The programme of the 2019 edition of the “Journée de l’Économie” is built on the general theme of “Protectionism, nationalism, global trade tensions on the rise – Turbulent waters and potential scenarios”. 

Dani Rodrik will speak during the event on this topic “Straight talk on trade: ideas for a sane world economy”. He gives us an overview of the current world situation in a Q & A session.

The presidency of Donald Trump, the emergence and election of populist parties in Europe, such as in Hungary or in Italy, etc. Can we say that we are facing a global populism phenomenon? What are fundamental causes behind this situation?

Dani Rodrik. — “Clearly, there is something in common going on in the countries you mentioned and others. In many of the developing or transitional economies, I would say it is more a case of reversion to authoritarianism rather than something inherently populist. That is the case in Turkey, Brazil, the Philippines, and perhaps Hungary. 

In the most developed economies (such as the US, Italy, France, or Britain), it is a backlash to globalisation, economic dislocations and social/economic exclusion, often wrapped around a nativist, ethno-nationalist narrative.

For businesses, Brexit represents a high degree of long-term uncertainty. It is unclear how things will develop in the near future. How will this particular context affect the European trade scene?

“The populist impulse is to turn inward, so I expect this will diminish the hyper-globalist push of the last three decades. Businesses will have to find a way of accommodating the new demands, and that certainly means paying a lot more attention to local stakeholders rather than global markets and global competitiveness. 

I do not want to exaggerate and claim this is the end of globalisation. However, it will reinforce other, technological trends that are leading to reshoring and bringing supply chains back home.

What can small European countries do when faced with these global trade disruptions?

“Small countries will always remain reliant on global trade and global markets. Moreover, I do not expect the nationalist pressures to reach an extreme, where moderate levels of globalisation are really at risk. It’s more like a return to the 1960s and 1970s style of globalisation rather than the end of globalisation. Many small countries did fine in that earlier era. The trick in all countries, small and large, will be to repair the domestic social bargains that enable openness.”

For more information and to register, visit the official website of the event.

The Journée de l’Économie is organised by the Ministry of Economy via the Luxembourg Competitiveness Observatory; the Luxembourg Chamber of Commerce and FEDIL - The Voice of Luxembourg's Industry, in close cooperation with PwC Luxembourg.