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Multilateralism was defined by Miles Kahler as "international governance" or global governance of the "many," and its central principle was "opposition [to] bilateral discriminatory arrangements that were believed to enhance the leverage of the powerful over the weak and to increase international conflict."
In 1990, Robert Keohane defined multilateralism as "the practice of coordinating national policies in groups of three or more states." The foreign policy that India formulated after independence reflected its idiosyncratic culture and politic traditions. Speaking in the Lok Sabha, the lower house of the Parliament of India, in March 1950, Nehru affirmed: “It should not be supposed that we are starting on a clean slate. It is a policy which flowed from our recent history and from our national movement and its development and from various ideals we have proclaimed. (Nehru, 1961, p.34). In fact, the foreign policy culture of India is an elite culture, meaning, in effect, that the writings and speeches of select leading figures of the Indian foreign policy elite provide an insight into the key ideas and norms constituting the foundation of India’s foreign policy.
John Ruggie elaborated the concept based on the principles of "indivisibility" and "diffuse reciprocity (international relations)" as "an institutional form which coordinates relations among three or more states on the basis of 'generalized' principles of conduct ... which specify appropriate conduct for a class of actions, without regard to particularistic interests of the parties or the strategic exigencies that may exist in any occurrence."
Multilateralism, in the form of membership in international institutions, serves to bind powerful nations, discourage unilateralism, and gives small powers a voice and influence that they could not otherwise exercise. For a small power to influence a great power, the Lilliputian strategy of small countries banding together to collectively bind a larger one can be effective. Similarly, multilateralism may allow one great power to influence another great power. For a great power to seek control through bilateral ties could be costly; it may require bargaining and compromise with the other great power.
Embedding the target state in a multilateral alliance reduces the costs borne by the power seeking control, but it also offers the same binding benefits of the Lilliputian strategy. Furthermore, if a small power seeks control over another small power, multilateralism may be the only choice, because small powers rarely have the resources to exert control on their own. As such, power disparities are accommodated to the weaker states by having more predictable bigger states and means to achieve control through collective action. Powerful states also buy into multilateral agreements by writing the rules and having privileges such as veto power and special status.
International organizations, such as the United Nations (UN) and the World Trade Organization, are multilateral in nature. The main proponents of multilateralism have traditionally been the middle powers, such as Canada, Australia, Switzerland, the Benelux countries and the Nordic countries. Larger states often act unilaterally, while smaller ones may have little direct power in international affairs aside from participation in the United Nations (by consolidating their UN vote in a voting bloc with other nations, for example.) Multilateralism may involve several nations acting together, as in the UN, or may involve regional or military alliances, pacts, or groupings, such as NATO. These multilateral institutions are not imposed on states, but are created and accepted by them in order to increase their ability to seek their own interests through the coordination of their policies. Moreover, they serve as frameworks that constrain opportunistic behavior and encourage coordination by facilitating the exchange of information about the actual behavior of states with reference to the standards to which they have consented.
The term "regional multilateralism" has been proposed, suggesting that "contemporary problems can be better solved at the regional rather than the bilateral or global levels" and that bringing together the concept of regional integration with that of multilateralism is necessary in today’s world. Regionalism dates from the time of the earliest development of political communities, where economic and political relations naturally had a strong regionalist focus due to restrictions on technology, trade, and communications.
One modern instance of multilateralism occurred in the nineteenth century in Europe after the end of the Napoleonic Wars, where the great powers met to redraw the map of Europe at the Congress of Vienna (November 1814 to June 1815). The Concert of Europe, as it became known, was a group of great and lesser powers that would meet to resolve issues peacefully. Conferences such as the Conference of Berlin in 1884 helped reduce power conflicts during this period, and the 19th century was one of Europe's most peaceful.
Industrial and colonial competition, combined with shifts in the balance of power after the creation - by diplomacy and conquest - of Germany by Prussia meant cracks were appearing in this system by the turn of the 20th century. The concert system was utterly destroyed by the First World War. After that conflict, world leaders created the League of Nations (which became the precursor of the United Nations) in an attempt to prevent a similar conflict. Multilateral arms limitation treaties were agreed, such as the Kellogg-Briand Pact. But the League proved insufficient to prevent Japan's conquests in Eastern Asia in the 1930s, escalating German aggression and, ultimately, the Second World War.
