established. Our economy is the strongest it’s ever been, our corporate sheets are the strongest they’ve ever been, our unemployment rate is at a record low, we have seen 15 million new jobs created and these are honest numbers, not numbers created by a party machine.387
But as described supra, the current prospect is different in several crucial aspects and a plausible potential exists that China and several key allies will indeed successfully challenge American supremacy.388
As the new architects benefit from the global power shifts, it is inevitable that the global governance orders—financial and legal—will undergo a transformation with ramifications in the international geo-political389 and economic battle-fields. This is neither surprising nor new—monetary power correlates positively with strategic success.
There is nothing new in the idea that countries seek to turn financial capital into political power. Britain pursued the same approach in the 19h century, and the United States has done so successfully since World War Two.390
China’s strategic and long-term interest is fundamentally different form that of the Allies after
Moreover, the potential exists that Western nations will seek to embrace the new powers as evinced by the failure of the
Just as access to American markets and capital was once a key component of
u.s.diplomacy, China is now employing its financial and trade muscle to win friends and influence.396
This may substantially affect Western nations and their willingness to confront powerful states that do not share the current values. Pursuant to the United States led Western model of domestic government and global governance, governments are institutions could be critiqued without retribution and government control of individuals is viewed as a negative.397 However, once a new hegemon arises, incentive will expeditiously shift to engage in a spirit of alliance and leave the orbit of the existing hegemon. “China’s economic dominance has broken into the Western alliance system, with countries from Japan to Australia eager for trade with China rather than to remain as ramparts for a Western military project.”398 Moreover, demonstrating the fluidity of norms, Western nations, particularly post-9/11, have shifted towards the “non-civilized” notions of security arguing in favor of conduct once considered a clear violation of international law.399
Indeed, a large set of freedoms and rights taken for granted by the Western Euro-
Further, while the narrative in recent decades has been that interaction with Western norms would help democratize China, perhaps this goal may in some sense be unethical since for example the Chinese seem satisfied with their current values and norms.401
[T]he Chinese appreciation of democracy is different from the West. Dickson explained that most Chinese do not measure democracy with the rights that they exercise but with what they get from the government.”
Moreover, despite Western critique, the majority of Chinese citizens perhaps do not mind censorship402 and appear to be satisfied with their Government.403 “86 percent of Chinese said they were content with their country’s direction, double the percentage who said the same thing in 2002.”404 This suggests that Chinese perceptions on rights and freedoms—while markedly different than Western—may be legitimate in China.405 If so, then is it impractical and perhaps unfair for the “civilized world” to impose a Western version of rights and freedoms on the “uncivilized”? Is it fair to presume modern Western values are the superior ones or at a minimum, norms that all nations must accept? This is reminiscent of the rationale “a country would not truly be civilized until it adopted and implemented legal reforms to create a Western-style legal system for all persons within its jurisdiction.”406 Certainly, large scale dissatisfaction among the citizens of the current architects does not corroborate this presumption of superiority. Indeed, some argue that the “civilized” Europeans were in fact anything but barbaric.
Europe confessed itself impressed and was stung to emulation by the lofty magnanimity and the ideals of chivalrous honour presented to it by the knights of Spain, by gentlemen like the fierce soldier Al-Mansur who claimed that, though he had slain many enemies in battle, he had never offered an insult to any—an ideal of knightly demeanour and dignity which twentieth-century England might with profit emulate. The ruffianly Crusaders were shamed by the grandeur of conduct and generosity of Saladin and his chivalry.407
Militating against rapid transformation and in favor of incrementally modifying the current order is the fact that China must deliver economic growth to its citizens and socialist models fail at doing so. For example, one of the great consequences of the last 50 years has been the detachment and autonomy of the private sector. It will be hard for China to put that genie back in the bottle. Furthermore, the rise of the new architects has been enabled by adherence to a market based formula. Free trade and a rights based system has empowered the new architects and some or many may have a vested self-interest continuing this path. For example, the rise in
The possibility also exists for the international law architects to stand firm and/or use their still superior power to limit the rise and influence of the new architects.410 Thus, pursuant to Western self-interest, the existing architects could attempt to limit the power of Confucian and Islamic states.411 After all, “in the long term, our [United States] security is best ensured by the success of our ideals: freedom, human rights, open markets, democracy and the rule of law”412 Doing so is not based upon an ethical or moral duty, but rather cold hard self-interest and would corroborate the claim that the current architects’ idealistic notions are a self-serving contextual narrative.413 Of course having reached a critical mass, the ability to limit let alone stop the new architects may no longer be feasible.
A nation’s status as an architect (i.e. a powerful state) determines its influence on international law. The current international legal and financial governance order has been created, dominated and overseen by the United States—the indispensable global leader along with key strategic allies. This exceptional dominance has been institutionalized by the
However, the world has changed over the last few years. No longer dominated and principally shaped by the current architects, new architects will likely attempt to—and will wield sufficient power to—affect international law.414
The situation of Asia is unique in that the states of the region have a majority of the world’s population, the largest share of its landmass and are projected to overtake Europe and North America in economic output in the coming decades. For such a region to be predominantly a ‘rule taker’ is a problem that scholars have been trying to explain for some time. In particular, there does not appear to be a comparable example of a great power (or multiple powers) rising within a normative framework not of its own making, where that normative framework has not undergone substantial change or revolution as a result of the new power’s values and interests.415
This transformation will likely lead to re-writing the rules and will serve to devalue the institutions which have enforced the global governance architecture over the prior 70 years. At a minimum, the replacement of the present architects will present a definitional, let alone enforcement problem with respect to international law. A different code of conduct practiced by these new “civilized” or “leading” nations may conflict with current norms and international law will need to focus on this potential dichotomy between former and new standards and customs. The failure to address this impending clash of customs may lead to a fracture of global enforcement of international law, reduced prosperity and heightened conflict.
- (a) in the form of customary law;
- (b) by international agreement; or
- (c) by derivation from general principles common to the major legal systems of the world (emphasis added).