Trésor-Info - Publications de la direction générale du Trésor - TRADE

Geopolitical Fragmentation of Trade

2025-11-06T00:00:00+01:00

At a time of heightened geopolitical tensions, economic exchanges between nations are increasingly governed by a bloc-based approach. We are witnessing a reorganisation of trade between groups of geopolitically aligned countries, i.e. a geopolitical fragmentation of trade.

According to our estimates covering a period preceding the second Trump administration, the fragmentation between blocs of military allies is more marked than between diplomatically aligned countries or countries maintaining close economic cooperation. This fragmentation began with the annexation of Crimea in 2014 and accelerated with Russia’s invasion of Ukraine in 2022.

Since 2010, the military allies of the United States have increased their imports from other US-allied countries by around 40%, while imports from Russia’s military allies have decreased by 80% compared with trade between or with countries not belonging to either of these blocs (see Chart opposite).

Fragmentation can stem from strategies that address legitimate concerns, such as reducing unwanted dependencies. However, trade fragmentation would be less economically efficient than the free allocation of resources.

Similarly, reduced trade diversification could undermine the resilience of our economies. Lastly, fragmentation could hamper our ability to tackle global challenges such as the green transition and development.

World Economic Outlook in Autumn 2024: Monetary Easing and Geopolitical Tensions

2024-09-19T00:00:00+02:00

Global growth is expected to reach 3.2% in 2024, a similar rate to 2023, before increasing to 3.4% in 2025. This outlook is a slight improvement on forecasts released in spring 2024. In 2025, global activity is anticipated to grow at the same pace as in the second half of the 2010s, supported by monetary policy easing and strong performances in emerging countries.

Growth is forecast to remain uneven across advanced economies. In 2024, activity is expected to be particularly robust in the United States and Spain, more moderate in Italy and the United Kingdom and flat in Germany. These advanced economies are experiencing different levels of growth due to disparities in consumption patterns and export performance. Growth rates are expected to converge in 2025, with an acceleration of activity in the euro area and a slight slowdown in the United States, primarily due to a weakening of household consumption.

Although still strong, activity in the major emerging economies – China, India, Brazil and Turkey – is projected to slow compared with 2023, particularly in China where structural imbalances are likely to continue to weigh on activity.

Following a contraction in 2023, global trade is anticipated to recover in 2024 and accelerate in 2025. Global trade is expected to be driven primarily by emerging economies and the United States, resulting in slower growth in global demand for French exports (see Chart).

Global activity could nonetheless be impacted by an escalation of geopolitical tensions, which are the main risks surrounding this scenario.

The Impact of Brexit on the United Kingdom's Economy

2024-04-30T00:00:00+02:00

The United Kingdom’s withdrawal from the European Union (EU), which was voted for by referendum in June 2016, became effective on 31 January 2020. After a transition period, the UK left the single market on 1 January 2021. Brexit has had an impact on the United Kingdom’s economy and has dampened its growth potential through three main channels.

Firstly, owing to the reintroduction of non-tariff barriers, the UK’s trade in goods with the EU fell in 2021 to a greater extent than trade with non-EU countries, although the impact only seems to have been temporary. On the other hand, trade in services with the EU has been more lastingly affected, especially for financial and transportation services.

Secondly, business investment in most sectors has stalled since the 2016 referendum following a period of strong growth. Due to the effects of both Brexit and the COVID-19 pandemic, in Q2 2023, it was more than 20% below the level that it would have reached had it maintained the momentum seen between Q1 2010 and Q2 2016 (see Chart).

Lastly, restrictions on the employment of EU nationals have reduced the labour supply at a time when the UK’s labour market is under great strain. Employment of EU workers has levelled off since 2016 whereas it had rocketed during the years prior to the referendum. This has forced British employers to have greater recourse to non-European labour.

How Dependent Are Emerging Market Economies on China's Growth?

2024-01-30T00:00:00+01:00

China is now the top export market for many emerging countries, as its average share of exports from these economies rose from 4% in 2002 to 12% in 2022. Additionally, the growth of outbound Chinese tourism has created new forms of dependence, especially for certain Asian countries.

