Annual Davos Meet Kicks Off With Globalisation in the Spotlight

19 January 2017

The World Economic Forum’s (WEF) Annual Meeting in the Swiss ski resort town of Davos-Klosters got underway on Tuesday 17 January, bringing together leaders from international organisations, national governments, industry, academia, and the media for several days of high-level discussions.

The 17-20 January gathering is being held under the theme “Responsive and Responsible Leadership,” with a description of the event’s objectives referring to the need to address the growing “frustration and discontent” for those who are not benefiting from improved economic or social conditions.

“The emergence of a multipolar world cannot become an excuse for indecision and inaction, which is why it is imperative that leaders respond collectively with credible actions to improve the state of the world,” the WEF document says.

Indeed, this year’s meet comes at a time of major political uncertainty, with the impending leadership transition in the US, the expected launch of Brexit negotiations in early spring, and elections in various major EU member states, among various other factors. (See Bridges Weekly, 15 December 2016)

The rise of populism across these countries, paired with growing concerns over the merits and pitfalls of globalisation, has also loomed over the Davos gathering, analysts say. (For more on the US or Brexit, see related articles, this edition)

On the economic front, global economic growth for 2017 and 2018 is expected to hit 3.4 and 3.6 percent, respectively, according to updated projections released by the International Monetary Fund (IMF) earlier this week.

However, the Washington-based institution cautioned, “notable negative risks to activity include a possible shift toward inward-looking policy platforms and protectionism.” The Fund also warned of the adverse implications should China experience a harsher “slowdown,” among other potential challenges.

Xi, Biden, Kerry take stage in Davos

Among the various high-level participants in Davos is Chinese President Xi Jinping. Notably, he is the first sitting Chinese president to address the annual gathering, and gave a keynote speech on Tuesday.

The speech comes just days before US President-elect Donald Trump is due to be inaugurated on Friday 20 January – a change in leadership that has indicated a potentially landmark shift in principles underlying the global economic order, given the incoming official’s comments on topics ranging from the value of European integration to immigration and trade policy.

Speaking during the opening plenary, Xi defended globalisation, arguing that it is not the source of the world’s problems. He also cautioned against protectionism, stating that “no one will emerge as a winner from a trade war.”

“We should recognise that economic globalisation is a double-edged sword. The pitfalls of economic globalisation have been laid bare and we need to take to take these seriously,” he added.

Xi also chronicled some of Beijing’s own paths towards economic reform and liberalisation, while pledging that more such changes are on the way for the Asian economic giant.

“There was a time when China also had doubts about economic globalisation, and was not sure whether it should join the World Trade Organization. But we came to the conclusion that integration into the global economy is a historical trend,” said Xi.

The Chinese president also defended the UN’s Paris Agreement on climate change, which entered into force this past November. While the United States has already ratified the accord, Trump pledged on the campaign trail that he would “cancel” Washington’s participation in the landmark climate deal, though has since suggested that he will have an “open mind” going forward. (See Bridges Special Update, 20 November 2016)

Outgoing US Vice-President Joe Biden and Secretary of State John Kerry both took the stage in Davos this week, with each of them praising the Obama Administration’s achievements and calling for its international legacy on climate change and other issues to be continued.

Biden, for his part, urged other countries to continue playing an active role in ensuring and advocating for the “liberal international order,” while arguing that future US leadership on the international stage will be contingent on doing the same.

“There will be a new president in the US, but the challenges and choices we make as an international community do not hinge exclusively on Washington’s leadership. Whether we reinforce the ties that bind us or they unravel, these choices will be made by every single nation,” said Biden.

Trade ministers’ meeting coming up

With many more events still to come as the WEF meeting continues, one of the key trade items on the docket will be an informal meeting on Friday of various trade ministers, as in previous years. The group is expected to focus on the possible direction of WTO negotiations in the coming months, particularly in light of the upcoming ministerial conference.

The 20 January meeting will be hosted by Johann Schneider-Ammann, who serves as the head of the Swiss Federal Department of Economic Affairs, Education, and Research. WTO Director-General Roberto Azevêdo will also be in attendance.

The ministerial conference marks the global trade body’s highest-level meeting and will be held in Buenos Aires, Argentina, from 11-14 December 2017. Over the past year, WTO members have been engaged in a “process of reflection” in an effort to determine where to take the organisation’s negotiating agenda next, particularly in light of the unresolved issues resulting from the outcomes from the December 2015 ministerial conference in Nairobi, Kenya. (See Bridges Daily Update, 19 December 2015)

A wrap-up of the WEF Annual Meeting, including the informal trade ministers’ gathering, will be included in next week’s edition of Bridges on 26 January.

ICTSD reporting; “In Era of Trump, China’s President Champions Economic Globalization,” THE NEW YORK TIMES, 17 January 2017; “Xi Jinping delivers robust defence of globalisation at Davos,” FINANCIAL TIMES, 17 January 2017; “Xi warns Trump against quitting UN climate deal,” CLIMATE HOME, 17 January 2017.

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