Solving the Challenges to World Trade
31 Pages Posted: 23 Nov 2020
Date Written: November 2020
World trade faces fundamental challenges. This essay examines six threats to the intellectual case for open trade: to wit, worries about ecology, fairness, morality, equity, security, and geopolitics. Together, these threats implicate a huge swath of international trade. One of the biggest indicators of diminishing support for trade is the moribund status of the leading institution of the trading system, the World Trade Organization (WTO). There are three branches of WTO governance and all three are in trouble: the judicial branch and its vacant Appellate Body, the executive branch and its vacant post of WTO Director-General, and the legislative branch where the WTO Ministerial Conference has failed to meet since 2017. Solving global problems often requires focused international policies and sometimes specialized international agencies to administer such policies. Unfortunately, during the 21 st century, the growth in international problems has not been matched by a growth in international solutions. The faltering of the trading system is one example of that mismatch, but the same pathology exists in many areas of global governance. The biggest problem may be the shallow Paris Agreement on Climate Change that lacks any mutually agreed commitments, such as a carbon tax, for harmonized actions to combat global warming. Yet even without any international commitment to impose a carbon tax on domestic commerce, there are political demands to impose carbon taxes on imported products for ecological and fairness reasons. This essay introduces the term “tradeclimate” questions as nomenclature for the set of environmental issues relating to transborder trade that should be resolved in the climate regime, not in the WTO. In discussing China, the essay notes that the trade war between China and the United States spills into the WTO, and explains why the WTO should not arrogate to itself the task of re-educating China. Gaining China’s cooperation is critical to achieving better policies in the WTO, the Paris Agreement, and the World Health Organization.
Keywords: WTO, Paris Agreement, ILO, trade sanctions, free trade, protectionism, climate change, trade fairness, public morality, social justice, global poverty, national security, geopolitics, TRIPS, pharmaceutical patents, Covid-19, international law, international organization, international relations, bor
JEL Classification: B10, E61, F13, F16, F52, F64, F66, H23, J88, L52, O34, Q27, Q54
Suggested Citation: Suggested Citation