Are We Heading to Multilateral Chaos: When the World Stops Playing by the Rules
For decades, the global economy functioned because countries accepted one basic principle: rules could be contested but not casually ignored. Whether in trade, finance, climate or technology, the world relied on a predictable procedural grammar. It allowed large and small states to navigate disagreements without fearing sudden reversals. That quiet architecture of discipline is now steadily weakening, and with it the foundations of global economic cooperation.
The signs are everywhere. Governments today behave as if the guardrails that once constrained diplomatic behaviour have loosened. It is not simply a question of great-power rivalry or supply-chain anxieties. The deeper shift is that processes once treated as inviolable have become negotiable. The multilateral system is entering an era where nothing is fully settled until the very end—and sometimes not even then.
In the trade arena, the strain is most visible. When the United States allowed the WTO’s appellate body to lapse into paralysis, it was not merely registering dissatisfaction with individual rulings; it was signalling discomfort with binding adjudication as a principle. Around the same time, the increasing resort to national security exceptions—by the US, China, India, the EU and others—blurred the line between traditional trade policy and strategic competition. Measures once justified only in extraordinary circumstances have become tools of routine economic statecraft.
Finance and climate governance have felt similar tremors. International financial institutions have splintered into overlapping initiatives and parallel lending channels. In climate diplomacy, sharply differing interpretations of “responsibility” and “capability” have produced cycles of ambition and backlash, with each group of countries suspecting the other of overreach. Meanwhile, the regulatory landscape for technology — privacy, data, AI, semiconductors — has become so fragmented that countries increasingly craft domestic frameworks first and look outward later, reversing the order that once guided digital rulemaking.
Against this broader backdrop, recent events in Belém—where negotiators revisited a technical section of text that was generally believed to be closed — did not shock seasoned observers. What would once have caused a diplomatic storm barely registered as an irregularity. It was simply folded into a growing catalogue of procedural improvisations that no longer seem especially dramatic. The significance of Belém lies not in the episode itself, but in how unremarkable it has become for established conventions to be set aside.
Trade negotiations offer further examples of this erosion. At successive WTO ministerial meetings, especially in Geneva and Abu Dhabi, delegations found themselves navigating late-night reintroductions of issues previously considered stabilised. Smaller countries, some represented by only two or three officials, struggled to keep pace with these fluid manoeuvres. Their comparative disadvantage is no longer merely material; it is procedural. When texts can be reopened or reshaped after midnight, the balance shifts towards those with the capacity — bureaucratic and political — to absorb the shocks.
The consequences for the global economy are neither abstract nor long-term. When procedural expectations weaken, states become more cautious, and caution expresses itself through unilateralism. Export controls multiply. Preferential trade agreements proliferate. Green-industrial policies expand behind the language of climate responsibility. The US Inflation Reduction Act, EU’s green taxonomy and Carbon Border Adjustment Mechanism, and India’s production-linked incentives each reflect domestic priorities, but they also mirror a growing reluctance to trust collective outcomes. If others are not bound firmly by the rules, why should one bind oneself more tightly?
Predictability — the intangible currency that underpins investment decisions, cross-border manufacturing, and long-term contracting—begins to diminish. Businesses adapt by shortening planning horizons, diversifying suppliers, and factoring political risk into basic operational choices. Governments respond by strengthening industrial policy tools and building exclusive partnerships, whether in critical minerals, infrastructure finance, or digital regulations. The cumulative effect is a geoeconomic order that is more fragmented, more interventionist, and more dependent on the bargaining strength of individual states rather than on common frameworks.
Yet this fragmentation is not purely the product of rivalry. It is also the result of a psychological shift. Countries no longer assume that once something is agreed, it will necessarily be honoured in spirit. They plan for loopholes, hedge against sudden reinterpretations, and treat commitments as provisional rather than definitive. This mindset — more than any tariff schedule or subsidy regime — marks the true departure from the post-war economic order.
Still, it would be wrong to conclude that cooperation is fading entirely. When interests align — on supply-chain resilience, renewable energy deployment, maritime connectivity, or select areas of financial regulation — countries can still coalesce around shared objectives. But the character of cooperation is changing. It is becoming narrower, more transactional, and less anchored in a belief that institutions can reliably deliver equitable bargains. The coalitions that matter now are flexible, issue-based, and often temporary: the Indo-Pacific Economic Framework, Africa-EU critical minerals partnerships, or the plurilateral digital trade initiatives launched by ASEAN. These are pragmatic arrangements, not expressions of systemic trust.
If there is a challenge for emerging economies like India, Brazil, Indonesia, South Africa, and ohers, it lies in adapting to this new procedural environment. Building negotiation capacity becomes as important as developing sectoral expertise. Forming coalitions early—before texts solidify—matters more than waiting for the traditional drafting cycles. Domestic policy needs to be aligned with external bargaining goals so that countries can withstand pressures when procedural norms begin to fray.
Ultimately, the central question for the coming decade is not whether great powers will compete — they will — but whether the global system can retain enough procedural coherence to manage that competition without constant disruption. The episode in Belém was a reminder that the answer is not guaranteed. The real fault line in the geoeconomic world is no longer between protectionists and free traders, or climate leaders and laggards. It is between those who still believe in the discipline of process and those who treat it as optional.
The world has not abandoned the rules. But it has certainly stopped treating them with the reverence that once kept the system stable. Rebuilding that discipline — quietly, consistently, and across institutions — may prove to be the most important economic project of the next decade.
The writer is President of the Chintan Research Foundation and former Director of WTO, with extensive experience in international trade, finance, and industry.; views are personal
