By Euronews’ Brussels bureau “Multilateralism has taken a lot of knocks.” That’s the conclusion that...
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How to reset globalisation

By Euronews’ Brussels bureau

“Multilateralism has taken a lot of knocks.”

That’s the conclusion that Ngozi Okonjo-Iweala, the new Director General of the World Trade Organization (WTO), draws from all the twists and turns of the last decade.

“Globalisation has lifted hundreds of millions of people out of poverty, but it's also left some people behind,” she told our business editor Sasha Vakulina during the State of the Union 2021, a high-profile event in Florence that featured more than 150 speakers.

It is fair to say that international trade is not what it used to be. The fallout from the 2008 financial crisis and the rise of populism have brought to the forefront ideas of economic nationalism and protectionism that directly defy the main tenets of globalisation promoted in the 1990s and early 2000s.

In Washington, the Biden administration is asking citizens to “Buy American” to help kickstart the economy. In Brussels, plans are drafted to enhance the EU’s “strategic autonomy” and reduce import dependencies. Each time a new trade deal is announced, detractors immediately appear. The European Commission is visibly struggling to advance both the EU-Mercosur trade deal and the EU-China Agreement on Investment, two texts that were once described as “landmarks”.

But despite the winds of change, Okonjo-Iweala still has faith in trade.

“The new multilateralism must be managed and supported in such a way that it can contribute to tackle the problems that globalisation did not deal with, and even strengthen the solidarity and cooperation that we need to solve problems of the global commons,” she told Sasha.

“People are talking about protectionism, deglobalisation, globalisation not working. I prefer to think of it as re-globalisation. The way that globalisation is working is being reorganised.”

Any attempt to reset the system is certain to be influenced by the COVID-19 pandemic, a seismic phenomenon that plunged the global economy into the worst crisis since World War II and increased calls for reshoring and export restrictions. The hoarding of vaccines by rich countries exemplifies how malleable trade rules can be when national interests are at stake.

“There are many lessons that emanate from the crisis. I think some of the biggest ones are the interconnectedness of the world, just how unprepared the world was for this crisis, whether it's rich countries or poor ones.”

Okonjo-Iweala is well aware that much of the success of this revamped globalisation will depend on her own organisation’s ability to deliver. WTO countries have been trying to lower trade barriers for almost 20 years as part of the Doha Development Round, which began in November 2001. Disagreements between developed and developing countries have hindered progress and Doha’s conclusion remains an abstract aspiration.

“The fact that the WTO doesn't get results is dysfunctional. That has to change,” the director admits.

The European Union could play a decisive role in this regard, she adds, by helping the WTO finish the Doha round, reform the dispute settlement mechanism (paralysed since the Trump administration) and devise international rules for digital trade and e-commerce. The EU and the WTO could also work together to use trade as a way to green the economy.

“What the European Union does is critically important for the WTO and for the world trading system,” Okonjo-Iweala says.

One of her first major tasks will be coordinating the negotiations to lift intellectual property rights of coronavirus vaccines, a remarkable proposal made by the White House last week that has so far received mixed reviews in Europe. While the outcome of these discussions is still unclear (Germany has already said “nein”), the fact that they’re happening proves that globalisation might be indeed heading towards a new phase.

For Okonjo-Iweala, the ultimate goal of this global reset is clear: “Trade is a means to an end. The end is to develop and improve people's lives. It's all about people.”



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