Latest Developments and Trends in Global Trade System

Economic Development Foundation
İktisadi Kalkınma Vakfı

IKV hosted a panel entitled “Latest Developments and Trends in Global Trade System” with collaboration of Friedrich Naumann Foundation on 31 October 2017. After the opening speech of IKV Chairman Ayhan Zeytinoğlu, the panel session started with IKV Vice-Chairman Prof. Dr. Haluk Kabaalioğlu’s moderation. The panelists of the session were Prof. Dr. Refik Erzan, Asst. Prof. Dr. Pınar Artıran and IKV Brussels Representative Haluk Nuray.

IKV Chairman Ayhan Zeytinoğlu began his speech underlining IKV’s important role and works concerning Turkey-EU relations for the last 52 years. Within the framework of the panel, IKV Chairman Zeytinoğlu underlined that the global economy has been gaining momentum and it has been under the effect of some rapid changes. IKV Chairman noted that trade may sometimes cause the emergence of strained relations amongst states. He mentioned that protectionism in global trade is in rise more than ever as the newly elected USA President Donald Trump withdrew the USA from TPP and suspended the negotiations of TTIP. He also highlighted the importance of the modernisation of Turkey-EU Customs Union and the inclusion of especially services sector to it.

The first speaker of the panel was Prof. Dr. Refik Erzan from Boğaziçi University Department of Economics. He began his speech by stating that the United Kingdom’s Brexit decision and the election of Donald Trump as the new US president have been two important outcomes of the globalisation. Refik Erzan analysed the mentioned outcomes with regards to economics, and remarked that the globalisation has resulted in convergence of income distribution among countries. He stated that whereas the income disparities between the rich and poor countries had increased between 1880 and 1980, the gap declined afterwards until the 2010’s. He also underlined that domestic migrations in the EU and the USA have decreased during the last 30 years due to the reduction in labour force mobility. Prof. Dr. Erzan emphasised that the foreign direct investments have increased this year, adding in the forthcoming years, China would be the most influential power of the global system.

After Prof. Dr. Erzan’s speech; WTO Chair Holder Asst. Prof. Dr. Pınar Artıran from Istanbul Bilgi University, Faculty of Law started her speech by articulating that the world economy has begun to recover in spite of the economic recession and protectionism. She implied that this recovery might not continue as today. Pınar Artıran highlighted two prior problems with which foreign trade agents and the WTO has been encountering: e-commerce and automation. She highlighted that the adaptation process of the SME’s to e-commerce should be managed carefully by the WTO. Moreover she enunciated that with the transition to full automation, the WTO will have to carry a greater responsibility, as there would probably be job losses. Asst. Prof. Dr. Artıran also put Canada under the leadership of Trudeau; the EU with the potential collaboration between Macron and Merkel as well as Saudi Arabia with the support of the USA forward as candidates for the leadership of the global trade alongside China. Lastly, she stated that if the WTO can not find a solution for the negative outcomes of the President Trump’s protectionist measures towards China and blocking attempts for dispute settlement mechanism; it would be likely to lose its leading place in the global trade system.

The next speaker, IKV Brussels Representative Haluk Nuray, started his presentation by stating that trade has been on a transition period with the changes in production, consumption and physical and legal environment due to slow eradication of liberal economic system. In terms of changes in production, Haluk Nuray highlighted the significance of the sophistication level of products in the new economic order. Concerning the consumption issue; with the short and long term plans of China to take the lead status of the USA, Nuray claimed that just as the Westernisation challenge once Turkey went through, there might be possibilities of Turkey going through an “Easternisation” problem, as well. He ended his speech by expressing that Asia will become the biggest global market in a short span of time.

Lastly, former Ambassador Bozkurt Aran started his evaluation at the end of the panel by stating that election of Trump and the UK’s Brexit decision will reshape the global trade. He underlined the need for laws, as there are some irregularities in e-commerce, and stated that the ambiguities will be abolished in the long term. He finished his speech by stating that after having fulfilled the establishment of services and financial systems, China is currently completing its political alliances, and it will finalise its military alliances in the next period to be the leader of global trade.