TradeMoves’ blogs are primarily focused on trade policy and promotion initiatives that directly affect US exporters and overseas sales. On occasion, our team reports on macro policies and strategic global initiatives that may impact global trade and its players. This is one such blog, which is relevant in putting globalization and global governance efforts into perspective.
There is no doubt that globalization, or the increasing interconnectivity of nations around the world propelled by technological advances, has been accompanied with both benefits and costs to society. Whether beneficial or harmful, the effects of globalization pay no heed to national borders and may require global solutions.
The Brookings Institution hosted an event on 28 October in which two international trade heavyweights addressed the question: “Is Globalization in Need of Global Governance?” Given the central role that international trade has played in globalization and the World Trade Organization’s experience with trials and errors in governance, it is no surprise that Pascal Lamy, Director-General of the WTO from September 2005 to September 2013, was asked to be the featured speaker. In addition, Brookings invited Robert Zoellick, former US Trade Representative and the 11th President of the World Bank, to respond to Mr. Lamy’s lecture.
Perhaps a more accurate title for the event should have been, “How do we modernize global governance to address 21st century issues?” After listing some of the major negative aspects of globalization (protectionism, cyber warfare, environmental issues, etc.), Mr. Lamy suggested that it isn’t that we lack global governance but that “we don’t currently have a global governance system able to cope with these challenges.” Similarly, Mr. Zoellick stated that there is “an ongoing need to modernize the multilateral institutions” created in the last century. The two speakers, however, emphasized different obstacles and suggested different solutions to this problem.
The major issue going forward, in the opinion of Mr. Lamy, will be the disparate value systems between nations. Nations do not argue on deciding what the end goals of global governance should be. Countries all around the world are, in Mr. Lamy’s words, “for more freedom, for more security, for less injustice, for a better environment, but the coefficients we attribute to each of these different variables leads to a system of different individual equations.” Our success in addressing the issues that globalization generated will depend on how successful we are at harmonizing these values, or turning “these individual preferences into collective preferences.”
Mr. Zoellick, on the other hand, argued that it is “sharing of responsibilities in the system” that will present the greatest challenge to the global governance issue. As middle-income countries have separated themselves from the least developed countries but have not risen quite on par with other developed countries, a successful modernization of multilateral institutions will require increased burden sharing with these developing countries. In fact, the solution to overcoming the burden-sharing issue may depend on the success of harmonizing value systems, as Mr. Lamy indicated.
Both speakers headed major multilateral institutions and are aware of the difficulty of modernizing global governance for addressing 21st century issues. The obstacles must be overcome by some innovations in the international system because, as Mr. Lamy said, “after all, all countries swim in the same global sea.”
More information on the event, including the audio recording and transcript, can be found here.
Tyson Smith TSmith@TradeMoves.net
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