THE GLOBAL GOVERNANCE SYSTEM AOTP PTOURRTMUONIILT:I ES AND CHALLENGES

PANG ZHONGYING

Distinguished Professor, Institute of Marine Development, Ocean University of China and Distinguished Professor, Institute for Social and Cultural Research, Macau University of Science and Technology

A fter the end of the Cold War, the bipolar pattern collapsed and global governance was on the rise. Through more than two decades of development, most profound changes since the end of the Cold War have happened to the current global governance system, among which there are both worrying crisis and positive improvement. Some of the countries like the United States (US) under the presidency of Mr. Donald Trump have announced to withdraw from some of the global governance mechanisms whereas other countries like China are injecting new vitality to global governance. At present, the demand of the international community for global governance remains significant, and even those countries that criticize global governance and choose to walk out from pertinent treaties and organizations continue to make use of the existing global governance system. Indeed, there are some countries that seek after replacement of global governance system, but other countries including China continue to pledge not to “reinvent the wheel” and stress on the importance of continuing to keep up the global governance system set up in the wake of the World War II. Though there are differences among countries in perception, position and policy, it is a basic consensus to reform on the existing global governance system. In response to new global challenges, led by some of the countries, a number of new mechanisms for global governance have come about. Though there are bound to be uncertainties in the future development of those mechanisms, as institutional innovations they display initial vitality in comparison to traditional international institutions. This Essay is in the main to explore the profound changes that are happening in the global governance system, to analyze the opportunities and challenges facing global governance and to look into its future.

THE GLOBAL GOVERNANCE SYSTEM BECOMES MORE COMPLEX

Global governance is a process of collective actions or international cooperation to deal with global challenges, issues and crises, a process that goes beyond nation-states and regional integration mechanisms of nation-states, takes global public goods such the United Nations (UN) for platform and is based on international rules, norms and institutions. Evidently, as a process of solving global issues, global governance is, by nature, peaceful, political, regulatory, multilateral and consultative. However, the existence of global governance does not mean that there are rule (norm or institution)-based solutions to all problems of the international community. Global governance goes side by side with non-global governance. Even by participating in global governance, some of the countries sometimes do not rely on global governance for solving problems.

China actively engages in global governance. China shares the same standpoint with the majority of the participating parties, which is conducive to stabilize the existing global governance system. The China-France Global Governance Forum was held in Paris in March, 2019. The picture shows Chinese President Xi Jinping meeting with French President Emmanuel Macron, German Chancellor Angela Merkel and European Commission President Jean-Claude Juncker who attended the closing ceremony on March 26th. (Photo source: Xinhua News Agency)

In the early 1990s, as the end of the Cold War accelerated globalization, it provided opportunities for solving global issues that kept growing. In the process of solving global issues, post-Cold War world peace was consolidated. What makes the world of the 21st century different from that of all past times is the simultaneous presence of globalization, global issues and global governance. It is beyond doubt that the current global governance system is a highly complex system and a pluralized one. In the system, there are not only states varying greatly in composite strength but also all kinds of non-state actors.

The rise of global governance after the Cold War was symbolized by at least two events. First, non-Western states, China in particular accelerated the process of participating and integrating into international institutions (international organizations) that had come into being after 1945. It was precisely because of the full participation of countries like China in global governance that international organizations including the United Nations (UN) attained more inclusiveness and greater representation. Second, more and more non-state actors of all kinds took part in the process of global governance. As non-Western states and non-state actors increasingly became an important, even the principal part of the global governance system, the system itself gradually transformed. A new global governance system has come into being through interactions (including trade and game) between various actors or stakeholders in global structures such as power, market (including trade and finance), ecology (including climate) and knowledge (including technology).

On global level, the effects of choice and conduct of states to the global governance system vary a great deal. Some countries like the US are superpowers. Discontent with US policy for global governance over the years, Trump is full of complaints against the existing global governance system. He has decided to exit from some of the institutions or agreements for global governance (that is US-exit). US-exit has weakened and even deteriorated the global governance system, causing turmoil for it. On the other hand, some countries, China for one, are emerging countries taking advantage of post-Cold War international environment of peace and development. To the contrary of the US, they have injected new vitality to global governance. It is the role played by emerging countries like China that helps maintain and consolidate the global governance system.

On regional level, actors in global governance and in particular regional integration bodies with international action capacity such as the European Union (EU) make the global governance system more complex. On March 29, 2018, Britain launched Brexit process. So far, Brexit has not directly hit the EU's role in global governance. Under the shadow of Brexit, the EU continues to expand and strengthen its role in global governance. Under the new situation, the EU remains active in partaking in the complex process of global governance via the Group of Seven (G7), the Group of Twenty (G20) and the UN. It styles itself as the greatest guarantor of global security, especially maritime security. It is worth noting that the role played by the EU in global governance remains an important global topic, on which there are all kinds of debates within and without the EU. To take part in global governance is a major content of EU common foreign and security policy. Other actors in global governance (other countries in the world, international governmental organizations and major global forums) recognize and accept the key role for the EU to play in global governance, enhancing interaction and coordination with the EU on global governance. Global governance has become a cornerstone of China-EU relations.

