The collapse (once again) of the Doha negotiations has put trade back in the spotlight – albeit a rather dim and fading light after seven years of negotiations with no end yet in sight. This most recent set of talks were held in Geneva in July, but stalled after nine days in a now familiar fashion – an impasse between developing (in this case China and India) and developed (the United States) countries over agricultural trade.
The “Doha Development Round” was originally launched in the Qatari capital in November 2001. In a burst of multilateral goodwill following the attacks on the World Trade Center in New York City, the Doha Declaration promised to put the needs and interests of developing countries at the heart of the trade agenda, and to address the barriers that limit trade and economic growth by poor countries.
That goodwill was short-lived, however. Although the 2004 Asian tsunami also sparked a brief burst of global cooperation, these gestures now are being overshadowed by rising protectionism and fears about terrorism; competition for food, fuel and other resources; and climate change, alongside bitter disputes over who should bear the burden of addressing such challenges. In addition, the United States, which played such a critical role in fostering global stability after 1945, has grown antagonistic towards multilateralism and any perceived constraint on its ability to act in its own interests.
This is not entirely an American phenomenon; domestic sentiment has become increasingly nationalistic in many countries. The growing economic power and influence of countries such as China, India, Russia and Brazil – the “rise of the rest” in the words of US journalist and author Fareed Zakaria – has created fear and distrust in both the United States and Europe about the impact on local jobs. In the leading emerging markets, meanwhile, there is increasing confidence in their ability to exert more political influence, coupled both with a rising sense of national pride and with resentment about the foreign policies of the United States and its allies.
In his book, The Post-American World, Zakaria quotes a young Chinese diplomat as saying: “When you tell us that we support a dictatorship in Sudan to have access to its oil, what I want to say is, ‘And how is that different from your support of a medieval monarchy in Saudi Arabia?’ We see the hypocrisy, we just don’t say anything—yet.”
Historically, the first half of the twentieth century also was a period when protectionism and nationalism became the order of the day. Coupled with a lack of international institutions or leadership by any individual nation – Britain was unable, the United States unwilling – the result was chaos and crisis through the first half of the century.
After the Second World War, however, the situation reversed as the United States overcame its historical isolationism and brought critical leadership in the creation of a set of institutions to guide the global system. These include the United Nations, the International Monetary Fund and World Bank, and the World Trade Organisation (previously GATT). The United States also invested heavily in reconstruction and development following the war, in both Europe and Asia. The developed world – both the United States and Europe – benefited greatly from this “Pax Americana”, which also created the pre-conditions for the emerging markets to thrive.
Now, however, the United States seems to be losing its appetite – and, arguably, its ability – to drive world trade, as popular support has eroded domestically and the current political leadership has become increasingly isolationist. Many, most notably the former European Union trade commissioner Peter Mandelson, point to the farm subsidy bill recently passed by the US Congress as an example of how far back US sentiment has slid.
At the same time, multilateral institutions have become dangerously weakened as their legitimacy is questioned by both the United States, which seeks a free hand in acting to defend what it perceives as its national interests, and by emerging markets, which see the governance of multilateral institutions as anachronistic and heavily skewed against developing countries.
Europe, although broadly multilateralist, is too internally divided and lacks the political will to provide the missing leadership. The result in Geneva in July was that none of the key actors were willing to be the first to make significant concessions for the sake of the global good.
So where does this leave us? Maybe a change in the US administration, particularly to Barack Obama, who has committed to multilateralism and will re-engage the United States as an enthusiastic supporter of global trade? An even riskier bet might be that Europe – the world’s largest single trading bloc – will get its own house sufficiently in order to take leadership and provide a model of successful integration and cooperation between many nations. Or globalisation may be led by “the rest” – most notably China.
We do not have the answer, but we do know that finding a solution that fosters global cooperation while supporting the principles of sustainable development will be crucial. To this end, the consultancy and think-tank SustainAbility is joining the multi-stakeholder dialogue of the “Evian Group” in October. The aim is to identify solutions to promote collaboration and mitigate confrontation in two critical areas of global interest: trade and climate change.
Established in 1995, the Evian Group aims to foster an open, inclusive, global market economy within a rules-based multilateral framework. It is a “coalition of the willing”, to borrow a somewhat uncomfortable phrase, bringing together international corporate, government and opinion leaders, and undertaking advocacy to influence the public-policy process.
If we are to have any hope of achieving a century based on peace, stability and an equitable sharing of the common wealth of this planet – aims that underpin sustainable development – we will need a functioning institutional system to facilitate trade, broker solutions and provide far-sighted stewardship of our resources. We cannot leave such great challenges exclusively in the hands of senior politicians closeted in Geneva, Brussels, Beijing or Washington. We need much greater engagement of those who stand to benefit from a new “pax mundus”, including business, governments at all levels and civil society – which ultimately means most of us.
John Elkington is co-founder and director at SustainAbility (www.sustainability.com) and founding partner at Volans (www.volans.com). Jodie Thorpe is manager of SustainAbility’s emerging economies programme (www.sustainability.com/emerging-economies).
Homepage photo by rojam