Trade Deals or Disputes? / DAVOS 2025

Summary

This panel discussion at Davos 2025 focused on navigating trade disputes and deals in a changing global landscape. The panelists, including government ministers and business leaders, explored how countries and companies are adapting to new trade realities.

A key theme was the desire for mutually beneficial trade relationships. The Senegalese minister emphasized the importance of value addition and local development, moving beyond simply exporting raw materials. The French minister stressed the EU’s commitment to free trade while calling for Europe to strengthen its competitiveness. Business leaders highlighted the need for stable, transparent trade rules to enable long-term investments and efficient supply chains.

The discussion touched on evolving trade dynamics, including China’s growing economic influence and the challenges of Brexit. Panelists noted the increasing complexity of global supply chains due to geopolitical tensions and regulatory fragmentation. There was broad agreement on the continued importance of trade for economic growth and development.

Several innovative approaches to trade deals were discussed. These included agreements focused on critical minerals, incorporating local development provisions, and balancing high standards with increased market access. Panelists emphasized the need for trade deals to deliver tangible benefits to local communities and workers.

The conversation concluded on an optimistic note, with participants seeing opportunities to reshape trade relationships to be more inclusive and sustainable. There was a call for the business community to articulate principles for 21st-century trade that balance commercial interests with broader societal goals.

Keypoints

Major discussion points:

– The changing nature of trade relationships, especially for developing countries seeking to add more value domestically

– The need for new types of trade deals and policies to address current geopolitical and economic realities

– The importance of de-risking investments and providing policy stability to encourage long-term projects

– Balancing competitiveness, fair trade practices, and local development in trade agreements

– The role of business in shaping trade principles for the 21st century

Overall purpose:

The goal of this discussion was to explore how trade deals and disputes are evolving in the current global context, and to identify potential new approaches for creating mutually beneficial trade relationships that address both economic and geopolitical concerns.

Tone:

The tone of the discussion was largely constructive and forward-looking. Despite acknowledging challenges in the current trade landscape, participants focused on opportunities and potential solutions rather than dwelling on problems. The conversation maintained an optimistic and collaborative tone throughout, with panelists building on each other’s ideas to envision new possibilities for trade relationships and agreements.

Speakers

– Simon Evenett: Professor at IMD Business School, co-chair of the Trade Council at WEF, moderator of the panel

– Vandita Pant: CFO of BHP

– Tak Niinami: CEO of Suntory Holdings, senior economic advisor to Japanese prime ministers

– Tobias Meyer: CEO of DHL Group

– Laurent Saint-Martin: Minister for France (Foreign Trade Minister)

– Serigne Gueye Diop: Minister for Senegal (Minister of Industry and Trade)

Additional speakers:

– None identified

Navigating Trade Disputes and Deals in a Changing Global Landscape

This panel discussion, moderated by Professor Simon Evenett of IMD Business School, brought together government ministers and business leaders to explore how countries and companies are adapting to new trade realities. The conversation focused on several key themes, including the evolving nature of trade relationships, the need for innovative trade deals, and the role of business in shaping future trade principles.

Perspectives on Global Trade

Serigne Gueye Diop, Minister for Industry and Trade of Senegal, emphasized Africa’s desire to move beyond simply exporting raw materials. He stated, “We don’t want to be a raw material provider to the world. We want to have more investors coming in Africa and helping us to process those raw materials.” Diop highlighted Senegal’s efforts to attract investment, including the creation of special economic zones and initiatives to improve the business environment.

Laurent Saint-Martin, France’s Foreign Trade Minister, noted that Europe must reconsider its trade policy and focus on building economic strengths. He reaffirmed the EU’s commitment to free trade, stating, “Europe believes in it and our multilateral [approach]. And it’s not an ideology, it’s because it’s good for our GDP, because it’s good for our companies.” Saint-Martin also mentioned the EU’s recent critical minerals agreement with Kazakhstan as an example of innovative trade instruments.

Tobias Meyer, CEO of DHL Group, highlighted the increasing complexity that companies face in navigating trade restrictions and regulatory frameworks. He noted that DHL has had to invest significantly in enhanced intelligence capabilities to manage geopolitical risks effectively. Meyer also emphasized the importance of trade for export-led development, poverty reduction, and accessing global technologies and specialized capabilities.

Tak Niinami, CEO of Suntory Holdings, suggested a nuanced approach to trade agreements, advocating for both high-standard agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and lower-standard agreements like the Regional Comprehensive Economic Partnership (RCEP) to promote global trade and investment. This perspective acknowledges the diverse needs of different economies and the importance of inclusive trade policies.

Vandita Pant, CFO of BHP, brought attention to the unprecedented demand for resources driven by development, energy transition, and digitalization. She provided a striking example: “For just next 10 years, copper, another 10 million tonnes of copper is needed. And that is 250 billion of capital investment.” Pant emphasized the importance of balanced permitting and fiscal stability to enable these substantial resource investments.

Key Elements for Effective Modern Trade Deals

The discussion highlighted several key elements for effective modern trade deals:

1. Local Development Focus: Prioritizing local development and value sharing in trade agreements.

2. Practical Mechanisms: Implementing tools like carbon border adjustments that address climate concerns without disrupting trade flows.

3. High Standards: Maintaining high standards in areas such as technology and intellectual property protection.

4. Investment De-risking: Ensuring stable fiscal arrangements and rule of law to encourage long-term investments.

5. Critical Minerals Agreements: Developing new types of trade instruments to address specific economic and strategic needs.

Challenges in Global Trade

The panel discussed various challenges facing global trade:

1. Balancing the desire for local processing and value addition with the need for foreign investment, particularly in Africa.

