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Srinath Sridharan

Independent markets commentator. Media columnist. Board member. Corporate & Startup Advisor / Mentor. CEO coach. Strategic counsel for 25 years, with leading corporates across diverse sectors including automobile, e-commerce, advertising, consumer and financial services. Works with leaders in enabling transformation of organisations which have complexities of rapid-scale-up, talent-culture conflict, generational-change of promoters / key leadership, M&A cultural issues, issues of business scale & size. Understands & ideates on intersection of BFSI, digital, ‘contextual-finance’, consumer, mobility, GEMZ (Gig Economy, Millennials, gen Z), ESG. Well-versed with contours of governance, board-level strategic expectations, regulations & nuances across BFSI & associated stakeholder value-chain, challenges of organisational redesign and related business, culture & communication imperatives.

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Is Multilateralism Possible In The Era Of Bilateralism And Regional Blocs?

Multilateralism, which emphasises collective action, shared responsibilities, and inclusive decision-making, has long been heralded as the cornerstone of global governance

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Multilateralism, the principle of coordinating actions among multiple nations through international institutions, has long been considered a cornerstone of global governance. As the world grapples with unprecedented global challenges, from climate change to pandemics to geopolitical tensions, the relevance and effectiveness of multilateralism, once hailed as a panacea for global governance, has come under serious question. The rise of bilateral and trilateral national deals, the formation of regional blocs, and the inward-looking policies of some global politicians have cast a shadow of doubt over the future of multilateralism as we knew it.

Multilateralism, which emphasises collective action, shared responsibilities, and inclusive decision-making, has long been heralded as the cornerstone of global governance. International institutions such as the United Nations, the World Trade Organisation, and the World Health Organisation were created with the vision of fostering multilateral cooperation to address common challenges. However, in recent times, the cracks in the foundation of multilateralism have become increasingly evident. The UN, once seen as the pinnacle of multilateral cooperation, has long been facing criticism for its inability to effectively address global challenges due to issues such as veto powers, lack of its own reforms, and erosion of trust among member states. Similarly, the WTO has struggled to make progress in multilateral trade negotiations, with countries increasingly resorting to bilateral or regional trade deals, undermining the principles of multilateralism.

To address these challenges, it is imperative for countries to reaffirm their commitment to multilateralism and strengthen global institutions. Efforts should be made to revive multilateral forums, foster cooperation among nations, and promote inclusive and equitable decision-making processes. It is also crucial to address the root causes of inward-looking policies, such as inequality, insecurity, and disillusionment, and promote a shared understanding of the benefits of international cooperation. Furthermore, efforts should be made to reconcile diverse regulatory frameworks and promote convergence towards common global standards. The urgency of global challenges such as climate change, pandemics, and migration requires concerted multilateral efforts. It is imperative for nations to rise above narrow interests and work collaboratively to preserve and strengthen the principles of multilateralism, lest we risk an erosion of global governance and the ability to effectively address the complex issues facing our interconnected world.

The Rise of Bilateral and Trilateral Deals

In recent years, many countries have pursued bilateral or trilateral agreements, bypassing multilateral forums. For instance, the United States under the Trump Administration withdrew from multilateral agreements such as the Paris Climate Agreement and the Trans-Pacific Partnership (TPP), and instead pursued bilateral trade deals with individual countries. This trend has been further amplified by the emergence of new economic powers such as China, which has engaged in bilateral agreements with several countries through its Belt and Road Initiative (BRI).

One of the glaring signs of the eroding state of multilateralism is the rise of bilateral and trilateral nation deals, often driven by narrow self-interests. Powerful nations are increasingly bypassing multilateral forums and opting for exclusive partnerships with select allies. Examples abound, such as the United States pulling out of the Trans-Pacific Partnership (TPP), the United Kingdom's pursuit of bilateral trade deals post-Brexit, and the India-Japan-US trilateral dialogue and the Quadrilateral Security Dialogue (Quad) in the Indo-Pacific region. These deals, while pegged as strategic partnerships, risk undermining the principles of inclusivity, transparency, and multilateral decision-making, eroding the collective approach needed to tackle global challenges.

Such bilateral and trilateral deals can undermine multilateralism in several ways. Firstly, they can create a fragmented and unequal global governance system, where countries with greater bargaining power can secure favourable deals at the expense of smaller and weaker nations. This can result in an uneven distribution of benefits and exacerbate global inequalities. Secondly, bilateral and trilateral deals can bypass established multilateral institutions and weaken their authority, leading to a loss of trust and confidence in these institutions. This can erode the legitimacy and effectiveness of multilateralism as a means of addressing global challenges.

The Formation of New Regional Blocs

In addition, the formation of regional blocs has gained momentum, with countries aligning along regional lines to pursue their interests. This trend, while promoting regional integration and cooperation, can also lead to fragmentation, exclusion, and even conflict, as seen in the rise of regional tensions in various parts of the world, such as the Middle East, Eastern Europe, and the South China Sea. These regional blocs can potentially dilute the global approach required for addressing global challenges, further marginalising smaller and less powerful nations. These regional blocs often prioritise regional interests and may exclude non-member states from their decision-making processes, leading to fragmentation and competition among different regional groupings. Examples of such regional blocs include the European Union (EU), the Shanghai Cooperation Organization (SCO), and the African Union (AU). 

