The Multilateralism Conundrum: International Economic Relations in the Post-Hegemonic Era

The Doha Development Round and the WTO suffered from a broad systemic malaise that was besetting multilateralism, argues Guy de Jonquières in a ECIPE/GMF working paper produced for the Transatlantic Task Force on Trade. Procedural and mechanical changes were not going to fix the problems in the WTO, since these are related to profound shifts in the structure of the world economy. The rise of important new economic players had eroded U.S. and European dominance. At the same time, no one was prepared to lead the multilateral system in the style of the U.S. hegemon during the Cold War. Diverging national priorities, unwillingness to compromise and the primacy of self-interest over the collective good were symptoms of this current transition away from the familiar old structures that had governed international co-operation. The United States and the EU needed to rethink their approaches to trade liberalization. It was imperative to return to the core argument of trade liberalization – the biggest economic benefits did not come from exports but from removing barriers to one’s own market, thereby increasing competition, productivity and innovation.