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France is looking to give political impetus to reform of the global financial architecture. Others should swing in behind its gambit  Almost 500 days into the war in Ukraine, Europeans and Americans are anxious about their relationship with the global south. While the transatlantic allies are united, they have been left perplexed by the often tepid reaction of third countries to Russia’s aggression. And the gap between north and south appears only to be growing. The global crises of the last five years – covid-19, Russia’s war on Ukraine, inflation, climate change – have pushed Europeans’ focus inward, while these challenges have plunged much of the developing world into economic decline alongside exacerbating energy and food insecurity. Worse, some of the solutions put in place to overcome these crises – border closures, sanctions, re-shoring – have had major negative impacts on the global south. Meanwhile, the multilateral system has spiralled further into crisis, accelerated by the effects of the US-China rivalry, and has failed to provide relief to developing and vulnerable countries. More deeply affected by this ‘polycrisis’ than the global north, they have much less resource to tackle its consequences: dozens of low-income and medium-income countries now face crippling debt. To start to address these problems, President Emmanuel Macron is holding an ambitious event that seeks to focus political attention on the injustices and inequities of the current global financial architecture. Hurriedly decided on after last year’s COP27 in Egypt, his Summit for a New Global Financing Pact will bring leaders, civil society advocates, private actors, and international financial institutions together in Paris. The gathering’s goal is to find ways to build a more inclusive and equitable financial system, one that enables the climate transition and promotes biodiversity without jeopardising development. From its colonial and post-colonial history, and with its permanent seat on the United Nations Security Council, France maintains many close relationships on other continents. In response to brewing discontent and despair, Macron has stressed the need to address global south grievances, using frequent speeches to do so, whether in New York, Washington, or Bratislava. He is now once again engaged in an ambitious yet hasty endeavour: inspired by COP21 in Paris in 2015, the president believes diplomatic elbow grease goes a long way in mobilising around global issues, and he has made good use of it. As early in his first presidency as 2018, he launched the Paris Peace Forum, an annual event bringing together leaders and civil society to work towards a revived and innovative multilateral order. After President Donald Trump rescinded the Paris Agreement on climate change, Macron launched summit after summit on aspects of the issue (One Planet, One Ocean, and One Forest). To tackle the impact of covid-19 on Africa, in May 2021 France hosted the summit on the financing of African economies. This time, the goal is to reinvent the global financial architecture. Ever since the paradigm shift brought about by the pandemic, Macron has argued for a new approach – a “Paris consensus,” in a reference to the 2015 Paris agreement on climate change – to replace the market-orientated Washington consensus with net zero, sustainable economic development goals. In his view, the metrics used in the past are “not valid any more to fight against poverty, for the decarbonisation of our economy, and for biodiversity”. He is therefore pushing to reform the global architecture to incentivise net zero investments for a sustainable future. Macron’s idea behind the new summit is to give a political boost to an issue all too often discussed only on a technical level, and in silos. No one expects an actual “pact” to be signed, but France – along with the summit’s steering committee, which is composed of states and international organisations – is aiming for a political declaration that would muster firm commitments from world leaders, and force consequences down the line. And world leaders are indeed showing up: the secretary general of the United Nations, the new president of the World Bank, the president of the European Commission, the US Treasury secretary, the president of Brazil, the German chancellor, and the Chinese prime minister are all expected to attend, along with 40 heads of state, one-third of whom will be from Africa. As so often before, Macron hopes to be transformational in record time. The summit planning started with high ambitions, but sources say it has had to adapt due to a lack of time and focus. Initially launched around the Bridgetown initiative of Barbados prime minister Mia Mottley, France had aimed to include topics other than climate, such as health and poverty, and sought a G20 presidency endorsement by India. Unfortunately, Indian prime minister Narendra Modi will be in Washington during the summit and, despite the fact that India is co-chairing the summit’s steering committee and the expected presence of Lula and Li Qiang, the event may not in the end be a show of force for the global south. NGOs have been privately critical of the lack of inclusivity and transparency of the working groups, and disillusionment is running high. Some concrete results could still emerge from the four working groups, if negotiations are successful. Among the ambitions floated are debt suspension clauses for natural disasters, reallocation of special drawing rights, scaling up private capital flows through improved de-risking instruments, freeing up more concessional resources from multilateral development banks, and new international taxes (such as a levy on maritime transport). In an increasingly fragmented world, a united political declaration in support of these changes at the conclusion of the summit would be a win for everyone. However, a more modest but attainable goal from the summit would be the emergence of a “coalition of ambition,” in which a number of committed countries, or “champions,” take on specific challenges and sustain the diplomatic effort beyond the summit in Paris. Many other opportunities to build on momentum created in Paris will shortly follow: the African Climate Action Summit, the SDG summit, the New Delhi G20 Leaders Summit, and COP28 in Dubai. Since this summit has no mandate, it can only be a success if it is able to agree actions that then endure. For global south countries, the gathering should in turn create opportunities to strengthen support for their demands in all these upcoming forums. The success of the Paris summit will also depend on the capacity of states and other major players to take on the challenge – including Europeans. Germany is backing France in this effort, but most Europeans have yet to show their commitment to the process. Thirteen world leaders have penned a declaration of good will in an op-ed ahead of the summit, although without offering specific pledges or a timeframe for results. Unfortunately, the American president will not attend the summit, nor will the Italian, Canadian, or British prime ministers. The choice to stay away may stem from irritation at yet another grandiose French summit. But rich industrialised countries have no excuse for lacking interest in the dire situation of developing and vulnerable countries. It also puts responsibility on France to continue to move the ball forward after the summit – and not be content with the impression that it tried. Even if France may indulge in summit-mania, and however imperfect the event will inevitably turn out to be, Europeans and Americans must realise that France’s solo act is worth supporting. With clear steps taken by France ahead of the summit, such as the reallocation of 30 per cent of its special drawing rights (about €7.8 billion), Macron is defending his concept of an effective multilateralism in action, one that delivers. With Russia seeking to peel global south states away from the West, Europeans and the United States need to take up concrete actions that correct the imbalances of the current system and offer developing countries greater voice and power. By finally accepting that the institutions set up after the second world war must change, they would enhance their own credibility among global south states while escaping multilateralism limbo. The only way to salvage international cooperation – and to push back against the narrative of an inevitable north-south polarisation – is to demonstrate that it bears fruit for all.

Beijing seeks normalisation of ties with Europe; however, for Brussels, reconciliation will be conditional on Beijing’s willingness to address fundamental divergences On 7-8 December, European Commission President von der Leyen and European Council President Charles Michel will be in Beijing for the 24th European Union (EU)-China summit, but the first in-person one in four years, taking place at a critical juncture in EU-China ties. At the previous EU-China virtual summit in April 2022, the Ukraine conflict was the primary talking point for the Europeans and other issues such as climate and economics were relegated to the back burner. This time, the focus is likely to be economics. A relatively constructive meeting between United States (US) President Joe Biden and Chinese President Xi Jinping on 15 November, which led to the resumption of US-China high-level military dialogue and Xi’s assurances on Taiwan, has contributed to paving the way for the EU to focus on ironing out economic irritants. Deficits, dependencies and de-risking With daily EU-China trade amounting to 2.2 billion euros, the EU is concerned about its widening goods trade deficit with China—400 billion euros in 2022—referred to by EU Ambassador to China, Jorge Toledo, as the “highest in the history of mankind”. In the context of China’s restrictive environment for foreign companies, the EU is keen for a level playing field and greater reciprocity in trade. Another major area of contention is Chinese overcapacity through subsidies in key industrial export sectors such as electric vehicles (EVs) that are undermining European automotive industries. The European Commission has already launched a probe for the EVs sector and is now considering other major sectors including wind energy and medical devices. In addition, Europe is heavily dependent on critical raw materials such as lithium and gallium from China, which are intrinsic to its green transition. While over 90 percent of the EU’s supply of raw materials comes from China, the EU aims to address this dependency through its Critical Raw Materials Act. Factors such as Chinese aggression in the South China Sea, human rights violations in Xinjiang, and pandemic-era supply chain disruptions have deteriorated European perceptions of China. The downswing in EU-China ties was further accentuated by Beijing’s posture in the Russia-Ukraine conflict and the failure of European leaders to coax China to positively use its influence with the EU’s most immediate security threat, Moscow. Thus, a major trust deficit has accompanied the trade deficit. On 6 November, only a month before the summit, von der Leyen in her speech warned against “China’s changing global posture” with its “strong push to make China less dependent on the world and the world more dependent on China”. While acknowledging China as Europe’s most important trading partner, she emphasised the “explicit element of rivalry” in the relationship. Another dialogue of the deaf? The EU and its member states are recalibrating their China policies, with countries such as Germany even releasing China-specific documents outlining their approach. The EU’s “de-risking” strategy aims to reduce dependencies in critical sectors, and through an expansion of its policy toolbox, the Union is implementing a range of measures including greater scrutiny of inbound-outbound foreign investments, anti-coercion instruments, and export controls for dual-purpose technologies. In this context of an evolving European approach, the upcoming summit is a much-anticipated one for EU-China watchers. Despite the strain in relations, high-level diplomatic exchanges have continued in full swing, many of which, such as von der Leyen’s visit to China in April, EU Trade Commissioner Valdis Dombrovskis’s visit in September, and EU Foreign Policy Chief Josep Borrell’s visit in October were conducted in preparation for this summit. A sluggish Chinese economy gives Europe room to wield its economic leverage. However, grey areas in Europe’s China policy remain, especially with regard to the implementation of measures and the need for more effective coordination, often compromised by a lack of unity amongst member states and tendencies of leaders such as French President Emmanuel Macron and German Chancellor Olaf Scholz to prioritise business interests over all else. Thus, straddling the fine balance between economic opportunities and security risks will continue to be a test for how Europe manages its interdependence with the lucrative Chinese market. Previous EU-China summits have not produced a joint statement, and according to sources, this summit is unlikely to produce one as well. Yet it is an opportunity for the EU to put forward unresolved concerns and forge some common ground. Without concrete deliverables, the upcoming summit risks being another “dialogue of the deaf” as Borrell famously described the previous one. Amidst renewed transatlantic solidarity, Beijing’s rhetoric indicates that it seeks normalisation of ties with Europe and a more independent European policy towards China away from Washington’s influence. Yet for Brussels, reconciliation will be conditional on Beijing’s willingness to address fundamental divergences.

한국어로 읽기Leer en españolIn Deutsch lesen Gap اقرأ بالعربيةLire en françaisЧитать на русском The concept of a multipolar (or polycentric) world order [1] was first coined by Academician Yevgeny Primakov in 1996 [Primakov 1996]. Like everything new, it was not immediately accepted, but ultimately became a significant contribution to both domestic and world theory of international relations, offering a compelling alternative to Western approaches, particularly the one proposed in Samuel Huntington’s The Clash of Civilizations [Huntington 1993]. It informed the idea of trilateral cooperation between Russia, China and India, implemented by Primakov and later embodied in the BRICS group. By now, the idea of multipolarity has been recognized in global political science, has entered the conceptual framework and the language of international diplomacy and is used in Russia’s doctrinal documents. In 2015, we proposed the scenario of a new bipolarity [2] as one of the possible trajectories for global development. Today, many scholars, both Chinese and American, [3] suggest that China-centric and U.S.-centric poles are emerging. This article discusses the “multipolarity — new bipolarity” dichotomy. Long Global Macro-Transformations World history shows that a new world order typically emerges after the end of a major war (see Table 1). Table 1. International system (world order)    Source: systematized by A.A. Dynkin, IMEMO RAS Europe was usually the “kitchen” where the world order was cooked. Take the last 200 years. After the end of the Napoleonic Wars, the Concert of Europe emerged and lasted for 100 years. The century-long stability of that system could be explained by the homogeneity of the political organization of its guarantor states. All members of the Concert of Europe were monarchies. World War I produced the Versailles system, which lasted only 20 years. One of the reasons for its short life was the exclusion of the Soviet Union, Germany and China. The Yalta-Potsdam system was formed by the victors in World War II. Its guarantors were the “Big Three” powers—the Soviet Union, the U.S. and the UK—along with France and China. The three defeated powers—Germany, Japan and Italy—were discriminated and disenfranchised. This system existed for 45 years and was initially thought to be polycentric, but quickly degenerated into a bipolar order, and the Cold War commenced. With the collapse of the Soviet Union and dissolution of the Warsaw Pact, the system became unipolar, dominated by the West, primarily the U.S. It disregarded Russia’s interests and, from 2018 onward, began discriminating against China as well. February 2022 can be considered the formal date of the unipolar world’s demise. However, today’s predictions suggest it will take at least 10 years before the new post-unipolar system becomes stable. The economic center of gravity is a spatial indicator of the economic strength of states, borrowed from physics. To put it simply, this is a geographical point of equilibrium for GDP, trade and investment flows of different countries. Figure 1 shows a map of how the world’s economic center of gravity shifted for over a thousand years. It appeared in Central Asia, on the territory of the Ghaznavid Empire (modern-day Afghanistan). The center then migrated northwest, while the devastation in post-war Europe forcefully pushed it (within just 10 years) to the West, toward Greenland. Then it turned east again. The sharpest shift, to the southeast, occurred in 2000–2010 and is associated with the rise of China. The economic center of gravity has almost returned to the same meridian but remained more than 2,000 km north of the starting point, which indicates a return to the millennial balance of economic power between the West and the East. Figure 1. “Journey” of the three-dimensional economic center of gravity    Source: Dobbs R., Remes J., Manyika J. et al. Urban world: Cities and the rise of the consuming class. McKinsey Global Institute, 2012. https://www.mckinsey.com/featured-insights/urbanization/urban-world-cities-and-the-rise-of-the-consuming-class. Statistic calculations by IMEMO RAS for 60 years of peace (1960–2021) indicate the stability of the center’s latitudinal (horizontal) position. This suggests a relatively consistent proportion of GDP production by the countries in the Global South and Global North, under the economic leadership of the Northern Hemisphere. The shift to the East has also been clearly confirmed. According to our projections up to 2050, the future position of the globe’s center of economic activity will lie on the border of India and China. This method of analysis reveals a high level of inertia in time and geographic monotonicity of changes in the balance of economic power of states. It also shows that wars can drastically disrupt the natural course of events. The center of gravity method can also be applied to the arsenals of strategic and tactical weapons (see Figure 2). For example, during the Cuban Missile Crisis, the U.S. had a huge advantage, but then there was a clear pivot to the northeast—the creation of superior nuclear capabilities in the Soviet Union. With the onset of arms control in 1993, a reversing loop emerged, heading southwest. This was followed by a curve to the east with an implied southward inclination, which reflects the growing nuclear stockpiles of India, Pakistan, North Korea, and the rapid buildup of strategic and tactical nuclear forces in China. The military center of gravity follows its economic peer with a lag of 20 years, reflecting the geopolitical ambitions of Asian powers. These interpretations also clearly demonstrate the end of unipolarity and point to the rise of multipolarity. Figure 2. Movement of the nuclear center of gravity Source: calculations by K.V. Bogdanov, Center for International Security at IMEMO RAS, based on the data from the Bulletin of the Atomic Scientists. https://thebulletin.org/nuclear-notebook/. Technology. Politicians tend to be techno-optimists. Barack Obama predicted that 3D printing would transform the entire world. [4] George W. Bush promised that decoding the human genome would revolutionize medicine. [5] All false starts. Economists traditionally measure the rate of technological progress (TP) using the total factor productivity (TFP) index. To put it simply, this is the part of economic growth driven not by an increase in inputs—labor and capital—but rather by improvements in the efficiency of their use. Technological progress means not only the generation of new scientific and technological ideas but also their mass replication. Without economic validation of the impact of wide dissemination of innovations, scientific or technological achievements remain in history as brilliant breakthroughs with only local economic effects, giving rise to journalistic generalizations at best, such as the “Fourth Industrial Revolution” or “the sixth techno-economic paradigm.” Statistical metrics rely on data of technologically advanced nations, while catching-up countries have room for growth by approaching the TP frontier, i.e. adopting and improving existing ideas and technologies. Technological leaders spend more resources pushing the TP frontier, while those catching up can accelerate at lower costs, effectively staying in the “wind shadow” of the leaders. The TFP index growth rate has been steadily declining in developed countries for many years, but this has been especially conspicuous since the mid-2000s. Today, the growth is below 1.5% and even 1% per year (see Figure 3). Figure 3. Average annual growth of total factor productivity, % Source: calculations by IMEMO RAS based on the data from the International Productivity Monitor. No. 38, Spring 2020. http://www.csls.ca/ipm/ipm38.asp#:~:text=Martin%20Neil%20Baily%2C%20Barry%20P.%20Bosworth%20and %20Siddhi%20Doshi%0ALessons%20from%20Productivity%20Comparisons%20 of%20Germany%2C%20Japan%2C%20and%20the%20United%20States%C2%A0; Innovative China: New Drivers of Growth. World Bank Group, and the Development Research Center of the State Council, P.R. China. 