INTERNATIONAL
The European Textile Services Association (ETSA) Congress 2024, 2-3 May in Prague, was a particularly special event as ETSA celebrated its 30th anniversary. 2024 is also European Parliament election year, a subject that was not lost among, but rather complementary to, other presentations designed to explore the sector’s essential role in shaping a sustainable, green, and digitised economy for the EU and beyond.
Alongside gaining insights into the EU Green Deal and the Climate Pact, and how they influence the industry, and offering an unrivalled opportunity to network with industry leaders, innovators and peers, Europe’s place in the global scheme of things was also explored.
The geopolitical situation and world economy are experiencing crucial changes with economic downturns in the US and Europe and with China’s ever-growing influence. Geopolitical tensions are not diminishing with energy and climate change continuing to be politically polarising issues, especially before the EU elections in June. In a year of elections which, as well as those for the European Parliament, will witness the USA Presidential contest, and those in India and the UK, the question is, will Europe be heading right or left? (In the UK there was a decisive victory for Labour over the Conservatives in the local and Mayoral elections, as the conference was taking place. But will it be a similar result in the general election? The pundits think yes.)*
Just five years ago things were jogging along quite comfortably but since then the EU – and the rest of the world – suffered through Covid, came out the other side, and was then hit by conflict on its borders with Russia’s war on Ukraine and then, further afield, the Middle East erupted with Israel and Iran rumbling threateningly at each another even as the Israel and Hammas/Gaza situation continues to alarm.
Time for keynote speaker Paulo Portas, pictured, to give his views on the situation. Photo credit: Dávid Pacut
Portas, a former deputy Prime Minister of Portugal and Minister of Foreign Affairs, as well as Minister of Defence (2002-2005), was leader of the centre-right CDS-PP for 16 years, eight of them while in government and served as an MP for eight terms. He is also a regular commentator on international politics on Portugal TV, and frequent speaker at international conferences. ‘Global Threads: Unravelling the Role of Textile Services in World Affairs’ was his keynote address, and he advised delegates: “Assume risk is a possibility and you will be less surprised.
“We cannot assume we can negotiate this. If no more major events happen, we might have been too excessive in our predictions. Covid ended the longest economic expansion on record. Post Covid it was assumed China would make a big recovery, Germany would go into recession and the US would see stagnation. The truth could not be more different. Only Germany had a recession – not Italy, not the UK. It is now 2024 and it could happen again. Global slowdown is happening but there are many uncertain factors. Geopolitical and geoeconomic tensions are threatening economic global performance in 2024 but the reality may be better than current outlooks predict.
“There are two lessons to learn from this. The US economy will always survive. It has seen 120 months of continuous growth. As for China, it has had a double-digit growth and is still a growing economy, but expect a cycle of less than 5%. China faces sub-5% for three straight years, a record unprecedented since Mao Zedong died in 1976. India will replace China here as it is consistently growing above 5%,” said Portas.
Portas says the ‘social contract’ in China is working. It is a far better life for this generation in exchange for loyalty and obedience “yet 2023 showed a problem – 770,000 apartments had not been sold and there is local and national debt, probably due to youth unemployment”.
Geopolitical instability
“Without US aid Ukraine will lose. Ukraine needs to win but Russia wants to press Ukraine. Ukraine defensive:Russia offensive. If Trump wins, he will probably abandon Ukraine. Putin will have a political victory, not military, and will realise how weak the West is,” he warned.
“We Europeans will have a serious problem. Putin has already made eight interventions in former Soviet Republic countries. Kazakhistan, Tajikhistan; Belarus, Azerbaijan, the Donbass, Crimea and Georgia. He will be looking at Estonia, Latvia and Lithuania. After a constitutional referendum, Putin can stay in power until 2036.
“Then there is the new Gaza war – economic global impact dends in the level of escalation of the conflict. Israel and Iran are both nuclear countries, so this is very dangerous. You have one US President who wants resolution before November, one presidential hopeful who doesn’t.
“A two states agreement is the only solution in Palestine but that is so much easier to say than to organise. They have to recognise each other and embrace a peace agreement but the guys who risked sitting at a negotiating table, namely Sadat and Rabat, were assassinated,” said Portas.
