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Entrance to the World Trade Organization headquarters in GenevaFABRICE COFFRINI

KARL MOORE: This is Karl Moore of the Desautels Faculty of Management at McGill University, Talking Management for The Globe and Mail. Today I am speaking to Stephen Kobrin, who is a professor at the Wharton School of Business at the University of Pennsylvania.

Good Morning, Steve!

STEPHEN KOBRIN: Good Morning!

KM: When we look around us we have some really big global problems. We have global warming, we have issues with trade and trade agreements not being signed and we have issues with equality. It seems like it's been difficult for the world's nations to work together. I know you have been studying it, so what is your view on multilateralism?

SK: I think that achieving multilateral agreements is getting more difficult than ever before and will be increasingly difficult in the future for a number of reasons. Two very good examples are inability to come to an agreement on the current round of trade talks at the WTO, the Doha round, which has been going on for over 10 years and shows no signs at all of resolution, and the second is the environmental talks in Copenhagen which, after years of preparation, produced a memo signed by a relatively small number of countries. I think the problems flow from structural changes in the nature of the world's political system, world economy: there are more countries than ever before that are serious players in the world economy. If you look back to the post-war period, the '60s and '70s, the world economy was dominated by a small number of countries that were relatively similar in a very general sense - a small number of European countries, the U.S., Canada and later Japan. If you look at the world today we have, perhaps, 50 or 60 countries that are serious players that can influence international negotiations. It is not simply the dramatic increase in the number of players that makes an agreement more difficult to achieve, it is the vast differences among them.

KM: When we go from the G8 to the G20 and to even more countries, this is a reflection of reality and it's probably a good thing for the world. Given that it's a good thing, and it's the right way to go and it's recognized as reality, how do we make it so it works more effectively?

SK: First of all, it's a very positive element for the world - we wanted economic development to work, we want more countries engaged in a rule-based international system but the other side of that coin is that the diversity among the countries makes it more difficult to come to an agreement. There is a second factor, which may be a little more sensitive, and that the post-war rounds of negotiations were all dominated by liberal Western democracies. We now have a number of countries involved, such as China, that are not liberal Western democracies that have a very different political system, very different views about the rule of law and domestic political systems reflected internationally. So the countries that are not democracies that have autocratic systems, autocratic capitalist systems, tend to look at the international system differently than the Western democracies do, and so I think that also makes it very difficult to reach an agreement.

KM: So, given that this is a good thing, what should we do? Is there a way of moving forward in your mind?

SK: I think that's an extremely difficult question. There are a couple of possible solutions and I can think of three of them, two of which are less than desirable. One is simply that we muddle along, that we go from meeting to meeting and have great difficulty in achieving any kind of serious agreement. We've been doing that for a number of years, and see that continue into the future. I think a second possibility that people suggest is mini-lateralism. It may be possible to have smaller groups of countries, perhaps regional groups of countries, come to agreements and then have the regions negotiate an international agreement. I think the third possibility is less desirable, but very possible, and that is crisis-driven agreements, and if you think of where there have been agreements, think about fighting the avian flu, for example, where the World Health Organization was reasonably effective and there was reasonable cooperation among countries. That was motivated by a fear of a pandemic. The problem is, half facetiously, I think that global warming will be taken seriously when Los Angeles and New York are under water, and London, and the problem with a crisis-driven agreement is that you are walking a very fine line between a crisis that is serious enough to force an agreement and that isn't catastrophic, and I don't think that's a place that any of us want to be.

KM: This has been Karl Moore of the Desautels Faculty of Management at McGill University, Talking Management for The Globe and Mail.





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