Good morning, Professor Bieler. Thank you for taking the time to join us for this conversation. Let’s begin with our first question on Global North–South relations. The traditional dependency of the Global South on the Global North has long been a central theme in political economy with scholars debating whether structural inequalities are being reinforced or challenged. With shifts like China’s rise, digital economies, and changing global policies, how do you see the North-South divide evolving? Are developing nations gaining more agency, or does dependency remain dominant?

Yes, very interesting question. And perhaps let me start by looking at China. China is, of course, rising. There’s no doubt it is making advances when it comes to technology – we’ve seen that in relation to recent developments in artificial intelligence. On the other hand, I also think that this rise is sometimes exaggerated. If you look at GDP per capita, China, the largest country in the world, is still nowhere near, for example, the US or other industrialized countries. And, of course, we also need to consider the huge inequality within China itself. So, while China is rising – it is perhaps the one case where we can see development coming through – I would be a bit sceptical as to whether it’s suddenly going to be in a position to challenge global powers. Especially when you look at how it has been included in the global division of labor – despite China’s advances in technology, it is still valued for cheaper labor in assembling, for example, Apple products.

Thinking more generally about Global North-South relations. there are different perspectives. On the one hand, if you adopt a liberal free market perspective, you would argue that countries in the South should open themselves up to the global economy, and by being integrated they then have the chance of development. If you look at what’s actually happening on the ground, I would lean towards colleagues who point out that that this has not been successful. We’ve discussed the example of China. Beyond that, it’s very difficult to look for positive examples. People refer to the Asian tigers – countries such as South Korea, Malaysia, Thailand, and Singapore developed quite a bit in the 1960s and 70s, but this was during the Cold War at a time when the United States was prepared to make concessions to these nations in exchange for allegiance. The US tolerated South Korea blocking imports to sell their goods domestically, but still opened the US market to South Korean exports. This is because they very clearly wanted to avoid South Korea coming under the influence of the Soviet Union. I think in our current political environment, that kind of openness doesn’t apply any longer.

Some would say that we’re in a new form of a Cold War between the US and China. As you say, the development of the Asian Tigers had taken place in the backdrop of enveloping US and USSR blocs. Do you see our current cold-war dynamic mirroring some of these dynamics or are we in a completely different environment today?

That of course, opens up a whole different angle, but I think countries or blocs today no longer accept other countries to close off their markets, and instead firmly insist on reciprocity. They almost pressure countries in the Global South to adopt open markets, as well as allowing these countries to export. I think that’s where this notion, I would argue, of unequal exchange comes in quite well. Because if we take the case of the currently negotiated EU–Mercosur Free Trade Agreement, what it indicates is that when you open up your markets in terms of industrial manufacturing, countries in the Global South can’t compete with the advanced manufacturing in the Global North. As a result of this, the EU can export goods such as cars, pharmaceuticals, and other manufactured products to Latin America, but this would lead to an estimated 186,000 job losses in Argentina, Chile, Uruguay, Paraguay and Bolivia – nations part of the Mercosur bloc. While they would also benefit by exporting primary commodities such as soya, beef, ethanol, etc, what they would be experiencing is a period of de-industrialization. That’s where one would question the dynamic since although these nations may be receiving high value-added manufactured goods in exchange for labour-intensive primary commodities or agricultural exports such as cash crops, there’s an inherent unequal exchange present in this trade which stifles the development of countries in the Global South.

Moving to trade in a tariff-driven world. The resurgence of protectionism – evident in US tariffs – has raised questions about the viability of global trade as we once knew it. How do smaller economies navigate these disruptions? Do you see alternative trade alliances such as BRICS being emboldened by US isolationism to reshape global trade structures?

That’s a very good question. Perhaps it’s a bit too early to analyse the full outcome of the current US position. Under Trump in his First Presidency, the US was already quite hostile to China and imposed tariffs on various sectors and areas – the Biden administration never changed that stance. What has changed now, however, is the US beginning to impose tariffs on “friendly” countries as well.  What is interesting, at least when we look at tariffs vis-à-vis Mexico and Canada, is that they resulted in additional agreements with these countries involving further concessions. This forces us to question whether these policies reflect the US splitting up global trade, or are they an instrument of power deployed by the US to get more favourable terms? I think that still remains to be seen.

When we talk about China’s and the BRICS’ role in this global environment, they have of course been talking about alternative global currencies and substitutes to the IMF and the World Bank for quite some time. They’ve even established some institutions to contest them, such as the Asian Infrastructure Investment Bank (AIIB) and others. But people question to what extent this has resulted in a tangible impact. We need to remember that Chinese political economy – despite the developments in relation to the Belt and Road Initiative and the forming of the BRICS bloc – still depends vitally on exports to the North American market. Similarly, Russia mainly exports primary commodities such as oil and gas – they’ve had to refocus because of the Ukraine war with Europe being cut off as an importer, but they have delivered these exports to India, Iran, and China instead. But Russia is not the kind of power which could completely redirect global trade. The same dynamic can be applied to the other BRICS nations, such as Brazil, South Africa, and India – these nations are still closely linked and operate interdependently with the US economy.

Does that suggest that the idea of an alternative financial system is more of an ideological pursuit rather than a tangible shift with material consequences?

