Dr Estelle Denton-Townshend is a teaching fellow at the University of Waikato. She holds a Masters and PhD in international politics and security, focusing on the Middle East. Divergent Options’ content does not contain information of an official nature nor does the content represent the official position of any government, any organization, or any group.
Title: Assessing the Impact of the Red Sea Crisis on the Rules Based International Order: Implications for the Indo-Pacific
Date Originally Written: April 1, 2024.
Date Originally Published: April 22, 2024.
Article and / or Article Point of View: The article is written from the point of view of the Indo-pacific countries towards the Red Sea Crisis and a perceived weakening of the rules based order.
Summary: The rules-based international order is crucial to the Indo-Pacific states of Australia and New Zealand. The strength of the rules-based order is tied to U.S. legitimacy and strength. The Red Sea crisis disrupts a key trade route and weakens the U.S. on the world stage as the world tires of U.S. inaction to the Netanyahu Government’s attacks on Gaza and the blatant disregard of international humanitarian law.
Text: The Indo-Pacific is a key focus of Chinese and U.S. strategic rivalry. Currently, the U.S. security umbrella extends to important routes that serve the Indo-Pacific. However, there have been more than 60 Houthi attacks in the Red Sea since October 17, 2023[1], resulting in ships diverting to the longer and more expensive route around the African coast and the Cape of Good Hope[2]. The average cargo cost per 40ft container has risen from $1,875 in December 2023, to $5,650 on January 16, 2024. This price increase and the disruption to global supply chains is feeding into business costs, adding to the global economic headwinds trade is already facing[3][4]. Sparked by Houthi frustration with Israeli attacks in Gaza, the Red Sea crisis has highlighted the fragility of the region’s security[5] and vulnerability of globalised economies to shipping route security issues.
The lessoning of U.S. military superiority[6] over the 2000s, and the diversification of non-Western alliances points to the emergence of a more multipolar order[7]. The world is heading away from the rules based international order and into a “more power based international system[8].” This change has implications for how the Indo-Pacific maintains its security and trading links with Europe. There are strategic vulnerabilities on the trade route to Europe; piracy in the Malacca Strait, the contested South China Sea, and the Red Sea route through the Suez Canal[9][10]. Until recently the main guarantor of access to these routes was provided by the Western established rules-based international order, backed by U.S. military and economic might. The Red Sea is a particularly complicated case as rivals are emboldened[11] by U.S. disengagement from the Middle East, and there has been an accompanying increase in non-Western engagement. Additionally, regional autonomy has grown in the face of what the IMF describes as “global geoeconomic fragmentation[12]”, which is a “policy-driven reversal of global economic integration” and has been fueled by events such as the Gaza war, Ukraine war, Covid 19[13], and potentially by the rising impacts of climate change.
This Red Sea, which links the security systems of the Indo-Pacific, Mediterranean, and the Middle East, looks likely to become increasingly militarised by a variety of actors. Military bases are already held in the area by the United Arab Emirates (UAE), France, Italy, Japan, China, and the U.S. Other strategic competitors in include Turkey, Qatar, Saudi Arabia, Russia, the European Union, and India[14]. Many of the Red Sea states are highly vulnerable with internal security challenges and are in need of foreign investment to ensure economic growth. Somalia, Sudan, Eritrea, and Djibouti are also amongst the top 10 source countries for refugees. Additionally, the Sovereign Wealth Funds of the wealthy Gulf states, looking to diversify away from a reliance on fossil fuels, have emerged as key investors in the Red Sea and the Gulf of Aden in the post-covid global economic downturn. Cooperation in the Red Sea between Global South[15] countries, alongside potential exploitation of the region’s weak states by the wealthy Global South actors gives the West less room for policy errors, including policies that leave a perception that the U.S. is callous with Global South lives.
