G20 experts: Reform of economy and trading systems key for prosperity in post-pandemic era

Global trade and economic policy experts called for support and reform of global trade systems and governing institutions to ensure economic and social prosperity at the 4th annual Global Solutions Summit.

BERLIN — Global trade and economic policy experts, including Gabriel Felbermayr of the Kiel Institute for the World Economy, the Paris Peace Forums’ Pascal Lamy, Susan Aaronson of CIGI and German Minister for the Economy Peter Altmaier, called for support and reform of global trade systems and governing institutions to ensure economic and social prosperity at the 4th annual Global Solutions Summit.

“We must protect our rules-based trading system from backlash due to the coronavirus,” said Minister Altmaier in his keynote speech. The 2020 Global Solutions Summit, the annual gathering of high-ranking G20 representatives, policymakers, researchers and business leaders is being held digitally due to the COVID-19 pandemic. “It is unrealistic to assume that had trade barriers been in place, we would have been better prepared,” Altmaier added, saying global supply chains are vital but require a readjustment to ensure more resilience.

PIIE’s Anabel Gonzalez further emphasized the role of trade policy in fighting the coronavirus by “help[ing] us recover and rebuild a system in the future that is more resilient.” She outlined the importance of eliminating tariffs on coronavirus-related products and the need to prohibit export bans and restrictions that weaken supply chains and close trade links on critically-needed items.

A major challenge facing such coordinated efforts is a “lack of commitment on protectionism,” said Jean Pisani-Ferry of the European University Institute, warning that an increase in protectionist measures, especially from large economies China and the United States would be detrimental, especially to poorer countries.

Panelists of the Global Table: What can the G20 do to stabilize the world economy in times of the COVID-19 pandemic? agreed that poor leadership and growing multipolarity of the global system stand to impede efforts to pave the way toward a more human-centered economy and emphasized the importance of a rules-based trading system supported by governing institutions, like the World Trade Organization.

In his keynote, Altmaier urged for a redoubling of efforts to strengthen and reform the institution.

In the Global Table: What can the G20 do to ensure a human centered trading system that benefits all countries?, panelists further examined the need to reform the WTO and other institutions. IfW’s Felbermayr argued “transparency, continuity and predictability” be the key focus, while Aaronson emphasized the need to build trust: “These institutions won’t function without the trust of their constituents.”

Looking ahead to a post-pandemic era, Irene Natividad of the Global Summit of Women warned of a new normal that stands to further burden women and minorities: “Old inequities will remain and become exacerbated in efforts to get the economy and trade going.”

“The COVID-19 pandemic shows us the importance of recognizing the true purpose of all our businesses and economies, our political parties and governments, our local civic associations and our international organizations, our conventions and ideologies, and all our other systems: namely, to serve human needs and purposes,” said Dennis J. Snower, president of the Global Solutions Initiative.

In a similar thread, David Sloan Wilson of Binghamton University argued that the pandemic revealed fault lines that existed before the crisis that result from globalism. “Globalism in its current form has led to inequities we are very familiar with. It is understandable why people would reject that form of globalism,” Wilson said, arguing it is time to rethink the foundations of macroeconomic policy.

Lamy, on the other hand, argued the system of capitalism and not globalism is the problem: “We have to reform global capitalism in order to increase more room for public goods, such as health, environment and others.”

This proposal was also addressed by Harvard Economist Dani Rodrik, who argued that governance regimes needn’t be centered on finance and trade but rather the provision of global public goods. — SG