Perhaps a cyclone was after all a fitting backdrop for the meeting of the APEC Business Advisory Council (ABAC) which was held in Auckland on 12-14 February – the global environment against which the meeting took place is decidedly stormy.
Remarks to Confederation of Indian Industry Partnership Summit, New Delhi, 15 March 2023
“The Future of Multilateralism” by Stephen Jacobi, NZIBF Executive Director
Tēnā koutou katoa – greetings to you all in the language of the Māori people of Aotearoa New Zealand.
It is an honour for me to speak to such a distinguished gathering today.
Congratulations to CII and the organisers of this remarkable event for bringing us all together.
Although we come from different parts of the world all of us have a major stake in the future of multilateralism and the rules that underpin the world order.
There’s no doubt the world is facing multiple crises – any one of them would challenge the world order, but together they create a perfect storm.
That makes the environment against which we are doing business both complex and uncertain.
Just as we were beginning to find our collective way out of disease and lockdown – with India leading us strongly in this direction – we are now confronted with another pandemic – this time one of geo-political conflict and inflation.
Pandemic, plus war, plus inflation are a toxic mix.
Add to that food insecurity, energy insecurity and the ever present risks of dangerous climate change.
These global challenges are far beyond the power of any one country, or any one government to solve.
Unfortunately, the level of political will in the world right now to address these challenges is coloured by geo-political differences which frustrate our ability to work together.
It is no wonder that, speaking to G20 Foreign Ministers in Delhi just a few weeks ago, Prime Minister Modi went so far as to say that global governance has failed in some key areas.
That is why it is good to remind ourselves at a conference such as this of the intrinsic value and purpose of multilateralism.
I come from a small country located far from many of the world’s most troubled hotspots.
New Zealand is a young nation but has been fortunate to have been present at the creation of many of the great multilateral institutions, including the United Nations, the Bretton Woods institutions and the World Trade Organisation.
We are a nation of joiners – if there is something to join, you can be sure that New Zealand will want to have its hand up and to work constructively to find outcomes that address the problems needing to be solved.
New Zealand’s disposition towards multilateralism is not just high-minded internationalism: it is also enlightened self-interest.
The fact is that smaller countries have even more of a stake in the international order than larger ones.
We depend on international organisations to make progress on the things New Zealanders care deeply about including human rights, development and environmental protection.
We also depend on international rule-making to uphold our national sovereignty.
We cannot force the larger players to take actions to suit our national interests or, more to the point, to desist from actions that harm our national interests.
We rely on international rules – rules which we have had a hand in making and which can be upheld on the merits of the case, rather than size or political power.
Take the World Trade Organisation (WTO) for example.
The WTO is the place both where trade rules are made and where trade disputes are settled.
It is of paramount importance to us as business because it provides the legal under-pinning against which trade is conducted.
And it is an organisation where all members, large and small, have an equal voice.
That is not to say that the outcomes or the institution itself are perfect – far from it.
But the fact is that New Zealand, like many countries, has not only benefited from successive rounds of trade liberalisation in the WTO, but we have been able to challenge some of our biggest trading partners when they have not followed the rules.
We have taken WTO cases against trade giants including Australia, the United States, the European Union and Canada – and we have won every case.
India is of course a world away from New Zealand in terms of size – but like New Zealand, has gained a great deal from the multilateral rules-based trading system.
WTO rules have enabled new trade opportunities across many of the sectors where India is, or aspires to be, a true global powerhouse, including services and manufacturing.
In the agriculture sector, where India has a number of sensitivities, WTO rules have helped create new markets for important exports such as rice, sugar, pulses and wheat.
Even so agricultural reform remains a work of progress in the WTO.
India is a key and influential member of the WTO: India played a pivotal role in concluding the Twelfth Ministerial Meeting last June.
India’s ongoing leadership, including of the world’s developing economies, will be critical in helping to shape and give impetus to the future of the WTO system at the Thirteenth Ministerial Conference next February.
Today India has an enormous responsibility as Chair of the G20 and B20 processes and is clearly rising to this challenge with the theme of “One earth, one family, one future”.
G20 is not an instrument that New Zealand can claim to join, but your deliberations will undoubtedly have an impact on global economic management and then be relevant to us also.
Finding international consensus is never easy – it requires leadership, tenacity and skill.
The magnitude of problems we currently face will require nothing less: if we have learned anything in the last few years it is surely that global problems do in fact require global solutions.
Ongoing reform of multilateral institutions to make them more fit for purpose is clearly required.
Increasing transparency and boosting the capacity particularly of developing and least developed countries to participate effectively should be a key objective.
The world’s advanced economies have a big role to play and the G20 with its own diverse make up is a particularly useful forum to encourage these initiatives.
This is not to suggest however the multilateral institutions should turn to focus inwards or refrain from trying new ideas.
Let’s look again at the WTO, which, despite its importance, is facing an existential crisis.
This is revealed most starkly by its inability to conclude the Doha Development Agenda of multilateral trade negotiations and its dispute settlement mechanisms being rendered unworkable by the inability to appoint judges to the Appellate Body.
Some WTO Members including New Zealand (but not India) have established a Multiparty Interim Appeal Arbitration Arrangement to continue the dispute resolution process in the meantime.
No-one pretends that such interim arrangements are optimal solutions, but they are preferable to allowing critical functions of the WTO to be paralysed.
Nor do they absolve any party of the responsibility to work to find enduring solutions to the problems they see in the institution – we need real and constructive engagement from all members to develop practical, workable answers.
In a similar way some members of the WTO have looked to advance the negotiating agenda through a series of plurilateral initiatives.
I am well aware that India and others have concerns about these initiatives for systemic reasons.
But these are open and inclusive negotiations in which all can participate – and in fact more than 110 WTO members are taking part in the various negotiations.
In my view these plurilateral initiatives which are respectful of WTO principles and subject to transparency and scrutiny by the contracting parties, are useful ways of continuing to maintain the credibility and momentum of the WTO at a time when the broader multilateral process has stalled.
These initiatives are ways in which the international community can continue to innovate in its approach to contemporary problem solving while continuing to work on important reform of the key multilateral institutions.
Today the world faces a seemingly endless array of problems and challenges – geo-politics, climate change, food and energy insecurity are amongst the biggest.
The way we – as countries and as businesses – respond to them will be defining for future generations.
India and New Zealand are old friends – Commonwealth and cricket have long been unifying bonds.
Both of us are international citizens who care about the future of the world and our two countries’ place in it.
That’s why I am delighted to have been asked by CII to participate in the Partnership Summit and to share views on the future of multilateralism.
With our distinct interests and experiences India and New Zealand have much to offer by working more closely together.
It can only be to the advantage of us all if that multilateral co-operation can be enhanced and lead to a brighter future for all our citizens.
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