The national and regional rules applied during the pandemic and the subsequent economic and financial downturn are fragmenting the global economy, reducing transparency and fueling injustice. In an effort to buck this trend, it would seem opportune to discuss the need for establishing a series of global legal standards.
The areas of application for such standards would be many, but sectors such as supply chain management, finance and taxation, and corporate governance might take priority, in the interests of protecting jobs and the environment and, at the same time, improving transparency and fairness. This would be a fundamental step toward an international system based on common rules to address various forms of inequality and imbalance, avoiding the risk of a differentiated globalization based on localized standards. Indeed, although the economy is global, the rules are not; and since it is also an institutional component and therefore all the more reason for clear and common rules.
Key words that emerged from the discussion included multilateralism, transparency, harmonization, implementation and continuity.
Multilateralism: A system that has been criticized as inefficient in recent times, leaving many countries to fall back on economic individualism and protectionism. The combination of the pandemic, a newly elected American administration and the international community itself has triggered a shift toward renewed interest and an understanding of the need for international cooperation. That means clear, common and well-defined rules, which, moreover, are the result of encounter and collective reflection. In the current context, three distinct risks are to be avoided: a fragmented and antagonistic multilateralism, whether America- or China-centric; China getting the upper hand in forging the rules for international organizations; and a rift between the two shores of the Atlantic that would preclude establishing a balance between quite different contexts. This should not be allowed to happen; the stakes are high and a strong multilateralism with Euro-American leadership could generate efficiency and standardize the rules for all major global stakeholders to the overall benefit of the global community.
Transparency: Establishing Common Legal Standards would facilitate not only the proper conduction of business, making supply chains and the data associated with individual products more transparent; it would also facilitate the application of policy to value chains and production – with, for example, environmental protection in mind – as well as a homogeneous fixing of costs. The greatest effort will therefore consist of consolidating and streamlining the rules of individual nations in order to establish common global standards.
Harmonization: Consideration of transparency leads necessarily to the more delicate issue of harmonization. It was correctly pointed out that although legal systems differ immensely – Islamic law, Confucian culture, and Western rule of law – there are some win-win situations. Thus, the current fragmented scenario shows a deficit of global legal order; compliance is difficult to enforce in the world so it is important to standardize standard-setting procedures, i.e. create “level 2” standards aimed at repairing fragmentation. How to proceed? By increasing the linkage between global regulatory codes in order to improve coordination. To that end, it could be useful to provide for the establishment of consultative bodies within the organizations that generate standards, as was the case with major international organizations such as the International Labor Organization (ILO), which has a three-part structure in which the representatives of governments, employer organizations and labor unions of 187 member countries have an equal voice and work together to adopt international labor laws.
Although the World Trade Organization does not itself set standards, it does support members’ adhesion to international agreements already in effect in various sectors and that concern international trade rules. Regional accords are also considered on the condition that they respect the required principles of transparency, effectiveness and coherence. Finally, precisely in reference to the concept of harmonization, consideration must also be given to the question of how to interact in global legal terms with multinationals, i.e. how to incorporate private sector activities into an international legal framework. To be kept in mind also is the fact that there is a difference between binding and non-binding rules; therefore, collaboration between regulatory authorities, and the setting in which to develop the rules, becomes important. The optimal solution is probably a balanced blend of the two.
Implementation: The establishment and/or development of Global Legal Standards would help to foster trust and cooperation among nations. The pandemic has underscored the need for more collaboration and the revision of some former systems. Some global norms and rules already exist, but they are not properly implemented; thus, in addressing the complexity of international legislation, two aspects must be kept in mind: compliance and inclusiveness. It is going to be necessary to design an open economic system built on a political consensus that actively involves all the main stakeholders, creating a global playing field where every player contributes to more equitable and inclusive economic and social development. In that sense, an important role is played by the G7, which cannot lay down laws for the entire world on its own, but can instead identify solutions to propose in a broader and more inclusive framework, which would be the G20 and the second step to a broader global solution. The third step would be to submit all proposals to the review of the international community. These three complex phases would make it possible to achieve the objectives of equitable economic and social development.
Continuity: The formulation of an adequate global legal standards framework affects a multitude of sectors. The world economy continues to be interdependent, thus multilateralism is essential. This goes especially for public assets such as health, climate and sustainable development, but also for the financial sector. On such a competitive geopolitical/geo-economic stage, how can international cooperation carve out a space for itself? That space is the G7/G20, where countries can find fertile ground for debate and cooperation on global legal standards that respond to the basic rules of inclusiveness, trust and collaboration. The common denominator is wider, but allows for thinking on a global scale, which, in turn, sets in motion a virtuous cycle. Thus, the Global Legal Standards project can be characterized not as a static one over the short-term but rather as a dynamic one over the long-term.
Therefore, ensuring continuity to this project becomes fundamental, and the upcoming G20s, wherever they are held, could provide an opportunity to do just that. Indeed this very year’s G20 would do well to set up a High-Level Group to begin to working on a series of Global Legal Standards to be discussed in 2022 (G20 India) or 2023 (G20 Indonesia).