Political ‘governance’ exists on sub-National, the Nation-State and supra-National levels.
It became fashionable in policy circles some 10-15 years ago to talk of the ‘porous’ nature of modern sovereignty.
The G20 has effectively replaced the G8 (formerly G7) as the centrepiece of global governance in the economic sphere.
It is, I believe, a profoundly positive shift.
The idea that the developed world (plus Russia) could seriously manage governance in the 21st Century, given the vast and accelerating shift of power to China and the emerging economies, is risible.
Unfortunately, it is equally clear that whatever institutional machinery lies beneath the G20 (and I have attended one as a ‘special observer’ on trade), it is completely undercooked.
Declarations from the highest level of political power are made and there appears no drive shaft to turn the wheels.
Serious disconnection
I was astonished when the G20, which met in Washington on November 15, 2008 (days after I was appointed Trade Minister), issued a clarion call to their Trade Ministers to go to Geneva to complete the WTO Doha Round.
Not only did their Trade Ministers ‘fail’ to do what their Heads of Government had called for, none of them even bothered turning up in Geneva to try.
Actually, even if there were good reasons for totally ignoring what their Leaders had said, it is a sign of the ‘disconnect’ at the highest level of international governance.
The good news is that it is abundantly clear that the emerging economies to where the power is flowing value and wish to improve, not replace, the existing machinery of global governance.
They are queuing up to join the key institutions of global governance, not to leave them, Russia being the latest to join the ‘international rule set’ implied by the membership of the World Trade Organisation (WTO).
Absorbing the underlying culture of these liberal institutions is another matter; it would also take some time.
The Challengers
But it is impossible to read the communiques of BRIC (Brazil, Russia, India and China) and draw the conclusion that they reject root and branch the existing institutional machinery.
In this sense, the ‘challengers’ to American pre-eminence (China, India and the major emerging economies) are fundamentally different to the competition of the 1950s and 1960s – the Soviet Union.
The former Soviet Union indeed had a fundamentally different agenda, driven by an incompatible ideology and consciously created competing and parallel institutional governance machinery to the Western machinery.
Debt control
We are, post 1989 and ‘Fall of the Wall’, in a completely different space with those who are jostling for influence today.
Indeed, some leading emerging economies seem to be reinforcing the prudence of the existing system. It was instructive that President Felipe Calderon of Mexico issued well-judged appeals to the developed world to get their debt under control.
He was right to do so. But anyone who remembers recurrent Mexican debt crises 20-30 years ago, could hardly fail to notice the irony of the student-turned instructor.
At the same time, these huge and increasingly powerful emerging economies still face formidable development challenges.
There are hundreds of millions of very poor people in China.
Changing climate
In climate change, the imperatives of development will continue to trump politically the need to get on top of their rapidly rising emissions.
A ‘Second Commitment Period’ made pursuant to the Kyoto Protocol deals only with 15% of global emissions.
We are moving towards a multi-hegemonic system of power but the global governance system that would match that is remarkably immature.
My central view is that it is not a fundamentally different system that needs to be designed, but the informal modus operandi of the system needs to change to reflect the shift in relative power.
The issue here is about leadership: no system of global governance can work without it.
When China joined the WTO, I heard some deeply experienced people speculate on how the WTO would work with the ‘800 pound gorilla’ in the ring.
The concern is entirely the wrong way round.
The greater danger is the opposite – these great emerging economies may not use their huge weight and influence to provide leadership but behave too passively.
The transition
There can be no definitive conclusion to this.
I think we are in a process of transition and the trick here will be to ensure that something gets done on both trade and climate change during that transition.
Tim Groser is New Zealand’s Trade Minister. The above is a part of his address (and hence may appear incongruous at some places) to the New Zealand Institute for International Affairs (Victoria University, Wellington) on ‘Governance and Multilateralism in the 21st Century’ on August 16, 2012. For the full text of his speech, visit www.beehive.govt.nz
