WTO NEWS: SPEECHES — DG PASCAL LAMY

“Global governance in the steps of William Rappard”


> Pascal Lamy’s speeches

  

Ladies and Gentlemen,

Permit me first of all to thank the Diplomatic Club for organizing this evening's gathering, which affords me the opportunity to give you my thoughts on the system of world governance, a system which the city of Geneva had a pivotal role in establishing in the wake of the decisive first steps taken by William Rappard.

Born in New York of Swiss parents, William Rappard was destined for a brilliant career in the diplomatic service. He gained recognition in the context of the peace talks following the First World War, when he managed to convince the Allies of the advantage to the future League of Nations of accepting neutral States, including Switzerland, as Members, while allowing them to preserve their neutrality.

William Rappard was not only an outstanding diplomat, but a renowned academic and a great humanitarian, who became the first Secretary General of the League of Red Cross and Red Crescent Societies.

It is also to him that Geneva owes its ascent to the position of the leading centre for global cooperation, making it the lynchpin of the system of world governance. As an ardent advocate for the League of Nations project from the outset, he supported Geneva's bid to become the host city, ahead of The Hague, London or Brussels, and then campaigned vigorously to convince the Swiss to join.

The final contest was between Brussels and Geneva, given their history of neutrality and the tranquil surroundings offered by both cities. Geneva won the day, being the preferred choice of President Wilson in particular, who considered the Swiss a people dedicated to total neutrality, both by nature and by virtue of their Constitution. Switzerland, in his view, was thus predestined to serve as a meeting place for other peoples desirous of embarking on an enterprise of peace and collaboration.

Nearly a century later, the enterprise of peace and collaboration remains incomplete: the lingering fault lines, the interminable deadly conflicts, famine, the economic and financial crisis, the deterioration of the environment, all have a global dimension which calls for the strengthening of the system of global governance. A system of global governance capable of meeting the requirement for a modern “league of nations”.

Global governance, to what end?

For me, global governance describes the system we set up to assist human society to achieve its common objectives in a sustainable manner, that is, with equity and justice. Growing interdependence requires that our laws, our social norms and values, our mechanisms for framing human behaviour be examined, debated, understood and linked together as coherently as possible. This, in my view, is the prerequisite for genuinely sustainable development in economic, social and environmental terms.

To this end, any system of governance must satisfy four requirements:

(1) It has to provide leadership, embody a vision, and inspire political enterprise, in order to create momentum;

(2) it needs to provide legitimacy, which is essential to ensure support for decisions that lead to change, in order to overcome the natural propensity to adhere to the status quo;

(3) it must also ensure efficiency by bringing about concrete and visible results for the benefit of the people;

(4) lastly, it needs to be coherent, which means that compromises have to be found in respect of frequently contradictory objectives.

There are today three levels of governance which respond unequally to these requirements: the international legal order, the European Union and national systems. As a metaphorical illustration, let us take the three physical states of matter: gas, liquid, and finally solid. Today's system of governance is a combination of these three states.

  • Gas: the coexistence of particles devoid of any hierarchical differentiation; this is the international system made up of sovereign States organized around essentially “horizontal” principles, with a decentralized responsibility mechanism. This is the operational model followed by most international organizations, including the WTO.

  • The liquid state is reflected in the European Union, the perfect example of an international integration organization in which member States have consented to give up elements of sovereignty in order to strengthen the coherence and the efficiency of their actions.

  • Finally, the solid state is represented by the national level, the wielder of hard power, with the capacity for coercion, as exemplified by tax enforcement, road safety enforcement and deployment of State force.

Our challenge today is to put in place a system of global governance that offers a better balance between leadership, efficiency and legitimacy, as well as coherence, in order to bring global governance out of its gaseous state.

 

Specific challenges of global governance

General de Gaulle, who was not exactly fond of supranationality, would have called it a huge undertaking. That is certainly true. What then are the obstacles to be overcome?

The first challenge stems from the difficulty in identifying leadership. Who is the leader? Should it be a superpower? A group of national leaders? Selected by whom? Or should it be an international organization?

As with conventional legitimacy, the identification of leadership implies the selection of community representatives by a vote. But it also presupposes that the system has the political capacity to develop a public discourse and proposals that rally coherent majorities and give citizens the feeling that they are participating in a debate. Since legitimacy depends on the closeness of the relationship between the individual and the decision making entity, the second specific challenge of global governance is distance, which creates the risk of a democratic deficit and an accountability deficit. In short, we have to combat the widespread perception that the international decision making process is too distant, lacking in accountability and not directly open to challenge.

