In this introduction to a special section of the September 2019 issue of International Affairs, we revisit the main themes and arguments of our article ‘Beyond seablindness: a new agenda for maritime security studies’, published in this journal in November 2017. We reiterate our call for more scholarly attention to be paid to the maritime environment in international relations and security studies. We argue that the contemporary maritime security agenda should be understood as an interlinked set of challenges of growing global, regional and national significance, and comprising issues of national, environmental, economic and human security. We suggest that maritime security is characterized by four main characteristics, including its interconnected nature, its transnationality, its liminality—in the sense of implicating both land and sea—and its national and institutional cross-jurisdictionality. Each of the five articles in the special section explores aspects of the contemporary maritime security agenda, including themes of geopolitics, international law, interconnectivity, maritime security governance and the changing spatial order at sea.

Video: Marianne Schneider-Petsinger and Dr Yu Jie discuss key themes from the research paper

Summary

• The underlying driver of the ongoing US–China trade war is a race for global technological dominance. President Trump has raised a number of issues regarding trade with China – including the US’s trade deficit with China and the naming of China as a currency manipulator. But at the heart of the ongoing tariff escalation are China’s policies and practices regarding forced technology transfer, intellectual property theft and non-market distortions.
• As China’s international influence has expanded it has always been unlikely that Beijing would continue to accept existing global standards and institutions established and widely practised by developed countries based on ‘the Washington Consensus’.
• China’s desire to be an alternative champion of technology standard-setting remains unfulfilled. Its ample innovation talent is a solid foundation in its quest for global technology supremacy but tightening controls over personal freedoms could undermine it and deter potential global partners.
• It is unclear if Chinese government interventions will achieve the technological self-sufficiency Beijing has long desired. China’s approach to macroeconomic management diverges significantly from that of the US and other real market economies, particularly in its policy towards nurturing innovation.
• Chinese actors are engaged in the globalization of technological innovation through exports and imports of high-tech goods and services; cross-border investments in technology companies and research and development (R&D) activities; cross-border R&D collaboration; and international techno-scientific research collaboration.
• While the Chinese state pushes domestic companies and research institutes to engage in the globalization of technological innovation, its interventions in the high-tech sector have caused uneasiness in the West.
• The current US response to its competition with China for technological supremacy, which leans towards decoupling, is unlikely to prove successful. The US has better chances of success if it focuses on America’s own competitiveness, works on common approaches to technology policy with like-minded partners around the globe and strengthens the international trading system.
• A technically sound screening mechanism of foreign investment can prevent normal cross-border collaboration in technological innovation from being misused by geopolitical rival superpowers.

The forum aims to develop substantive and actionable policy recommendations for the future direction of global trade in a context of changing geopolitical dynamics and rapid technological transformations.

At the core of the Chatham House Global Trade Policy Forum will be the Chatham House Global Trade Conference, a series of roundtable meetings which address the range of regional and systemic trade matters, and a series of written outputs. The activities will culminate in an annual Global Trade Policy Review Briefing paper.

Our unique position in London, and as a world-leading source of independent analysis and with unparalleled convening capacity, enables Chatham House to engage with a committed network of action-oriented policymakers, business leaders, academics, and representatives from the media and civil society to develop trade policy insights. We are committed to the promotion of sustainable growth and more inclusive governance.

The forum’s work is supported by AIG (founding partner), Clifford Chance LLP, Diageo plc, and EY (supporting partners).

View our current work on International Trade and the World Trade Organization (WTO).

 

This event is part of the Chatham House Global Trade Policy Forum. We would like to take this opportunity to to thank founding partner AIG and supporting partners Clifford Chance LLP, Diageo plc and EY for their generous support of the forum. 

This event is part of the Inaugural Virtual Roundtable Series on the US, Americas and the State of the World and will take place virtually only. Participants should not come to Chatham House for these events.

This event is part of the Inaugural Virtual Roundtable Series on the US, Americas and the State of the World and will take place virtually only.  Participants should not come to Chatham House for these events.

The COVID-19 pandemic highlights the absence of US global leadership. Michèle Flournoy talks with Dr Leslie Vinjamuri about the impact of COVID-19 on US domestic priorities and foreign policy commitments.

Flournoy discusses current US strategy towards China and the Middle East and how this might change under a Democratic administration.

