11 June 2008

EU trade chief urges rethinking of global economy

This article is excerpted from the 10 June 2008 edition of “The Journal of Commerce”.

European Union Trade Commissioner Peter Mandelson on Tuesday said that global policymakers will have to rethink some central assumptions about how power works in the global economy, and how American and European governments can best defend their people and their interests.

"The Atlantic world is no longer the center of the economic world because the economic world no longer has a center," Mandelson said in a speech in New York. …

Mandelson said that the next phase of globalization will be dominated by questions of global resource pressure for water, energy and food. He said that while economic internationalism remains the only way of addressing these problems effectively, it is being undermined at home by a "crisis of confidence" and a slide towards protectionism in the United States and Europe. …

Americans and Europeans should worry about the failure of the developing world, not its success, Mandelson said. The level of interdependence in the global economy has made the costs in stability and prosperity of disengagement from a growing global economy dramatically high. …

Mandelson said the greatest risk that the EU and the U.S. face is not "a world of multiple powers, but a world of multiple powers without institutions to coordinate their action and bind them together."

Mandelson is urging the renovation of global institutions to enable the emerging economies "not just to exercise their rights, but to assume their responsibilities.”