In the same way as legitimacy, coherence is part and parcel of the nation State and is transferred to specialized international organizations to which States belong and whose mandates are limited. In theory, there should be no problem. The coherent action of nation States in the various domains of international governance would translate into coherent global action. But we all know that, in practice, States often act incoherently.

Finally, the remoteness of power and the multiple levels of governance pose a challenge for efficiency. Nation States put up varying degrees of resistance to the transfer or sharing of jurisdiction within international institutions. And national diplomatic systems frequently do not reward international cooperation: I know of hardly any diplomat whose career has suffered for having said “no”. Saying “yes” is certainly more risky.

The use of traditional models of national democracy to handle global problems has important limitations, as we have just seen. And yet the very credibility of national democracies is at risk if global governance fails to establish its own democratic credentials and if citizens feel that the issues that affect them on a day to day basis, having now become global issues, are beyond the control of their political will as expressed through the ballot box.

 

Europe as a new paradigm of global governance

If there is one place on earth where new forms of global governance have been tried out following the Second World War, it is Europe. European construction is the most ambitious experiment in supranational governance ever attempted up to now: it is the story of a desired, defined and organized interdependence between the member States. Hence the value of examining, experimentally so to speak, how Europe has coped with the challenges I have outlined.

The first point to make is that the construction of the European Union is a work in progress. It is not complete in any of its aspects: neither in terms of geography, nor in terms of depth, that is, in the powers conferred on the European Union by its member States; nor again, of course, in terms of identity.

Secondly, the European paradigm remains specific, closely dependent on the geographical and historical heritage of the European continent; a continent ravaged by two world wars and by the Holocaust, which left millions dead; a continent haunted by nightmares which have united the survivors of those times in a collective aspiration for peace, stability and prosperity. We must therefore be very cautious in seeking today to ascribe universal value to what is only one part of the world.

The creation of the European Coal and Steel Community in the 1950s was the result of the political will to overcome those distressing memories and to see peace take root in what Robert Schuman called "de facto solidarities". The men and women of that time gave expression to that will in a concrete project: combining the two essential pillars of the economies of the time: coal and steel. To these two elements they added a third: the creation of a sui generis supranational institution : the High Authority of the European Coal and Steel Community.


At the heart of this initial venture was the essence of the European project: the creation of a space of pooled sovereignty, a space in which the members agree to manage their relations without having to have constant recourse to international treaties.

The paradigm of European governance is thus characterized by the combination of three elements: a political will, a goal to be attained and an institutional structure. It is true that the method of governance used involves a series of major technological innovations when contrasted with the “Westphalian” principles: the primacy of Community law over domestic law; the existence of a Commission with a monopoly on the introduction of legislation; the establishment of a Court of Justice whose decisions are binding on national courts; the introduction of a bicameral parliamentary system, with the Council representing member States on one side, and the Parliament representing citizens on the other. While these are important institutional innovations, they only complement and do not take the place of agreement on a precise collective goal.

That collective goal included global governance, at least, that is, if we are to believe Jean Monnet, another William Rappard, so to speak, when he wrote: “The sovereign nations of the past can no longer provide a framework for the resolution of our present problems. And the European Community itself is no more than a step towards the organizational forms of tomorrow's world”.

 

Scorecard of the European governance paradigm

From this perspective, how today does the European system stack up in terms of leadership, coherence, efficiency and legitimacy?

As far as internal leadership is concerned, European governance has a good record, as is attested by the creation of the internal market in the early 1990s or the euro in the late 1990s, two examples of successful synergies between political will, identification of an objective and establishment of powerful institutional machinery.

With respect to external leadership, that is, the capacity to influence world affairs, the results are less than satisfactory in the absence of the three basic ingredients I just mentioned. The one exception is international trade, where these three ingredients have been part of the mix for 50 years, resulting in a single policy aimed at opening up trade, with a single duly mandated negotiator.

I believe that Europe scores well on coherence, mainly because of its institutional structure. The principle of collegiality governing the work of the Commission, the fact that the Commission has a monopoly on introducing legislation in most areas that fall within the purview of the Community, the growing powers of the European Parliament, and the strengthening of Community competence (including through the Lisbon Treaty) are catalysts for greater coherence in the action of the European Union.

Nonetheless, the blurring of the dividing lines between the national and Community spheres of influence, which is characteristic of all federal systems, remains a source of incoherence. This is evidenced by poor coordination in areas such as macroeconomic policy, budgetary matters, energy and transport.

On the question of “efficiency”, I also believe that Europe scores rather highly, thanks to the work of the European Court of Justice in ensuring respect for the rule of law, the extension of majority voting and the capacity of the European Commission to enforce European rules.

