Forming a new order following the end of the US-led free trade regime requires a non-state global forum and Tokyo’s leadership

1. Discussions about global order formation differ between the US and Europe

Five months have passed since the US Trump administration took office. In the meantime, the conventional global order has come under close scrutiny.

From late May to the first part of June, I visited the US and Europe to exchange views with local experts and intellectuals. I noticed differences in their arguments between the US and Europe.

The typical argument in the US focused on diplomacy among major powers while recognizing changes in the balance of power among states.

This argument seemed to presuppose that the US holds hegemony and would continue to do so more or less.

Surely enough, some experts in the US argue on the assumption that the unipolar hegemony of the US has become a thing of the past. But they remain a minority.

In terms of economic power, however, the US share of global gross domestic product (GDP) has almost halved from about 50% right after the end of World War II to 26% in nominal terms, according to the International Monetary Fund’s World Economic Outlook, April 2025.

The long-term outlook suggests that the declining trend in the US share is expected to continue given the economic development of China as well as Global South countries such as India and those in Southeast Asia and Africa.

On top of that, the Trump administration’s manufacturing revitalization policy and decoupling policy toward China constitute a downward pressure on the US economy, as many intellectuals point out.

If these policies continue, the US share of the world’s total GDP will likely shrink at an accelerated pace.

From such a long-term perspective, the global order is already changing, moving away from the unipolar hegemony of the US. And this trend is expected to grow stronger.

An American expert who shares this view said that the Trump administration will expedite the multi-polarization of the global order.

The typical global order argument in Europe, on the other hand, tended to presuppose a shift to multilateral diplomacy (multilateralism) in the face of an increasingly multi-polarized world.

Behind this view lies the fact that Europe has made a major shift toward reinforcing its own autonomous defense capabilities independent from the US since the launch of the second Trump administration.

Most European countries agree to increase their defense spending to 5% of GDP from the current levels, which are more or less 2% of GDP for many countries.

Despite differences in the degree of commitment, these countries are considering specific policies to secure the budget needed to cover such increases.

Japan is having a hard time raising its defense budget even to 2% of GDP. It seems that the impact of the risk of a Taiwan contingency for East Asia pales massively in comparison with that of the Russo-Ukrainian War on Europe.

Nevertheless, the world has yet to find a clear answer to the question: How can we form a stable global order given the increasingly multi-polarized nature of world affairs?

In sum, although experts and intellectuals in the US and Europe have been keenly feeling significant changes to the global order since the inauguration of the Trump administration and undertaking serious debates on what the future global order should look like, they have yet to acquire a clear picture of it.

2. Reason for inability to envision the future shape of global order

Why can’t we see what the future shape of global order should look like?

It is because we assume that only states have the role to play in shaping the global order.

For the past 80 years since the end of WWII, the foundations of democracy have continued to be reinforced.

At least on the surface, steady progress has been made to the democratization of politics even in China, a country with an authoritarian political system, compared to the 1980s. Online public opinions are having a greater influence, for example. There is nothing to say about Western countries.

In addition to that, common global issues now have a far greater impact on political, economic, and social issues of various kinds at the national level.

The global environment, the COVID-19 pandemic, trade and investment frameworks, and illegal immigrants, among other issues, cannot be solved by domestic policy alone; they also defy international consensus building because different counties take different stances on each of these issues.

Given such a reality, it is a logical consequence that unlike in the past, all frameworks for global order formation can no longer be determined by consensus among states.

Even if a direction toward that end is agreed upon through negotiations among states, it is increasingly difficult to address both global and domestic issues simultaneously by persuading businesses and individuals to follow in that direction.

3. A hybrid model of global order formation that involves both states and non-state actors

Given the arrival of such a new era, novel ideas are needed to consider global order formation.

Since 2019, I have had discussion after discussion with scholars, intellectuals, and students from Japan, the US, Europe, China, and South Korea on how to shape a new global order in the face of an increasingly multi-polarized world.

When I first started this series of discussions, I had no idea that I would encounter diverse policy issues concerning the COVID-19 pandemic, the Russo-Ukrainian War, and the second Trump administration.

And yet, every time an event that destabilized the global order occurred, all those involved are reminded of the profound significance of having initiated these discussions.

Based on all these discussions, we are making a proposal as to what the future shape of global order should look like.

The following paragraphs briefly summarize the basic idea:

Given an increasingly multi-polarized world, it is more and more difficult for states to shape a rule-based, stable global order. If things go on like this, the world will be thrown into further confusion, raising the risk of entering into a third world war.

The model for shaping a new global order that could help avert that risk is a hybrid model that involves coordination and cooperation between states and non-state actors.

Countries in the world have been shaping the global order based on agreements on international rules. They will continue to play this important role.

Nevertheless, they are increasingly unable to implement effective measures to address global issues because deepening ideological conflicts and other factors in recent years make it more and more difficult to build international consensus.

Obviously, what makes solving important issues difficult is an inadequate international consensus on how recent environmental challenges and the COVID-19 pandemic should be addressed as well as what the free trade regime should be like.

That is why we emphasize the importance of the roles non-state actors play based on morality to complement the roles played by states.

Non-state actors cannot implement policies that are effective in the short-term because, unlike states, they do not have the enforcement power.

And yet, non-state actors such as businesses, universities, experts, and intellectuals can freely propose and discuss policies that can be effective in addressing global issues. Because they do not represent the countries they belong to, they are not bound by the stances taken by these countries.

A crucial prerequisite is this process is for all non-state actors to contribute to solving global issues unselfishly and altruistically.