2. Navigating complex regulatory environments and trade restrictions, which require businesses to invest in enhanced intelligence capabilities.

3. Meeting the massive demand for resources needed for global development and energy transition, while ensuring sustainable and responsible extraction.

4. Developing trade agreements that cater to the diverse needs of both developed and developing economies.

The Role of Trade in Economic Development

Despite challenges, the panel reaffirmed the crucial role of trade in driving economic growth and development. Meyer emphasized trade’s importance for accessing global technologies and specialized capabilities. Diop articulated Africa’s aspiration to be seen as an equal trade partner and investment destination, moving beyond traditional donor-recipient relationships.

Conclusion

The panel discussion revealed a broad consensus on the continued importance of trade for economic growth and development. It highlighted the need for innovative approaches to trade deals that balance various stakeholders’ interests, promote local development, and address contemporary challenges. As Simon Evenett noted in his closing remarks, the conversation demonstrated a positive direction in thinking about trade relationships and the potential for more inclusive and sustainable approaches in the future.

Simon Evenett: Welcome to Davos 2025. My name is Simon Evenett and I have the honor of moderating this panel on trade disputes and trade deals. We have a distinguished panel with me, which I will introduce in a moment. I’m a professor at IMD Business School and co-chair of the Trade Council here at the WEF. The organizers of this panel wanted us to reflect and link trade deals or trade disputes. I imagine, since we are all in the spirit of Davos, we should be thinking about trade deals. But when you think about the link between these two, it seems to me that some trade disputes become trade deals later, and then some trade deals fall apart and become trade disputes, as we are learning in the last few weeks. So the timing of this, the link between trade tensions and trade reforms, seems to be quite complex and I hope we can unpack them here today in this panel. With me we have five speakers, two ministers, two CEOs and one CFO. We have Minister Diop from Senegal, Minister Saint-Martin from France, Mrs. Pant from BHP. We have Tak-San from Suntory Holdings, and he has been a senior economic advisor to four Japanese prime ministers. And we have Mr. Meyer from DHL Group. Thank you all for coming and joining us. We’re going to start with a series of opening questions, and there may be a little discussion amongst ourselves, but we want to leave space for the audience to participate, and I know we have a number of senior officials who are joining us as well, and I’d love to hear what they have to say as well. So Minister Diop, please, we start with you. There are, as you know, growing geopolitical rivalry. Much is made of the opportunity that this might create for Africa. How do you see this in Senegal as a source of opportunity or risk, and what are you doing to try and push the equation towards the benefits for Senegal?

Serigne Gueye Diop: Thank you very much. This is really a very important issue today. Our country, Africa in general, used to be a provider of raw materials, a trader of raw materials. And today, this mindset is totally changing. We believe that the world is an opportunity of really adding value to your raw materials and making sure that you have a local impact first in terms of job creation, in terms of growth rate in the country, in terms of GDP growth. So this equation is really something new and is going to grow in the future. Today, you have just one figure. The trade between Africa, African countries, is still very low. It’s less than 15 percent. So in the future, we want to increase the trade between East African countries and West African countries. But at the same time, since Africa is a reservoir of raw materials, minerals, agro-raw materials, fisheries, and all types of raw materials, we see that we need to continue as well to export, to trade with Asia, to trade with Europe, America, to trade with all the different continents. But we need to make sure that it is a win-win situation. In the past, of course, we used to trade in a very unilateral way, where we just was actually accepting the price of whatever it is. And today, I think this is changing. So that’s why we talk about now deals. We want to make sure that this trade, these opportunities that Africa has for its raw materials, and for today also, we have another advantage is that every day, a country like Senegal, my own country, we discover gas and petrol, a lot of gas and petrol. We discovered last year something like 100,000 barrels a day. In two years, it will be 200 barrels a day. So this is going to increase our trade in the world. But it’s not only about gas as well. What do we do about it? Are we going to trade it as gas or as petrol, or are we going to process it into added value product? So this is the way we look at things today in Africa. We don’t want to be a raw material provider to the world. We want to have more investors coming in Africa and helping us to process those raw materials. Whereas it’s phosphate, for example, we discovered in the eastern part of the country, a lot of phosphate. So are we going to export it as it is, in the form of phosphoric acid, fertiliser, or are we going to manufacture it locally? So this trade for us is very important. We need to be very open. That’s why I’m here. I was just appointed minister nine months ago. And today, we want to voice now for Africa being your partner in the world, being a partner for Finnish goods, and at the same time a partner for inviting you to invest in a country like Senegal, where we consider ourselves as a gateway to Africa, one of the most stable countries, and also a country that will help you to have access to 54 countries with this agreement. You know that we have this 54-country future agreement. We call it AFDAC. So this is really very important. It will be one single market. We have another market we call ECOWAS, 15 countries from Nigeria to Senegal. This is 350 million people. In five years, it will be almost 450 million people like Europe. In this country, 70% of the people have less than 30 years. So it’s a reservoir of skills of young people who can provide digitalisation, who have a lot of knowledge on those things. So I really would like to emphasise on this new role of Africa, where we want to trade more with the rest of the world. We are not focused on one continent. We are focused on every different continent, and we would like to really invite people to come to Africa now with a new mindset. Senegal, in particular, has this advantage to be closer to Brazil, to be closer to France, to Europe, to be close also to many, many parts of the world. With this new democracy, with our young government, we just have our last election. We have a lot of opportunities. So this is really something we wanted to convey, and we once again see this commerce, this trade, as something very important. But we should go more into a deal than into disputes, of course. There’s competition, of course. Africa wants to be now taken very seriously because many people are coming back with a lot of skills from all over the world. I was working here for almost 15 years for Nestle, so many people are coming back to bring their expertise in the field of technical field, marketing field, financial field, and this is a new aspect that we need to take into consideration.

