The World Economic Forum (WEF) starts on Tuesday its landmark 50th anniversary summit in Davos, Switzerland. Yet, while the session is a landmark for international cooperation after a half century of such sessions, storm clouds are on the horizon as reflected in this year’s theme of “stakeholders for a cohesive and sustainable world”.
The fact that US President Donald Trump is perhaps the most high-profile guest in the Swiss ski resort personifies these tensions. It is his own “America First” vision which has been a key driver of the breakdown in international agreements and cooperation in the last few years by undermining a range of global agreements, including the Paris climate change treaty.
To be sure, Trump has significant support — in the United States and internationally — with his agenda, and he stands a significant of winning four more years in office in November. Yet, he will not be very popular among the elites and activists in and around Davos who tend to see him more as a menace than international messiah.
In this vacuum, others have been warmly received in Davos, including Chinese President Xi Jinping who became the first Chinese president to give a speech, well received at the event in 2017, where he made an impassioned defence of globalisation in the face of Trump’s protectionist rhetoric.
It is increasingly likely that the future of the international order may well depend on the shape of bilateral relations which could be shaping what is sometimes called a multi-bilateral world — or a network of loosely coordinated bilateral and regional trade deals.
The key themes of promoting a more cohesive, sustainable world at this year’s Davos underlines that, a generation from the promise of the late 1980s and early 1990s, which saw the collapse of Soviet Communism, many expectations about how the post-Cold War world might look have been dashed, not least around international cooperation. The WEF itself has ridden this wave of optimism and pessimism through its provision in the last several decades of a global platform for dialogue.
Its early successes in bolstering international cooperation included the Davos Declaration signed in 1988 by Greece and Turkey, which saw the two turn back from the brink of war. In 1989, moreover, North and South Korea held their first ministerial-level meetings at the WEF in Switzerland, and East German Prime Minister Hans Modrow and German Chancellor Helmut Kohl met there to discuss German reunification.
Three decades on, the idealistic future vision held by some then of a universal order of liberal, capitalist, democratic states living in peace and contentment has been undermined. As multiple reports highlight, there is currently a potentially toxic cocktail of trade disputes, environmental risks, cyber threats, and geopolitical dangers threatening the fundamental fabric of the global political economy.
Multiple challenges facing the world order
To be sure, as a generation ago, the United States remains the world’s most powerful country, certainly in a military sense. And it can still project and deploy overwhelming force relative to any probable enemy as Iran, for instance, is well aware as it currently considers its options after the assassination of Qasim Soleimani.
Yet, there are now multiple challenges confronting the US-led order today which have helped drive the international fractures that the WEF will discuss. For instance, following Russia’s annexation of Crimea, US relations with Russia are now more strained than at any time since the Cold War, despite Trump’s professed desire to try to improve relations. And the Israeli-Palestinian peace process has collapsed again, while Washington and Pyongyang remain locked into stalled nuclear diplomacy on the Korean peninsula.
Moreover, almost two decades after 9/11, Washington is still significantly engaged in Afghanistan and the Middle East. Indeed, Washington could become significantly more entrenched in the latter region if tensions with Iran continue to grow in 2020.
On the positive side of the ledger, however, the world today continues to contain multiple positive opportunities for international cooperation.
Take the example of the landmark global climate change deal agreed in Paris in 2015 which represents a welcome fillip to tackle global warming and, crucially, a new post-Kyoto framework has been put in place. Moreover, the once-every-five-years review framework means that countries can toughen their response to climate change in the future, especially if the political and public will to tackle the problem increases with time.
Zero-sum trade relations
Compared to three decades ago, in the last 1980s and early 1990s, the rise of China is one of the biggest game changers in global affairs. And, in the week in which Washington and Beijing sign a first stage trade deal, it is increasingly likely that the future of the international order may well depend on the shape of bilateral relations which could be shaping what is sometimes called a multi-bilateral world — or a network of loosely coordinated bilateral and regional trade deals.
One of the key indicators of whether such a future can be realised could come if the two sides can, ultimately, reach a wider ambitious, comprehensive, and sustainable phase two deal to settle their economic tensions. If so, this could help catalyse a new multi-bilateral trading order rather than the potential alternative of world hurtling faster toward zero-sum trade relations descending into a fully blown economic war.
While a “multi-bilateral” trade order would be more complicated and less satisfactory than the status quo, it will be better than a zero-sum world that could otherwise be our collective fate, salvaging significant, sizeable parts of the old post-1945 settlement.
— Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics