Kemal Derviş says multilateral institutions are under attack, seeing a trend towards bilateral and regional groupings. Although the US had in the past been vilified for acting alone on a wide range of issues, and that the international community is often outraged by American unilateralism, no US president had in modern history assailed the multilateral rules-based order as Trump is doing.

Given the “changes in the structure of the world economy” since World War II, existing multilateral institutions – like the IMF, the UN, WTO and the World Bank – have been accused of divorcing from global realities. Demands for “pragmatic reforms” in the past had been ignored, generating grievances that “have escalated into pressure for the wholesale transformation – or even total destruction – of the global framework of multilateral institutions.”

Trump has threatened to leave the WTO, preferring a “system” that favours bilateral deals. As the US is still the world’s largest and most advanced economy, he believes it can get the best “deal” by negotiating alone, “unbound by international rules – a view that extends to military affairs.” He capitalises on the advantage that the US can afford to act unilaterally thanks to its economic strength and military might.

As Europeans can no longer rely on the US as their ally, the author says their best strategy to defend themselves and avoid being bullied by Trump is to cooperate among “likeminded or geographically proximate countries” across the globe. While the joint forces would not be able to lead the world, their viable alternative could stop Trump from dismantling the global order, by formulating “their own sets of rules” and stand up to autocratic dominance.

China and Russia have strengthened their bilateral ties and deepened cooperation to defy Washington’s hardening stance against them. China is taking part in Russia’s largest military drills since World War II, while Xi Jinping and Putin met in the Russian Far East port of Vladivostok yesterday on the sidelines of the Eastern Economic Forum. The two affirmed their intent to denuclearise North Korea and to counter American protectionism and sanctions.

The author’s main focus is to rescue the WTO, which has become a horrified bystander, as the system it oversees crumbles. Trump’s departure from the past 20 years of trade practice, which focused on the multilateral and legal settlement of disputes, has dealt hard blows to the WTO so far. As a major global economic power which had hugely benefited from its WTO membership, China is paying close attention to how the US-WTO relationship evolves.

There are three alternative “systems” that appear to be possible, according to the author. The first scenario will see the absence of international rules and law, in which bilateral deals are being forged, based on “the law of the jungle.” The second is to keep the status quo - global multilateral institutions are a meaningful constraint on countries’ trading practices, and a guardian of the international legal order.

The third alternative aims to enable “like-minded” countries to forge closer ties or “geographically proximate countries” to promote deeper regional cooperation. The author calls this system “a fragmented multilateralism, with not much room for global institutions.” The downside is that regionalism, - unlike multilateralism – can not “deliver the sought-after global public goods and benefits” that all countries rely on to prosper.

The ideal solution would be to reform multilateral, global institutions so that there is room for the principle of subsidiarity, that allow regional or “like-minded” groupings to organise themselves. As our economy and politics are moving towards global interdependence, international rules and standards are required, to “confront the world’s existing and emerging challenges.”