Editor's note: This article is part of the Policy Preview Report for G20 Summit in Argentina.
Shen Chen
Multilateralism has at least three connotations. One, it is a diplomatic concept based on diffuse reciprocity and opposite of unilateralism or isolationism. Two, it is a diplomatic mode involving three or more countries. Three, it is an international instrument based on the concept of diffuse reciprocity and the principle of consultation and consensus, a salient example being the multilateral trading system.
As bargaining and compromise are often the case, it thus gives smaller countries a certain say and influence, and even sets the stage for them to join against big ones. Under this framework, big countries are prone to moral risks and material costs for their intention to seek control over other countries.
The G20 is an institutional form consistent with multilateralism. Compared to the G7, it is regarded as more diverse and representative as it also includes most influential emerging economies. With regard to rules, its resolutions, though lacking coercive power, facilitate all parties to reach a consensus and jointly carry out actions. In addition to member states, the G20 also invites multilateral organizations such as the WTO and the IMF to participate, which highlights its importance in the multilateral governance system.
Over the past decade, G20 has facilitated dialogues and cooperation among major economies, and promoted reforms of the global financial governance mechanisms, which helped avoid a sustained economic recession. Despite the recovery in global growth, the global economy still faces downside risks due to trade protectionism and geopolitical tensions. However, the G20 members now lack a sense of urgency, posing a challenge to the initiative and effectiveness of its coordination.
It cannot be denied that post-war multilateralism was achieved under US hegemony. The US relied on its unparalleled strength to create a multilateral framework based on the so-called Constitutional Bargain that restricts hegemons to a set of relatively fair and stable rules. Out of the optimism of postwar multilateralism, Robert Keohane proposed a cooperative picture: When the US declines, other countries would, from the perspective of reducing transaction costs, continue to protect the existing international system.
The G20 has indeed constructed a multilateral framework accommodative to hegemonic cooperation, providing countries with more stable information channels and behavioral expectations, and greatly reducing uncertainties in national policies.
However, even if countries agree on matters of principle reached within the group, there are big differences in understanding and implementing them. As a result, bridging differences and reaching compromises are both the main goal and the difficulty for G20.
Recently, it has become even more difficult to pursue multilateralism with rising nationalism and populism in a few major economies. US government is willing to undermine or even withdraw from the rules and agreements created by the US itself in pursuit of pleasing US conservatives and some protectionist voters. The practice has created an international environment harmful to multilateralism. The US used its strong political and economic influence to blackmail other countries. As a result, after reaching a compromise with the US, some countries were limited by terms and could not reach any agreement with the remaining countries which were thus trapped in a dilemma: Either to accept the unfavorable agreement or to be isolated and treated differently.
The reason for the Trump administration’s non-cooperation is that under the existing international system (such as the multilateral trading system), the US benefits less than other countries do. Non-cooperation leads to losses for both, but the loss for others (such as financial turmoil or economic recession) is greater than that for the US. In sum, Trump has completely abandoned the Constitutional Bargain, the cornerstone of multilateralism in favor of a calculation of relative power and interests.
Multilateralism cannot impose effective constraints on its member states. The G20, for example, operates on the principle of consultation and consensus; so the US can veto any resolution that is not in line with its own policy even by 1:19. The past two years have proved that general international opposition failed to contain the US' damage to multilateral rules in areas of trade and climate. Of course, the G20 will not fail to support multilateralism. It accounts for 85 percent of the world economic aggregate and is the only international mechanism today that brings together the heads of the world’s 20 most important economies.
Therefore, the G20 should not aim too high, but focus on safeguarding an amicable environment and maintaining basic principles of multilateralism.
In the long run, the international system depends not so much on hegemonic oppression and economic inducement as on normative principles such as free trade, sovereign equality and preferences of developing countries -- that are all contained in the concept of multilateralism and will definitely prevail. The principle of multilateralism will not end with the withdrawal of hegemons or the alternation of hegemony. From this angle, the G20 should transform its function from crisis response to normative communication which pursues justice and equality. Based on previous experience in finance, taxation, infrastructure and anti-corruption, the G20 is capable of putting forward a general document upholding the concept of multilateralism and reforming the rules of multilateral cooperation.
As G20 countries take turns to hold the presidency of the summit, host countries often play an important role in the drafting of the agenda and post-meeting declarations, with many articles reflecting their respective perspectives and positions. Despite the large differences among the member states, for the G20’s own sake, host countries are better off diluting self-interest or ambitions and play the role of honest brokers to seek common ground.
Specifically, the host country should not deliberately ignore or emphasize certain specific positions. It must be pointed out that due to differences in resources, political systems, history and culture, some multilateral rules may not accord with an individual country’s national conditions, affecting its political or economic security.
Therefore, the G20 should not only boycott protectionism by certain countries, but also adhere to the necessary limits of sovereignty to safeguard the basic rights and interests of all.
Shen Chen is assistant researcher at the Institute of World Economics and Politics, Chinese Academy of Social Sciences. The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.
All rights reserved. Copying or sharing of any content for other than personal use is prohibited without prior written permission.