2019. Washington, DC: World Bank. https://doi.org/10.1596/978-1-4648-1335-1. License: Creative Commons Attribution CC BY 3.0. https://documents1.worldbank.org/curated/en/833871568732137448/pdf/Innovative-China-New-Drivers-of-Growth.pdf. A similar pattern of dramatic TFP deceleration was observed in China. The consensus interpretation of these figures is that the main effects of the Third Industrial (i.e., computer) Revolution have largely been exhausted, and no new general-purpose breakthrough technologies (such as electricity, internal combustion engines, or computers and mobile communications) have emerged. However, it seems that the intellectualization of technologies and approaches to project management, as well as informatization, simply do not fit into the traditional factor-based view of progress that was established many years ago. The scale of knowledge is growing, new professions are springing up, the role of emotional intelligence and cognitive functions is increasing. All this dramatically changes the structure of capital assets (see Figure 4). From the beginning of the 21st century and until the 2008 crisis (2000–2007), equipment accounted for over 50% of the increase in capital’s contribution (investment) to output growth, whereas in 2019–2021, almost 63% of this increase was attributable to intellectual property assets. This result of our research suggests a refocusing of technological progress from final products to intellectual technologies, enabling the production of a range of innovative goods and services tailored to highly segmented demand. Figure 4. Transformation of the capital structure in the U.S. private sector Source: Total Factor Productivity for Major Industries—2022. U.S. Bureau of Labor Statistics. https://www.bls.gov/news.release/archives/prod3_03232023.htm. There are now hopes that the pace of technological progress may accelerate due to the development of artificial intelligence (AI) technologies, which will spark a new industrial revolution. An indirect sign of its imminence is the sharp rise in the rate of business births and deaths in the U.S. economy in 2020–2022. [6] The spillover of labor from companies that are losing efficiency to corporations with increasing market shares has also accelerated. These are some sort of leading indicators that suggest the structural results of TP are approaching. Similar developments occurred 30 years ago, on the cusp of the computer revolution. The above-mentioned intellectualization of fi ed capital, where trusted AI will be applied, adds credibility to these hopes. In addition, AI is one of the critical areas of technological sovereignty. It is no coincidence that Vladimir Putin described AI as “crosscutting, universal and essentially revolutionary technology.” [7] The Russian President announced the preparation of a new edition of the National AI Development Strategy and a respective decree. I believe that this prioritization is justified. China’s experience in the semiconductor race is a good model to be emulated (see Figure 5). Its distinguishing feature is the focus on companies as drivers of development, with massive, cumulatively growing state support. Figure 5. Focusing on China’s priorities (nanometer chip race) Source: Systematized by I.V. Danilin, IMEMO RAS The U.S. strategy of curbing technological development of Russia (in all areas) and China (in semiconductors, artificial intelligence and quantum computing and electric cars) leads to stiff competition in high technology, which is fraught with fragmentation, diversification of technical standards, legal norms and rules. And this is another argument in favor of a new bipolarity. Demographic processes. According to UN projections, by the middle of the 21st century, Russia will drop from its current 9th place to 14th in terms of population, while remaining the most populous country in Europe. [8] A more significant problem for Russia is population aging. The proportion of elderly people, who are typically not part of the labor force, is increasing. Japan, Spain and Italy are leading this process today, but neither China nor India will be spared. Nigeria appears to be the only major country where population and the share of young people will continue to grow until the end of the 21st century. As of December 2023, one in 10 people worldwide was aged 65 or over, with health spending taking up 10% of global GDP. [9] In this context, the importance of medical technologies cannot be overstated, as they can extend not only people’s life expectancy but also the duration of their healthy and socially active life, thereby easing labor market pressures. Needs always steer technological progress toward overcoming economic growth constraints tied to the scarcest resource in any given historical period. A serious risk associated with the problem of aging is a slowdown in innovation, since it is people under 40—the age group that will shrink throughout the 21st century—who are the primary drivers and consumers of innovation. So far, this risk has been mitigated by the large youth cohorts in China and India. This is why these two nations are experiencing almost exponential growth in patenting, massive reengineering and, consequently, in middle-class numbers. Demographics give India an edge until around 2060, which is already evident in the growth rates of Indian economy. Combined with the influx of hi-tech investments and the contribution of the Indian diaspora, India has good prospects, making its position crucial to the future architecture of the world order, regardless of how it evolves. The U.S. understands this and has been figuratively “clinging” to this nation for the past 20 years. I believe that the Russian Academy of Sciences should significantly bolster scientific and educational ties with India and its dynamically developing neighbors in Southeast Asia—Vietnam, Malaysia and Indonesia. The anticipated tension in the global market of new generations of innovators aggravates inter-country competition for this scarcest resource. I think that the international reputation of the Russian Academy of Sciences is a powerful tool to attract and retain young people and foster their creative motivation. We should reassert this as we celebrate the 300th anniversary of the Academy of Sciences. Ideology. Dirigisme [10], or statism, is the main trend in both economic theory and economic policy of the West. A pivot to a more state-controlled economy began with the disappointing outcomes of the Washington Consensus, which aimed to guide post-socialist countries from planned to market economies. The 2008–2009 financial crisis cemented the trend toward statism, and the COVID-19 pandemic elevated it to unprecedented proportions. In the U.S., Democrats are among the most vocal proponents of greater government intervention in all spheres of life, but they are not alone. Republicans are also actively advocating industrial policy, repudiation of free trade, as well as strict control over Big Tech, among other measures. The popularity of the so-called cultural Marxism is on the rise. [11] Its origins go back to the critical theory of the Frankfurt School (H. Marcuse, E. Fromm and others). These ideas are moving from the realm of ideological and theoretical confrontations into political activism. For example, the leaders of the BLM movement publicly self-identify as “trained Marxist organizers.” The essence of the strategy inspired by “cultural Marxism” is the rejection of direct political struggle on the barricades, since the proletariat has been “bought off by the bourgeoisie and is no longer capable of anything,” and the ranks of the classic proletariat are rapidly thinning. The direction of social change is set, on the one hand, by intellectuals with personal power and, on the other hand, by marginalized groups seeking to assert their “right to identity.” The strategy of activists who form this paradoxical combination of intellectuals and marginalized individuals is the creeping takeover of the main institutions of power and society by planting “correct” ideas in the mass consciousness. In the U.S., the fighters for political correctness have already hijaked the school system, university campuses, major media outlets and the entertainment industry (Hollywood). Civil servants are forced to take courses in critical race theory, which postulates not only the socially constructed nature of race and the recognition of systemic racism [Delgado, Stefancic 2017: 45] but also a sense of guilt in one part of society toward another. This, in turn, allegedly requires addressing moral and material injustices by organizing public life in line with such an ideology. Similar concepts are being pushed into public discourse as well. It is already dominated by the ideas of radical feminism, cancel culture, anti-systemic racism and postcolonialism, the fight against global warming and the green agenda, which claims to be universal and non-negotiable. As a result, the energy transition is motivated more by ideology than by the comparative market efficiency of energy supplies. Different environmental-political discourses—eco-nationalism, eco-imperialism and green growth—are competing in shaping the green agenda, eroding the attractiveness of the dominant sustainable development model. Another universal weapon in fighting any dissent is political correctness. Large corporations, government agencies and universities are developing and implementing strategies to promote DEI (Diversity, Equity, and Inclusion) principles, which are nothing but tools of ideological control over employees. Universities are required to fi reports on their compliance with such principles and efforts to promote them, which causes mounting criticism as they violate academic freedom and cultivate ideological conformity. [12] However, ideological censorship has already taken deep root in various spheres of public life, and questioning its compatibility with democracy is deemed politically incorrect. Revising cultural norms has become a cultural norm in and of itself, deepening divisions in modern polarized societies, primarily in the U.S., but also in Old Europe [Semenenko 2023: 27-35]. Another curious phenomenon is associated with the new agenda. In the 20th century, the left championed progress, advocating faster economic growth, rapid technological advancement and better social welfare. Now the ideas of zero or even negative growth and post-growth are popular among them. [Buchs, Koch 2017: 218]. Such ideological narratives exacerbate the question of how to treat the poor countries of the South, but also their own poor: the welfare state for all no longer fit into this agenda. On the contrary, it becomes a selective tool of backing the “right” minorities. This creates a breeding ground for stronger positions of populist forces. Such contradictory internal political processes distort public consciousness as well as domestic and foreign policy decision-making. The new elites are extremely ideologized. The U.S. political system is becoming less effective at regulating the economy. Two rating agencies, Standard & Poor’s and Fitch Ratings, have downgraded the U.S. credit rating to AA+ from the top mark of AAA. In November 2023, Moody’s lowered its outlook on the U.S. credit rating to “negative” from “stable.” All three agencies agree on the main reason for the downgrade: the growing dysfunctionality of the political system. In foreign policy, the U.S. has withdrawn from 16 major international treaties and agreements on arms control, global trade, climate and the Arctic since the beginning of the century [Dynkin 2020]. In other words, the unipolar world order with its unbridled appetite for expansion has brought the world into a zone of extra-high risks. And the paradigms that are dominant in the West have proven incompatible with either Russian or Chinese value-oriented political projects. Therefore, the ideological sphere will inevitably see increased confrontation, marking another step toward bipolarity. IMEMO RAS researchers have repeatedly warned about the West’s miscalculated strategic hopes: 1) that Russia would face an economic catastrophe because of an unprecedented sanctions war in modern history; 2) that the unipolar world order would remain unchallenged; 3) that a global blockade of Russia’s export-oriented economy would be feasible. And we were not the only ones who made these warnings. In response, we only heard propagandistic clichés like “a gas station masquerading as a country,” “a regional power” and “Russia is isolated with its economy in tatters”. This kind of “expertise” led the Washington establishment to believe that Russia is a “declining power” whose strategic interests could be safely neglected. This “strategic lunacy” is a consequence of a universalist mindset—a product of the West’s political experience and culture, which tends to elevate Anglo-Saxon and European historical tradition to absolutes—and of a failure to understand the shifts in the balance of power in the 21st century. Today, Russia is the world’s fourth-largest economy by purchasing power parity (PPP), while the top fi e global economic powers include three BRICS nations and none from the blooming “garden” of Josep Borrell, the EU foreign policy chief who has recently been fired. Now a new narrative has been launched into the propaganda orbit: “Russia is about to attack Eastern Europe.” The logical gap between the image of a declining power and that of an “aggressive bear” is conveniently ignored. This primitive, one-dimensional perception of complex non-linear processes can only lead to disappointment—just as it did when the West lulled itself into believing that Chinese reforms would eventually lead to political pluralism. As a result, the West has an inexhaustible stream of surprises. It appears that their experts are increasingly out of touch with Russian (and any other non-Western) realities. Figuratively speaking, they are staring into a distorting rearview mirror constructed by their own rhetoric and propaganda. But the main real surprise was the fantastic resilience of the Russian economy. I dare say that no other economy in the world, not even China’s, could withstand such aggressive pressure. The high resistance of the Russian economy to external shocks can be explained by three fundamental reasons. First, it is the result of difficult, sometimes agonizing institutional and structural reforms. These efforts have ultimately produced a self-sufficient, adaptive and highly diversified market economy. Second, the crisis of 2022 was the fifth (!) in the history of post-Soviet Russia. The government, federal regulators and the Bank of Russia have accumulated hard-earned professional experience in crisis management and counter-cyclical strategies. The same can be said about business. Our economic entities have demonstrated time and again that there are always more effective solutions than there are problems. Finally, the West miscalculated its ability to isolate our economy. The dual containment of Russia and China, in fact, only strengthens ties between the BRICS member states. Transformations of the 2020s. The first half of the 2020s has fi y buried what was once known as “European security.” It is impossible to glue this “broken cup” back together without Russia. The unwillingness of the Ukrainian side and the West to stop the armed conflict at its very beginning, the dangerous escalation, NATO’s constant violation of its own “red lines” and the accession of Sweden and Finland to the North Atlantic Alliance are all symptoms of the European security system transforming into a transatlantic one. Meanwhile, the Eurasian security system is taking shape. The outcomes of Russian President Vladimir Putin’s visit to China hint that the “political East” is starting to form, if not as an alternative to the long-standing “political West,” then at least as an equal partner. Without considering its interests, any debate about “rules-based” global security will be mere fantasy. Indian Prime Minister Narendra Modi’s first visit to Moscow after his recent reelection is in the same vein. Of course, geography cannot be changed, and Russia has been and will remain a European power. However, it is also the geographic center of Eurasia, providing the infrastructure backbone for the Eurasian partnership—from the Northern Sea Route and up to the Trans-Siberian Railway, Baikal–Amur Mainline, Trans-Asian Highway and cross-continental pipelines. The “post-Ukrainian” world seems to be moving toward a new, indivisible Eurasian security architecture, relying on existing institutions: the Union State, CSTO, EAEU, CIS, BRICS, SCO and ASEAN. Minsk has put forward an initiative to develop a Eurasian Charter for Diversity and Multipolarity—a strategic vision for a new system of international relations to replace the “rules-based” world order. An important event of 2024 in this context is the expansion of the BRICS club (see Figure 6). Its combined economic power could potentially reach $67 trillion, surpassing the total GDP of the G7 countries. Figure 6. Economic potential of BRICS countries Source: calculations by A.A. Dynkin, IMEMO RAS, based on the data from the IMF, Food and Agriculture Organization, World Steel Association, Energy Transition Institute, Statistical Review of World Energy 2023, International Energy Agency. And there are still 28 more countries on the “waiting list”. In several important markets such as metals, automotive industry, oil and mineral fertilizers, BRICS already matches or exceeds the potential of the G7 nations. Russia, which took over the BRICS rotating presidency in 2024, faces the task of energizing the harmonized economic and technological policies of the members. This approach is the institutional cornerstone of the future polycentric world. What will the coming world order look like? It is difficult to say which of the two trends—bipolarity or polycentrism—will prevail in the end. It is more likely that they will coexist: for example, rigid bipolarity in the Global North and polycentrism in the Global South. Signs of military, economic and technological bipolarity are already visible in the North. Interestingly, New Delhi tends to categorize China as a country of the North [Jaishankar 2020: 240]. This viewpoint has substance, as China is far ahead of other countries of the Global South in terms of GDP per capita ($12,541). For comparison, India’s GDP per capita is $2,612. [13] The decoupling of the U.S. and Chinese economies has not affected trade flows yet, but only technology and investment. In 2023, China saw a reversal of foreign direct investment inflows, with funds previously invested being withdrawn. Negative trends took hold, and the outflow approached negative $1.5 trillion (see Figure 7). Meanwhile, the Asia-Pacific macro-region is gaining greater internal dynamics, unlike Europe or North America. Figure 7. U.S.–China Economic Decoupling Source: UN Comtrade Database. https://comtradeplus.un.org/; State Administration of Foreign Exchange (SAFE) of the People’s Republic of China. https://www.safe.gov.cn/en/. Meanwhile, the trend toward political polycentricity persists. For example, New Delhi and Ankara were initially poles apart on the Palestinian–Israeli conflict. This is also the dawning of post-unipolarity, where the new centers of power are increasingly guided by their own interests in decision-making rather than by any “rules” or advice from Washington, Beijing or Moscow. It would be unrealistic to expect that the future world order will be free of conflict. The world will retain its diversity, with different potentials of countries and their competition. It is crucial that, despite their differences, the interests of larger and smaller nations are respected, and problems are solved through constructive dialogue. Russia was the first to challenge the notorious unipolar world order. Today we can state that most countries in the Global South have responded to this challenge and refused to subscribe to the Western interpretation of the conflict in Ukraine . The future world order is taking shape right before our eyes. I am sure that a multipolar world is preferable for Russia as a developed, self-sufficient and sovereign nation. But this world also requires a new system of global governance, development and strengthening of its institutions, such as BRICS, G20, SCO and EAEU. For instance, the EAEU member states (Russia, Belarus, Kazakhstan, Armenia, Kyrgyzstan) are faring much better than the five other post-Soviet countries. In 2022, GDP per capita in the countries of the Eurasian Economic Union was 3.5 times higher than the average for the fi e other CIS states that are not part of the EAEU (Azerbaijan, Moldova, Tajikistan, Turkmenistan, Uzbekistan) (see Figure 8). Our strategy in these organizations requires a solid approach and “stereoscopic” vision from socio-economic, scientific, technological and political perspectives. Here, the Russian Academy of Sciences should play a major role as a leader of scientific and expert community. Figure 8. Economic trends of EAEU and CIS countries Source: EEC. https://eec.eaeunion.org/?ysclid=lr7rtdg7np631919243; IMF. https://www.imf.org/; World Bank. https://www.worldbank.org/.  