Spotlight on Global Economy as Davos Approaches, Trade Ministers to Consider WTO Next Steps
A host of officials, including several world leaders, are preparing to descend on the Swiss alpine town of Davos next week for four days of high-level discussions which are expected to touch on questions regarding how to improve global cooperation on issues such as the economy, trade, and climate change. The event will also feature an informal meeting of trade ministers from various WTO members, which could serve as an early opportunity for reflecting on the results of the Buenos Aires ministerial conference last December.
The 23-26 January Annual Meeting of the World Economic Forum (WEF) is slated to bring together leaders from industry and business, policymakers from intergovernmental organisations and from various different countries and country groups, and representatives from academia, think tanks, and the media.
This year’s theme is “Creating a Shared Future in a Fractured World,” with the WEF description of the event noting that “geostrategic fissures have re-emerged on multiple fronts with wide-ranging political, economic, and social consequences.”
“Governments, business, civil society cannot address alone the manifold challenges we have on the global agenda. We need collaborative efforts. Davos has become the annual, most representative high-level multi-stakeholder summit,” said Klaus Schwab, WEF Founder and Executive Chairman, at a pre-meeting press conference on 16 January.
“We are living at an inflection point with many opportunities, great opportunities, but also confronting, like never before, perils. There is today a real danger of a collapse of our global systems. The change is not just happening. It is in our hands to improve the state of the world,” he added.
New forecasts released by the World Bank last week have already suggested that global economic growth could hit 3.1 percent this year, crediting this improvement partly to trade and investment being on the rebound. However, the organisation also warned that this is “largely seen as a short-term upswing” and noted the potential risks ahead that could have damaging implications for poverty and inequality.
Leaders’ list growing
At last year’s event, Chinese President Xi Jinping delivered a speech defending globalisation which captured headlines around the world, and led many analysts to question whether Beijing is planning to take a greater leadership role on the global economic stage, particularly as the US began stepping back in order to focus on the new administration’s “America First” agenda. (See Bridges Weekly, 19 January 2017)
Indian Prime Minister Narendra Modi is due to give this year’s keynote in the WEF plenary, which will reportedly focus on the development of a “new, young, and innovative India” and address wider economic concerns, according to the Economic Times.
Leaders from dozens of countries are expected in Davos, including Argentina, Brazil, Canada, Colombia, France, Israel, Italy, and the United Kingdom, among various others. High-level officials are also attending from China, Nigeria, South Africa, and Switzerland, to name a few. European Commission President Jean-Claude Juncker will also attend, according to a list of participants released by the WEF.
Much of the G7 and G20 coalitions will also be represented at Davos, and Schwab told reporters this week that this could see some discussions on how both groups address their upcoming agendas under their respective presidencies. This year’s G7 will be hosted by Canada, while the G20 is under the presidency of Argentina.
US President Donald Trump is due to give a closing speech at Davos, according to the WEF. His decision to go to the WEF Annual Meeting was announced by White House Press Secretary Sarah Huckabee Sanders earlier this month, who told reporters that Trump “welcomes the opportunity to go there and advance his America First agenda with world leaders.”
“The President is still 100 percent focused and committed to promoting policies that promote strength for American businesses and the American worker. And that’s going to be the same whether he’s in the US or any other place,” she said in response to questions on whether Trump’s move to attend Davos was showing a shift in tactic or viewpoint, given previous reticence to attend a meeting that was deemed a gathering of high-powered international elites.
Trump will be joined in Davos by various cabinet-level officials, including US Trade Representative Robert Lighthizer and Secretary of State Rex Tillerson, with the delegation itself led by Treasury Secretary Steven Mnuchin.
Given the critical challenges facing the future of global cooperation on trade, climate change, and other subjects, the WEF’s Schwab told reporters this week that “in this context, it is absolutely essential to have President Trump with us” for the Davos discussions.
Trade ministers’ meeting
The Davos meet has also traditionally served as an occasion for trade ministers from various countries to convene and send political signals over where discussions at the WTO may go in the coming year. These meetings are convened by Switzerland, as host country.
The gathering comes just one month after trade ministers concluded their eleventh WTO ministerial conference in Buenos Aires, Argentina, which saw limited substantive outcomes at the multilateral level and many questions raised regarding the organisation’s future role on global trade and investment governance.
In Buenos Aires, no deal was reached to discipline harmful fisheries subsidies, as originally pushed for, with ministers instead agreeing to work towards adopting such an accord in two years. They did not endorse any work programme on agriculture, nor did they reach consensus on any outcomes from the WTO’s development talks. (See Bridges Daily Update, 14 December 2017)
The next steps for negotiations at the multilateral level remain unclear, and how trade ministers may address the future of these outstanding issues, as well as the differences which led to the result in Buenos Aires, will be a key question heading into Davos.
While an informal meeting on fisheries is scheduled at the WTO’s headquarters later this month, the timing of other negotiating meetings is not confirmed. The WTO’s General Council is currently set to meet in early March.
Notably, the WTO ministerial did see various groups of members agree to launch initiatives on e-commerce, investment facilitation, and micro, small, and medium-sized enterprises (MSMEs), which would be open to any interested parties. Regarding e-commerce, this effort is being pursued with the goal of launching formal negotiations. On investment facilitation, participants are aiming to hold “structured discussions with the aim of developing a multilateral framework on investment facilitation.”
Officials from interested countries are due to convene their first meetings on these subjects before the end of this quarter. Many of these countries will be represented at the ministers’ and potentially leaders’ level throughout next week, and will have trade ministers present at the informal ministers’ meeting.
ICTSD reporting; “PM Narendra Modi to encapsulate making of new, innovative India in Davos,” ECONOMIC TIMES, 14 January 2018; “Commerce sends Section 232 steel report to Trump,” POLITICO MORNING TRADE, 12 January 2018.