If there is one area in which Europe scores less well, it is that of legitimacy. Indeed, we stand witness to a growing gulf between European public opinion and the European project. Despite constant efforts to adapt the European institutions to democratic requirements, democratic sentiment is still absent from the institutional space of the European Union. The reasons for what Elie Barnavi called this European “frigidity” remain a mystery and could usefully be looked at more closely in intellectual circles.

If I had to put forward an explanation, I would cite the anthropological dimension, a continuing blind spot in European construction, which governs the complex relationship between identity and affiliation, between the depiction of history, geography and everyday life. It seems as if human societies, which have built so many of their myths on war, have been incapable of inventing a myth of peace. Switzerland may offer us a helpful field of research in this connection.

 

Lessons of European integration for global governance

This rapid overview of 60 years of European integration enables us to draw some useful lessons for global governance.

The first one is that institutions alone cannot fulfil the needs. Neither can political will without a clearly defined common project. Nor can a well thought out common project deliver results if there is no institutional machinery. In fact, it is the combination of these three elements that is required to create an integration dynamic.

But even if these three elements are present, there is the risk that a real or perceived problem of legitimacy will remain, creating an obstacle to any further integration. The main difficulty lies in the fact that supranational institutions like the European Union require a long term investment on the part of national leaders, and this is often incompatible with the short timescale of national politics, under the constraint of multiple electoral deadlines.

The second lesson is the importance of the rule of law and of enforceable commitments. Global governance must be anchored in commitments undertaken by stakeholders, in laws and regulations accompanied by mechanisms for their enforcement. These principles are essential to the multilateral trading system, with its more than 60 years of regulating trade between nations and with its binding dispute settlement system as a means of ensuring that Member States comply with their commitments. These principles are also crucial to the governance structures which the international community is seeking to introduce in order to combat climate change. This is also what the international community is striving to achieve in the area of non proliferation.

The third lesson concerns respect for the principle of subsidiarity. This involves ensuring that all action is carried out at the level of governance which guarantees the greatest efficiency. This is one of the points on which Pope Benedict XVI makes a convincing argument in his most recent encyclical, where he states that: “The governance of globalization must be marked by subsidiarity, articulated into several layers and involving different levels that can work together. Globalization certainly requires authority, insofar as it poses the problem of a global common good that needs to be pursued. This authority, however, must be organized in a subsidiary and stratified way, if it is not to infringe upon freedom and if it is to yield effective results in practise”. Indeed, the international system should not be overburdened with issues which are better dealt with at the local, regional or national level.

The final lesson which I think European integration offers for global governance is that, to the extent that the political “demos” remains essentially national, the legitimacy of global governance would be greatly enhanced if international issues were more fully taken into account in the domestic political debate and if national governments were held accountable for their behaviour at the international level. In order to establish the legitimacy of international organizations, it is not enough for States to be represented on them by governments elected at national level, or for the decisions of those organizations to be taken by consensus on the basis of “one State, one vote”, as in the case of the WTO. More is required. In other words, we must eliminate the frontiers between local, national and global democracy. National actors political parties, civil society, parliaments, trade unions and citizens need to ensure that issues which are part of the “global” level are discussed at the “domestic” and “local” level as was emphasized by Bernard Kouchner last week, here in Geneva, in his memorial lecture in honour of Sergio Vieira de Mello, when he appealed to the “public conscience” to stir governments into action.

The good news is that many of these issues are already being reviewed and that we therefore need not expect a big bang in the area of global governance. The economic crisis we are going through has speeded up the transition to a new architecture of global governance characterized by what I have called a “triangle of coherence”.

On one side of the triangle lies the G 20, replacing the former G 8 and providing political leadership and policy direction. On another side lie international organizations providing expertise, whether in the form of rules, policies or programmes. The third side of the triangle is the G 192, the United Nations, which provides a framework for global legitimacy through accountability.

 

Conclusion

Ladies and gentlemen,

Today, globalization poses a major challenge to our democracies, and our system of governance must confront this challenge. If our citizens have the feeling that the global problems are insoluble, if they feel that they are out of reach, our democracies risk being weakened and undermined by populist movements with xenophobic agendas.

This will also happen if our citizens think that global problems can be addressed but that they have no influence on the outcome.

Today, more than ever, our governance systems, whether in Europe or at the global level, must provide citizens with the means to shape tomorrow's world, the world that they wish their children to inherit.

Gathered here in Geneva, which became the “moral capital of the world” in 1919 when it was made the headquarters of the League of Nations, the international diplomatic community, together with international civil society, have a decisive role to play in defining global governance and in organizing tomorrow's world. I thank the Diplomatic Club of Geneva for aspiring to become one of the laboratories in which these new technologies of governance are researched.

Thank you for your attention.

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