1. Adapting International Trade Institutions to New Realities
- Author:
- Felix Pena
- Publication Date:
- 02-2018
- Content Type:
- Working Paper
- Institution:
- Council on Foreign Relations
- Abstract:
- The institutional order governing world trade is going through a critical period. Debate over its future form and design will be a dominant theme on the global agenda for the coming years. The Donald J. Trump administration has questioned the benefits of the multilateral trading order and is pulling the United States back from its traditional leadership role. In December 2017, the Eleventh Ministerial Conference (MC11) of the World Trade Organization (WTO) ended in disappointment with no substantive multilateral achievements. The shift in economic power from the West to the East and the growth of nonstate actors further complicate the search for consensus on international trade rules, leading to a so-called multiplex world. In a multiplex world, actors with different cultural values and relative power inequalities—such as nation-states, international and regional institutions, corporations, and nongovernmental organizations—compete against each other. To ensure a resilient trading system, multilateral trading rules and institutions need to be adapted to these new realities of trade, investment, and the distribution of global power. Unlike the international system as it functioned after World War II, today’s trading system does not reflect the interests of a single power or an alliance of powers with sufficient clout to impose their will on others in a sustained way. This is not a Group of Twenty (G20) or Group of Seven–led world: it is a G-Zero world, with no established lineup of who should be invited to the table where decisions are made. In this vacuum of global leadership it is increasingly difficult to identify who will create the new rules of international competition. Actors pursue their own self-interest, which results in less certainty for the international trade system.
- Topic:
- International Trade and Finance, Multilateralism, Trade Wars, and WTO
- Political Geography:
- Global Focus