Emerging economies are also financially dependent on China through commercial and sovereign loans. The main recipient sectors (energy, mining and transport) and regions (Asia and Africa for almost 60% of the loans) are in line with China’s strategic priorities, particularly in terms of its supply needs. China’s total outward foreign direct investment (FDI) flows remain low in relation to loans, but Chinese FDI accounts for a significant share of the FDI stock of several countries (Pakistan, Angola, South Africa and Thailand).

China’s slower medium-term growth – which the IMF has projected will fall to 4% over the next few years, down from 8% in the 2010s – will affect emerging economies through two primary channels. On the trade side, slower Chinese growth will result in (i) a decline in domestic demand and imports, and (ii) price and volume effects on commodities. On the finance side, China’s slowdown will play a role in the continued push, which began in 2015, to reduce the flow of its financing (loans and FDI) to emerging economies (see Chart), and in the country’s geographic and sectoral refocusing, as already reflected in the shift in the official stance regarding the Belt and Road Initiative (BRI). Asian countries and commodity-exporting countries are expected to be the most vulnerable to China’s structural slowdown due to their close trade ties with Beijing.

What Factors Could Drive the Reorganisation of Global Value Chains?

2023-07-27T00:00:00+02:00

After an exceptional expansion in trade in the 1990s and 2000s, globalisation experienced a slowdown between the financial crisis of 2008 and the COVID-19 pandemic, largely due to the rebalancing of China’s economic growth (see Chart).

The pandemic led to tensions, or even shortages, in certain value chains, revealing supply vulnerabilities in some countries. These disruptions raise the question of how resilient the global production organisation is and if globalisation is built to last. After the shock from the pandemic in 2020, the scale of global trade has exceeded its 2019 level, and the distance travelled by goods is as large as before.

However, the structure of trade has evolved. Exports of goods returned to their pre-pandemic level by December 2020, compared to September 2021 for services. The quick recovery in trade particularly benefitted China, which increased its trade surplus due to its exports.

Changes in the organisation of value chains in the years to come will depend on several factors. Geopolitical tensions and Russia’s invasion of Ukraine have led to trade diversion, which could increase in the context of new sanctions and businesses seeking out more secure ways to conduct trade. Climate change could affect certain production lines, particularly due to a decrease in agricultural yields and the relocation of agricultural production. Governments could encourage or even require businesses to adjust their value chains to reinforce their resilience and sustainability, or respond with protectionist measures.

Owing to these different factors, some particularly concentrated value chains are showing initial signs of diversification. Manufacturers of semiconductors, which have mostly been based in Korea and Taiwan up to now, have announced large-scale investments in production capacity in Japan, the United States and Europe.

Westminster & City News du 9 au 15 Décembre 2022

2022-12-16T00:00:00+01:00

Fait marquant : Le taux directeur de la banque centrale britannique passe à 3,5%.

Comme attendu par les marchés et les prévisionnistes, la Banque d'Angleterre a annoncé le jeudi 15 décembre le relèvement de son taux directeur de 50 points de base (pb) le fixant à 3,50% par 6 votes contre 3 (contre 0,1% en décembre 2021). Les membres du Comité de Politique Monétaire estiment que le marché du travail est resté tendu et que les signes de tensions sur les prix domestiques et les salaires pourraient suggérer une plus grande persistance de l'inflation, ce qui justifierait une nouvelle réaction énergique de la politique monétaire en 2023.

Actualité macro-économique

Le PIB d’octobre rebondit de 0,5% sur un mois, après une contraction de 0,6% en septembre
En novembre, l’inflation (CPI) atteint 10,7% sur douze mois, soit un niveau légèrement moins élevé que celui d’octobre à 11,1%
Selon l’ONS, le taux d’emploi a augmenté de 0,2pp en octobre par rapport au trimestre précédent, s’établissant à 75,6%, tandis que le taux de chômage a cru de 0,1 pp, à 3,7%

Actualité commerciale

En visite officielle à New Delhi, la ministre au commerce britannique et son homologue indien entament le sixième cycle de négociations commerciales entre les deux pays
Plusieurs organisations professionnelles estiment que l’introduction d’un registre britannique « des influences étrangères » pourrait nuire à l’environnement des affaires
Le Royaume-Uni et l’Etat de Caroline du Sud signent un protocole d’accord (MoU) en vue de renforcer leurs relations économiques

