A principles-based international system set up at the end of World War II seems to have disappeared in 2026. Fragmentation is contributing to a great power competition, economic nationalism, and institutional weaknesses.

Multilateralism – the practice of resolving common issues through multilateral organisations such as the UN, WTO, and NATO – is being tested. But it’s too early to say goodbye just yet. The future is not a romantic reconstruction of the past or a complete breakdown of anything, but rather an adaptation to the fact that there are realities in terms of raw power, as well as space for collective action – flexible coalitions, rethinking institutions, cooperation on issues that arise.

Things are getting worse. The UN Security Council still has its working procedures and legitimacy and effectiveness problems with regard to major conflicts. WTO dispute settlement is paralyzed, and the world trade growth has slowed down in the wake of geoeconomic tensions. The WTO forecast of merchandise trade volume growth falls significantly to 1.9% in 2026 from 4.6% in 2025, and services growth will decline from 5.3% to 4.8%.

It is a great-power competition that is the main driver. Multilateral forums have become sites of competition in the US-China rivalry. The second Trump administration has emphasized transactional bilateralism and the “America First” principle, focusing on burden-sharing and selective engagement, rather than on wide-ranging multilateralism, while China has been pressing other platforms, like the Belt and Road Initiative and financial institutions, as alternatives to the West.

The expansion of the BRICS also enhances this change.........

© Paradigm Shift