Conclusion In conclusion, there are compelling arguments both for multipolarity and for a new bipolarity. Leading U.S. experts are asking similar questions: “What order will replace the crumbling US-led system is far from certain. Will China push aside the United States as the global hegemon to lead a world according to rules written in Chinese characters? Will the world become bipolar, divided between two more or less rigidly defined blocs led by the United States and China? Will a genuinely multipolar world emerge based on several states or coalitions of more or less equal strength?” [Graham 2023: 272]. These questions are yet to be answered, and definitive conclusions in this case are premature. Given this high uncertainty, one should be prepared for any scenario. The essential prerequisite for such readiness is Russia’s strategic autonomy based on military-strategic parity with the U.S. The fundamental question to which the author has no answer today is: how likely is the emergence of a new world order without a major war? In 2024, presidential or parliamentary elections will take place (or have already taken place) in 50 countries, which account for more than 45% of the world’s GDP and population. Perhaps their results will clarify our vision of the near future. Dynkin A.A. (2024). World order transformation: economy, ideology, technology. Polis. Political Studies, 5, 8-23. https://doi.org/10.17976/jpps/2024.05.02 This article was prepared with the support of a grant from the Ministry of Science and Higher Education of the Russian Federation for major scientific projects in priority areas of scientific and technological development No. 075-15-2024-551 “Global and regional centers of power in the emerging world order”. The author expresses gratitude to his colleagues at IMEMO RAS R.I. Kapelyushnikov, V.D. Milovidov, I.S. Semenenko, I.V. Danilin, S.V. Zhukov, K.V. Bogdanov, A.P. Guchanova for consultations and assistance in preparing this article. References Büchs, M., & Koch, M. (2017). Critiques of growth. In M. Büchs, & M. Koch. Postgrowth and Wellbeing: Challenges to Sustainable Welfare (pp. 39-56). London: Palgrave Macmillan. https://doi.org/10.1007/978-3319-59903-8_4 Delgado, R.,& Stefancic, J. (2017). Critical race theory. Anintroduction. New York: New York University Press. Graham, T. (2023). Getting Russia right. UK: Polity Books. Huntington, S.P. (1993). The clash of civilizations? Foreign Affairs, 72(3), 22-49. https://www.foreignaffairs.com/articles/united-states/1993-06-01/clash-civilizations Jaishankar, S. (2020). The India way: strategies for an uncertain world. New Delhi; New York: Harper Collins Publishers India. Kupchan, C. (2021). Bipolarity is back: why it matters. The Washington Quarterly, 44(4), 123-139. https://doi.org/10.1080/0163660X.2021.2020457 Yan Xuetong. (2016). Political leadership and power redistribution. The Chinese Journal of International Politics, 9(1), 1-26. https://doi.org/10.1093/cjip/pow002 Dynkin, A.A. (2020). International turbulence and Russia. Herald of the Russian Academy of Sciences, 90(2), 127-137. https://doi.org/10.1134/S101933162002001X. Primakov, E.M. (1996). Mezhdunarodnye otnosheniya nakanune XXI veka: problemy, perspektivy [International Relations on the eve of 21st century: problems, prospects]. Mezhdunarodnaya zhizn’, 10, 3-13. (In Russ.) Semenenko, I.S. (2023). Razdelyonnye obshchestva [Divided societies]. In I.S. Semenenko (Ed.), Identichnost’: lichnost’, obshchestvo, politika. Novye kontury issledovatel’skogo polya [Identity: The Individual, Society, and Politics. New Outlines of the Research Field] (pp. 27-35). Moscow: Ves’ Mir. (In Russ.) https://www.imemo.ru/files/File/ru/publ/2023/Identichnost-Semenenko-2023.pdf Литература на русском языке Дынкин А.А. 2020. Международная турбулентность и Россия. Вестник РАН. Т. 90. № 3. С. 208-219. https://doi.org/10.31857/S0869587320030032. EDN: WINCQO. Примаков Е.М. 1996. Международные отношения накануне XXI в.: проблемы, перспективы. Международная жизнь. № 10. С. 3-13. Семененко И.С. 2023. Разделенные общества. Идентичность: личность, общество, политика. Новые контуры исследовательского поля. Отв. ред. И.С. Семененко. М.: Весь Мир. С. 27-35. https://www.imemo.ru/files/File/ru/publ/2023/Identichnost-Semenenko-2023.pdf. EDN: NTQYRB. 1. The world order or international system is a stable set of institutions and norms of military-political and economic relations, which is institutionalized and legitimate in the international legal sense. The world order remains stable during the active life of at least one generation—a universal measure of social time. However, in the wake of geopolitical macro-crises, illegitimate systems emerge, forcibly imposed by the winner. This was the case with the unipolar world order. 2. Dynkin A., Burrows M. Here’s the Playbook for Getting U.S.–Russian Cooperation Back on Track. The National Interest. 07.12.2015. https://nationalinterest.org/feature/heres-the-playbook-getting-us-russian-cooperation-back-track-14527. 3. For example, see: [Yan Xuetong 2016; Kupchan 2021]. 4. Remarks by the President in the State of the Union Address. The White House. President Barack Obama. 12.02.2013. https://obamawhitehouse.archives.gov/the-press-office/2013/02/12/remarks-president-state-union-address. 5. President Bush Calls on Senate to Back Human Cloning Ban. Remarks by the President on Human Cloning Legislation. The East Room. The White House. President George W. Bush. 10.04.2002. https://georgewbush-whitehouse.archives.gov/news/releases/2002/04/20020410-4.html. 6. Private sector establishments birth and death, seasonally adjusted. U.S. Bureau of Labor Statistics. 25.10.2023. https://www.bls.gov/news.release/cewbd.t08.htm. 7. Artificial Intelligence Journey 2023 conference. President of Russia. Official website. 24.11.2023. http://www.en.kremlin.ru/events/president/transcripts/72811. 8. World Population Prospects 2024, Online Edition. United Nations, Department of Economic and Social Affairs, Population Division (2024). https://population.un.org/wpp/Download/Standard/MostUsed/. 9. Global Health Expenditure database. World Health Organization. https://apps.who.int/nha/database. 10. Dirigisme is a policy of active state intervention in the national economy, pursued by France and the UK in mid-1940s. 11. Mendenhall A. Cultural Marxism is Real. The James G. Martin Center for Academic Renewal. 04.01.2019. https://www.jamesgmartin.center/2019/01/cultural-marxism-is-real/. 12. AFA Calls for an End to Required Diversity Statements. Press Release. AFA. Princeton, NJ. 22.08.2022. https://academicfreedom.org/afa-calls-for-an-end-to-required-diversity-statements/. 13. World Economic Outlook Database (October 2023 Edition). International Monetary Fund. 10.10.2023. https://www.imf.org/en/Publications/WEO/weo-database/2023/October.

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском The world economy is underperforming as a result of tight monetary policies, weaker global trade, a slowing Chinese economy and uncertainty around the US election. An escalation of conflict in the Middle East could increase uncertainties, harming inflation reduction efforts and hurting growth. It has been over a year since the Hamas-led attack on Israel. Israel’s response in Gaza has resulted in widespread destruction and significant loss of life. The conflict has since expanded beyond Gaza, involving the Houthis in Yemen, Hezbollah in Lebanon and Iranian strikes targeting Israel. In addition to the awful humanitarian cost of the conflicts, the war and the possibility of its further expansion pose significant repercussions for the global economy. This article discusses three potential ways in which the current conflict and a wider conflict in the Middle East could affect the global economy. Increased geopolitical uncertainties First and foremost, an escalation of the Middle East conflict could lead to greater geopolitical uncertainties. Figure 1 shows the evolution of the geopolitical risk (GPR) and geopolitical acts (GPRA) indices (Caldara and Iacoviello, 2022) – these are text-based measures of heightened uncertainties due to adverse geopolitical events such as wars, terrorism and international tensions. (See this article for more discussion about these measures.) Following the Hamas-led attack on 7 October 2023, both the overall GPR index and its ‘war and terror acts’ component spiked strongly, to a level higher than that seen during the ISIS attack in Paris in November 2015. Both indices eased significantly in the months following October 2023 despite the continuation of the conflict. But they jumped again following Israel’s attack on southern Lebanon in September 2024. As of mid-October 2024, the GPR and GPRA remain, respectively, 21% and 35% higher than their historical averages.   What might be the consequences of such elevated levels of risk? Research tells us that higher geopolitical risk raises oil prices (Mignon and Saadaoui, 2024). It also reduces global investment and increases inflation (Caldara et al, 2022). Greater geopolitical risk has a significantly negative impact on business and consumer confidence in several advanced economies (de Wet, 2023). This is because consumers typically cut non-essential spending and businesses postpone investment decisions during turbulent times. This reduces firm-level investment, particularly for businesses with higher initial investment costs and greater market power (Wang et al, 2023). Higher geopolitical risks also reduce global trade and financial flows, causing greater volatility in capital flows in emerging markets (Kaya and Erden, 2023). Oil production cuts and higher energy prices The second way in which the Middle East conflict could affect the global economy is its impact on energy prices, both directly through production cuts and indirectly through greater uncertainties. In response to Israel’s actions against its neighbours, the Organization of the Petroleum Exporting Countries (OPEC) could reduce oil production to penalise countries supporting Israel. A similar action in the 1970s led to a significant jump in oil prices, which contributed to years of stagflation, with higher global inflation and recessions in major economies. Before Israel's attack on Lebanon at the end of September, oil prices had been declining due to falling demand, particularly from China. On the supply side, oil production had increased in Canada and the United States, countering the production cuts by OPEC, and Saudi Arabia was expected to increase oil production from December. But the situation quickly reversed following Israel’s attack on Lebanon. Oil prices jumped by nearly $10 per barrel within a week, before easing by around $5 per barrel. While the immediate oil price impact of Israel’s attack has mostly faded, the potential for higher oil (and other energy) prices still poses a risk to global inflation and economic activity (Liadze et al, 2022). To provide further context for the potential scale of this impact, we can show what would happen if oil and gas prices were to remain $10 higher for two years than the baseline levels projected in the Summer Global Economic Outlook from the National Institute of Economic and Social Research (NIESR), using NIESR’s Global Macroeconometric Model (NiGEM). The results demonstrate that the $10 rise in oil and gas prices increases inflation by around 0.7 percentage points in major economies in the first year (see Figure 2). The impact is higher in China, where the economy relies relatively more on oil imports for its strong manufacturing industries. The inflationary pressures persist for two years despite central banks’ efforts to curb inflation by increasing interest rates.   The effect of higher oil and gas prices on real GDP is shown in Figure 3. In the scenario described above, GDP would fall by 0.1-0.2% in major economies immediately. Partly due to higher interest rates, real GDP would continue to weaken for three years following the shock. After this, economic activity would start to return to base levels as oil and gas prices revert to their levels in the baseline forecast.   Increased shipping costs and supply chain disruptions A wider conflict in the Middle East could also affect the economy through higher shipping costs and supply chain disruptions. Houthi attacks on commercial ships in the Red Sea in late 2023 showed that such disruptions can have a huge impact on global trade through shipping, which comprises 80% of world trade volume. Following the rocket attacks by the Houthi rebels, some commercial shipping re-routed from the Red Sea to the Cape of Good Hope, leading to significant delays in travel times and increased freight costs. As a result, the Shanghai Containerized Freight Index – a measure of sea freight rates – rose by around 260% in the second quarter of 2024 with additional disruptions to supply chains. Our analysis shows that an increase of 10 percentage points in shipping cost inflation can lead to import prices rising by up to around 1% and consumer inflation increasing by around 0.5% in OECD countries. As Figure 4 shows, the impact of shipping costs on inflation shows its full effects over six quarters. This means that inflationary concerns could be with us for the next year and a half as a result of higher shipping costs that may emerge from any possible escalation of the Middle East conflict.   Wider economic implications and policy responses While rising geopolitical risk and increased oil and shipping costs can each individually exert upward pressure on inflation and may slow down economic activity in the global economy, the combined impacts are likely to be greater. Countries with stronger trade and financial ties to the Middle East and those that rely heavily on oil imports as an input for domestic production would be most affected. On the monetary policy front, central banks may have to take a more hawkish stance in response to rising inflationary pressures from the Middle East conflict. This could lead to higher interest rates, which would further dampen economic activity, particularly in an environment where there are already recessionary concerns in some major economies. Beyond its immediate economic implications, an escalation of the Middle East conflict could trigger large-scale displacement of people, which would increase economic and social pressures on neighbouring countries. Many countries may also have to increase their military spending in response to growing regional tensions. Given that public debt levels are already elevated in many countries due to successive shocks to the global economy over the past decade, any additional defence spending could come at the expense of public infrastructure investments that would otherwise boost productivity growth. Overall, the global economy is already underperforming as a result of the lagged effects of tight monetary policies, weaker global trade, a slowing Chinese economy and uncertainties surrounding the upcoming US election and possible changes to US trade policy. A potential escalation of conflict in the Middle East could exacerbate the situation by increasing uncertainties, harming efforts to bring down inflation and reducing global GDP growth. Over the medium and long term, it could further damage the global economy, with the possibility of refugee crises as well as increased defence spending, making the effects more complex and longer lasting. This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском While the IPCC warns that we should reach the emissions peak this year, greenhouse gases released into the atmosphere will grow by 0.8%, according to the annual report from the Global Carbon Project presented this Wednesday at COP29. A cold shower in the middle of the Climate Summit, or rather, a scorching one. The independent organization Global Carbon Project (GCP), specialized in quantifying greenhouse gas emissions from fossil fuel combustion, has released its latest research. The 2024 edition of the Global Carbon Budget projects, with just over a month and a half left in the year, total annual emissions from fossil fuels to reach 37.4 billion tons of carbon dioxide (CO2). This represents a 0.8% increase compared to 2023 — with a possible error range from a 0.3% decrease to a 1.9% increase — marking a new unprecedented record at the worst possible moment. In the crucial year in which, according to the Intergovernmental Panel on Climate Change (IPCC), humanity should reach its emissions peak if it wants any chance of avoiding a global average temperature rise of 1.5°C, not only has a new historical high been reached, but there is also "no signal" that the world has reached the peak of emissions from fossil industries, warn the team behind the research presented this Wednesday. As Professor Pierre Friedlingstein from the University of Exeter’s Global Systems Institute, who coordinated the study, laments, "we still don’t see any signs that fossil fuel burning has peaked." The figures are actually more concerning, as the emissions from the "changes in land use" —which include deforestation caused by humans and their agroindustry — will add 4.2 billion tons of CO2 (GtCO2). This means that we will emit 41.6 billion tons of CO2 into the atmosphere, one billion more than last year, a period that was already a record. More coal, more oil, and more gas amid the acceleration of the climate crisis Despite significant progress in decarbonization, emissions from the three main fossil fuels will increase in 2024. The GCP’s projection is that coal emissions will rise by 0.2%, with coal responsible for 41% of emissions from fossil fuels; oil emissions will increase by 0.9%, with oil burning accounting for 32% of emissions; and gas emissions will grow by 2.4%, contributing 21% of total fossil fuel emissions. On the other hand, emissions from the cement industry, which account for 4% of global emissions, will decrease by 2.8% in 2024, mainly due to a reduction in the EU, although they will increase in China, the United States, and India, according to the research. By economic poles, while the EU — responsible for 7% of global emissions — will reduce its emissions by 3.8% this year, the United States, accounting for 13% of the total annual emissions, will only reduce them by 0.6%. China, the leading polluting power, with 32% of global annual emissions, is projected to increase its emissions by 0.2%, although the projected range suggests it could end the year with a slight decrease. Another emission hub, India, which produces 8% of greenhouse gases, will increase its emissions by 4.6% in 2024. In the rest of the world, where 38% of global emissions are produced, the forecast is an increase of 1.1%. The GCP highlights the growing importance of aviation and maritime transport in the emissions inventory: their emissions are expected to increase by 7.8%, although they remain below their 2019 level. An unprecedented concentration of gases in human history The report, conducted by researchers from over 80 institutions worldwide, including the universities of Exeter and East Anglia (UK), Ludwig-Maximilian University of Munich (Germany), and the CICERO Center for International Climate Research (Norway), provides an overview of emissions over the past decade. While they mention a certain stagnation in the past decade regarding the total greenhouse gases released into the atmosphere, the reality is that emissions continue to rise, and the previous decade (2004-2013) saw strong emission growth, with an annual increase of around 2%. Such figures mean that the concentration of CO2 in the atmosphere continues to rise. Just two weeks ago, the World Meteorological Organization (WMO) warned of a new record for greenhouse gas concentrations last year: an annual average of 420 parts per million (ppm) for CO2. In addition, surface concentrations of 1,935 parts per billion (ppb) of methane (CH4) and 336.9 ppb of nitrous oxide (N2O) were recorded. These represent increases of 151%, 265%, and 125%, respectively, compared to pre-industrial levels. "During 2023, CO2 emissions caused by massive wildfires and a possible reduction in carbon absorption by forests, combined with persistently high CO2 emissions from the burning of fossil fuels for human and industrial activities, drove the observed increase in concentrations," stated the WMO Annual Bulletin on Greenhouse Gases. Never in human history has the atmosphere been so laden with these gases, which have been released at an unprecedented speed: in twenty years, CO2 concentrations have increased by 11.4%. It is expected that atmospheric CO2 levels will reach 422.5 parts per million in 2024, 2.8 ppm higher than in 2023 and 52% above pre-industrial levels. Half-full glass However, at GCP, there is room for hope amid all the discouraging figures. "Despite another increase in global emissions this year, the latest data shows evidence of widespread climate action, with the growing penetration of renewable energy and electric vehicles displacing fossil fuels, and the decrease in deforestation emissions in recent decades, now confirmed for the first time," says Corinne Le Quéré, Research Professor at the Royal Society in the School of Environmental Sciences at the University of East Anglia. In the same vein, Dr. Glen Peters from the CICERO Center in Oslo points out that "there are many signs of positive progress at the country level, and a sense that a peak in global fossil CO2 emissions is imminent." A total of 22 countries, accounting for a combined 23% of global fossil CO2 emissions, have reduced their emissions in the 2014-2023 decade. Furthermore, countries within the Organization for Economic Co-operation and Development (OECD), in the group of wealthier nations, increased their emission reduction rates in the last decade compared to the previous one, from 0.9% to 1.4%. In the non-OECD group (excluding China), emissions growth decreased from 4.9% in the 2004-2013 decade to 1.8% in 2014-2023. However, Peters warns that "the global peak remains elusive" and emphasizes that "climate action is a collective issue, and while gradual emission reductions are occurring in some countries, increases continue in others." Another positive note is that, globally, emissions from the change in land use have decreased by 20% in the last decade, although they are expected to increase in 2024 under this category. While permanent CO2 removal through reforestation and afforestation (new forests) is offsetting emissions, it is only compensating for about half of the emissions from permanent deforestation. The GCP also issues a direct message to proponents of techno-optimism: "Current levels of technology-based carbon dioxide removal (excluding nature-based methods such as reforestation) account for only about one-millionth of the CO2 emitted by fossil fuels," they emphasize.This article was translated and licensed under CC BY-SA 3.0 ES (Atribución-CompartirIgual 3.0 España)