For example, the EU's emphasis on regional integration and protectionist policies has sometimes been criticised for undermining global trade liberalisation efforts. Secondly, regional blocs may create a complex web of overlapping and sometimes conflicting rules and regulations, leading to regulatory fragmentation and inefficiencies. This can pose challenges for global governance, as it may be difficult to reconcile and harmonise diverse regional regulations with global standards.

Regulatory Challenges to Multilateralism

In addition to the rise of bilateral and trilateral deals and inward-looking policies, regulatory challenges also pose a threat to multilateralism. Multilateralism often requires the establishment of common rules, standards, and regulations that govern the behaviour of nations. However, the increasing diversity of national regulations and the reluctance of some countries to adhere to global norms can hinder the effectiveness of multilateral efforts.

For instance, in the area of international trade, the World Trade Organization (WTO) has faced challenges in reaching multilateral agreements due to differences in regulatory frameworks, particularly on issues such as intellectual property rights, labour standards, and environmental regulations. This has led to a proliferation of bilateral and regional trade agreements that often have varying rules and regulations, resulting in regulatory fragmentation and complexity.

The ability of multilateralism is tested against the failure of global institutions to effectively address pressing global issues such as climate change, migration, and global health crises. For example, the United Nations Framework Convention on Climate Change (UNFCCC) has struggled to reach a consensus on meaningful global action to address climate change, with some countries withdrawing from international commitments and others failing to fulfil their pledges. The United Nations Global Compact on Migration, aimed at addressing the challenges of global migration, has faced resistance and withdrawal from some countries, undermining its effectiveness as a multilateral instrument.

India & multilateralism

India, as one of the major global players and a rising power in the international arena, is also relevant in the discourse on multilateralism. As the world's most populous country and a fast-growing economy, India's role in multilateralism and its stance on global institutions can have significant implications for the state of multilateralism and the functioning of global institutions. India has traditionally been a proponent of multilateralism, emphasising the importance of collective global action to address transnational challenges. India has been an active member of various multilateral forums, including the United Nations (UN), the World Trade Organisation (WTO), and regional groupings like the Shanghai Cooperation Organisation (SCO) and the South Asian Association for Regional Cooperation (SAARC). India's commitment to multilateralism is rooted in its philosophy of Vasudhaiva Kutumbakam, which translates to "the world is one family," reflecting its belief in the interconnectedness and interdependence of nations.

In recent years, India's diplomacy has been marked by a proactive and assertive approach to global leadership, particularly in the realm of multilateralism. India has been at the forefront of initiatives to address global challenges such as climate change, sustainable development, and counter-terrorism. For instance, India has been actively engaged in global climate negotiations and has taken steps to promote renewable energy, reduce carbon emissions, and enhance environmental sustainability. India has also played a prominent role in advancing the 2030 Agenda for Sustainable Development, with a focus on poverty eradication, healthcare, education, and gender empowerment.

India has also been a vocal advocate for the reform of global institutions to make them more representative and inclusive, reflecting the changing global power dynamics. For instance, India has called for reforms in the UN Security Council to reflect the realities of the 21st century and ensure greater representation of developing countries, including India, in decision-making processes.

However, India has also pursued bilateral and trilateral deals, such as the India-Japan-US trilateral dialogue and the India-Australia-Japan-US Quadrilateral Security Dialogue (Quad), which are seen as strategic partnerships aimed at balancing China's rise in the Indo-Pacific region.

India's approach to multilateralism is also reflected in its efforts to promote a multipolar world order, where power is distributed among multiple centres and no single nation dominates global affairs. India has called for reforms in global governance institutions, such as the UN Security Council, to make them more inclusive and representative of the current global realities. India has also been a vocal proponent of the concept of "sovereign equality" among nations, emphasising the importance of mutual respect, non-interference in internal affairs, and the peaceful resolution of disputes.

However, India's pursuit of multilateralism is not without challenges. The evolving global landscape, marked by shifting power dynamics, geopolitical rivalries, and protectionist tendencies, poses obstacles to effective multilateralism. Differences among nations on issues such as trade, climate change, and security can hinder consensus-building and compromise in multilateral forums. Moreover, India faces its own domestic challenges, including climate transition, public services for a large population and developmental needs, which demand attention and resources. The evolving stance of India and its engagement with multilateralism, as well as its pursuit of bilateral and trilateral deals, regional blocs, and regulatory challenges, can impact the state of multilateralism and the effectiveness of global institutions in addressing global challenges. It highlights the complexities and dilemmas faced by global powers like India in navigating the balance between national interests and global collective action and the implications of such choices for the future of multilateralism.Th e future of multilateralism will depend on various factors, including the political will of nations, changing geopolitical dynamics, and the effectiveness of multilateral institutions in addressing global challenges.