With the mighty sovereign wealth funds of China, Saudi Arabia, the UAE and Qatar investing in the Red Sea, the influence of the rules-based international order over the leadership of these unstable states is likely to become overlaid by the wishes of the foreign states with high engagement in the region. This battle for engagement in the region creates uncertainty around the shipping routes. Australia and New Zealand, given that they are geographically isolated from the rest of the Global North, need to consider the U.S. capable of maintaining the global trading system and it’s routes, including the important Red Sea chokepoint. The U.S. led multinational Operation Prosperity Guardian, established to deter Houthi attacks on shipping, demonstrates that the U.S. is willing to deal with the symptoms of the Red Sea crisis. However, the U.S. seems reluctant to confront a key underlying driver of the tensions. The U.S. needs to be adept at keeping allies, but also knowing which ones are becoming geopolitically expensive. The Netanyahu government’s military action in Gaza as retaliation for the terrorist attack on Israel by Hamas on October 7, 2023 is increasingly seen as excessive, with the Gazan death toll reported at 31,600 by Gaza’s Health Ministry[16]. The U.S.’ defeated UN Security Council resolution for an “immediate and sustained ceasefire in Gaza[17]” and subsequent abstention from voting on the following successful ceasefire proposal[18], goes some way towards a tonal shift regarding this issue, but the rules-based international order has been damaged by the initial lack of resolve from the U.S. to rein in Israeli excesses. U.S. inaction leaves space available for China and the Global South leadership to advance the Arab and Islamic world’s demands, as outlined by Algeria’s Ambassador Amar Benjama; that Israel acknowledge responsibility for Gazan civilian deaths[19].
International criticism of Government military action by a Western ally undermines the U.S. led rules-based international order. This criticism weakens the legitimacy of the U.S. to criticise China over the treatment of the Uyghurs, to criticise Russia over the lives lost in the Ukraine, and it further weakens the UN’s Responsibility to Protect. This criticism also weakens the legitimacy of the U.S.’ commitment to its own Elie Wiesel Genocide and Atrocities Preventions Act of 2018, and the accompanying Executive order 13729, A Comprehensive Approach to Atrocity Prevention and Response, which outlines that “preventing mass atrocities and genocide is a core national security interest and core moral responsibility of the United States[20]”.
In order to retain its leadership position in a world with increased levels of geoeconomic fragmentation, the U.S. needs to prove that it continues to play a key role in maintaining global order and stability, particularly through leadership of its allied states. Selectively attempting to apply international rules and norms on non-aligned states and having a muted response to the instability caused by allies such as Israel, particularly in such a region in which instability can impact the world’s economy given its important shipping routes and fossil fuels, is likely to undermine the rules-based international order on which the Indo-Pacific depends for its security and international trade. Without the rules-based international order, Indo-Pacific states face increased coercion from more powerful states, such as China, which is the top trading partner of both New Zealand[21] and Australia[22].
In an increasingly geoeconomic fragmented world, investment and economic engagement between states is increasingly driven by geopolitical alignment. This alignment should concern the U.S., given in the strategic importance of the Indo-Pacific and the high levels of trade between Pacific states and China. With economic challenges facing the globe such as recovering from the covid pandemic, the Chinese economic downturn, the wars in Ukraine and Gaza, shipping costs in the Red Sea, and increasing fiscal pressure from climate change impacts, states may become increasing reluctant or economically less able to stand up to key trading partners. With New Zealand officially in recession from March 21, 2024[23] and the Australian economy sitting at 0.2% growth[24], if the rules-based international order is perceived as weakened these countries may start to feel very vulnerable to Chinese geoeconomic pressure.
Endnotes:
[1] Congressional Research Service. (2024, March 12). Houthi Attacks in the Red Sea: Issues for Congress. Retrieved from Congress: https://crsreports.congress.gov/product/pdf/IN/IN12301
[2] Scarr, S., Arranz, A., Saul, J., Huang, H., & Chowdhury, J. (2024, February 3). Red Sea attacks: ow Houthi militants in Yemen are attacking ships in one of the world’s busiest maritime trade routes. Retrieved February 11, 2024, from Reuters: https://www.reuters.com/graphics/ISRAEL-PALESTINIANS/SHIPPING-ARMS/lgvdnngeyvo/
[3] Simpson, J. (2024, January 16). What impact have UK and US strikes had on Red Sea shipping disruption?Retrieved January 17, 2024, from The Guardian: https://www.theguardian.com/world/2024/jan/16/what-impact-have-uk-and-us-strikes-had-on-red-sea-shipping-disruption