Actualité financière

La FCA lance une consultation sur le cadre réglementaire des dashboards des fonds de pensions
Le Royaume-Uni et le Chili ont signé un Memorandum of Understanding portant sur la coopération dans les services financiers
Le rapport sur la stabilité financière de la Banque d’Angleterre (BoE) de décembre 2022 a été publié
Microsoft et la bourse de Londres (LSEG) lancent un partenariat sur 10 ans axé sur le partage de solutions en matière de données et d'analyse et d'infrastructure de cloud
La BoE consulte sur le cadre réglementaire encadrant l’accès au cash pour les Britanniques
UK Finance, organisme de représentation du secteur financier britannique, a publié ses prévisions 2022-2023 concernant le marché immobilier britannique

Westminster & City News du 23 au 30 Septembre 2022

2022-09-30T00:00:00+02:00

Actualité macro-économique

Dans un communiqué, le FMI a indiqué suivre de près les récents développements économiques au Royaume-Uni

Actualité commerciale

Le parti travailliste plaide pour accroitre la dimension régionale au sein des négociations commerciales
La ministre au commerce international, Kemi Badenoch, promeut l’attractivité britannique lors de sa première visite aux Etats-Unis
Dans une interview au FT, le Maire de la City of London, Vincent Keaveni souligne l’importance d’un accord ambitieux commercial avec l’Inde

Actualité financière

Le gouvernement a publié son projet de loi sur la criminalité économique et la transparence des entreprises
La Banque d’Angleterre (BoE) et le Trésor dévoilent les détails du dispositif pour faire face aux problèmes de liquidité du secteur de l’énergie
Le gouvernement britannique a publié un rapport sur sa stratégie d’allocation des financements publics verts
La BoE a dévoilé les éléments constitutifs de la prochaine session de stress-test des grandes banques britanniques
Les institutions financières britanniques réduisent leur offre de prêts à taux fixes dans un contexte de volatilité des taux

[PFUE] Retour sur le Conseil du commerce et des technologies, organisé à Saclay le 16 mai

2022-05-18T00:00:00+02:00

La France a accueilli, le 16 mai à l’ENS Paris-Saclay, la première réunion en Europe du Conseil du commerce et des technologies (CCT). Organisée dans le cadre de la présidence française du conseil de l'Union européenne, cette rencontre réunissait la Commission européenne et les Etats-Unis. Elle illustre la coopération transatlantique à l’œuvre pour relever les défis mondiaux en matière de commerce et de technologie, conformément à nos engagements communs en faveur de la démocratie, de la liberté et des droits de l'homme.

En la présence des vice-présidents exécutifs de la Commission européenne Margrethe Vestager et Valdis Dombrovskis, du Commissaire européen Thierry Breton, de la secrétaire au commerce Gina Raimondo, de la représentante américaine au commerce Katherine Tai et du sous-secrétaire d’Etat Jose Fernandez, le Conseil du commerce et des technologies (CCT) a permis d’aborder la question de la réponse transatlantique à l’agression de l’Ukraine par la Russie, la lutte contre la désinformation ou encore l’amélioration de la résilience et de la durabilité de nos chaînes de valeur.

Après une matinée de réunions de travail, les participants ont pris part à un échange, avec des membres de la société civile et du monde de l’entreprise afin de recueillir leurs attentes et échanger sur les priorités qui devraient guider les prochaines réunions du conseil du commerce et des technologies. Cet échange a été ouvert par Sandrine Gaudin, secrétaire générale des affaires européennes.

Vidéo : session d'échanges avec la société civile

La journée s’est terminée par une visite du centre de nanosciences et de nanotechnologies, laboratoire de l’Université Paris-Saclay contractualisé avec le CNRS, pour mettre en valeur les coopérations européennes et américaines concrètes pour trouver des réponses aux défis d’aujourd’hui et de demain.

La direction générale du Trésor était activement mobilisée dans la préparation et l’organisation de cette journée.

Mis en place en juin 2021, le CCT est une plateforme de discussion entre les États-Unis et l'Union européenne ayant pour objectif de structurer la coopération transatlantique en matière de technologie, d’économie et de commerce.

