Populism, Globalization, and the Prospects for Restoring the WTO

Abstract

This article sets out to identify a constructionist framework for a new and expanded “embedded liberalism” and WTO reforms in the global trading system. Globalization and populism led the Trump administration to attack the WTO system by introducing unilateral protectionist measures and undermining its rules and norms. US populist trade policies have persisted under President Biden. Necessary steps to restore the WTO system include (a) domestic reforms by WTO members to improve economic adjustment, labor mobility, and social safety nets; (b) WTO reforms to allow for additional domestic policy space, new negotiated rules to address contentious issues, and a relaxation of the consensus rule; and (c) US restoration of its commitment to multilateral trade rules. Renewed global leadership will be required to pursue these steps. If the current WTO agreement proves to be incapable of resolving these issues, countries will turn increasingly to the alternative of regional trade agreements, which may be able to re-create the conditions for a return to a rules-based global trading system. Yet populism, anti-globalization pressures, and geopolitical tensions present the danger of a continued unwillingness to cooperate among major countries.

Economic and Political Dynamics of Globalization: A Review of Continuity and Change in Research Focus

“…Populism has been spurring anti-globalization pressures, escalating fears about the quality of products, and concerns about escalating geopolitical tensions. The promotion of anti-globalization poses a risk of dominant countries continuing to be unwilling to cooperate in trade (Jones, 2023;Hix, Zapryanova, 2023;Finbow, 2023;Whittaker, 2022;Osgood, 2022).…”

Re‐Embedding Trade in the Shadow of Populism

“…Ehrlich and Gahagan ( 2023) help clarify the types of opposition to free trade that have emerged in the USA and focus on how populist opposition to trade should be understood. In contrast to Jones (2023), they are less sanguine about the ability of compensation-a key policy tool of embedded liberalism-to address populist opposition to trade, which is rooted in nativism. Their analysis can help inform policies that address popular opposition to trade.…”

“…The contributors have been asked to go beyond purely descriptive accounts to also propose policy solutions or approaches to resolving the tensions they describe. Jones (2023) and Bachand (2023) address the embedded liberalism compromise from contrasting points of view. The former argues for a strong version of Ruggie's original framework and draws on the sociological concept of constructivism to understand the foundation of global trade institutions.…”