When the pursuit of national interests by a country or countries inhibits a solution to a global issue, we see a kind of selfishness there.

As a platform to ensure that non-state actors make such a contribution, we propose a forum where non-state experts who share a commitment to altruism collectively make policy proposals in specific fields.

By adopting such proposals, countries can implement effective policies even without intergovernmental consensus.

Currently, both policy making and implementation are in the hands of states. This makes it difficult to build a consensus in the policymaking phase. If an agreement is ever reached, it would likely be a product of compromise, likely limiting its effectiveness.

By contrast, non-state actors have no such limitations. This allows them to make policy proposals that are effective in addressing global issues.

On top of that, such proposals need not be singular. Non-state actors enjoy the advantage of being able to propose policies that meet the different needs of different countries as long as they share the underlying policy direction to take in solving such issues.

Yet, non-state actors do not have the enforcement power, thus leaving each state to decide on such policy proposals and implement them.

Such a hybrid system for global order formation in which states and non-state actors cooperate in different fields can better stabilize the order formation process than a system that builds solely on the current practice of rulemaking through agreements among states, even in the face of multilateral diplomacy in an era of multipolarity.

(For details about the basic idea, see “A New Framework for Global Order Formation,” November 11, 2022, on my webpage on the website of the Canon Institute for Global Studies.)

4. A non-state forum for reviewing the free trade regime

States are said to have three intrinsic functions that cannot be fulfilled unless they represent their peoples.

They are diplomacy, military affairs, and currency policy.

In other fields, non-state actors can engage or contribute in one form or another. In food safety, accounting standards, and sports, for instance, non-state actors continue to take the initiative in formulating international standards.

Under such circumstances, the current free trade regime in which states take the lead in deciding international rules based on the World Trade Organization (WTO) is not working properly now.

In the US, politicians cannot disregard demands from people who believe that Americans have been deprived of job opportunities due to growing imports under the free trade regime. They have the political sway: The states where they constitute a majority hold a casting vote in the two-party system.

Given this particular domestic political situation, the US cannot cooperate in expanding the free trade regime through the WTO at least for the time being.

If the free trade regime continues to weaken rapidly, however, the world could again be divided into economic blocs, raising the possibility that this might trigger another world war.

Avoiding this requires expanding and developing the free trade regime under a new framework in place of the WTO.

One viable option is to develop the free trade regime based on the Trans-Pacific Partnership (TPP).

In the near term, the free trade regime can be expanded if a new framework can be built that would supersede the WTO with the involvement of all countries that want free trade, except the US.

I used the expression “in the near term” because the US might rejoin the ranks someday in the future.

It seems logical to assume that the WTO would take the lead in considering the issue mentioned above.

In the face of strong opposition by the US, however, it is impossible not only to expand the functionality of the WTO, where unanimous consent is required for any decision, but also to discuss what a new free trade regime that would supplant the WTO would look like.

This is where my proposal comes in. I suggest that scholars and intellectuals who are trusted internationally, rather than government representatives, debate—in the capacity of non-state actors and in an informal setting—what the future free trade regime should look like. The idea is to take on some of the policymaking functions that should otherwise be performed by states.

State officials and non-state experts need to cooperate in devising specific constructive measures aimed at building a viable framework in consideration of the US’s strong opposition to an expanded WTO.

Many experts agree that the TPP serves as a basis for exploring such a framework.

The Japanese government has been playing an important role in maintaining and developing the TPP since the US withdrew from it.

The Japanese government is thus expected to take the initiative in setting up a platform where non-state experts have informal discussions with officials from states and international organizations in attendance as informal observers.

5. The roles the Japanese government and Japanese non-state actors are expected to play

Non-state actors alone may not be able to successfully build a new framework for considering what the future free trade regime should look like.

This suggests the need for both states and non-state actors to work together to build a mechanism for leveraging the capacity of the latter.

To recapitulate what I have discussed, such consideration calls for a platform that allows reliable experts from different countries to discuss freely—without being bound by national interests or ideologies.

Such experts need to share morality. Instead of pursuing their own interests, they also need to share an altruistic stance in the hope that all the people around the world can enjoy happiness.

It is also important for officials from states and international organizations to participate in the discussions as informal observers whenever necessary in order to explore more practical solutions.

Here again, it is necessary for a hybrid system involving coordination and cooperation between states and non-state actors to function properly.

Non-state actors alone may not simply be able to set up such a platform. The need to continue discussions over the long term means that the funds required will be too large for non-state organizations alone to raise.

If a state organizes such a forum, there are often concerns that the interests of that state are strongly reflected in that forum. It is expected that many countries will not like the idea that major powers like the US and China organize such a forum.

I think a viable option would be for the Japanese government to play that role.

The idea is not to lead the direction of discussions but to work as a secretariat, serving as a neutral facilitator, so that experts and intellectuals from countries around the world can exchange views freely.

Obviously enough, the Japanese government is not simply in a neutral position. It may be worth noting, however, that Tokyo has been playing a central role in maintaining and developing the TPP since the US left it.

Historically, Japan has ample experience in closely interacting not only with its ally, the US, as well as G7 member states and other Western countries, but also with countries with different ideologies, like China, Russia, and Iran.

My idea is that building on such experiences, the Japanese government should preferably take it upon itself to develop a platform where state officials and non-state experts can exchange views freely, as long as Tokyo sticks to its neutral position as much as possible.

Many of the Western experts and intellectuals with whom I have had discussion after discussion believe in the sincerity of the Japanese government and agree with my proposal.

I hope the Japanese government will consider the idea described above.