Lire aussi :

PFUE : Conseil du commerce et des technologies (CCT) Union européenne–États-Unis (sur le site du Ministère de l'Économie, des Finances et de la Relance)
Conseil du commerce et des technologies UE-États-Unis: renforcer notre partenariat renouvelé en période de turbulences (communiqué de presse publié sur le site de la Commission européenne)

Autres ressources disponibles sur le site de la Commission européenne :

[Royaume-Uni] Westminster & City News du 26 novembre au 2 décembre 2021

2021-12-03T00:00:00+01:00

Actualité macro-économique

Le Trésor britannique écarte certaines propositions de réformes fiscales de l’Office of Tax Simplification
L’OCDE a dégradé ses perspectives économiques pour le Royaume-Uni
La probabilité d’une remontée rapide du taux directeur de la Banque d’Angleterre resterait élevée malgré les incertitudes liées au variant Omicron
La croissance de l’économie nord-irlandaise surclasse celle du reste du Royaume-Uni

Actualité commerciale

Des divergences au sein du gouvernement émergent à l’approche du début des négociations commerciales avec l’Inde
Le gouvernement britannique lance une consultation sur l’établissement d’un guichet unique aux frontières britanniques
Les Etats-Unis temporisent sur la suppression des droits de douane sur l’acier et l’aluminium britannique imposé sous l’administration Trump
Le Board of Trade publie un rapport invitant le gouvernement à se saisir des opportunités du commerce numérique

Actualité financière

Le plafond des frais des régimes de retraite à cotisations définies pourrait être relevé en vue de faciliter l'investissement dans des placements moins liquides à long terme
La Financial Conduct Authority (FCA) a publié les modifications de MIFID2 en termes d’exigences de conduite et d’organisation
La FCA et la Banque d'Angleterre (BoE) consultent sur l’évolution du cadre des infrastructures des marchés financiers
La FCA projette une augmentation des frais de contrôle imposés aux entreprises assujetties
La contribution du secteur des services financiers et des services professionnels connexes restent majeure pour l’économie britannique
Les chiffres du commerce des services financiers britanniques sont revus à la baisse

Westminster & City News du 1er au 7 octobre 2021

2021-10-08T00:00:00+02:00

Fait marquant

Plus de 200 investisseurs sont attendus au Global Investment Summit

Actualité macro-économique

R. Sunak met l’accent sur la responsabilité budgétaire lors de son allocution au Congrès du parti conservateur
Le Chancelier a dévoilé de nouveaux financements à hauteur de 500 M£ pour son initiative Plan for Jobs
L’augmentation des salaires ne serait qu’un effet conjoncturel

Actualité commerciale

Le ministre du Brexit David Frost fait planer la menace de l’article 16
La ministre au commerce international Anne-Marie Trevelyan promeut les opportunités du libre-échangisme pour les exportations britanniques
Le commerce a contribué à hauteur de 1 point de pourcentage à la croissance globale du PIB au deuxième trimestre

Actualité financière

Selon CityAM, les investissements en capital risque ont atteint 4,9 Md de dollars dans les fintechs britanniques au troisième trimestre
Les firmes de private equity paient des primes records pour le rachat d’entreprises publiques
Deux enquêtes révèlent les inégalités salariales entre hommes et femmes ainsi que les discriminations raciales dans le secteur de la finance
La Banque d’Angleterre encourage le secteur financier britannique à participer à l’initiative d’exercice de prévention visant à tester ses mécanismes de cyberdéfense
Le Financial Reporting Council (FRC) a reçu des appels à publier son rapport sur la qualité des audits

Westminster & City News du 4 au 11 mars 2021

2021-03-11T00:00:00+01:00

Fait Marquant

Baisse marquée des échanges commerciaux entre le Royaume-Uni et l’UE en janvier 2021

Actualité macro-économique

La campagne de vaccination améliore les perspectives du rebond britannique selon le gouverneur de la Banque centrale

Les ventes au détail ont crû de 1 % en février en glissement annuel après -1,3 % en janvier

La mise en place d’une taxe internationale sur les services numériques sera l’une des priorités de R. Sunak lors du G7

Le programme anglais « Test and Trace » fait l’objet de vives critiques du Parlement

Actualité commerciale

Le UK Board of Trade a publié son premier rapport : ‘Global Britain, Local Jobs’

Actualité financière

Un nouveau programme de prêts garantis sera opérationnel en avril 2021

Les régulateurs britanniques lancent une consultation sur les exigences de marge bilatérale pour les dérivés de gré à gré