[4] Villa, M. (2024, February 1). Trade and Inflation: The Costs of the Red Sea Crisis. Retrieved February 11, 2024, from Italian Institute for International Political Studies: https://www.ispionline.it/en/publication/trade-and-inflation-the-costs-of-the-red-sea-crisis-162429
[5] Italian Institute for the International Political Study. (2023, December 22). Houthis Churn the Waters of the Red Sea.Retrieved February 11, 2024, from Italian Institute for the International Political Study: https://www.ispionline.it/en/publication/houthis-churn-the-waters-of-the-red-sea-158406
[6] Center on Military and Political Power. (N.D.). Retrieved February 24, 2024, from Center on Military and Political Power: https://www.fdd.org/projects/center-on-military-and-political-power/
[7] Araya, D. (2022, October 5). America’s Global Dominance Is Ending: What Comes Next? Retrieved February 11, 2024, from Centre for International Governance Innovation: https://www.cigionline.org/articles/americas-global-dominance-is-ending-what-comes-next/
[8] Gaal, N., Nilsson, L., Perea, J. R., Tucci, A., & Velazquez, B. (2023). Global Trade Fragmentation: An EU Perspective. Retrieved February 14, 2024, from European Commission: Economy Finance: https://economy-finance.ec.europa.eu/system/files/2023-10/eb075_en.pdf
[9] Girardi, B., Van Hooft, P., & Cisco, G. (2023, November). What the Indo-Pacific means to Europe: Trade value, chokepoints and security risks. Retrieved February 11, 2024, from The Hague Centre for Strategic Studies: https://hcss.nl/wp-content/uploads/2023/11/What-the-Indo-Pacific-means-to-Europe-Trade-Value-Chokepoints-and-Security-Risks-HCSS-2023.pdf
[10] Panda, J. (2023, October). Indo-Pacific Security in 2030-35: Links in the Chain. Retrieved February 11, 2024, from Hague Centre for Strategic Studies: https://isdp.eu/content/uploads/2023/10/01-SLOCS-Jagannath-Panda-Supply-Chains-Maritime-Choke-Points-and-Indo-Pacific-Security-in-2030-35-v6-SLOCS-1.pdf
[11] Center on Military and Political Power. (N.D.). Retrieved February 24, 2024, from Center on Military and Political Power: https://www.fdd.org/projects/center-on-military-and-political-power/
[12] IMF. (2023, January). Geoeconomic Fragmentation and the future of Multilateralism. Retrieved February 11, 2024, from IMG: https://www.imf.org/en/Publications/Staff-Discussion-Notes/Issues/2023/01/11/Geo-Economic-Fragmentation-and-the-Future-of-Multilateralism-527266
[13] Baba, C., Lan, T., Mineshima, A., Misch, F., Pinat, M., Shahmoradi, A., . . . Van Elkan, R. (2023, November 30). Geo-economic Fragmentation: What’s at stake for the EU. Retrieved from International Monetary Fund: https://www.imf.org/en/Publications/WP/Issues/2023/11/29/Geoeconomic-Fragmentation-Whats-at-Stake-for-the-EU-541864
[14] Ashine, S. G. (2024). The new global superpower geo-strategic rivalry in the red sea and its implications for peace and security in the horn of Africa. Social Sciences & Humanities Open, Vol. 9, https://doi.org/10.1016/j.ssaho.2024.100834.
[15] Heine, J. (2023). The Global South is on the rise – but what exactly is the Global South? Retrieved from The Conversation: https://theconversation.com/the-global-south-is-on-the-rise-but-what-exactly-is-the-global-south-207959
[16] Khadder, K., & Dahman, I. (2024, March 17). Gaza death toll exceeds 31,600, health ministry says. Retrieved from CNN: https://edition.cnn.com/world/live-news/israel-hamas-war-gaza-news-03-17-24/h_52b8706a615460e042d7a6ca43059b80
[17] United Nations. (2024, March 22). Russia and China veto US resolution stating imperative of ‘immediate and sustained ceasefire, in Gaza. Retrieved from United Nations: https://news.un.org/en/story/2024/03/1147856
[18] Borger, J. (2024, March 25). Israel isolated as UN security council demands immediate ceasefire in Gaza.Retrieved from The Guardian: https://www.theguardian.com/world/2024/mar/25/un-gaza-ceasefire-vote
[19] United Nations. (2024, March). US Resolution would have given green light to ‘continuing bloodshed’: Algeria.Retrieved from United Nations: https://news.un.org/en/story/2024/03/1147856
[20] Department of State, USAID, Department of Defense, Department of Justice, US Department of Homeland Security, Federal Bureau of Investigations, Department of the Treasury. (2022). U.S Strategy to Anticipate, Prevent and Respond to Atrocities. Retrieved from U.S Department of State.
[21] Minstry of Foreign Affairs. (2022). China. Retrieved from Ministry of Foreign Affairs and Trade: https://www.mfat.govt.nz/en/countries-and-regions/asia/china/#:~:text=China%20remains%20New%20Zealand’s%20largest,the%20year%20ending%20December%202022).
[22] Department of Foreign Affairs and Trade. (n.d.). Background Paper: The Australia-China Trade and Investment Relationship. Retrieved from Department of Foreign Affairs and Trade: https://www.dfat.gov.au/trade/agreements/in-force/chafta/negotiations/Pages/background-paper-the-australia-china-trade-and-investment-relationship
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