Geopolitical Transition: From Rule-Based to Deal-Based Order

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"The shift from a rule-based to a deal-based order marks a significant transformation in global governance."

The international order that emerged after the Second World War was underpinned by a “rule-based” system governed by multilateral institutions, legal norms, and collective decision-making mechanisms. Institutions such as the United Nations (UN), the World Trade Organisation (WTO), and the International Monetary Fund (IMF) played crucial roles in mediating global interactions. However, in recent years, this system has increasingly given way to a “deal-based” order, wherein bilateralism, transactional diplomacy, and power politics have superseded universal norms (Acharya, 2017; Allison, 2018).


Erosion of Multilateralism

Multilateral institutions are facing a crisis of legitimacy and functionality. For instance, the WTO's appellate body has been rendered inoperative since 2019 due to the United States blocking judicial appointments (Bown, 2020). As a result, trade disputes are increasingly resolved through direct negotiation or unilateral actions, as evidenced by the U.S.-China tariff wars, which have circumvented WTO mechanisms (Hopewell, 2020).

During the COVID-19 pandemic, the World Health Organisation (WHO) faced significant criticism from major powers, especially the United States, which accused it of favouring China. Rather than adhering to global distribution mechanisms like COVAX, countries pursued bilateral vaccine deals, exacerbating global inequality in access to vaccines (Fidler, 2021).

"Rather than adhering to global distribution mechanisms like COVAX, countries pursued bilateral vaccine deals, exacerbating global inequality in access to vaccines."


Rise of Transactional Diplomacy

An observable trend is the prioritization of bilateral deals over multilateral agreements. A salient example is the Comprehensive Economic Partnership Agreement (CEPA) signed between India and the United Arab Emirates in 2022. This agreement bypassed broader regional or global trade platforms and emphasized pragmatic, deal-specific objectives (Ministry of Commerce & Industry, 2022).

Challenges to International Norms

The rule-based order faces severe tests from major geopolitical events. Russia’s invasion of Ukraine in 2022 is a flagrant violation of international law and the UN Charter. Nonetheless, global responses have been fragmented, with countries like India and China continuing trade with Russia based on strategic and energy needs (Chaudhury, 2022). This selective adherence to international norms underscores the growing influence of national interest over collective security frameworks.

"Russia’s invasion of Ukraine in 2022 is a flagrant violation of international law and the UN Charter."

Likewise, China’s rejection of the 2016 Hague Tribunal ruling regarding its claims in the South China Sea demonstrates the marginalization of international legal frameworks in favor of unilateral control and coercion (Permanent Court of Arbitration, 2016).


Geoeconomic Fragmentation

Protectionism and economic nationalism are on the rise. The U.S. Inflation Reduction Act of 2022 provides significant subsidies for domestic industries, leading to concerns among trade partners, particularly in the European Union, about unfair advantages and the erosion of free trade norms (Tankersley, 2022).

China’s Belt and Road Initiative (BRI) has similarly shifted development financing away from institutions like the World Bank, emphasising state-to-state loans and infrastructure deals that often bypass governance and sustainability checks (Hurley, Morris, & Portelance, 2018).

"China’s Belt and Road Initiative (BRI) has similarly shifted development financing away from institutions like the World Bank."

Regional Diplomacy and Multipolarity

Middle powers are playing an increasingly prominent role in reshaping the global order. The 2023 China-brokered reconciliation between Saudi Arabia and Iran exemplifies how regional issues are increasingly resolved outside Western-led multilateral frameworks (Al Jazeera, 2023). Similarly, the expansion of BRICS to include countries like Iran and Egypt reflects the growing appeal of alternative, non-Western institutions built around flexible, interest-based cooperation (BRICS, 2023).

Security and Technology Alliances

Security alliances are also evolving beyond traditional frameworks. The AUKUS pact among Australia, the United Kingdom, and the United States, signed in 2021, facilitates the transfer of nuclear submarine technology and advanced cyber capabilities, signalling a preference for exclusive strategic partnerships over collective security arrangements like NATO or the UN (Reynolds & Wallace, 2021).

India’s growing defence partnership with the United States, including agreements on technology transfers and joint production, is similarly conducted on a bilateral basis, aimed at counterbalancing China in the Indo-Pacific (Pant & Joshi, 2022).

Conclusion

The shift from a rule-based to a deal-based order marks a significant transformation in global governance. While it allows greater flexibility and accommodates the rise of new powers, it also increases unpredictability, weakens institutional legitimacy, and risks undermining global cooperation. The resulting multipolar and fragmented world order requires new approaches to diplomacy, norm-setting, and conflict resolution that can bridge the gap between legalistic multilateralism and pragmatic bilateralism.

"The resulting multipolar and fragmented world order requires new approaches to diplomacy, norm-setting, and conflict resolution."



@Surya Bahadur Ghimire, Researcher

References 

Acharya, A. (2017). The End of American World Order. Polity Press.

Al Jazeera. (2023, March 10). Iran and Saudi Arabia agree to restore relations after talks in China. Retrieved from https://www.aljazeera.com

Allison, G. (2018). Destined for War: Can America and China Escape Thucydides’s Trap? Houghton Mifflin Harcourt.

Bown, C. P. (2020). The US–China Trade War and Phase One Agreement. Journal of Policy Modeling, 42(4), 805–819.

BRICS. (2023). BRICS Expansion: Summary of New Members. Retrieved from https://www.brics2023.org

Chaudhury, D. R. (2022). India’s Neutral Stance on Ukraine War Reflects Strategic Autonomy. The Economic Times. Retrieved from https://economictimes.indiatimes.com

Fidler, D. P. (2021). Vaccine Nationalism’s Politics. Think Global Health. Retrieved from https://www.thinkglobalhealth.org

Hopewell, K. (2020). The Slow Death of the WTO. Foreign Affairs. Retrieved from https://www.foreignaffairs.com

Hurley, J., Morris, S., & Portelance, G. (2018). Examining the Debt Implications of the Belt and Road Initiative from a Policy Perspective. Center for Global Development.

Ministry of Commerce & Industry. (2022). India-UAE CEPA Agreement Signed. Government of India. Retrieved from https://commerce.gov.in

Pant, H. V., & Joshi, Y. (2022). India–U.S. Defense Relations: Converging Interests. Observer Research Foundation.

Permanent Court of Arbitration. (2016). The South China Sea Arbitration (The Republic of the Philippines v. The People’s Republic of China).

Reynolds, E., & Wallace, J. (2021). AUKUS Explained. BBC News. Retrieved from https://www.bbc.com

Tankersley, J. (2022). Biden’s Green Subsidies Create Global Trade Tensions. The New York Times. Retrieved from https://www.nytimes.com


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