TOKYO -The fracture of the global rules-based order, as epitomised by the United States-China trade spat, comes as existing norms have not evolved fast enough to meet new challenges or cover new areas, panellists said at a forum on Sunday (March 3).

“Rule-making which fits the new age is still behind the curve,” Japanese deputy chief secretary Yasutoshi Nishimura told the third annual Tokyo Conference organised by the Genron think-tank.

He said Japan will take the lead, as host of this year’s Group of 20 (G-20) summit in Osaka in June, to push for reforms to modernise age-old institutions like the World Trade Organisation. This is necessary to cover areas where trade rules have not been written such as in e-commerce, he added.

Sunday’s forum, themed The US-China confrontation and the future of the international order, included panellists from think-tanks of the Group of Seven bloc of developed economies, as well as from Brazil, India and Singapore.

One big challenge, the panellists said, lies in finding a balance, given the ideological difference in the traditional Western system and a new model espoused by China.

Complicating matters, they said, is the breakdown of the tried-and-tested Western model, as seen from rising unemployment and pressures on the middle class that have given rise to populism.

“The current world order has been fraying for years,” said Dr James Lindsay, senior vice-president of the US’ Council on Foreign Relations.

“It delivered what it promised but it also meant a redistribution of power (and) the rise of transnational problems that have outstripped the institutions that were created to manage the order.”

Mr Nishimura added that the US-China trade spat was more than just about tariffs or a tit-for-tat exercise, as they iron out differences in new areas like intellectural property rights and structural reforms.

One cause of the US-China divide, said Dr Alice Ekman, the head of China research at the French Institute of International Relations, is Beijing’s unhappiness at having to inherit existing institutions that were “shaped by xi fang guo jia (the West), without China”.

As such, China has been making its voice heard in three key ways, she said, namely by participating in existing frameworks to push the boundaries from within; supporting institutions that do not involve traditional powers like the US and its allies, particularly in central Asia; and by creating new institutions of its own like the Belt and Road Forum that hosted nearly 30 heads of state.

The rise of competing norms, too, can lead to what Dr Ekman called an “impoverishment of the multilateral agenda” as multiple agencies “talk about the same issues like infrastructure development at the expense of other things”.

Singaporean veteran diplomat Ong Keng Yong and chairman of India’s Observer Research Foundation Sunjoy Joshi agreed that Asia does not want a bipolar battle.

“The deeper conflict between US and China is more to do with tech dominance,” Mr Joshi said.

“The larger war is about who shall rule the telecommunications networks of the future, the race to install 5-G networks. It’s like the sea lanes of communication which countries fought battles over in the 14th and 15th century.”

Mr Ong added: “Whether to maintain the world order or to change it, we need rules, good legal structures, understanding, and a consensus to change or improve.”

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