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.

Ken Ash, Visiting Fellow, Institute for International Trade and formerly Director of Trade and Agriculture at the OECD.

To read the full summary, click here.

To read the full policy brief, click here.

The post Whither (not Wither) Multilateralism: Priorities for G7 Trade Ministers appeared first on WITA.

Global trade will continue to face multiple challenges in 2023 as inflation and high interest rates, debt distress and geopolitical frictions weigh on many economies. The downside risks to the global economy and international trade are significant, ranging from an escalation of Russia’s war on Ukraine to deepening tensions between the US and China.

‘Reglobalization’ – rather than deglobalization – best describes the current pattern of economic integration and fracturing across different economies and sectors. Globalization is far from finished, but will increasingly emphasize greater regional links and the formation of economic blocs for sensitive and strategically important sectors. Comprehensive decoupling from China is neither achievable nor desirable for the G7 and like-minded partners.

The supply-chain disruptions of 2020–22 will continue to ease. Given that extreme weather events are the biggest threat to global production networks, supply-chain resilience and diversification efforts will persist, with added impetus to act on ‘greening’ trade.

The future of trade is closely linked to the transition to green and digital economies. As climate ambitions and technological leadership are intertwined with industrial policy objectives, concerns about unfair trade practices and protectionism are coming to a head not just as regards China, but also among the US, the EU and like-minded partners.

With major breakthroughs at the World Trade Organization unlikely in 2023, limited progress can be expected in some bilateral, regional and sectoral agreements. Meanwhile, efforts to avoid further trade fragmentation will progress more readily under Japan’s G7 presidency than under India’s G20 presidency.

Introduction

This briefing paper analyses the outlook for global trade in 2023, and examines the structural forces shaping global trade and globalization more broadly.

It argues that ‘reglobalization’ – rather than deglobalization – best describes the current and likely future pattern of economic integration and fracturing across different economies and sectors. Trade policy has an important role to play in underpinning the positive aspects of a reglobalized world and in balancing geopolitical competition and cooperation, not just through coordinated efforts to strengthen supply-chain resilience, but also in harnessing the twin transitions to green and digital economies.

The paper draws on insights from expert roundtable discussions and a high-level speaker series under the umbrella of the Chatham House Global Trade Policy Forum. It is the first of a new annual series that will highlight some of the major global trade trends and prospects for the year(s) ahead.

Marianne Schneider-Petsinger is a senior research fellow in the Global Economy and Finance Programme at Chatham House, responsible for analysis at the nexus of political and economic issues. Before joining Chatham House in 2016, she managed the Transatlantic Consumer Dialogue, an international membership body representing consumer organizations in the EU and the US. She also worked for a think-tank on transatlantic affairs in the US, and for the Thuringian Ministry of Economic Affairs in Germany.

To read the full report, please click here.

The post Global Trade in 2023: What’s Driving Reglobalization? appeared first on WITA.