TheMarketForIdeas

The 1967 Outer Space Treaty was written for a world in which no private company was a serious actor beyond the atmosphere. It says, in its second article, that outer space cannot be subject to national appropriation by claim of sovereignty, by use, or by occupation. Nearly sixty years later, that single sentence sits underneath a space economy the treaty’s drafters could not have imagined: one that the World Economic Forum and McKinsey expect to grow from $630 billion in 2023 to $1.8 trillion by 2035, expanding at roughly twice the pace of global GDP. Supply chains, food production, state-funded defence, retail, and digital communications are set to generate more than 60% of that growth. The treaty’s silence on who, if anyone, may own a mined asteroid or a bucket of lunar water has stopped being an academic curiosity and become the terrain on which the major space powers now compete.

Underneath all of that, the competition is about rules, and about who gets to write them, far more than it is about rockets.

Three ways to read the same silence

The 1967 Treaty never says whether extracting a resource counts as appropriating it. The United States settled that question domestically first, through the 2015 Commercial Space Launch Competitiveness Act, which lets private companies own what they extract in space. Luxembourg followed with its own Space Resources Law in 2017. Neither statute amends the Outer Space Treaty; both act as though the ambiguity has already been resolved in their favour. Law firms such as Norton Rose Fulbright have warned that this kind of unresolved disagreement is not a minor technicality: without clarity on who holds title to extracted resources, private operators cannot commit serious capital, and the uncertainty itself becomes a drag on investment.

The Artemis Accords, launched by NASA in 2020 and counting 60 signatories at the time of writing, go a step further. They state outright that extracting space resources does not, by itself, amount to national appropriation under Article II. That is a legal interpretation rather than a binding revision of the treaty. Endorsed by enough states, though, an interpretation can start functioning like one. Getting enough countries to agree on a reading of an old rule that none of them can formally rewrite, closer to quiet bureaucratic manoeuvring than to any declaration of peaceful cooperation, is how space diplomacy functions in practice.

Washington’s coalition of the willing

The American approach can best be described as coalition diplomacy. Rather than seeking universal consensus, Washington expands its preferred rules by accumulating partners, one bilateral agreement at a time, until the accumulated weight of signatories starts to look like a norm. The Artemis Accords’ “safety zones,” which grant a form of operational exclusivity around American activities without ever claiming territorial sovereignty, are a clean example, functionally similar to a sovereignty claim but worded so as not to be one.

For smaller space powers, signing on is no longer just a diplomatic gesture. It buys access to NASA partnerships, high-resolution Earth observation data, and training programs, which turns a normative commitment into a tangible payoff. States with limited launch capability supply something Washington cannot manufacture on its own, the appearance of broad, voluntary buy-in for the American model of governance.

Beijing’s counter-coalition

China plays a different game. Its diplomatic language leans on equity and the idea of space as the common heritage of humankind, a framing well suited to building support in multilateral forums and among developing countries wary of an American-led order. Scholar He Qisong has argued that this reflects China’s structural position: a rising power that benefits from a governance order grounded in formal international law, which it can shape more easily through alliances with the developing world than by beating the United States at its own bilateral game.

The practice does not always match the rhetoric. While Beijing talks the language of shared heritage, it is building, together with Russia, the International Lunar Research Station, and has drawn in partners such as Thailand, Nicaragua, and Serbia since 2024. Research from Frontiers in Space Technologies suggests China is deliberately exploiting cracks in the Western-led multilateral system to attract states that feel underrepresented in the Artemis architecture. The result looks less like principled multilateralism and more like the construction of a rival pole, dressed in multilateral language because that language sells better to the audience China is courting.

Brussels’ rulebook

The European Union has neither Washington’s coalition-building leverage nor Beijing’s willingness to build parallel infrastructure. Instead, it exports rules. In June 2025 the European Commission proposed a European Space Act, which would harmonize national space legislation and impose sustainability and cybersecurity standards on any company that wants to operate in the EU’s internal market. EU Cyber Direct has drawn the obvious comparison to the General Data Protection Regulation: a case where Brussels turned market access into a lever of global influence, since companies elsewhere often find it simpler to meet the EU standard everywhere than to run two compliance regimes.

Regulatory diplomacy of this kind cuts both ways: it reduces legal uncertainty for anyone who wants to serve the European market, but raises compliance costs for outside firms and, potentially, encourages a fragmentation of standards rather than a common one. Europe is converting a lack of hard power into normative influence, but that influence only works as long as the market it is attached to remains worth accessing.

