Davos Meet Wraps Up, As Speakers Outline Approaches to Global Economic Cooperation
The World Economic Forum’s (WEF) Annual Meeting in Davos, Switzerland, wrapped up on Friday 26 January, capping several days of high-level speeches and meetings on the global economy, inclusive growth, sustainability, and multilateralism.
The early days of the Forum saw addresses from Indian Prime Minister Narendra Modi, Canadian Prime Minister Justin Trudeau, German Chancellor Angela Merkel, and French President Emmanuel Macron, among others. (See Bridges Weekly, 25 January 2018)
Their speeches had touched on topics such as trade, multilateralism, climate change, women’s economic empowerment, and international cooperation, which were recurring subjects across this year’s Davos agenda.
In the later days, US President Donald Trump took the stage for his highly-anticipated closing speech, as did other world leaders such as UK Prime Minister Theresa May and Argentine President Mauricio Macri, who is also the current chair of the G20.
The final day of the event also featured an informal meeting of trade ministers from various WTO members, which is held every year on the WEF sidelines and is hosted by Switzerland.
US President: America is “open for business,” warns about “unfair” trade practices
On Friday 26 January, Trump told the audience in the closing plenary that his administration supports free and open trade, so long as it is “fair and reciprocal.”
“The global economy cannot flourish unless all countries follow the rules and are held responsible when they don’t,” he added. The US leader also discussed his “America First” approach to trade and economic policy, while telling Forum participants that “America first does not mean America alone.”
The Forum’s theme, which was on “creating a shared future in a fractured world,” had fuelled discussions over how Trump would broach the subject of international economic cooperation, given some of the trade policy actions that his administration has taken over the past year.
In Davos, Trump discussed his interest in undertaking reforms on both the domestic and international levels, including for the international trading system “so that it promotes broadly-shared prosperity and rewards to those who play by the rules.”
“We cannot have free and open trade if some countries exploit the system at the expense of others,” Trump said, reiterating past talking points on free, fair, and reciprocal trade.
Trump also indicated that he might be willing to consider deepening existing relationships with the Trans-Pacific Partnership (TPP) countries. The deal has now been renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), with the remaining 11 members agreeing last week to suspend certain provisions of the deal – several of which pertained to previous US demands on intellectual property – and move forward with signature and ratification. (See Bridges Weekly, 25 January 2018)
“We have agreements with several of them already,” he said at the time. “We would consider negotiating with the rest, either individually, or perhaps as a group, if it is in all of our interests.”
While some CPTPP members, such as Australia, have suggested that the US could eventually re-join, whether this would be a possibility in practice given Trump’s comments about wanting to reshape the deal to better suit his administration’s priorities are not clear.
The US leader also touted the recent tax reforms approved by Congress and signed into law, along with the ongoing work to cut what he deems are burdensome regulations – saying that such policy changes should fuel greater interest in investing in his country.
“There has never been a better time to hire, to build, to invest and to grow in the United States,” he said. “America is open for business and we are competitive once again.”
Macri outlines G20 agenda
The future of globalisation and multilateralism was a major theme during last week’s meetings in the Swiss alpine city. Argentine President Mauricio Macri spoke on Thursday 25 January at the plenary session, where he outlined the case for global trade and international cooperation, noting his country’s recent history with populism and its negative effects.
“Our citizens understand that if we continue to be isolated from the world, all we will do is make our poverty problems more acute,” he said. Macri also welcomed the prospective agreement between the EU and Mercosur as an “unparalleled opportunity” for both. Argentina is one of Mercosur’s members, with the South American group also including Brazil, Paraguay, and Uruguay. (See Bridges Weekly, 18 January 2018 and related story, this edition)
Macri then devoted much of his speech to describing his country’s intended G20 agenda for 2018, as this year’s summit is scheduled to take place under the Argentine presidency. He urged G20 members to guarantee that “technological change does not increase social exclusion or disintegration.” He said that education would be “at the centre of this debate,” stressing a need for higher investment in skills for the workforce.
Infrastructure development was another theme of his agenda. “It is essential to mobilise private investment to fill the global infrastructure gap,” he said. The final priority is agricultural production. Macri stressed the challenge to guarantee food security and to secure “responsible land management.”