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском The Paris Agreement will be ten years old in 2025. It is a good opportunity, then, to reassess the feasibility of its long-term goals and understand what they mean for the current and for the next generations. In a very optimistic scenario, if the goals of the Paris Agreement are achieved, the climate crisis will have been solved by the end of the 21st century. In the meantime, though, the crisis will worsen, as temperature overshoot is very likely to occur by the middle of the century. During the overshoot period, our planet’s average temperature exceeds 1.5°C above pre-industrial levels, which is the threshold proposed by the Paris Agreement. At the end of the overshoot period, which could last from one to several decades, the temperature will begin to fall until it eventually stabilises at 1.5°C at the turn of the century (IPCC 2023, 1810). Expectedly, the success of the Paris Agreement would greatly benefit the “post-overshoot generation”, namely the generation that will live in the first half of the 22nd century. But to ensure the success of the Paris Agreement, the generation that will live in the overshoot period – the “overshoot generation” – will have to remove an enormous amount of GHG (Greenhouse Gases) from the atmosphere. For now, though, it is unclear whether CCS (Carbon Capture and Storage) technologies will be available at a scale that might enable the overshoot generation to achieve the long-term goals of the Paris Agreement. To aggravate the problem, the overshoot generation will also probably have to rely on as-yet untested geoengineering technologies to promote their own survival. As we can see, conflicting interests of three different generations are at stake here, namely: (1) the interests of the current generation, (2) those of the overshoot generation, and (3) the interests of the post-overshoot generation. Given the unequal distribution of power across generations (Gardiner 2011, 36), it is likely that the current generation will tend to further their own interest to the detriment of the overshoot generation, even if, in the end, the climate policies enforced by the current generation do indeed fulfil the interests of the post-overshoot generation. The best possible world is one in which the goals of the Paris Agreement are achieved. Yet, depending on the choices that we make today, the best possible world could also mean the worst possible world that human beings will ever have met on our planet. That will be the fate of the overshoot generation, squeezed between the self-serving policies of the current generation and the climate hopes of the post-overshoot generation. The implications for international relations are momentous, as we intend to show in this article. Possible pathways The Paris Agreement did not establish a concrete deadline for the achievement of the goals set out in Article 2, namely: Maintain the increase in the global average temperature well below 2°C above pre-industrial levels, and make efforts to limit this temperature increase to 1.5°C above pre-industrial levels, recognising that this would significantly reduce the risks and impacts of climate change. The scientific community generally understands that the Paris Agreement aims at climate stabilization at the end of the 21st century. There are two main reasons for this. The first is a constraint imposed by our planet’s climate system. The second is a constraint imposed by agreed upon principles of justice. As for the first reason, we have to bear in mind that an immediate reduction of GHG emissions would not be followed by an immediate decline of global temperature (Dessler 2016, 91). Even if all countries decided to eliminate their respective emissions today, the global temperature would continue to rise for several decades, until it begins to recede and stabilises at the turn of the century. As for the second reason, the Paris Agreement assumed that developing countries could not immediately reduce their own emissions without compromising their own development and the prospect of eradicating poverty. Thus, the Paris Agreement also established in Article 4 that each country could continue to emit GHG until their respective emissions peaked as soon as possible. After peaking, emissions should be rapidly reduced. Thus, the attempt to achieve the goals set out in Article 2 well before the end of the 21st century might turn out to prove inconsistent with the reality of our planet’s climate system and unfair towards developing countries. The problem, however, is that the Paris Agreement did not establish a specific pathway for the achievement of its long-term goals (Figure 1). There is, indeed, a multitude of pathways, but many (if not most) of them involve an overshoot period (Geden and Löschel 2017, 881; Schleussner et al. 2016). And as there are “different interpretations for limiting global warming to 1.5°C”, there emerges the question, then, as to which interpretation could do justice to the conflicting claims of the three different generations considered as a whole, namely the claims of the current generation, those of the overshoot generation, and the claims of the post-overshoot generation (Figure 2). There has been much discussion now on the concept of a “just transition”. But this debate has focused entirely on the claims that the members of the current generation can raise against each other, and not on claims that could be raised – or presumed – across the three generations referred to above. The IPCC (Intergovernmental Panel on Climate Change) Glossary from 2023, for instance, contains a specific entry on this topic: “Just transitions. A set of principles, processes and practices that aim to ensure that no people, workers, places, sectors, countries or regions are left behind in the transition from a high-carbon to a low carbon economy” (IPCC 2023, 1806). The IPCC entry ends with some considerations regarding past generations: “Just transitions may embody the redressing of past harms and perceived injustices”. Interestingly, though, the entry says nothing about the normative implications of a just transition for future generations. A 2023 United Nations document defines the concept of just transition along similar lines (United Nations Economic and Social Council 2023, 3, 12–13). But, again, it understands “just transition” in terms of claims that stakeholders within the current generation, whether at national or international level, can raise against each other. As for the international level, the United Nations document makes the following statement concerning the concept of just transition as applied to international relations: “As countries pick up the pace of their climate change mitigation strategies, it is critical that developed countries do not transfer the burden of the transition onto developing countries” (United Nations Economic and Social Council 2023, 8). The problem, however, is that, as a matter of justice, it is equally critical that the current generation does not transfer the burden of the transition onto the overshoot generation, even if that burden, in the end, turns out to benefit the post-overshoot generation. Such an unequal distribution of burdens across three generations would certainly conflict with the requirements of intergenerational justice (Moellendorf 2022, 161–70; Meyer 2021). Overshoot generation and retroactive mitigation One might perhaps argue that no extra burden is being imposed on the overshoot generation, for the current generation is already having to face challenges that the overshoot generation, supposedly, will not have to face. The overshoot generation, one might suggest, will inherit from the current generation all the benefits resulting from the energy transition, but without having to bear the costs that the transition imposes on the current generation. The idea here is that by the middle of this century global emissions will have already peaked and will be declining at an accelerated pace, towards stabilisation at 1.5°C above the pre-industrial level at the end of this century. Thus, the overshoot generation can arguably reap the benefits of green energy, as long as the current generation remains free, at least for the time being, to emit GHG further, which is necessary to finance the human and technological development that the overshoot generation will need later. This claim, however, overlooks a crucial fact about the climate crisis – a fact that has not been given due attention in the public debate on climate policies. In a very optimistic scenario, the overshoot generation will not have the burden of reducing their own emissions because they will be able to rely on carbon-free energy. The problem, however, is that the overshoot generation will still have to retroactively mitigate the emissions of previous generations – including, of course, the emissions of the current generation. We call this process “retroactive mitigation”, for what is at stake here is not reduction and phasing out of one’s own emissions, but the removal of massive amounts of GHG, which previous generations failed to mitigate in the past. In a 2014 report, the IPCC realised that simply reducing GHG emissions would no longer be enough to preclude irreversible climate change. Removal of GHG would also be necessary (IPCC 2014, 12). The IPCC called attention to yet another problem: it was unclear whether CCS (Carbon Capture and Storage) technologies, including DAC (Direct Air Capture), could be deployed on a global scale in time to avoid a climate disaster. In a 2018 report, the IPCC was even less confident about the future development and scaling-up of CCS technologies (IPCC 2018, 136). To make matters worse, two further factors must be taken into consideration. (1) Recent studies show that there are practically no pathways left for the achievement of the Paris Agreement goals without the massive deployment of CCS (Smith et al. 2023). And (2) it has become increasingly probable that the overshoot generation will also have to deploy geoengineering technologies to cope with ever more frequent heatwaves (Moellendorf 2022, 161–70). It could perhaps be argued that afforestation and preservation of existing forests could be used instead of CCS technologies. However, the amount of land and water that would be necessary for the creation of new forests is probably larger than the amount of land and water available. Moreover, the attempt to create new forests on such a large scale might compromise the water and food security that the overshoot generation will need to promote their own climate adaptation (Shue 2017, 205). It is also necessary to take into account the amount of time new forests need to grow, not to mention the risk of fire. In this case, forests stop absorbing GHG and become GHG emitters themselves (Gatti et al. 2021). Implications for international relations In the aftermath of the Second World War, human being’s capacity to trigger catastrophic events at a global scale became increasingly apparent. As Garrett Hardin aptly put the problem in 1974: “No generation has viewed the problem of the survival of the human species as seriously as we have” (Hardin 1974b, 561). But while even realist thinkers such as Hans Morgenthau and John Herz argued for international cooperation in the face of global threats, Hardin himself advanced what he called the “lifeboat ethics”. According to Hardin, instead of engaging in international cooperation, richer states should behave like lifeboats and resist the temptation to help individuals from poorer states to cope with environmental disasters or famines. This, he argued, might undermine richer states’ capacity to secure their own survival (Hardin 1974a; 1974b). In his The Limits of Altruism: An Ecologist’s View of Survival from 1977, Hardin resumes his criticism of international cooperation to alleviate the plight of poorer states: We will do little good in the international sphere until we recognize that the greatest need of a poor country is not material: call it psychological, moral, spiritual, or what you will. The basic issue is starkly raised in a story of personal heroism that unfolded in South America a few years ago (Hardin 1977, 64). Hardin goes on to recall the 1972 Andes plane crash, turned into a feature film in 2023. Hardin suggests that the passengers who had survived the crash would not have taken the initiative to save their own lives had they not heard on the radio that the search efforts to rescue them had been called off. Hardin’s conclusion is this: “This true story, I submit, bears a close resemblance to the moral situation of poor countries. The greatest gift we can give them is the knowledge that they are on their own” (Hardin 1977, 65). Hardin, of course, does not take into consideration the extent to which richer states themselves may be responsible for the plight of poorer states. Hardin’s self-help approach to international relations is in line with political realism. But when major realist thinkers themselves addressed the question of human survival, around the same time Hardin advocated his lifeboat ethics, they came to entirely different conclusions. Authors such as Morgenthau and Herz realized that nation-states had become unable to protect their own citizens in the face of global catastrophes triggered by the depletion of the environment or the outbreak of a nuclear war. As Morgenthau put the problem in 1966: “No nation state is capable of protecting its citizens and their way of life against an all-out atomic attack. Its safety rests solely in preventing such an attack from taking place” (Morgenthau 1966, 9). In a 1976 article on the emergence of the atomic age, Herz made a similar point: “Nuclear penetrability had rendered the traditional nation-state obsolete because it could no longer fulfill its primary function, that of protection” (Herz 1976a, 101). Both Morgenthau and Herz argued for international cooperation – or perhaps even the dissolution of the system of states (Morgenthau 1978, 539) – as the better strategy to avert global catastrophic risks (Herz 1976a, 110; 1976b, 47). Herz later also theorized about the concept of “ecological threat” and argued for the development of a new interdisciplinary field, which he aptly named “survival studies” (Herz 2003; Seidel 2003; Laszlo and Seidel 2006, 2–3; Graham 2008; Stevens 2020). During the overshoot period, as heatwaves and other climate-related extreme events become more severe and frequent, people in poorer countries are likely to suffer the most. Mass migrations are likely to occur on an unprecedented scale (Vince 2022). Given the current popularity of anti-migration measures both in the United States and Europe, it is imaginable, then, that the lifeboat ethics will strike a chord with future conservative governments. That would be an error, for the assumption that governments will be protecting their own citizens by way of making their borders impenetrable to climate migrants is misleading. The “ecological threat” cannot be held back by higher walls. Lifeboat ethics will make everyone worse-off. Back in the 1960s, Martin Luther King may not have had climate change or mass migration in mind, but his words strike us as even more poignant now: “We may have all come on different ships, but we’re in the same boat now” (as quoted by former American President Barack Obama). There is only one boat, carrying three generations of hopeful passengers with equal legitimate claims to a better climate. It is a long journey. Let us not allow our only boat to go down. Final remarks The scenario in which the overshoot generation will have to live is not an encouraging one, but it is even less inhospitable than the scenario that the post-overshoot generation will have to face if the goals of the Paris Agreement are not met. It is up to the current generation to make sure that the overshoot period is as short as possible, and that the overshoot generation will not only be in a position to adapt to unprecedented climate scenarios in the history of human civilization, but also fulfil hopes of the post-overshoot generation. Figures Figure 1: Pathways compatible with the goals of the Paris Agreement (IPCC 2018, 62). FIGURE01  Figure 2: Pathways that would limit global warming to 1.5°C (IPCC 2018, 160).   Acknowledgements Marcelo de Araujo thanks Prof. Darrel Moellendorf for the invitation and the Alexander-von-Humboldt Foundation for the financial support. Support for this research has also been provided by the CNPq (The National Council for Scientific and Technological Development) and FAPERJ (Carlos Chagas Filho Research Support Foundation). An earlier draft of this article was presented at the University of Graz, Austria, Section for Moral and Political Philosophy, in 2024, with thanks to Prof. Lukas Meyer for the invitation. Pedro Fior Mota de Andrade benefited from financial supported provided by CNPq (National Council for Scientific and Technological Development). References Dessler, Andrew Emory. 2016. Introduction to Modern Climate Change. Second edition. New York, NY, USA: Cambridge University Press. Gardiner, Stephen. 2011. A Perfect Moral Storm: The Ethical Tragedy of Climate Change. Oxford: Oxford University Press. Gatti, Luciana V., Luana S. Basso, John B. Miller, Manuel Gloor, Lucas Gatti Domingues, Henrique L. G. Cassol, Graciela Tejada, et al. 2021. ‘Amazonia as a Carbon Source Linked to Deforestation and Climate Change’. Nature 595 (7867): 388–93. https://doi.org/10.1038/s41586-021-03629-6. Geden, Oliver, and Andreas Löschel. 2017. ‘Define Limits for Temperature Overshoot Targets’. 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한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском From January 20 to 24, 2025, the traditional World Economic Forum (WEF) took place in Davos. The organizers registered approximately 2,000 participants from over 130 countries, including around 1,600 executives from major corporations, among them 900 CEOs. The political agenda of the WEF was supported by more than 50 heads of state and government. As part of the official program, about 300 sessions were held, 200 of which were broadcast live. Press accreditation was granted to 76 media companies. For official events, 28,043 square meters of space were allocated, accommodating 117 meeting rooms and 23 lounge areas. Additionally, several participating companies (such as HSBC, EY, and Cognizant) rented additional venues separately for their own events. WEF President Børge Brende, announcing this meeting, emphasized that in 2025, due to geopolitical conflicts, ongoing economic fragmentation, and the acceleration of climate change, the forum would be held under conditions of exceptionally high global uncertainty for the first time in decades. The theme of the Forum was “Cooperation in the Age of Intelligence”. On January, WEF experts presented four reports. The first one, a traditional report and the 20th edition, analyzed the most significant global risks and threats facing the international community. The study is based on a survey of over 900 experts from various fields and covers short-term (2025), medium-term (until 2027), and long-term (until 2035) perspectives. The key risks identified for these periods include the following:- in 2025 the most serious threat for most respondents is interstate armed conflicts, followed by extreme weather events and geoeconomic conflicts, including sanctions and trade measures;- by 2027 key risks include disinformation and fake news, which undermine trust in institutions and intensify social polarization, tension, and instability, as well as an increase in cyberattacks and espionage cases;- by 2035 environmental threats are a major concern, including extreme weather events, biodiversity loss, ecosystem destruction, critical changes in Earth's systems, and natural resource shortages. Additionally, technological risks such as the negative consequences of artificial intelligence and other advanced technologies are highlighted.The authors emphasize the need to strengthen international cooperation and increase resilience to global threats. According to them, rising geopolitical tensions, climate challenges, and other risks require coordinated global action to prevent the escalation of existing issues and the emergence of new crises. The second report presents the perspectives of leading experts on the global economic outlook for 2025. They predict moderate economic slowdown, driven by geoeconomic fragmentation and protectionist measures. The most resilient economic growth is expected in the United States and South Asian countries, while Europe, China, and Latin America may face significant challenges. Inflation is projected to rise in most countries, primarily due to increased government spending and shifts in global supply chains. Most experts consider a further escalation of the U.S.-China trade war likely, along with continued regionalization of global trade, leading to the formation of more isolated economic blocs and reduced global interdependence. While experts acknowledge the high potential of artificial intelligence (AI), they emphasize the need for greater investment in infrastructure and human capital to fully leverage its benefits. The third study provides a comprehensive analysis of employment issues. The main conclusion is that ongoing changes, global trends and new technologies will cause 92 million people to leave the labor market worldwide by 2030, but will also create 170 million new jobs. One of the challenges in this regard is the need to improve skills and train for new specialties. The fourth report assesses the state of global cooperation across five key areas: trade and capital, innovation and technology, climate and natural capital, health and well-being, and peace and security. After analyzing more than 40 indicators, the authors conclude that due to heightened geopolitical tensions and instability, overall cooperation remains at the same level. However, positive trends are observed in areas such as climate, innovation, technology, and health. Davos as a Symbolic Benchmark of Switzerland Despite existing criticism, the Davos Forum remains a key platform for the annual interaction of leading figures in global politics, business, and the expert community. Without Switzerland's neutral status, the Davos Forum likely would not exist. However, it was Klaus Schwab, who founded the World Economic Forum (WEF) on January 24, 1971, who played a crucial role in transforming this event and its host location into one of Switzerland’s comparative advantages in political and economic terms. Despite his advanced age, Schwab continues to be an active ideologue and architect of Davos, moderating key discussions while fine-tuning his creation and addressing annual criticism. Yet, he has his own limitations—despite Switzerland’s neutrality and his personal reputation for impartiality, Schwab once again refrained from inviting Russian representatives, even at the level of individual entrepreneurs and experts. Such a move, rather than formal attempts to broaden participation and accessibility, could have enhanced the forum’s status. The participation of a Russian delegation would have been particularly relevant in this critical year for global politics, marked by the unpredictable presidency of Donald Trump, which is set to shape most geopolitical and geo-economic processes worldwide. Including Russian representatives could have strengthened the WEF’s competitive standing, but once again, it did not happen. The Swiss leadership highly values the opportunities that the Davos platform provides, particularly in the realm of foreign policy and, most notably, foreign economic relations. In September 2024, both chambers of the Swiss Parliament—the Council of States (the smaller chamber) and the National Council (the larger chamber)—decided to continue state support for the World Economic Forum (WEF) in Davos and allocated budget funding for the period 2025–2027. During the discussions, lawmakers emphasized that the event strengthens Switzerland’s role as a global hub for international dialogue, while also having a positive economic impact on the Graubünden region. As the host country of the forum, Switzerland actively leverages it to advance its own interests. This year, six out of the seven members of the Swiss Federal Council (Cabinet of Ministers) attended the WEF. As part of the European Free Trade Association (EFTA), Swiss Economy Minister Guy Parmelin signed free trade agreements (FTAs) with Kosovo and Thailand, bringing Switzerland’s total number of FTAs to 37. There are also plans to adapt and update the existing FTA with China. One of Bern’s key priorities remains securing an FTA with the MERCOSUR bloc. As a result, a focal point of this year’s WEF was Argentine President Javier Milei, who, during an “exceptionally warm bilateral meeting,” invited Swiss President Karin Keller-Sutter to visit Buenos Aires in 2025. The Trump Factor The opening of the current WEF coincided with the inauguration of Donald Trump, who, in recent months, has made numerous provocative statements and promises, swiftly beginning their implementation upon taking office on January 20. The U.S. president signed nearly 100 executive orders, including the repeal of 78 regulations enacted by his predecessor, Joe Biden. Among these were directives for all federal agencies and departments to address rising living costs and to end government-imposed censorship of free speech. The most significant orders included the U.S. withdrawal from the Paris Climate Agreement and the World Health Organization, as well as the declaration of a state of emergency at the U.S.