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That sounds no worse than the current situation between the US and China, say. China protects Chinese companies violating US trademarks.

(There’s a common libertarian saying about how criticisms of libertarianism are usually just criticisms of the status quo.)

Common standards often emerge voluntarily because people prefer objectivity and wish to avoid arbitrariness.

Consider communications technology and the web. Competing phone companies agree on standards for underlying technology so their customers can call each other. Developers of web browsers adopt common standards for the web. Developers of operating systems follow shared, cross-OS standards (called POSIX).

These standards result in objectivity, and they emerged without government involvement. People develop and agree upon such standards voluntarily because of the benefits they offer: without them, there’d be chaos. People generally don’t like chaos.

The anarcho-capitalist stance: competing governments in a single territory would not only work but be superior to having a single government, a monopoly on violence.