This event is part of the Inaugural Virtual Roundtable Series on the US, Americas and the State of the World and will take place virtually only.

This event is part of the US and Americas Programme Inaugural Virtual Roundtable Series on the US and the State of the World and will take place virtually only.

This event will take place from 14:00 – 15:00 BST.

This event is organized by Chatham House and the Center for Strategic and International Studies (CSIS).

Keynote speaker:

• Lindene Patton, Climate Product Officer, Zurich Financial Services

Other speaker highlights:

• Alexis Livanos, Northrop Grumman
• Sir David King, University of Oxford
• Barend Van Bergen, KPMG
• Mike Keebaugh,Raytheon
• Peter Stott, UK Met Office
• Trevor Maynard, Lloyd's
• Shree Khare, Risk Management Solutions
• Giovanni Rum, Group on Earth Observations
• Greg Withee, US National Oceanic and Atmospheric Administration
• Man Cheung, Marsh Ltd

In the aftermath of the recent Rio+20 conference, James Bacchus will discuss the potential for establishing new trade, investment and other international rules and arrangements to promote sustainable growth. In particular, he will explore the interconnections and the international arrangements relating to food, energy, water, climate and other issues affecting global sustainable development.

Attendance is strictly by invitation only. To enable as open a debate as possible, this event will be held under the Chatham House Rule.

About Director's Breakfast Briefings.

Hydrofluorocarbons (HFCs) are replacements for many of the chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs) currently being phased out under the Montreal Protocol on Substances that Deplete the Ozone Layer. Unlike those ozone-depleting substances (ODS), HFCs do not destroy the ozone layer, but they are very powerful greenhouse gases (GHGs) – up to thousands of times more damaging to the climate than carbon dioxide – and their use is currently growing faster than any other category of GHGs. Projections show HFC use increasing as much as 30-fold by 2050, adding up to 0.1°C of global average temperature rise by mid-century, and increasing up to five-fold, to 0.5°C, by 2100. This clearly makes it more difficult to limit the rise in global temperature to the internationally agreed ceiling of 2°C – and thereby avoid dangerous climate change – by the end of the 21st century.

As GHGs, HFCs fall under the purview of the 1992 United Nations Framework Convention on Climate Change (UNFCCC) and are explicitly listed under the UNFCCC’s 1997 Kyoto Protocol, which controls emissions of HFCs and other GHGs. They are not, however, subject to any specific measures under the climate agreements, and this is unlikely to change in the near future. Accordingly, the last five years have seen proposals to amend the Montreal Protocol to phase down the production and consumption of HFCs.

Such a step would have a number of advantages. Since substitutes already exist for almost all uses of HFCs, the consumption and production phase-out model of the Montreal Protocol is better suited to controlling HFCs than the emissions limits controls of the climate regime; and the individuals and organizations involved in implementing the Montreal Protocol have accumulated substantial experience and expertise in dealing with precisely those industrial sectors in which HFCs are used, including refrigeration and air-conditioning, foams, solvents and aerosols.

This paper, which draws on the discussions at a workshop held at Chatham House in April 2014, outlines the main issues around the question of how best to craft a fair and effective global response to the growth in HFC use. A number of key issues are central to the debate: the principle of equity between developed and developing countries; the availability of alternatives to HFCs; the need for financial support for developing countries; the legal relationship between the climate and ozone regimes; and, underlying all these, the need for political will to resolve these challenges.

The European Union has reached agreement on its 2030 climate and energy package in preparation for the next major international climate summit in Paris in December 2015. In the agreement member states have signed up to reducing greenhouse gas (GHG) emissions by at least 40% by 2030 – compared to 1990 levels. Currently emissions are approximately 20% below 1990 levels and so the 2030 target represents a continuation of current decarbonization trends, but it is below the rate of reductions required to meet the longer term objective of cutting emission by 80-95% by 2050.

However, the overall 40% reduction will still drive structural changes in Europe’s economy and the energy sector. This could and should be seen as an opportunity for the EU to become a world leader in the innovation of both the new technologies and systems, such as electricity storage, dynamic demand responses and the deployment of electric vehicles, all of which are experiencing a rapid increase in the size of their global markets.

