Professor of Law : Georgetown University, and Director,
Institute of International Economic Law




Multilateralism just isn’t what it used to be. Wherever you look, the big, global international organizations that dominated the postwar economic system appear to be suffering from middle age – and in some instances, irrelevance. The last successful multilateral trade agreement was signed over 15 years ago, when 123 countries created the World Trade Organization (WTO) and crafted a new set of rules for international trade. Since then, all other attempts to reach an additional deal have failed, including the most recent Doha Round of trade negotiations. The United Nations, meanwhile, has played virtually no role in crafting international financial policy in the wake of the most recent crisis – a significant meaningful departure from the 1970s when members launched policy initiatives resetting investor expectations and national economic sovereignty. And the International Monetary Fund (IMF) and World Bank, though retaining important resources for stabilizing the international financial system, have yet to recover from their widely discredited responses to the Asian Financial Crisis of the 1990s, and have been in many ways sidelined in crafting policy responses to the Greek, Irish, Portuguese, and Spanish debt crises – and international regulatory policy.

Instead, the “global” multilateralism characterizing the last fifty years of international economic affairs has been supplanted by an array of more modest and seemingly less ambitious joint ventures – from regional ventures like the (shaky) European Union and (rising) ASEAN to more diverse collectivities like the Basel Committee on Banking Supervision, the G-20, and upstart BRICS. Like their predecessors, these institutions and forums seek to generate global policy responses and export shared policy preferences. To do so, they have, despite their more exclusive memberships, adopted the trappings of the more traditional international organizations – by setting agendas, convening summits, and crafting agreements of varying scope and content in areas as diverse as currency controls, banking supervision, and macroprudential policy. But unlike the multilateral institutions that have largely defined international cooperation in the wake of World War II, these institutions are markedly different – and less grandiose than their predecessors. More modest in size, formality, and even inclusiveness, they play small ball on the court of international affairs and embrace what can be described distinctively minilateral strategies of economic statecraft.

As such, today’s economic diplomacy seems destined to disappoint the ambitious diplomat or international lawyer. After all, for more than a generation, the grand narrative of globalization has largely been one of ever growing (and more ambitious) economic cooperation. The story went that as countries, spurred by technology and free trade, allow the free flow of capital, goods, services, and ideas across borders, they also, inevitably, should come to cooperate more. Globalization shortens the distances for business and trade, allows for specialization and for countries to exploit their natural competitive advantages, and in the process makes countries depend on one another to an unprecedented extent. Indeed, many serious historians and economists – and yes, even law professors – presumed that trade wars (and indeed war itself) had become, if not obsolete, then highly unlikely insofar as global capital markets would not permit such disruptive, inefficient disturbances in the global economy. Global multilateralism – taking shape in cross-border institutions, treaties, and maybe even supranational democracies – would become ascendant in an increasingly interconnected world economy. “The end of history,” which Francis Fukuyama famously proclaimed in 1989, would eventually arrive in the form of universalized, capitalist democracy as both capitalism and democracy spurred others to trade, adapt, and evolve, all presumably for the good of the global economy.