Global Policy Forum

By Parag Khanna and Alpo Rusi

This past week saw not only the Irish rejection of the Lisbon treaty, forcing a crisis summit this week to chart an alternative path to EU continuity, but also the annual EU-American summit in Slovenia, aiming to forge a common transatlantic agenda on Middle East peace, climate change and trade. The Irish vote is likely to fuel rumours of the EU's demise, yet it is the latter summit that will prove more revealing about its future. While mending transatlantic divides is commendable, the summit presents an opportunity to rectify misperceptions about the US leading and Europe following on global issues. No matter who occupies the White House, the actual trend is the reverse.

On May 23 in Brasilia, a treaty was signed to establish Unasur, the South American union of nations. It was the most recent example of the real geopolitical revolution that has been under way since the end of the second world war: the regionalisation of international relations on the precedent set by the six nations who established the Treaty of Rome, which became the European Economic Community in 1957. It was this breakthrough in thinking that offers the greatest potential to prevent the return of what conservative thinkers take for granted: superpower conflict between the US and China, or an east-west conflict between democracies and autocracies.

From the Association of South East Asian Nations to Unasur and the African Union, it is globalisation within regions that has become the driving narrative of political and economic life. The issue is not whether rival trade blocks will emerge, but rather that each regional grouping promises to eliminate conflict among its members, as Europeans have done. The US is no longer providing the security blanket or umbrella; rather, each region is building its own.

For elite observers in western capitals, it has always been easier to conceive of globalisation as global first and local second. Globalisation is thought to be synonymous with westernisation. But in many places today, globalisation starts with bringing down barriers between neighbours, building common diplomatic institutions and eventually even common armies, peacekeeping forces, and criminal courts - all of which the AU has now established.

A world of regions still needs leadership, but not necessarily a single leader. While many have fretted that Europe follows the US without providing an alternative course, in fact the EU has been providing this model for decades, and it is bearing fruit around the developing world, despite the US's post-9/11 actions, which have served only to discredit the west.

Today the EU provides more than itself as an institutional model. Its emissions trading system is the world's leading carbon market and a model progressive US voices yearn to replicate. It is the largest aid donor and market for goods from developing countries. And next year it will launch an external action service through which eventually the embassies of the EU will be larger abroad than those of individual members. The EU is not finished: even if its expansion stops at 30 or 35 members, its global presence will be increasingly felt on matters of global concern.

Even as multilateral institutions such as the UN, the IMF and the World Bank strive for reform to remain relevant, the EU has paved the way for a world of unions to focus on resolving their own problems and managing globalisation as collectives. One sees this in East Asia's selective integration of WTO standards, and even in the push for an EU-style North American union to boost competitiveness. Europe has become the gold standard for creating such institutions, and is far better poised than the US to be the arbiter of disputes among them.

A future concert of powers among the US, China and EU - capable of setting basic global standards and leveraging the adherence of other major powers such as Russia and India - is a vision with which Americans should be familiar, for it resembles Roosevelt's "Four Policemen". A half century later, it is clear who the three most influential global actors are and who must assume responsibility for preserving peace. But among these three, the EU has the most credibility today, and must ensure that the other two do not return the 21st century to the 19th.