But there are some concerns. The climate and energy package has put forward a collective target to double the current level of renewables so that it will provide at least 27% of energy by 2030. However, the target is binding on the EU as a whole but not on individual member states, which creates uncertainty and is further complicated by a lack of clarity on the enforcement mechanism, which remains vague. To avoid loss of investor and industrial confidence a transparent process needs to be rapidly developed that ensures compliance. 

The EU has also failed to give energy efficiency the priority it deserves, downgrading it to an indicative target (i.e. one that is aspirational only) of a 27% reduction in energy use from business as usual. However, this is equivalent to, at most, a 19% reduction from Europe's pre-recession trajectory. The weaker energy efficiency and renewable energy elements of the package reflects the resistance of a relatively small number of countries to further EU-wide legal commitments, either because they prefer market inducement or due to their reluctance to reform their energy sectors. The package also makes clear that the a reformed Emissions Trading Scheme will be the main instrument to achieve the GHG reduction target and proposes to accelerate the reduction of the cap on maximum permitted emissions. However, this would only kick in after 2021, meaning the scheme will remain relatively ineffective for at least another five years. 

The crisis in Ukraine and the potential implications for security of supply once again highlights the importance of both domestic energy production and common European approaches to energy suppliers. Every 1% of energy saved across the EU reduces gas imports by 2.6%, and a stronger target would do more to reduce dependence on Russian gas imports. The EU’s failure to adopt a more far reaching and binding target on energy efficiency is a missed opportunity given that it is one  of the only approaches that delivers on the three pillars on energy policy, namely environmental protection, competitiveness and security of supply, simultaneously.

It is important to note the progress that the EU has made in both meeting its climate targets over the last decade and the impact that this has had on its other energy policy objectives. Currently, the EU’s 2020 target for reducing GHG emissions by 20% has or is very close to being met, in part due to the economic downturn, but also due to efficiency, renewable energy and changing industrial patterns and technologies. Furthermore, the use of renewable energy is now estimated to save around €30 billion per year in imported energy, improving balance of payments and improving security of supply. Likewise improvements in energy efficiency have been shown since the turn of the century to have contributed to a 1% annual reduction in energy consumption in the EU.

But the EU is not alone in preparing national carbon reduction targets for the UNFCCC conference in Paris 2015. Both China and the US, the world’s first and second largest emitters, are preparing their own emission reduction plans. China announced in September that it would put forward a new target for the peaking of its carbon dioxide emissions as early as possible. It is suggested that this might be as early as in 2025, with the potential for peak coal use coming even earlier in 2020. The US has proposed to set limits on the emissions from new coal-fired power stations and a 30% reduction in US power sector emissions by 2030 (relative to their 2005 baseline), and President Obama is expected to go further with new climate measures next year.

In the year ahead all countries that are party to the UNFCCC are expected to put on the table their national carbon abatement plans for 2030.  Some will be conditional upon further international assistance and commitments. The package agreed by Europe has scope to respond to increased efforts by other countries. This could include increasing the EU’s own domestic target (currently framed as ‘at least 40%’) or through international offsets and climate finance. How the EU responds to other countries efforts will be a test of its global leadership on climate issues.

To comment on this article, please contact Chatham House Feedback 

Summary

• The Paris Agreement, reached at COP21, was a triumph of diplomacy. The deal can be characterized as: flexible, combining a ‘hard’ legal shell and a ‘soft’ enforcement mechanism; inclusive, as it was adopted by all 196 parties to the UNFCCC and is therefore the first truly global climate deal; messy, as the bottom-up process of creating nationally determined contributions means the system is unstandardized; non-additive, as the contributions do not currently deliver the agreement’s stated long-term goal of keeping the rise in global average temperature to ‘well below 2˚C’; and dynamic, as the deal establishes a ratchet mechanism that requires more ambitious contributions every five years.
• The next five years are critical for keeping the below 2˚C goal within reach. A ‘facilitative dialogue’ starting in 2018 will give states the opportunity to revisit their contributions in advance of the agreement entering into force in 2020. International forums, such as the G7 and G20, can play a crucial role in kickstarting these efforts.
• The ‘coalitions of the willing’ and clubs that were launched under the Lima-Paris Action Agenda provide an innovative space for state and non-state actors to unlock transformational change. However, it is important that these groups set specific and measurable targets to ensure effective delivery of objectives.
• The post-Paris regime implies a significant role for civil society organizations. However, in many countries the ‘safe operating space’ both for these organizations and for the media is shrinking. Expanding the capacity of civil society and the media in areas such as communications, litigation, project implementation and technical expertise will be important if they are to support the regime effectively.

