Pax Americana is over, but empowered cities and a reformed EU can take the lead for a better global governance model.

While the new US administration was busy reining in support for international trade and freedom of movement, China’s president, speaking at the annual Davos forum in the Swiss Alps, performed a stunning defence of globalisation. While Donald Trump was withdrawing the United States from the Paris climate agreement, France’s newly elected President Emmanuel Macron was trolling him by demanding to “make the planet great again” – now an official website – and China’s leadership, meeting with the EU institutions, was reaffirming its commitment to leading the fight against climate change.

While we should take China’s new global role with a pinch of salt, one thing should be clear to all: global governance is in shambles. The recent failure of the G7 meeting in Taormina, Sicily, with the lack of agreement on measures to tackle climate change and the refugee crisis, is only the latest event to signal a breakdown of international cooperation. The unipolar world order of American hegemony is over.

This is not necessarily bad news: the so-called Pax Americana has been anything but peaceful, ushering in an endless string of wars that have inflamed the Middle East. But the risk of moving from a unipolar to an anarchic world system is real. A system where powers vie for influence – in Eastern Europe or in the South China Sea – in a zero-sum game of opposed national interests always one step away from catastrophe.

This is worrying, because today’s world requires cooperative global governance as never before. The list of new global challenges goes well beyond fighting climate change, as if that were not already enough: just take wealth distribution and economic globalisation. Brando Milanovic’s “elephant graph” (pdf) may be the reference chart for the decline of Western middle classes, but it also shows something else: the stunning rise of the wealthiest one percent globally. Excessive concentration of wealth creates distortions and inefficiencies, as even the International Monetary Fund now admits. Short of expropriation, the solution is progressive taxation – and here is the problem.

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Multinational corporations are increasingly able to play one state against the other to drive a fiscal bargain all but unimaginable for small and medium enterprises. Well beyond Apple’s infamous 0.005 percent Irish tax rate, the scandal stretches to a majority of the largest corporations – from the furniture of Ikea to the toothpaste of Procter&Gamble. Only international cooperation can put a break to such practice. Yet, progress is stalling, at both European Union and global level, with the G7 failing spectacularly to take a position on the issue despite pressure from the Italian hosts.

The cooperative, transnational experiment of the European Union represents a powerful blueprint for a new multipolar world order, one where proud nations are no longer pitted one against the other but work through consensus and the rule of law to reach mutually beneficial solutions.

The list of crises that go well beyond the remit and reach of any nation-state keeps on growing. The refugee crisis is here to stay, fuelled by ongoing warfare and the nefarious effects of global warming, such as droughts, increasing in intensity in the most vulnerable African economies. Or, again, the need to regulate internet surveillance and data privacy, something Angela Merkel is hoping to raise at the upcoming Hamburg G20 summit in July. The list could be extended at length.

We need to reconstruct a global governance for this century or risk letting go of our capacity to govern some of the most important challenges of our time.

One part of the answer comes from cities. Cities are taking an increasingly central role all across the world. Often, as the in the US experience of the sanctuary cities that offer protection to undocumented migrants, they go directly against central government policy. And cities are now creating elaborate networks that could turn into effective agents of transnational governance.

On June 10, Barcelona hosted a global summit, fearless cities, bringing together mayors from across the world to commit to joint initiatives to tackle precisely the global challenges that national leadership seems increasingly unable to address.

Actions on climate, for instance, with reinforced cooperation over the implementation of ambitious environmental standards are more than just rhetoric: New York Mayor Bill de Blasio has just signed an executive order committing the city to the Paris agreement. Actions on refugees, with initiatives such as Solidarity Cities creating a pan-European network of municipal governments for the integration of migrants and refugees, are also taking place. Such initiatives need to be fostered, for cities matter enormously: More than half the world’s population and over 70 percent of Europeans live in urban areas, while the top 100 cities produce just under half the world’s GDP. They deserve political and economic recognition from national governments, constructing a space for global cooperation below the level of the nation state.

And then there is the level above. And here the cooperative, transnational experiment of the European Union represents a powerful blueprint for a new multipolar world order, one where proud nations are no longer pitted one against the other, but work through consensus and the rule of law to reach mutually beneficial solutions.

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Emmanuel Macron has just won a landslide victory in France’s legislative elections. He has a clear mandate to be in the driving seat of a comprehensive reform of the European Union – something he has repeatedly advocated. After the upcoming German elections in September, there are signs that the traditional Franco-German engine will gear up for further integration of of the Eurozone, the EU’s core.

There is a risk. We should not forget that the policy mix supported by Angela Merkel’s Germany over the long years of European crisis – rebranded “austerity” – has brought Europe to the brink of collapse. Nor should we be fooled by Macron’s youthful personality, when he seems to be supporting the same market-friendly economic policies that have led to the crisis in the first place.

Without a serious policy rethink – such as a comprehensive New Deal to put the continent back to work and a profound democratisation of EU institutions – Europe’s path towards greater integration risks becoming a fast-track to disintegration. This would be a shame for Europe as much as for the world.

Yes, we run the risk of stumbling towards a chaotic world of nationalism and conflict. But today’s crisis of global governance also offers the chance to move beyond a system that never truly worked in the first place. Crafting a new global role for cities and reforming Europe are the heart of this challenge.

Lorenzo Marsili is a writer, politic activist, and the founder of international NGO European Alternatives.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.