Le Royaume-Uni révisera la surtaxe sur les bénéfices des banques à l’automne 2021

Un rapport du think tank britannique Policy Exchange propose un plan en 12 points pour un système financier global vert et résilient

HSBC lance un programme de prêts pour les PME britanniques

La Lloyds Bank envisage de devenir un acteur du marché locatif en achetant puis louant des logements neufs et existants dans tout le Royaume-Uni

La filiale britannique de Greensill Capital a déposé le bilan

Trade openness, growth and inequalities

2017-06-26T00:00:00+02:00

Les Entretiens du Trésor is a yearly conference which focuses on a key economic issue and its associated policy challenges. This event is hosted by the French Treasury, at the Ministry for the Economy and Finance. Theme of the 2017 edition : “Trade openness, growth and inequalities”.

⇒ French version

Joseph Stiglitz, Nobel Prize in Economics highlighted that doubts from the academic world have emerged regarding the capacity of international trade to generate positive gains unless it is better managed. In developed countries where there is no full employment, free trade may foster more job losses than job creation. Any limited gains are unequally shared, with unskilled workers benefiting the least from trade. Distribution effects, e.g. from weakened bargaining power, may even make them worse off. Measures of social support are required to compensate for the negative consequences of international trade.

Despite limited forecasted gains from trade agreements, Stiglitz argues that well-managed economic integration is still desirable. The reality of interconnected supply chains make protectionism very costly to national economies as well as the global economy. Trade barriers may lead to market inefficiencies and the appreciation of local currencies.

The international community is increasingly concerned about how to cope with the rise of protectionist measures in the US. According to Joseph Stiglitz, the rest of the world has a responsibility to strengthen and reform the international trade rules to make them more equitable in face of this American protectionist turn.

Roberto Azevêdo, Director General of the WTO reminded the audience that fears on the potential risks caused by trade liberalization had already been expressed by political leaders attending the last G20 summit. These objective difficulties are not questioning the economic benefits of trade openness. It creates jobs (20% of French employees work in exporting companies), it pushes prices down which thus accelerates consumption and supports improvement in living conditions of the poorest (1 billion people would have been risen out of poverty thanks to international trade).

Trade openness is often stigmatized as the unique responsible for the rise in inequalities. In fact, technological change causes 80% of job losses. It is a crucial diagnosis to undertake relevant economic policy reforms to fight against growing inequalities. Without more focus on improved national redistributive policies some countries will continue to see the unequal redistribution of trade liberalization gains.

Marie-Ange Debon, Vice President International Division CEO of SUEZ pointed out the fact that the debate on trade openness should not be limited the issues related to trade in goods. Trade in services and capital flows should also be duly taken into account. Foreign direct investments, such as infrastructures, including green ones, contribute to economic integration and reduction in inequalities.

Furthermore, analyzing international trade only through country-by-country trade is not the most relevant. A regional and territorial approach now seems more powerful to understand international trade. However it makes trade negotiations more complicated. For instance, infrastructure developments are designed across countries, and cities play a growing role in the expansion of international trade.

Branko Milanovic, Professor of Economics at City University of New York explained that two groups most benefited from globalization since the 1980s: middle classes from emerging countries and the top 1% in richest developed countries. Those who benefited but less from this period were lower middle classes from developed countries. While standards of living converged between people from developed and developing countries, inequalities increased inside developed countries. These patterns were partially caused by an unequal repartition of the gains from trade gains.

The fact that trade openness generates aggregated gains does not mitigate skepticism regarding the effective benefits from globalization for members of this “lost generation”, which lost their jobs and won’t be able to find a new one. Nevertheless, the major part of this shock looks behind us: 15% of world jobs are being currently affected by trade, while 30% of jobs were exposed during the previous period.