Simon Evenett: Thank you, Minister. On the subject of deals versus disputes, we turned now to the Minister for France. We have one or two people around the world who are not so happy with their trading relationship with the European Union, and our friend in the White House is making plain his views on the subject. In Europe, we hear discordant voices. Some people are arguing that we should negotiate some type of new arrangement with the United States, others saying perhaps we need to respond in different ways. How do you see this matter?

Laurent Saint-Martin: First of all, thank you very much for your invitation. You’re right, I think the topic of this panel is very accurate with this new geopolitical configuration. And you’re right, I’m speaking as a French foreign trade minister, but also as a European Union state member foreign trade minister. So we cannot or we should not divide the vision of Europe and of France for this topic when we are talking about trade deals and disputes. Because the most important thing, and I do believe that the President of the Commission yesterday here in Davos said it very clearly, Europe and France first do believe in trade, are pro-trade, are pro-investment, are pro-deals, and of course not pro-dispute, but pro-rule-based system. Within, dispute can be of course on a regulatory and on a rule-based trade system can be resolved. This is very important. There is a rulebook, there is a WTO, and it still exists. And I want to say that also today because Europe believes in it and our multilateral And it’s not an ideology, it’s because it’s good for our GDP, because it’s good for our companies. There are some companies here. They need FTAs, they need trade deals, and at the end it’s good for jobs and for employees. So our position in France and in Europe is that we are pro-trade because we do believe it’s better not only for us but for everyone. So I won’t directly answer your question, but what I want to say is that maybe the new situation you pointed out with the election of the new President of the United States might be, and should be, a wake-up call for Europe. I do believe it. It might be a wake-up call maybe to be more united, to be more united and to rethink the way we create and the way we think our own trade policy. And Minister Diop talked about relationship with Senegal and Africa in general, but we can think and rethink also in this new configuration our relationship with some countries, for example in ASEAN, in Latin America, et cetera, et cetera. So there is a huge opportunity in this situation to diversify the partnership and trade deals. And inside Europe, I think we should use this situation and this very specific context to maybe focus on building the strength on our own economy. We should and we must focus on reducing what today make our competitiveness maybe sometime fragile or weak. For example, I think it’s time we reduced price of energy. It’s time also for us and we must as European finally reduce or remove what we can call a regulatory burden for our European companies, et cetera, et cetera. This is what I mean when I’m talking about wake-up call for Europeans. And I would like to use and benefit from this situation. So for me, it’s not a question of danger or how we have to deal with this new Trump administration. It’s how we rethink ourself as European to adapt and to say we still believe in a positive agenda in terms of trade deals. We still believe in multilateralism and on dispute settlement mechanism. We need that. And we didn’t change our mind. But we have to change ourself. And moreover, moreover, we have to prepare the world, of course, and we have to be capable to defend ourselves. This is, I think, a kind of continuation of what we are and what we believe in, and at the same time an adaptation to this new context, being less naive, being more conscient and more offensive of our own strengths, be on a positive agenda, but prepare the world.

Simon Evenett: Thank you, Minister. Now I’d like to turn to Mrs. Pant. Your company is trying to navigate this new trade and investment landscape. We’ve heard a statement here from a minister who would love to see more value addition. Maybe you could help us understand how you would navigate this landscape and also advise governments on what types of policies would make it more conducive for value to be captured in their own country, and as well as serving your customers’ needs, of course.

Vandita Pant: Sure, Simon. Firstly, it’s a fantastic moment in time that the world, looking to do three things, from my perspective, continue to develop the swathes of the world which still need development, traditional commodity requirement. It needs to change its energy system for security and transition, which requires a lot of commodities and minerals that we produce. And then, as we have been discussing for the last three days here in Davos, the world needs to build up at an accelerated pace an AI infrastructure, which requires – the bottleneck can be the resources for the electrification required. So I take this accountability as the largest mining company in the world and as the largest producer of copper in the world, with the largest endowment of copper resources that BHP has, to say everything that the world needs to develop, to digitize, to decarbonize, or to secure its energy transition comes from the resources that we produce. And if that is the place that we are in, I sort of go back in history and say one-fifth of global trade is of commodities. One-fifth of global trade is of commodities. And we know commodities are where they are, as the Minister was saying. The endowment, physical endowment is where it is, but the demand centres of these resources are global. So from my perspective, we need to work together with the governments, with the civil society, with various partners across the corporate value chain to see how we can find, fund, fulfil the resource requirements that the world needs at a pace and at a scale which is unprecedented, and we need to do it sustainably. And if that is the backdrop, for me it’s an opportunity, generational opportunity, for companies, for communities, for nations to come together and say, how are we going to do this? I’ll give you an example of just one commodity which is quite pervasive in our way of life and is required for all these three drivers which are mega themes right now in the world, which is copper. For just next 10 years, copper, another 10 million tonnes of copper is needed. And that is 250 billion of capital investment. And given the scale that it is needed, we need to work together to enable that to happen. Just one data centre of $500 million requires 2,000 tonnes of copper. And you know the scale of investment that’s going in that. So we take this accountability seriously. Then you talked about what kind of policies which may be needed to enable this to be unlocked. And I think there’s a plethora of policies and enablers which can be put in place. In some places, balanced permitting could work. I think very important that it’s balanced so that the sustainability of standards is not compromised, but any waste in the process does get cut, because we can’t afford it collectively for the world to do what it needs to do. The stability of fiscal arrangements is important. Infrastructure, to be able to take the commodities from where they are to the markets, that is needed. But that’s not the work for just one player. It is about bringing our perspective and continuing to engage across all this ecosystem of enablers to do what is needed for the world to continue to do real growth drivers, which is a quite exciting place to be right now.

