In a world reeling from a pandemic, businesses are under such immense pressures that now hardly feels like a polite moment to be telling them they need to re-engage with international trade policy. Unfortunately, they do.
It’s tempting to assume the international trade uncertainty paralysing investment, disrupting supply chains and killing jobs is a temporary anomaly of the US-China trade war, Donald Trump, and a World Trade Organisation (WTO) paralysed by the Trump administration’s procedural blockade of the WTO Appellate Body. If only.
As I argued in my recent analysis for the Lowy Institute, the trade war is just one of the problems with international trade, the WTO Appellate Body crisis is just one of the areas where the WTO is bleeding, and the WTO is just one symptom of a global trading system besieged.
Business has largely given up on the WTO and its rules as a source of solutions. The organisation has struggled to negotiate new rules or even enforce existing ones.
The global consensus, based on the underlying wisdom of sacrificing some sovereign policy space to allow predictable, rules-based trade, has never been weaker.
Done well, trade rules can serve to steer the rampaging bulls of international competition toward sustainable, inclusive growth.
Done poorly, the results can be monopolistic, anti-consumer and rent-seeking, locking new players out of markets and shielding established players from any challenge to outmoded business practices, negligent practices or substandard products. The difference lies as much in who is talking to government as who is running it.