The 2026 Jones Cup produced a bewildering outcome. The Philippines defeated Chinese Taipei Blue by a wide margin and posted a better overall record, yet failed to advance. Chinese Taipei Blue secured a place in the next round under a host-team qualification rule. Da-Nien Liu, Director of the Regional Development Study Center at the Chung-Hua Institution for Economic Research (CIER), said the controversy over the “winners being eliminated and the losers advancing” did not arise from an absence of rules. Rather, the rules created an exception for a specific participant. When exceptions override generally applicable rules, they undermine not only the perception of fairness but also the credibility of the system.
When Exceptions Override Common Rules, It Erodes Not Only Fairness but Institutional Credibility
Liu said this phenomenon of exceptions overriding common rules is also unfolding across the global economy. The fundamental change is not the disappearance of rules, but a reversal in the relationship between rules and power. In the past, rules were intended to constrain power. Today, power increasingly shapes the rules. Countries with advantages in markets, technology, and supply chains have greater capacity to redefine the terms of competition and even create exceptions for themselves.
From the General Agreement on Tariffs and Trade (GATT) to the World Trade Organization (WTO), the objective was not merely to reduce tariffs but also to establish a transparent and predictable competitive environment. Although major and smaller economies differed greatly in strength, all were at least required to follow common mechanisms. The value of this system rested on giving every participant confidence that rules would not apply only when they served a particular country’s interests.
This logic has weakened markedly in recent years. U.S.-China competition, the COVID-19 pandemic, the Russia-Ukraine war, and geopolitical risks have shifted economic and trade policies from efficiency toward security. Tariffs, export controls, industrial subsidies, investment screening, and local production requirements have proliferated. Companies now compete on far more than price and quality.
In the past, companies selected investment locations primarily by comparing wages, land prices, taxes, and transportation costs. They must now also consider trusted partners, export controls, component origins, and rules-of-origin requirements. Even corporate ownership and control can affect market access. Global competition has therefore evolved from competition based solely on markets into a dual contest involving both markets and regulatory systems.
Global Trade Shifts from Efficiency to Security as Companies Face Competition in Both Markets and Regulatory Systems
Liu said the United States is the clearest example. In recent years, tariffs, semiconductor export controls, investment restrictions, and industrial subsidies have gone beyond addressing traditional trade imbalances. The United States is using its advantages in markets, technology, and finance to reshape global supply chains. Other countries have followed suit. Rules have not disappeared. Instead, countries have begun building their own regulatory frameworks and supply chain systems.
The difficulties facing the WTO reflect the declining influence of common rules. Its dispute settlement system once provided an essential mechanism through which small and medium-sized economies could seek remedies under common rules, even in disputes with major powers. As the mechanism has remained dysfunctional for an extended period, countries have become more inclined to rely on unilateral measures and use their economic power to resolve disputes. When powerful countries gain greater influence over how rules are applied, other participants naturally lose confidence in the system.
Countries’ pursuit of economic security is not itself the cause for concern. The pandemic, wars, and supply chain disruptions have demonstrated the risks of a globalization model based primarily on cost efficiency. Semiconductors, energy, food, and critical minerals also cannot be left entirely to market forces. The real problem arises when security becomes a justification for protectionism. If exceptions continue to expand, they may ultimately weaken the binding force of common rules.
The proliferation of exceptions changes not only how countries behave but also the incentives facing businesses. If companies find that subsidies, tariff protection, or policy exemptions have a greater influence on competitive outcomes than lower costs, better products, or greater efficiency, they will naturally devote more resources to securing government support. The global economy will then gradually shift from competition based on “efficiency” toward competition based on “policy and economic power.”
Instead of Merely Relying on Protection Rules, Taiwan Must Turn Its Industrial Strengths into Leverage for Institutional Participation
Liu said this shift is particularly important for Taiwan. Taiwan lacks the leverage that comes with a large market and political influence. It therefore has a greater need for protection under common rules. At the same time, it must strengthen its advantages in technology, industry, and supply chains to make itself increasingly indispensable.
The real challenge ahead is not merely to comply with rules, but to secure a role in shaping new ones. Taiwan must avoid being left to passively accept the terms of competition set by major powers.
As the global economy shifts from rules constraining power toward power shaping rules, Taiwan cannot simply expect rules to protect it. It must turn its industrial strengths into leverage for negotiations and institutional participation. Taiwan should not seek to become an exception to the rules. It should instead become a participant that cannot be overlooked whenever new rules are formulated.
Source: Da-Nien Liu (September 4, 2026). What Exceptions on the Court Reveal About Changes in Global Rules. Economic Daily News. https://money.udn.com/money/story/5629/9733413/