-Mexico border to enforce strict immigration controls. In one way or another, the presence of the “new-old” president was felt across nearly all discussion platforms at the forum. On January 23, Donald Trump addressed the participants of the Davos Forum via video conference, outlining the following agenda:- NATO defense spending: Member states should increase their defense budgets from 2% to 5% of GDP to ensure a more equitable distribution of financial burdens within the alliance.- Trade tensions with the EU: The EU and its member states treat economic relations with the U.S. unfairly. European business regulations, including tax policies, disadvantage American companies, particularly in the tech sector, prompting Trump’s call for tariffs on European imports.- Criticism of the EU’s Green Deal: Labeling it as a “new green scam”, Trump emphasized that the U.S. would ramp up oil and gas production and expand power plant construction to become the “capital of artificial intelligence and cryptography”.- Oil prices and the Ukraine conflict: Trump suggested that lower oil prices from Saudi Arabia could help resolve the Ukraine conflict and urged Saudi leadership to take necessary steps, emphasizing their responsibility in the matter.- Tariffs on companies outsourcing production: Countries whose companies manufacture outside the U.S. will face tariffs to incentivize production relocation to American soil.- China's role in Ukraine: Trump called on China to support ending the Ukraine conflict, while stating his own efforts to mediate a peace deal between Russia and Ukraine.- U.S. domestic policy shift: A large-scale deregulation program is underway in the U.S., including tax cuts and potential elimination of diversity, equity, and inclusion (DEI) initiatives, which Trump views as discriminatory.Trump’s speech elicited mixed reactions among forum participants. His focus on protectionist policies and sharp criticism of international partners raised concerns about potential consequences for the global economy, particularly among European attendees. Additionally, his stance signaled an escalation in the strategic rivalry between Washington and Beijing, which is expected to play out through potential trade conflicts, tensions in the South and East China Seas, continued arms sales to Taiwan, and other geopolitical developments. The Europe Factor   At Davos, Europe is traditionally represented by the European Union, with the United States as its primary political and economic partner. Ursula von der Leyen, re-elected as President of the European Commission and beginning her new term on December 1, 2024, addressed the forum on January 21. Her speech largely responded to challenges outlined by Donald Trump before the WEF began, setting out the EU’s key priorities for the coming years: overcoming economic stagnation, enhancing competitiveness, and further integrating the single market across all 27 member states. A central theme of her address was the “Competitiveness Compass” initiative, first introduced in late 2024. This strategy, shaped by recommendations from Mario Draghi’s influential report, aims to drive economic reform and growth within the EU. The European Commission planned to unveil the full document by the end of January. At Davos, Ursula von der Leyen effectively introduced the concept of “Europe United” as a counterbalance to “America First” and cautioned the U.S. against igniting a trade war with the European Union. She emphasized the importance of early engagement and dialogue on shared interests, stating: “Our priority will be to initiate discussions as early as possible, focusing on common interests and readiness for negotiations. We will be pragmatic, but we will always adhere to our principles. Protecting our interests and defending our values is the European way”. At the same time, the European Commission president highlighted the high level of interdependence between the European and American economic models. She underscored that the era of global cooperation has given way to intense geostrategic competition, stating: “The world's largest economies are competing for access to raw materials, new technologies, and global trade routes—from artificial intelligence to clean technologies, from quantum computing to space, from the Arctic to the South China Sea. The race is on”. Christine Lagarde, President of the European Central Bank (ECB) emphasized that Brussels must be prepared for U.S. trade tariffs which are expected to be more “selective and targeted”, especially given the “existential crisis” facing the EU economy. She also noted that the ECB is not overly concerned about the impact of inflation from other countries, including the U.S., on the eurozone. The UK was also represented at Davos, with its delegation led by Chancellor of the Exchequer Rachel Reeves. She used the trip primarily to promote Britain’s economic landscape, focusing on the country’s political and economic stability, its business-friendly environment, and recent government efforts to reduce regulatory barriers—all under the central message: “Now is the time to invest in Britain”. However, the extent to which this narrative aligns with reality remained beyond the scope of the Forum. The true assessment was left to the executives of major corporations with whom Reeves held meetings, including JPMorgan and Goldman Sachs, discussing investment opportunities in the UK's infrastructure and green projects. Additionally, the UK delegation engaged in negotiations aimed at restoring and strengthening ties with sovereign wealth funds and private investors from the U.S. and the Gulf states. The Ukraine Factor Due to the ongoing Ukraine conflict, Davos once again served as a prelude to the Munich Security Conference, which traditionally takes place in early February in Bavaria. While the war and Donald Trump’s influence shaped many discussions, Ukraine was not the central focus of the forum, resulting in a somewhat reduced emphasis compared to previous years. Ukraine’s interests at the World Economic Forum (WEF) were primarily represented by V.Zelensky, who took it upon himself to “educate” European politicians and “interpret” the signals previously sent by Donald Trump. His focus was on defense spending, emphasizing that a significant portion should go toward supporting the Kyiv regime, the presence of foreign troops on Ukrainian territory, and the need for “real security guarantees”. In the first days after taking office, the U.S. president made several key clarifications regarding his previously stated 24-hour timeline for resolving the Ukraine conflict — this period has now been significantly extended. The reason lies in the fact that, regardless of the revocation of Zelensky’s well-known decree, Ukraine must have a head of state authorized to negotiate and officially confirm any agreements or their outcomes. As of late January, no such figure was present in Kyiv, and Washington is aware of this reality. Switzerland, while emphasizing its neutral status (despite being designated by Russia as an “unfriendly state”), consistently maintains that it provides Ukraine only humanitarian aid and diplomatic support at Kyiv’s request. At the 2024 WEF, the well-known Bürgenstock Conference was announced, which later took place in the summer. However, in 2025, no similarly large-scale initiatives were introduced. Nevertheless, discussions at the Forum once again touched on the possibility of granting Switzerland the right to represent Kyiv’s interests on the international stage. Additionally, it was reported that a Swiss-Ukrainian memorandum was signed, with Ukrainian Economy Minister Yulia Svyrydenko representing Kyiv. The agreement focuses on the participation of Swiss private businesses in Ukraine’s reconstruction efforts. V.Zelensky used Davos as an opportunity to meet with world leaders, including German Chancellor Olaf Scholz, who had recently blocked additional aid to Ukraine. However, his main competitor in Germany’s upcoming snap Bundestag elections, Friedrich Merz, was more open to the idea of support, and Zelensky also held a discussion with him. Both meetings were held behind closed doors, and no details were disclosed. Meanwhile, German Green Party leader Robert Habeck managed to avoid an impromptu conversation with Zelensky, who had attempted to engage with him on the spot. At a January 23 briefing, Russian Foreign Ministry spokesperson Maria Zakharova commented on V.Zelensky’s speeches at Davos 2025, describing them, among other things, as “narcotic madness”. The Germany Factor Germany, still holding its position as the political and economic leader of the European Union, was represented at Davos by key political heavyweights: Chancellor Olaf Scholz, Economy and Climate Protection Minister (and Vice-Chancellor) Robert Habeck, and CDU/CSU Chairman Friedrich Merz. All three have been selected by their respective parties as key candidates for chancellor in Germany’s snap Bundestag elections scheduled for February 23, 2025. Given this, it was no surprise that they used the Swiss platform as part of their election campaigns. The current head of the German government had an objective advantage: he delivered a keynote speech on behalf of Germany, in which he focused on the presence of traditional standard factors (the largest economy in the EU; efficient small, medium and large businesses; government support for investments; low level of government debt), which should help to overcome the crisis. Regarding the United States, he declared his interest in maintaining close relations with the new administration, but “without false fawning and servility”. D. Trump and his team, according to him, will keep the whole world on edge in the coming years, but the German leadership will be able to cope with this. O. Scholz's main message is that constructive European-American interaction “is of decisive importance for security throughout the world and is the engine of successful economic development”. It is noteworthy that there were many empty seats in the hall and after the Chancellor's speech there were no questions for him for a long time, which greatly surprised the moderator of the session, K. Schwab. O. Scholz's closest associate, Finance Minister J.Kukis, who was appointed to this position to replace K. Lindner, who was dismissed in early November 2024, was participating in the Forum. He was unable to provide any special pre-election support to his boss during the Forum, and did not distinguish himself in any special way. Incidentally, K. Lindner himself preferred to remain in Germany and continue to fight there for the votes of voters, which are extremely necessary for the liberals to overcome the five percent barrier and get into the Bundestag. F.Merz, who is very likely the future head of the German Cabinet, and his possible future deputy R. Habeck also sought to prove their chances of winning the elections during their speeches. O. Scholz and F.Merz organized meetings with leading representatives of German business, trying to show which of them understood their problems better and was ready to solve them constructively. Despite all their differences, they were united on one issue - the need to soften the provision on the “debt brake” enshrined in the Basic Law (Constitution) and increase support for entrepreneurs. External observers considered that F.Merz was more convincing, including regarding the transatlantic economic vector. R.Habeck unexpectedly engaged in self-criticism during the podium discussion, stating that he initially believed that the difficult economic situation in the country was due to a short-term cyclical crisis, but it turned out that this was a consequence of a long-term structural crisis. Such “self-education” of the minister cost Germany dearly. During the Forum (January 22) in the Bavarian town of Aschaffenburg, an Afghan refugee subject to deportation committed a crime, killing a child and an adult who was protecting him. This event pushed the issue of migration regulation to the top of the election campaign agenda. Unexpectedly, F.Merz found himself in a sticky situation, when his parliamentary request as the leading representative of the opposition in the current Bundestag for stricter controls at the external borders of the FRG could only count on success with the support of the unpopular Alternative for Germany and the center-left Sahra Wagenknecht Union. From Davos, Olaf Scholz traveled to Paris for a meeting with Emmanuel Macron. The French president was unable to attend the Forum due to domestic political circumstances and the need to manage the situation on the ground. The two leaders discussed the prospects for cooperation between their countries in strengthening their economic and political frameworks, as well as the European Union as a whole. None of the three key chancellor candidates managed to present a clear vision for Germany’s economic and political future, one that would be based on creativity, radical progress, technological breakthroughs, and prosperity—transforming the country into an innovation powerhouse not only for Europe but for the collective West as a whole. This means that Germany risks falling behind, failing to establish itself as an economic model capable of competing on equal terms with Donald Trump’s transforming North American economic space.Under Friedrich Merz, Olaf Scholz, and Robert Habeck, Germany faces the danger of remaining trapped in the past, relying too heavily on its post-war economic miracle—Made in Germany—which was achieved through the brilliance of ordoliberal economists and engineers. Davos 2025 made it clear that leaning solely on past achievements is no longer enough to drive a radical leap toward the future. If the German political elite, represented by the “handshake” established parties, remains in such reactionary positions in relation to the need for qualitative changes in economic policy, then the German standard will have no chance to take a leading place among the world's innovation locations. Here we will briefly indicate that, according to the estimates of the authors of the global risks report, the main ones for Germany are (in descending order): a shortage of highly qualified labor, recession / stagnation of the economy, illegal migration, disinformation, and a shortage of energy resources. They are the ones that largely determine the content of the current election campaign for the German parliament. The China Factor Among the political heavyweights representing the countries of the Global South at Davos 2025, the participation of the Chinese delegation, led by Vice Premier of the State Council of the People's Republic of China Ding Xuexiang, stands out. In his keynote speech, he emphasized Beijing's commitment to economic globalization, which is “not a zero-sum game, but a process of mutual benefit and common progress” and declared that protectionism does not lead to success, and trade wars have no winners. Among the key messages were that China is economically attractive, does not seek a trade surplus, is ready to import more competitive and high-quality goods and services to achieve balanced trade, is open to investment from foreign companies, and is ready to solve problems faced by both domestic and foreign firms. While condemning protectionism, he emphasized the importance of multilateralism and the role of the UN. While mildly critical of the “new-old” US president, he never mentioned him by name. Ding repeatedly referred to Xi Jinping, including his initiatives on global development and security. As part of the Forum, Ding Xuexiang hosted a private luncheon with top global financiers and business leaders, including the CEOs of BlackRock, Bridgewater Associates, JPMorgan, Blackstone, and Visa. Discussions centered on China’s ongoing economic reforms, efforts to stabilize the real estate market, stimulate domestic demand, and attract foreign investment. Experts noted that global business leaders responded positively to Ding Xuexiang’s statements, signaling growing confidence in China’s economic direction. In general, he fulfilled the standard mission assigned to him: to increase the international community's confidence in China's economic policy and confirm its role as a key player in the global economy. At the same time, the Forum participants remained concerned about a slowdown in China's economic growth, especially in the context of a possible increase in tariffs by the United States. The Artificial Intelligence Factor One of the leitmotifs of the forum, along with rethinking economic growth, industrial development prospects, climate and restoring trust, were discussions on the rapid development of AI, its impact on the labor market, prospects and challenges associated with the integration of this technology into various sectors of the economy. Experts identified a few trends that will emerge by 2030. AI and automation will increase the demand of enterprises for specialists in the field of AI, big data analysis, digital marketing, and cybersecurity. About half of the current skills of such employees in these areas may become obsolete, which suggests the need for timely adaptation of secondary and higher education to such a challenge. Employees whose professions will become unclaimed due to automation, especially in traditional sectors, will have to undergo advanced training programs. Special attention in the expert sessions was given to the ethical aspects of AI application and the related problems of developing the necessary standards. Issues of international cooperation took an important place, including in the context of ensuring a fair distribution of the benefits of AI application, as well as minimizing the potential risks it generates for society (for example, possible discrimination and bias in algorithms, as well as the protection of users' personal data). In terms of geopolitical rivalry in the field of AI, the global race for leadership in this area, which has already begun between the United States, China and several EU countries, was discussed. Experts pointed out the concerns of the leaders of the latter regarding the need to strengthen the positions of European companies in this area. Strategies for government stimulation of innovation and support for businesses developing AI were discussed. In addition, the participants in the discussions considered the possibilities of using artificial intelligence technologies to achieve sustainable development goals, including combating climate change, improving healthcare and increasing resource efficiency. Examples of using AI to monitor the environment, optimize energy consumption, develop new methods of treating diseases, and improve various aspects of life were of interest. *** The World Economic Forum 2025 in Davos was predictably held under the sign of global challenges, the Ukraine conflict, and increased economic competition, set against the backdrop of geopolitical and geoeconomic changes. Børge Brende, summarizing the event, accurately noted that the current time is “a moment of serious consequences and uncertainties”. This is largely linked to the return of Donald Trump to the White House. At the Forum, the United States’ priorities in strengthening national interests were outlined, including the goal of reducing import flows. This move drew criticism from the European Union and other participants, who expressed growing concerns about the escalation of trade conflicts and the fragmentation of the global economy. The President of the European Commission highlighted the prospects for strengthening the EU’s competitiveness and increasing its independence, considering the intensifying rivalry between the American and Chinese economic spheres. In this regard, representatives of China advocated for reducing trade tensions and strengthening regional alliances, while Germany emphasized the current risks facing its economic standard, outlining the difficulties of finding ways to minimize them. The Ukrainian conflict once again became one of the central topics, but with the formal support of the leaders of the collective West, delegations from the global South showed a restrained reaction to V.Zelensky's speech and messages. Discussions about AI became quite meaningful. Overall, Davos 2025 and its participants confirmed the important role of the WEF as a platform for discussing global challenges and finding constructive answers to them. The need for collective efforts to solve the most pressing issues was noted. One of B. Borge's final messages: the only way to achieve progress in solving global problems is to work together and “find solutions that will make the world a better place”. It is evident that Russia could have significantly contributed to enhancing the effectiveness of this approach.

