The Revival of Economic Nationalism and the Global Trading System

25 Pages Posted: 30 Mar 2018

See all articles by Ian Sheldon

Ian Sheldon

Ohio State University (OSU) - Department of Agricultural, Environmental & Development Economics

William McGuire

University of Washington, Tacoma

Daniel C. K. Chow

Ohio State University College of Law

Date Written: March 29, 2018

Abstract

The election of Donald J. Trump to the US Presidency coincided with the US adoption of an “America First” policy in trade. This policy reflects an underlying theory of economic nationalism that is fundamentally at odds with the current approach of the multilateral trading system established by the GATT/WTO. The current multilateral system is based on a “positive sum game” theory, i.e. the view that cooperative trade concessions can increase the volume of trade for all nations involved and result in reciprocal and mutual benefits. A large body of theoretical and empirical work, discussed and analyzed in this Article, supports the conclusion that the GATT/WTO system has historically achieved significantly increased trade volumes on both a multilateral and national scale since its creation at the end of the Second World War. By contrast, President Trump’s economic nationalism holds that trade is a “zero sum game” in which a gain in trade by one nation must be accompanied by a corresponding trade loss by another nation. Under the view of the current Administration, the US has often been the loser in the global trade deals of the GATT/WTO. The current Administration now seeks to dictate the terms of any future trade agreements so that the US wins at the expense of its trading partners, if necessary, in a zero sum game. The economic nationalism espoused by the current Administration, if unconstrained, could result in the dismantling of the current multilateral trading system leading to long-term negative, if not catastrophic, consequences for the world economy.

Keywords: International Trade, International Economics, International Law, World Trade Organization

JEL Classification: K2, K20, K33

Suggested Citation

Sheldon, Ian and McGuire, William and Chow, Daniel Chee King, The Revival of Economic Nationalism and the Global Trading System (March 29, 2018). Cardozo Law Review, 2019 Forthcoming; Ohio State Public Law Working Paper No. 441. Available at SSRN: https://ssrn.com/abstract=3152299 or http://dx.doi.org/10.2139/ssrn.3152299

Ian Sheldon

Ohio State University (OSU) - Department of Agricultural, Environmental & Development Economics ( email )

234 Agricultural Administration Building
2120 Fyffe Road
Columbus, OH 43210-1067
United States
614-292-2194 (Phone)

William McGuire

University of Washington, Tacoma ( email )

1900 Commerce Street
Tacoma, WA 98402-3100
United States

Daniel Chee King Chow (Contact Author)

Ohio State University College of Law ( email )

55 West 12th Avenue
Columbus, OH 43210
United States
614 292-0948 (Phone)
614 292-3202 (Fax)

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