Philippe Jahshan, President of the NGO Coordination Sud voiced the predominant views of civil society on trade openness. According to him, there are risks that international trade negatively impacts the environment and hinders sustainable development, for instance by facilitating uncooperative olicies such as fiscal dumping which can contribute to the deterioration of public finances and interferes with State’s ability to pursue ambitious social measures. It also led middle class from developing countries to compete with middle class from developed countries, and this also increased competition with different social models. It can also negatively affect the climate, by increasing polluting freight transportation and marine transportation. Developing countries are far more affected on that front. Trade openness impoverishes local and familial farming, whereas they are crucial for subsistence and resiliency of entire populations. Every trade liberalization leads to winners and losers. However, losers lack compensations with respects to their needs. Thus, inequalities increase significantly. New generation agreements can even exacerbate these collateral damages, because they deal with regulations and they introduce a dispute settlement mechanism to resolve disputes, which might overlap with state competence to regulate. Democracy is the most important issue raised by trade agreements. Nevertheless, border shutdown is not the solution. Trade policy must be revised in order to make trade agreements not an end in itself, but a lever and an instrument for higher objectives such as sustainable development. Commercial law should not take over other laws. We should sign these agreements in coherence with other international agreements, social and environmental rules (e.g. COP, ILO) in order to ensure that trade supports a fair and sustainable project.

Paul Romer, Chief Economist of the World Bank Group suggested that debates regarding the economic impact of trade openness are a theoretical topic which generates ambivalent reactions because of ongoing socio-economic mutations. Thus we should focus on the concrete effects caused by trade openness. International trade allowed developing countries to improve their standard of living by helping them have access to new technologies. As no one is ready to give up these economic improvements, we can hope that developing countries will not follow developed countries’ example in turning back to protectionism.

Trade does not bear the sole responsibility for increasing inequality, and a whole array of public policies is available to States to cope with these collateral effects. Since the 1990s the US and Denmark have been confronted with the same economic mutations but they have not followed the same path in terms of inequality. Inequality has declined in Denmark (Gini coefficient went done from 31% to 21%) while it has increased in the US (Gini coefficient went up from 43% to 47%). Choosing protectionism is synonymous with not trying to deal with these redistributive fiscal challenges.

Jean-Luc Demarty, Director-General for Trade of the European Commission explained trade agreements are a ley vehicle to regulate globalization, by integrating new issues such as best practices and regulatory cooperation, social and environmental dimensions, intellectual property and investment protection, as well as disciplines in competition. To a large extent, monitoring norms is equivalent to monitoring markets (even if regulatory cooperation doesn’t mean co-legislating), whose openness remains a key determinant of trade negotiations. Although trade generates losers, it is a positive sum game between countries and trade policy is not responsible for these negative externalities. However targeted adjusting policies such as training and social protection should accompany trade liberalization. We should also take into account civil society concerns as regards greater transparency in trade negotiations. By defending our economic interests, trade policy positively impacts growth and employment.

Sébastien Jean, Director General of the CEPII raised the question of the legitimacy of “new trade agreements” which includes nontrade chapters (social, environmental and fiscal clauses). Through these chapters, trade may be used as lever for increased cooperation in other fields. Supporting trade between two countries makes regulation discrepancies more costly. Yet, non-trade chapters may overload or paralyze negotiations – increasing the mixed nature of trade agreements – and bear the risk of interfering with national issues. Greater integration of non-trade chapters should be investigated. Different options should be studied such as: supporting a minimum level approach, binding automatic commitments, agreeing on auditable criteria and accepting to give up some trade negotiations if they conflict with other objectives. Indeed trade is more a tool than an end in itself.

Yann Delabrière, Chairman of Faurecia highlighted the priority given the current general context for preserving major regional trade agreements such as NAFTA. Any break in trade relations could have harmful effects on the US industry. Protectionist policies to support local production in Russia and Brazil in the automotive sector turned out to lead to blatant economic failures. 15-20% of North American automobile production and 50% of automobile components come from Mexico. The importance of challenges related to norms (electrical and connectivity ones) is going to increase because of the development of connected cars. Nowadays, the main part of industrial automobile production is made in South-East Asia (Philippines, Indonesia, and Thailand) and China will account for 60% of the world automobile market in 2030. Thus, the European Union should orientate its strategy towards Asia, and more precisely South-East Asia and ASEAN.

However, international trade is not the only one responsible for manufacturing sector difficulties in the US / UK. When you look at Germany for instance, you see a different trend. For 15 years, French production has decreased by 1.5 million while the exact opposite happened in Germany. Yet, they supported the same shocks. Education and interaction between public and private research are two other parameters that should be taken into account.

