KUALA LUMPUR, Malaysia, Aug 24 (IPS) – International governance arrangements are in trouble. Condemned as “dysfunctional” by some, multilateral agreements have been rejected or ignored by the powerful, except when they were useful to protect their interests or ensure legitimacy.
Economic multilateralism under siege
There is no doubt that many multilateral agreements have become less appropriate. At the heart of these is the United Nations (UN) system, conceived during the last year of US President Franklin Delano Roosevelt’s presidency and World War II.
The Bretton Woods agreement allowed the US Federal Reserve (Fed) to issue dollars, as if they were backed by gold. In 1971, President Richard Nixon repudiated the obligations of the United States under Bretton Woods. Along with the US military and “soft power,” the widespread acceptance of the dollar has since effectively extended the “exorbitant privilege” of the Fed.
This unilateral rejection of US commitments was a precursor to the fate of some other multilateral agreements. Most were designed by the United States, some in consultation with its allies. Many of the key privileges of the North – especially the United States – endure, while duties and obligations are ignored if deemed inconvenient.
The International Trade Organization (ICO) was to be the third pillar of the postwar multilateral economic order, later reaffirmed by the Havana Charter of 1948. Despite postwar global hegemony, the ‘OIC was rejected by the US Protectionist Congress.
The General Agreement on Tariffs and Trade (GATT) has become a substitute for compromise. Recognizing the diversity of national economic capacities and capacities, the GATT did not impose a single requirement on all participants.
But the lessons learned from these flexible and successful precedents were ignored when the World Trade Organization (WTO) was established from 1995. The WTO imposed onerous new obligations such as the requirement of “the all-or-nothing single undertaking and the Agreement on Trade-Related Intellectual Property. Rights (TRIPS).
In September 2021, the UN Secretary General (SG) released Our common program, with new proposals for international governance. Besides their new status quo bias, the proposals fall short of what is needed in terms of scope and ambition.
The problem is that it legitimizes and seeks to consolidate already diffused institutional responsibilities, further weakening the intergovernmental leadership of the UN. This would legitimize the infiltration of international governance by multiparty partnerships managed by private commercial interests.
The past six decades have been marked by often chillingly slow changes aimed at gradually improving the situation under the aegis of the UN – mainly due to the recalcitrance of the privileged and powerful. These changes have altered the participation of Member States and civil society, with mixed effects.
More equitable institutions and arrangements – agreed after inclusive intergovernmental negotiations – have been replaced by multi-stakeholder processes. These are generally not accountable to the Member States, even less to their public opinion.
Such biases and other problems with seemingly multilateral processes and practices have eroded public confidence in multilateralism, particularly in the United Nations system.
Multi-stakeholder processes – involving transnational business interests – can speed up decision-making and even implementation. But the most reliable study so far, little evidence of clear improvements has been found, especially for people who are already marginalized.
New multi-party governance – without significant prior approval from relevant intergovernmental bodies – undoubtedly strengthens the power and autonomy of the executive. But such initiatives have also undermined legitimacy and public trust, with little net gain.
Too often, new multiparty agreements with private parties have been concluded without the approval of Member States, even retrospectively because of the requirements. It is not surprising that many people in developing countries have become alienated and suspicious of those who act on behalf of multilateral institutions and processes.
Consequently, many countries in the South have shown themselves to be reluctant to cooperate with the efforts of the SG to resuscitate, reinvent and reorient intergovernmental institutions and processes that have no doubt disappeared.
The path to follow ?
But the SG’s report also made some important proposals that deserve careful consideration. It is right to recognize the long overdue need to reform existing governance arrangements to adapt the multilateral system to current and future needs and requirements.
This opportunity for reform is now under threat due to the lack of support, participation and legitimacy of Member States. Inclusive consultative processes – involving state and non-state actors – should strive to find pragmatic solutions that are broadly acceptable. These should be adopted and implemented through intergovernmental processes.
There is no doubt that multilateralism and the United Nations system experienced increasing marginalization after the end of the first Cold War. The UN was slowly but surely supplanted by NATO and the Organization for Economic Co-operation and Development (OECD), led by the G7 group of the largest rich economies.
The second UN secretary-general, Dag Hammarskjold – who worked for the OECD’s predecessor – warned the international community, especially developing countries, of the dangers posed by the club of rich nations. This became evident when the rich blocked the UN from leading international tax cooperation.
In search of quick fixes, “clever” advisers or consultants may have persuaded the SG to adopt corporate-dominated multi-stakeholder partnerships, contrary to UN standards. More recent initiatives by the SG may suggest his frustration with the failure of this approach.
After the problematic and controversial assessment of such processes and events in recent years, the SG can still meet contemporary challenges and strengthen multilateralism by changing course. By restoring the effectiveness and legitimacy of multilateralism, the United Nations will not only be fit, but also essential for the future of humanity.
IPS United Nations Office
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