Simon Evenett: Thank you very much. Now I’d like to turn to Tak san. Japanese firms have always emphasised their strong supply chains throughout the region, especially the Asia-Pacific region. There’s been a lot of attention on securing supply chains, making them very resilient. Perhaps you could share with us your company’s experience in moving towards that goal and the way in which trade deals have supported that objective.

Tak Niinami: Right. We’ve been in a huge challenge for global supply chain, not because of the COVID, not as a geopolitics. And in the past three, four years, we established further capabilities in intelligence, because we just had thought about country risks and so forth. And COVID was an annoying factor around the global supply chain. As a matter of fact, nowadays, we have to understand the geopolitical implication. But a CEO can’t say, we can’t predict what’s gonna happen because we have to make a decision. So which means we need lots of analysis of intelligence. So we established the network in Washington DC, New York, Singapore, London to collect a lot of intelligence. That’s a new thing for the business, as a matter of fact. And then based on the analysis, we just reduced the unpredictable things. And we plan A, B, C, which was not the usual way to do. And even A, that is more costly than before. So just look at the 90% of vitamin C, which comes from China. But can we rely on only one country? Maybe not. So which means we have to shift the product, I mean, sources from country A to B, C, D, which is more costly operation. So we have to first agile, if something happens, then we have to shift to the plan B or C, more costly. So we totally changed the strategy to be more focused on our strength. And we have to be more innovative. We have to be avoiding the harsher competition from the industry to enjoy the gross margins. So supply chain totally changed the entire strategic landscape for us. So, and we talked with the government to enhance the trade pact, so like CPTPP, RCEP. I like to talk later in detail, but we need that kind of the trade pacts because trade is so important for Japan. Trade is so important for international global player. So, and trade is, I think, essential for countries to enjoy growth. So we want to keep our global supply chain based on the trade pacts for the free trade. And Japan is still a free trade flag bearer, and we corporates want to support it. And as a Sino-economic advisor, I’m talking to the prime ministers, let’s work on free trade. Whatever happens in the world, we need it. So later, I’d like to talk about the CPTPP and RCEP.

Simon Evenett: Thank you. Thank you very much. We will definitely come to which trade deals matter more. So let’s turn to Mr. Meyer. Your company is in the business of getting things across borders, right? And there is a lot of regulatory fragmentation. Some argue there’s more fragmentation over time. How are you navigating that and still satisfying your customers’ needs and also your shareholders?

Tobias Meyer: Well, absolutely. The world has gotten more complex. We have more trade restrictions, which I find very regrettable. And that’s where I would like to start. Some comments were already made, why do we trade and why is this beneficial? We have definitely the aspect to participate, to have access to raw materials. But I also want to remind ourselves that in the space of technology, be that pharma, be that medical devices, we need specialisation around the world. Not every nation will be able to develop a new vaccine. We’ve seen this during COVID. We transported a lot of those vaccines and I think we also saw how dire the need was. So trade can have a positive effect as export-led development and trade has brought a huge amount of people out of poverty and many nations are still aiming for that objective of trade. But also the participation in technology is an increasing reason to trade. And there are very few, maybe two or three large countries that are largely self-sustaining. The rest of the world is not. So that’s the reason why we trade and that’s why it’s so regrettable if trade is restricted. And I always wonder that people don’t look at Brexit as this terrible case study. What got better in the UK after Brexit? Tell me one thing that is better due to Brexit. I haven’t found it. We employ 1,500 additional people doing paperwork. 800 on the UK side, 700 on the continental European side. It’s not value-adding. It’s good business for us, but it’s not value-adding for the societies. It’s a terrible thing. So trade has a lot of advantages, but it needs to be fair and that’s what trade deals try to do. And I think it would be good if nations think about that maybe a principle again, not to expand extraterritorial reach. And that’s also something Europe should think about. Trade deals have been held up, also the Mercosur trade deal. And I also hear this, what the Honorable Minister is saying, a big part of the world is tired of being told what to do by the West. We don’t talk about it openly, but you see it in the facts. What’s growing is the trade with the rest of the world, not being EU and not being US with China. That’s what has been growing the strongest. That trade, China with the rest of the world, is now far bigger than the trade that China has with the US and EU combined. You have nations like Nigeria on the other side of China. 40% of Nigerian imports come from China. So I think it’s important to recognize that, that the failure of doing trade deals, particularly under new conditions, has really led to that economic development and that a lot of nations silently side with China in this way, at least if you look at the trade figures. So for us, we are globally local. We’re present in all markets with local teams. We adhere to the local rules. Conflicting extraterritorial reach and such is a huge complexity for us. It’s very difficult to navigate. If the US imposes certain restrictions that China does have a different view on, and there are many of such examples. So it’s a complexity that we need to navigate with our customers. There are certain business that we can’t do anymore, that we needed to step back from because we can’t do it in a compliant way. It’s very regrettable. I think it’s not what it’s intended by those who put those rules in place, but that’s what de facto is happening, goes into other channels. We see a need going forward. Obviously now we have intense discussions with our customers, how we can help them. And we see that happening, that supply chains are adjusting to trade restrictions. It’s not for the benefit of the planet, but it’s a necessity that business needs to deal with. And that’s part of what we do for our customers.

