Everywhere you look, Multiple global crises Climate change, pandemic threats, food insecurity, technological races, trade disputes and hot wars are all around us. Confidence in free trade, globalization and multilateral cooperation as the foundations for eliminating poverty and promoting global economic growth is being shaken.
On their behalf, world leaders Inward-lookingThey want industrial policy, protectionism, Customs Duties and Subsidyanti-foreigner sentiment, and an obsession with fending off national security threats that seem to lurk around every corner.
Headlines proclaim “the end of globalization” or the need for deglobalization. Editorials discuss the need for “risk aversion,” “reshoring,” and the erection of high tariff walls to protect local businesses and jobs. Much of it is nonsense, but headlines like these have garnered sympathetic attention in the past year. General elections coming upPolitical militants are happy to blame the world’s ills on pesky foreigners.
In reality, reports of a collapse in trade and globalization are currently exaggerated: world trade did slow during the COVID-19 pandemic, but has since recovered to pre-pandemic levels.
Trade between China and the United States has shrunk since former U.S. President Donald Trump declared a trade war, but China’s trade surplus with the U.S. remains large. Researchers at the Peterson Institute for International Economics wrote: Hyperglobalization This characterizes the period from 1992 to 2008, but we must be careful not to extrapolate too much from current trends of deglobalization.
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US proposes new tariffs on China as trade war escalates
US proposes new tariffs on China as trade war escalates
While the factors that make up the current multiple crises all pose major potential threats to the global economy, what worries me most is The Collapse of MultilateralismThat is a threat in itself, of course, but without it, few other significant challenges can be addressed.
The United States is particularly worrisome in this regard, not only because it was instrumental in the creation of many of the multilateral institutions that have maintained peace, promoted economic development, and reduced poverty over the past 70 years, but also because Trump has One-sided transactions by those in power.
A world of bilateral agreements may work well for large economic powers such as the United States, the European Union and China. Impose demands It serves the country’s vital political, strategic and economic interests. For the rest of the world, the challenge of negotiating an international agreement on a bilateral basis with a global power is, to say the least, intimidating.
parable Mid-sized countries It is extremely difficult to negotiate directly with large nations like Indonesia, Brazil, South Korea, and India. For smaller nations, the challenge is impossible. Can you imagine Fiji negotiating face to face with the United States and having any hope of success? Financial compensation Is it a protest against the damage caused by global warming or is Sri Lanka demanding funds to combat the pandemic?
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COP28 climate summit concludes with agreement on ‘transition’ away from fossil fuels
COP28 climate summit concludes with agreement on ‘transition’ away from fossil fuels
Multilateral institutions are essential to ensure that the world’s smaller economies can expect fair outcomes for many of the multiple crises that plague us today.
Scholars at a forum hosted by Singapore’s Lee Kuan Yew School of Public Policy elaborated on the situation at a seminar in January. Danny Quah, dean of the school, noted that multilateralism is “a way of thinking about how nations should engage with each other on an equal footing,” providing “a level playing field for how trade should be conducted” and “ensuring that larger nations don’t bully smaller ones.” Multilateralism also includes a commitment to “peaceful resolution of disputes” and a willingness to make concessions for the greater good.
Global climate change measures, Billions of dollars The financing needed to secure investments to address the effects of climate change and mitigate the risks from floods, fires and crop failures cannot be secured without such self-sacrifice in the interest of the international community. It is equally clear that such self-sacrifice is unlikely to occur when world powers are in the driver’s seat in bilateral negotiations.
Thus, the spirit of cooperation and compromise that is at the heart of the multilateral process, and the willingness to use multilateral channels, is essential to resolving the most serious challenges threatening the world today. Prioritizing unilateralism may serve the self-interests of the largest players, but it could have truly disastrous consequences for the rest of the world.
International Monetary Fund (IMF) Managing Director Kristalina Georgieva (left) and World Bank Group President Ajay Banga during a press conference at the IMF and World Bank Annual Meetings in Marrakech on October 12, 2023. In recent years, there have been calls for reform of the Bretton Woods institutions. Photo: AFP
“The ongoing erosion of globalization is Geopolitical divisions “All but the largest economies will be vulnerable to foreign economic shocks,” it said, and called on the IMF to act as a “technocratic bulwark against political bullying in access to financial and other markets” and to serve its member countries.
The same should be said about most of the Bretton Woods institutions that have been the bedrock of international cooperation for the past 70 years, even as they need to be reformed to adapt to a world that has changed dramatically over that time. We need to encourage and build on the creation of more recent multilateral institutions so that countries have a habitual preference for multilateral cooperation.
From my perspective, of all the urgent priorities facing governments in the midst of this complex global crisis, one stands out above the others: the need to recommit to multilateral engagement remains the single most important priority.
David Dodwell is CEO of Strategic Access, a trade policy and international relations consultancy focused on the developments and challenges facing the Asia-Pacific region over the past four decades.
