What should the next trading system be? Can we restore the capacity of the U.S. to produce—and of all nations to regulate capitalism?
Hyper-globalization is dead, killed by the rise of China, the supply chain catastrophe, the COVID pandemic, Russia’s invasion of Ukraine, and the belated recognition that ultra-free trade was mainly designed to serve financial elites. The Biden administration is pursuing a course correction and looking inward for economic security. Many other nations are taking this approach. Even some businesses recognize that the risk of disruption brought about by extreme globalization doesn’t justify the allure of weak regulation and low labor costs.
Despite this shift, a great deal of global trade will continue, under different rules. The task of the next decade is to figure out what those rules will look like. Is there a path back to a trading system that allows nation-states more room to govern capitalism, as in the Bretton Woods era? Can the successor system offer a better deal to developing countries of the Global South? Might a new trade regime give more weight to climate goals, labor rights, public health, or public provision of goods? And where does China fit in?
The next trade regime will not be a single universal set of rules, as the WTO’s sponsors imagined. It will be a hybrid that could provide more space to pursue progressive economic and social policies, nationally and globally, if we don’t succumb to the lingering influence of trade traditionalists in government and their allies on Wall Street.