- The existing weaknesses of the multilateral system can be attributed to two main forces: a decline in trust and a geopolitical reconfiguration.
- UNCTAD’s ‘New Multilateralism’ is fundamentally anchored in the objectives of inclusion and equity.
- The real-world consequences of the ‘New Multilateralism’ for global trade and development are wide-ranging, focusing on re-energising the international economic system as a genuine vehicle for inclusive, sustainable growth and resilience.
- UNCTAD’s vision is to create a digital future in which technology, particularly Artificial Intelligence, becomes a tool for development and not a driver of disparity.
The notion of multilateralism, which refers to the coordination of relations among three or more states, is undergoing one of the deepest stress tests it has faced since its creation in the aftermath of World War II. In a world where geopolitical competition and economic fragmentation are becoming intense, and in which overlapping global crises abound, from climate change to rising unsustainably high levels of debt, the old order seems at increasing risk. The UN Conference on Trade and Development (UNCTAD) Secretary-General, Rebeca Grynspan, has put forward a concrete and timely idea for a ‘New Multilateralism,’ which was the focus of the Chatham House event. This change is not just a shift in institutional practice, but a conception of international cooperation and collaboration with deep, real-world implications for the future of global trade and sustainable development.
The Erosion of the Old Order and The Rise of Geopolitical Realignment
The existing weaknesses of the multilateral system can be attributed to two main forces: a decline in trust and a geopolitical reconfiguration. For many years, the multilateral system largely rested on a consensus of liberalised trade, financial integration, and a commitment to global institutions (although uneven). The emergence of great-power rivalries, notably between the United States and China, has disrupted this consensus. Geopolitical distance is now an active factor in economic decision-making and represents a turning point marked by a material decoupling, or de-risking, of global supply chains. Evidence shows that trade volumes have been growing more slowly between geopolitically distant countries, and foreign direct investment (FDI) is being consciously diverted largely along ideological lines. This fragmentation risks reversing decades of economic convergence and prosperity, with smaller, developing economies likely to suffer most, because they rely on an open, rules-based system to access markets and build resilience.
As a result, there is an erosion of trust and hope as international institutions that originated for a unipolar or bipolar world have proven less capable of addressing the complexities of a multipolar world. More vulnerable developing countries often perceive that the existing architecture, particularly the global financial system, is incapable of addressing contemporary development needs. The global financial architecture has failed to provide developing countries with liquidity during shocks or a transparent and stable mechanism for addressing large debt burdens. UNCTAD’s proposal for reform is rooted in this systemic failure to deliver equitable outcomes.
The Vision of a ‘New Multilateralism
UNCTAD’s ‘New Multilateralism’ is fundamentally anchored in the objectives of inclusion and equity. It proposes that global governance systems shift from ones dominated by hierarchical conference tables, where outcomes are decided, to ones that genuinely embrace the ‘circle of equals.’ This is more than rhetorical; it also means pragmatically reforming the institutions themselves to reflect the realities of today’s economic and political landscape.
An essential element is the urgent need for reform of the international financial architecture. The existing system, established after the Bretton Woods agreement in 1944, is no longer adequate for a global economy that is defined by cross-border flows and diverse development pathways. The new multilateralism proposes the establishment of a legitimate, stable, permanent institutional structure for managing debt, rather than solutions that do little more than delay crises. The proposals also call for a stronger voice and greater representation for developing countries in key institutions, such as the IMF and the World Bank, to ensure their interests are represented within global institutions, as opposed to token ‘safeguards.’
Practical Implications for Global Trade and Development
The real-world consequences of the ‘New Multilateralism’ for global trade and development are wide-ranging, focusing on re-energising the international economic system as a genuine vehicle for inclusive, sustainable growth and resilience.
In global trade, the ‘New Multilateralism’ approach consciously avoids the seductions of isolationism and the zero-sum calculation of geopolitical trade wars, but instead underpins a reinvigorated, non-discriminatory trade system that actively promotes the diversification of the developing countries’ economies. This will mean greater multilateral support for building productive capacities, the economic resources, institutions, and policies that enable countries to produce goods and services and to compete globally. In practical terms, this may involve expanded technical assistance and capacity-building programmes, perhaps through joint efforts like the Global Trade Helpdesk, to assist micro, small, and medium enterprises (MSMEs) in developing countries to navigate complex trade regulations and to access global value chains. It may also mean ensuring that new standards, such as those relating to sustainability or digital trade, do not become additional non-tariff barriers that exclude exporters in developing countries.
In technology and digital governance, to address the digital divide, ‘New Multilateralism’ must establish effective rules. The risk of widening inequalities, as global commerce becomes more digital, if developing countries do not have fair access to the digital economy, is serious. UNCTAD’s vision is to create a digital future in which technology, particularly Artificial Intelligence, becomes a tool for development and not a driver of disparity. It will require international cooperation to regulate cross-border data flows, provide equitable access to essential technologies, and ensure the benefits of the digital economy are broadly shared. The digital revolution will only reinforce the power of a few technological superpowers unless multilateral rules are put in place to check dominance and promote inclusion.
In investment and finance, to achieve true sustainability, global investment flows need to be better aligned with the Sustainable Development Goals (SDGs), and the role of Foreign Direct Investment (FDI) and Global Value Chains (GVCs) must be reframed to consider long-term developmental impacts. UNCTAD argues for the strengthening of regional and continental economic integration areas, such as the African Continental Free Trade Area (AfCFTA), as well as supporting the capacity of developing countries to create resilient, diversified regional value chains. Importantly, the ‘New Multilateralism’ argues that trade, finance, investment and technology are interlinked issues. Successfully pursuing development requires taking a holistic approach toward all strategies, recognising that financial stability and adequate sources of capital for investment are prerequisites for trade-led growth.
In conclusion, the UNCTAD Secretary-General Rebeca Grynspan’s plea for a ‘New Multilateralism’ is an important and pragmatic response to the existing geopolitical and economic challenges. It acknowledges that the world cannot afford, and does not desire, a fragmented, power-based global order in which collective responses to shared global challenges (such as climate action, a pandemic) cannot be achieved.
The practical implications are obvious in terms of a more equitable international order, foundational reform of the international financial architecture and public international institutions, and a new trade and development agenda focused on productive transformation and inclusion for all nations. The Chatham House event offered an important forum for discussing how global institutions could move from their traditional forms to a ‘circle of equals’, ensuring that the future of multilateralism delivers the collective prosperity and sustainability for all humanity.
Hridbina Chatterjee is a final-year postgraduate student in International Relations at Jadavpur University, Kolkata. She has written for newspapers and think tanks, with interests in South Asian politics, India’s foreign policy, and the Indo-Pacific. Views expressed are the author’s own.
Aayush Pal 
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