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.”

 

WHAT ELSE IS GOING ON?

DATA BATTLE Is data the new oil? Not for Margrethe Vestager, the Executive Vice-President of the European Commission, who thinks data, unlike the black gold, is a renewable resource that can be pooled and shared across borders. “This is a global matter because we are also in a geopolitical context where we have both systemic rivalry, economic competition, but also the need for partnerships,” Vestager told Méabh McMahon during the State of the Union 2021. Watch the full conversation.

NEXT GEN EU Our Brussels bureau continues the explainer series on the recovery and resilience plans that EU countries are submitting to the European Commission for internal evaluation. This week we look into how disagreements inside Poland's ruling coalition led to a €36 billion package to digitalise and green the country and how Italy and PM Mario Draghi are aiming to invest €191.5 billion of EU funds to break a two-decades-long cycle of stagnation.

ACCESSION TALKS Last Thursday, Olivér Várhelyi, the EU Commissioner for enlargement, surprised many when he told Euronews that decoupling the EU accession processes of Albania and North Macedonia “might be an option” if Bulgaria continues to oppose the latter’s entrance in the bloc. Our reporter Efi Koutsokosta asked Zoran Zaev, North Macedonia’s PM, if he would countenance such a move. “It’s not possible to have decoupling,” he replied. “Our Macedonian language and Macedonian identity are not negotiable.” Meanwhile, Albania’s PM Edi Rama sat down with Giorgia Orlandi and said “Europe is a religion and nobody can betray this religion in Albania.”

ROAD TO NOWHERE Montenegro is building its first-ever motorway, comprising 40 bridges and 90 tunnels. The grand project has been hit by corruption allegations, environmental tragedies and construction delays: today, out of the planned 170 kilometres, just 40 have been completed. The motorway, one of the most expensive in the world, is being financed by a whopping $1 billion loan from China, which the small Balkan country is already struggling to repay. In the latest episode of Unreported Europe, Hans von der Brelie takes us through Montenegro's road to nowhere.

CANCEL CULTURE While the current trend in Europe is to increase scrutiny over social media content, the Czech Republic is going in the opposite direction. Czech lawmakers have passed the first reading of a legal amendment that would criminalise social media firms if they ban content that is deemed to be in the public interest. The law is seen as an attempt by the country’s right-wing to fight back against the so-called cancel culture seen elsewhere in Europe, David Hutt reports.

‘THIS ISN’T DANISH’ Denmark has recently made international headlines after the left-wing government classified Damascus, the capital of war-torn Syria, a safe place and asked refugees to return home. The decision has been widely criticised by the European Commission, NGOs and experts. Jens Renner spoke with some of the Syrian refugees based in Denmark who now face the prospect of going back to the very place they escaped from.

ECO BEAUTY If last week we brought you a list of the most hideous urban constructions, this week we turn things around with the 10 most extraordinary eco-friendly buildings in the world, courtesy of Euronews Green. First up: the Museum of Tomorrow in Rio de Janeiro, Brazil, which features moving solar panels and a natural air conditioning system.

 
 
 
IT'S IN THE NUMBERS

The European Union's economy is set to grow faster than initially expected in 2021 and 2022 thanks to the accelerating pace of vaccinations and the gradual easing of coronavirus restrictions. These conditions have encouraged the European Commission to revise upwards its economic forecast: this year the EU's economy will grow by 4.2 percent while the eurozone will expand by 4.3 percent. For 2022, the Commission predicts a 4.4 percent growth rate for both.

On the other hand, the debt-to-GDP ratio inside the euro area will rise to 102 percent, the highest level ever recorded, as a result of the unprecedented levels of fiscal support.
 
EDITOR'S CHOICE

Is Michel Barnier after the Élysée?

 
 
Michel Barnier rose to global prominence as the EU’s chief negotiator on Brexit. During four long years of negotiations with the United Kingdom, Barnier managed to maintain the unity of the bloc’s 27 member states and drove a hard bargain while shuttling across the English Channel. His efforts earned him the respect across the continent and his name was even suggested for one of the EU top jobs that were up for grabs after the 2019 European elections. Unbothered by the attention, Barnier continued to work on his task until a landmark trade deal was signed on Christmas Eve. Having sealed the agreement, the official retired as negotiator and went back to his native France. “I will now devote all my energy to my country,” he said upon return. His homecoming immediately set the alarms of political observers, who see in him a potential rival to Emmanuel Macron. Many now wonder: Does Michel Barnier want to be France’s next president?
 
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