Re-Globalization: Tectonic Shifts in the Geo-Economic Landscape
On June 17, 2016, panel session titled ‘Re-Globalization: Tectonic Shifts in the Geo-Economic Landscape’ was held as part of the 20th St. Petersburg International Economic Forum. The session was attended by participants from Russia, the US, Denmark, India, Great Britain, Turkey, and France.
Discussing the processes of globalization and re-globalization, the speakers address globalization’s future, the influence escalating geopolitical situation has on globalization, and the future of integration alliances and the WTO. CNBC anchor Geoff Cutmore moderated the discussion.
Russia’s First Deputy Prime Minister Igor Shuvalov reminded his audience that the Doha round of the WTO negotiations proved fruitless, despite all the countries’ desire to arrive at a compromise. What emerged instead was the as-yet non-ratified Trans-Pacific Partnership Agreement. Simultaneously, the US intends to sign an agreement with the EU creating the Transatlantic Trade and Investment Partnership.
“And, as you can easily see, Russia and China will soon put forward a proposal on creating a comprehensive Eurasian partnership on the Eurasian continent. Yet unlike the other two partnerships led by the US, the Eurasian one will be based on the WTO principles and will be open for accession,” Mr. Shuvalov stated.
At the same time, Russia does not claim the leading role in the Eurasian partnership, while the US stakes its claim for leadership in both transoceanic unions, Deputy Prime Minister said. Moreover, the Eurasian Partnership will focus on economy and will exclude elements of politics.
Christian Friis Bach, Executive Secretary of the UN Economic Commission for Europe, doubted any new economic unions were necessary. “The WTO handled its tasks perfectly well. Today, it’s a balanced and working system, an instrument we could use to strengthen and stabilize the global economy,” he said.
Christopher Pissarides, Nobel Prize winner in economics, Professor at the London School of Economics, also spoke on economic unions. The expert believes that what crisis phenomena signify is not the decreasing role of international institutions, but certain deficiencies that had been inherent in these institutions from the outset.
“Given the current geopolitical situation, the thing of primary importance is achieving consensus. As soon as they have been achieved, it will give rise to negotiations that will span the entire world. Global economy is overcoming recession and begins to think about further integration, about correcting mistakes that have been made. It is clear we have not yet found a solution, but we are moving in that direction,’ Mr. Pissarides said.
Andrey Kostin, President and Chairman of the Management Board of VTB Bank, said that the policy of sanctions undermines the basics of the global financial system. Due to restrictions imposed on Russia, the country’s leaders are forced to create Russia’s national payment system, to actively promote mutual payments in national currencies and abolish the dollar.
“We will no longer be able to trust the global system because it is too susceptible to geopolitical risks. We have to create an alternative, and that leads to processes that are the opposite of globalization,” Mr. Kostin commented.
Christian Friis Bach responded. “Recently, we’ve been receiving signals about relations gradually being restored, because we need economic integration. We need to begin negotiating our points of view and the ways we could achieve integration,” Mr. Bach said.
