Just before Christmas, the U.N. Security Council adopted an arms embargo on Eritrea, which has been supplying weapons to Islamic insurgents in nearby Somalia. In one sense, the strictly worded measure is a symbol of the international community’s determination to stop tragic conflicts in the Horn of Africa. The resolution, however, is years late and could end up having little effect. A similar U.N. embargo on Somalia has not prevented weapons from being freely traded in Mogadishu. The concept of global collective security, unfortunately, has not worked well, either last century or this one.

It is no surprise that the United Nations is not meeting important challenges, but even once-successful global institutions are losing effectiveness. The International Monetary Fund, for instance, completely failed to handle—or even anticipate—the global economic downturn. The G-7 and G-8 are now thought to be irrelevant, and the G-20, considered a replacement for these two groupings, has little to show for three grand gatherings in 2008 and 2009. The World Trade Organization has been unable to prevent a resurgence of protectionism, and its Doha Round negotiations, now more than eight years old, have stalled. These negotiations could be the first major trade talks to fail since the 1930s. Last month’s Copenhagen climate change summit, the 15th installment of the once-productive Conference of the Parties talks, flopped even though it was hailed as “the most important meeting in the history of the world.” Weak nuclear rogues like Syria are now getting the better of the once-mighty International Atomic Energy Agency. North Korea has already outsmarted the watchdog organization by covertly building plutonium-core weapons, and Iran is developing an atomic warhead with impunity.

President Obama says the United States cannot solve the world’s problems alone. Maybe that’s true, but sooner or later he has to realize he’s not going to get the help of the world’s other powers. The “international community” is not coming together to solve common problems.

This is not how we thought things would work out two decades ago. In the early 1990s, optimistic Western analysts predicted that, with the Soviet Union gone, the world would enter a generally harmonious era. As Francis Fukuyama famously argued, events would continue to occur, but “the evolution of human societies through different forms of government had culminated in modern liberal democracy and market-oriented capitalism.”

Because democracies did not fight one another, the reasoning went, the international system would become more manageable. Nations would generally tend to agree with one another on the big issues—or at least manage to get along. In this type of world, multilateralism was not only considered possible, it was thought to be necessary and even desirable.

Multilateralism, by its emphasis on consensual action, implicitly delegitimized America’s leading role in defending core Western values. So did the concept of globalization. Trade, the theory went, would lead to open -economies, open economies to prosperity, prosperity to representative governance, and representative governance to peace. In this extraordinarily benign environment, the impersonal forces of history, relentlessly grinding forward, would finish off Communists, autocrats, and bad actors of all stripes.

As we now know, the opposite occurred. When the political barriers to trade fell, globalization indeed kicked into high gear, creating unprecedented amounts of wealth and liquidity. But global prosperity also strengthened hardline states, notably China and Russia, giving them the means to resist democratization, pursue aggressive foreign policies, and even bend the international system more to their liking. The Chinese, in particular, are displaying a newfound “sense of triumphalism” (as a senior U.S. official put it to the Washington Post last week) and are acting as if their economic success means they don’t have to listen to anybody. Developing democracies, such as India and Brazil, also gained prominence and a platform to pursue policies that differed from those of the more advanced nations.

The result is a world with many different voices, one where consensus, or even agreement, on important issues is not possible. Simply put, among the 195 nations of the world there is no common view of the troubling events of the day and no accepted approach to handling them.

Even though the conditions that gave rise to multilateralism no longer exist, the concept has not only survived but attained the status almost of a geopolitical religion. In this environment, solutions are legitimate only if they are multilateral. Yet because multilateral solutions are becoming increasingly difficult to reach, problems fester. Most of the time, the best the international community can manage are lowest common denominator fixes on matters marginal to global security. It was thus utterly predictable that the Security Council chose last month to deal with Eritrea instead of, say, the Islamic Republic of Iran.

The odds of the U.N. stopping the Iranian nuclear weapons program, which were never high to begin with, are getting vanishingly small. Why? China, which has supplanted Russia as Tehran’s primary backer, can veto any Security Council measure aimed at the mullahs. And in mid-October, Premier Wen Jiabao announced that China was going to strengthen its already robust commercial ties with Iran, thereby giving the theocracy additional means to resist international pressure. Last week China firmly blocked a fourth set of U.N. sanctions on Iran, setting back American efforts to rally the international community.

Despite China’s siding with Tehran’s atomic ayatollahs, the United States has not abandoned efforts to structure a U.N. solution. The prospect of enlisting Beijing, however, remains bleak. There are many reasons for China’s obstructionism, but the most important factor complicating ties between the two giants is the worldwide economic downturn.

Last year, the global economy contracted by 2.2 percent according to a U.N. estimate, the first drop since the Second World War. Forecasters expect an uptick this year of 2.4 percent, but it may be temporary. The principal factor creating current growth is government stimulus programs in the world’s largest economies. Beijing, for instance, pumped a massive $1.1 trillion into its $4.6 trillion economy last year, and Obama’s Washington is employing the same tactic, albeit on a smaller scale.

American and Chinese leaders know that government spending is only a short-term solution. Long-term, both want to export their way out of economic peril, putting them on a collision course. As Fred Bergsten and Arvind Subramanian of the Peterson Institute have noted, Obama’s top economic adviser, Larry Summers, has warned China that it “can no longer behave like China because the U.S. intends to behave much more like China.” So the generally complementary economic relationship between the two nations is now a thing of the past. And global markets are not big enough for even one China-sized exporter at the moment. Indeed, Chinese exports have declined every month since November 2008.

In a deteriorating economic environment, it was almost inevitable that the United States and China would end up bickering; they are now engaged in a series of trade disputes over tires, steel pipe, chicken, automobiles, automobile parts, paper, and nylon, among other items. And there is growing unease in Washington over China’s predatory currency practices.

The geopolitical consequence of trade friction is that the Chinese will be even less amenable to helping Washington contain Tehran, especially because Beijing places importance on its economic relations with Iran’s theocracy. The possibility of a U.N.-brokered solution to the Iranian nuclear crisis, in other words, is becoming more remote.

The growing troubles between the United States and China are a leading indicator of problems that will become evident elsewhere. World trade appears to have contracted last year by almost 10 percent. If this early estimate is accurate, the falloff would be the largest decline in 80 years. In a period of slumping output and faltering trade, economies around the world will continue to “de-globalize,” in other words, to delink from each other. In these circumstances, national leaders will likely see less of a need to cooperate with each other on the great security issues of the day. Contracting trade could become the new motor for geopolitical friction.

Multilateralism, which didn’t work in a prosperous period, is even less likely to be effective in the stagnant (or declining) years ahead. The risk is that the pursuit of multilateral solutions will make the world more dangerous because critical time will be squandered pursuing approaches with little or no hope of succeeding. North Korea, for instance, used the time gained during the Beijing-sponsored six-party talks—they began in 2003 and are now stalled—to test its first nuclear device, and it could use additional time to add to its arsenal. Iran is now perfecting its nuclear technology while the Obama administration, held back by China, is unable to craft a solution in the Security Council.

“The only international security system that works is the U.S. alliance system,” writes Greg Sheridan. It is ironic—and a bit sad—that it takes an Australian journalist to see what an American president cannot. Multi-lateralism sounds fine in theory, but in this precarious period it will take strong leadership from Washington, the ultimate guarantor of the international system, to meet challenges. Others understand this. When will we?

Gordon G. Chang is the author of The Coming Collapse of China.

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