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The Guardian of the Liberal World Order

By Ana Palacio

MADRID – The global financial crisis, which began ten years ago this month, showed that the Western-led rules-based international order’s long-term survival is not inevitable. It is often assumed that if and when the United States loses its place as the global hegemon in that system, China will be the country to lead the world. But what would a Chinese-led order look like?

Events this summer hinted at an answer. In June, a subsidiary of the Spanish oil company Repsol began drilling an offshore well within Vietnam’s exclusive economic zone in the South China Sea. China immediately protested, first by canceling a joint China-Vietnam security meeting, and then by reportedly threatening military action against Vietnamese positions in the Spratly Islands. Unable to rely on American support, Vietnam kowtowed to the Chinese, ordering Repsol to halt its exploratory drilling. It was a victory for naked power – and a defeat for shared rules.

Then, in July, just before the G20 meeting in Hamburg, Germany, news broke that Chinese Nobel Peace Prize laureate Liu Xiaobo – who had been detained by the Chinese government for most of the last decade over his calls for democracy – had been diagnosed with late-stage liver cancer. Liu requested permission to receive treatment abroad, but the Chinese government denied him that dignity. He died shortly thereafter.

Far from condemning this cruel approach, the international community – and Europe, in particular – offered only a muted response. No one raised Liu’s name publicly during the G20 meeting. And even after Liu’s passing, Western leaders offered only anodyne messages of condolence. Nobody wanted to rock the Chinese-powered boat.

At first glance, that approach might seem sensible, particularly for a Europe that is still finding its footing after years of economic crisis. China is the European Union’s second-largest trading partner after the US, and it has become a key source of direct investment, having invested over €35 billion ($41 billion) in the EU last year.

But such ostensible pragmatism has serious drawbacks. Perhaps more than any other global actor, Europe – not just the EU, but all of Europe – has an interest in the continuation of a liberal order founded more on cooperation than on competition. Indeed, the existing order plays to Europe’s strengths, while mitigating its weaknesses.

Rules-based cooperation is embedded in Europe’s – and especially the EU’s – institutional DNA. It forms the basis of the European project, which links separate states through shared norms, interests, and values. And it has facilitated unprecedented peace and prosperity in a region long wracked by conflict and competition.

For Europe, soft power far outstrips hard power. That works fine within today’s rules-based system, where the EU – with its well-enforced laws, technological competence, educated population, and broad cultural influence – plays a critical role in bringing together diverse actors. But in a brave new world of ad hoctransactions and raw power relations – the kind that both China and US President Donald Trump seem to prefer – these qualities would do Europe little good.

But what is Europe to do? The EU is in no position to serve as the leader of the free world, no matter what European Commission President Jean-Claude Juncker and European Council President Donald Tusk say. The US is – and, for the foreseeable future, will remain – the world’s indispensable power.

The problem is that the Trump administration seems to have little interest, and even less competence, in leadership, preferring instead to tout a short-sighted and largely undefined “America First” approach. If this is a permanent condition, there can be little hope for a rules-based international order. But if the Trump administration does not snuff out the candle of values-based policy and the rule of law in the next four (or eight) years, then all is not yet lost.

During this time of uncertainty, Europe must tend to that flame. It should do so not by launching headlong into foolhardy and fruitless crusades, but by continuing roughly – albeit more courageously – on its current path, picking its battles and weighing risk against reward. Where it can promote human rights or institutional approaches at a reasonable cost, it should do so. Where such efforts would prove unproductive and costly, Europe should tread carefully, while still upholding its values. The sad truth today is that if Europe does not speak up, nobody will.

A China-led transaction-based world order would have clear winners and losers – and the latter would far outnumber the former. Europe must do what it can to prevent that outcome, balancing ambition with realism, and courage with caution. Leadership may be a bridge too far for Europe today. But stewardship is within its grasp.

About the Author

Ana Palacio, a former Spanish foreign minister and former Senior Vice President of the World Bank, is a member of the Spanish Council of State, a visiting lecturer at Georgetown University, and a member of the World Economic Forum’s Global Agenda Council on the United States.