The states that get to decide whether any of this is legitimate

None of these three models can claim legitimacy on its own. India’s Chandrayaan-3 mission, which put a lander near the lunar south pole in 2023, showed that advanced space capability is no longer confined to the traditional powers, and states such as Saudi Arabia and the UAE are following a similar trajectory. Frontiers in Space Technologies has cautioned that if these emerging space states are left out of the current rule-making process, the resulting norms risk reproducing the same structural inequalities found in other regimes governing global commons.

That makes emerging space states more than an afterthought in this competition. They are the audience whose adherence, or lack of it, decides which of the three diplomatic models can plausibly claim broad acceptance, and which is merely convenient for its author. Washington’s coalition, Beijing’s counter-coalition, and Brussels’ regulatory bloc are all recruiting from the same pool of undecided states; each new recruit counts as a small verdict on which model is winning.

What happens when nobody agrees

The clearest sign that the old multilateral consensus has cracked came in 2025, when a Russian veto blocked a UN Security Council resolution on space security, according to Diplomacy.edu’s analysis. That moment mattered less as a single diplomatic failure than as a signal that the UN’s Committee on the Peaceful Uses of Outer Space can no longer be relied on to produce binding, universally accepted norms. Power has shifted from that forum toward the networks of selective partnerships and rival normative blocs now competing to take its place.

This fragmentation is expensive in ways that go beyond diplomacy. It raises legal uncertainty for private investors facing competing interpretations of resource rights, and it encourages the formation of rival technological ecosystems, adding coordination costs for any company trying to operate across blocs. Whoever ends up setting the technical standards for accessing orbital and lunar infrastructure will, in effect, decide who profits from the next generation of the space economy. Harvard’s Ely Sandler has proposed a Conference of the Parties mechanism for the 1967 Treaty, similar to the process used in international climate law, which would allow binding interpretations without a formal renegotiation of the treaty itself. Sandler’s proposal makes sense on paper, but its success depends on the great powers agreeing to accept multilateral constraints they have so far shown little appetite for.

Conclusion

Three competing diplomatic styles are now reinterpreting what sovereignty in space even means, each one built to serve the interests of the power behind it. Washington builds its coalition one bilateral partnership at a time, Beijing borrows the language of shared heritage while building its own parallel infrastructure, and Brussels converts market access into regulatory reach. None of the three is purely about resources. Each is a bid to decide who writes the rules for a domain that, within a decade, will be worth close to two trillion dollars, and whose eventual rulebook will shape investment flows, technological alliances, and the distribution of power long after the first bucket of lunar ice has been mined.

Photo source: PxHere.com.

Recommended readings:

Atkins, S., Taylor, M., McAdam, H., & Morrison, R. (2022, November). Governance in outer space: The case for a new global order. Norton Rose Fulbright. https://www.nortonrosefulbright.com/en/knowledge/publications/e8862684

DiploFoundation. (n.d.). Space diplomacy. https://www.diplomacy.edu/topics/space-diplomacy/

Freeland, S., Frank, R. J., Lazatin, A., Vazhapully, K. M., Byers, M., & Nadarajah, H. (2025, September 18). Shaping space governance: Strategic reflections on multilateralism, international law, and the role of emerging states. Asia Pacific Foundation of Canada. https://www.asiapacific.ca/publication/strategic-reflections-shaping-space-governance

He, Q. (2024). The order of law-based vs. rules-based: The competition in space order between China and the United States. Advances in Space Research, 73(1), 1006–1018. https://doi.org/10.1016/j.asr.2023.10.032

Kulesza, J. (2025, July 9). Space diplomacy toolbox and digital sovereignty: Lessons from European cyber diplomacy. EU Cyber Direct. https://eucyberdirect.eu/blog/space-diplomacy-toolbox-and-digital-sovereignty-lessons-from-european-cyber-diplomacy

National Aeronautics and Space Administration. (2020). The Artemis Accords: Principles for cooperation in the civil exploration and use of the Moon, Mars, comets, and asteroids for peaceful purposes. https://www3.nasa.gov/specials/artemis-accords/img/Artemis-Accords-signed-13Oct2020.pdf

Palit, S., Dias, T. S., & Hazra, S. (2025). Rebalancing space governance: A Global South perspective on outer space as a global commons. Frontiers in Space Technologies, 6, Article 1594352. https://doi.org/10.3389/frspt.2025.1594352

Sandler, E. (2025, December 8). Governing outer space: A conference of the parties for the Outer Space Treaty. Belfer Center for Science and International Affairs, Harvard Kennedy School. https://www.belfercenter.org/research-analysis/space-cop-governance

Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies, Jan. 27, 1967, 610 U.N.T.S. 205.

United Nations. (n.d.). International space law explained. https://www.un.org/en/peace-and-security/international-space-law-explained