The purpose of this research paper is to identify and analyse the key policy challenges associated with anti-competitive practices in international metals and minerals markets.

Recommendations

Enhanced dialogue and intensified international cooperation in four areas could significantly improve the functioning of global mineral markets:

1. Deal with the last remnants of producer-country cartels 
   Consumer countries should make a publicly visible case that in an age of interdependence and global supply chains, any remaining forms of producer-country cartels are an anachronism. Given limited means to coerce governments to stop supporting the last remaining mineral cartels in potash, a ‘naming and shaming’ approach in key forums such as the Group of Twenty (G20) and the Organization for Economic Cooperation and Development (OECD) is likely to be most effective. Such action could be initiated by the three largest potash importers China, India and Brazil, and should seek support from others such as the EU and Japan.
    
2. Prevent damaging export restrictions through win-win arrangements
   WTO litigation against export restrictions is unlikely to be a silver bullet and in the short term cooperative policy dialogues, such as those pursued by the OECD, offer the best prospects for concrete results. Such dialogues should also be initiated by major emerging economies and could focus on providing incentives such as investment packages or technology-sharing to entice producer countries to abstain from imposing restrictions. Consumers should continue to push for more specific and stricter WTO rules on export restrictions. Japan, the EU and the US should seek to include similar measures in regional trade negotiations.
    
3. Strengthen cooperation among regulators on clandestine private cartels and other anti-competitive practices 
   Concerted action will be required by governments to tackle anti-competitive practices such as clandestine cartels, price-fixing and territorial agreements. Key regulators, such as those in the EU and China, should expand collection and sharing of data and best practice on anti-trust enforcement in minerals markets. In key cases they could also coordinate prosecution. Sustained investment in institutional capacity is required in many emerging economies; this should be supported through bilateral cooperation and via regional forums. Governments should also resuscitate the stalled negotiations on the WTO’s role in competition policy.
    
4. Enhance governance for transnational market platforms and pricing mechanisms
   The responsibility to regulate key nodes in global minerals markets will remain in the hands of national bodies, but coordination is vital given interconnected global markets. International organizations and regulators should strengthen structural cooperation and exchange in the area of physical markets and with greater involvement of emerging economies. An informal high-level forum on regulating physical markets could reinvigorate debate, foster new perspectives and stimulate new partnerships. Governments in key consumer countries should also give their national regulators a clear mandate in minerals markets.

Executive summary

China’s new role in the global governance of natural resources is coming to the fore against a backdrop of profound uncertainty, driven by the convergence of three interlinked trends. At home, China’s leaders are navigating the structural shift to slower but higher-quality growth, a phase of development referred to as the ‘new normal’, while facing considerable environmental and resource security challenges. Globally, the slowdown in China’s economy has sent reverberations through commodity markets, pulling the plug on the decade-long commodities ‘super cycle’. Meanwhile, China is taking on a growing role in global governance, from the G20 and multilateral development banks, to its regional partnerships in Latin America and Africa.

During the resources boom of the last decade, policy-makers and businesses in consumer countries were focused on high and volatile resource prices. The risks posed by resource nationalism in producer countries were seen in the proliferation of export restrictions and the increase in investment disputes. Today, the tables have turned, leaving producer countries facing economic pressure from falling revenues and investments. Many organizations have called on governments to phase out subsidies for fossil fuels and other natural resources while prices are low. The international policy debate is shifting to the immediate challenges presented by a massive oversupply of many energy and mineral commodities, and the longer-term risk of ‘stranded assets’.

These new resource realities will provide the context for China’s growing global role, as well as setting the tenor of its relations with producer countries. Over the past decade, narratives around China often focused on its real or perceived impacts from resource production overseas and consumption at home. In the next, China’s approach to resource security and sustainability will help define its reputation, and whether it is perceived as a responsible actor on the world stage and as a development partner. The collection of international narratives, norms, rules and organizations that currently guides resource production, trade and consumption – what we call ‘global resource governance' in this report – will provide the framework.