Pervenche Berès, Member of the European Parliament considers international trade is following cycles. We are currently experiencing a new model. Despite she doesn’t want to give up gains from trade and its redistributive fallouts, she raises out the fact that the overall economic context has changed:
1/ WTO did not meet expectations but it does not question all multilateral negotiations: COP was a success and a source of hope.
2/ The challenge of defining norms: emergence of new stakeholders such as China forced developed countries to define new rules more in line with developing country standards.
3/ new types of trade: goods and intangible products are not comparable. We underestimate new questions arising on protecting personal data.
4/ Trump coming to power may slowdown trade.
5/ Brexit: Theresa May has been in line with her political camp: she wants Great Britain to recover its ability to negotiate trade agreements.

According to Pascal Lamy, we are switching from protection to precaution agreements.The European Commission should take into account these mutations and propose a new doctrine. It should:
1/ respect of GI and SPM,
2/ Cope with fiscal issues by forcing better cooperation between countries,
3/ require an exhaustive list of public procurements,
4/ get dispute settlement mechanisms, permanent court or any other mechanism,
5/ ability for countries to refuse regulatory cooperation to respect capacity of states to legislate.

CETA does not meet these requirements. Access to markets is not the only one reason for questioning CETA. It’s a question raising lawmaker concerns and which fuels transparent critics. With that route, we should redesign the whole international trade doctrine. Meanwhile, we should also react to potential fiscal dumping from Great-Britain. Pervenche Berès added that: “Fair global economy is much richer than Free Trade.”

Guntram Wolff, Director of the think-tank Bruegel indicates that many countries have benefited from economic integration. It is for instance the case in Europe where we have seen a reduction in inequalities and a convergence of standards of living thanks to the economic catch-up of Eastern European countries supported by Union integration dynamics. Moreover, Europe’s social models have been better in reducing inequality than the “Anglo-Saxon” social models.

Donald Trump seems to try revitalizing manufacturing employment thanks to protectionist measures but it won’t help the American economy in the long run. It could have damaging economic consequences for Europe. Trade slowdown between the US and Europe could lead to a 0.4% decrease in GDP and 240,000 job destructions according to a recent paper by Hylke Vandenbussche (those figures may be under-estimated because European vulnerability to American investments is insufficiently reflected in the model). WTO should address increasing risks of the rise in trade barriers from the US and EU should support WTO. The EU should have fiscal and other measures ready to react if the US administration decides to introduce measures that are not compatible with WTO against EU.

Philippe Aghion, Professor at the Collège de France presented briefly his economic analysis on the relation between trade growth and innovation based on Schumpeterian theory of growth. Long-term growth is supported by innovation in developed countries. On the one hand trade contributes to growth through innovations thanks to three mechanisms: it increases market volume (market size effect) and thus incomes from innovation. It stimulates competition (competition effect) and facilitates technology transfer. On the other hand, trade generates inequalities and weakens low-skill workers and those who find it hard to adapt to change. Ensuring that economic liberalization of trade is correlated with an inclusive educational system is crucial. Reforming the labor market to provide genuine security for career paths is also essential. Not supporting trade liberalization with active policies in education, training and individual protection to cope with risks related to creative destruction would be a serious mistake. Reagan and Thatcher liberalization policies missed the inclusive dimension. They lead to populist stalemates in the Unites-States (with Trump) and in Great-Britain (with Brexit).

Martin Kaufman, Assistant Director Strategy, Policy and Review Department, IMF emphasized that in past years the focus was on how to advance trade integration, regionally and globally, in a context of new trade policy frontiers (e.g., non-tariff barriers, regulatory coherence, protection of physical and intellectual investment); the advent of global supply chains and production fragmentation;
and services as the next ‘extensive margin’ for trade. The challenge now is how to advance trade integration in a different context
of greater distrust about globalization in many countries and avoid potential escalation of trade tensions. This would require restating
and re-thinking key questions: How to make trade work for all? How best to address possible dislocations? What is the role for re-training and addressing other barriers to labor and resource re-allocation to those sectors of the economy that would be expected to expand? How to address such dislocation in an integral way in any future trade initiatives?

