They keys to resolving global economic instability are greater collaboration at the international level (at least among the principal economic operators), greater transparency in national support for industrial policies and new governance mechanisms.
The discussion at this conference focused on three major actors: the United States, Europe and China. More balanced trade relations among these actors is essential in terms of potential impact on the global economy. With regard to China/Europe relations in particular, a common path needs to be found to adjusting imbalances between excess demand in Europe and a lack of demand in China, which has led to an increased propensity for saving. Now that the pandemic crisis has passed, Beijing must stabilize growth by confronting the many challenges to what is, in any case, a positive economic outlook.
The pandemic also led to protectionist policies. However, a better tack would be to enhance international coordination and collaboration, improve efficiency to reduce production costs, and strengthen market stability and national security, all through shared rules and agreements. This scenario sees a revived role for currency, prompting consideration even of a new “Bretton Woods”.
Two crucial issues are prompting a revision of energy policies and international collaboration: supply security and climate change governance. The three main actors confronting these on the global stage – the US, Europe and China – are doing so in different ways. China is still leaning toward coal, as are many other developing countries, yet is showing considerable interest in renewables; indeed, it could be advantageous for China to invest surplus savings precisely in that capital-intensive sector, thereby advancing the fight against climate change and at the same time reducing economic imbalances. China does well to take the example of European policies – considered concrete and thus a good guide for the rest of the world – in identifying new pathways to completing the energy transition. As a result, therefore, new prospects are opening up for collaboration between China and Europe both in terms of financing/investments and risk management. Moreover, Sino-European collaboration could potentially be extended to other areas of the world such as Sub-Saharan Africa, for example, with a view to increasing cooperation and synergies.
If the European and Chinese economies are still based on fossil fuel imports, not so the US, robust producers of energy used mainly for domestic needs and less for exports. Collaboration between the two shores of the Atlantic is good, given that the US is a major European partner. Problems emerge in their divergent approach to energy policies: the EU is strong on regulation, while the US is pushing for trade development, another prominent theme, especially in spheres such as nuclear fusion and hydrogen that are both necessary for the transition. The way in which various regulations interact with third parties in the world – not least ahead of a restructuring of energy governance that will lead to new forms of collaboration with new providers – will be a critical point of discussion. For that reason, it is going to be essential to produce new sector agreements and rules so as to avoid ulterior instability.
Some concerns arise with regard to the American Inflation Reduction Act (IRA: on the one hand it facilitates the American domestic market, reducing competition, for example with China; on the other it attracts investments, especially by European companies which, if they choose to move production to the United State would result in a negative impact on the Old Continent. The IRA has outlined agreements for specific sectors and subsectors, introducing a new trade approach and new energy sector rules; nevertheless, there is still room for new cooperation formulas that could be advantageous to both sides of the Atlantic.
From the governance standpoint, health too plays an important role, particularly in terms of international cooperation, as the Covid-19 pandemic showed. Important to making the most of the lessons learned will be preparation and prevention, therefore countries’ means for sharing data and information will have to be perfected and become a central focus in US/European/Chinese relations. The current fragmentation of systems and information makes necessary the development of global coordination based on mutual trust and capable of creating effective instruments by which to respond rapidly to emergencies. Danger signs arise from various sources: human beings, the environment and the animal world. It is going to be essential then to rethink the financing of research with a view to optimizing available resources while simultaneously building trust in science, eliminating inequalities and rendering healthcare accessible to all. This is the top priority of an effective and efficacious global governance independent of politics and reinforced by the World Health Organization (WHO) authorities.
Europe, for example, found itself unprepared for the pandemic in 2020. Thanks to rapidly cobbled instruments, however, and a series of actions in the collective interest and the collaboration of all member states, the pandemic was able to be “governed”. It was established in the two years that followed that each member state would have to have a national plan, verified with the EU, in addition to a European plan subdivided by authorities and by state. Moreover, a new agency was created – the Health Emergency Response Authority – that ensures access to instruments and all necessary counter-measures. This international treaty stands on three pillars: early detection, transparency and data and information sharing; information exchanges in the case of pandemic; and a unified approach coordinated by the WHO and centered equally on humans, animals and the environment. The chief impediments to this course of action include climate change, which has a deep impact on the spread of disease, and the particularly serious problem of resistance to antibiotics. Three main actors fundamental to achieving the established goals are the public sector, the private sector (e.g., pharmaceutical industries) and the tertiary sector. With the proper official coordination, these three should be able to work together to share all available data.
Finally, it must not be forgotten that the world is experiencing a new scientific and industrial revolution thanks to Artificial Intelligence. The potential here is extremely high and will have to be managed in a global context of governance in order to reap all the possible benefits in terms of health crisis prevention and preparation.
In conclusion, the world can be recognized as consisting of a “North” (the US), a center (Europe) and a “South” (led by China). The collaboration of these three actors in ensuring a global balance is strategic to the solution of our planet’s problems. We may be on the road to deglobalization, but we are still firmly interconnected.