Editor's note: This article is part of the Policy Preview Report for G20 Summit in Argentina.
Shen Chen
Multilateralism has at least three connotations. One, it is a diplomatic concept based on diffuse reciprocity and opposite of unilateralism or isolationism. Two, it is a diplomatic mode involving three or more countries. Three, it is an international instrument based on the concept of diffuse reciprocity and the principle of consultation and consensus, a salient example being the multilateral trading system.
As bargaining and compromise are often the case, it thus gives smaller countries a certain say and influence, and even sets the stage for them to join against big ones. Under this framework, big countries are prone to moral risks and material costs for their intention to seek control over other countries.
The G20 is an institutional form consistent with multilateralism. Compared to the G7, it is regarded as more diverse and representative as it also includes most influential emerging economies. With regard to rules, its resolutions, though lacking coercive power, facilitate all parties to reach a consensus and jointly carry out actions. In addition to member states, the G20 also invites multilateral organizations such as the WTO and the IMF to participate, which highlights its importance in the multilateral governance system.
Over the past decade, G20 has facilitated dialogues and cooperation among major economies, and promoted reforms of the global financial governance mechanisms, which helped avoid a sustained economic recession. Despite the recovery in global growth, the global economy still faces downside risks due to trade protectionism and geopolitical tensions. However, the G20 members now lack a sense of urgency, posing a challenge to the initiative and effectiveness of its coordination.
It cannot be denied that post-war multilateralism was achieved under US hegemony. The US relied on its unparalleled strength to create a multilateral framework based on the so-called Constitutional Bargain that restricts hegemons to a set of relatively fair and stable rules. Out of the optimism of postwar multilateralism, Robert Keohane proposed a cooperative picture: When the US declines, other countries would, from the perspective of reducing transaction costs, continue to protect the existing international system.
The G20 has indeed constructed a multilateral framework accommodative to hegemonic cooperation, providing countries with more stable information channels and behavioral expectations, and greatly reducing uncertainties in national policies.
However, even if countries agree on matters of principle reached within the group, there are big differences in understanding and implementing them. As a result, bridging differences and reaching compromises are both the main goal and the difficulty for G20.
Recently, it has become even more difficult to pursue multilateralism with rising nationalism and populism in a few major economies. US government is willing to undermine or even withdraw from the rules and agreements created by the US itself in pursuit of pleasing US conservatives and some protectionist voters. The practice has created an international environment harmful to multilateralism. The US used its strong political and economic influence to blackmail other countries. As a result, after reaching a compromise with the US, some countries were limited by terms and could not reach any agreement with the remaining countries which were thus trapped in a dilemma: Either to accept the unfavorable agreement or to be isolated and treated differently.
The reason for the Trump administration’s non-cooperation is that under the existing international system (such as the multilateral trading system), the US benefits less than other countries do. Non-cooperation leads to losses for both, but the loss for others (such as financial turmoil or economic recession) is greater than that for the US. In sum, Trump has completely abandoned the Constitutional Bargain, the cornerstone of multilateralism in favor of a calculation of relative power and interests.
Multilateralism cannot impose effective constraints on its member states. The G20, for example, operates on the principle of consultation and consensus; so the US can veto any resolution that is not in line with its own policy even by 1:19. The past two years have proved that general international opposition failed to contain the US' damage to multilateral rules in areas of trade and climate. Of course, the G20 will not fail to support multilateralism. It accounts for 85 percent of the world economic aggregate and is the only international mechanism today that brings together the heads of the world’s 20 most important economies.
Therefore, the G20 should not aim too high, but focus on safeguarding an amicable environment and maintaining basic principles of multilateralism.
In the long run, the international system depends not so much on hegemonic oppression and economic inducement as on normative principles such as free trade, sovereign equality and preferences of developing countries -- that are all contained in the concept of multilateralism and will definitely prevail. The principle of multilateralism will not end with the withdrawal of hegemons or the alternation of hegemony. From this angle, the G20 should transform its function from crisis response to normative communication which pursues justice and equality. Based on previous experience in finance, taxation, infrastructure and anti-corruption, the G20 is capable of putting forward a general document upholding the concept of multilateralism and reforming the rules of multilateral cooperation.
As G20 countries take turns to hold the presidency of the summit, host countries often play an important role in the drafting of the agenda and post-meeting declarations, with many articles reflecting their respective perspectives and positions. Despite the large differences among the member states, for the G20’s own sake, host countries are better off diluting self-interest or ambitions and play the role of honest brokers to seek common ground.
Specifically, the host country should not deliberately ignore or emphasize certain specific positions. It must be pointed out that due to differences in resources, political systems, history and culture, some multilateral rules may not accord with an individual country’s national conditions, affecting its political or economic security.
Therefore, the G20 should not only boycott protectionism by certain countries, but also adhere to the necessary limits of sovereignty to safeguard the basic rights and interests of all.
Shen Chen is assistant researcher at the Institute of World Economics and Politics, Chinese Academy of Social Sciences. The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.
All rights reserved. Copying or sharing of any content for other than personal use is prohibited without prior written permission.
