Bulletin No.4 | Thursday, February 25, 2021

As post covid-19, a more open and stable legal system is required to revive trade, the panel highlighted the pressure on World Trade Organisation (WTO) to reform its old structure. Trust in plurilateralism can be restored only by reforming universal rules for trade. The conversation was built on establishing a trade system with increased participation of China in the policy making space.  Further, the panel underlined the significance of WTO in plurilateral trade deals such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Regional Comprehensive Economic Partnership (RCEP).

Trade war between the U.S. and China did raise a lot of questions in terms of moving supply chains from China. But China being a large market with growing middle class, strong manufacturing and faster roll-out of business continuity measures in response to Covid-19, hasn’t seen mass exodus of companies. With that ability, China is one of the countries that has observed a positive growth rate during the pandemic. Its V-shaped recovery has astonished many.

The panel discussed that while global trade is a constant, it will see new waves of globalisation post pandemic in view of agreements such as RCEP facilitating shorter supply chains. On WTO, the panel agreed that its rule making and dispute settlement functions needs remaking. However, it won’t be easy in view of highly volatile geopolitical developments. The panel emphasised more reciprocity, mutuality and complementarity for economies to thrive in a symbiotic relationship. Leaving any one out is not an option.

The session was moderated by Wu Chen, Managing director, The Economist Global Business Review. The speakers at the session were David Wang, President, Asia Pacific, Buhler Group;  Holly Lei, President, China, Covestro;  Ker Gibbs, President, American Chamber of Commerce, Shanghai; and Jeongmin Seong, Partner, McKinsey Global Institute.

Covid-19 pandemic has pushed manufacturing and industrial automation and robotics to a great extent. With that, any disruption makes way for creative destruction and spurs technological advancement. Robotics and automation increase flexibility and resilience. However, it was also noted that not all tasks can be automated. Hence, industries require a right combination of technical and human strength.

The pandemic has shown the importance of resilience. Industries and companies are moving forward with reconfiguration of supply chains to be more resilient for any such future disruptions.

The panel pointed out three major disadvantages of automation on developing economies, which are; a) Will China be the only country that will come up as the middle income countries?; b) Joblessness; c) Increased inequality. Furthermore, it was reflected that government policies should target to boost labour income.

Education and its quality have not been able to keep pace with the technological advancement. Hence, the government in less advanced economies should intervene in reskilling and retooling of presents workers and addressing the education needs of future generations. However, some jobs will become obsolete but there will be creation of other more skilled jobs. The net effect of robotics will be positive in the long run, also, trade is expected to see new trends, the panel stated.

The session was moderated by Henry Curr, Economics Editor, The Economist. The speakers at the session were Keyu Jin, Professor of Economics, London School of Economics; Susanne Bieller, IFR International Federation of Robotics; Tommy Leong, Zone President of East Asia and Japan.

Globalisation was blamed for a decline in manufacturing jobs, an increase in inequality, and lower productivity growth even before covid-19. The session was a debate on a more pertinent question, ‘’has globalisation finally reached its peak?’’ With a transition in the socio-economic dynamics of different nations, the perspectives to the idea of globalisation have also been altered. This has become particularly evident discourse with the advent of the pandemic. In this session, two debaters argued for and against the proposition, and the audience voted on which is the most convincing argument.

Mihir Sharma, Senior fellow and Head, Economy and Growth Programme, Observer Research Foundation  presented his views in favour of the motion emphasising that globalisation has reached its zenith  and is bound to decline, which has been substantiated by the fall in trade statistics. In addition to this, he stated that even though globalisation encompasses a larger idea of flow of values, freedom and rights, political interventions per se have become a significant determinant to globalisation.

On the contrary, Barbara Ramos, Chief of Research and Strategies for Exports, International Trade Centre highlighted the true meaning of globalisation as underpinning integration of countries, people and ideas. She emphasised that if we believe globalisation has peaked then all the other associated ideas have materialised to their full potential. She pressed on the idea of unexplored and underexplored territories which leave a considerable space for growth of globalisation.

It can be validly assumed from the debate that there exists an urgent need of reformation in the political prerogatives of different nations.  Effective functioning of the WTO is equally important to ameliorate the status quo to make the benefits of globalisation accessible to all. This is the only way to explore the unutilised potential of global socio-economic integration.

The debate was the final session at Asia Trade Week 2021 and was moderated by Simon Cox, Emerging Markets Editor, The Economist.