After the Second World War the victors, drawing upon experience from the League's failure, created the United Nations in 1945. Since then, the "breadth and diversity" of multilateral arrangements have escalated. Unlike the League, the UN had the active participation of the United States and the Soviet Union, the world's then greatest contemporary powers. Along with the political institutions of the UN, the post-war years also saw the development of organizations such as the General Agreement on Tariffs and Trade (GATT) (now the World Trade Organization), the World Bank (so-called 'Bretton Woods' institutions) and the World Health Organization. Formation of these subsequent bodies under the United Nations made it more powerful than the League. The multilateral framework played an important role in maintaining world peace in the Cold War. Moreover, United Nations peacekeepers stationed around the world became a visible symbol of multilateralism.
Multilateral institutions of varying scope and subject matter range from the International Telecommunications Union (ITU) to the World Intellectual Property Organization (WIPO) and Organisation for the Prohibition of Chemical Weapons (OPCW).
The multilateral system has encountered mounting challenges since the end of the Cold War.
The United States became increasingly dominant in terms of military and economic power, which has led countries such as Iran, China and India to question the UN's relevance. Concurrently, a perception developed among internationalists such as former UN Secretary-General Kofi Annan, that the United States is more inclined to act unilaterally in situations with international implications. This trend began when the U.S. Senate, in October 1999, refused to ratify the Comprehensive Test Ban Treaty, which President Bill Clinton had signed in September 1996. Under President George W. Bush the United States rejected such multilateral agreements as the Kyoto Protocol, the International Criminal Court, the Ottawa Treaty banning anti-personnel land mines and a draft protocol to ensure compliance by States with the Biological Weapons Convention. Also under the George W. Bush administration, the United States withdrew from the Anti-Ballistic Missile Treaty, which the Richard Nixon administration and the Soviet Union had signed in 1972.
These challenges presented by the U.S could be explained by a strong belief in bilateral alliances as instruments of control. Liberal institutionalists would argue, though, that great powers might still opt for a multilateral alliance. But great powers can amplify their capabilities to control small powers and maximize their leverage by forging a series of bilateral arrangements with allies, rather than see that leverage diluted in a multilateral forum. Arguably, the Bush administration favored bilateralism over multilateralism, or even unilateralism, for similar reasons. Rather than going it alone or going it with others, the administration opted for intensive one-on-one relationships with handpicked countries that maximized the U.S. capacity to achieve its objectives.
Another challenge in global governance through multilateralism involves national sovereignty. Regardless of the erosion of nation-states' legal and operational sovereignty in international relations, "nation-states remain the ultimate locus of authoritative decision making regarding most facets of public and private life". Hoffman asserted that nation-states are "unlikely to embrace abstract obligations that clash with concrete calculations of national interest."
Global multilateralism is challenged, particularly with respect to trade, by regional arrangements such as the European Union and NAFTA, although these are not in themselves incompatible with larger accords. The original sponsor of post-war multilateralism in economic regimes, the United States, turned towards unilateral action and in trade and other negotiations as a result of dissatisfaction with the outcomes of multilateral fora. As the most powerful nation, the United States had the least to lose from abandoning multilateralism; the weakest nations have the most to lose, but the cost for all would be high.
When enacting foreign policies, governments face a choice between unilateralism, bilateralism and multilateralism.
Bilateralism means coordination with another single country. Multilateralism has attempted to find common ground based on generalized principles of conduct, in addition to details associated with a particular agreement. Victor Cha argued that: power asymmetries predict the type of structures, bilateral or multilateral, that offer the most control. If small powers try to control a larger one, then multilateralism is effective. But if great powers seek control over smaller ones, bilateral alliances are more effective.
Thus, a country's decision to select bilateralism or multilateralism when enacting foreign policies is greatly affected by its size and power, as well as the size and power of the country over which it seeks control. Take the example of Foreign Policy of the United States. Many references discuss how the United States interacts with other nations. In particular, the United States chose multilateralism in Europe and decided to form NATO, while it formed bilateral alliances, or the Hub and spokes architecture, in East Asia. Although there are many arguments about the reasons for this, Cha's "powerplay" theory provides one possible reason. He argued:
...postwar U.S planners had to contend with a region uniquely constituted of potential rogue allies, through their aggressive behavior, could potentially entrap the United States in an unwanted wider war in Asia. ... To avoid this outcome, the United States created a series of tight, deep bilateral alliances with Taiwan, South Korea, and Japan through which it could exercise maximum control and prevent unilateral aggression. Furthermore, it did not seek to make these bilateral alliances multilateral, because it wanted to amplify U.S. control and minimize any collusion among its partners.