Brexit and Trump both Signal the end of Multilateralism! Is this what we want?

When countries seek unilateral means to get ‘stuff’ done, this by-inference, means multi-lateral institutions are broken. It means multi-lateral institutions are NOT value added. National leaders have lost faith in multilateralism!

This is precisely, what the rise of Brexit and Trump both Signal! We are seeing the end of Multilateralism! So, what will it take to restore multilateralism? Do we need another world war to reform global institutions?

Our current global multi-lateral system is broken, and sadly outdated. There is also, institutional inertia and resistance to change in multi-lateral institutions. The net result of all this, has been a ‘trend’ among many countries to abandon multilateralism in favor of unilateralism to address critical issues. However, if you look at the United States or China or Russia or India, you see large Unions that have a federal infrastructure that add value to its member states.

The trend to unilateralism is ironic, given an objective review of global affairs after world war II! The world has in fact benefitted greatly from the creation of many multilateral institutions which have fostered a climate of governance, transparency, and accountability – and a willingness to tackle a plethora of issues concerning humanity head on – ranging from climate change to immigration flows to conflict resolution. Some multi-lateral achievements of note, include Malaria and small pox eradication; international nuclear watchdogs, global refugee crisis and disaster management …to name a few. It is also true, that the world has seen the longest period without a ‘continental, large scale war’ since 1945.

If Mr. Trump’s dystopian view of the world comes to pass, much of the multi-lateral infrastructure stands at risk. Unilateral approaches, are inherently, sub-optimal, and short-sighted. It’s like putting a band-aid on a wound instead of dealing with the underlying infection. Unilateralism, is not a cure – when the problems are complex, multi-lateral and multi-dimensional. Unilateralism, at best, enables a limited set of issues to be addressed, and even so, in a very selfish, self-centered approach.

Take the case of global resource scarcity or climate change. U.S. simply walked out of the ‘multi-lateral’ Paris accord. And no one can do a damn thing about it. The world’s largest, most powerful economy, just walked out…stating it was a bad deal for America! Fair enough! So now what?

How should the world move forward? Climate change is a global issue, facing all humanity, yet one country can simply decline to participate!

Another consideration is the rise – even further – of a tendency toward economic nationalism and the propensity for protectionism. As national budgets become further strained, jobs become scarcer, and growth rates continue to decline around the world, governments that are already predisposed to protect their own interests and adopt policies designed to shelter domestic industries will do so more liberally. They will not take into consideration that the erection of trade barriers and imposition of non-investor friendly investment policies is contrary to economic growth in the long-term – for everyone. If the U.S. no longer leads the way in adopting and practicing free trade and investment policies, governments around the world will have even less incentive to do so. We could see tit-for-tat trade wars that collectively drive the global economy into the ground.

Take the case of Yemen – for example. We have a war ravaging a country, with a massive outbreak of cholera affecting literally hundreds of thousands of children. No one cares. No one is doing anything about it. Global institutions are paralyzed and powerless; powerful countries don’t see Yemen as a strategically important part of the world. The net result is the war continues, children are dying – and nothing is being done about it.

I could go on and on. But these examples are symptoms of a greater problem. Global institutions are badly outdated, need reform and are beginning to fail. They are failing the planet. Failing almost every test! People are just throwing up their hands and admitting, ‘nothing can be done’!

Never, has a political force emanating from America (and now Britain), been intent on dismantling the very multilateral international order it helped to create. Mr. Trump’s version of the coming American isolationism has truly frightening potential consequences, immersing the U.S. into a cocoon of self-interest and propelling the world into competing economic and political landscapes where a common set of rules no longer apply and countries are only in it for themselves.

Trump’s election as president of the U.S. implies an assault on a great many things, but none of them has as much potential negative global impact as the coming assault on multilateralism. In the Post-War era, the world has been clearly transformed for the better by the ever-freer flow of information, people, money, trade and investment. It is important to realize that over half of all global trade is in sub-components for more complex products. Nothing, it seems, is ‘wholly’ made in one country any more!

Envision a world where, because of trade wars, the price of natural resources and food could skyrocket at any given time because of spot shortages, resulting in riots and increased global political and economic instability. These are some of the potential outcomes of a collapse of multilateralism in a world reduced to a series of business transactions where the winner is supposed to take all. We’ve been there before — in the 1930s.

But is this acceptable? Is this the outcome we all want? Why can’t we find a way to resolve global issues, on a global level? How can the system be improved? Why can’t the system be improved?

I believe that the only way to improve the system, is if all parties involved are ‘motivated’ to address the fundamental issue: which is the global institutions need to be reformed. It takes will. It takes hard work. It takes true resolve! Will it take another world war before we create new global institutions or fix the ones we have?

The core problem, I believe, is a lack of creativity and imagination among the global elite that manage our multi-lateral institutions. You must start with understanding who they are, and why they rose to the ‘top’ of these institutions. We must study their motivations. In the next blog, I will propose some real ideas for reform.

 

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