“What has been is what will be; and what has been done will be done, and there is nothing new under the sun” (Ecclesiastes)
On April 21–22, 2023, within the framework of the VII International Economic Symposium, the XX International Conference “EVOLUTION OF THE INTERNATIONAL TRADE SYSTEM: PROSPECTS AND CHALLENGES” was held, organized by the Department of World Economy of St. Petersburg State University.
The Conference was attended by representatives of the expert academic community, both domestic and foreign, as well as students and graduate students of St. Petersburg State University and other Russian universities.
The plenary session of the Conference was held under the title “The world economy in the era of modern geopolitical challenges: was Ecclesiastes right?”
Participants of the plenary discussion:
- Miroslav Jovanovic, senior researcher at the Center for Competence in European Studies. Dusana Sidjanski, Professor, University of Geneva, Geneva, Switzerland
- Maxim Yuryevich Medvedkov, Professor, Head of the Department of Trade Policy, Higher School of Economics, Advisor, Autonomous non-profit organization "Center of Expertise on World Trade Organization Issues", Moscow, Russia
- Sed Saad, Professor, ICHEC Graduate School of Management, Brussels, Belgium
- Sergey F. Sutyrin, Doctor of Economics, Professor of the Department of World Economy at St. Petersburg State University
The moderator of the plenary session was Olga Yu. Trofimenko, associate professor, acting. Head of the Department of World Economy, St. Petersburg State University.
At the moment, the world economy is facing unprecedented challenges: geopolitical confrontation, global economic downturn, migration pressure, problems in the development of global production systems, worsening food security problems and others. International economic interaction has always included not only mutually beneficial cooperation, but also fierce confrontation. From this point of view, how unique is the situation in which we find ourselves today, and how applicable are the words of Ecclesiastes to it?
The discussion was opened by Sergei F. Sutyrin, Doctor of Economics, Professor of the Department of World Economy at St. Petersburg State University. In his speech, he noted that no matter how similar the problems we face now are to those we have experienced in the past or to those awaiting us in the future, we are destined to solve them here and now. And it’s hard to disagree with him on this. Next, Professor Sutyrin spoke about what, in his opinion, distinguishes the agenda of the international trading system in the current conditions:
“What distinguishes the current situation is the open sacrifice of not only current, but also long-term economic interests of a significant part of one of the warring parties, namely the European Union. These interests are sacrificed on the altar of US geopolitical ambitions, simultaneously with an attempt to cause the maximum possible damage to the Russian economy, which solves the problem of reducing the international competitiveness of both Western European countries and Japan, and in this part the results are more significant than in the anti-Russian direction.”
The analogy given by Sergei with the events of two centuries ago, namely the American-Mexican War of 1846-1848, as a result of which Mexico lost 55% of its territory: the modern states of Texas (1845), California, Arizona, New Mexico, Nevada and Utah, makes one think. No one demanded they be returned to Mexico. In addition, when this war began, trade sanctions were imposed against the United States by members of the world community, primarily European countries. However, approximately three years after the end of the conflict, they were all removed.
Another aspect of the problem that Sergei Feliksovich draws attention to is the level of compliance with the obligations assumed by members of the international community. The plot is also not new (let us remember the economic blockade of Germany during the First World War, which included an almost complete ban on food with the goal, in the words of W. Churchill, “to starve the entire population - men, women and children.” This was a direct violation Paris Declaration of 1856, London Declaration of 1909, etc.).
“The now widespread skepticism towards international law, or even its direct reduction to a level below the plinth, is in direct connection with the violations that we observe on a massive scale. The more such violations, the more compelling becomes the need to revise existing norms and rules. In truth, this already happened in the centuries that were before us, as Ecclesiastes interprets.”
