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If you put 10 economists in a room, you’ll get with 11 opinions, or so the saying goes. While the amount of opinions candidly expressed at Chatham House’s Global Trade 2016 conference is not immediately quantifiable, the forum provided an open platform to discuss the biggest current issues in trade, against the backdrop of the recent Brexit vote and the ongoing downward trend in global trade as percentage of GDP.

As the meeting was held under Chatham House rules, GTR is unable to attribute the quotes and thoughts expressed to the speakers, but can nonetheless provide an overview of the topics discussed.

  1. Agreeing to disagree

Trade agreements are important but aren’t the only things that matter

The state of the UK’s trade relations with the European Union and the rest of the world following the vote for Brexit was a top concern at the event. Despite the quicker than expected instalment of a new government, led by Theresa May as prime minister and counting two new ministries dedicated to international trade and to exiting the EU respectively, doubts remain over when, or indeed whether, article 50 will be initiated to begin negotiations with the EU. Announcing her bid for PM, May said this would not happen until the end of the year, but who knows she won’t change her mind.

One of the issues under consideration is whether the UK should be negotiating other trade deals, including its status as a World Trade Organisation member (the country’s membership is currently integrated into the EU’s) and its position in the two major trade agreements the bloc is negotiating with Canada (CETA) and the US (TTIP), in parallel with the negotiations with the EU or afterwards. A speaker compared negotiating trade agreements at the same time as divorcing from the EU as planning your next wedding while still living with your ex-spouse – perhaps not the best idea.

Others questioned the need for trade agreements altogether: according to them, there is a danger of exaggerating their importance relative to other economic forces. China is one example in which the capacity to trade is more important than the deals, although the country may be seen more as an exception than the rule.

One argument that saw widespread accord was that trade agreements, particularly those the UK will have to renegotiate, will need to increasingly focus on services – an area in which the EU has not delivered, although the trading bloc is one of the 23 entities negotiating the trade in services agreement (TiSA) at the WTO level.

  1. Resurging anti-globalisation mood

We do have a problem of communication on globalisation, we have to learn to take into account the concerns of those who feel excluded

The vote for Brexit was widely framed as an opposition to the forces of globalisation – and Donald Trump’s rise in the US is explained in a similar vein, too. Parts of society feel they have missed out on the benefits of an interconnected and interdependent global economy.

Such explanations neglect strong and worrisome nationalistic feelings underpinning both the Brexit vote and Trump’s popularity (and also other concerns related to trade deals’ environmental impact and corporations’ influence on national legislation), but they do point to a failure of communicating (and, arguably, sharing) the benefits of trade agreements and globalisation.

Discussions at the event focused on whether globalisation is inevitable or man-made, and the degrees of responsibility businesses and governments carry in influencing this process.

For some, trade agreements represent a tool to shape globalisation rather than being shaped by it: trade deals have been proven time and time again to stimulate exports, increase higher-paying jobs and provide better choices for consumers. According to this camp, new deals like the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) are an occasion to learn from the past and implement agreements that take into account jobs and the environment, which could set high standard for future deals, even at the WTO level.

For others, the idea of being able to set standards for others is inherently problematic, as it implies that the rest of the world must subscribe to values and rules made up by a few. According to one speaker, the deep integration of value chains is bound to affect national sovereignty in different countries and it is not realistic to expect over 160 countries (at the WT level) to all agree to it. Others mentioned that there needs to be more humility and dialogue in international trade co-operation and reforming the WTO to allow for increased inclusion of developing countries in decision-making processes.

  1. Concerning China

Great challenges, no clear direction

The state of the Chinese economy never fails to capture audiences’ attention. The country faces many challenges, but there is little understanding on how it plans to tackle them. While on one hand the technology sector is rising extremely fast, traditional sectors face many difficulties. GTR’s latest feature on China focuses on the struggling steel sector and the overall inefficiency of state-owned enterprises, which were also mentioned at the event as big problems for the country’s economy.

Speakers also touched upon the failure of the Shanghai Free Trade Zone (FTZ) to drive China’s future growth. Equal scepticism was expressed with regards to the numerous investment initiatives under the New Silk Road initiative, which may face substantial financial losses, but is needed to deploy the excess production capacity.

Some even went as far as to say the exclusion from TPP is an embarrassment for China, because it isolates it from its neighbours. Whether this is true or not, China’s attitude to its neighbours raised speakers’ concerns, particularly in relation to the handling of the South China Sea disputes.The exacerbation of tensions in the South Pacific area, in which both China and the US strive to assert their influence, is concerning from both a global trade and security perspective.

  1. Supporting digital trade

Digitally-enabled trade democratises trade

Among some gloomy discussions, one that never fails to reveal a certain level of optimism is that on the increasing importance of digitally-enable trade. Trade costs are lower online and this has enabled a greater pool of businesses, particularly small and medium sized enterprises (SMEs), to expand internationally.

New technologies such as smart contracts, which are digital and self-executed, can increase productivity and lower costs, and it is only a matter of time before governments issue digital currencies to facilitate online commerce.

According to the speakers, trade agreements matter less to digital trade, but that is also because few have included issues that are relevant to digital trade, such as connectivity, global marketplaces, connected delivery services and favourable legal framework.

The recent WTO IT tariff agreement can help reduce barriers to technological products, but the online infrastructure enabling digital trade is still lacking in emerging markets, where mobile penetration is still low in comparison with developed economies. According to some speakers, one solution would be to broaden the notion of developmental assistance to include digital infrastructures as key to growth.

But as Facebook’s failure to woo India with its offer of free internet services to the rural part of the country shows, even digital infrastructure is an area in which contentious views of globalisation are bound to clash.