tensoriana

Coherence and Decoherence

It is with great pleasure that I find myself today reading a press release from the WTO that announces Pacal Lamy’s interesting observation of a triangle of coherence:

“I see a new triangle of global governance emerging that we need to strengthen. A ‘triangle of coherence’. On one side of the triangle lies the G20, providing political leadership and policy direction. On another side lie member-driven international organisations providing expertise and specialized inputs whether rules, policies or programmes. The third side of the triangle is the G-192, the United Nations, providing a forum for accountability.”

Translated to normal parlance this means that one can look at this new triangle of coherence as being comprised of three groups: the rich nations, the rich and up and coming nations and everybody else who likes to travel to Geneva or New York. I am still wondering if this new coherence has much of an effect on the price of coffee in China, or whether the Chinese even care to drink coffee on occasions.

“In the last sixty years the multilateral trade rules have played a vital role in increasing predictability, reducing uncertainty, underwriting the rule of law and fostering a sense of legitimacy in trading relationships.”

Now, what is the man saying really? Mind you, Pascal Lamy is no dummy, and you may or may not like how he expresses himself, or you may find it offensive that the man has a high opinion of himself, but then I do not think that this world would be safer if anybody in his position was a meek or naive bureaucrat easily swayed by the latest ideological fashion. I am thinking of all the anti-WEF demonstrators that can not distinguish WEF from WTO and put it all in one big pot, and do wonder what it is that they teach people in schools these days. However the quoted phrase above is a clear statement of what it is that global regulation, in this case of trade, has done for us all: it has produced more predictability and reduced uncertainty by making all efforts to create a level playing field when it comes to trade. Not that I do not think that people throughout the globe do not have good reasons to be both dissatisfied and satsfied with governance at all sorts of levels, however we ought to look at what it is that has been achieved and how it is that the circumstances have changed.

“The crisis is likely to have accentuated a sense of insecurity about the future, as have the pre-crisis food and natural resource price situation and the swine flu pandemic. The impulse to turn inwards poses real challenges to those governments that understand the benefits of international openness. One response to negative public attitudes is to do more by way of providing social safety nets, but governments also have a responsibility to convince the public of why a retreat inwards is no answer to the challenges of engagement.”

I do wonder if he is thinking of one country in particular, or a few? Those observing the international political stage will notice that public speak at these fora and national speak are not necessarily coherent in meaning. At this point, it may be appropriate to ask if a particular country who goes and pledges international doctrine, and then makes big “buy national” fireworks is really addressing the fundamental challenges of international engagement and speaking with one voice, be it abroad or on national territory.

It is not like a man like Pascal Lamy could not find a better paying job than that of being the Director-General of the WTO – a group of occasionally quarreling well-intentioned and greedy nations run by a plethora of individuals and ideologies – and when he argues for the value of the multilateral trading system, there is more at play than his own individual fortune, a whole lot more.

“As we contemplate the different ways that the world economy may be affected by the crisis, it becomes clear why we need the multilateral trading system more than ever. Even if we believed that all crisis phenomena were cyclical and that we would soon be able to resume ‘business as usual’, we would still need a strong regime of international cooperation to exit the crisis. But when we add the strong likelihood of secular change — that policies and behaviour in the financial sector will be modified to avoid a replay of the forces that generated the crisis, that ways of doing business may change, that new economic structures and patterns of exchange are evolving, and that public attitudes are likely to exert new influences on governments, this gives us a second reason for reinforced and more effective international cooperation.

There is also a third reason. The imperatives of changing economic, social and environmental circumstances, along with the shared global challenges of addressing development and poverty, mean that the nature and substance of cooperation is always changing too. We know we face new challenges for the trading system such as:

i) managing the relationship between trade and climate change;
ii) improving cooperation in a world where fundamental changes in supply and demand relationships are emerging in international food and natural resource markets;

iii) forging better coherence between regional trading arrangements and the multilateral trading system; and
iv) addressing some of the more opaque and intractable non-tariff barriers to trade.”

The whole of this speech makes for interesting reading, it may however be a bit hard to digest for those unfamiliar with WTO lingo. The concluding remarks deserve a few comments from my side, if noting else as a way of making some notes for further thought.

“First, the current crisis will end but it will have changed the world, against the background of a world already in an important phase of change, and these new realities will challenge the ingenuity and commitment of policy-makers across the globe.”

Is it in the nature of the dynamics of global economy that it is cyclical in nature? That asked, if so, then is it also its nature that given the non-linear nature of the various couplings between the interacting systems, that the next crisis will also not be predictable? (Needless to say that there will be enough ex facto futurologists claiming that they saw it coming; however those are in constant supply regardless of circumstances.)

“Second, we need multilateral cooperation more than ever, including in trade, and in that connection we must attach priority to the completion of the Doha Round.“

Oh, yeah. If it was easy, it would have been done long ago. What is different about the Doha round?

“Third, we need a new architecture of global governance to provide a framework for effective cooperation. These are all ideas that cannot be fleshed out adequately in thirty minutes, but I offer them for consideration and debate.”

Yes, thank you!

World Economic Forum / Open Forum Discussion: Human Right to Food. Davos, 31. January 2009

Alternative link via the World Trade Institute: here

Disclaimer: I am involved with the WTI, and Philipp Aerni is a colleague.