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском Abstract This study examines the short-term, medium-term, and long-term implications of recent "tariff wars" on the European Union (EU). The imposition of tariffs by the United States, particularly the "Liberation Day" tariffs announced by President Trump on April 2, 2025, led to significant disruptions in global supply chains, negatively impacted GDP growth, increased financial market volatility, and exacerbated geopolitical tensions. The EU faces challenges in navigating this shifting geopolitical landscape while maintaining its economic interests and influence. However, the EU has opportunities to leverage these conflicts to strengthen its internal market, foster international cooperation, and emerge as a more resilient global actor. The paper concludes by discussing the potential end of transatlanticism, the future of the EU, and the implications for globalisation in light of the current "tariff chaos." Keywords: Tariffs, Geopolitics, European Union, Trade Wars Introduction Before we examine the topic of tariffs, let us recall that the terms "tariff war" or "trade war" are not strictly academic. International Security scholars generally believe that the notion of war is reserved for military conflicts (both domestic and international) that involve at least a thousand casualties in any given year.[1] One of the most prominent sources in this regard is the Armed Conflict Dataset Codebook, published by the Uppsala Conflict Data Program at the Department of Peace and Conflict Research, Centre for the Study of Civil Wars, and the International Peace Research Institute at Uppsala University in Uppsala.[2] Therefore, "tariff war" or "tariff wars" are more journalistic and hyperbolic. Hence, they are used in this study with quotation marks. Journalists and commentators from various backgrounds often use inflated language to impress their readers. On the other hand, wars are cataclysmic events that have game-changing consequences. In this sense, some tools that state leaders use to achieve political and economic goals, such as tariffs, may have short- and long-term outcomes. Nonetheless, scholars who tend to be precise in their explanations will mainly discuss economic competition rather than "economic war" or "wars." This study investigates the short-, medium-, and possible long-term implications of "tariff wars" on the European Union. These implications appear multifaceted and encompass stability, political relationships, and a broader international order."Liberation Day" On April 2, US President Trump announced new tariffs under the banner of "Liberation Day" – a minimum baseline of 10 per cent tariffs on goods imported from all foreign countries and higher, reciprocal tariffs on nations that impose tariffs on US exports.[3]  Crucially, the White House claims that the new tariffs are reciprocal: "It is the policy of the United States to rebalance global trade flows by imposing an additional ad valorem duty on all imports from all trading partners except as otherwise provided herein. The additional ad valorem duty on all imports from all trading partners shall start at 10 per cent, and shortly thereafter, the additional ad valorem duty shall increase for trading partners enumerated in Annex I to this order at the rates set forth in Annex I to this order. These additional ad valorem duties shall apply until such time as I determine that the underlying conditions described above are satisfied, resolved, or mitigated".[4] We did not have to wait for strong reactions to occur worldwide. China vowed to retaliate against the 34 per cent tariffs imposed by the US on Wednesday (April 2 2025) and protect its national interests while condemning the move as "an act of bullying".[5] Doubling down, a few days later, Trump threatened a 50 per cent tariff on China on top of previous reciprocal duties,[6] to which Chinese President Xi Jinping already replied hawkishly.[7] In an equally hawkish response, the Trump administration declared that Chinese goods would be subject to a 145 per cent tariff.[8] In a twist of events, on April 9, the US  declared a 90-day-long pause for previously declared tariffs covering the whole world (keeping a minimum of 10 per cent, though) except against China.[9] The next couple of weeks will show whether the world will enter the "tariff arms race" or we will enter some "tariff détente". Importantly, as one can surmise, "Xi has sold himself domestically and internationally as the guy standing up to America, and people that want to stand up to America should get in line behind Chairman Xi".[10] For the EU, European Commission President Ursula von der Leyen described US universal tariffs as a significant blow to the world economy and claimed that the European Union was prepared to respond with countermeasures if talks with Washington failed. Accordingly, the EU was already finalising a first package of tariffs on up to 26 billion Euro ($28.4 billion) of US goods for mid-April in response to US steel and aluminium tariffs that took effect on March 12.[11] Consequently, on April 7, 2025, a meeting was organised in Luxembourg[12] regarding the EU's response to US tariffs on steel and aluminium and the preparation of countermeasures, which included a proposal to impose 25 per cent tariffs on US goods. Interestingly, the "Liberation Day" tariffs do not include Russia. According to numerous commentators, this indicates Moscow's importance as a future trade partner once the Ukrainian war is over. However, the official explanation issued by the White House suggests that the existing sanctions against Russia "preclude any meaningful trade."[13] Tariff imposition: short, medium and long-term consequences Several observable phenomena can be identified regarding their economic ramifications: First, the imposition of tariffs can lead to significant disruptions in global supply chains, thereby affecting industries that rely heavily on international trade. This disruption can lead to increased costs and reduced competitiveness for EU businesses, particularly in sectors such as agriculture and manufacturing.[14] While national measures may yield political and economic benefits in the short term, it is essential to note that global prosperity cannot be sustained without cooperative and stable international trade policies. Second, the Gross Domestic Product is likely to be impacted. The imposition of tariffs has been shown to negatively affect GDP growth. For instance, the US-China "trade war" decreased the GDP of both countries, which could similarly affect the EU if it becomes embroiled in similar conflicts.[15] Third, we examine volatility in the financial markets. "Tariff wars" contribute to financial market volatility, which can cause a ripple effect on EU economic stability. This volatility can deter investment and slow economic growth.[16] Fourth, political targeting and retaliation. "Tariff wars" often involve politically targeted retaliations, as seen in the US-China trade conflict. The EU has been adept at minimising economic damage while maximising political targeting, which could influence its future trade strategies and political alliances.[17] Fifth, global alliances are shifting. The EU may need to reconsider its trade alliances and partnerships in response to these shifting dynamics. This could involve forming new trade agreements or strengthening existing ones to mitigate the impact of "tariff wars."[18] Next, increased geopolitical competition and economic nationalism can exacerbate tensions between major powers, potentially leading to a crisis in globalization. As an aspiring global player, the EU must navigate these tensions carefully to maintain its influence and economic interests.[19] Social impacts should also be considered. "Trade wars" can lead to changes in employment and consumer prices, thus affecting the EU's social equity and economic stability. These changes necessitate policies that enhance social resilience and protect vulnerable populations.[20] Does Team Trump have a plan? The tariffs imposed by the Trump administration appear to be part of a broader strategy that Trump describes as a declaration of economic independence for the US, notably heralding them as part of the national emergency. The long-term effects of this strategy depend on how effectively the US can transition to domestic production without facing significant retaliation or trade barriers from other nations. Notably, the US dollar's status as the world's primary reserve currency has been supported by military power since the introduction of the Bretton Woods system. The US military, especially the US Navy, has helped secure trade routes, enforce economic policies, and establish a framework for international trade, favouring the US. dollar. The countries that subscribed to the system also gained access to the US consumer market. Importantly, what is explained by the Triffin Dilemma, back in the 1960s, the US had a choice: to either increase the supply of the US Dollar,  sought after by the whole world as a reserve currency and international trade currency and that way to upkeep global economic growth, which was pivotal for the US economy or to end the gold standard. In 1971, the US finished its Bretton Woods system. What followed was a new system primarily dictated by neoliberalism based on low tariffs, free capital movement, flexible exchange rates and US security guarantees.[21] Under that neoliberal system, reserve demand for American assets has pushed up the dollar, leading it to levels far in excess of what would balance international trade over the long run.[22] This made manufacturing in the US very expensive, and consequently, the deindustrialisation of the US followed. Therefore, it appears that Trump wants to keep the US dollar as the world's reserve currency and reindustrialise the US. According to Stephen Miran, chair of the Council of Economic Advisers (a United States agency within the Executive Office of the President), two key elements to achieve this goal are tariffs and addressing currency undervaluation of other nations.[23] The second element in that duo is also known as the Mar-a-Lago Accord.[24] Scott Bessent, 79th US Secretary of the Treasury, picked up this argument.[25] In a nutshell, the current "tariff chaos" is arguably only temporary, and in the long term, it is designed to provide an advantage for the US economy.A readjustment of sorts fundamentally reshapes the existing international political economy. Whether or not this plan works and achieves its goals is entirely different. As market analysts observe, "For the past two decades, the US has focused on high-tech services like Amazon and Google services, which have added to a service surplus. However, the real sustainable wealth comes from the manufacturing of goods, which, for the US, went from 17 per cent in 1988 to 10 per cent in 2023 of GDP. The entire process of building goods creates many mini ecosystems of production/capital value that stay in a country for many decades. […] Initially, the Chinese started in low-tech and low-cost labour manufacturing before 2001, but shifted towards becoming major manufacturers of high-tech products like robotics and EV automobiles. […] For President Trump to levy high tariffs on the Chinese in the current moment, he is doing everything that he can to resuscitate US manufacturing".[26] EU's options The EU and the US share the world's largest bilateral trade and investment relationship, with 2024 data showing EU exports to the US at 531.6 billion euros and imports at 333.4 billion euros, resulting in a 198.2 billion Euro trade surplus for the EU.[27] While the EU faces significant challenges due to "tariff wars," there are potential opportunities for positive outcomes. The EU can leverage these conflicts to strengthen its internal market and enhance its role in global trade. By adopting proactive trade policies and fostering international cooperation, the EU can mitigate the negative impacts of "tariff wars" and potentially emerge as a more resilient and influential global actor. However, this requires careful navigation of the complex geopolitical landscape and a commitment to maintaining open and cooperative trade relations. It seems likely that the EU can leverage recent US tariffs to strengthen ties with China and India, potentially reducing its dependency on US trade. China is the EU's second-largest trading partner for goods, with bilateral trade at 739 billion euros in 2023, though a large deficit favouring China (292 billion euros in 2023).[28] The EU's strategy is to de-risk, not decouple, focusing on reciprocity and reducing dependencies; however, competition and systemic rivalry complicate deeper ties. Meanwhile, India's trade with the EU was 124 billion euros in goods in 2023, and ongoing free trade agreement (FTA) negotiations, expected to conclude by 2025, could yield short-term economic gains of 4.4 billion euros for both.[29] India's fast-growing economy and shared interest in technology make it a potentially promising partner. EU and China: Opportunities and Challenges Economically, there are more opportunities than challenges. China remains the EU's second-largest trading partner for goods, with bilateral trade reaching 739 billion euros in 2023, down 14 per cent from 2022 due to global economic shifts.[30] The trade balance shows a significant deficit of 292 billion euros in 2023, driven by imports of telecommunications equipment and machinery, whereas EU exports include motor cars and medicaments. The EU's strategy, outlined in its 2019 strategic outlook and reaffirmed in 2023, positions China as a partner, competitor, and systemic rival, focusing on de-risking rather than decoupling. Recent actions, such as anti-dumping duties on Chinese glass fibre yarns in March 2025, highlight tensions over unfair trade practices. Despite these challenges, China's market size offers opportunities, especially if the EU can negotiate for better access. However, geopolitical rivalry complicates deeper ties, including EU probes, in Chinese subsidies. Politically, the EU and China differ significantly in this regard. Regarding human rights policies, the EU consistently raises concerns about human rights issues in China.[31] These concerns often lead to friction, with the European Parliament blocking trade agreements and imposing sanctions on them. Moreover, China's stance on the war in Ukraine has created tension, with the EU viewing Russia as a major threat, and China's support of Russia is a significant concern.[32] China is often perceived in Western European capitals as not making concessions on issues vital to European interests.[33] The understanding of the war's root causes, the assessment of implications, risks or potential solutions - in all these areas, the Chinese leadership on the one hand and the European governments and the EU Commission in Brussels on the other hand have expressed very different, at times even contrary, positions.[34] Finally, China's political model demonstrates that democracy is not a prerequisite for prosperity, challenging Western emphasis on democracy and human rights.[35] EU and India: Growing Partnership and FTA Prospects and Political Challenges Economically, it seems that there are more opportunities than challenges. India, ranked as the EU's ninth-largest trading partner, accounted for 124 billion euros in goods trade in 2023, representing 2.2 per cent of the EU's total trade, with growth of around 90 per cent over the past decade.[36] Services trade reached nearly 60 billion euros in 2023, almost doubling since 2020, with a third being digital services.[37] The EU is India's largest trading partner, and ongoing negotiations for a free trade agreement (FTA), investment protection, and geographical indications, initiated in 2007 and resuming in 2022, aim for conclusion by 2025.[38] A 2008 trade impact assessment suggests positive real income effects, with short-term gains of 3–4.4 billion euros for both parties. The EU seeks to lower Indian tariffs on cars, wine, and whiskey. Simultaneously, India has pushed for market access to pharmaceuticals and easier work visas for IT professionals. However, concerns remain regarding the impact of EU border carbon taxes and farm subsidies on Indian farmers. Politically, challenges to EU-India relations stem from several sources. Trade has been a persistent friction point, with negotiations for a free trade agreement facing roadblocks (Malaponti, 2024). Despite the EU being a significant trading partner for India,[39] differing approaches to trade liberalization have hindered progress. India's historical emphasis on autonomy and self-reliance can sometimes clash with the EU's multilateral approach.[40] Further, India's complex relationship with Russia, particularly its continued reliance on Russian defence technology, presents a challenge for closer EU-India security cooperation.[41] Finally, while the EU and India share concerns about China's growing influence, their strategies for managing this challenge may differ. These issues, if left unaddressed, could limit the potential for a deeper, more strategic partnership between the EU and India.[42] Conclusions "What does Trump want? This question is on the minds of policymakers and experts worldwide. Perhaps we are witnessing the opening salvo of a decisive phase of the US-China economic conflict - the most serious conflict since 1989. It is likely the beginning of the end of the ideology of Globalism and the processes of globalisation. It is arguably aggressive "decoupling" at its worst and the fragmentation of the world economy. For the EU, this is a new situation which dictates new challenges. Someday, probably sooner than later, European political elites will have to make a choice. To loosen or perhaps even end the transatlantic community and go against the US. Perhaps in tandem with some of the BRICS countries, such as India and China, or swallow the bitter pill, redefine its current economic model, and once again gamble with Washington, this time against the BRICS. It seems that the EU and its member states are at a crossroads, and their next choice of action will have to be very careful. In a likely new "Cold War" between the US and this time, China, the EU might not be allowed to play the third party, neutral status. One should also remember that Trump, like Putin or Xi, likes to talk to EU member states' representatives directly, bypassing Brussels and unelected "Eureaucrats' like Ursula Von der Leyen. In other words, he tends to leverage his position against the unity of the EU, which should not be surprising given the internal EU conflicts. More often than not, Hungary, Slovakia, Italy, or Nordic members of the EU clash on numerous Issues with Berlin, Paris and most importantly, Brussels. (I write more about it here: Will the EU even survive? Vital external and internal challenges ahead of the EU in the newly emerging world order. https://worldnewworld.com/page/content.php?no=4577).   References [1] See more at:  For detailed information, consult one of the most comprehensive databases on conflicts run by Uppsala Conflict Data Programme at: https://ucdp.uu.se/encyclopedia[2] Pettersson, Therese. 2019. UCDP/PRIO Armed Conflict Dataset Codebook, Version 19.1. Uppsala Conflict Data Program, Department of Peace and Conflict Research, Uppsala University, and Centre for the Study of Civil Wars, International Peace Research Institute, Oslo. https://ucdp.uu.se/downloads/ucdpprio/ucdp-prio-acd-191.pdf[3] Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits. https://www.whitehouse.gov/presidential-actions/2025/04/regulating-imports-with-a-reciprocal-tariff-to-rectify-trade-practices-that-contribute-to-large-and-persistent-annual-united-states-goods-trade-deficits/[4] Regulating Imports with a Reciprocal Tariff to Rectify… op. cit.