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Spring 2012

The Triangle of Coherence

Pascal Lamy is the director general of the World Trade Organization. This reflection is adapted from a recent speech at the Oxford Martin School, Oxford University.

OXFORD—It is my firm conviction that one can find a way to better articulate the elements of governance at the global level through what I have called the “triangle of coherence.”

On one side of the triangle lies the G-20, replacing the former G-8 and providing political leadership, policy direction and coherence. The second side of the triangle is the United Nations, which provides a framework for global legitimacy through accountability. On the third side lie member-driven international organizations providing expertise and specialized inputs, be they rules, policies or programs.

This “triangle” of global governance is emerging. Bridges linking the G-20 to international organizations and to the UN system have started to be built. I myself participate in G-20 meetings, alongside the heads of a number of other international organizations. The presidency of the G-20 has organized regular briefings at the United Nations General Assembly.  Specific sessions dedicated to trade have been regularly organized during G-20 summits, giving us, at the WTO, some political impetus we need. The political backing of the G-20 allowed me, at the dawn of the 2008 financial crisis, to launch a strengthened monitoring of trade policy developments, which has proved a useful and powerful tool to contain protectionism.

In terms of tools, I believe that the European experience of rule-making, transparency and peer review offer interesting avenues for the global level. Peer review appears to me as an efficient “Westphalian” tool of governance. It leverages the pride of sovereign nations when reviewed by their peers.

The second idea I would like to share with you is the importance of regionalism. Regional integration processes, which permit a progressive familiarization with supra-nationality, should be further encouraged. Regional integration allows us to address the questions of our time at a level where the affectio societatis is stronger, at a level where the feeling of belonging, of togetherness is more solid. Regional integration represents in my view the essential intermediate step between the national and the global governance level. Central America, Eastern Africa or the ASEAN are good examples of this. But regionalism is not a magical recipe. It may suffer from the same difficulties as global governance, falling victim of nationalistic tendencies that drag the level of ambition down.

Finally, one needs to pay greater attention to values. Institutions alone, be they regional or international, cannot do the trick. Our experience with global governance to date shows it. A successful governance system requires not only an institutional machinery, but also a common objective and shared values.

The success of the European monetary integration process is the result of the coming together of shared values and a common goal. It is the combination of these two elements that led to the establishment of an institutional machinery. The creation of the Euro is a project that took 30 years to mature between the Werner report of 1969 and the report of Jacques Delors on the Economic and Monetary Union. The institutional structure then followed relatively quickly: the creation of the European Central Bank, the most federal of the European institutions, was decided in three weeks only.

And today Europe realizes that  monetary integration cannot function without a deeper economic and political integration. A common currency is no longer enough. It requires other common European economic policies. At the same time the existing institutions cannot compensate for the lack of shared values and common goals with respect to this much needed further European economic integration. Absent a proper discussion and a shared vision about these common goals, Europe will continue to limp. 

So what are we missing in the case of global governance? We already have a set of institutional machineries in some areas, but these are not underpinned by a sufficiently strong set of core principles and values. This is, in my view, one area where global governance falls short.

What is lacking today is a platform of common values at the international level, in the name of which actions would be taken. The question of social inequalities, for example, is not embodied in the UN vision as designed in the 50’s. Our world needs a platform of common values, which would be shared not only by the “West,” but with the “rest.” Without a basic agreement of this kind, it is difficult to talk about “global public goods.” Public goods are necessarily underpinned by common values. If we are to efficiently address today’s global challenges, which in many cases are related to the defense, promotion or protection of global public goods, we need to share a collective sense of values for a better global governance. In fact we need a new declaration of global rights and responsibilities.

We see the growing importance of values at the WTO itself. Rules are made less and less to protect producers; more and more to protect consumers. Issues such as trade and health and trade and environment, where values play an important role, have gained in visibility. As traditional obstacles to trade such as quantitative restrictions or tariffs are decreasing, regulatory discrepancies risk becoming an impediment to market opening and economies of scale.

The world of global trade is, to some extent, where Europe was in the 70’s: no more tariffs but not yet an internal market. Getting there, whether through harmonization or mutual recognition, will imply a higher level of trust. And trust is built on bedrock of common values.

I had the chance, in my professional life, of working at three different levels of governance, which I often compare to the three states of mass: the national level, which in my view represents the solid state; the European level, which is liquid; and now the international level, which is more like the gaseous mass. The challenge with global governance today is to try to move from its current gaseous state to a more solid one.

But, because of this fundamental legitimacy deficit of global governance, the solution is not to globalize local problems; it is to localize global problems; to make these more palatable to citizens in order to reinforce the sentiment of togetherness I referred to. This requires strong leadership, not only at the international level, but above all at the national level as there is no international leadership in a Westphalian order without national leadership. Of course, such leadership is easier in smaller and homogeneous countries than in bigger and diverse ones, but the stakes of strong leadership are the same for all. It is, in my view, the most pressing issue global governance is facing today.