Only Multilateralism Can Save Us
Between a coronavirus pandemic and collapsing stock markets, the global economy may be in a worse situation than it was during the 2008 financial crisis, because America has all but slammed the door shut on international cooperation. And yet, without a multilateral response, the US will suffer as much as anyone.
WASHINGTON, DC – The global economy was ripe for a recession even before the coronavirus pandemic struck. Many commentators have been warning that stock markets were overheated, that advanced economies were heading for a slowdown, and that US President Donald Trump’s protectionist policies had disrupted supply chains and ushered in an era of heightened uncertainty. Now, the stock market has finally crashed, and a recession has become almost inevitable.
In the past, the international community has successfully mustered a coordinated response to similar crises. The threats posed by SARS in 2003, H1N1 (swine flu) in 2009, MERS in 2012, Ebola in 2014-2016, and the 2008 global financial crisis were all contained through rapid multilateral action. But Trump has shown nothing but contempt for multilateralism, which helps to explain why a global response to the COVID-19 crisis has yet to materialize.
Trump’s flailing response to the outbreak is a sharp departure from that of his predecessor. According to former Vice President Joe Biden, now the leading contender for the Democratic presidential nomination, Barack Obama’s administration helped to contain multiple previous outbreaks by convening health officials from around the world in the White House Situation Room, where they mapped out a coordinated response. Earlier economic downturns were likewise addressed through multilateral channels. At the height of the global financial crisis, the G20 repudiated trade protectionism and committed to pursuing simultaneous fiscal and monetary expansion. We now know that this coordinated response played a major role in preventing the downturn from getting significantly worse.