Furthermore, besides the EU, traditional regional organizations such as the African Union (AU) and the Association of Southeast Asian Nations (ASEAN) have played a role in strengthening rather than weakening global governance since the Cold War ended and especially since the outset of the 21st century. So also have emerging regional and trans-regional bodies such as the Shanghai Cooperation Organization and the BRICS cooperative mechanisms.

IMPROVING REPRESENTATION OF GLOBAL GOVERNANCE AND ITS OWNERSHIP STRUCTURE

Representativeness of global governance is a very important subject. Since long ago, many countries and regions (like Africa) have argued that they are under-represented in global governance. Such under-representation is a sign of an international order that is unjust. However, as the global governance system evolves, representation of global governance has improved. It began with the G20 Summit of 2008. Almost all of the emerging economies that had not fully participated in global governance until the Cold War ended were included to cope with the global financial crisis. Surprisingly, the emerging economies became united in the framework of the G20 and in the form of BRICS began to interact with the G7 among others. The G20 played a key role in improving representation of global governance. Promoted by the G20, representation (“say”) of countries like China in international financial organizations has improved somehow as their contributions keep growing. In 2019, China becomes the second largest fee-paying country to the UN and its peace-keeping budgets, which improves the representation of the developing countries as a group in the UN-led process of global governance. Since 1992, the UN has undergone reform. Reform on UN Security Council is center to UN reform. However, the UN reform so far has not made progress that gratifies the member countries. Recently, Germany suggested that France give up its permanent membership of UN Security Council to be replaced by the EU, which was rejected by France.

On improving the representation of participating countries in the global governance system, contribution-based “say” is what is talked about more at present, which in concrete terms is “voting right” (namely right to decision making). What is less talked about is ownership in the global governance system, which is even more important than “say”. Because ownership indicates to whom global governance belongs, for whom global governance is conducted and who conducts it. On the ownership of principal actors in the process and its structure hinges success or failure of global governance.

More serious problems rest with the representation of non-state actors in the global governance system. The UN has attached great importance to non-state actors' participation in its affairs. Nonstate actors have taken part in the global governance process of almost all the UN organizations. In spite of this, the role of non-state actors in global governance needs to be further strengthened.

RISKS OF RETROGRESSION IN GLOBAL GOVERNANCE

As a scholar points out, global governance is indeed retrogressing. The point is whither global governance will retrogress? It is imperative to reform on global governance system, and necessary reform is for progress.

Since the Cold War ended, some of the practices of global governance have been increasingly deepened. International collective action that seems normal today could be “full of ambition” at the outset of the end of the Cold War. The World Trade Organization (WTO) established in 1995 signified transcending the old General Agreement on Tariffs and Trade (GATT) and establishing a global economic governance system for the 21st century. Different from the GATT, the WTO eventually made real the conception of constructing a truly global trade organization conceived in the wake of World War II. It set up an unprecedented dispute settlement system. At present, against the background of resurgence of de-globalization, populism and nationalism, the WTO dispute settlement system has become highly controversial. It is none other than the US that makes it an issue, a country that pushed for the establishment of WTO dispute settlement system and has made the most use of it.

Furthermore, the macroeconomic policy cooperation of G20, the mutual assessment process (MAP) even touches on domestic economic structure of all major economies and involves sovereignty. The G20 Pittsburgh Summit of 2009 defined the G20 as “the primary platform of international economic cooperation”, calling for “macroeconomic policy cooperation” between major economies. It means that global economic governance was upgraded further in face of the global financial crisis. However, it is noteworthy that at recent G20 summits the central position of the G20 on global economic governance has not been emphasized. Since the G20 Summit hosted by Mexico in 2011, the MAP no longer has been the theme of G20 process.

In most of the existing global governance bodies are a lot of problems accumulated in their operation. It is the consensus of all participants in global governance that it is necessary and urgent to reform on global governance bodies. However, the participants differ on how to do it, they even conflicting one another. Concerning reform on the WTO, there are differences between China and the US. The EU has put forward a plan for reform on the WTO and its appellate body in particular and attempted to resolve differences with the US and to enhance cooperation with China at the same time. Reform on the UN and especially its Security Council will go on, but in the foreseeable future it is difficult to make any breakthrough.