Mrs. Liina Carr, Confederal Secretary at ETUC emphasized that ETUC is not againsttrade. However it considers that current trade negotiations are not meeting trade union expectations for two reasons:

(i) trade agreements are negotiated secretly

(ii) trade negotiations which do not deal only with tariff barriers do not take into account the trade unions and Civil society concerns especially as regards public service protection and sovereign right to regulate (workers’ rights and working conditions, social and environmental norms, health and consumer protection).

They are questioned by dispute settlement mechanisms between investors and States which imply a separate legal system. More generally, Mrs. Carr is supporting closer cooperation between WTO and ILO. Globalization should take into account Human rights as well as social and environmental problematics. National social models and trade policies should be better articulated, especially in developing countries. Fiscal coordination at the international level should be
also addressed as it has direct implications on firm competition and employment.

Based on his experience in Mexico, Juan Manuel Gomez Robledo, Ambassador of Mexico in France explained that articulation between multilateral trade system and regional trade agreements works well and facilitates regulation of trade frictions. Mexico signed up to the GATT in 1986 while concluding many regional and bilateral free-trade agreements (46). There are other ongoing negotiations with Jordan, Turkey, Brazil and Argentine. Mexico negotiated agreements on investment protection as well to strengthen credibility and attractiveness of the country towards international investors.

According to the Ambassador, multilateral and regional approaches have additional benefits. Regional trade agreements supported growth of trade flows while being in accordance with WTO rules. At that time, legal experts feared that multiplying trade agreements could lead to a legal chaos. In practice, this risk has remained theoretical. Mexico experienced many times WTO and regional dispute settlement procedures (as advocate or complainant) and considers that their solutions is relevant to cope with trade frictions.

According to Hendrik Bourgeois, VP European Affairs and General Counsel Europe, General Electric Europe while trade openness and globalization support innovation, entrepreneurship, competition and growth protectionist barriers are on the rise. International trade serves as a scapegoat for all types of critics on growth, employment and growing inequalities. However productivity is the main challenge. International trade is no longer a technical field. It is now a highly political topic which fuels critics. It is partly due to the fact that trade agreements deal now with regulatory and environment topics. The European Union should rethink governance and political trade mechanisms. The European Commission has an exclusive competence regarding trade which makes its decisions difficult: it needs a strong political mandate to lead trade negotiations in a more legitimate and inclusive manner, while trying to support SME.

While the positive impacts of international trade on wealth is widely shared between economists, Philippe Martin, Professor of Economics at Science Po Paris points out the fact that there is no consensus on the means to mitigate inequalities fostered by globalization. Public policies failed to redistribute efficiently to the losers of globalization benefits from trade either through fiscal policies or through professional training and education. Globalization is not politically sustainable if, at a time when inequalities are increasing, governments see their tax base move to other countries, which implies lower capacities of financing public policies. Making globalization more acceptable is through managing financial globalization by fighting against non-cooperative fiscal strategies and tax evasion. The European Union should use trade agreements as instruments to promote fiscal cooperation. The link between trade and taxation arose still more strongly with the arrival of the new American government, which aims to reduce corporate taxation, and with future trade negotiations following Brexit.

M. Angel Gurria, Secretary-General of the OECD spotlighted the fact that we are going through a critical period with general loss of
confidence and since a decade in OECD countries a deep increase in income and wealth inequalities (In OECD countries, the revenue of the richest 10% is now 10 times higher than the revenue of the poorest 10%, whereas the gap was equal to 7 in 1980). There are several causes for reluctance to globalization and its consequences are obvious. It implies an amplification of protectionist threat. Globalization should be “more inclusive” integrating new concepts such as cooperation and shared commitments. It should also support more inclusive productivity. Due to the slowdown in productivity growth and the surge in inequalities the OECD has launched several studies on the links between productivity and inequalities (topic discussed during the 2016 Ministerial Council Meeting and a paper published on “productivity and inequalities”). Public leaders should take into account the transformations as well as the risks induced by automation for a segment of population (PIAAC study of the OECD; new horizontal project of the OECD on digital transformation supporting inclusive growth and well-being). The OECD is currently leading a major tax reform to support justice and transparency. Tax international cooperation especially with BEPS project (“Base Erosion and Profit Shifting”) and the automatic exchange of information are essential. The theme for this year’s OECD Ministerial Council Meeting which will take place in June 2017 will be “Making globalization work: better lives for all”.