2017 World Review

2017 has been full of ups and downs. As the year comes to a close, we are reviewing some of the main events that have marked the year. Some of these political and economic events will still continue on influencing the world in the coming year. 

 

At the beginning of 2017, we identified three main geopolitical events that were foreseen to have a great impact on the world: Trump's Presidency, Brexit and Article 50, as well as China's economic outlook with the 19th National Congress of the Communist Party of China. While China has been able to skillfully manage and control its economic outlook, the Brexit negotiations with the European Union by the British Prime Minister Theresa May as well as the United States (US) President Donald Trump's "America First" policies have brought about many uncertainties.

" Some of these political and economic events will still continue on influencing the world in the coming year. "

G20 leaders summit in Hamburg July 7, 2017

Trump's "America First"

Right after his inauguration in January, US President Donald Trump has set the tone of his presidency by signing an executive order to withdraw the United States from the Trans-Pacific Partnership, a free trade agreement (FTA) with eleven other Asia Pacific countries and the United States. Moreover, he has instructed his administration to review the North American Free Trade Agreement (NAFTA) with Canada and Mexico as well as the United States-Korea Free Trade Agreement (KORUS) with South Korea. All these measures have rattled all the US trade partners. The world is coming to terms with the fact that the US is becoming more protectionist in terms of trade with Trump.

" The world is coming to terms with the fact that the US is becoming more protectionist in terms of trade with Trump. "

As for the US foreign policy, Trump has been antagonising its allies and close partners. He clashed with the Mexican President Enrique Peña Nieto by insisting that Mexico should fund the building of a wall along the US-Mexico border. With the Australian Prime Minister Malcolm Turnbull, Trump had an argument about refugees, that the US agreed to take on during the Obama administration. Last May, at the NATO meeting in Brussels, Trump publicly admonished the NATO members by saying that they are not paying the US enough for what it is doing for NATO. During the Asia Pacific Economic Cooperation summit in Da Nang, Vietnam, last month, Trump reiterated his "America First" message in front of the Asian leaders. With the North Korean leader Kim Jong-un, it's a clash of egos and constant taunting and warmongering, while in the Middle East, his policies towards Saudi Arabia, Qatar, Israel and others have divided the whole world.

Last June, fulfilling his presidential campaign promises,  Trump announced that the US would no longer be part of the 2015 Paris Agreement, that the Obama administration has endorsed. Prior to that, not only has Trump nominated Scott Pruitt, a climate change denier, to be the head of the US Environment Protection Agency, but he has also systematically rescinded all climate policies made by the Obama administration. Last in the COP 23 climate summit in Berlin, the Trump administration sent representatives to advocate the use of coal. 

To Brexit or Not to Brexit 

 

At the beginning of the year, the British Prime Minister Theresa May seemed to be very confident about Brexit so much so that she hinted to the European Union (EU) that Britain is prepared for a 'Hard Brexit' by declaring that "No deal is better than a bad deal". Nearing the end of the year, it will seem that Theresa May is scrambling to get from the EU that 'bad deal', she does not want. 

 

After triggering the Article 50 last March, it may have been overconfidence that pushed May to have a general election. In the end, it all backfired when she lost the majority in the government and has to negotiate for a coalition with a small Irish party, the Democratic Unionist Party (DUP). From then on, things went on from bad to worse and in fact, the worst nightmares are coming to realisation. In the current negotiations with the EU, the DUP is proving to be May's achilles heel with her being forced to be make major concessions so that the EU is satisfied with 'enough progress made' to move the Brexit discussions to the next phase. 

 

Till to date, the more important discussions on the trade relations between the EU and the United Kingdom have not even started. With the British Brexit Secretary David Davis admitting that there has been no Brexit economic impact assessment made so far, the United Kingdom (UK) is indeed badly prepared for the trade negotiations. In the end, the UK may have to take on the worst Brexit deal ever in March 2019.

" Nearing the end of the year, it will seem that Theresa May is scrambling to get from the EU that 'bad deal', she does not want. "

China taking on the leadership mantle

 

One of the major risks in the world at the beginning of the year was a hard landing of the Chinese economy, that would have affected the fragile recovery of the global economy. In the end, despite the fact that many of the economic issues in China still remain, the Chinese policy makers have been able to steer the economy properly and avoid any economic crisis. 

 

2017 is also the year of the 19th National Congress of the Communist Party of China. The Chinese government and its leaders were making sure that everything was done to ensure that this event would be successful and without any major incidents. During the congress, not only has the mandate of President Xi Jinping been renewed for another five years, but also the 'Xi Jinping Thought' (习近平新时代中国特色社会主义思想) is now embodied in the political and military ideology of the Communist Party of China. 

" In the end, despite the fact that many of the economic issues in China still remain, the Chinese policy makers have been able to steer the economy properly and avoid any economic crisis. "

With both President Xi Jinping and Premier Li Keqiang having their mandate renewed after the 19th National Congress, China is coming out stronger politically and economically to face a more volatile world with Trump, Brexit and many other geopolitical issues, that will continue on influencing the world in the future. 

 

While the United States with the Trump administration is adopting a more and more protectionist approach to trade, China under President Xi is advocating globalisation and free trade in the world. Moreover, it will seem that the US is relinquishing its leadership roles in the world, whether it is related to trade, investment, climate, diplomacy and security. Being the world's second largest economy, the world has now great expectations on China.

Conclusion

 

The Trump administration and the ongoing Brexit negotiations are completely changing the global geopolitical environment. As a result, we will be facing an increasingly volatile and uncertain world in the coming years. The many events, that will unfold with Trump and Brexit, will indeed make the world harder to predict and more unstable.

" The many events, that will unfold with Trump and Brexit, will indeed make the world harder to predict and more unstable. "

The US is also leaving behind a global leadership vacuum, that is not only making its allies feeling very uneasy about how the US will respond in the event of a crisis, but also forcing all countries to find a new direction without the US. While there are greater expectations on China, whether China with President Xi will embrace that leadership role and whether other countries will agree to follow its leadership are still debatable. Hence, whatever the scenarios, that will arise, we can only hope that the global leaders will have the necessary restraint and wisdom to lead the world in the right direction forward.

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