Simon Evenett: Thank you for that. And so let me, if I may draw together some of the observations we’ve heard. All five speakers want to engage, with the rest of the world. And we certainly see that in the data. Since 2010, I checked this morning, for every dollar of extra imports into the United States, between six and seven were exported to other countries. So there’s clearly opportunities growing. In the go-go years before the global financial crisis, that ratio was 16 to one. So there are markets out there. The question then is how to secure those markets in an environment where security concerns have become important and geopolitical concerns are important. Yet at the same time, we seem to see the bigger players find it more and more difficult to sign free trade agreements. Yet we have very active middle powers and smaller economies who have not given up at all. And in some cases, some incredibly active regions who are getting together. So then maybe we could shift the discussion to, okay, what does it take to create trade deals in this current environment, which have the type of commercial payoff that we’re looking for, and also deliver the sort of security of supply which we’re looking for. So Mr. Takasone, you said you wanted to make a few comments about RCEP and CPTPP, and then I would like to open it up to our other colleagues. So let’s move the discussion to what types of trade deals could really work in the 21st century?

Tak Niinami: Well, there are two kinds. One is high standards, like including technology, IP. That’s so important for us to protect, for example. And the CPTPP is based on the high standards. And the RCEP is a low standard to promote the trade. Both are so important. And the CPTPP promotes high standards. and promote the transparent market to promote the foreign investment to your country. So we are now bringing more participants to the CPTPP. The country which is willing to bring more foreign investment, so the country has to be based on the rules of the CPTPP. And the country needs the high technology, for example, to produce something, but the rule is so important to comply. Then transparent, then you can bring foreign investment for the high skilled business. So UK just joined, and then Indonesia is raising a hand, and more countries. And what to do with China then? China raised a hand, but my personal opinion, we should start a negotiation. And we have to check if China can comply with the rules. But checking their behavior, now putting a lot of things to the world, and it’s a matter of the problem of perhaps the over-excessive products are going to many countries. But look at the RCEP. China is a lot of exports, and China is creating the community of RCEP, which is fine. But we have to bring more countries to pursue further trade. What to do with the fairness of the trade? Because most countries are under the deficit because of China. And I understand the Chinese economy, current production, a lot of things, but how to keep the RCEP in line to increase the membership? Definitely we have to have a fair proposition. How to manage the fairness of the trade deficit, trade surplus? That’s so important. So anyway, both are the key factors for us to pursue to keep the business, I mean, trade, toward the better situation so that we can have frequent trade and investment. That is a key to grow the GDP in the world.

Simon Evenett: Thank you. I want to turn now to Mrs. Pant. I mean, you have a very specific need. Your company invests over decades. Getting policy uncertainty down must surely be important to provide you with some type of confidence that your shareholders will get some type of return. So what types of either trade deals or possibly investment accords work best in your sector? What are the aspects of them that really matter the most? And then we can think about how they can be incorporated into agreements.

Vandita Pant: Yeah, sure. So rather than go from trade deal onwards, I would go from what are the enablers for the kind of investment that we need in the resources. And if you look at the enablers, they’re pretty simple at one way, if we can put it that way. One is around how do we enable mining to be something which everyone knows how important it is. I think it’s on the centre of the table in this Davos discussions because it’s needed. And if that is assumed is the case, then the way we can get permitting, the way we can get infrastructure, the way we can get the, I agree, with the high standards, I think it’s very important. As you said, we invest for 30, 40, 50 years and we are in that community for that long. And hence, having the right kind of standards around sustainability is something that we are very conscious of because that brings social value for all stakeholders. However, enabling infrastructure is needed. A lot of unlock of capital will be needed. So investors, governments, companies, communities, all need to come together. As I was saying, just for copper, if it is $250 billion of investment for a period which can take from discovery to sanction 15, 20 years and the production happens for the next 40 years, that’s the kind of investment horizon I have in mind. And for that, stability of fiscal arrangements, stability of just rule of law, that becomes quite important. And governments, of course, have a role to play in that because this is a high, long horizon, high capex, which requires some kind of de-risking. And the de-risking is through these enablers.

Simon Evenett: Thank you. So Minister, you would like some of this investment. So de-risking, you hear from the private sector, is a request. You have been in the private sector, so this is no surprise to you. Which of the different collaborative instruments out there would be most useful? And notice I say collaborative. I’m not asking you what it is that only Senegal has to do. What can Senegal do with partners which will help de-risk these investments to create the type of jobs and value creation that you’re looking for?

Serigne Gueye Diop: Yes, in Senegal, actually, we have one big principle which is called creating shared value. It means that we encourage companies really coming and mining, companies coming and fishing, companies coming and really helping us to process the raw material to make sure that it is useful and to make sure that it can serve to create wealth. So this is really the big principle. We have a liberal government in Senegal. And what is changing, actually, is what you just said, is how do we make sure that the value created affects the local communities. Because in the past, this was not happening. In the petroleum, we remember Nigeria, many countries. So today, the new generation of leaders in Africa, in Latin America, in many parts of the world, they want to make sure that this raw material that exists from mine to vegetable to animal product and so on, and we are very rich about that, we all know that. How do we now go to the next step of being a provider of just raw? We know that between the raw material itself and the finished product, you can have a multiplying factor of 10 to 15 to 14, even to 20. So this is now something we want to challenge. That’s maybe not the deal, but maybe the problem we need to solve. So that’s why we’re saying we need the Western world, the America, the Asia, China, Japan, all the countries, we need to invite them to come in Africa and make now deals with the local business people, with local government. And my role as Minister of Industry and Trade is to make it easy for them. Two ways to make it easy. One is to de-risk. It means that we are now removing many, many taxes that will actually really decelerate the investment in Africa. In Senegal, for example, we have a new rule, we call the rule for economic zones. It means that any tax that is going to make it difficult for industrial people, mining people, we just take them out. Because our vision is the technology transfer. We want people to come in Senegal to invest in economic zones, in the phosphorus, in the vegetables, in the mining. For example, we’re exporting a lot of zircon. But at the same time, we want them to train the local people to make sure that the technology is also shared and to make sure that also the processing, if you can add another step in the processing, into adding a finished product with more added value, that will create jobs. You can believe that exporting your raw material is exporting a part of your jobs. And this is really the new mindset. That’s why what I expect from this forum is to start thinking how all this investment that we’ve been doing, all this export of raw material from cocoa to coffee to copper, iron, phosphorus, this will not happen like that any longer in Africa. Because we see that in the last 100 years, that was what was happening, from Congo to Zaire and so on, South Africa, many, many countries. Today, I think what I would like to share is in all the governments in West Africa, in South Africa, in Central Africa, the new idea is how we can deal with the rest of the world by industrializing our own system, even manufacturing locally, manufacturing even complex issues, having now patent on drugs as a product, manufacturing also complex things that were supposed not to be done locally, but that we encourage people to come. And what we are giving back is just tax reduction, is just customs fees and so on. So in Senegal today, when we import raw material to manufacture product, they are just exempted from any tax. If you import a line, it’s the same thing. So this is really what I wanted to share, and what is valid for Senegal is maybe valid for many, many African countries today.

