Where is global trade and investment governance headed? A Tour d’Horizon
Since the US created the post-World War Two liberal international order and is still the pre-eminent global power notwithstanding the growing Chinese challenge, it is uniquely placed to determine the trade and investment system’s fortunes. The answer to the question posed in the title, therefore, depends fundamentally on the medium-term trajectory of US politics, and the resultant US position in the world. Accordingly, in this blog I put forward my analysis of where the US political system is headed under President Donald J. Trump, how key countries are responding, and the ensuing implications for the global trade and investment system.
Trade policy headlines are dominated today by the ups and downs of the United States-China relationship, the renegotiation of the North American Free Trade Agreement (NAFTA) and the Brexit process. There is concern on the effects that disintegrating closely linked economic partners could have on growth, jobs, supply chains, and consumers. The perils of a return to unilateralism and power-based mechanisms threaten the relevance of the World Trade Organization (WTO). Among the challenges confronting global trade governance, however, there is positive energy coming from several regions of the world in the form of renewed and pro-active leadership on preferential trade agreements (PTAs) on the part of the European Union (EU), Japan and Africa. This energy is welcome as it is a source of global cooperation, but more is needed to make sure it complements the multilateral trading system.