[5] Hanin Bochen, and Ziwen Zhao. "China vows to retaliate after 'bullying' US imposes 34% reciprocal tariffs". South China Morning Post. April 3 2025. https://www.scmp.com/news/us/diplomacy/article/3304971/trump-announced-34-reciprocal-tariffs-chinese-goods-part-liberation-day-package[6] Megerian, Chris and Boak, Josh. "Trump threatens new 50% tariff on China on top of 'reciprocal' duties". Global News. April 7, 2025. https://globalnews.ca/news/11119347/trump-added-50-percent-tariff-china/[7] Tan Yvette, Liang Annabelle and Ng Kelly. "China is not backing down from Trump's tariff war. What next?". BBC, April 8 2025. https://www.bbc.com/news/articles/ckg51yw700lo[8] Wong, Olga. “Trump further raises tariffs to 120% on small parcels from mainland, Hong Kong”. South China Morning Post, 11 April 2025. https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3306069/trump-further-raises-tariffs-120-small-parcels-mainland-hong-kong?utm_source=feedly_feed[9] Chu, Ben. “ What does Trump's tariff pause mean for global trade?”, BBC, 10 April, 2025. https://www.bbc.com/news/articles/cz95589ey9yo[10] Wu, Terri. "Why US Has Upper Hand Over Beijing in Tariff Standoff". The Epoch Times April 7, 2025. https://www.theepochtimes.com/article/why-us-has-upper-hand-over-beijing-in-tariff-standoff-5838158?utm_source=epochHG&utm_campaign=jj  [11] Blenkinsop, Philip, and Van Overstraeten, Benoit. "EU plans countermeasures to new US tariffs, says EU chief." April 3, 2025. https://www.reuters.com/markets/eu-prepare-countermeasures-us-reciprocal-tariffs-says-eu-chief-2025-04-03/[12] Payne, Julia. The EU Commission proposes 25% counter-tariffs on some US imports, document shows". Reuters, April 8, 2025. https://www.reuters.com/markets/europe/eu-commission-proposes-25-counter-tariffs-some-us-imports-document-shows-2025-04-07/  [13] Bennett, Ivor. "US seems content to cosy up to Russia instead of imposing tariffs." Sky News, April 4, 2025. https://news.sky.com/story/us-seems-content-to-cosy-up-to-russia-instead-of-coerce-it-with-tariffs-13341300[14] Angwaomaodoko, Ejuchegahi Anthony. "Trade Wars and Tariff Policies: Long-Term Effects on Global Trade and Economic Relationship." Business and Economic Research, 14, no. 4 (October 27, 2024): 62. https://doi.org/10.5296/ber.v14i4.22185[15] Ilhomjonov, Ibrohim, and Akbarali Yakubov. "THE IMPACT OF THE TRADE WAR BETWEEN CHINA AND THE USA ON THE WORLD ECONOMY," June 16, 2024. https://interoncof.com/index.php/USA/article/view/2112[16] Angwaomaodoko, Ejuchegahi Anthony. "Trade Wars and Tariff Policies: Long-Term Effects on Global Trade and Economic Relationship." Business and Economic Research 14, no. 4 (October 27, 2024): 62. https://doi.org/10.5296/ber.v14i4.22185[17] Fetzer, Thiemo, and Schwarz Carlo. "Tariffs and Politics: Evidence from Trump's Trade Wars." Economic Journal 131: no. 636 (May 2021): 1717–41. https://doi.org/10.1093/ej/ueaa122[18] Angwaomaodoko, Ejuchegahi Anthony. "Trade Wars and Tariff Policies: Long-Term Effects on Global Trade and Economic Relationship …op. cit.[19] Mihaylov, Valentin Todorov, and Sławomir Sitek. 2021. "Trade Wars and the Changing International Order: A Crisis of Globalisation?" Miscellanea Geographica 25: 99–109. https://doi.org/10.2478/mgrsd-2020-0051[20] Wheatley, Mary Christine. "Global Trade Wars: Economic and Social Impacts." PREMIER JOURNAL OF BUSINESS AND MANAGEMENT, November 5, 2024. https://premierscience.com/wp-content/uploads/2024/11/pjbm-24-368.pdf[21] Money & Macro, https://www.youtube.com/watch?v=1ts5wJ6OfzA&t=572s[22] Miran, Stephen. "A User's Guide to Restructuring the Global Trading System." November 2024. Hudson Bay Capital. https://www.hudsonbaycapital.com/documents/FG/hudsonbay/research/638199_A_Users_Guide_to_Restructuring_the_Global_Trading_System.pdf[23] Miran, Stephen. "A User's Guide to Restructuring the Global Trading System"... op.cit.[24] Zongyuan Zoe Liu, "Why the Proposed Mar-a-Lago Accord May Not be the Magic Wand That Trump Is Hoping For", 9  April 2025. https://www.cfr.org/blog/why-proposed-mar-lago-accord-may-not-be-magic-wand-trump-hoping  [25] Treasury Secretary Scott Bessent Breaks Down Trump's Tariff Plan and Its Impact on the Middle Class. https://www.youtube.com/watch?v=zLnX1SQfgJI[26] Park, Thomas. https://www.linkedin.com/feed/update/urn:li:activity:7316122202846765056/[27] See more at: https://ec.europa.eu/eurostat/fr/web/products-eurostat-news/w/ddn-20250311-1[28] See more at: https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/china_en[29] Kar, Jeet. "The EU and India are close to finalising a free trade agreement. Here's what to know." World Economic Forum. March 7 2025. https://www.weforum.org/stories/2025/03/eu-india-free-trade-agreement/[30] See more at: https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/china_en[31] "The paradoxical relationship between the EU and China'. Eastminster: a global politics & policy blog, University of East Anglia. http://www.ueapolitics.org/2022/03/29/the-paradoxical-relationship-between-the-eu-and-china/[32] Vasselier, Abigaël. "Relations between the EU and China: what to watch for in 2024". January 25 2025. https://merics.org/en/merics-briefs/relations-between-eu-and-china-what-watch-2024 [33] Benner, Thorsten. "Europe Is Disastrously Split on China." Foreign Policy, April 12 2023. https://foreignpolicy.com/2023/04/12/europe-china-policy-brussels-macron-xi-jinping-von-der-leyen-sanchez/[34] Chen, D., N. Godehardt, M., Mayer, X., Zhang. 2022. "Europe and China at a Crossroads." 2022. https://thediplomat.com/2022/03/europe-and-china-at-a-crossroads.[35] Sharshenova, A. and Crawford. 2017. "Undermining Western Democracy Promotion in Central Asia: China's Countervailing Influences, Powers and Impact." Central Asian Survey 36 (4): 453. https://doi.org/10.1080/02634937.2017.1372364.[36] See more at: https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/india_en[37] See more at: https://digital-strategy.ec.europa.eu/en/news/key-outcomes-second-eu-india-trade-and-technology-council[38] Kar, Jeet. "The EU and India are close to finalising a free trade agreement. Here's what to know"… op. cit.[39] Malaponti, Chiara. 2024. “Rebooting EU-India Relations: How to Unlock Post-Election Potential.” https://ecfr.eu/article/rebooting-eu-india-relations-how-to-unlock-post-election-potential/.[40] Sinha, Aseema, and Jon P. Dorschner. 2009. “India: Rising Power or a Mere Revolution of Rising Expectations?” Polity 42 (1): 74. https://doi.org/10.1057/pol.2009.19.[41] Chandrasekar, Anunita. 2025. “It’s Time to Upgrade the EU-India Relationship.” https://www.cer.eu/insights/its-time-upgrade-eu-india-relationship.[42] Gare, Frédéric and Reuter Manisha. “Here be dragons: India-China relations and their consequences for Europe”. 25 May 2023. https://ecfr.eu/article/here-be-dragons-india-china-relations-and-their-consequences-for-europe/

International efforts, such as the Paris Agreement, aim to reduce greenhouse gas emissions. But experts say countries aren’t doing enough to limit dangerous global warming. Summary Countries have debated how to combat climate change since the early 1990s. These negotiations have produced several important accords, including the Kyoto Protocol and the Paris Agreement. Governments generally agree on the science behind climate change but have diverged on who is most responsible, how to track emissions-reduction goals, and whether to compensate harder-hit countries. The findings of the first global stocktake, discussed at the 2023 UN Climate Summit in Dubai, United Arab Emirates (UAE), concluded that governments need to do more to prevent the global average temperature from rising by 1.5°C. Introduction Over the last several decades, governments have collectively pledged to slow global warming. But despite intensified diplomacy, the world is already facing the consequences of climate change, and they are expected to get worse. Through the Kyoto Protocol and Paris Agreement, countries agreed to reduce greenhouse gas emissions, but the amount of carbon dioxide in the atmosphere keeps rising, heating the Earth at an alarming rate. Scientists warn that if this warming continues unabated, it could bring environmental catastrophe to much of the world, including staggering sea-level rise, devastating wildfires, record-breaking droughts and floods, and widespread species loss. Since negotiating the Paris accord in 2015, many of the 195 countries that are party to the agreement have strengthened their climate commitments—to include pledges on curbing emissions and supporting countries in adapting to the effects of extreme weather—during the annual UN climate conferences known as the Conference of the Parties (COP). While experts note that clear progress has been made towards the clean energy transition, cutting current emissions has proven challenging for the world’s top emitters. The United States, for instance, could be poised to ramp up fossil fuel production linked to global warming under the Donald Trump administration, which has previously minimized the effects of climate change and has withdrawn twice from the Paris Agreement. What are the most important international agreements on climate change? Montreal Protocol, 1987. Though not intended to tackle climate change, the Montreal Protocol [PDF] was a historic environmental accord that became a model for future diplomacy on the issue. Every country in the world eventually ratified the treaty, which required them to stop producing substances that damage the ozone layer, such as chlorofluorocarbons (CFCs). The protocol has succeeded in eliminating nearly 99 percent of these ozone-depleting substances. In 2016, parties agreed via the Kigali Amendment to also reduce their production of hydrofluorocarbons (HFCs), powerful greenhouse gases that contribute to climate change. UN Framework Convention on Climate Change (UNFCCC), 1992. Ratified by 197 countries, including the United States, the landmark accord [PDF] was the first global treaty to explicitly address climate change. It established an annual forum, known as the Conference of the Parties, or COP, for international discussions aimed at stabilizing the concentration of greenhouse gases in the atmosphere. These meetings produced the Kyoto Protocol and the Paris Agreement. Kyoto Protocol, 2005. The Kyoto Protocol [PDF], adopted in 1997 and entered into force in 2005, was the first legally binding climate treaty. It required developed countries to reduce emissions by an average of 5 percent below 1990 levels, and established a system to monitor countries’ progress. But the treaty did not compel developing countries, including major carbon emitters China and India, to take action. The United States signed the agreement in 1998 but never ratified it and later withdrew its signature.  Paris Agreement, 2015. The most significant global climate agreement to date, the Paris Agreement requires all countries to set emissions-reduction pledges. Governments set targets, known as nationally determined contributions (NDCs), with the goals of preventing the global average temperature from rising 2°C (3.6°F) above preindustrial levels and pursuing efforts to keep it below 1.5°C (2.7°F). It also aims to reach global net-zero emissions, where the amount of greenhouse gases emitted equals the amount removed from the atmosphere, in the second half of the century. (This is also known as being climate neutral or carbon neutral.) The United States, the world’s second-largest emitter, is the only country to withdraw from the agreement, a move President Donald Trump made during his first administration in 2017. While former President Joe Biden reentered the agreement during his first day in office, Trump again withdrew the United States on the first day of his second administration in 2025. Three other countries have not formally approved the agreement: Iran, Libya, and Yemen. Is there a consensus on the science of climate change? Yes, there is a broad consensus among the scientific community, though some deny that climate change is a problem, including politicians in the United States. When negotiating teams meet for international climate talks, there is “less skepticism about the science and more disagreement about how to set priorities,” says David Victor, an international relations professor at the University of California, San Diego. The basic science is that:• the Earth’s average temperature is rising at an unprecedented rate; • human activities, namely the use of fossil fuels—coal, oil, and natural gas—are the primary drivers of this rapid warming and climate change; and,• continued warming is expected to have harmful effects worldwide. Data taken from ice cores shows that the Earth’s average temperature is rising more now than it has in eight hundred thousand years. Scientists say this is largely a result of human activities over the last 150 years, such as burning fossil fuels and deforestation. These activities have dramatically increased the amount of heat-trapping greenhouse gases, primarily carbon dioxide, in the atmosphere, causing the planet to warm. The Intergovernmental Panel on Climate Change (IPCC), a UN body established in 1988, regularly assesses the latest climate science and produces consensus-based reports for countries. Why are countries aiming to keep global temperature rise below 1.5°C? Scientists have warned for years of catastrophic environmental consequences if global temperature continues to rise at the current pace. The Earth’s average temperature has already increased approximately 1.1°C above preindustrial levels, according to a 2023 assessment by the IPCC. The report, drafted by more than two hundred scientists from over sixty countries, predicts that the world will reach or exceed 1.5°C of warming within the next two decades even if nations drastically cut emissions immediately. (Several estimates report that global warming already surpassed that threshold in 2024.) An earlier, more comprehensive IPCC report summarized the severe effects expected to occur when the global temperature warms by 1.5°C: Heat waves. Many regions will suffer more hot days, with about 14 percent of people worldwide being exposed to periods of severe heat at least once every five years. Droughts and floods. Regions will be more susceptible to droughts and floods, making farming more difficult, lowering crop yields, and causing food shortages.  Rising seas. Tens of millions of people live in coastal regions that will be submerged in the coming decades. Small island nations are particularly vulnerable. Ocean changes. Up to 90 percent of coral reefs will be wiped out, and oceans will become more acidic. The world’s fisheries will become far less productive. Arctic ice thaws. At least once a century, the Arctic will experience a summer with no sea ice, which has not happened in at least two thousand years. Forty percent of the Arctic’s permafrost will thaw by the end of the century.  Species loss. More insects, plants, and vertebrates will be at risk of extinction.  The consequences will be far worse if the 2°C threshold is reached, scientists say. “We’re headed toward disaster if we can’t get our warming in check and we need to do this very quickly,” says Alice C. Hill, CFR senior fellow for energy and the environment. Which countries are responsible for climate change? The answer depends on who you ask and how you measure emissions. Ever since the first climate talks in the 1990s, officials have debated which countries—developed or developing—are more to blame for climate change and should therefore curb their emissions. Developing countries argue that developed countries have emitted more greenhouse gases over time. They say these developed countries should now carry more of the burden because they were able to grow their economies without restraint. Indeed, the United States has emitted the most of all time, followed by the European Union (EU).   However, China and India are now among the world’s top annual emitters, along with the United States. Developed countries have argued that those countries must do more now to address climate change.   In the context of this debate, major climate agreements have evolved in how they pursue emissions reductions. The Kyoto Protocol required only developed countries to reduce emissions, while the Paris Agreement recognized that climate change is a shared problem and called on all countries to set emissions targets. What progress have countries made since the Paris Agreement? Every five years, countries are supposed to assess their progress toward implementing the agreement through a process known as the global stocktake. The first of these reports, released in September 2023, warned governments that “the world is not on track to meet the long-term goals of the Paris Agreement.” That said, countries have made some breakthroughs during the annual UN climate summits, such as the landmark commitment to establish the Loss and Damage Fund at COP27 in Sharm el-Sheikh, Egypt. The fund aims to address the inequality of climate change by providing financial assistance to poorer countries, which are often least responsible for global emissions yet most vulnerable to climate disasters. At COP28, countries decided that the fund will be initially housed at the World Bank, with several wealthy countries, such as the United States, Japan, the United Kingdom, and EU members, initially pledging around $430 million combined. At COP29, developed countries committed to triple their finance commitments to developing countries, totalling $300 billion annually by 2035. Recently, there have been global efforts to cut methane emissions, which account for more than half of human-made warming today because of their higher potency and heat trapping ability within the first few decades of release. The United States and EU introduced a Global Methane Pledge at COP26, which aims to slash 30 percent of methane emissions levels between 2020 and 2030. At COP28, oil companies announced they would cut their methane emissions from wells and drilling by more than 80 percent by the end of the decade. However, pledges to phase out fossil fuels were not renewed the following year at COP29. Are the commitments made under the Paris Agreement enough? Most experts say that countries’ pledges are not ambitious enough and will not be enacted quickly enough to limit global temperature rise to 1.5°C. The policies of Paris signatories as of late 2022 could result in a 2.7°C (4.9°F) rise by 2100, according to the Climate Action Tracker compiled by Germany-based nonprofits Climate Analytics and the NewClimate Institute. “The Paris Agreement is not enough. Even at the time of negotiation, it was recognized as not being enough,” says CFR’s Hill. “It was only a first step, and the expectation was that as time went on, countries would return with greater ambition to cut their emissions.” Since 2015, dozens of countries—including the top emitters—have submitted stronger pledges. For example, President Biden announced in 2021 that the United States will aim to cut emissions by 50 to 52 percent compared to 2005 levels by 2030, doubling former President Barack Obama’s commitment. The following year, the U.S. Congress approved legislation that could get the country close to reaching that goal. Meanwhile, the EU pledged to reduce emissions by at least 55 percent compared to 1990 levels by 2030, and China said it aims to reach peak emissions before 2030. But the world’s average temperature will still rise more than 2°C (3.6°F) by 2100 even if countries fully implement their pledges for 2030 and beyond. If the more than one hundred countries that have set or are considering net-zero targets follow through, warming could be limited to 1.8˚C (3.2°F), according to the Climate Action Tracker.   What are the alternatives to the Paris Agreement? Some experts foresee the most meaningful climate action happening in other forums. Yale University economist William Nordhaus says that purely voluntary international accords like the Paris Agreement promote free-riding and are destined to fail. The best way to cut global emissions, he says, would be to have governments negotiate a universal carbon price rather than focus on country emissions limits. Others propose new agreements [PDF] that apply to specific emissions or sectors to complement the Paris Agreement.  In recent years, climate diplomacy has occurred increasingly through minilateral groupings. The Group of Twenty (G20), representing countries that are responsible for 80 percent of the world’s greenhouse gas pollution, has pledged to stop financing new coal-fired power plants abroad and agreed to triple renewable energy capacity by the end of this decade. However, G20 governments have thus far failed to set a deadline to phase out fossil fuels. In 2022, countries in the International Civil Aviation Organization set a goal of achieving net-zero emissions for commercial aviation by 2050. Meanwhile, cities around the world have made their own pledges. In the United States, more than six hundred local governments [PDF] have detailed climate action plans that include emissions-reduction targets. Industry is also a large source of carbon pollution, and many firms have said they will try to reduce their emissions or become carbon neutral or carbon negative, meaning they would remove more carbon from the atmosphere than they release. The Science Based Targets initiative, a UK-based company considered the “gold standard” in validating corporate net-zero plans, says it has certified the plans of  over three thousand firms, and aims to more than triple this total by 2025. Still, analysts say that many challenges remain, including questions over the accounting methods and a lack of transparency in supply chains. Recommended Resources This timeline tracks UN climate talks since 1992. CFR Education’s latest resources explain everything to know about climate change.  The Climate Action Tracker assesses countries’ updated NDCs under the Paris Agreement. CFR Senior Fellow Varun Sivaram discusses how the 2025 U.S. wildfires demonstrate the need to rethink climate diplomacy and adopt a pragmatic response to falling short of global climate goals. In this series on climate change and instability by the Center for Preventive Action, CFR Senior Fellow Michelle Gavin looks at the consequences for the Horn of Africa and the National Defense University’s Paul J. Angelo for Central America. This backgrounder by Clara Fong unpacks the global push for climate financing.

