Global Corporations and Economy
Digital Agreements: New Trends in International Alliances

Biden’s multilateralism does not refer to participation in a collective security organisation such as the United Nations; it is a euphemism, describing the perseverance of the Cold War-era NATO military alliance in contemporary times. Its lack of confidence in its own strength and development renders it unable to respond to external competition in a normal way, which is the vital mechanism in promoting digital agreements, writes Shen Yi, Director of the Cyberspace International Governance Research Institute, Fudan University.

On March 12, 2021, four countries, the United States, Japan, India and Australia, declared that they would strengthen their mutual cooperation at a summit meeting. One of the measures they specified is to establish a working group to promote effective cooperation among the four countries in COVID-19 vaccine distribution, climate change, and key and cutting-edge technologies. Some comments and analysis pointed out that the cooperation among the four countries in key and cutting-edge fields of technology is a concrete reflection of so-called technical cooperation among countries with similar values. Taking the United States under Biden as a typical example, Western countries regard this as an important measure to improve their competitive status, and related action will obviously have a certain impact. In the present, such measures may be specified in digital agreements, in the latest context of the digital technology revolution, but these hearken back to national alliances, the traditional form of diplomacy practiced in international relations since the 17th century. 

Global Corporations and Economy
Digital Economy Agreements: The New Phase in Economic Alliances
Yaroslav Lissovolik
During the crisis year of 2020 a new trend has set in the formation of international economic alliances that was to a significant degree expedited by the unprecedented challenges posed by the pandemic. The emergence of digital economic agreements (DEAs) was a response to the need to forge ahead with opening markets amid the excesses of protectionism, while at the same time addressing the rising demand for digital services and international cooperation triggered by the Covid crisis. The propagation of digital economic accords may deliver a crucial contribution to bolstering the dynamism of the global economy in the face of a massive economic downturn.

The pace at which the distribution of power in the international system has changed has exceeded Western expectations, which is the core reason for the development of the digital agreement. An alliance is an institutionalised arrangement with clearly-perceived (and sometimes imaginary) external enemies.

All of the countries which are members of the alliance aim at the common enemy within their cognitive framework; the essence and core of the multilateralism advocated by the Biden administration after coming into power is to reinforce the international alliance system, with the United States as the core and China and Russia as the main targets.

In other words, Biden’s multilateralism does not refer to participation in a collective security organisation such as the United Nations; it is a euphemism, describing the perseverance of the Cold War-era NATO military alliance in contemporary times.

Its lack of confidence in its own strength and development renders it unable to respond to external competition in a normal way, which is the vital mechanism in promoting digital agreements. In terms of the United States, the pros and cons of individualist Silicon Valley capitalism are obvious in the development of emerging technologies: It cannot truly compete with a well-matched competitor, but must rely on the asymmetric protection measures provided by US government at critical moments. In the 1980s, the United States within the G7 framework successfully suppressed Japan’s overall impact and challenge to itself in the high-tech field through its asymmetrically political and military advantages, and eventually succeeded in splitting and marginalising Japan as a secondary, auxiliary actor in the industrial chain. In 2018, the United States began to try to suppress China in the same way. The experience during Trump’s presidency proved that the United States can no longer solely rely on its own strength to force China to make substantial concessions in the short term at an affordable cost. Later in his term, by proposing “The Clean Network” and other projects, the Trump administration demonstrated its intention to strengthen digital agreements and the US international alliance by improving their technique, to jointly fight the Chinese threat. The Biden administration, alternately, has articulated a desire to build effective cooperation with so-called “like-minded” countries; Biden would set up technical standards embodying specific values — values preferred by the United States and the West. This is an asymmetric game; a system of selective protectionism that maintains the semblance of political and ethical legitimacy, but fundamentally violates the basic rules of the international system and the global economy. It has become the key tactic used in dealing with the challenges posed by China and Russia, from the perspective of the United States. 

The preference of the United States for digital agreements fully proves that it is a realistic country which prefers relative gains. In the theory of international relations, the core difference between neoliberalism and neorealism is that neoliberals believe the states prefers absolute benefits — the promotion of a state’s own benefits is enough to motivate it to participate in international cooperation; neorealists believe the states attach more importance to relative benefits, namely, advantages over other countries.

If cooperation affects the dominant status of the hegemony, then it prefers some “dog in the manger” to destroy cooperation, even if such a decision is neither economic nor rational.

In practice, the US government prefers to coat its digital agreement in evocative words such as freedom, democracy, human rights, privacy, prosperity, and development to strengthen and propel the technical-cooperation attributes of the transatlantic alliance between the United States and Europe, which has clearly and continuously showed that the core purpose of the United States in building a digital agreement is to maintain and protect its hegemony. However, relevant measures are doomed to fail in achieving effective results due to two endogenous structural defects. 

First of all, the pursuit of hegemony wrapped up in the digital agreement has an endogenous tension with the development trend of today’s cutting-edge technology. The establishment of digital agreements between the United States and European countries essentially protects the hegemonic advantages and status of the United States. However, this support significantly and directly contradicts the endogenous trend, development direction, and core driving force of frontier technology development. Digital technology must be developed in a globally integrated market with a high-speed and effective flow of elements to maximise its advantages and deliver the most considerable rewards. Digital agreements which employ non-technical and non-economic political-ideological elements to wilfully establish geopolitical boundaries to technological development will eventually lead to folly, if history serves as any example. 

Secondly, the digital agreements are the manifestation of the protectionism of a hegemonic country, even US allies cannot truly approve of this ultra-self-centred arrangement. Whenever the US government, whether under Trump or Biden, has adopted hostile or competitive policies towards Russia and China, it has also resorted to economic sanctions, political condemnation, and other restrictive measures against its EU partners, who are within the framework of the digital agreement, when these partners do not obey US instructions. Many precedents in history illustrate that when an alliance system has been completely reduced to a tool for the use of the most powerful state, it soon becomes entangled in great uncertainty. 

As the world enters the digital economy era, concluding and signing digital agreements has become a new trend emerging in international affairs against the backdrop of tectonic changes in the power of the international system. It can be seen as the United States and Europe making use of traditional ‘balance of power’ thinking to maintain their advantages in the era of digital technology and to continue an asymmetric hegemonic structure. However, from the perspective of future development trends, it stands to become more and more obvious that acting to support and protect hegemony will encounter a significant setback.

After the Pandemic the World Will Never Be the Same Again
Djoomart Otorbaev
The current epidemiological shock and probably subsequent upheavals will have long-term consequences for the planet. The coronavirus pandemic is compelling humanity to fight a common enemy. Communities that have survived wars are becoming more united. Now people have fully realised that only consolidation and collective efforts can bring success in this war, writes Djoomart Otorbaev, Prime Minister of the Kyrgyz Republic in 2014–2015
Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.