Global Policy Forum

By Tim Weber

The transatlantic tensions of the past year were firmly put in the past during a meeting of the world's rich and powerful at the World Economic Forum in Davos. In marked contrast to last year's forum, there were no recriminations between Americans and Europeans, while the US government sent Vice President Dick Cheney to offer an olive branch to its partners in Europe.

However, the discussions and workshops during the five day meeting ending on Sunday highlighted worries for the future: stalled global trade talks, a weak dollar and escalating budget deficits in the world's six largest economies, and the social impact of globalisation. Only a few demonstrators managed to get past the police lines to Davos, but were kept well away from the about 2,100 business people, politicians, artists, academics and campaigners meeting in the Swiss mountain resort.

'No venom'

US politicians attending the forum noted that the received a much friendlier reception, while many Europeans stressed that now was the time to look forward and work together again. "There is not the venom or aggressiveness that was there six months or a year ago," said Richard Haass, President of the New York-based Council on Foreign Relations. And even though many Europeans quibbled with the details of Mr Cheney's speech, they praised it for being a clear attempt to reach out to allies that were unhappy with US policy on Iraq. Stefano Sannino, top adviser of European Commission president Romano Prodi, summed it up: "The transatlantic friction is over".

Trade hopes

World economic leaders had also realised that "one can't clap with one hand" and were "rediscovering the benefits of multilateral institutions," Mr Sannino said. One of those institutions is the World Trade Organisation, but Davos did not provide much hope for the stalled global trade talks. On Swiss invitation, 19 trade ministers and WTO ambassadors attending Davos met to discuss ways of restarting the so-called Doha round of trade negotiations. But when the talks ended, the Swiss president and economics minister Joseph Deiss made the dire prediction that this was unlikely to happen during 2004.

Not everybody was so pessimistic. Alan Larson, US undersecretary of state for economic affairs, professed "guarded optimism" that trade talks could get underway soon - "despite it being an election year in the United States".

Some just did not understand the delay at all. "We planned to create a framework for trade liberalisation in just five days [at the world trade talks] in Cancun last year, I don't understand why we should not be able to achieve this during the next five months," said a weary-sounding Supachai Panitchpakdi, director general of the World Trade Organisation.

Soros rocks the boat

Little progress on trade was coupled with no clarity on the economic future, with experts at odds with each other whether the recovery in the United States was sustainable, whether the US budget and trade deficits were a problem, and whether the euro would rise to $1.40 or more. Only one forecast was barely disputed: the recovery of the eurozone economies will take a long time.

One man who had troubled European economies before, billionaire investor and philanthropist George Soros, this time tried to rock the American boat. Speaking at a reception for journalists on the last evening of Davos, he delivered a scathing critique of President George W Bush, accusing his administration of "Orwellian doublespeak" that was undermining the "democratic foundations of an open society". He defended his decision of donating millions of dollars to two organisations campaigning against Mr Bush, accusing the president of having dragged the country into the Iraq war on false premises.

Many of the American journalists in the audience were clearly uncomfortable when Mr Soros accused large parts of the US media of being part of a "truth machine" manufacturing an alternative reality.

Davos business

But, in between the dozens of session every day - ranging from "understanding modernity" to investing in China - the real business of Davos was the networking of participants milling in the Davos Congress Centre and surrounding hotels. It was a chance to meet friends, and to "synch yourself with what's going on in the world", said Nandan Nilekani, boss of Indian technology giant Infosys. Other participants were more jaded, saying that this year's meeting had lacked the "surprise factor" of past years with fewer big names turning up in Davos.

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