**London**: While the UK and US retreat from global cooperation, the EU, Japan, and China advance sustainability frameworks embedding accountability into trade. These efforts redefine international legitimacy and economic leadership, impacting global South producers and shaping future trade dynamics amid delays in EU policies.
At a time when global leadership and cooperation are increasingly in demand, two major democracies— the United Kingdom and the United States—have taken paths suggestive of retreat rather than renewed engagement on the world stage.
The United Kingdom’s decision to leave the European Union, commonly known as Brexit, marked a significant shift in its international stance. While justified domestically as a means to reclaim sovereignty, this move has been widely interpreted as a strategic miscalculation that sacrificed Britain’s influence in shaping global cooperation. Instead of working within the EU to help define emerging rules and standards, the UK chose to step away, trading its seat at the table for a more isolated position.
Similarly, the United States under the leadership of Donald Trump has embraced a protectionist economic agenda. With Trump’s return to the White House, marked by his supporters as “Liberation Day,” a series of sweeping tariffs were introduced on all imports. These tariffs were officially presented as necessary to protect American jobs and industries. However, this inward turn has raised concerns about increasing economic costs such as higher prices and disrupted international alliances, while diminishing America’s voice in shaping future global trade and sustainability standards.
While these choices have had economic and diplomatic repercussions, they also represent a retreat from shared responsibility in addressing critical and interconnected global challenges including climate change, social inequality, and international legitimacy.
In contrast, the European Union has been advancing a distinctive model of global leadership focused on embedding sustainability into the fabric of economic and regulatory systems. The EU has launched several key initiatives such as the Corporate Sustainability Reporting Directive (CSRD), the Green Taxonomy, and the Carbon Border Adjustment Mechanism. These measures institutionalise sustainability requirements, making them obligatory for over 50,000 companies that operate in or trade with the EU market—including those headquartered outside Europe. These firms must provide audited disclosures covering environmental emissions, human rights considerations, governance structures, and supply chain practices.
“We are not simply defending sustainability—we are encoding it,” notes the perspective highlighted in a recent analysis by Asia Times. The EU’s approach transforms market access into a form of conditional legitimacy, where participation in its economic sphere demands demonstrable commitment to sustainable and just business practices. This method stands apart by choosing to lead through values and accountability rather than protectionist trade barriers.
Alongside Europe, Japan is adopting a methodical and quieter approach to enhancing sustainability. In 2025, Japan’s Sustainability Standards Board (SSBJ) implemented the country’s first sustainability disclosure standards aligned with the International Financial Reporting Standards (IFRS). These apply to companies listed on the Tokyo Stock Exchange’s Prime Market and cover emissions transparency, governance practices, and climate risk management. Japan has also set an ambitious target: reducing greenhouse gas emissions by 73% by fiscal year 2040 relative to 2013 levels, positioning itself as a leader among the Group of Seven economies in decarbonisation efforts.
China, too, is developing its sustainability framework on terms aligned with its national priorities. In late 2024, it introduced the Basic Standards for Corporate Sustainability Disclosure, laying the foundation for a comprehensive ESG reporting system consistent with global expectations. This initiative complements China’s Sustainable Development Goal (SDG)-aligned green taxonomy and strengthens its influence over sustainable finance and trade policies. Notably, China’s Global Development Initiative incorporates environmental and social metrics into its infrastructure diplomacy, reflecting an integrated approach to sustainable development.
These varied paths—European regulatory leadership, Japan’s methodical standards alignment, and China’s recalibration of sustainability frameworks—signal a broader global shift. Sustainability is moving from a peripheral concern to a structural pillar of legitimacy and market access.
For nations in the Global South, the implications are immediate and significant. Export competitiveness increasingly depends not only on price but on providing verifiable proof that goods adhere to sustainability and ethical standards. From cocoa farmers in Ghana to garment manufacturers in Bangladesh, producers face rising demands to demonstrate that their products embody both value and responsible practices.
This evolution challenges traditional trade dynamics without representing a new form of neocolonialism; rather, it functions as a reflection of accountability expectations in a globalised economy. The key question raised is whether the global economic architecture can evolve to reward contribution and credibility over coercion or superficial branding.
However, this emerging sustainability architecture remains fragile. Delays in implementing key EU initiatives such as the CSRD and the Corporate Sustainability Due Diligence Directive (CSDDD) have raised concerns. These postponements do not merely affect timelines but risk eroding the values and clarity that underpin the movement towards accountability. The EU, having positioned itself at the forefront of this development, faces a critical juncture where faltering progress could undermine global trust in its leadership role.
According to the Asia Times analysis, “Europe has planted its flag at a new peak: sustainability as the foundation of global legitimacy. If it slows down, the world might wait. But if it turns back, the world may stop believing.”
Leadership in the current global context demands an ability to persevere amid complexity and pressure. The era of glossy ESG (Environmental, Social, and Governance) reports is giving way to one of tangible results and consequence. In this new environment, Europe’s leadership is vital but insufficient on its own. Japan’s disciplined approach, China’s strategic recalibration, and the proactive engagement of the Global South are also essential for building inclusive, credible systems that can address planetary boundaries while respecting developmental needs.
The evolving global landscape suggests that the future of trade, legitimacy, and cooperation will be defined not by the loudest or richest actors, but by those that demonstrate consistency, accountability, and credible sustainable practices. As the world grapples with overlapping social and environmental challenges, sustainability increasingly defines the terms of participation and leadership in the international order.
Source: Noah Wire Services
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