Simon Evenett: So in the spirit of thinking of innovative tools, I would like to turn to Minister Saint-Martin. The EU has a quite, I would argue, quite creative and elaborate deal with Kazakhstan on critical minerals. But it’s not a classic binding trade deal. It’s a new type of instrument. You’ve heard some observations about the way in which the EU has in the past structured its trade negotiations. Given that legacy and these new innovative tools, what do you see as the future for the types of trade deals which will enable Europe to secure these critical minerals as well as to support industrialization abroad, and of course to strengthen economic security at home? What’s the formula for success?

Laurent Saint-Martin: Well, I fully agree with what I heard. We can talk effectively of Kazakhstan, but more recently, for example, I was in Mongolia with Orano to sign an agreement for uranium. And I must say it’s a bilateral agreement, but I must say we can build, because I’ve seen it, a very modern and very different way of building a free trade agreement with exactly what you said, new standards, and most of all, the issue of local development. And this is very important. It’s true when we talk about royalties. It’s true when we talk about sharing value. This is true. But most important, I think, if we talk about future trade agreements, I think we have to mostly think about local development. And I think this is a 21st century trade deal. And I had a great chat just a couple of hours ago with Rebecca Greenspan with that. And I think we really need, again, on the multilateral scale to think about that. And I do believe it’s possible. And it might be the hope to save and preserve maybe not a multilateral system, but at least a multiparty system with new standards. And let’s be very – let’s have a high objective on that. And I think it’s really possible. And it may, for some countries, gather more countries than what we have, for example, with the MPIA at the WTO. We could do more with a multiparty trade system. But we need rules, because as you said, why do we need a rule-based trade system? Not only because we do believe in it as an ideology. We do believe because it creates certainty. It creates transparency. And business is needed. Business needs transparency and centrality. That’s why we are fighting for that. But it’s not only preserving from a conservative perspective trade deals and multilateralism. It’s because it’s good for prosperity. It’s good for autonomic strategy, as you said. And it’s good tomorrow to develop, to develop a new way of partnership thanks to trade. And this is why we are so keen to continue to develop those kind of trade deals. But we have to – and you’re right to emphasize on this – we have to be more – we have to get a higher objective on local development. I do believe in it.

Simon Evenett: Thank you. I want to give Mr. Meyer an opportunity to reflect on – we have had a number of initiatives over the years, both here in the Forum and also at the WTO, on enhancing trade facilitation. Where could that go? And what type of trade deal could support getting the stuff across the borders, which is a large part of what you and several of your colleagues are in the business of doing?

Tobias Meyer: I think what’s very important, and I think the discussion shows that, not to mix up the issue about the fairness of trade and the issue with own competitiveness. Because what was outlined for Senegal, for instance, is increasing your competitiveness and thereby on merits brings you into a better position to also have fair trade. And I think that is something that is also important in the discussion with China. There is a lot of competitiveness in that market. Now, we still want fair trade, but we shouldn’t mix that. So I think having fair trade on merits is an important principle, and to do your homework as a nation on competitiveness is a different issue that is, to some extent, important for the success that you also have as a trading nation. So that, I think, is extremely important to set the right rules. The other topic that I would mention is not only to focus on the trade of goods, particularly also when it comes to the trade imbalances that the US, for instance, has. Yes, the US has a massive imbalance, massive deficit in trade of goods, but they are a huge beneficiary of market access globally for their tech companies. They’re a great beneficiary of capital flows into the US. So that, I think, also needs to be seen in a balance, that there is also other benefits of having access to other markets of other nations. And if we recognize that also in those discussions, I think it’s much easier to get to good, practical trade deals. And I wish, for instance, for the EU to have another look at the carbon border adjustment mechanism. I think this is a looming issue that could be very disruptive for global trade next to more short-term things that we might be facing. I’m a believer that we need such a mechanism. Europe should really advance and should have a high price on carbon. I think that’s good. But it needs to be a practical mechanism that is not perceived by other nations as a massive barrier to fair trade.

