26.09.2016 | FES Office Geneva

In Need of Rethinking

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Trade Policies in Times of De-Globalisation

by Hubert René Schillinger

  • Free trade has both been negatively affected by and an active contributor to an anti-globalisation backlash in the public opinion of many advanced economies. Further trade liberalisation is increasingly resisted. Much of the backlash can be viewed as a reaction to the underlying policies that, in the past, have produced many »losers« – not just »winners« – and especially have increased income inequality.
  • Most of the »low-hanging fruit« in trade liberalisation has already been harvested. In the search for further cost savings, the frontier of trade negotiations has moved away from the borders deep into the arena of national policies. Attempts to use trade negotiations to modify regulations that express societal preferences and had been established for reasons that are unrelated to international trade have largely eroded the confidence in trade negotiations and trade negotiators – and added to the backlash.
  • The increasing resistance against further liberalization comes at a time when the global economy itself is about to become less global. In order to avoid any further politically motivated regression that could lead to tit-for-tat »trade wars« reminiscent of the 1930s there is a need for rethinking trade policy. Trade policies should become more realistic and pragmatic – not overselling its alleged benefits – and stop pushing for an aggressive corporate agenda. Potential losers of trade liberalization must be identified in advance – and adequately compensated. Finally, trade policies must become compatible with and aligned to internationally agreed policy frameworks, such as the Decent Work Agenda, the 2030 Agenda for Sustainable Development and the Paris Agreement.