Will there be a trend to de-escalate or will there be conflict, wondered Portas, that will pitch the big maritime sea powers of the US and UK against Iran and the Houthis (Iran by proxy), who are threatening the Red Sea maritime road and thereby targeting global trade. The economic global impact depends on the level of escalation of the conflict, said Portas. “If shipping has to divert it’s going to be more days, more time, more energy. It will cost money but this is not insurmountable. We should be finishing the fight against inflation. However, the decline in inflation is slowing and the delay in cutting interest rates. We will just have to wait. Perhaps European Central Bank will be first – a change in June?”
Portas observed that the EU needs migration, but it needs to be managed, pointing out that Asia and Africa account for more than 80% of global births with Europe and Oceania way behind. Meanwhile, he said, the World Economic Forum (WEF) has significantly adjusted its survey for 2024 and 2025: disinformation and misinformation (including AI) are the top risks it says. Interesting that misinformation and disinformation remains in Table 2 (see below) along with extreme weather events and societal polarisation, cyber insecurity and interstate armed conflict are replaced by three very worrying environmental risks.
Table 1: WEF GLOBAL RISKS IN THE NEXT TWO YEARS
• Misinformation and disinformation
• Extreme weather events
• Societal polarisation
• Cyber insecurity
• Interstate armed conflict
Table 2: WEF GLOBAL RISKS OVER THE NEXT 10 YEARS
• Extreme weather events
• Critical change to Earth systems
• Biodiversity loss, ecosystem collapse
• Natural resources shortage
• Misinformation and disinformation
Protectionism affects trade
Protectionism jeopardises trade, according to Portas, a policy pursued by ex-US President Trump which only opened the door to the Asia-Pacific trade agreement (RCEP), the world’s largest free trade agreement which went live in January 2022. Nevertheless. Despite discussion between Brazil and Argentina to create a common currency and the UAE exploring the use of rupees to trade non-oil commodities plus Russia and Iran working together to launch a crypto currency backed by gold, few expect to see the end of the dollar’s reign as number one gobal trading currency. Central banks still hold about 60% of their foreign exchange reserves in dollars. This is according to the Atlantic Council, IMF and US Department of the Treasury in 2023.
Turning to the USA, in the ‘poll of polls’, he said, Biden and Trump are running neck and neck in the Presidential elections and that it will all hang on seven key swing states. “The possibility of insurrectionist Trump being elected lets you see the state of the West today. Biden is a centrist in an age of capitalism. The real risk is that Trump does not believe in NATO. Worst of all he does not believe in Article J – when one member is attacked, we all stand together,” he said.
Incidentally, in the E-world charts, out of the 10 leaders, American companies are top with (in this order) Microsoft, Apple, Google/Alphabet, Amazon, Facebook/Meta taking the first five places. Then it is China with Tencent, US with Netflix, China with Bytedance and Alibaba with US Uber at number 10.
“We (Europe) are getting old!” said Portas “Europe innovates less than the USA and China. Don’t expect the world to wait for you. A less regulated Europe could be a good thing. Innovate first, legislate later.”
• We will hear from Joseph Ricci, TRSA President and CEO, and his report following on from Paulo Portas’ presentation in a forthcoming report as he puts forward the view from the USA.
•• More reports from ETSA congress will follow on keynote speeches, presentations and panel debates.
*Nearly half of EU countries are seeing the far right or nationalist parties being in the top three just a month ahead of the elections, according to a report form Bloomberg I September 2023. Since then, the Polish general election in October 2023 resulted in The United Right alliance placed first for the third straight election and won a plurality of seats but fell short of a Sejm majority. The opposition, consisting of the Civic Coalition, Third Way, and The Left, achieved a combined total vote of 54%, managing to form a majority coalition government. However, the loss of a vote of confidence in December ousted Prime Minister Mateusz Morawiecki and Donald Tusk to return after nine years securing the support of the Polish parliament on Monday evening to head a new government. this paved the way for Tusk to forge a centrist, pro-EU government from his Civic Coalition party, the liberal Poland 2050 party, the conservative agrarian Polish People’s Party and the Left.