Much political leadership will be required to overcome the barriers to China assuming a more active role in global resource governance. On the one hand, there has been slow progress in expanding China’s role in organizations from the World Bank to the International Energy Agency (IEA). On the other, new instruments or processes initiated by China can be seen as a challenge to the existing rules-based order, as the US reaction to the establishment of the Asian Infrastructure Investment Bank (AIIB) demonstrated. Yet developments such as the US–China Joint Presidential Statement on Climate Change in September 2015, ahead of the Paris Climate Conference, show that it is possible to forge cooperation and boost the prospects for progress on public goods at the multilateral level, even in politically fraught areas.

China’s international role on natural resources is also closely tied to ongoing reforms at home. The introduction of ‘ecological civilization’ as a guiding principle for China’s development at the Communist Party’s 17th Congress in 2007 marked a recognition of the need not only to address China’s domestic challenges such as air quality and water scarcity but also shift to an environmentally sustainable model of economic development. In 2015 China’s leaders set out the key incentives, accountability and mechanisms to deliver the ecological civilization in China’s 13th Five-Year Plan. Central elements of this vision, such as building sustainable cities, pursuing environmentally-friendly economic growth and developing the circular economy will have major impacts on China’s future resource consumption and import needs.

Globally, the speed and scale of the economic realignments have taken most experts and policy-makers by surprise – in many respects, China’s new normal is the world’s new normal. The greatest challenge that China’s government faces is managing a shift to slower but higher-quality growth. It is clear that the ramifications of this reach far beyond the confines of the Chinese economy or global commodity markets; yet the situation remains fluid and the nature of a new equilibrium is difficult to predict. This only makes it more urgent to consider the strategic and practical options available to policy-makers, both in China and around the world.

This report is the result of two years of joint research between Chatham House and the Development Research Center of the State Council (DRC), including six expert workshops in China and conversations with international organizations. It discusses key policy areas in global resource governance as they relate to China – in light of recent falls in commodity prices, China’s shifting economic situation, and its growing global role in the ‘new normal’. The scope of the research is limited to non-renewable energy, metals and mineral resources; throughout this report, the term ‘resources’ refers to these commodities. Other traded commodities such as agricultural goods are not included, and land, water and air are discussed only in the context of their important linkages with energy and metals. 

The report considers the costs and benefits of a more active role for China in global resources governance. It recognizes that different commodities face different challenges and require different governance frameworks, and that different regions require context-specific responses. The report also considers the risks of more limited engagement of China and other new actors, which could mean declining relevance for existing processes and institutions that govern resource production, trade and consumption, and a diminished capacity to tackle longer-term challenges like climate change.

During the resources boom of the last decade, countries, companies and communities alike were quick to highlight the transformative potential of the mining sector. With appropriate governance advice and capacity-building support, it seemed the ‘resource curse’ could be overcome. Yet as companies have adjusted their spending in response to declining global commodities prices and longer-term supply and demand projections, low- and middle-income resource-rich economies appear to have increased their dependence on the minerals sector. But how far has the potential of the mining sector been realised to date, and how different does this potential look today?

Taking ICMM’s third edition of the ‘Role of Mining in National Economies’ as the starting point, this meeting will critically assess the contribution that mining has made to development over the past decade, the prospects for ‘mining-led’ growth in the new global context, and the relevance of classic fiscal, employment and governance prescriptions.

Recommendations

• Integrate chokepoint analysis into mainstream risk management and security planning - for example, government agencies should assess exposure and vulnerability to chokepoint risk at the national and subnational levels.
• Invest in infrastructure to ensure future food security – for example by agreeing on guidelines for climate-compatible infrastructure through an international taskforce established under the G20.
• Enhance confidence and predictability in global trade - for example, through a process under the World Trade Organization (WTO) to continually reduce the scope for export restrictions
• Develop emergency supply-sharing arrangements and smarter strategic storage, e.g. an emerging response mechanism among major players in the global food trade, modelled in part on that of the International Energy Agency in oil markets and led by the UN Food and Agriculture Organization (FAO), the UN World Food Programme (WFP) or the Agricultural Market Information System (AMIS).
• Build the evidence base around chokepoint risk - including through the collection of data on real-time food trade and infrastructural capacity to aid in assessing risks to food supply chains.

Further Reading

• Read more about chokepoints in global food trade at resourcetrade.earth
• Take a closer look at chokepoints and food security threats in an interview with a report author and experts in related fields
• Discover the 5 things you need to know about chokepoints
• Explore what the Qatar crisis tells us about food supply risk (in The New Arab)