Abstract The EU-India–Trade Agreement (FTA) negotiations, relaunched in 2022 after a nine-year hiatus, represent a significant step towards deepening economic and geopolitical ties between the European Union (EU) and India. The agreement, with its potential to eliminate tariffs, reduce non-tariff barriers, and enhance market access, particularly in services such as telecommunications, could substantially increase trade volume between the two entities, offering promising economic prospects. By creating a combined market of over 1.5 billion people, the FTA offers significant economic opportunities in sectors such as chemicals, machinery, and transport equipment. More importantly, it serves as a geopolitical tool aligned with the EU’s Indo-Pacific strategy, aiming to strengthen partnerships with like-minded democracies and potentially counterbalance China’s increasing influence, reassuring them about its geopolitical implications. Therefore, this study examines the potential economic and geopolitical opportunities and challenges associated with the EU-India FTA. It concludes that, perhaps unsurprisingly, much depends on the foreign and security policies of great powers such as the US, China, and Russia. Key Words: EU, India, Free Trade Area, Geopolitics Introduction Negotiations regarding the EU-India Free Trade Agreement (FTA) were initially launched in 2007. The talks were suspended in 2013 due to a gap in ambition and resumed after a nine-year pause with a formal relaunch on June 17, 2022, announced by Union Minister Piyush Goyal and European Commission Executive Vice-President Valdis Dombrovskis in Brussels.[i] This relaunch also included separate negotiations for an Investment Protection Agreement (IPA) and an Agreement on Geographical Indications (GIs), reflecting a broader agenda to enhance bilateral economic relations. The EU is India's largest trading partner, accounting for €124 billion in goods trade by 2023 (12.2% of the total Indian trade). India is the EU’s ninth-largest trading partner, representing 2.2% of the total trade in goods. Trade in services reached €59.7 billion in 2023, nearly double the 2020 level, with a significant portion being digital services, highlighting the growing economic interdependence.[ii]       *Data acquired from the European Commission at: https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/india_en Negotiation Rounds and Progress Since the relaunch, ten rounds of negotiations have been conducted, with the following timeline detailing key developments:   ·         Acquired through Grok. Prompt: What is the latest on the EU – India FTA Negotiations? At: https://x.com/i/grok?conversation=1922705918707265888 (14 May 2025) What is so important regarding FTAs? Free Trade Areas (FTAs) have become the cornerstone of international trade policy by reshaping global economic landscapes and geopolitical dynamics. These agreements aim to reduce trade barriers and foster economic cooperation among member states; however, their implications extend far beyond mere economic exchanges. Economic Consequences of Free Trade Areas One of the primary economic consequences of FTAs is the creation of new trade opportunities among the member states. By reducing tariffs and non-tariff barriers, FTAs encourage specialisation and efficiency and increase trade volumes. For instance, the African Continental Free Trade Area (AfCFTA) is expected to boost intra-African trade by creating a single market for goods and services that can unlock regional value chains and enhance economic integration.[i]  Similarly, the ASEAN-China Free Trade Area (ACFTA) has expanded trade between Indonesia and China, although the benefits may be asymmetric, with Indonesia's imports growing faster than exports.[ii] However, FTAs can also lead to trade diversion, in which member states import goods at the expense of non-member countries. This phenomenon can harm non-members by reducing market access and undermining global trade liberalisation efforts.[iii] For example, the Trans-Pacific Partnership (TPP), which never entered into force,[iv] and the Transatlantic Trade and Investment Partnership (TTIP), which shared the same fate, were criticised for potentially marginalising non-member states and creating a fragmented global trade system.[v] FTAs often attract foreign direct investment (FDI) by creating more integrated markets. For instance, the Regional Comprehensive Economic Partnership (RCEP) has stimulated FDI inflows into member states such as Japan, Australia, and New Zealand, contributing to GDP growth.[vi] Similarly, establishing Free Trade Zones (FTZs) in China has promoted financial employment and industrial upgrading, particularly in the middle and western regions, balancing regional development.[vii] However, the benefits of FTAs are not always distributed evenly. Some studies suggest that while FTAs may boost economic growth for member states, non-members may experience adverse impacts such as reduced trade volumes and deteriorating terms of trade.[viii] Geopolitical Consequences of Free Trade Areas FTAs often serve as tools for geopolitical influence, allowing powerful states to shape their global economic order. For example, the TTIP and TPP were partly designed to counterbalance China's rising economic influence and establish new trade standards.[ix] Similarly, the RCEP has reinforced China's economic leadership in Asia, while the United States–Mexico–Canada Agreement (USMCA) has allowed the United States to maintain its influence in North America.[x] For smaller countries like Vietnam, FTAs can enhance international recognition and strategic balancing between major powers, contribute to regional integration and stability, influence internal political legitimacy and power dynamics, and provide tools to manage geopolitical risks and external shocks. FTAs, especially New Generation Free Trade Agreements (NGFTAs) such as the EU-Vietnam Free Trade Agreement (EVFTA), act as economic instruments and geopolitical tools that shape Vietnam's global and regional order position.[xi] The geopolitical implications of FTAs are evident in their impact on international trade governance. The proliferation of mega-regional trade agreements has challenged the multilateral trading system under the World Trade Organization (WTO), creating a fragmented trade landscape.[xii] This shift has raised concerns about the marginalisation of developing countries and the erosion of global trade rules. FTAs can also mitigate interstate conflict by increasing war costs. For instance, the African Continental Free Trade Area (AfCFTA) catalyses regional peace, fostering economic interdependence and reducing the likelihood of conflict.[xiii] Similarly, the ASEAN-China Free Trade Area (ACFTA) has strengthened economic ties between Indonesia and China, reducing potential geopolitical tensions in the region.[xiv] FTAs are not always effective in preventing conflict. In some cases, they may exacerbate tensions by creating unequal benefits or excluding certain states. For example, the TPP and TTIP have been criticised for their exclusionary nature, which may have contributed to trade tensions between member and non-member states.[xv] FTAs often serve as building blocks for broader regional integrations. For instance, the EU began a series of FTAs and customs unions before evolving into a deeply integrated economic and political bloc. Similarly, AfCFTA is part of a broader vision for African economic integration, aiming to create a single market and customs union. The proliferation of FTAs has also raised concerns regarding the future of multilateralism. The Doha Round of WTO negotiations has stalled, and the rise of mega-regional trade agreements has further fragmented the global trade system.[xvi] This has led to calls for a more inclusive and equitable approach to trade governance that ensures that developing countries are not left behind.Free trade has profound economic and geopolitical consequences. It shapes global trade patterns, influences regional stability, and affects the distribution of wealth and power. Although FTAs offer significant economic growth and integration opportunities, they also pose inequality, exclusion, and sustainability challenges. EU – India FTA Opportunities Economic The potential Free Trade Agreement (FTA) between the EU and India presents significant economic opportunities for the EU driven by eliminating trade barriers, increased market access, and deeper economic integration. First, the services sector is a critical area where the EU can benefit significantly from an FTA with India. The EU's services exports to India could more than double, while India's services exports to the EU would increase by approximately 50%.[xvii] This growth is attributed to reduced trade barriers and the liberalisation of sectors such as telecommunications, which has been identified as a key area for reform. Arguably, half of the predicted export expansion is driven by reforms to domestic regulations, particularly in the telecommunications sector, which could further enhance the EU's competitive position in the Indian market. The FTA is expected to eliminate tariffs and reduce non-tariff barriers, creating a more level-playing field for the EU businesses in India. The FTA of EU-Indian trade could approximately double, particularly in business services.[xviii] This liberalisation would increase trade volumes and lead to structural changes in both economies, with the EU potentially gaining a competitive advantage in high-value-added sectors. The FTA would create a combined market of over 1.5 billion people, enabling the EU and India to reap the benefits of economies of scale. This integration would be particularly beneficial for manufactured goods, such as chemicals, machinery, and transport equipment, where intra-industry trade could lead to efficiency gains and cost reductions. These economies of scale could also give the EU a competitive edge in global markets, helping to stimulate economic growth and job creation.[xix] Geopolitics and security The EU–India FTA is an economic arrangement and a geopolitical tool that aligns with the EU's broader objectives in the Indo-Pacific region. The EU's geopolitical position and security interests are central to understanding the opportunities and challenges presented by the FTA. The EU's engagement with India through the FTA is deeply rooted in its Indo-Pacific strategy, formally launched in 2021. This reflects the EU's ambition to strengthen its presence in the Indo-Pacific region, an area increasingly characterised by multipolar competition, particularly between the United States and China. The EU's strategy is driven by recognising that the Indo-Pacific is the "pivotal region" of the 21st century, and its economic and security dynamics will shape global governance.[xx] While the EU's new strategy does not take a confrontational stance towards China, it reflects increased concerns about Beijing’s growing assertiveness and the implications of the US-China rivalry for Europe. The strategy advocates for a multifaceted engagement with China, encouraging cooperation and protecting EU interests and values. An FTA with India is a key component of the EU’s strategy. India's growing economic and political influence in the Indo-Pacific region makes it a critical partner for the EU. The EU views India as a like-minded democracy that shares concerns about China's assertiveness and the need for a rule-based international order. This alignment creates a unique opportunity for the EU to deepen its strategic partnership with India by leveraging economic cooperation to strengthen geopolitics.[xxi] The EU's engagement with India is part of its broader effort to strengthen security cooperation in the Indo-Pacific region. The EU and India share concerns regarding maritime security, cybersecurity, and the challenges posed by China's growing influence in the region. The FTA can serve as a foundation for deeper collaboration on security issues such as counterterrorism, non-proliferation, and disaster management.[xxii] The EU's security strategy in the Indo-Pacific also emphasises the importance of upholding a rule-based international order. An FTA with India can help promote this objective by reinforcing shared norms and standards in trade, investment, and intellectual property rights. This alignment is critical in China's increasing assertiveness and need for like-minded partners to counterbalance its influence.[xxiii] The EU's approach to an FTA is also shaped by its identity as a normative power. The EU has historically sought to promote its values, such as human rights, environmental sustainability, and social justice, through trade agreements. The FTA with India allows for advancing these values by incorporating labour rights, environmental protection, and sustainable development clauses.[xxiv] However, its geopolitical and economic realities constrain the EU’s ability to promote its normative agenda. The EU must be pragmatic and balance its value-based approach with the need to secure concessions on market access and other economic interests. This tension is evident in EU trade policy, where strategic and economic interests often precede normative objectives.[xxv] EU – India FTA Challenges Existing literature on the challenges the EU–India FTA poses is sparse. Generally, scholars admit that FTA, especially those negotiated by the EU, can face varying degrees of politicisation and contestation from civil society, as seen with TTIP and CETA.[xxvi] This finding suggests the potential for public opposition to new FTAs. In addition, the EU often pursues ambitious agreements beyond tariff reductions, including behind-the-border measures and regulatory cooperation.[xxvii] While FTAs aim to boost trade, their impact can be uneven. Some agreements have failed to entirely realise the expected benefits of trade and investment flows.[xxviii] There are also concerns that FTAs may reduce policy space for developing country partners to pursue alternative development strategies.[xxix] Economic However, several economic challenges regarding the EU-India negotiated FTA can be easily identified. To begin, the talks were stuck for nearly two decades, mainly because the EU and India had different goals. The EU wants deeper integration, including investment and competition policies, whereas India prefers a more limited agreement. This has led to repeated delays, and little progress has been made. Specifically, market access has been a point of contention, especially in sensitive sectors such as agriculture and automobiles. India imposes high tariffs on EU cars (60-100%) compared to the EU's 6.5% on Indian cars, and it protects its agricultural sector, making it difficult for EU farmers to enter the market. The EU also wanted India to open up services such as accountancy and legal work, but India resisted due to fears of competition.[xxx] The EU has strict rules, such as the Carbon Border Adjustment Mechanism (CBAM) and sustainability directives, which India sees as overregulatory and burdensome. This creates friction, as India worries these rules could act as trade barriers. There are also issues with intellectual property rights, where the EU wants stronger protection, but India resists keeping generic drugs affordable.[xxxi] Finally, the EU has invested heavily in India, around €100 billion by 2020, but India's decision to end bilateral investment treaties in 2016 and stalled talks on investment protection since 2023 creates uncertainty. There is also a trust deficit, with India fearing EU regulatory overreach and the EU worrying about compliance.[xxxii] Geopolitics and security As mentioned above, the EU's engagement with India is part of its broader strategy to deepen ties with the Indo-Pacific region. This strategy is driven by the need to counterbalance rising powers like China and enhance its global influence. The EU's Indo-Pacific Strategy and the Global Gateway Initiative reflect this ambition, emphasising the importance of strategic partnerships with like-minded actors such as India.[xxxiii] China's growing economic and military presence in the Indo-Pacific region poses a significant challenge for the EU and India. The EU has expressed concerns about China's assertive behaviour in the South China Sea and its Belt and Road Initiative (BRI), which is seen as a tool for expanding Chinese influence.[xxxiv] The EU and India share a common interest in promoting rules-based international order and countering China's increasing dominance. This alignment has been a key driver of their strategic partnership, with both sides seeking to enhance trade, technology, and security cooperation.[xxxv] The Russia-Ukraine war has further complicated the geopolitical landscape, with significant implications for EU-India relations. While the EU has strongly supported Ukraine, India has maintained a more neutral stance by prioritising its strategic partnership with Russia.[xxxvi] This divergence in approach has created tensions, particularly in terms of energy security and sanctions, which could impact FTA negotiations. The EU and India face various traditional security challenges that affect their strategic partnerships and FTA negotiations. China's military modernisation and assertive behaviour in the Indo-Pacific region have heightened security concerns for the EU and India. The EU has expressed support for India's role in maintaining regional stability, particularly in China's actions in the South China Sea and along the India-China border.[xxxvii] The EU and India are also concerned about regional instability, including Myanmar and the Korean Peninsula. These issues underscore the need for enhanced security cooperation between the two partners.[xxxviii] As for non-traditional security challenges, climate change and energy security are key areas of cooperation between the EU and India. The EU has emphasised the importance of transitioning to renewable energy sources, while India has sought to balance its energy needs with environmental concerns.[xxxix] In addition, the increasing importance of digital technologies has highlighted the need for cooperation in cybersecurity and data protection areas. The EU and India are interested in collaborating with digital infrastructure and innovation.[xl] Conclusion According to the European Parliament, “India was among the first countries to establish diplomatic relations with the European Economic Community in 1962. With the formal establishment of the EU in 1993, India signed a Cooperation Agreement in 1994, which opened the door to broader political interaction between the two. […] The relationship was upgraded to a 'Strategic Partnership' during The Hague's 5th India-EU Summit in 2004. From 1980 to 2005, EU-India trade grew from €4.4 billion to €40 billion. The EU was India's largest trading partner at the time, accounting for 22.4% of Indian exports and 20.8% of imports”.[xli] Despite these incentives, India's historical emphasis on autonomy and self-reliance can sometimes clash with the EU's multilateral approach.[xlii] Further, India's complex relationship with Russia, particularly its continued reliance on Russian defence technology, presents a challenge for closer EU-India security cooperation.[xliii] Finally, although the EU and India share concerns about China's growing influence, their strategies for managing this challenge may differ. 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