He also noted that this year marks the 10-year anniversary of the first G20 leaders’ summit, noting that unlike 2008, “global economic growth is stable but has not reached everyone, and has undermined the confidence that many had placed in globalisation; we realise every day that we must redouble our efforts.”
Trade ministers reflect on MC11, look to next steps
Another key event on the Davos agenda was the annual WTO “mini-ministerial” meeting, an informal gathering of trade ministers, vice ministers, or senior officials from various countries or country groups. The meeting has often served as an early indicator of the global trade club’s direction in the year ahead.
This trade ministers’ meeting also gave a first opportunity to reflect on the outcomes of the WTO’s Eleventh Ministerial Conference (MC11) in Buenos Aires, Argentina, last December, which saw trade ministers unable to agree on multilateral, negotiated outcomes, while some groups of members announced initiatives on the event sidelines to pursue more structured discussions in new areas. (See Bridges Daily Update, 14 December 2017)
Marie-Gabrielle Ineichen-Fleisch, the Swiss State Secretary for Economic Affairs who served as the meeting’s chairperson, noted that officials expressed “particular concern” about the impasse on selecting new members for the current vacancies on the WTO Appellate Body, the seven-member group that serves as the organisation’s highest court.
Under WTO rules, a minimum of three Appellate Body members must serve on any case and sign off on the final report. Three of those seven seats are now vacant, and a fourth member is due to see his first term expire on 30 September unless it is renewed.
The US has blocked the start of selection processes to fill these slots for several months, including at the most recent meeting of the Dispute Settlement Body on 22 January. (See Bridges Weekly, 2 November 2017 and 30 November 2017)
In addition, WTO Director-General Roberto Azevêdo, who attended the meeting, reflected on the “disappointing” outcome of the December ministerial conference, urging members to follow up on their promises to continue backing the multilateral trading system. “Everyone seems ready to pledge their support for the system. But while political support is essential, it is not sufficient. Words need to be matched by deeds,” he continued.
Trade ministers, meanwhile, discussed “the need to complete the negotiations by 2019” on disciplines on harmful fisheries subsidies, according to the personal concluding remarks by Ineichen-Fleisch. An outcome in this area had eluded officials in Buenos Aires, despite a ramp up in negotiating activity during the months leading up to the ministerial. (See Bridges Daily Update, 14 December 2017)
Other issues also raised included micro, small and medium-sized enterprises (MSMEs), electronic commerce, investment facilitation, services domestic regulation, and trade and gender. Those were areas which saw groups of members express interest at MC11 in advancing discussions, and in cases such as e-commerce actual negotiations for new rules. The initiatives are open to any interested WTO members.
“Proponents of these initiatives indicated that they would pursue the work on these issues in an open and inclusive manner, consistent with the spirit and principles of the WTO,” the chair’s concluding remarks noted.
The statement also referred to long-standing divergences among the membership over how to address traditional negotiating issues, along with debates on the subject of “differentiation” among developing countries and how to ensure and improve the “functioning of the multilateral trading system and the existing WTO framework.”
The meeting included officials from Argentina, Australia, Brazil, Cambodia as coordinator of the Least Developed Countries (LDC) Group, Canada, China, Colombia, Costa Rica, the EU, Guyana as the coordinator of the African, Caribbean and Pacific (ACP) Group, Hong Kong, India, Indonesia, Japan, Kenya, Korea, Mexico, New Zealand, Nigeria, Norway, Pakistan, Russia, Saudi Arabia, Singapore, South Africa as the coordinator of the African Group, Switzerland, Thailand, Turkey, and the US.
It also included among its attendees the WTO Director-General and the current chair of the WTO General Council, Ambassador Xavier Carim of South Africa.
India also confirmed that it would be convening its own WTO “mini-ministerial” on 19-20 March in New Delhi.
ICTSD reporting; “U.S. gives Davos trade meeting no clues on ending WTO crisis,” REUTERS, 26 January 2018; “Davos 2018: Macri says Argentina wants to play ‘significant’ role on world stage,” FINANCIAL TIMES, 25 January 2018; “Trump Tells Davos ‘America First’ Will Benefit the World,” BLOOMBERG, 26 January 2018.