Simon Evenett: So thank you for that. And in reflecting on this, you made me think of the history of the trading system where so many of the principles which were advocated – most favoured nation treatment, national treatment, having certainty and security – these were actually advocated by the business community in the 20s and 30s of the last century after the chaos that they went through. And I wonder if, listening to this group here, there is another opportunity for the business community to articulate certain principles by which they want to see 21st century advance, not just in goods but also in services and certainly digitally delivered services as well. And I think we also have to listen to what the ministers want to bring to the table as well. We hear it is not enough just to have market access. We want results. This has to translate into something for living standards. We can’t have too many people falling behind, I think is one message one might want to take from the populism of the last few years. So I am very heartened by this discussion. We could have, after the developments of this past week, gone down a very dark rabbit hole in the past hour or so in this conversation. And I am very grateful that we have gone in a different way and hopefully charted a possible new path forward, which I hope our friends at the Forum can explore. I know they are doing a lot of work on trade facilitation, goods and services, digital trade, as well as classic advanced manufacturing and also critical minerals, which I think are important. So let me thank our panellists for their great contributions. They shared with us a lot of thoughts and I am afraid we didn’t get time for questions from the audience. Blame me for that, but please congratulate our panellists. Thank you. Thank you.

Agreement Points

Importance of value addition and local development in trade

speakers

– Serigne Gueye Diop
– Laurent Saint-Martin
– Vandita Pant

arguments

Africa seeking to add value to raw materials rather than just exporting them

Trade deals should focus on local development and sharing value

Importance of balanced permitting and fiscal stability to enable resource investments

summary

The speakers agree on the need for trade deals and investments to focus on adding value locally, promoting development, and ensuring benefits for local communities.

Need for new trade deal structures and instruments

speakers

– Laurent Saint-Martin
– Tak Niinami
– Tobias Meyer

arguments

Critical minerals agreements as a new type of trade instrument

Need for both high-standard and low-standard trade agreements to promote trade and investment

Need for practical mechanisms like carbon border adjustments that don’t disrupt trade

summary

The speakers agree on the need for innovative and flexible trade agreements that can address specific needs while promoting overall trade and investment.

Similar Viewpoints

Both speakers emphasize the importance of trade deals that prioritize local development and value creation in the countries where resources are extracted.

speakers

– Serigne Gueye Diop
– Laurent Saint-Martin

arguments

African countries want partnerships to process raw materials locally and create jobs

Trade deals should focus on local development and sharing value

Both speakers highlight the positive impact of trade on economic development and the importance of maintaining high standards in trade agreements.

speakers

– Tak Niinami
– Tobias Meyer

arguments

Importance of high standards in areas like technology and IP protection

Trade as a driver of export-led development and poverty reduction

Unexpected Consensus

Balancing competitiveness and fair trade

speakers

– Serigne Gueye Diop
– Tobias Meyer

arguments

African countries want partnerships to process raw materials locally and create jobs

Companies must navigate increased trade restrictions and regulatory complexity

explanation

Despite representing different perspectives (developing country vs. global logistics company), both speakers recognize the need to balance local competitiveness with fair trade practices, highlighting a shared understanding of the complexities in global trade.

Overall Assessment

Summary

The speakers generally agree on the need for innovative trade deals that promote local development, value addition, and fair trade practices while addressing specific needs such as critical minerals and technology transfer.

Consensus level

Moderate to high consensus on the broad principles of future trade deals, with implications for more collaborative and flexible approaches to international trade agreements that balance various stakeholders’ interests.

Different Viewpoints

Approach to trade agreements

speakers

– Tak Niinami
– Laurent Saint-Martin

arguments

Need for both high-standard and low-standard trade agreements to promote trade and investment

Trade deals should focus on local development and sharing value

summary

While Tak Niinami emphasizes the need for both high-standard and low-standard trade agreements, Laurent Saint-Martin focuses more on local development and value sharing in trade deals.

Unexpected Differences

Overall Assessment

summary

The main areas of disagreement revolve around the specific approaches to trade agreements and the balance between local development and global trade facilitation.

difference_level

The level of disagreement among the speakers is relatively low. Most speakers share similar goals of promoting economic development and fair trade, but they emphasize different aspects based on their roles and perspectives. This low level of disagreement suggests a potential for finding common ground in developing future trade policies and agreements.

Partial Agreements

All speakers agree on the importance of local development and value creation, but they differ in their approaches. Diop focuses on processing raw materials locally, Saint-Martin emphasizes trade deals for local development, and Pant stresses the need for balanced permitting and fiscal stability.

speakers

– Serigne Gueye Diop
– Laurent Saint-Martin
– Vandita Pant

arguments

African countries want partnerships to process raw materials locally and create jobs

Trade deals should focus on local development and sharing value

Importance of balanced permitting and fiscal stability to enable resource investments

Similar Viewpoints

Both speakers emphasize the importance of trade deals that prioritize local development and value creation in the countries where resources are extracted.

speakers

– Serigne Gueye Diop
– Laurent Saint-Martin

arguments

African countries want partnerships to process raw materials locally and create jobs

Trade deals should focus on local development and sharing value

Both speakers highlight the positive impact of trade on economic development and the importance of maintaining high standards in trade agreements.

speakers

– Tak Niinami
– Tobias Meyer

arguments

Importance of high standards in areas like technology and IP protection

Trade as a driver of export-led development and poverty reduction

Key Takeaways

There is a shift in global trade dynamics, with Africa seeking to add more value to raw materials rather than just exporting them

Countries and companies need to adapt to increasing trade restrictions and regulatory complexity

Both high-standard and low-standard trade agreements are important to promote trade and investment globally

There is unprecedented demand for resources to support development, energy transition, and digitalization

Trade deals in the 21st century should focus on local development, sharing value, and promoting sustainable practices

De-risking investments through stable fiscal arrangements and rule of law is crucial for long-term projects in the resources sector

Trade remains a key driver of economic development, poverty reduction, and access to global technologies and capabilities