That’s a good way of expressing it, certainly at the political level it mostly exists as a demonstration of intention. As of yet, I don’t think it’s been backed up with material developments on the ground. For instance, the cross-border payments system SWIFT, dominated by the US, is organised in such a way that it has proven very difficult for Russia or China to develop an alternative system of that scale in opposition to it. As the US has demonstrated on multiple occasions, they can cut off other countries and utilise the ubiquity of the system to impose sanctions.

Given your extensive experience in political economy, when we look at historical counter-movements from the Global South – such as the Bandung Conference of 1955 and the Non-Aligned Movement – do you think these efforts fell short because they were too reliant on ideology rather than concrete governance systems and enforcement mechanisms?

Bandung was a major post-war moment of liberation and evidenced a number of newly independent countries as well as some big players such as India and China. But what we still need to remember is that the over-arching system that these events took place in was shaped by the historical legacy of imperialism. So, of course, they became politically independent, but a lot of the economic structures from the colonial period were still in place. Therefore, from the very beginning, those countries were not in such a favourable position. The renowned political economist, Samir Amin, said in the early 1970s (the time period when the Non-Aligned Movement came into its own) that in order for these countries to really forge their own path, they would have to de-link completely from the global political and economic order. The majority of nations have been unable to do this. While some nations were initially success stories, such as Argentina and Chile both being able to industrialise to a significant extent in the early 20^th century, this progress is being eroded as a result of the current structures in the global economy.

You talked about the EU-Mercosur Free Trade Agreement before – I wanted to come back to the role of the EU in our global economy. While it champions free trade, recent supply chain disruptions and geopolitical shifts have pushed it toward strategic autonomy in key industries and a new approach to industrial policy. Is the EU balancing free trade and protectionism effectively? What lessons should policymakers take from recent economic shocks?

With the EU, there is indeed this notion of strategic autonomy. Some people question, however, whether there has been such a drastic change in EU foreign free trade policy recently. When you think about the Lome conventions in the 1950s, 60s, and 70s, – the means through which states dealt through the EU with their former colonial countries – there was no firm insistence on reciprocity. These countries were given concessions. Nevertheless, the pivotal moment of change came in 2006 when the new Global Europe free trade strategy was adopted. The EU was going to open up its markets to the global economy, but this was conditional on other nations now opening up theirs too. The concessions for countries in the Global South under the Lome Conventions no longer applied. What is interesting now is that with geopolitical competition coming into the mix vis-à-vis access to minerals and resources, there is a further shift in focus from no-holds-barred free trade to more strategic decisions. This, ultimately, will increase pressure on the EU to impose even more stringent conditions on global trade.

You touch on a very interesting dynamic where global value chains prevent countries, which focus on the export of primary commodities, from benefitting from the processing of minerals, for example. Would you say that this is a by-product of the global political economy, or is it a lack of effective policies from governments in these resource-rich nations?

They are certainly pressured through the global economy by industrialized countries like the US. But then, of course, there are also social class forces in those countries which benefit from this focus on exporting primary commodities. For instance, if you are a domestic actor in Brazil involved in soya production, and you aren’t worried about whether you deforest further for your product, the EU-Mercosur FTA is fantastic, because you have access to global markets securing an increase in soya exports. So, there are large agro-businesses operating in the Global South benefitting from this type of trade expansion. As a result, the idea that domestic actors or governments would be opposed to the current structure in global value chains is not so clear cut. Similarly, when you look at Chile, copper export is fundamental. But their main activities are predominantly in mining and then exporting it. The real value-added activities take place elsewhere, in the metropoles of the Global North. So, if development for a country like Chile was the objective, domestic activities must transcend simply mining resources but also processing it and adding value before selling on the global market.

As political and economic unpredictability grows, the role of global financial institutions becomes ever more crucial. Yet, organisations such as the IMF, World Bank, and WTO, face growing scrutiny – especially from the Global South, where they are often seen as enforcers of Western economic orthodoxy. With rising debt crises and alternative financial networks, can these institutions adapt, or is a fundamental shift in global economic governance needed?

Historically, these institutions have always adapted. If you think back to the 1950s or 60s, they were designed to manage the post war compromise of embedded liberalism. And then in the 70s, 80s and 90s, especially with the rise of neoliberalism, they suddenly adopted a very different role pushing Structural Adjustment Programs in the Global South. So, we know that they can change. But it will be interesting to see what their new role is going to be in a world where there is more emphasis on state action. If you think about the World Trade Organization in the past 10 – 15 years, there has very rarely been a discussion on global free trade agreements under the supervision of the WTO, but this hasn’t stopped bilateral free trade agreement negotiations. So that brings the relevance of the WTO into question. Similarly, with the IMF and the World Bank, it will be interesting to see what kind of role they can carve out for themselves, especially when the Global South is becoming more cautious of western economic orthodoxy.

In your opinion, what is the future for the global political economy? Are there any changes you would like to see?

Personally, being a historical materialist, I would argue that we need a drastic transformation away from organising production around wage labor and private ownership of means of production – features of the fundamental capitalist nature of the global political economy. But if one were to think in smaller steps, multilateralism must be encouraged. I don’t necessarily believe in capitalism with a human face, but even within capitalism, there are more inclusive forms which are potentially preferable over others. So, if it were to come to that, one would hope that international organisations play a strong role in upholding multilateralism and more cooperative forms of capitalism. Unfortunately, that is precisely what is being undermined in the current politico-economic moment.

We thank Professor Bieler for his perspective on these pressing economic and political issues.