On the second day of the IMF & World Bank Annual Meetings you could start to sense that things were beginning to ramp up, as all the key players arrived in town. The packed schedule provided plenty of discussions and side-events for us to attend, allowing us to take full control of our Global Voices Scholarship experience.
My highlight was attending a seminar led by a panel of experts in foreign trade, where the discussion was robust. The key takeaway for me was the importance of free trade agreements in creating new markets and encouraging movement between boarders.
The panel also noted the risks associated with the ‘protectionist movement’ and warned the audience of the dangers of using trade as a scapegoat for occasions when the economy is experiencing times of disparity or distress. Unfortunately, blaming trade for poor economic outcomes generally leads to the creation of poor economic policy in response.
The panel raised two current issues: the first, that global trade is currently below global Gross Domestic Production (GDP), which can be attributed to the global economy becoming a more serviced-based, digital economy. The second, is that inequalities can be created in many sectors of an economy (namely, income inequality).
When taking these issues into account, the panel proposed two potential ways to tackle these issues. In relation to the service-based digital economy, the panel stressed the need for greater balance and flexibility when attempting to pursue growth and development. In response to the concerns of inequality, it was argued that it should be addressed by each region, in order to achieve true consensus. If that was to fail, then countries could try and erase the issues of inequality separately. Although, the idea of mutual agreement between regional blocks was stressed as the preferred alternative.
On a final note, the panel highlighted that the European Union should listen to the United States and its concerns regarding multilateral reform. As they are an important member State to have on board, these concerns should be considered as a central focus for reform, and not contribute to the destruction of multilateral free-trade agreements.
By: Giuseppe Pacillo, University of South Australia