The Sustainability of the International Trade System and the Future of Globalization
Trade wars are a threat to the global economy
I am fearful that we are in for a long standoff between China and the United States. And I think that there is a risk that we end up with the two biggest economies operating in parallel tracks in regards, and not in a cooperative fashion. And the world economy will suffer as a result of that — James McCormack, Global Head of Sovereign and Supranational Ratings Group, Fitch Ratings .
From my perspective, the trade conflict that we are now discussing is only trade in form, but is purely economic in substance, and covers many more areas than trade. President Trump always refers to a big deficit in trade with China. <...> China is a very important player in intermediate trade. <...> Really the trade deficit is not the issue. <...> From my perspective I see it as a bigger conflict between two very different economic systems — Timur Maksimov, Deputy Minister of Economic Development of the Russian Federation.
I do think the sticking point [between China and the US] is around intellectual property — Carmine Di Sibio, Global Chairman and Chief Executive Officer-elect, EY.
The global trade system is unfair
The biggest challenge in global trade development is growing tension in the economic and political system globally. This is because of different development for different groups of people. We see different speeds of growth in emerging economies and developed economies. We see that a lot of people feel excluded from economic growth, that they do not benefit from it — Alexey Mordashov, Chairman of the Board of Directors, Severstal.
There is a high degree of political uncertainty
The World Bank has flagged up that their unpredictability around policy index is at an all-time high — Geoff Cutmore, Anchor, CNBC.
Imperfect mechanisms for regulating global trade
There has been a crisis in the WTO discussions since the Doha Round in 2001. What was delivered by the WTO was just a trade-facilitation agreement, nothing else, despite all attempts to facilitate the trade agenda. We probably need to come back to the negotiation table. I do not know whether Twitter is the best tool to facilitate this trade war which we are observing now between major economies, but we definitely have to invent some formats to discuss it in an open way — Alexey Mordashov, Chairman of the Board of Directors, Severstal.
The fallout from the global financial crisis
There is one other factor which I should probably raise, and that is the issue of debt left over from the financial crisis, and the fact that maybe there are some lights flashing on the dashboard telling us that we are at the end of a business cycle, and there may be natural reasons why we get trade disputes and slower global growth — Geoff Cutmore, Anchor, CNBC.
The development of universally accepted rules
We need a set of rules that create security and confidence for everybody — Timur Maksimov, Deputy Minister of Economic Development of the Russian Federation.
What is important for the steel industry globally and for all countries is to preserve a level playing field. That should be our focus, and to avoid subsidies — Alexey Mordashov, Chairman of the Board of Directors, Severstal.
The development of mechanisms for multilateral cooperation
Multilateral trade agreements – if they are fair – work very well. I think now the US wishes they were part of the TPP, because think about it if they were – the leverage would now be a little bit different in the China negotiation — Carmine Di Sibio, Global Chairman and Chief Executive Officer-elect, EY.
I expect more regional coalitions, which might potentially lead to a big split in different systems — Alexey Mordashov, Chairman of the Board of Directors, Severstal.
Strengthening national self-sufficiency
The sanctions against Russia were primarily financial, so what we did was we built a stable macro-framework where we do not need external financing from the rest of the world, and as for where we are going, that is fine with us — Timur Maksimov, Deputy Minister of Economic Development of the Russian Federation.
Fostering stable growth within countries
In the meantime, while we expect the resolution of this trade conflict [between China and the US, – Ed.], we should focus more internally, and we should do more to ensure more equality, and look at how the wealth is distributed among different layers of society — Timur Maksimov, Deputy Minister of Economic Development of the Russian Federation.
The answer in my view in the long term is training and education. That is really the answer on how you close the equality gap — Carmine Di Sibio, Global Chairman and Chief Executive Officer-elect, EY.
The material was prepared by the Russian news agency TASS