Is the high point in multilateral trade relations already 30 years in the past? Are notions of international cooperation and mutual benefit relics of an earlier time? Hopefully not, there is still much more to play for. Amidst the visible geopolitical tensions, and what often looks like a blurring of trade, economic, climate, and security interests, there are some encouraging signs recently.
This brief considers prior developments that helped shape the nature of the trade policy debate today, offers an admittedly optimistic assessment of a renewed interest by G7 members in international cooperation, and highlights immediate priorities for action by G7 Trade Ministers.
The Trade Policy Challenge: Looking Beyond Trade and the Economy
The Uruguay Round of multilateral trade negotiations (1986-1994) was the eighth trade round since 1947. It successfully reduced trade barriers, established enforceable trade rules, and created the World Trade Organization (WTO).
Its importance to a well-functioning multilateral trading system, global income and job growth, and global poverty reduction would be hard to over-state. Yet, less than five years later the planned launch of the ninth trade round stalled in Seattle, and while it was revived in late-2001 in Doha, twenty-two years have since passed, and WTO members have still not delivered a much-needed comprehensive modernization of global trade rules.The 2007-08 financial crisis quickly became a global economic crisis, leading to a virtual collapse of trade flows and a sharp rise in global unemployment. Worldwide, millions of people lost their jobs and their homes – as well as their trust in public institutions.
While inequalities across countries were reduced significantly, subsequently lower global growth added to increasing inequalities of household wealth, income, and opportunity within many countries. Regional productivity levels within countries were also diverging, with lagging regions unable to offer good jobs, wages, and community well-being. More people were growing frustrated with globalization – driven at least as much by technological progress as by trade flows – and with an overall economic system that was not working for them and their families.
ua30938-policy-brief-22-002Ken Ash, Visiting Fellow, Institute for International Trade and formerly Director of Trade and Agriculture at the OECD.
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