Multilateralism at the Crossroads

Recently, the Organisation of Economic Co-operation and Development (OECD) unveiled tax proposals that seek to collect US$ 100 billion annually from the global digital economy. Undeniably, it is hoped that a significant part of these taxes would be realised from the US-based, Big-Tech companies that have a stranglehold on e-commerce. But the deciding factor here will be the willingness of the US government to accede to such proposals. Note that France's earlier attempt to tax these companies met with strong resistance from the US. This example illustrates the increasing failure of multilateralism. Multilateralism involves nations and international institutions working together to resolve global issues through diplomatic negotiations, trade agreements and treaties.

While the planet and its resources are shared by all living beings;  people have created boundaries and divided the world into countries. But we continue to share a host of common problems that know no borders such as the perils of climate change, several  health crises, water shortage and frequent violations of human rights among other pressing matters. Ideally, a multilateral solution that would benefit all, would work best to resolve these concerns. Over the years, Multilateral organisations like the United Nations (UN), the World Trade Organization (WTO) and the World Health Organisation (WHO) have developed rules of multilateralism that lead to constructive  solutions; albeit slowly, but having a lasting impact and quietly transforming lives across the globe. Thus, it is inconceivable to imagine a future devoid of a universal approach.

However, in recent times multilateralism has been under fire for various reasons. The rising tide of nationalism, disillusionment with globalisation, and critically, the inadequacy of an existing multilateral framework to meet new challenges is severely denting its credentials. The fragility is further exploited by leaders who win elections in their countries on the narrative of nationalism. This trend is dangerous and likely to lead to more fundamental  disagreements between nation-states, hampering the progress in containing global warming, preventing forest fires, violation of fishing protocols and other serious problems.

Climate change is a catastrophe waiting to happen. Ensuring the Paris Agreement's success, signed by 195 countries to limit the rise in global temperature is critical. However, the US has chosen to be an outlier to the agreement that spells doom for this ambitious goal. It would dismember financial flows in developing a new technology framework that would help all countries, including the developing and most vulnerable nations, to meet this objective.

Nearly every country is guilty of breaching these rules in one form or the other. While the US and China routinely overstep the protocols of multilateralism;  very recently, even the UK refused to honour its commitment to the Brexit withdrawal treaty. India itself got pulled up by the Permanent Court of Arbitration at the Hague for a US$ 3 billion tax demand from the Vodafone Group, which supposedly amounted to a violation of the spirit of international tax law.

The epitome of multilateralism is the UN, that took birth at the end of the second world war and completed 75 years in September this year.  In its years of existence, the UN has spearheaded efforts to save humanity from poverty, played a significant role in peacekeeping with more than 70 missions, and spawned many more special initiatives. Unfortunately, while the agenda of issues that call for joint resolutions is only growing, the perception that the relevance of the UN is on the decline is widely prevalent.

Although the WHO has an important role to play in facilitating a way out of the pandemic for all concerned;  it is fractured at the seams with the largest contributor, the US withdrawing financial support at this critical juncture. We are unfortunate witnesses to a time that will be recorded in history as the biggest threat to humanity, and it will be a shame if all countries do not unite to deal with the present calamity.

While the fervour that sells is jingoism and often power prevails; eventually multilateralism is the only rational approach to find answers for all the vexing problems of the world ranging from trade disputes to stemming the devastation that could be unleashed by climate change. Most importantly, it is only by banding together that the voices of the smaller and weaker nations will not get drowned out and only by walking together can we look at a bright future ahead for all humanity.