Resolutions and Action Items

European Union to reconsider its approach to trade agreements, focusing on building economic strengths and adapting to new global realities

African countries to create more favorable conditions for foreign investment, including tax reductions and economic zones

Companies to establish better intelligence networks to navigate geopolitical complexities in global supply chains

Governments and businesses to collaborate on enabling infrastructure and capital unlocking for resource development

Unresolved Issues

How to effectively balance competitiveness and fair trade, especially in discussions with China

The practical implementation of mechanisms like the carbon border adjustment without disrupting global trade

How to address trade imbalances while considering non-goods aspects like market access for services and capital flows

The specific structure and content of future trade deals that can satisfy both developed and developing countries’ needs

Suggested Compromises

Combining high standards in areas like technology and IP protection with provisions for local development and value sharing in trade agreements

Balancing the need for environmental and sustainability standards with the desire for increased investment and development in resource-rich countries

Creating more flexible, innovative trade instruments that go beyond traditional binding agreements, such as the EU’s deal with Kazakhstan on critical minerals

We don’t want to be a raw material provider to the world. We want to have more investors coming in Africa and helping us to process those raw materials.

speaker

Serigne Gueye Diop

reason

This comment challenges the traditional view of Africa as primarily an exporter of raw materials and introduces the idea of value addition and local processing.

impact

It shifted the conversation towards discussing how trade deals and investments can support local development and industrialization in Africa, rather than just extraction of resources.

Europe believes in it and our multilateral And it’s not an ideology, it’s because it’s good for our GDP, because it’s good for our companies.

speaker

Laurent Saint-Martin

reason

This comment frames trade not as an ideological position but as a practical economic necessity, challenging the notion that protectionism is beneficial.

impact

It reaffirmed the EU’s commitment to trade while acknowledging the need to adapt to new geopolitical realities, leading to discussion of how to make trade deals more effective and inclusive.

For just next 10 years, copper, another 10 million tonnes of copper is needed. And that is 250 billion of capital investment.

speaker

Vandita Pant

reason

This comment provides concrete data on the scale of investment needed in critical minerals, highlighting the importance of the mining sector in global development and technology.

impact

It focused the discussion on the practical challenges of securing large-scale, long-term investments in resource extraction and processing, and how trade policies can support this.

We’ve been in a huge challenge for global supply chain, not because of the COVID, not as a geopolitics. And in the past three, four years, we established further capabilities in intelligence, because we just had thought about country risks and so forth.

speaker

Tak Niinami

reason

This comment highlights how companies are adapting to increased geopolitical complexity by investing in intelligence capabilities.

impact

It broadened the discussion to include the private sector’s role in navigating geopolitical risks and how this affects their approach to global trade and investment.

What got better in the UK after Brexit? Tell me one thing that is better due to Brexit. I haven’t found it. We employ 1,500 additional people doing paperwork.

speaker

Tobias Meyer

reason

This comment provides a stark, real-world example of the negative impacts of trade barriers, challenging the notion that protectionism benefits economies.

impact

It grounded the discussion in practical realities of trade restrictions and emphasized the importance of reducing trade barriers and bureaucracy.

Overall Assessment

These key comments shaped the discussion by moving it beyond abstract principles of free trade versus protectionism. Instead, they focused the conversation on practical challenges and opportunities in global trade, including value addition in developing countries, securing critical mineral supplies, adapting to geopolitical risks, and reducing trade barriers. The discussion emphasized the need for innovative, inclusive trade deals that balance economic growth, local development, and geopolitical realities.

How can trade deals be structured to promote local development and value addition in resource-rich countries?

speaker

Serigne Gueye Diop and Laurent Saint-Martin

explanation

Both ministers emphasized the importance of trade deals that support local development, technology transfer, and value addition in resource-exporting countries. This is crucial for creating jobs and sustainable economic growth in developing nations.

What policies and enablers are needed to unlock the large-scale investments required in the resources sector, particularly for critical minerals?

speaker

Vandita Pant

explanation

Given the massive investments needed in resources like copper for global development and energy transition, understanding how to create a favorable environment for long-term investments is critical.

How can trade deals address both high standards (e.g., technology, IP protection) and promote broader participation, especially from developing countries?

speaker

Tak Niinami

explanation

Balancing the need for high standards in trade agreements with the desire for broader participation, especially from developing economies, is a key challenge in modern trade policy.

What innovative tools or new types of trade agreements can be developed to secure critical minerals and support industrialization abroad while strengthening economic security at home?

speaker

Simon Evenett (directed to Laurent Saint-Martin)

explanation

As traditional trade deals face challenges, exploring new types of agreements that balance various objectives becomes important for future trade policy.

How can the issue of trade fairness be separated from discussions about national competitiveness in trade negotiations?

speaker

Tobias Meyer

explanation

Distinguishing between fair trade practices and national competitiveness is crucial for developing effective trade policies and agreements.

How can the benefits of market access for services and capital flows be better incorporated into trade discussions that often focus primarily on goods?

speaker

Tobias Meyer

explanation

Considering the full spectrum of trade benefits, including services and capital flows, is important for a comprehensive understanding of trade relationships.

How can mechanisms like the carbon border adjustment be designed to be both effective for climate goals and perceived as fair by trading partners?

speaker

Tobias Meyer

explanation

Balancing climate action with fair trade practices is a critical challenge for future trade policy, particularly for initiatives like the EU’s carbon border adjustment mechanism.

What principles should guide 21st century trade agreements to address both business needs and societal concerns?

speaker

Simon Evenett

explanation

Developing a new set of principles for modern trade agreements that balance business interests with broader societal concerns could help shape more effective and widely accepted trade policies.