Roundtable: New Trade Opportunities
23 May 2018
International trade is in peril. The adaptation of economies as a result of globalization has reached political agendas. Populist political parties in the European Union and the United States have capitalized on the discontent surrounding globalization. At the same time, the international institutions dealing with trade are at a standstill: the Eleventh WTO Ministerial Conference ended in disappointment with no substantive achievements and the Group of Twenty has dropped its traditional anti-protectionist pledge.
With multilateral trade organizations facing increased contestations, the spaghetti bowl of bilateral trade agreements is expanding. The European Union, guided by its core values, explores these avenues as well. The EU has a long history of building trade relationships with countries and has bilateral agreements with a long list of countries. However, one of the biggest and latest undertakings, the Transatlantic Trade and Investment Partnership with the US, is only slowly progressing, so the EU might want to venture out and attract new partners.
The question is which countries could and should the EU engage with. Its traditional approach on multilateralism guided by its core values, such as respect for human dignity and human rights, freedom, democracy, equality and the rule of law, might render it difficult to engage in bilateral agreements with certain countries, as these sometimes see these values as interfering with their national sovereignty.
Other questions that have recently surfaced relate to the distribution of the welfare gains realized by globalization. Global value chains should result in higher welfare gains. However, as recent research and have shown, these benefits seem to accrue to a few big corporations rather than the general public. The rise of populist and nationalist parties capitalizing on these complaints can also be seen as a result of this growing inequality.
The European Union should ensure that globalization works for all. In the current era of antiglobalization and the rise of populist and nationalist political parties. this would already be an immense task if the international trade regimes were functioning. However, with the latter and global cooperation on drifting sand, this might be unattainable in the short run.