The movement of goods and people has increased significantly since the end of World War II. The emergence of populist political forces in the West is reversing the benefits of globalization. The Avenir Suisse Think Tank Summit 2017 was launched by Tibère Adler, Director of Avenir Suisse’s French-speaking branch. The Summit offered think-tankers from the USA, Great Britain, Belgium, Germany, France and Switzerland the opportunity to analyze the changing geopolitical framework. Here are some key points from the presenters:
Peter Grünenfelder (Director of Avenir Suisse):
“The current international political developments pose a major challenge for liberal democracies and economies. Switzerland would be particularly affected by a new protectionist era. … Globalization will continue to be a major trend, in other countries, and on other continents.”
Richard Baldwin (Professor of International Economics, Graduate Institute of Geneva): “The ‘new’ globalization, as we have seen it in the last twenty years, was more about international knowledge transfer than trade flows. Import duties are a trade-policy from a bygone era. In high-wage economies of the Western world, they will not create new jobs in large numbers – at most for robots.”
Kristian Niemetz (Institute of Economic Affairs, IEA London): “The majority of the Brexit supporters were not against free trade, but against deeper political integration with the EU. After the implementation of Article 50, Great Britain will only have two years for the signing of new trade treaties with the EU. A contractual vacuum after the end of this term would be equivalent to an ‘Ultra Hard Brexit’ with great uncertainty for both sides.”
Galina Kolev (Economist, Cologne Institute for Economic Research): “The German export industry has focused on the production of high-value goods. Currently, its biggest problem is the general uncertainty in many parts of the world, which has a negative impact on investment dynamics. … In principle, a ‘hard Brexit’ would be a lesser threat for the German economy than a soft Brexit, since the former would most likely strengthen cohesion within the EU.”
Frances G. Burwell (Distinguished Fellow Atlantic Council, Washington D.C.): “Donald Trump has reintroduced mercantilism to US politics. With of the new US president’s critical attitude towards multilateralism in international trade agreements, difficulties with the EU and the WTO are virtually pre-programmed. In general, Trump’s ideological focus on trade is evidence of a low understanding of globalized economic processes.”
Patrick Dümmler (Senior Fellow Avenir Suisse, Research Coordinator of Open Switzerland): “Switzerland should continue to rely on its proven strategy of openness, intensifying existing free trade agreements and concluding new ones. This would reduce the high administrative costs faced by many companies.”
