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Value of int’l soft law in jointly building B&R

GUO CHENGLONG | 2021-09-02 | Hits:
(Chinese Social Sciences Today)

The “Golden Bridge on Silk Road” structure in Beijing Olympic Park in Beijing Photo: CFP

The current international economy is essentially a rule-of-law economy, with rules being a basic element of its governance. The legal governance mechanism has gradually become the core of international economic governance. As such, an essential step towards a successful Belt and Road (B&R) initiative is to build a sound legal governance mechanism. The B&R is a big and comprehensive project that involves many fields, and its legal governance system is set against a complex political and legal background due to the large number of countries involved. 

To reduce these uncertainties and difficulties, it is necessary to prioritize and fully utilize international soft law, and facilitate a good balance between international soft law and hard law. This will allow stakeholders to avoid unnecessary negotiations and conflicts, while reducing cost, obstacles, and time. 
International soft law 
Although academia has yet to agree on the definition of “soft law,” a commonly used one is that it is a code of conduct that is not legally binding, but still has actual effect. International soft law covers a wide range. Strictly speaking, international soft law does not fall into the sphere of law, but it tends to be observed in practice. 
An important reason why international soft law came into being is that the current international relationships are non-centralized, with no world government, supranational legislation, law enforcement, or judicial system. 
In addition, a big gap exists among different countries in terms of the territories they pay close attention to, priorities concerning their interests, and their development ability. Therefore, it’d be hard to come up with a legally binding international document, such as a treaty or a convention. Enormous efforts spent on negotiations are usually in vain. This is especially the case along the B&R path. 
The B&R routes link multiple cultural spheres and over 60 countries. Each country has different economic conditions. For example, China and India are large emerging economies, whereas Moldova and the Republic of Montenegro are smaller ones. Each country has its own unique legal system, and its own way of looking at and practicing the rule of law. 
The intra-domain legal environment is even more complicated, including the civil law system, common law system, and the Islamic law system. Some countries or districts even adopt a mixture of common law, Islamic law, and customary law. Consequently, legal conflicts remain within the region, making it difficult to reach a high level of international economic and trade agreement in a short period of time. 
By contrast, international soft law is not only easier to conclude, but also more flexible, thus more tolerant to the differences in legal ideas and systems. For the time being, when no international economy and trade law can be enacted within a region or between involved countries, it can help secure the sustainable implementation of the B&R if a relatively stable framework of rules can be established to facilitate diversified regional cooperation. 
Meanwhile, unlike international economic and trade agreements that involve only one certain type of decision-making body, international soft law is formulated and carried out not only by governments and international organizations, but also non-government actors such as business associations, enterprises, and even individuals. This makes it helpful for the B&R given that it is being rolled out in such a complicated governance environment, since joint collaboration helps countries fill in the information and resource gaps, and diversify the sources of international cooperative norms. It reduces the conflicts of rights and liabilities caused by political sensitivities that are embedded in rules-based management. It also helps enterprises ease the burden of making and fulfilling an agreement for a project. 
Soft law fuels consensus 
Free trade agreements (FTAs) propelled by major developed countries in recent years show a certain degree of exclusiveness in their patterns. As the dominant party, when choosing member states for their regional cooperation, these countries tend to intentionally choose those more capable of supporting the pact with meaningful socioeconomic contributions, or advancing geopolitical security and economic benefit. The so-called “equity” or “fairness” is thus achieved through rights and obligations secured by a country’s strength, authority, or discourse power. 
In contrast, the B&R is an open and inclusive regional cooperation initiative. Besides, countries along the B&R are too different in their historical, cultural, economic, and legislative backgrounds, making it a lot harder to reach an agreement. It is particularly difficult to start negotiations on high-level open markets or frontier trade issues. It would entail a long time, great governance cost, and uncertainties for a hard law to take shape. 
In the meantime, due to historical, political, and economic reasons, certain major countries outside of the B&R region still exert massive influence over B&R countries and the progress of B&R regional economic integration. 
As the B&R advances further, it will inevitably be influenced by the external landscape. Nevertheless, the initiative can help improve global economic governance. This dual dynamic mechanism can cause great instabilities in the prospect and implementation of the B&R, making it more likely for competitions and conflicts to occur regarding rules within the region, and harder to build a legal environment and a governance mechanism. 
Hence, when constructing the legal governance system for the B&R, it is important to consider the potential chain reactions and their solutions, while ensuring the governance model is inclusive and flexible. It helps enhance B&R countries’ sense of community by introducing a standard of behavior that has no legal effect but is still capable of ensuring that participants deliver on their promises. 
As of January, 2021, China has signed 205 documents for jointly building the B&R with 140 countries and 31 international organizations, according to the statistics released by the Ministry of Commerce. The majority of them are joint declarations, memoranda, and investment guides, signifying that international soft law has become an essential part of the B&R cooperative mechanism. 
Policy integration 
To better leverage international soft law in facilitating the B&R, China has set up platforms for cooperation, including the Belt and Road Forum for International Cooperation, summits, and strategic dialogues. Periodic meetings facilitate exchange of cooperative willingness, which leads to cooperative projects of higher quality. Meanwhile, consultation has become the best way of solving conflicts. 
This mechanism also allows consensus to be reached in which all parties’ concerns and appeals regarding trade and economic policies are well taken care of. It also reduces the cost of negotiations for rules’ upgrades and market openings. The China-Indochina Peninsula Economic Corridor and the Lancang-Mekong Cooperation can serve as references for China to establish various types of cooperative mechanisms with other countries and regions along the route, including economic corridors and sub-regional cooperation. 
When the conditions are right, it may also be a good idea to set up a regional economic organization similar to Asia-Pacific Economic Cooperation, as a platform for information sharing and communication about policies among members. The topics for the dialogues can also be further expanded, such as about market openings, best practices of legal supervision and management, and rules about facilitating infrastructure investment. 
That said, the B&R development still falls within the mechanism of international law. The best way to sustain a long-term, institutionalized, and standardized B&R is to flexibly combine both soft law and hard law, while gradually driving soft law to become hard law so as to improve the legal governance mechanism for the B&R. 
In the long run, the legal governance mechanism should still be the first option, and legal norms should still be the leading guide for the future of the B&R. The binding force of law is the best foundation to ensure that countries fulfill their legal responsibilities, thus stabilizing the bilateral and multilateral cooperation along the Belt and Road. 
Guo Chenglong is from the Business School at Renmin University of China. 
Edited by WENG RONG