Moderator: Christine Lagarde, Managing Director, IMF
Speakers:
Roberto Azevêdo, Director-General, WTO
Ulrik Knudsen, Permanent Secretary, Ministry of Foreign Affairs, Denmark
Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, EU
Ernesto Zedillo, Director of the Yale Center for the Study of Globalization, Yale University
Panelists shared their experiences with globalization and discussed whether trade has left people behind. They also considered the role, scope, and possible reform of the World Trade Organization (WTO). Speakers agreed that growth in trade and the global integration of value chains has propagated new industries and enabled higher growth and prosperity in most countries, and underscored the importance of standing firm against protectionist measures to preserve the economic gains achieved so far.
Key Points:
People left behind. Speakers agreed that many policy makers and economists have overlooked the need to address the income distribution effect of trade. However, Zedillo noted that trade is often blamed for problems that have domestic solutions and pointed to an avoidance of responsibility by domestic policy makers. Muscovici agreed on the need for domestic policies to address rising inequalities. As a best-practice example for countries reliant on global trade, Knudsen shared the experience of Denmark having flexible labor market policies in combination with a strong social safety net, including educational and retraining opportunities.
Rising trade tensions and WTO reform. Azevêdo highlighted that the aim is to increase the flexibility of agreements and to address rising tensions among members, but that most reform alternatives require multilateral consensus, which currently is missing and is hindering agreement. Knudsen, Muscovici said that until consensus can be reached, there has to be a plurilateral alliance of the willing. Muscovici urged efforts to de-escalate trade tensions through dialogue, and that unilateral measures must be dissuaded. Knudsen encouraged the international community to engage with those within the US administration who are still supportive of the multilateral trading system.
WTO dispute resolution. Zadillo underscored the critical role of the US in blocking the appointment of members to the appellate body. Azevêdo noted that the dispute mechanism continues to function—although at a limited capacity with only three out of seven members appointed. However, the appellate body will be paralyzed when the appointment of one of its members expires in 2019.
Contributor: Marushia Gislén