The Trump administration demands that reform on global governance system be pursued from the angle of US national interests, alleging that global governance threatens US sovereignty. Such a foreign policy is radical and subversive to the current global governance. On January 16, 2019, the US presented to the WTO General Council a paper titled An Undifferentiated WTO: Self-Declared Developm ent Status Risks Institutional Irrelevance, calling for removing the right to special and differential treatment from a large number of developing members. The US approach for “undifferentiated” reform is detrimental to developing members that are the bulk of the WTO. On February 15, 2019, China, India, South Africa and Venezuela jointly presented to the WTO an analytical paper titled the Continued Relevance of Special and Differential Treatment in Favor of Developing Members to Promote Development and Ensure Inclusiveness. The EU partly concurred with US positions, which attracted a lot of attention.

It is worth noting that the effects of US-exit from some of the global governance mechanisms or the US putting forward plans subversive reform on global governance may be exaggerated. If the US continues to put forward action plans that may affect the fundamental interests of most of the participants in the global governance system, they can only serve as excuse for further US-exit from the global governance system. Likewise, the effects of Brexit on the current global governance system should not be exaggerated, either. Britain after Brexit will no longer be part of the EU common foreign and security policy but take independent position in the global governance system. However, Britain and the EU share generally common objectives and approach on global governance. They will remain close cooperative partners in the process of reform on global governance. Without Britain, the capacity of the EU in global governance will decrease somehow, but it will not affect the normative role played by the EU there.

If the US is absent, will global governance continue? At present, after USexit from some of the global governance mechanisms, the process of global governance goes on in US absence. What will global governance look like in the absence of the US? In perspective of scenario analysis, “in the absence of the US” may only mean without the US Government rather than truly without the US. Under the circumstances of the Trump administration keeping up USexit, the role played by the US in global governance should be seen in a proper way. In many areas of global governance, American local governments or non-governmental organizations also play an important role. In sum, USexit and Brexit do not mean the end of global governance.

CORRECTLY UNDERSTAND ALTERNATIVE ARRANGEMENTS FOR GLOBAL GOVERNANCE

As Chinese leadership has made it clear on a number of important international occasions, a China that takes an active part in global governance will not seek to reinvent the wheel. The principled position of not reinventing the wheel means that China is a staunch supporter of the current global governance system. China's position being similar to that of most of the participants helps stabilize the current global governance system.

However, China not reinventing the wheel does not mean that other countries will not do so. Many countries including the US, while discussing reform on the global governance system, have continued to seek alternative arrangements for solution. Such alternative arrangements should not be unilateral or in the interest of a single country only. Rather, they need to be made through thorough discussion of all actors and stakeholders in the global governance system so as to coordinate value differences and conflicting interests between different actors on new plans for global governance, which helps prevent new global governance from lacking necessary, minimum legitimacy.

Currently, against the backdrop of resurgence of anti-globalization, populism and nationalism, the WTO dispute settlement system has been thrown in doubt. The World Trade Organization lowered its forecast for global trade growth this year from 3.7% to 2.6% in its latest Trade and Statistics Outlook which was released on April 2nd, 2019.

At present, in solving global issues there are either new prospects or new processes of multilateralization. For instance, on global security, the Intermediate-Range Nuclear Forces Treaty (INF Treaty) signed between the US and the former Soviet Union is now challenged by US-Exit. The US Government has mentioned on several occasions that even if the INF treaty were kept, it should become multilateral to include China at least. At the moment, China does not accept such multilateralization as that of the INF Treaty. However, if the process of multilateralization on INF starts, China will have to face pressure for a multilateral INF treaty to replace the nullified US-Russia bilateral one. On global financial area, multilateral institutions parallel to the World Bank and regional development banks have come into being, for one, the Asian Infrastructure Investment Bank (AIIB). Such multilateral institutions are necessary supplements to the current global financial pattern rather than challenge it. Even so, the US has for long been opposed to the establishment and operation of the AIIB. Furthermore, on the field of governing the global commons, especially on designing and shaping the rules for governing the global commons, some of the world major countries have taken the lead to build the momentum for multilateralization of solutions to global issues on global commons. The process of global negotiations for climate governance will formally begin, being a major event for global sustainable development and global maritime governance.

CONCLUSION

Since the Cold War ended, as globalization diversifies global issues, the global governance system has become complex more and more. The post-Cold War process of reform on the current global international organizations has been tortuous, that on some of them even coming to a deadlock. If in the foreseeable future reform or modernization of global international organizations with piling problems cannot live up to the expectations of most of the countries, those organizations will lose their relevance to solving related global issues. The current global governance system is in face of major challenges which are also opportunities for their reconstruction. The world's major countries shoulder important tasks of reforming on the global governance system. However, at present there are disagreements and even conflicts between them over position, policy and action for reform on global governance. Therefore, it is necessary for them to conduct meaningful dialogue, coordination and cooperation for the future of global governance and, above all else, to reach consensus on averting major retrogression in global governance but effectively advancing it.