Professor, head of the department of trade policy at the Higher School of Economics in Moscow, as well as the head of the delegation at the negotiations on Russia’s accession to the WTO, Maxim Yu. Medvedkov, believes that in history one can undoubtedly find parallels to the situation the development of which we see today (Russian trade in the 12th century between Veliky Novgorod and the Hanseatic League, where even then there were attempts to institutionalize trade, tariffs, concepts of trade rights, disputes and a mechanism for resolving them, showing insufficient inefficiency). According to Maxim Yurievich, the difference between the current situation is that the existing problems have become the result of globalization:
“Not countries, but continents have come into play, and contradictions at the continental level are beginning to be reflected in the world economic order. As an important element of decision-making, it is not the economic criterion that comes to the fore, but the political one. And this breaks the whole structure. And finally, new factors have appeared. For example, the topic of security, which is now used as a tool to combat competition. We see this in all large countries without exception, which, under the slogan of security, actually solve specific economic problems.”
Professor Medvedkov agrees with the position of his colleagues on the need to agree on new rules, but draws attention to the question that arises in this regard about where are the guarantees that the new rules will be followed:
“Using the example of the WTO legal system, we see that those countries that were considered models of law enforcement continue to take measures that do not comply with this law. Along with the development of new rules, we need to think about how to ensure their implementation.”
Professor at the ICHEC Graduate School of Management in Brussels, Sed Saad, is sure that many answers can be given to the questions posed, but there is something unique about the current situation:
“What’s new is two things. The first is artificial intelligence. History does not repeat itself here; this is a completely new adventure for humanity. The second is that giant companies have more power than countries. Large companies have so much influence that they can extend it to geopolitical decisions.”
Regarding the formation of new rules and regulations for the international trading system and leaders capable of leading this process, Professor Saad noted that we are indeed witnessing the emergence of a new economic order that does not meet the expectations of the West. But it originated here in Russia, and we are seeing its impact: the unification of Russia and China, the emergence of new players - India, Saudi Arabia, Brazil and others. But the most important thing is that countries have a choice, and the “new leaders” offer new alternatives.
Professor Saad’s idea was supported by a senior researcher at the Center for Competence in European Studies. Dušana Sidjanski, professor at the University of Geneva, Miroslav Jovanovic:
“We are leaving behind the “American Empire,” whose strength is backed not only by military might, but also by the almighty dollar. As the backbone of the international financial system, the dollar allows the United States to confiscate or freeze your assets. One more aspect of what is happening is especially thought-provoking. The United States declared a freeze of $300 billion in Russian gold and foreign exchange reserves. This is not entirely true. The real definition of what happened is this: the United States froze $300 billion worth of legally earned Russian assets. There are other examples: Afghanistan, Syria, Venezuela. Many countries are asking, who is next?”
These countries are looking for alternative systems, alternative mechanisms for building mutually beneficial economic relations with partners who are ready to guarantee the fulfillment of their obligations.
In connection with the highlighted aspects of the new reality in which the world economy finds itself, the moderator of the discussion, associate professor, acting. Olga Yurievna Trofimenko, Head of the Department of World Economy at St. Petersburg State University, noted that the world has long been accustomed to meeting existing global economic challenges on the basis of a multilateralism mechanism that allows solving management problems “by voluntarily limiting sovereignty on a mutual basis and regulating interaction between different national systems.” The idea of giving up part of one’s sovereignty explains the possibility of solving international and national problems through consolidated efforts. This form of interaction, when the parties agree on the rules and their observance, allows us to develop the basis for the stability of the international trading system as a whole.
Summing it up and turning to the question of the future of the international trading system, I would like to quote the head of the delegation at the negotiations on Russia’s accession to the WTO, professor at the Higher School of Economics in Moscow Maxim Yuryevich Medvedkov:
“If the multilateral system is to remain, the leadership system will have to change. For the simple reason that the leader of any multilateral organization can be a state that enjoys the support of the majority of members and pursues policies consistent with the philosophy of the requirements of this organization, otherwise it is not a leader. The United States has indeed done a lot to create and launch the multilateral system. But I think that the future lies in neutral or collective management. The time for one-man leadership is over.”
