The U.S. Must Shape the Emerging World Order

The U.S. Must Shape the Emerging World Order

The shift toward a gated world is already happening, leaving countries still clinging to open trade and security networks at a competitive disadvantage.

 

“Openness” is a watchword of the recently released National Security Strategy (NSS). In the NSS, the White House calls for an “open international order” that guarantees a “fair and open trade and international economic system,” “free, open next-generation digital infrastructure,” and unrestricted access to the global commons.

In practice, however, many of the Biden administration’s key initiatives point toward the opposite—a gated world that restricts access to U.S. security, economic, and technology spaces. Export controls, investment screening, and the weaponized use of the dollar all build gated economic and technology networks, which have figured prominently in President Joe Biden’s foreign policy. The administration has also invested in gated security partnerships like AUKUS and the Quad that offer some partners access to information, resources, and decision-making, but exclude others.

 

There’s a good reason for the decisive move in this direction: a gated world is better suited to advance U.S. interests in the face of increasing multipolarity.

In fact, keeping the “open international order” concept at the center of U.S. foreign policy could end up being self-defeating. For one, it tends to undermine U.S. credibility with allies and potential partners. More importantly, by diverting policymakers’ attention from the realities of how the world order is changing, it prevents a coordinated and strategic effort to shape the future gated world to the advantage of the United States.

Rhetoric Versus Reality

The push for an open international order has been central to U.S. foreign policy since at least the end of World War II, on the grounds that open markets and capital flows bring economic benefits, and that security is strengthened in a world without spheres of influence. But, under today’s conditions, insisting on an open order risks undermining U.S. competitiveness in the long term.

First, the benefits of an open order come with tradeoffs that have become more meaningful as international competition intensifies. For all their efficiency gains, globalized trade networks are susceptible to disruption and result in unequal dependencies between states. In today’s world, this asymmetric interdependence creates security, economic, and technological vulnerabilities. Countries and companies moving to build gated supply chains for advanced technology and critical minerals that are localized or “friend-shored” reflect the growing recognition of the risks inherent in open networks.

Second, the economic and security gains from an open order require a widespread commitment to shared rules—a commitment that is already fast eroding in the face of worsening interstate rivalries. Once some countries start to build their own gated networks, the liabilities of remaining tied to the open order—theft of intellectual property, economic exploitation, and military aggression—increase.

This shift toward a gated world is already happening, leaving countries still clinging to open trade and security networks at a competitive disadvantage. Globalized economic markets are increasingly being replaced by regional trade agreements. The European Union’s web of stringent standards controlling access to its economic networks has expanded over time, to cover data processing and storage, for instance. Gated regional economic groupings are emerging elsewhere, including the Regional Comprehensive Economic Partnership (RCEP) in Asia and the proposed Africa Continental Free Trade Area. In cyberspace, South Korea and India are building gated digital governance regimes. U.S. rivals are also turning to gated partnerships. China, for instance, attempted (though failed) to formalize a gated security partnership in the Pacific Islands.

A Gated—Not Closed—World Order

Gated networks with barriers or costs to entry and exit are becoming widespread because, in a contested world like that emerging today, they are superior to open networks at creating and leveraging lasting competitive advantages. In a multipolar international system, gatekeeping—the ability to manage entry and exit into networks and set the rules inside of those networks—becomes a vital source of power. Gatekeeping allows states to safeguard and amplify their economic, military, and technological resources and strengths and accumulate and direct network power toward key goals. Gated networks can operate more efficiently than open ones and may be more cohesive, resilient, and enduring, as partners are likely to share common commitments, standards, and interests.

A gated world is not a closed world, however. It does not need to be made up of exclusive economic or security blocs. This distinction is an important one. Gated networks have barriers or costs to entry, but their borders remain somewhat permeable, allowing members the flexibility to move between or operate in multiple networks. Participating in gated networks like the Quad or AUKUS does not prevent members from also engaging with China or Russia on other security issues, though there are some constraints. In contrast, U.S. semiconductor export controls establish gates so rigid that they veer towards creating a fully closed network that does force potential partners to choose between the United States and China. Gated networks build and harness usable network power, but closed networks can alienate partners, constrict U.S. influence, and trigger escalation.

The order emerging in the Indo-Pacific offers insight into what a gated world might look like. The region is teeming with overlapping networks between countries, militaries, government agencies, and companies. Some are led by China, others by the United States, and still others by pan-Asian coalitions. Many of these networks have requirements for entry and exit—standards, commitments, and costs—but most countries in the region operate in all three types of networks, often on similar issues. For example, many RCEP members are also part of the U.S. Indo-Pacific Economic Framework (IPEF), ASEAN’s free trade agreements, and economic-focused “minilaterals” that include neither China nor the United States. What is emerging with this gated order is a patchwork of influence and power across domains, not clear U.S.- or China-led blocs.

Planning for a Gated World

Biden’s investment in gated networks, then, moves in the right direction. But the Biden administration’s NSS continues to advance the vision of a fully open world. This has two downsides. First, it can undermine U.S. credibility, damaging relationships with allies and weakening Washington’s ability to attract new partners. The United States already faces charges of hypocrisy for falling short of its own ideals on democracy and respect for sovereignty. Calling for an open world while building a gated one could further erode trust in the United States. Second, it squanders the narrow window the United States has to be a first mover in shaping the boundaries of the emerging gated international order in ways that advance U.S. and allied interests. This is because the discussions and planning required to achieve this aim are unlikely to occur until this gated architecture becomes the explicit focus of U.S. foreign policy.

Thus far, there is little evidence that U.S. policymakers are following a clear strategy for leveraging gated networks, despite employing them more often. Some gated networks created by the Biden administration— for example, technology export controls and AUKUS—seem unhelpfully narrow. Others, like the IPEF or efforts to build coalitions around global infrastructure investment, appear too open to be effective.

Policymakers need to accept that the open international order is already shifting and no longer best serves U.S. interests. Instead, they should begin a concerted effort to plan for a gated order. This planning should include three types of considerations.

First, around what issues should gated networks form? The most effective gated networks will be organized around common needs where states or companies are already interacting. For example, many states in the Indo-Pacific are interested in building their defense industrial bases and creating secure technology supply chains. These issues could be centers of gravity for gated regional networks.

Second, policymakers will need to consider membership and the specific barriers to entry and exit. Networks that are too restrictive may push toward a bloc-based world, but those that are too open may be undermined by adversaries or opportunistic third parties. The key will be finding the right balance and attracting the right partners for the network’s objectives.

Third, policymakers will need to examine the overall architecture—that is, how various gated networks, both U.S.-led and those of allies and adversaries, interact to determine the contours and durability of the gated world order. Without such coordination, there is the risk that gated networks will undermine each other or create an international system too fragmented to yield competitive gains.

Shaping and mobilizing the emerging gated world should be a central goal of U.S. foreign policy. The path to this new international order will be hard and probably unpopular at first, but the outcome may be decisive for long-term U.S. competitiveness.

Jennifer Kavanagh is a senior fellow in the American Statecraft program at the Carnegie Endowment for International Peace and an adjunct professor in the Security Studies Program at Georgetown University.

Image: Reuters.